Out-of-Turn Supplementary Estimates 2022-23

James Murray Excerpts

Monday 24th October 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Today’s debate is unusual in terms of parliamentary process. The last time that supplementary estimates were considered out of turn was in October 2008, when an estimate was presented to give the Treasury funding to meet costs during the financial crisis. This is no small matter. These out-of-turn estimates will increase overall spending by £71.4 billion, and I would like to briefly raise certain points on behalf of the Opposition so that they are put on record and the Minister has a chance to respond.

First, the largest component of these estimates is the £60 billion that the Department for Business, Energy, and Industrial Strategy is seeking through its resource annually managed expenditure budget. This funding is due to be split almost equally on implementing a per unit price cap for domestic energy users and a per unit price cap for non-domestic energy users. The Opposition have been calling on the Government since August to implement an energy price freeze, so we are glad that support for businesses and families with energy bills is finally being implemented.

Of course, as my right hon. Friend the Member for Doncaster North (Edward Miliband) set out a week ago, the passage of this energy support package through Parliament has been typical of the Tories’ hallmark chaos. During the debate on the legislation for this energy support, he pointed out that the now outgoing Prime Minister had gone

“on and on about her decisive action of a two-year guarantee”,

and he reminded us that she had

“even derided the Opposition’s approach of a six-month freeze”.—[Official Report, 17 October 2022; Vol. 720, c. 441.]

That was before U-turning and following our lead by implementing a six-month package. However, despite the U-turns, the Government’s approach differs in crucial respects from ours. Our plan was for a real freeze, whereas the Government’s approach still sees a rise, and of course the Government have refused to use a windfall tax on oil and gas producers’ excess profits to help fund this financial support.

Moving on, the second component of these estimates comprises just over £11 billion of capital annually managed expenditure to fund payments to the Bank of England’s asset purchase facility under the terms of its indemnity by the Treasury, as the Minister set out. This part of the debate is particularly laden with financial terminology, but I will make my point to the Minister as simply as I can. The Bank of England has used quantitative easing to support the economy through lending to households and businesses. This has been carried out by buying Government bonds or other financial assets from private investors through the vehicle known as the asset purchase facility. The asset purchase facility borrows the money to buy these bonds from the Bank and pays the Bank rate—the headline rate set by the Monetary Policy Committee—on that loan. It can therefore make profits or losses, as we have heard, depending on the difference between the Bank rate and the return on the assets it holds.

The Treasury has indemnified the asset purchase facility against any losses it incurs, and of course it receives any running profits. A crucial determinant of whether the Treasury—the public purse—receives profits or losses is therefore the Bank rate. No one is denying that, since the scheme’s inception, it has been expected that, after receiving profits during years of the Bank rate being set low, at some point the Treasury would need to pay out on its indemnity of losses as, for instance, the Bank rate was expected to rise. However, if people thought the public finances were likely to pay for those losses in a relatively stable and orderly fashion, it seems extremely unlikely that the Government would have needed to make the payment by way of an out-of-turn estimate—the first such emergency payment in 14 years.

As the House of Commons Library put it in its briefing, published on Friday, the speed and scale of this cash flow appears to have been unexpected. In the briefing, the House of Commons Library acknowledged that it has been known for a long time that the Treasury would eventually need to make cash payments to the asset purchase facility, but:

“Despite that, the scale and speed of the impact leading to cash flowing from HM Treasury to APF may have been unexpected by HM Treasury, leading to this out-of-turn Estimate. It is also not clear how much of the impact may have been caused by events after the publication of the Main Estimate, for instance the hit to the gilt markets after the publication of the Government’s Growth Plan in September 2022.”

The implication is very clear: this payment to the Bank of England is being made urgently and unexpectedly—the first such out-of-turn payment in 14 years—and it comes straight after the kamikaze mini-Budget. What we are seeing is yet more of the damage done by the Conservatives. The £11 billion bill before us today is a brutal reminder that the Tories created this economic crisis and that working people are paying the price.

Stamp Duty Land Tax (Reduction)

James Murray Excerpts

Monday 24th October 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

The last time we debated a stamp duty cut in this House was summer 2020. During that debate, my hon. Friend the Member for Liverpool, Walton (Dan Carden) made it clear that we do not oppose the principle of additional support for homeowners and buyers, and action to stimulate the housing market. The same principle applies today. At the time, however, my hon. Friend rightly questioned why the Government’s plans include such significant support for second home owners, landlords and holiday home buyers. Why have the Government today designed a scheme that gives so much help to second home owners?

We estimate that the Bill means subsidising second home owners to the tune of £300 million a year. That is not only a very significant amount of public money, but an amount that will be paid out each and every year. How can the Government justify that spending?

What is more, any benefit that the stamp duty changes may have for first-time buyers, or for the housing market in general, will pale into insignificance when compared with the havoc that the Government’s kamikaze mini-Budget unleashed on our economy. The Conservatives’ recklessness has seen more than 40% of available mortgages withdrawn from the market. It has seen lenders begin to price in interest rates of over 6% for two-year, fixed-rate deals. It has led to families facing their mortgage repayments increasing by £500 a month.

Despite the inevitable U-turns on all but a few measures, the damage has been done. No matter how much the Conservatives shuffle the personalities in Downing Street, as the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), put it a week ago:

“People will be paying a Tory mortgage premium for years to come”.—[Official Report, 17 October 2022; Vol. 720, c. 398.]

So we come to the fundamental question behind this resolution: whether spending public money on this stamp duty cut is the right priority in the midst of an economic crisis that the Conservatives have thrust upon us.

Under Labour, all our proposals are fully funded. Our approach is governed by clear fiscal rules and value for money is at the heart of how we would manage the public finances. Our approach to the economy will be even more important than ever, given the damage that the Tories have caused and the mess they have made. In truth, we still do not know just how big that mess will prove to be. As we stand here today, we still have not seen the forecasts from the Office for Budget Responsibility in relation to the damage that the Tories have caused.

The easy thing for the Opposition to do would be simply to vote for the stamp duty cut today, but that would not be right or responsible. At a time when our economy is reeling from the long-term damage that the Conservatives have done, when current and future homebuyers are facing spiralling and prohibitive mortgage costs, and when we are still flying in the dark as the Tories refuse to publish the OBR forecasts, it is not the time to spend £1.7 billion a year on this tax cut. We will be opposing the Government’s plans.

Stamp Duty Land Tax (Reduction) Bill

James Murray Excerpts

2nd reading
Monday 24th October 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Yesterday was one month since the previous Chancellor delivered his mini-Budget. Since then we have had a month of utter chaos, a month of the most extraordinary U-turns and a month in which the Conservative party recklessly inflicted damage on our economy—damage that the British public will be paying for and that will take years to fix, yet the Conservatives are clinging on to power, putting their party’s interest before the country’s. We are here today debating one of the very few remaining pieces of the former Chancellor’s mini-Budget.

