Economic and Taxation Policies: Jobs, Growth and Prosperity
Lord Harper Excerpts(2 weeks, 5 days ago)
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Lord Harper (Con)
My Lords, it is a great pleasure to speak in this debate. I congratulate my noble friend Lord Elliott on securing it—and it is genuinely a great pleasure to follow my noble friend Lord Young, with whose speech I wholeheartedly agreed.
I start by congratulating the Minister on his personal contribution to productivity and the economy. For those noble Lords who do not know, as well as being the Financial Secretary to the Treasury and the Minister for Growth, he has also recently become Labour’s campaign co-ordinator. In such a way, he has taken another job that presumably comes with no pay, so he has increased the productivity of the economy at least a little bit—so I congratulate him. I also congratulate him on his courage because, given that the Chancellor seems to be leaning into the unpopularity of her forthcoming Budget, he must be contemplating the consequences for his other job next year as he tries to raise Labour’s fortunes in Wales, Scotland and across England. I wish him the very best of luck.
I wish to set out for noble Lords the list of excuses that we have heard from the Minister and the Chancellor ahead of the Budget for why she is going to break her manifesto commitments, or so it sounds. She said that it was because the OBR had changed its view about productivity—not actual productivity, but its view, coming into line with, I think, most other forecasters. She has blamed Brexit, Donald Trump and the pandemic. We can look at what the public think and whether those excuses are going to wash—and I think probably not. In a recent poll taken by Ipsos MORI and published in the Sunday Times, only 10% of the public think that the productivity of British workers is the problem with the poor state of the economy. Only 29% think that it is Donald Trump’s fault. The outright winner, 59%, think that it is the fault of the Prime Minister and the Chancellor, so they have their work cut out for them in trying to land those arguments.
With regard to the key economic statistics, several noble Lords have already mentioned today’s growth figures. We see growth slowing, and many economic forecasts see it getting slower still. At the time of the general election, inflation was at 2%, bang on the Bank of England’s target; it is now 3.8%, almost double. That has a real impact on family finances. Unemployment has risen from 4.4% at the time of the election to 5%, which is the highest since lockdown. That reminds us that every Labour Government has left office with unemployment higher than when they came in. That is a fact that I remember, when I was in the other place, Labour MPs hated being reminded of, and I suspect that Labour Peers do not like being reminded of it, but it none the less remains true.
Why might that be? I think that it is because of taxes. At the previous Budget, Labour came up with the fiction—I say that it was a fiction because it was not stood up; the OBR refused to stand it up in interviews or in documents—of a £22 billion black hole. The Chancellor raised taxes by £40 billion but increased spending by £70 billion, so it is not really surprising that it is a problem. She then said that she was not going to raise taxes or borrowing for the rest of the Parliament. She was interviewed by Trevor Phillips and confirmed that for the rest of the Parliament she would keep income tax rates, national insurance rates and VAT rates unchanged. When he challenged her on this, she said that the responsibility for the economy was “on us”.
I say to the Chancellor and to the Minister in closing that if he thinks that raising income tax in the Budget—particularly to raise welfare benefits, as the Chancellor indicated in her interview earlier this week—is going to be a winning formula, he will be sorely disappointed. It will be at the cost of the livelihoods and growth opportunities of everyone in the United Kingdom.
Lord Livermore (Lab)
I am only five minutes into my speech; let us hear my whole speech before we conclude on that.
The OBR’s productivity assessment will be a look in the rear-view mirror, but the past mistakes of the previous Government do not need to determine our country’s future. While the record of the past 14 years may be even worse than previously realised, it underlines the importance of delivering higher and more sustainable economic growth, which has been the defining mission of this Government since we entered office. The noble Lords, Lord Elliott, Lord Harper and Lord Bridges, and the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, mentioned today’s growth figures. While they are, of course, lower than any of us would want to see, they confirm that the UK was the fastest growing economy in the G7 in the first half of this year and show just how much more there is to do.
