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Oral Answers to Questions
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Richard Foord (Honiton and Sidmouth) (LD)
The Secretary of State for Scotland (Ian Murray)
First, Mr Speaker, I apologise to you and the House for Scottish questions overshadowing other events today.
I was pleased to join the Commonwealth Games Federation last week to confirm that Glasgow will host the Commonwealth games in 2026. It will be yet another wonderful opportunity for Scotland to show how we put on world-class sporting events. I also visited the Sir Chris Hoy velodrome and spoke to the next generation of cyclists, who have been inspired by Sir Chris. I am sure that the whole House will wish to pass on their best wishes to him and his family. I also congratulate Scotland women’s football team, who qualified for the play-offs yesterday after a 4-0 win over Hungary.
I was delighted to join the Prime Minister as he hosted the inaugural meeting of the Council of Nations and Regions at Queen Elizabeth House in Edinburgh earlier this month. We discussed opportunities for attracting long-term inward investment, stabilising the UK economy and creating good jobs. The council demonstrates our commitment to working together to deliver those priorities.
Richard Foord
It is essential that all the UK’s nations and regions have a seat at the council of nations and regions, alongside Scotland, yet areas such as the great south-west, which is home to over 3 million people and has an economy of £80 billion, are being left out because we do not have metro mayors. Will the Secretary of State speak to colleagues in the Cabinet Office to ensure that, on the council, Scotland can work with all the non-mayoral regions of England?
Ian Murray
On 16 July, the Deputy Prime Minister wrote to all areas that do not have a devolution deal to invite them to come forward with a proposal. New mayors established through that process would be eligible to sit on the Council of Nations and Regions. I will make sure that the Deputy Prime Minister forwards that letter to the hon. Gentleman.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
It was brilliant to welcome the Prime Minister to my constituency for the first meeting of the Council of Nations and Regions. Following that meeting, are the Government committed to ending the decade and a half of austerity imposed on my constituents by the Conservative and SNP Governments?
Ian Murray
I was delighted to attend the Council of Nations and Regions, held in a Labour constituency in Edinburgh. I can assure my hon. Friend that our manifesto said “no return to austerity”, and that is what we are determined to deliver.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The trade union Unite has issued a joint letter from political leaders across the United Kingdom’s nations and regions opposing Labour’s cut to the winter fuel payment. That letter has been signed by every party at Stormont and by parties in Wales, and the Scottish Conservative leader Russell Findlay also signed it. Was the winter fuel payment even discussed at the Council of Nations and Regions?
Ian Murray
I thought that, with a full House, the shadow Secretary of State would have taken the opportunity to apologise for his Government not only crashing the economy, but leaving a £22 billion black hole. That is something this Government are determined to clean up. [Interruption.]
Mr Speaker
Order. We have not even got to the Budget yet, Mr Bowie, and you are already excited. Come on, Secretary of State.
Ian Murray
I hope that, in a later question, the shadow Secretary of State will apologise at the Dispatch Box to the country for crashing the economy, and to pensioners for what has happened to them as a result.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The Secretary of State for Scotland (Ian Murray)
I was delighted to speak at the Space-Comm expo last month in Glasgow, where I met a wide range of industry members, both national and international, and recently I was fortunate enough to visit the SaxaVord spaceport in Shetland, where I saw wonderful progress. I have also met representatives of Orbex in the hon. Gentleman’s constituency, and will continue to champion Scotland’s spaceports, including in Sutherland in his constituency.
Jamie Stone
The Secretary of State mentions Orbex. At present, it employs 125 people; by 2030, it could employ as many as 500. Is the Secretary of State willing to visit Orbex in Elgin and, indeed, the Sutherland space launch site?
Ian Murray
Elgin is certainly not the final frontier, so I would be very happy to visit. The Minister for Science recently visited the UK Space Agency’s new office in Edinburgh, and during that visit, he echoed my sentiments about the importance of Scotland’s space sector. The Minister for Data Protection and Telecoms has recently met Orbex as well, and I will remain in close contact with my ministerial colleagues to ensure that we back the sector. I am very happy to visit when ministerial time allows.
Christine Jardine (Edinburgh West) (LD)
As the Secretary of State knows, I recently had the opportunity to visit California with the Scottish Affairs Committee to look at how that state has created an environment that encourages new space projects. In Scotland, we have a unique opportunity, not least because of developments in Glasgow, but also because the University of Edinburgh is already well respected and part of the programmes at Stanford, New York University, Columbia and NASA. What will the Government do to encourage the creation of that sort of environment in Scotland, and will the University of Edinburgh, given its reputation, be central to that?
Ian Murray
Scotland will be central to the space sector, and I very much welcome the question. We will fully back the space sector, as I said to the Member for Caithness, Sutherland and Easter Ross (Jamie Stone). The Minister for Science has been to the UK Space Agency’s new office in Edinburgh, and the Minister for Data Protection and Telecoms has met Orbex. I have met Orbex and been to Unst in Shetland to visit the spaceport up there. We will fully back this; of course, its potential reaches to infinity and beyond.
Kenneth Stevenson (Airdrie and Shotts) (Lab)
The Secretary of State for Scotland (Ian Murray)
I welcome my hon. Friend to his place; it was a wonderful election result in his constituency of Airdrie and Shotts. Investment in the UK to drive growth is the Government’s No. 1 priority, and we have already started delivery on it. Just this month, we hosted an international investment summit, at which we announced £63 billion of shovel-ready investment across the UK. That includes the likes of Greenvolt’s £2.5 billion investment in Scotland and Iberdrola’s £24 billion investment in green energy. We also announced this week that Glasgow will host the Commonwealth games, which will bring £100 million to the city.
Kenneth Stevenson
I thank the Secretary of State for his answer. It is refreshing to see a Government working across Departments to ensure a pro-worker, pro-business and pro-growth approach that attracts inward investment. After years of Scotland being let down by two poor Governments, how does he see this new Labour Government approach benefiting my constituents in Airdrie and Shotts?
Ian Murray
The No. 1 benefit to my hon. Friend’s constituents in Airdrie and Shotts will be that they have him for their Member, championing them. I am pleased by his welcome for our approach. Airdrie and Shotts has a rich industrial heritage, and a modern industrial strategy will reignite the industrial and technological potential in all our communities. The national wealth fund and Great British Energy will help rebuild Scotland’s industrial base. We want Scotland to be the most attractive part of the UK to invest in, and we will continue to work closely with the Scottish Government to make that a reality. I could not put it better than my hon. Friend did: pro-worker, pro-business and pro-growth—that is this Government.
Chris Law (Dundee Central) (SNP)
Earlier this year, the UK Conservative Government promised a £20 million levelling-up partnership for my city of Dundee, for projects such as the university’s life sciences innovation district, a new campus for Dundee and Angus college, and the Dundee Museum of Transport. Despite having written two letters in the last four months seeking assurances about the funding, I have so far not received a commitment to it, which raises concerns that Labour is about to renege on this commitment. Can the Secretary of State assure me today that these projects and the £20 million for Dundee will be committed to in full?
Ian Murray
The hon. Gentleman will not have to wait long. The Budget is in about an hour’s time, and the Chancellor will lay out all the spending plans in that Budget. The biggest impact on his constituency of Dundee will of course be made by GB Energy, given what that will do to our green energy system; it makes me very surprised that nobody from the SNP voted to back the Bill last night.
Graeme Downie (Dunfermline and Dollar) (Lab)
Martin McCluskey (Inverclyde and Renfrewshire West) (Lab)
The Secretary of State has regular discussions with the Ministry of Defence on supporting Scotland’s defence sector, which makes a vital contribution to growth in both Scotland and the UK, and helps the UK remain safe in the face of current and future threats. The Secretary of State was pleased to visit the Babcock site at Rosyth dockyard recently with my hon. Friend, where he saw at first hand the fantastic work done there.
Graeme Downie
I thank my hon. Friend for that reply, and I congratulate him on his debut at the Dispatch Box this morning. As he mentioned, earlier this month the Secretary of State joined me on a visit to Rosyth dockyard in my constituency. Does my hon. Friend agree that the failure of the SNP to support the defence sector in recruiting the highly skilled workers it needs from my constituency and the rest of Fife is a damning indictment of the SNP’s commitment to the security and prosperity of the people of Scotland? Will he reassure me that he will do all he can to ensure that the defence sector in Scotland contributes fully to the UK’s security and future economic growth?
Martin McCluskey
My hon. Friend has been a champion for the defence sector in his constituency since his election, and I commend him for that work. I agree that it is essential that any Government engage with the defence sector, not just because of the jobs created across Scotland, but because of the vital technology that the sector is developing. There is a real opportunity to create and retain skilled work in Scotland, and all of us have a responsibility to promote that as much as possible. I am happy to reassure my hon. Friend that the Secretary of State for Scotland and the Government will continue to champion the defence and manufacturing sectors in Scotland.
Jess Brown-Fuller (Chichester) (LD)
Martin McCluskey (Inverclyde and Renfrewshire West) (Lab)
The Scotland Office is committed to championing Scottish arts, and regularly showcases the sector’s significant cultural and economic contributions to UK and Scottish Government Ministers. In the Budget later today, the Chancellor will set out her spending decisions, and those will allow the Scottish Government to make their own spending decisions on devolved matters, including arts funding.
Jess Brown-Fuller
I was glad to hear the Secretary of State celebrate events in Scotland in his opening remarks. Scotland, and the UK in general, boasts one of the world’s leading arts industries, and we have the notable Edinburgh Fringe festival, but it faces funding pressures due to Government cuts and increased Brexit red tape, which complicates travel to Europe. British artists are being shut out of European markets, which hinders their ambitions and success. What steps is the Minister taking with other Departments to ensure that a thriving arts sector is unimpeded by Brexit red tape?
Martin McCluskey
The hon. Lady has a background in performing arts, and brings her experience to this House. I agree with her: Scottish artists are world-renowned, and it is important to them and to promoting Scottish culture around the world that they can perform internationally. We are supporting Scottish artists, and continue to work to help our musicians tour, including through the Government’s successful music export growth scheme, the international showcase fund, and the Department for Business and Trade’s internationalisation fund. We are engaging across Government with the EU and member states on how best to improve arrangements for touring in Europe without a return to free movement.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
Since being elected, my hon. Friend the Member for Edinburgh East and Musselburgh (Chris Murray) has secured a Westminster Hall debate on the culture and economic contribution of the Edinburgh festivals—the first debate on the subject since 1992. Does my hon. Friend agree that that highlights the SNP Government’s shameful treatment of the Scottish creative sector, and can he outline what the UK Government will do to secure the future of the industry, and support thousands of Scottish writers, artists and performers?
Martin McCluskey
I welcome my hon. Friend’s comments, including those about my hon. Friend the Member for Edinburgh East and Musselburgh (Chris Murray). I was pleased to attend his debate in Westminster Hall, at which those issues were discussed. The UK Government have supported creative industries across Scotland, including in the city of my hon. Friend the Member for Edinburgh North and Leith (Tracy Gilbert), with £8.6 million for the Edinburgh festivals, £2 million of capital funding for the King’s Theatre in Edinburgh, and £5 million of capital funding across Scotland for the Burrell Collection. Millions more have been committed to Falkirk arts centre through the Falkirk and Grangemouth growth deal. We will continue to support arts and culture across Scotland.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
The Secretary of State for Scotland (Ian Murray)
The crisis that we inherited from the previous Government is not just fiscal but industrial, because neither the previous Government nor the SNP had any proper industrial strategy for Scotland. Our industrial strategy will deliver certainty and stability, which businesses need in order to invest in the high-growth sectors that will drive long-term sustainable economic growth. Well-paid jobs are at the heart of our modern industrial strategy, which is complemented by our plan to make work pay. Our strategy is clear: as a Government, we are pro-business and pro-worker.
Kirsteen Sullivan
The new industrial strategy identifies creative industries as a key sector for UK growth. My constituency is a popular setting for film and TV productions, including the Lockerbie film and “Outlander”, as well as hosting the Pyramids studios. As film and TV make an increasingly important contribution to my constituency’s economy, what steps are the Government taking to support investment in the creative industries in my constituency?
Ian Murray
My hon. Friend mentions “Outlander”, which was filmed in Bathgate and Linlithgow, as well as the Lockerbie bombing film starring Colin Firth. The film “Damaged” is in production there. It stars Samuel L. Jackson—I hope he did a few leaflets for her while he was in her constituency. The creative industries are a jewel in Scotland and the UK’s crown, and there is the independent film tax credit announced earlier this week by my right hon. Friend the Secretary of State for Culture, Media and Sport. Films with distinct homegrown content and talent meet the criteria for that new relief. Productions eligible for the tax break must have a UK writer or director, or be certified as an official UK co-production. That shows that this Government are determined to back our creative industries, and to continue to grow our film and TV industries.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Does the Secretary of State share my anger and disappointment that the SNP Scottish Government dogmatically continue to block new nuclear developments in Scotland, depriving my constituency of important jobs and economic prospects? What can he do through the industrial strategy to ensure that we at least take advantage of decommissioning and supply chain opportunities?
Ian Murray
I have never known the right hon. Gentleman to be angry or disappointed, but I share his anger and disappointment. This Government back our industry. Nuclear will be a major part of the energy mix going forward, and we need to ensure that we have the right balance. GB Energy has been set up, and the related Bill passed Third Reading yesterday. I am disappointed that neither he nor the SNP voted for it, but that is the vehicle through which we will take these issues forward.
Adam Jogee (Newcastle-under-Lyme) (Lab)
The Secretary of State for Scotland (Ian Murray)
I welcome my hon. Friend to his place. The Budget, which will be announced by my right hon. Friend the Chancellor shortly, will herald a new era of investment and growth in Scotland. In our first 100 days, we announced the headquarters of GB Energy in Aberdeen, launched the national wealth fund and announced the biggest upgrade of workers’ rights in a generation.
Adam Jogee
Newcastle-under-Lyme is home to many people who left Scotland to build a life, such as my constituent Lee-Bernadette Walford. Can the Secretary of State outline how resetting the relationship between the UK and Scottish Governments is important for economic growth up and down our United Kingdom?
Ian Murray
We do not agree with the Scottish Government on everything—or, indeed, very much at all—but Scots expect us to work together to produce results, and that is what we have tried to do. Yesterday I had my regular meeting with the Deputy First Minister, and this morning I spoke to the Finance Secretary ahead of the Budget. Economic growth is a key area, and I am delighted to highlight shared work on energy, our bringing the Commonwealth games to Glasgow, and the jointly funded £100-million package for the Falkirk and Grangemouth growth deal. Our long- term economic strategy requires the Governments to work together. The Prime Minister and the First Minister have been clear that that is what we are determined to do.
Pete Wishart (Perth and Kinross-shire) (SNP)
The Secretary of State boasted of a £150-million investment fund, only to contradict himself, bizarrely, and say that no such figure existed. Is this Scottish Schrödinger’s funding? Is it perhaps the levelling-up fund referred to by my hon. Friend the Member for Dundee Central (Chris Law)?
Ian Murray
I am surprised that the hon. Gentleman was keen to ask a question, given that he did not apply for one in the shuffle—nor did any other SNP Member. It is also surprising that he, with all his experience in the House, wants to spend his time in this new Parliament defending the previous Tory Government’s reckless gambles with the economy.
Mr Speaker
Order. I do not know whether the Chair of the Select Committee is standing or not. Do you want to come in on this question?
Patricia Ferguson (Glasgow West) (Lab)
Yes, thank you, Mr Speaker. Does my right hon. Friend the Secretary of State agree that the Drumchapel levelling-up fund bid and the project that would follow from that would be a good way to promote the economic and social growth of the area?
Ian Murray
My hon. Friend has been a doughty campaigner for the Drumchapel project. She will not have long to wait, as the Chancellor will come to the Dispatch Box shortly and announce the Budget. I am hopeful that all these projects, including some of the anti-poverty projects that my hon. Friend has championed for years in her constituency, come to pass.
Jim Shannon (Strangford) (DUP)
When it comes to promoting economic growth in Scotland, it is clear that the best way to do that is from within this great United Kingdom of Great Britain and Northern Ireland. What is the Minister doing to make that happen, and to convince my SNP colleagues sat in front of me of the best way forward?
Ian Murray
The best way to keep the United Kingdom together is to make sure that this is a successful UK Labour Government, and that is what we are determined to do. May I point the hon. Gentleman to the row in front of him? There are nine SNP MPs left, and we have 37 Scottish Labour MPs. That is how we protect the Union.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Secretary of State said at the weekend that the Labour Budget
“will herald an era of growth for Scotland”,
but what is going to grow? Is it the tax burden on hard-working Scots, the number of pensioners choosing between heating and eating because they have not got their winter fuel payments, or the number of Labour broken promises? Or will we get all three this afternoon?
Ian Murray
The hon. Gentleman had a second opportunity to apologise for the Conservative party crashing the economy, and the dreadful £22-billion black hole that we inherited, which was hidden from the Office for Budget Responsibility. I ask the shadow Secretary of State to reflect on that before he asks his questions. Of course, he will not have long to wait to find out, as the Chancellor will be here shortly.
John Lamont
There were no answers in that response. Not so long ago, the Secretary of State said that a national insurance rise would have “an enormous impact” on businesses. He also said that
“under Labour, National Insurance wouldn’t go up”.
Tax rises, economic damage and broken promises—are this Labour Government not just the same as the SNP?
Ian Murray
I thought the shadow Secretary of State was just describing his previous Government.
Blair McDougall (East Renfrewshire) (Lab)
Martin McCluskey (Inverclyde and Renfrewshire West) (Lab)
My hon. Friend will know that the House recently gave the Employment Rights Bill its Second Reading. Shamefully, the Conservative party opposes the Bill, which is the biggest upgrade to workers’ rights in a generation. The Government are taking a joined-up and collaborative approach to the delivery of the plan to make work pay, which has been developed with businesses and trade unions. We are committed to continuing that approach through consultation on the plan’s implementation, to ensure that the changes we are making work well for both employees and businesses.
Blair McDougall
I am sure the whole House will join me in congratulating my hon. Friend the Member for High Peak (Jon Pearce) on the birth of his daughter Connie. [Hon. Members: “Hear, hear!”] As my hon. Friend enjoys his paternity leave, I am sure the Minister will be familiar with the Dad Shift campaign, which seeks to increase paternity leave for more fathers. Will he support that campaign so that more fathers can enjoy paternity leave, in addition to the tens of thousands the Government have already opened it up to, and does he agree that that is a huge contrast with the Conservative party’s spending its time talking about getting rid of maternity leave?
Martin McCluskey
I send our congratulations to my hon. Friend the Member for High Peak (Jon Pearce) on the birth of his daughter, and I agree with what my hon. Friend the Member for East Renfrewshire (Blair McDougall) said. That is why we are making immediate changes to paternity leave through the Employment Rights Bill. We are making paternity leave available from day one in a new job and enabling it to be taken after shared parental leave. I pay tribute to my hon. Friend for his vigorous campaigning on this issue. I am sure that, like me, he was delighted to vote for the biggest upgrade to workers’ rights in a generation, which the Conservative party shamefully opposes.
John Cooper (Dumfries and Galloway) (Con)
One of the criticisms of the employment legislation that is being brought in is that it delivers us into the hands of the trade union barons. Does the Secretary of State agree that we are indeed in the iron grip of the barons, since he was unable to attend an event in his own office last night because he would not cross a picket line?
Martin McCluskey
We will take absolutely no lessons on employment rights from the Conservative party, which left us with a £22 billion black hole in the public finances that we are having to pick up. My right hon. Friend the Chancellor will address that in a moment.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
I join the hon. Member for East Renfrewshire (Blair McDougall) in congratulating the hon. Member for High Peak (Jon Pearce) on the birth of his daughter. On the demographic challenge, just before the election the Scottish Labour deputy leader said
“there is something we can do to incentivise”
more people to come to Scotland. In terms of employment in Scotland, have the Secretary of State and colleagues sat down with the Home Office to discuss encouraging more migration?
Martin McCluskey
The Government will work closely with the Migration Advisory Committee. We welcome the contribution that migrants make to the economy, but we will take no lessons from a party that has consistently said that the positive destination for people in Scotland is a zero-hours contract, and whose Members sat on their hands last night when we dealt with the Great British Energy Bill.
Stephen Gethins
Let me try to challenge the hon. Member. In a spirit of collegiality, the UK Government have committed to working with the Scottish Government. The hon. Member for Na h-Eileanan an Iar (Torcuil Crichton), who is in his place, has said:
“When it comes to immigration policy one size does not fit all. It shouldn’t be beyond us to devise ways to attract more people to work and settle here.”
Will the Minister confirm that the Scottish and UK Governments should work together, and will he commit to a meeting between the Governments so that we can take forward the idea of more migration to Scotland, which the Labour party committed to and we committed to, and business is crying out for?
Martin McCluskey
We have committed to Scottish representation on the Migration Advisory Committee, which would go a long way to dealing with these issues, but it is for the Scottish Government to do things like build houses in areas where we need more migration in order to encourage people to come to live in Scotland.
Mr Gregory Campbell (East Londonderry) (DUP)
The Secretary of State for Scotland (Ian Murray)
Scotland is rightly proud of its six world heritage sites. As the hon. Gentleman will appreciate, responsibility for planning decisions for large-scale energy projects in Scotland rests with Scottish Government Ministers. The UK Government work closely with the Scottish Government to deliver for Scotland, while respecting devolution. I meet regularly with my Scottish Government counterparts on these issues.
Mr Campbell
I thank—[Interruption.] I thank the Secretary of State for his reply. In any discussions he has, will he take account of the fact that I have written to UNESCO about the potential for a huge offshore wind farm very close to the Giant’s Causeway and the UNESCO world heritage site there? The Communities Minister in Northern Ireland has also met UNESCO. Will the Secretary of State make representations to ensure that all considerations are taken account of, so that people know the problems that may compromise that world heritage site?
Ian Murray
I am glad that the hon. Member has not lost any of his popularity in the House. It would be inappropriate for me to comment on planning decisions for large-scale energy projects in Scotland, as it is a devolved responsibility. I recognise the importance of considering the protection of local assets when developing renewable projects, particularly at cherished world heritage sites.
Mr Speaker
I wish to remind the House that, following the horrendous, terrible incident in Southport on 29 July, a suspect is awaiting trial, having been charged with multiple offences. That means that the House’s sub judice resolution is engaged, and references should not be made to the case. I know that all hon. Members wish to see justice done in this case. It is therefore paramount that nothing is said in this House that could potentially prejudice a proper trial or lead to it being abandoned.
I know it can be frustrating when we see reports in the media of matters that we are not free to discuss here, but that arises from Parliament’s constitutional relationship with the courts. More importantly, at the heart of this case are three young girls. We all want justice to be done for them and their families, and for others injured in and affected by this appalling incident. Speculation about the case, including comments made in this House, could seriously risk prejudicing proceedings. I know that none of us would ever wish to do that. Therefore, it would be wrong of me to exercise a waiver in this case. Members should not refer to it, or risk prejudicing it.
I understand that Members have legitimate questions about the circumstances surrounding this case. No doubt, they will want Ministers to commit to come to the House and answer those questions once the legal proceedings have concluded. I give my assurance that I will ensure ample opportunities to do so. My understanding is that the trial is expected to start in January. If Members have questions about the operation of and the decision on the sub judice resolution, they can speak to the Clerks and the Speaker’s Counsel. In the meantime, our thoughts are with the family and friends of Bebe, Elsie and Alice, and all those who were injured and affected on that horrendous day.
Oral Answers to Questions
(1 day, 14 hours ago)
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Mr Speaker
Before I call the Prime Minister, I would like to mark the fact that this is the last time that the right hon. Member for Richmond and Northallerton (Rishi Sunak) will appear at the Dispatch Box during Prime Minister’s questions—although he has a bit more to do afterwards. He has spoken at the Dispatch Boxes as Chancellor of the Exchequer, Prime Minister and Leader of the Opposition. After today, we all look forward to his continued contributions from the Back Benches. We wish him and his family well in their future endeavours. I thank him personally for our working relationship.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
The Prime Minister (Keir Starmer)
I wish everyone celebrating in the UK and around the world a joyful Diwali. It is a time to come together to celebrate and focus on a brighter future. Last Diwali, the Leader of the Opposition and his family lit the diyas outside No. 10 Downing Street. It was a significant moment in our national story. The first British Asian Prime Minister is a reminder that this is a country where people of every background can fulfil their dreams, and it makes us all proud to be British.
As you just mentioned, Mr Speaker, this is our last exchange across the Dispatch Boxes, so I want to take this opportunity to thank the Leader of the Opposition for his service. We have had political disagreements and ideological differences, and we have argued at some length, but I want to thank him for his hard work, commitment and decency in everything he has done. I, too, wish he and his family the very best for whatever the future may hold for them.
This morning, I had meetings with ministerial colleagues and others. In addition to my duties in this House, I will have further such meetings later today.
Katrina Murray
I would like to associate myself with the remarks made by the Prime Minister. Cumbernauld in my constituency was promised an elective and diagnostic treatment centre by the Scottish Government in 2021. This has continued to be delayed and is now alleged to be mothballed. What assurances can the Prime Minister give me that any Barnett consequentials from today’s Budget will be used to benefit my constituents and not be held on to by the Scottish Government?
The Prime Minister
I thank my hon. Friend for her question. I am sorry to hear about the delays affecting her constituents. The party opposite oversaw years of mismanagement and chaos, and the impact on the Scottish NHS is evident. This Labour Government are committed to delivering for the Scottish people, including making sure that we have an NHS fit for the future. The Chancellor will set out the details in just a few moments.
Rishi Sunak (Richmond and Northallerton) (Con)
Mr Speaker, thank you for your kind words—and, indeed, I thank the Prime Minister for his kind words. No Prime Minister looks forward to PMQs, but I always did like this pre-Budget one. It was, for a change, nice not to be the main event but just the warm-up act.
As you said, Mr Speaker, today is my last appearance at PMQs. I am happy to confirm reports that I will now be spending more time in the greatest place on earth, where the scenery is worthy of a movie set and everyone is a character. That’s right, Mr Speaker, if anyone needs me, I will be in Yorkshire. As an adopted Yorkshireman, I am particularly looking forward to doing the coast-to-coast walk that runs through my constituency and many others. Since 2015, we have made significant progress with the campaign to make it a national trail, and Natural England is close to concluding its work. Can I ask the Prime Minister to ensure that the coast-to-coast walk does indeed become Britain’s greatest national trail, and, in preparation for my return to the Back Benches, will he meet with me to discuss it?
The Prime Minister
Mr Speaker, I thought the right hon. Gentleman was about to ask me to join him on the walk. [Laughter.] Certainly I will meet him, and that is an important point.
Rishi Sunak
That is very kind of the Prime Minister. I know he is partial to the Lake district, but perhaps we can tempt him over to our end as well.
Yorkshire is famous not just for its walks, but for being home to some of England’s greatest cricketers. Sadly, no one is going to put me on that list—but who knows? I now have a lot more time to practise. Cricket has the power to bring people from all communities together and give them fantastic opportunities, as was shown so powerfully by Andrew Flintoff’s recent documentary. We lead the world in female participation, and that will stand us in good stead when we host the women’s world cup in 2026 and when cricket becomes an Olympic sport in 2028. Can I therefore ask the Prime Minister to continue Government support for the England and Wales Cricket Board’s new initiative to get cricket into vastly more state schools, fostering a whole new generation of cricketers for us all to cheer on at every level?
The Prime Minister
Yes, is the answer to that question. That point is a really important one. We celebrate cricket and it does bring communities together, but it is also really important for children and young people to enjoy lots of different sports. It gives them a confidence that they might not otherwise have and the ability to work in a team, and it teaches them about skills like leadership, so I am fully supportive.
Rishi Sunak
Our two predecessors, Sir Tony Blair and Lord Hague, have repeatedly come together and powerfully argued in their joint reports that it is vital for the future prosperity of Britain’s economy, society and public services for us to be a world leader in technology and innovation. The Prime Minister and I may not yet be at our joint report writing stage, but in a similar spirit of cross-party agreement, could I ask him to find his inner tech bro and continue to support emerging British tech businesses and establish our country as the home of AI growth and innovation?
The Prime Minister
Yes, and that is a really important point. Last year, the Leader of the Opposition held a summit on AI, which was very important. We have been bringing together the leaders in AI. We have a huge advantage in this country, being ranked in the top three in the world. AI will have huge potential for our growth and our public services, and I think that the whole House should be fully supportive of it.
Rishi Sunak
The Prime Minister has the immense privilege of being Prime Minister of the United Kingdom of Great Britain and Northern Ireland. Northern Ireland is a special part of our Union, but one that needs particular care, attention and respect. Having a strong, functioning Assembly at Stormont is good for the people of Northern Ireland and good for our Union, which is why I was so pleased to see government restored there earlier this year, and I am grateful to the Prime Minister for his support with that. Can he assure the House that he will continue to work to keep Stormont open, delivering for the Northern Irish people and strengthening Northern Ireland’s place in our Union?
The Prime Minister
Yes. Again, that is a very important point, and it is one that matters to me personally. I worked for five years in Northern Ireland on some of the proposals under the Good Friday agreement, in particular the transformation of the Royal Ulster Constabulary into the Police Service of Northern Ireland. I worked with both communities there for those five years. That was very important to me and it had a huge impact on me, so I care deeply about Northern Ireland. I absolutely agree that the institutions of government need to be up and running, and I want to give all the support I can to further development in Northern Ireland.
Rishi Sunak
As Prime Minister, the right hon. and learned Gentleman will be acutely aware of the threats that our United Kingdom faces from an axis of authoritarian states: Iran, North Korea, Russia and China. In particular, I am proud of the way in which this House has united in standing up to Russian aggression in Ukraine, and I know that we will never waver in our commitment to the Ukrainian cause. I will always be grateful for the support that the Prime Minister gave me when we were the first country to send Ukraine western battle tanks and long-range missiles, and the first to offer security assurances to Kyiv. In the light of the threats that we face, may I urge him always to maintain the strength of the transatlantic alliance and to ensure that NATO remains the bedrock of western security, with the United Kingdom playing a leading role?
The Prime Minister
Yes. NATO is, in my view, as important today as it was on the day on which it was created, in the light of the challenges that we face. It was a Labour Government who were the proud co-founder of NATO, and we repeatedly say that we support NATO to the hilt.
Rishi Sunak
Finally, may I point out that tomorrow is Diwali? I became leader of my party during Diwali, and I now stand down during that same festival. I am proud to have been the first British Asian Prime Minister, but I was even prouder that it was not that big a deal. That speaks volumes about the values of the British people, of our country, and of this Parliament. Will the Prime Minister join me in applauding the kindness, decency and tolerance that have always been the British way?
The Prime Minister
Yes, and I meant it when I said that we were all proud to see the right hon. Gentleman standing there as Prime Minister representing our diverse country. We were all proud: I think everyone in the House was. I thank him for that, and for his last question as Leader of the Opposition—although, given the speed with which his party goes through leaders, he may be back here before too long. In the meantime, I am sure that he will be a great champion for the people of Richmond.
Finally, I am sure that the right hon. Gentleman will not mind my disclosing to the House the contents of a letter that he wrote to me this week. My answer to it is clear: yes, I will arrange for him to meet the relevant Minister about the A66, which runs through his constituency.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Prime Minister
I thank my hon. Friend for raising this issue. It is a source of national shame that there are just under 1.3 million households on a social housing waiting list, including, I think, 8,000 in Hackney. The best way to tackle overcrowding and meet housing need is to build the homes this country needs, and that is why we will deliver 1.5 million homes over this Parliament. The Chancellor will set out further details in just a moment.
Ed Davey (Kingston and Surbiton) (LD)
Thank you, Mr Speaker. May I associate myself with your remarks and those of the Prime Minister about the right hon. Member for Richmond and Northallerton (Rishi Sunak), and thank him for his service? I wish him and the whole country a happy Diwali. Despite our political differences, I have always felt a certain kinship with him since the general election, when he was the only other party leader to get as wet as I did. [Laughter.] I am looking forward to debating the Budget with him and the Chancellor shortly, but may I wish him and his family all the best for the future?
Next month’s summit in Baku is a chance for the UK to regain world leadership on climate change—a role disastrously lost under the Conservatives. As this is the final summit before countries must ratchet up their new Paris agreement targets for 2035, will the Prime Minister take this opportunity to seize back world leadership on climate change by committing today to support the targets set out this week by the independent Climate Change Committee and publishing a programme to deliver on them?
The Prime Minister
We will seize that initiative. We have reset on the international stage, and climate is one of the biggest challenges that we face. I will be going to the conference this year, just as I went last year as Leader of the Opposition, to continue those discussions about how we reach the very important targets that we must reach.
Ed Davey
I thank the Prime Minister for his reply. I hope we really can take that world leadership back again.
Another issue on which the UK needs to show urgent leadership is the escalating war in Sudan. Tens of thousands of people have been killed, and 11 million Sudanese have had to flee from their homes. The reports of mass killings and horrifying sexual violence against women are truly stomach-churning. When the UK takes over the presidency of the UN Security Council this Friday, will the Prime Minister make it a priority to secure a new resolution on preventing future atrocities, including a no-fly zone to stop the Iranian drones?
The Prime Minister
I thank the right hon. Gentleman for raising this, because it is an important issue and I do not think we discuss it enough in this House. We continue to see mounting evidence of appalling atrocities against civilians and unacceptable restrictions on humanit-arian access. Working with international partners— including as penholder at the UN Security Council, as he knows—to end the violence, secure humanitarian access and ensure the protection of civilians is a major priority.
Rachael Maskell (York Central) (Lab/Co-op)
The Prime Minister
The scale of poverty that we inherited in this country is truly appalling, with over 4 million children now growing up in low-income families. We will deliver on our manifesto commitment to tackle child poverty, as we did last time in government. We will publish our strategy in the spring.
Carla Denyer (Bristol Central) (Green)
The ICJ has mandated that Israel must ensure access to lifesaving aid in Gaza under article 2 of the genocide convention, yet the Israeli Government have voted to effectively block its delivery. As a human rights lawyer, does the Prime Minister agree that banning UNRWA is a breach of international law? How much more evidence does he need before he calls out what is happening as genocide and acts in line with the UK’s responsibilities as a signatory to the genocide convention?
The Prime Minister
I am very worried and concerned about the decision that has just been taken by the Parliament in relation to UNRWA. There is a humanitarian catastrophe in Gaza, and that decision will only make it much worse, which is why I have expressed my concern about it already, before today, and will continue to do so. It needs to be reversed very quickly indeed. I have never described what is going on in Gaza as genocide, but I do agree that all sides should comply with international law.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
The Prime Minister
This is the second time this has come up this afternoon in Prime Minister’s questions, and I hope that SNP Members are listening good and hard. I am sorry to hear that my hon. Friend’s constituents have been waiting so many years for the medical treatment that they need. We are committed to the NHS, and the Chancellor will have a lot more to say about that in just a moment.
Richard Tice (Boston and Skegness) (Reform)
The Prime Minister
Obviously I will tread carefully in answering this question, Mr Speaker, for the very reasons that you set out at the beginning of this session. It is very important, first and foremost, that in all cases, including the particularly difficult case that the Speaker mentioned earlier, the police and prosecutors are able to do their difficult job. All of us in this House have a choice to make, including both candidates to be the next Tory leader. They can either support the police in their difficult task or they can undermine the police in their difficult task. I know which side I am on.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
The Prime Minister
Homelessness levels are far too high in this country, and we are developing a long-term strategy, working with mayors and local leaders, to end homelessness once and for all. We are taking action to tackle the root causes, which is delivering the biggest increase in social and affordable house building in a generation, and we have picked up where the Conservatives failed by abolishing no-fault evictions, preventing many renters from ending up homeless.
Lincoln Jopp (Spelthorne) (Con)
Lincoln Jopp
Thank you, Mr Speaker. Then we had the national capitulation of the Government over the sovereignty of the Chagos islands, and now we have had the personal humiliation of the Prime Minister at the Commonwealth Heads of Government summit, all of which begs the question: how on earth does the Foreign Secretary still have the full confidence of the Prime Minister?
The Prime Minister
I was intending to say that the hon. Gentleman was an upgrade on his predecessor, who of course drove up mortgages by thousands of pounds, but I withdraw that now.
Ben Goldsborough (South Norfolk) (Lab)
The Prime Minister
I welcome my hon. Friend to his place. Talking of predecessors, no one did more damage to rural constituencies than his nearby predecessor, whose disastrous mini-Budget crashed the economy and hurt his constituents. I note that she has been tweeting her approval of the shadow Chancellor’s attacks on the independent Office for Budget Responsibility, showing that the Conservative party has learned absolutely nothing. More than 12,000 farmers have been forced out of business due to Tory neglect, but we will turn that around. My hon. Friend will hear more about that in the Budget in just a minute.
Helen Morgan (North Shropshire) (LD)
The Prime Minister
I thank the hon. Member for raising this issue. We are all grateful to our veterans for their service in protecting our country. I understand the value of the Veterans’ Orthopaedic Service and the support it provides for veterans. We are committed to ensuring that veterans receive the employment, mental health and housing support they need. The upcoming Budget will set out the changes we will be making.
