Spring Forecast
Liam Byrne Excerpts(2 months ago)
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Rachel Reeves
I have huge respect for the right hon. Gentleman, but he left a massive black hole in the public finances. There had not been a spending review for years, and during that time inflation went through the roof because the Conservatives lost control of the public finances. We had to find the money to properly fund our national health service. It is a bit rich for the Conservative party to say that we should bring welfare spending down when it presided over a huge increase in welfare spending.
On the burden of taxation, our choices ensured that those with the broadest shoulders pay higher taxes. We got rid of the non-dom tax status and we are introducing the higher value council tax, VAT on private school fees and the energy profits levy. We are ensuring that those with the broadest shoulders pay the higher prices, rather than allowing the increases in inflation and interest rates in the last Parliament, which hit working people.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
The plan that the Chancellor has set out this afternoon shows that inflation, debt and bills are down, and that headroom, growth and living standards are up. That is testament to a plan for stability that is working, but that stability would be undermined if she surrendered to the idea of the £47 billion-worth of unfunded tax cuts set out by the Conservatives, so will she resist those calls? As fiscal headroom opens up, will she look again at what can be done to drive down energy costs for small business and genuinely reform business rates, so that we are backing our wealth creators, and not gambling with the public finances, as the Conservatives did?
Rachel Reeves
We are backing the innovators through the reforms that we made in the Budget last year to make it easier to list in London, and easier to raise finance in the UK. We have permanently changed business rates, so that we have a lower multiplier for high-street businesses and smaller businesses, particularly in the retail, hospitality and leisure sector. We did that by putting £4.3 billion into the system. All of that money would have been withdrawn by the Conservatives.
Business Rates: Retail, Hospitality and Leisure
Liam Byrne Excerpts(3 months, 2 weeks ago)
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Dan Tomlinson
On the point about 20p versus 5p, we legislated for a reduction in the multiplier of up to 20p for retail, hospitality and leisure businesses, but that did not set an expectation that we would go that far; it set the bounds within which the Government could choose to operate. As the first step in our significant reform to the business rates system, we chose to reduce the multiplier by 5p, which reduces the total taxes paid by RHL businesses by almost £1 billion and increases the tax take from the largest businesses by an equivalent amount.
The answers to many of the questions that hon. Members ask are very easy to find in the data published by the VOA. Detailed breakdowns of the change in the value of properties between the different revaluation periods are published on the Government’s website. I will not take—I will not say “lectures”—suggestions from Liberal Democrat Members on VAT, given that when they were in power, they and the Conservatives chose to whack up VAT, a decision that pushed up inflation and added to the cost of living for people up and down the country.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
The £4 billion package in the Budget is very welcome, but the manifesto commitment was to replace the business rates system, not tinker with it or subsidise it. Pubs alone will see bill increases of 4% this year. Alongside that, VAT thresholds are strangling hospitality businesses on the high street, and that is on top of a tax compliance bill of £25 billion for small business, not least because His Majesty’s Revenue and Customs does not answer 4 million phone calls a year. I repeat the question posed by my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), the Chair of the Treasury Committee: when will the Government table comprehensive, radical reform that meets the test of the manifesto commitment?
Dan Tomlinson
At the Budget, we published further updates on our broader work to transform the business rates system. There are things that we want to look at—for example, a switch from a slab system to a slice system, which should support and encourage investment. As was confirmed by the Chancellor at the Budget, we have already extended small business rate relief, so that businesses do not face a disincentive to expand from one premises to two premises, but there are more things that we want to look at that are in that consultation. Of course, we will continue to engage with businesses on our high streets up and down the country, and with businesses large and small, to see what more we can do to continue our work of reforming and improving the business rates system.
Spending Review 2025
Liam Byrne Excerpts(10 months, 3 weeks ago)
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Rachel Reeves
The hon. Lady knows that we increased money for flood defences in the spending review in autumn last year, because we knew that there was no time to waste. We have already increased that flood defence spending, in addition to what the previous Government were spending.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
This spending review is good for Britain’s business, because it invests in the things that British business needs: it invests in skills, infrastructure and innovation, cuts red tape and supports small firms. Can the Chancellor clarify that this spending review will also open a new era of energy abundance for our country? The Business and Trade Committee heard directly from the International Monetary Fund in Washington yesterday that high energy costs are holding back growth. That is a consequence of the dither and delay from the Conservatives, who left us with the highest industrial energy costs in Europe. Will the Chancellor confirm to the House that we are consigning that era to history?
Rachel Reeves
My right hon. Friend is right. We are backing innovation, skills and infrastructure, because we are backing British business. We are also cutting red tape, as we did yesterday, when we took the Planning and Infrastructure Bill through the House, making it easier to get things built in Britain again. As we make the investments, we want those jobs to come to Britain, including in the energy sector, whether it is investment in small modular reactors, Sizewell C, carbon capture and storage or floating offshore wind. We will set out the industrial strategy in the next couple of weeks, in which we will have more to say about energy costs for business.