We will move further and faster with our growth strategy, set out clearly many times and built on the three pillars of ensuring economic and fiscal stability, reforming the economy and increasing investment. It is welcome that the IMF has said that this strategy focuses on the right areas to increase productivity. This strategy recognises that growth comes not from government but from businesses and investors and that there is a role for a strategic state, not to step back and let businesses fend for themselves, but to act in partnership with business by systematically removing the barriers to growth that it faces.
The first pillar, stability, is the foundation all else is built on. That began with the Government’s first Budget last October. The noble Lords, Lord Harper, Lord Swire and Lord Leigh of Hurley, could not help but mention the £22 billion black hole in the public finances we inherited, which the previous Government sought to conceal from the OBR, but once again—
Lord Harper (Con)
Will the Minister confirm that at no point would the OBR, either in interviews or in its documents, confirm the existence of a £22 billion black hole because it absolutely did not?
Lord Livermore (Lab)
The report that it produced stopped before the conclusion of the previous Government. It stopped at that Government’s last Budget and of course they had several months left to run. The OBR reported on the period it was asked to report on, yet the previous Government still had several more months to run. The OBR has absolutely concluded that that information was concealed from it, and I think that is a very serious thing for us to know. Once again, noble Lords who mentioned it in their speeches today sought to deny and downplay that black hole—exactly the behaviour that got the country into the mess the previous Government left behind.
Faced with that inheritance, any responsible Government would need to act. One of the decisions we took was to increase the level of employers’ national insurance contributions to help repair the public finances, rebuild public services and restore economic stability, as mentioned by so many noble Lords in today’s debate. Contrary to what the noble Lord, Lord Bridges, said, I acknowledge, as we have always acknowledged, that there are consequences to responsibility and that the increase in employers’ national insurance would have costs to businesses and beyond, but the consequences of irresponsibility for the economy and working people would have been far greater, as we saw in the Liz Truss mini-Budget. Many noble Lords opposite mentioned the importance of small businesses, and I completely agree with them. The Government protected the smallest businesses from these changes by increasing the employment allowance from £5,000 to £10,500. This means that 865,000 employers will pay no national insurance contributions at all, and more than half of all employers will either gain or see no change.
Another area highlighted in this debate by the noble Lords, Lord Elliott and Lord Bilimoria, the noble Viscount, Lord Trenchard, and the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, was the non-dom regime. It is right that everyone who makes their home in the UK pays their taxes here. The Government have therefore removed the outdated concept of domicile status from the tax system and introduced a new residence-based regime. The OBR has certified that the non-dom reforms the Government have implemented will raise £33.8 billion in total revenue, and that figure accounts for some non-doms who are ineligible for the new regime choosing to leave the UK in response to these reforms. The Government will of course continue to work with stakeholders to ensure that the new regime is internationally competitive and focused on attracting the best talent and investment into the UK.
The noble Baroness, Lady Foster, and the noble Lord, Lord Bilimoria, among others, mentioned changes to agricultural property relief and business property relief. The Government made these changes better to target APR and BPR and to make them fairer. The reforms mean that, despite the tough fiscal context, we are maintaining very significant levels of relief from inheritance tax beyond what is available to others. These reforms mean that almost three-quarters of estates claiming APR, including those that also claim BPR, will not pay more inheritance tax.
The economic stability provided in our first Budget is underpinned by our fiscal rules, mentioned by my noble friend Lord Eatwell and the noble Lord, Lord Young of Cookham. Those rules allow us to invest more in capital, alongside a credible plan to grow our economy and bring debt down within this Parliament. We met these fiscal rules in the Budget last year and at the Spring Statement in March, and we will meet them again at the forthcoming Budget.
The second pillar of our growth strategy is to deliver whatever reforms are necessary to remove the barriers to growth faced by businesses and investors. These include planning reforms, which the OBR estimates will add 0.4% to GDP—the biggest policy-driven booster growth with no fiscal cost that it has ever scored. Our pension reforms will unlock £50 billion of investment for businesses and major infrastructure. Our skills reforms will equip firms with the skilled workforce they need to grow. We have begun a reset with the European Union, which I hope the noble Baroness, Lady Kramer, will support, despite not going as far as she argued for in her speech today. We have also reached a trade agreement with the US and signed a new trade deal with India. We have set out a new modern industrial strategy to target high-growth sectors. As mentioned by the noble Lord, Lord Risby, we are cutting the administrative costs of regulation on business by 25%, and we are delivering the Leeds reforms, the widest-ranging reforms to financial services regulation in over a decade.