Jim Dickson (Dartford) (Lab)
The Prime Minister
I am really pleased that, under this Government, Britain has already secured £63 billion-worth of investment, which will be measured in tens of thousands of jobs. Our No. 1 mission is growth, and my hon. Friend will be hearing a lot more about that in a few minutes’ time.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
My constituents Colin and Mandy Mackie’s 18-year-old son, Greg, died after having his soft drink spiked shortly after he went to college. They welcome the fact that this Government will continue with the legislation proposed by the previous Government. Can the Prime Minister assure them and other campaigners that Ministers and officials will work with them not only on bringing forward this legislation, but on raising awareness of this abhorrent practice and its potentially fatal consequences?
The Prime Minister
I thank the right hon. Member for raising this tragic case, and I join him in paying tribute to Greg’s parents. Their tireless work to raise awareness of spiking, to support victims and to call for changes in the law is inspiring, given what they have been through. This Government will act. We will make spiking a specific criminal offence to better protect victims and support the police in tackling these crimes.
Alex Baker (Aldershot) (Lab)
The Prime Minister
I welcome my hon. Friend to her place. She is the first female and first Labour MP for Aldershot, and she is doing a superb job for her constituents. Rushmoor borough council was left with a shortfall of over £19 million over the last four years. The running down of local services has been one of the most painful features of the last 14 years. We will work hand in hand with councils, including on multi-year funding settlements, and with local leaders to develop and make sure the services that are needed are there.
Mr Mark Francois (Rayleigh and Wickford) (Con)
Prime Minister, you mentioned veterans a few minutes ago. As we approach remembrance time, one group of veterans we all owe a great debt to are those who served during the troubles in Northern Ireland. Hundreds were killed and thousands were maimed, by both republican and so-called loyalist bombs. Many of those veterans are now in the autumn of their lives, yet you are proposing to repeal the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023, which was designed in part to protect them from endless investigation and reinvestigation. Why, sir, are you throwing those veterans to the wolves to pander to Sinn Féin?
Mr Speaker
Order. The right hon. Member has been here for a long time—“you” is not me, and I do not want it to be me.
Ways and Means
(1 day, 14 hours ago)
Commons ChamberRead Full debate Read Hansard Text
Financial Statement and Budget Report
(1 day, 14 hours ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before I call the Chancellor of the Exchequer, I would like to make a short statement.
Over the past few days, Ministers have made a series of new policy announcements with significant and wide-ranging implications for the Government’s fiscal policy and for the public finances. It is evident to me that they should have been made in this House in the first instance. The principle is unambiguously set out in paragraph 9.1 of the ministerial code. The premature disclosure of the contents of the Budget has always been regarded as a supreme discourtesy to this House and to all of its democratically elected MP, not to mention to Mr Speaker and the Chairman of Ways and Means—[Interruption.] I really do not need any help.
Let me remind Members on the Treasury Bench that the Budget statement and the ensuing resolutions are
“the most important business of Ways and Means”
in the House, as set out in “Erskine May” paragraph 36.33. I am disappointed by comments made by Government spokespeople believing they can use precedent as an excuse. I am telling them today that they are entirely wrong.
Mr Speaker has always defended the undoubted right of this House, including Members of Opposition parties and Back Benchers from all parts of the House, to be the first to hear major Government policy announcements on behalf of their constituents. As Chairman of Ways and Means, I have responsibility to oversee the House’s consideration of the Budget fairly and impartially, and to ensure hon. Members on both sides of the House have adequate opportunity to hold the Chancellor to account.
Finally, we, collectively, should all remember to respect the Chair, respect our colleagues and respect this House.
Before I call the Chancellor of the Exchequer, I remind hon. Members that copies of the Budget resolutions will be available from the Vote Office in the Members’ Lobby at the end of the Chancellor’s statement, and online. I also remind hon. Members that interventions are not taken during the Chancellor’s statement, nor during the replies of the Leader of the Opposition or the Leader of the Liberal Democrat party.
I call the Chancellor of the Exchequer.
The Chancellor of the Exchequer (Rachel Reeves)
Madam Deputy Speaker, on 4 July, the country voted for change. This Government were given a mandate: to restore stability to our economy and to begin a decade of national renewal; to fix the foundations and deliver change through responsible leadership in the national interest. That is our task, and I know that we can achieve it.
My belief in Britain burns brighter than ever, and the prize on offer is immense. As my right hon. Friend the Prime Minister said on Monday, change must be felt: more pounds in people’s pockets; an NHS that is there when we need it; and an economy that is growing, creating wealth and opportunity for all, because that is the only way to improve living standards. The only way to drive economic growth is to invest, invest, invest. There are no shortcuts, and, to deliver that investment, we must restore economic stability and turn the page on the last 14 years.
This is not the first time that it has fallen to the Labour party to rebuild Britain. In 1945, it was the Labour party that rebuilt our country out of the rubble of the second world war. In 1964, it was the Labour party that rebuilt Britain with the white heat of technology, and, in 1997, it was the Labour party that rebuilt our schools and our hospitals. Today, it falls to this Labour party—to this Labour Government—to rebuild Britain once again. And while this is the first Budget in more than 14 years to be delivered by a Labour Chancellor, it is the first Budget in our country’s history to be delivered by a woman. I am deeply proud to be Britain’s first ever female Chancellor of the Exchequer. To girls and young women everywhere, I say: let there be no ceiling on your ambition, your hopes and your dreams. Along with the pride that I feel standing here today, there is also a responsibility to pass on a fairer society and a stronger economy to the next generation of women.
Madam Deputy Speaker, the Conservative party failed our country: its austerity broke our national health service; its Brexit deal harmed British businesses; and its mini-Budget left families paying the price with higher mortgages. The British people have inherited the Conservative party’s failure: a black hole in the public finances; public services on their knees; a decade of low growth; and the worst Parliament on record for living standards.
Let me begin with the public finances. In July, I exposed a £22 billion black hole at the heart of the previous Government’s plans—a series of promises that they made, but had no money to deliver—covered up from the British people and covered up from this House. The Treasury’s reserve, set aside for genuine emergencies, was spent three times over just three months into the financial year. Today, on top of the detailed document that I provided to the House in July, the Government are publishing a line-by-line breakdown of the £22 billion black hole that we inherited, which shows hundreds of unfunded pressures on the public finances this year, and into the future too.
The Office for Budget Responsibility has published its own review of the circumstances around the spring Budget forecast. It says that the previous Government
“did not provide the OBR with all the information to them”
and that, had the OBR known about these
“undisclosed spending pressures that have since come to light”,
then its spring Budget forecast for spending would have been “materially different”.
Let me be clear: that means that any comparison between today’s forecast and the OBR’s March forecast is false, because the previous Government hid the reality of their public spending plans. Yet at the very same Budget, they made another £10 billion-worth of cuts to national insurance. It was the height of irresponsibility, and they knew it. They had run out of road, and they called an election to avoid making difficult choices. So let me make this promise to the British people: never again will we allow a Government to play fast and loose with the public finances and never again will we allow a Government to hide the true state of our public finances from our independent forecaster. That is why I can today confirm that we will implement in full the 10 recommendations from the independent Office for Budget Responsibility’s review.
The country has inherited not just broken public finances, but broken public services. The British people can see and feel that in their everyday lives: NHS waiting lists at record levels; children in portacabins as school roofs crumble; trains that do not arrive; rivers filled with polluted waste; prisons overflowing; crimes that are not investigated; and criminals who are not punished. That is the country’s inheritance from the Conservative Government. They had no plan to improve our public services and they had no plan to put our public finances on a sustainable footing—quite the opposite.
Since 2021, there have been no detailed plans for departmental spending set out beyond this year, and the previous Government’s plans relied on a baseline for spending this year, which we now know was wrong because it did not take into account the £22 billion black hole. They also failed to budget for costs that they knew would materialise, including funding for vital compensation schemes for victims of two terrible injustices—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I have just spoken about respecting colleagues. The public are watching, and they want to hear what the Chancellor has to say. Simmer down.
Rachel Reeves
I would politely suggest that hon. Members listen to this, because it includes funding for vital compensation schemes for victims of two terrible injustices: the infected blood scandal and the Post Office Horizon scandal.
The Leader of the Opposition rightly made an unequivocal apology for the injustice of the infected blood scandal on behalf of the British state, but he did not budget for the costs of compensation. Today, for the very first time, we will provide specific funding to compensate those infected and those affected in full, with £11.8 billion in this Budget. I am also today setting aside £1.8 billion to compensate victims of the Post Office Horizon scandal—redress that is long overdue for the pain and injustice that they have suffered.
The leadership campaign for the Conservative party has now been going on for over three months, but in all that time there has been not one single apology for what they did to our country. The Conservative party has not changed—but this is a changed Labour party and we will restore stability to our country once again. The scale and seriousness of the situation that we have inherited cannot be underestimated. Together, the hole in our public finances this year, which recurs every year, the compensation schemes that the previous Government did not fund, and their failure to assess the scale of the challenges facing our public services, means that this Budget raises taxes by £40 billion. Any Chancellor standing here today would have to face this reality, and any responsible Chancellor would take action. That is why today I am restoring stability to our public finances and rebuilding our public services.
As a former economist at the Bank of England, I know what it means to respect our economic institutions. I put on record my thanks to the Governor of the Bank, Andrew Bailey, and the independent Monetary Policy Committee. Today, I can confirm that we will maintain the MPC’s target of 2% inflation, as measured by the 12-month increase in the consumer prices index. I thank James Bowler, the permanent secretary to the Treasury, and my team of officials. I also thank my predecessors as Chancellor of the Exchequer for their wise counsel as I have prepared for this Budget. In particular, I thank the former right hon. Member for Spelthorne for his invaluable advice in this weekend’s papers, where he concluded that his mini-Budget “wasn’t perfect”. For once, he and I are in absolute agreement. Finally, I thank Richard Hughes and his team at the Office for Budget Responsibility for their work in preparing today’s economic and fiscal outlook.
Let me take the House through that forecast. The cost of living crisis under the last Government stretched household finances to their limit, with inflation hitting a peak of above 11%. Today, the OBR says that CPI inflation will average 2.5% this year, 2.6% in 2025, 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2.0% in 2029.
Moving on to economic growth, today’s Budget marks an end to short-termism, so I am pleased that, for the first time, the OBR has published not only five-year growth forecasts but a detailed assessment of the growth impacts of our policies over the next decade. The new charter for Budget responsibility, which I am publishing today, confirms that this will become a permanent feature of our framework. The OBR forecasts that real GDP growth will be 1.1% in 2024, 2.0% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028 and 1.6% in 2029. The OBR is clear: this Budget will permanently increase the supply capacity of the economy, boosting long-term growth. [Interruption.] It may sound shocking to Conservative Members, but this Government are boosting long-term economic growth.
Every Budget that I deliver will be focused on our mission to grow the economy, and underpinning that mission are the seven key pillars of our growth strategy, developed and delivered alongside business, and all driven forward by our excellent Financial Secretary to the Treasury. The first and most important is to restore economic stability. That is my focus today. Secondly, increasing investment and building new infrastructure is vital for productivity, so we are catalysing £70 billion of investment through our national wealth fund, and we are transforming our planning rules to get Britain building again. Thirdly, to ensure that all parts of the UK can realise their potential we are working with the devolved Governments and partnering with our mayors to develop local growth plans. Fourthly, to improve employment prospects and skills we are creating Skills England, delivering our plans to make work pay and tackling economic inactivity.
Fifthly, we are launching our long-term modern industrial strategy and expanding opportunities for our small and medium-sized businesses to grow. Sixthly, to drive innovation, we are protecting record funding for research and development to harness the full potential of the UK’s science base. Finally, to maximise the growth benefits of our clean energy mission, we have confirmed key investments, such as carbon capture and storage, to create jobs in our industrial heartlands. Our approach is already having an impact: just two weeks ago, we delivered an international investment summit that saw businesses commit £63.5 billion of investment into our country, creating nearly 40,000 jobs across the United Kingdom. But we cannot undo 14 years of damage in one go. Economic growth will be our mission for the duration of this Parliament.
In our manifesto, we set out the fiscal rules that would guide this Government. I am confirming those today: our stability rule and our investment rule. The stability rule means that we will bring the current Budget into balance so that we do not borrow to fund day-to-day spending. We will meet that rule in 2029-30, until that becomes the third year of the forecast. From then on, we will balance the current Budget in the third year of every Budget, held annually each autumn. That will provide a tougher constraint on day-to-day spending, so that difficult decisions cannot be constantly delayed or deferred. The OBR says that the current Budget will be in deficit by £26.2 billion in 2025-26 and by £5.2 billion in 2026-27, before moving into surplus of £10.9 billion in 2027-28, £9.3 billion in 2028-29 and £9.9 billion in 2029-30, meeting our stability rule two years early.
Monthly public sector finance data show that Government borrowing in the first six months of this year was already running significantly higher than the OBR’s March forecast, and the OBR confirmed today that borrowing in this financial year is now £127 billion, reflecting the inheritance left by the Conservative party. The increase in the net cash requirement in 2024-25 is lower than the increase in borrowing, at £22.3 billion higher than the spring forecast. Because of the action that we are taking, borrowing falls from 4.5% of GDP this year to 2.1% of GDP by the end of the forecast. Public sector net borrowing will be £105.6 billion in 2025-26, £88.5 billion in 2026-27, £72.2 billion in 2027-28, £71.9 billion in 2028-29 and £70.6 billion in 2029-30.
Before I come to tax, it is vital that we are driving efficiency and reducing wasteful spending. In July, to begin dealing with our inheritance, I made £5.5 billion of savings this year. Today we are setting a 2% productivity, efficiency and savings target for all Departments to meet next year by using technology more effectively and joining up services across Government. As set out in our manifesto, I will shortly be appointing our covid corruption commissioner. They will lead our work to uncover those companies that used a national emergency to line their own pockets, because that money belongs in our public services, and taxpayers want it back. I can confirm today that David Goldstone has been appointed chair of the new office for value for money to help us realise the benefits from every pound of public spending.
Today, I am also taking three steps to ensure that welfare spending is more sustainable. First, we inherited the last Government’s plans to reform the work capability assessment. We will deliver those savings as part of our fundamental reforms to the health and disability benefits system that my right hon. Friend the Work and Pensions Secretary will bring forward.
Secondly, I can today announce a crackdown on fraud in our welfare system—often the work of criminal gangs. We will expand the DWP’s counter-fraud teams, using innovative new methods to prevent illegal activity, and provide new legal powers to crack down on fraudsters, including direct access to bank accounts to recover debt. That package saves £4.3 billion a year by the end of the forecast.
Thirdly, the Government will shortly be publishing the “Get Britain Working” White Paper, tackling the root causes of inactivity with an integrated approach across health, education and welfare, and we will provide £240 million for 16 trailblazer projects, targeted at those who are economically inactive and most at risk of being out of education, employment or training, to get people into work and reduce the benefits bill.
Before a Government can consider any change to a tax rate or threshold, they must ensure that people pay what they already owe. We will invest to modernise His Majesty’s Revenue and Customs systems using the very best technology, and recruit additional HMRC compliance and debt staff. We will clamp down on the umbrella companies that exploit workers, increase the interest rate on unpaid tax debt to ensure that people pay on time, and go after the promoters of tax avoidance schemes. Those measures to reduce the tax gap raise £6.5 billion by the end of the forecast, and I thank the Exchequer Secretary to the Treasury for his outstanding work on that agenda.
I know that for working people up and down our country, family finances are stretched and pay cheques do not go as far as they once did, so today I am taking steps to support people with the cost of living. It was the Labour Government who introduced the national minimum wage in 1999. That had a transformative impact on the lives of working people. As promised in our manifesto, we asked the Low Pay Commission to take account of the cost of living for the first time. I can confirm that we will accept the commission’s recommendation to increase the national living wage by 6.7% to £12.21 an hour, worth up to £1,400 a year for a full-time worker. And, for the first time, we will move towards a single adult rate, phased in over time by initially increasing the national minimum wage for 18 to 20-year-olds by 16.3%, as recommended by the Low Pay Commission, taking it to £10 an hour—a Labour policy to protect working people, being delivered by a Labour Government once again.
Secondly, I have heard representations from colleagues across this House, including my hon. Friends the Members for Shipley (Anna Dixon) and for Scarborough and Whitby (Alison Hume), and the right hon. Member for Kingston and Surbiton (Ed Davey), about the carer’s allowance and the impact of the current policy on carers who are looking to increase the hours that they work. Carer’s allowance currently provides up to £81.90 per week to help those with additional caring responsibilities. Today, I can confirm that we are increasing the weekly earnings limit to the equivalent of 16 hours at the national living wage per week—the largest increase in the carer’s allowance since it was introduced in 1976. That means that a carer can now earn over £10,000 a year while receiving carer’s allowance, allowing them to increase their hours where they want to, and keep more of their money. I am also concerned about the cliff edge in the current system and the issue of overpayments. My right hon. Friend the Work and Pensions Secretary has announced an independent review to look at the issue of overpayments, and we will work across the House to develop the right solutions.
Thirdly, we will provide £1 billion from next year to extend the household support fund and discretionary housing payments to help those facing financial hardship with the cost of essentials. Fourthly, having heard representations from the Joseph Rowntree Foundation, the Trussell Trust and others, I will reduce the level of debt repayments that can be taken from a household’s universal credit payment each month from 25% to 15% of their standard allowance. That means that 1.2 million of the poorest households will keep more of their award each month, lifting children out of poverty, and those who benefit will gain an average of £420 a year.
Our plan to make work pay will also protect working people. I know that Conservative Members are deeply interested in our plans. Having seen their colleagues repeatedly dismissed at short notice, I know that they are worried about their future under the right hon. Member for North West Essex (Mrs Badenoch). They should rest easy knowing that our plan will protect working people from unfair dismissal; it will safeguard them from bullying in the workplace; and it will improve their access to paternity and maternity leave. I hope the new shadow Cabinet will soon be grateful for those increased protections at work.
It is right that we protect those who have worked all their lives. In our manifesto, we promised to transfer the investment reserve fund in the mineworkers’ pension scheme to members. I have listened closely to my hon. Friends the Members for Easington (Grahame Morris), for Doncaster Central (Sally Jameson), for Blaenau Gwent and Rhymney (Nick Smith) and for Ayr, Carrick and Cumnock (Elaine Stewart) on this issue. Today, we are keeping our promise, so that working people who powered our country receive the fair pension that they are owed.
Our manifesto committed to the triple lock, meaning that spending on the state pension is forecast to rise by over £31 billion by 2029-30, to ensure our pensioners are protected in their retirement. That commitment means that while working-age benefits will be uprated in line with CPI at 1.7%, the basic and new state pension will be uprated by 4.1% in 2025-26. This means that over 12 million pensioners will gain up to £470 next year, up to £275 more than uprating by inflation. The pension credit standard minimum guarantee will also rise by 4.1%, from around £11,400 per year to around £11,850 a year for a single pensioner.
While I have sought to protect working people with measures to reduce the cost of living, I have had to take some very difficult decisions on tax. I want to set out my approach to fuel duty. Baked into the numbers that I inherited from the previous Government is an assumption that fuel duty will rise in line with the retail prices index next year and that the temporary 5p cut will be reversed. To retain the 5p cut and to freeze fuel duty again would cost over £3 billion next year. At a time when the fiscal position is so difficult, I have to be frank with the House that that is a substantial commitment to make. I have concluded that, in these difficult circumstances, while the cost of living remains high and with a backdrop of global uncertainty, increasing fuel duty next year would be the wrong choice for working people. It would mean fuel duty rising by 7p per litre, so I have decided today to freeze fuel duty next year, and I will maintain the existing 5p cut for another year, too. There will be no higher taxes at the petrol pumps next year.
The last Government made cuts of £20 billion to employees’ and self-employed national insurance in their final two Budgets. Those tax cuts were not honest, because we now know that they were based on a forecast that the OBR says would have been “materially different” had it known the true extent of the last Government’s cover-up. Since July, I have been urged on multiple occasions to reconsider those cuts—to increase the taxes that working people pay and see in their payslips—but I have made an important choice today: to keep every single commitment that we made on tax in our manifesto. I say to working people, I will not increase your national insurance, I will not increase your VAT, and I will not increase your income tax. Working people will not see higher taxes in their payslips as a result of the choices I am making today. That is a promise made and a promise fulfilled.
Any responsible Chancellor would need to make difficult decisions today to raise the revenues required to fund our public services and restore economic stability. So in today’s Budget, I am announcing an increase in employers’ national insurance contributions. We will increase the rate of employers’ national insurance by 1.2 percentage points to 15% from April 2025, and we will reduce the secondary threshold—the level at which employers start paying national insurance on each employee’s salary—from £9,100 a year to £5,000. This will raise £25 billion per year by the end of the forecast period. I know that this is a difficult choice; I do not take this decision lightly. We are asking businesses to contribute more, and I know that there will be impacts of this measure felt beyond businesses, too, as the OBR has set out today. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Our constituents are watching—they need to be able to hear the Chancellor. Simmer down.
Rachel Reeves
In the circumstances I have inherited, it is the right choice to make. Successful businesses depend on successful schools, healthy businesses depend on a healthy NHS, and a strong economy depends on strong public finances. If the Conservative party chooses to oppose this choice, it is choosing more austerity, more chaos and more instability. That is the choice our country faces, too.
As I make this choice, I know it is particularly important to protect our smallest companies. Having heard representations from the Federation of Small Businesses and others, I am today increasing the employment allowance from £5,000 to £10,500. This means that 865,000 employers will not pay any national insurance at all next year, and over 1 million will pay the same or less than they did previously. This will allow a small business to employ the equivalent of four full-time workers on the national living wage without paying any national insurance on their wages.
Let me now come to capital gains tax. We need to drive growth, promote entrepreneurship and support wealth creation while raising the revenue required to fund our public services and restore our public finances. Today, we will increase the lower rate of capital gains tax from 10% to 18% and the higher rate from 20% to 24%, while maintaining the rates of capital gains tax on residential property at 18% and 24%. This means that the UK will still have the lowest capital gains tax rate of any European G7 economy.
Alongside these changes to the headline rates of capital gains tax, we are maintaining the lifetime limit for business asset disposal relief at £1 million to encourage entrepreneurs to invest in their businesses. Business asset disposal relief will remain at 10% this year before rising to 14% in April 2025 and to 18% from 2026-27, maintaining a significant gap compared with the higher rate of capital gains tax. Together, the OBR says that these measures will raise £2.5 billion by the end of the forecast.
In a sign of this Government’s commitment to supporting growth and entrepreneurship, we have already extended the enterprise investment and venture capital trust schemes to 2035, and we will continue to work with leading entrepreneurs and venture capital firms to ensure that our policies support a positive environment for entrepreneurship in the UK.
Next, I turn to inheritance tax. Only 6% of estates will pay inheritance tax this year. I understand the strongly held desire to pass down savings to children and grandchildren, so I am taking a balanced approach in my package today. First, the previous Government froze inheritance tax thresholds until 2028. I will extend that freeze for a further two years, until 2030. That means that the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants and £1 million when a tax-free allowance is passed to a surviving spouse or civil partner.
Secondly, we will close the loophole created by the previous Government, made even bigger when the lifetime allowance was abolished, by bringing inherited pensions into inheritance tax from April 2027. Finally, we will reform agricultural property relief and business property relief. From April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax at all, but for assets over £1 million, inheritance tax will apply with a 50% relief at an effective rate of 20%. This will ensure that we continue to protect small family farms, with three quarters of claims unaffected by these changes.
I can also announce that we will apply a 50% relief in all circumstances on inheritance tax for shares on the alternative investment market and other similar markets, setting the effective rate of tax at 20%. Taken together, these measures raise over £2 billion by the final year of the forecast.
Next, I can confirm that the Government will renew the tobacco duty escalator for the remainder of this Parliament at RPI+2%, increase duty by a further 10% on hand-rolling tobacco this year, and introduce a flat-rate duty on all vaping liquid from October 2026, alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking. We will increase the soft drinks industry levy to account for inflation since it was introduced, as well as increasing the duty in line with CPI each year going forward. These measures will raise nearly £1 billion per year by the end of the forecast period.
We want to support the take-up of electric vehicles, so I will maintain the incentives for electric vehicles in company car tax from 2028 and increase the differential between fully electric and other vehicles in the first-year rates of vehicle excise duty from April 2025. These measures will raise around £400 million by the end of the forecast period.
Let me update the House on our plans for air passenger duty—and I can see the Leader of the Opposition’s ears have pricked up. Air passenger duty has not kept up with inflation in recent years, so we are introducing an adjustment, meaning an increase of no more than £2 for an economy class short-haul flight. But I am taking a different approach when it comes to private jets, increasing the rate of air passenger duty by a further 50%. That is equivalent to £450 per passenger for a private jet to, say, California. [Laughter.]
Let us now turn to our high street businesses. I know that, for them, a major source of concern is business rates. From 2026-27, we intend to introduce two permanently lower tax rates for retail, hospitality and leisure properties, which make up the backbone of our high streets across the country, and it is our intention that it is paid for by a higher multiplier for the most valuable properties. The previous Government created a cliff edge next year, as temporary reliefs end, so I will today provide 40% relief on business rates for the retail, hospitality and leisure industry in 2025-26 up to a cap of £110,000 per business. Alongside this, the small business tax multiplier will be frozen next year.
Next, I can confirm that alcohol duty rates on non-draught products will increase in line with RPI from February next year. However, nearly two thirds of alcoholic drinks sold in pubs are served on draught, so today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7%—[Hon. Members: “Hear, hear!”]—which means a penny off the pint in the pub.
Alongside the changes I am making today, I am publishing a corporate tax road map, providing the business certainty called for by the CBI, the British Chambers of Commerce and the Institute of Directors. This confirms our commitment to cap the rate of corporation tax at 25%—the lowest in the G7—for the duration of this Parliament, while maintaining full expensing and the £1 million annual investment allowance, and keeping the current rates of research and development relief to drive innovation.
In our manifesto, we made a number of commitments to raising funding for our public services. First, I have always said that if you make Britain your home, you should pay your taxes here, too, so today I can confirm that we will abolish the non-dom tax regime, and we will remove the outdated concept of domicile from the tax system from April 2025. We will introduce a new, residence-based scheme, with internationally competitive arrangements for those coming to the UK on a temporary basis, while closing the loopholes in the scheme designed by the Conservative party. To further encourage investment into the UK, we will extend the temporary repatriation relief to three years and expand its scope, bringing billions of pounds of new funds into Britain. The independent Office for Budget Responsibility says that this package of measures will raise £12.7 billion over the next five years.
The fund management industry provides a vital contribution to our economy, but as our manifesto set out, there needs to be a fairer approach to the way that carried interest is taxed, so we will increase the capital gains rates on carried interest to 32% from April 2025, and from April 2026 we will deliver further reform to ensure that the specific rules for carried interest are simpler, fairer and better targeted.
In our manifesto, we committed to reforming stamp duty land tax to raise revenues, while supporting those buying their first home. We are increasing the stamp duty land tax surcharge for second homes, known as the higher rate for additional dwellings, by 2 percentage points to 5%, which will come into effect from tomorrow. This will support over 130,000 additional transactions from people buying their first home or moving home over the next five years.
Next, we are committed to reforming the energy profits levy on oil and gas companies. I can confirm today that we will increase the rate of the levy to 38%. The levy will now expire in March 2030, and we will remove the 29% investment allowance. To ensure that the oil and gas industry can protect jobs and support our energy security, we will maintain the 100% first-year allowances, and the decarbonisation allowances, too.
Finally, 94% of children in the UK attend state schools. To provide the highest-quality support and teaching that they deserve, we will introduce VAT on private school fees from January 2025, and we will shortly introduce legislation to remove their business rates relief from April 2025, too.
We said in our manifesto that these changes, alongside our measures to tackle tax avoidance, would bring in £8.5 billion in the final year of the forecast. I can confirm today that they will in fact raise over £9 billion to support our public services and restore our public finances. That is a promise made and a promise fulfilled.
I have one final decision to announce on tax today. The previous Government froze income tax and national insurance thresholds in 2021, and then did so again after the mini-Budget. Extending their threshold freeze for a further two years raises billions of pounds—money to deal with the black hole in our public finances and repair our public services. Having considered the issue closely, I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips. I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax and national insurance thresholds beyond the decisions made by the previous Government. From 2028-29, personal tax thresholds will be uprated in line with inflation once again. When it comes to choices on tax, this Government choose to protect working people every single time.
Those are the choices I have made to restore economic stability and protect working people. My next choice is to begin to repair our public services. In recent months, we conducted the first phase of the spending review to set departmental budgets for 2024-25 and 2025-26. I thank my right hon. Friend the Chief Secretary to the Treasury for his tireless work with colleagues from across Government. Because I have taken difficult decisions on tax today, I am able to provide an injection of immediate funding over the next two years to stabilise and support our public services.
The next phase of the spending review will report in late spring, and I have set out the overall envelope today. Day-to-day spending from 2024-25 onwards will grow by 1.5% in real terms, and today departmental spending, including capital spending, will grow by 1.7% in real terms. At the election, we promised that there would be no return to austerity, and today we deliver on that promise, but given the scale of the challenge that we face in our public services, there will still be difficult choices in the next phase of the spending review. Just as we cannot tax and spend our way to prosperity, neither can we simply spend our way to better public services. We will deliver a new approach to public service reform, using technology to improve public services and taking a zero-based approach, so that taxpayers’ money is spent as effectively as possible, and so that we focus on delivering our key priorities.
In the first phase of the spending review, I have prioritised day-to-day funding to deliver on our manifesto commitments. I want every child to have the very best start in life, and the best possible start to their school day. I know that my right hon. Friend the Secretary of State for Education shares my ambition, so today I am tripling investment in breakfast clubs to fund them in thousands of schools. I am increasing the core schools budget by £2.3 billion next year to support our pledge to hire thousands more teachers in key subjects. So that our young people can develop the skills that they need for the future, I am providing an additional £300 million for further education. Finally, this Government are committed to reforming special educational needs provision, to improve outcomes for our most vulnerable children and ensure that the system is financially sustainable. To support that work, I am today providing a £1 billion uplift in funding—a 6% real-terms increase from this year.
There is no more important job for Government than keeping our country safe, and we are conducting a strategic defence review, to be published next year. As set out in our manifesto, we will set a path to spending 2.5% of GDP on defence at a future fiscal event. Today, I am announcing a total increase in the Ministry of Defence’s budget of £2.9 billion next year, ensuring that the UK comfortably exceeds our NATO commitments, and providing guaranteed military support to Ukraine of £3 billion per year for as long as it takes. Last week, alongside my right hon. Friend the Defence Secretary, I announced, in addition to that, further support for Ukraine, on top of our NATO commitment. That support comes through our £2.26 billion contribution to the G7’s extraordinary revenue acceleration agreement. That will be repaid using profits from immobilised Russian sovereign assets.
As we approach Remembrance Sunday, it is vital that we take time to remember those who have served our country so bravely. I am today announcing funding to commemorate the 80th anniversary of VE and VJ Day next year, to honour those who served at home and abroad. We must also remember those who experienced the atrocities of the Nazi regime at first hand. I would like to pay tribute to Lily Ebert, the Holocaust survivor and educator who passed away aged 100 earlier this month. I am today committing a further £2 million for Holocaust education next year, so that charities such as the Holocaust Educational Trust can continue their work to ensure that those vital testimonies are not lost, and are preserved for the future.
To repair our public services, we need to work alongside our mayors and local leaders. We will deliver a significant, real-terms funding increase for local government next year, including £1.3 billion of additional grant funding to deliver essential services, with at least £600 million in grant funding for social care and £230 million to tackle homelessness and rough sleeping. We are today confirming that Greater Manchester and the West Midlands will be the first mayoral authorities to receive integrated settlements from next year, giving mayors meaningful control of funding for their local areas. To support our high streets, we are taking action to deal with the sharp rise in shoplifting that we have seen in recent years. We will scrap the effective immunity for low-value shoplifting introduced by the Conservative party, and having listened closely to organisations such as the British Retail Consortium and the trade union USDAW, I am providing additional funding to crack down on the organised gangs that target retailers, and to provide more training for our police officers and retailers, in order to stop shoplifting in its tracks.
Finally, I am today providing funding to support public services and drive growth across Scotland, Wales, and Northern Ireland. Having discussed the matter with the First Minister of Wales, Eluned Morgan, my hon. Friend the Under-Secretary of State for Wales (Dame Nia Griffith), and my hon. Friend the Under-Secretary of State for Justice (Alex Davies-Jones), I am today providing £25 million to the Welsh Government next year for the maintenance of coal tips, to ensure that we keep our communities safe. To support growth, including in our rural areas, we will proceed with city and growth deals in Northern Ireland, in Causeway Coast and Glens, and the Mid South West. We will drive growth in Scotland, which is a key priority for Scottish Labour and our leader, Anas Sarwar, including through a city and growth deal in Argyll and Bute.
This Budget provides the devolved Governments with the largest real-terms funding settlement since devolution, delivering an additional £3.4 billion to the Scottish Government through the Barnett formula—funding that must now be used effectively in Scotland to deliver the public services that the people of Scotland deserve. This Budget also provides £1.7 billion to the Welsh Government, and £1.5 billion to the Northern Ireland Executive in 2025-26. I said there would be no return to austerity; that is the choice I have made today.
To rebuild our country, we need to increase investment. The UK lags behind every other G7 country when it comes to business investment as a share of our economy. That matters. It means that the UK has fallen behind in the race for new jobs, new industries, and new technology. By restoring economic stability, and by establishing the national wealth fund to catalyse private funding, we have begun to create the conditions that businesses need to invest, but there is also a significant role for public investment. For too long, we have seen Conservative Chancellors cut investment and raid capital budgets to plug gaps in day-to-day spending. The result is clear for all to see: hospitals without the equipment they need; school buildings not fit for our children; a desperate lack of affordable housing; and economic growth held back at every turn. Under the plans I inherited, public investment was set to fall from 2.5% to 1.7% of GDP, but in Washington last week, the International Monetary Fund was clear: more public investment is badly needed in the UK.
Having listened to the case made by the former Governor of the Bank of England, Mark Carney, the former Treasury Minister, Jim O’Neill and the former Cabinet Secretary, Gus O’Donnell, among others, I am confirming our investment rule. As was set out in our manifesto, we will target debt falling as a share of the economy. Debt will be defined as public sector net financial liabilities—or net financial debt, for short. That metric has been measured by the Office for National Statistics since 2016 and forecast by the Office for Budget Responsibility since that date, too.
Net financial debt recognises that Government investment delivers returns for taxpayers by counting not just the liabilities on a Government’s balance sheet, but the financial assets, too. That means we count the benefits of that investment, not just the costs, and we free up our institutions to invest, just as they do in Germany, France and Japan. Like our stability rule, our investment rule will apply in 2029-30, until that becomes the third year of the forecast. From that point onwards, net financial debt will fall in the third year of every forecast. Today, the OBR says that we are already meeting our target two years early, with net financial debt falling by 2027-28 and £15.7 billion of headroom in the final year.
So that we drive the right incentives in Government investments, we will introduce four key guardrails to ensure capital spending is good value for money and drives growth in our economy. First, our portfolio of new financial investments will be delivered by expert bodies, such as the national wealth fund, and must by default earn a rate of return at least as large as that on gilts. Secondly, we will strengthen the role of institutions to improve infrastructure delivery. Thirdly, we will improve certainty, setting capital budgets for five years and extending them at spending reviews every two years. Finally, we will ensure greater transparency for capital spending, with robust annual reporting of financial investments based on accounts audited by the National Audit Office and made available to the Office for Budget Responsibility at every forecast. Taken together with our stability rule, these fiscal rules will ensure that our public finances are on a firm footing, while enabling us to invest prudently alongside business.
The capital plans I now set out to drive growth across our country and repair the fabric of our nation are possible only because of our investment rule. Let me set out those investment plans. Today, we are confirming our plans to capitalise the national wealth fund to invest in the industries of the future, from gigafactories to ports to green hydrogen. Building on those investments, my right hon. Friend the Business Secretary is driving forward our modern industrial strategy, working with businesses and organisations such as Make UK to set out the sectors with the biggest growth potential. Today, we are confirming multi-year funding commitments for these areas of our economy, including nearly £1 billion for the aerospace sector to fund vital research and development, building on our industry in the east midlands, the south-west and Scotland; more than £2 billion for the automotive sector to support our electric vehicle industry and develop our manufacturing base, building on our strengths in the north-east and the west midlands; and up to £520 million for a new life sciences innovative manufacturing fund.
For our world-leading creative industries, we will legislate to provide additional tax relief for visual effect costs in TV and film, and we are providing £25 million for the North East combined authority, which it plans to use to remediate the Crown Works Studios site in Sunderland, creating 8,000 new jobs.
To unlock these growth industries of the future, we will protect Government investment in research and development, with more than £20 billion-worth of funding. This includes at least £6.1 billion to protect core research funding for areas such as engineering, biotechnology and medical science through Research England, other research councils and the national academies. We will extend the innovation accelerators programme in Glasgow, Manchester and the west midlands. With more than £500 million of funding next year, my right hon. Friend the Secretary of State for Science, Innovation and Technology will continue to drive progress in improving reliable, fast broadband and mobile coverage across our country, including in rural areas.
We committed in our manifesto to build 1.5 million homes over the course of this Parliament, and my right hon. Friend the Deputy Prime Minister is driving that work forward across government. Today, I am providing more than £5 billion of Government investment to deliver our plans on housing next year. We will increase the affordable homes programme to £3.1 billion, delivering thousands of new homes. We will provide £3 billion-worth of support in guarantees to boost the supply of homes and support our small house builders. We will provide investment to renovate sites across our country, including at Liverpool Central Docks, where we will deliver 2,000 new homes, and funding to help Cambridge realise its full growth potential.
