(1 month, 3 weeks ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Jeremy Hunt (Godalming and Ash) (Con)
It is a pleasure to open this day of the Budget debate with you in the Chair, Madam Deputy Speaker, for what will be my last contribution as shadow Chancellor. I am aware that may be a relief to Members on the Government Benches, and possibly to those on the Opposition Benches as well.
Yesterday’s Budget was the biggest tax-raising Budget in British history. It was a huge tax on business and takes our tax burden up to German levels for the first time. After the pandemic, the previous Government also put up taxes, but we started to bring them down, because higher tax leads to lower growth. Indeed, the Office for Budget Responsibility said that yesterday’s £40 billion of tax rises would lead to lower pay, lower living standards, higher prices and more expensive mortgages. Without remorse and without hesitation, a triumphalist Government have ripped up the pre-election promises that they made in the biggest ever assault on our economic competitiveness since the 1970s.
Let us look at the promises cast aside so casually. The Chancellor said that she would not change the debt target, because she was “not going to fiddle the figures or make something different to get better results”. Yesterday, she did exactly that. In May she said that Labour policy
“will be fully costed and fully funded. No ifs, no ands, no buts”—
and no additional tax rises. A total of 30 times this year, she promised not to do exactly what she did yesterday. She even said that she wanted to bring the burden of tax down. Ordinary families, small businesses and working people believed her. Yesterday, they were betrayed.
It went further. When we said in the election that taxes would go up by £2,000 per household over four years, the Leader of the Opposition at the time accused the then Prime Minister of a deliberate lie. Three months on, they will go up not by £2,000 over four years, but by £2,000 every year. Paul Johnson called it a
“straightforward breach of a manifesto commitment”.
The Institute for Fiscal Studies has today said:
“The continued pretence that these changes will not affect working people risks further undermining trust.”
The OBR said that 76% of the impact of the national insurance rise would pass through to lower wages.
And because the Government planned this all along, we now know why they rushed so fast to concoct the fiction of a black hole—something that was not corroborated by the OBR yesterday. It was cover not just to raise national insurance, but to impose countless other tax rises on working people: capital gains tax up; energy taxes up; stamp duty up; and taxes on family farms up—something we will oppose, for the sake of farmers up and down the country.
Working people whose wages the Chancellor promised to protect will see them go down; businesses whose profits fund new investment will see them raided; markets to which she promised stability are absorbing the biggest tax-and-spend Budget in a generation; and all of us on the outside are left wondering which is worse, the damage to the economy or the damage to trust.
Jim Shannon (Strangford) (DUP)
There is not one person on the Opposition Benches who is not concerned about the inheritance tax changes. If I am honest, I do not think there is one Member on the Government Benches who represents a farming community and is not also worried. The measure has been universally condemned by all the farmers I have spoken to, and I live in a farming community. The National Farmers Union, the Ulster Farmers Union and others are up in arms about this inheritance tax. The sum of £1 million draws everybody into that scheme, and because of that, we must vote against it. I say to those on the Government Benches: guys, you have got it wrong, and this time you will be condemned. When it comes to election time, the people who you have hurt will remember.
Madam Deputy Speaker (Ms Nusrat Ghani)
Please stop using “you”, Mr Shannon.
Jeremy Hunt
I thank my hon. Friend—I say “my hon. Friend” because he is a great friend to us—for what he has said and I could not agree with him more. When we talk about stability, anybody who has run a business knows that the most stable businesses in the country are family businesses that are passed from generation to generation. This is not just about farms, but about any small businesses that are passed down through the generations. This is a hammer blow to their plans to invest for the future.
I wish to move on, because the main argument that the Government make—I am sure that we will hear this from the Chancellor of the Duchy of Lancaster—is that all this is necessary to improve public services. We on the Conservative Benches want to say, right up front, that it is absolutely right to prioritise public services. As Health Secretary, I negotiated an increase in the NHS budget of £20 billion a year, and, in this year’s Budget, I increased it by a further £6 billion. Many times I said as Chancellor that I wanted to avoid austerity cuts to public services. We would have done so this time, not by using tax rises that harm working families and businesses, but by taking difficult decisions on welfare reform and productivity—decisions that were ducked yesterday.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
May I suggest that the difference between my right hon. Friend’s Budget and this one is that, although he gave considerable extra increases to the national health service, he coupled them with a need to increase productivity? There was no word in yesterday’s Budget about increasing productivity in the health service.
Jeremy Hunt
I thank my hon. Friend for his intervention, but there was an even more basic difference between our Budget earlier this year and this one: as a result of measures in our Budget, the growth rate went up, whereas as a result of measures in Labour’s Budget, the growth rate went down.
Reducing the number of working-age people claiming health-related benefits back to pre-pandemic levels would save £34 billion a year. It would bring more people into the workforce and improve the wellbeing of the individuals concerned, but welfare reform was dropped from the King’s Speech, and yesterday’s Budget saw the welfare bill rise by an average of £13 billion a year. According to the OBR, increasing public sector productivity—another area that we did not hear much about—to pre-pandemic levels would raise £20 billion a year. We heard some warm words about that, but delivering it requires difficult negotiations with the unions.
That was too difficult for the Government, who cancelled plans to reduce the civil service to pre-pandemic levels, increased the salaries of train drivers by £10,000, and gave junior doctors a 22% pay rise—all without asking for a single productivity improvement in return. It was no strings for the unions, but no help for 2.5 million pensioners in poverty. The Government should be ashamed. Picking the pockets of businesses, which do not vote, is the easy path, but when it damages economic growth, the result is less money for the NHS, less money for schools and less money for the armed forces, which is why, in the end, Labour Governments always run out of money.
Graeme Downie (Dunfermline and Dollar) (Lab)
The right hon. Member was keen to quote the IFS earlier. Does he also agree with the IFS that
“it was not credible for Jeremy Hunt to claim that planned departmental spending limits would hold”
and there was
“no world in which 2 per cent rises would have happened and been sustained”?
Jeremy Hunt
I always listen to the IFS, and indeed to the Resolution Foundation, very carefully. I think that the IFS was right—[Interruption.] Let me answer the point, if I may. The IFS was right to say that it would be very challenging to hold to 1% spending assumptions, but in the Budget earlier this year I explained exactly how we would do that. I asked the NHS, “How are we going to improve efficiency so that we can live within tight spending limits?” The NHS said, “We need to overhaul the IT systems.” We gave the NHS £3.5 billion to do so, and in return it was able to deliver 2% productivity savings.
Jeremy Hunt
The hon. Member shakes his head, but yesterday the Chancellor said that she was going to roll that out to the whole of the public sector. I think that it is possible to do so; my concern is that doing so involves difficult decisions, and the track record of this Government is that when those decisions involve a conversation with the unions, they run a mile.
The final spurious claim from the Chancellor was that yesterday’s draconian measures were necessary because she had received the worst economic inheritance since world war two. Not a single independent economist supports that claim, and it is not hard to see why. Inflation is at 1.7%, around half what it was in 2010. Unemployment is at 4%, nearly half the 2010 level. If the public finances were in the same state today that they were in back in 2010, the deficit would now be £160 billion higher, which is the entire budget of the NHS. Instead, we left behind a deficit that had been halved, and was lower than that of France, Germany, Italy, Japan and the United States.
Luke Murphy (Basingstoke) (Lab)
If the last Government’s attempts at levering investment into the economy were so successful, why in 2022 was the UK 28th out of 31 OECD countries for business investment? The truth is that the last Government failed to reform the economy to lever in that investment to pay for the growth in our public services.
Jeremy Hunt
Let me tell the hon. Gentleman exactly what happened to business investment under the last Government. Since 2010, we attracted more foreign greenfield direct investment than not just anywhere in Europe, but anywhere in the world apart from the United States and China. That was foreigners voting with their dollars as to where they wanted to invest in the world, and they said, “Outside the United States and China, there is nowhere that we want to invest more than the United Kingdom.” Compare that with what the OBR said about yesterday’s Budget: business investment will not just fall, but fall by even more than the amount of the extra investment caused by public investment going up.
Luke Murphy
Does the right hon. Gentleman deny that business investment was the lowest in the G7 under his Government? If the Government were so successful, does he also deny that in that respect the UK was 28th out of the 31 OECD countries?
Jeremy Hunt
The hon. Gentleman is absolutely right that for decades we have had lower business investment in the UK economy than our peers. That was why, in the autumn statement a year ago, I introduced full expensing, which was the big business tax request, to make it more attractive to invest in new factories, capital, machinery, here than anywhere else in the OECD, and that was widely welcomed.
The other part of our legacy—the so-called worst inheritance since the second world war—was the fastest-growing economy in the G7, and one that the IMF said would grow faster than Italy, France, Germany or Japan over the next five years. The Government probably thought it was a clever political trick to rubbish their inheritance, but trash-talking the British economy has real- world consequences. We see the sharpest decline in consumer confidence since the beginning of the pandemic. Lloyds bank, KPMG and the Institute of Directors all saying that business confidence has plummeted. The former chief economist of the Bank of England says that the Chancellor has generated “fear and foreboding” and uncertainty among consumers, among business, and among investors in UK plc. And we see higher bond yields, leading to higher debt interest payments. Careless talk costs jobs and money, and this Government have been careless.
What every economist does, however, agree is that if we are to increase our living standards to German or American levels we need higher productivity, and that means more investment. But according to the OBR, yesterday’s measures will mean lower investment overall. Higher public investment is more than offset by lower business investment because of huge tax increases. Lloyds bank said that the increase in employers’ national insurance is a “handbrake” on investment. UKHospitality said it is a “tax on jobs” and
“makes it harder to employ people and to take a risk on recruitment and expansion.”
The Federation of Small Businesses says it will shrink small business employment, and the Institute of Directors has likened it to the poll tax.
Max Wilkinson (Cheltenham) (LD)
The shadow Chancellor mentioned hospitality. Overnight I had discussions with the local hospitality industry in Cheltenham. They had two pieces of feedback. The first was that they were very worried about some of yesterday’s announcements on reliefs and national insurance, and the second was that the Budget was not as bad as the Liz Truss Budget. I wonder whether he preferred yesterday’s Budget or the Liz Truss one.
Jeremy Hunt
I actually liked neither. I was the person who reversed the decisions made in the mini-Budget, but I will say this: at least Liz Truss wanted to grow the economy and said so explicitly. What we had yesterday is a Budget where the Government’s official forecaster said the impact would be lower growth, fewer jobs and lower investment.
We were promised the most pro-growth Government in history, but in just 17 weeks we have ended up with German taxes and French labour laws, higher taxes, higher mortgages, less investment, lower wages, lower living standards and lower growth, less money for public services on which we all depend, and less money in the pockets of working people—same old Labour, same old spin. It didn’t end well before and it won’t end well this time, either.
The Chancellor of the Duchy of Lancaster (Pat McFadden)
The right hon. Member for Godalming and Ash (Jeremy Hunt) has confirmed that this is his last appearance at the Dispatch Box, at least in his current guise, so I begin by thanking him for his service to government and to the country. He and I have something in common: we both inherited an awful mess from our predecessors. He was appointed Chancellor of the Exchequer as the repair man—the adult in the room—and was meant to sort things out after the disaster left by his predecessor. He was supposed to be the antidote to Liz Truss, but in recent days, he has become an ally of Liz Truss, united with her in attacking the OBR. He was brought in to praise the economic institutions, but he has ended up condemning them. However, he cannot hide from the verdict: the OBR has confirmed that the previous Government hid billions of pounds of pressures that they knew about, and the Treasury has given us a full picture of precisely what those pressures added up to.
Alicia Kearns (Rutland and Stamford) (Con)
The right hon. Gentleman states that a full breakdown was provided by the Treasury yesterday, but that is just not true. In fact, the chair of the OBR said on “Sky News” last night:
“Nothing in our review was a legitimisation of that £22 billion”
claim. That was him making it very clear that the OBR does not support and has not endorsed the claim in the Treasury report. Will the right hon. Gentleman now confirm, with a simple yes or no, that the OBR does not legitimise that claim?
Pat McFadden
Let me read what the OBR has said:
“The Treasury did not share information with the OBR about the large pressures on RDEL, about the unusual extent of commitments against the reserve… had this information been made available, a materially different judgement…would have been reached.”
Jeremy Hunt
Perhaps the right hon. Gentleman ought to read the next paragraph, in which the OBR says that it is “not possible to judge” how much those pressures would have been offset by savings elsewhere, which demonstrates that they were within the range of the normal cost reductions that a Chief Secretary to the Treasury would make ahead of any Budget.
Pat McFadden
The right hon. Gentleman suggests that things got better after February. They did not; they got worse, and that is how we got to £22 billion. This is not just a verdict about what happened but an indictment of the Conservative party’s final period in office. The truth is that, under his watch, the Treasury had stopped doing the basic job of controlling expenditure.
Announcements were made with no money set aside, the asylum and hotel bill was funded by emptying the country’s reserves within the first few months of the financial year, hospital building programmes were announced without the necessary funds set aside to pay for them, a pay award sat on a Secretary of State’s desk while they looked the other way, and compensation schemes were announced without the full funds being set aside to pay for them. That was an irresponsible dereliction of duty that has led to us picking up the pieces and to the right hon. Gentleman attacking the independent watchdog that was set up by his own party. Even his predecessor, the former Member for Spelthorne, admitted this morning that Labour is clearing up the Tory mess. If Conservative Members are more out of touch with reality than the former Member for Spelthorne, let me tell them that that is not a good place to be.
The right hon. Gentleman referred to the IFS, which said this morning that the Chancellor
“is not wrong to stress that she got a hospital pass on the public finances.”
Pat McFadden
No, I am not giving way.
The Conservatives talk about their golden legacy, and we heard the former Chancellor read out some of his greatest hits. Who are they kidding? The last Parliament was the worst on record for living standards, with British families worse off than their French and German counterparts. His Government had the second lowest growth in the G7 since the pandemic and the highest inflation in the G7 since the pandemic. They left a prison system overflowing and just days away from collapse, and rather than take responsibility for it, they cut and ran and called an early election.
I have to give the previous Government credit: some things did grow on their watch, such as hospital waiting lists, housing waiting lists, shoplifting, insecure work and the decline of our high streets. That is their record, and it falls to us to fix it and start to rebuild Britain, so there is no point in coming to this Chamber and pretending that people are making it all up.
The former Chancellor talks about business. His party stuffed business—his colleague, the former Prime Minister, said “eff business”, and then the Conservatives carried out the policy. Under them, we had the lowest business investment in the G7. Why? Because of constant chaos in their Governments, meaning that business did not know who would be leading them from one year to the next; because they caved in to their Back Benchers and blocked anything substantial from being built; and because businesses could not hire the workers they needed with so many people on the sick.
This could have been a Budget where we just muddled through—patched up some mistakes made by the Conservative party and hoped something would turn up—but that is not good enough. We have had that time and again. In fact, we have had 14 years of it—long enough to show that that approach is not going to work. The country voted for change, and this was a Budget to deliver change. It is not a time for more of the same; it is a time to choose. We did not duck the challenge or look the other way; we confronted the challenge, because that is what the country needs. This is the moment when the country turns a corner and sets out a proper plan for the years to come.
We did make tax changes in this Budget, which is never an easy thing to do. That was because the first thing we had to do was fix the foundations and put the public finances on a sound footing. With this Budget, we say how we will pay for what we will do. The first fiscal rule announced by the Chancellor is to fund day-to-day spending from the revenue that we raise, a rule that the OBR judges will be met two years early.
The IMF, to which the right hon. Member for Godalming and Ash referred, has today welcomed
“the Budget’s focus on boosting growth through a needed increase in public investment while addressing urgent pressures on public services”,
so let me turn to those public services. Secondly, there will be more NHS appointments to get waiting lists and times down; more technology to improve productivity; more prevention to stop people falling ill in the first place; new surgical hubs and diagnostic centres; a hospital-building programme brought from fiction to reality, this time founded on more than hot air; new schools to help children learn; more teachers to bring out the best in every child; and more investment in further education to give people the skills they need. It is investment and reform together—not just more money into the same system, but changing the system for a new age, with productivity targets alongside the extra money.
The right hon. Gentleman also talked about welfare spending, but the Conservatives had plenty of time to sort out welfare spending. Their legacy is almost 3 million people out of work because of long-term sickness. The truth is that they did not have a plan, but they do have a record, and again, it falls to us to sort that record out. We will take tough action on welfare fraud, and we will not give up on those who can work and make a contribution, because we understand that when the sick can get treated and when every child of every background has the best chance to learn, that is not just good for them and their families but for the economy as a whole.
Thirdly, this Budget put in place help with the cost of living for millions: a rising minimum wage with extra help for young workers, fuel duty frozen, carers allowed to earn more, the triple lock protected, the household support fund extended to help the poorest, and lower deductions from universal credit. Those are the choices that we made—real help for millions of people.
Finally, we reject the path of decline for investment that the Conservatives were planning. They wanted to cut public investment by a third. That was the right hon. Gentleman’s plan—to once again cut back on the house building, schools, hospitals and transport projects that the country needs. That is a path of decline that has been chosen too often in the past. The Tories do not yet have a leader, and the only policy to come out of their leadership contest so far is to cut maternity pay, but on the question of investment, they do have a position. Budgets are about choices, and yesterday they chose: the former Prime Minister, the right hon. Member for Richmond and Northallerton (Rishi Sunak) railed against our new investment rule, and more Conservative Members have spoken out since. What does that mean their position is? New money for housing—opposed. New money for schools—opposed. New money for potholes—opposed. New money for research—opposed. Investment in the future itself—opposed by the Conservative party. I understand the perils of opposition. We have had long enough experience of it, but if the Conservatives really want to run around the country opposing every new investment over the coming four or five years, be our guests.
Yes, this Budget was a big choice, and in opposing the investments within it, the Conservatives have made a big choice too. We will remind them of it, project after project, year after year. They wanted to lock us into the world that voters rejected just four short months ago.
Jake Richards (Rother Valley) (Lab)
My right hon. Friend has mentioned the policies, or lack thereof, that have come out of the Tory leadership contest. Unfortunately, I spent an evening watching the GB News debate between the Tory leadership contenders, and the one policy that one of the contenders said she would put in place on day one as Prime Minister was a tax cut for private schools. That is the priority of the modern Conservative party: opposing the investment in this Budget while offering tax cuts for the very richest.
Pat McFadden
I thank my hon. Friend for his intervention, although I have to say that his television viewing choices are a little bit different from mine. With regard to education, we have always said that we support aspiration for all children in every type of school.
Our growth plans are about far more than this Budget. They are about planning reform to get Britain building, a challenge that was ducked by the Conservative party year after year. They are about more clean energy for energy security. They are about private investment, with £63 billion of investment announced at our investment summit just a few weeks ago—investors are finally appreciating the stability that has come to the country after the chaos wrought by the Conservative party—and they are about reform of business rates to support our neglected high streets.
This is a big moment for the country. In July, the public did not vote to carry on as we are—they did not vote to continue with the plans of the Conservative party. They voted for change, and this is a Budget for change: not just change in policy, but facing up to the reality of what the Conservative party left behind. It is a Budget to stabilise the public finances, to help people with the cost of living, to begin to turn our public services around, and to start to rebuild Britain. It is a choice between investment and decline—a turning of the page after 14 years. It is a Budget that launches a new chapter for Britain, and we will be proud to vote for it in the Lobby next week.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to speak in this debate in response to the first ever Budget delivered by a female Chancellor. This Government have inherited a mess, and we know that the cause of that mess is the legacy of reckless economic mismanagement left behind by the previous Government.
The Liberal Democrats are glad that the Chancellor has listened to our calls for investment and support for the NHS to start repairing all the damage done to local health services by the Conservatives. We will continue to stand up for our constituents, and press the Government to act with urgency and to provide the support to public services that is so desperately needed. The NHS has been stretched to its limits after years of Conservative neglect, and the Liberal Democrats have been tirelessly campaigning for an emergency health and social care budget to get it back on its feet. We therefore welcome yesterday’s announcements. However, we need to see outcomes, including people being able to see a GP within 7 days, cancer treatment targets being met and people having a dentist appointment when they need one. We will hold the Government to account for delivering on these issues.
Millions of people have a long-term health condition that makes them too ill to work and millions more are stuck on NHS waiting lists. Many others cannot leave hospital because there is no care provision. The Liberal Democrats have always understood that we cannot have a thriving economy and strong public finances until we fix the crisis in health and social care, so we welcome some of the steps that the Government announced in this direction yesterday. The Liberal Democrats have campaigned on improving support for carers. While I am glad that the Government’s review will look again at getting rid of the cliff edge for carer’s allowance and the earnings limit, I hope that the Chancellor and her colleagues will consider a broader review to give family carers the support they deserve. We will hold them to account for ensuring that this new funding is delivered for patients and carers, including through extra GP and hospital appointments.
I also welcome the promise made by the Chancellor yesterday of full compensation for the victims of both the contaminated blood scandal and the Horizon scandal, and I hope that that can be delivered quickly to bring the victims closer to the justice they deserve. The previous Conservative Government yet again showed themselves to be totally shameless with the revelation that, while they promised to compensate the victims of the hideous infected blood scandal, they entirely neglected to set aside the funds to actually pay for them. It is essential that there is transparency in Government spending, and we are glad that the Government are strengthening the powers of independent bodies, such as the OBR, to ensure that taxpayers receive value for money.
We were glad that, during the Chancellor’s Budget, she committed to investing to modernise the systems of His Majesty’s Revenue and Customs using the very best technology, and we are glad that she has committed to recruiting additional HMRC compliance and debt staff. Investing in HMRC reduces the risk to businesses and individuals in navigating the bureaucratic and often complex processes associated with this service. I have heard from businesses in my constituency of the risks they face by not being able to directly speak to someone at HMRC. Strengthening these services with greater resources should benefit not only businesses, but all those required to complete self-assessment. Greater resources will protect citizens from unfair charges, including the loan charge, and allow people to access clear advice and support, making our tax system more efficient.
While I am pleased to support many of the announcements made by the Chancellor yesterday, I am concerned by her decision to raise employer’s national insurance contributions. I fear that this will be deeply damaging to many already struggling small businesses and care providers, so we urge the Government to at least consider exempting social care from the employer’s national insurance tax rise. The Chancellor has provided extra funding for the NHS and other public sector organisations to cover the cost of the tax rise. However, the vast majority of care providers are in the private sector, so will not benefit from this help.
Small businesses are the beating heart of our local economies. For years under the last Conservative Administration, these businesses have struggled, having to carry the burden of rising energy prices, interest rates and the red tape of the Conservative’s Brexit deal. I urge the Government to go further than the announcements made yesterday on business rates by fundamentally overhauling the broken business rates system, which is destroying our high streets and town centres.
The Liberal Democrats believe that there are much fairer ways of raising revenue. Our manifesto set out our calls for a fairer tax system, including raising money by reversing the Conservatives’ tax cuts for the big banks, or by asking the social media giants to pay a bit more. We do not believe that it is right or fair for the Government to instead increase the burden on small and medium-sized businesses, which are the engines of our economy and which are already struggling under the unfair tax system set out by the last Conservative Government.