The final pillar of our growth strategy is investment, which stability and reform are designed to increase. The Government have an important role to play here. The IMF has long warned that a lack of public investment was a significant barrier to growth. That is why we have committed an additional £120 billion of public investment over the next five years, made possible by reform of the fiscal rules. Our fiscal rules ensure that we do not need to cut capital spending, unlike the previous Government which planned to cut it even further, as my noble friend Lord Eatwell observed, which got us into this productivity hole in the first place. We are directing our additional capital investment into growth-driving projects, including new homes, improved transport connectivity and new nuclear projects such as Wylfa, as mentioned by my noble friend Lady O’Grady of Upper Holloway and the noble Lord, Lord Bilimoria, and we are catalysing private investment through the new National Wealth Fund and British Business Bank.
As so many noble Lords opposite have said today, the real prize is increased private sector investment in our economy. Whereas under the previous Government the UK had the lowest level of private investment in the G7, since the election private sector companies have committed over £325 billion-worth of investment into the UK, including during the US state visit in September and, as mentioned by my noble friend Lord Chandos, at the regional investment summit last month—the first, we hope, of many.
Real progress takes time and, as my noble friend Lord Chandos said, we cannot reverse 14 years of underinvestment overnight. But real wages grew more in the first 10 months of this Government than in the first 10 years of the previous Government. Under the previous Government, we saw the worst pay growth in a century, with barely 0.3% growth between 2010 and 2024. The noble Lord, Lord Elliott, spoke about living standards in his opening speech. Living standards are up 2.1% since the election, compared to the 1.8% fall over the last Parliament. That was the only Parliament on record where living standards were worse at the end of the Parliament than at the beginning, as referred to by the noble Lord, Lord Skidelsky.
Whereas the UK was ranked seventh out of seven for projected 2025 growth in the G7 under the previous Government, our growth was the fastest in the G7 in the first half of this year. But we do not expect anyone to be satisfied with growth of 1%. Today’s growth figures reinforce the fact we need to go further and faster, not repeating the previous Government’s mistakes of cutting investment but continuing to create the right conditions for growth.
The first part of our planning reforms will add an additional £6.8 billion to the size of our economy in the next five years, but the next part, our planning Bill, must complete its passage through Parliament before it can make a difference. Interest rates, which rose consistently in the last Parliament, have now been cut five times since the election, but at 4% they are still a constraint on business borrowing and a burden on family finances. Inflation is clearly much lower than the double digits seen under the previous Government, but the choices we make must be focused on getting inflation falling and creating the conditions for interest-rate cuts to support economic growth and improve the cost of living.
As mentioned by the noble Lord, Lord Elliott, in his opening speech, while we have taken action in the industrial strategy to reduce business energy costs by up to £420 million a year, they are still too high and we must go further.
Noble Lords, including the noble Lords, Lord Elliott, Lord Harper and Lord Bilimoria, mentioned the importance of employment. The latest figures show that 138,000 jobs have been created since the election. The OBR forecasts that over this Parliament employment will rise and unemployment will fall, but the figures published this week show exactly why we must go further to get Britain working and get our economy growing. I am grateful for the support for the youth guarantee from the noble Lord, Lord Skidelsky; and the noble Lord, Lord Howard, mentioned the importance of jobcentre reform.
Noble Lords, including the noble Lords, Lord Elliott, Lord Leigh of Hurley and Lord Massey of Hampstead, the noble Viscount, Lord Trenchard, my noble friend Lord Liddle and the noble Baroness, Lady Neville-Rolfe, mentioned the Employment Rights Bill. As noble Lords know, the Bill is still going through its final parliamentary stages. The Government are also supporting businesses to create jobs, innovate and grow, including by reforming our regulatory framework to reduce barriers to growth and investing in our economy.
