16:32 - The House divided: - Ayes: 88 / Noes: 253 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Although that felt like a very long 50 minutes, it is always nice to see the hon. Member for Arundel and South Downs (Andrew Griffith) taking centre stage for the Conservative party. As one of the authors of the Liz Truss Budget, he is a constant reminder of the fiscal mess the Conservatives very kindly left this Government to confront.
Once again, the Opposition are trying to make us all believe that we are living in an alternate reality where the economy is shrinking, not growing, and investment is low, not high. There is only one problem with that analysis: none of it is true. Figures published last week showed that the economy grew by 0.7% in the first quarter of this year—the fastest growth of any G7 economy. The Office for Budget Responsibility’s forecast for growth has been revised up for future years, and the latest forecast from the International Monetary Fund predicts that the UK will see the third highest growth in the G7 over the course of this year. This Government have a plan for change, and it is working.
Harriet Cross
I just wanted to clarify whether inflation at 3.5% is higher or lower than inflation at 2%, which is where it was last July.
Gareth Thomas
I say gently to the hon. Lady that the current rate of inflation is an awful lot lower than the 11% it rose to under her party.
I was a bit surprised that there was nothing in the shadow Secretary of State’s lengthy speech on trade until my hon. Friend the Member for Peterborough (Andrew Pakes) provoked him. We have secured three massive trade deals: with India, the United States and, this week, the European Union. That will slash the cost of doing business abroad, reduce border checks, cut tariffs and axe red tape. Those trade deals will support jobs for British people, and create opportunities for Great British businesses in our biggest current markets, and in one of the world’s biggest future markets.
The Conservatives tried to do a deal with India, but could not; it has taken us just 10 months. They wanted a trade deal with the US—indeed, they had four years to do a trade deal with President Trump—but they could not; we have managed to do one in just four months. The deal they did with the EU was the worst trade deal in history; every opportunity they had to minimise red tape and border checks, they rejected. What was the result? Businesses stopped exporting to Europe in their thousands. Our deal with Europe sticks to our red lines, will save businesses thousands of pounds, will cut the cost of food in our supermarkets, and will help to get great British food products—from sausages to shellfish to seed potatoes—back into European markets.
Once upon a time, the Conservatives were in favour of free trade and trade deals. Now, they are against just about everything. Far be it from me to give advice to the Opposition, but the party in opposition is still allowed to support measures that are obviously in the national interest.
Dr Luke Evans
The key thing is, the Conservatives are in favour of free trade, just not at any cost. That has been the biggest problem with these deals. The Minister says that the previous Government did not sign off on them, and for jolly good reason—that is the point we are trying to get across. There will be people queuing up to come to the UK because they see us as a soft touch now and think they can get anything out of us. That is what we want to stop.
Gareth Thomas
Well, I am grateful to the hon. Gentleman for confirming once again that he is against the India trade deal, against the deal with the US and against the deal with the European Union.
I turn now to business investment. The Opposition’s motion claims that
“investors and entrepreneurs are being driven overseas”.
I hate to break it to Opposition Members, but the facts tell a rather different story: business investment actually rose by 5.9% in the first quarter of this year, the fastest quarterly growth in two years. In other words, business investment is higher than when the Conservative party left office.
Dave Doogan
Is the Minister a little worried that the unexpected growth in the first quarter of this year was businesses making capital investment to get in ahead of tariffs?
Gareth Thomas
One way that the hon. Gentleman could help businesses in Scotland would be to call for the Scottish Government to do what we are doing in this country and extend business rates relief to hospitality and leisure.
Investors from across the globe are choosing to put their money in the UK. Our international investment summit last year saw £63 billion committed to the UK—double the amount secured by the previous Government, when the Leader of the Opposition was the Secretary of State for Business and Trade—which is set to generate 38,000 new jobs. Crucially, the leaders of companies that committed to invest in our country at our international investment summit have hailed our pro-business approach as a driving factor behind their decision.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
I am sure Members across the House agree on the need and desire to promote growth and business investment. However, small and mid-sized businesses in my constituency—especially those in the hospitality sector—have been particularly squeezed, not just through the change of rate of national insurance, but with the threshold lowering, as they employ a lot of younger people on sometimes part-time wages. Will he make representations to the Treasury for those hospitality businesses to be included in future fiscal considerations?