We welcome yesterday’s news of increased funding for schools. Supporting children and young people must be central to any Government policy. After schools were left to crumble by the last Government, we are glad to see an increased investment in education. However, the Liberal Democrats oppose ending the VAT exemption for independent schools. We do not support taxing education, and we believe parents should have a choice about how they educate their children.
We were disappointed that at no point in the Chancellor’s Budget was there a mention of Europe. The Government cannot indefinitely ignore the damage that the Conservative’s shambolic Brexit deal continues to have on our economy.
Chris Vince (Harlow) (Lab/Co-op)
Do you not think the fact that you are supporting all the spending commitments but none of the tax rises is the reason that the Lib Dems will never be in government—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Sit down, please. The hon. Gentleman said “you” twice.
Madam Deputy Speaker
I am not going to allow the hon. Gentleman to continue.
Sarah Olney
I am glad the hon. Gentleman has raised that point. I refer him to our general election manifesto in which, as I have already said, we set out a range of tax-raising measures, including reversing the Conservatives’ tax cuts on big banks and taxing the social media giants. There are plenty of ways that the Government could have raised taxes more fairly than by placing additional burden on small businesses, which will be the engine of economic growth.
Brexit is another reason why our economy is not growing in the way it should. I urge the Government to acknowledge the seriousness of yesterday’s report from the OBR outlining the continual damage that Brexit red tape causes UK businesses, and the OBR finding that weak growth of trading, exacerbated by Brexit, will reduce the overall trade intensity of the UK economy by 15% in the long term. We understand that rebuilding our relationship with Europe is a gradual process. However, we are disappointed that the Government have ruled out joining the single market in the future, even when relationships improve. We urge them to consider the breadth of benefits that a strengthened trading relationship with Europe would bring. The Liberal Democrats want to forge a new partnership with our European neighbours —built on co-operation, not confrontation—and to move to a new comprehensive agreement.
Wendy Chamberlain (North East Fife) (LD)
Does my hon. Friend agree that, although the new Government say they want to reset their relationship with Europe, if the No. 1 thing on the European Union’s mind is a youth mobility scheme that the Government are ruling out, they are not going to get very far?
Sarah Olney
I am grateful to my hon. Friend for making that point, and she is absolutely right. The first thing we should be doing is negotiating a youth mobility scheme. We owe it to our young people, who are struggling more than most in the current economic environment.
The mismanagement of our economy by the outgoing Conservative Government has left deep challenges, and we understand that undoing that damage will not be easy. Nevertheless, it is not right for the consequences of these decisions and for this burden to be carried by some of the most vulnerable in our society. In July, I urged the Chancellor to remove the two-child limit on social security payments in her first Budget, and we are disappointed that this did not happen. No child should grow up without adequate food, a warm home or security for their future. Currently, 1.6 million children are affected by the two-child benefit cap. Parents subject to these limitations have less available income for childcare costs, and therefore experience barriers to employment. The Liberal Democrats believe that removing this cap is the most cost-effective way of immediately lifting children out of poverty and getting more parents back into the workforce.
I and my Liberal Democrat colleagues have also listened to our constituents and heard from countless pensioners who are worried about how they will afford their energy bills this winter. Since the cut to the winter fuel payments was announced, I have been inundated with expressions of local people’s disappointment at this decision. We will continue to urge the Government to give their full support to measures to boost the uptake of pension credit, and to ensure that all those eligible for pension credit claim both the benefit itself and the winter fuel payments.
For years, the previous Government failed to keep our communities safe from crime. It is vital that the new Government urgently restore the proper community policing that local people deserve. I ask the Government to clarify how and when the Chancellor will fund the thousands of new neighbourhood officers that her Government have promised. The Metropolitan Police Service has drawn on its financial reserves, slashed spending and sold off assets. During the election, our constituencies were promised more community police officers, but the Met has already made cuts and savings of over £1 billion, and next year it is facing a funding gap of over £450 million.
The Liberal Democrats are pleased to see the Chancellor’s goody bag of infrastructure projects, yet I personally was disappointed that this did not extend to funding for Hammersmith bridge. Some 22,000 vehicles a day used to cross the bridge, and those cars are now causing gridlocked traffic throughout my constituency in Mortlake, East Sheen and Barnes. It will cost £250 million to fix Hammersmith bridge, a sum no local authority can afford to pay, so I hope the Government will consider what more they can do to assist with the bridge’s reopening.
We all agree that we need economic growth and a stable economy after the chaos caused by the last Government. We know that this dire economic situation requires tough decisions. I welcome many of the steps that the Chancellor announced yesterday, but the Government must ensure that this does not come at the expense of the most vulnerable. I ask the Government to set out a timeline for the delivery of their proposals for investment, and I urge them to act with the urgency required to ensure that people can access the services they need when they need them. 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.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Tom Collins to make his maiden speech.
Tom Collins (Worcester) (Lab)
As a boy, I remember walking to the shops with my mum and passing our nearest pub. Its name, the Lord Protector, confused me at the time, and I later learned that I share a home town with one Oliver Cromwell, so perhaps I should feel at home in this place. Having said that, I confess that the nearest pub to my first family home was The Cavalier. That is because I represent, and am proud to call my home, the faithful city of Worcester. Famous among historians as the site of both the first and final armed conflicts of the English civil war, Worcester is seen by many as the birthplace of modern parliamentary democracy, and that is fitting for our city.
Nestled on the great River Severn and in the shelter of the ancient Malvern hills, Worcester is one of England’s best kept secrets. Rooted in the beauty of nature, and richly decorated by a long and varied history, Worcester is a city deeply informed by the past, and with a record of deeply informing the future. Throughout its history, it has continuously expressed creativity, enterprise and innovation, and through the stirring music of Elgar, the creation of the world’s first combined hydroelectric power station, and even the establishment of the British Medical Association, the people of Worcester have been shaping the future of the world for millennia. We are home to Berrow’s Worcester Journal, the oldest newspaper still in print, and of course we manufacture Lea & Perrins’s famous Worcestershire sauce.
Having given a flavour of our city, I pay tribute to my immediate predecessor in this place, Robin Walker. Wherever I go, be it in this place or in my constituency, people consistently speak well of Robin, who won the affection of many with whom he worked. He worked with passion and dedication to improve education, and for that I offer my sincere thanks, and that of many others.
Worcester is home to many small and independent businesses that contribute hugely to our distinctive culture. During the election, I visited Spin the Black Circle and Script Haven, to give just two examples, as well as larger companies that are also expressing our nation’s creativity and shaping its future. I have been privileged to work with teams of talented people at Worcester Bosch, inventing the technologies of the future to grow and decarbonise our economy. If any Member would appreciate an in-depth discussion on heat pumps or hydrogen, I am always happy to indulge, being an enthusiastic engineer by background.
It is my belief that releasing innovation by investing in the talent, passion and skills of our emerging leaders, creators and problem solvers is key—key to our mission for growth, which is the guiding light of this Budget, and key to decarbonising our economy through industrial renewal, rebuilding our NHS, and putting people at the heart of all we do. Today, we are doing the vital work of fixing the foundations, because this kind of history-writing ambition is exactly what this place is for.
Worcester, and its incredible community of dedicated and talented people, is ready to deliver an exciting vision for the future, with our schools, colleges, and the Hive—one of the largest children’s libraries in the UK—ready to grow the next generation. The Budget’s commitment to taking the first steps towards the renewal of our schools, and especially its provision for children with special educational needs and disabilities, will be very welcome in Worcestershire.
With the University of Worcester continuing our heritage through teacher training, Worcester Business School and Three Counties Medical School, where prospective Prime Ministers can reliably capture a good selfie, as well as a wealth of innovative businesses and creatives in the digital space, including the Kiln, now hosting BetaDen, our community has the vision for people and nature to flourish. It is led by local people such as Worcester Environmental Group, our cathedral’s eco-group, and projects such as Bramblewood. It is a hub of culture, with arts at the Swan theatre, the Scala project and the Arches, and has a growing track record in disability sports, historic world-class cricket at New Road, our fantastic city football clubs, and hopefully soon the return of professional rugby with the Warriors. We are also very good in a tug of war!
Informed by the past and informing the future, Worcester has taught me that the key is to put people first, dream big, and unleash the creativity of diverse teams to shape the future. I came to politics with a passion to tackle climate change, see an end to modern slavery, and put leadership and vision back at the heart of politics. Let us remember that throughout the long history of this place, we, like Worcester, have never lingered on the past. As the Budget empowers us to do, let us continue always to fix our gaze with ambition, clarity, and focus on the creation of a bright and prosperous future.
Madam Deputy Speaker (Ms Nusrat Ghani)
Well done. Your family will be very proud indeed.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
May I start by paying a huge tribute to the hon. Member for Worcester (Tom Collins) for his maiden speech? It was clear, and he paid a sincere tribute to his predecessor, for whom we all have a great deal of affection. I am sure that the hon. Gentleman will have a great future in this place, and I look forward to hearing more speeches from him.
I agree with the final remark made by the Chancellor of the Duchy of Lancaster: this Budget marks a new chapter in the economic performance of this country, it is true, but I suspect that his predictions and mine, which I will make clear in my speech, are rather different. Starting on the plus side, there are measures in the Budget that we should welcome. My constituents who live in rural areas will be particularly pleased that fuel duty is to be frozen for another year, because often they have very little choice in how to get to work; they must do so by car. As I said in an intervention yesterday, I welcome certain Government contingencies, such as on the infected blood and Horizon scandals, that have now been funded. The onus is very much on the new Government to ensure that the people affected are paid as quickly as possible, even if only with an interim payment, so that they can start, at long last, to rebuild their life. Spending on special educational needs in Gloucestershire is a particular problem, so increased funding will be welcomed by parents whose children need help in that area.
The Public Accounts Committee held several sessions in the last Parliament on rebuilding schools and hospitals, particularly those affected by asbestos and reinforced autoclaved aerated concrete, commonly known as RAAC. We also looked at the huge project of restoration and renewal in this House. If the Government gets those investment projects under way, I will welcome it, but the PAC will scrutinise them to see how we can get value for money.
Contrary to what was said in leaks to the press before the Budget, the pensions industry appears to have been largely untouched in the Budget—perhaps Ministers will confirm that when they wind up the debate—and the trick now is to encourage large pension funds to invest in UK infrastructure. We did not hear anything about that in the Budget yesterday, but I know that the Government are thinking about it.
As predicted, we have a higher fiscal burden in this country under this Labour Government than ever in our history. The Office for Budget Responsibility could not find the fabled £22 billion black hole; instead, it found £9.5 billion associated with deteriorating circumstances, and that will happen to any Government in any fiscal year; £9.5 billion is equivalent to some of the public sector pay increases that we have seen, particular to highly paid train drivers.
The Chancellor has increased taxes and borrowing by a staggering £40 billion each—the largest increase in any Budget for 30 years. The Conservatives left office with low inflation, high employment, particularly for younger people, and the fastest growing economy in the G7. In stark contrast, in this Budget the Chancellor has put up national insurance, and we have inheritance tax up, capital gains tax up, mortgages up, stamp duty up, employment costs up, and business confidence down. The OBR has downgraded our GDP growth, based on the Budget, in every year of the next five-year forecast. That will affect everybody in this country; they will continue to see their living standards fall as a result.
There are lots of topics that I would like to cover, but I have chosen to cover those that will affect my constituents most adversely. First is national debt. UK national debt is £2.5 trillion, which is not far off 100% of GDP, and it is growing at a staggering rate of almost £16 million an hour, or £400 million a day. The interest for servicing the debt has now reached more than £100 billion, which is equivalent to the budget of the fifth largest Department, and it is completely dead money. As a result of the Budget, the debt will rise even further, by £50 billion, involving even higher servicing costs, which will result in higher taxes to pay for it in future years.
On a really important point, the OBR has forecast that national debt will triple over the next 50 years. That is completely unsustainable and should be a real wake-up call to the fact that we have to correct that dire structural problem. But the Budget has made the problem far worse. We cannot just change the rules to make the results sound better. Interest rates, including mortgages, will be higher for longer, and our children and grandchildren will now be saddled with the debt, which they will have to repay, for longer.
Alex Ballinger (Halesowen) (Lab)
I congratulate the hon. Gentleman on his recent appointment as Chair of the Public Accounts Committee. Would he like to apologise for the £22 billion black hole that the previous Government left behind, and the contribution that made to the awful debt situation that the Government inherited?
Sir Geoffrey Clifton-Brown
I thank the hon. Gentleman for his comments about my election, and the PAC looks forward to scrutinising all Government expenditure carefully. He has fallen into the same trap as everybody else. Unfortunately, the OBR said yesterday that it could not find the £22 billion black hole. I do not have the exact quote, but the Government were advised, “When in a black hole, stop digging.” I suggest gently to Labour Members that they stop digging, because it could not be found.
The Chancellor announced that she expects national insurance contributions to rise by a staggering £25 billion, although she promised in the election that they would not. During the election, she said that the measures would not be a tax on working people; clearly she believes that entrepreneurs, who spend their time, energy and talent forming new business, are different. They will be heavily taxed, and changing the employment rules will make it more difficult to employ extra people. A 15% national insurance tax and a savage cut to the threshold, down from £9,100 to £5,000, will harm any business in my constituency employing more than four people. It could be the difference between a business growing and providing more jobs and a business not surviving.
We must all remember that the private sector, and individuals who work hard and put their livelihoods on the line, take financial risks to boost productivity and provide the growth the country needs, and they must be nurtured if they are to succeed. Small businesses account for more than 90% of all businesses.
Graeme Downie (Dunfermline and Dollar) (Lab)
Will the hon. Gentleman give way?
Graeme Downie
I ran a small business for at least 10 years. Does the hon. Gentleman welcome the increase in the Budget to the allowance on national insurance from £5,000 to £10,500, which will protect small businesses and help them grow?
Sir Geoffrey Clifton-Brown
I have run a business for a much longer time than that. There are many measures in the Budget that will be very deleterious, especially for the smallest businesses, and we will have to wait and see how they turn out.
The Budget will have serious implications for farmers and rural communities in my constituency. I refer to my entry in the Register of Members’ Financial Interests, as a farmer. I am incredibly disappointed that from 2026, agricultural property relief and business property relief will apply only to the first £1 million of assets. That will worry many in my farming community and those in many other constituencies. It will result in fewer farms to rent.
Equally damaging will be the cap on the amount that can be transferred to spouses for inheritance tax purposes. The purpose of that tax relief was to ensure that working farms that provide our food will not have to be split up after the death of a family member. Very few farms are valued under £1 million—basically only those of less than 100 acres are—and the rest will face a 20% tax. That will lead to the loss of jobs and livelihoods in the North Cotswolds and elsewhere. It will change the fabric of our countryside permanently. The structure and productivity of agriculture will change as more and more farms are split up and sold off as a result of this measure.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
I accept that the hon. Gentleman has great experience in farming, but did he read the analysis by Professor Andy Summers of the London School of Economics, which shows that the £1 million relief is on top of the £1 million couples allowance? The benchmark is really £200 million farms, and the average estate value is lower, so only about 200 estates will be affected a year. In this case, only a small number of UK farmers will be affected, and it is not the armageddon for farms that the Conservatives are claiming.
Sir Geoffrey Clifton-Brown
I suggest gently to the hon. Gentleman that, whatever the number, if the change causes damage to the farming sector and the productivity of food production, it is not helpful, and nor does it raise much money. What we surely want is measures in the Budget and elsewhere to boost the productivity of our agricultural sector so that we can produce more of the food we eat ourselves, rather than importing it from the rest of the world. I encourage the Chancellor to release any impact assessment she has done on this measure. I hope that she will reconsider this proposal, although I doubt she will.
I now turn to a topic that I have mentioned many times, and one that I will continue to raise with the Treasury. The Chancellor has talked about the difficult decisions that she has had to make on tax and spending to promote growth. May I suggest one specific policy area, tax-free shopping, which has the potential to increase growth considerably? Since we left the EU, British people have been able to shop tax-free in European states. However, we have not given the same advantage to wealthy visitors visiting the UK to spend their money here and benefit our economy. That disincentive to visit the UK will be worse if visa costs are increased. I have talked to some of the bigger businesses involved in this area, and they are seeing that instead of visiting the UK people are going to Paris, Madrid or Milan to do their duty-free shopping. We are losing out as a result.
That whole new market, unique to the UK, is worth an estimated £10 billion annually in foreign spending and would generate more than £3 billion for the Exchequer, based on an Oxford economist’s report that said that for every £1 spent by visitors, 37p was generated for the Exchequer. The only thing stopping Ministers in the last Government looking again at this issue was the Treasury’s 2020 forecasts, which unjustifiably—in my opinion—predicted little or no impact on EU visitor numbers or spending levels. That led to the wrong conclusion that there would be costs to the Exchequer, even without all the other added benefits I have mentioned for hospitality, airports and luxury goods manufacturers, which would help the economy. All the data on actual spending supplied by real businesses proves the opposite.
My only ask of the Chancellor today is that she takes the cost-free decision to review the 2020 impact forecasts in the light of overwhelming real data and this time, unlike the last, ask the OBR to scrutinise the Treasury’s forecast impact of extending the scheme to EU visitors. I would welcome the opportunity to discuss this with Ministers, and I could bring experts with me to help the discussion.
As the new Chairman of the Public Accounts Committee, I remind Treasury Ministers of the report produced in the last Parliament called “Lessons learned: a planning and spending framework that enables long-term value for money”, about how the Treasury should focus on getting the best value for every £1 of taxpayers’ money spent. The PAC will scrutinise the whole of the Government’s expenditure and help them to get better value for money.
Madam Deputy Speaker (Ms Nusrat Ghani)
We have another maiden speech, from Margaret Mullane.
Margaret Mullane (Dagenham and Rainham) (Lab)
Thank you, Madam Deputy Speaker, for allowing me to contribute to this debate with my maiden speech. It is the honour of my life to be standing here, in this historic place, at the heart of democracy, representing the communities of Dagenham and Rainham, the place where I was born and raised.
I was well and truly made in Dagenham, and I am also the first woman to represent the seat since the boundaries were redrawn in 2010, when the old seat of Dagenham inherited the communities of Rainham, South Hornchurch, Elm Park and now Beam Park. I am proud to join the long list of political women from Dagenham, such as the Ford machinists whose battle paved the way for the Equal Pay Act in the ’70s, and now our very own Holly Ridley, Labour’s new general secretary.
I must take this opportunity to pay tribute to the inexhaustible work of my predecessor, Jon Cruddas, who always put the needs of local people first and was, I know, a very well-respected Member of this House for his very thoughtful contributions. His presence will be missed by honourable colleagues in Westminster and by the people of Dagenham and Rainham, not least for his community-led approach to parliamentary politics. He always brought people with him, displaying integrity and compassion, and I have committed to continuing in that vein.
When people think of Dagenham and Rainham, they think of industry and the era of great British manufacturing —the Ford factory, Sanofi-Aventis and May & Baker, which created one of the first antibiotics, saving many thousands of lives during world war two, including that of Sir Winston Churchill when he suffered with pneumonia. People also think of council housing. The Becontree estate, one of the most ambitious social housing projects in the world, built during the interwar period, marked its 100th anniversary in 2021 and is still a source of great pride. People also think of working-class solidarity: the communities that were forged on the factory floor, in the clubs and at the docks; and the indomitable spirit of the women machinists whose famous fight paved the way for the Equal Pay Act 1970 and for a strong trade union voice in our area.
Dagenham and Rainham has a rich past, and it is now my job to ensure that it has a bright future, full of opportunity and promise, built on the back of a new deal for working people. It has not always been politics for me; I have worked in insurance and in a call centre, and was a barmaid at the Dagenham Trades Hall.
I know how precarious work can be in areas such as Dagenham and Rainham, and it was the miners’ strike that drew me into politics. Seeing secure jobs stolen away, the injustice of Orgreave and the heart being ripped out of working-class communities by decisions made in Westminster, I knew then that I wanted to be a voice for working-class people. That is why I welcome the Government’s commitment to making the Hillsborough law a reality, creating a level playing field for people in places such as Dagenham and Rainham when tragedies sadly happen—like in 2015, when four young men were murdered by a serial killer. The Independent Office for Police Conduct found that mistakes were made during the investigation, and nearly a decade later I continue to work with the family of Jack Taylor, seeking the justice they deserve.
It is not only justice that working-class communities such as Dagenham and Rainham seek; they want more police on our streets to tackle the scourge of knife crime, particularly around transport hubs such as Dagenham Heathway, Elm Park and Rainham. We want thriving town centres, an NHS fit for the future—one where you can get a GP appointment—jobs you can raise a family on, council housing, infrastructure, good public services we can all rely on and representatives who serve with integrity.
The devastating fire at the Spectrum building in my constituency in the early hours of Monday 26 August will not have escaped the attention of the House. That has yet again brought to the fore the safety of residents in high-rise blocks across the country. Thankfully, a combination of brave residents and the rapid response from the London Fire Brigade meant that there was no loss of life on this occasion. I want to take a moment to thank our emergency services for their amazing work and our community in Dagenham for their overwhelming response to this tragedy. Local businesses and residents rallied around to help families who had lost literally everything. That is who we are in Dagenham and Rainham, and I could not be prouder as their representative in this House.
There is a long way to go before we have a level playing field, but in the meantime I will dedicate every moment I spend in this House to raising living standards and attracting opportunities for my constituents. The work has already begun. In a matter of months London’s biggest film studio will be complete, bringing skilled work in the creative industries to a new generation of young people, making hope possible. That has only been made possible under the local stewardship of Labour, guided by Jon Cruddas, who brokered the agreement when Sanofi-Aventis vacated the site, and Barking and Dagenham council, which secured the deal with Hackman Capital Partners to develop it.
As with all things, there is good news and bad news, and there are still a lot of battles that need to be fought. There is a patch of empty land at Marsh Way where c2c trains should be taking customers from their new neighbourhood on the Beam Park estate to Fenchurch Street in 20 minutes, as promised by developers. I am determined to make sure that promise is made good. Since discovering that this crucial infrastructure has been derailed, it is Labour representatives who have been fighting for a green light to get it delivered.
I have always been a champion of council housing at traditional social rents, and I will continue to do that in Parliament. That is why I welcome the Government’s commitment to build a new generation of social and affordable homes. I also welcome the commitment to put in the essential services that communities desperately need. I will always beat the drum of infrastructure. As we build—there is a lot of development planned for Dagenham and Rainham—we must ensure not only that the homes are affordable, but that there are schools, GPs and dentists, transport options, leisure facilities, green spaces and the amenities needed to thrive.
There are many new challenges in Dagenham and Rainham, but there are also historical challenges that need resolution. The ongoing fires at the illegal landfill on Launders Lane in Rainham are not only a scandal but a public health risk, and I will be fighting tooth and nail to extinguish them once and for all. The health of my constituents is paramount. That is why I am in regular contact with the chief executive of the Barking, Havering and Redbridge university hospitals NHS trust, offering my support to get our local NHS back on its feet. Our local NHS has ambitious plans to expand the emergency department at Queen’s hospital, and I will be doing everything in my power to make that a reality.
