Update on Recent Bank of England Asset Purchases

Kwasi Kwarteng Excerpts

Wednesday 12th October 2022 Written Statements

[The Chancellor of the Exchequer (Kwasi Kwarteng)]

The Bank of England decided to carry out temporary purchases of long-dated UK Government bonds (gilts) from 28 September through the asset purchase facility (APF) on whatever scale is necessary to restore orderly conditions. These interventions will be strictly time limited, with auctions taking place until 14 October.

I have therefore authorised an increase in the total size of the APF by £100 billion. This will bring the maximum total size of the APF from £866 to £966 billion.

On 11 October, the Bank decided that that it will widen the scope of its daily gilt purchase operations to also include purchases of index-linked gilts. This was designed to act as a further backstop to restore orderly market conditions by temporarily absorbing selling of index-linked gilts in excess of market intermediation capacity, the purchasing of index-linked gilts was already covered by the existing indemnity for the APF.

The amendments to the APF that could affect the allocation of credit and pose risks to the Exchequer have been discussed with Treasury officials. The risk control framework for the APF previously agreed with the Treasury will remain in place, and HM Treasury will keep monitoring risks to public funds from the facility through regular risk oversight meetings and enhanced information sharing with the Bank.

The Government will continue to indemnify the Bank and the APF from any losses arising out of, or in connection with, the facility. If the liability is realised, provision for any payment will be sought through the normal supply procedure.

A full departmental minute has been laid in the House of Commons providing more detail on this contingent liability.

[HCWS319]

Oral Answers to Questions

Kwasi Kwarteng Excerpts

Tuesday 11th October 2022 Commons Chamber

[Karl MᶜCartney (Lincoln) (Con)]

10. What fiscal steps he is taking to support small and medium-sized enterprises.

[The Chancellor of the Exchequer (Kwasi Kwarteng)]

My hon. Friend will know that the growth plan really was a very strong package for business and for small and medium-sized enterprises, and I am sure that many of his constituents will appreciate the strong measures that we introduced.

[Mr Baron]

I refer Members to my entry in the Register of Members’ Financial Interests.

I welcome the Government’s growth agenda, notwithstanding the lack of reassurance to the markets, but will the Chancellor seriously consider lowering taxation on smaller businesses, despite the package that has already been announced? They are the engine room of the economy and employ most people in the private sector, and if cost savings are necessary, High Speed 2 and the streamlining of myriad quangos could be the first option.

[Kwasi Kwarteng]

I am very pleased to tell my hon. Friend that we are going to introduce the medium-term fiscal plan in three weeks’ time, but let us consider the measures that we have already introduced. National insurance hikes have been reversed, the corporation tax rise has been scrapped and the annual investment allowance remains at £1 million. These are measures that small businesses up and down the land have been very appreciative of.

[Ian Levy]

As my right hon. Friend will be aware, small businesses are the backbone of our local economy—none more than Catling Bakery in Cramlington, which has expanded from running a bakery to running a café and now a dessert bar. Would my right hon. Friend please assure me that this Government will do all they can to help these businesses thrive?

[Kwasi Kwarteng]

Absolutely right. Of course, we have also supported Catling Bakery which my hon. Friend mentions through an energy package—£60 billion for households and businesses for six months—which we absolutely felt it necessary to do.

[Mr Speaker]

I call Karl MᶜCartney.

[Karl MᶜCartney]

Thank you, Mr Speaker; it is like I never went away. I refer Members to my entry in the Register of Members’ Financial Interests.

Supporting businesses will always be a key pillar for growing our economy and, by association, our small and medium-sized businesses, of which there are many in Lincoln and more across our county of Lincolnshire. They should be at the forefront of the Government’s growth agenda. Devolved areas such as Teesside and the West Midlands have continually been successful in delivering for their areas. Greater Lincolnshire stands ready right now for a maximum devolution deal. Therefore, will the Treasury support any such deal for Greater Lincolnshire?

[Kwasi Kwarteng]

My hon. Friend knows that devolution is at the heart of the Government’s plans to level up and strengthen communities, and in the levelling-up White Paper the Government have fully committed to offering a devolution deal to every area that wants one by 2030.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Can I declare an interest to the Chancellor? I have actually worked in a small or medium-sized business. Unlike many people on these Benches, I have actually worked in manufacturing industry, and the manufacturing SMEs in my constituency are absolutely up against it with the cost of energy. What is he going to do to relieve them right now?

[Kwasi Kwarteng]

I think the hon. Gentleman makes a very good point and represents his constituency ably. In respect of small businesses, we have introduced a package —an energy price guarantee not only for households but for businesses—to the tune of £30 billion in the first six months. This is something that was absolutely necessary, and I am very proud of the fact that we acted very swiftly to protect businesses such as those in his constituency.

[Sarah Olney (Richmond Park) (LD)]

The Government’s failed mini-Budget sent interest rates soaring, which is already causing mortgage pain for millions, but rising borrowing costs are now threatening our high streets too. Small businesses in Richmond Park and across the UK are seeing their loan repayments spiral and their financing options dry up. We have already seen the highest number of company insolvencies since the financial crisis—more than 5,600 businesses closed in the second quarter of this year—and SME debt is now at a staggering £204 billion. Most of those businesses will not see a penny from the cut to corporation tax. What is the Chancellor—

[Mr Speaker]

Order. Come on—we cannot do that.

[Kwasi Kwarteng]

As I have stated a number of times already, the energy support package will help every single one of the businesses in the hon. Member’s constituency. I would be very pleased to see the Lib Dem growth plan. The anti-growth coalition carps from the side lines but it has nothing to say about growth.

[Chris Bryant (Rhondda) (Lab)]

The one thing businesses always want is security, and an understanding of what is going to happen for them next year. They are worrying about their borrowing costs for next year, and the Chancellor has already made that more difficult for them. He says he has a package for energy costs, but that lasts for only six months. Yesterday I spoke to a man who owns a leisure company. He said that his bill next year will go from £100,000 to £475,000, and that he will be closing. Why does the Chancellor not bring in a proper measure that will last more than six months?

[Kwasi Kwarteng]

The hon. Gentleman makes a fair point in respect of energy costs, and that is precisely why we intervened in the way that my right hon. Friend the Prime Minister announced only a couple of weeks ago. The package is £60 billion for households and businesses across the next six months. That is a generous package, and we are listening.

[Mr Speaker]

I call the SNP spokesperson, Alison Thewliss.

[Alison Thewliss (Glasgow Central) (SNP)]

Businesses of all sizes are struggling with Brexit, import costs, material costs, the weak pound against the dollar and the euro and increased wage and energy costs, and they still do not know what will happen when the Chancellor’s temporary reprieve ends in March. The clock is ticking. Calder Millerfield, a food manufacturing business in my constituency, has come back to me with its latest quote, with the relief applied. It is £944,000 per year, up from £160,000 last year. What will the Chancellor do to support manufacturing businesses now, because they will not survive those increases?

[Kwasi Kwarteng]

As I have stated, the energy price guarantee does help businesses in a large measure. Also, I am not going to take lectures from the SNP about growth. In Scotland, for every year from 2010 to 2019, growth was lower than in the rest of the United Kingdom. I will not take any lessons about supporting business from the hon. Lady.

[Mr Laurence Robertson (Tewkesbury) (Con)]

3. What recent discussions he has had with the Governor of the Bank of England on rising mortgage rates.

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[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

7. If he will publish an assessment by the Office for Budget Responsibility of the growth plan 2022 before 23 November 2022.

[The Chancellor of the Exchequer (Kwasi Kwarteng)]

The hon. Gentleman will have seen that I have brought forward the publication of the medium-term fiscal plan to 31 October.

[Jamie Stone]

I think the House will agree that the uncertainty over the date has not exactly helped forward planning on benefits. Any real cut in benefits will mean people not having enough money to buy food and clothing for their children, so does the Chancellor agree that increasing benefits in line with inflation is the only fair way forward? Indeed, it would be immoral to do otherwise. As the chief executive of Inverness citizens advice bureau pointed out to me, such benefit money is spent in the local economy and is a boost to what the Chancellor has talked about many times: growing the economy.

[Kwasi Kwarteng]

I am delighted to see that one member of the anti-growth coalition is focusing on growth. However, on the hon. Gentleman’s specific question, he will understand that the medium-term fiscal plan is coming out on 31 October, and I will not prejudge any measures in it.

[Robert Halfon (Harlow) (Con)]

Does my right hon. Friend agree that the levelling-up fund is an important part of the plan for growth, and has he seen Harlow Council’s levelling-up fund bid, which I wholeheartedly support? It would transform a derelict area of our town centre into a thriving cultural quarter with jobs and investment, tackling antisocial behaviour. Those abandoned buildings have blighted the heart of our town for far too long.

[Kwasi Kwarteng]

My right hon. Friend is a redoubtable and highly persuasive representative of his constituents. I would be happy to talk to him about what we can do together to help his great constituency.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

The Bank of England has had to intervene not once, not twice, but three times now. The impact on pension funds is very significant, and many of my constituents will be deeply worried. What assessment has the Chancellor made of the impact of potential additional pressures on the economy on public sector pensions and the damage to pension funds for pensioners up and down this country? Is that another reason why he did not want to publish the OBR’s forecast at the time of his mini-Budget?

[Kwasi Kwarteng]

The OBR will be fully scoring and giving a forecast ahead of the medium-term fiscal plan. I speak very frequently to the Governor of the Bank of England, who is absolutely independent and is very effectively managing what is a global situation.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Mel Stride (Central Devon) (Con)]

I very much welcome my right hon. Friend’s decision to bring forward the medium-term plan and the OBR forecast; he has listened, and he is right. However, may I caution him to reach out as much as he can across both sides of the House, to be certain that he can get through this House the measures he puts forward to underpin that forecast? Any failure to do so will unsettle the markets.

[Kwasi Kwarteng]

My right hon. Friend is absolutely right. He does a brilliant job of chairing his Committee and is full of wise counsel; he is absolutely right that we will and should canvass opinion widely ahead of the publication of the plan.

[Alison McGovern (Wirral South) (Lab)]

The OBR was the creation of a Conservative Government and was designed to curtail wishful thinking in economic policy, so does the Chancellor agree that it is unfortunate, to say the least, that we seem to have Cabinet Ministers briefing against the economic expertise of that independent institution?

[Kwasi Kwarteng]

As far as I am concerned—I speak to investors regularly about this—the OBR is an institution that commands wide respect, not only in the UK but across the world. Its independence, to me, is absolutely sacrosanct.

[Guy Opperman (Hexham) (Con)]

The energy price guarantee is an outstanding part of the growth plan. It is key, but far too few businesses and households know about it. May I urge the Chancellor to have a nationwide mail-out campaign, coupled with the Government taking the lead on the reduction of energy in all public buildings, as Germany and other countries are doing? That would have the twin benefits of saving consumers money and reducing taxpayer subsidies.

[Kwasi Kwarteng]

My hon. Friend makes an excellent suggestion. Obviously I am very careful not to make unfunded spending commitments on the Floor of the House, but his suggestion is very well made and we should look into it.

[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.

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[Stephanie Peacock (Barnsley East) (Lab)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Kwasi Kwarteng)]

This Government are relentlessly focused on growing the economy. Putin’s barbaric war in Ukraine continues to put pressure on gas prices so, with predictions of typical bills reaching between £4,000 and £6,500 a year, people needed immediate support to get them through this winter.

Last month we set out the growth plan, which will focus on breaking out of the high-tax, low-growth cycle in which we are currently trapped. This will put more money into people’s pockets and raise living standards for all our people. This week I wrote to my right hon. Friend the Member for Central Devon (Mel Stride) to inform him that I will set out the medium-term fiscal plan on 31 October, and I wish to remind the House that it will be accompanied by a full economic and fiscal forecast published by the Office for Budget Responsibility.

[Stephanie Peacock]

The Chancellor sat in a Cabinet that committed to increasing social security payments in line with inflation. Why will he not honour that promise?

[Kwasi Kwarteng]

As my right hon. Friend the Chief Secretary to the Treasury and I have repeatedly said, no decisions have been made. The usual statutory process is being undertaken, and we will have more detail at the time of the medium-term fiscal plan.

[Priti Patel (Witham) (Con)]

The Chancellor will know that Essex is a pro-growth county and a hub of economic growth. To support job creation and more economic growth, will he commit to funding the dualling of the A120 between Braintree and Marks Tey and, importantly, along the route that the county council, businesses and the local community have specified?

[Kwasi Kwarteng]

I pay tribute to my right hon. Friend for her role in the Cabinet and the Government. She is a fantastic colleague. I wish to confirm that the A120 between Braintree and the A12 remains under active consideration, alongside the rest of the third road investment strategy pipeline.

[Mr Speaker]

I call the shadow Chancellor, Rachel Reeves.

[Rachel Reeves (Leeds West) (Lab)]

Since the Chancellor’s disastrous mini-Budget just 18 days ago, we have seen wild swings in the value of the pound, gilt yields up 100 basis points in a single day and the Bank of England stepping in because of, in its words,

“a material risk to UK financial stability”.

The International Monetary Fund has now said that UK growth is to slow further next year. This is a British crisis, made in Downing Street; no Government are sabotaging their own country’s economic credibility as this Government are. Are the Chancellor and the Prime Minister the last people left on Earth who think their plan is working?

[Kwasi Kwarteng]

To pick up on a point, the IMF said today that the plan—the mini-Budget—has increased the forecast for growth. That is precisely the opposite of what the hon. Lady has said. It is very clear where we stand on this. We have pro-growth, pro-enterprise, pro-business Conservatives on one side and the anti-growth coalition on the other—they want to tax more and commit us to low growth.

[Rachel Reeves]

The Chancellor is in a dangerous state of denial, but the costs of these mistakes are all too real for everyone else: borrowing costs up; growth down; and mortgage payments set to increase by £500 a month. Now the Government scrabble around looking for cuts, hitting the most vulnerable and our public services. It does not need to be this way. Will the Chancellor put aside his pride, do the right thing for our country, end this trickle-down nonsense and reverse the Budget?

[Kwasi Kwarteng]

Which of the tax cuts do the Opposition want to stop? Do they want to stop the cut in the basic rate? Are they committed to having a high tax economy? The other thing I suggest is that the hon. Lady should get her facts right; the IMF today has said that our growth is going up, not down.

[Caroline Ansell (Eastbourne) (Con)]

T4. Early results from my local business survey strongly suggest that a lower VAT rate would increase investment, which would boost recovery and growth in the hospitality sector in my beautiful constituency. Will my right hon. Friend be reviewing the case for a lower rate, to bring us back into line with some of our international competitors?

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[Theresa Villiers (Chipping Barnet) (Con)]

T7. It is a massive relief that the nightmare scenario of energy bills of £4,000, £5,000 or even £6,000 has been prevented by the energy price cap. Will the Government explain how they are reducing the cost to taxpayers of that scheme and stabilising the energy market for the future?

[Kwasi Kwarteng]

My right hon. Friend was 100% right to notice that the energy intervention was exactly the right thing. We are going to have a commitment to fiscal responsibility, which will stabilise the economic situation and picture, and I am sure that her constituents will fully understand what the growth plan is all about: putting more money into their pockets so that we can have a growing and dynamic economy.

[Allan Dorans (Ayr, Carrick and Cumnock) (SNP)]

T5. The Scottish Government announced yesterday that they will be doubling the December bridging payment granted to low-income families, to £260. The Child Poverty Action Group noted that this will make “a real difference” to households struggling with the cost of living crisis. What plans do the UK Government have to follow suit and bring in targeted measures for low-income households?

[Kwasi Kwarteng]

As my right hon. Friend the Chief Secretary said earlier, most of the measures that constitute the £37 billion intervention were targeted directly at the vulnerable constituents of all of us in this House. The energy price guarantee will also be greatly beneficial to people across our country who are suffering because of the cost of living. The Government are committed to a huge amount of intervention, and our top priority is making sure that everyone gets through challenging times as best they can.

[Laura Trott (Sevenoaks) (Con)]

T8. The Chancellor has provided families across Sevenoaks and Swanley with vital support for their energy bills. However, in the past year the price of heating oil has more than doubled for my more rural constituents who are off the mains gas grid. The £100 support is welcome, but will the Chancellor and the Business Secretary review the support in the light of those severe price rises?