Gareth Thomas
I can assure the right hon. Gentleman that we are always talking to businesses in the hospitality sector and across the economy. I say gently to him, though, that we had to take those difficult decisions in the Budget because of the mess that we inherited from his party. Businesses in the hospitality sector and beyond need to ensure that our schools, hospitals and police are properly funded.
Gareth Thomas
I am happy to give way to the right hon. Gentleman one more time.
Sir Gavin Williamson
Could the Minister set out to the House how much his Government actually raised through additional taxes in the Budget, and how much the Government set out in terms of additional spending?
Gareth Thomas
Those assessments were published in the Red Book at the time of the Budget. The right hon. Gentleman can do his own research and look those figures up.
Turning back to the international investment coming into our country and the support from business leaders for our measures, Iberdrola’s executive chairman said at the time of our international investment summit that
“the clear policy direction, stable regulatory frameworks and overall attractiveness of the UK”
have led the company to double its investments over the next few years, reaching up to £24 billion. We have seen more ringing endorsements of this Government’s approach since the summit. In April, the CEO of BlackRock, Larry Fink, praised our pro-growth agenda and said that investment in Britain is “undervalued”. He said that he has more confidence in the UK economy than he did a year ago. Meanwhile, the chief executive of JP Morgan, Jamie Dimon, has told the Financial Times that he backs this Government’s economic reforms, noting that there is much to like about the new Government’s pro-growth agenda. Our forthcoming industrial and trade strategies are further steps to support businesses and accelerate growth in the sectors of our economy with the most potential.
There has not been a strategy to help small businesses for more than a decade. The Conservatives cut support to small businesses to get into new markets. They cut support to help businesses to adopt new technologies and they failed to tackle the scandal of late payments from big businesses.
Jerome Mayhew
The Minister talks about growth and his pro-growth policy. In quarter 1, he had the unexpected growth of 0.7%. The UK Treasury’s April 2025 survey of independent forecasts assesses that the entire growth for the year is 0.8%. Does that mean that he is looking forward to 0.1% growth for the whole of the rest of the year? His policy is not working, is it?
Gareth Thomas
With due respect, the hon. Member is wrong. The OECD says that we will have the second fastest growing economy in the G7.
Let me come back to small businesses. Since taking office, we have sought to hardwire the views of small businesses into everything that we do. Together with the Federation of Small Businesses, we have announced robust measures to tackle late payments. Large companies will soon have to include their payment performance in their annual reports—a massive incentive to pay their suppliers more quickly. We have also launched our new fair payment code, overseen by the Small Business Commissioner. We intend to go even further, developing a strong package on late payments, including stricter maximum payment terms and strengthened powers for the Small Business Commissioner.
Jerome Mayhew
The Minister said that I was wrong. And, yes, it was the Treasury’s own survey, so perhaps it was wrong, but is the Bank of England wrong as well? It has a forecast of 0.75% growth for this year, and even the OBR has a forecast of just 1% growth. His growth policies are simply not working, are they?
Gareth Thomas
With due respect to the hon. Gentleman, he needs to track these things over a period of time. The Bank of England has revised the growth numbers up for this year, as a result of the measures that we have been taking.
As I said earlier, we have had to take some difficult decisions in the Budget to fill the £22 billion black hole left to us by the previous Government to tackle record NHS waiting lists, to invest in schools and to invest in our police. But we have been making headway to deliver on our manifesto pledge to reform business rates. One reason the Conservatives lost the confidence of the business community is that, time after time, they promised to reform business rates and never actually did. We are delivering lower tax rates for retail, hospitality and leisure properties from 2026-27. We are also scrapping the Conservative party’s policy of immunity for low-value shoplifting, and providing additional funding to crack down on the organised gangs who target retailers. We know that this has plagued businesses for years, with both staff and store owners feeling powerless. That changes now.