At the election, I promised that I would help local communities to shape the future of Dagenham and Rainham. From the Daggers boxing club to local faith groups, businesses, working men’s clubs, and amazing local charities such as Dagenham United and the Ship in Rainham, everyone plays a part in building a future for Dagenham and Rainham. That includes Barking and Dagenham and Havering councils, which is why I will be a constant voice asking for a revised funding formula for local authorities, so that they have the resources they need to transform lives.
I will finish as I started. It is the honour of my life to stand here representing my community and to be given the opportunity to serve. I am fiercely proud of Dagenham and Rainham and, building on the legacy of those who stood here before me, I will always be on hand to fight for the communities who call my constituency home. Thank you.
Madam Deputy Speaker (Ms Nusrat Ghani)
I do not doubt that the hon. Lady will be a strong advocate for her constituency.
Sir John Whittingdale (Maldon) (Con)
It is a pleasure to follow the hon. Member for Dagenham and Rainham (Margaret Mullane), who made an excellent speech. She spoke with knowledge and passion about her constituency and about the challenges that face the residents of Dagenham and Rainham. Hers is a constituency I know well, since I drive back to my own on the A13 every week. Sometimes, when it is closed, as happened last week, I find myself exploring even more of Dagenham and Rainham. I also congratulate the hon. Member for Worcester (Tom Collins), who also made a very good contribution. We look forward to hearing from both of them in the future.
I want to start by putting on record the thanks that I think are due to my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt), the shadow Chancellor, and my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), the former Prime Minister. One of the extraordinary things I have found in the Budget speech that we are debating is the complete failure to mention the two extraordinary challenges that the Government had to face: covid and the economic consequences of Putin’s invasion of Ukraine.
Those two events combined potentially threatened the survival of every business in this country and could have led to a catastrophic increase in the cost of living for ordinary people. It was only through the intervention of the then Government in providing support that we managed to keep the economy going and that those businesses and the jobs associated with them survived. I find the Chancellor’s failure even to mention that challenge when talking about the economic legacy extraordinary. It has left us with a legacy, but despite the level of borrowing that was necessary, the Government were bringing it down and had restored the economy. I think that when the history books are written, a lot of credit will be given to my right hon. Friends the shadow Chancellor and the former Prime Minister.
Mrs Sarah Russell (Congleton) (Lab)
Does the right hon. Member accept that the Conservative Government’s decisions to reduce gas storage and to fail to invest in the NHS over long periods made dealing with those crises considerably worse?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the right hon. Member responds, interventions are a healthy part of debate, but the hon. Lady should draw the attention of the Member by speaking loudly in asking for an intervention.
Sir John Whittingdale
Every country in the world faced enormous challenges. The record of the Conservative Government in tackling those challenges bears comparison with any other country. That cannot be diminished. I will say a little bit more about the NHS in particular as I move forward with my remarks.
I saw that Alastair Campbell tweeted in defence of this particular Budget. He said:
“It was a very Labour Budget”.
I would certainly agree with that. It put up spending massively, borrowing massively and tax massively—to that extent, it was a very Labour Budget. In the first 30 minutes of the Chancellor’s speech yesterday she did not actually make any announcements; she simply tried to justify some of the measures she was going to introduce by talking about the fictitious black hole. The shadow Chancellor, my right hon. Friend the Member for Godalming and Ash, has already adequately exposed why that is a fiction, and the Office for Budget Responsibility was unable to find any evidence for the figures that she quoted.
Let us be clear: tax and spend is a matter of choice. It was the choice of this Government to break all the promises that they made at the last election. It was their choice to break their manifesto commitments not to increase national insurance contributions. They said that they would not increase tax on working people, but in many areas the measures that they have introduced will have a significant impact on working people.
The denial that there was a tax bombshell to come is extraordinary, given that they subsequently announced a £40 billion one, which will result in the tax burden in this country rising steadily to what will be the highest ever on record. Yet this is a Government who took office saying that their priority would be to fuel growth. I can say to the Minister that he cannot fuel growth by punishing the businesses that will be responsible for creating the jobs and wealth of the future. The Office for Budget Responsibility’s forecast following the Budget shows that growth is forecast to fall steadily.
I want to speak about one or two of the tax choices that have been made—they, too, are a matter of choice. It was up to the Chancellor to decide how to raise the extra revenue. Even before the Budget, we already heard of one extremely damaging, painful decision—the withdrawal of the winter fuel allowance—to save money by taking it away from pensioners across the country. I have received many emails expressing great disappointment that the Chancellor pressed ahead with that measure and did nothing yesterday to reduce its impact.
It is primarily businesses that will pay the price in this Budget. The increase in employers’ national insurance contributions is estimated to cost them £25 billion, which represents £615 more for every single employee of a business over the threshold. What is the result? If the cost of employing people increases, that can have only two consequences: lower wages and fewer jobs. Each of those will hit working people. On top of that, businesses will face an increase in the national minimum wage. That will hit the businesses that are already finding it hardest to survive. It will impact on the care sector and the hospitality sector—already under enormous pressure. The decision to increase the national minimum wage for young adults by 16% will make it even harder for those people to find jobs.
Just 10 days ago the Government heralded the investment summit, which was supposed to persuade international investors that this was a country they should want to invest in. Yet a week later, we have higher capital gains tax and higher stamp duty, and a war declared on non-doms. Instead of investment coming into this country, already we are seeing the flight of people living here—the entrepreneurs on whom our future success depends are leaving in droves.
Graeme Downie
The right hon. Member mentioned people fleeing the country. Could he point to at least three examples of anyone at the investment summit now saying that they will withdraw that money?
Sir John Whittingdale
The investment summit announced a lot of investment for which the Conservative Government were actually responsible. Let us wait and see. The Budget was yesterday. Businesses will have to look very carefully at their plans, but I do not expect them to do so in a mere few hours. I am happy to have this debate with the hon. Gentleman again in a few weeks’ time once we have seen the impact of the measures that have been announced.
There are two specific measures that I want to touch on because they have a particular impact on my constituents. One of them, which has been mentioned a number of times in this debate, is the removal of agricultural property relief. The Country Land and Business Association estimates that that will affect 70,000 businesses. Family farms in particular will feel the impact worse. It is hardly surprising that the president of the National Farmers’ Union has said:
“This Budget not only threatens family farms but will also make producing food more expensive… The shameless breaking of those promises on Agricultural Property Relief will snatch away much of the next generation’s ability to carry on producing British food, plan for the future and shepherd the environment.”
This is a measure that the Labour party said it would not introduce, but it has broken that promise and is now proposing to introduce it, with enormous damage not just to farmers but to food security and our environment.
The second measure that I would like to touch on—[Interruption.] Madam Deputy Speaker, I see you have acquired Speaker’s cough. I will heed your warning, but I want to mention VAT on private schools. In my constituency I have three small independent schools: Heathcote school in Danbury, Elm Green in Littleborough and Malden Court school. The parents who send their children there are not rich; they make huge sacrifices. In Essex we are very fortunate to have really good grammar schools. Those parents make that sacrifice to help their children hopefully get into the grammars, but they will not be able to continue if there is 20% increase in fees as a result of the imposition of VAT. They will withdraw their children and those schools will be threatened with closure. The consequence is that the children will need to be placed in state schools, which are already under huge pressure. My constituency is growing rapidly, and there is enormous pressure on schools. This will simply make it worse. This policy is simply vindictive and will do enormous damage.
Very quickly, I note that the Minister for Secondary Care, the hon. Member for Bristol South (Karin Smyth) has come back into the Chamber, and she would be disappointed if I did not say that I welcome the hospital building programme in the Budget and the announcement of new money. However, once again I reiterate that a hospital in my constituency is threatened with closure. We have been promised a new one for 30 years or more, under both my Government and the Government before that. She was good enough to see my right hon. Friend the Member for Witham (Priti Patel) and me the other day, so that we could make the case. If she does hold this money, I hope that she might be able to direct some of it to my constituency.
This Budget is one of the worst I have heard in all my time in this place. It will do enormous damage. I am grateful for this opportunity to put that on the record.
Jon Trickett (Normanton and Hemsworth) (Lab)
Thank you, Madam Deputy Speaker. I will try to be reasonably quick.
I pay tribute to the maiden speeches we have heard today, which were exceptional. In particular, I associate myself with the views of my hon. Friend the Member for Dagenham and Rainham (Margaret Mullane) when she said that she stands for working class life and communities, and will do everything she can for them. That is how I have seen my 28 years in this place, too.
I think I am probably the only person on the Labour Benches today who was here in 1997, so I want to say something to the Government and to all our Back Benchers. I was there when Labour came into office—I was elected in 1996, so I was here in ’97—and the same lack of humility shown then by the Conservative party, which had been thrashed by the electorate, is being shown today. There is the same short-term memory of the failures their Government had committed under John Major and the other Prime Minister before that, and the same lack of remorse. There is a lack of remorse for what we have now: food bank Britain, with millions of people in poverty. Not a word from those on the Conservative Benches. There are millions of people on NHS waiting lists. No remorse from the party opposite for that. There is no remorse for the fact that our economy has not been properly invested in throughout their whole period in office. This country was the lowest investor in the whole of the G7. There is no remorse for all the other failures either, and no sense of humility when the public told them that they had made a series of mistakes.
Jon Trickett
No, I am going to try to be quick. I am not going to take any interventions.
All those matters, and others too, require us to make a change in the direction of our economy. That is what this Budget has begun to do; we are turning the page.
One final reflection on ’97. When Labour introduced the minimum wage, one of the great reforms of the century, the Tories kept us in the Lobby night after night after night. We were proud to do it. The arguments they made then have a parallel with the arguments they are making about our Budget today—that there will be job losses, an impact on profitability, small firms will be in trouble and so on. Let me say this. Eventually, they accepted the minimum wage because it was the right thing to do. There were no job losses and there was no impact on profitability. So, I say to those on the Government Front Bench: continue in the direction you are travelling, but move faster and be even more radical. I recommend that they have a look at Spain, where a socialist Government are in place. They have—I think I am right in saying—the highest rate of growth in the G7. They introduced a 0.5% wealth tax on estates worth more than €3 million a year and they are getting high growth. That shows that a determined Government restructuring the economy, as we need to do, can deliver change and not damage a country’s economic success.
I represent 23 villages, all former mining communities that were treated brutally by the Tory party 40 years ago. It is a distant memory for many, but I remember every single moment of the strike. They destroyed the mining industry and have done nothing to replace it in the last 40 years, so we have widespread poverty, as there is in all post-industrial communities throughout our country. They perpetrated a hoax on those communities by saying that they would level up. The levelling-up fund was not directed to where poverty was. In any event, it was a competition in deprivation between one area and another. My communities got nothing, yet we are struggling desperately to achieve growth. Levelling up was a great slogan, but it was used as a trick to persuade people to vote Conservative in 2019. What happened? People have learnt their lesson.
Let me come on to one point that I am worried about and then on to a general point. On transport, the differences in the distribution of funding for transport are extraordinary. The previous Government—that lot—spent £418 per head on transport in Yorkshire. In London, it was £1,200. That is three times as much per head per year spent on transport in London than in Yorkshire, and that leaves us with problems. I represent 23 villages—rural communities in many ways, deprived communities, post-mining communities. To get from one community to another, bearing in mind over 20,000 people in our area do not have a car and the trains do not work very well—the train service has left us without adequate public transport by train—the only option is the bus. Buses often do not start until 8 o’clock, but people begin work at 7, or leave home at 7. I have met women walking from one village to another in the dark on unlit streets because the bus service has not yet started. That is a problem the Conservatives created.
I regret this Government’s decision to raise bus fares from £2 to £3. I do not suppose there is anybody in this whole Parliament who does not have access to a car, but there are many people across the country who do not have a car because wages are so low. People are walking in the dark at 7 o’clock in the morning to get to work from one village to another. And for those of us who do have a bus service, it is going up by 50%. It will be roughly £6 a day to get to and from work. That is £30 a week and £1,500 a year in bus fares to get to work and back. Clearly, that gives us a problem. In my constituency, there are villages that are only seven miles apart, yet the bus takes one hour and 19 minutes to get from the one you live in to the one where you work. That is completely unsatisfactory. If we are going to raise bus fares—that is the decision that has been made, which I regret—we need to reform the way buses operate so that they are accessible to communities. The Government have made some announcements in relation to that already, which is welcome.
My final point is on the lack of investment the Conservative party presided over for years. I heard the shadow Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt) saying today, “Okay, there might have been a black hole in the public finances, but we were going to cover it with cuts.” That is effectively what he said. The cuts were always taking place to investment and they were going to cut more investment. If we measure my constituency by GDP per head—a controversial measure, but the one we are familiar with—that lack of investment means the average worker produces £29,000 per year of GDP. Wages are pegged to productivity, as we all know, so we have low wages—less than £30,000 a year. But listen to this. In Camden—we know it is a different economy in Camden—GDP per head is £174,000. The regional differences between output, capacity and productivity are all the result of that failure to invest.
The Budget sets out to invest, and to invest big and go for growth, but I will be pressing, for all the held-back, post-industrial communities up and down our country— not only the coalfields but in the midlands and elsewhere —for the investment we achieve and the growth we deliver to be more equitable than it has been under the Conservatives.
With those few thoughts, and an encouragement to be more radical and even more bold for the future—let us bear in mind ’97—I wish the Budget well.
Wendy Chamberlain (North East Fife) (LD)
One thing that we always feel after a Budget is a sense of relief, because we at least know that we are going to get some answers. It feels that when we are talking, campaigning and raising issues, we are always told to wait for the Budget. I was additionally relieved yesterday because my son managed to pass his driving test theory. [Hon. Members: “Hear, hear.”] Thank you.
I do not think the Government need any help in talking about the economic legacy left by the previous Government, but we do have to acknowledge that the funding structures put in place by the previous Government have created a legacy, as well as expectations. I want to talk about those that most directly impact North East Fife, starting with infrastructure funding.
I was pleased to hear the city deal announcement in relation to Argyll and Bute, given that I have an Argyllshire father, but I want to highlight the opportunities within existing city deals to add value and to make up some of the increased costs we have seen in recent years. The town of Newburgh in North East Fife has been cut off from the railway for almost 70 years. It has a line running through it that transports 38 trains a day and for the last 13 years there has been a campaign to rebuild a train station and reconnect it to the line. That makes sense from a number of perspectives: a train station takes cars off the road; it allows investment into the town; it can bring tourists to places such as the Lindores Abbey distillery; and it shortens journey times for those travelling beyond for NHS or other treatments. However, the only mention of railway infrastructure is in relation to the city region sustainable transport settlements, which are for England only. I acknowledge that transport is devolved, but there are ways in which the UK Government could look to work with the Scottish Government in order to help those communities where additional funding could make a difference.
The other element of transport infrastructure is Access for All, which is a UK scheme although the Scottish Government play a part in determining which stations receive support. I want to make an additional call for funding for Leuchars station, which serves St Andrews—although it is one of the best-known parts of my constituency, it does not have a station. It sometimes feels that we have fallen into the cracks between Westminster and Holyrood on that. On disability and on Access for All, we need to do more at all levels to ensure that we deliver the funding.
Returning to the impact of the different funds and schemes that were put in place post following our departure from the EU, and the need to replace EU structural funding, I want to touch on the community ownership fund and the shared prosperity fund. I and other Fife MPs—I see two of them in their places—recently met Fife council to talk about the future of the shared prosperity fund, which is due to end in March 2025. I am pleased by the commitment to continue it for another year, although we need to move away from year-to-year funding. I am sure we all meet third-sector organisations and others who talk about the uncertainty that short-term funding brings to the services that they provide. We also have to acknowledge that the Budget— the relevant passage is very short—will mean that Fife council, for example, will see a cut of about a third in shared prosperity funding, which has delivered programmes such as Kingdom Works, an employability service that has supported over 8,000 people. The Government said in the Budget that they want to reform funding, and I urge them to do so quickly so that we get certainty.
The Liberal Democrats have talked a lot about health and social care. Others have spoken about the fact that we need to focus on social care, because without fixing it, we will not fix the NHS. Again, the NHS is devolved in Scotland. I welcome the significant increase in funding for Scotland; it is now over to the SNP-led Scottish Government to deliver on that. I am pleased, too, that we will see support for public sector organisations in relation to the national insurance increase. However, there is no doubt that the NHS in Scotland is in a dire state. In Fife, there is no NHS dentist currently taking patients, and in my constituency we are seeing further cuts and closures in dental services.
The other thing that I want to say about what I think the Scottish Government should be doing relates to the business rates changes that the UK Government have brought forward. Let me quote one of my constituents, who was reported in today’s Courier newspaper saying about rates relief:
“We don’t have the cliff edge in Scotland. We’ve been paying full rates ever since last summer.”
I accept that that potentially is not covered by the block grant, but given that the whole UK is a tourism destination, the Scottish Government need to look at how they best support hospitality and tourism, because there is a real difference between what is happening in other parts of the UK and what is happening in Scotland.
I should declare an interest at this point: I am chair of the all-party parliamentary group for Scotch whisky and worked for Diageo for four years before my election. At the start of the debate, the Chancellor of the Duchy of Lancaster talked about choices. For me, the other aspect of choices is managing expectations. That is where the real issues that I have with the Budget come to the fore.
Mark Kent, the chief executive of the Scotch Whisky Association, said in The Scotsman today that the decision to increase rates on Scotch whisky
“not only flies in the face of the commitment to back the industry as a core element of the government’s ‘Brand Scotland’ concept, it also serves no economic purpose.”
The Conservatives’ 10.1% increase in alcohol duty was deeply damaging to the whisky industry. In the 12 months since it came into force, revenues from the tax have actually fallen by £298 million, so it is clearly not delivering increased revenue to the Treasury. What we saw from the Government yesterday will continue to hurt the industry, which is so important for Scotland. The Chancellor offered support to breweries through the cut in duty on draught products, but that will do nothing to support responsible drinking. Taxing based on strength of alcohol is not the right way to go about it; it is about alcohol being alcohol and how it is consumed. I might not represent the most whisky distilleries in Scotland by number, but I probably do by volume, with the Diageo distillery and bottling plant in Leven.
Returning to the point about promises and expectations, we come to farming and the issue of the inheritance tax changes. The National Farmers Union Scotland said on its blog today that it is pleased to see the roll-over of the agricultural funding, although that has gone into the Scottish Government’s block grant, so, again, it is over to the Scottish Government to ensure that they deliver for farmers. We need farmers for our food production and security, for our climate and nature recovery, which is more vital than ever, and for rural growth and support.
Dr Roz Savage (South Cotswolds) (LD)
The Budget is subtitled “Fixing the foundations” but I was saddened that it contained no mention of the most important foundation of everything in Britain: our natural world. Does she agree that more resources need to be dedicated to the restoration of nature and to supporting our farmers, both of which are crucial to food security?
Wendy Chamberlain
I absolutely agree. Whenever I have that discussion with farmers, they want to support climate and nature—they want to do the right thing—but they need support to do so.
As I say, the overall funding envelope for farmers is for the Scottish Government to deliver, and I am confident that my Scottish Liberal Democrat colleagues in Holyrood will be making the case for them to do so. In his intervention on the Chair of the Public Accounts Committee, the hon. Member for Leeds Central and Headingley (Alex Sobel) talked about how the number of farms affected will be small, but the issue is that the Government promised last year not to do anything in relation to agricultural property relief, yet that is what is happening. I am already being contacted by local farmers who fear that this will be the death of their and other families’ farms. It is important that we remember that it is not just about those farmers; it is also about the infrastructure and the wider communities that they support, such as vets and other facilities.
We should not forget tenant farmers, either, because they are some of our most vulnerable. I know that because I worked with some of them prior to the election in relation to the roll-out of universal credit. That system is not fit for purpose for farmers. The Work and Pensions Secretary is no longer in her place, but I will be coming back to her on that issue. We need to ensure that we provide that support.
Until very recently, I wore multiple hats, because I had far fewer colleagues. Now that I have more of them, I have given up my Department for Work and Pensions hat, but I welcome the changes to carer’s allowance. I would like some clarity about the carer support payment in Scotland, which is a devolved benefit that is currently being rolled out. I have not seen it in the notes that I have looked at so far, but perhaps it will become clear in the coming days whether that is included in the block grant that is coming to Scotland, or whether there will be additional consequentials.
To conclude, there are things in this Budget that I absolutely welcome, but, as always, there are unintended consequences, on which I hope the Government will listen to us.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Gregor Poynton to make his maiden speech.
Gregor Poynton (Livingston) (Lab)
Thank you, Madam Deputy Speaker, for giving me the opportunity to speak in today’s debate. First, I pay tribute to my hon. Friends the Members for Worcester (Tom Collins), and for Dagenham and Rainham (Margaret Mullane), who have proudly shown the best of their constituencies in their maiden speeches today. I pay tribute to my predecessor, Hannah Bardell. Hannah has diligently supported our constituents over the past nine years, whether by addressing the Broxburn floods, assisting homeowners affected by RAAC, advocating for those affected by the infected blood scandal, and championing LGBTQ+ rights. On election night, she was incredibly gracious—a spirit that has continued, as Hannah and her team have gone above and beyond in passing on cases and helping my team to get settled. She said to me on the night, “It’s all about the constituents,” and she has been true to her word. Hannah said in her speech on polling night that she intends to be back in some form. Of that I have no doubt. I just hope it is not too soon.
My constituency is called Livingston, which is understandable, as that is the biggest town in the constituency and the county, but the constituency is so much more than that; it includes towns and villages such as Breich, Dechmont, Ecclesmachan, Uphall, Longridge, Broxburn, Bents, Stoneyburn, Addiewell, Kirknewton, Wilkieston, East Calder, Mid Calder, West Calder and Fauldhouse, each rich with history and a distinct community spirit. The area’s economy and population was initially boosted by mining, of coal in the west, and oil shale in the east. The landscape still bears witness to this history, with the bings that remain. That is why it was important to me that the Chancellor announced in yesterday’s Budget that we are delivering on our manifesto commitment to return the investment reserve to miners. We are handing back £1.2 billion to former miners and their families. In fact, 144 former miners in the Livingston constituency will receive an average increase of £29 per week in their pension. For those who would like a further insight into Scottish oil and the shale oil industry, there is the Almond Valley visitor centre, which brings to life the first truly commercial oil works in the world, and celebrates the West Lothian chemist James “Paraffin” Young’s work and discoveries.
However, the biggest growth in the area was in the 1960s, with the creation of the new town of Livingston. Many from Glasgow and the west of Scotland ventured east because of the promise of improved housing and job opportunities. That entrepreneurial spirit is still alive in Livingston, which is the home of high-end manufacturers like Wyman-Gordon, biotech companies like Valneva, Glenmorangie’s bottling plant, Paterson’s shortbread factory, Mitsubishi Electric, a designer outlet village, Sky, and numerous small and medium-sized enterprises, which are the lifeblood of our local economy. Now that I have highlighted Pateron’s shortbread and Glenmorangie, I am expecting a visit from my right hon. Friend the Secretary of State for Scotland—all in the name of promoting Brand Scotland, of course.