[Kwasi Kwarteng]

Absolutely. I am in frequent contact with my right hon. Friend the Business Secretary, and we have sequestered and dedicated a pot to help people who are off the gas grid. We are happy to help my hon. Friend and her constituents in this challenging time.

[Rachael Maskell (York Central) (Lab/Co-op)]

T6. Given that the Bank of England is having to go even further to refinance the UK Government bond market, what discussions has the Chancellor had with the Pensions Regulator about the viability of defined benefit schemes and the devaluation of defined contribution schemes and annuities—or will workers have to pay for this?

[Kwasi Kwarteng]

My hon. Friend the Financial Secretary to the Treasury and I are engaged with all the regulators, particularly the Prudential Regulation Authority, and we will be absolutely committed to getting to the bottom of what has happened, particularly in the long-dated gilt market, which has been over-levered in the past few weeks.

[Mr Mark Harper (Forest of Dean) (Con)]

T9. The Chancellor has said that he will set out a fully costed plan to get debt falling as a proportion of GDP, and he has confirmed at the Dispatch Box that that will be done in just under three weeks’ time. This morning’s Institute for Fiscal Studies report suggested that in order to do so, there will need to be fiscal tightening of around £62 billion over the next four years. Does the Chancellor agree with that analysis? If, as I suspect is the case, he does not, will he set out why not?

[Kwasi Kwarteng]

As I have said repeatedly, I am not going to prejudge what is in the medium-term fiscal plan, which will be fully scrutinised not only by the OBR but, I am sure, by my right hon. Friend. I do not think that it is right for me to prejudge or anticipate those measures today.

[Christine Jardine (Edinburgh West) (LD)]

Despite the Chancellor’s confident words, the IMF is predicting that inflation will last longer in this country than in other similar economies. In my constituency of Edinburgh West, which has half the national average rate of unemployment and claimants, people are so concerned that more than half of them are talking about cutting their essential budgets, and, according to recent reports, 20% are concerned that they might have to turn to food banks for the first time. When will the Chancellor reassess the potential impact of this growth plan and accept that maybe he has got it wrong?

[Kwasi Kwarteng]

The IMF specifically said this morning that the 2023 forecast for growth in this country has gone up as a direct consequence of the mini-Budget. In respect of helping constituents up and down the land, we have already committed £37 billion of energy support this year and a further £60 billion to houses and businesses over the next six months, and we are committed to making sure that every one of our constituents gets through this winter as best they can.

[Sara Britcliffe (Hyndburn) (Con)]

Numerous residents such as those at Harwood Bar caravan park have been in touch with me about the £400 energy support scheme. The previous Chancellor confirmed that there was an equivalent scheme for those in caravan parks and park homes. Could the Chancellor please provide an update for my constituents in Hyndburn and Haslingden?

[Kwasi Kwarteng]

As I said in relation to heating oil, a pot of money is going to be reserved to help people who are off the grid. We have already made announcements about that, but I would be very happy to speak with my hon. Friend and my right hon. Friend the Business Secretary.

[Christian Matheson (City of Chester) (Lab)]

The upkeep of the Chester city walls costs about £600,000 a year, but that money has to come out of the local authority’s highways budget. Can the Government set aside a small amount of money to help local authorities with the stewardship of internationally important heritage assets?

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[Rushanara Ali (Bethnal Green and Bow) (Lab)]

The Chancellor was warned that unfunded tax cuts would force the Bank of England to increase rates and that is exactly what has happened. The Bank of England has said today that, in effect, the mini-Budget has caused a material risk to Britain’s financial stability. Can the Chancellor explain how people are supposed to pay their mortgages, which have gone up by £500 on average and £900 in London? What is he going to do about it, because it is not acceptable that his incompetence is risking people’s livelihoods?

[Kwasi Kwarteng]

I have two points to make on that. First, the Bank of England certainly did not say that the mini-Budget increased risk. Secondly, as rates are rising throughout the world, there is exposure. That is precisely why we thought that it was absolutely right to have the energy intervention, which is for two years—let us not forget that the Labour plan was for only six months —and to reduce the burden on people by reducing taxes.

[Steve Brine (Winchester) (Con)]

Talking to people working in the housing industry in Winchester, I have found that they are not convinced that the stamp duty reduction will help first-time buyers while inflation and particularly mortgage rates are creeping up. Lenders are coming back with some good rates, and the Chancellor will know that, but when he delivers his statement on 31 October, will he ensure that it has confidence at its heart and that it is—knowing him, it will be—a relentlessly positive statement, so that we can push confidence right the way through the market?

[Kwasi Kwarteng]

It will be relentlessly upbeat. These are challenging times, but we have to live within our means and there will be an absolute iron commitment to fiscal responsibility.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Will the Minister admit that, if the Government do not increase the guarantee credit component of pension credit in line with inflation this year, they are effectively cutting the incomes of our poorest pensioners when they need help most?

[Kwasi Kwarteng]

We are absolutely committed to fairness and to helping the most vulnerable in our society—we are always committed to that—and I will not prejudge or anticipate measures in the medium-term fiscal plan this afternoon.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

Will my right hon. Friend confirm that the cuts to national insurance will help not only working households, but businesses and the public sector, such as schools?

[Kwasi Kwarteng]

My hon. Friend and constituency neighbour is absolutely right. The reversal of the planned increase in national insurance will help businesses, individuals and the institutions to which he refers.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Can the Chancellor state how much the investment zones are worth and how they will be funded?

[Kwasi Kwarteng]

There will be more detail about investment zones. My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will be updating the House on the specifics of the zones.

[Mr Speaker]

I call Mr Hollinrake for the final question.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Thank you, Mr Speaker. The UK has rightly frozen around £30 billion of Russian foreign currency reserves. A number of countries are moving from freezing those assets to seizing them to pay reparations to Ukraine. Will my right hon. Friend look at similar measures from the UK?

[Kwasi Kwarteng]

Those measures have been discussed in the past; I think my right hon. Friend the Member for Surrey Heath (Michael Gove) talked about that earlier in the year. Those schemes are always being looked at in the light of what is an increasingly bleak and volatile situation in Russia and Ukraine.

Timing of Medium-Term Fiscal Plan

Kwasi Kwarteng Excerpts

Tuesday 11th October 2022 Written Statements

[The Chancellor of the Exchequer (Kwasi Kwarteng)]

Today I can inform the House that I have asked the Office for Budget Responsibility to bring forward the date of its next forecast to 31 October.

Strong growth and sustainable public finances go hand in hand. Alongside the publication of the economic and fiscal outlook, I will set out the Government’s medium-term fiscal plan. This will set out further details on the Government’s fiscal rules, including ensuring that debt falls as a share of GDP in the medium term.

This forecast, in addition to the forecast that will be commissioned in spring, will fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.

[HCWS310]

The Growth Plan

Kwasi Kwarteng Excerpts

Friday 23rd September 2022 Commons Chamber

[The Chancellor of the Exchequer (Kwasi Kwarteng)]

Let me start directly with the issue most worrying the British people today: the cost of energy. People will have seen the horrors of Putin’s illegal invasion of Ukraine. They will have heard reports that their already expensive energy bills could reach as high as £6,500 next year. We were never going to let that happen. My right hon. Friend the Prime Minister has acted with great speed to announce one of the most significant interventions the British state has ever made. People need to know that help is coming—and help is indeed coming.

We are taking three steps to support families and businesses with the cost of energy. First, to help households, the energy price guarantee will limit the unit price that consumers pay for electricity and gas. That means that, for the next two years, the typical annual household bill will be £2,500. For a typical household, that is a saving of at least £1,000 a year based on current prices. We are continuing our existing plans to give all households £400 off bills this winter. Taken together, we are cutting everyone’s energy bills by an expected £1,400 this year, and millions of the most vulnerable households will receive additional payments, taking their total savings this year to £2,200.

Secondly, as well as helping people, we need to support the businesses that employ them. The energy bill relief scheme will reduce wholesale gas and electricity prices for all UK businesses, charities and the public sector, such as schools and hospitals. It will provide a price guarantee equivalent to the one provided for households for all businesses across the country.

Thirdly, energy prices are extremely volatile, rising and falling erratically every hour, which creates real risks to energy firms that are otherwise viable businesses. Those firms help to supply the essential energy needed by households and businesses. To support the market, we are announcing the energy markets financing scheme. Delivered with the Bank of England, this scheme will provide a 100% guarantee for commercial banks to offer emergency liquidity to energy traders.

The consensus among independent forecasters is that the Government’s energy plan will reduce peak inflation by around 5 percentage points. It will reduce the cost of servicing index-linked Government debt and lower wider cost of living pressures, and it will help millions of people and businesses right across the country with the cost of energy.

Let no one doubt that, during the worst energy crisis in generations, this Government are on the side of the British people. The Bank of England are taking further steps to control inflation, acting again only yesterday, and I can assure the House that this Government consider the Bank of England’s independence to be sacrosanct. We remain closely co-ordinated, with the Governor and myself speaking twice a week.

However, high energy costs are not the only challenge confronting this country. Growth is not as high as it should be, which has made it harder to pay for public services, requiring taxes to rise. In turn, higher taxes on capital and on labour have lowered returns on investment and work, reducing economic incentives and hampering growth still further. That cycle has led to the tax burden’s being forecast to reach the highest levels since the late 1940s—before even Her late Majesty acceded to the throne.

We are determined to break that cycle. We need a new approach for a new era, focused on growth. Our aim over the medium term is to reach a trend rate of growth of 2.5%, and our plan is to expand the supply side of the economy through tax incentives and reform. That is how we will deliver higher wages and greater opportunities and, crucially, fund public services, now and into the future; that is how we will compete successfully with dynamic economies around the world; and that is how we will turn this vicious cycle of stagnation into a virtuous cycle of growth.

As a Government, we will focus on growth, even where that means taking difficult decisions. None of this is going to happen overnight, but today we are publishing our growth plan that sets out a new approach for this new era, built around three central priorities: reforming the supply side of the economy, maintaining a responsible approach to public finance and cutting taxes to boost growth.

The UK today has the second lowest debt-to-GDP ratio of any G7 country. In due course, we will publish a medium-term fiscal plan setting out our responsible fiscal approach more fully, including how we plan to reduce debt as a percentage of GDP over the medium term. The Office for Budget Responsibility will publish a full economic and fiscal forecast before the end of the year, with a second to follow in the new year. Fiscal responsibility remains essential for economic confidence, and it is a path we are committed to.

Today, we are publishing costings of all the measures the Government have taken, and those costings will be incorporated into the OBR’s forecast in the usual way. The House should note that the estimated costs of our energy plans are particularly uncertain, given volatile energy prices, but, based on recent prices, the total cost of the energy package for the six months from October is expected to be around £60 billion. We expect the cost to come down as we negotiate new, long-term energy contracts with suppliers.

In the context of a global energy crisis, it is entirely appropriate for the Government to use our borrowing powers to fund temporary measures in order to support families and businesses. That is exactly what we did during the covid-19 pandemic; a sizeable intervention was right then and it is right now. The heavy price of inaction would have been far greater than the cost of these schemes.

We are at the beginning of a new era, and as we contemplate—[Hon. Members: “Oh!”] That’s right: a new era. As we contemplate this new era, we recognise that there is huge potential in our country. We have unbounded entrepreneurial drive. We have highly skilled people. We have immense global presence in sectors such as finance, life sciences, technology and clean energy. But there are too many barriers for enterprise. We need a new approach to break them down, and that means reforming the supply side of our economy.

Over the coming weeks, my Cabinet colleagues will update the House on every aspect of our ambitious agenda. Those updates will cover the planning system, business regulations, childcare, immigration, agricultural productivity and digital infrastructure. But we start this work today. An essential foundation of growth is infrastructure—the roads, railways and networks that carry people, goods and information all over our country. Today, our planning system for major infrastructure is too slow and fragmented. The time it takes to get consent for nationally significant projects is getting slower, not quicker, while our international competitors forge ahead. We have to end this.

We can announce that in the coming months we will bring forward a new Bill to unpick the complex patchwork of planning restrictions and EU-derived laws that constrain our growth. We will streamline a whole host of assessments, appraisals, consultations, endless duplications and regulations. We will also review the Government’s business case process to speed up decision making. Today, we are publishing a list of infrastructure projects that will be prioritised for acceleration, in sectors such as transport, energy and telecoms. To increase housing supply and enable forthcoming planning reforms, we will also increase the disposal of surplus Government land to build new homes. We are getting out of the way to get Britain building.

One of the proudest achievements of our Conservative Government is that unemployment is at its lowest level for nearly 50 years. But with more vacancies than unemployed people to fill them, we need to encourage people to join the labour market. We will make work pay by reducing people’s benefits if they do not fulfil their job search commitments. We will provide extra support for unemployed over-50s and we will ask around 120,000 more people on universal credit to take active steps to seek more and better paid work, or face having their benefits reduced.

At such a critical time for our economy, it is simply unacceptable that strike action should be disrupting so many lives. Other European countries have minimum service levels to stop militant trade unions from closing down transport networks during strikes. We will do the same, and we will go further. We will legislate to require unions to put pay offers to a member vote, to ensure that strikes can be called only once negotiations have genuinely broken down.

Of course, to drive growth, we need new sources of capital investment. To that end, I can announce that we will accelerate reforms to the pension charge cap so that it will no longer apply to well-designed performance fees. That will unlock pension fund investment into UK assets and innovative, high-growth businesses. It will benefit savers and increase growth. And we will provide up to £500 million to support new, innovative funds and attract billions of additional pounds into UK science and technology scale-ups.

This brings me to the cap on bankers’ bonuses. A strong UK economy has always depended on a strong financial services sector. We need global banks to create jobs here, invest here and pay taxes here in London—not in Paris, not in Frankfurt and not in New York. All the bonus cap did was to push up the basic salaries of bankers, or drive activity outside Europe. It never capped total remuneration, so let us not sit here and pretend otherwise. As a consequence, we are going to get rid of it. [Interruption.] We are going to get rid of it and, to reaffirm the UK’s status as the world’s financial services centre, I will set out an ambitious package of regulatory reforms later in the autumn.

To support growth right across the country, we need to go further, with targeted action in local areas. Today, I can announce the creation of new investment zones. We will liberalise planning rules in specified agreed sites, releasing land and accelerating development. And we will cut taxes. For businesses in designated tax sites, for 10 years, there will be accelerated tax reliefs for structures and buildings and 100% tax relief on qualifying investments in plant and machinery. On purchases of land and buildings for commercial or new residential development, there will be no stamp duty to pay whatsoever; on newly occupied business premises, there will be no business rates to pay whatsoever; and if a business hires a new employee in the tax site, on the first £50,000 they earn, the employer will pay no national insurance whatsoever. That is an unprecedented set of tax incentives for business to invest, build and create jobs right across the country.

I can confirm to the House that we are in early discussions with nearly 40 places such as Tees Valley, the west midlands, Norfolk and the west of England, to establish investment zones. We will work with the devolved Administrations and local partners to make sure that Scotland, Wales and Northern Ireland will also benefit if they are willing to. If we really want to level up, we have to unleash the power of the private sector.

Now we come to tax—central to solving the riddle of growth. The tax system is not simply about raising revenue for public services, vitally important though that is. Tax determines the incentives across our whole economy. We believe that high taxes reduce incentives to work, deter investment and hinder enterprise. As the Prime Minister has said, we will review the tax system to make it simpler, more dynamic and fairer for families. We are taking that first step today.

The interests of businesses are not separate from the interests of individuals and families. In fact, it is businesses that employ most people in this country. It is businesses that invest in the products and services we rely on. Every additional tax on business is ultimately passed through to families through higher prices, lower pay or lower returns on savings.

I can therefore confirm that next year’s planned increase in corporation tax will be cancelled. The corporation tax rate will not rise to 25%; it will remain at 19% and we will have the lowest rate of corporation tax in the G20. This will plough almost £19 billion a year back into the economy. That is £19 billion for businesses to reinvest, create jobs, raise wages or pay the dividends that support our pensions. I have already taken steps elsewhere in this statement to support financial services, so the bank surcharge will remain at 8%.

We will do more to encourage private investment. The annual investment allowance, which gives 100% tax relief on investments in plant and machinery, will not fall to £200,000 as planned. It will remain at £1 million, and it will do so permanently. Our duty is to make the UK one of the most competitive economies in the world, and we are delivering—we will deliver on this.