Alongside this investment, we will put the right policies in place to increase the supply of affordable housing. Having heard representations from local authorities, social housing providers and Shelter, I can today confirm that the Government will reduce right-to-buy discounts and that local authorities will be able to retain the full receipts from any sales of social housing, so that we can reinvest them back into housing stock and into new supply. By doing that, we will give more people a safe, secure and affordable place to live.
We will provide stability to social housing providers with a social housing rent settlement of CPI plus 1% for the next five years, and we will deliver on our manifesto commitment to hire hundreds of new planning officers to get Britain building again. We will also make progress on our commitment to accelerate the remediation of homes, following the findings of the Grenfell inquiry, with £1 billion of investment to remove dangerous cladding next year.
The last Government made a number of promises on transport, but failed to fund them. Working with my right hon. Friend the Transport Secretary, I am changing that. We are today securing the delivery of the trans-Pennine upgrade to connect York, Leeds, Huddersfield and Manchester, delivering fully electric local and regional services between Manchester and Stalybridge by the end of this year, with a further electrification of services between Church Fenton and York by 2026, to help grow our economy across the north of England with faster and more reliable services.
We will deliver East West Rail to drive growth between Oxford, Milton Keynes and Cambridge, with the first services running between Oxford, Bletchley and Milton Keynes next year, and trains between Oxford and Bedford running from 2030. We are delivering railway schemes that improve journeys for people across our country, including upgrades at Bradford Forster Square station, improving capacity at Manchester Victoria and electrifying the Wigan to Bolton line.
My right hon. Friend the Transport Secretary has also set out a plan for how to get a grip of HS2. Today, we are securing delivery of the project between Old Oak Common and Birmingham, and we are committing the funding required to begin tunnelling work to London Euston station. That will catalyse private investment into the local area, delivering jobs and growth.
I am also funding significant improvements to our road network. For too long, potholes have been an all-too-visible reminder of our failure to invest as a nation. Today that changes, with a £500 million increase in road maintenance budgets next year—more than delivering on our manifesto commitment to fix an additional 1 million potholes each year. We will provide over £650 million of local transport funding to improve connections across our country, in towns such as Crewe and Grimsby and in our villages and rural areas from Cornwall to Cumbria. While the previous Government’s policy was for the bus fare cap to end this December, we understand how important bus services are for our communities, so we will extend the cap for a further year, setting it at £3 until December 2025. Finally, we will deliver £1.3 billion of funding to improve connectivity in our city regions, funding projects such as the Brierley Hill metro extension in the west midlands, the renewal of the Sheffield Supertram, and West Yorkshire mass transit, including in Bradford and Leeds.
To bring new jobs to Britain and drive growth across our country, we are delivering our mission to make Britain a clean energy superpower, led by my right hon. Friend the Energy Secretary. Earlier this month, we announced a significant multi-year investment between Government and business in carbon capture and storage, creating 4,000 jobs across Merseyside and Teesside. Today, I am providing funding for 11 new green hydrogen projects across England, Scotland and Wales—they will be among the first commercial-scale projects anywhere in the world—including in Bridgend, East Renfrewshire and Barrow-in-Furness. We are kick-starting the warm homes plan by confirming an initial £3.4 billion over the next three years to transform 350,000 homes, including a quarter of a million low-income and social homes, and we will establish GB Energy, providing funding next year to set it up at its new home in Aberdeen.
Overall, we will invest an additional £100 billion over the next five years in capital spending—that is possible only because of our investment rule. The OBR says today that this investment will drive growth across our country in the next five years and, in the longer term, increase GDP by up to 1.4%. It will crowd in private investment, meaning more jobs and more opportunities in every corner of the UK. That is the choice that I have made: to invest in our country and to grow our economy.
Today, I am setting out two final areas in which investment is so badly needed to repair the fabric of our nation. My hon. Friend the Member for Lewisham West and East Dulwich (Ellie Reeves) and I joined the Labour party because of the condition of our schools in the 1980s and 1990s under Conservative Governments. When we were at secondary school, my sixth form was a couple of prefab huts in the playground. My school, like so many others, was rebuilt by the last Labour Government, but after 14 years of Tory government, progress has gone backwards: school roofs are crumbling and millions of children are facing the same backdrop as I did. I will be the Chancellor who changes that.
Today, I am providing £6.7 billion of capital investment to the Department for Education next year—a 19% real-terms increase on this year. That includes £1.4 billion to rebuild over 500 schools in the greatest need, including St Helen’s primary school in Hartlepool, Mercia academy in Derby and so many more across our country. We will provide £2.1 billion more to improve school maintenance—£300 million more than this year—ensuring that all our children can learn somewhere safe. That will include dealing with reinforced autoclaved aerated concrete-affected schools in the constituencies of my hon. Friends the Members for Watford (Matt Turmaine), for Stourbridge (Cat Eccles) and for Hyndburn (Sarah Smith) and beyond, alongside investment in new teachers and funding for thousands of new breakfast clubs. This Government are giving our children and young people the opportunities that they deserve.
I come to our most cherished public service of all: our NHS. My right hon. Friend the Health Secretary is beginning to repair the damage of the last 14 years. In our first week in office, he commissioned an independent report into the state of our health service by Lord Darzi. Its conclusions were damning. While our NHS staff do a remarkable job, and we thank them for it, it is clear that in so many areas we are moving in the wrong direction. A hundred thousand infants waited over six hours in A&E last year. Three hundred and fifty thousand people are waiting a year for mental health support. Cancer deaths here are higher than in other countries. It is simply unforgiveable.
In the spring, we will publish a 10-year plan for the NHS to deliver a shift from hospital to community, from analogue to digital and from sickness to prevention. Today, we are announcing a down payment on that plan to enable the NHS to deliver 2% productivity growth next year. These reforms are vital, but we should be honest: the state of the NHS that we inherited after—I quote Lord Darzi—
“the most austere decade since the NHS was founded”
means that reform must come alongside investment. So today, because of the difficult decisions that I have taken on tax, welfare and spending, I can announce that I am providing a £22.6 billion increase in the day-to-day health budget and a £3.1 billion increase in the capital budget over this year and next. This is the largest real-terms growth in day-to-day NHS spending outside of covid since 2010.
Let me set out what this funding is delivering. Many NHS buildings have been left in a state of disrepair, so we will provide £1 billion of health capital investment next year to address the backlog of repairs and upgrades across our NHS. To increase capacity for tens of thousands more procedures next year, we will provide a further £1.5 billion for new beds in hospitals across our country, new capacity for over a million additional diagnostic tests, and new surgical hubs and diagnostic centres so that people waiting for their treatment can get it as quickly as possible.
My right hon. Friend the Health Secretary will be setting out further details of his review into the new hospital programme in the coming weeks and publishing in the new year, but I can tell the House today that work will continue at pace to deliver those seven hospitals affected by the RAAC crisis, including West Suffolk hospital in Bury St Edmunds and Leighton hospital in Crewe. And finally, because of this record injection of funding, the thousands of additional beds that we have secured and the reforms that we are delivering in our NHS, we can now begin to bring waiting lists down more quickly and move towards our target for waiting times to be no longer than 18 weeks by delivering on our manifesto commitment for 40,000 extra hospital appointments a week. That is the difference that this Labour Government are making.
The choices I have made today are the right choices for our country—to restore stability to our public finances, to protect working people, to fix our NHS and to rebuild Britain. That does not mean these choices are easy, but they are responsible. If the Conservatives disagree with the choices that I have made, they must answer: what choices would they make? Would they again choose the path of irresponsibility—the path taken by Liz Truss—and ignore the problems in our public finances all together? If that is their choice, they should say so. But let me be clear: if they disagree with my choices on tax, they would not be able to protect working people. If they disagree with our plans to fund public services, they would have to cut schools and hospitals. If they disagree with our investment rule, they would have to delay or cancel thousands of projects that drive growth across our country.
This is a moment of fundamental choice for Britain. I have made my choices—the responsible choices—to restore stability to our country and to protect working people. More teachers in our schools, more appointments in our NHS, more homes being built, fixing the foundations of our economy, investing in our future, delivering change and rebuilding Britain. We on the Government Benches commend those choices, and I commend this statement to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Value added tax (private school fees) (motion no. 34);
(b) Stamp duty land tax (additional dwellings: purchases before 1 April 2025) (motion no. 35);
(c) Stamp duty land tax (purchases by companies) (motion no. 37);
(d) Rates of tobacco products duty (motion no. 46).—(Rachel Reeves.)
Question agreed to.
Madam Deputy Speaker (Ms Nusrat Ghani)
We come now to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on the succeeding days. The questions on this motion and the remaining motions will be put at the end of the Budget debate on Wednesday 6 November.
Budget Resolutions
(1 day, 14 hours ago)
Commons ChamberRead Full debate Read Hansard Text
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Leader of the Opposition.
Rishi Sunak (Richmond and Northallerton) (Con)
On the day that the Prime Minister took office, he said that he wanted to restore trust to British politics with action, not words. Today, his actions speak for themselves, with a Budget that contains broken promise after broken promise and reveals the simple truth that the Prime Minister and the Chancellor have not been straight with the British people. Time and again, we Conservatives warned that a Labour Government would tax, borrow and spend far beyond what they were telling the country, and time and again they denied they had such plans. Today, the truth has come out—proof that Labour planned to do this all along. Today’s Budget sees the fiscal rules fiddled, borrowing increased by billions of pounds, inflation-busting handouts for the trade unions—[Interruption.]
Madam Deputy Speaker
Order. Just as we respected the Chancellor and heard her speak, we will hear the Leader of the Opposition.
Rishi Sunak
Britain’s poorest pensioners squeezed, welfare spending out of control and a spree of tax rises that the Government promised the working people of this country they would not do. National insurance—up. Capital gains tax—up. Inheritance tax—up. Energy taxes —up. Business rates—up. First time buyer’s stamp duty—up. Pensions tax—up. They have fiddled the figures. [Interruption.]
Madam Deputy Speaker
Order. The public will also want to hear what the Leader of the Opposition has to say. Those who I see shouting will not be called to speak later on. Simmer.
Rishi Sunak
Labour Members do not like it, but this is the truth: they have fiddled the figures and raised tax to record levels. They have broken their promises, and it is the working people of this country who will pay the price.
The Chancellor and Prime Minister have tried to say that they had no choice, but let us be in no doubt: their misleading claims about the state of the economy are nothing but a cynical political device. Today’s situation is a world away from the genuinely bleak legacy that we Conservatives inherited from the last Labour Government. The Chancellor forgot to point out that borrowing was £1 in every £4 that they spent, with debt rising every year and unemployment at 8%. I understand the Chancellor’s shameless political motivations and why it suits her to cook up a false justification for her agenda, but today, the OBR has declined to back up her claims of a fictional £22 billion black hole. It appears nowhere in its report. It is deeply disappointing that she has sought to politicise the independent OBR, which should be above party politics.
As the Chancellor now knows, her playing politics has done real damage to our economy. She talked about being a Bank of England economist, but the Bank of England’s former chief economist has said that Labour’s approach has generated fear, foreboding and uncertainty among consumers, businesses and investors. The rhetoric of this Chancellor and this Prime Minister is damaging the British economy for political purposes.
We need only to look at the facts to see that the Chancellor’s claims about her economic inheritance are nonsense. Labour inherited an economy with inflation back at its 2% target, mortgage rates cut and unemployment low. When we left office, the United Kingdom was the fastest growing advanced economy in the world. When it comes to the public finances, not once has the Chancellor acknowledged that we took the right decision to spend half a trillion pounds to protect the British people from the impact of covid and Putin’s war. Let me remind the House that not only did the Labour party support all those interventions, it wanted us to go even further. When I made the tough choices to fix the public finances afterwards, the Prime Minister and Chancellor opportunistically opposed me every step of the way, so I will take no lectures from those two about difficult decisions. But because of the decisions we made, the Chancellor inherited lower borrowing than France, America, Italy and Japan, and the second-lowest debt in the entire G7. Any which way you look at it, Labour’s claims about its inheritance are purely ludicrous. These are her choices, so stop blaming everyone else and take responsibility for them. [Interruption.]
Let me turn to the substance of those choices. During the election, the Chancellor repeatedly promised that her plans were fully funded. Only a few weeks ago, the Prime Minister said the Budget would “balance the books”, but this Budget does no such thing and reveals that they have not been straight with the British people. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I can see you even when you are hiding behind another colleague. Yelling across the Chamber is not on. The public—our constituents—are watching. I know emotions are high and I expect some noise, but I will definitely call you out.
Rishi Sunak
Today, the Chancellor has launched an enormous borrowing spree, saddling our children and grandchildren with billions upon billions of pounds of more debt, pushing up interest rates, leaving our economy more exposed to future shocks and leading the OBR today to now forecast higher inflation in every year of the forecast. Her decision to let borrowing rip makes a total nonsense of her claims on the state of the public finances. If they truly were in such a dire state, as she has said, what we should have seen today is a significant reduction in borrowing to repair them, not the splurge she has just unleashed. Instead, what we see is borrowing higher in every year of the forecast and debt higher in every year of the forecast.
Now, the Chancellor has tried to cover up that splurge by fiddling the fiscal rules. According to the Institute for Fiscal Studies, the new measure will not actually even be a constraint on the amount she can borrow. It says it is:
“hard to escape the suspicion”
that the Government are attracted to this change
“by the fact that it would allow for significantly more borrowing…without any need for tough choices elsewhere.”
“Fiscal fiddling” is what it has called it. The Chancellor herself actually agrees. She specifically told the British people she would not change the debt target. She said she was
“not going to fiddle the figures”
to get better results, but that is exactly what she has done. She has gone back on her word and fiddled the figures so she can borrow billions more—broken promise after broken promise, and working people will pay the price.
The reason the Chancellor has increased borrowing and increased taxes is because she has totally failed to grip public spending. First, she has no meaningful plan to deliver the £20 billion-worth of savings available if the public sector simply returned to its pre-pandemic levels of productivity. Instead, one of the first things the Chancellor did was to hand out inflation-busting pay rises to the unions without getting any productivity-enhancing reforms in return. The Chancellor also scrapped her predecessor’s plan to get the civil service back to its pre-pandemic numbers. She does not seem to think that the civil service can be reduced by a single person.
And the Chancellor has no plan to control welfare spending. Yet if we simply got working age welfare spending on people with a disability or health condition back to pre-covid levels, that would free up £30 billion-worth of savings. Whether it is scrapping our plans to shrink the civil service or their failure to control welfare spending, this is not her inheritance, these are her choices. The result: higher spending, higher borrowing, higher taxes. It is broken promise after broken promise, and working people paying the price.
Let me turn next to growth, and remind the Prime Minister and Chancellor that they did, in fact, inherit the fastest-growing economy in the G7. That is testament to the last Government boosting investment by introducing full expensing, increasing the labour supply by expanding childcare, reforming welfare and cutting tax on work—all decisions the OBR said would increase growth. The Chancellor has said that growing the economy is the Government’s No. 1 priority. The Prime Minister even said that higher growth would come “very quickly”.
To be fair, the Prime Minister and Chancellor have had a rapid impact on growth. As their plans for the economy became clear, survey after survey showed business confidence plummeting. No wonder the Government’s own assessment says their French-style labour laws will impose a £5 billion—[Interruption.] Labour Members will be explaining it to the businesses in their constituencies that their labour laws, by their own assessment, will impose a £5 billion direct cost on business, disproportionately hitting smaller businesses. As business group after business group has pointed out, the tax rises on jobs and enterprise in today’s Budget will “hobble growth”—a “poll tax on business” is what they have called it. Despite the record-breaking tax rises, despite fiddling the figures and despite letting borrowing soar, today the OBR has forecast that growth will be lower under this Government than it was forecast to be under the Conservatives. That is the change they have wrought.
This is what happens when the Labour party is led by people who have no experience of business and enterprise: relentlessly talking down our economy, delivering a tidal wave of anti-business regulations, destroying our flexible labour market and raising taxes to the highest level in our country’s history. It is the classic Labour agenda: higher taxes, higher borrowing, no plan for growth, and working people paying the price.
During the election campaign, the Prime Minister specifically said there would be no tax surprises under Labour. The Chancellor went even further, saying she wanted to bring taxes down. Each time they made those promises, we warned that they were not telling the truth. Today, the Chancellor and Prime Minister have done what they were always planning to do, but chose to keep hidden from the British people. Far from reducing taxes, as a result of today’s Budget never in the history of our country have taxes been higher than they are under this Labour Government. They specifically promised that they would not raise tax on working people. The Chancellor said:
“Labour will not put up your income tax, national insurance or VAT.”
Just this month, the Prime Minister gave an “absolute commitment” to not raising tax on working people. What does today’s Budget do? It raises tax on working people by increasing national insurance and breaking Labour’s promise.
As the independent Institute for Fiscal Studies has said, this is a straightforward breach of Labour’s manifesto, because, as the Office for Budget Responsibility has made clear, this tax rise is “passed through entirely” to working people. Even since the Chancellor started speaking, the IFS has already confirmed that the vast majority of this tax increase will hit working people through lower pay. However, we do not need to take it from the IFS or even the OBR; we can take it from the Chancellor herself. She has previously described her tax rise as a “jobs tax” which
“takes money out of people’s pockets”.—[Official Report, 19 October 2021; Vol. 701, c. 675.]
And not only that—the Chancellor also said that the problem with national insurance
“is that it is a tax purely on people who go to work and those who employ them”.
Far from protecting working people, she is literally raising the only major tax that exclusively hits working people.
But it does not stop there. Businesses on the British high street: your taxes are going up. Businesses investing in British energy: your taxes are going up. The small business owner looking to reap the rewards of years spent growing a business and creating jobs: your taxes are going up. The young couple saving to buy their first home: your taxes are going up. The family—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Streeting, you promised me this morning. Let us try and keep our promises.
Rishi Sunak
I am sure that those on the Government Front Bench were wanting to explain to the young couple in their constituencies saving to buy their first home that their taxes are going up, and to the family wanting to pass on their farm or their business to their children that their taxes are going up. The parents sacrificing to give their kids the best start in life: your taxes are going up. They are taxing your job, they are taxing your business, they are taxing your home, they are taxing your savings. I said during the election campaign:
“You name it, Labour will tax it”,
And that is exactly what the Government have done, with broken promise after broken promise and working people paying the price.
For the final time from this Dispatch Box, let me deliver some basic truths. A Government can foster growth, but they cannot magically conjure it up. We need businesses, workers, investors and entrepreneurs to all back this country and build our economy. It does not matter whether your income comes in a pay packet, from investments, in dividends or in profits. It is a poor politics that is so focused on what people receive that it fails to see that what matters is what people put in. The only way to grow the economy and to create wealth is for people to put in more, so when you create a negative environment for business, when you undermine confidence in our country, when you vilify and penalise people for doing exactly what we need them to do, which is to invest, take risks and work hard, you do not create growth; you hold back growth—and more than that, the promise of growth tomorrow does not pay the bills today. This is not the first Government to peddle the “borrow to grow” myth, but time and again we have seen the same ending: not higher growth, but higher debt, higher inflation, and higher taxes.
But, Madam Deputy Speaker, whatever you think about the economic arguments surrounding today’s Budget, there is a more fundamental point with which I want to conclude. The Prime Minister has talked relentlessly about trust, yet today’s Budget reveals above all that those in the Labour party did not tell the truth. They said they would not fiddle the figures; they have. They said they would not increase borrowing; they have. They said they would not raise taxes on working people; they have. There has been broken promise after broken promise, and it is the working people of this country who will pay the price.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
On a point of order, Madam Deputy Speaker.
Madam Deputy Speaker (Ms Nusrat Ghani)
It had better be a genuine, relevant point of order.
Dr Spencer
I wonder if you could give me some advice, Madam Deputy Speaker, because I fear that the Chancellor may have inadvertently failed to declare an interest. She spoke a great deal about working people during her speech. Is she a working person, and should she declare that? Or maybe she isn’t.
Madam Deputy Speaker
That was not a relevant point of order, and it will be noted in case the hon. Gentleman wishes to put forward any further points of order. I now call the Chair of the Treasury Committee.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Before I begin, I must—as well as drawing the House’s attention to my entry in the Register of Members’ Financial Interests—draw its attention to the fact that I have a family member who works for Allied Irish Bank.
I have been looking forward to today. I feel honoured to have been chosen by this House, on a cross-party basis, to chair the Treasury Committee, and to be the first Labour Treasury Committee Chair to welcome the Budget of a Labour Government and our first female Labour Chancellor. I thought that, after a 14-year wait, this would be an exciting moment; and in a moment of sentimentality, realising that for the second time today I would be following the right hon. Member for Richmond and Northallerton (Rishi Sunak), I was going to reflect on an interesting constitutional position. When I was in my former role as Chair of the Public Accounts Committee, there was common ground at times with the Prime Minister of the day. In private, when I had cause to meet the right hon. Gentleman, he was courteous, thoughtful and respectful, had the national interest at heart, and, when it came to constitutional matters, was in very much the same place as me. I was therefore very disappointed today by the cheek of the right hon. Gentleman in standing up and having the chutzpah to talk about fear, foreboding and uncertainty.
It was the 2022 mini-Budget that plunged the country into crisis, put up the mortgage rates of our constituents, and is still leaving people living in great hardship. It was on the right hon. Gentleman’s watch as Chancellor—although he did some things about covid that we would all recognise needed to be done, and we recognised it at the time—that the bounce back loans led to a significant amount of the fraud that resulted from covid. Now my right hon. Friend the Chancellor has stood up, and what has happened? The FTSE is up—and it has gone up by more since I stood up, by 1.6 percentage points, unless anyone can update me—and the OBR has said that this will add growth to the economy.
The right hon. Gentleman also attacked the Chancellor on fiscal rules. Let us be clear: fiscal rules are not a new thing. Since 2011 there have been seven fiscal mandates, five supplementary debt targets, two supplementary borrowing targets, and an investment limit. The rules set in 2011 lasted three years, but in the last three years we have had three different fiscal mandates, two different supplementary debt caps, and one supplementary borrowing target. I think the Chancellor knows that when she is in front of the Treasury Committee we may challenge her and ask her about her fiscal rules, but I have certainty—we all have certainty—that she will be in her post for long enough to stick to the fiscal rules that she has set. They will have a longevity beyond the previous Government. I welcome this Budget, and pay tribute to my right hon. Friend. The UK’s first woman Chancellor stood at that Dispatch Box, and another glass ceiling was shattered. She should be proud; we are proud, and I congratulate her on that achievement.
It is my first Budget as Chair of the Treasury Committee. I have spent 13 years examining public spending in enormous detail, including nine years as Chair of the Public Accounts Committee. Like me, the Chancellor was a scrutineer: she chaired the Business and Trade Committee, and she understands the importance of scrutiny. I am very clear that the Treasury Committee will not give the Chancellor an easy ride, because she is a highly capable woman who can come and explain all her decisions to us. She knows that it is our job to rigorously examine the detail of the Budget next Wednesday, when she will appear in front us. She will be getting a bit of what she dished out as Chair of the Business and Trade Committee. I know that she will expect nothing less than robust challenge—if she were not up to it, she would not be in her post.
I have to say that I am disappointed that so much of this Budget was revealed before today, which is not normal practice. Going forward, I hope that constituents and the MPs representing them will be the first to know about major issues, and that courtesy to this House and the Treasury Committee will be a hallmark of Treasury engagement.
This Budget comes at a very exciting time, but it is a difficult one for the Chancellor. She has made it very clear that she will deliver certainty, and she has inherited one hell of a mess. We have had a tumultuous period: Brexit, the pandemic, the mini-Budget, 14 years of austerity, delayed and failed decisions, particularly on capital spending—we have had three carbon capture and storage projects that have never come to fruition—the saga and cost of stop-and-start on High Speed 2, 700,000 pupils in schools that are not fit for purpose, public services on their knees, and public sector net debt at its highest rate since the second world war.
Dame Harriett Baldwin (West Worcestershire) (Con)
I congratulate the hon. Lady on her unopposed election as Chair of the wonderful Treasury Committee. Does she share my concern that the individual who has been appointed to the office for value for money was previously on the board of HS2?
Dame Meg Hillier
The hon. Lady is a former Chair of the Treasury Committee and I welcome her being a member of it, as she will add great value. As she knows, we will have the opportunity to raise questions with the Chancellor at next week’s hearing. She has now been forewarned that the hon. Lady may ask about this issue. It is important that we recognise good people who provide support in the public sector by watching our public finances, and I always take people on good faith unless I have a reason not to do so. We have an opportunity to explore this issue elsewhere.
As a share of GDP, taxes are higher than at any time since world war two. Before the election, my right hon. Friend the Chancellor was tough on spending commitments, and sometimes there was a bit of moaning in the Tea Room. I do not want to tell tales out of school, but shadow Ministers were dismayed because they could not spend everything that they wanted to spend. As Chair of the Public Accounts Committee at the time, however, I knew what she was talking about and that what was coming was not going to be pretty, so I welcome some of the steps that she has announced today. I have not had a chance to look in the Red Book or at the detail, but the multi-year funding settlements that she has put in place are a great opportunity to give certainty to business and investors in our country. Hopefully, we will finally nail the issue of HS2, which has cost the taxpayer a fortune. We need to get on with that in order to make sure that we are delivering investment for our country.
I look forward to seeing the detail on cladding, but it is a big issue in my constituency, where many people’s lives are on hold as a result. The money for affordable homes is incredibly vital for those living in difficult situations, and the Chancellor is absolutely right to have finally funded the compensation schemes for infected-blood victims and for postmasters and postmistresses. When the state makes an error, the state needs to correct it. It should never be a party political football.
The Chancellor has had to make tough choices, and she has set out her fiscal rules to provide clarity to the markets and a long-term trajectory for investment and growth. We on the Treasury Committee will watch net financial debt closely to see how the benefit is measured, and it is important for taxpayers and the market that we do so. She will be more aware than anyone about the impact on the market if she does not manage debt very carefully. International investors may use the existing debt model, so when she comes in front of the Treasury Committee, I would be interested in talking to her about how she sees this playing out in the international arena.
Dame Caroline Dinenage (Gosport) (Con)
I have enormous respect for the hon. Lady, given her previous role and her important new role as Chair of the Treasury Committee. As the Chancellor will be coming to see the Committee shortly, could the hon. Lady put a question to her on my behalf. We all know that we can learn lessons from previous Budgets about the law of unintended consequences. The thing that most concerns me in this Budget is the combination of raising employers’ national insurance contributions, cutting the threshold at which they start paying NI, and raising the minimum wage. Could the hon. Lady ask the Chancellor whether there will be special support for businesses that employ a lot of people on low wages, such as care homes and childcare settings, which will be most impacted by the measures? Otherwise, the costs will be passed on.
Dame Meg Hillier
The hon. Lady is a very experienced Member of this House, and she has made her point. She will no doubt have the opportunity to speak in this Budget debate, and there will be plenty of opportunities across the Committee corridor. I welcome her as a fellow Chair. Committee Chairs are already planning how we will work together to ensure that we hold the Government to account, whichever party we represent.
The fiscal rules are designed to provide fiscal certainty and predictability, to bring a sense of discipline to the public finances, and to reassure the markets, as I have mentioned. I welcome that stability, as will the markets, as the FTSE increase suggests. Given the headroom that the Chancellor has secured under the new rule, the Treasury Committee will be watching how much she invests, because we need to see the growth that she has set out as her goal. That must be sustainable, so it needs to be productivity growth. There is no single solution, but analysis by the Resolution Foundation found that a 1% increase in capital stock increases productivity by 0.4%. We will look closely at this, and at the spending review in 2025.
On tax, the increase in employers’ national insurance to 15% is an understandable measure. It is always challenging to find money in these difficult fiscal circumstances, but the increase brings money into the Exchequer at a faster pace than some of the other measures that were mentioned in the media. I have a wide approach to reading about things. If we read The Daily Telegraph, we will think the world is going to hell in a handcart, but if we read more measured commentary, we will find that the Chancellor is judged well on what she has achieved today.
As the hon. Member for Gosport (Dame Caroline Dinenage) said, there are concerns about how the measures in the Budget interact. Alongside sister Committees, we on the Treasury Committee will examine those.
Tim Farron (Westmorland and Lonsdale) (LD)
Will the hon. Lady and the Treasury Committee look very carefully at the Chancellor’s proposals on agricultural property relief? They are very likely to do damage to small, family-owned farms, and especially to tenants, who are likely to be evicted as a consequence. Will she look at what that might do—not just for basic justice, but for food security in this country?
Dame Meg Hillier
If I were the sort of person to get big-headed as a result of the number of Members asking me to do things that are probably not within my remit, I could extend the remit and the power of the Treasury Committee infinitely. Of course, it is the right hon. Member for Orkney and Shetland (Mr Carmichael) who chairs the Environment, Food and Rural Affairs Committee. As I say, we Chairs are planning to ensure that we work closely together on issues where there is an overlap of interests, and we will pick up on all these issues. The Government have promised openness, transparency and accountability, and I take my Front Benchers at their word on that. I am sure that the Chancellor and her Ministers will be available to talk to people and address Members’ concerns about specific elements of the Budget.
I welcome some of the other measures that have been announced. The increase in the national living wage will make a huge difference for so many of my constituents. They work hard and are certainly not shirkers, as some Conservative Members might call them, but they can barely make ends meet. In my constituency, many people work four days a week because they earn enough to be able to do so. Others have four jobs over seven days, just to hold body and soul together. I welcome the increase and the removal of age discrimination.
The devolution model makes so much sense in so many ways. On the Public Accounts Committee, we repeatedly looked at the challenge of bidding for pots of funds, which is costly and time-consuming. We need to trust our elected Mayors to make decisions for their area, and the model shows the direction of trust that, hopefully, this Government will continue to go down.
Before the last general election, I listed what I called the big nasties. This was just some of the additional spending that needed to take place on things that had been left, sometimes by the previous Government and, sadly, sometimes by successive Governments. These issues included the reinforced autoclaved aerated concrete failure in schools—I welcome the move finally to deal with that—the long waiting lists in the NHS and overcrowded prisons. From the Red Book, it looks as though the Justice Department has had an uplift, although it is difficult to make a full judgment on that in the few minutes I have had to glance through it.
Other things such the Animal and Plant Health Agency in Weybridge and Porton Down need investment. These are risky things not to invest in. There is going to be a challenge in public spending even with the increase. Although the increase is welcome, the growth that the Chancellor has called for and is trying to achieve will be required in order to deliver and ensure that we see the spending that we need. Even with the uplift that she highlighted—the 1.5% from next year in day-to-day spending—this is a very tight financial situation for all Government Departments.
The boost to the Department of Health and Social Care is staggering, and welcome. I am sure that the Public Accounts Committee, the Treasury Committee and the Health and Social Care Committee will, among us, hold the Health Secretary to account for his promises to make sure that that is spent well and delivers permanent and lasting change. Also, the capital investment is desperately necessary. It is not that long ago that the previous Government raided capital budgets for day-to-day spending in the NHS. That cannot be allowed to continue.
The investment in defence is also absolutely necessary. There is a huge gap in the defence equipment plan, which I know my right hon. Friend the Chancellor is all over, and she is right to make that increase. I look forward to the path to 2.5% of GDP on defence; never again should we be going below that.
Local government, although it has had a boost, is going to be very squeezed. Again, we will be working with sister Committees to look at that.
The Chancellor also promised to close or reduce the tax gap. That is very bold, and difficult to deliver, so again the Committee will be looking closely at how it is dealt with, as well as at the recovery of fraud moneys, which can be challenging to deliver in any particular timescale.
Dame Meg Hillier
I will give way to the Chairman of the Public Accounts Committee.
Sir Geoffrey Clifton-Brown
I thank the Chair of the Treasury Committee and congratulate her on her new role. There was one very welcome bit of the Budget today, and that was the funding for the infected blood scheme and the Post Office Horizon scheme, but will she join me in urging the Chancellor to ensure that those amounts are quickly paid out, so that those victims, whom we hear about almost every day in the media, are rapidly compensated and can get their lives back to normal?
Dame Meg Hillier
It seems that the Chair of the Public Accounts Committee—this is something the hon. Gentleman and I have in common—hears promises made by Governments of different colours who do not always deliver as they should. He is absolutely right. In fact, the National Audit Office, at my request, pulled together a document looking at compensation schemes. They are often put together differently—although these particular schemes have now been set—and some do not deliver as well as others. Windrush is also in that mix. This is important, and perhaps the hon. Gentleman is offering his services to the Chancellor to ensure that that money gets out of the door. Of course, his Committee will be examining these programmes as time goes on.
It gives me great pleasure to respond to the Budget today and to welcome a Labour Chancellor to her place. I wish her well, and I wish the Labour Government well, of course. I want to see these results on the ground in my constituency. As I say, the Chancellor will appear in front of our Committee, without fear or favour, over the coming years and we will be challenging her and her Ministers to make sure that they stick to the promises that she has laid out today.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to the leader of the Liberal Democrats, Sir Ed Davey.
Ed Davey (Kingston and Surbiton) (LD)
It is a pleasure to follow the Chair of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), and I wish her all the best in her new role, especially given her promise to scrutinise this Budget very, very closely. I join her in noting that this is an historic day. This is the first Budget to be presented by a female Chancellor, and I congratulate the right hon. Member for Leeds West and Pudsey (Rachel Reeves). I am sure that she is blazing the trail for the women and girls who are watching our proceedings today.
There can be no doubt about the enormous task facing the Chancellor. After years of chaos and decline under the Conservatives, their appalling economic legacy, set out so clearly in the figures today, is being felt by people across the United Kingdom. People were looking to this Budget for a clean break with those failures of the past few years, and for a sense of hope and urgency and the promise of a fair deal, but I fear that the Budget will not deliver all that. The Conservatives left behind an enormous mess in our NHS, but I am afraid it will not be fixed unless the Government fix social care, too. The cost of living crisis will not be solved by hitting families, pensioners, family farms and struggling small businesses, and our economy will not grow strongly again unless we repair our broken relationship with Europe. Liberal Democrats will continue to stand up for our constituents and press the Government to be far bolder and act much faster on people’s priorities.
Having said that, let me recognise that there were some good things in the Budget. I welcome the Chancellor’s decision to move away from the Conservatives’ broken fiscal rules to allow the capital investment that our country so desperately needs. I was genuinely surprised that there was no recognition from the Leader of the Opposition of the difference between capital and current spending, which is at the heart of this change. I welcome the promise of full compensation for the victims of the contaminated blood scandal and the Horizon scandal, and I hope that that can be delivered quickly.
I also welcome the extra investment in our NHS. Fixing the crisis in our NHS is literally a matter of life and death. It is also essential for growing our economy, by getting people off waiting lists and getting them fit and healthy and back into work. The Conservatives left the health service on its knees. We on the Liberal Democrat Benches have consistently argued for more investment across the NHS—in hospital buildings, extra GPs, cancer nurses, new radiotherapy machines and much more—so I am glad that the Government and the Chancellor have been listening.
However, people have heard bold promises of extra GPs and new hospitals before. The Conservatives made similar promises on the NHS and then broke them, so what we need now is a guarantee that this Government will deliver. I can assure the Chancellor that Liberal Democrats will hold the Government to account on their NHS plans, and I hope that the Budget document sets out in full the answers to some obvious questions. When will the funding be in place for desperately needed hospital projects, and when will those projects be completed? When will the Government be able to guarantee that people can see a GP or an NHS dentist when they need one? When will all cancer patients be able to start treatment within the 62-day target and not have to wait for months? When will people know once more that when they call an ambulance it will be there within minutes, not hours?
Above all, as I have said before, I worry that despite the welcome extra investment announced today, the Government will not be able to fix the NHS because they are ignoring the elephant in the NHS waiting room: the crisis in social care. We all know how bad it is. Hundreds of thousands of people are waiting for care, and many are stranded in hospital beds because the care is not in place for them to leave hospital. That is bad for them, bad for their loved ones and bad for the NHS. I am afraid that today’s announcement on social care just will not touch the sides. It is only a standstill in a crisis. Unless we finally tackle this problem and agree a long-term solution for social care, we will never end the crisis in our health service, so I urge the Government once again to start cross-party talks on care without further delay and to take action now.
Any solution must involve paying care workers properly to fill the 130,000 care worker vacancies, so that elderly and disabled people can get the care they need. The Government’s plan for a fair pay agreement is a step in the right direction, but it is nowhere near enough, so will the Chancellor look at our plans for a special higher minimum wage for carers? And we must not forget the vital role of unpaid family carers—the heroes keeping the entire system afloat. I strongly welcome the Chancellor’s decision to raise the earnings limit for carer’s allowance. It is a good first step, but as she accepted in her speech, on its own it will not end the repayments scandal or fix the system. Will she confirm whether the earnings limit will, in future, be pegged to at least 16 hours a week at the minimum wage? Although I am glad that the review will look again at getting rid of the cliff edge for carer’s allowance and the earnings limit, I hope she and her colleagues will consider a broader review to give family carers the support they deserve.
The Conservative cost of living crisis has hit family carers particularly hard, but they are not alone. Practically no one has been left untouched by rising bills, higher mortgage payments and soaring food prices. Our small businesses and the self-employed have experienced a crisis of their own, having had to deal with the pandemic and now spiking energy prices and other input costs. The Conservatives only added to that pain by hitting struggling families with stealth tax rises, by betraying pensioners when they broke the triple lock, and by raising national insurance for our small businesses.