As hon. and right hon. Members will know, the current Chancellor—I assume he is still in post as we speak—U-turned on almost all his predecessor’s plans. One of the measures he decided to keep was lifting the cap on bankers’ bonuses. It is particularly hard to understand why he chose to do so when even bankers themselves do not seem to have been advocating for it. In fact, it could involve reputational damage that I know many of them fear. None the less, lifting the cap remained a priority for the previous and current Chancellors.

As we know, the current Chancellor also decided to keep the legislation that reversed the national insurance rise and repealed the health and social care levy. We are glad that the Government finally followed the position that Labour set out over a year ago that raising taxes on working people in a cost of living crisis is wrong. The decision to reverse the national insurance rise was itself a U-turn by the current Chancellor, the outgoing Prime Minister and their colleagues on the position they held just last year. At least by doing the right thing the right hon. Member for South West Surrey (Jeremy Hunt) avoided doing a U-turn on a U-turn in this particular instance.

The current Chancellor also decided to keep the changes to stamp duty that were announced on 23 September and that we are debating today. Under these changes, which are the subject of the resolution we have just debated and the Bill that is now to be read a Second time, the nil rate threshold for stamp duty payments on residential properties is increased, effectively by removing the existing lowest band. There are consistent changes to the higher rates for additional dwellings and changes to the threshold and limits for first-time buyer relief.

Before I address the substance of the proposed changes, I would like to ask the Minister about the process of the legislation before us. In the business of the House statement on Thursday 13 October, the Leader of the House of Commons said that we would today be debating

“a resolution relating to stamp duty land tax (reduction), followed by all stages of the Stamp Duty Land Tax (Reduction) Bill.”—[Official Report, 13 October 2022; Vol. 720, c. 258.]

Four days later, the current Chancellor confirmed that the stamp duty changes would proceed. However, during her next business of the House statement on 20 October, the Leader of the House said that we would no longer be considering all stages of the Bill today, only its Second Reading. That most recent statement by the Leader of the House did not set a date for the Bill’s remaining stages. What message does that send?

Treasury Ministers will know that, across the country, families and businesses are crying out for stability. In the housing market, as in many parts of the economy, certainty is prized. That is why, when the stamp duty cut was announced, it took effect straight away. It had to be in place immediately to avoid giving people a reason to delay their home purchases as they waited for an announced change to come into force. Indeed, the policy paper published alongside this announcement on 23 September confirmed that no consultation had been carried out on the measure. The reason stated was:

“It would not be in the public interest to consult, as this may have an adverse effect on the housing market if buyers delayed purchases during the consultation period.”

Yet now, the remaining stages of the Stamp Duty Land Tax (Reduction) Bill have been delayed.

This last-minute flip-flop of parliamentary business sends the message that it is open to the new Prime Minister and whoever his Chancellor might be to change their mind over these stamp duty changes. By delaying the Bill’s remaining stages, the Government have introduced more uncertainty into the housing market, which is the last thing anyone needs. I do not know what the Economic Secretary to the Treasury, the hon. Member for North East Bedfordshire (Richard Fuller), will be able to say that will give homebuyers any confidence in this matter, but I urge him to try to give them and the housing sector whatever assurances he can.

I fear that the Government have learned nothing from the mistakes they made two years ago about uncertainty when it comes to stamp duty. As hon. Members may remember, when stamp duty was last changed in the summer of 2020, the legislation was rushed through Parliament earlier than planned. This happened after someone thought they were being clever by briefing the press about the plans of the then Chancellor—now the incoming Prime Minister—three months ahead of their being implemented. In that debate, the former Member for South West Hertfordshire and Chief Secretary to the Treasury, David Gauke, was quoted as having said that this trailing of plans months ahead would be “hugely counter-productive”. He said that even “two days of speculation” over such plans would be “unhelpful”. So this concern is nothing new. It is crucial that stamp duty changes are not left hanging. Decisions either way must be executed swiftly and with certainty. These last-minute changes to parliamentary business seem to be another reminder that the Conservatives are not fit to govern.

As I said in the previous debate, it would be easy for us as the Opposition simply to vote for the stamp duty cut today, but it would not be right and it would not be responsible. At a time when our economy is reeling from the long-term damage the Conservatives have done, when current and future homebuyers are facing spiralling and prohibitive mortgage costs and when we are still flying in the dark as the Tories refuse to publish the Office for Budget Responsibility’s forecasts, this is not the time to spend £1.7 billion a year on this tax cut.

There is so much else the Government could be doing to support the housing market and to help people to get a secure and decent home that they can afford. Beyond restoring financial stability, they could go further and adopt some of our plans to introduce a mortgage guarantee scheme, to raise stamp duty for foreign buyers and to give first-time buyers first dibs on newly built properties. Those are some of the plans we need after 12 years under the Tories, during which home ownership rates have fallen. Compared with when the Conservatives came to power in 2010, there are now 800,000 fewer households under 45 who own their own home. At the same time, nearly 1 million more people are renting privately. Some of them might once have been hopeful that the Government would deliver on their commitment to ban no-fault section 21 evictions, but that promise was made more than three years ago. It was pushed into the long grass, and it was rumoured a few weeks ago that it was about to be dropped. Now, with a new Prime Minister coming through the revolving door, its fate is anyone’s guess. The only safe conclusion is that the Tories cannot deliver the security, stability and affordability that people need.

This debate is focused on the stamp duty changes that the Government are seeking to approve, but it cannot be taken outside the context of their disastrous mishandling of the economy. After 12 years of failure, the Conservatives have shredded any claim to economic competence they might once have thought they had. We are suffering an economic crisis created in Downing Street. The damage has been done and working people are paying the price. The Conservatives can rearrange the personalities in Downing Street, but they have inflicted damage on our country and have no mandate to govern. It is time for the British people to have a say on our country’s future. It is time for a fresh start with a Government who are ready to sort out the Tories’ mess, to grow the economy for working people and to build a fairer, greener future. It is time for general election.