As I prepared to give this speech, I sought inspiration from the maiden speeches of two previous MPs for Livingston: Robin Cook and Tam Dalyell, who knew a thing or two about speaking in this place. Even in their maiden speeches, they set themselves apart with their wit, intellect and fire for social justice. Tam Dalyell used his experience as a school teacher to outline practical reforms that could be made to the education system, and Robin Cook, a former chair of housing on Edinburgh City council, made a plea for more and better housing. I took from them that you should talk about what you know, and if I can maintain that for my whole parliamentary career, I think I will be doing rather well. Tam Dalyell and Robin Cook are two giants of Scottish Labour politics, who, in their different ways, made a mark in this place. We new Scottish Labour MPs must now make ours.
There is a Scottish Labour thread of history in this place, from Hardie, Maxton, Lee and Dewar to Cook, Brown and Darling. Living up to that is an impossible task, but try we must, because in that trying and effort is the opportunity to make a change. The idea of being a Scottish MP in the Parliament of the United Kingdom is important to me. I am Scottish, and I am British. I do not see these identities as contradictory, but they are different. Given that all four nations are part of the United Kingdom, and have been, in some cases, for hundreds of years, it would seem logical that the UK identity would subsume all, but that is not so.
The idea of Scotland is powerful. It has stood the test of time, and it means different things to different people in the Borders, the highlands, the island communities, the east, the west, the central belt, urban areas and rural areas, but there is a common fabric of what it means to be Scottish, and it binds us together, whether we were born into being Scottish or chose to make our home in Scotland. This is part of who we are, and having Scotland as one of the four nations makes our country greater than the sum of its parts.
The theme of today’s debate is “fixing the foundations”, because over the last 14 years our country has not been on secure foundations. The chaos of the last 14 years across the UK—and particularly the last 10 years in Scotland, where there has been a focus on the constitution, not the day job—has made our country feel less secure and life feel too precarious for far too many. Families are one mistake, a piece of bad luck or a decision that is no fault of their own away from disaster. That is no way to live. That is why this Budget—which ensures a pay rise for over 200,000 of the lowest-paid Scots, letting more families keep more of their hard-earned cash—is important for families right across the Livingston constituency.
I wanted to come to this place to make sure that everyone, no matter their background, can thrive. That is what drives me and my politics. Having grown up in a working-class family in a working-class town in central Scotland in the ’80s and ’90s, I have seen what happens when people have opportunities and security, and what happens when they do not. My father worked in a plastics plant in Grangemouth for over 35 years, providing our family with stability and dignity through unionised work. Without it, I would not be here today.
There is hope for the future. Yesterday’s Budget marks the end of the era of austerity, and raises much-needed cash for our public services. This Labour Budget delivers the largest budget settlement for the Scottish Government in the history of devolution. It means there is an additional £1.5 billion for the Scottish Government to spend in this financial year, and an additional £3.4 billion next year. This is a significant increase in investment to ensure that we have the funding available for Scotland’s NHS, schools and public services. It is now for the SNP, which has lost its way in recent years, to get a grip and spend the money wisely.
I recently visited the Larder, a social enterprise providing solutions to poverty through learning opportunities and access to high-quality, affordable food. It supports young people for whom traditional academic settings have often not worked, helping them to build skills and confidence. The Larder has had huge success in turning lives around, so it can be done. We have the people and drive to build stronger communities. We have a Government who are on the side of working people, and we should not rest until everyone in this country has the opportunities that they need to build a more secure life for themselves and their families. That is what I resolve to spend my time in this place doing, on behalf of people in the Livingston constituency.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call my constituency neighbour, Mims Davies.
Mims Davies (East Grinstead and Uckfield) (Con)
I congratulate all hon. Members who have made their maiden speeches. May I wish the hon. Member for Livingston (Gregor Poynton) well in his time in this place?
I agree with my right hon. Friend the Member for Maldon (Sir John Whittingdale) that the failure of the Budget, and its long preamble, mentioning covid and the war on our continent, was very stark. However, I would like to start on a positive note. I am the 380th woman elected to Parliament, and it was truly a historic moment to see the first female Chancellor at the Dispatch Box. She said that it would give hope to other women who were watching, and I absolutely agree. I just hope that our businesses, and sectors such as hospitality, feel that hope.
It was very pleasing to hear the announcement of the compensation schemes for infected blood victims— my constituent Robert, in East Grinstead, has been campaigning very hard on that—and for victims of the Post Office scandal, which will be welcomed by many of my constituents. It is also pleasing that fuel duty has been frozen, and I thank all my hon. Friends and campaigners who made sure that there was support in this area of the family finances. I am pleased about that, and, indeed about the cladding interventions. There is a welcome boost for funding for special educational needs and disabilities, and something for the dreaded potholes, although we have yet to find out how far that funding will stretch.
However, 10 independent schools are in peril in my constituency, and their food providers, staff and many others are very worried about where they will go if they are displaced. There is no funding in this Budget to deal with such displacements. I would have welcomed more support for the Sussex wine sector; I am sure that you would agree with me on that, Madam Deputy Speaker.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. That point was not about the consumption of wine; I have many vineyards in my constituency, as the hon. Member does.
Mims Davies
It is very important to support people working in the wine sector. Viticulture is alive and well in Sussex, Essex and across the country. If the train drivers’ needs have truly been satisfied, the services from East Grinstead to the capital simply must improve. That is my plea to the Southern rail service.
Despite the leaks and the pre-Budget announcements, it came as something of a shock to hear the full announcements in the Budget yesterday. There can be no mistake: the cost to the country is very dear. According to the OBR, the direct and indirect costs amount to £52 billion. The new Labour Government cannot escape the fact that, in their first Budget in 14 years—as they keep reminding us—they are set to raise taxes by a staggering £40 billion. Taxes will be at their highest level since 1993, and that builds on the winter fuel payment debacle. Despite Labour Members’ glee and their waving of Order Papers, when they go back to their constituencies or open their emails, they will see a very different story. Their constituents, like mine, will face the largest tax burden in our history, and working people will pay the price, as the Chancellor has now agreed.
Let me turn to younger voters and those keen to get on the housing ladder. Stamp duty is back for first-time buyers. One of my Conservative councillors in Copthorne and Worth highlighted this morning that the purchase of two rental properties has fallen through because the margins were already very tight. Yesterday’s decisions mean that two couples will now not be homeowners.
In Handcross and Pease Pottage, one of my councillors, Mr Prescott, mentioned the Budget of broken promises. His organisation will face a cost of £70,000, it will lose two people, and the delivery of programmes will be stopped. That is the reality of these decisions. Small businesses—often those that are women-led, such as salons—will see the impact of the national insurance rise. I will be interested to see the effect across all sectors, particularly as the measures are a clear breach of the Labour manifesto. Despite Labour’s retrospective revisionism, the effect will be felt right across the land. On every radio station that I listened to on my way in this morning, the dismay across sectors, affecting real people’s lives, was everywhere.
The national insurance rise affects charities and organisations, such as our hospices and air ambulances. As the shadow Chancellor said in the media this morning and again here today, picking the pockets of business, charities and organisations is not cost-free. The Institute for Fiscal Studies confirmed that the rise will hit the lowest-paid workers through lower pay, and the OBR has said that it will hit employment. So much for not raising taxes on working people. Two manifesto commitments have been broken.
Yuan Yang (Earley and Woodley) (Lab)
My constituents told me on the doorstep that their No. 1 priority was to improve the NHS. If the Conservative party were still in government, it would be overseeing steep cuts across the NHS and our public services. Would the hon. Lady be happy to be part of such a programme?
Mims Davies
Nobody here wants any negatives for their constituencies from the Budget, least of all for health services. However, I have family in Wales who have been living under a Labour Government, and they know the reality of what is coming down the line.
Let me build on the questions I have had from constituents this morning. Family businesses are directly affected. A local funeral directors group with national reach said that it believes that the Treasury has its figures wrong on the impact of the changes to agricultural property relief and business property relief. The cap and the 20% rate must surely be a simple mistake, the group writes. To meet the inheritance tax bill and pay their liability, firms will have to extract capital, incurring a 38% dividend tax rate, which is above the proposed 20% rate of reduced IHT. Given that capital gains tax is at 24%, it makes no sense for family businesses to pass on their shares to family. They will simply have to sell them or their business. I have been implored to ask those on the Treasury Bench to ensure that the Government consult and listen to family businesses, at the very least.
The Chancellor of the Duchy of Lancaster talked about Conservative Members opposing the Budget. We are opposing it. It is anti-choice, anti-growth, anti-business—particularly anti-family businesses—and anti-aspirational. It is focused on more borrowing. Disgracefully, as has been said, it pits the public sector against the private sector. Happy Hallowe’en, because everybody here knows that this is the ghost of a Labour Government of the past. They are back and haunting every single constituency.
I represent a rural constituency, and it is clear that local farmers will be hit by the changes to inheritance tax—we just need to read the messages from the NFU today. I am afraid that the subterfuge and the hoodwinking of the farming community will be felt not just by Opposition Members, but across everybody’s communities.
I recently read out in Westminster Hall the words of a local farmer, whose concerns were purely about business confidence at that point. The same farmer wrote to me again this week—I remind the House that farmers are working people, and they work 365 days and 52 weeks a year—to say:
“My family’s farm and estate are currently economically viable but there is no chance that they would ever produce sufficient cash flow to make it possible for us to cover any significant amounts of inheritance tax. If we are struck by excessive taxation we will no longer be able to produce 7,000,000 litres of milk per annum or timber for the nation. The heritage of 200 years could be gone.”
Farmers across my constituency are stunned. This is a hammer blow for family businesses, as the shadow Chancellor said, and we will oppose the Budget. It does not fix the foundations; it is a set of dangerous ground works.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Maya Ellis to make her maiden speech.
Maya Ellis (Ribble Valley) (Lab)
Thank you, Madam Deputy Speaker. My journey here comes via almost 10 years in local government, as an officer working on economic development and regeneration. I grew up among passionate socialists, but I also saw the investment that small businesses all around me put into their local areas, so I am delighted to be making my maiden speech, as the first Labour MP for Ribble Valley, in this debate on a Budget that truly harnesses the best of both social policy and great British enterprise. We need both, and we need them to work together.
For a young woman, full of dreams and wanting to change the world, sometimes our day-to-day can feel a pretty restrictive place to be. Anyone who has felt held back in their ambition will know that it can take just one or two people to believe in you, to make all the difference to whether you carry on or give up. I cannot possibly name all the people who helped me get here, but you know who you are, and it made all the difference that you never questioned for a second that I could do this.
It is so easy to quickly take for granted that we are speaking in a debate on a Budget presented by the first ever woman Chancellor of the Exchequer. She will know as well as I do that as fairytale as our journeys may seem at their high points right now, the prejudices and obstacles that we faced, and that women face every day, are still far too high. I have said it to many women, and I will say it to any listening now: you are as smart and as capable as you think you are; do not let anyone convince you otherwise. We need your fire.
I have been in Westminster a few months now, and one thing I hear people say frequently about my predecessor, the right hon. Nigel Evans, was how much he loves and cares for this place that we stand in today. Mr Evans worked incredibly hard and diligently as Deputy Speaker and on the restoration and renewal programme board. We are very lucky to have this well-managed centre of debate and challenge in the UK, and I am grateful to Mr Evans, and to all those who work here, for upholding our exceptional standards of democracy.
I promised Mr Evans on the night of the election that I would take care of the Ribble Valley constituency that I know we both love. I can already safely say that I will likewise show this incredible institution of Westminster and our strong democracy the respect and protection that I know we both value so highly.
I am one of those exceptionally lucky MPs who have lived in their constituency most of our life. It means that I know it like the back of my hand. For better or worse, it also means that I encounter situations like I did the other day, when one of my old Brownie leaders called me over while doing the school run to raise an issue about local social housing—I am on it, Jan, I promise.
My constituency of Ribble Valley is a patchwork of our country’s history and its future. We remember the battle of Bamber Bridge, when locals stood up against white GIs to welcome black US soldiers into their pubs—a brilliant example of the inclusion and multi- culturalism that makes this country great. In Samlesbury, we have produced planes to protect the country since world war two, and I am delighted that progress on establishing the National Cyber Force in my constituency is well under way. It will lead our country’s research, develop our future security and build our skills in cyber.
People are often surprised by the size of the Ribble Valley constituency. Its boundaries have changed over the years, but it currently reaches from the Lancashire-Yorkshire border, with picture-perfect villages such as Tosside, Rimington, Waddington, West Bradford and Chipping, through to the lively suburbs of Preston, taking in Fulwood, Bamber Bridge and Walton-le- Dale, and almost reaching the Ribble estuary at the Irish sea.
I see the breadth of my constituency as its depth. We have wonderful places to live, though much could be done to keep them safer and kinder. We have great transport links, with the M6 running through, and it is only two hours to London on the train from Preston. We also have utterly stunning countryside, including a large part of the trough of Bowland, where the late Queen said that she would have loved to retire.
Strong communities are so important to me, and both the rural and urban areas of my constituency are made up of villages that come together to create celebrations such as the Lostock Hall carnival and the Broughton scarecrow festival just last week.
Right in the heart of my constituency is my home village of Ribchester, where my family have lived since 1961 and where I am now raising my family. I must pay a quick tribute to the people of that village. From the amateur dramatic society and the church to the Brownie unit and the parish council, the village showed me the best of what it means to be British. I look forward to this Government easing the burden on families, so that they can spend more time contributing to the amazing communities that we all need to thrive.
The only person I know who loved Ribble Valley more than I do was my dad. He travelled the world, living in big cities and in communes, dreaming of new ways to live our lives, but I recently found a letter that he wrote to himself at age 21, in which he spoke of the strange pull back to our beautiful little corner of the world, where he chose to raise his family and, without knowing it, raised the Labour MP he dreamed of it having.
It is my deepest sadness that my dad did not live to see me standing here, but I know that he relished every heated debate we had at the dinner table and, along with my mum—one of the most intelligent women I know—I think my dad had an eye to what he was preparing me for. He was the biggest feminist I have ever known, and, in me, I think he raised the second biggest.
A lot of my career has involved working on innovation policy, which has collided over time with my passion for social justice. I think we all need a vision to look towards, and I want us to be ambitious that our rapid advances in technology and automation should translate into greater rewards for workers. I would like to think that it is not too utopian to hope that we will move to a standard four-day working week in my lifetime.
So much of what our society needs does not necessarily cost money, but it does cost time—time to give our children focused play; time to truly rest our bodies so that they do not crumble far too early; and time to live slowly and to grow our own food, to reduce the huge demands on this Earth. Technology can give us time, if that is where we choose to channel the benefits.
Before I finish, I will touch on my utmost priority as a Member of Parliament: working families. We need to make life much more tenable, more affordable and, dare I say, more joyful for parents, who want to contribute to our country while also raising good humans. It is also critical to me that we make sure the children have the lives, support and love they deserve.
We have a vision for an innovative and high-growth economy, but we do not get innovation without diversity of thought. This Parliament is the most diverse in history, and I, as one of those new diverse Members, am able to be here with my mental health just about intact only because my husband took three months of paternity leave with both our children. This meant that, when an election was called two days after I was selected as the Labour candidate, I did not have to spend a single second handing childcare over to him; he already knew how to change a nappy, what to pack in a bag and the books my children want to read at bedtime. I fully believe I would not be standing here now if he had not taken paternity leave. That opportunity should not be rare.
Forgive me for speaking in a hetero-normative context, but that is my personal experience. We know that few dads take up paternity or parental leave, which means that many women cannot dream of putting themselves forward for political office, as I did. Knowing that my husband can confidently care for my children gives me time to think, to organise and to dream. Too many women are still unable to do this because their mental load fills every bit of additional brain space they have.
We need the ideas and dreams of mothers and parents to propel our businesses, our public services and our society. I was delighted to join the campaigning organisations Pregnant Then Screwed and The Dad Shift earlier this month to try to shift the dial on parenting equality. I hope to see some truly ambitious step changes as our Government review paternity leave over this coming year, not only to create a new vision of fatherhood in this country, but to unlock the dreams and plans of mothers, which we have been so desperately lacking but which are so desperately important. I send a huge thank you to my incredible husband for holding the fort at home, and for being the foundation of my standing here today.
Finally, I want to acknowledge that it takes a lot of bravery to be a girl or a young woman today; it always has. It is relentless, scary and exhausting, especially for those with caring responsibilities or facing additional prejudices. There are a million reasons to give up, and a million times I almost did, but please do not give up. I can promise you this: brave girls grow up, and one day you might stand here and be the one in charge.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I congratulate the hon. Member for Ribble Valley (Maya Ellis) on her spirited maiden speech. Her speech, along with the other maiden speeches, underlines how new Members come here with good will in their hearts, full of good intentions and full of ideals. It is heartening to see that in new colleagues on both sides of the House.
I do not think the new Labour Government have any lack of good intentions, but this Budget is happening in something of a political bubble. Much of the Chancellor’s discourse seems to reflect a continuation of the general election campaign, which we now know could have been fought more honestly, openly and transparently by the Labour party.
That said, I am sure the Chancellor believes she has produced the best Budget for this country. The biggest cheer from the Labour Benches yesterday seemed to be for the 1p cut in draught beer duty, but I have since spoken to people in the hospitality industry, and they have described this as a shattering Budget. The money that publicans and restaurateurs will now have to pay their staff, and pay for their staff, massively dwarfs any benefit they could possibly pass on to their customers from the 1p beer duty cut. In fact, most of the increased beer prices that we will see as a result of this Budget are a direct consequence of the tax increases inflicted on businesses. I am afraid that those cheers demonstrate a complete lack of reality about the world we live in.
The character of this Budget reflects a reversion to the failed Labour policies of the 1960s and 1970s. It is naive to believe that taxing wealth creators, wealth creation and capital formation will not drive entrepreneurs and business leaders out of our country, which is happening. It is also deceiving, because the Budget reflects that Labour’s plans were not fully costed, and it is destructive of wealth, wealth creators and pensions. The Budget massively reduces people’s incentive to save into their pension pot, as they will now be taxed on what is left over at the end of their life to pass on to their children.
Of course, there is also a streak of vindictiveness towards wealth creators. I heard a Labour Member shout “Good!” when the shadow Chancellor said that we are climbing the league table of countries with higher tax rates across the economy, moving beyond Germany. The attitude that taxation is somehow an inherent good has limits, and we are going beyond those limits.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
On that point, will the hon. Gentleman give way?
Sir Bernard Jenkin
I certainly will if it was the hon. Gentleman that said that—
Alex Sobel
What is wrong with the German economy? The German economy has consistently performed well over the past 30 years, in excess of our economy, and has a strong industrial strategy. This Government are going to produce an industrial strategy so that we can have just as strong an economy as Germany, and a similar tax base.
Sir Bernard Jenkin
When Margaret Thatcher was elected in 1979, we were the sick man of Europe. What she, Lord Howe and Lord Lawson did to the British economy in that period put us on a faster growth track than the German economy. Since that time, we have been falling behind again. This Budget will help us fall behind again.
Elements of this Budget are a defiance of reality, because behind the cheer for the 1p cut on draught beer is the real world outside. I have been watching the gilt rate—the 10-year bond rate—on my telephone. It closed yesterday at 4.362% after going up substantially in the last hours of trading, and now stands at over 4.5%. That means the Budget has spooked the markets into increasing the cost of borrowing, which the Government will have to pay. The idea that these measures are pain free, and that getting more tax revenue in and borrowing more is going to bail out the economy, is very flawed.
I do not suggest there is going to be a bond crisis tomorrow, but we are enmeshed in a debt trap in this country, as are so many other mature democracies, after the energy crisis and covid, so there is likely to be another liquidity crisis of some kind over the next few years. How well prepared will this Government be, if they have already put up taxes and borrowing to spend on more consumption, rather than for our long-term economic benefit?
This is not a Budget for growth. Apart from the initial impact of the extra spending in the forthcoming year, the throttling back of expenditure, then the decline in borrowing and the burden of the extra taxes, suppresses economic growth, which the Office for Budget Responsibility is perfectly clear about. It was an empty promise for the Prime Minister to say, “We are going to prioritise economic growth.” This Budget simply does not prioritise economic growth. We have forgotten all the lessons of our economic history, learned from the disastrous policies of the 1960s and 1970s.
If socialism worked, everyone would do it. Socialism does not work. This is a more socialist Government than we have seen since the 1970s. They have forgotten what Tony Blair and Gordon Brown did. It was Gordon Brown who cut the capital gains tax rate. As Chancellor, Gordon Brown was the successor to Margaret Thatcher and continued with many of the same policies. Gordon Brown did not set up a ludicrous vanity project like Great British Energy. He did not believe that taking control of investment in a sector like energy would increase the wealth of the country. All the equivalent state-owned enterprises around Europe lose money—the Government will not make a return in that sector.
Yuan Yang
The hon. Gentleman mentions Gordon Brown. Yesterday’s Budget starts to restore the level of Government spending as a share of the economy to levels that are similar to those under Gordon Brown and the last Labour Government. It starts to restore the foundations of our public services. Does the hon. Gentleman welcome that restoration and investment?
Sir Bernard Jenkin
I wish we could all have everything that we wanted. Gordon Brown inherited a golden economic legacy from the Conservatives in 1997—[Interruption.] Yes, he did. Debt was falling and growth was outstripping our competitors. By the time of the financial crash in 2008, he had already increased borrowing and spending. The consequence of the financial crash is that he achieved what every Labour Government always achieve: they leave office with higher debt, higher unemployment and higher inflation. That is what Labour Governments always do, and that is what this Labour Government are set to do again.
Sir Bernard Jenkin
I am not going to give way any more. We need only look around the world to see that the idea that an ever-larger state makes the people richer is confounded by economic experience, otherwise the richest countries in the world would be those with the biggest state. It is businesses and free enterprise that generate the wealth that pays for the public services we need.
We can all recall Milton Friedman’s four ways to spend money. There is people’s own money that they spend on themselves: they think about it, spend it very carefully and make sure they get the maximum value for money. There is money that people spend on other people, such as when they buy a present: they may want to keep the cost down and may not be sensitive about whether the person really wants a particular gift or not. There is somebody else’s money that people spend on themselves: when people use expense accounts, they go on the most expensive aeroplane or get the biggest car their company will pay for. Finally, there is somebody else’s money that is spent on other people: that is what Governments do. It is a reality that Governments are the worst allocators of resource for ensuring future wealth creation. That is just a fact.
The record will always confirm that if we want to create more wealth, the smaller the state can be, the faster economic growth will be and the more we can afford to then spend on public services. This Government are profoundly un-strategic—just look at what the OBR says about investment:
“Tax rises in this Budget weigh on real incomes, so private consumption falls as a share of GDP”—
that means people are going to be getting poorer. It continues:
“Corporate profits are expected to continue falling as a share of GDP in the near term”.