I welcome the increase in the national minimum wage as it addresses the cost of living, although I urge the Chancellor to extend this higher wage to apprentices, too. However, it is concerning to see the Chancellor repeat a number of the Conservatives’ past mistakes. Raising employers’ national insurance is a tax on jobs and people. The OBR report published today shows that the Budget will reduce real household incomes and worsen the health and care crisis by hitting thousands of small care providers. Hitting family homes with changes to inheritance tax will not help, and cutting winter fuel payments will leave millions of vulnerable pensioners worried sick this winter.
Instead of adopting Liberal Democrat proposals to raise the money we need, such as by reversing Conservative tax cuts for the big banks or by asking the social media giants to pay a bit more, the Chancellor has chosen unfair tax hikes that will hurt small and medium-sized businesses, which are the engines of our economy. They have already paid too high a price for Conservative economic failures, and forcing them to pay even more simply is not right.
Another Conservative mess that I fear this Budget will not begin to clean up is the crisis in local council funding. Year after year, the previous Government slashed funding while asking councils to do more and more. The result has been nothing short of a disaster. Spiralling social care costs are a huge part of this, which is yet another reason why reform is so vital.
There is another black hole in council budgets due to the broken system for special educational needs and disabilities. The extra £1 billion announced by the Chancellor is therefore welcome, and I pay tribute to my colleagues, not least my hon. Friend the Member for Twickenham (Munira Wilson), who have campaigned so hard on this. However, I fear that the crisis in SEND budgets left by the Conservatives is much bigger.
Last week, the National Audit Office laid bare the sheer scale of the problem, with half of children waiting more than the 20-week limit for an education, health and care plan, and with 43% of councils at risk of bankruptcy. The severity of the crisis left by the Conservatives speaks for itself, so we need to act with even greater urgency to tackle it. We will press the Government to give the House a clear timeline for reform, because neither children, parents nor councils can wait any longer.
The Chancellor has said that her main objective is economic growth, and she is right. We all agree that we need to get our economy growing strongly again to create jobs and opportunities for everyone, and to raise the money that our public services need, but we need a real plan to do that and not just stop things getting worse or return to business as usual. We need to build the economy of the future—one that is genuinely innovative, prosperous and fair.
Part of that is about fixing the health and care crisis, which will be crucial, as will managing the public finances responsibly and giving businesses the certainty and stability they need to invest in our economy. We must also invest in cheap, clean, renewable power to drive a strong recovery, to bring down energy bills and to create secure, well-paid jobs. I welcome the steps that the Government have taken so far, but we must do more to back small businesses. They are the beating heart of our local economies, so I urge the Chancellor to go beyond today’s announcement on business rates by making an historic change to overhaul the broken business rates system that is destroying our high streets and town centres. Tinkering around the edges is simply not good enough any longer.
One final crucial ingredient of growth is fixing our broken relationship with Europe. Removing the Conservatives’ trade barriers would be a massive boost for British jobs, British business and the British economy. By ruling out important steps such as a youth mobility scheme or key long-term goals such as membership of the single market, the Government are trying to grow our economy with one arm tied behind their back.
In July, the British people kicked out of office one of the most damaging Governments in our country’s history. On the Conservatives’ watch, we saw living standards fall, the economy stagnate and public services decline. Although no Government would have an easy time turning that around, people were looking to this Budget for hope and a genuinely new direction. They were looking for urgent action to fix the health and care crisis, for a break from the previous Government’s tax mistakes, for a plan to grow our economy and to rescue local councils that are on the brink, and for a fair deal.
Yes, the Chancellor had to make big, difficult decisions, but I fear that she has got too many of them wrong. We needed a different Budget to repair the damage done to our country and to give people the fair deal they deserve. For our constituents, Liberal Democrat Members will push the Government to do far more for our economy, for the NHS and for care—those are the things that the Liberal Democrats will always champion.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Business and Trade Committee, which is my old Select Committee.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I congratulate our first female Chancellor on delivering an outstanding Budget. It is a great pleasure to speak in my first Budget debate for 14 years, and I think that period of silence was probably appreciated more by my own party than by any other.
When I look back on those debates, which I listened to even though I did not speak, it is striking that the curtain has finally fallen on an economic philosophy, an economic approach and an economic settlement that has fundamentally failed this country. Over the past 14 years, we have witnessed something akin to “The A.B.C. Murders” of the British economy—austerity and a bungled Brexit, followed by chaos.
I see clearly how today’s Budget is a very different kind of settlement. It honours the approach, the compassion, the intelligence and the judgment of the last Budget presented to this House by my good friend, mentor and boss, Lord Darling, in March 2010. Alistair Darling is much missed in this place. [Hon. Members: “Hear, hear.”] He was a man of dry wit, patience, tenacity, kindness and compassion. I have no hint of reservation in my mind in saying that this is a Budget of which he would have been proud, because it strikes the right balance. All Budgets are a balance, as we ask Chancellors not only to balance the numbers but, more importantly, to balance the interests of our country.
Compared with the Budget in March 2010, the Chancellor’s task today was far harder. Back in 2010, we tried to present a Budget that would remedy a deficit opened up by the greatest financial crash since the 1930s.
Liam Byrne
We aimed to get the right balance between spending restraint, budget rises, growth and time. Balancing those four ingredients was at the heart of any Budget judgment, and our judgment would have halved the deficit within four years and seen debt falling by 2016. Our obsession was to avoid the double-dip recession that had been experienced in Japan and to ensure we escaped the perils of widening inequality that we had seen in the United States. Mr Osborne chose a different path, and he was supported by the right hon. Member for New Forest West (Sir Desmond Swayne), to whom it is my pleasure to give way.
Sir Desmond Swayne
The reality, as the right hon. Gentleman knows because he wrote to his successor about it, is that he left us with a deficit that stood at fully 10%, as against the 4.3%—and in sharp decline—that we have bequeathed to this Government.
Liam Byrne
Let us be really clear about what has been bequeathed to this Government. The right hon. Gentleman is right that back in 2010, at the height of the financial crash, the deficit went up. What happens in a financial crash is that the economy has a heart attack: spending continues, because to cut spending would be to deepen a recession and turn it into a depression, tax receipts fall off a cliff, and the role of Government is to sustain a country through that kind of crisis. The deficit rose to £154.4 billion, yet today how much interest do we pay on the debt we have been bequeathed? We pay £104 billion in interest alone, which is almost the entirety of the deficit we had back in 2010.
It is important for the House to recognise that that happened because Mr Osborne chose a balance that was different. He chose to load his austerity programme on public spending cuts. Actually, he eventually arrived at the same settlement that Labour proposed in 2010, but he took four or five years to get there and he put the economy into recession. If memory serves me correctly, he blamed it on some light snow. That austerity programme was followed by a Brexit that was bungled, and then the chaos of the former Prime Minister.
Emily Darlington (Milton Keynes Central) (Lab)
Does my right hon. Friend recall that the previous Labour Government oversaw the fastest economic recovery from the international incident? The economy was back in growth by the time of the election because of investments like over £20 billion for research and development, so our economy could compete in the race to the top, not the race to the bottom that we saw under the previous Government?
Liam Byrne
Correct. In a way, that is the point that I am gently trying to make to the House, with a very brief and, everyone will be pleased to hear, soon-to-conclude lesson in the fiscal consolidation of the last 14 years.
Austerity, a bungled Brexit and chaos left us with a growth rate that fell from an average of 3% in the Labour years down to 1.6% over the last 14 years. We had tax forecasts that failed time and time and time and time again; living standards that simply did not rise in the last Parliament; productivity growth that collapsed from about 2% a year to about 0.5% a year; inequality that soared; and, as I have just rehearsed, debt that multiplied to an extraordinary £2.7 trillion.
In the old days, we used to have debates about whether the roof had been fixed while the sun was shining. The reality is that for the last 14 years, the Conservative party has been trying to patch the roof by ripping out the foundations of our economy. That approach has drawn to a close today. We have only got through the last 14 years because of the ingenuity, fortitude, kindness and compassion of the people we represent. Those people deserve a better approach and that is what they got from the Chancellor today. We have an approach that Alistair Darling would have well appreciated: a Budget balanced not simply in the numbers, but in the balance of interests.
If we look at the numbers in the Red Book, we can see the guts of that different approach. Everybody knows—we might as well be honest in the House today—that the original sin of the British economy is a failure in the investment rate. Over the last 14 years, the approach to trying to stimulate development has relied on tax cut after tax cut after tax cut after tax cut. Today, the Chancellor has ended the insanity of trying the same thing over and over again, expecting different results.
The capital investment delivered by this Budget will see £104 billion extra being surged into the economy. The Chancellor was absolutely right. Last week, at the annual meetings of the International Monetary Fund and the World Bank, we heard a clear message from the IMF that unless we raise the fixed rate of investment in our economy, we are not going to improve living standards or the growth rate, and we are not going to pay down the debt, so the Chancellor’s approach is extremely welcome.
The Budget forecast shows that over the forecast period, we will now see the rate of fixed investment increase in our economy by between 6% and 7%. That is still probably not enough to catch up with our competitors, but it is a hell of a good start and, crucially, it is a departure from the failed economic philosophy for stimulating investment of the last 14 years. After 14 years of failure, it was time to try something new, and that is what the Chancellor has given us today.
That allows us to strike a new bargain with business. We can say to the business community, “Look, we will put £104 billion extra of capital investment into the economy. We will make sure you have the roads, the railway systems and the digital infrastructure that you need for your markets to function. We will make sure you have a workforce that is actually healthy and well, fit for work and well-trained. We will make sure there is investment in the skills you need in your business, and we will make sure your workers stand a hope in hell of getting a home somewhere near their work. We will make sure there is investment in research and development.” Why? Because if we put all of that together, we will have the greatest entrepreneurs in the world.
Our entrepreneurs have been making history by inventing the future since the age of the industrial revolution, but they need good people, good ideas and access to capital markets, which they do not have today. This Budget begins to make that available.
Sarah Gibson (Chippenham) (LD)
Will the right hon. Gentleman and the Chancellor remember that working people also live in rural areas? I was disappointed that the word “rural” was mentioned only twice in an hour during the Chancellor’s speech, and then only as an aside. No mention was made of the south-west of England, where there are serious pockets of deprivation—
Sarah Gibson
Except Cornwall, but no towns. No mention was made of the rest of the south-west, where we suffer from a lack of public transport. Does the right hon. Gentleman agree that access to public transport and primary care is vital for working people in rural areas?
Liam Byrne
I agree 100%, but I say gently to right hon. and hon. Members across the House that that is not free. If we want to ensure that there are good transport links and digital links, that the workforce is healthy, well and trained, and that there is a rich ecosystem of ideas, the money has to come from somewhere. The sensible decisions that have been made to increase borrowing in order to fund a higher level of fixed capital investment are wise. Investment in public services is wise too. I very much hope that that will benefit the hon. Lady’s constituency.
An increase in investment on the scale we have seen today will improve the profitability of businesses in this country. The Business and Trade Committee looks forward to scrutinising the detail and ensuring the Government have got the balance right, because, goodness knows, it is hard enough to get the balance right in a Budget, never mind translating it into legislation. That bargain for business has to consist of two sides: on the one hand, we will create a better business environment through higher capital investment, but on the other we have to give workers a pay rise.
The labour share of income in this country has fallen precipitously since the 1950s. If the labour share of national income was as high today as it was in 1955, on average a worker would be receiving a pay packet this year that was over £7,000 bigger. That is why we have to get the balance right between ensuring that businesses are more profitable and ensuring that workers are getting their share of national income. Getting the balance right is difficult. Like my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), the Chair of the Treasury Committee, my Committee and I will scrutinise that in detail. We will begin that work when we see the Secretary of State for Business and Trade in front of our Committee in just a couple of weeks’ time.
My final point is about where I wanted the Chancellor to go further. Among the worst of her inheritance is the yawning gulf in inequality that scars our country. We have a moral emergency in Britain: sales of superyachts, luxury cars and big mansions are at an all-time high, but, at exactly the same time, the queues for food banks have never been greater. There is no mystery to that. Over the past 14 years, the combination of easy money and low taxes on capital income has meant that the top 1% in our country—the luckiest 1%—are 41 times richer than everybody else. Did they work 41 times harder? Are they 41 times cleverer? Did they win the lottery? Well, in a way they did, because £850 billion-worth of quantitative easing held interest rates in our country down by about 1%. That triggered three quarters of the rise in asset prices that we have seen over the past 14 years. Of course, people in the top 1% will own assets and will have seen a windfall gain, yet the rate of tax they pay on those capital gains is just half the top rate of marginal tax.
I am sorry that the Leader of the Opposition is no longer in his place to hear me say this, but he did a good thing a couple of years ago, which was to publish his tax return. I am sure that all hon. Members will have read it—it does not take long, as it is only a page long. It declares an income of £2 million and a tax rate of 23%. At a time when so many people in our country are paying a top marginal rate of more than 47%, I do not think that it is morally right that those with broader shoulders are paying much lower tax rates. I would have liked to have seen the Chancellor go further on capital gains tax.
I welcome the changes to the non-dom and inheritance tax regimes, but I would have proposed other changes as well. If we had truly restored fairness to the tax system, we could have raised money to increase the national wealth fund and opened the opportunity, for the first time, of paying dividends into a universal savings account for every young person in this country. That would have helped them get a foot on the housing ladder, repay their student debt, invest in their training, or kickstart savings for their pension. That would have helped us to create a universal basic capital system in this country. We will need a system like that if we are to fix the scandalous inequalities of wealth that now bedevil our country. None the less, I accept that the Chancellor had to put first things first today. She had to fix the foundations, because, as all of us in this House know, if we get that job done well, the best years for this country truly lie ahead of us.
Sir Edward Leigh (Gainsborough) (Con)
It is a pleasure to follow the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne). He said that Alistair Darling was his hero. My hero was Nigel Lawson, because I am personally convinced that the way to create growth and prosperity is to flatten and lower taxes. I think I have sat through 45 Budget statements in this House. They are quite exhausting, and I am quite cynical about the whole process. Normally, large amounts of good news are given out during the Budget statement when we are all sitting in the Chamber, but when we read the Red Book the next day we find that we are probably paying even more tax than we were before—everything has been taken back. However, this time, the pain has been loaded up front, so I suppose we should be grateful for small mercies. I am sure the Chancellor of the Exchequer would claim that she is just being honest, but the Budget is, none the less, a massive expansion of tax and spend. Governments who indulge in massive expansions of tax and spends are Governments who gradually impoverish countries.
More and more people—even those just surviving on a state pension—will be dragged into tax. People on higher incomes will be dragged into paying ever higher rates of tax. The right hon. Member for Birmingham Hodge Hill and Solihull North made the classic attack on the top earners, but 1% of top earners pay 30% of all tax revenues. If we simply tax people more and more at the top end of the scale, we will get less enterprise, less growth, and those people will leave the country. It is a vicious circle, and it does not work.
Liam Byrne
I am incredibly grateful to the Father of the House for giving way, which is characteristically generous. I think we would both agree that his inspiration and mentor, Nigel Lawson, was not a hoary old socialist, but, of course, he was the one who equalised the top rate of tax and the rate of capital gains, and I did not see people fleeing the country back then.
Sir Edward Leigh
The right hon. Gentleman and I could have an argument about history, but I would still defend my mentor and, even more so, the Prime Minister at that time, Margaret Thatcher, until the day I die, and we would just have to disagree on that. That is our philosophical foundation.
I could devote my speech to an attack on the Labour Government. There is plenty of ammunition to do so. The leader of my party has just given a brilliant exposé of their weaknesses. However, I want to take the debate a bit further and not be too party political. The British state has fundamental problems. Members can the criticise the previous Government for not having the time or the courage to deal with things, or they could say that we were thrown off course by the pandemic. There are a whole load of reasons why we were not able to solve the fundamental problems, but I believe very strongly that this Budget will not solve them either. My personal belief is that we have to create an entire new social contract. More and more people feel disconnected from the need to work and to take responsibility for their lives. There are four or perhaps five key failures in the state, and I do not think that the Budget has long-term solutions for them. I refer to the national health service, the pension service, benefits, immigration, and probably housing, and they are all interconnected. As successive Governments have not had the courage to go to the root causes of our failure as a state, we are gradually falling behind other countries.
Pumping in more billions of pounds this year, next year and the year after that will not solve the fundamental problem of the national health service. This is a huge, inefficient, state-run monopoly that solves its problems with queueing. Somebody of my age knows all about the national health service and having to wait for non-urgent operations—not just for months, but for years, and I can speak about that with personal experience.
Emily Darlington
In Lincolnshire, nearly six out of 10 people faced wait times exceeding four hours to be seen in A&E in 2023. That is a 42% increase. Does the right hon. Gentleman agree that the investments made today will help reduce those waiting times in Lincolnshire?
Sir Edward Leigh
Well, let us see. Of course we can pump more and more money into this broken system and solve some of the short-term problems, but soon we will be not just a country with an NHS, but an NHS with a country attached to it. Is it 44% of total spending that goes on the NHS? It is growing all the time, which means that, as a country, we are gradually becoming poorer and poorer. The long-term result will be that we will have a worse health service. I say to the hon. Lady that, of course, it is totally unacceptable that people wait hours to be treated in A&E, and wait months and years for an operation. In Lincolnshire, 58% of people in A&E now have to wait more than four hours—four hours! I can tell the House horror stories of my constituents waiting up to 24 hours. That is not happening in any other developed country. It is totally unacceptable. Surely everyone in this House can unite around the a principle that those who have paid into the system for years should be treated with dignity and expeditiously.
Sir Edward Leigh
I must not give way too much, because I will prevent other people from getting in.
A study of 18 developed countries shows that the UK is in the bottom three when it comes to survival rates for common cancers, strokes and heart attacks. Lord Darzi’s review found that 14,000 avoidable deaths per year were due to long waits in A&E. This drags our life expectancy statistics down and down. Meanwhile, even before the Budget, the NHS was eating up 44% of day-to-day public spending. We are paying more and more and the results are getting worse and worse. I predict that for the rest of this Parliament, the Government will keep on pumping more of our national wealth into this failed system and we will still fail to catch up with other countries.
Sir Edward Leigh
No; I have to keep going.
I accept that some issues, such as hospital capacity, can only be dealt with by spending, but we do not need to reinvent the wheel; we need to learn from other countries. The Health Secretary, who I admire for his apparent radical zeal—although we have not seen much evidence of it—studied Australia, for instance. Let me break the national taboo on “our NHS”, our religion. There are other countries that are like ourselves but which deliver much better—incomparably superior—health outcomes. It is my personal belief, and I think I am about the only person who has said this year after year, that we should adopt Australia’s social insurance model. There is nothing wrong with encouraging private provision in health. Is that some great heresy? Is it some sort of right-wing philosophy? Well, it is followed by France, Germany, Australia and the Netherlands, and all those other countries produce much better health outcomes.
Australia slowly developed a hybrid system of state and private health insurance. Everyone has universal public health insurance, but workers are encouraged to purchase private health insurance on top of that. My point is that, with a ballooning, ageing population, yes, we have to spend more on health, but we have to get people to put more of their own money into health; and they must be assured that, having put their money in, they will not just end up at the back of a queue, because they have personal rights and are committed to this health service.
For instance, the average cost of a treatment-only plan for a 20-year-old in Australia is just £23.14 a month, and comprehensive cover starts at £31 a month. That cost rises to £109 per month for a 70-year-old. People earning less than £119,000 can claim rebates to reduce the cost of health insurance, and higher earners without insurance pay a surcharge of between 1% and 1.5%. Research commissioned by Australia’s Department of Health shows that the cost to the taxpayer would be greater without the rebates, because there would be increased stress on the public system.
The health outcomes are noticeable. Australia has one of the lowest rates of avoidable mortality among the developed nations. Its cancer survival rates are several percentage points higher than the UK’s, and stroke and heart attack mortality rates are several points lower. It is not perfect, of course, and not everything can be imported from other countries, but Australia’s system shows that there are other models.
We must have a national debate about how, with an ageing population, we can produce the kind of health outcomes that people desire. There is a cumulative effect: in 2022, the Australian Government debt was 70% of GDP. In other words, it is running a tight, well-run ship. That is a country much like us—but the UK has already, even before this Budget, reached a staggering 104% debt in the same year. We are going broke because we do not have the courage, on either side of the aisle, to think from first principles. I am making this argument as much to those on my own Benches as I am to the Government. This situation simply cannot go on and on, otherwise people will start talking about charging or giving tax relief for private health insurance.
We have to have a fundamental debate about the whole structure of health, and the Health Secretary has the good will of people across the House and across the country to start thinking big and thinking of new ideas. If he can find a way forward and improve health outcomes, he will go down in history as one of the greatest Health Secretaries we have ever had.
The second fundamental problem we have is the ballooning benefits system, particularly when it comes to incapacity. It is trapping more and more people in dependence. We need a culture of the necessity of work. We have 4 million people on incapacity benefit, and two thirds of them—recent joiners—are claiming mental illness. The situation is out of control. Work should always pay more than benefits. I would have liked to have heard more from the Chancellor about how she is going to attack the benefits system and incapacity, which is gradually reducing the Government into penury.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
Would the right hon. Member join me in congratulating the Chancellor on raising the national living wage—an uplift that will have a transformative impact on the lives of more than a third of children living in poverty in Gainsborough as well as children living in poverty in my constituency of North Warwickshire and Bedworth? The measure will make such a massive difference.
Sir Edward Leigh
The hon. Lady has made her point, although I was talking about incapacity benefit, so I am not sure how her point has addressed mine.
The culture of people living off the state for years, when they are capable of doing some work, needs to be stamped out. We have to work together in the House to get people off benefits and help them. It is about not just reducing benefits, but having innovative schemes, like those that the former Secretary of State for Work and Pensions, my right hon. Friend the Member for Central Devon (Mel Stride), was trying to bring about to encourage people back into work, making their whole lives better and more productive.
Thirdly, tackling benefits is a vital ingredient of curbing immigration. What is the spur for mass immigration? It is that health and social care simply cannot get enough workers for the salaries they are paying. There are too many people on benefits, and we are dragging more and more people from all over the world into our system. We need to insist that anyone entering the country earns at least average UK earnings. We cannot go on undercutting our native workers with cheap foreign labour. We have to pay decent wages in our care service, and reform the whole benefits structure so that people actually want to work. We cannot solve our problems with mass immigration, and mass illegal immigration is part of the problem. It is gradually destroying the social contract and people’s belief in the system, and the Government must have a plan to deal with it, which basically means arresting people when they land illegally on these shores, and offshoring them.
The other great problem in our national psyche that we have not really addressed is the whole pension system. I have to declare an interest: I am of pensionable age. [Hon. Members: “Never!”] Some Members will be very happy when I retire from this House, but I do try to tell the truth according to my own lights and to state difficult truths. The fact is that we have more and more elderly people, more and more sick people, and more and more people with multiple health problems. We are all committed to keeping the triple lock, and I would get into awful deep water if I said that doing so is becoming increasingly unaffordable, but of course if the portion of the state spending devoted to pensions increases every year in real terms, we will gradually ensure that the country cannot pay its way.
This is a difficult truth that nobody yet has had the courage to address: we have to do more to encourage private pensions, and not—I say this to the Chancellor—seeing private pension pots as a convenient thing to raise taxes on. Many years ago, I served on the Social Security Committee under the late, great Frank Field, a man immensely respected on both sides of the aisle. We studied countries like Chile that were making explicit the creation of contributory pension systems. People were encouraged to put more into their pensions and plan for their old age. That is the only way, with an ageing population, that we can solve our problems.
In addition to all this, I am afraid that wokery and human rights legislation are gradually eating away into our—[Laughter.] Government Members may all laugh, but it is true. Many people feel that they are not part of the way in which this country is run. These are just lessons that the Government have to learn.
Sir Edward Leigh
The hon. Lady has tried to intervene again and again, so I will give way.
Yuan Yang
The right hon. Member mentions that many people do not feel part of how the country has been run, and for the last 14 years we have seen regressive Budgets that have hit the poorest hardest. Does he welcome, with me, that our Budget is progressive and in fact distributes the burden where it is most well shouldered?
Sir Edward Leigh
Well, if the hon. Lady thinks that, I wish her luck, but I fear that we are just going to gradually paper over the cracks—and I will criticise my own side in this regard. For 14 years, Ministers went along with the liberal consensus, talking about “our NHS”, papering over the cracks with more and more money, employing more and more nurses and doctors, and getting worse and worse outcomes. Meanwhile, productivity nosedived and mass immigration reached unimaginable heights to keep public services going.
We have to be honest, as we are now in opposition. I welcome the fact that one of our leadership candidates is saying that we have to start from first principles. That is what I am trying to do: start from first principles on how to recreate the British state. That is what Mrs Thatcher did; I worked for her when she was Leader of the Opposition in the 1970s. We need a whole new intellectual drive. In opposition, Keith Joseph and the Institute of Economic Affairs created a new vibrant Conservative philosophy for how we could solve the deep-seated problems in this country. The Budget could have been such an opportunity, but I am afraid it reflects the old tax and spend instincts of the Labour party. I agree with the Labour party that housing is a great failure of our state. Of course we need a massive house building drive, or more appropriately a flat building campaign. The easy way out is to take good agricultural land and greenbelt land, particularly around London. Instead, we need to incentivise building in cities and on brownfield sites.
I fear I have wearied the House, so I will stop now. [Hon. Members: “More!”] No doubt these difficult words about the national health service or the triple lock will be used by Labour party spokesmen for years to come, if anybody is interested. However, I hope that we have the intellectual courage to try to solve the real problems in our society. How are we going to get a decent health service that is on a par with what we find in France, Australia and the Netherlands? How are we going to get a decent housing programme? How are we going to get people to contribute more towards their old age? Unless we address the fundamental deep-seated problems in the British state we will just gradually become a poorer and poorer nation.
Tonia Antoniazzi (Gower) (Lab)
It is an honour to follow the Father of the House; I hope not to weary the House with my speech. Today, the Chancellor has been extraordinary in her strength and her ability to turn a really bad situation into a really good one. We cannot hide from the fact that we have had 14 years of Tory Government. While those on social media may say, “Oh, the Labour party is just slagging off the Tories for the last 14 years,” those 14 years are the reason I decided to stand to be a Member of Parliament. Having been the Parliamentary Private Secretary to the Chancellor when she was the shadow Chancellor, and having been the shadow Whip to the Treasury team, I know the integrity and seriousness with which they will have dealt with her first Budget.
The scaremongering of the Leader of the Opposition, pretending to be a man of the people, really sticks in my throat. I do not know how he has the audacity after 14 years of Tory Government. However, the Labour party and this Labour Government have promised change from the failure of the last 14 years, and the Budget shows our commitment to deliver that. The scale of the challenge is gargantuan, and I know that the Chancellor has made some tough but necessary decisions. Although inflation has subsided to around 2%, helping to boost household incomes, interest rates are predicted to be cut later in the year, extending household budgets a bit more. I need not remind the House that the inflation reached 11% under the last Government.
Today, I will wear a number of hats—metaphorically, of course. I am the Chair of the Northern Ireland Affairs Committee, and the chair of the all-party parliamentary beer group. [Hon. Members: “Hear, hear!”] It is very important. I am also the MP for a constituency where agriculture plays a huge role. Many of my farming constituents, and many farmers around the country, were concerned to hear speculation regarding the removal or upheaval of inheritance tax reliefs, including the agricultural property relief and business property relief. With many farmers still feeling the impact of the loss of direct payments, two years of severe flooding, high inflation and extremely volatile market conditions, the industry welcomed reassurances from Labour last year that agricultural property relief would not be changed.
Family farms are the backbone of the industry, especially in my constituency of Gower. Farming is in these people’s blood. They do not do it for financial benefit, because for many of them there is not much money in it. They do it because it is their life and their calling. The 100% rate of relief continuing for the first £1 million of combined agricultural and business assets to help to protect family farms and businesses is most welcome, but I would appreciate an opportunity to discuss with the Chancellor, the Secretary of State for Environment, Food and Rural Affairs or the Treasury team how we can ensure that family farms that may come just over the threshold can continue to play their role in our country, and how we can support them through the change and avoid any unintended consequences. I am hopeful that measures in the Budget will help the industry by driving ambition and investment. Investment in our agricultural sector will improve our food security and give farmers confidence in a Labour Government.
As well as agriculture, brewing and hospitality have a huge footprint in my constituency and across every United Kingdom constituency. These sectors support 1 million jobs, provide £17 billion in wages and deliver £34.3 billion of gross value added across the UK economy. The brewing and hospitality sectors are vital to the economic and social wellbeing of our communities across the United Kingdom; however, the industry remains under a great deal of pressure post the pandemic. Supported by a number of members of the all-party parliamentary beer group, I wrote to the Chancellor highlighting key areas in which the Budget could make a positive impact on the brewing and hospitality sectors.
First, the industry previously welcomed the Government’s pledge to reform the business rates system, and I welcome today’s announcement of the Chancellor’s commitment to permanently lower business rates multipliers for retail, hospitality and leisure properties from 2026-27. I acknowledge that the drop to 40% relief will cause concern, so I hope that the Chancellor or the Secretary of State for Business and Trade will work with the sector to address those concerns.
Secondly, the beer and pub sector is one of the highest taxed sectors of the economy in recent years. The industry has supported the alcohol duty review. The cutting of duty on draught products is a recognition of the commitment to pubs and smaller breweries. Again, I hope that concerns around the increase on non-draught products in line with RPI will be listened to. Finally, I am pleased to hear the Chancellor commit to ensuring that Northern Ireland receives its fair share, with an extra £1.7 billion received through the Barnett formula. I am personally delighted to read that £730,000 will be given to the Executive to support integrated education, and a further £45.8 million will be given to support the vital work of the additional security fund of the Police Service of Northern Ireland, and the Executive programme on paramilitarism and organised crime.
Aside from that, concerns have been raised with me about future funding applications for organisations in Northern Ireland—whether about the shared prosperity fund, the city deals, or, let us not forget, the poor execution of the levelling-up fund under the last Government. Community groups play such a vital role in Northern Ireland, and we must recognise that. The shared prosperity fund has been a lifeline for many organisations, and although it is continuing at a reduced rate, I welcome the fact that the Budget puts aside £1 million for community groups in Northern Ireland. The decision on the Causeway Coast and Mid South West city deals was paused during the pre-Budget spending review, so I am sure that the people behind those deals will be absolutely delighted with the announcement that they will go ahead.
I am hopeful that the Government will work well with our devolved Governments. As we have seen, the last 14 years have worked against the Labour Government in Wales. We must have the best outcomes for people across the United Kingdom. The increase in funding through the Barnett formula shows positive commitment to devolution. The Budget is difficult, but it is necessary. It is a once-in-a-generation Budget. It will, and it must, deliver the change that our constituents voted for. We will not go backwards; we will only go forwards. This country needs change.
Dame Harriett Baldwin (West Worcestershire) (Con)
It is a pleasure to follow the hon. Member for Gower (Tonia Antoniazzi). I do not wear quite as many hats as her, but it was interesting to hear her perspective on the Budget. I have a different perspective.
My issue with the Budget is not the political choices that the Chancellor has chosen to make—clearly she has the mandate to make any changes that she wishes to make—but the fact that it is a Budget of broken promises to the electorate, which is a dreadful thing to do for trust in politicians. I will also highlight the economic choices that I think the Chancellor has got wrong.
The first broken promise is one that the Chancellor made during the election campaign, when she said time and again that she would not “fiddle the figures.” Today, she has clearly broken that promise. She has announced a multi-billion pound change to the UK’s borrowing, and she announced it overseas, not first to Parliament—I know how angry you and Mr Speaker are about that, Madam Deputy Speaker. As we all know, and as the IFS has said, borrowing is not a free lunch; it will mean that there is more debt and more debt interest spending. I have not yet had a chance to question the Office for Budget Responsibility in detail on its numbers, but from an initial look at its charts, the amount of additional borrowing that was announced today by far exceeds anything in the mini-Budget in late 2022. The Treasury Committee will ask the Office for Budget Responsibility about that.
The second broken promise that the Chancellor made during the election campaign was that her plans were fully funded, and that she had no plans to raise taxes, beyond those listed in the manifesto. In fact, colleagues have counted that she and the Prime Minister made that utterance 50 times. I believe that that promise has been soundly broken today, and that a deliberate political choice has been made to announce the biggest unforced tax-raising Budget ever.
Dame Harriett Baldwin
Unforced. During the election campaign, the Chancellor told the British public that taxes were too high. She said that she wanted to bring taxes down. She has roundly broken that promise today, because the Budget increases tax for every household in this country, possibly by up to £10,000 over this Parliament. That is way beyond the £2,000 figure that we warned about during the election campaign—a warning that the Prime Minister said on national television was a lie.
The Chancellor campaigned on a general election strategy that I believe was deliberately designed to mislead the electorate. Her plans, and those of the Deputy Prime Minister, end up giving us German taxes with French labour laws—a recipe for higher unemployment if ever I have seen one. The scale of the tax changes announced today for small businesses that employ more than four people is astonishing. Labour Members should let that sink in.
Dame Harriett Baldwin
I will not give way to the hon. Gentleman, who so often gave evidence to the Treasury Committee. I recall that I had to press him on the fact that NHS productivity has not yet returned to its pre-pandemic level. He told us on the record that if it did, that would be worth £20 billion in additional NHS output.
The Chancellor promised that she wanted to focus on growth. That is her mission, but I believe that more taxes, more public spending and more borrowing do not lead to growth; if they did, Venezuela would be one of the most prosperous countries on earth. What the Chancellor was planning all along, together with her Cabinet colleagues —who have no experience of working in the wealth-creating, job-creating, tax-paying private sector—is a Budget of the public sector, by the public sector, for the public sector. She cannot blame us, because in her first 25 days as Chancellor she announced £25 billion of additional new spending, whether that was for Great British Energy, a national wealth fund, or inflation-busting backdated union pay rises with no productivity requirements.
I also want to speak up for my farmers in West Worcestershire.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Will the hon. Lady give way?
Dame Harriett Baldwin
Does the hon. Gentleman want to stand up for my farmers? My farmers are some of the most productive and hard-working people in this country. They are the ones who put food on our tables, and they are soundly disappointed with today’s Budget. There was no help or certainty for them in the Budget—no help for them through the agricultural property relief that allows them to hand on the family farm to the next generation. Labour Members should know that this Budget will mean that many family farms will be broken up, unable to be handed on to the next generation.
Dame Harriett Baldwin
As the hon. Lady can see, I am not giving way at the moment.
As you know, Madam Deputy Speaker, the only way that we get true, genuine, sustainable growth in this country is through productivity and investment by the private sector.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
Will the hon. Lady give way?
Dame Harriett Baldwin
I am not giving way at the moment. I am going to allow more time for others later on.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The hon. Lady has made it very clear that she is not giving way, so please allow her to continue.
Dame Harriett Baldwin
Thank you, Madam Deputy Speaker. Anyone who has ever worked in business knows that they need to increase the productivity of their business, and investment in that business is linked to its profitability, profits that will fall as a result of the measures that have been imposed on business today. When we work out the numbers, I think those measures will equate to about 4p on corporation tax. This is a Budget of broken promises that will end up giving the British people less growth. Members do not have to listen to me to hear that: they can listen to the Office for Budget Responsibility, which forecasts a short-term boost to growth but a longer-term reduction in the sustainable growth rate of the British economy thanks to the measures that the Chancellor outlined today.
In the months since the Chancellor took office, we have seen the evidence. We have already seen businesses shutting at double the rate they were a year ago. We are already seeing a plunge in business confidence, and we have heard the former chief economist of the Bank of England say that the socialist narrative we have had since the election has generated
“fear and foreboding and uncertainty”.
This is a Budget of broken promises—a straightforward breach of promises to the British public—and it is a dreadful day for the British economy.
Madam Deputy Speaker
When we go through Hansard, I am sure we will see that the hon. Member did not mean to accuse another hon. Member of lying—changing that term to “misleading” would have been far more appropriate. No doubt the hon. Member agrees with me.
Dame Harriett Baldwin
On a point of order, Madam Deputy Speaker. I referred to the Prime Minister’s words on national television, and I was quoting him directly, but if I have inadvertently misled the House, I apologise.
Madam Deputy Speaker
Thank you so much. That was an absolutely appropriate way to respond.
Chris Evans (Caerphilly) (Lab/Co-op)
It is a pleasure to follow the hon. Member for West Worcestershire (Dame Harriett Baldwin). I well remember one of her very early speeches when we both came to this place, in which she gave a lecture to this House about the benefits of the Laffer curve. Having also listened to the right hon. Member for Gainsborough (Sir Edward Leigh), I am pleased to report that although Milton Friedman, Keith Joseph and Mrs Thatcher may be long gone, their ideas will live on as long as those two Members sit on the Conservative Benches.
I pay tribute to my hon. Friend the Member for Gower (Tonia Antoniazzi) for a great speech standing up for her farmers in her rural constituency. I think she faces, as Chair of the Northern Ireland Affairs Committee, the same problems that we face in Wales. We in Wales are too heavily dependent on the public sector and there is a lack of entrepreneurship, which are similar problems to those faced in Northern Ireland, but I can think of no greater champion to stand up for Northern Ireland than my hon. Friend.
Things have changed since the last time I spoke in this House. I was the Member for Islwyn, and I am now the Member for Caerphilly. If you, Madam Deputy Speaker, and the House will indulge me for a moment, I want to pay tribute to my predecessor as the Member of Parliament for Caerphilly, Wayne David, who was a doughty champion for his constituency. He absolutely loved this place, and he was one of our great Welsh parliamentarians.