We want this country to be an entrepreneurial, share-owning democracy. The enterprise investment scheme and the venture capital trusts, we will extend beyond 2025. The seed enterprise investment scheme and company share option plans, we will increase the limits on to make them more generous—crucial steps on the road to making this a nation of entrepreneurs.

For the tax system to favour growth, it needs to be much simpler. I am hugely grateful to the Office of Tax Simplification for everything it has achieved since 2010. But instead of a single arm’s-length body that is separate from the Treasury and HMRC, we need to embed tax simplification into the heart of government. That is why I have decided to wind down the Office of Tax Simplification, and mandated every one of my tax officials to focus on simplifying our tax code.

To achieve a simpler system, I will start by removing unnecessary costs for business. First, we will automatically sunset EU regulations by December 2023, requiring Departments to review, replace or repeal retained EU law. This will reduce burdens on business, improve growth, and restore the primacy of UK legislation.

We can also simplify the IR35 rules—and we will. In practice, reforms to off-payroll working have added unnecessary complexity and cost for many businesses. So as promised by the Prime Minister, we will repeal the 2017 and 2021 reforms. Of course, we will continue to keep compliance closely under review.

Britain welcomes millions of tourists every year, and I want our high streets and airports, our ports and our shopping centres to feel the economic benefit. So we have decided to introduce VAT-free shopping for overseas visitors. We will replace the old paper-based system with a modern, digital one, and this will be in place as soon as possible. This is a priority for our great British retailers, so it is our priority too.

Our drive to modernise also extends to alcohol duties. I have listened to industry concerns about the ongoing reforms. I will therefore introduce an 18-month transitional measure for wine duty. I will also extend draught relief to cover smaller kegs of 20 litres and above to help smaller breweries. At this difficult time, we will not let alcohol duty rates rise in line with RPI, so I can announce that the planned increases in duty rates for beer, cider, wine and spirits will all be cancelled.

We now come to the question of personal taxation. It is an important principle that people should keep more of the money they earn, and it is good policy to boost incentives for work and enterprise. Yesterday we introduced a Bill that means that the health and social care levy will not begin next year—it will be cancelled. The increase in employer national insurance contributions and dividends tax will be cancelled, and the interim increase in the national insurance rate, brought in for this tax year, will also be cancelled. This cut will take effect from the earliest possible moment, 6 November. Reversing the levy delivers a tax cut for 28 million people and is worth, on average, £330 every year. It is a tax cut for nearly 1 million businesses. I can confirm that the additional funding for the NHS and social care services will be maintained at the same level.

Mr Speaker, I have another measure. Today’s statement is about growth. Home ownership is the most common route for people to own an asset, giving them a stake in the success of our economy and society. So to support growth, increase confidence and help families aspiring to own their own home, I can announce that we are cutting stamp duty. Under the current system, there is no stamp duty to pay on the first £125,000 of a property’s value. We are doubling that to £250,000. First-time buyers currently pay no stamp duty on the first £300,000, and we are increasing that threshold as well, to £425,000. We are going to increase the value of the property on which first-time buyers can claim relief from £500,000 to £625,000. The steps we have taken today mean that 200,000 more people will be taken out of paying stamp duty altogether. This is a permanent cut to stamp duty, effective from today.

I have another measure, Mr Speaker. High tax rates damage Britain’s competitiveness. They reduce the incentive to work, invest and start a business. The higher the taxes, the more ways people seek to avoid them, or they work elsewhere or simply work less, rather than putting their time and effort to more creative and productive ends. Take the additional rate of income tax. At 45%, it is currently higher than the headline top rate in G7 countries such as the US and Italy, and it is even higher than in social democracies such as Norway. But I am not going to cut the additional rate of tax today; I am going to abolish it altogether. From April 2023, we will have a single higher rate of income tax of 40%. That will simplify the tax system and make Britain more competitive. It will reward enterprise and work, incentivise growth, and it will benefit the whole economy and the whole country. After all, that only returns us to the top rate that we had for 20 years, including the entire time that the Opposition were last in power, bar one month.

And that is not all. I can announce today that we will cut the basic rate of income tax to 19p in April 2023—one year early. That means a tax cut for over 31 million people in just a few months’ time. This means that we will have one of the most competitive and pro-growth income tax systems in the world.

For too long in this country we have indulged in a fight over redistribution. Now we need to focus on growth, not just how we tax and spend. We will not apologise for managing the economy in a way that increases prosperity and living standards. Our entire focus is on making Britain more globally competitive, not losing out to our competitors abroad.

The Prime Minister promised that we would be a tax-cutting Government. Today, we have cut stamp duty; we have allowed businesses to keep more of their own money to invest, to innovate and to grow; we have cut income tax and national insurance for millions of workers. We are securing our place in a fiercely competitive global economy, with lower rates of corporation tax and lower rates of personal tax. We have promised to prioritise growth. We have promised a new approach for a new era. We have promised to release the enormous potential of this country. Our growth plan has delivered all those promises and more, and I commend it to the House.

[Mr Speaker]

Before I call the shadow Chancellor, I inform right hon. and hon. Members that at the end of questions on the statement I will call the Chancellor of the Exchequer to move a provisional collection of taxes motion. Copies of the motion are being made available in the Vote Office. I call the shadow Chancellor of the Exchequer, Rachel Reeves.

--- Later in debate ---

[Kwasi Kwarteng]

I was very interested to hear the hon. Lady’s defence and I was very curiously affected when she said that Labour believes in wealth creation. That was the biggest fantasy I have ever heard. You cannot grow the economy if you keep taxing families. You cannot grow the economy if you see business as the enemy. We have to reiterate very clearly to our friends on the Opposition Benches that you cannot tax your way to prosperity. You cannot help workers by increasing their taxes. Far from denigrating British workers, our measures are relieving burdens on our workers and our people by intervening on energy prices and relieving the burden of taxation. We have to unshackle the creative energies of this country and that is what we are 100% focused on.

[Mr Speaker]

I call the Chair of the Treasury Committee, Mel Stride.

[Mel Stride (Central Devon) (Con)]

I welcome much in this statement. There is a great deal that will help millions of families and businesses up and down the country. There is, however, a vast void at the centre of the announcements that have been made this morning: the lack of an independent OBR forecast. At a time when the markets are getting twitchy about Government bonds and the currency is under pressure, now is the time for transparency and making it very clear that whatever tax cuts or otherwise there may be, they are done in a fiscally responsible manner.

I have to say to my right hon. Friend that he should have come forward with an OBR forecast. The Treasury Committee knows, because of our correspondence with Richard Hughes, the head of the OBR, that it was standing ready to come forward with such a forecast. We further know, because of that correspondence, that there is a baseline forecast that the Chancellor has at the moment and that would have been on his desk when he first arrived in office. May I gently and respectfully ask him to release that forecast to provide transparency to the House and calmness to the markets, and to do that without further delay?

[Kwasi Kwarteng]

I thank my right hon. Friend and gently and respectfully remind him that, in the statement, I committed in a very categorical way to the OBR coming up with a forecast before the end of the calendar year. It will be a full forecast, not a baseline forecast, and it will fully score the measures outlined in this growth plan. I would be very happy to meet him at his Committee at a convenient time.

[Mr Speaker]

I call the Scottish National party spokes- person, Alison Thewliss.

[Alison Thewliss (Glasgow Central) (SNP)]

The Chancellor comes here today—the sixth Chancellor in seven years—asking us to believe that the things that he voted for and supported just a few months ago were all fine at the time, but need to be completely reversed now. This is a new era, but the Conservatives have been in government for 12 years. He stretches credibility beyond breaking point in saying that tax cuts for the rich, whopping bonuses for the bankers and low corporation tax for companies will somehow refloat magically Britain’s sinking economy. He has no evidence and this is no plan for growth. These are Budget measures with no OBR assessment. They are ducking scrutiny time and again. It is a plan for recession, for debt on an unsustainable trajectory and, almost inevitably, for public sector cuts to come.

Actively choosing to cut taxes permanently and spend eye-watering sums to patch up a failed energy market while inflation soars, interest rates are hiked and recession looms will not create growth; it will create economic chaos. Nothing the Chancellor has said today will provide any reassurance or give hope to ordinary people—folks who are struggling to get by in broke, broken Britain.

Families are unable to put food on the table and heat their homes, punished by the Tory benefit cap and the two-child limit. Those policies are driving up child poverty and the Chancellor should be scrapping them, not the bankers’ bonus cap. For indebted households already struggling to pay their mortgages and debt, a stamp duty cut will not help; it will overheat the housing market even more.

Disabled people and carers are terrified that the electricity will run out. Pensioners are scared to turn on the heating. The energy price cap should not go up; it is already too high and people must get more help now. Asylum seekers and people stuck on no recourse to public funds are forced to get by on a pittance, and there is nothing whatsoever for them from this Chancellor.

Community organisations such as Glasgow Central Mosque face additional energy bills of hundreds of thousands of pounds, which, as a charity, the mosque just cannot afford. People depend on community organisations like the mosque and they are being asked to be on the frontline this winter. Even with a six-month reprieve on energy prices, the bills will not go away. Would the Chancellor have the mosque close its elderly daycare service, the counselling provision, the mother and toddler group, the poverty reduction work or the vaccination centre that has been running in the community hall? These are very real choices that communities are already having to make.

The businesses that I have been listening to over the past months are incredibly worried for the future. They were already facing severe pressure through supply chain costs, input costs, labour costs, covid debts and Brexit woes before energy prices soared. Now they do not know how they will survive. Six months will go by in a flash and the question remains: what then? What then from the Chancellor? Companies cannot wish away these bills or the eye-wateringly unaffordable contracts they are being forced to sign right now. What happens to those businesses that just miss the arbitrary cut-off, and what of the increase in standing charges, which we know are disproportionately high in Scotland?

Scotland is an energy-rich country, but we do not have the power. Scotland’s renewable sector is booming, but in off-gas grid rural Scotland, surround by the wind turbines generating clean, green energy, people have to spend an absolute fortune on heating oil. In Argyll and Bute, Angus, the highlands and islands, and across our rural communities, households have faced increases of more than 230% in the past two years alone. The UK Government’s offer of £100 is nothing short of an insult as people turn to credit cards to fill up their fuel tanks.

The Scottish Government are doing all in their power to support people through this crisis: strengthening the safety net by increasing the Scottish child payment to £25 a week, doubling the fuel insecurity fund to £20 million and freezing rents, because renters are also facing pressures. We have the highest rate of the real living wage in Scotland, and we have invested in tackling fuel poverty and energy efficiency, but we could do so much more with more budget and more powers. At the back of the Blue Book today, there is still no carbon capture and storage for the north-east of Scotland. It is a game changer for renewables in Scotland. Where is it in the Chancellor’s plans? Nowhere, again. We could have growth by investing in skills, in net zero and in productivity, but the Chancellor’s plans will not achieve that.

People do not freeze to death in our Nordic neighbour countries, and people there are not living in one of the most unequal countries in the world. And it is only getting worse: this right-wing, Thatcher-cosplaying shambles of a Government are making choices of which they will never feel the consequences. I beg of this Chancellor that he listen to those on the edge—to those who are desperately looking to him right now for a lifeline. No one should have to beg for a decent standard of living.

The people of Scotland see a Scottish Government doing their best to mitigate the worst, but stymied by the broken politics of this Union and the economic madness that we heard from the Chancellor today. Scotland is looking for a different path. Scotland needs independence.

[Kwasi Kwarteng]

What Scotland does not need is reheated socialism from the SNP. The hon. Lady mentions energy; I am always staggered when people in her party mention energy but do not countenance nuclear power, which is a great, clean form of energy.

While we are speaking about energy, the hon. Lady will know that we have, indeed, listened. We have implemented a limit on energy prices: my right hon. Friend the Prime Minister, who is no longer in her place, made the announcement within two days of taking office. It is something that I am very proud of, and we have extended it to supporting businesses—[Interruption.]

[Mr Speaker]

Order. In fairness, the spokesperson for the SNP was heard in silence by Government Members. I certainly expect the answer to be heard in silence, especially as it affects the constituencies concerned.

[Kwasi Kwarteng]

I was very surprised to hear the hon. Lady mention energy, given the SNP’s appalling record in that regard. I am very open to her ideas, but I very much recommend that she pursue nuclear power, of which there is a great tradition in Scotland.

[John Glen (Salisbury) (Con)]

I very much welcome the aspirations for growth; all Governments and all Conservative Chancellors should have their minds focused on sustainable growth. I welcome the measures on the EIS and the SEIS, which were planned. I note the economic logic behind the bankers’ bonus cap change, but in my four and a half years as City Minister, the biggest concern that banks had was the overall tax burden. I urge the Chancellor to keep his focus on its global competitiveness. Finally, in an era of grave uncertainty about inflation, there is clear concern in the markets about the irreconcilable realities of having monetary tightening at the same time as fiscal loosening. I would welcome the Chancellor’s observations and his reassurance to the markets at this time.

[Kwasi Kwarteng]

My hon. Friend is absolutely right to say that bankers are concerned about the overall tax burden. That is why many of the bankers in the City of London are going to Paris: because they pay 30% tax there. That is a legitimate thing, and it is why we have reduced tax levels.

With respect to monetary and fiscal policy, my hon. Friend will know that monetary policy is the responsibility of the Bank and is targeted on inflation. The fiscal course that we have charted has absorbed two exogenous shocks, in the form of covid-19 and the Russian invasion of Ukraine. It is entirely appropriate in both those circumstances to have a looser fiscal policy to steer our path through those shocks. There is an entire logic to those positions.

[Dame Angela Eagle (Wallasey) (Lab)]

The Chancellor, without giving us any sign of the figures, has announced what is, in effect, a Budget with massive tax cuts, most of which go to those who are already well off. He has asserted that this will lead to growth, but he must now admit that there is no evidence whatsoever to suggest that large tax cuts for the already well-off lead to growth—in fact, the International Monetary Fund has said the opposite.

[Kwasi Kwarteng]

In response to that, I would say that there is plenty of evidence that high-tax, high-regulation socialism leads to a complete disaster as far as economic outcomes are concerned, and we are doing the opposite.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I commend my right hon. Friend for the incredibly broad package of support for all those faced with massive energy bills right now. Does he share my concern that Opposition Members are talking down the size of that package and that that, in itself, is causing grave concern among pensioners and families, as they are not under-standing that help is on its way and that the Government have sought to deal with that grave concern?

[Kwasi Kwarteng]

I am very grateful to my right hon. Friend for pointing out that the scale of the intervention is unprecedented and that millions and millions of people and businesses will be helped by what the Government are doing. I thank her very much for that.

[John McDonnell (Hayes and Harlington) (Lab)]

The cut to the 45p rate benefits the richest 1% in our society. When that is combined with lifting the cap on bonuses and the Chancellor’s attack on those on universal credit, does he not realise that this is the most socially divisive Budget in a generation? Has he not looked at the history of engineered booms of this sort? In the 1960s, the dash for growth created catastrophe in our economy; the Barber boom of the 1970s created unemployment; and the Lawson boom eventually created chaos. The only benefit that each of those three engineered booms had was that they resulted in the fall of a Tory Government.

[Kwasi Kwarteng]

All I remember is the financial crash of 2008, which the right hon. Gentleman’s party presided over and managed to engineer. I would also mention that the 40p rate was the rate for 20 years, and it was the one adopted by his party when it was successful and used to win elections.

[John Redwood (Wokingham) (Con)]

I strongly welcome the growth plan and the tax cuts that will help deliver it. Does the Chancellor agree that there are more obstacles to be swept aside so that we can grow more of our own food, produce more of our own energy and supply more of our goods, in order to raise living standards and generate the better jobs we all want for our constituents?

[Kwasi Kwarteng]

As so often, my right hon. Friend is 100% right.

[Sarah Olney (Richmond Park) (LD)]

This Conservative Government are completely out of touch. Today, we have witnessed the biggest and most irresponsible increase in borrowing in recent times—borrowing that could have been offset by increasing the windfall tax on oil and gas companies. Instead, the bill will be paid by millions of householders through higher taxes for years to come. The Chancellor’s excuse for this reckless approach is that it will lead to growth, which will, supposedly, trickle down as higher prosperity for the rest of us. Will he explain to my constituents how handing £45 billion of their taxes to the UK’s most profitable companies and the wealthiest individuals will help them to get a GP appointment when they need one, give their children a better education and make their streets safer?