At the same time, we are reforming the British Business Bank to free up precious capital for businesses to expand. This includes our start-up loans and the growth guarantee scheme, so that, if people want to set up a new shop or business, the support is there to help them. It is why my Department launched a call for evidence on access to finance for SMEs last month, as part of our work on our upcoming small business strategy. All of this work is having a positive, tangible impact: the newest ONS statistics revealed that the number of businesses set up in this first quarter is up 2.8%, compared with quarter 1 last year.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
The Minister mentioned talking to businesses, but I would urge him to do a little bit more listening to them. My right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) asked how much in additional taxes and spending commitments was raised in the Budget, but I did not hear an answer. Can he please give the House an answer? If he does not know, will he agree to write to my right hon. Friend and leave a copy in the Library, so that we can all know the answer?
Gareth Thomas
As I understand it, the hon. Lady actually supports the investment that those tax changes are delivering—she supports every penny of that investment coming into our economy. I wish the Conservative party—perhaps the hon. Lady has some influence with the shadow Chancellor—would set out its plans to raise a similar amount of money, if it does not like our spending plans.
I was reflecting on the newest ONS statistics, which show a 2.8% increase in the number of new businesses during this first quarter. Despite what Conservative Members have claimed, business closures are actually down 4.4%. The latest business confidence index of the Institute of Directors showed a significant rise in economic confidence, with their members stepping up recruitment and investment plans for a second month in a row.
Dr Evans
Employment statistics are really important. In the Minister’s constituency, unemployment has risen by a staggering 31% in the past year. In my constituency, it has gone up by about 10%. That will have a real impact. Perhaps he will come on to how he will support people into work, because it looks like unemployment has gone up by 10% across the country. That is a real concern for people, as they need to work and look after their families.
Gareth Thomas
The ONS numbers on employment show an extra 200,000 jobs in the economy since the general election, so I gently encourage the hon. Gentleman to look at a slightly wider range of statistics.
The shadow Secretary of State once again turned to the making work pay and Employment Rights Bill agenda of the Labour party. Let me remind the House that the reforms are about increasing job security for working people. They are about raising both the national minimum wage and the national living wage so that more than 3 million eligible workers receive a pay rise of up to £1,400; ending exploitative zero-hour contracts; and bringing an end to unscrupulous fire and rehire policies.
Alison Griffiths
I hear what the Minister says about job security, but if businesses will not be providing jobs because of day one rights, as my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) has so eloquently laid out, there will not be more people in work—[Interruption.] As my hon. Friend says, that is what the figures already show.
Gareth Thomas
With due respect to the hon. Lady, it is not one or the other: a pro-worker economy is a pro-business economy. That sentiment has been echoed by experts such as Simon Deakin, a professor of law at the University of Cambridge. He says that, on average, strengthening employment laws in this country has had pro-employment effects. He said that the consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity. Right now, it is worth noting that optimism among business leaders is rising, with improved expectations for investment, hiring and costs. Employment has risen by nearly 200,000, as I have said, since we took office. Payroll employment remains near record highs at around 30.3 million, and wage growth has been consistently outpacing inflation. These indicators suggest a labour market that remains robust and responsive, not one being held back, as the Opposition contend.
Let there be no doubt: this Government are delivering on our plan for change with investment and reform to deliver growth, put more money in people’s pockets, rebuild Britain and realise a decade of national renewal. We are the party of entrepreneurs and wealth creation. We are the party of workers, the party for economic growth and the party of social justice. The Conservative party has no ideas, no imagination, just a dismal record that it does not have the courage to face up to. We are delivering for British workers and for British businesses, so I urge the House to reject the motion before us.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Chris Vince
In all honesty, A1 Bacon has not contacted me about the Employment Rights Bill. As I said, it is concerned primarily with the increase in tariffs since we left the EU. I do not want to reopen that debate, as some hon. Members across the House seek to do, but I hope that the deal negotiated by the Prime Minister will help deal with that issue while ensuring that we maintain our sovereignty, which so many people who voted leave clearly want.