I am sure Wayne David would join me in welcoming today the first speech by a Labour Chancellor for 14 years, and the very first by a female Labour Chancellor at that. For those of us who came in in 2010, it was a long haul in opposition, and I am delighted to be standing here today on the Government Benches.
“Britain has lived for too long on borrowed time, borrowed money, borrowed ideas. We live in too troubled a world to be able to promise that in a matter of months, or even in a couple of years, that we shall enter the promised land. The route is long and hard.”
Those words were spoken by Prime Minister James Callaghan at the Labour party conference in Blackpool almost 50 years ago, in 1976. His analysis laid the blame for Britain’s problems at the door of high Government debt, high taxation and low productivity.
The economic ills we suffer today have come upon us over several decades. They will not go away in days, weeks or months, but they must go away. Great as our tax burden is, it has not kept pace with public spending. For decades, we have piled deficit upon deficit, mortgaging our future and our children’s future for the political gain of the present. To continue this long trend is to guarantee moving towards tremendous social, cultural, political and economic upheavals. We face handing over a toxic legacy to our children and our children’s children. That is how serious the current crisis we face is. Our challenge, in this place in this time, is breaking the cycles that mean those words of Callaghan still reflect acutely on the situation we face today.
We need to get away from two myths that are peddled about the British economy. First, there are those who believe that sweeping tax cuts will, as we have heard from Opposition Members, turbocharge the economy without any adverse effect on public services. They cite the 1980s as a global age, but taxes could be cut when the Government were able to rely on North sea oil money and the privatisation of industries. In 2024, that is not an option. A tax cut would only come at the price of cutting public services. It is a lesson we should have learned from the infamous fiscal event of September 2022. The experience of most people we speak to, whether they are trying to book a medical appointment or simply renew a passport, is poor. That position is intolerable.
The second myth is that, if we chuck enough money at a problem, somehow that will solve it. As someone who served on the Public Accounts Committee for five years under my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), who is now the Chairman of the Treasury Committee, I find that a laughable idea. Take the Ajax programme, which was meant to provide a new armoured vehicle for our Army. It was initially meant to be delivered in 2017, but it is now 2024, and it is still not complete. Meanwhile, north of £3 billion of public money has been wasted. Both soldiers and the public purse have suffered the consequences of a wasteful mess that created unsuitable, unsafe and largely unusable vehicles. The National Audit Office called it “flawed from the start”, and noted that it was suffering from problems that plague other defence programmes. The programme is even yet to be delivered, and it faces the threat of being obsolete, despite the mammoth cost to the taxpayer. We cannot allow a system in which regular mistakes are the norm, and are simply part of the culture. We cannot have civil servants shrugging their shoulders and saying, “That’s the way it is.” They are spending public money.
An estimated £7.3 billion was lost to fraud related to covid-19 schemes from 2020 to 2022, according to the National Audit Office. Some £2.9 billion was spent on personal protective equipment that was deemed unusable for frontline services. I welcome the Chancellor’s announcement about the covid corruption commissioner, but the fraud should not have happened in the first place.
Most recently, hundreds of millions of pounds went down the drain for the failed Rwanda scheme. Whatever we think about such schemes, what message does that give to those who are working hard to pay into the system every month, and who are asked for more and more of their hard-earned money in taxes? Ronald Reagan—yes, I am quoting somebody from the right wing—once said:
“Government is not the solution to our problem; government is the problem.”
I believe that bad government is the real problem. The Government cannot do everything, but they can do some things well—the rise in the minimum wage announced today is one such example. However, we cannot go on this way; there is no future in giving Departments more and more money if it is only going to be wasted. If there is a black hole in a Department’s budget, the system created that, and more money will not change wasteful practices. There needs to be fundamental reform in the way we manage major projects.
The Chancellor announced some productive measures today, but if we do not stop money leaking out of Government through wastefulness and mistakes, we are failing the taxpayer. We must be strict with ourselves when it comes to projects and Government spending. We need the chair of the Office for Value for Money, announced in July, to report annually to the House. They must be tasked with several questions about each project: is it on time, and is it delivering value for money? If not, if necessary we have to be ruthless. We either take the decision to carry on with projects that are doomed to lose money, or we take a step back—do less but do it better, and start creating more things that we can export abroad.
As the Chancellor recognised in her speech, we cannot borrow indefinitely, and we cannot keep asking hard-working people for more and more, while Governments make costly errors and ask the taxpayer to pick up the bill. Investment to rebuild is necessary, and the Government are right to protect the most vulnerable from shouldering an increased burden. However, it is time for a root and branch reform of the civil service, with a realistic economic policy that considers the state of the public finances as they are, not as we wish or hope they were. I am hopeful that the Budget has done that today.
If we do not act now, in 50 years’ time will future generations be speaking of the same ailments? If they are, it means simply that we have failed and have effected no real change in our time in this place. Callaghan raised these problems 50 years ago. It is our duty to ensure that we do not spend another 50 years stuck in that same place.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the SNP Treasury spokesperson.
Dave Doogan (Angus and Perthshire Glens) (SNP)
Four months ago the people took the Labour party at its word and voted for change. It did not take long for it to become clear that the Labour party was offering not change for the better, but change for the worse. Pre-election there was no mention of pushing 900,000 pensioners in Scotland into fuel poverty, yet here we are. The Chancellor said that she would not raise taxes on working people, yet we now find due to Labour’s absurdly one-dimensional yet infinitely flexible definition of “working people” that people are in line for five years of fiscal drag on their incomes and tax allowances.
The Chancellor said that she would not put up national insurance, but after the election she qualified that with “on employees”, as she now raids payroll accounts for charities, care homes and local businesses for her 1.2% national insurance hike. During all that, where were Scottish Labour MPs? Where were their howls of indignation defending their Scottish constituents and the Scottish economy? They were silent, with a mere seven Labour MPs rebelling on the two-child cap, and not one of them from Scotland.
The national insurance increases are a direct assault on Scotland’s businesses, workers, and growth plan. Scotland’s vital hospitality sector—our pubs, hotels and cafes—are already hamstrung by Brexit, and will face an increased burden as a result of the changes today. This punishing tax hike will hit many of Scotland’s 340,000 SMEs hardest—the very companies that drive growth, that reinvest locally, that sustain 1.2 million Scottish jobs and 42.4% of all private sector turnover in Scotland and that sponsor local groups and clubs. They are caught in the crosshairs of this anti-small business Labour Chancellor.
Like much else, raiding employment taxes was not in Labour’s manifesto, and many ordinary self-employed people with modest incomes from local businesses—they deliver essential economic activity where the capital generated remains local, turning an average profit of £23,000 a year, and many of them may well have voted Labour—will fall foul of Labour’s rank duplicity in this change to tax orthodoxy, unlike those working for public limited companies or the public sector earning six-figure salaries.
The national insurance hike, with the threshold down to £5,000 and the rate up to 15%, represents a £25 billion double whammy tax on jobs—plain and simple. The resources that will fund the Chancellor’s raid on payroll are the same resources that businesses would have used to recruit more people into work, reducing unemployment, growing their own business and assisting in the ambition of greater growth in the wider economy. The Chancellor has just torpedoed that. It is the same resource that would have delivered pay rises for ordinary working people next year. Where will that resource come from now? The Chancellor notes that she is not putting up taxes on working people, and that may technically be true this year, but with next year’s pay claims guaranteed to be suppressed by her raid on employers’ NI, she is baking in lower wages for workers next year and in subsequent years.
The Scotch Whisky Association has described the duty on whisky as “a hammer blow”. The Prime Minister promised to
“back Scotch producers to the hilt.”
He should have told his Chancellor, because she has just taxed Scotch whisky to the hilt. It is completely unacceptable, and it is part of Scotland’s burden.
None of this is acceptable. We are not content to continue footing the bill for decisions that we had no part in. We went into this election with the highest taxes in living memory, and they have just gone up again. Ten years ago, we were implored to lead the UK, not leave the UK, and what have we got now? We have Government Benches awash with Scottish Labour MPs, while Scotland waits with bated breath for just one of them to stand up for their constituents, where their interests lie at odds with Westminster. The Scottish Labour MPs have backed the Chancellor’s two-child cap, snaring 87,000 of our constituents’ children in poverty, and voted to strip the winter fuel payment from 900,000 Scottish pensioners in ours, the coldest part of this island. If that is a local Labour champion, I do not fancy meeting a local Labour villain on a dark night.
All of this is justified by the fabled £22 billion black hole. With all this black hole hyperbole, I would like somebody in the Treasury to put the lights on, because it might shine the white light of truth on the black holes that Labour fears to mention. They include the £30 billion black hole where, by ripping ourselves out of the EU, we have been mortgaged to the twin burdens of increased administrative costs and the lost opportunities of membership of the world’s largest trading bloc. There is the black hole of nuclear energy sucking billions from the taxpayer, producing the most expensive energy at some time indeterminate in the future, and the Bank of England’s £24 billion black hole for quantitative tightening, which has not been discussed once in this House.
I welcome the £12.21 minimum wage. It falls short of the £12.60 Scottish living wage, but it is a start. I welcome the £2.9 billion for defence, but I would be interested to know if any of that is ringfenced. Alarm bells will be ringing on farms across Scotland about agricultural property relief, especially as Labour has said consistently—it was specifically said by the Secretary of State for Environment, Food and Rural Affairs prior to the election—that it has no plans to review agricultural allowances. It is deeply worrying.
It is good that Budgets will now be annual. Investment in capital investment should be 3%, and that should be a floor, not a ceiling, but long-term certainty is needed for the devolved nations.
Blair McDougall (East Renfrewshire) (Lab)
The hon. Member may have seen that the Scottish Trades Union Congress has said that, for the SNP,
“The Westminster blame game is finished. They have the money. They have the powers.”
Will he acknowledge that this Budget ends austerity and that the Scottish Government now have no more excuses for their failures?
Dave Doogan
Indeed I will not accept that. I will get on to that—and to the block grant in particular—in just a minute if the hon. Gentleman will bear with me for a second or two.
Infrastructure is like a sport: if you do not do it very much, you tend not to be very good at it—see smart motorways, Hinkley Point C and HS2. The Chancellor claims that there is no return to Tory austerity, and she is right, because this is Labour’s austerity, plain and simple. It is all the same to Scotland, though. She has called on Government Departments to make 2% efficiency savings. There is literally no precedent for that, ever. No Government have ever achieved that, so those efficiency gains will not be realised, and those 2% savings will turn into 2% cuts.
The hon. Member for East Renfrewshire (Blair McDougall) asked about the Scottish Government’s position. We are led to believe that the block grant is going up by £3.4 billion. Clearly, that is welcome, but let us look at the back story, because that is what is important. The Scottish Government now receive a lower share of UK spending than at any point in the last decade. Total UK Government expenditure has decreased since 2020, and Scotland’s share of that expenditure has decreased faster still. In 2014, the adjusted block grant represented 8% of UK Government expenditure; however, that figure has fallen to 7.6%. That attrition represents a real-terms cut to the Scottish budget every year since 2020, and the Scottish block grant is now worth £6.4 billion less than it was in 2021, a drop of 12.7%. Of course, as we always do, the Scottish Government will put the £3.4 billion to tremendous use, but it still leaves us £3 billion short of where we were just four years ago. That is the problem with this Union.
Moreover, last year the Scottish Government’s capital block grant was cut by 9.6%, a real-terms cut of £600 million, and we face a further cut from Westminster of 3%, or £200 million, to our capital grant this year. That is money not available to build schools, hospitals, roads and so on in Scotland. The Chancellor did not address that in the Budget today.
We have fresh austerity and a fresh cost of living crisis delivered by this Labour Government—a Hobson’s choice for Scotland in broken Brexit Britain, where things can only get worse. Nine hundred thousand Scottish pensioners will have watched today in the vain hope that the Chancellor would U-turn on her winter fuel payment cut. Well, she finished that hope today. The winter fuel payment raid is a political choice with the most serious consequences. Labour’s own figures show that it could result in 4,000 excess deaths this winter, and estimates suggest that the cost to the NHS will be just shy of £1 billion and just shy of £100 million in Scotland.
In leaflets that went out across Scotland and elsewhere in the UK, Labour promised to reduce energy bills by £300; instead, they have risen by £149, so where is Labour’s £449 saving coming from? Speaking to us from Manchester, the chair of GB Energy could not say when any savings would materialise, and last night Labour moved to block any move to put that on a statutory footing in the GB Energy Bill. It is heads Westminster wins and tails Scotland loses. This Budget has done nothing to atone for the 4.3 million UK children living in poverty, a situation that is further entrenched by Labour’s two-child cap impacting over 87,000 Scottish children. Over 100 children a day fall into poverty with Labour’s two-child cap. That is 10,000 children since Labour took office in July. What a record!
This is a know-your-place Budget for children, the disabled and those living in poverty. It is a wait-a-little-longer Budget for WASPI women. It is a kiss-goodbye-to-your-family-farm Budget. It is a hand-over-the-money Budget if you are in Scotch whisky. It is a show-some-gratitude Budget to Scotland, to get a piece of what was already ours to begin with. And it is a grim reaper Budget for the 4,000 pensioners across these islands who will not survive to see another.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
It is a pleasure to follow the hon. Member for Angus and Perthshire Glens (Dave Doogan), despite his failure to acknowledge that this is the biggest real-terms block grant that Scotland has ever seen from the UK Government, and his failure to apologise for the mess that his Government, the SNP Scottish Government, have made over the past 17 years for people across Scotland.
It was from the Opposition Benches in 2010, during the Budget debate, led by the Conservative Chancellor of the time, that I rose to make my maiden speech. It feels fitting to speak for the first time since my return to the House in today’s Budget debate, following our first Labour Budget for many years—and from the first female Chancellor, no less.
With your leave, Madam Deputy Speaker, I will touch on my return to the House and my new constituency before returning to the Budget. I am from a working class background, the daughter of a factory worker and a car salesman. I was raised to know that the odds were against us. I entered politics to work hard to even the playing field with my colleagues, giving people the homes, the education, the healthcare and the money in their pocket to ensure the best possible quality of life. But during my last period serving in this House as a Scottish MP, from 2010 to 2015, all politics was seen only through the prism of the constitutional debate, and progress in Scotland withered in its shadow. It means the world to me to return to Parliament now, when we are moving from a period of stagnation in Scotland and across the UK, and to get back to fighting to improve the lives of our constituents from every single background.
In my constituency of Motherwell, Wishaw and Carluke, I am now the next-door neighbour to my previous constituency. It is an area I know and love exactly the same, and I am so excited about working with the people there in the months and years to come. With the three main towns of Motherwell, Wishaw and Carluke, the smaller towns of Forth and Law, our lovely villages and beautiful rolling fields and views of Clyde valley, our constituency is a brilliant place to live and visit. Carluke is picturesque, with its sandstone town centre, and is known as a “town called courage”, in recognition of three sons of the town, William Angus, Thomas Caldwell and Donald Cameron, who were each awarded the Victoria Cross. More than 2,000 men and women with local connections have served our armed forces in the past 200 years. That is testament to the bravery and dedication of our community, both past and present.
Motherwell and Wishaw were at the heart of Scotland’s industrial landscape, with the towering Ravenscraig at its centre. Its closure in the early 1990s had repercussions that we still feel today. Now, the site is home to our state-of-the-art sports centres, the New College Lanarkshire campus, and thousands of people and homes built for the future. The rejuvenation and hope at Ravenscraig symbolises both the hardships that Lanarkshire has faced for decades, and our ambition and drive to achieve a better future. I will do everything I can, as the MP for Motherwell, Wishaw and Carluke, to make that future a reality.
Until the election, our constituency was represented by Angela Crawley and Marion Fellows, and I pay tribute to them. Angela was a hard-working champion for her constituents, and became known in this House as a vocal advocate for LGBT rights, and especially for trans people at a time when it was most difficult to do so. I applaud her for that work. Marion proved to be a respectful and fair opponent in this summer’s election campaign. Her time here will be remembered for her work for the rights of people living with disability, and as a lead campaigner for justice for sub-postmasters long before it became a fashionable cause to champion. I wish her well in her retirement.
Before returning to the Budget, I cannot let this moment pass without paying tribute to my Labour predecessors in my constituency, whom I served alongside in this House between 2010 and 2015. Jimmy Hood and Frank Roy both had their politics forged in the Thatcher years. Jimmy was a leading member of the National Union of Mineworkers during the miners’ strike, and Frank was a steelworker at the forefront of the battle to save Ravenscraig. Jimmy served his constituents for 23 years, and we sadly lost him 2017. People here in Parliament and at home in Carluke often remember him fondly to me. I knew him to always be always smiling, fun and kind.
Frank Roy has been a trusted friend of mine since I started out in politics. In fact, Frank was the first person who asked me to stand for Parliament. That simple question helped to give me the confidence to express my ambition to do so. He was an incredible representative for Motherwell and Wishaw, and continues to serve the people of Lanarkshire now, leading the Lanarkshire Cancer Care Trust based in Wishaw. I am lucky to call him my friend.
I will turn my comments to the business of today’s debate. Today’s Budget represents a real commitment to protect working families and to reject the damaging austerity measures that have scarred our communities for far too long. We all remember—indeed, are still living with—the effects of austerity: cuts to vital services, job losses and increased hardship for our most vulnerable citizens. This Budget unequivocally signals that this Government are committed to moving away from that approach. We will not return to the failed economic model of the past 14 years, which prioritised cuts over care. Instead, we are focusing on investment and growth. The people of Motherwell, Wishaw and Carluke have felt those consequences deeply, and it is our responsibility to ensure that we do not return to that path. The country voted for change, and this Budget is all about delivering the solutions we need for a brighter future. It was the irresponsible choices of the last Government that caused this mess, and it is the responsible choices of this Government that will get us out of it.
I cannot help but have a bit of personal excitement to see an old friend, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), deliver the Budget at the Dispatch Box, the first woman to do so. I have been asked several times recently, “When you were first elected together in 2010, did you ever think that she would end up Chancellor?” And the answer to that is yes—yes, I did. It should never have taken us this long to have a woman at No. 11, but I think we can all agree—at least on the Labour Benches—that it has been worth the wait.
Let us be clear that today’s Budget from a Labour Chancellor is good news for people across Scotland and across the UK, especially in my constituency of Motherwell, Wishaw and Carluke. We on the Labour Benches campaigned loud and clear at the general election for change, and that is what has been delivered here today. The triple lock is confirmed for pensioners, meaning that pensions will go up by £900 this year and £470 next year, and they are projected to go up by another £1,700 during this Parliament.
Pamela Nash
I will not give way just now.
There is a wage rise for 200,000 Scots, with the increase in the minimum wage and the steps taken to remove the discrimination against young people, who deserve the same wage for the same work; the largest increase ever for carer’s allowance; and an additional £3.4 billion for Scotland, bringing our block grant to a record level. It is now the responsibility of the SNP Scottish Government to put that money to good use.
Madam Deputy Speaker, you and I know that those of us in this House are a bit unusual. Political animals are not the norm. When I speak with my constituents, they do not care if it is Labour, Tory or SNP politicians who put more money in their pockets and fix public services—they just want it done. So we need no more vanity projects, and no more money wasted on research papers for an independence debate that people are sick of hearing about. This is real money that can alleviate real problems now. I do not want my constituents to have to wait until the Scottish elections in 2026 for an improvement in our schools and our hospitals. This money has to get to the frontline immediately, and the Scottish Government will be judged at the ballot box if it does not.
I will finish by saying that my welcome back here has been heartfelt and warm, from colleagues across the House to the Doorkeepers and staff across the estate who look after us in this place every day, but the one question I am asked over and over again is, “What has changed since the last time you were here?” The truth is that not much has changed. We still work very much the same way. There are, perhaps, a couple of changes for me. Last time I was here I was the baby of the House and now I am old enough to be the current holder of that title’s mum. But the one enormous change from the last time I was here is that I am in government with this Labour party—a Labour Government. There could be no bigger change, and we are just at the start of seeing the great waves of investment, progress and growth that this new Government will achieve.
Sir Desmond Swayne (New Forest West) (Con)
It is an enormous pleasure to follow the hon. Member for Motherwell, Wishaw and Carluke (Pamela Nash). Until recently, my cousin was a minister in Carluke.
Let me give the House a piece of Swahili wisdom. Howezi kuwafukuza swala wawili: you cannot chase two antelope. That, however, is exactly what the Government have been doing since they were elected. They announced immediately after the election, and repeated today, that their overriding priority was to secure economic growth by investing, investing, investing, but in reality their main effort was elsewhere. Their main effort was a creating a narrative in the public mind that they had inherited a wasteland, the worst inheritance of any Government since kingdom come: that the wicked Tories had operated a scorched earth policy leaving absolutely everything broken, nothing working, and a huge black hole. As a consequence, things would have to get worse before they could get better, and there would be implications for tax in the forthcoming Budget—and, of course, we have discovered that today.
The reality is that investment requires an optimistic outlook. By pouring such a bucket of cold water on the British economy, what the Government achieved was to reverse what was soaring business confidence and turn it into absolutely collapsing business confidence; and business confidence is the key to investment, not the great binge of borrowing that the Government are about to enter into.
Tom Hayes (Bournemouth East) (Lab)
Would the right hon. Gentleman welcome the £63 billion of investment that came through the international investment summit as a result of the election of a Labour Government? That money had been held back until the election, and the election led to the investment of those billions of pounds. Is that not a sign of significant business confidence in our country?
Sir Desmond Swayne
Much of it reannounced, and much of it put at risk by the behaviour of the Transport Secretary, but nevertheless an achievement. Of course I welcome any inward investment. What I think is a huge risk is a great borrowing binge for exactly the sort of investment that we saw throughout the 1960s and 1970s, which never delivered. Real investment—investment that improves productivity—is that which is undertaken largely by medium and small firms to invest in their own enterprises, but it is crowded out by the increased costs that are entirely a consequence of the Government’s great borrowing binge. On that basis, this Budget is a disaster.
Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)
It is my great pleasure to speak in this debate responding to the first Labour Budget in 14 years, delivered by the first ever female Chancellor of the Exchequer. I congratulate my right hon. Friend the Chancellor on making history today.
In July, the country elected Labour to fix the foundations of our country and put us on a path towards national renewal, and that is what this Budget does. The Chancellor is not ducking the big decisions or slapping sticking plasters on the problems; instead, she is fronting up to the challenges and taking long-term decisions in the interests of Britain. My constituents voted for change, and with this Budget they will see a Government who are on their side—on the side of working people—pulling up their sleeves to deliver the change that they voted for. I was delighted to see the Prime Minister visit Birmingham earlier this week, where he set out his desire to put our city at the centre of the Government’s plan for growth. Growing our economy is the only sustainable way in which to fund the public services on which we all rely.
I thank the Chancellor for the many excellent announcements in her speech. We have already heard a lot of bluster from the Opposition, playing silly games with semantics over the definition of a working person, but it could not be clearer whose side this Government are on. May I remind Conservative Members that the last Parliament was the first in modern history in which living standards fell? They left an economy of high taxes, low growth and low wages. Public services are on the floor, and we have had a “pay more, get less” doom loop of stagnation and decline. Under the Conservatives, the very basics of what one needs to live a good life—a safe and affordable place to live, money in one’s pocket, and the security of strong public services that are there when needed—were all ripped away. First, austerity stripped more than £1 billion from Birmingham over a decade. Then we had the Conservatives’ botched Brexit deal. Finally, they crashed the economy under Liz Truss.
The Tory record left us with slow economic growth, nearly 8 million people stuck on NHS waiting lists, a housing crisis, with 24,000 people on Birmingham’s housing register, crumbling schools and hospitals, stagnant wages, rising living costs, and limited job growth, with young people and graduates facing fewer employment opportunities for the jobs of the future. Worse still, under the last Government, people lost faith in the fundamental promise of this country that the next generation should do better than the last. They lost trust that politicians were able to take tough decisions for the long term, and to put the country before their own political skins.
The “here today, gone tomorrow” culture of broken promises damaged people’s faith in politics, but with this budget we can begin the patient work of rebuilding our country, because we have a Prime Minister and a Chancellor who understand that we were elected to serve. The people of our great country finally have a Government who are prepared to take tough decisions and get on with the job of cleaning up the mess left by the Conservative party. We will invest in our NHS after 14 years of decline. We will make fairer choices on tax, spending and welfare. We will protect working people by not increasing national insurance, the basic, higher and additional rates of income tax, or VAT, just as we promised.
We brought a record-breaking £63 billion of private investment into Britain at our international investment summit this month. That is a vote of confidence in this Government. We have £500 million of new investment in battery storage, which will create the jobs of the future in Birmingham. Today, the Chancellor has confirmed a change to the fiscal rules to break the low-investment, low-growth cycle under the previous Government. That is a decision to secure Britain’s long-term future. It will put muscle behind the Government’s industrial strategy so that we can invest in the industries of the future in partnership with the private sector, and create revenue to fund the public services that our constituents expect and deserve. The question has always been whether to invest or decline. The Conservatives can choose decline, but we choose investment.
The truth is that the average person in the west midlands is £4,320 poorer than they would have been had the economy grown since 2010 at the same rate it did under the last Labour Government. That is why I heartily welcome the Chancellor’s decision to increase the national minimum wage, which provides a £1,400 boost to full-time equivalent pay for over 45,000 people in Birmingham alone. University Hospitals Birmingham, which is in my constituency, is the largest trust in the country, so I thank the Chancellor for announcing funding to support the delivery of 2 million extra NHS operations, scans and appointments a year in order to cut waiting lists across England. I cannot describe how much that means to not just NHS staff, whose morale has been ground into a fine dust over the last 14 years, but people throughout my constituency. Some of my constituents have died while waiting for treatment, and I know of one child who lost her sight while waiting for an appointment.
A healthy economy depends on the health of the country. Under the last Government, nearly 3 million working-age people were out of work or long-term sick—a British record. That is why I am pleased to see the announcement of £240 million for local services, to help people back into work. Skills England will map the jobs that are needed and the pathways to opportunities. Some £30 million will be spent on primary school breakfast clubs, which will help children to get a nutritious start to their day and take the pressure off parents who want to get out to work. The confirmation of £1.8 billion to support the expansion of Government-funded childcare is extremely good news for hundreds of young families in my constituency, especially given that more than half of our children’s centres in Birmingham were closed under the Tories. Families will be far better off with Labour.
I appreciate that the Chancellor has had to make some extremely tough choices in this Budget to get the public finances back in order. The £22 billion black hole is the tip of the iceberg after the last 14 years, but it is no less appalling. The OBR has today revealed an absolutely shocking litany of mismanagement and failure, including spending the reserves three times over, wasting hundreds of millions of pounds on the Rwanda gimmick and billions on asylum hotels, propping up failing train companies, and unfunded spending commitments. So will the Conservatives please spare us some of their faux outrage about tax? They raised the tax burden to its highest level since the second world war, they knew full well that public services had to be paid for and they hid the £22 billion black hole from the public. How did they expect to pay for that? They should have some shame, frankly.
This Government are fixing the Conservatives’ mess and protecting working people’s payslips as they do it. Our announcements today will make a difference. We are investing billions to get Britain building, making business rates fairer to protect our high streets, giving certainty to business on tax, supporting frontline policing levels, providing funding to local government and £1 billion for SEND provision, protecting the pension triple lock and finding money for potholes—I could go on.
Some things will of course take time, but these decisions are the reason we can have confidence that the Britain we are building will be built on something solid, not on sand. With this Budget, this Government have returned stability to our economy. It has reinforced the role of the OBR, and it will make sure that we can never, ever again have a repeat of the reckless mini-Budget that sent mortgages through the roof. We are backing business by releasing investment in sectors with potential to grow, including rail and road, green technology, green hydrogen and gigafactories. We are investing in our public services, including our NHS, early years and affordable housing, to ensure that we are ready to face the challenges of the next decade in an increasingly uncertain world. This is a Budget to deliver on the promise of change. It is a Budget that will fix the foundations of our economy, invest in our future, get the NHS back on its feet and rebuild Britain.
George Freeman (Mid Norfolk) (Con)
It is a great pleasure to follow the hon. Member for Birmingham Edgbaston (Preet Kaur Gill). It is also an honour and a pleasure, after 14 years, to be able to rise as a free man—free to speak on the Opposition Benches liberated from the tyranny of the Whips’ handouts that are being so beautifully read from the Labour Benches, and from the tyranny of desperate ambition to get on to the Front Bench. I want to speak today, after 14 years on and off the Front Bench, about the state of the public finances. I shall speak much more in sorrow than in anger, not to score party political points but to share reflections on the real depth of the crisis this country faces in our structural deficits and the challenge that this Chancellor, this country and this Parliament face in tackling it.
As a former Minister for life science, for fusion, for quantum and for space, I am delighted to have been elected by, I think, the House to the Science, Innovation and Technology Committee. I am also chair of the parliamentary and scientific committee—the oldest all-party group—and chair of the APPG on science and technology in agriculture. I am also proudly and gladly pleased to declare my entry in the Register of Members’ Financial Interests. I am trying to repair my finances—I carry too much debt, like this country—by working with some great British companies to help them to raise money in the international markets and to grow. That is what this country has to do to get itself out of debt as well.
I want to say three things this afternoon: something about the real nature of the crisis in our public finances; something about why I so deeply believe the innovation economy is the only way to get us out of this doom loop spiral of structural deficit and debt; and something about my poor constituents in Mid Norfolk and the effect of this Budget on them. Tempting though it is to stand up and accuse the Labour Government of causing all the ills of the world, and to take no responsibility for them, I want to do the opposite and suggest that this Parliament and this country have for the last 25 years been failing to grapple seriously enough with the deep nature of structural deficit in our broken public finances.
I remember, when I was newly elected in 2010, having a brilliant briefing from Robert Chote and Paul Johnson of the Institute for Fiscal Studies, and having the structural deficit properly explained to me. That has stayed with me, and it is worth sharing for the benefit of those listening to this debate. Traditionally, all Governments in this country tax and spend. They earn money every year from tax revenues and then spend it. In some years, the economic cycle turns down, so we do not cut spending; we borrow a bit to maintain our spending and then repay it when the economic cycle turns. Occasionally in the cycle, we run deficits. The structural deficit is that bit of the public finances that means that, even when the economy is growing—even when it is growing at 2% or 3%—we are running a deficit, because there are bits of the economy that are constantly swallowing more money than we are capable of earning.
When we took office in 2010, debt interest was effectively the fourth biggest Department of state. We had a serious crisis on our hands. Looking back, if we are honest, new Labour did not pay enough attention to deep reform of our public finances during the “Cool Britannia” years of Gordon Brown and Tony Blair. In the 2007-08 crash, that Government unleashed £700 billion of borrowing and quantitative easing. We can argue about whether that was the right thing to do, but it drove huge asset price inflation and left us with huge debts.
The coalition tried to get us out of that debt with austerity, on which I think the country was with us for the first two or three years before feeling that we had overdone it. Yes, we had that crash, the disruption of Brexit, a terrible once-in-a-century pandemic and a war in Ukraine—we had £700 billion of QE, £400 billion of pandemic relief and £40 billion of cost of living relief—but we have effectively come back to where we were in 2010, facing a structural deficit and flashing red lights in the public finances. I call it the bonfire in the basement of the British economy. Even when the economy is growing, even when we see Canary Wharf on the drive from Norfolk, the unseen bonfire in the basement eats away at the economy’s resilience and sustainability. That should worry all of us involved in public policy, and I have a sneaking feeling that the public understand this.
The people I spoke to on the doorstep during the election were not economists or seasoned political observers but, after observing successive Governments fail, their common sense told them that there is a deep problem in the state. I suggest that much of the political volatility in recent years comes from an inability, including in my own party, to be honest about the scale of the problem. I think the Brexit revolution was driven by deep anger and resentment not just at Brussels, but at the failure of this country’s political economy. People outside the golden triangle felt left behind by their own Government, their own country and their own model of growth.
The lecture I received in 2010 from Robert Chote and Paul Johnson is just as relevant today. Four things drive the structural deficit. The first is debt interest. There was an inflation surge because of the war in Ukraine, but we have been lucky that the markets have generally not punished us for borrowing too much. Second is welfare bills. The coalition implemented very painful reforms to stop the rise of the welfare bill. We did not cut the welfare budget; we just stopped its rise. Third is public sector pensions. Again, there were some very painful reforms, not to cut the costs but to prevent them from booming and bankrupting the public finances.
Those are all significant issues, but the biggest one, by far, is healthcare. The structural cost of healthcare in our ageing economy, with increasingly expensive medicines and an NHS designed for the 1940s rather than the 21st century, is in danger of bankrupting itself and the public finances. I am on record as saying, and I will repeat it, that the Health Secretary’s honesty is a breath of fresh air. The NHS has not been broken by a lack of Tory funding—we have all poured money into the NHS—but the problem is that the model is not fit for the 21st century.
Much more in sorrow than in anger, I suggest that we need to start this debate by being profoundly honest about the real nature of the problem. The truth is that we cannot cut, borrow, tax or spend our way out of a debt crisis, and successive Governments have tried and failed.
I speak as a card-carrying supporter of industrial strategy, of increased R&D spending and of getting the country out of its current spiral and into a higher-growth model. I want to cheer much of this Budget, and perhaps there will be more to cheer when we read the Red Book tomorrow, but I am worried.
Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
I thank the hon. Gentleman, my fellow member of the Science, Innovation and Technology Committee, for giving way. He knows that R&D funding is vital to driving innovation, productivity and future growth and prosperity. Does he agree that we should welcome the commitment to protecting core R&D funding, as well as the specific investment in high-tech areas such as automotive, aerospace and clean energy? Does he agree that the Committee looks forward to examining the detail of the Budget to see its impact on science and technology in every Department and across the country?
George Freeman
I thank the hon. Lady for her intervention and for her chairmanship of our Select Committee. I welcome bits of the Budget, including the £20 billion commitment. My right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), the former Prime Minister, and I secured an historic commitment to raise R&D investment to £20 billion when he was Chancellor, and I heard the Government ringfencing that amount today. I support the notion of an industrial strategy, as long as that does not involve earnest committees of Whitehall mandarins far away from the innovators, entrepreneurs and people on the ground. I support the wealth fund and the Mansion House reforms, but I have sincere concerns about the message that today’s Budget sends about innovators, entrepreneurs, wealth creators and businesses. They are the people who turn great science into great businesses that drive growth.
Let me talk about why the innovation economy is key. If we want to get out of debt, the innovation economy provides the only model of growth that will deliver the productivity increases we so urgently need. It will reduce our reliance on the low-wage labour that has been completely built into the service economy, which has dominated this country since the 1980s and since the Tony Blair and Gordon Brown years of “Cool Britannia”. That model was based on letting London boom and pulling in cheap labour, which drove an immigration crisis that my party got itself twisted up about and that put huge pressure on our public services. We have to get away from that model of growth, and move to a model of growth led by innovation, with higher skilled jobs, much greater efficiency and productivity.
Sectors are growing in this country that could attract billions of pounds of investment from all over the world. There is a wall of capital to invest in agritech, clean tech, fusion energy, satellite manufacturing—I could go on—and all the sectors where we are strong. That is the part of the economy that we should focus on, and it is the only bit of the economy that drives genuine regeneration. The sustainable levelling up is happening in Glasgow through the satellite manufacturing economy, in Edinburgh through quantum computing, in Newcastle through data, in Leeds through digital health and in Norwich through agritech. The R&D economy is the best mechanism for driving that levelling up and regeneration, and creating the opportunity society we all need. We cannot have an innovation economy without an opportunity society. I would go as far as saying that we cannot have an opportunity society without an innovation economy. That is key if we want to tackle the problem of debt.
Nesil Caliskan
Does the hon. Gentleman agree that supporting skills and employment is key to creating the sort of economic growth he talks about? Getting young people on a pathway to training and receiving the skills they need to secure jobs is critical.
George Freeman
I completely agree and the hon. Lady makes an important point. I was the Minister that covered that agenda. The science superpower piece is about our being a bigger player in the world, attracting billions into the country and using our science and research to solve global challenges. Our science ecosystem is not yet set up to do that—that is not even what it thinks it is there to do. The innovation economy piece is about using the science engine to drive economic advantage in this country through the catapult network, greater industrial R&D, investment in skills, ensuring we train the workforce for tomorrow’s industries, procurement and regulation, and supporting innovation clusters. Skills are key to that.
In that context, a Budget is an opportunity, but the Chancellor has missed the fact that to drive the innovation economy, we need entrepreneurs, innovators, and people who will take a risk and create a business. That does not happen in the Treasury or, dare I say it, in my beloved old Department for Science, Innovation and Technology. It does not happen in Whitehall. Our job is to create the conditions for innovation to flourish.
I fear that the signal that has gone out from today’s Budget is that although we have had a change of Government, we have not had a change in the core narrative. It feels to me as though Treasury orthodoxy has been reasserted. We will balance the books by making cuts, taxing existing wealth and chasing harder and harder after growth, but what we will see is growth down, inflation up, borrowing up, mortgages up and taxes up. We need to send a big signal that this country is open for business.
The hon. Member for Birmingham Edgbaston (Preet Kaur Gill) made an interesting point about the global investment summit, which we set up and which is now called the international investment summit. It is good news that that money is coming in, but I have to say that, in 30 years in the innovation economy, I have never seen so many people decide that they are going to sell their businesses and leave the country than I have over the past three or four months. The Government thought that they were playing a clever political trick of rolling the pitch, so that, on Budget day, the news would not be so politically damaging. However, they have misunderstood how mobile capital and talent are in the global economy.