It adds that
“business investment falls as a share of GDP as profit margins are squeezed, and the net impact of Budget policies lowers business investment.”
Is that good for the British economy? I submit not.
What about debt? If someone has too much debt, the one thing they should do is not borrow more money, if they want to get out of a debt trap—[Interruption.] Members on the Government Benches have surgeries attended by people who are in debt. The one thing hon. Members will tell them not to do is to stack up more debt, but that is what the Government have chosen to do. That is not a long-term policy.
Finally, what about GDP? I take no pride in saying that growth in GDP has been struggling for a decade or more—
Sir Bernard Jenkin
Yes, I do not think we did enough to dynamise the British economy. We did not do enough, but I was very grateful for the support of the Liberal Democrats for the first five years of the Conservative Government. That helped us to keep public expenditure under better control so we could begin that process.
GDP per head has really been flatlining. We are falling significantly further behind the United States, but what are the trends? On these trends, we will be overtaken by Poland by 2030 in terms of GDP per head. What are this Government doing to address the real long-term trends? Let us look to 2050. What is the shape of public expenditure going to look like in 2050? This Budget does not begin to address that. What will be our national debt on a long-term basis? What is happening to our demographic, including the ageing population and the ratio of people in work and out of work? What are this Government doing to address that trend and to address the immigration trend, because that is adding to the cost of our economy?
How will we be able to increase defence spending? The Chief of the General Staff has recently said that this country could well be directly involved in a war within the lifetime of this Parliament. We will have to spend more on defence, as well as controlling the rest of the public sector. It is many decades since health, education and welfare started swamping out every other kind of expenditure in the Government. If we are to survive as a country, we will have to address these very damaging long-term trends.
Sir Bernard Jenkin
If the hon. Gentleman will forgive me, I am just drawing to a close.
What is the true cost of decarbonisation? That is something that the Government are hopelessly naive about. It is as though investing in decarbonisation is somehow a get-out-of-jail-free card, and everybody’s bills will start to come down, but anyone involved in the industry will say that that is not the case. The need to dynamise our zombie economy is still there and being made worse by the burdens that this Government have inflicted on us. How will we re-industrialise our economy when deglobalisation has taken away the opportunity to import all the cheap things that we used to make, but no longer do? Those are the real strategic challenges, and the Budget does not begin to address them.
Richard Baker (Glenrothes and Mid Fife) (Lab)
Thank you, Madam Deputy Speaker, for giving me the opportunity to speak about how this Budget is fixing the foundations of our economy, which could not be more important for my constituents. I listened with interest to the remarks of the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) about the last Labour Government. Let us remember that the last Labour Government lifted 900,000 children out of poverty. What costs to our economy are caused by poverty, rather than getting people into work and securing for them the quality of life and living standards that they deserve?
Richard Baker
Of course, because I have just mentioned the hon. Gentleman in my speech.
Sir Bernard Jenkin
One hon. Member complained about food banks. Actually, food banks started under Tony Blair. I think that we need to share these problems and concerns. We need to understand each other’s different approaches to economic policy if we are eventually to have a solid approach to reviving the economy of this country, but I am afraid that this Budget does not do that. There will be more poor people as a result of this Budget.
Richard Baker
I thank the hon. Member for his intervention. In Scotland we say, “Facts are cheils that winna ding.” The fact of the matter is that 900,000 additional children were lifted out of poverty by the previous Labour Government, and the rise and use of food banks under this Administration has been exponential —to the extent that, now we as a Government are dealing with food banks running out of food because of the level of poverty that we have inherited. This Budget will fix the foundations of our economy. It will redistribute wealth, tackle poverty and invest in growth. That is why we can look forward to what will be achieved by this Government, thanks to the decisions taken by my right hon. Friend the Chancellor of the Exchequer.
Anybody looking at events in Scotland will see that my constituents have suffered from two Governments failing to deliver on investment and failing to deliver on growth. Their mismanagement of the public finances stands in sharp contrast to the measures that have been bought forward by my right hon. Friend the Chancellor of the Exchequer, who has taken some challenging decisions on taxation, to ensure that there is no return to austerity and that we can invest in growth.
The Budget gives us the chance to move on from the reckless incompetence of the Tories here in Westminster and of the SNP in Holyrood. It is a chance to move on from the catastrophic mini-Budget of Liz Truss—a mini- Budget that caused so much damage to my constituents. The hon. Member for East Grinstead and Uckfield (Mims Davies) conjured up images of Halloween in her speech, but the economic nightmare was caused by the Conservative party, and our constituents paid the price in their living standards.
Those of us in Scotland cannot underestimate the impact of the shambolic stewardship of Scotland’s finances by the SNP. It is one thing for the SNP to crash the finances of its own party, but quite another to crash the finances of our country. The SNP Government have completely mishandled contracts for much-needed new ferries. Other public sector projects have been overspent by millions, while others have been delayed or cancelled. They have also failed to spend hundreds of millions of pounds which had been allocated to them in structural funds. Funding for our local authorities has been slashed. The housing budget has been cut, and the Institute of Fiscal Studies assessed that the Scottish health budget faced a real-terms cut under the SNP in this financial year.
While we know that this Budget is fixing the foundations, so that we can deal with the reckless approach of the previous Government here, the SNP cannot simply blame everyone else for its own mistakes, as, yet again, it has attempted to do over the past 24 hours.
Mims Davies
The hon. Gentleman is making an excellent speech, not least because he has mentioned both me and my constituency, so I am grateful to him for that. On that point about the SNP blaming everyone else, he has just blamed the SNP and then blamed us. While he is looking at all this guilt, he should consider the merry-go-round operating under Labour with its jobs for the boys. Perhaps he might like to address that issue.
Richard Baker
I think the guilt should be felt by those on the Conservative Benches. The fact is that we have inherited a £22 billion black hole in the country’s finances, and that has been assessed independently by the OBR. That is how blame should be apportioned.
I was talking about matters in Scotland, which I am sure will be of interest to the hon. Lady and her constituents. The Scottish Fiscal Commission stated that much of the pressure in Scotland comes from the Scottish Government’s own decisions on cuts in its last Budget. I very much welcome the additional £3.4 billion that will come to Scotland and our public services through this Budget. It is vital that the SNP learns from its mistakes, and undoes the damage that it has caused. I do not know where the SNP Members are today. Perhaps they are travelling back to Scotland in their own party campervan.
My constituents cannot put up any longer with lengthening waits for hospital treatment, with finding it so difficult to register for an NHS dentist, and with a housing crisis where so many people do not have the homes they need or cannot get a foot on the housing ladder. In my constituency, there can also now be no excuse for further delays by the Scottish Government in constructing a new health centre for Lochgelly. The SNP has promised to deliver this for over a decade, but has failed to do so.
In contrast, this Budget sets out a different vision for our public services. This Government will invest in homes and in our schools. Having worked with the disability charity, Enable, prior to taking my seat in this place, I am delighted with the announcements on social care and special educational needs. It is astonishing to hear some Members talk about our plans for wages in the social care sector. They seem to imply that our hard-working social care staff, who play such a huge role in our communities, should not get fair pay for that vital role that they carry out for us and for our loved ones.
The pension triple lock is protected. Representing a constituency where there are so many former miners— 849 members of the mineworkers’ pension scheme are living in Glenrothes and Mid Fife—I am delighted that this Government are ensuring that more than £1 billion owed to them will be returned, which will be an average of £29 a week more for each member, as my hon. Friend the Member for Livingston (Gregor Poynton) highlighted in his excellent maiden speech—one of so many excellent maiden speeches from Labour Members.
As many of my constituents benefit from this Government’s ending an injustice of the past, more can look to investment in the future. The Budget is redistributive, but it is a Budget for growth, too, boosting public investment by £100 billion over the next five years. A total of £125 million is immediately being invested in GB Energy, headquartered in Aberdeen. It was extraordinary, Madam Deputy Speaker, that when it came to the vote this week, SNP Members failed to back the establishment of GB Energy. Far from standing up for Scotland, the ones who were actually here were sitting on their hands.
Renewables is a key and growing part not only of the Scottish economy, but of our local economy in Glenrothes and Mid Fife. Along with GB Energy focused on establishing Scotland and the UK as a green energy powerhouse, the National Wealth Fund opens up the potential for us to invest in our renewables infrastructure. As we seek to secure a long-term future for the Methil fabrication yard in my constituency, investment in the facilities of that yard would ensure that the 200-strong skilled workforce can play a vital role in taking forward our ambitions for our renewables sector.
The election of Anas Sarwar as Scotland’s First Minister will be required for my constituency to reap all the rewards that the Budget has set the foundations for, but with £3.4 billion extra for Scotland in it, as the Scottish Trades Union Congress has said:
“The task now falls to the Scottish Government to take the decisions needed to invest, through progressive taxation, into our communities and public services. The Westminster blame game is finished.”
This is a Budget for our public services, and a Budget to boost investment. This is a Budget for Scotland.
Dr Neil Hudson (Epping Forest) (Con)
May I join you, Madam Deputy Speaker, and colleagues across the House in congratulating the hon. Members for Ribble Valley (Maya Ellis), for Livingston (Gregor Poynton), for Dagenham and Rainham (Margaret Mullane) and for Worcester (Tom Collins) on their fantastic maiden speeches?
We have heard that the Budget was about fixing the foundations of our economy, as both the Prime Minister and the Chancellor have claimed. If that is the case, many of my constituents in Epping Forest will be asking what exactly will be built on those foundations, and they may rightly be concerned that some of that building may well be on top of our precious greenbelt. At its heart, when fixing the foundations is promised but there is no coherent or evidence-based vision to underpin it, a misguided Budget like this one is what we end up with.
Before I go into further details, I must acknowledge some of the announcements in the Budget that I welcome. The freeze on fuel duty, maintained for years by our Conservative Government, is very welcome for my constituents, who no doubt have faced real worries about paying extra at the pump. I very much welcome the increase in SEND funding, which is so important to support our young people with special educational needs. A penny off a pint is welcome, but it is small beer for landlords, who will struggle to pass it on when they are hit by the national insurance rises for employers and the reductions in business rates relief. Reinforced autoclaved aerated concrete has unfortunately blighted a number of schools across my constituency, so the Labour Government honouring the previous Conservative Government’s commitment to funding rebuilding is most welcome, and I hope that we see action soon.
Chris Vince
I welcome his welcoming—I am sorry to repeat the word—of investment in schools that have RAAC. Does he agree that the time for the Government to spend money on repairing those schools was when Essex county council recognised the issue of RAAC in our schools in 2012? Had the Conservative Government done so, we would not be in the situation that we are in now.
Dr Hudson
The situation with RAAC has built up over many years, under Governments of all colours. It is important that we stand together to sort out the problem as soon as possible so that the educational experience of our young people, and the staff who teach them, is improved. I welcome the fact that we will make progress on that, and I hope that we see action soon in schools such as Buckhurst Hill community primary and Roding Valley high, which I visited just a couple of weeks ago. I discussed these very issues with staff and students.
Unfortunately, however, there are a number of areas in the Budget where putative short-term gain has been prioritised for little to nothing in the long term. With the NHS facing pressures, it is one thing to provide day-to-day funding, but it would be very short-sighted to suspend or withdraw funding for key infrastructure projects that would tackle the long-term issues facing the NHS. The rebuilds of Whipps Cross hospital in Leytonstone and the Princess Alexandra hospital in Harlow, promised by the previous Conservative Government and now put on hold by Labour, are so important for my constituents’ healthcare needs—not just today or tomorrow but in the long term. While I am pleased that the Government have listened to me by honouring the Conservative commitment on the new community diagnostic centre coming to St Margaret’s hospital in Epping, I urge the Government to fulfil those much-needed hospital rebuilds to address the healthcare needs of my constituents and of neighbouring constituents, including the constituents of the Health Secretary.
Chris Vince
I thank the hon. Member for giving way on two occasions. I would not normally intervene on a speech twice, but he referred to a hospital in my constituency: the Princess Alexandra. Although he and I may have political differences, I welcome the opportunity to talk about the Princess Alexandra hospital as often as possible. Does he recognise that part of the delay has been caused by the funding not being there for the new Princess Alexandra hospital, and does he recognise the work that I have done in lobbying the Secretary of State for Health and Social Care, who has committed to a new hospital but recognises the challenges, because the funding was just not provided for by the previous Government?
Dr Hudson
I thank the hon. Member, who is my neighbour, for his intervention. We have to get on with rebuilding the Princess Alexandra and Whipps Cross, and we need to do it quickly.
I also urge the Government to listen to my constituents’ concerns about the introduction of VAT on independent school fees. This tax on education impacts not only 2,000 pupils in my constituency at independent schools but our excellent local state schools. Some families will unfortunately have to move their children midway through the school year, or in the next year, to some of these fantastic schools, some of which are already oversubscribed, impacting class sizes. Independent schools provide a social good in my constituency and right across the country, providing access to high-quality facilities, and providing access bursaries. For many parents, independent schools are a choice borne out of hard work and sacrifice. For some, they are the best way their children with special educational needs can be supported, amid the difficulties and delays found in the process of receiving and delivering an education, health and care plan. Once again, the supposed short-term gain comes at the long-term expense of our children’s future, and the Government must look again at reversing that punitive measure.
Unfortunately, harming aspiration flows not just through that education tax but in the measures that affect the everyday lives of the working people the Labour Government claim to speak for—if they have finally worked out who “working people” are. If someone strives to own their own business, they will be forced to pay increased employer national insurance contributions for having that aspiration. Business owners will have their business rates relief cut. People who rely on the bus to get to work or appointments will be penalised by the bus fare cap increase from £2 to £3. We Conservatives introduced the £2 bus fare cap, which helps people in urban and rural communities alike, and we promised to deliver it for the whole of this Parliament. The Labour Government have callously ripped up that lifeline bus ticket.
Dr Hudson
No, I am going to carry on. For pensioners aspiring to live in dignity in their retirement, this Labour Government have taken away their winter fuel payment. That is just immoral.
Let me say a couple of words about national security. It is deeply disappointing that the Government are not heeding calls to commit to spending 2.5% of GDP on defence now, when we really need to show our allies, and indeed our adversaries, where we stand. Nationally, it seems that another area of the Government’s lack of vision is food security and biosecurity. Food security is national security, and biosecurity is national security. Over the last five years, agriculture and biosecurity have faced a seismic shift as we have navigated our departure from the EU. This was an opportunity that our previous Government seized, with environmental land management schemes to ensure that farmers are rewarded for feeding us, while protecting our precious environment, and the border target operating model to keep our food industry safe from the biosecurity risks that pose a threat to both animal and human health.
The last thing that the sector needed was to learn that it will not get the stability and support of investment that is so desperately needed. To state in the Budget document that farm schemes and flood defence funding will be reviewed is no way to treat our farmers and rural communities. We have heard a lot today about agricultural property relief, the changes to which could devastate our farming sector, risking the decimation of the sector that we rely on to feed us and support our environment. The impact of the policy on family farms, the tenanted sector and our food security will be untold. Families have had their succession planning turned on its head, and that inheritance tax pressure will have profound impacts on people’s mental health. Farming communities face huge challenges from shock events such as floods and animal disease outbreaks, and chronic pressures of finance and rural isolation. These are people who we know are at higher risk of mental health issues, and tragically suicide as well. I say that as a veterinary surgeon—a profession with similar risk factors. Gallingly, this policy decision has broken the promises that Labour made to our farming communities.
The opportunity has likewise been lost in the Budget to invest in the frontline of our defence against biosecurity risks—the Animal and Plant Health Agency, the A-team of our national biosecurity. Its headquarters in Weybridge, Surrey needs an urgent and full redevelopment, as outlined by the National Audit Office report a couple of years ago. With biosecurity threats such as African swine fever afflicting livestock in Europe, avian influenza not gone away, and bluetongue virus bubbling away in this country, a full funding of the headquarters in Weybridge is now more urgent than ever. We cannot afford the devastation that biosecurity threats such as foot and mouth disease or African swine fever could wreak on our economy, our farmers, our food industry and rural mental health if we are not firing on all cylinders against these threats.
This Budget’s claim to fix the foundations falls short in meeting the everyday needs of the people of Epping Forest and of people throughout the United Kingdom. This short-termist Budget with a lack of evidence-based decision making will harm our country in the long term. An urgent rethink and reversal is needed from those on the Treasury Bench. I and my Conservative colleagues will stand up for our constituents, who will suffer from this anti-aspirational and promise-breaking Labour Budget.
Frank McNally (Coatbridge and Bellshill) (Lab)
I start by commending Labour Members for such wonderful maiden speeches this afternoon.
I am proud to support this historic Budget. Our new Labour Government are working tirelessly to deliver the change that my constituents in Coatbridge and Bellshill need, and this Budget represents an important change—an important step towards fixing the foundations and repairing the damage caused by 14 years of economic mismanagement and fiscal vandalism by the previous Government.
The scale of that challenge is immense—public services have been pushed to breaking point, wages have been stagnant for far too long, child poverty is on the rise and too many people in my constituency are forced to work multiple jobs just to make ends meet.
In Scotland we have had the double whammy of two bad Governments. Just like the Tories, the SNP has decimated our public services, pushed our NHS to the brink and forced Scots to pay more to get less, as my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) highlighted in his excellent speech. The Budget offers significant support to my constituents and provides record funding for Scotland. On top of the £47 billion block grant, the level of investment in public spending outlined by my right hon. Friend the Chancellor will generate an extra £3.4 billion in Barnett consequentials, resulting in the strongest settlement yet for Scotland in the devolution era. Sadly, the SNP Government have not yet worked out whether to love or loathe this Budget, and as my hon. Friends pointed out earlier, SNP Members are not here to tell us. As the Scottish Trades Union Congress highlighted yesterday, however, the blame game is now over—the SNP Government have the money and they must act to address the challenges impacting Scots.
The Budget has also addressed a number of fundamental injustices, from the infected blood scandal to Horizon and—critical for me—the mineworkers pension scheme. Representing mining communities and as a member of the coalfields parliamentary group, I wholly welcome the ending of this injustice and the delivery of Labour’s manifesto commitment of more than £1 billion to ex-miners. For the retired miners in the scheme in my community, that will mean an increase of £29 a week in their pension. Ending that scandalous injustice has not been a short or easy undertaking, and I commend my predecessors and all hon. and right hon. Members who have fought on this for many years before my time in this place.
I also commend the Government for their commitment to ensuring that £20 million will come to Coatbridge in my constituency through the towns fund. The previous Government announced that plan, but their fiscal irresponsibility put it in doubt. I am grateful to Ministers for taking the time to meet me to discuss these matters and delighted that the £20 million for Coatbridge is now costed and will be delivered by this Labour Government. That will allow our town board to help develop and deliver a long-term local plan, support business and secure investment.
I am also delighted that the Budget delivers a pay rise for 200,000 Scots. Increasing the national minimum wage by 6.7% and, critically, starting the journey to end age discrimination banding for 18 to 20 year-olds by increasing their wages by 16.3%, are key steps, as is the 18% increase for under-18s and apprentices. Young people are not immune to the challenges linked to the cost of living crisis and often struggle just to make ends meet. It is unfair that, for so many of them, their work —their labour—is valued less than that of their peers, simply because of their age. It has to end, and this Labour Budget has set us on a course to eradicating it.
This is the first Budget of this new Labour Government, and it lays the foundations to deliver the change our constituents voted for. Serving in Government is a privilege: it is an incredible honour that no party should take for granted. It is clear from the Conservatives’ actions that their party failed to live up to that solemn duty; they drove our country, our constituents, down a dirt path of decline until they ran out of road. They tried to mask their failings with fantasy economics and imaginary money pots, and it now falls to this Government to clean up their mess.
It is not the only mess that Labour will have to clean up. The SNP Government are equally hapless, and we are counting down the days to 2026 to deliver the change we need in Scotland too.
After 14 years of failure, our Labour Government have set a new course—to restore public finances, transform public services, tackle poverty and raise living standards. This is an honest Budget, which does not cynically shrink from the challenges, but seeks to tackle them head on—a Budget that will deliver the change that Scotland needs, that Coatbridge and Bellshill needs, and it should be welcomed across the House.
Bobby Dean (Carshalton and Wallington) (LD)
The first Budget of a new Government is always significant, but one can rarely have been set in such tricky circumstances. This one comes following a series of major shocks—some of them external and unpredictable, as Opposition Members have said, such as the covid pandemic and the energy crisis, but some of them down to policy decisions, such as the Brexit deal and the mini-Budget. It also sits in the long shadow of the financial crisis and over a decade’s worth of cuts to public services. Growth has been stubbornly sluggish, the cost of living has eroded people’s wages, and as tax as a proportion of our national income has ticked up, the capability of many to contribute more has diminished. The result of all of this is that our public services are under strain, our public finances are under strain and the British public are under strain. It is in that context that I try offer a constructive opposition to the Budget today—pointing out what I agree with, what I do not and where I think it can be better.
Healthcare is the biggest issue for my constituents, so I will start there. At first glance it looks like we have a big injection of cash into the NHS. That is a relief. I have previously warned about the counterproductive nature of further austerity, and I am cautiously optimistic that we might escape it in this area. But the rate at which the cash is being injected, alongside the speed at which it drops off, presents questions about how well it can be spent and what the hangover from this sugar rush might be. That requires further scrutiny.
On capital expenditure more broadly, I am glad that we are waking up to the real calculation that needs to be made by seeking to borrow to invest in vital infrastructure. I made my maiden speech on Second Reading of the Budget Responsibility Bill, and I took that opportunity to encourage a change to the fiscal rules. That is exactly the kind of geekery that you will get from me, Madam Deputy Speaker, now that I sit on the Treasury Committee. Next week, I will go into more detail on “persnuffles”—PSNFL, or public sector net financial liabilities—and so on, but I will spare the House of that today. Overall, I am pleased to see a move in that direction.
I say “overall” because in my maiden speech, I used the example of rebuilding my local hospital as the perfect no-brainer project that could be unlocked by greater willingness to borrow to invest—St Helier hospital is older than the NHS itself, and some parts of the estate are literally crumbling and desperately need investment in major works and a new building—so I was disappointed that we did not even receive greater assurances about the progression of that project. I hope that the Health Secretary will soon return to the Chamber with further announcements.
The other big gap in the Chancellor’s Budget was on social care. As my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) said yesterday, it is still undeniably
“the elephant in the…waiting room.”
Without addressing social care, any investment in the NHS will be fundamentally flawed. Billions of pounds will pour in, but it will be undermined by the failure to get people who would be better treated at home out of hospitals. Of course, that has a knock-on impact on local authorities. I fear that the £600 million put forward yesterday to support councils on social care will be spread too thinly, especially when factoring in the impact of the national minimum wage and employer NICs, so I ask the Government to consider extending the public sector exemption to the care sector. The Budget means that councils that are already on the brink are going to have to make some pretty unpalatable cutbacks just to survive. It means that the mismatch between what taxpayers pay and the local services they receive will get worse. I hope that we get much greater clarity next year on local government funding.