I want to recognise some other businesses in Harlow. What is brilliant when we are first elected as MPs is that we get to see many hidden treasures in our constituencies that perhaps we could not see before we were elected. One of my early visits was to Harlow Group, which makes components for Boeing aircraft that travel the globe. I understand that it is the only business in the UK that produces the boxes into which all the electrics go on a Boeing 747, which is pretty awesome. I also pay tribute to Wright’s Flour; New Ground café; Stort Valley Gifting, where I do my Christmas shopping, as did my predecessor; O-I Glass; and Ecco, which is a fantastic environmentally friendly charity that I will visit next week. Of course, the Minister would rightly criticise me if I did not mention our wonderful local Co-ops.
Chris Vince
Thank you very much. One thing I will raise with the Minister, which has been fed back from my local Co-op—I am sure it is the same at his as well—is the increase in retail crime. I hope that he will take that seriously. He is nodding appreciably. I look forward to hearing him talk about that in his wind-up.
Harlow is a great town. I have always said that it may not be the oldest new town, it may not be the newest new town, and it may not be the most successful economically, but it is absolutely the new town with the biggest heart. This morning, as a member of the all-party parliamentary group on new towns, I looked at some data produced by Visa on all the towns in the country and the challenges that many of them face. The challenges that Harlow faces, based on the metrics that Visa used, did not come as a big surprise to me. In relation to growth in particular, they were housing and productivity. The solutions that will increase Harlow’s productivity and that of the country as a whole come down to three key areas.
First, I will talk about skills. I pay tribute, as I have a number of times in the Chamber, to the fantastic work of Harlow college, which for many years has supported Harlow’s next generation of young people, giving them the skills they need not only for today, but for the jobs of tomorrow.
Equally, I want to talk about the importance of transport links. I will later do a little pitch for Harlow; I hope that the Minister does not mind. We are ideally located between London and an international airport, so there is lots of potential.
The other thing is transactions, and stimulating the economy through the transactions we make. I welcome the £20 million of Government investment in Harlow town centre, but I do want more for my town. I appreciate that the right hon. Member for Salisbury (John Glen), who is not in his place—I told him that I would mention this—has today’s Adjournment debate on this issue, but I will continue to lobby for the new site of the UK Health Security Agency to be in Harlow, which would mean 3,000 new high-tech jobs, providing Harlow’s next generation with the opportunity not only to aspire, but to really achieve in those jobs of the future. Economic inactivity rose in Harlow under the previous Government. My big ask of this Government is to invest in my town and my community.
Anyone who knows me will know that I am a pretty positive guy. [Hon. Members: “Hear, hear!”] Thank you. The Minister set out the reasons why we should be positive. The UK has the fastest growing economy in the G7, we have had four interest rate cuts in a row, and this week and last week we have signed three international deals to boost trade. For the first time in a long time, there is hope on the horizon for the people of Harlow. I know that under this Government, this country will have a great future on the world stage. My only ask of the Minister is to ensure that Harlow is part of that bright future.
Mr Mohindra
That is an excellent point. I have a plea to Government. Perversely, reducing tax rates sometimes increases the amount of money received in the coffers. I say that as a retailer. When VAT was reduced to 15%, it allowed me the certainty to expand our furniture business; we secured another outlet, employed more people and paid more business rates. In effect, it was a win-win for both the state and for our small business.
We have spoken about NICs, but the Employment Rights Bill also causes me massive concerns. I would now think twice about the risks that I would have taken hiring a 16 to 18-year-old, because it would cost me the same to employ someone in their 30s or 40s as to employ a first-jobber. There is a ticking time bomb for people leaving university or college in the summer. Where are they going to work? We have spoken about the 100,000 fewer jobs over the last 12 months; that will only get worse when those people finish their degrees, A-levels, BTECs and so on, and cannot get into employment. That is going to affect the Minister’s workings.
We on the Conservative Benches will be fully supportive of the Government if they do the right thing. Our role in this place is to be critical friends because we all want—
The Parliamentary Secretary to the Treasury (Torsten Bell)
Are the hon. Gentleman’s colleagues listening?