We need people to want to come to this country. Often they want—I did not—to put their children into independent schools. They want to make money here. They want to build businesses here. We need to attract them. We have no right to just assume that they will come. If we are to build an innovation economy, we need a tax regime that is fair. No one wants this to be the home of Russian money-laundering, international criminals and abuse of the non-dom system, but we have to build an economy that is attractive for innovators.
We also need to better connect the City to our science, research, technology and innovation sector. It is shocking to me, and it should be to this House, that, in 1997, 73% of the £3 trillion-odd held in the City—our money that is invested in pensions—went into equities, 53% of which went into UK equities. That figure today is just under 4%. In the past 25 years, we have seen the most extraordinary globalisation, digitalisation and indexation of the City. The City has not been encouraged by successive Governments, and has not itself been investing actively in the productive businesses of this country. We have seen a hollowing out in the City of its commitment to support British industry and British companies, and it is an accelerating model. In every month over the past four years, we have seen a net outflow of investment in UK equities.
I hugely support the work that the fantastic Parliamentary Secretary, His Majesty's Treasury, the hon. Member for Wycombe (Emma Reynolds) is doing on taking forward our Mansion House reforms. We must better connect our capital in the City of London to our productive innovation economy. I am not for a minute suggesting that everyone’s pension should go into one biotech company—quite the opposite—but if we connect some of that money with our innovation economy, we will unlock tens of billions of private money—our money—to drive growth in this country. At the moment, we incubate world-class businesses and then watch the Australian and Canadian pension funds buy them, or American investors buy them out and float them.
I worry about today’s inheritance tax and capital gains tax announcements. We will find that the devil is in the detail when we read the Red Book tomorrow. If we kill the engine that drives the people who create the companies of tomorrow, we will end up with a big science investment and not enough actual innovation in the economy.
To close, I want speak briefly about the issues in Mid Norfolk. It is a rural, sparse, disconnected place—it is something of a backwater—in the middle of East Anglia with poor traditional access. I am afraid that today’s Budget will hit the two key groups in my constituency. Many pensioners have been hit by the winter fuel changes, and huge damage has been inflicted on the small businesses on the high street, including the hospitality businesses and the pubs. They were looking for relief—not just a penny off beer duty but real relief for businesses out in rural areas. The agricultural property relief hit will damage the rural economy of Mid Norfolk. I hope that when we read the Red Book we will see some better news, but my fear is that we have a change in Government, but all too little change in our economic orthodoxy. Just like a company, this country is running out of cash. We need to unlock much more innovative and enterprising models of economic growth.
Dr Jeevun Sandher (Loughborough) (Lab)
Today’s Budget is when we start to turn this country around, rebuild prosperity and rekindle the belief that things can get better. With this Budget, we begin to rebuild hope. I became an economist and then a Member of Parliament to help set Budgets in this Chamber, because what we spend, tax and invest determines our future. In my teenage years, I had the privilege of growing up under a Labour Government, and I saw great Labour Chancellors, from this Dispatch Box, deliver Budgets that built a better Britain—a Britain where wages grew, where hospitals were built and where poverty fell. More than that, I saw a Budget and the creation of a country where hope and graft were rewarded, renewed and refreshed by a Labour Government who delivered on their promises.
But then I became an adult, and I grew up under a Conservative Government: a Government who cut investment and created a no-growth economy with the worst fall in wages since Napoleonic times; who cut home insulation and blocked clean energy, leaving us dependent on fossil fuels supplied by dictators like Putin; who blocked house building so that young people in my generation saw house prices soar while their wages only fell; and who cut defence and weakened our armed forces. We on the Government Benches understand that amateurs talk tactics and professionals talk logistics. That is what this Conservative Government left us with and gave us for my entire adult life—until now.
Winning the last election means that this Labour Government can rebuild our nation’s prosperity and rebuild a country where wages rise and things do get better, with investment in our schools so that kids can learn more today and earn more tomorrow, investment in our NHS so that temporary illnesses do not stop us from working permanently, investment in clean energy so that we get bills down for good, investment in our police so that we can go to the shops without fear—and investment in homes for my generation; mum and dad, we love you, but it’s time for the kids to move out.
Rebuilding this nation brick by brick is hard and patient work. We will not notice how each brick changes this country, as we do not notice the inches that make up a mile, but slowly, surely, certainly, as we invest in this nation, we will create a more prosperous Britain, where each of us can and will thrive. Some of us, including me, will measure that progress in numbers and graphs, but what we create will be defined by so much more: a country defined by hope and pride, where tomorrow is better than today; and a country built by a Labour Government upon Budgets delivered by a Labour Chancellor.
Sammy Wilson (East Antrim) (DUP)
Unlike the Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh), I have not sat through 45 Budgets, or however many he mentioned—I am far, far too young for that—but I have sat through a number of Budgets where, after a change of Government, Chancellors and Prime Ministers have sought to blacken the people they inherited the economy from. When I played football, we used to call it “getting your retaliation in first”; I think that we have seen a bit of that. We had it under the last Government as well, of course. For about three years, I had to listen to George Osborne telling us that the previous Government had not fixed his roof while the sun was shining, and I suspect that for about the next three years we will have to sit and listen to the black hole that the present Government have inherited—and so it will go on as people try to justify the situation they find themselves in and indeed some of the failures of Government, year after year.
When listening to debates like this, I suspect that there are points that go over the heads of most of the population. Billions are thrown around—“We’re going to spend billions on this, and we are going to take billions out of that”—but that does not immediately resonate with the population. What does resonate, as we have seen in the last three months, is seeing figures that enable them quickly to identify the impact on them of the policies being introduced. I suspect one reason that there has been such reaction against the withdrawal of the winter fuel payment is that people can understand. They might not understand when the Government take £3 billion off a departmental Budget, but they understand when they take £300 off them in the middle of winter, when they are struggling with their fuel bills.
I wonder whether the Chancellor has learned that lesson already. I was relieved when she announced that she was not going to increase fuel duty. I suspect that one of the reasons is that she knows that an increase would have been easily understood by people who went to a petrol station to fill their car up and saw another 7p on the price of petrol per litre. If she has learned that lesson, I am glad that costs will not go up for my constituents, many of whom live in rural areas and depend on their car. In Northern Ireland, an awful lot of our supplies come in by road.
One thing I am fairly sure of, looking at the broader picture that the Government have tried to paint, is that the Budget, and the behaviour of the Government in the lead-up to it, will increase the existing cynicism towards politics and politicians. During the election, the Labour party said, “We have a fully funded programme. We know what the figures are. We’re not going to increase your taxes.” Then suddenly there is a black hole. After painting the black hole, what do the Government do? They immediately start spending stacks of money. They give wage increases, set up quangos to deliver net zero, and spend money on carbon capture and storage. Billions of pounds are suddenly announced against a background of: “We have no money, and we’re going to have to put up taxes.”
Labour’s promise was that no taxes would be imposed on working people. The Government tried to wriggle out of that. Who are these working people? Who will be affected? I will not go through all the iterations that there have been of “working people”. The fact is, as a result of the Budget, people know that they will pay more tax and their wages will be affected. I notice Labour Members shaking their heads; they should look at the report from the Office for Budget Responsibility. What prediction does it make? It predicts that disposable income will fall in real terms, real earnings will be reduced, and interest rates on Government bonds, which were already expected to go up, will go up further—all of which has an impact on people’s livelihoods.
The Government promised that they would not fiddle the figures and would be dead straight with people. Yet immediately—the Chancellor talked about it today—they have started to redefine borrowing. It does not matter what we call borrowing. It does not matter whether we put it in one barrel or another; at the end of the day, borrowed money has to be paid back, and interest has to be paid on it. It does not matter how we classify it; it is fiddling the figures to try to pretend that borrowing is not borrowing, and it has consequences for the economy and for individuals.
There are some things in the Budget that I welcome. As the chairman of the loan charge and taxpayer fairness all-party parliamentary group, I welcome the fact that there will be a review of the loan charge. It will be interesting to see what its terms are; they are not outlined in the Red Book. We will have to tease that out from the Government. The all-party group would be more than happy to talk about what the terms should be, and what issues need to be addressed.
I also welcome the fact that the suspended city deals, one of which would have affected the periphery of my constituency, have been restored. Being a cynic, I wonder whether they were stopped so that they could be given back, and we could all be grateful that we had got something back as a result of our lobbying. I know that there was extensive lobbying by councils, by the Chair of the Northern Ireland Affairs Committee, the hon. Member for Gower (Tonia Antoniazzi), whose intervention I welcome, by the Secretary of State, and by the political parties in Northern Ireland. Those city deals were important because, as we heard from the hon. Member for Mid Norfolk (George Freeman), one way of growing our economy and making it more robust is to spend on research and development and innovation. In both city deals, there was a strong element of research and development, and innovation hubs, and there had already been interest from the private sector because of the money that was going to be spent on them.
I also welcome the additional money under the Barnett formula. Northern Ireland has been short-changed under the funding formula for many years, because it was not based on need as it was in other parts of the United Kingdom. I note that it will, in future, be based on need, and that welcome change will help the Executive in the delivery of public services in Northern Ireland.
So many of my constituents have been affected by infected blood. Now that the funding commitment is there, I hope that there will be no slowdown in the delivery of that funding to those who have been infected.
I have concerns. About half of my constituency is rural and made up of small farms. The inheritance tax, and especially the ending of the agricultural property relief, will have huge implications. Not only do we have small farms, but the average age of farmers is 58, so many of them are coming to the point where the farm will be passed on. They are not cash-rich, so how will they pay the tax? They will simply have to sell the land, breaking up the farm and making is less viable. That will have a huge impact on the agricultural community in Northern Ireland. The Government have made a mistake on that. It will impact on small farms and food security. I hope that there will be greater examination of that.
Most of our many businesses in Northern Ireland are small and medium-sized businesses. The Government have placed further burdens on them in the Budget, not least in the tax on jobs and the cost of jobs through national insurance contributions, the threshold being lowered, and the percentage that businesses will have to pay. I believe that that will add to the difficulties that businesses are already experiencing.
I have already mentioned this last point. The borrowing that the Government will undertake will have—and is already having—an immediate effect on interest rates. The OBR points out that the yield on Government bonds is already increasing and will continue to increase. That will feed through to ordinary mortgage payers and to people who have to borrow money for their businesses. That will, in turn, have an impact on growth. In fact, the OBR indicates that, as the next four years go on, growth rates will fall—they will be lower at the end of this period than they are currently—yet this is meant to be a Budget for growth.
I noticed Members cheering the Government as the Chancellor made her announcements today. I hope that they are still cheering in a year’s time; I hope that they are still cheering in two years’ time. I want to see people cheering—I do not want to see the country do badly just to make a political point—but it is important that we are honest about the warning signs and do not build the expectation that this Budget will deliver all the good things that the Government talk about. We will certainly examine and hold the Government to account over future years on whether the policies that they have announced today will deliver what was promised to people.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Members will be aware that this debate is very oversubscribed. In order that people can help each other, I am imposing an informal seven-minute time limit.
Matt Western (Warwick and Leamington) (Lab)
It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson). I hope that in a few years’ time I will be joining him in celebrating growth rates that exceed the target objective.
What a tour de force by the new Chancellor! If only we had had a general election back in the summer and autumn of 2022. There has never been a more important Budget in recent years. After more than a decade of decay, this Budget must herald a decade of renewal. As the previous Labour Government did from 1997 to 2010, this Government must rebuild our country by founding a stronger, more diverse and more balanced economy. As the Chancellor has spelled out, we will do so by investing in our country, growing the economy and attracting private investment. Only then will we be able to restore the public services that the public need and expect.
This Budget sits in stark contrast to the 14 years of failure we have just suffered. It takes us beyond the absolute poverty, the waiting lists in our hospitals for surgery and cancer treatment, the decay in our crumbling schools, the teacher retention crisis, and an economy that has been virtually stagnant, boasting terrible productivity and income inequality. Those are the dreadful metrics of the last Government. The Institute for Fiscal Studies says that UK economic activity is 36% lower than it would have been if it had continued to grow in line with the 1997 to 2008 trend. That is a lower level than the eurozone or the United States, and when measured in terms of productivity, the latest 10-year average of growth in potential GDP per worker is zero, the second lowest level in the past 150 years. It is an economy still reeling from the events of Truss’s kamikaze Budget that sent mortgages soaring and prices skyrocketing.
Turning to inequality, the UK now has the ninth most unequal incomes in the OECD. Wealth inequality is even more glaring, with the top fifth of the country owning 63% of its wealth, while the bottom fifth hold only 0.5%. That does not just impact the amount of money in people’s pockets: it impacts the economy, too. That is why I believe we must address the imbalance of regressive flat taxes. Council tax must be addressed in the future, and I am glad that the Chancellor has closed tax loopholes and rebalanced the burden of payments, placing it on those who can afford it.
At the same time, this Budget will ensure that hard work pays off by raising the minimum wage. I welcome this—it is striking that many states in the US already pay a higher relative minimum wage than we in the UK do. Hard-pressed households facing the cost of living crisis will also welcome today’s Budget. The fact that we have frozen fuel duty is important, as is not having any increase in income tax, personal national insurance or VAT, as well as the penny off the pint. Those measures will all be welcomed by constituents of mine in Warwick and Leamington.
However, it is through investment that we can grow and rebalance our economy. Strikingly, 14 years of the Conservatives’ economic policies have led to our having the lowest level of public and private investment in any G7 economy. That is why I am proud to be standing on the Government side of the House discussing this Labour Budget, because we understand the synergy between investing in people and investing in the economy. We have already put £7 billion into a sovereign wealth fund, we have set up GB Energy, and we will be establishing Skills England to ensure we have the skills for the next decade. The investment summit a few weeks ago announced £63 billion—an extraordinary achievement. That investment is desperately needed, as was pointed out by Gus O’Donnell, Jim O’Neill, Mariana Mazzucato and Mark Carney. They argue the case for loosening the fiscal rules, stating that
“The current fiscal framework has helped to drive this short term thinking and created an inbuilt bias against investment”.
That point is also supported by the International Monetary Fund.
For years, economists have been calling for a radical shake-up of our economy: we need to shift from a consumption-driven economy to an investment-led one. As such, I welcome the Chancellor’s announcement of support for vital sectors, such as the energy transition and the automotive industry, through the advanced manufacturing plan. The opportunities are huge—that is why the Industrial Strategy Council is so important—so the support announced for green hydrogen, gigafactories, the life sciences and the aerospace sector, as well as the £2 billion promised for electric vehicles in the UK, are so important.
We need investment in our schools, our infrastructure and our NHS. I am particularly pleased to see the additional investment going into our NHS, because we can only become wealthy as a nation if we are healthy as a nation. If we do not address our NHS, we will worsen people’s lives, but this will also have a significant impact on our economy. In 2023, the number of people economically inactive because of long-term sickness rose to over 2.5 million.
I would love to talk about productivity, Madam Deputy Speaker, but perhaps I will do it another time. However, a London School of Economics report last year found that UK productivity is lower than that of France, Germany and the United States. That is why we need investment, and why we need to address the flexible labour laws in this country that have led or contributed to lower than average investment.
I am conscious of time, but I welcome all the measures that my right hon. Friend the Chancellor has announced, particularly on addressing the issue of business rates, which is so important for our town centres up and down the country. I welcome the investment in local government —the additional moneys for potholes, for example—but also the support for families, carers and children with SEND.
This Budget is about stability, certainty and credibility, and about investing in our economy, which is so important because, above all, we need to fix the foundations of our economy. The Chancellor has set out the plan to deliver that change, as was promised to the British people, and I commend the choices she has made.
Nigel Farage (Clacton) (Reform)
I think we have to give credit to the Chancellor for a Budget that, in political presentation, was very clever. The SNP has had an absolutely rotten day, and the decision to put money into potholes was clever. The fuel duty freeze is very welcome, especially for those living in rural parts of our country. But for me, the big one is of course the 1p off a pint off draught beer. I have worked out that it will save me over £1 a week, so I am particularly thrilled about that.
I sat listening to the numbers thinking that this Budget is economically illiterate. I do not know who is doing the sums—perhaps it is the right hon. Member for Hackney North and Stoke Newington (Ms Abbott)—but the sums do not work. The markets now agree with me, because just in the last couple of hours we have seen a very substantial spike in gilt yields. We are not yet quite back to the mini-Budget of 2022, but clearly people are saying that this is not going to work. Even more concerning, I suppose, is that the new head of the Office for Value for Money, David Goldstone, served for many years on the board of HS2, which I would suggest is the very opposite of value for money.
Madam Deputy Speaker (Judith Cummins)
I hope this point of order will be relevant. Can you confirm that it is relevant?
Matt Western
It is relevant, Madam Deputy Speaker. The hon. Gentleman mentioned my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), but had he warned her that he would be mentioning her in the Chamber?
Madam Deputy Speaker
I thank the hon. Member for the point of order. However, that is not a point of order; it is a courtesy of the House.
Nigel Farage
Nice try! I was just gently teasing, that was all.
We heard “invest, invest, invest” at the start of the Budget statement, and I thought, yes, that is absolutely what we need—not just from the big multinationals that come to smart conferences, but equally from hundreds of thousands of people putting their own risk capital into start-ups and new businesses. But no, this “invest, invest, invest” is going to be done by the Chancellor on our behalf. Not only was she a top economist at the Bank of England, but she is now going to be the fund manager of the nation, investing money and trying to pick winners. I would suggest that the last time Governments attempted to invest money and pick winners, back in the 1970s, it ended very badly indeed.
Sarah Owen (Luton North) (Lab)
The hon. Gentleman talks about investment in our country and in businesses, but I just question whether he would prefer to have investment from our Government, or investment from maybe the Russian Government.
Nigel Farage
Maybe one or two Members of the House ought simply to grow up, but there we are—it’s a bit sad. I have worked in private business, and I do think picking winners is wrong. I think we leave that to the free market, and we let people either make money or lose money. Frankly, if they do their dough, well, that’s just the way these things work.
Any business employing five or more people has been hammered today. I have set up and run companies, but nobody on the Government Front Bench has ever worked in private business. None of them understands what genuine risk capital is. From what I can make out, our Business Secretary has never even had a job.
Nigel Farage
I have had plenty of jobs—well, apart from being in the European Parliament, which doesn’t really count, obviously.
What is dismal about this Budget is the growth forecast. If the ambition of our Chancellor is that in four years’ time growth should be 1.5%, that is very bad news for everybody, particularly because it takes no account of the rise in population that will happen through legal immigration. It basically means a rise of 0%. Nobody has even mentioned the fact that gross domestic product per capita—wealth per capita—has been falling consistently nearly every quarter for the past two years. The bigger our population becomes the poorer we are becoming, and we must wake up to that reality.
The big picture is that we are in decline. We are getting poorer. There is no £22 billion black hole—that is nonsense. It is £2.7 trillion. Our debt repayments are £90 billion a year, and from all the figures I have seen today, that will be worse in five years’ time than it is today. We need a complete change of culture. We need to start saying that success is a good thing, and making money is a great thing. People becoming rich is something we should encourage. We have to change our culture of work. There is this idea, “Oh yes, work from home, do a four-day week, get your work-life balance right”—well actually, why do we not say to young people that hard work is a good thing? Hard work is the only way that anybody succeeds individually, and the only way that we will have a chance as a country to turn any of this around.
Nigel Farage
No, please sit down—honestly, you’ve had a go.
We are in much deeper trouble than anybody on either Front Bench dares to admit. That is a reality we should all face. We have a Labour party that could not define what a woman is or what a working person is, and after today I am pretty convinced that it cannot define what economic growth is.
Ruth Jones (Newport West and Islwyn) (Lab)
I would like to say it is a pleasure to follow the hon. Member for Clacton (Nigel Farage), but honesty forbids me and I will move on.
This is a long-awaited Budget. In Wales we have waited 14 years for a Budget from a Labour Government in Westminster who will finally work with, not against, the Senedd in Cardiff, and provide support for the people of Wales. I am so proud that this is the first Budget to be delivered by a female Chancellor—the first female Chancellor ever in the UK. That is fantastic, and I am proud to have been able to listen to her deliver her speech.
Since I was first elected back in 2019, hundreds of constituents have emailed and written to me about the effects of previous Conservative Budgets, most noticeably after the disastrous mini-Budget by the former Prime Minister Liz Truss and Kwasi Kwarteng, the failed Chancellor. One constituent wrote to me:
“Everyday is becoming a struggle”.
Another person had been living off less than £2 over the weekend and came into my office saying that they were
“very low on food and…overdrawn.”
As Members of Parliament, where we are able to help we do, but too often we have reached the end of what support we can offer too soon. I welcome this Budget, which will help working people after 14 years of constant deterioration in their living standards. We must be under no illusions: the Budgets of past Governments were Budgets to enrich the rich and to impoverish ordinary people, not help them. The situation that this Labour Government inherited as a result is not one that we wanted, but it is the one we are left with. We are faced with this black hole, and we must face up to it. This new Labour Government promised change from the failure of the past 14 years, and this Budget confirms our commitment to do just that. The Government have already taken steps to fix the foundations of the economy by shifting power towards working people with the Employment Rights Bill, by addressing the rail rip-off by bringing train companies into public ownership and by introducing a Bill to combat the Tory sewage crisis.
The Conservatives crashed the economy, sending mortgages through the roof. They wasted billions of pounds of taxpayers’ money on their failed asylum system, propped up private rail companies that were not delivering and facilitated dodgy covid contracts, leaving the £22 billion black hole in the nation’s finances and public services on their knees. Let us not forget that the £22 billion is a recurring amount, so it needs to be addressed right away. We cannot afford to wait any longer. After all their dither and delay, the Conservatives called an election and then ran away. All of that means there are choices to be made.
The first choice that this Government have had to make is to be open and honest with the electorate. All of us have felt the effects of 14 years of Tory Government. They were evident in every aspect of our lives. As my right hon. Friend the Chancellor has made clear today, the true scale of the problem did not become clear until very recently, when she actually had the keys to No. 11. The second choice that this Government have had to make is to be responsible in how to go about filling the £22 billion black hole created by the Tories. The third choice is to truly acknowledge the parlous state of our public services and the scale of work that must be done to address that. Crumbling buildings, poor staff morale and recruitment and retention problems are present throughout our whole public sector. Schools, hospitals and the brilliant people who sustain our education and health systems are crying out for the investment they need and deserve.
After 14 years of austerity combined with a post-covid inflation crisis, we have seen a decline in living standards and a soaring cost of living, all while private profits increased and the wealthiest became wealthier still. The Prime Minister is therefore right to insist that tax rises should not be levied on working people, but that those with the broadest shoulders should bear the costs—the very wealthiest and the large corporations that have registered soaring profits. As we promised in our manifesto, we will not raise national insurance, VAT or income tax.
Just as we pledged in the election campaign, Labour will protect working people—people like my constituents in Newport West and Islwyn. This Budget has delivered for Wales for the first time in a generation. Wales voted for change at the general election, and change has begun by sustainably investing in Wales’s future. As Chair of the Welsh Affairs Committee, I welcome the £1.7 billion of new money for Wales through the Barnett formula and through direct spending. Most notably, I welcome the substantial increase in Barnett consequentials for the Welsh Labour Government to put towards day-to-day spending on public services, such as the NHS.
I welcome the money to support steel communities, both through the transition board and by protecting the levelling-up funding in Port Talbot and elsewhere. I welcome the £25 million to make coal tips safe—I am so glad that our Government have stepped in so quickly to do that important work. I welcome the £430 million in funding for communities across Wales and investment zones to drive economic growth. I welcome the money for rail projects with the promise of a sustainably funded future. In Wales, we are seeing the largest real-terms settlement since devolution began in 1999. Labour is creating the conditions for long-term economic growth, so that people can finally enjoy the proceeds of their hard work and see an actual increase in living standards.
Change has begun. With this Budget, this Labour Government are investing in Britain’s future so that we can protect working people, fix the NHS and rebuild our country. This Budget shows the difference that having two Labour Governments working together makes for Wales. I thank the Chancellor for her drive, determination and honesty, and I look forward to her remaining in her post for many years to come.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is with sadness that I rise to speak in this debate on the Budget of broken promises. During the election campaign, I heard from many constituents about how they felt regarding their disillusionment with our political system. They feel that Westminster seems to talk only about itself, does not represent them and at times treats them like fools. This Budget damages our democracy in the contempt with which it treats our voters.
For the past few months, my constituents have been hearing from the Government that everything is going to be awful and this is going to be a punishment Budget, and they have been awaiting it with trepidation. They have heard that when the Labour party came into power, it discovered things it was not expecting, so it had to announce winter fuel payment cuts—despite the fact that it had been talking about doing so in this place for some time. Labour has said that it has to make difficult decisions but that it will stick to all its promises, but—hey!—it turns out that it can pull out various loopholes that it had carefully weaved into its manifesto.
That is one of the reasons why over the past few weeks we have seen this incredible debate about what a “working person” is, which so far has been pure and utter sophistry. It appears that that is what so much of this Budget debate turns on, so what is a working person? Certainly, I would say I am a working person; people here are working people, for the most part. The majority of my constituents are working people, or had been until they started claiming a pension, and that needs to be respected.
Since the Chancellor said that there would be no tax rises on working people, this question has led to a great degree of confusion as we go through the Budget. Is a business owner, or someone who works as a tradesman, not a working person? Ironically, Labour says it wants to fix the foundations of the country, but I wonder where it is going to get the tradespeople to do so. How about people who save for their future? Are they not working people? How about our pensioners? Have they not been working people? How about people who use the bus? Are they not working people?
Thankfully, today I got an email from the TUC, which helped clarify who working people are. It pointed out that the TUC are the ones who represent working people. I think our constituents all know that unless they are a trade union member or someone who is dependent on the state, the Labour party does not think they are a working person, and it is coming for them. [Interruption.] Well, look at the tax rises. When Government Members start digesting the Budget—when they look at the impact of an extremely low growth rate over the next few years, the impact on farmers, who will struggle to pass on their farms, and the impact on small businesses, which we depend on for growth, investment and prosperity —they will regret what has been said today.
I was sad that the south-east and Surrey were not really mentioned. [Interruption.] Labour Members laugh, but they would do well to consider that Surrey is the biggest net contributor to the Treasury outside London. The Chancellor would do well to listen to Surrey MPs about the investment that we need in local infrastructure so that we can continue to provide money to the economy for the ambitions of us all. In my constituency, that means confirmation of support for the Weybridge health centre rebuild, fixing our level crossings and motorways, and rebuilding the Magna Carta school.
The Government had an opportunity with this Budget, and they have missed it. They have chosen duplicity over delivery, politics over pragmatism and sophistry over service.
Naz Shah (Bradford West) (Lab)
It is an honour to follow the hon. Member for Runnymede and Weybridge (Dr Spencer), but may I urge some humility given the number of repossessions that my constituents in Bradford West experienced after a Budget that he supported, which led to a run on the pound? It was not that long ago that repossessions increased, mortgages went up and people were suffering. The party over there think it is quite good to—you know, food banks have become food porn. That happened under his Government’s watch, so maybe there is a need for a little bit of humility.
Let me say thank you to the Chancellor—the first female Chancellor to stand in this Chamber—for delivering today’s landmark Budget. I have waited more than 15 Budgets for one from the Labour Benches. It is heartwarming after nine years in opposition having to fight for the basics like school meals for children, and having footballers campaign for it. It was an embarrassment for us as a country when austerity was a political choice that the Conservatives made when they were in government.
It is lovely to see the grown-ups back in charge, delivering a Budget for the working people of Great Britain. There must be no doubt that the Chancellor’s task to deliver that was extremely difficult, given the reality of the public finances that we inherited from the Conservatives. Today, the Chancellor put forward a plan to turn the tide. She has delivered a Budget that will put money back into the pockets of working people. It is a Budget that will not only save the NHS, but ensure that it remains the pride of our public services for generations to come. It is a Budget that provides for our children and schools, giving them the education they deserve for a brighter future. It is a Budget that invests in infrastructure to rebuild Britain.
From the moment the coalition was formed following the general election in May 2010, the then Prime Minister David Cameron stated that his first priority was to
“reduce the deficit and restore economic growth.”
Well, how did that work out? Let me remind the House: by the end of the Conservative era, both those priorities had failed. UK GDP is now £400 billion less than expected in the OBR’s growth rate forecast when the Conservatives took office in 2010. When it comes to wages, from 2010 to 2014, earnings grew at probably the slowest rate in more than 200 years.
For my constituents in Bradford, this Budget provides us with infrastructure investment, which I am really grateful for—a huge boost that we need. Therefore, I welcome the Chancellor’s announcement today of funding for upgrades to Bradford Forster Square station and investment in mass transit system for the Bradford tramline, which will redefine the urban journey from Bradford city centre to Leeds city centre. That will improve public spaces, drive economic growth and ensure faster and more reliable access to essential destinations while linking key communities in between. I will be speaking to the Chancellor and the Secretary of State for Transport on the finer details, but this infrastructure investment is needed for Bradford to drive our economic growth.
On the flip side, what happened with the Conservatives? Time and again in the 17 statements I sat through they promised Northern Powerhouse Rail and to unlock growth. They promised to level up, and all they did was level down, level down, level down. Now, we have the chance to fix all those issues and what they did wrong. Our Chancellor and our Government had difficult choices because of Tory failures, but today they delivered. They delivered a pay rise for 3 million workers, the biggest increase in carer’s allowance since its introduction and a £2.3 billion increase in core school budgets.
They delivered a Budget that tripled free school breakfasts, added £1 billion in funding for special educational needs and disabilities, and £1.4 billion for the school rebuilding programme to provide our children with the school buildings they need to thrive in education. They delivered to protect the NHS, with an extra £22.6 billion for day-to-day spending in the NHS, £25.6 billion over two years to cut waiting times and 40,000 extra elective appointments a week—a manifesto promise made true and delivered today. People can have the care and the health protections in the NHS that they deserve.
This is unashamedly a Budget for working families and working people, putting money in the pockets of the very people who have been let down by 14 years of Conservative rule. I welcome this Budget, and I am pleased to see the positive impact it will have on my constituents across Bradford West.
Llinos Medi (Ynys Môn) (PC)
Diolch, Dirprwy Lefarydd. Today, the Chancellor had the opportunity for a transformative change, but she decided to give with one hand and take with another. Plaid Cymru recognises the terrible financial legacy inherited from the Conservatives, but this was not the way to fix it. There was no fairer funding formula for Wales, no sign of the £4 billion-worth of High Speed 2 consequentials owed to Wales, no devolution of the Crown Estate and no U-turn on the winter fuel allowance or an end to the cruel two-child benefit cap.
The Government could have tried to spread the pain with a bigger contribution by the very richest through a wealth tax, for example. Instead, the increase to national insurance will punish businesses and make it harder for them to create well-paid jobs. The Budget document suggests that there is an allowance for public sector organisations. I would appreciate some clarity from the Minister as to what that allowance entails and what constitutes a public sector organisation. Crucially, austerity will continue for some of the most vulnerable in our society, through failing to help the 540,000 pensioners in Wales to keep warm this winter and refusing to bring an end to the two-child cap in Wales, where a third of our children live in poverty.
There is little in the Budget that fixes the foundations for Wales. The uplift to the block grant will not rebalance Wales’s fiscal settlement. Welsh councils alone face a £559 million budget gap in 2025-26. I am afraid that the changes to rules on inheritance will seriously threaten Welsh family farms, which are the backbone of our rural economy. In opposition, the Labour party supported Plaid Cymru’s call for the £4 billion owed to Wales in rail funds. It criticised the previous Government for failing to give clarity on the Wylfa project in my constituency, yet in government it is repeating the same errors.
We welcome that Westminster is finally beginning to address coal tip safety. This is a long-standing issue that pre-dates devolution. This is an important first step in tackling its environmental impact, but communities will continue to suffer without meaningful efforts to create jobs and prosperity. I urge both the Welsh and UK Governments to develop a strategy that not only addresses safety and environmental concerns, but breathes life into local economies. That would be true, lasting co-operation.
Plaid Cymru will scrutinise every line of Labour’s Budget, because Wales deserves more than broken promises. We demand a fair deal.
Noah Law (St Austell and Newquay) (Lab)
I very much welcome the Chancellor’s Budget. It is a landmark Budget not just because it is the first Labour Budget in 14 years and the first Budget from a woman Chancellor in over 800 years, but because, as the Father of the House, the right hon. Member for Gainsborough (Sir Edward Leigh) referenced, of the intellectual change it represents. In that change, we are looking to enact a significant shift in the mindset of Budgets, from a no-can-do Britain to a can-do Britain; a Britain where we believe that investing is not simply a waste, but an un-blocker for private sector dynamism and investment of the kind that we so desperately need in Cornwall.
I welcome the commitment from the Minister for Industry, my hon. Friend the Member for Croydon West (Sarah Jones), to join a roundtable in the new year to meet the most promising industries in Cornwall. I am also delighted that our calls for structural funding, in the form of shared prosperity funding, have been honoured by the Government, particularly given the willingness of the previous Government to throw us under a bus, shipping young people on their not so merry way to a hare-brained national service scheme. I only wish that more Conservative Members from the previous Government were sat on the Opposition Benches to debate this landmark Budget with me this evening.
It is through the national wealth fund and GB Energy that we will be able to mobilise billions of pounds of private finance, de-risking investments to support critical infrastructure projects including in Cornwall, which will turbocharge the green economy and propel our country into the future. Our Labour Government will make sure we invest every penny of taxpayers’ money responsibly, prioritising our public services and ensuring that economic stability remains at the heart of decision making, and protecting working people from preventable economic shocks, such as those we have seen. We are driving forward the green industrial revolution at home in Cornwall and I am committed to ensuring that the spoils are spread among the community. Our investment in skills and infrastructure will empower local people and open up those opportunities for growth and innovation.
Several hon. Members rose—
Noah Law
This Government’s Budget—[Laughter.] I am actually making quite a brief speech, but I appreciate the eagerness of colleagues to lend their remarks to this landmark Budget debate. [Interruption.] I thank those sitting on the Front Bench.
This Government’s Budget signals a clear departure from the short-termism and sticking-plaster politics of the last 14 years. They are committed to taking long-term decisions to fix the fragile foundations of this country and secure a prosperous future for all. For St Austell and Newquay and the clay country, that means not just recovery but a real chance to thrive, ensuring that our communities are at the forefront of this transformation and benefit from a brighter, more prosperous future.
Mike Wood (Kingswinford and South Staffordshire) (Con)
I do not know whether you, like me, are a fan of “Yes Minister”, Madam Deputy Speaker, but if you are, you may remember the first ever episode of what was supposed to be a sitcom. In the episode called “Open Government”, Sir Humphrey started by explaining to Bernard, “Dispose of the difficult stuff in the title. It will do far less harm in the title than in the actual report.”
That seems to be a lesson that the Chancellor of the Exchequer has taken to heart. While we see any number of posters, slogans, signs and reports with “growth” in the title—it even popped up once or twice in the Chancellor’s speech—there is virtually nothing in today’s Budget statement, or in the hundreds of pages of documentation that the Treasury has published today, that will actually lead to growth in our economy, and there was almost nothing in the King’s Speech that could deliver the meaningful growth that the economy clearly needs.
With every hour that passes, it becomes clearer that the Chancellor’s promises have not been delivered, and that there is a very wide gap between what was promised and the hopes that were raised before the election and what we have seen both in the legislative programme and in the first Budget in 14 years—as has been said—to be presented by this Chancellor of the Exchequer. The problem is not the black hole that the Chancellor claims to have found, but whose existence the OBR’s “Economic and fiscal outlook” report does not support; the problem is not that hole, but the enormous gap—the chasm—between what the Chancellor and the Prime Minister promised in opposition and before the election, and what they are now delivering for our constituents. With every hour that goes by, people are seeing that they were sold a false prospectus on that growth. The OBR’s report makes it absolutely clear that while it expects a temporary boost to GDP in the short term, there will probably be some crowding out of private activity in the medium term. That is why the OBR forecasts that the measures in the Budget will not raise growth but will cut growth, in 2026, 2027, 2028 and 2029. This is an anti-growth Budget.
We were looking to the Chancellor to announce measures to support growth locally in our constituencies. Where is the certainty when it comes to the levelling-up funds that our communities were promised? Where is the certainty when it comes to the long-term plan for towns that our communities were promised—the plan that, in my previous constituency before the election, I worked so hard with local stakeholders, local councils and the combined authority to help to secure? The new boundaries mean that those projects are no longer in my constituency but in those of Labour Members of Parliament. Although it has been pointed out repeatedly that people voted for change, the people of Brierley Hill did not vote to lose a next-generation vehicle technology centre that would deliver the new skills that the community needs. The people of Dudley did not vote to lose £20 million of long-term investment from the towns fund, which would make such a difference to the community.
Graham Stuart (Beverley and Holderness) (Con)
My hon. Friend is giving a powerful speech on this Budget of broken promises. People in Dudley and elsewhere did not vote for this Labour Government to put up taxes on working people, yet the OBR has said today that 76% of the cost of the rise in national insurance contributions will come out of ordinary working people’s wages. Does he agree that they are rightly angry about that and will get angrier still when they understand the implications?
Mike Wood
My right hon. Friend is absolutely spot on. We do not need to take his word for it, definitive though it is. The Chancellor herself was clear that many of the tax rises that she has introduced today are taxes on jobs and can only find their way out of people’s pay packets.