Many noble Lords, including the noble Lords, Lord Young of Cookham, Lord Petitgas, Lord Horam and Lord Bridges of Headley, and the noble Baroness, Lady Stedman-Scott, mentioned welfare. The Government are committed to reforming our welfare state. We are shifting the focus from welfare to work, skills and opportunities. We have backed that up with £1 billion a year for employment support by the end of the decade. As my noble friend Lord Liddle said, the Government have also announced an independent report into young people and work, to be led by Alan Milburn, which will examine why increasing numbers of young people are falling out of work or education. He will publish his final report by next summer.
Many noble Lords, including the noble Lords, Lord Elliott, Lord Harper, Lord Petitgas, Lord Swire, Lord Wharton of Yarm, Lord Massey of Hampstead and Lord Kempsell, the noble Baronesses, Lady Stedman-Scott, Lady Fall and Lady Kramer, and my noble friend Lord Liddle, spoke about the forthcoming Budget in just under two weeks’ time. There has been much speculation about the forthcoming Budget, as mentioned by the noble Lord, Lord St John of Bletso, but, as my noble friend Lord Chandos rightly suggested, I am not going to comment on individual tax measures today. The Chancellor has asked the OBR to produce a new forecast. She will take decisions based on that forecast, and we will set out our fiscal plans at the Budget in the usual way. The Chancellor will, though, make those decisions mindful of the importance of growth and investment to businesses and to the economy, and it is vital that the tax system supports our growth mission.
The noble Lord, Lord Elliott, spoke of the importance of innovation and enterprise, mentioned also by the noble Lord, Lord Marks of Hale, while the noble Baroness, Lady Fall, rightly spoke about the importance of supporting scale-up businesses. The current rate of corporation tax is the lowest in the G7, and that is supplemented by generous business investment reliefs that directly support investment, including full expensing, R&D tax reliefs and the patent box regime.
The noble Lord, Lord Bridges, mentioned headroom. As the Chancellor said earlier this week, we will continue to
“build more resilient public finances—with the headroom to withstand global turbulence … giving business the confidence to invest and leaving government freer to act when the situation calls for it”.
We have been clear about the principles that will guide the forthcoming Budget. It will protect the NHS and public services from a return to austerity, because it was austerity that choked off investment that would have put our country on a path to recovery after the financial crisis. Instead, we will protect investment in our economy and build on the progress already made to repair the public services. The Budget will support growth, enabling businesses to create jobs and innovate. It will improve the cost of living by doing what is necessary to protect families from high inflation and high interest rates, and it will keep debt under control because the less we spend on debt interest, the more we can spend on the priorities for working people, as the noble Baroness, Lady Kramer, rightly said,
I am grateful to all noble Lords who have spoken in today’s debate, but we will take no lectures from the party opposite, which presided over 14 years of instability, low productivity and economic decline. Where it delivered the slowest projected growth in the G7, growth in the first half of this year was the fastest in the G7. Where it presided over the worst Parliament ever for living standards, living standards have increased by 2.1% since the election. Where it oversaw the worst pay growth in a century, real wages grew more in the first 10 months of this Government than in the first 10 years of the previous one. Where it continually cut capital spending and deterred investment, we are investing for the long term, with £120 billion over the next five years, alongside £325 billion committed by the private sector since the election.
The OBR may conclude shortly that the productivity record of the previous Government was even worse than previously thought, but we will not let those past mistakes determine our country’s future. This Government will invest in the NHS, support growth and improve the cost of living. We will continue to build strong foundations for our economy because that is the only route to securing Britain’s long-term future.
Road Pricing
Lord Harper Excerpts(2 months, 2 weeks ago)
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Lord Harper (Con)
My Lords, this is one of those occasions on which I hope the Minister will welcome the fact that I strongly agree with him. I am very pleased that he has adopted the policy that we set out in our manifesto at the election to rule out road pricing. As the noble Lord opposite said, most people in this country go to work in a car and depend on their cars. If the cost of motoring becomes cheaper as people get more electric vehicles, protecting the environment, we should welcome that it has become cheaper, not look for opportunities to make it more expensive. I urge the Minister to maintain the policy of no road pricing, however seductively I suspect Treasury officials will try to suggest that he change it.