Mr Mohindra
Well, I have been listening; I spend a lot of time in the Chamber. Yes, there is an element of Punch and Judy, but the reality is that there are 650 of us here who want great legislation to support our communities and make sure that people can get on with their daily lives without the burden of having to think about legislation. They want us to get on with it on their behalf.
On tax rises, we have seen the leak of the Deputy Prime Minister’s letter to the Chancellor. I remain concerned that any ambition to increase taxes is another death by a thousand cuts for our small businesses. We need certainty and support from this Government, saying to people, “Go and be ambitious.” If people are risk-averse, there will be a structural problem for us on our high streets and for our small businesses. That means that we will not create the world’s next unicorn because those ambitious people will already have left our country to generate their income in a better financial climate, typically in the middle east or other parts of Europe.
The Parliamentary Secretary to the Treasury (Torsten Bell)
This is hopefully one thing on which all Members and definitely those on both Front Benches agree: “It’s the economy, stupid.” It is a growing economy that raises living standards and that sustains public services and eases public finances. Perhaps most importantly, it is a growing economy that proves to people that tomorrow can be better than today.
I welcome it that the Conservative party has called this debate. It is an important topic, it is deserving of our time and I thank all hon. Members for their contributions, even if I cannot thank them all for the duration of those contributions. Fifty minutes to deliver one speech is Britain’s productivity crisis right there. [Interruption.] The hon. Member for Arundel and South Downs (Andrew Griffith) is still talking. The productivity crisis rolls on.
Given how important this topic is, it will be a surprise to hon. Members, probably those on both sides of the House, that this is the one and only time that the Conservative party has wanted to talk about the economy in the year since the election. It is the first Opposition day on the economy. I initially thought that that could not be true. I am a new Minister and I have a lot to learn, so I said to my office, “Go and check. They can’t have got through a whole year with no Opposition day on the economy.” My office checked and it found that it has been 10 months with not one debate on the economy. Private schools? Oh yes, the Conservatives want a debate on that. But investment, growth, jobs and the economy? Not one debate. It is no surprise that they do not want to talk about the economy, because their economic legacy was one of entirely unprecedented failure, as my hon. Friend the Member for Loughborough (Dr Sandher) set out.
Torsten Bell
I will in a second.
It is a legacy of stagnation not seen in living memory, with the lowest business investment in the G7; wages, which used to grow at a consistent 2% a year, flatlining for their entire period in office; the worst Parliament on record for living standards; and the public finances trashed as debt soared. It is no surprise that the Conservatives have nothing to say about the past—the Leader of the Opposition said that it was true that they had no plan for growth—and it is staggering that they still have nothing to say about the future.
Torsten Bell
I said that I would give way first to the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien), but I will come to my hon. Friend.
That is not just my view, but the view of George Osborne. He says that the Tory party has no “credible economic plan”. I always enjoy listening to the hon. Member for Grantham and Bourne (Gareth Davies), so I listened extra carefully just now, and there is still no plan, credible or otherwise.
Neil O’Brien
I was just observing and enjoying the way in which the Minister was lecturing us about not wanting to talk about the economy, when at one point during the debate, literally only three Labour Members were in the Chamber—it is extraordinary. If they are so wonderfully proud of their record of higher unemployment, higher inflation and slower growth, why are none of them here?
Torsten Bell
Because Labour Back Benchers support and have total trust in their Front Benchers. All they would have said is everything that I am about to say about the record of this Government, of which we are very proud.
I will come on to the labour market, which the hon. Member for Harborough, Oadby and Wigston raised. The hon. Member for Richmond Park (Sarah Olney) asked about employment and changes to national insurance, and several Members claimed that there is a direct relationship between changes to national insurance and changes in vacancies in the labour market. Let us introduce some facts to the debate—[Interruption.] While the shadow Secretary of State chunters, here are some facts: vacancies in Britain have been falling for 34 months, there has been a Labour Government for 10 months, and there has been a national insurance change for one month. Those are the facts. We cannot let the Conservative party escape from their disastrous record by reinventing history.