People were sold a false prospectus on our national finances. Before the election, the then shadow Chancellor promised that Labour would be the party of “fiscal responsibility” and that she would have “iron discipline”. Well, at least Gordon Brown was faithful to prudence for a full term. It looks as though fiscal responsibility has been jilted at the altar by the Chancellor within her first few months. Page 6 of the OBR outlook makes it clear that the measures in this Budget will increase borrowing by £150 billion over the course of this Parliament.
Nesil Caliskan
If the hon. Gentleman thinks that taxes on businesses should not increase, where should the tax burden lie? If he does not think that borrowing should increase, what would he cut from the Budget?
Mike Wood
We have yet to see the departmental allocations. It is clear in the OBR’s projections that there are massive increases in borrowing, but even the savage tax rises that have been set out today are dwarfed by the increases in spending. The choices that the Chancellor has made are not to do with any black hole; they have been made because of her priorities, which were set out before the election. People were told that taxes would not have to rise under a Labour Government, but they are now seeing the reality. The current budget deficit will increase by £9.3 billion a year.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
I notice that the hon. Member still has numerous pieces of paper in front of him, so I hope that he is coming to this point. The Chancellor stood up today and made choices for the future of the country. We can agree or disagree with the choices that have been made, but I am not hearing from any Conservative Members what alternative choices they would make.
Mike Wood
The Chancellor and the Prime Minister made it very clear to voters that nothing in Labour’s plans would require tax rises, other than very specific tax rises that they had indicated. They said that they were not looking to raise taxes on businesses, working people and farmers, which was dismissed as “a lie” in the television debate. We now see that the claims made during the election campaign were untrue only inasmuch as the Leader of the Opposition and shadow Chancellor hugely underestimated how much the Labour Government would hike people’s taxes. Again, a false prospectus was sold.
Page 11 of the OBR’s outlook sets out that earnings growth will halve over the course of this Parliament. This is a betrayal of working people. It is the tax on jobs that the Chancellor was so keen to attack while in opposition. The increase in business rates will add £6,000 to the bills for a typical pub at a time when so many are only just managing. Per worker, the increases in national insurance contributions for businesses will add—
Mike Wood
I am getting glances from Madam Deputy Speaker to suggest that I ought to be winding up.
The costs are proportionately much higher for those who employ part-time workers on modest incomes. As my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin) has said, we are seeing French labour laws and German taxes, and I fear that will lead to Spanish unemployment rates. This Budget is damaging for growth, for national finances, for small businesses and working people and for farming in our rural communities. It is smoke and mirrors. It is the fiscal equivalent of the people on Westminster bridge who invite tourists to put money on “find the lady”. It is a Budget that is hidden behind semantics, sophistry and small print. It is bad for the country and the sooner that it can be reversed, the better.
Kanishka Narayan (Vale of Glamorgan) (Lab)
It is a privilege to speak in this historic Budget and on this historic day, and I start by congratulating my right hon. Friend the Chancellor and the Treasury team. For 14 years, the people of the Vale of Glamorgan and this country have carried the weight of hope, pent up inside. Today the Chancellor has weighed up their hopes, looked them in the eyes and lifted them. For that I congratulate her and the entire Treasury team.
Government is supposed to be the means by which ordinary people exercise their collective agency to shape our communities. For 14 years, the Conservatives denied ordinary people their voice. They denied us collective agency and a sense of hope in our community. Per-worker productivity growth in the past decade was the weakest on average since 1850. That is the worst foundation for shared prosperity. Public services are on their knees. That is the worst foundation for shared dignity. Our Army has shrunk and our prisons are bursting. That is the worst foundation for shared security. And through it all, we have had the double whammy of high borrowing rates and low nominal growth, through which they punched into our weak foundations a further £22 billion fiscal black hole.
As a side note, it is astonishing to me that the hon. Member for Kingswinford and South Staffordshire (Mike Wood) talks about fiscal responsibility and semantics. I do not think he was rising and talking about that during the sharpest spike in overnight gilt yields this country had seen in the 21st century. This is a national embarrassment for the Conservatives. They should be standing here and apologising. They should be pointing the finger down, as they ought to have been doing at the time, and apologising for what they were doing, but I see no contrition on that side of the House.
There are those who ask why we talk about the £22 billion black hole the Conservatives left, and why we dwell on the past. I do so because, if we are to grip the urgency of where we must go, we have to know where we have come from. Even more, amid the worst foundation for prosperity, dignity and security and the final punch of their fiscal black hole, there is a deeper inheritance, which is one of diminished trust and diminished hope that we can get out of their hole. That is why the Chancellor’s Budget is not just good for our economy but essential for my community in the Vale of Glamorgan. It says with strong conviction, “That was them. This is now us.” It is the voice of ordinary people expressed in our collective agency. Foundations that were wrecked by them will now be fixed by us. The OBR that was trashed by them, and is still being trashed by them, will be affirmed by us. Investment in our future, our health and our jobs that was structurally slashed by them will be regained by us.
Graham Stuart
The hon. Gentleman talks about investment for our future. What is he going to say to the farmers of the Vale of Glamorgan who fear that they will no longer be able to pass on their farms to the next generation, as each generation before them has been able to do until this black day of broken promises in this Budget?
Kanishka Narayan
I will say to them what I said during the campaign, which is that I see the pain inflicted on them over the past 14 years. The fact is that the animal welfare and environmental standards of our proud Welsh and British farms were sold down the river in trade deals negotiated by Conservative Ministers while the right hon. Gentleman laughed along. It was absolutely unacceptable. That is what I will say to them, and I will confirm that we will not allow any of it to happen again.
Structural investment in our future was slashed by the Conservatives, but it has been restored by us. Borrowing rates shot up under them, including the biggest overnight spike in short-term gilts in the 21st century, but they have been brought back to par with the United States by us. The markets were decried as conspiracists by them, but those same markets now hail the return of British fiscal credibility due to us. Wales was denied a voice by them, but it is now front and centre again thanks to this Budget and this Government. Real wages were squeezed by them, but the national living wage is now rising again. Fuel duty has been frozen, carer’s allowance has been increased and, much to my heart’s delight, 1p has been taken off the price of a pint in pubs in Vale of Glamorgan and across the country. At the heart of it, trust, the most critical foundation of my community, ripped up by them, and now, brick by brick, rebuilt by us.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
I remind Members that we are pushed for time, so I am imposing an immediate five-minute time limit.
Pippa Heylings (South Cambridgeshire) (LD)
It is so inspiring for women and girls across the country to have heard the first female Chancellor deliver her Budget today. As Liberal Democrats, we will always welcome those parts of the Budget that aim to take the NHS off life support after so many years of under-investment by the last Conservative Government. It is good to hear those commitments today.
If we are to fix the NHS and bring down the disastrous treatment and appointment backlogs that are causing incredible suffering to constituents across the country, we need not only to repair hospitals with crumbling roofs but to build new ones, and urgently, because progress has been far too slow. We all knew that the new hospitals programme was ambitious but, sadly, the Conservatives failed. Originally, 40 new hospitals were promised by 2030, but not one of them has yet opened. In a cruel irony, we find ourselves with a backlog of hospitals waiting to be built, with no assurances in this Budget on how many will be funded.
In my constituency, the cutting-edge Cambridge cancer hospital, with its great ambition to change the story of cancer forever, will offer lifesaving treatment to patients across the east of England, including, I hope, my husband. What really sets it apart is that in the same building, alongside the patients and their medical teams, academic and industry researchers will focus on delivering groundbreaking early detection and innovations that will transform the lives of millions of cancer patients, not just in Cambridgeshire and the east of England but worldwide.
However, this new hospital is trapped in uncertainty. Despite having had a full business case approved, planning permission granted and spades in the ground, this essential hospital is on hold. Every day that we wait for the final green light, the costs escalate—not only the cost of the building but, potentially, at the cost of human lives, too. The Government have placed these hospitals that were promised in 2019 under review, because despite their promises the Conservatives never allocated the necessary funding. We wait with bated breath for the final decision, which is now set for January 2025.
I had the pleasure of meeting the Secretary of State for Health and Social Care to discuss the situation facing the Cambridge cancer hospital in my constituency. I received assurances that funding to support the costs of the contractor is still being paid. Will the Chancellor commit finally to allocating the funding necessary for the Cambridge cancer research hospital, so that the promises to all those in the east of England and beyond who are desperate for groundbreaking, lifesaving cancer treatments are not broken once again?
Steve Yemm (Mansfield) (Lab)
Although it is disappointing that the Conservative Benches are almost empty, it gives me great pleasure to welcome the first Labour Budget in more than 14 years.
I am delighted that the Chancellor herself visited Mansfield. She clearly listened to the concerns of my constituents, because many of the things local people have been saying they wanted to see were announced in the Budget this afternoon. During my election campaign, I set out a mandate of five missions to deliver as part of my commitment to help the people of Mansfield and Warsop. It is refreshing that today’s Budget will enable me to deliver on those missions, alongside the national missions we have as a Government.
Nottinghamshire has previously held the accolade of being the worst place for potholes in the UK. My constituents regularly contact me in exasperation about the state of the roads in Mansfield, after eight years of failure from the Tories in county hall. The people of Mansfield will therefore welcome the news that we are investing almost £1.6 billion more to maintain and renew the nation’s roads, enabling us to go even further than the previous Government’s commitment to fix an additional 1 million potholes across England each year. I look forward to working with Ministers to ensure Nottinghamshire gets its fair share of that funding.
My residents in Mansfield report to me their experiences of the 8 am scramble for a GP appointment. They want more investment to rebuild our NHS and to cut waiting times. I am glad we made progress today towards dealing with the mess left by the previous Government. I know those Mansfield residents will welcome the Chancellor’s announcement of a more than £20 billion increase in the day-to-day health budget, helping to deliver our manifesto commitment to fund 40,000 extra hospital appointments a week, increasing capacity for tens of thousands more procedures next year, and delivering new capacity for over a million additional diagnostic tests.
Local people want to see us fix our broken housing market, for both buyers and renters. The £500 million boost to the affordable homes programme will help local authorities and housing associations.
Visitors to our town centre want us to crack down on crime and antisocial behaviour. I know the people of Mansfield will welcome today’s announcement to increase the core Government grant for police forces.
My final focus is to see us create the conditions for a stable and growing economy that benefits the prosperity of people in Mansfield and Warsop. The Chancellor clearly understands that, with the announcement of an additional £300 million for further education by transforming the apprenticeship levy into a growth and skills levy. I look forward to collaborating with my colleagues in Government to deliver the benefits of that package for Mansfield.
Stability ensures energy security, protects household budgets and gives my local businesses the confidence to invest in people. Stability means that instead of worrying about political infighting and jumping from one crisis to the next, we can invest in our public services. That is what the people of Mansfield sent me here to deliver on, so I am very pleased that our first Budget is protecting working people. We are choosing to ask the wealthiest and businesses to pay their fair share, while ensuring that working people will not face higher taxes in their payslips.
The Conservative party wrecked the economy. Today we are fixing the foundations and beginning the work of rebuilding it. That is why I am so proud to be part of this new Government, to support them and to support this Budget.
Brian Mathew (Melksham and Devizes) (LD)
Many Members have welcomed aspects of today’s Budget, and I do, too, especially the additional funding for the NHS and for school rebuilding in the face of the reinforced autoclaved aerated concrete crisis. However, the impact on small farms that are slightly larger than the £1 million threshold will be devastating and will see family-owned farms in my constituency, and no doubt across the UK, selling out to big business as inheritance tax literally tears them apart. I urge the Government to think again on that before it breaks up family farms, threatens food security and destroys communities.
Blair McDougall (East Renfrewshire) (Lab)
I am not surprised to see the Conservative Benches so empty as we come to scrutinising their economic record. People understand that our inheritance from the previous Government was not one of poor delivery or of an economic downturn, but was one of national decline. Everywhere we look in this country, things simply do not work. People understand that, because they live it every single day of their lives.
I disagree a little with our Front-Bench team in its analysis of the Tories’ record on growth. There is a record on growth that the Tories deserve to have their names attached to: the number of food parcels given out in this country grew to 3 million; the number of workers on zero-hour contracts grew to more than 1 million; the number of patients on waiting lists grew threefold; the number of people having to pay for private treatment reached almost 1 million; the average heating bill grew by more than 100%. The problems grew and grew under the previous Government and the response became smaller and smaller. They shrank from the challenge, refusing even to acknowledge the problem, and even hiding it in their own Budget.
A number of hon. Members have fondly mentioned Alistair Darling today. Everyone who knew him and who was friends with him will be thinking about him today. The worst insult that Alistair had for someone was that they were not serious. The right hon. and gallant Member for New Forest West (Sir Desmond Swayne) impressed the House by quoting some Swahili. My Swahili was learned from “The Lion King”. That idea of Hakuna Matata sums up the whole economic attitude of the previous Government. It is clear from listening to Conservatives today that, if the voters had not intervened, they would have kept on for year after year with cuts, under-investment and austerity. Thank goodness that we have serious leadership again and a Budget that moves us on from that failed project.
There will be debate about how public debt is registered within the public finances, but these are not technical details. That we took such strict view of investment in this country is why we have so few scanners in hospitals, why kids in my constituency spend their whole childhood in crowded homes, why families are waiting for social housing, and why kids are in classrooms that should have been rebuilt. What a relief it is to see that investment today. In my constituency of East Renfrewshire, I welcome the investment in hydrogen, building on the advantage that we already have there.
Values are, as others have said, about choices. We have seen the choices of the Opposition. They choose to stand with the 1% who pay capital gains tax over the 99% who do not, with the 0.1% of the population who are non-doms over those who are not, and with the private jet-setters over the masses. If they oppose the revenue raisers, they are also setting themselves against the spending and investment.
Speaking of being serious, as a Scottish MP I am delighted that the adults are in charge here, although the clowns are still in charge of the circus in St Andrew’s House—and it is not surprising that SNP Members are not here today. With the largest ever settlement of the devolution era, they are left naked. The last fig leaf covering their embarrassment is gone, their own inadequacy is exposed, and what it lays bare is not very impressive. Today offers the chance for Scotland to deliver change based on the investment that has been made available by Labour, but it cannot go down the same drain that everything else has in Scotland.
This Budget offers the opportunity to grow the economy, incomes and industries, but there is something else stirring today that other hon. Members have mentioned, and it is an unfamiliar feeling: we can begin to hope again. We can begin to hope, to feel proud and to look forward to the future of our country once again.
Torsten Bell (Swansea West) (Lab)
I praise my hon. Friend the Member for East Renfrewshire (Blair McDougall) for his speech and for his reference to Alistair Darling, who would indeed think that not being serious was the worst thing that could possibly happen. But he also would have had his definition of seriousness, which would be saying that on a day when we have a huge Budget like this and people will be spending their time going through all the weeds—I promise you, Madam Deputy Speaker, it is sorely tempting —we should focus on the big picture choices that have been made, because those are the choices that will define not just this Budget, but this Parliament and this Government.
I will touch on two of those choices today: first, the choice that the state of the public finances and public services cannot continue as it is today; and, secondly, the choice that we cannot continue to be a country living off our past rather than investing in our future. Those are the choices of this Budget, and the fact that Opposition Members are not in their place shows that they do not know what their choices are and they do not have answers to those questions.
Let me turn first to the public finances and public services. We all live in parts of the country where people are not getting the operations they need, where crimes are not being investigated, and where prisons are overflowing and do not have the places we need them to. In order to turn that situation around, tax rises are inevitable, and we will start to do that through the tough but fair choices set out by the Chancellor today.
Several Opposition Members have suggested that our position on the public finances is a looser perspective, but the truth is that the fiscal rules we have set on current spending today relate to a target that was not met once —not in one single year—under the previous Conservative Government. I think most Opposition Members know that public services are not sustainable and that they left the public finances in bad shape. The peak of austerity was back in 2018, and they knew then that it could not be sustained politically or indeed socially, because they promised to bring austerity to an end.
But it has not felt like austerity has been brought to an end. Yes, that is partly due to difficult circumstances, from covid to the cost surges on energy, but it is also because the previous Government were distracted, promising tax cuts while delivering tax rises. I invite all hon. Members to turn to chart 4.5 in the OBR document to recognise that the tax rises put in place by the previous Government were much larger than the tax rises that have had to be announced, regrettably, by the Chancellor today. If tax rises are the death of growth, the tax rises that the country is living with are Tory tax rises.
This is not just about tax; the previous Government were also promising public service improvements without allocating the public spending to make them a reality, as the OBR has laid out clear and bare today. We all know the result. Public services are worse today than they were in 2018, and the spending plans we inherited would have made them worse still, with £1 in every £10 cut from day-to-day public service spending. None of us thinks that is possible, so we have made a different choice. We have chosen to take tough but fair choices on tax and to put in the spending that is needed, including £1.7 billion for Wales.
Let me turn to the second choice that I outlined at the start of my speech: the choice to invest. We cannot carry on living off our past rather than investing in our future, and even if that were ever an option, it is not today, after we have done so for three long decades. The previous Government were planning a cut of a third in net investment—over £20 billion a year. Why? Yes, because politics of all stripes has short-termist incentives, but also because for too long our macroeconomic framework has had a heavy bias against investment spending built in.
Fiscal rules have driven cuts whenever bad news has arrived, which drives problems in the volume of investment—the average OECD country has invested 50% more than us this century—and in the volatility of investment. That was what the previous Government were planning, and that weak investment undermines growth. It has been said a lot today that business will not like every measure in the Budget, and it may not, but we need to be clear that business investment in Britain has been lower than in every other G7 economy in previous years. Why? Because of a lack of stability, from Liz Truss to Boris Johnson; because things cannot be built; because we cannot get the workers; because we have run down the NHS and people are too sick to work.
It is true that this is a big Budget and there are big choices that we have to recognise. How do we deliver stable public finances? How do we deliver functioning public services? How do we deliver an investment programme that underpins growth, rather than undermining it? We should all agree that those are the questions facing the country, and the Tories lost the election because they did not even try to answer them. On the basis of today, they are still not trying. The Chancellor has answered all three, with tough but fair choices—not easy answers, but a new direction for Britain.
Josh Simons (Makerfield) (Lab)
I, too, rather than getting lost in the weeds, will take a step back, because we in this country today, like allies over the Atlantic and across the channel, are reckoning with turbulent forces of change: technological transformation, ageing societies, the destruction of our natural world, vast inequalities of wealth and power, and mass migration across the globe. Ours is an age of insecurity and uncertainty—a moment when grasping the opportunities before us requires choices, such as whose side we are on, which industries will power growth, what frictions we will permit in pursuit of security, and which partners we will embrace around the world.
Today, the Chancellor has made choices. What underpins those choices is a simple but powerful point: because the challenges of this age are immense, the solutions must be equally bold. A turbulent age requires the confidence to stand tall, square up to what is not working and ensure that we reform what is not delivering for the people of this country. The Chancellor’s choices demonstrate that commitment, reckoning with the magnitude of the challenges that the country faces.
First, the Chancellor chose investment. Sometimes I wonder whether Conservative Members could benefit from more time to think through what they are really for and why, because to oppose the changes that she has made today is to welcome the apathy and defeatism that says that decline is inevitable. A certain mental attitude appears to have gripped Conservative Members: it is too hard; there are too many barriers; it cannot be done. By opposing the revolution in investment that the Chancellor unleashed today, Conservative Members have firmly put themselves on the side of the naysayers, and those who would lie still while Britain declines. Not us. Not Labour Members.
Josh Simons
I will make some progress.
Secondly, the Chancellor chose who the Government will stand beside, by raising taxes; taxing assets, wealth and those who can afford it; protecting working people; and following my predecessor, Ian McCartney, in raising the minimum wage, from which 8,000 of my constituents will benefit.
Josh Simons
No, I will not.
Labour Members are proud that, alongside the Make Work Pay package, the Government are delivering a generational shift in wealth and power towards workers—a shift that is long overdue. We know that eroding worker power and pay is bad for productivity and growth. More importantly, how can any worker in Britain trust their Government and have faith in their country when for so long the Government have failed to deliver for them? This Government will stand beside working people no matter what.
Lastly, the Chancellor chose to move Britain confidently into the future by being an activist Government, embracing a new era of technological change, investing billions in data storage and processing, and transforming how we deliver healthcare to shift towards prevention and community health provision. I hope that she and the Secretary of State for Health and Social Care will visit my local trust in Wigan, which is pioneering such healthcare in the towns I represent in Makerfield.
For weeks now, Conservative Members—disinterested in big arguments about the future—have reverted to type. They have sought to sow discord and division, at times telling outright lies, and as ever wholly lacking the humility to reflect on why they are in opposition and we are in government. I have spoken to hundreds of constituents in the last month who have heard some of their nonsense, and to them I say this: I promised that this Government would not remove free bus passes for pensioners. We kept that promise. I promised that this Government would not levy income tax on pensions, and we kept that promise. I promised that income tax rates would not go up, and we kept that promise. We chose to back workers and tax wealth and assets; we chose to invest in our NHS; we chose to take Britain into the future rather than wallowing in the past; and, above all else, we chose to keep our promises, because that is what Labour does.
I wonder whether Conservative Members will own up to their choices and show some leadership in an age when it is so badly needed. If they oppose our investment rule, which hospital and data centre would they cut? If they oppose our tax rises, which struggling public service would they sacrifice? If they cannot answer those questions, as they have not done today, the public will not take them seriously and will see them for what they are: the same old Tories, always navel-gazing, and always lacking hope and the imagination to see how things could be better and different, and what a stronger and more confident country might look like. Their party no longer measures up to the age in which we live. I, for one, am mighty glad that we have a Chancellor and a Government who do.
Matthew Patrick (Wirral West) (Lab)
Today, the Chancellor has not only made history, but has opened up Britain’s future once again—history maker, game changer.
Governments do not decide the conditions in which a Budget is made, and nobody would choose these conditions, after 14 years of Tory failure, but Governments do get to decide the choices that they make, and this Government’s choices are clear. They have decided to face the realities head on, protect working people’s payslips and invest in Britain and our future—that is the responsible path. The Government reject the short-termism of the Conservative party, which brought chaos to Britain. The Conservatives have not even bothered to turn up to this debate on how we will fix the mess that they left—they shirked responsibility for 14 years and are still shirking it today.
Short-termism meant that prisons reached breaking point as sentences increased but the number of spaces did not. Short-termism meant a handbrake turn on HS2, as investors saw a Government who were not serious about their commitments or infrastructure. Short-termism meant that dental decay was the No. 1 reason for child admissions to hospital, and feeble inaction caused a crisis in dentistry. No wonder the country was left in such a mess. The Conservatives papered over the cracks with bluster and boosterism, leaving people to fend for themselves. Where they shirked responsibility, we will shoulder it.
This Government know that belief in Britain is measured not in false promises and hollow headlines but in real, meaningful investment. Our investment will mean more opportunities, better pay, and public services that are there when people need them—a Britain we can be proud of again. The Government are making long-term decisions so that we can look back on a decade of expanding opportunities and rising standards, not another decade of shameful decline, which the country, and working people, cannot afford.
We were elected to clean up a mess that was 14 years in the making. Nobody thinks that it can be undone in just one Budget, but what was announced today is the downpayment on change to bring back hope—and not false hope. Announcements of new hospitals that never come, plans to reduce debt that instead see it spiral, and unfunded tax cuts that crash the economy are not real hope. Real hope is built on solid foundations, including a £1 billion investment for special educational needs, £1.4 billion to rebuild crumbling schools and £30 million to kick-start breakfast clubs, allowing our teachers to focus on teaching and giving our kids the best start in life. Not only is that a good education policy, but it is good for the economy and the future of our country. I cannot wait until we open those breakfast clubs in Wirral West, to expand opportunities for parents and kids alike.
The investment of £22 billion in our NHS, and £600 million in social care, will mean more appointments, which will bring down waiting times so that people are not waiting years for the help they need. That is not just a good health policy; it is a policy that will make Britain stronger, happier and ready to take on the challenges coming our way. I do not want to be faced with more stories of my constituents waiting years for important operations. I have heard enough of those heartbreaking stories to last me a lifetime—stress upon stress, costing jobs and crushing hope.
What the Chancellor has announced today is vital: choosing investment over decline, rejecting failed short-termism and fixing the foundations. While we are at it, we are protecting the payslips of working people, with no increase in VAT, income tax or national insurance and a pay rise that Britain desperately needs: an increase in the living wage to £12.21 an hour, delivering on the promise of secure work and better pay. This Budget protects working people, invests in our NHS and rebuilds the foundations for Britain’s future. Once again, we are investing in Britain, creating the conditions so that businesses the world over can do the same. It is a Budget of investment, and it is a Budget for investment. More of the same simply was not an option; hope was on the ballot in July, and this Budget brings back hope.
David Pinto-Duschinsky (Hendon) (Lab)
I thank my right hon. Friend the Chancellor for her Budget statement, which brought into sharp focus the choice that the country faces. The stakes could not be higher: we face a choice between beginning down a path of national renewal with today’s Budget, or continuing decline and denial if we tread the path of the Conservative party.
We cannot fix our problems until we face up to them. The Conservatives parrot empty fantasies about their legacy, but the truth is that they have left our economy, our public services and our finances in ruins. The figures are stark: according to the World Bank, since 2014, real income per capita has only grown by 6%. That is without historical precedent. Poverty and hardship have risen, and meanwhile Britain has fallen behind. Since 2010, if we had kept up with comparable countries, the average household would now be over £8,000 richer. While our economy has languished, our public services have been run into the ground. NHS waiting lists have more than doubled. Criminal prosecutions and convictions have halved in recent years. Our schools struggle to recruit expert teachers. Our prisons are bursting. The list goes on and on.
That stagnation is not some kind of accident—some kind of economic act of God. Rather, it is the result of decisions made by the Conservative party. Under Liz Truss, the Conservatives crashed the economy, sending bills and interest rates soaring, but the Truss disaster was but one instalment of their 14-year story of economic mismanagement. Investment is the downpayment we make today to ensure prosperity tomorrow, yet for 14 years the Conservatives turned that logic on its head, mortgaging our future to pay for their political gimmicks and undeliverable plans. They invested 50% less as a proportion of GDP than our peers and hamstrung private investment, leaving us consistently at the bottom of the league table for business investment.
That may sound abstract, but the effects are all too real. Over the past decade, we have built only half as much motorway as Germany and a fifth as much rail track as Spain. Our overstretched hospitals have only half the average number of CT scanners seen in other OECD countries, and our crumbling schools have only half the number of electronic whiteboards. Today, Britain has barely half the capital per worker of comparable countries. No wonder we are growing slower—no wonder our public services are at breaking point.
The Conservatives failed the British people, and rather than coming clean, they overspent, hid the problems from the public, and hid the scale of their irresponsibility even from the Government’s own budget watchdog: a £22 billion black hole, an emergency reserve spent three times over, with no money put aside for the infected blood crisis or the Post Office scandals. It was a festival of fiscal recklessness. For example, according to the IFS, the Conservatives spent the asylum support budget 25 times over, costing every man, woman and child in the country £110. Their cover-up has been laid bare by the review published by the OBR today, yet they remain in complete denial. They have no shame, and importantly, they have no plan.
As the Chancellor’s statement has shown, though, where the Conservatives jeopardised our future, this Government will fix the foundations. This Budget will deliver stability, putting our public finances on a sound footing. Unlike the Conservative party, this Chancellor will never gamble with Britain’s future. Instead, she will begin the work of delivering the investment that our economy and public services need, launching new investments, injecting over £6 billion into our crumbling schools and boosting the NHS with record investment. She will protect the payslips of working people, she will drive forward reform, and she will deliver the change the country voted for. It will not be easy, and change will not happen overnight. The Conservatives have left a terrible inheritance and, as we have heard throughout this debate, they have absolutely nothing to say about the answers they would offer.
David Pinto-Duschinsky
No, thank you. I am winding up.
As the Chancellor has made clear, our Government will not shy away from taking the steps needed. We will not let our ambition be dimmed. To govern is to choose, and the Conservative party chose to put party before country. This Government and this Chancellor are making a different choice—to invest and rebuild, to fix our NHS, to protect people’s payslips and to deliver change. We are putting our country first. It is a choice that will give us our future back, and we should all support it.
Tom Hayes (Bournemouth East) (Lab)
In this Budget today, we are basically asking this question: what kind of country will we be? I think we should first think about this debate because we have desertion on the Opposition Benches. We have used lots of numbers in this debate, and I have quickly crunched some more: 3.3% of the Conservative parliamentary party are sitting facing us.
Tom Hayes
I think the hon. Lady should say the same to her leadership contenders. I think it is important to say that, because we have very big decisions being taken in this Budget. The Conservatives are now the Opposition, and the public have entrusted to them the responsibility for holding this Government to account for getting things right. However, there is a desertion of duty and a dereliction of what they are supposed to do that I think the country will remember.
Having campaigned in many elections and lost many elections over the last 14 years, I know the pain that comes from losing, but I also know the importance of listening to the voters. What we heard in the Leader of the Opposition’s contribution to the Budget debate was a refusal to listen to the result of the general election. So divorced are the Conservatives from the reality of people’s lives that they are projecting absurd notions. Again, I think the Conservative party will be judged on that, but enough about the Conservative party.
With our first Budget in 14 years, this Labour Government are putting Bournemouth and Britain back on track. We are fixing broken public services and broken finances. Unlike the Conservatives, we will fix the foundations rather than accept permanent decline. Unlike the Conservatives, we were elected to be on the side of working people, and we will govern as such. Unlike the Conservatives, we are on the side investment to grow our economy, and we reject austerity.
After over a decade of stagnant wages and out of control prices, we are putting money into people’s pockets. Over 8,000 people across Bournemouth, Christchurch and Poole on the national living wage will see their pay packet increase by 6.7%, and they will get a well-deserved pay rise of up to £1,400 a year. Labour is cancelling Tory stealth tax increases by ensuring that income tax brackets will rise with inflation from 2028, and we are freezing fuel duty. After years of economic mismanagement, Labour’s Budget will boost our local economy, and we are restoring economic stability to give businesses the confidence to invest. I welcome the fact that the Federation of Small Businesses has said today that the Budget is
“a huge help for small firms”,
which have been heard loud and clear.
After a decade of austerity and under-investment, Labour’s Budget will give a new lease of life to our struggling public services. We are investing a record £22 billion in our NHS. As somebody who cared for two disabled parents when I was growing up, I know that waiting lists kill. Waiting lists have got longer, and more people are dying because of that. With this Labour Government, there is an investment in protecting people’s lives and people’s quality of life, which we should never ever forget.
We are also providing £2.3 billion of extra investment in our core schools budget and £6.7 billion to rebuild crumbling schools in all of our communities. It is particularly important to me that we are investing an additional £1 billion to start to fix the special educational needs and disabilities system. It is a good start, with more to come. These are just a few of the measures that Labour is taking to boost the economy nationally and locally, and to improve people’s lives.
Labour is making different choices from the Conservatives, and as somebody who grew up, in mouldy and damp council housing, caring for disabled parents who knew the value of a Labour Government, I am so pleased that people across Bournemouth East and across Britain will once again know the value of a Labour Government after 14 years of Tory chaos and Conservative austerity.
I am particularly pleased that those claiming carer’s allowance will see the earnings limit increase, which means that people claiming the allowance can earn over £10,000 a year while continuing to be eligible. That is such an important step for carers, who give so much to their families, their loved ones, and our communities. I commend all that they do in my constituency and across the country—this Government has got your back.
We are investing billions in our public services to ensure that children have access to breakfast at school, that our roads are fixed, and potholes filled. That is all happening because of balanced, careful choices by our Chancellor of the Exchequer to fund the changes that people voted for at the general election. Earlier today somebody was talking about hope. I feel hopeful for the first time in a very long time, and when I go knocking on doors in Bournemouth East on Saturday and Sunday, I am 100% confident that people will feel hopeful too.
Sam Carling (North West Cambridgeshire) (Lab)
I thank my right hon. Friend the Chancellor for delivering this Budget, which shows the difference that a Labour Government make. It shows a Government who are willing to invest in our country and deliver support for those who need it. That investment will not be built on tax rises for working people. It will be focused on those with the broadest shoulders who can afford to contribute more. Conservative Members have criticised capital gains tax increases, but less than 1% of people pay capital gains tax. They have criticised the increase to employers’ national insurance payments, claiming that it would damage small businesses, but we have just heard from my hon. Friend the Member for Bournemouth East (Tom Hayes) that the Federation of Small Businesses has welcomed the Budget, due to the support for small businesses that we are bringing in with that allowance increasing.
The Budget will fix the foundations of our economy to focus on what matters most: higher living standards and better public services. Those are the things that make a real difference to people’s lives. There are currently five Conservative Members in the Chamber, and I wonder why the others are not here. What is it that they do not want to discuss and hear about? Is it perhaps the Government’s decision finally to set aside funding to compensate the victims of the infected blood scandal, and the sub-postmasters who were so badly affected by one of the worst miscarriages of justice in our history? Apologies without action, as we saw from the last Government, are not enough, and victims have had to wait for too long.
I welcome measures such as the industrial strategy, with more than £20 billion of funding for research and development in growth industries of the future, investment in infrastructure, and in broadband, which will make a real difference to my constituents in North West Cambridgeshire. The cut to duty on draft alcohol will be a welcome boost to local pubs in my constituency—I was delighted to see that after I raised with Ministers the need to support pubs in questions yesterday.
Everyone has the right to a safe, comfortable, affordable home, and the housing measures in the Budget will help make that a reality for more people. Social housing was left to rot by the last Government, who ended their time in office with nearly 1.3 million households on waiting lists and, devastatingly, 150,000 children in temporary accommodation. The Budget includes an immediate injection of £500 million extra capital into the affordable homes programme for next year, supporting thousands of new social and affordable homes. That takes overall investment in the housing supply for next year to over £5 billion.
Reforms to the right to buy will make the scheme more sustainable, supporting long-standing tenants buying their own homes, but crucially making sure that councils can replace those homes—for which many have been calling for so long. Newly announced housing projects across the country will allow for the delivery of more than 30,000 homes. This Government are delivering the biggest increase in social and affordable housing in a generation.
I am delighted that education is finally getting the support it needs. Last year we saw school buildings literally crumble, as the extent of the reinforced autoclaved aerated concrete scandal became clear. The £1.4 billion rebuilding programme we have announced will be welcomed by schools in my constituency and throughout the country. It is also hugely positive to see an extra £30 million for breakfast club funding, which will make sure that every child starts the day fed and ready to learn. I know how valuable that will be to my constituents.
One of the biggest problems over the past few years has been the ever-increasing cost of living. Measures such as the 6.7% increase to the national living wage, the extension of the household support fund, the preservation of the triple lock on pensions, and the increase to the carers’ allowance weekly earnings limit will do so much to ease pressure on those that have been feeling it for too long. The huge boost to childcare will see new and expanded nurseries across the country, easing the pressure on parents, including so many in North West Cambridgeshire who rely heavily on those services.
I also welcome the £44 million for kinship and foster carers, as part of a trial. It is a subject close to my heart and to those of my Labour colleagues on Peterborough city council. Kinship carers are family or friends who step in to help support a child when its parents cannot, and they do a tremendous and critical job that too often goes unnoticed. I am pleased to see the Labour Government recognising their contribution, and the greater role that kinship carers can play in our society with the right level of support.
This Budget also demonstrates our concrete commitment to the NHS. We are all far too aware of the fragile state of our national health service after 14 years of neglect under the Conservatives. The inability to see a doctor or find a dentist comes up time and time again when I talk to my constituents, and I know that picture is replicated around the country. We are ending that, with much-needed resource for equipment and buildings that will set the foundations for clearing the backlog. It was Labour that created the NHS and it is this Labour Government who will transform it into a service fit for the British people. I am proud of Labour’s first Budget in 14 years. It is a strong step forward in the journey towards national renewal, and it shows our Labour Government’s drive to deliver for everyone across our country.
Madam Deputy Speaker (Judith Cummins)
I am now imposing a four-minute time limit with immediate effect.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
I am proud to speak at the first Budget by a Labour Government in 14 years, and the first delivered by a woman Chancellor. What better symbol is there of the hollow outrage of the Conservatives than their completely empty Benches now. I am disappointed, however, that the hon. Member for Mid Norfolk (George Freeman) is not here, because his contributions were thoughtful, and I learned quite a bit from them.
We have heard how this Budget will fix the foundations of this country, and as someone who has worked in housing all my life, I know a thing or two about what good foundations look like. Earlier today, I asked the Prime Minister about our plans to end homelessness, and he reiterated our strong determination to put an end to homelessness. I am glad to follow the remarks of my hon. Friend the Member for North West Cambridgeshire (Sam Carling).
This Budget gets us closer to delivering the 1.5 million homes we need in the next five years to tackle the housing crisis that is so damaging in my constituency. It will avoid the failures of the last Government by ensuring that those homes are delivered alongside the infrastructure that communities need to thrive. We have all heard the stories of homes built with no public transport, no school places and no GP surgeries. The Conservatives delivered only one third of the £4.2 billion they pledged in the housing infrastructure fund. They drained local authorities of capacity, so developer contributions for local infrastructure have gone unspent. They failed to provide any stability to social housing, leaving a black hole in housing revenue accounts. In London alone, that black hole reaches £170 million. That is a direct consequence of 14 years of Tory austerity, a botched Brexit deal and Liz Truss’s disastrous mini-Budget, which sent interest rates skyrocketing, the pound plunging and building costs through the roof.