[Kwasi Kwarteng]

What the hon. Lady did not mention in her question was the fact that a growing economy creates growing tax revenues, which pay for public services. Her high-tax, high-spend approach leads to a cycle of stagnation. We want to break free of that.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Growth and cutting taxes are true Conservative principles, and so is balancing the books. By my calculations, based on the Chancellor’s announcements, the deficit this year will be in the region of £250 billion and then probably £150 billion. That is certainly the evidence we got at the Treasury Committee yesterday; if that is not the case, I would be interested in his forecast. Of course, following this announcement there will be a higher deficit either way, so can he confirm that, as he seeks to balance the books in the future, he will not do so by cutting infrastructure investment in the north, whatever the outcome may be in terms of his likely growth path from here?

[Kwasi Kwarteng]

My hon. Friend will know that, through growth, we will get more tax receipts, which will actually reduce the net debt to GDP ratio over the medium term. That is 100% what we are focused on. He is right that in the past we have tended to reduce expenditure on capital projects. We must not do that in the future if we are to pursue our levelling-up goals.

[Dame Margaret Hodge (Barking) (Lab)]

We expect our Government to implement policy based on evidence. As a student of history, the Chancellor will be familiar with Anthony Barber’s disastrous economic experiment in the 1970s. It was the same thing: low tax, deregulation and a desperate quest for growth. All that did was lead to the Barber boom, followed by a big crash and a three-day working week—it turned to bust. The Chancellor is risking all our livelihoods, he is risking our economy and he is risking our public finances on the altar of a discredited ideology. A tsunami of tax cuts and giveaways to 80,000 Conservative members who voted the Prime Minister into office, with little for the 80% of Britons who are struggling and facing a tough winter ahead, is outrageous. According to Einstein, insanity is trying to do the same thing over and over and expecting different results. Can the Chancellor not see that his Budget is madness?

[Kwasi Kwarteng]

No, I think it is perfectly sane to want to grow the British economy by creating incentives. The Barber boom—the right hon. Lady is a student of history—was driven primarily by very loose monetary policy. It was essentially a demand pump-priming experiment. This is the opposite of that. What we are trying to do is create incentives and look at supply-side reform. It is a completely different model.

[Greg Hands (Chelsea and Fulham) (Con)]

I congratulate the Chancellor on his new role and on the measures announced today—particularly the cut in the basic rate, the abolition of the 45p rate, the stamp duty cut, and the return of tax-free shopping for visitors, which will be welcomed very much in central London. Will he look further, at the seven-year bonus deferral rules in financial services, which are among the most punitive in the world today?

[Kwasi Kwarteng]

Absolutely. I will be updating the House on measures to try to make sure that the financial services become, as they have been in the past, a world-leading industry.

[Sammy Wilson (East Antrim) (DUP)]

I think many people will be astounded at the reaction to the Chancellor’s proposal to increase economic growth in the United Kingdom, which will increase standards of living, increase employment, help to raise revenue for public services and reduce the national debt. I only hope that the Brexit freedoms that he talks about, once we are free of the Northern Ireland protocol, will lead to investment zones and regulatory reform in Northern Ireland.

Will the Chancellor consider two things to help working families? First, will he consider increasing tax-free childcare allowances, which would be an immense help for them? Secondly, since two thirds of people in Northern Ireland rely on home heating oil, will he accept that a £100 increase in assistance is not acceptable when there has been a 300% increase in the price of heating oil?

[Kwasi Kwarteng]

We are absolutely looking at the childcare issue, and I am sure one of my Cabinet colleagues will update the House on that; we are talking about the heating oil intervention; and we are very willing and eager to engage with Northern Ireland colleagues and friends on working out how we can roll out investment zones in Northern Ireland.

[Anthony Browne (South Cambridgeshire) (Con)]

I strongly welcome this radical and generous package of measures to promote growth and provide support for households. I also welcome the position of the Conservative party as a low-tax party, and join my colleagues in welcoming the cuts in income tax, corporation tax and various other taxes. I particularly welcome the cut in the most economically damaging of all taxes, stamp duty, which is seen as reducing labour mobility and clogging up the housing market. However, groups including the Institute for Fiscal Studies have called for its full abolition to promote economic growth. Will my right hon. Friend go even further, and consider more cuts in stamp duty to reduce the economic damage and the damage to households that it causes?

[Kwasi Kwarteng]

I am grateful to my hon. Friend, whose policy prescriptions are always interesting and valuable. I have only been in post for two and a half weeks, but I should be happy to discuss with him how we can simplify our tax system.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

We know that inflation is way off target, and today’s announcement of £45 billion of tax cuts will make that worse. It will force the Bank of England to continue consistently to raise mortgage rates, which will hammer homeowners and mortgage holders. The Chancellor has not published the OBR analysis. Is it not time he did, and is not his reason for not publishing it the fact that it reveals that he has broken the fiscal rules for which he voted and will not achieve the growth target that he set himself?

[Kwasi Kwarteng]

As I reminded my right hon. Friend the Member for Central Devon (Mel Stride), and as I said in my statement, the OBR will be coming up with a forecast, certainly before the end of the calendar year, and I shall be very interested to see and hear what it has to say.

[Harriett Baldwin (West Worcestershire) (Con)]

President Putin has weaponised the cost of energy against western economies, and the measures announced today will provide welcome temporary support for our constituents during this terrible time of invasion. Can the Chancellor confirm that the measures to support business that he has announced today will also allow incentives for investment in renewable energy to continue, so that we never again allow Putin to weaponise energy against us?

[Kwasi Kwarteng]

My hon. Friend has made an excellent point about renewables. It is always salutary for the House to be reminded that we have 11 GW—in fact, nearly 12 GW—of installed capacity of offshore wind, which makes us second only to China in terms of the offshore wind roll-out. There is no reason why we cannot continue to lead the world in offshore wind, solar, and other forms of renewable power.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Does the Chancellor agree with the former Bank of England rate-setter Martin Weale, who has said that the Government’s approach could “end in tears” with a run on the pound?

[Kwasi Kwarteng]

What will end in tears are high taxes, high spend and very low growth, and that is exactly the iron circle that we are trying to break.

[Mr Andrew Mitchell (Sutton Coldfield) (Con)]

I welcome what my right hon. Friend has said, in respect of growth, about investment zones. He said that they would come to the west midlands, which I think will be very helpful in levelling up in the Birmingham area and the west midlands in general. May I remind him, however, of the importance of UK investment in tackling international problems, whether they involve pandemics, illegal migration or climate change? This is about British expertise, but it is also about British money. Can my right hon. Friend confirm that we are on track to restore what was a manifesto promise to bring back the 0.7% aid commitment in 2024?

[Kwasi Kwarteng]

We are always looking at our manifesto commitments, and given our leadership in this regard, I hope that we can come to the 0.7% as soon as is practicable and as soon as the public finances allow it.

[Ben Lake (Ceredigion) (PC)]

The Chancellor began his statement by saying that the Government would be cutting everyone’s energy bills by an average of £1,400, but there is concern about whether that will apply to households and businesses that are not connected to the mains gas grid. Some 74% of properties in Ceredigion depend on alternative fuels that will not be subject to the measures announced this week. Will there be further support for such households and businesses to ensure that they benefit in a similar way to those that are connected to the mains gas grid?

[Kwasi Kwarteng]

We are discussing support for off-grid properties where people rely on heating oil and other forms of energy. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy will be discussing it as well, and will set out the position in more detail very soon.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

I welcome the short-term support for energy costs that the Government are pursuing. I also welcome their focus on longer-term growth, but does my right hon. Friend agree that growth is dependent on the confidence not only of businesses, but of the households that spend on the products and services those businesses create? Does he also agree that that confidence will evaporate if people’s mortgage costs increase further than the benefits they gain from tax reductions? Will he do all he can to make sure that does not happen?

[Kwasi Kwarteng]

My right hon. and learned Friend is right. The two interventions I announced today—the energy intervention and reducing the tax burden—will have a positive impact on inflation. He is quite right that there is a risk in respect of interest rates. I regularly speak to the Governor of the Bank of England to seek his views on that. We work closely together and are focused on alleviating the burden on our constituents.

[Sir George Howarth (Knowsley) (Lab)]

The Chancellor proclaims the end of redistribution. Well, I listened very carefully to the measures he announced, and it strikes me that they are redistributive measures: they redistribute away from those in the greatest need to those in the least need. How, in that context, does he defend spending £10 billion a year on the buy-to-let scheme, which serves only to help those who do not need it to buy houses that they do not live in, and serves no purpose whatsoever for those who end up renting those houses?

--- Later in debate ---

[Kwasi Kwarteng]

My statement announced measures to help people across the income scale. We are very focused on growth. What I said is that we should not indulge in a fight on redistributing something small that we should be trying to grow—that is where our focus is.

[James Cartlidge (South Suffolk) (Con)]

I congratulate my right hon. Friend on his statement and his new position. He knows that to increase output he needs capacity in the labour market, which is extremely tight, so he will come under huge pressure to loosen immigration rules. May I urge him instead to focus on the economically inactive to ensure they get support? Is it not the case that if those who have been written off, because of mild mental ill health, anxiety and all the rest of it, get the right support, it is in their interest and in the interest of their self-esteem to get back to work?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. There is a huge pool of talent that needs to be brought into the labour market. Every Government, and our Government in particular, should be focused on trying to bring more people into the labour market.

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The Chancellor is a midwife to profiteering by energy companies on the public’s credit card. He has done very little, as my friend the hon. Member for Ceredigion (Ben Lake) said, about rural and island places that depend on heating oil. People in my consistency have an electricity unit rate of 33p, which is 10% higher than the 29.6p in London. The standing charge is 51p in my constituency, a staggering 60% higher than the 32p in London. Those are yesterday’s figures from E.ON. This UK Government are highwaymen stealing from energy-rich Scotland. It is a disgrace, and this Chancellor should conduct himself far more fairly. As has been said, this statement is something for the rich and not for the deserving.

[Kwasi Kwarteng]

I reject that. The hon. Gentleman will know that, when I was Secretary of State for Business, Energy and Industrial Strategy, I was very focused on bringing the renewables pot to remote island wind. We achieved great things by working together, and I hope we can continue that dialogue in my new office.

[Richard Drax (South Dorset) (Con)]

I welcome my right hon. Friend to his place. How refreshing it is to hear some Conservative policies at last. Weymouth is talking to officials about the idea of an investment zone—we are entirely supportive and very much hope to get it. If we do get it, Weymouth is asking for the infrastructure funding to go with it. Without that, we will not attract the private investment we need to create prosperity and jobs.

[Kwasi Kwarteng]

My hon. Friend is absolutely right. We will link the investment zones to infrastructure projects, because one without the other does not make sense. I would be very interested to talk to him about Weymouth and the opportunities for investment zones in that area.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

We have seen this Chancellor rip up fiscal responsibility, sack the senior civil servant at the Treasury and mortgage the future of our children and our country. It is not just me who is concerned about his ambition for growth. The Institute for Fiscal Studies tells us that

“we shouldn’t underestimate the scale of the challenge”.

Hopefully, no one does that. It says that

“an increase in annual growth of more than 0.7% of national income—the increase required just to stabilise debt as a share of GDP…would be equivalent to the difference between the growth in the UK”

experienced in the 25 years from 1983.

There is no “miracle cure”, says the IFS. There is not. Can the Chancellor just admit that he is fiscally irresponsible and that he is gambling with this country’s future?

[Kwasi Kwarteng]

I do not admit that at all. In fact, the gamble was to do nothing. The gamble was to stick on the path that we were on and simply raise spending and taxes and think that, magically, we were going to get to the promised land. That was not a credible path; this is.

[Nickie Aiken (Cities of London and Westminster) (Con)]

I certainly welcome the comprehensive growth plan that the Chancellor has outlined today. I particularly welcome the reintroduction of tax-free shopping for international visitors. I hope that that also now includes EU citizens. It sounds like this Chancellor and this Government are very much a reforming Government and I welcome that. Can my right hon. Friend please guarantee that he will consider now reforming one of our most antiquated and punitive taxes—business rates?

[Kwasi Kwarteng]

We are having a tax review to fit our tax system to the 21st century. I pay tribute to my hon. Friend and her campaign on VAT and duty-free shopping. We engaged on that when I was the Business Secretary, and I hope that we can deliver on her vision.

[Kenny MacAskill (East Lothian) (Alba)]

The world has seen this dogma over orthodoxy before in Pinochet’s Chile with the adoption of the Chicago Boys. That tanked the Chilean economy, and this will do the same to the UK economy: the pound will tank, inflation will rise, unemployment will escalate and we will see social discord. The Chancellor says that tax is not simply about revenue, but about the economy. I agree, but it is also about the society that we want. What he is doing is taking from the poor and giving to the rich. He is giving to this generation and impoverishing the young and future generations, ensuring that the UK becomes an ever more unequal society. That comes at a cost not just in unemployment, but in all sorts of social issues that we saw in the 1980s. That is why Scotland demands its referendum. We want the opportunity to continue to build a better and fairer society. This is a route to disaster that will be paid not just by the poor, but by middle-income earners and only the rich will benefit.

[Kwasi Kwarteng]

I am glad to hear the hon. Gentleman’s optimistic assessment of my growth plan, but he is entirely wrong. What we have to do is focus on growth. That is what we are doing and that is what we will be delivering.

[Greg Clark (Tunbridge Wells) (Con)]

I welcome my right hon. Friend’s statement. He is absolutely right to focus the Treasury on growth. One of the most important sources of that is to build on our excellence in science and innovation. Will he say whether he is still committed to reaching the 2.4% international average for research and development investment by 2027 and to achieve his target of £20 billion by the end of this Parliament?

[Kwasi Kwarteng]

I pay tribute to my right hon. Friend’s tenure in the Department for Business, Energy and Industrial Strategy. He was a great Secretary of State who really championed science. I tried to do the same in that post. I look forward to engaging with him on the science agenda going forward.

[Jon Trickett (Hemsworth) (Lab)]

Is it not clear that the Chancellor’s growth plan only grows one part of the economy: the bankers’ bonuses and the incomes of the richest in our society? If he really wants to cut through the cycle of low pay, poor productivity and low economic growth, should he not be abandoning his ideological commitment to trickle-down economics and finally announce a massive public programme of investment in England and Britain’s regions and nations?

[Kwasi Kwarteng]

We do have a massive programme of investment: it is called business and the private sector being able to mobilise capital to act in institutions such as investment zones. That is a really radical plan, and I was delighted to announce it this morning.

[Robert Halfon (Harlow) (Con)]

I strongly welcome the income tax cuts, the energy rebates and the freeze, as well as the other cost of living measures. They will enormously help my constituents, many of whom are working seven days a week just to keep their heads above water. My right hon. Friend knows that petrol and diesel prices have been at historic highs; hauliers have been paying up to £125 more every time they fill up, and white van men and women are paying £25 more every time they fill up at petrol stations. When he comes back and does a full Budget, will he please do everything he can to cut fuel duty, since, as he has made clear, he is a tax-cutting Chancellor?

[Kwasi Kwarteng]

I would be very happy to engage my right hon. Friend on that. He and I entered the House at the same time, and I know nobody has been more tireless and unstinting in supporting their constituents and focusing on lessening the tax burden.

[Ellie Reeves (Lewisham West and Penge) (Lab)]

We welcome the Chancellor’s target to get back to levels of growth last sustained under a Labour Government, but under the Conservatives the UK is currently forecast to have the slowest growth rate of any advanced economy next year. Can the Chancellor tell us what the OBR’s estimate is of the impact of the measures he has announced today on growth?

[Kwasi Kwarteng]

As I said, the OBR will come up with a full forecast before the end of the calendar year.

[Martin Vickers (Cleethorpes) (Con)]

My right hon. Friend is well aware of the great opportunities in northern Lincolnshire and the Humber region, particularly in renewable energy. I welcome his announcement on investment zones, and I and the two Conservative local authorities in my constituency will want to work with him to deliver that. Even sooner, however, we can deliver on the Humber freeports. Can he confirm that the freeport designation will continue, and will he unblock the process that is delaying their launch?

[Kwasi Kwarteng]

The freeports are certainly continuing and I would be very happy to speak to my hon. Friend about how we can, as he puts it, unblock the process to accelerate the Humber freeport bid.