Dr Luke Evans
One fact is that the claimant count and unemployment rate in Swansea West have gone up by 4% on the previous year. What does the Minister say to his constituents when they confront him because they are losing their jobs and the unemployment rate has gone up?
Torsten Bell
The most important fact for my Swansea West constituents is that wages at the end of the Conservatives’ period in office were stuck at the same level as when they came into office in 2010—14 wasted years for my constituents. To respond to the hon. Gentleman’s question about unemployment, I would not use the claimant count at that level because the data is not as robust as it should be. Several hon. Members have, over the course of the debate, talked about increases in the unemployment rate in recent months. Why has the unemployment rate gone up? It is not because employment has come down, but because the inactivity that shot up on the Conservatives’ watch has started to decline. That is what is going on beneath the numbers.
Why do Conservative Members not want to talk about their disastrous record on the labour market? It is because they left us as the only G7 economy whose employment rate still had not returned to pre-pandemic levels. They left us with 2.8 million people out of work through long-term sickness, and 1 million young people not in education, employment or training—more than one in eight young people were left on the scrapheap by the Conservatives.
Let me turn to the labour market today, which hon. Members have mentioned. Some 200,000 jobs have been created since the Government took office. Pay has outstripped prices, with the strongest real pay growth for years. Let me pause on the question of wages, because for many people, what they get paid is the economy. Here is a fact so staggering that it tells us all we need to know about the failure of the previous Government and the progress made under this one: wages have grown faster in the first 10 months of this Government than they did in the first 10 years of Tory Governments from 2010. That is what a country turning a corner looks like.
Torsten Bell
It is not boom and bust. Wages for workers need to rise in Britain once again. We also need to turn the corner on an economy that is far too unequal. That is what our Employment Rights Bill will do.
Neil O’Brien
The Minister is being incredibly generous with his time. He is saying what a wonderful outlook there is for wages. Why, then, is the OBR’s forecast for real household disposable income to be lower than in the 1950s, the 1960s, the 1970s, the 1980s, the 1990s, the noughties and the 2010s?
Torsten Bell
Real household disposable income per capita is growing quite fast, according to the latest measure at the end of the fourth quarter of 2024. The OBR says that the legacy of the previous Government has shown it that productivity and growth in this economy have been too slow. Our job is to turn around their record, so that the forecasts and real wages start to rise.
Matt Rodda
I thank the Minister for giving way on that point. He is making an excellent speech, contrasting the 14 years of utter failure by the Conservatives with the quick start by Labour. He has been quoting statistics for the period since Labour was elected, but will he say more about the potential benefits of the three trade deals for growth and investment?
Torsten Bell
What is great about my hon. Friend is that he has a forecasting ability that is significantly above that of many economic forecasters. He has predicted exactly where I shall be turning shortly.
I want to dwell on a few points about the unequal economy. Three million workers have benefited from the introduction of a higher minimum wage last month. That is worth £1,400 to a full-time worker. Just today, the Trussell Trust provided an update on the painful symbol of modern Britain that is food banks. Far too many food parcels were provided over the last 12 months: 2.9 million. That is up by nearly a half over five years, which is an absolute disgrace, but it is down 8% on the past year and we need to keep it falling.
Several hon. Members have raised the question of tax. The right hon. Member for East Hampshire (Damian Hinds) and the shadow Minister sounded as if they were opposed to all taxes and made it the core of their argument that a higher tax level is a problem that this Government have put in place. Neither of them mentioned that the increase in taxes under the Tories in the last Parliament was significantly higher than any change in taxes under this Government—[Interruption.] It is true.
The hon. Member for South West Hertfordshire (Mr Mohindra) raised the question of non-doms, but also asked whether HMRC was behaving more aggressively. He favoured direct control of HMRC by Government Ministers. The Exchequer Secretary to the Treasury now chairs HMRC, and I am sure he will have heard the hon. Gentleman’s points. On the idea that HMRC has become more aggressive, one of my first jobs in government was being involved in merging what was then the Inland Revenue and the Customs department, and I promise Members that nobody is as aggressive as the Customs department was in the olden days. There were guns involved.