Lord Livermore (Lab)
I am grateful to the noble Lord for his support of the policy that we have set out. I have been clear that, on many of the issues that he raised in his question, we as a Government are having to balance several objectives. We must always ensure fiscal stability and sustainability, motoring must remain affordable for consumers and we must support the decarbonisation of the transport sector. We will continue to balance those objectives.
Tax Increases
Lord Harper Excerpts(4 months, 3 weeks ago)
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Lord Harper
To ask His Majesty’s Government, following the decision not to proceed with changes to Personal Independence Payments, whether they have plans to increase taxes as a consequence.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, the OBR will produce a new forecast in the autumn before the annual Budget, and the Chancellor will take decisions based on that forecast. We will set out our fiscal plans at the Budget in the usual way.
Lord Harper (Con)
I am grateful to the Minister for that Answer. It is very clear, following recent events, that this Government are not going to make any meaningful reform of the welfare system and save any money, despite saying that the system is broken. They have said they are not going to touch their existing spending plans, so that means tax rises are coming, as we predicted. In her Budget speech, the Chancellor said that it was the Government’s policy not to freeze tax thresholds any longer from 2028-29 because that would hurt working people, and that from 2028-29 thresholds will continue to be uprated. To be clear, I am not asking the Minister to write future Budgets today. I am simply asking him to repeat from the Dispatch Box that those words of the Chancellor’s remain the Government’s policy.
Lord Livermore (Lab)
The noble Lord is absolutely correct that there are financial consequences to the decisions that have been taken, but he will not be surprised to know that I will not speculate on the next Budget now. We will do things in the usual way. The Chancellor will ask the OBR to produce a new forecast in the autumn before the annual Budget and will take decisions based on that forecast. We will set out our fiscal plans at the Budget in the usual way.
Winter Fuel Payment
Lord Harper Excerpts(5 months, 2 weeks ago)
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Lord Livermore (Lab)
I am not sure I entirely followed the noble Lord’s question. We have set out clearly what the policy is. All pensioners with incomes up to and including £35,000 will benefit from the support, as will all those on pension credit and certain other income-related benefits. The payment of £200 per household, or £300 per household where there is someone over 80, will be made to all pensioner households in England and Wales. Individual pensioners with taxable income above £35,000 will have any winter fuel payment automatically recovered by HMRC without the need for them to take action.
Lord Harper (Con)
My Lords, earlier this week, when the Prime Minister was explaining the rationale for the Government’s change on the winter fuel payment, he said that because the economy was now growing as a result of the Government’s policies, they were now able to make this change. Given the news yesterday that the economy is no longer growing, but actually shrank in April, would the Minister like to have another go at explaining the reason for the reversal of policy, and perhaps be honest about the fact that it was just incredibly unpopular and very ill-thought-through in the first place?
Winter Fuel Payment
Lord Harper Excerpts(5 months, 3 weeks ago)
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Lord Livermore (Lab)
I am grateful to my noble friend and I agree with everything that she says. I will just add to what she said at the end: low pay and insecurity at work are detrimental to growth, and obviously we need growth in our economy to pay for the benefits that we want to pay to pensioners and others. Once again, the party opposite calls for the growth but they are not willing to support the policies that get us there.
Lord Harper (Con)
My Lords, when the Chancellor was doing her various media interviews setting out the retreat on this policy, she rather unbelievably tried to suggest that it was done not because it was incredibly unpopular but because somehow the economy has got rather better since last year. Given that we have seen inflation up, unemployment up and the OBR slashing its growth forecast, the Minister should get some personal credit for not trying to insist on that nonsense in your Lordships’ House. When the Treasury analyses the cost of both the original policy and its reversal and takes into account the extra people claiming pension credit and the cost of reversing this policy, can he set out, either today or at the fiscal event, whether this whole set of decisions has saved or cost the taxpayer money?