[Caroline Lucas (Brighton, Pavilion) (Green)]

This Budget amounts to an environment wrecker’s charter and it is a statement of missed opportunities. For example, a report just this week shows that a major programme of insulating homes in Britain and installing heat pumps could benefit the economy by £7 billion a year, create 140,000 jobs by 2030, get our fuel bills down and get climate emissions down too. Tucked away on page 14 of the growth report is a tiny reference to some investment in energy efficiency. It is nowhere near enough. Why is the Chancellor setting his face against the kind of retrofit revolution that offers the only viable way out of the current crisis, as well as reducing our dependence on fossil fuels? Is it because, for him, dogma and deregulation trump evidence and common sense every time?

[Kwasi Kwarteng]

It is not about dogma and deregulation. In fact, I campaigned for the eco and energy efficiency measures when I was Business Secretary and ensured that there was reference in the growth plan to the eco plan. We may well expand that at a future date.

[Alberto Costa (South Leicestershire) (Con)]

Nuclear power must form part of a diversified energy portfolio. I welcome the measures the Chancellor has announced today, particularly accelerating energy infrastructure. Will he say a few words on whether his welcome package includes accelerating modular nuclear reactors, which are the future of the nuclear industry?

[Kwasi Kwarteng]

I was very focused on small modular reactor production when I was BEIS Secretary, as my hon. Friend knows, and I want to bring the thinking about that into the heart of the Treasury. There are still negotiations to be had, but he is absolutely right that SMRs and nuclear are part of our energy mix in the future.

[Jess Phillips (Birmingham, Yardley) (Lab)]

Can the Chancellor just confirm for me that he has announced a tax cut that means someone earning £1 million will be £40,000 better off—more than a nurse earns, and £10,000 more than the average wage in Birmingham?

[Kwasi Kwarteng]

What I will confirm is that the top rate of tax has gone back to what it was before the hon. Lady entered the House, when the Labour party was successful and winning elections. That was the top rate for 20 years, and that is what we have gone back to.

[Peter Aldous (Waveney) (Con)]

In the Lowestoft and Great Yarmouth area there is already an enterprise zone that has been very successful, although the land allocated needs to be adjusted to take advantage of the opportunities in offshore energy and a revived fishing industry. Will my right hon. Friend confirm that the existing enterprise zone will benefit from the opportunities that will be provided for the investment zones that he has announced?

[Kwasi Kwarteng]

The enterprise zones, freeports and new investment zones will all benefit from tax reduction and planning relaxation. Of course, there will come a time when other places will want to become investment zones. This is a huge opportunity for communities up and down the country.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Twelve years of a Conservative Government and another growth plan, yet the reality is that the child poverty gap between the north-east and the rest of the country is at a 20-year high. Will the Chancellor explain how giving tax cuts to the wealthiest will put food on the table of children living below the poverty line in Newcastle this winter?

[Kwasi Kwarteng]

When a recession and economic downturns have hit in the past, the people most adversely affected are the most vulnerable in society. That means we have a duty to grow the economy and make sure that we turbo-charge growth. That is how we will help all our constituents.

[Greg Smith (Buckingham) (Con)]

I warmly welcome my right hon. Friend’s statement and the return to the low-tax free market principles that we on the Conservative Benches know will lead to growth and prosperity for everybody in our country. We know the role played by the self-employed and entrepreneurs in growing the economy and getting us back to prosperity after the mess that the Labour party made of the economy when it was last in government, so I was delighted to see the reforms to IR35 in my right hon. Friend’s statement. There are 12,000 registered self-employed people in my constituency; will he confirm that the reforms will come quickly to give the self-employed of today, the entrepreneurs of tomorrow and the businesses that might contract their services the confidence to get on and grow?

[Kwasi Kwarteng]

Absolutely—100%.

[Kirsten Oswald (East Renfrewshire) (SNP)]

This statement seems completely divorced from the realities of most people’s lives. The Chancellor has made the choice deliberately to remove the cap from bankers’ bonuses while deliberately ignoring the needs of people who are already struggling to make ends meet. What is his message to the people who are not going to benefit from his love-in with the super-rich? How does he think people are going to manage? Does the Chancellor just not care?

[Kwasi Kwarteng]

We absolutely care, which is why have the energy intervention that we announced last week and that we have mentioned today. We have eco schemes, such as the warm home discount, and a reduction of council tax for bands A to D. We have already done a huge amount of intervention and we will always protect the most vulnerable.

[Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)]

My right hon. Friend has made clear his intention to lift the bankers’ bonus cap, but I draw his attention to another cap or threshold: the £40,000 annual pension allowance, which is also causing challenges, particularly to many experienced and senior public sector workers. My right hon. Friend will be aware of the NHS workforce challenges that our health service currently faces. Unless this issue is dealt with effectively and we scrap the £40,000 annual allowance for defined-benefit pension schemes, we are going to lose a lot of very experienced clinicians at a time when the NHS needs them most. If he can look at bankers’ bonuses, can he also look at this issue?

[Kwasi Kwarteng]

The issue has been raised, and it is a question of not just the annual limit but the lifetime allowance: anecdotally I hear that the fact that it has been reduced successively over time is a big driver of people leaving the profession. I would be happy to have a discussion with my hon. Friend about that.

[Mohammad Yasin (Bedford) (Lab)]

While millions struggle with the cost of living, the Chancellor’s first priority is to lift the cap on bankers’ bonuses and tighten the rules on benefits for those who have the least. The Government have already forgotten that the bonus culture led to the banking crash. To lower the regulations that were put in place to protect ordinary people and their pensions is dangerous. This is Tory austerity all over again: making the rich richer and the poorest poorer. At a time when key workers are being denied a decent pay rise, why has the Chancellor chosen to help his wealthy chums?

[Kwasi Kwarteng]

The focus of the growth plan is on growth—on getting our economy moving and getting to 2.5%. That is the lens through which I am looking at this problem. I am also happy to remind the hon. Gentleman that we are protecting the most vulnerable, through the energy intervention and other forms of support.

[David Rutley (Macclesfield) (Con)]

Growth sectors such as pharmaceuticals will no doubt welcome my right hon. Friend’s steps on corporation tax. Does he agree that supply-side reforms are also required, with the Department of Health and Social Care and BEIS working with greater urgency to approve and adopt clinically proven medical treatments to more fully realise the potential of the UK life sciences sector?

[Kwasi Kwarteng]

I am pleased to confirm to my hon. Friend that that is exactly what we need to be driving forward. We need to be accelerating the process so that we can deliver outcomes more quickly. I pay tribute to the fact that he and I have been talking about these issues for many years now. I am pleased that he remains as focused on growth as he was many years ago.

[Stephen Farry (North Down) (Alliance)]

It may be an uncomfortable truth for some, but the biggest barrier to growth at present is the fact that there are increased barriers to trade with our nearest neighbour, the European Union, as a result of Brexit. There is an alternative reality: an increased windfall tax on energy companies, investment in a green new deal, investment in skills and sound public finances. How on earth can we look our constituents in the eye when they have been offered only £100 for home heating oil and the wealthiest in our society will get thousands in extra benefits today?

[Kwasi Kwarteng]

My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy is looking at the heating oil issue and we will come to a decision on Northern Ireland imminently.

[George Freeman (Mid Norfolk) (Con)]

I thank the Chancellor for putting growth at the heart of his mission at the Treasury and for challenging Treasury orthodoxy, and making that the priority. I thank him in particular for recognising the potential of Norfolk.

Does the Chancellor agree that there are different types of growth? We need growth that drives levelling up, strengthens the Union and drives innovation for higher productivity. Science, technology and innovation are fundamental to that. Does he echo the comments of my right hon. Friend the former Chair of the Science and Technology Committee that we need the Treasury to move quickly to unlock private investment in fast growing sectors?

[Kwasi Kwarteng]

My hon. Friend is absolutely right; I pay tribute to his service as Science Minister when I was Secretary of State for BEIS. We worked closely together then and I hope that we can do so now, to make sure that the Treasury and other Departments are as focused on the science and technology agenda as my hon. Friend.

[Sir Stephen Timms (East Ham) (Lab)]

Will the Chancellor give the important assurance that his predecessor gave—that social security benefits will be fully uprated in the usual way, in line with this month’s inflation figure?

[Kwasi Kwarteng]

We will make announcements about that in due course.

[Helen Whately (Faversham and Mid Kent) (Con)]

I welcome my right hon. Friend’s focus and drive for increased economic growth and for making sure that people get to keep more of what they earn. Will he assure me that, as part of that, the Government will also be absolutely focused on reducing the barriers that sometimes prevent people from working more and earning more—particularly when it comes to skills and childcare?

[Kwasi Kwarteng]

The childcare issue has been raised many times and I am looking forward to a subsequent statement from my right hon. Friend the Secretary of State for Education. That is clearly an issue that can unlock growth and enable people to go out and earn money to protect their families. That is really important.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Surely the Chancellor understands that the cut in stamp duty will do nothing to help 99% of people who cannot quite afford their own homes? It will do huge amounts to incentivise people who want second, third, fourth or fifth homes in my constituency in Cumbria or in other rural parts of Britain. Does he not realise the damage that excessive second home ownership and non-permanently-occupied dwellings do to communities such as mine and those in Cornwall, Northumberland and the rest of the country? Will he listen to rural Britain, stop backing second home owners and back our communities instead?

--- Later in debate ---

[Kwasi Kwarteng]

We are backing the hon. Gentleman’s communities—by reducing taxes, by creating the potential for investment zones and through the energy intervention. There is a whole host of measures that are backing ordinary, hard-working people.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

I welcome much of the announcement, particularly the change to IR35. As the Chancellor will know, that has caused real distress and injustice to many honest, hard-working self-employed people. I also welcome the changes to stamp duty, but will he bear in mind—I am sure he does, as a Conservative—that we also believe in sound money and we must keep an eye on inflation? We do not want the benefit of the stamp duty cut to be eroded for many homeowners by increased mortgage costs.

[Kwasi Kwarteng]

Absolutely. My hon. Friend will understand that, historically, we have managed to get out of high periods of debt by growing our economy. That is why we have a renewed focus on growth. What we cannot do is simply tax our way to prosperity; that has never happened before.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I inform the Chancellor of the Exchequer that that was probably the most disappointing presentation that I have heard since I came into the House in 1979. What exactly is he hiding? Is he not hiding the fact that in future, our children and grandchildren will have to pay the price of what he has announced today? Is it not the truth that we will put this borrowing on future generations, which will blight their whole future?

[Kwasi Kwarteng]

What I find extraordinary is that Opposition Members stood on a platform of pure unadulterated socialism in 2019 that was totally reckless and had no interest in the private sector. What we are doing is putting more money into the pockets of people and businesses. That is what drives growth.

[Duncan Baker (North Norfolk) (Con)]

Is it not the case that the Chancellor’s intervention to freeze energy bills is already predicted to reduce inflation by 5%, and that for every single percentage point that inflation comes down by, our borrowing costs are reduced by £6 billion? Therefore, by simple economics, in which the Opposition need a lesson, it is entirely feasible that we have the second-lowest amount of net debt to GDP within the G7. That makes this growth strategy entirely plausible.

[Kwasi Kwarteng]

My hon. Friend is absolutely right. Because of careful stewardship of the public finances, we can withstand the exogenous shocks represented by covid-19 and Russia’s invasion of Ukraine. We have the second-lowest net debt to GDP in the G7 and we will use our fiscal position to help the most vulnerable in society.

[Rachael Maskell (York Central) (Lab/Co-op)]

Since the Chancellor came to his feet, the value of UK Government bonds has plummeted, which will put the national debt into a serious crisis for generations to come. How will he mitigate that loss?

--- Later in debate ---

[Kwasi Kwarteng]

The markets will react as they will, but the growth plan will soon show that we are on the right course and that we are steering us to a more prosperous future.

[Matt Warman (Boston and Skegness) (Con)]

I welcome the focus on putting rocket boosters under Britain’s brilliant technology sector in the Chancellor’s Budget, but internet businesses are open 24/7. This is a deregulating Government. Will the Chancellor look at deregulating Sunday opening hours, so that we can compete on the high street as we can compete on the internet?

[Kwasi Kwarteng]

We have looked at that in the past. It was not without controversy, but I would be happy to hear my hon. Friend’s ideas on the subject.

[Hilary Benn (Leeds Central) (Lab)]

The Chancellor argues, on the one hand, that those on the lowest incomes—people on universal credit—should face the threat of their income being reduced further to boost economic growth, while on the other hand, that people already on the highest incomes, such as bankers, need an increase in their incomes through their bonuses to do the same. How on earth is that fair?

[Kwasi Kwarteng]

It is a very basic lesson. We currently tax bonuses at about 50%, which goes into public services. It is absolutely legitimate to get more people into the labour market. That seems to be a reasonable thing to want to do.

[Virginia Crosbie (Ynys Môn) (Con)]

As chair of the Anglesey freeport bidding consortium, I am delighted with the announcement of new investment zones by the UK Government. Can the Chancellor say what that means for Ynys Môn and its freeport bid, especially with a deadline to submit by 24 November?

[Kwasi Kwarteng]

Ynys Môn has a fantastic Member of Parliament in my hon. Friend, and we are focused not only on freeports, but on the future of nuclear. Ynys Môn represents a hugely exciting opportunity in that regard.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The Chancellor has admitted that the last 12 Tory years were a mistake, and for once I agree with him. But the real impact of this Budget is that we are piling debt on future generations. It is unaffordable. If the Chancellor were a local councillor presenting this as a budget, his monitoring office would be issuing him with a section 114 notice, and his Ministers would be calling in the commissioners.

[Kwasi Kwarteng]

The focus is on growth. As my hon. Friend the Member for North Norfolk (Duncan Baker) said, our net debt to GDP ratio is low compared with other countries in the G7. We are 100% focused on growing the economy, so that future generations will be able to deal with the fiscal shocks they will have to deal with. That is what the purpose of this is.

[Sara Britcliffe (Hyndburn) (Con)]

Getting through key infrastructure projects and the announcement of investment zones, while helping families and businesses with their energy costs, is key for people in Haslingden. It has been announced that Lancashire can be an investment zone, but there are significant differences and problems between west Lancashire and east Lancashire. Could the Chancellor say whether it is possible for areas to have two investment zones in a county?

[Kwasi Kwarteng]

Absolutely. There is no reason why we cannot have lots of different investment zones dotted around in lots of areas of the country. The Secretary of State for Levelling Up, Housing and Communities is engaged in conversations with various local authorities as we speak, to see whether they can accommodate investment zones.

[Amy Callaghan (East Dunbartonshire) (SNP)]

I was not aware that new legislation was introduced during a fiscal statement. Announcing to the House plans to annihilate workers’ rights, during a statement framed as supporting our constituents and those very workers through the energy crisis, is a new low even for a Tory Government—I would say “this Government”, but the faces change on the Benches so often that I cannot possibly say “this Government”. I would ask the right hon. Gentleman to scrap those plans, but they are not the plans of the Chancellor. Is it not the case that they are the ill-thought-out plans of a power-hungry Tory leadership candidate, and they must be scrapped?

[Kwasi Kwarteng]

I did not mention anything on workers’ rights in my statement and I have always been very focused on broader workers’ rights—[Interruption.] On the right to strike, the minimum service levels are crucial to ensure that the public are protected from militant trade union action. That is entirely fair, it is what happens in Europe and we are 100% committed to that.

[Antony Higginbotham (Burnley) (Con)]

I welcome the Secretary of State’s focus on growth, which will allow businesses in Burnley and Padiham to grow, and allow people to keep more of the money they earn. Following on from my hon. Friend the Member for Hyndburn (Sara Britcliffe), in east Lancashire we stand ready to lead this country in aerospace, cyber and small modular reactors. So I urge the Chancellor to look sympathetically on a bid from east Lancashire. Will he meet me, and other east Lancashire colleagues and the leader of Lancashire County Council, to talk about what an east Lancashire investment zone might look like?

[Kwasi Kwarteng]

Just to remind my hon. Friend, investment zone conversations are very much being led by the Secretary of State for Levelling Up, Housing and Communities, who I am sure will be engaging with the relevant councils. I would be happy also to talk to my hon. Friend about the opportunities that investment zones represent.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

Can I take the Chancellor back to his party’s manifesto commitment on levelling up? What I want to know is: will the investment zones tackle the need for real infrastructure investment, for example, if he is really serious about growth, the need for electrification of the line to Hull, which was ruled out by the Conservative party’s integrated rail plan just last November for the next 30 years.? Will he look at that again, if he is serious about growth?