My final point on the NHS relates to its potential to get our economy going again. Far too many people are economically inactive because of ill health. That places a huge strain on our welfare budget, and if we are honest, we do not really have enough data on what is driving it. I am worried that the Labour Government think that it is because we have suddenly become a nation of shirkers. There was tough talk yesterday of carrying over the Tory plan to get more punitive on work capability assessments. Chasing down benefit cheats might go down well with some newspapers, but that kind of demonisation of the sick is both shameful and ineffective.
Let me point to just one example. My dad, a proud scaffolder for most of his life, has worked his socks off from Monday to Saturday every week, but he is now in his late 50s, and that kind of work is not easy. He started having trouble walking and has had to stop work, and it took months to get a diagnosis. When he finally found out that he had a hip problem, the NHS basically told him to come back in a year, because it could not treat him until then. He asked what he was supposed to do about work, and was told that he would have to sign off sick. Do Members think that my dad enjoys doing that? He hates it; he is a proud working man being denied the opportunity to work. If the NHS could fix him today, he would be back in work tomorrow. Here is my big bet: there are far more people like my dad than there are the benefit cheats that Labour focused on yesterday. So let us have some compassion and focus on what will really get people back into work.
Before I bring my remarks to a close, I will touch on two big elements that I plan to take up further on the Treasury Committee. The first is tax. I want the country to start a more honest conversation about tax. I know what some Labour Members will be thinking, but the Liberal Democrats set out in our manifesto £27 billion-worth of tax and spend proposals, because we knew that public services desperately needed the cash injection. The Labour manifesto proposed only £5 billion in tax rises, but yesterday we were presented with an increase of £40 billion. I am willing to accept that a black hole was left behind, but those numbers do not add up. The Conservatives proposed tax cuts in their manifesto, and at the previous Budget, but it turns out that they were not based on realistic figures either. Tax is always something to be “hit by” in politics—always deemed a punishment instead of a contribution. It leaves in tatters the debate about what a fair distribution of tax is, and trust in politics plummets as a result. We all need to do much better.
My other point is about growth. We have had months of hearing this Budget being pitched as one of growth, yet the OBR thinks that its effect will be broadly flat—at least over the forecast period. The conversation around how to achieve growth must get much more serious. Growth in GDP—a very specific measure—should not be the sole way in which we evaluate the country’s success, and someone who believes that it should must at least recognise that growth has not only a rate, but a direction, and it up to us, in this place, to set that direction.
Finally, I was advised recently that the key way to critique the Budget is to look out for the big numbers in the Red Book that the Chancellor did not mention. Well, I will save that, but I will highlight a small number that the Chancellor did not mention: £40 million to trial a kinship care allowance. I moved into the care of my grandparents as a teenager, and they would have been immensely grateful for that support, so I welcome the trial and hope that it is a roaring success.
Mrs Sarah Russell (Congleton) (Lab)
I thank the hon. Member for Carshalton and Wallington (Bobby Dean) for his comments about kinship allowance, which I will address in due course, because it is helpful when we have constructive opposition. However, he talks about the difficulty of obtaining NHS treatment, and I remind him of the five years that the Liberal Democrats spent working alongside the Conservatives to bring about cuts to our NHS, the police and many other vital services. I will leave it at that.
I congratulate my right hon. Friend the Chancellor on the Budget, which is clearly the start of a new chapter towards making Britain better off. I can see clearly how it links into our Labour target of securing the highest sustained growth in the G7, as well as into our other missions of having an NHS fit for the future and breaking down barriers to opportunity. It is clear that there is a strategy for achieving aspiration and providing people with support. Those two things can truly combine to make our country greater.
One measure that will affect my Congleton constituency is the work that will now continue at pace for hospitals affected by the RAAC—reinforced autoclaved aerated concrete—crisis, including Leighton hospital in Crewe, which serves many of my constituents. The hospital still has paper notes; it does not have an electronic records system. The major reason for that is that it has spent over £100 million in the past few years just on propping up its walls. That kind of failure spend to sustain the hospital’s most basic physical infrastructure means that the investment to make the NHS fit for the future cannot be made. I look forward to being part of a Government who enable us do the sort of forward-thinking work in which we stop making short-term decisions that simply prevent people from having access to the care that they need—we must work in a rational manner. People in the NHS, including doctors and nurses in my constituency, will be grateful that we are moving in that direction.
The NHS has been broken, but the Budget will begin to fix it. Our social care system has also faced significant challenges in recent years. Again, this Budget begins to fix that. Alongside the £600 million in grant support for local authorities, I am so pleased to hear about the £86 million increase in the disability facilities grant, which will enable us to support 7,800 more home adaptations. As I think we all know, people want to stay in their homes for as long as possible, and it is our duty as a Government to facilitate that.
Similarly, I am pleased to see the 4.1% uplift in the state pension through the triple lock, which will enable more than £475 per year to be given to many pensioners across the country. We are also going to see the biggest ever cash increase in the earnings threshold for carer’s allowance, meaning that many more thousands of carers in my constituency can increase their income—which is so important for people’s dignity—and many more people will be able to access carer’s allowance for the first time. I also want to say an enormous thank you to the kinship carers in my constituency: those grandparents, older siblings, aunts and uncles, extended family members and family friends who are looking after children. They will welcome the announcement of £44 million to support kinship and foster carers, including through the new kinship allowance trial.
Speaking of children, I turn now to schools. Schools across the country are crumbling. RAAC schools specifically have hit the headlines, but there are many other fundamental structural problems in many of our schools—schools that were decimated overnight by the previous Government’s scrapping of the Building Schools for the Future programme. This Budget will begin to fix those problems, with £1.4 billion allocated to delivering classrooms that children can learn and thrive in, and a £2.3 billion increase in the core schools budget to support the recruitment of 6,500 new teachers. It will also enable us to properly fund pay rises for the public sector, which are so important for retaining the experienced teachers on whom we rely. I am delighted that £1 billion of that £2.3 billion increase will go towards fixing our special educational needs system and systems for disabled children within education. It is so important that we get that right: parents in my constituency and their children are desperately reliant on us for it.
Our childcare system has also been struggling, which has had huge implications for parents’ ability to go to work. This Budget will begin to fix that by allocating £1.8 billion to continue the expansion of Government-funded childcare, which will help people to stay in, and return to, work. More than a quarter of children in my constituency of Congleton live in relative poverty after housing costs. The roll-out of free breakfast clubs in primary schools is a very welcome measure to help struggling families. Moreover, the increases in the national minimum wage will have an enormous impact on families and on child poverty. Some 70% of children in this country who are growing up in poverty live in a family with at least one working parent. It is low wages that are causing those problems, and I am very pleased that we are addressing them.
Our roads have also been broken by 14 years of austerity, and again, this Budget will begin to fix them. The investment of £500 million to fix an additional 1 million potholes per year is a good start. Drivers in my constituency will welcome that investment, as well as the continued fuel duty freeze.
Of course, businesses will welcome many of the steps in the Budget as well. While we are increasing the national living wage to support workers, we are also supporting small businesses through an increase in the employment allowance, fairer business rates, start-up loans, growth hubs and the new national wealth fund. Small businesses in my constituency will also welcome the funding the Chancellor has committed to tackling shoplifting, which affects all of our shopping bills and is worth billions of pounds to the economy every year. Shopkeepers in my constituency recently told me and the Cheshire police and crime commissioner, Dan Price, that they have given up on trying to report shoplifting in many instances because it is simply not a good use of their time. I am so pleased that we will begin to address this issue.
We are beginning to get the fundamentals right. Under the last Government, there were so many counter- productive cuts that undermined our national productivity. This Budget does not stand alone as a one-off event. Rather, it is part of a coherent set of plans to ensure that our public services are reformed and that we are able to develop cross-departmental working in government and deliver what working people need to have a good quality of life, an NHS that is there when they need it and work that pays. I look forward to working with businesspeople and families in my constituency to ensure that we get the delivery of those plans right over time, but right now, this Budget looks like a solution that will begin to fix the NHS and social care; rebuild hospitals and schools; fix the SEND system; and rebuild confidence in our public services, in the economy and in our future as a country.
Andrew Rosindell (Romford) (Con)
I am pleased to follow the hon. Member for Congleton (Mrs Russell). It was enlightening for me to listen to her because she listed a huge array of things on which the Government are now going to be spending a lot more money. They are all very good causes of absolute benefit to the people of our country. The one problem I have listening to her, and to all the Labour Members, is that we do not have any money left: we have spent it all. We had to spend half a trillion pounds on the pandemic, but I notice that no one has mentioned that. We are, in effect, running on tick. We are living beyond our means, we are spending money we do not have, and all we are doing, laudable though it may be to spend the money we are discussing today, is handing huge debts to future generations.
I have to remind Labour Members that every Labour Government we have ever had in my lifetime has left this country with higher debt, more unemployment and an economy in a worse state. I would also remind them that it was in 1979, after years of failed socialist government, that we finished up having to rebuild the economy under a Prime Minister who had the determination to do what was right for our country, and those economic reforms led to years of prosperity.
Andy MacNae
It sounds as though the hon. Member is giving up on Britain. He seems to be saying that there is no point in trying to find a better future for ourselves because there is no money left, and the previous Labour Government left no money. Would he recognise that the level of debt left in this country at the end of the recent Conservative Administration is twice what was left by the Labour Government in 2010?
Andrew Rosindell
The hon. Member forgets about the pandemic and its associated costs. The reality is that we have to create the wealth before we spend it. For many years I have heard Labour Members talk about how to spend money. I very rarely hear how we actually create the wealth we need to spend on our public services, and that is where it all goes wrong.
Andrew Rosindell
No, I will not give way.
The Chancellor yesterday painted a dire picture of our country’s future. Under Labour, it is not the economy that is booming but the size of the state, with an ever-increasing burden of taxation on working people. Under this Government, it is not the businessmen in my constituency of Romford who are being supported with the future success of their enterprise but the climate alarmist, with a public energy company that will not even produce any energy. How sensible is that? It is not the young family in areas such as Collier Row or the pensioner in Rush Green—both in my constituency—who are being supported by, for example, a decrease in stamp duty or help with energy payments, but, of course, the union bosses who are able to deliver over-inflated pay rises to the public sector, and the private sector is once again paying for that.
Despite the Government’s talk of growth, this Budget is preparing us for the return of the dark days of the 1970s, with hard-working people paying the price. Indeed, the Government are so lacking in aspiration for this country that they want the Office for Budget Responsibility not only to mark their work but, it seems to me, to do their homework completely. They are even gifting the OBR more powers, as was outlined in the King’s Speech.
In my view, Britain’s potential is far greater than a high-tax, low-growth and dysfunctional big state. Far from my “giving up on Britain”, as the hon. Member for Rossendale and Darwen (Andy MacNae) said—quite the opposite—I love this country, I believe in this country, and I hate to see what socialism has done to this country over the years. Labour Governments always end up in a worse situation than when they started, and Conservative Governments always have to come in and pick up the pieces, and restore the economy back to prosperity and vibrancy again. In five years’ time, I am sure we will have to do the same.
It is now clear that, under this Labour Government, the British people face a tyranny of taxation. Not content with the record-breaking tax burden that already exists, Labour is adding to the load on the shoulders of hard-working people. Under Labour, it will be harder than ever to buy a property. The journey to work of my constituents in Romford who are lucky enough to own their own home is going to be even more expensive than it is already under the control of the Mayor of London, Mr Khan, with the rise in bus fares. Once they get to work, my constituents will have far less in their pay packet, because the increase in national insurance paid by employers will, of course, clearly be passed on to employees. It is nothing but a stealth tax by this supposedly transparent Labour Government, and it is job destroying. Businesses in my constituency have already been telling me that they will not be employing people because of this reckless increase in national insurance. My constituents, all our constituents, might even lose their jobs. [Interruption.] They will lose their jobs, as businesses struggle with the national insurance increase. The costs of that will be phenomenal, and the growth-crushing increase in capital gains tax will also have a big impact.
As if that was not enough, when someone sadly passes away, the Labour Government want to make it even harder for them to pass on what they have earned throughout their life to their loved ones, by expanding inheritance tax to pensions and so on. That is incredibly cruel. People pay tax throughout their life, and will pay more tax when they die. Is that really the kind of thing a Labour Government should be doing? It will harm a lot of families who would inherit but will not be able to because of the cash grab from this Budget.
I do not believe that the Government are pro-worker at all. They cannot even define what a worker is. Labour used to be the party of the state from cradle to grave. Now it seems to be the party of taxing my Essex constituents from cradle to grave and beyond. This has been a very Essex-weighted debate, with contributions from my hon. Friends the Members for Epping Forest (Dr Hudson) and for Harwich and North Essex (Sir Bernard Jenkin), my right hon. Friend the Member for Maldon (Sir John Whittingdale), the hon. Member for Harlow (Chris Vince) and others. People in my county of Essex are very disillusioned by all this, because they are aspirational and hard-working. They are market traders and small business people. They will be devastated by all this. I warn Labour Members that they will find that out when they next knock on doors in their constituency.
As Margaret Thatcher warned us—[Laughter.] Well, she did rescue our country’s economy; let’s be honest about it. [Interruption.] She really did, and we are still benefiting today from the reforms that she introduced. As Margaret Thatcher said, any Government who impose high taxation are taking power away from the people and giving themselves power over the people. Of course taxation at some level is always necessary. It has to be in place to support our nation’s armed forces, to support families and protect pensioners, and for investment in necessary infrastructure and public services for the future. But what are the Labour Government doing with all the hard-earned money that the working people of this country have created? I think they will be spending billions of pounds on things that will go to waste.
Chris Vince
Does the hon. Gentleman not think that there was quite a lot of waste under the previous Government? There were dodgy personal protective equipment contracts that did not result in money being spent on PPE. Is that the sort of waste our Government should claw back?
Andrew Rosindell
I have to say that I agree with the hon. Gentleman. The last Government wasted a huge amount of money—[Interruption.] No, they did. No wonder we lost the election. But this is not a political point; this is about how we run the country effectively and efficiently. My hon. Friend the Member for Harwich and North Essex made a range of serious points about how we are going to survive as a country. We cannot keep spending money like this. It does not work, and future generations will suffer because of it. The last Government failed, but this Government are going way further. This is all simply unaffordable, and I worry about the future of our country if we cannot see where this will eventually lead.
The Labour Government are spending billions of pounds on a renewable energy company that will not produce any energy—another vanity project. They are spending billions of pounds on public sector wage hikes, and are pouring even more taxpayers’ money into public services, with virtually no concrete productivity targets.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
Does the hon. Gentleman accept that those pay rises will go to hard-working people who are themselves taxpayers?
Andrew Rosindell
Look, we have to live within our means. Of course I do not object to money being spent wisely and sensibly—it is the role of any Government to ensure that the money we spend goes where it is really needed in our country. The problem I have is that all this is unaffordable. We are about 100% of our GDP in debt. That is the highest that debt has been in our entire history. We cannot go on doing this. Eventually it will all come crashing down, and every hon. Member who let it happen without speaking out, as I am doing today, will have to take responsibility when future generations have to pick up the pieces. We cannot afford the debt we are getting into.
If hard-working people are being taxed, they rightly expect the money to be put to good use, to boost infrastructure. We should focus on local services and economic growth, not ideological consumption. Again, the people of Romford and throughout the borough of Havering and the county of Essex will be rightly outraged that there is so much unfairness, especially in local government funding. The funding formula has not been addressed in the Budget, from what I can see. That is a serious issue in the London borough of Havering, where my constituency is based. Despite this being the greatest example of tax and spend that I can remember since I have been a Member of Parliament, nothing has been done to address that very serious problem.
The funding formula is unfair, outdated and discriminatory. It fails to address local demographic shifts. Local people, businesses and public services are the bedrock of our economy. They face acute financial pressures in my constituency. They deserve an ambitious programme of reform, so that the money we pay in can be spent on our local services, instead of us closing down libraries and facilities, which my council is sadly now doing—necessarily, because of a lack of funding. It is a question of priorities. My local council should not close libraries, but at the end of the day, we are not being funded fairly, and the Government need to address that. If local services are not provided, people will be angry and disillusioned, and local communities will be harmed.
I speak not only for Essex and the surrounding London boroughs, but for all hard-working people the length and breadth of this country when I say that the United Kingdom has no place being a high tax, low growth and low aspiration nation. If the Chancellor wants growth, I encourage her to look to nations whose economies are expanding much faster than ours is due to under the sluggish and rather depressing growth forecasts she outlined yesterday. The formula for some of those countries is the same, whether they are in north America, Asia or Europe: low taxes that give people back the money that is rightly theirs, policies that incentivise enterprise and growth in the economy, and a lean state with minimal regulation. Investment in infrastructure is critical, and truly local public services are vital to people. They also create a basis for private investment.
In Britain, cutting red tape and reaping the benefits of Brexit—we really should do that—will attract booming business and stimulate success. The mantra that the state should manage decline needs to be rejected. The British people deserve better than this. I encourage the Government to follow not the example of failed Labour Governments littered throughout history, but the nation-saving policies embarked on in 1979 by a Prime Minister who had a vision of a greater Britain and more prosperous United Kingdom.
We must pursue an agenda of low taxes, economic growth and an efficient state that improves the public services that look after the elderly and those truly in need. The people of this country do not want, and simply cannot afford, a return to red-blooded socialism that discriminates against hard-working people, decimates our economy, destroys jobs, curtails growth and restricts freedom. The British people need a small state that works, not a bloated state that holds our country back.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
It is an honour to follow the hon. Member for Romford (Andrew Rosindell), even though I fundamentally disagree with everything that he said. I know that he will take that in the right spirit. I congratulate all colleagues who made their maiden speeches. The speeches were fantastic and moving, and I wish them all a really wonderful time in this Parliament and, I hope, Parliaments to come.
Progressive Governments are judged on whether they deliver higher standards, and I welcome the direction of travel that our first woman Chancellor took yesterday. It is good to hear that for the first time, the cost of living will be taken into account when calculating the national minimum wage. I also welcome the step towards a single adult wage rate, with 18 to 20-year-olds receiving a 16.3% increase. I hope that those kinds of revisions will continue. Those are valuable examples of the change that a Labour Government will make to low-income households.
A key feature of this Budget is that it can safeguard existing jobs in the north-east and help to create new well-paid jobs for the people I represent. One of the biggest sectors in our north-east industrial base is the offshore energy sector—that is, oil and gas companies that work in the North sea, and the associated supply chain. We are proud to have those jobs in my constituency, and we must anchor them here in the UK and avoid their being attracted overseas. Last year, in Newcastle upon Tyne East and Wallsend, the offshore sector added £2 million in gross value added and supported thousands of jobs. That is just a snapshot from the region, where the sector contributed £416 million and more than 4,500 good jobs overall. I am pleased that my right hon. Friend the Chancellor recognises the reality: that oil and gas will be essential to our economy and for energy security for decades to come, especially given that if we misstep, we will simply have to rely on imports, which are more expensive, have a higher carbon footprint and do not deliver any tax yield.
This Government have committed to ensuring that the North sea is managed in a way that does not jeopardise jobs and continues to attract necessary investment, with the delivery of net zero and energy transition being an exciting prospect. A successful home-grown energy transition has the potential to deliver the economic growth that the country needs. I know that the oil and gas sector and its representative body, Offshore Energies UK, found yesterday’s Budget encouraging. They are grateful for the positive engagement from the Secretary of State, the Chancellor of the Exchequer and the Exchequer Secretary over the summer. They recognise that the energy profit levy served a purpose, but the commitment to looking at unwinding it, and to finding a new permanent regime, can give companies and investors the confidence that they need to invest in our UK.
I look forward to helping Ministers succeed, but I will of course also hold them to account. I will also hold the industry to account on its commitment to support workers, deliver a fair transition and provide retraining and working standards for all. The trade unions are keen and willing to play their part. Offshore Energies UK estimates that with the right investment environment, UK offshore energy companies could invest £200 billion in home-grown energy this decade alone, supporting the UK to reach 50 GW of wind and 10 GW of hydrogen, reducing reliance on oil and gas, and allowing us to scale up to at least four carbon capture and storage clusters by 2030—an exciting prospect indeed.
Moving away from the economy and on to local government, I welcome the 6% real-terms increase in spending on SEND and alternative provision. The SEND system is broken. In my constituency, children have been held back from flourishing and reaching their true potential. The £865 million to help plug deficits is a movement in the right direction. I urge the Chancellor to build on that moving into the spending review in the spring.
Today, Longbenton councillor Karen Clark has been selected as Labor’s candidate for the North Tyneside 2025 mayoral election. Karen welcomes the Chancellor’s historic Budget and looks forward to promoting its promised investment for local government during her forthcoming campaign.
On social security, the reduction in the deductions cap will help to minimise the financial impact of debt repayments, with those benefiting keeping an extra £420 a year. It is a smart, fiscally neutral way to help reduce negative household budgets and raise living standards. However, the commitment to deliver the Conservative plans to reform the work capability assessment and to deliver the inherited savings has worried many with limited capability for work and work-related activity. I hope the House will be given time to examine and debate that when the proposals are outlined in greater detail.
As the chair of the responsible vaping all-party parliamentary group, I have concerns about the announced tax on vaping liquid from 2026. There are still 6 million smokers who have yet to make the switch to vaping, and a tax on vaping will only serve to discourage those smokers to quit. The vaping tax proposed by the Chancellor is unsustainably high, at 22p per ml of vape liquid. It will make the UK’s tax one of the highest in Europe. The tax will also hurt working people throughout the north-east who rely on vaping to keep them off cigarettes. Currently, many stores sell vaping liquid for refillable devices for 99p. Under the Chancellor’s proposals, that will increase by 267% to £3.64. Access to vaping liquids is not driving youth vaping—the Government are already looking to address that through the Tobacco and Vapes Bill. I fear that the tax on vapes will hurt people who have made the decision to switch from smoking to the less harmful alternative—a decision that has already saved the NHS tens of thousands of pounds per person.
Yesterday’s Budget has renewed the hope of ordinary people that the future can be different—a Labour Budget for lower-income households, working people and children. Our public services can be rebuilt, living standards can begin to turn around, and our politics can deliver progress again.
Dr Scott Arthur (Edinburgh South West) (Lab)
It has been a real privilege to share the debate with so maiden speeches this afternoon—something I did not expect. My hon. Friend the Member for Ribble Valley (Maya Ellis) is not in her place just now, but I am sure her father would have been proud of her, as will her husband. I have a fantastic charity in my constituency called Dads Rock, which supports dads and gives them confidence. It sounds like her husband is a dad who rocks.
It has been remarkable that Margaret Thatcher has been invoked quite a few times. It is quite unusual for her name to be mentioned so many times in my presence. I grew up in Fife during the 1980s, and I am sure my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) would agree that the impact that she had there is still felt today. People still feel the impact of the rapid deindustrialisation of proud communities. I am sure that my hon. Friend has casework still about the impact of that.
