Income Tax (Charge)

Debate between Darren Jones and Toby Perkins

Tuesday 5th November 2024 Commons Chamber

[The Chief Secretary to the Treasury (Darren Jones)]

I rather enjoyed that! I hope the hon. Gentleman can take a breather now. May I welcome the new shadow Chancellor of the Duchy of Lancaster to his place? From what he has said today—I should confess that I am not a clinician—I think he may have some amnesia about the performance of his party in government, but maybe the right hon. Member for Tatton (Esther McVey), the former Minister for common sense, can help him find some before he next appears before the House.

May I also welcome the new shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire (Richard Fuller), to his place? Madam Deputy Speaker, some Members of this House will know that you, the shadow Chief Secretary and I worked very well together for many years on the Business and Trade Committee. Clearly, some things have changed and some have not. You, Madam Deputy Speaker, are now very much in control in the Chair; I am on the other side of the Table and answering the questions; and the shadow Chief Secretary will still shout at Ministers, irrespective of whether they are Conservative or Labour, for being too socialist.

Every Government come into office seeking to improve the country, but it is now clear that the last Conservative Government did not come into office to improve public services. In a recent report from the Institute for Government, two key conclusions were drawn: first, that most public services are performing substantially worse in 2024 than they were in 2010, and secondly, that public service performance has been damaged by a lack of capital investment.

After 14 years of failure from the Conservative party, this Government will begin the work of implementing a bold programme of public service reform. This Budget starts that work by choosing a different path—by choosing investment over decline. In doing so, we will make sure that every pound is spent well and that reform is baked into our approach to governing, but we have also signed up to the much greater challenge of fundamentally reforming our public services. I see no greater opportunity than modernising the very nature of the state—not to get stuck on the old debate about the size of the state, but to fundamentally rewire and improve the state of the state.

This is a generational Budget. It is a Budget that meets the scale of the challenges we face as a country. To illustrate that more clearly, it is worth the House reflecting on the story so far and on where the country found itself before this new Labour Government came into office. Our national debt was almost the same size as our GDP, our investment share was the lowest of any in the G7 and, perhaps most significantly, our growth lagged behind that of other OECD countries over the course of the last Parliament, resulting in lost opportunities and lost growth totalling £171 billion.

The impact of this is painfully clear in our fiscal picture, because the public finances we were told we had inherited from the last Government have been proven to be a fiscal fiction. Ahead of the election, we all knew that the public finances were bad. That was no secret, but nobody expected to discover the negligent, shameful hidden secret of the £22 billion black hole of in-year spending. That was hidden from this House, from the media, from the Office for Budget Responsibility and from the public—[Interruption.] I encourage Conservative Members to look at the evidence from the OBR to the Treasury Committee today, which makes just this point. These issues were a direct result of 14 years of papering over the cracks in our country’s foundations instead of fixing them.

[Mr Perkins]

My right hon. Friend is repeating a statistic that we will all be familiar with—that of the £22 billion black hole—but it is important to make the point that that £22 billion is not the extra money the Conservatives were spending compared with what they were bringing in. The deficit last year was £120 billion. This £22 billion was extra money—worse than the £120 billion deficit we already knew we were inheriting.

[Darren Jones]

My hon. Friend is absolutely right. These were promises made by the last Government that they knew they did not have the money to pay for. This was spending from the general reserve—the money put aside for genuine emergencies each year—that they blew three times over within the first three months of the financial year. Anyone who runs a business, anyone who runs family finances and anyone who is in charge of the country’s finances should know that that is shameful, and the Conservatives should apologise to the country for it. Nowhere is that more true than in our public services, which have suffered as a consequence of the Conservatives’ mismanagement. For example, Lord Darzi’s independent report into the state of our NHS found that the past 14 years had left the NHS in a critical condition.