Cost of Living: Support for Young People

James Murray Excerpts

Tuesday 18th October 2022 Westminster Hall

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to speak in this debate with you as Chair, Ms Ali. I congratulate my hon. Friend the Member for Leeds North East (Fabian Hamilton) on securing this important debate and comprehensively setting out the need to support young people through the cost of living crisis. Growing up at any time brings its challenges, but young people today are living through a time of particularly great turbulence and uncertainty. We know that today’s young people will feel the impact and cost of 12 years of Conservative rule and the economic chaos of recent weeks longer than any of us. After 12 years of presiding over low economic growth and of undermining our public services, in the past few weeks the Conservatives have crashed the economy. Their unfunded tax cuts for the wealthiest and their reckless approach to public finances have caused enormous damage that will be felt well into the future. The new Chancellor’s U-turn in the past few days had become unavoidable, but the damage had already been done. That damage will be felt by working people across this country for many months and years. Let me be clear: this is a Tory crisis, made in Downing Street and being paid for by working people, many of whom are just starting out in adult life.

The former Chancellor’s disastrous mini-Budget shattered the plans of many young first-time home buyers, as the reaction to the Conservatives’ recklessness saw more than 40% of available mortgages withdrawn from the market and saw lenders begin to price in interest rates over 6% for two-year fixed rate deals. For many young people who have been able to get over the hurdle of saving for a deposit, they have fallen at a new hurdle put in their way by the Government. This follows 12 years during which home ownership rates have fallen. There are now 800,000 fewer households under 45 who own their own home, and nearly a million more people rent privately than when the Conservatives came to power in 2010. We have seen the prospect of home ownership slipping out of reach of more and more young people. In contrast, at the recent Labour party conference, we set out our plans to introduce a mortgage guarantee scheme, raise stamp duty on foreign buyers and give first-time buyers first dibs on newly built homes. Labour is the party with a plan to increase the rate of home ownership and support councils in making social housing the second tenure in our country.

Of course, many young people across the country are renting privately, often out of necessity rather than choice. They are left vulnerable to unaffordable rent rises and no-fault evictions. We are concerned by the confusion about the reports that the Government have U-turned on their commitment to scrap section 21 no-fault evictions—although they have subsequently U-turned on that apparent U-turn. As things are changing so rapidly, I would be grateful if the Minister could confirm that—assuming the current Prime Minister is still in office, which I realise is a dangerous assumption—the Government can give a cast-iron guarantee that they will introduce a rental reform Bill in this Parliament.

We know that another reality of the Conservative cost of living crisis is food poverty. A recent survey of 2,000 young people carried out by the Prince’s Trust found that a quarter said they had skipped meals to cut back on spending, and 14% had used a food bank at least once in the past 12 months. Furthermore, a third said they could not afford to turn the heating on, while a similar proportion have struggled to afford the cost of travelling to work. Just yesterday, representatives from the Trussell Trust, Independent Food Aid Network and Feeding Britain delivered a letter to the Prime Minister signed by more than 3,000 food bank volunteers, in which they called for urgent help as they face “breaking point”. The letter warned that food banks are “struggling to cope” as demand outstrips donations. The volunteers said they were “overstretched and exhausted”, and urged the Government to take action to

“end the need for charitable food aid by ensuring everyone has enough income, from work and social security, to buy the essentials.”

According to the Children’s Society, a third of children were living in poverty prior to the cost of living crisis and, as my hon. Friend the Member for Leeds North East mentioned, that is why Labour’s commitment to breakfast clubs in every primary school in England is so important. More widely, the continued failure of the Conservative Government to commit to uprating benefits in line with inflation will leave families with children significantly worse off. Does the Minister personally agree that benefits should now rise with inflation?

Finally, we know that the cost of living crisis has had an impact on mental health, particularly the mental health of young people. I know from speaking with young people in my constituency how aware they are of the need to look after their mental health, and since I was elected I have often been struck by how clear so many young people are about what support they need. That is why I am glad that we have been able to set out our plan to use funding from closing tax loopholes for private equity fund managers, and removing the VAT exemptions from private schools, to strengthen mental health services for young people. This funding would improve mental health services, particularly those for young people—from guaranteeing mental health treatment within a month to all who need it to ensuring there is a full-time mental health professional in every secondary school and a part-time professional in every primary school.

Young people today face great uncertainty and insecurity after 12 years of the Conservatives, and never more so than after the damage caused by the economic chaos of recent weeks. Changing the Chancellor and making U-turns will not undo the damage that has been done by this Prime Minister and Conservative Government. The damage they have caused has come from Downing Street, but it will be paid for by working people, and young people will face the impact and the costs for longer than any of us. Only a Labour Government will support young people with the jobs, homes, public services and stability they need to succeed.

Oral Answers to Questions

James Murray Excerpts

Tuesday 11th October 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[James Murray (Ealing North) (Lab/Co-op)]

The Chancellor’s refusal to publish OBR forecasts just over two weeks ago played a key role in falling confidence in the pound, rising borrowing costs and market panic. His woeful decision to avoid scrutiny by gagging the OBR helped to increase mortgage costs for working people, who are now paying the price for Conservative failure.

The Chancellor’s behaviour has been described by the former Bank of England Governor Mark Carney as “undercutting” economic institutions. Jonathan Haskel, a member of the Monetary Policy Committee, has made it clear that a

“sidelined OBR generates more uncertainty”.

Does the Chancellor accept that they are right?

[Kwasi Kwarteng]

As I have repeatedly said today, the OBR will have a fully forecasted and scored response to the medium-term fiscal plan in less than three weeks.

Health and Social Care Levy (Repeal) Bill

James Murray Excerpts

2nd reading
Tuesday 11th October 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Just over a year ago, Opposition Members stood in this Chamber urging the Government to drop their plans to hike national insurance contributions and to introduce a new levy on working people and their jobs. It was not just my Opposition colleagues and me making the case against this tax rise; the Government were warned by so many others, from the Federation of Small Businesses to the British Chambers of Commerce, the CBI and the TUC. Ministers were warned from all sides of the harm that their approach would cause. The Government were warned by their own Back Benchers. Ministers at the time even warned themselves. The tax information impact note on the tax rise was signed off by the Minister who took the original legislation through Parliament, and that note said:

“There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”

In relation to businesses, it said:

“Behavioural effects are likely to be large, and these will include...business decisions around wage bills and recruitment.”

Yet the Government pressed ahead with the tax rise, supported in the Lobby by the current Prime Minister and the Chancellor. The Government kept supporting it until the then Foreign Secretary became Prime Minister and decided to perform a U-turn.

We welcome this U-turn, as it puts an end to a tax rise that we said was wrong from the very start. It is, of course, not the only U-turn that we have seen under this Prime Minister. Just last week the Government U-turned on their damaging and misguided plan to cut the top rate of tax for the very highest paid, so our current message to the Prime Minister and the Chancellor is to keep on U-turning.

[James Cartlidge (South Suffolk) (Con)]

Will the hon. Gentleman clarify something? Would he keep the social care cap and the spending on the backlog, and if so, given that he supports repeal, how would he fund that?