It was emotional yesterday to hear the Chancellor deliver her fantastic speech. I am still a little hoarse today from all the emotion. This is the Budget our country needs, and the IMF agrees, which is incredible. It was great news for Labour MPs to wake up to this morning—I expect colleagues from other parties were less happy. The chances of my being elected were always slim, but I promised those I met on the campaign trail that Labour would get our country back on track. Yesterday’s Budget is proof that we are serious about that. We have spent the weeks since the election clearing up the mess which was left by others, but the Budget sets down the foundation for what we want to do next. It is transformative Budget. I cannot believe we are achieving so much in our first Budget, but it is only the start of a real change for our country.
The Budget will work for both the working people who call Edinburgh South West home, but also the young and retired people who deserve well-funded public services. The measures that we set out yesterday are a re-set, establishing the tone for the remainder of this Parliament and for the coming decade, not just five years. Gone are the irresponsible commitments, without plans to follow through, that we have been dealing with since the election. It feels like the grown-ups are now running the country.
We have a Budget that provides the stability to encourage growth and investment in our nation’s infrastructure and our public services. After reading through the details of the Budget, it was clear that when my colleague Anas Sarwar said,
“Read my lips: no austerity under Labour”
he meant it. The Chancellor has delivered. The Budget will deliver for the people of Scotland, with a record-breaking £47.7 billion for the Scottish Government’s budget in 2025-26. That has the potential to be entirely life changing not just for my constituents, but for people right across Scotland. The Chancellor yesterday proved that when Labour wins, Scotland wins, with the measures announced resulting in more investment per head of population in Scotland than in the rest of the UK.
The Scotland Office is now equipped with a budget for trade missions around the world, selling brand Scotland and bringing in new investment and custom to countless Scottish businesses. Some 200,000 of the lowest-paid Scots will also feel the benefit in their payslips. We will close the age banding on the living wage, which has always been unacceptable. The Budget has protected working Scots and has laid the foundations for a new era of investment and growth in Scotland, raising money from those with the broadest shoulders.
With all that in mind, I find it rather embarrassing that SNP Members talk with a straight face about this being an austerity Budget. It is almost as if they wrote their speech before they heard the Budget. It is quite curious. I can only guess—as others have commented, none of them are here today—that they are busy rewriting their lines and thinking about how they are going to respond. But I think a lot of people in Scotland will find it unacceptable that no SNP Members are here today to engage in this debate.
Is it not time, when the UK Labour Government have given the Scottish Government their largest ever funding settlement, that the SNP begins to take responsibility for its own mismanagement of Scotland’s finances? In government, the SNP has wasted millions on pet projects rather than the services on which so many Scots rely. We have had ferries with painted windows. As I speak, a hospital in Edinburgh is being closed as an emergency action because of a lack of maintenance. This is not a small hospital. The Princess Alexandra Eye Pavilion caters for 1,400 out-patients per week and it has been closed almost overnight. It is a planned process, but one that has been forced. It is absolutely incredible and shameful.
In parallel with that, local authorities have been starved of cash and our towns and cities have found their public services decimated. On Tuesday, I met third sector groups in my constituency who were preparing to make staff redundant due the pressures of SNP cuts to social care. At 10 past 12 yesterday, just as the Chancellor was getting ready to speak, I received a WhatsApp message from a GP serving one of the most deprived parts of my constituency. She described the cuts to social care services in Edinburgh as catastrophic and devastating. At quarter past 11 last night, I received an email from a GP making exactly the same points. The SNP will blame Westminster or howl austerity, but in reality that is mince—that is a Scottish phrase, Madam Deputy Speaker. The Scottish Government’s own decisions are to blame for “much of the pressure” facing Scotland’s finances. That is not just my view, but the considered view of the official economic forecaster in Scotland.
The Budget presents the Scottish Government with a choice. They can use the record funding to own the problems that they created and get our public services back on track, including the social care services I talked about. The only alternative to that is handing over power to Anas Sarwar in Scotland, because more guddle cannot be an option but I fear that that is what we are going to get. If the SNP is not up for that challenge, Scottish Labour is ready to step in. My constituents know more than most the impact of the SNP’s cuts and mismanagement, because Edinburgh—Scotland’s capital—has the worst-funded local authority in Scotland. With this additional funding, it is high time that the Scottish Government do the right thing and stop starving our council of the resources it needs. Councillor Cammy Day, Edinburgh’s council leader, made that demand yesterday. Let us hope that the funding will be a lifeline to social care providers.
In 2026, Scottish voters will have the opportunity to elect a Scottish Labour Government that will work hand in hand with this UK Labour Government to continue to deliver for the people of Scotland. However, until then, we Scottish Labour MPs, and our colleagues at Holyrood and in council chambers, will hold the Scottish Government to account for how they choose to spend the additional funding. After all, I think we can all agree that the Scottish Government have not just needed more cash; they have needed to get better at spending it.
We saw yesterday what a Labour Chancellor can do to turn around the lives of working people, even in the face of a shocking legacy handed to us by the Conservatives. This Government have given the Scottish Government all the financial tools they need to succeed. Just imagine how truly transformative it would be if we had a Scottish Labour Finance Secretary working in partnership with a Labour Chancellor here in London. That is our goal.
Alex Ballinger (Halesowen) (Lab)
It has been a pleasure to listen to so many excellent maiden speeches this afternoon, and to hear so many colleagues saying such positive words about a Budget that I am excited to support.
Every single Member on these Labour Benches represents a mandate: a mandate we were given by the British people when they voted for change on 4 July. They did not just vote for Labour Members to sit on these Benches and continue the last Government’s failed policies of austerity and decline; on 4 July, people voted for real change. I am delighted to say that this Budget has set us on a path that will change our country for the better. It begins the process of fixing the foundations of our broken economy, it sets in motion the investment needed to deliver change, and it remains steadfast that no working person will see higher taxes in their payslips.
The country knows that the Conservative party failed us with a cost of living crisis, a shoddy Brexit deal and a dreadful mini-Budget that fractured our economy, and working families in towns like Halesowen felt its failures hardest. People across my constituency have shared countless stories of their struggles to cope, with their bills going up, their wages stagnating and no help from the Government. The last Parliament was the first in modern history to leave living standards lower at its end than they were at its start.
People have been exasperated with our public services. They have watched relatives wait months and years for NHS treatment, seen their local services close, and seen the public infrastructure crumble around them. They were tired—tired of living under a Government that did not deliver on their commitments, tired of seeing our public services get worse year after year, and tired of waiting for a Government that would bring about genuine, lasting change.
Yesterday, I was proud to listen to the Chancellor as she set out the plan to change our country. I was delighted to hear her focus on fixing the foundations of our economy, on real investment in our public services and, rightly, on putting the burden on those with the broadest shoulders. With each announcement, I began piecing together what the Budget will mean for our community in Halesowen. It delivers a real difference for those most in need of help: a 6.7% increase in the national living wage, putting £1,400 more in the pockets of retail workers, pub staff and many others; an increase of the carer’s allowance earnings limit to £196 a week—carers’ charities in my constituency, such as We Love Carers, have said that that will make a vital difference to carers by allowing people on really low incomes to earn that little bit extra to support their families—and a £25 billion investment in our NHS, meeting our promise to bring waiting times down to no longer than 18 weeks, just as they were under the last Labour Government.
However, what I am most pleased by is the funding for our town centres and local communities. It pains me to say it, but our high streets have struggled in recent years—I have seen many independent shops close, and our community centres are really struggling—so I am delighted that the Government are providing £1 billion to support our high streets and communities, and the infrastructure that will support people across Halesowen. That includes £20 million to regenerate Halesowen town centre, and an additional £20 million to redevelop Haden Hill leisure centre in Cradley Heath. Both are really important projects that were promised under the last Government, but no funding was provided, so I am delighted to see that this Government have made that available. People deserve better, and Halesowen deserves better. It is time for revitalisation, and these commitments will do just that.
This Budget sets a precedent, and this Government are laser-focused on delivering for our communities. It is a Budget for growth, a Budget for investment, a Budget for fair taxation, a Budget for workers and a Budget for stability. It is a Labour Budget, and I am proud to support it. It is a Budget that will change our country, and I am hopeful for the years ahead.
Graeme Downie (Dunfermline and Dollar) (Lab)
I congratulate all those on this side of the House who have made their maiden speeches this afternoon. It has been absolutely fantastic to hear all those stories.
It has been a long 14 years since we had a Government and a Budget that will deliver for Scotland, the UK and working people. We have had 14 years of austerity, 14 years of chaos, seven Chancellors and 19 fiscal events, but not one of them delivered a thing. Opposition MP after Opposition MP—wherever they have gone—welcomed investment and said, “I want a new hospital; I want this and that,” but not one of them had an idea about how to pay for it. Yesterday, I was proud to sit and listen to a Chancellor who was being honest with the British people about the mess that was left, what we will spend, the improvements that we will make, and how we are going to pay for them.
That is what changed yesterday as we heard the first female Chancellor deliver the first Labour Budget in 14 years, and what a Budget it was. It boosted public investment by over £100 billion and maintained the fuel duty freeze and 5% cut, which are vital for families and small businesses in Dunfermline and Dollar, and across Scotland and the rest of the United Kingdom. Alongside that, the Budget supported the take-up of electric vehicles and abolished non-dom tax loopholes, raising £12.7 billion. It increased, extended and reformed the energy profits levy, as we promised to do, and kick-started GB Energy, which is headquartered in Aberdeen, to deliver the clean energy and green jobs that we will need in the future. Despite GB Energy being described by Conservative Members as a vanity project, it will deliver the infrastructure that this country needs, which they failed to deliver in 14 years.
We have increased the employment allowance for small businesses to £10,500. As someone who used to run a small business, I know how well that will be received. We have preserved the state triple lock on pensions, which will see over 12 million pensioners gain up to £475 next year. We have provided an uplift of £2.9 million for the defence budget, while maintaining £3 billion in annual support for Ukraine for as long as it takes.
As has been mentioned by my hon. Friends, this UK Labour Government will deliver a total of £47.7 billion in Scotland—the largest settlement in the history of devolution. That includes an additional £1.5 billion for the Scottish Government this financial year, and an additional £3.4 billion next year.
Andrew Rosindell
It is a bonanza of expenditure; a lot of money is being spent. The hon. Gentleman said earlier that he would explain how it will be paid for. Just for clarification, will he please explain where all this money is coming from and how we are going to pay off the debt in the long term?
Graeme Downie
I believe the Chancellor outlined all of that absolutely perfectly yesterday. I would never seek to improve on the performance of our fantastic Chancellor, from whom we heard just yesterday.
Whereas the rest of the UK has only had to endure 14 years of the Conservatives’ incompetence, we in Scotland have suffered even more. We have had 17 years of the SNP blaming the Tories for its own economic incompetence and decisions. We have had years of two failed Governments who have been content to play political games, rather than come to the help of the people of Scotland.
Frank McNally
My hon. Friend is making an excellent speech. Following yesterday’s Budget, there will be a significant increase in investment in further education, which is critical to delivering the skills revolution that we need. In Scotland, further education has been decimated by the SNP Government. Does he agree that they need to recognise the important steps taken by the Chancellor and follow suit?
Graeme Downie
My hon. Friend makes an excellent point. As I and other Members from Fife know, we are celebrating the 125-year anniversary of Fife College. I will attend a college dinner this week and I will make exactly that point to those attending. Further education is critical in providing the skills that Scotland needs, as I said yesterday during Scotland questions in relation to the defence sector. We need to ensure that the investment being provided by this Government is best used in Scotland to develop the skills that we need.
We have had years of two failed Governments but that time is coming to an end. It will truly end only in May 2026 when the people of Scotland have the opportunity to elect a Scottish Labour Government. But before the SNP exits stage right—although SNP Members seem to have exited the Chamber during this debate—I urge it to use the record funding wisely and start delivering for the people of Scotland.
The SNP Government must abandon their austerity programme of cuts to public services and a focus on their pet projects as they have gone along. They might be on their way out the door, but the least they owe the people of Scotland is not to leave the same kind of mess as their partners in constitutional distraction, the Tories, have left for the rest of the UK. That includes projects such as the Kincardine health centre in my constituency. Like the health centre mentioned by my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker), that has been delayed by more than a decade after being promised by the SNP.
Alongside the good news, we heard the Chancellor outline the mess and legacy left after 14 years of Conservative Government, who made announcements with no funds allocated. Among the empty promises from the Conservative Members was the £500 million of cultural funding promised to the city of Dunfermline in my constituency. While it is absolutely clear that the blame for that lies with the previous Government, it is none the less disappointing for the city of Dunfermline that the Government have been forced to consult on and review the funding. Dunfermline is an old city and the historic capital of Scotland, but it was officially awarded city status only in 2022. It is a growing city, which has the potential to be the driving force for the economy of Scotland. To achieve that, however, we need the right investment and support.
As the consultation on cultural funding is under way, prior to the Budget, I also wrote to the Chancellor of the Exchequer asking for assistance and support to find a small amount of investment for the port of Rosyth in my constituency to enable a new, regular passenger and freight service between Scotland and the continent. With major local employers such as Mowi and Amazon UK in the area, a ferry service to Europe would further strengthen their position as major contributors to the Fife economy and provide the option of more environmentally friendly logistics by removing truck journeys from the road.
Both the previous UK Conservative Government and the current SNP Scottish Government have talked about supporting that project, but neither have been willing to make the necessary investment. Having being failed by the previous Government promising money that they did not have, will Ministers meet me and others behind these plans to find ways of perhaps funding that commitment?
Yesterday, we truly turned the page on 14 years of Tory austerity and have given the UK and Scotland the chance to grow and succeed again. I will be the proudest Member of Parliament to support this Budget, which fixes the foundations of our country and sets us on a path to prosperity and growth in the future.
Jim Dickson (Dartford) (Lab)
It is a privilege to rise as Dartford’s first Labour MP for 14 years to welcome the first Labour Budget for 15 years. But before I do so, I pay tribute to those who have made their maiden speeches this afternoon; they have been inspiring and personal, and Members have talked about their journeys and lovingly about their constituencies. I thank Members for those, and congratulations on them.
Dartmouth, like much of the country, is at a crossroads after more than a decade of Conservative failure, with our economy stagnating and our public services broken and unable to be the safety net that my constituents need. Labour Members were elected on a promise of change, and yesterday’s Budget delivers that with a hugely welcome focus on investment to get our economy moving, setting the foundations for growth and beginning to fix our schools, our hospitals and our broken roads.
It is astonishing to hear Conservative Member after Conservative Member say how they wish to see public services improved in their constituency, without willing any means to pay for it. The hon. Member for Romford (Andrew Rosindell), for example, seems to want European levels of public service on American levels of taxation. That is not possible, but this Government are achieving European-level public services supported by European-level taxation, borne by those with the broadest shoulders.
The Chancellor is absolutely right that we must grow our economy. Nowhere is this truer than in the Thames estuary, which has the potential to be one of the UK’s engines of growth, with 1.3 million new jobs, 1 million new homes and £190 billion-worth of additional value added by 2050.
In this Parliament, I hope to work with MPs on both sides of the House and from across the estuary region, as well as with Ministers, to make real progress. Work is already under way on establishing an all-party parliamentary group on the Thames estuary, which will work with Ministers on the fair growth agenda set out by the Government-sponsored Thames Estuary growth board.
For the small number of people who have followed my short parliamentary career to date, it will come as no surprise to learn that I believe that a key shovel-ready piece of infrastructure, the lower Thames crossing, will be crucial to our investment in the estuary. Currently, we have only one road crossing of the Thames east of London, at Dartford—a single point of failure that can not only block crucial freight movement across the country but make the lives of Dartford residents a misery due to the gridlock. This project could start very quickly, with the planning process already undertaken and a delivery team already in place. In short order, it would create jobs across the local area and help us to unlock the largest bottleneck in the UK. I look forward to working with the Chancellor and her colleagues across Government to secure the necessary finance to get this project started.
Dartford is lucky to have a district general hospital at Darent Valley, where the staff work with dedication every day to support our local population. However, after 14 years of Conservative government, waiting lists are far too high and the accident and emergency unit lacks the capacity to see people quickly. The latest figures indicate that more than 26,000 residents are awaiting treatment, with more than a third waiting longer than 18 weeks. The Chancellor’s announcement of £25 billion over two years for the NHS, to cut waiting times through extra elective appointments and additional capacity, should help to bring down these waiting lists.
The recent Darzi report on the NHS highlighted the need to be far more creative in how we keep people healthy over the long term by building prevention into the system. I hope that Ministers will recognise the opportunities for people to get involved in community activities that help them to lead more active, healthy lives, as emphasised in this Budget. There is more work to do on tackling health inequalities, as these opportunities are not evenly spread across the country.
On the subject of prevention, I particularly welcome the proposal to review the sugar tax, and to consider its extension to milk-based drinks. I would like to see this consideration extended to other products, including foods that are high in salt, fat and sugar. An obese nation cannot be a healthy nation.
I finish by touching on an area of personal importance to me. Six years ago, my mother was diagnosed with dementia after her memory began to fail. I am proud that, thanks to the NHS, she has received high-quality care and continues to lead a high quality of life. As a former local government cabinet member for health, working across NHS and council boundaries, I know that is very often not the case. We can make life better for those who, like my mother, are diagnosed with dementia by ensuring early and accurate diagnosis, so the condition can be better managed, with the right treatments, and those who have been diagnosed and their families can prepare for the care they need. I hope Ministers will use the extra investment to look at how we can make that happen within the NHS.
Dartford residents will welcome two other sets of critical measures in the Chancellor’s speech. Like colleagues from across the House, I know from my many conversations with parents of children with special educational needs how inadequate and broken the provision is, across the UK and in Kent. On top of the significant increases for schools and further education, the new £1 billion announced yesterday will add resources to the review of SEND announced by the Secretary of State for Education.
I also welcome the steps the Chancellor has taken to tackle crime and to make people feel safer on our streets. Across the country, our sense of security has been eroded, with levels of antisocial behaviour and shoplifting that are far too high. This Budget will put us on the road to delivering our manifesto pledge to boost visible neighbourhood policing, with 13,000 more neighbourhood officers and police community support officers.
As other hon. Members have said, for too long we have tolerated high levels of shoplifting in our town centres. Thanks to the effective immunity for low-value shoplifting introduced by the previous Government, retailers and staff live in fear of the individuals and organised gangs that target them. The additional funding to tackle that and provide more training to our police officers and retailers will help stop shoplifting in its tracks.
It is clear that the problems we have inherited from the previous Government are substantial, but the Budget has laid the foundations for us to begin to tackle them. Steps to boost public investment, cut NHS waiting lists and fix our schools will be warmly welcomed by Dartford residents, and show that the new Labour Government are on the path to delivering the change our country voted for.
Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
It has been a pleasure to listen to so many excellent maiden speeches this afternoon from new colleagues on the Government Benches. I am looking forward to hearing the remainder of the maiden speeches to be made by our fabulous new intake to this Parliament.
This Budget was about fixing the foundations, and we should take a moment to think about that word “foundations”. It was not about fixing the country or the economy, but fixing the foundations, so what underpins our country is broken. In Leeds, prior to 2010, there was one food bank and no food pantries in a city of 800,000 people. In my constituency, which is one of eight constituencies in the city, our food banks and food pantries are now in double figures. That represents an economic failure that we will fix. I hope that by the end of this Parliament, we will be closing food banks and food pantries because people will no longer need them, and we will not be having to open new ones.
There is nothing more foundational to this country than the national health service. I thank the Chancellor—my neighbour—for her continued focus on the NHS, a service that means so much to everyone in this country. The £1 billion capital investment to address the backlog of repairs and upgrades to outdated NHS infrastructure is a crucial step forward. I also want to acknowledge the £1.5 billion in capital funding that will be focused on increasing capacity in our health service, through new hospitals, surgical hubs, diagnostic tests and diagnostic centres.
I am particularly grateful to hear confirmation that the Health Secretary will be providing further details of the new hospital programme in the new year. With that in mind, I would like to make a strong case for the prioritisation of the Leeds Teaching Hospitals NHS Trust’s hospitals of the future project. Leeds is home to one of the largest and busiest acute trusts in the country, treating more than 1.6 million patients each year. The trust includes one of the largest centres for children and young people in the country, which cares for over 250,000 children annually and supports the birth of more than 8,000 babies.
Despite the progress made by the trust, it faces significant operational challenges because of outdated infrastructure. Some parts of the Leeds General Infirmary in my constituency date back to the Victorian era. Maintenance of such an old estate is an enormous financial strain, with backlog maintenance costs now exceeding £630 million. The previous Government’s delays in the new hospital programme have already added an extra £300 million in costs to the trust. These challenges are not just financial; they directly impact our ability to deliver care to the people of Leeds. I have been to the Portland building and seen that three floors are shut. I know that the Secretary of State for Health and Social Care has also visited the site. What is going on is not acceptable.
The hospitals of the future project will create the Leeds innovation village, delivering £13 billion in economic benefit and creating more than 4,000 jobs—delivering part of the vision that Lord Darzi had. For every £1 invested, there will be a return of £12 in public benefit—both to the NHS and the taxpayer. That is real efficiency and real productivity in public services.
Leeds is ready to deliver. The trust has already secured outline business case approval and planning consent, and has completed significant enabling works. The new hospital will be a net zero carbon building, designed to meet the highest standards of sustainability and digital innovation. This will not only improve the quality of care, but set a national benchmark for environmentally friendly and efficient healthcare infrastructure. I urge my constituency neighbour, the Chancellor of the Exchequer, and the Health and Social Care Secretary to ensure that the Leeds hospitals of the future project is given the priority that it deserves in the upcoming review of the new hospital programme. Leeds is ready to go. We have the approval, the plans and the commitment. We just need the green light to get on with it.
My constituency is a significant cultural centre. Earlier this year, under the previous Government, Michael Gove committed £5 million to the National Poetry Centre, but, unfortunately, it was £5 million that he did not have. The centre will be sited by the University of Leeds in my constituency. Yesterday, we received the news that the £5 million of funding was under review, subject to consultation. I hope the Chancellor, or a Treasury Minister —I see that there are a couple on the Front Bench—will meet me and the poet laureate, who has made this centre his passion project, to ensure that this centre adds to our national cultural life.
The British Library in the North is situated in my neighbouring constituency of Leeds South, just a few hundred yards from my own constituency, and it received very similar news. I hope that we can meet the relevant Ministers in both the Treasury and the Department for Culture, Media and Sport to ensure that these projects do not flounder under the false promises of the previous Government.
Like many other colleagues, I am also pleased about the funding commitment for special educational needs. I meet so many parents who cannot even find a place in an appropriate school for their SEN children. Some have to travel many miles to be able to get the education that they deserve. The £1 billion funding promise yesterday, which is 6% above inflation, will hopefully provide a new school, or schools, in Leeds for SEN children, with new teachers and I will no longer have to knock on doors and meet parents saying, “My child is not going to school, because there is not an appropriate place in our city”.
Finally, let me turn to devolution. I am sure that you will agree, Madam Deputy Speaker, that devolution has been a success in West Yorkshire. We have seen our bus fares capped at £2, and I know that the mayor is committed to keeping that going. We have also had a huge increase in lifelong learning and the skills agenda. None the less, Leeds is still the largest city in Europe without mass transit. It was great to hear the Chancellor recommit to that mass transit yesterday, and that West Yorkshire will receive part of the integrated settlement to deliver that.
