Autumn Statement Resolutions

Debate between Jonathan Reynolds and Alan Brown

Thursday 23rd November 2023 Commons Chamber

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

Thank you, Madam Deputy Speaker. I hope that you will not mind me saying, as someone born and raised in the north-east of England, not too far from Stockton, that it is unequivocally a beautiful part of this country. Anyone on the Government Benches who is not aware of that should visit it for themselves.

Yesterday’s autumn statement felt a bit like the season finale of this Conservative Government. While we might have been hoping for an uplifting twist in the tale, sadly what we were left with was a pitiful ending to an underwhelming story. It was an autumn statement made of pure fantasy: the Government Benches cheering a tax cut, when in fact taxes are higher than they have ever been; a Chancellor claiming to have delivered for working people, when in reality living standards face an unprecedented fall; the Conservatives desperately trying to address business investment, when in fact their chaos was what caused business investment to collapse to begin with.

I understand that it is tempting for Conservatives to buy into the Chancellor’s fiction, but in the real world people can see the cost of the Conservatives in their bank balance, mortgage bill, high street and public services. This country desperately needs hope for the future and a change of course. For all the spin from the Chancellor, people know that they are worse off after 13 years of the Conservatives. The statement confirmed that nothing that the Government will now do will change that. The Conservatives promised that it would be a statement for growth, but the reality is that growth will be down next year, the year after that, and the year after that. The Chancellor said that we have turned a corner, but all we got was confirmation that Britain has hit a brick wall.

Let us get one thing clear at the beginning of this debate: when inflation went up after the invasion of Ukraine, the Government said, “It’s nothing to do with us; it’s all global pressures.” Now, when some of those pressures have reduced and the Bank of England has operated monetary policy in the way we would expect, the Prime Minister wants personal credit for inflation falling. Do the Government really think they can get away with that?

On inflation, the Government oppose the single most important thing they could do, which is to reduce our exposure to volatile fossil fuel prices so that we are never again so vulnerable and exposed. Labour has a plan for energy independence and security so that Britain is never again so badly exposed to those volatile fossil fuel prices. That is the lesson we need to learn.

Let us also not forget that, while we all welcome lower inflation, it is still high, particularly food inflation. When I do the big shop in my local supermarket in Stalybridge, I wince when I see the price of some food items. Families are working harder than ever before, only to have to put the little things that they treat themselves with back on the shelf, or to cut back on what they would once have considered essentials. This is no time for Conservative Ministers to go around asking for a pat on the back.

On the Chancellor’s central claim that lower inflation means he can now spend money, he is simply not being straight with people. The public finances have not meaningfully improved. It is high inflation, not a stronger economy, that has led to higher tax receipts. It is the fiscal illusion of higher tax receipts caused by high inflation, but rather than using that to meet higher costs in the public sector caused by that inflation, he has chosen to spend it. The Minister mentioned his own business career and, as he knows, I personally admire him very much for that career, but if he had run his businesses in the same way that this Chancellor is running the national finances, I think he knows he would have gone out of business very quickly indeed.

There has to be a reckoning for what that will mean for schools, the NHS, the police and the criminal justice system. While the Prime Minister and the Chancellor may live in a different world, our constituents can see the public realm literally crumbling around them. That is the reality of Conservative Britain, and some fiscal trickery will not be enough to convince people that everything is fine. It is also important to say that the Chancellor’s fiscal headroom is now entirely dependent on things such as a large rise in fuel duty next year—and I imagine that very few Conservative MPs have come to the debate today to say that they support that.

Another major focus of the Chancellor’s speech was business investment, and I welcomed that. I enjoyed that bit of the statement because, as I have made clear, I believe that is a fundamental weakness that we must address. The UK, as the Minister knows, has the lowest business investment in the G7. When British innovation is so abundant, that is an appalling effort from this Government. Full expensing is not perfect, because there are issues with the scope of what is covered by the policy as it stands, but not making it permanent would have been untenable and our relative position in the ranking of attractiveness as a place to invest would have fallen off a cliff.

However, if the Government think that is enough to restore the business confidence that they have frittered away over the last 13 years, they are mistaken. The No. 1 thing that business leaders tell me they need is stability. I have been our shadow Business Secretary for two years, and in that time I have shadowed five different Business Secretaries, we have had four Chancellors and I think we have had three Prime Ministers. In the last 13 years, by my count, we have had 11 different growth strategies, and now it appears we are on to the 12th. We see that lack of consistency across every bit of Government.

Take HS2, which is a national embarrassment: billions of pounds wasted, businesses let down, regeneration plans lost, and a flagship Government policy that goes overnight when Parliament is not even sitting and is unable to ask the most basic of questions by way of scrutiny. Or take the phasing out of new petrol and diesel vehicles from 2030. There was a major announcement on the headline date, one not made at the request of business, that hugely undermines investment certainty, but without a corresponding change to the rest of the policy environment—the zero-emission vehicle mandate—that leads up to 2030. Therefore they lose the certainty and credibility of keeping the target, but do not gain any flexibility from moving it either. Businesses say to me time and again that they cannot rely on a word any Conservative Minister says, and they are right. What businesses need is a real industrial strategy that gives them certainty and co-ordination. They need real commitments on planning, to get Britain building again. They need politicians who are willing to say, “We need new homes and infrastructure, and we are willing to commit our political capital to deliver it.” They need reform of the apprenticeship levy, so that they have more flexibility over skills and training. They need a better trade and co-operation agreement with the European Union than the one we have at present.

On the energy transition, the Chancellor and the Minister spent some time attacking what Labour call our “green prosperity plan”—our policy commitment to ensure not only that the transition happens, but that the UK gets maximum economic benefits from it. We on the Labour Benches love wind turbines, but we are sick of seeing them built overseas. We love cars and vans, but we know that unless we build batteries for electric vehicles in the UK, we will not have an automotive sector in the long term. We want green steel, but we are not prepared to close down our blast furnaces and import virgin steel from the far east, as the Conservatives plan to do.

The key point is that the Government do not entirely disagree with us. In the last year, £0.5 billion in subsidy has been allocated to Tata Steel in Somerset. Similar sums have been promised for other steel. But what we want to know is what the Government will get for it. How do they get value for money if those are just ad hoc bilateral negotiations? How is public money protected? The difference between us is not the principle that the state will need to co-invest to deliver some of that private investment; it is a huge difference of ambition, transparency and effectiveness.

Labour will not respond to the challenges that we face through such panicked ad hoc announcements. We will face the future with confidence and with a full plan that delivers for British industry. That is what our national wealth fund will do: manage the investments that we will make and ensure that the British people see their money being well looked after. Fundamentally, we want to get the transition right rather than repeat the mistakes of the 1980s and 1990s, which still haunt many parts of the UK today.

[Alan Brown]

I agree with the principle of a sovereign wealth or investment fund. Look at Norway, which has a £1.1 trillion sovereign wealth fund—the largest in the world. Does the hon. Gentleman agree that Westminster has missed a trick for successive decades by not creating an oil and gas fund, and is that not a damning legacy?

[Jonathan Reynolds]

Unsurprisingly, I agree with part of what the hon. Member said. We could have a lengthy and robust debate on the weaknesses of Conservative Governments in the 1980s and the consequences of their short-term decisions. I would—