Regional Growth
Liam Byrne Excerpts(11 months ago)
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Darren Jones
I think the hon. Member is slightly confused. The statement today is about devolved transport funding to mayors for intra-city transport. He is asking me questions on the broader spending in the Department for Transport, which will be announced in the spending review next Wednesday.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I congratulate my right hon. Friend on an announcement that will make a huge difference to delivering the industrial strategy for this country—something that the Business and Trade Committee will report on later this week. I particularly commend him for the £2.4 billion for the east Birmingham tram, which I have been campaigning on for 15 years. It is crucial for connecting the impoverished part of east Birmingham to the extraordinary new growth opportunities created by HS2. Will he just confirm today that this is only the first piece of the tram, and that, in future, we will finish the job?
Darren Jones
I congratulate my right hon. Friend on securing that investment into Birmingham. I recently visited part of that development and saw the enormous potential that will come for his constituents from connecting Birmingham city centre with the new sports quarter. I am delighted to see how much private investment that investment is unlocking for his constituency and for the city. The funding allocations have been devolved to mayors. The announcements today are the announcements that mayors wish to make on some of the early allocations of the funding, and it will be for mayors to decide how they wish to allocate the rest of their funding. I encourage my right hon. Friend to work with the Mayor of the West Midlands, and I will help in any way I can to extend that and get the full benefit for his constituents.
Economy, Welfare and Public Services
Liam Byrne Excerpts(1 year, 9 months ago)
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Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
It is an honour to speak in this King’s Speech debate, and a privilege to have heard the first female Chancellor in our history deliver such a remarkable opening salvo. I will say a word not just about the King’s Speech itself, but the strategy behind it. When the Chancellor and my right hon. Friend the Prime Minister launched our manifesto, there was a clear ambition at its heart to ignite a revolution in wealth creation in this country not just for some, but for all. That strategy was absolutely right, because among the worst of our inheritance is the scandal—the moral emergency —of the inequality of wealth that now scars our country.
Madam Deputy Speaker, you and I could take a walk this afternoon down to a coffee bar called Shot in Mayfair, which would serve us coffee for £265 a shot. We could go next door to a restaurant Aragawa, where they serve steak for £900 apiece. Some, if they were lucky enough, could book a night at the Raffles hotel for £25,000. These are extraordinary prices, but not unremarkable in a country that now has the highest sales of Rolls-Royces, superyachts and private jets. This absurdity of affluence sits alongside a country where, on the last figures, more than 1,000 people died homeless, tens of thousands of people are dying from the diseases of poverty, and 2.1 million people can put food on the table only because of the tender mercies of food banks. That is the inequality of wealth bequeathed to this Government. It is best illustrated perhaps by one figure: the wealth of the top 1% has grown by 31 times the wealth of everybody else over the past 14 years. That is why my right hon. Friend the Chancellor was right to say that there has to be a revolution in wealth creation in this country—not just for some but for all.
The measures that my right hon. Friend has set out are the right ones: a plan for growth and a plan to devolve economic power out of the paralysis of Westminster and Whitehall and down to mayors and local councils. Alongside that is a revolution in planning law, infrastructure law and skills finance. I urge my friends on the Government Front Bench to maximise the amount of power held locally, because it is local people and local leaders who know best how to grow our economy. If we have a growing economy, the key is then to ensure that growth is fairly shared. That is why the employment rights Bill is so important. As my right hon. Friend said, there has not been growth in living standards for more than 14 years. That is why we need to ensure that there is a fair day’s pay for a fair day’s work.
Alongside that, the draft equality Bill is extremely important, and I urge my right hon. Friend to go further and to use the consolidation of pension funds to inaugurate an era of civic capitalism in this country, where we use the combined £2 trillion-worth of pension savings to encourage businesses that are good, not businesses that are bad, such as those that she revealed when she was a brilliant Chair of the Business and Trade Committee, or the scandals that we exposed in the last Parliament with McDonald’s, Asda and other firms behaving in a way reminiscent, frankly, of Victorian capitalism.
Once we have begun raising incomes, we must help people build well. That is why the changes to the housing market that my right hon. Friend proposed are so important. We can underpin that and maximise investment into the infrastructure of this country by ensuring that there is a national wealth fund, but I would go further, and I ask her to look at how we can put together not just the national wealth fund but the Crown estate fund, which is set for reform under a Bill in the King’s Speech.
We could go a step further and review the whole portfolio of investments held by the Government and by UK Government Investments. The last Government made some pretty strange investments during covid, including, I understand, buying shares in Bolton Wanderers, shares in a bespoke boutique whisky company, and even, it is said in some newspapers, shares in a strange firm that organises international sex parties called Killing Kittens. I say to my friends on the Government Front Bench that it is time we had a Domesday Book that consolidated assets in this country. Let us look at what we need and what we do not. Crucially, let us look at how we maximise dividends going to ordinary working people in this country to help them build wealth for themselves.
I conclude with this: on the Government Benches, we have long known that we only deliver and maximise freedom and opportunity for people in this country, and make those freedoms and opportunities real, if there is security. There is no security without wealth, which is why the ambition that my right hon. Friend set out not simply to build a wealthy democracy but a democracy of wealth, is the right one.