We have only had a mayor in West Yorkshire since 2021, but I understand from a letter that she has received that West Yorkshire will be included in the integrated settlement in 2026, two years ahead of schedule if we look at previous integrated settlements that have been announced and the length of time that those authorities have had a mayor. That shows the exemplary leadership that we have in West Yorkshire at parliamentary level, at local council level and, most of all, at mayoral level with Tracy Brabin. West Yorkshire is ready to deliver in transport, in health, in education and in all areas. I know that my colleagues on the Treasury Bench will be supporting us, and I shall be supporting this Budget.
Andy MacNae (Rossendale and Darwen) (Lab)
I congratulate all my colleagues who have made brilliant maiden speeches today. As always, I am taken aback by the range of experience and expertise in this House.
I had planned to be radical and speak very briefly about a few matters that are particular to the north-west, but before I do so, I have to pick up on some issues raised by Conservative Members. First, the right hon. Member for Maldon (Sir John Whittingdale) made a seemingly unequivocal statement that businesses facing increases in payroll have only two choices open to them: to reduce their workforce or increase prices. That is patently untrue. Businesses increase payroll all the time for perfectly good business reasons. We cannot be so simplistic in our analysis. Far more important for business is having the right infrastructure, and a skilled workforce who are able to get good healthcare and support—all things that the Budget will provide.
Another Conservative Member, who would not take an intervention, drew the tired analogy between household budgets and national budgets. They are not the same. It is that sort of rubbish that got us in this mess in the first place. Finally, there were several references to short-term growth forecasts. Conservative Members are either unaware of or wilfully ignoring the fact that there is a lag between good infrastructure investment and meaningful, sustained growth. The decisions that we are taking now are long-term decisions—the sort of decisions that previous Governments ducked. These decisions will deliver sustained growth in four, five, six or seven years, which will make a real, sustained difference to the country —not short-term, sugar-rush growth for political gain.
Let me focus now on the north-west. Like much of the country outside the home counties, the north-west was badly let down by the cuts and false promises of the previous Government, so I am particularly pleased that the Budget will reverse that trend and start the process of rebuilding our infrastructure and public services. I am particularly pleased to see the very significant commitment to northern rail infrastructure. With the commitment to fund a trans-Pennine route upgrade, our cities and towns across the north will be better connected, with more frequent and faster trains.
I also welcome the recognition of the importance of local connectivity, with the commitment of £650 million specifically to fund local transport links outside the key city regions. In that context, I look forward to continuing to make the case for a commuter rail link from Rossendale to Manchester. I am also delighted to see our Government’s commitment to properly funded local growth deals and town funds, with both Darwen and Rawtenstall set to benefit from £20 million over 10 years. I will be excited to work with local leaders to develop innovative implementation plans. I look forward to the development of ambitious regional growth and investment plans that will unlock the true potential of our area.
Another hugely important aspect of the Budget is the move towards integrated settlements for mayoral combined authorities. That will truly move decision making away from the centre, end the command-and-control mindset, and put power in the hands of local leaders and communities, who know our area so much better than officials in Whitehall. That approach has the potential to bring transformational change to our region and deliver both greater value for money and better outcomes for our residents. While Lancashire is not currently in a position to receive that sort of settlement, the Budget should be a signal to council leaders and other key stakeholders in the county of the huge opportunity for Lancashire if we can all work together to get a devolution structure in place. I look forward to continuing to work with the Government and local leaders to grasp that opportunity and put Lancashire back in the fast lane.
Finally, with the average income in Rossendale and Darwen much lower than the standard throughout the UK, and even in the rest of the north-west, I wholeheartedly welcome the rise in the national living wage that the Chancellor introduced. It will mean a £1,400 pay rise for many of my constituents—a rise that can make a truly significant difference to people’s day-to-day lives. Taken together, I am delighted to see how the measures in the Budget start the process of real and sustained change for the north-west, but I am very much aware that it is simply the start of the process. I look forward to future Budgets.
Chris Vince (Harlow) (Lab/Co-op)
It is Halloween this evening, so I thought that I would come as the scariest thing that I could think of—I am wearing a blue tie. More seriously, thank you, Madam Deputy Speaker, for the opportunity to speak in this important debate. I also thank the Chancellor and the Treasury team, including the Exchequer Secretary, who is here today, for the incredible amount of hard work they put into the Budget.
As a former councillor who served on a council that was Labour-controlled for nine of the 14 years of Conservative Government-imposed austerity, I know of the huge challenges involved in putting forward a progress budget, a forward-thinking budget and a budget that gives hope, at the same time as dealing with a gaping black hole in finances.
However, as I often paid tribute to Harlow council’s finance lead, former councillor Mike Danvers, for balancing the books as well as protecting services and staff during those difficult times—something that the Conservative administration that followed were unable to do—I congratulate the Chancellor and her team on performing a miracle, frankly, with the Budget they have presented to the House.
The Labour Government were elected on a manifesto that put economic growth and stability at its heart, recognising that anything else would continue the reckless legacy of the previous Government, and this Budget does just that. We were elected as a Government to make tough decisions and we have shown already that we will not shy away from those tough decisions. We were also elected on a manifesto that focused on fixing the foundations of our NHS, and I am pleased that we have a Budget that will allow my right hon. Friend the Secretary of State for Health and Social Care to do just that.
This Government are providing an additional £22.6 billion of resources to the NHS, delivering 40,000 elective appointments a week to make progress towards a commitment that patients should expect to wait no longer than 18 weeks from referral to consultant-led treatment a reality. The capital investment in public services includes £1.5 billion to deliver capacity for more than 30,000 NHS procedures, over 1.25 million more diagnostic tests and new beds across the NHS. And there is £1 billion to reduce the backlog of crucial NHS maintenance, repairs and upgrades. The Government are investing £1.4 billion to help rebuild our schools; £1.2 billion pounds to deliver extra prison spaces; half a billion pounds to invest in local roads and deal with the dreaded potholes, which we will all be aware of; and £1 billion in new funding for extending the household support fund.
However, Members will be unsurprised to know that, as the new chair of the all-party parliamentary group for young carers, although the carer’s allowance is not paid to young carers, I really welcome the fact that the carer’s allowance weekly earnings limit is being raised to improve financial security for carers and support them into work, or to allow them to work more hours if they choose: 16 hours a week, or £196 a week—a rise of £45. It was with real delight that I was messaged by a friend who suffers from cerebral palsy, to talk about the massive difference that will make to his family. He is going to buy me a pint, apparently, but he also pointed out that the pint will cost less.
Alex Ballinger
My hon. Friend has given a long list of the achievements of this Budget, but he has neglected to mention that the Labour party has taken one penny off a pint of beer.
Chris Vince
I have cut down on my drinking now, so it does not help me as much as it would have done in the past, but I am delighted that we have done that, and delighted with the many achievements that we announced yesterday.
However, this is just the start. We know that rebuilding our economy, our public services and our country will take time, but I know—this Budget confirms it—that under this Labour Government we have the leadership and the will to make life better for everyone in our society, not just the privileged few.
Madam Deputy Speaker (Judith Cummins)
I call the shadow Minister.
Gareth Davies (Grantham and Bourne) (Con)
If you will indulge me, Madam Deputy Speaker, I shall start by paying tribute to and thanking my right hon. Friend the shadow Chancellor for his service on our Front Bench. I had the pleasure of serving him in government, as Parliamentary Private Secretary and then as Exchequer Secretary; we worked very closely together. If I may say so, there are very few people who match his ability, but also his decency. I thank him for that.
This debate has had a number of excellent contributions. I will come to the maiden speeches in a moment. My hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown), the Chair of the Public Accounts Committee, made important points about the pension fund industry and the importance of getting it to invest in infrastructure—something that we worked on very hard in government. My right hon. Friend the Member for Maldon (Sir John Whittingdale) rightly highlighted the pandemic and the war in Ukraine, which has undoubtedly had a massive impact on our economy, but we were showing the signs of recovery, as he pointed out. My hon. Friend the Member for East Grinstead and Uckfield (Mims Davies) rightly focused on the new tax on education, and especially the impact on displaced children, which I appreciated.
My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) gave a great speech, first highlighting the importance of pubs and the hospitality industry, but then the importance to our economy of enterprise more broadly. As a vet, my hon. Friend the Member for Epping Forest (Dr Hudson) made excellent points—as usual—about the importance of farming, and mentioned in particular the devastating impact of the Budget on family farms. My hon. Friend the Member for Romford (Andrew Rosindell) made excellent remarks, not least about Margaret Thatcher and, in particular, the importance of private sector investment to our economy.
Those speeches were part of a debate that has included some excellent maiden speeches. The hon. Member for Worcester (Tom Collins) will, as an engineer, bring great talent and experience to the House. He was right to highlight the importance of innovation in our economy. I personally appreciated his comments about his predecessor, who worked very hard for the people of Worcester, as I am sure will he. The hon. Member for Dagenham and Rainham (Margaret Mullane) made an excellent speech about her home. She comes to this place not just as a local MP but as a strong advocate for workers throughout her constituency, and I wish her well. The hon. Member for Livingston (Gregor Poynton) represents the home of one of my favourite drinks. Scottish whisky is one of our great exports, and I wish him well in championing that sector as well as his constituents. The hon. Member for Ribble Valley (Maya Ellis) painted a wonderful picture of her constituency. Her dad clearly made a good decision in raising his family there, and if I may say so, he would be extremely proud of what she has achieved, but I feel that she is only getting started.
Let me turn to today’s subject. The Government are calling it “Fixing the foundations,” but frankly I think the OBR would call it “Breaking the foundations,” because in just one hour Labour broke our economic fundamentals. Labour has broken trust with the British people, and the spirit of aspiration and opportunity, which it will never understand or accept is the true foundation of growth in our economy. Our country woke up this morning to a new but darker dawn, with fear and a feeling of betrayal. People woke up to a number of headlines that I am not sure the Chancellor was expecting or hoping for, including “Halloween horror show,” “£40bn tax bombshell for Britain’s strivers,” “Things can only debt better”—which I particularly liked—and even The Guardian laments the “Return of tax and spend” under Labour. It is indeed a Budget that has broken our economic fundamentals. Labour has performed its biggest U-turn yet and reversed our economic recovery.
Let us never forget that the Labour Government inherited the fastest growth in the G7, inflation at target, and a deficit that is half what we inherited from Labour. Their first act was to spook consumer and business confidence, which fell more sharply than at any time since the pandemic. Now we see those worst fears being realised. Across almost every conceivable metric, the latest figures on our economy make for grim reading, even for Halloween: the highest tax burden in history, debt up and rising as a share of GDP in every year of the forecast, and debt interest payments above £100 billion in every year of the forecast—the first time ever that that has happened.
The OBR says that inflation will be higher, interest rates will be higher for longer, mortgage rates will be revised up. Gilt rates are today soaring, real household incomes are declining, and employment will undoubtedly be down, as anybody who has run a business would tell us. And for what? Unbelievably, and perhaps most humiliatingly, growth—the No. 1 pledge and priority for this Chancellor—has been downgraded by the OBR as a result of the Budget. The Government used to talk about pulling the growth lever, but they have gone and pulled us into reverse. It is unbelievable.
The Labour Government have also broken trust with the British people. They promised that they would not raise national insurance, but the Budget increases it by £25 billion. They promised that their plans were fully funded, but the OBR calls the Budget the largest increase in borrowing as a result of policies in nearly three decades. They promised that they would not fiddle the fiscal rules, but they have done just that to fund their borrowing spree. They promised that they would crowd in private sector investment; the OBR now says that it is being crowded out by this Budget. They promised to boost business investment; the OBR says that it will now fall. They promised to cut energy bills by £300; we questioned them countless times on that, and the OBR now says that we will experience
“higher gas and electricity prices”.
To justify all of this, the Government concocted a fictitious black hole, which the OBR yesterday refused to endorse. Let me quote this to Labour Members, because it is important that we clear this up once and for all: Richard Hughes of the OBR was directly asked this question live on television. He said:
“Nothing in our review was a legitimisation of that £22 billion.”
Nobody believes it; nobody is backing it up.
Finally, Labour has broken the spirit of aspiration that, as I said, is the true foundation of growth. We on the Conservative Benches recognise that it is the British people and British businesses who drive growth and prosperity in our country, not the Government, and certainly not this Labour Government. This Budget said to Britain, “If you want to invest—to expand, to take risks, to innovate—and to build a better life for yourself and your children, Labour will not back you; it will tax you.” Far from fixing the foundations, this is a Budget of broken promises, a Budget of betrayal, and a Budget that will set us back, push us down and kill aspiration. It is a Budget that the public will never forget and will never forgive.
The Exchequer Secretary to the Treasury (James Murray)
I thank my right hon. Friend the Member for Wolverhampton South East (Pat McFadden) for opening today’s debate, and for so clearly reminding us of the state in which the Conservatives left our country.
As many Members have rightly made clear today, yesterday’s Budget made choices about the future of our country. They were not just choices to get through the next few months until the next fiscal event, as we got used to under the last Government, but choices—sometimes difficult ones—about the long-term future of the UK economy and the public finances. The Chancellor’s Budget honoured our manifesto commitments by restoring economic stability, fixing the public finances and boosting long-term, sustainable investment in our country. The first Budget of this new Government turned the page on the last 14 years of chaos and decline. This Budget is a generational event to fix the foundations, so that we can deliver the change that the people of this country voted for. It begins to address the urgent pressures that our NHS, our schools, our police and our borders are under.
However, this Budget is not just about the coming year, nor even the whole of this Parliament; it is about making the right long-term decisions to create opportunities for people throughout the country, put more money in people’s pockets and begin a decade of national renewal.
Mims Davies
I thank the Minister for giving way; he is very generous. He has mentioned choices. Could he comment on the fact that the cost of borrowing is soaring after this tax-raising Labour Budget of broken promises? Labour Members have talked about a crashed economy, but now the Government are presiding over their own low-growth, slow-growth car crash, and they are living in denial themselves.
James Murray
Although we will not comment on market movements, the Chancellor outlined yesterday two new robust fiscal rules, which are the bedrock of stability on which this Budget is built. Those rules will put the public finances on a sustainable path and prioritise investment to support long-term growth. The current budget is in surplus by £9.9 billion in 2029-30, with net financial debt falling in 2029-30 and with headroom of £15.7 billion.
When we went into the election in July, the first steps that we promised to the British people opened with these three words: “Deliver economic stability”. As the Chancellor confirmed yesterday, our first fiscal rule is the stability rule. That means we will bring the current budget into balance so that day-to-day spending is met with tax receipts. No more borrowing for day-to-day spending, no more living beyond our means, and no more papering over the cracks. Our tough new stability rule means that the British people, businesses and the markets can all see the fiscal responsibility that will underpin every decision we take in government.
The Chancellor is clear that taking the tough decisions needed to deliver stability is not always easy. The previous Government ducked the difficult decisions. They made promise after promise to the British people that they knew they could never afford. Our stability rule offers a different approach. Meeting it means we needed to raise taxes, but we have been clear that we will protect working people. That is why the Budget does not increase income tax or national insurance contributions that working people see on their payslips. Instead, we are balancing the books in a fair way.
That does not always mean decisions are easy—far from it—but it is also right that, before considering any changes to taxes, we make sure everyone pays the tax they owe by closing the tax gap. That is why, as the Chancellor set out yesterday, we will deliver the most ambitious package to close the tax gap that this country has ever seen. Alongside a series of policy changes set out in the Budget documents, by 2029-30 HMRC will have recruited 5,000 additional compliance officers and funded 1,800 additional debt management staff. Together, that will mean £6.5 billion in additional tax revenue to pay for the country’s priorities before we make a single change to a tax rate or threshold.
Beyond the crucial work to close the tax gap, the Budget confirms that we will implement our manifesto promises, including to abolish the non-dom tax loophole, which the OBR says will raise £12.7 billion over the forecast period. We will end the VAT exemption and business rates relief for private schools, which the OBR confirms will raise £1.8 billion a year by 2029-30. As of today, we have increased the stamp duty land tax surcharge on second homes to 5%, helping more than 130,000 people to buy their first home or move home over the next five years, while raising £310 million a year by 2029-30 to support public services.
I know hon. Members have raised questions about some of the other tax changes announced in the Budget, and I am glad to have the opportunity to respond. In particular, I would like to address the changes we have made to inheritance tax, specifically the reforms to agricultural property relief. I realise that people may be concerned about the impact on family farms, so I would like to make clear some of the facts about how the reforms to this relief will work. The main rate of agricultural property relief on all assets was set at 50% until 1992, at which point it was raised to 100% just before the election that year.
Let me be clear: these reforms still provide a very significant level of relief to protect family farms. The Chancellor confirmed yesterday that the first £1 million of combined business and agricultural assets will continue to receive 100% relief in most circumstances. Assets above £1 million will attract a 50% relief, equal to the pre-1992 rate, which means that inheritance tax will be paid at a rate of 20% instead of 40%. Our reforms, in a tough fiscal context, still leave the relief as being far more generous than it has been in the past.
It is important to note that agricultural and business property reliefs are in addition to the nil rate bands and other exemptions, such as the transfers between spouses and civil partners, and the rules on gifts. Indeed, the National Farmers Union director of strategy has highlighted that these other features of the tax system are important. He said just today that APR
“is not the be all and end all for passing on farms on death.”
Indeed, these exemptions mean that if someone has no other assets and is passing it on to a direct descendant, a farm or farming business worth up to £2 million can be passed on without paying any inheritance tax at all. Furthermore, those liable for a charge can in most circumstances pay any liability over 10 annual instalments.
Let me also be clear about the data on agricultural property relief. The total value of a farm should not be confused with the value being passed on at death. Multiple family members can own part of a farm. For example, if an individual jointly owns a farm worth £3 million with their partner, only £1.5 million is in their estate at death. In 2021-22, the most recent year for which data is available, the median value of assets qualifying for APR was £486,000. Three quarters of estates claimed for assets below £1 million, and such estates will continue to pay no inheritance tax at all. Just 463 claims were for agricultural assets of over £1 million, or 27% of all claims. The largest assets, those worth over £2.5 million, related to just 7% of claims for APR. That data is published openly on gov.uk for everyone to see, and I encourage people to investigate it.
Sir Bernard Jenkin
It does seem rather odd to introduce a new tax and then to defend it on the basis that very few people will pay it. Why is the Minister so confident that it will yield anything recognisable in terms of a contribution to the public finances? The few landowners who will be caught by this measure will be making other arrangements to ensure that they avoid it, particularly the very large landowners.
James Murray
I thank the hon. Gentleman for acknowledging that the impact of these changes is limited and targeted. That is an important point. He leads me on to my concluding point, which is to point out that the decision we have taken to retain APR, but to limit its generosity for the top quarter or so of assets, is the right approach to fixing the public finances while also protecting family farms.
I have set out some of the detail of how we are restoring stability and responsibility to the public finances and meeting our first fiscal rule, the stability rule. As the Chancellor set out yesterday, that rule is accompanied by the investment rule, which makes sure that debt is falling as a share of the economy. Debt is measured as net financial debt—a statistic measured by the Office for National Statistics since 2016, and forecast since then by the OBR. It recognises that Government investment can deliver returns for the taxpayer by counting not just liabilities on our balance sheet, but our financial assets too. That new approach provides space to deliver the step change in investment that our country needs, within a strong fiscal framework that puts public finances on a sustainable path.
To drive investment further still, the corporate tax road map, which we published yesterday, commits us to providing the best environment for businesses through a predictable, stable, tax system. It caps the headline rate of corporation tax at 25%—the lowest in the G7. It maintains our world-leading capital allowances system, including permanent full expensing and a £1 million annual investment allowance. It maintains our generous R&D reliefs so that the most innovative companies can invest in the long-term future of our country.
Before I conclude my remarks, let me thank all hon. Members for their contributions today. It is a pleasure still to be hearing maiden speeches so far into this Parliament. I found the speech from my hon. Friend the Member for Worcester (Tom Collins) truly uplifting as he spoke about what he drew from the past of his constituency, the promise of the future and, most importantly, the people who he represents and the inspiration they give him. I thank him for bringing some of that uplifting inspiration to the Chamber.
I thoroughly enjoyed the maiden speech by my hon. Friend the Member for Dagenham and Rainham (Margaret Mullane), and everyone in this Chamber will immediately have felt the connection that she has to her constituency and the people she represents. Having formerly been the Deputy Mayor for Housing in London, I found her emphasis on the history and future of affordable housing particularly close to my heart.
My hon. Friend the Member for Livingston (Gregor Poynton) spoke passionately about his constituency, and perfectly articulated the strength of our Union in the UK, balanced with the strength of our national identities in Scotland, England, Wales and Northern Ireland. I thought he encapsulated that perfectly in his speech, and I will be looking at Hansard to remember his phrasing.
The maiden speech from my hon. Friend the Member for Ribble Valley (Maya Ellis) touched us all as she spoke about her late father, who I am sure would be incredibly proud of what she has achieved. I thank her for sharing that close personal story with us today.
We also heard from the hon. Member for Carshalton and Wallington (Bobby Dean) whose maiden speech I believe I heard last time I was at the Dispatch Box. Was he trying to claim that the change in fiscal rules was his campaign win during his speech? I am pretty sure it was the Chancellor of the Exchequer who came up with the idea, but I thank him for his contribution none the less, and I look forward to seeing him on the Treasury Select Committee.
I also thank my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) for acknowledging the importance of working with mayors across the country, including the excellent Mayor of West Yorkshire.
Let me briefly address two points made by Opposition Members, including the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) who spoke about a pensions review. It is an excellent idea to have a pension review, so I am glad that the Chancellor announced in August a landmark pension review, which is looking at how to boost investment and to increase pension pots. It will set out how billions of pounds of investment could be unlocked from defined contribution pension schemes and how pension pots in such schemes could be boosted by up to £11,000. I hope that the hon. Gentleman will look at that review, and I would welcome discussing it with him in due course.
The hon. Member for North East Fife (Wendy Chamberlain) spoke about the Scotch whisky industry. I understand that it may not have welcomed everything in the Budget, to put it mildly, but I want to be clear that we feel that the overall package on alcohol balances the commercial pressures on the alcohol industry with the need to raise revenue. Of course, 90% of whisky is exported so no duty is due on that. We have also looked to support the Scotch whisky industry by reducing fees for geographical verification—specific support that I hope will help the industry in the years ahead.
Today’s debate has brought to the surface the stark difference between this side of the Chamber and the other. The Conservatives have made it clear, yet again, that they are unable to take responsibility for the state of the country as they left it. In contrast, Labour’s first Budget makes it clear that, above all else, we are taking the difficult and responsible decisions to fix the mess they made. We know there are no shortcuts. We are realistic about that, but our Budget is the one our country needs. It is a Budget to restore economic stability while protecting working people, to fix the foundations and fix the NHS, to invest in the future and to rebuild Britain. I commend it to the House.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Debate to be resumed on Monday 4 November.