[James Murray]

The truth is that we are having this debate as part of a wider Government economic strategy that has caused economic chaos, and contains no plan for growth and no plan to fund public services. Even when we were discussing the original Bill last year, there was no plan for social care: there was no guarantee that a penny of the money would go into social care. So I will not take lectures from the hon. Gentleman.

[James Cartlidge]

rose—

[James Murray]

I am going to make some progress. I may let the hon. Gentleman intervene again in a few moments.

As I was saying, right now our message to the Prime Minister and the Chancellor is to keep on U-turning. They need to U-turn on their whole disastrous approach to the economy, which the Chancellor set out just over two weeks ago. That Budget—in all but name—was the most destructive, unfair and irresponsible fiscal announcement in a generation.

The Prime Minister and the Chancellor should now U-turn on their decision to lift the cap on bankers’ bonuses. They should U-turn on their refusal to ask oil and gas giants to put some of their eye-watering excess profits towards helping keep to people’s energy bills down. They need to U-turn on their discredited, dangerous trickle-down approach to the economy. It is time for them to reverse their disastrous kamikaze Budget, which has unleashed an economic crisis that they made in Downing Street, and which working people are paying for through higher mortgages and prices.

[Alex Cunningham]

My hon. Friend says, rightly, that we support this particular U-turn, but is he not as perplexed as I am about where all this money will actually come from—or does he know that, rather than having a magic money tree, the Tories have a full orchard?

[James Murray]

My hon. Friend is right to point out that the Conservatives’ sums simply do not add up. However, you do not have to take our word for it, Mr Deputy Speaker. Just look at the markets: they have issued their own judgment on the Conservatives’ so-called economic plan, and they are not convinced.

As we consider the repeal of the Health and Social Care Levy Act, it is important to remember how the Government’s decision to bring in this national insurance hike came to pass in the first place. Over the last 12 years under the Conservatives, we have been stuck in what the Chancellor himself rightly described last month as a “vicious cycle of stagnation”. With tax revenues stagnating under low growth, the Government made it clear that they felt the only way to raise more funds was to raise taxes on working people.

On Second Reading of the legislation that is being repealed today, the then Chief Secretary to the Treasury tried to defend the Government’s approach, saying that this new charge would

“enable the Government to provide additional funding to the NHS so that it can recover from the pandemic.”—[Official Report, 14 September 2021; Vol. 700, c. 843.]

We argued at the time that if the Government felt that they had to raise taxes, those with the broadest shoulders should contribute more, but the Government refused. They pushed ahead with this tax rise on working people and their jobs, and they refused throughout the debate on the original legislation to ask those with the broadest shoulders to take more of the burden. Now, as they repeal the legislation for the national insurance increase, they have abandoned any attempt at fiscal responsibility altogether, with an economic approach that has borrowing at its heart.

In a letter sent to the shadow Chancellor and the shadow Secretary of State for Health and Social Care on 22 September, the Economic Secretary to the Treasury wrote:

“The additional funding used to replace the expected revenue from the Levy will come from general taxation and may require further borrowing in the short-term.”

Labour takes a different approach. Our pledges are fully and fairly funded. As the shadow Chancellor has set out, we would boost NHS investment by ending the outrageous non-dom tax loophole exploited by the super-rich. We will use money from what is saved by scrapping that arcane practice to double the number of district nurses qualifying every year, to train more than 5,000 health visitors, to create an additional 10,000 nursing and midwife placements every year and to double the number of medical students so that our NHS has the doctors it needs.

[Chris Philp]

I think I heard the shadow Chancellor on television a week or so ago saying that her proposals on non-doms would raise about £2 billion. The cost of this measure is about £15 billion, so where is the other £13 billion going to come from?

[James Murray]

The Minister must not have been listening carefully enough to the shadow Chancellor setting out Labour’s plans, because we have set out how we would scrap the non-dom status, which it is completely irresponsible to keep in the current context, and to use some of that money to set out our plans for investment in the NHS. The difference between the Government and the Opposition is that the Government make promises and use throwaway comments about how they might fund this with general taxation or through extra borrowing, whereas when we set out our pledges, we set out exactly what we will pay for. They are fully costed, fully funded and paid for through fairer taxation.

[James Cartlidge]

Will the hon. Gentleman give way?

[James Murray]

No, I am going to make some progress.

We have set out that we will not borrow for day-to-day spending and that we will not ask working people who are already struggling to foot the bill. That is what we mean when we say we are the party of economic responsibility and the party of social justice. The Conservatives have shown themselves to be the party of a failed approach to the economy. After six so-called growth plans from the Government that have all failed, the drunken gamblers of Downing Street have rolled the dice one last time, putting their faith in the ideological mantra that if they just slash taxes and regulation, they will unleash business investment and growth. They believe that wealth is created only by a few at the top, when the truth is that it comes from the bottom up and from the middle out.

The trickle-down economics of the Prime Minister and her Chancellor are wrong. Their approach will not work and it is not fair. It will hit working people’s spending power, undermining prospects for growth, and it ignores the need for the Government to be a partner for business to grow—something that is more important than ever with the turbulent, changing, challenging outlook that we face. That is why the next Labour Government would do things differently. We would bring together businesses and trade unions through a national economic council. We would support businesses to grow, through our modern industrial strategy, and we would use a national wealth fund to invest in the new green industries of the future. That is our approach to the British economy: pro-business, pro-worker, pro-growth.

The Government are making the wrong calls again and again. They were wrong last year to introduce the national insurance rise on working people, just as they were wrong last month when they tried to cut tax for some of the highest paid in society and to hide the OBR report on their plans. We welcome the Government finally admitting that they were wrong to raise national insurance on working people and businesses in the middle of a cost of living crisis, but their wider economic approach is one that is characterised by ballooning borrowing and a discredited trickle-down approach to economic growth.

The Prime Minister and her Chancellor are gambling with the livelihoods and wellbeing of people across the UK. Their gamble is dramatically worsening the cost of living crisis, with higher costs and mortgage payments for households across the country. It is shredding any reputation for economic competence the Conservatives might once have claimed to have, and it will fail to deliver the growth we need after 12 years of stagnation.

Throughout the cost of living crisis, Labour has forced the Conservatives to U-turn time and again. By repealing the national insurance rise and levy and by halting their plans to cut the top rate of tax for the very highest paid, the Prime Minister and the Chancellor have shown that they have it within themselves to make a U-turn. Our message to them is clear: do not stop there. The Government must U-turn on their whole economic approach and reverse their disastrous kamikaze Budget. Our message to the British people is also clear: this is a Tory crisis that has been made in Downing Street and is being paid for by working people. Only Labour will fix the damage that the Tories are doing. Only Labour will deliver economic responsibility and social justice. Only Labour will be a Government that are on your side.