Thanks to this Budget, this Government are back to directly delivering public transport, water and hospitals, alongside the 1.5 million new homes we so desperately need. This Budget chooses a five-year settlement for the social rented sector, giving registered providers the confidence they need to invest in their stock. While Labour councils have been building social housing up and down the country, the last Tory Government pulled the rug out from under them by turbocharging right to buy. As the number of households in temporary accommodation continues to rise, the Tories oversaw a net loss of 6,500 sorely needed council homes.
The reforms that our Chancellor has announced today will set discounts back to a reasonable level, put sensible time limits on residence and introduce much-needed protections for new-build council homes. With right-to-buy receipts going straight back to councils, where they belong—a matter close to my heart—we will give local authorities the security and stability they need to plan for the future and deliver a generational boost to social housing.
This Government were elected on a mandate to fix the foundations of our economy. This Budget is the first step to delivering that change, and I am proud to support it.
Nesil Caliskan (Barking) (Lab)
I begin by putting on record my congratulations to my right hon. Friend for being the first female Chancellor to stand at the Dispatch Box. It was a historic moment in the mother of all Parliaments. After 14 long years of low growth, low investment and failing public services, we are now turning the page. This Budget is about fixing the fundamentals of our economy, demonstrating responsible governance by sticking to tough fiscal rules and investing for the future. Those are all necessary to achieve sustainable economic growth. In the end, economic growth is what will improve people’s living standards and life chances, and it will certainly benefit my constituents in Barking. Crucially, this Budget ensures that working people in my constituency are protected as we stabilise, fix and grow the economy.
On tax, let me just say this. If Opposition Members do not want to borrow to invest and do not want to tax business, they should tell us what in the Budget they would cut. They are simply out of touch. They moaned and groaned earlier, but the people in my constituency and the country as a whole will not forget that when the Conservatives were in power, they caused inflation to hit the roof and interest rates rose. Almost 12,000 people in my constituency saw their mortgage rise by over £3,000, and rents have soared. Wage stagnation has cost working people £11,000 on average. As for tax increases, it was the Conservative Government who increased taxes on working people and left the £22 billion funding gap. We on the Labour Benches will take no lectures from those on the Conservative Benches who supported the chaos of a Liz Truss Budget that crashed this economy, yet they have the audacity to stand up with zero humility after their Government left this country in a worse state than they found it.
Politics is full of choices, and the Conservatives played their politics in this place at the expense of British people. In contrast, today’s Labour Budget will make my constituents in Barking better off. The pay increase for public sector workers and the increase in the national living wage will put money in the pockets of working people. Those increases in people being paid a decent wage are vehemently opposed by those on the Conservative Benches, with such disdain it is unbelievable.
We know that the damage of the last Government cannot be undone with one Budget and that the Chancellor has to set tight fiscal rules, but we will rescue both the economy and public services. We must also invest for the future, and I particularly welcome the Chancellor’s steps today to unlock more investment for our public services. Much of it is capital spend, which is really an investment for people—additional money for schools and local authorities. This country has to invest or it will decline. That is what this Labour Budget delivers, and I am deeply proud to support it.
Adam Jogee (Newcastle-under-Lyme) (Lab)
It is a pleasure to speak in this debate on the first Labour Budget in 15 years. It has been a long and painful 14 years for my constituents. Families in my constituency have been struggling to make ends meet, and our services bore the brunt of a Government who did not value their work, slashed their funding, and created life-destroying waiting lists and response times. We heard a lot from the Conservative party today, but the one word we did not hear was “sorry”. I remain proud to have stood on a manifesto that committed to deliver the change working people need, and that is what we are doing today.
We owe a huge debt of gratitude to the mineworkers who powered our nation. For former coalmining communities such as mine in Newcastle-under-Lyme, the Chancellor’s fulfilment of our manifesto promise on the mineworkers’ pension scheme is so important. It gives the mineworkers the justice they deserve, and I know that the 838 former miners in Newcastle-under-Lyme will be grateful for it.
In recent years, I have made it a priority to visit local schools, and since the election I have comforted desperate carers and parents and made regular pleas to the Education Secretary, the Department for Education and Tory-led Staffordshire county council for action on the special educational needs and disability crisis in my constituency. I am very grateful to the Chancellor for listening to many of us across the House, acknowledging the crisis and committing a £1 billion uplift in funding for SEND provision. It is progress. There is more to do, but that is the difference that Labour in government makes.
I welcome the minimum wage increase. The minimum wage was introduced by the last Labour Government—opposed by the Conservatives at the time—and the new Labour Government have increased it for everyone of working age. That will help support people with the cost of living legacy left by the previous Government. It will help lift children out of poverty and put more money into our local communities.
The people of Newcastle-under-Lyme deserve a Government who take the tough economic decisions, not duck them, and who do not pull funding from our public services or destroy the hopes of future generations. They deserve a Government who have their best interests at heart, who will invest in our children and their futures and who will create wealth and equal opportunities for all. This Budget is the start of a new chapter for my constituents: an ambitious economic plan that invests in our people and communities, and turns the page on the failed Conservative policies of the past.
I echo the comments made by my hon. Friend the Member for Gower (Tonia Antoniazzi) about the importance of supporting our farmers. On support with the cost of living crisis, we have seen an increase in the carer’s allowance, an above-inflation rise in the state pension, frozen fuel duty, an increase in local transport funding and the cutting of draught beer duty. We have ended the Tory fiscal drag, and we have scrapped the non-dom status that some people not too far from this House enjoyed.
Delivering on our promises to the country, this Labour Government will always be on the side of working people. I am proud to back my right hon. Friend the Chancellor in delivering on our pledge not to increase national insurance, income tax or VAT. All those who came to campaign with me in the election, will recall that our roads in north Staffordshire are shocking, not least thanks to the Conservative-led Staffordshire county council—my hon. Friend the Member for Warwick and Leamington (Matt Western) was there. I very much welcome the £500 million allocated to fix our potholes.
This is a Budget that delivers for working people, young people, local communities, public services and the good people of Newcastle-under-Lyme. I look forward to working with the Chancellor and my colleagues on the Government Benches to deliver the real change that my constituents voted for on 4 July.
Andrew Lewin (Welwyn Hatfield) (Lab)
It is an honour to have the opportunity to speak on a historic day for this House, with the first Budget speech ever delivered by a woman, the first of this Labour Government and the first in 14 years that is serious about investing in our country, our people and our public services.
There is no escaping the inheritance that this Government were left by the Conservative party: austerity, the botched Brexit deal and Trussonomics. In five years our country was presented with six different Conservative Chancellors, with no clear or consistent strategy for our economy. The question for a Budget should be how we deliver the right fiscal strategy for the country. I am afraid that, under the Conservative party, it became a question of how to deliver a Budget in order to get through the next month without another leadership contest. That was no way to run an economy or a country. Business confidence was sapped, the cost of living spiralled and, as we heard from our Chancellor, the Conservatives made a conscious decision to cut investment in our future. Today, we heard from a Labour Chancellor who does not pretend that the choices that confront us are easy, but who has set out a clear plan for how our economy can grow and living standards can rise.
We will prosper as a country only if our society is in good health, and if we choose to invest in places and people. This is a Budget that invests in the country and in my community in Welwyn Hatfield. In my local NHS trust, 1,700 people have been waiting longer than a year to start treatment in our health service. We cannot fix the economy without getting people back to health, and to do that we need both investment and reform. That is why the £22.6 billion in extra investment announced for the NHS is so significant. Excluding the covid emergency, it is the single biggest investment since 2010. But we have to embrace new technology as well, and I know that is a priority for our Government. We cannot fix the NHS without supporting our staff, and the 5.5% pay rises announced in the first few weeks of this Labour Government are landing in people’s payslips this week. Key workers who endured so much during covid are finally being rewarded with a fair pay deal.
Since the summer, I have visited a different school in Welwyn Hatfield every week. On each and every visit, I have been blown away by the dedication of the staff and the abilities of the children, but too many have not been getting the support from the state that they deserve. That is why I was so glad to hear today the £1 billion of extra investment in SEND. I will be thinking of children studying at Lakeside school in Welwyn Garden City and Southfield school in Hatfield, who so desperately need that extra support.
When the Conservatives took office in 2010, they slashed funding for social housing. The results have been as devastating as they were predictable: a deepening housing crisis playing out in communities across the country. On their watch, Welwyn Hatfield has been losing council homes every year. We have to turn the corner and this Budget does that. The immediate £500 million injection into the affordable homes programme sends a clear message: Labour will invest in building social and council homes again.
The rebuilding of our country and my community starts with this Government and this Budget. It is a Budget for schools, a Budget for housing, a Budget for our NHS, and a Budget that I am so proud to support.
Mark Ferguson (Gateshead Central and Whickham) (Lab)
I wish first to refer the House to my entry in the Register of Members’ Financial Interests. Madam Deputy Speaker, I am one of those terrible trade unionists you have been hearing about from those on the Opposition Benches. It is a shame so few of them are here; clearly, this is a contractual obligation attendance at the debate. I genuinely suggest that they should look at getting a trade union rep.
Many Members who have spoken in this debate are trained economists—my hon. Friends the Members for Swansea West (Torsten Bell) and for Hendon (David Pinto-Duschinsky) being two of the most recent. I have been called many things in my life but never an economist, so I want to focus on what the Budget will mean for people where I am from, in Gateshead. I am particularly pleased that we will not be returning to austerity, because austerity ripped through Gateshead and the scars will remain for a long time. Today was about rebuilding the foundations of communities like mine for a better future. Let us recap on what some of that means.
As my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) said, the investment in the NHS is the biggest outside of covid since 2010—£25.6 billion. That will get waiting lists down—promise made, promise delivered. There is investment in high streets, transport and homes that will change my community for the better—promise made, promise delivered. There is a higher minimum wage, up nearly 7%, and closing the gap faced by younger workers. For some that will mean up to £1,400 a year, which is a life-changing amount of money—promise made, promise kept. Injustice is being tackled in a promise made to those who suffered from the Post Office scandal and a promise made to those affected by infected blood—promises that have previously been made by all parties, but a promise made by this party and a promise kept in government. There is £1 billion for the household support fund, targeting those who need help most—a promise made, a promise kept—and promises have been made to those who rely on our schools, too.
In particular, I want to mention our colleges: £300 million into further education is a huge and hugely welcome change for colleges such as Gateshead college in my constituency. On SEND, all of us on the Labour Benches promised that if we were elected into government we would act to help those with special educational needs. We have done that today, with a £1 billion investment—promise made, promise kept. There was also a promise made not to raise the taxes of working people in their payslips—a promise made and a promise kept.
There were also some underrated changes in the Budget that I would like to refer to in the time remaining. Universal credit changes reducing the gap in deductions will keep more people out of poverty, more people out of food poverty and, yes, more children out of poverty—as will breakfast clubs, because no child should go to school hungry and under Labour none will.
The people of Gateshead Central and Whickham who sent me here should take heart from today. The road to changing our country is a long one. We take the first steps together. We should take heart, because real change and positive change is coming.
Sarah Owen (Luton North) (Lab)
It is an honour to follow my hon. Friend the Member for Gateshead Central and Whickham (Mark Ferguson). He has dedicated his entire life to working people and defending their rights, and it is no different when he is sitting on these Benches.
After today, let no one pigeonhole women in politics or put limits on our ability not only to achieve the highest positions but to deliver, as the Chancellor has today. I hope that in future this will be the norm, and that my daughter will shrug her shoulders and say “Woman Chancellor? So what, mum—that’s normal”, but until that day comes, let us go on celebrating the exceptions that smash through glass ceiling after glass ceiling and, importantly, pass the ladder down. That is the Labour way, as has been demonstrated by this first Labour Budget in 14 long years.
This is a Budget with a positive focus on health, wages and schools, but there are also some very tough decisions. We expected that. No one who has been paying attention to the state of the finances left by the past 14 years of Conservative government would have expected anything different. The Conservatives left a bin fire of waste and self-serving greed, all paid for with taxpayers’ money—not their money but that of the taxpayers, the people we represent. Billions of pounds were wasted on warped priorities that did not just put Tory party before country, but in some sorry cases filled the pockets of former Ministers’ mates before filling the empty stomachs of children being taught in crumbling schools. Anyone who needs proof of how little the Conservatives care about the mess they have left should take a look at the empty Benches opposite me. Not a single Conservative Back Bencher is here. Working people, much?
It seems an age ago, but it was not, when the former Tory Government had to be shamed by campaigners such as the footballer Marcus Rashford into feeding hungry children during the school holidays. Children went hungry while the Tory Government wasted money on reckless experimental budgets and doomed Rwanda schemes. I am proud to say that because of this Labour Government, primary school children in Luton North—where nearly 50% of children grow up below the poverty line—will get a breakfast, so that they, and every child across the country, can start the school day with an appetite only for learning, and not for food.
Free breakfast clubs for children of primary school age will transform many young lives, and also the lives of working parents scrambling for the precious extra minutes of free childcare. There is also £1 billion extra for children with special educational needs. Everyone, of every political stripe, will and should welcome that much-needed investment. Every child given the start in life that they need to succeed: that is the power of a Labour Government, and this is the power of a Labour Budget. But should we really be celebrating stopping children going hungry? Should we have had to fight to show that that was the wrong political choice? Of course not. However, it is not by accident that people in constituencies such as like mine were inflicted by so much financial pain, from stagnating wages to non-existent industrial strategies to local authority cuts—in Luton, to the tune of nearly £190 million.
What a difference a Budget like ours shows: long-term strategies for investment and growth, and no return to the austerity that crippled communities such as mine. Thanks to the rising national minimum wage, 3,300 people in Luton North will be better off. There is £22 billion for the NHS, including £70 million for radiotherapy machines. That will improve poor health outcomes in our region, and will allow staff working at Luton and Dunstable University hospital to help patients more quickly. There is £5 billion of investment in housing, in addition to 33,000 new homes. These programmes will help people in Luton: they will help the more than 8,000 people on waiting lists for council housing.
People have suffered enough, and that is why they voted for change. Delivering these changes will take time, but for once they are not false promises. We know that no Budget can give everyone what they need overnight, but seeing today that this Government are intent on delivering for the people I serve in Luton North gives me not just relief, but genuine hope for our town’s future.
Oliver Ryan (Burnley) (Lab/Co-op)
I congratulate my right hon. Friend the Chancellor on a tremendous Budget despite a remarkably difficult inheritance. We have kept our promises: change is here, and it cannot come soon enough. Today’s Budget set out firmly the foundations of sustainable economic growth that will benefit towns, cities and villages across our nation. The Chancellor’s proposals laid down the central groundwork for addressing inequality, investing in our areas and the NHS, and tackling the housing crisis, full-throatedly supporting growth. These are critical steps towards a prosperous Britain, including Burnley, Padiham and Brierfield—a goal that we can all get behind.
Investment in our education system is critical for our future. Indeed, I am hugely proud that my right hon. Friend the Chancellor is prioritising education in this Budget. There is more money for teachers, support staff and breakfast clubs, £300 million for further education, and a further £1 billion for special educational needs—a critical injection of cash, and an investment in our future.
I am glad to see that this Budget is centred on real priorities: supporting working people, fixing the NHS and rebuilding our country. We are paying down the overdraft that the Conservatives built up. I still find it the height of irresponsibility that they spent the country’s emergency reserves three times over on what was essentially electioneering, and now they have the brass neck to lecture us about financial responsibility—when they turn up, that is. They did not fund the bus cap or the new hospital programme, and they did not disclose their shenanigans to the OBR. They did not fund our prisons and, disgracefully, they did not fund the compensation schemes for infected-blood victims and the sub-postmasters. They did not even fund day-to-day spending; they left us with a £126 billion in-year debt interest payment, just to stand still. It was short-termist and unsustainable.
I am glad to hear that my right hon. Friend the Chancellor will not only cut the deficit, but bring us into surplus in just a few years’ time. During the election, the Conservatives made promises that they had no intention of keeping. By making promises and failing to fund them, they were playing politics with people’s lives and services, which could only end with the grotesque chaos of a Prime Minister stood in Downing Street in the rain and calling an election that he hoped he would not win. Otherwise, people would have asked him to deliver on what he said he was going to do. He ran around signing cheques, knowing they would bounce.
For too long, working people have borne the weight of failed policies, from Liz Truss’s rising mortgage rates to billions of pounds lost to inefficient projects. Labour’s plan provides a clear choice: continued stagnation, or real change with Labour. I congratulate the Chancellor on the massive £22.6 billion increase for NHS day-to-day spending—the largest increase in capital spending that we have seen since 2010. Labour is back, and the NHS and my residents are happier for it.
Labour understands that revitalising Britain requires sustained investment in schools, hospitals, industries and infrastructure. Burnley exemplifies the transformative power of such investments. As part of the north-west industrial cluster, companies such as Safran Nacelles, AMS Neave and BCW Manufacturing contribute billions of pounds to the UK economy, provide thousands of jobs and export to over 100 countries worldwide. Supporting these local industries is essential for building a strong, resilient Britain.
It is clear that this Budget is about the future, not the past, but I want to put on record my disdain for the levelling-up, “Hunger Games” agenda of the last Administration. The last Labour Government rebuilt Burnley town centre, built St Peter’s Centre, built Burnley college, rebuilt every school in Burnley, Padiham and Brierfield, brought the University of Central Lancashire to Burnley in order to make us a university town, and invested in our town centres, particularly in the public realm. Contrast that with 14 years of being ignored since 2010, apart from the large, game show-style levelling-up cheques that contributed only to a roundabout and a cinema. I am glad to hear of all the commitments that the Chancellor has made today, particularly on levelling up, and I am glad that we will now get a long-term plan for the towns fund.
Ordered, That the debate be now adjourned.—(Vicky Foxcroft.)
Debate to be resumed tomorrow.
Business without Debate
(1 day, 14 hours ago)
Commons ChamberRead Full debate Read Hansard Text
Bradford District parking charges
(1 day, 14 hours ago)
Commons ChamberRead Full debate Read Hansard Text
Robbie Moore (Keighley and Ilkley) (Con)
Across the Bradford district, we are now hearing worrying stories of small businesses losing nearly half their footfall due to the extortionate new parking charges being introduced by leaders on Bradford Council, as well as of residents in my constituency of Keighley and Ilkley being forced to pay to park outside their own homes. I certainly will not stay silent on this issue while hard-working people pay the price.
The petition states:
The petition of residents of the Bradford District,
Declares that the proposed increase in car parking charges across the Bradford District and the introduction of new charges for residents’ parking permits will place an unfair financial burden on residents and workers; notes concern that individuals are now being required by Bradford Council to pay to park outside their own homes; and further declares that new charges will adversely affect small businesses and retail outlets.
The petitioners therefore request that the House of Commons urges the Government to encourage Bradford Council to reverse the proposed increases to car parking charges, and the new parking permit charges, across Keighley and Ilkley.
And the petitioners remain, etc.
[P003018]
Western Sahara
(1 day, 14 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Dr Andrew Murrison (South West Wiltshire) (Con)
I am grateful for this opportunity to raise the issue of the Government’s attitude to Western Sahara. For transparency, I am as of this morning co-chair of the all-party parliamentary group on Morocco, a distinction I share with the hon. Member for Leeds North East (Fabian Hamilton). I have also enjoyed the kind hospitality of the Moroccan ambassador and the Moroccan Government, which has been duly registered where appropriate. I have a significant Moroccan community in my constituency, of which I am very proud. I am a former trade envoy to Morocco. I am also an ardent admirer of all things Moroccan and have done everything I can in my time here to bring the two kingdoms closer together.
The UK’s outlier position on the status of Morocco’s possession of Western Sahara is the sheet anchor in the UK-Moroccan relationship. That relationship goes back to the 13th century. History matters, particularly in an ancient country such as Morocco. Possession of Western Sahara long predates colonisation by France and Spain and is for Moroccans an existential issue. Any UK Government that seek to partner with Morocco to make the UK more secure in every sense and to grow the economy just cannot afford to allow official inertia to obstruct progress and change. I fear that it is official intransigence that has meant that the UK now finds itself an outlier in international opinion on this matter—in the company, I regret to say, of feral states such as Russia and Iran.
Last month, in response to my written parliamentary question on the UK’s position on Western Sahara, the Under-Secretary of State for Foreign, Commonwealth and Development Affairs, the hon. Member for Lincoln (Hamish Falconer), regurgitated the same response that Sir Humphrey drafted for me when I was doing his job:
“Successive UK governments have regarded the status of the Western Sahara as undetermined.”
If the UK position was inadequate when I was Minister for North Africa and the Middle East, recent developments have made it untenable and incompatible with the UK’s national interest. I hope to persuade the Minister this evening to push back on the lines he is about to read out. In the national interest, and in the interest of our relationship with our good friend the Kingdom of Morocco, I want him to be more successful than I was in resisting the institutional torpor he will have experienced during his first few months in his rather lovely office in King Charles Street, which I miss very much indeed.
Jim Shannon (Strangford) (DUP)
First, I commend the right hon. Gentleman for all he is doing in this debate tonight and for all he has done in the past. It is recognised by a great many people, and we thank him for it. Does he agree that the reason why the Foreign, Commonwealth and Development Office guidance advises against travel to areas such as Western Sahara underlines the help that the people who live there need? Does he also agree that, rather than simply warning against travel, the Government should focus on whether any steps can be taken to help the tens of thousands of people in refugee camps who have no hope at all for the future?
Dr Murrison
Yes, the hon. Gentleman is absolutely correct. Of course, the UK does that through the United Nations and the Tindouf camps, but he makes a good point about Foreign Office advice to people seeking to travel to Western Sahara. There is very real potential for Western Sahara to be a vacuum in which the ill-disposed can do what they will. We cannot allow that space to be ungoverned. We need to ensure that there is a jurisdiction there to bring order and ensure that the ill-inclined are not a threat to Morocco, Western Sahara, the wider region and, frankly, ourselves.
The anaemic UK official line has relied on two arguments for doing nothing: first, that recognising Moroccan sovereignty would, in some mysterious way, challenge our sovereignty over the remaining British overseas territories, and secondly, that supporting the Moroccan autonomy plan would upset Algeria, which has a strained relationship with Morocco and supports the Polisario Front’s call for independence for Western Sahara.
There is no evidence that recognising Moroccan sovereignty over Western Sahara would compromise our wider regional equities in any significant way. We know this because peer nations that have been much more forward-leaning on Moroccan sovereignty have not suffered a backlash from a pragmatic Algiers. The only exception is France, but the Franco-Algerian relationship has been toxic before and since independence in 1962, so it in no way compares with our own relationship or with that of other countries seeking a positive future with both Algiers and Rabat.
I appreciate the Labour party’s difficulty in relation to the Polisario Front. Under previous management, Labour supported the hard-left Polisario Front and would never have accepted the Moroccan autonomy plan, but the Prime Minister has invested much time and political capital in putting as much distance as possible between himself and his predecessor. He might therefore see this as an opportunity.
What would changing our line to match our peers do to the UK’s case for holding on to its remaining overseas territories? The answer lies in the unforced surrender of the Chagos islands, which was a decision of infinitely greater consequence than what I propose would ever be.
In any event, Cambridge professor of international law Marc Weller, in his opinion of April 2024, is crystal clear:
“There are no points where endorsing the position of Morocco on which its autonomy proposal is based would in any sense distract from the UK position concerning title to the Falkland Islands.”
What about Argentina, whose mission to turn the Falkland Islands into the Malvinas has been refuelled by the Foreign Secretary’s Chagos capitulation? Well, it has said:
“The Sahara is indubitably Moroccan.”
Much of South America also appears to support the autonomy plan or has recanted its previous support for Saharan independence.
Dr Zubir Ahmed (Glasgow South West) (Lab)
Can the right hon. Gentleman adumbrate how the uninhabited Chagos islands are equivalent, in any way, shape or form, to the Falkland Islands?
Dr Murrison
I most certainly can. It is pretty plain to all who take an interest in these matters that the Argentine Government have their tail up as a result of the capitulation on the Chagos islands. If the hon. Gentleman doubts that the Argentine Government have had a shot in the arm, he should look up the Argentine Foreign Minister’s comments on this subject.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
Coming back to Western Sahara, could the right hon. Gentleman explain why the UK Government, or anybody else, should agree to its so-called autonomy within the Moroccan state given Morocco’s appalling human rights record in respect of the Sahrawi people in Western Sahara?
Dr Murrison
With respect, the hon. Gentleman is making the perfect the enemy of the good. Morocco stands as a beacon of solidity and decency in a very troubled region—[Interruption.] The hon. Gentleman shakes his head, but I am afraid he is incorrect. I want to see Morocco develop alongside its European partners, and I want it to continue improving its human rights record, just as I want every country around the globe to continue improving its human rights record. He who is without sin may cast the first stone.
We need to have a Western Sahara that makes sense and that is not a vacuum in which the ill-disposed can flourish. That is the basis of the only credible plan on the table, as acknowledged by France, the United States, Germany, the Netherlands and a great swathe of the middle east. All those countries seem to feel that this is the only way forward.
We have a choice, of course. We could do nothing and just let this issue rumble on for decades, and nothing would happen other than that the people in the Tindouf camps would continue to suffer, but I do not think that is right. I want something done about it, and the Moroccan autonomy plan is the only credible plan on the table.
Jeremy Corbyn (Islington North) (Ind)
I congratulate the right hon. Member on securing the debate. He must be aware that there are a large number of Sahrawi people living in refugee camps in Algeria, and there have been for a very long time. He must also be aware that since the departure of the Spanish from Western Sahara, the Sahrawi people have never been given a vote on their future and have never been able to decide on decolonisation. He will also be aware that legal opinion is against Moroccan exploitation of the agricultural, mineral and fish resources of Western Sahara. Is it not time that we got in line with the African Union and others who want to see a peaceful approach to the future, which means giving the Sahrawi people the right to their own self-determination to their place in history? That, surely, is what the decolonisation process should be about.
Dr Murrison
The right hon. Gentleman knows full well that that would require some sort of referendum or vote. The difficulty has always been defining what the electorate would be. That is why we would be kicking the can down the road for decades and decades. It is an almost insurmountable issue. It seems to France, the United States, Germany, the Netherlands and others that the only practical solution is to get behind the only credible plan on the table, which is the Moroccan autonomy plan.
To put it bluntly, I worry that the FCDO has been rumbled. Its reluctance to follow our north Atlantic peer group in recognising Moroccan sovereignty and the autonomy plan has nothing to do with Algeria or the British Overseas Territories. It is simply the consequence of institutional torpor and a languid, left-liberal indifference to the advancement of our national interests, and it will not do.
Emmanuel Macron is in Morocco on a state visit. In a letter to His Majesty King Mohammed earlier this year, he said:
“The present and future of Western Sahara fall within the framework of Moroccan sovereignty.”
He went on:
“France intends to act consistently with this position at both national and international level.”
Yesterday, President Macron, addressing the Moroccan Parliament, repeated the new French position. The Moroccan press today is reporting that France will be opening a consulate and branch of the Institut Français in Laayoune. It has even identified the building in which it will be housed from next month. The Franco-Moroccan Chamber of Commerce and Industry is already established in Western Sahara. Where are we?
Some 30 countries, primarily African or Arab, already have consulates in Laayoune or Dakhla. France is our friend, but it is also our competition. Changing tack on Western Sahara has been the necessary precondition in taking its relationship with Morocco to the next level. It is hardly surprising that Macron has in his retinue the chief executive officers of 100 French companies.
While the 2019 Morocco-UK association agreement has undoubtedly facilitated bilateral trade, we are nowhere near realising its full potential. The massive Tanger Med port, in the lee of Gibraltar, has been a largely missed opportunity for the UK. Our current stance on Western Sahara now threatens opportunities in Dakhla Atlantic port. Our posture means we cannot, for example, use UK Export Finance in Western Sahara and British International Investment will not engage. If growth for this Government is genuinely beyond the rhetorical, it cannot miss opportunities like Dakhla.
If high-minded Foreign Office officials remain sniffy about grubby trade and commerce, they might be more willing to reflect on the strategic importance of a strong, stable ally at the nexus of the Atlantic and Mediterranean, and what tends to happen in ungoverned spaces, particularly where Russian and Iranian proxies are involved. Happily, the Ministry of Defence has been forging strong working-level relationships with Morocco’s military, properly understanding the growing influence and leadership the country has been applying across the turbulent region in which it sits. The kingdom’s long-standing tradition of tolerance, moderate religious teaching and Sufi influence makes it the foil of extremism and instability in the region and more widely.
The Foreign Office might also eventually wake up to the potential for Morocco to help the Government hit their elusive net zero target and to diversify the grid. On offer is a 4,000 km interconnector sending the power of the Sahara’s reliable sun and wind to south-west England. This it would do through the Xlinks scheme to match in our time the great British engineering triumphs of Brunel and Telford. A country genuinely tooling itself up for growth needs to stop dragging its heels on shovel-ready schemes such as Xlinks.
Morocco, which is shrugging off the colonial yoke, is eager to forge new relationships with European countries with which it has no baggage. That should mean the UK. Morocco wants it to mean the UK, but too often we see the dead hand of British officialdom getting in the way.
Nobody can fail to be impressed by the development that Morocco has made possible in Western Sahara, lifting the condition of the people who live there. Nobody can fail to be impressed by the regional leadership that Rabat has provided in recent years. Nobody can be in any doubt that this ancient kingdom is a welcome bastion of stability, security and decency in Europe’s penumbra, our voisinage.
Even Spain, Morocco’s nearest European neighbour with which it has long-standing territorial issues, has a better line than the UK and, more significantly, one that has evolved in Morocco’s favour from a position of neutrality. It is noteworthy that many of our peers have been on a journey, with language that has typically moved from the Moroccan autonomy plan being a solution, to it being the solution or even the only solution.
This year, Spain has reiterated the revised position that it adopted in April 2022. Thus the autonomy plan is
“the most serious, realistic and credible basis”
for the resolution of the Western Sahara question in its view. Germany has adopted similar language. Then we come to the US. The White House issued this proclamation in 2020:
“The United States affirms, as stated by previous Administrations, its support for Morocco’s autonomy proposal as the only basis for a just and lasting solution to the dispute over the Western Sahara territory. Therefore, as of today, the United States recognises Moroccan sovereignty over the entire Western Sahara territory and reaffirms its support for Morocco’s serious, credible and realistic autonomy proposal as the only basis for a just and lasting solution to the dispute over the Western Sahara territory. The United States believes that an independent Sahrawi state is not a realistic option for resolving the conflict and that genuine autonomy under Moroccan sovereignty is the only feasible solution. We urge the parties to engage in discussions without delay, using Morocco’s autonomy plan as the only framework to negotiate a mutually acceptable solution.”
So, what do I want? I want the UK to stop hiding under the UN’s skirts and to adopt similar language on Western Sahara to our permanent UN Security Council friends, the US and France. If that is too radical for the Foreign Office, we could at least match Spain and Germany. I want the UK to match France toe to toe in establishing cultural and consular presence in Laayoune and Dakhla, facilitating British engagement with commercial opportunities in Western Sahara to our mutual benefit. I want Britain to rekindle one of our oldest diplomatic relationships—more than eight centuries old. What better way to advance plans for a Moroccan state visit to the UK. That is the next obvious step after the association agreement that we signed in Lancaster House. Why has it stalled?
Above all, I want the Foreign Office to wake up to a post-Brexit reality in which we sink or swim depending on our ability to pursue the national interest with pivotally located, like-minded jurisdictions with which we can do business—countries such as Morocco. Or, if the Minister wants, he can swallow the line that he is about to rehearse and leave the fruits of a new era in bilateral relations to our closest continental neighbour.
Be in no doubt that, for Morocco, the UK’s position on Western Sahara is the test of how we value our relationship. As others have evolved their position over time, the UK is out of line and out of date. We will make no further progress until we change it.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Hamish Falconer)
I am grateful to the right hon. Member for South West Wiltshire (Dr Murrison) for securing the debate, and for his service in the Foreign Office and as trade envoy, and for his many years of advocating for a closer relationship between the UK and Morocco, which is an important goal.
I regret that the drafting of my responses to the right hon. Member’s parliamentary questions were described as “anaemic” and “regurgitation”, and I will endeavour to provide a little more zest for him in future. I would, however, say in relation to Foreign Office officials, who got a rather extensive mention in the right hon. Member’s remarks, that they are excellent, hard-working servants of this country, who serve without fear or favour. They advise; Ministers decide. The speech I am about to deliver has, of course, been prepared by the excellent officials of King Charles Street, but it is me and my ministerial colleagues who have decided it, so in future I would hope that the right hon. Member might direct his criticisms of the policy at me rather than my officials.
It is a timely moment to have this debate. The UN Security Council is set this week to adopt a resolution renewing the mandate of the peacekeeping mission in Western Sahara, MINURSO—United Nations mission for the referendum in Western Sahara—for another 12 months. I am also grateful for the contributions to this debate from other Members, many of whom have shown long-standing commitment to the issues. I will try to respond to their points as I go.
I do not need to tell this Chamber of the complexity of the issues. The UN has maintained, through MINURSO, a presence in Western Sahara since 1991. Successive personal envoys and special representatives to the UN Secretary-General have steered both the activities of MINURSO and a UN-led process aimed at achieving a resolution to the disputed territory. The UK strongly supports MINURSO’s activities, and we welcome its ongoing de-mining and observer operations in Western Sahara. To that end, the UK has consistently supported UN Security Council resolutions concerning MINURSO, including most recently resolution 2703 in October 2023, which extended the mandate for 12 months.
The UK position remains to support the UN-led efforts to reach a just, lasting and mutually acceptable political solution that will provide for the self-determination of the people of Western Sahara. This is in line with the position taken by successive UK Governments and UN Security Council resolutions. A solution agreed by all parties would contribute significantly to regional security and prosperity, and have the potential to unlock wide economic possibilities and benefits for those communities directly affected by this long-standing dispute—and of course for the UK, as the right hon. Member alluded to. It is for the parties to agree resolution, but the UN needs our support in its efforts to find a pragmatic solution. This is why we encourage others to support the UN-led process, and I thank successive British ambassadors and officials who work in the region for their contributions to this effort.
The UK’s position is in line with our status as a permanent member of the UN Security Council, and a key contributor to other UN peacekeeping missions. This position also reflects our core national interests, and it is based on our political judgment of how best to protect them. The right hon. Member referred to a paper by a notable legal scholar, but he will understand that it is for Ministers of this Government to make a judgment about how to protect our core national interests and which political judgments lay behind them. We believe it is important that we support the principle of self-determination, which gives people the right to decide their own future, as enshrined in the UN Security Council resolutions on Western Sahara.
Andy Slaughter
I thank the Minister for reaffirming his commitment to self-determination, and for not going down the road of partition nor indeed of incorporation within the Moroccan state, as the right hon. Member for South West Wiltshire (Dr Murrison) seems to want. The Minister could go one stage further and follow the EU example, which would be the case were we still within the EU, and say that the provision of resources and trade with Western Sahara should only be undertaken if it is to the benefit of the indigenous people there, rather than to the benefit of the Kingdom of Morocco.
Hamish Falconer
We are studying the legal judgment to which my hon. Friend refers closely. Our position has not been to oppose economic activity in Western Sahara, but that it must benefit the Sahrawi people. We will continue to engage with our international partners, as the House would expect, including the European Union, our fellow Security Council members, regional stakeholders and indeed the UN itself in support of its efforts.
Jeremy Corbyn
In the Minister’s engagement with other European countries and other members of the United Nations, I hope that he will have respect for international legal opinion concerning the exploitation of minerals, agricultural products and fisheries from Western Sahara, and the plight of the Sahrawi people, many of whom have been in refugee camps for almost 30 years and deserve the right to decide their own future in their own country.
Hamish Falconer
The right hon. Member is right to refer to the humanitarian situation facing the Sahrawi refugees. I think other Members referred to the camps in the Tindouf wilayah. We consistently support both UN Security Council resolutions that highlight the Sahrawi people face, and we contribute through the UN to support the refugee camps. My officials last visited those camps in November 2023.
I was pleased last month to meet Staffan de Mistura, the UN Secretary-General’s personal envoy for Western Sahara, and our meeting was an opportunity to discuss both his mandate and that of MINURSO. I was able to reiterate the UK’s full support for the UN-led process. The situation in the Tindouf refugee camps, to which the right hon. Member just referred, remains challenging, and we are working with various UN agencies and bodies to provide vital humanitarian support. The circumstances have been made more dire by recent heavy flooding in the region, as colleagues will be aware. The situation remains of great concern to the UK, and we continue to closely monitor developments, including through visits by Foreign Office officials.
Members have referred to the Moroccan autonomy plan, which was first announced in 2007. We have chosen not to comment publicly on the plan, which is not a judgment on its merits or otherwise. However, I assure the House that the UK would warmly welcome any solution to the dispute that is able to secure the support of all parties. While we enjoy constructive dialogue with our partners on a wide range of issues, including Western Sahara, I say to the right hon. Member for South West Wiltshire that their foreign policy decisions are ultimately for them to make, in their own individual assessments and interests, as ours are for us.
The UK strongly believes that the UN is the best way to solve this long-standing dispute by delivering a solution that is agreeable to all parties. We will continue to give the UN Secretary-General’s personal envoy our support, encourage constructive engagement with the political process, and monitor progress. That remains the best way to deliver a sustainable, just, secure and prosperous future for the people of Western Sahara and the wider region.
Question put and agreed to.