Lord Livermore (Lab)
I am grateful to the noble Lord for his question. On the facts about growth, we inherited forecasts from the previous Government for 2025 growth where we would have been seventh out of seven in the G7. In quarter 1 of this year we were first out of seven in the G7, so we will not take any lectures from him about the growth performance of the economy. He asked about the costings of the policy. The costings of the previous policy included assumptions about take-up of pension credit, so that pension credit increase figure was already in the costings for the previous policy. The costings of this policy will be certified by the OBR and scored at the Autumn Budget, and we will set out what he asks for.
Economic Update
Lord Harper Excerpts(3 years, 1 month ago)
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Jeremy Hunt
I am very aware of how many vulnerable pensioners there are, and of the importance of the triple lock. As I said earlier, I am not making any commitments on any individual policy areas, but every decision we take will be taken through the prism of what matters most to the most vulnerable.
Mr Mark Harper (Forest of Dean) (Con)
I thank the Chancellor for his robust defence of Conservative economic policy over the last 12 years. More of that, please! My inner chartered accountant cannot but welcome the fact that he has reassured me that it is the Treasury’s job—its essential task—to ensure that the sums add up.
May I ask the Chancellor to say a little bit about the review of the energy price guarantee? It is right to focus taxpayer support on those who need it most, but may I draw his attention to the fact that one seventh of the population are not on the gas grid, and 40% of my constituents are not? As he designs that system to protect the most vulnerable, can he ensure that it works for everyone in the country, wherever they live and however they heat their homes?
Jeremy Hunt
I look forward to lots of useful advice from my right hon. Friend’s inner accountant in the months and years ahead, and I will certainly bear his points in mind. The issue with the revised scheme that we want to announce for the energy price guarantee is that, while I think most people agree with the logic of targeting support where it is needed the most, we need a scheme which works practically, and it is not particularly easy to design that kind of scheme. We are going to do as much work as we can, and we will announce what we are going to do as soon as we can; but we will certainly bear in mind the points that my right hon. Friend has made.
Oral Answers to Questions
Lord Harper Excerpts(3 years, 1 month ago)
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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)
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.
Oral Answers to Questions
Lord Harper Excerpts(3 years, 5 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
We are not immune to the global inflationary shocks that many countries are experiencing. Indeed, eurozone inflation is north of 8%, and inflation in the United States is closer to 9%. We have the determination we need to combat inflation and reduce prices, and we have the tools at our disposal, namely strong and forceful monetary policy, responsible fiscal policy and supply-side reforms.
Mr Mark Harper (Forest of Dean) (Con)
One of the really insidious effects of inflation is that it imposes more costs on the poorest in society. What steps will the Chancellor take to make sure not just that we protect people today, but that inflation expectations are not locked in, locking in high inflation for the future, which would be the worst thing we could do for the poorest in our society?
Rishi Sunak
As ever, my right hon. Friend makes an excellent and thoughtful point. He is right about the regressive nature of inflation, which is why our recent announcements have been specifically targeted at those on the lowest incomes—the most vulnerable in our society—to help them manage through the challenging months ahead. He is also right that inflation expectations are critical, and I know that the Bank of England will act forcefully, in its words, to restrain inflation and inflation expectations, because the quicker we get through this the better for everyone, particularly the most vulnerable.
Tackling Short-term and Long-term Cost of Living Increases
Lord Harper Excerpts(3 years, 6 months ago)
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Edward Miliband
I will not give way. Of course, being this Government, they always try to blame someone else, as we heard earlier. It is hard to keep track, but this is the roll call of people who the Conservative party have tried to frame in just the past few days: the Bank of England; civil servants working from home; and, shamefully, the British people for being unable to cook properly. That, apparently, is the cause of food banks. Yesterday, there was also the ludicrous suggestion from a Minister that people were not working enough hours. The Chancellor, of all people, is also at it. Who does he blame for the massive cut to benefits? He blames the IT system—the dude from Silicon Valley. Who is he trying to kid? If he had got his act together early enough, of course he could have raised benefits properly. The thing I do not get is this: he found it perfectly possible to cut universal credit by £20 in the middle of the year—in September. It is not a case of “Computer says no”; it is “Chancellor says no.” It is not that a computer system is not up to it; the Chancellor is not up to it.