[Mr Deputy Speaker (Mr Nigel Evans)]

Could people who intend to speak in the debate please stand, because I know that at least one is not on the list? Thank you.

Draft Double Taxation Relief and International Tax Enforcement (Luxembourg) Order 2022

James Murray Excerpts

Monday 5th September 2022 General Committees

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to serve on this Committee with you as Chair, Ms McVey, and I thank the Minister for her opening remarks. I am pleased to respond briefly on behalf of the Opposition.

As we heard from the Minister, the statutory instrument gives relief from double taxation in relation to capital gains tax, corporation tax, income tax and taxes of a similar character imposed by the laws of Luxembourg, as well as relating to international tax enforcement. As we can see, the schedule introduced by the order is largely technical in nature. It follows an approach that is consistent with similar bilateral agreements with other states and territories, and we will not oppose the order. It is important that bilateral agreements concerning taxation are clear.

We also welcome the objective of this double taxation treaty, which the explanatory memorandum makes clear is to

“protect the Exchequer by including provisions to combat tax avoidance and evasion.”

These provisions include

“measures providing for the exchange of information between revenue authorities”,

in order to

“make it more difficult for residents of both territories to evade taxation by concealing assets offshore.”

As the Minister knows from her time in office, the Opposition have been pushing her and her colleagues at every turn to do more to tackle evasion and avoidance. We have pushed them to implement the global minimum corporation tax rate that the OECD and G20 recently agreed, which the Minister mentioned in her speech. Therefore, I will use this opportunity to ask the Minister briefly about the implementation of the OECD agreement.

On 20 July this year, the Treasury published draft legislation that would introduce the new so-called multinational top-up tax. Can the Minister simply confirm whether the new Prime Minister tomorrow will support this legislation? If she cannot confirm that, will she join me in urging the new Prime Minister to continue with this legislation?

[Lucy Frazer]

I am happy to respond to the hon. Gentleman and I am very pleased to see him after the break. Of course he will realise that as the Prime Minister has just been appointed as the leader of the Conservative party and is yet to go to see the Queen, it would be a little bit premature to set out her plans.

Energy (Oil and Gas) Profits Levy Bill

James Murray Excerpts

2nd reading
Monday 11th July 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

I thank the Minister for setting out how North sea oil and gas producers will be affected by the measures the Bill seeks to introduce—even though he seemed unable to say the words “windfall tax” when referring to it at any point during his speech.

This Bill is long overdue. We are finally debating this legislation in Parliament, more than seven months after the shadow Chancellor first set out Labour’s plans for a windfall tax on oil and gas producers’ profits. In the seven months since Labour first called for a windfall tax, cost of living pressures for people have grown relentlessly, and in those seven months, oil producers’ profits have soared.

Since the start of this year, energy bills have spiralled by £700 for a typical household, inflation across the board has hit 9.1%, the highest in 40 years and, despite Tory smoke and mirrors with thresholds, average earners will still be paying £300 more in national insurance contributions by 2027.

[Alan Brown]

The hon. Gentleman is making the point that Labour has campaigned on this for seven months. At the same time, the SNP has been calling for a much wider profits levy to address excess profits of other companies. Why is Labour not looking at that? I will give an example: Tesco chair John Allan, as we know, called for the windfall tax on oil and gas, but Tesco trebled its profits from £636 million to more than £2 billion. Why not an excess profit levy on Tesco and others that have profited through the pandemic?

[James Murray]

I look forward to the hon. Gentleman supporting Labour’s amendments and new clauses to the Bill as we seek to cut some of the loopholes the Government have introduced, which I will turn to in a moment.

Let us not forget that, while cost of living pressures on people across the country have soared relentlessly, oil and gas producers’ profits have climbed too, with some tripling this year. A fair solution has been staring the Government in the face: levy a one-off windfall tax on North sea oil and gas producers’ profits and use that money to help to cut people’s energy bills at home.

Yet when, on 9 January this year, the shadow Chancellor first called on the Government to levy just such a tax, Conservative MPs opposed it outright. Leading that opposition the very next day was the then Education Secretary, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi). He is now of course the Chancellor, so this is his Bill. At the time of our announcement, the now Chancellor, who was an oil industry executive before becoming an MP, came out firmly against the tax on the grounds that oil producers were “already struggling”. When she responds, I would be grateful if the Financial Secretary to the Treasury confirmed whether the Chancellor supports his own legislation today.

Back in January, of course, it was not only the now Chancellor who opposed the tax. The Business Secretary opposed it too, saying:

“I have never been a supporter of windfall taxes.”

The then Northern Ireland Secretary, the right hon. Member for Great Yarmouth (Brandon Lewis), said that he thought a windfall tax sounded attractive, but did not work. The Deputy Prime Minister claimed it would be disastrous. Ministers and their Back-Bench Conservative colleagues then went on to vote against our plan for a windfall tax on three separate occasions.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

This demonstrates the difference between Opposition Members and Conservative Members, in that we do not come lightly to the decision to increase taxes on successful British industries. Labour and the SNP would tax anything that moved; we take a long time to think through our plans carefully. That is why we are presenting this plan today, which is far removed from Labour’s plan. That would decapitate the oil and gas industry—which, by the way, Labour does not support—and we would have the taps turned off tomorrow.

[James Murray]

The hon. Member is right that Conservative Members have taken a long time to come round to this. They have taken seven months to come round to it—seven months in which the cost of living pressure on people across the country has risen relentlessly and in which oil producers have seen extraordinary profits. That delay has not been without cost.

Despite our common-sense plan for a windfall tax having wide support across the country for many months, with even oil bosses backing its logic, Conservative Ministers and their colleagues on the Back Benches simply refused to get on board—until 26 May, the day after the Sue Gray report was published. That was the day the Prime Minister and the former Chancellor suddenly changed their minds. It seemed clear that what had finally caused the Conservative leadership to change course and back a windfall tax was not the deafening calls from people across the country for help with their energy bills, nor the blatant unfairness of oil and gas producers’ profits soaring in the middle of a cost of living crisis; rather, it was the need for a different set of headlines in that week’s news. That is a grubby way to govern, and it is proof, if further proof were needed, that the Conservatives are not fit to lead our country.

Now, after months of refusing to act, Ministers are rushing this Bill through Parliament with just one day of debate and with a consultation period on the draft legislation of just seven days. As Tax Justice UK, working with the campaign group Uplift, has said, such a short period of just one week for consultation on the draft Bill is

“a breach of well-established legal principles of procedural fairness.”