[Kwasi Kwarteng]

We are always looking at infrastructure projects and measuring their benefit to cost ratio. Investment zones are, of course, naturally allied to key bits of infrastructure and they have to be co-ordinated. That is one of the purposes of what we are announcing.

[Mike Wood (Dudley South) (Con)]

Investment zones have the potential to make a massive contribution to levelling up in areas such as Dudley South. Will the Chancellor reassure my constituents that the more liberalised planning regulations will not mean that communities have to sacrifice precious green belt as the price of an enterprise zone?

[Kwasi Kwarteng]

That is absolutely right. The whole premise and basis of the investment zone conversation is mutual consent. There has to be mutual consent—they will not be imposed in any area. Absolutely, local residents and councils will have a huge say in how the investment zone develops.

[Jeremy Corbyn (Islington North) (Ind)]

Will the Chancellor of the Exchequer explain where the morality is in giving a huge increase in income to the very richest in our society and threatening the benefits of the very poorest in our society, who are trying to get by on universal credit? What estimate does he have of the levels of inequality that will exist in this country in one year’s time and in five years’ time as a result of his statement today?

[Kwasi Kwarteng]

It is always our duty to help the most vulnerable in society. That is why we have had the energy intervention and the covid-19 pandemic intervention. It is also incumbent on the Government to seek to enable growth. That is what we are focused on, too, in this plan.

[Shaun Bailey (West Bromwich West) (Con)]

I welcome my right hon. Friend to his position. As he will know from his previous portfolio, highly energy intensive industries have been acutely affected by rising energy prices. I welcome the Government’s intervention on energy prices, but what we need in the black country, particularly in our advanced manufacturing and metals industries—this point was stressed yesterday to my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy—is continued communication between the Treasury and the Department for Business, Energy and Industrial Strategy. Will my right hon. Friend assure me that those discussions will be ongoing, and that as circumstances change for highly energy intensive industries, the Treasury remains open to carrying on that dialogue?

[Kwasi Kwarteng]

My hon. Friend will appreciate that as the Secretary of State at BEIS, I was very focused on energy intensive industries. I did engage Treasury colleagues then, and now that I am in the Treasury, I will be very happy to engage with BEIS colleagues on this pressing issue.

[Chris Bryant (Rhondda) (Lab)]

It must, surely, be the definition of chutzpah to come to the House of Commons and complain about high taxation and low growth, when the right hon. Gentleman voted for 15 increases in taxation and was the Business Secretary who took the UK into recession. It must, surely, be the definition of chutzpah to come to the House of Commons and say that he believes in sound money when he has just put £72.4 billion on the never-never credit card for the country.

Let me explain to the right hon. Gentleman why people in the Rhondda might think that he has got this wrong. We do not have any bankers begging for additional bonuses in the Rhondda. We do not have anybody, I would guess, earning more than £150,000 in the Rhondda, but we do have a lot of families whose energy bills have doubled this year, even after what he has done, and who will be going into energy poverty. They are seeing food prices go up by 15% and petrol prices locally go up even more. That is why we think he is a disgrace.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We need a question. If there is no question, the Chancellor of the Exchequer cannot answer.

[Kwasi Kwarteng]

I am not sure there was a question. We have to focus on growth. Through growth we get more tax revenue to pay for public services. That is a fundamental notion and that is what we are focused on.

[Selaine Saxby (North Devon) (Con)]

I warmly welcome my right hon. Friend’s focus on productivity. Will he also use fiscal levers to tackle the productivity of housing stock in tourist locations such as my constituency? It has winter ghost villages, as second homes and holiday lets sit empty, which results in local businesses having to close and endless businesses being unable to recruit people for good jobs, as there is nowhere to live.

[Kwasi Kwarteng]

I will absolutely be focused on that. I will be very interested to hear more detail in a conversation with my hon. Friend and to discuss what more we can do to free up the property market.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

With your forbearance, Madam Deputy Speaker, I would like to pass on to the House the sad news of the passing of my predecessor, Jim Sheridan. He diligently served the constituents of West Renfrewshire, and then Paisley and Renfrewshire North, for 40 years. I am sure that all our wishes and thoughts are with his wife Jean and his family and friends.

Jim and I did not agree on everything, I think it is fair to say, but I am certain that we would have agreed wholeheartedly on the Chancellor’s shameful and regressive statement. Workers’ rights were important to Jim, as they are to me, so the thought of attacking those rights is to the Chancellor’s shame. He spoke of the riddle of growth, so I wonder if he could riddle me this: how is it that giving bankers yet more millions drives economic growth, but giving those on benefits a fair deal, or those on low wages a cost of living pay increase, drives inflation?

--- Later in debate ---

[Kwasi Kwarteng]

If bankers are working in London, they are taxed in London; if they move out of the UK, they are taxed elsewhere, and we do not see a penny of tax revenue. Financial services are not just about the City of London; they are also provided in Edinburgh and a whole range of other towns. We have to be at the apex of the global financial system. We have to attract the talent, then we can tax it and use the revenue for public services.

[Craig Mackinlay (South Thanet) (Con)]

May I offer the Chancellor my congratulations on his growth plan? He will know of my interest in tax; the Register of Members’ Financial Interests will show it. I am delighted to see lower and simpler taxes. I think it is fair to say that the Conservatives’ inheritance of the claim to be a party of low taxes had become somewhat opaque and confused in recent years. Does he agree with my simplistic summary of what he is saying today: that this party believes in taking a smaller percentage out of a bigger pie, rather than in the state nicking more from a static and diminishing pie? The latter seems to be the message of the Opposition parties—except for the Democratic Unionist party, of course.

[Kwasi Kwarteng]

We openly repudiate a socialist vision of society. We do not believe that the state should take more and more of people’s income. We think that people should keep more and more of their earnings.

[Nick Smith (Blaenau Gwent) (Lab)]

The Chancellor has sacked his permanent secretary and muzzled the Office for Budget Responsibility, and is man-marking the Governor of the Bank of England. The Chancellor’s free-wheeling ideology is crushing dissent. Will the Governor of the Bank of England still be in his job by Christmas?

[Kwasi Kwarteng]

The Governor of the Bank of England is entirely independent. We actually have very good relations. We speak regularly, which I think is a good thing. The hon. Gentleman might think it is man-marking; I think it is very cordial. We exchange ideas, and we intend to continue doing so.

[Nick Fletcher (Don Valley) (Con)]

I welcome my right hon. Friend to his position. I welcome this statement on behalf of the whole of Doncaster, which has had decades of neglect and low aspiration while under opposition control. If Peel Holdings does the right thing today, we will have saved our airport. With low taxes at airports, an investment zone, and a grant from the Department for Business, Energy and Industrial Strategy for the Advanced Manufacturing Research Centre, Aspiration Doncaster can be achieved, and levelling up will be delivered, delivered, delivered. Will my right hon. Friend please meet me to look at all the opportunities available to the people of Doncaster as a result of the statement?

[Kwasi Kwarteng]

I would be very happy to meet my hon. Friend to discuss the opportunities presented by investment zones and our other policies.

[Matt Rodda (Reading East) (Lab)]

The Chancellor has clearly put the interests of large energy firms ahead of those of families and small businesses. Is that not why he is unwilling to publish the OBR’s report?

--- Later in debate ---

[Kwasi Kwarteng]

That is not true at all. We have intervened in a way that no other Government have to protect people from gas price spikes. We have also focused on expanding supply. I ask Opposition Members their views on North sea oil and gas. We are expanding it; we are proud to expand capacity in order to reduce prices.

[Jane Hunt (Loughborough) (Con)]

I congratulate my right hon. Friend the Chancellor on an excellent speech, and on his focus on growth for this country. We are a nation of small businesses; that goes for people who own businesses and the employees who work in them. He has really listened to those small businesses and understands the issues that they face. Given that he has achieved all that in only two and a half weeks, can he let us know the likely timescales for the repeal of IR35 and for business rate reviews? Could they be just as quick?

[Kwasi Kwarteng]

I made an announcement on IR35 this morning. I would be very interested to hear my hon. Friend’s ideas on business rates, because that is an ongoing conversation. I used to hear that the whole time when I was Parliamentary Private Secretary to the Chancellor five years ago, and I have as Chancellor for, as she says, two and a half weeks.

[Wendy Chamberlain (North East Fife) (LD)]

I would like to know how this Conservative plan for growth will help unpaid carers, whom Carers UK estimates deliver £500 million-worth of care a day. From speaking to constituents about my Carer’s Leave Bill, it is clear that carer’s allowance prevents people from working. Given that the Chancellor has failed to clarify whether we will see inflationary increases to benefits, will he at least look to ensure that they do not impact on other benefits, or, at the very least, will he allow people to work more before their carer’s allowance is impacted?

[Kwasi Kwarteng]

We are always looking at ways in which we can encourage people who are helping the most vulnerable in society to do what is a critically important job. We are always looking at how we can improve that.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

What has been announced today is more than just a fiscal event; it is a vote of confidence in Britain—a statement to the country that we can grow, we can aspire and we can achieve. Rather than wilt in the face of our challenges, we can and we will flourish. Does my right hon. Friend agree?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. We have a dynamic population of highly skilled people. Our job in Government is to empower people to grow, to achieve and to thrive in the ways he suggests.

[Dame Nia Griffith (Llanelli) (Lab)]

During the last 12 years of Tory Government, public services have been cut to the bone, and they now face rampant inflation and an escalation of costs. Following his announcement, what reassurances can the Chancellor give that there will be no real-terms cuts to the budgets of our public services?

[Kwasi Kwarteng]

I am not going to make any statement about a budget this morning.

[Jerome Mayhew (Broadland) (Con)]

Without growth, government just becomes an exercise in rearranging the deck chairs, so I absolutely welcome this unashamed focus on growth. As my hon. Friend the Member for Runnymede and Weybridge (Dr Spencer) said, it is a vote of confidence in the future of our country. Let us look at the western link road in my constituency. Does my right hon. Friend agree that the decision to accelerate that project is exactly the kind of enabling infrastructure and investment that helps local communities and unlocks local economic growth?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. By accelerating infrastructure projects, we can generate economic growth, generate achievement, enthuse the supply chain and get Britain moving again.

[Marion Fellows (Motherwell and Wishaw) (SNP)]

The current Chancellor said in his statement:

“We want this country to be an entrepreneurial share-owning democracy.”

I extend an invitation to him to come to Motherwell town centre and Wishaw Cross, and try to explain this pie-in-the-sky ideology to folk in my constituency who are scared to go to sleep at night in case they cannot wake up and keep their houses the next day or feed their families. How does he think this ideology will help those constituents of mine?

[Kwasi Kwarteng]

It is not ideology; it is a practical focus on growing the economy, so we have a more prosperous country. That is what Governments should be doing. The socialism of the Opposition parties—I do not know whether the hon. Lady represents that—is not going to work.

[Simon Baynes (Clwyd South) (Con)]

I congratulate my right hon. Friend on his focus on growth in his statement. Will the Government consider a cross-border investment zone in the Welsh borders, covering north-east Wales where my constituency is located and part of north-west England, given the very close economic inter- relationship between the two areas?

[Kwasi Kwarteng]

As I have said to other colleagues, my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities is very much engaging with local councils on where investment zones can be located, but I am very happy to speak to my hon. Friend about the possibilities for locating investment zones in the region he suggests.

[Matt Western (Warwick and Leamington) (Lab)]

Since people close to the Treasury started trailing details about this mini-Budget over the past 10 days, sterling has lost 5% in value against the dollar. Has the Chancellor not just fired the starting gun on a run on the pound?

[Kwasi Kwarteng]

I know that it is fashionable for Opposition Members to talk down Britain, and they are showing an extraordinary interest in the gyrations of markets, but what will improve market sentiment is strong growth and a Britain that is open for business. That is exactly what we are trying to achieve.

[Scott Benton (Blackpool South) (Con)]

Thousands of my constituents will welcome this statement, which will see the average working family in Blackpool more than £1,500 a year better off through the combination of tax cuts and the energy price guarantee. They will also welcome the opportunities that it presents for jobs and investments in the new enterprise and investment zones. How quickly can we roll one of those out in Blackpool?

[Kwasi Kwarteng]

I would be very interested in having a conversation with my hon. Friend about that, and I refer him to my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities, who is engaged in these conversations as we speak.

[Mr Clive Betts (Sheffield South East) (Lab)]

So after 12 years of failure, the answer, apparently, is first to blame workers and their trade unions, and then to blame the planning system—the system for which the Government have been responsible for the past 12 years. On the new investment zones, which sound rather similar to the failed enterprise zones of the 1980s, will the Chancellor explain what planning requirements will be abolished? Will that include the abolition of the requirement to build affordable homes for those who cannot afford to buy? Has he done a detailed cost-benefit analysis of the proposals, and if so, will he put that assessment in the Library by the end of today?

[Kwasi Kwarteng]

As I said, the core principle of the investment zones is consent; they will not be imposed on people. Actually, there have been successes with the enterprise zones—I look at places such as Canary Wharf—and I think that the investment zones will also be successful and we will look back fondly.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

I welcome my right hon. Friend’s statement, but more than that, I welcome the clarity of his philosophy. We cannot tax our way to prosperity; we need economic growth. I also welcome the principle that my constituents will get to keep more of their hard-earned money, both through the national insurance cancellation and income tax. Will he explain how much better off a typical £30,000-a-year earner will be because of the measures that he has set out?

[Kwasi Kwarteng]

They will be hundreds of pounds better off. The 1p rate provides a £330 benefit. The energy intervention provides roughly £1,200 a household. People all across our society will benefit from the approach that we are adopting. As my hon. Friend reminded the House, and as the socialists have never understood, we cannot tax our way to prosperity.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

It is already clear that this desperate bid for an economic bounce after a decade of failure is based not on a plan for growth, but on a wing and a prayer that if the rich get richer, all will be well. It comes at the price of higher borrowing and inflationary pressures that will result in interest rates and mortgage rates going up. As the Chancellor brings in large tax cuts for the already well-off, what is his message to his mortgage-paying constituents and mine who are stuck on high interest rates? I am thinking particularly of those who are mortgage prisoners with standard variable rates that they cannot change, who will see their mortgage payments rise further and faster, with his policies threatening the very home ownership that he says he supports.

--- Later in debate ---

[Kwasi Kwarteng]

The stamp duty nil band doubling is helping people buy a home. In the hon. Lady’s constituency and mine, there is an increase in the threshold, as there is around the country, and that will help lots of people who are buying a home. The energy intervention will help her constituents and mine, and the reduction in the basic rate will also help many of her constituents.

[Ben Bradley (Mansfield) (Con)]

A Conservative Chancellor announcing that he intends to let people keep more of their money and choose for themselves how to spend it—how refreshing! I am excited. I am also pleased that Nottinghamshire has been able to be part of early conversations about investment zones. The county is also on the final shortlist for STEP—spherical tokamak for energy production—nuclear fusion investment. Let us imagine, for a second, that huge infrastructure investment in the future of our domestic energy supply, supported by the incentives and the growth opportunity of an investment zone. We have some vision in Nottinghamshire. It will require Departments to talk to one other. Can the Chancellor help?

[Kwasi Kwarteng]

Absolutely. We fully intend—while I am in the Treasury, certainly—to talk to Departments to deliver the vision that I know my hon. Friend is driving in his constituency.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

Newcastle paid a very heavy price for Conservative austerity economics: wages cut, public services slashed, growth stifled, businesses closed, good jobs lost. We were told that there was no money to invest in north-east regional economic growth. Now the Chancellor is borrowing billions to gamble on tax cuts for the rich and boosting oil companies’ profits—and working people are still expected to foot the bill. Will he apologise to my constituents for making them poorer and expecting them to pay for it?

[Kwasi Kwarteng]

The tax cuts that I have announced affect everybody who pays tax, and they will affect many, many people in the hon. Lady’s constituency. I am very pleased that, through levelling up, we are now focused on driving growth right across our country, particularly with investment zones. I look forward to the investments there.

[Joanna Cherry (Edinburgh South West) (SNP)]

I am sure that many of my Edinburgh South West constituents will agree that threatening the low-paid with sanctions while ensuring that bankers can get bigger bonuses is not a moral way to go about creating growth. Before the Chancellor says that Edinburgh will somehow benefit from that, I assure him that most of my constituents who work in the financial sector will not benefit from these bonuses.

The Chancellor, not content with doing that, is also attacking the right of low-paid people to strike for better pay and conditions. The European Court of Human Rights has recently reaffirmed that under article 11 of the European convention on human rights, the right to strike is a fundamental human right. Will the Chancellor assure me that any Government legislation concerning strike rights will comply with the United Kingdom’s treaty obligations under article 11?