The story of the past few months is this: crypto has crashed, and so has the Chancellor—and how similar they are. The Chancellor and cryptocurrency came out of nowhere. The value surged, and it looked like the future, but it has all turned out to be one giant Ponzi scheme. The Chancellor has just been found out. He has been rumbled. Let us be honest, his colleagues all know it. He is out of touch with what is happening in the country. He is out of ideas when it comes to doing the right thing. He is out of his depth when it comes to the challenges that this country faces.
The problem, of course, is that today’s cost of living crisis does not stand alone; it comes on top of a decade of failure. That is why families and our economy are so vulnerable. Over the past 12 years, growth has averaged just 1.4%—the worst record of any Government since the second world war. This is the worst decade for living standards since the 1920s, according to the Institute for Fiscal Studies. Indeed, wages would be £7,000 higher on average if wage growth under this Government had matched the rate of growth under the last Labour Government. Taxes are at their highest level since the 1950s. Public services are struggling. Never have so many paid so much for so little. Twelve years of Tory economics have failed, and what does the Chancellor offer in the future? More of the same: anaemic growth at just 1.7%, and squeezed wages as far as the eye can see.
This is the plan for growth that we need: we should tackle the cost of living crisis, so that people have more money in their pockets. We need to put in place an industrial strategy, so that we have good jobs in the industries of the future; that is what Governments all around the world are doing. We need a plan to give people proper rights, to boost wages at work, and to make our economy fair. Where is the employment Bill? It was promised in 2019, but it is still not here. When it comes to being on the side of the workers, Conservatives may mouth the words, but their actions tell the real story.
Mr Mark Harper (Forest of Dean) (Con)
I am glad that the right hon. Gentleman mentioned jobs, particularly as today unemployment has fallen to its lowest level. The number of people out of work is now lower than the number of vacancies in the economy. He has just made an extraordinary number of unfunded spending commitments at the Dispatch Box. I want to highlight the big difference between the Labour party and the Chancellor. I remember the spring statement; the shadow Chancellor made a commitment to raising benefits early, because, she said, it would cost no money. It would actually have cost £24 billion across the spending period. There was no sense of how to pay for it. That is Labour from start to finish.
Edward Miliband
It is good to see that the right hon. Gentleman has clambered back onto the career bandwagon. I thought that he was no longer a loyalist. The truth is that it was the Resolution Foundation that pointed that out, and I can give him the reference.
I will wind up now. I have mentioned the basics of a modern economy, and this Government are failing on all of them; they have no cost of living plan, no growth plan, and no plan for rights at work. They have not learned from the mistakes of the past decade, and they are condemned to repeat them. The truth is that this Gracious Speech does not remotely rise to the short or long-term challenges that the British people face, but this House can make a difference tonight. I say this to Conservative MPs directly: we have all heard from our constituencies what families are facing. This is an emergency for millions of people. A windfall tax could make a difference.
Oral Answers to Questions
Lord Harper Excerpts(3 years, 8 months ago)
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Rishi Sunak
I can give my hon. Friend that reassurance. Representing as I do a rural constituency like hers, I know the difficulty that our constituents are facing. That is why our £9 billion package of support for energy that I announced earlier is done by electricity meter, ensuring that those who are off the gas grid also benefit.
Mr Mark Harper (Forest of Dean) (Con)
The impact on energy prices of the Russian invasion of Ukraine and the sanctions will inevitably mean that Britain is poorer. There is nothing that we can do about that overall, but we can help to smooth the impact. I welcome the announcement this morning that there are 275,000 extra people on payroll. What more can the Chancellor do to improve companies’ ability to hire workers and to enable people to keep more of their own money; for example, through the reduction in the taper rate on universal credit?
Rishi Sunak
I am grateful to my right hon. Friend for his typically thoughtful question. He is absolutely right about the circumstances we face. The data this morning shows record numbers of people on payroll, and that is to be welcomed. Indeed, the unemployment rate is now back to the levels we saw before the pandemic, thanks to our plan for jobs. There are record vacancies, and we want to get people into work. The best way to do that is to give them the skills they need and cut taxes to increase incentives. That is exactly what this Government are doing, and I expect us to make more progress in the months ahead.