As it points out, having a longer consultation period would not delay the levy taking effect, as the Bill names its start date as 26 May. It fears that the shorter consultation period the Government have chosen offers

“those with most resources—such as oil and gas producers—more opportunity to influence the shape of the legislation.”

[Alan Brown]

It is good that the hon. Gentleman mentioned Tax Justice UK. It is probably worth speaking to it about pandemic profits and a wider profits levy, because that it is what it advocated. Hopefully when he is discussing the oil and gas stuff with it, he will discuss a wider profit levy as well.

[James Murray]

I thank the hon. Gentleman for his intervention. We discuss many matters with Tax Justice UK, not least its response to the ridiculously short consultation period on the draft of the Bill that the Government are now seeking to rush through Parliament in a day.

Despite the fact that Ministers may be in a rush today, we know that their story until recently has been one of delay. Those months of delay in backing a windfall tax mean that the public finances have missed out on billions of pounds of tax revenue that could have gone towards further help for people struggling with the cost of living. But whatever it took to get the Prime Minister and the former Chancellor over the line, we were relieved that they finally agreed to back a windfall tax. On behalf of the people we represent across the country, we were relieved that some help with soaring energy bills was finally on its way. That help is set to include a payment of £400 to all domestic energy bill payers. We welcomed that promise of support announced alongside the windfall tax, and we were relieved that the Government had finally listened to what we and so many others had been saying as they agreed to drop the “buy now, pay later” compulsory loan scheme that had been promised before. But we were dismayed to learn that some of the people who need the help least will be getting that £400 payment several times over. Because this package has been cobbled together at the last minute, people who live in more than one home will get £400 for each of them, so a total of £200 million of public money will go towards people with multiple properties. That is not fair, it is not a good use of public money, and, as we see far too often, it is public money being casually wasted by this Government.

While that particular loophole may have been the result of carelessness or haste, the Bill contains another loophole that has been created by design—a brand-new tax break for oil and gas producers that will give money back to the same firms that were supposed to be paying their fair share through the windfall tax. This tax break means that oil and gas producers will receive an unprecedented level of subsidy for their spending on oil and gas-related activities. For every £100 an oil and gas producer invests in the North sea, they will receive £91.25 from the taxpayer. That compares with £25 that companies receive for investing in renewable energy—a figure that will fall to just £4.50 from April 2023.

[Andrew Bowie]

Although the hon. Gentleman is talking about how the Labour party likes to support working people, he is quite obviously abandoning all those working people who rely on the oil and gas industry for their employment, including the many thousands who live in my constituency. Given that he has had so many months to think about this, how many times have he and his shadow Cabinet colleagues actually met those in the oil industry to discuss this and see how it impacts on them?

--- Later in debate ---

[James Murray]

I and my hon. Friends have had discussions with them many times, and it is absolutely clear that even oil company bosses agree with the logic of a windfall tax, saying that it would not affect their investment plans.

[Andrew Bowie]

rose—

[James Murray]

No, I am not going to give way. I have been generous in giving way, and I am going to make some progress now.

This is a subsidy that not even oil executives think is necessary. BP’s chief executive, who in November last year said that soaring global commodity prices had made his company a “cash machine”, told shareholders in May that the company’s £18 billion of investment plans were

“not somehow contingent on whether or not there is a windfall tax.”

Yet despite even oil executives questioning its worth, the Government are pushing ahead with this tax break. Our analysis has shown that this means a third or more of any revenue from the new levy could be handed straight back to oil and gas producers.

The truth is that this tax break means that money that is supposed to be helping people struggling with their home energy costs will instead go back to the very oil and gas producers that have been making record profits during the energy crisis. Furthermore, that money will subsidise projects that almost certainly would have happened anyway. There is no requirement in the Bill for investments claiming this tax relief to be additional to what was already planned.

I wonder whether the Financial Secretary to the Treasury wants to correct what she said in this Chamber on 6 June. That day, she said:

“The investment relief should not be available for investments that are deadweight. It should be for new investments.”—[Official Report, 6 June 2022; Vol. 715, c. 546.]

Yet there is nothing in the Bill to make sure the tax relief it introduces goes towards investments that are new. Above all, let us remember that we are currently holding the COP26 presidency and being trusted with a position of leadership in the world’s efforts to tackle the climate crisis. It is astonishing and appalling that, at this of all times, we are giving 20 times more in taxpayer incentives to oil and gas producers than will be offered to firms investing in renewable energy.

While this Bill has plenty to say about tax breaks for oil and gas producers making extraordinary profits, it is silent on the idea of a windfall tax on the electricity generation sector. We know the Government were planning to tax the sector’s profits, as it was widely briefed in late May that the former Chancellor had ordered Treasury officials to draw up plans for a windfall tax on electricity generators. The uncertainty created by this will-they-won’t-they hokey-cokey on taxing profits from electricity generation risks discouraging vital investment in our future energy security.

As the Government are well aware, the price of electricity generated from renewable sources is currently linked to the price of gas. The spike in gas prices we are facing has therefore pushed up electricity prices, despite the costs of generating electricity from renewable sources not having changed, yet there is nothing about the electricity generation sector in today’s Bill and no detail on any wider plans from the Government to delink electricity prices from the price of gas. All we were promised in the explanatory notes published with the draft Bill was a vague intention that

“the government will urgently evaluate the scale of these extraordinary profits and the appropriate steps to take.”

I therefore urge the Financial Secretary in her response to take this opportunity to say, once and for all, whether the Government will or will not be introducing additional taxes on this sector, and when the Government will bring forward urgent legislation to delink the price of electricity from the price of gas. We are not claiming that a solution to this is simple, but it is the job of Ministers, and a sign of leadership in government, to plan ahead and solve the challenging issues our country is facing.

The windfall tax is a way to offer immediate help to people now, but we need to be investing in the long term to keep energy bills down and make our economy more secure and more sustainable. That is why the Government should be adopting not just our plan for a windfall tax, but also our wider plan to improve energy security and keep energy bills lower in the future. Labour’s plan would see us accelerate home-grown renewables and new nuclear, double onshore wind capacity, reform our broken energy system and retrofit 19 million homes to save households an average of £400 a year on their bills. From the Government, however, all we have in front of us today is a Bill that gives a tax break for oil producers’ continued spending in the North sea. Once again, this Government lurch from crisis to crisis with no plan to fix our broken system and provide the security we need.

We are relieved that the Government are finally proceeding with the windfall tax, and we will be supporting this Bill today, but we will come back to the detail of it in Committee of the whole House. At that stage, we will urge Ministers to make right their delay in introducing the windfall tax and to drop the unnecessary tax break for oil producers that undermines the impact of this windfall tax and our country’s wider efforts to tackle the climate crisis.