--- Later in debate ---

[Kwasi Kwarteng]

There are two measures that I referred to in that respect. The right to strike will not be compromised by minimum service levels, nor is it compromised by requiring union bosses to put a ballot to their entire membership ahead of a strike. Those are not measures that conflict with or in any way militate against the right to strike.

[Olivia Blake (Sheffield, Hallam) (Lab)]

This is a Budget, and the Chancellor should have treated it as such. It is a Budget that is lining the Savile Row pockets of the Government’s friends, allies and funders in the City. Who is paying for this? Is it the oil companies making millions and billions? Is it the mega-corporations making millions and billions? No, it is working people. Will the Chancellor admit it?

[Kwasi Kwarteng]

What I will admit is that the plan is a plan for growth that will drive entrepreneurialism, endeavour and economic opportunity in this country. Everybody will benefit from that.

[Barry Gardiner (Brent North) (Lab)]

While the Chancellor was speaking so optimistically about growth, the City saw the FTSE 100 fall, the S&P 500 fall and the pound fall to the lowest level since 1985. Given that oil and gas prices on the wholesale markets are in dollars, he will appreciate that that has increased still further the borrowing that he will have to pay back for the package announced yesterday. If he is so optimistic about growth, will he set a timescale? Will that timescale be six months? Will he retire in a year if the growth that he has predicated has not been achieved, or is this an admission that he is going to stuff as much money into as many of his friends’ pockets as possible before the general election in 2024?

[Kwasi Kwarteng]

The hon. Gentleman will know that over the past two or three months, oil and gas prices have come off quite a bit, so actually the long-term contracts that we are negotiating are just as likely to be much less costly as to be at an increased cost. As for our growth plan, I am not embarrassed about wanting to grow the British economy, I am not embarrassed about driving opportunity in this country, and I do not believe that higher taxes lead to prosperity.

[Helen Hayes (Dulwich and West Norwood) (Lab)]

This year, for the first time ever, the number of women aged 25 to 34 leaving the workforce to care for children is going up. Four in 10 mothers have considered giving up work or cutting their hours because of the cost of childcare. More than a third of parents of primary-age children are in part-time work. Why does the Chancellor think that bearing down with punitive sanctions on the lowest-paid working parents in part-time work will help them to increase their hours, when what they really need is an accessible, affordable childcare system fit for the 21st century?

[Kwasi Kwarteng]

The hon. Lady is absolutely right to identify childcare as a crucial issue, and I am looking forward to my right hon. Friend the Secretary of State for Education updating the House on that in the next few weeks.

[Ian Lavery (Wansbeck) (Lab)]

Within seconds, the Chancellor’s financial statement declared war on the trade unions and on those less well-off in society—those on universal credit—and at the same time scrapped the cap on bankers’ bonuses. That is ideology unfettered. Will he say who will benefit most from the huge financial intervention today? Will it be someone on a salary similar to his or will it be a two-parent family with two kids in my constituency who are having to claim UC to top up their income?

[Kwasi Kwarteng]

The energy intervention will help all the hon. Gentleman’s constituents deal with higher energy costs this winter and the reduction in the basic rate, which we have pulled forward one year, will also help people, to the tune of £330 a year. That covers a broad swathe of our countrymen and women.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

One group who never get a mention in fiscal events from this Government are the millions of unpaid family carers; there is no increase here to their miserly £67 a week carer’s allowance. As we have heard from colleagues, if these carers work part time, this Government are threatening them with sanctions if they do not increase the hours they work. As for any cost of living help, there is only £150 to help disabled people and their carers—that will not even scratch the surface. So I ask the Chancellor: what does his plan, with tax cuts for the highest earners, say to those who do that vital work of caring for the vulnerable and disabled people? He told the hon. Member for North East Fife (Wendy Chamberlain) that he wants to take opportunities to help them, but he has not taken an opportunity to help them.

[Kwasi Kwarteng]

We have. Let me mention two measures: we have reversed the national insurance increase—this was a tax cut for 28 million people, worth £300 a year—and we have brought forward the 1p reduction in the basic rate, to 19p, which is also helping people, to the tune of £330 a year. That is help for lots and lots of our constituents.

[Chris Law (Dundee West) (SNP)]

I am astonished, because I do not think I have received a letter from any constituent, be they a fat cat, an energy oligarch or someone in the richest 1%, saying, “Please help us with the cost of living.” However, I have had a bagful of constituents write to me about the cost of living and what help there would be in this package, especially for the most vulnerable in our society and the disabled. Given where we are at now, it seems as though the disabled are having to choose heat over eat and they are losing out on therapies. Next week, the Multiple Sclerosis Society will publish a report showing that 40% are going into a real deep crisis this winter, and not a single package has been announced. So let me ask the Chancellor: what package is he going to put forward for the disabled people in our society? We all care for them, yet not a single word for them is in this Budget.

[Kwasi Kwarteng]

We do care for the most vulnerable in our society. That is a moral duty of Government and we have announced measures in the energy space that are helping a whole range of people and that are fundamental to the cost of living and tackling bills this winter.

[Mr Toby Perkins (Chesterfield) (Lab)]

In the time that the Chancellor has been on his feet, the pound has reached its lowest rate against the dollar. The FTSE 100 index is down by 1.7% simply today. When my hon. Friend the Member for York Central (Rachael Maskell) raised this issue with him, he said, “Oh, the markets will react,” as they will. But if the point of his plan for growth is to increase confidence and even the City believes that stuffing the pockets of the very wealthiest, and expecting bankers’ bonuses and oil company profits to lead the rest of us to prosperity, is a bad idea, who is actually on his side?

[Kwasi Kwarteng]

The growth plan is about growing the economy, and we are not going to grow the economy by increasing taxes indefinitely.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

The Chancellor mentioned that his energy package would cost £60 billion for just six months, but the Prime Minister promised that the package would go on until 2024—a £240 billion borrowing requirement to fix the broken energy market today, saddled on future generations. Does the Chancellor think that is a price well worth paying?

[Kwasi Kwarteng]

I think the hon. Gentleman has got the mathematics slightly wrong. The business support is for six months, and the household support is for two years. Those are two things that need to be disaggregated. On long-term pricing, of course, nobody in this room—indeed, nobody in the world—has any idea what the price will be in two years, so it would be misleading to put a price on that.

[Dr Philippa Whitford (Central Ayrshire) (SNP)]

It is not just the American President; the dogs in the street know that trickle-down economics does not work. This statement pushes money into the pockets of bankers in the City of London and big fossil fuel companies. It will kill high streets. It will take money away from local economies. To make the entire UK economy dependent on one big city while strangling everywhere else is the opposite of levelling up. The Government’s “Growth Plan” document claims, on page 32, that the price cap will

“bring the average household bill down to £2,500”.

That is still £600 more than it is now, and double what it was in January. What will the Chancellor do to help people right now? In particular, will he cut VAT on fuel, as Germany has done?

[Kwasi Kwarteng]

The investment zones and our ability to incentivise investment will help a whole swathe of communities across the UK. The reversal of the national insurance increase and bringing forward the 1p reduction will also help thousands and thousands, if not millions, of our constituents.

[Dan Carden (Liverpool, Walton) (Lab)]

The UK is already a deregulated, low-tax economy with the most draconian workers’ rights in the whole of Europe, in which the richest are well rewarded; it would be bizarre if it were not after 12 years of a Tory Government. However, that has not led to a transformation of skills and training across the workforce; it has not led to rising wages, which are still lower in real terms than they were before 2010; it has not lifted children out of poverty; and it has left us ranking 150th in the world for the investment that the Tories always talk about. Let me ask the Chancellor a very specific question. Will he accept that there is no correlation whatsoever between tax burdens and prosperity across high-income countries?

[Kwasi Kwarteng]

I do not accept the hon. Gentleman’s proposition that the level of tax is immaterial, I do not believe that we can just tax our way to prosperity in the way that the socialists claim, and I absolutely reject the idea that tax does not incentivise economic activity.

[Paul Blomfield (Sheffield Central) (Lab)]

After 12 years of Conservative economic failure, the Financial Times reported earlier this week that those on the lowest incomes in the UK are much poorer than their counterparts across the rest of Europe—20% below Slovenia, for example—while those at the top are among the wealthiest. The Prime Minister has said she does not believe in redistribution. The measures announced today suggest she does—but in the wrong direction, taking from those who have the least and giving to those who have the most. Does the Chancellor not recognise that the British people will see it exactly for what it is?

[Kwasi Kwarteng]

What I do recognise is that socialism and high tax do not work. The hon. Gentleman and others have stood four times on a socialist platform and the British people have rejected them four times, and if they go back to their socialism, they will be rejected once again.

[Tonia Antoniazzi (Gower) (Lab)]

Today we have heard the promise of accelerated energy infrastructure. For as long as I have been in this place, every south Wales MP has been demanding a tidal lagoon in Swansea bay. Will the Chancellor commit to working with the Welsh Government and Swansea Council to make tidal energy—green energy—a reality in this country?

[Kwasi Kwarteng]

Actually, I have done a lot in that regard. We had a ringfence for tidal marine energy, and there is a project in Scotland which is focused on that. As for the lagoon project that the hon. Lady mentioned, I looked at it and it was not, at the time, value for money, but I am open to the concept.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Today’s plans mean that in Tory Britain, someone earning £50,000 a year will pay the same income tax rate as a millionaire. Today’s plans mean that someone earning £1 million will pay £42,500 less income tax every year. That is shameful. These plans were not in the Tory manifesto; they do not have a mandate, and they certainly do not have a mandate in Scotland.

According to the OECD, the UK is already the most unequal country in Europe in terms of disposable income, and that inequality is guaranteed to widen after today. The Chancellor may be proud of his announcements, but what does he say to those who will now conclude that, just like Britain, his moral compass is broken?

[Kwasi Kwarteng]

I reject that implication. I reject that statement. We are absolutely focused, in the Treasury and across Government, on helping the most vulnerable, and that is why ours was the most radical energy intervention that any British Government have ever made.

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

The reality is that this is a class war Budget. It is an ideological Budget. It is about taking from the poor and giving to the rich. It is about lining their pockets. It is about them and us. That party over there has said, “We do not care about ordinary people in this country; we care about piling on debt. We will make ordinary people pay while our chums in the City get rich.” And will those chums spend the money on the economy? No: they will squirrel it away in tax havens around the world, because that is what they have always done. Is this Budget not a disgrace?

[Kwasi Kwarteng]

Let me reiterate that reversing the national insurance increase, which Labour supported—[Interruption.] Three months ago, Labour voted against the increase in national insurance. I reversed that: we reversed it. That helps people—the 1p cut in the basic rate helps people. That is not class war.

[Clive Efford (Eltham) (Lab)]

The income of the wealthiest has actually gone up over the last 12 years; so how come the Chancellor’s economic miracle has not been working for the last 12 years? Where does his mandate for this new era come from? It is worth our reminding ourselves that two thirds of Conservative Members did not vote for a candidate who supports the economic approach that the Chancellor has taken today, and 43% of Tory members voted against that candidate.

The choice today is clear: who pays the bill? Is it the taxpayers, or is it these high-earning energy companies with their excess profits? The choice is clear to the public, so why do we not put it to a general election, given that the Chancellor does not have a mandate for what he is doing today?

[Kwasi Kwarteng]

The choice is indeed clear: should we back growth driven by the private sector, or do we believe that the state can tax its way to prosperity? That is a very easy choice to make, because it is clear that taxing and spending towards prosperity is a failure.

[Fleur Anderson (Putney) (Lab)]

The people of Putney, Roehampton and Southfields will see through this Budget. They will see how little it will do for them. The only growth that this “Growth Plan” will deliver is a growth in inequality. Does the Chancellor agree with his Department, which, according to reports, has conducted analysis that forecasts that the UK oil and gas producers and electricity generators will receive as much as £170 billion in excess profits over the next two years? Should they not pay their fair share?

[Kwasi Kwarteng]

That figure does not relate to taxable profits here in the UK, and it is not remotely accurate.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

How and when will the Chancellor address the concerns raised by economists at the Resolution Foundation, the Institute for Government and the IFS that this package does not meet the current fiscal rules?

[Kwasi Kwarteng]

As I said in my statement, we have a medium-term fiscal plan that will outline the medium-term approach to fiscal discipline in the next few months.

[Zarah Sultana (Coventry South) (Lab)]

My constituents are terrified about rising bills. The word they use is “terror.” Energy bills will still be double what they were earlier this year. This is a crisis for the working class, but it is not a crisis for the Chancellor’s class. When they are already making record profits, this is a bankers’ Budget. It scraps the cap on bonuses, slashes tax for the top 1% of earners and cuts tax on the profits of big business.

Up and down the country, people are saying that enough is enough. Does the Chancellor really believe that bankers and millionaire CEOs, rather than working-class people, need the most help?

[Kwasi Kwarteng]

I would say two things: the reversal of the national insurance increase will mean £330 a year, on average, for 28 million people; and bringing forward the 1p basic rate cut puts £330 into the average person’s pocket. This is not a bankers’ Budget.

[Alison McGovern (Wirral South) (Lab)]

We have heard a lot of words, but my constituents care about the numbers. They will think that £18 billion is an awful lot of money, so what are they going to get for it? The Chancellor said it will pay for business investment and job creation and will raise wages. I want to know by precisely how much real wages will rise by the end of this forecast period.

[Kwasi Kwarteng]

This is not the Soviet Union’s Gosplan. I cannot predict what the average wage will be, but I know that one way to destroy the economic productivity of this country is to raise taxes in the way she campaigned for over many years during her Corbynista days, or whatever. That is not the way to grow this country’s economy.

[Richard Foord (Tiverton and Honiton) (LD)]

I remind the Chancellor that security is the first responsibility of Government. How will today’s changes to corporation tax serve to reverse the cut of 10,000 soldiers, making the Army the smallest it has been since the Crimean war?

[Kwasi Kwarteng]

Corporation tax has not been changed; it is being kept at its current level. On defence spending, the hon. Gentleman will know that my right hon. Friend the Prime Minister has committed to a defence target of 3% of GDP by 2030, recognising the changing nature of the threats and the real importance of our armed forces.

[Imran Hussain (Bradford East) (Lab)]

This morning the Chancellor promised new laws to speed up the building of major infrastructure projects. May I take it that he is fully behind the Prime Minister’s promise to build the biggest infrastructure project, Northern Powerhouse Rail, in my constituency? Can I expect to meet him soon after the conference recess to discuss plans to build it in full, including the Bradford stop?

[Kwasi Kwarteng]

I will be very happy to meet the hon. Gentleman at a convenient time to discuss infrastructure projects. We have published a list of things that we want to accelerate, and infrastructure projects are clearly critical to the growth plans.

[Patrick Grady (Glasgow North) (Ind)]

Will the Chancellor make it clear to the House that £2,500 represents the energy bill of a typical or average household and that, in fact, many non-typical and non-average households will continue to pay more? Those households will often be in the greatest need, and they will continue to pay more until there is structural change to the energy market, including sorting out prepayment meters, sorting out the standing charge and ending the link between gas and oil prices.

[Kwasi Kwarteng]

The hon. Gentleman is absolutely right to say that we need to look at how the energy market works. How the gas price determines the electricity price is openly discussed, but a lot of our electricity generation is based not on fossil fuels but on renewables. I commissioned that work in the Department for Business, Energy and Industrial Strategy, and I hope to see it completed very soon.

[Chris Stephens (Glasgow South West) (SNP)]

What measures does the Chancellor have for working people who are having to utilise food banks, are considering utilising warm banks, and, at Christmas, will have to utilise toy banks? At the same time, the Government plan to introduce legislation to drag out pay negotiations, which could go on for months, leading to a stagnation in wages. Is the Scottish Trades Union Congress not correct when it describes his statement as a “full frontal assault” on working people in Scotland?

[Kwasi Kwarteng]

It is nothing of the kind. People will benefit from the reversal of the national insurance increase and the acceleration—the bringing forward—of the 1p cut in the basic rate. That is what tens of millions of people in this country will benefit from.

[Sarah Jones (Croydon Central) (Lab)]

A young adult asked me yesterday whether I really believed that things in our country could get better, which is the direct opposite to what I thought during my young adulthood, because it did not occur to us that things could get worse. What is it about 12 years of Conservative Government that have caused such poverty of hope, and what is it about this tired set of ideas, which have sent the markets crashing, that will work when all the other ones have failed?