This Government had to take difficult but fair choices on tax in the autumn Budget—
Jerome Mayhew
I am grateful to the Minister for giving way. A moment ago he told the House that real household disposable incomes were rising as a result of this Government, but does he not accept that the OBR, when critiquing the Budget last October, found that during the forecast period real household disposable incomes would fall as a result of the Budget proposals?
Torsten Bell
What the Office for Budget Responsibility has said is that disposable incomes will grow during this Parliament at twice the rate that they grew during the last Parliament. The hon. Gentleman has just given me another excuse to repeat my favourite fact, which is this: forget what anybody is forecasting, because in the real world, wages have risen more in the first 10 months of this Government than in an entire 10 years under the Conservatives.
We are going to stick to our promise not to raise working people’s rates of income tax, national insurance or VAT, and we are maintaining an internationally competitive tax system with the lowest rate of corporation tax in the G7. Nobody on this side of the House is pretending that these were easy decisions, but they were the right ones and the responsible ones, yet each and every decision has been opposed by the Opposition parties. It is no surprise to hear SNP Members joining with the Conservatives, as they do on almost everything these days.
Dave Doogan
The Minister is making great play of the way in which his new Government have increased wages across the United Kingdom since the election, but will he concede that 91% of earners and workers in Scotland were already earning more than the living wage level that his Government have recently set?
Torsten Bell
I will, and that is why I am celebrating the fact that average wage rises are happening. If the hon. Member does not want to be in favour of wage rises in Scotland, that says everything about today’s SNP.
We are all used to the Liberal Democrats’ fantasy economics, but the Conservatives used to believe in sound public finances. They used to understand that it is only on that basis that the Bank of England can sustainably cut interest rates, as it has done on four occasions since the general election. The shadow Secretary of State, in his very long speech, claimed that these choices were not pro-business choices. I tell him that these are pro-business choices because it is pro-business to deliver functioning public services. Was it pro-business when the Conservatives left shops up and down the country paying a retail tax, forced to employ their own security guards because the Tories took the police off the beat? Was it pro-business when employers everywhere faced a health tax under the Conservatives because the NHS was not functioning and their staff were off sick? As I said earlier, growth is key. Of course, the shadow Secretary of State is such a champion of the British economy that he predicted there would not be any. Back in December, he claimed with glee that Britain would start 2025 in recession—
Torsten Bell
I will quote the hon. Member. He said,
“‘could we be in recession’? Yes we could.”
He talked the economy down—he knows exactly what he did—and British business has proved him wrong: no recession and the fastest growth in the G7.
Although the economy is beginning to turn a corner, the Government recognise that there are big challenges ahead. There is no shortcut if we want to get the economy growing again; we have to start investing once again. That is why we have raised public investment by £113 billion over this Parliament. Compare that with the deep cuts planned by the Conservatives. It is why Britain’s pension funds—my day job is as Pensions Minister—are looking to invest more in productive assets and more in the UK. It is also why we are approving infrastructure projects from wind farms to reservoirs that were previously blocked for years. When firms decide to invest, they have to actually be able to build something. That is why Labour is the party of the builders, not the blockers.
Let me turn to trade. The Prime Minister has in quick succession secured three significant trade deals. Every single one has been opposed by the Conservatives—opposing our whisky industry exporting and opposing lower food prices in the shops. It is increasingly clear that they say they support free trade in principle, but there is no actual existing trade deal that they would ever support. They used to be the party of Robert Peel, and now they are just the party of plonkers.
We are under no illusions as to the challenges ahead. We all know, on both sides of the House, the deep cost of living squeeze that has left far too many British families suffering, but we are getting on with the job: stability in the public finances, investing at home, trade agreements abroad, interest rates down and wages up. After a long decade and a half of stagnation, Britain is growing at the fastest rate in the G7.
We have heard a lot from Conservative Members, but not a single word of apology has crossed their lips for the mess they left—no humility for the unprecedented economic damage they inflicted, no apology to businesses or workers, and not even a sign of an alternative plan to drive growth and investment in our economy. The British public learned a very long time ago: when Tories govern, Britain loses.
Question put.