The Conservatives’ approach to the windfall tax shows that they are not fit to govern. When we called for a windfall tax, they wasted months opposing it before finally changing course. Now they are undermining their own windfall tax with a new tax break for oil companies. When it comes to the long-term challenges we face, they simply do not have the plans we need for the future. That goes for the former Chancellor, the current Chancellor and all the Conservative leadership candidates as much as it does for the outgoing Prime Minister. Changing the person at the top of the Conservative party will not change anything. We need a change of Government, and that means we need a Labour Government.

Energy (Oil and Gas) Profits Levy Bill

James Murray Excerpts

Committee stage
Monday 11th July 2022 Commons Chamber

[Lucy Frazer]

I have read amendment 9 and will address it in due course. In response to the hon. Gentleman’s point, that will be included in guidance. I said it at the Dispatch Box last week, and my right hon. Friend the Chief Secretary to the Treasury has also said it at the Dispatch Box, so I think that point is quite clear.

Clause 5, on the meaning of “disqualifying purposes,” is an anti-avoidance provision to ensure that expenditure is not eligible for the investment allowance if it arises because of any tax avoidance arrangements. Clause 6 ensures that additional expenditure for the investment allowance is available only for new assets, including the acquisition of an interest in an oilfield. It prevents the allowance from being generated on assets that have already been taken into account for the purposes of the levy or that would have been had the levy been in force.

Clause 7 determines when investment expenditure is incurred. For capital expenditure, it is as per the rules set out in the existing capital allowances legislation; for operating and leasing expenditure, it is the date on which it is paid. The clause also makes it clear that expenditure incurred before 26 May 2022 or after 31 December 2025 is not to be treated as expenditure incurred in an accounting period to which the levy applies.

Clauses 8 and 9 define financing and decommissioning costs and are modelled on existing legislation. Clause 10 and schedule 1 set out the loss regime within the levy. This includes group relief and the losses that companies carry back or forward under the levy, such as carrying forward losses to a future qualifying period. Clause 11 applies general corporation tax principles to the levy, which is treated for administrative purposes as an amount of corporation tax. It also prescribes the framework within which the levy will operate.

Clause 12 introduces a requirement for companies making a levy repayment to provide information about that payment to HMRC, so that receipts from the levy can be monitored. Clause 13 provides for necessary adjustments to be made if alterations are made to a company’s ringfenced profits or losses. Clause 14 introduces schedule 2, which makes consequential amendments to enactments in the light of this Bill.

Clauses 15 to 17 set out the rules for apportioning profits for accounting periods that straddle the levy’s start or sunset dates. These rules identify which profits are chargeable to the levy by treating the periods before and after the start or end date as separate accounting periods. In particular, this requires companies to apportion their receipts, expenses, assets and liabilities on a just and reasonable basis. Clauses 18 and 19 simply set out the Bill’s legal interpretation and short title in the usual manner.

This Bill delivers the energy profits levy, a 25% surcharge on the oil and gas sector’s extraordinary profits. The levy will raise around £5 billion over the next year, and it will go towards supporting people via the cost of living measures we announced in May. The Bill also provides for the new 80% investment allowance, which means that businesses will overall get a 91p tax saving for every £1 they invest. Finally, the Bill provides certainty through a sunset provision. It will therefore give businesses further reassurance that the levy is indeed temporary.

[James Murray]

I will now address the detail of the Bill’s key clauses, as well as the amendments and new clauses tabled in my name and those of my hon. and right hon. Friends.

As I set out on Second Reading, this Bill is long overdue. The Government have finally agreed to introduce a windfall tax many months after they should have done. As I noted earlier, Ministers still cannot bring themselves to say “windfall tax” in relation to these measures, so we offer them amendment 8, which would rename the Bill, as one last chance to call this new tax what it is.

It has been six months since, on 9 January, the shadow Chancellor first set out Labour’s plans for a windfall tax on oil and gas producers’ profits to help to fund a cut to people’s home energy bills. Until their U-turn in late May, Ministers were falling over each other to attack our plans. In all the time they opposed our plans, people’s energy bills and oil producers’ profits both soared. Those months of opposing our plans left the public finances missing out on billions of pounds of tax revenue. Those extra funds could have given people further help with their energy bills. Today we are giving the Government the chance to right that wrong.

Clause 1 makes it clear that the windfall tax will apply from 26 May 2022. Our new clause 3 would require the Government to recognise how much extra tax revenue would be raised if the levy instead applied from 9 January. We urge all Conservative MPs to support our amendment and apply the windfall tax from 9 January, the day the shadow Chancellor first laid out Labour’s plans for a windfall tax, rather than leaving it to start only from 26 May, the day the former Chancellor finally changed his mind.

Those extra months would raise an extra £1.9 billion for the public finances, which we would then urge the Government to put toward removing VAT on domestic energy bills for the rest of this year. We have been urging the Government to scrap VAT on this year’s domestic energy bills since last autumn. We know that a VAT cut would provide immediate help to families now. Furthermore, taking VAT off energy bills would help to push inflation downwards from its current 40-year high. Funding for this should come from applying the windfall tax from January this year, when Labour first called for it, rather than only from May, when the Government finally came round.

Conservative leadership hopefuls have been talking a lot over the weekend about how keen they are on tax cuts, although they and their supporters have all failed to explain how any of those would be paid for. Today, we offer them a fully funded tax cut that will help people immediately with the cost of living. Today, we are asking them to follow our plan to cut VAT on home energy bills by applying the windfall tax on oil producers from the start of the year, as should always have been the case. The principle of backdating a windfall tax is not only well established—given that the very principle of windfall taxes is to tax unexpected profits that have occurred—but is included in this Bill, which backdates the levy in its first clause.

We know that oil producers such as BP and Shell reported bumper profits in the first quarter of 2022. As drafted, however, the Government’s Bill ignores those profits entirely, as their levy will not apply until well into the second quarter of this calendar year. I realise that the Financial Secretary has said that she will not support our new clause and that the current Chancellor, a former oil industry executive, is unlikely to change his mind after coming out so firmly against a windfall tax on oil and gas producers back in January, on the grounds that those producers were “already struggling.” But given the situation in the Conservative party, I wonder whether colleagues of the Minister may feel able to think more openly about how to vote. I wonder whether any of the other Conservative leadership candidates may like to support our plan for an immediate, fully funded tax cut to help people with the cost of living and tackle inflation. Later this evening, when we vote on new clause 3, we will find out what judgment they have made.