[Kwasi Kwarteng]

We are focused on growth, and it is through growth that that young person will get more opportunities and more benefits and have a much better funded public sector.

[Richard Burgon (Leeds East) (Lab)]

Are not tax cuts for the richest and bigger bonuses for bankers the classic trickle-down con trick? The wealth will not trickle down. In fact, it will be sucked up into fewer and fewer hands. Will the Chancellor not admit that that is what this statement is designed to do? The Tories are acting like Robin Hood in reverse, taking from the poor and giving to the rich. Is that not appalling when people across the country—people out there—are really suffering during this cost of living emergency?

[Kwasi Kwarteng]

There are three big measures that are helping tens of millions of people up and down the country: first, the energy intervention announced by my right hon. Friend the Prime Minister last week; secondly, the reversal of the national insurance planned increase; and thirdly, the acceleration—the bringing forward—of the 1p cut in the basic rate. The hon. Gentleman should be welcoming those measures and not playing to the gallery with his tired old socialist rhetoric.

[Wera Hobhouse (Bath) (LD)]

Access to dentists has reached a catastrophic low. One in five people is resorting to DIY dentistry, and there are shocking stories from many of my Bath constituents. The only way to get a dental appointment now is to go private, which costs far more than any tax cuts will offset. How will tax cuts today offer my Bath constituents proper access to the dental care they need?

[Kwasi Kwarteng]

The growth plan will mean that, as we grow our economy, we can get more tax revenue to pay for vital public services. That is a key part and a key rationale of the plan.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I congratulate the Chancellor on his appointment. Family-owned Equi’s Ice Cream in my constituency has been struggling with soaring energy bills. That century-old company will miss out on Government support, because its energy contract was renewed one day before the arbitrary cut-off following the collapse of its supplier. Will the Chancellor and his colleagues review the cut-off date to support small businesses?

[Kwasi Kwarteng]

Obviously, I will have to look at the specifics of the case, because I have just heard about it today. If the hon. Lady corresponds with my Department, I am sure that we can get back with a timely answer to her question.

[Kim Johnson (Liverpool, Riverside) (Lab)]

This is not a growth plan for the constituents in my constituency, or for the 4 million children living in poverty. The No Child Left Behind campaign is calling urgently on this Government to tackle child poverty. Will the Chancellor commit to finding funding to roll out free universal school meals immediately and to tackle childhood poverty?

[Kwasi Kwarteng]

This is not a spending statement, but, of course, we take child poverty and the vulnerable extremely seriously. That was the basis of the energy intervention.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

First, I thank the Chancellor for overturning his Business Secretary’s statement yesterday on onshore wind, by removing the ridiculous planning restrictions that are unique to that sector. Talk about a one-day Cabinet flip-flop! Secondly, I warn the Chancellor against removing normal planning rules in development and investment zones. When the Tory Government removed the need for planning rules on converting offices to housing, it led to houses like tiny rabbit hutches with no natural light and no basic services, often on industrial estates away from basic things such as footpaths, bus stops, schools and parks. Is this plan a dodgy developer’s charter too?

[Kwasi Kwarteng]

Not at all. The whole principle behind the investment zone is mutual consent. No investment zones will be imposed in any areas, and it will be up to local councils to work out which are appropriate sites for the investment zones. It is a co-operative exercise that will not be the developer’s charter the hon. Lady describes.

[Christian Wakeford (Bury South) (Lab)]

We were promised a “Big Bang” by the Chancellor; instead, we barely got snap, crackle and pop. We have tax breaks for the rich while he tells the next generation to pay off a debt he is piling up—truly the Chancellor of sound money! The Resolution Foundation says that the poorest 10% of households will gain all of £11 from this Budget—which is, of course, not a Budget. He is also raising the cap on bankers’ bonuses while threatening to cut benefits for 120,000 people on universal credit. Why is he not looking out for those who are struggling the most, instead of acting as the Chancellor for fracking donors and bankers?

[Kwasi Kwarteng]

It is nice to see the hon. Gentleman in his place on the Opposition Benches, in splendid isolation. I remind him that the measures relating to national insurance and the basic rate help the vast number of constituents of Members on both sides of the House.

[Richard Thomson (Gordon) (SNP)]

I wonder what it says about the Government that at the height of a cost of living crisis we appear to have a Chancellor putting pressure on the Governor of the Bank of England to increase interest rates—presumably on the basis that he considers that there are too many people right now with too much money in their pockets. What does it say about the Government’s priorities, I wonder, that of all the groups they have rushed furthest to help it is bankers suffering the indignity and privations of only being able to qualify for bonuses that are double their salary? We have an economic historian for a Chancellor; will the legacy of today’s statement not be that for tens of millions of households the length and breadth of the UK any notion of a fair economy will be history?

[Kwasi Kwarteng]

Any cursory look at the history of this country shows that the way to deal with debt and cost of living issues is to grow the economy. That is why we are 100% focused on that.

[Beth Winter (Cynon Valley) (Lab)]

As the TUC has pointed out, the Chancellor has said that we have been far too focused on redistribution and not on growth; yet here he is this morning making announcement after announcement that redistributes to the wealthy, lining the pockets of the bankers and the fossil fuel companies. People in my constituency—indeed, millions of people up and down the country—in receipt of public pay, social security benefits or pensions have never benefited from any form of redistribution under this Tory Government. All they have experienced is pay freeze, benefits cap and a freeze on the triple lock. Is it not the case, as the overwhelming evidence shows, that the only thing growing is people’s debt, people’s energy bills and—

--- Later in debate ---

[Madam Deputy Speaker]

Order. I politely asked the hon. Lady just to put her question; can she not just put her question? Has she put it? I did not hear it.

[Kwasi Kwarteng]

Madam Deputy Speaker, I was not clear what the question was, but if the hon. Lady was suggesting that we have not helped people with our growth plan, I gently remind her that the energy intervention helps nearly everybody; that the reversal of the national insurance increase helps 28 million people and gives them £330 a year; and that accelerating the 1p cut in the basic rate gives £300 a year to the average worker. Those are substantial benefits that I am sure the hon. Lady’s constituents will appreciate.

[Helen Morgan (North Shropshire) (LD)]

Today’s statement has shown that the Conservative Government are out of touch with rural Britain. The Rural Services Network has said that people in rural areas face significantly higher costs—partly because of their reliance on private transport and, as we have discussed in the House, off-grid heating—and that they earn much less than their urban counterparts. Will the Chancellor explain how today’s Budget will help people who live in rural areas?

[Kwasi Kwarteng]

The hon. Lady does well to raise this issue, because clearly the people who benefit from a limit to the price of electricity will not include people in rural areas who are off the grid. That is why my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy has announced some measure of support, and we are looking at other ways we can help people in the way the hon. Lady has described.

[Peter Grant (Glenrothes) (SNP)]

I am very proud of the fact that Glenrothes was the first town in any of our four nations to be recognised by the Living Wage Foundation for its progress towards becoming a living wage town—and that is a proper living wage, not the Chancellor’s pretendy, kidding-on one. The Living Wage Foundation has recently confirmed that the proper living wage needs to increase by more than 10% just for people to stand still. Fife Council, other public bodies and the many private businesses that act as their suppliers are keen to continue to pay that fair living wage to all their workers. Will the Chancellor confirm that the public spending budget will guarantee adequate funding so that responsible public sector employers can continue to pay a fair wage to essential workers? Or does he expect key workers to survive on rounds of applause for another 12 months?

--- Later in debate ---

[Kwasi Kwarteng]

We have made lots of progress in respect of the fair wage and we have also increased the national minimum wage. We have always sought to protect the most vulnerable in our society.

[Kirsty Blackman (Aberdeen North) (SNP)]

The Chancellor seems to believe that there are two fundamentally different groups of people in these islands—two classes, if you will. Why does he believe that those who earn mega-bucks will be incentivised by increasing their already excessive wealth, while those who have had to skip meals over the summer in order to survive will be incentivised by having their paltry amount reduced even further?

[Kwasi Kwarteng]

That is a complete misrepresentation, or wilful misunderstanding, of our position. What we have done in the growth plan is protect millions and millions of vulnerable people. We have allowed them to keep more of their own money—I know that the hon. Lady is not necessarily in favour of that—and we want to drive growth and entrepreneurialism in our economy.

[Madam Deputy Speaker (Dame Eleanor Laing)]

And finally, the prize for perseverance and patience goes to Ian Byrne.

[Ian Byrne (Liverpool, West Derby) (Lab)]

We have a Budget for the 1% from a grim, bankrupted Thatcherite tribute act. One in three people in my great city are in food poverty now. I have constituents who are unable to put the heating on, take a hot shower or put a meal on the table—and that is with prices at current levels, which are meant to double from January. This statement does absolutely nothing for them, so will the Chancellor actually focus on the people who face a humanitarian disaster across all our communities, instead of playing to the rich bankers who bankroll his party? Will he meet and sit down with me to discuss how a right to food could right some of the wrongs in society?

[Kwasi Kwarteng]

As a Minister I have always been open to colleagues on both sides of the Houses and people have spoken to me. Regrettably, sometimes some of my conversations are leaked to the press, but I would be happy to speak to the hon. Gentleman on an issue of concern to his constituents.

[Madam Deputy Speaker (Dame Eleanor Laing)]

In a moment, I will call the Chancellor of the Exchequer to move the provisional collection of taxes motion, copies of which are available in the Vote Office. This is in accordance with Standing Order No. 51(2), on Ways and Means motions, which states:

“A Minister of the Crown may without notice make a motion for giving provisional statutory effect to any proposals in pursuance of section 5 of the Provisional Collection of Taxes Act 1968. The question on such a motion shall be put forthwith.”

Resolved,

That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motion:

Stamp duty land tax (reduction)

That—

(1) Part 4 of the Finance Act 2003 is amended as follows.

(2) In section 55(1B) (amount of stamp duty land tax chargeable: general), for Table A substitute—

Better Jobs and a Fair Deal at Work

Kwasi Kwarteng Excerpts

Wednesday 12th May 2021 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)]

I was struck by the speech from the right hon. Member for Doncaster North (Edward Miliband). He said at one point that the Government had not changed; in fact, the one thing that had not changed was the right hon. Gentleman. I listened to his speech and was taken back to when I was a Back Bencher in 2014 and he was the Leader of the Opposition—he could have said exactly the same thing. It is always the same thing: he does the country down and says that we always talk about austerity. How can he talk about austerity when he himself acknowledged that the Chancellor has spent £350 billion on unprecedented support—on furlough and for British business? The world that he describes is the world of his tenure as Leader of the Opposition—there may well be a vacancy; who knows whether he could come back?—but it is not a world that many millions of people in this country recognise.

We continue to protect the lowest-paid workers: we have raised the national minimum wage and again raised the national living wage—having been the first Government to institute it, we raised it only in April, but perhaps the right hon. Gentleman forgot that. He has certainly forgotten the immense help and the grants that have supported businesses that would otherwise have closed. The bounce back loan scheme has approved more than £46 billion of loans for 1.5 million businesses. As we follow the Prime Minister’s road map out of lockdown restrictions, new recovery loans and restart grants will help businesses in urban areas.

The country that I see is completely different from the gloom and doom that the Leader of the Opposition—forgive me; the right hon. Gentleman is not the Leader of the Opposition any more, although he may be in future—paints. It is not recognised by millions of our fellow subjects. The Queen’s Speech builds back better and delivers on real people’s priorities. We are embracing a green, vibrant economy. It was extraordinary to hear the right hon. Gentleman again denigrate our achievements in the green industrial revolution. Only a month ago, John Kerry said to me—and he was good enough to say this publicly—that the efforts of this Government and this country had been extraordinary and we were world leaders in the fight against climate change. That is acknowledged. The right hon. Gentleman cited the United States: their target is a 50% reduction by 2030 from the 1990 level; our target for 2030 is a 68% reduction. It is far in excess of the United States’ target, yet the right hon. Gentleman once again points to other countries with the assumption that here in Britain we are terrible and everybody else is doing it better, whereas in fact the reverse is the case. It is Britain that people look to as leaders on climate change. Inwardly, the right hon. Gentleman probably acknowledges that.

Let me move beyond the histrionics of the right hon. Gentleman’s speech. We have laid legislation for the UK’s sixth carbon budget which, I am delighted to say, proposes a target that would reduce greenhouse gas emissions by 78% by 2035 compared with 1990 levels. It is by far the most ambitious reduction plan in the G7 and the right hon. Gentleman knows that. He knows that the 10-point plan has been acknowledged throughout the world as a world-leading and world-beating proposal. [Interruption.] They scoff and laugh, as they scoff and laugh at their own voters. They scoff and laugh at the country endlessly, and I am afraid they have suffered from their scoffing and mocking attitude.

The right hon. Gentleman was good enough to mention the EU’s proscriptive state aid regime, which we have jettisoned, and welcomed the fact that we have a subsidy control Bill that will create a new domestic subsidy control system. He accepted that, which did require a measure of realisation that we are moving on from the EU. I am delighted that, among his colleagues, he at least accepts that Brexit is finished and that we can move with confidence beyond EU membership. I very much welcome that but, again, to hear his speech one would think that the United Kingdom was a place of irredeemable squalor and poverty, when in fact the opposite is the case. When people look at the Oxford-AstraZeneca vaccine and the way in which we have conducted the vaccine roll-out, they see a country that has been extremely successful. Only today I was speaking to Ministers from Japan and Italy, who mentioned, without any prompting whatever, the extraordinary work that our scientists, nurses, health service and, in fact—dare I say—our hard-working Ministers and civil servants had put in to effect a successful roll-out. People are looking at Britain and they see a successful country that is regaining its place in the world.

This country is home to a powerful combination of elite research institutions, thriving life sciences companies, superb research charities and, of course, an excellent national health service. This winning combination has led the world’s fight against covid and saved many thousands of lives while creating a high number of high-quality jobs across the United Kingdom. These are things of which we should be proud and which our Government are hoping to—and will—build on. Yet the right hon. Gentleman is looking back to the past, simply repeating all the tired old phrases of five, six or seven years ago.

The ARIA Bill, which will become an Act in this Session and formed part of the Queen’s Speech, is a world first. It is a great innovation. The Department is delighted to have introduced this Bill to create an Advanced Research and Invention Agency, which will fund high-risk, high-reward research with the potential to produce new technologies, new industries and new jobs. ARIA represents the very best of British ingenuity and creativity, but the right hon. Gentleman and his friends wish to pretend that we are the very worst—that nothing we can do is any good and that nothing we can do can compete with France, Germany and all the other countries that he mentioned. In fact, in science and innovation the opposite is true. The Ministers from the countries I mentioned were actually saying the opposite of what the right hon. Gentleman is saying.

I see a huge difference between Government Ministers and MPs and our people across the country, and the Opposition—a fundamentally different outlook about the future and possibilities of this country. Time and again as a Minister and even as a Back Bencher, I have heard nothing from the Opposition but a litany of complaint and, frankly, a dirge of abuse about the country. The Government have huge optimism and belief in the abilities of this country and of our people to overcome difficulties—

[Gavin Newlands]

rose—

[Kwasi Kwarteng]

I am not going to take any interventions. All I hear from the Opposition is scoffing, mocking and abuse. The truth is that across innovation with the vaccine roll-out, across net zero with the 10-point plan and the opportunities for COP26, and across enterprise, we have a Government who are committed to bringing progress and driving success across the entirety of the United Kingdom.

It would be indecent of me not to mention the latest addition to our parliamentary forces, my hon. Friend the Member for Hartlepool (Jill Mortimer). Consider this, Mr Deputy Speaker: this was a constituency that had never returned a Conservative Member of Parliament. Indeed, a former Labour Member of Parliament who is not so popular on the Opposition Benches these days, Peter Hartle—I can’t even remember his name! Peter Mandelson, now Lord Mandelson, said quite clearly that this was a seat that would never vote Conservative, but of course it did. And why did it vote Conservative? I suggest that, listening to the dirge-like pessimism of many Members of the Labour party, the people of Hartlepool took a different approach. They believe in the future of the country and of their community. We as a Government are determined to repay their faith in their country and their hard work, and to ensure that we not only level up but build back better.

Ordered, That the debate be now adjourned.—(David T.C. Davies.)

Debate to be resumed tomorrow.