We would also like to know what judgment those people have made about the Government’s decision to undermine the levy by shamefully giving a third or more of any money raised straight back to the oil producers through the new tax break introduced by clauses 2 to 7. This new tax break offers oil and gas producers an unprecedented subsidy for their spending on oil-related activities. As we made clear on Second Reading, for every £100 an oil and gas producer invests in the North sea, they will receive £91.25 from the taxpayer. That is an astonishing 20 times the £4.50 that companies investing in renewable energy will receive from April next year.

Any argument by Ministers that this tax break is necessary to support investment in oil-related activities has been challenged by the bosses of the oil producers themselves. BP’s chief executive told shareholders just two months ago that the company’s £18 billion investment plans were

“not somehow contingent on whether or not there is a windfall tax”.

Yet despite even oil executives questioning its worth, the Government are pushing ahead with this tax break. Our analysis has shown that that means a third or more of any revenue from the new levy could be handed straight back to oil and gas producers. That money will subsidise projects that almost certainly would have happened anyway, as there is no requirement in the Bill for investment to be additional to what was already planned, and this move stands totally at odds with the paramount need to invest in renewable energy sources.

It is critically important and urgent for us to invest in renewable energy to strengthen our energy security while bringing down people’s bills and tackling the climate crisis. We have set out Labour’s plan to do just that. Alongside insulating 19 million homes over 10 years to cut people’s bills, we would strengthen our energy security and reduce our carbon emissions by doubling our onshore wind capacity, tripling solar power, backing tidal power and nuclear power, and further investing in hydrogen. Yet the Government are today introducing a tax break that seems to fly in the face of tackling the climate crisis.

That is why we have tabled new clause 2, which would force the Government to come clean about the impact of their unnecessary tax giveaway to oil producers on our country’s net zero obligations, energy security and renewable energy supplies. This new clause also asks the Government to spell out what impact their tax break will have on fracking, given the deeply concerning reports in the media that legal advice provided to the campaigning group Uplift suggests that fracking companies would also be eligible for this tax break, based on the way the Bill has been written. I urge the Government to accept new clause 2, to make it clear what impact the tax break in the Bill will have on fracking. If the Minister refuses to do that, will she at least come clean today and confirm or deny whether this tax break could lead to public money being channelled toward dangerous, unpopular and expensive fracking projects?

Energy (Oil and Gas) Profits

James Murray Excerpts

Tuesday 5th July 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

We have been waiting for many months for this day to come, but here we finally are: I am referring not to the news that has broken within the last hour outside this Chamber, but to the fact that the Government are finally implementing a windfall tax, even if the Minister absolutely refused to say those words in her remarks.

The Conservatives are finally introducing a windfall tax on oil and gas producers’ profits more than seven months after the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), first set out Labour’s plans for one. In the seven months since Labour first called for a windfall tax, the cost of living pressures facing people across the country have grown relentlessly and oil producers’ profits have soared.

Since the start of the year, energy bills have spiralled by £700 for a typical household. Inflation has risen to 9.1%, the highest level in 40 years, and taxes on working people’s pay have jumped thanks to the Government’s decision to hike national insurance contributions. This year has seen the cost of living rise unremittingly, while oil and gas producers’ profits have in some cases tripled.

A fair solution has been staring the Government in the face: levy a one-off windfall tax on North sea oil and gas producers’ extraordinary profits and use that money to help to cut people’s energy bills at home. Yet when, on 9 January this year, the shadow Chancellor first called on the Government to levy such a tax, Conservative MPs were falling over themselves to oppose it. The Education Secretary—as it happens, a former oil industry executive—came out firmly opposing a windfall tax on oil and gas producers on the ground that they, the oil producers, were already “struggling.” The Business Secretary said:

“I’ve never been a supporter of windfall taxes.”

The Northern Ireland Secretary said that he thought that a windfall tax

“sounds attractive but doesn’t work”.

The Deputy Prime Minister claimed that it would be “disastrous”.

Ministers and their Back-Bench Conservative colleagues then went on to vote against our plan for a windfall tax on three separate occasions. So, despite our common-sense plan for a windfall tax receiving wide support across the country—with even some oil producer bosses backing its logic—Conservative Ministers simply refused to get on board until 26 May, the day after the Sue Gray report was published, when the Prime Minister and the former Chancellor suddenly changed their minds. It seems clear that what finally caused the Conservative leadership to change course and back a windfall tax was the need for a different set of headlines in that week’s news. Whatever it took to get the Prime Minister and the former Chancellor over the line, we were relieved that they finally agreed to back a windfall tax. We were relieved that some help with soaring energy bills was finally on its way.

But that is no way to run the country—and what a cost those months of delay have had. For every day that Conservative Ministers refused to act, £53 million has been added to Britain’s household bills during this cost of living crisis. Next Monday, when we consider the Bill that will follow the resolution, the Opposition will urge Ministers to make right their delay in introducing the windfall tax. Otherwise, their months of delay will leave the public finances missing out on billions of pounds of tax revenue that could have supported further help for people with the cost of living.

We know from the draft Bill and from what the Minister said that the Government are planning to introduce a brand-new tax break for oil and gas producers. That will give money back to the same firms that are supposed to be paying their fair share through the windfall tax. The Minister was unable to answer when my hon. Friend the Member for Bristol North West (Darren Jones) intervened, but our analysis shows that that tax break could lead to a third or more of any revenue from the new levy being handed straight back to the oil and gas producers.

It is a subsidy that even oil executives do not seem to think necessary. It will subsidise projects that would almost certainly have happened anyway, and it will see 20 times more being given in taxpayer incentives to oil and gas producers than to firms investing in the renewable energy of the future, yet the Government seem determined to push ahead with their tax break. When we consider the Bill next Monday, we will urge Ministers to think again about that unnecessary tax break for oil producers, which will undermine both the impact of the windfall tax and our country’s wider efforts to tackle the climate crisis.

We are relieved that the Government are finally proceeding with a windfall tax, and we will support the motion, but the Conservatives’ whole approach has shown so much of what is wrong with the way they conduct themselves in power. When we called for a windfall tax, they spent months opposing it as strongly as they could. They dismissed a fair and common-sense way, which was staring them straight in the face, to help people who face soaring energy bills. Then they changed course, not because it was the right thing to do, but because they needed a new headline to take attention away from the Prime Minister’s lack of integrity in office. Now, as they finally reveal the detail of their windfall tax proposals, they immediately undermine its effectiveness, and any wider efforts to tackle climate change, with a new tax break for oil producers. Their instincts are wrong. Their priorities are wrong. The way they run our country is wrong. With the windfall tax, we have shown that Labour is winning the battle of ideas in Britain, and that Labour will provide the leadership that our country needs.