Spring Statement
Debate between Mel Stride and Lindsay Hoyle(1 week ago)
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Mel Stride (Central Devon) (Con)
At the last Budget, the right hon. Lady said that she would bring stability to the public finances, but this statement, more appropriately referred to as an emergency Budget, has brought her to a cold—[Interruption.]
Mr Speaker
Order. Rightly, I wanted to hear the Chancellor, and I now want to hear the shadow Chancellor. [Interruption.] I do not need any help.
Mel Stride
This emergency Budget has brought the right hon. Lady to a cold hard reckoning. She has become fond recently of talking about the world having changed, and indeed it has. This country was growing at the fastest rate in the G7 only about a year ago. Just as the OECD, the Bank of England and other forecasters—including, we learn today, the OBR—have stated, growth has been halved for this year. It has been cut in two as a consequence of the decisions and the choices that the right hon. Lady has made on her watch. Inflation was down to 2%—bang on target—under a Conservative Government on the very day of the last general election. We are now told that this year we will be running at twice the level as was forecast under us in 2024. That will mean prices bearing down on households and on businesses right across the country, because of her choices.
The OBR also says that unemployment will be rising this year, next year and the year after. In fact, across the forecast period it will not decline at all. So much for the right hon. Lady’s back to work plans. We have already seen what it means when it comes to controlling borrowing under this Chancellor. She has come forward now with a plan to squeeze spending later on in the forecast period, and she has of course told the OBR that these are the elements of spending restraint to which she will stick, but what do the markets think? Given her track record, and the fact that she has failed to control spending and borrowing to date, what does the right hon. Lady think the markets will make of her latest promises?
Of course, the right hon. Lady says that none of this is her fault. It is the war in Ukraine, it is President Trump; it is tariffs; it is President Putin; it is the Conservatives; it is her legacy; it is anyone but her. What the British people know, however, is that this is a consequence of her choices. She is the architect of her own misfortune. It was the right hon. Lady who talked down the economy so that business surveys and confidence crashed through the floor. It was the right hon. Lady who confected the £22 billion black hole, a smokescreen that was only ever there to cover up for the fact that she and the Prime Minister reneged on their promises to the British people during the last general election, and a black hole that the Office for Budget Responsibility itself—ironically, at the Government’s behest—has said it will not legitimise. She chose to be reckless with a sliver of headroom against her fiddled targets. She borrowed and spent and taxed as if it were the 1970s. Little wonder that the Chancellor has tanked the economy, little wonder that we have an emergency Budget, all because of her choices.
The Chancellor likes to tour the television studios and tell everyone that they should be thankful that she will not be ramping up taxes in this emergency Budget as she did before, but that will be cold comfort to the millions up and down the country who are waiting in fear and trepidation for the start of the new tax year, buckling under the burden of tax that will rise to the highest tax burden—on her watch—in the history of our country. May I ask the right hon. Lady whether, when she replies, she will give that much-needed reassurance, particularly to businesses, that she will not be ramping up taxes still further in the autumn? Even a basic economist knows that if you tax something, you get less of it. You do not need to have worked at the Bank of England for 10 years to know that.
So what did the Chancellor tax? She taxed jobs and wealth creation. She has destroyed livelihoods. Businesses have been clobbered, big and small—small companies, the backbone of our economy—and enterprise has been crushed on the altar of her ineptitude. The Chartered Institute of Personnel and Development has told us that a third of the businesses affected will shed labour, with Morrisons losing 200 jobs, Tesco 400, and Sainsbury’s 3,000. No wonder the Federation of Small Businesses has said that outside the pandemic, business confidence has been left at its lowest level on record. However, it is not just businesses. It is charities, it is GPs, it is pharmacies, it is those who transport children with special educational needs, and it is hospices caring for the sick and the dying. In this House, the Labour party had the opportunity, yesterday and last week, to stop that, but they voted our amendments down, and we will never let their constituents forget it.
If you ramp up taxes, Mr Speaker, and if you ramp up borrowing and spending without any commensurate improvement in productivity, it leads to growing inflation, and inflation has been increasing on this Government’s watch. It means that interest rates stay higher for longer. The Chancellor has just trumpeted the fact that there have been three interest rate cuts since the Labour party came to office. She knows full well that there would have been more than that had she managed—[Interruption.] She knows full well that interest rates are higher for longer because of the choices that she made. This has led to servicing costs for our national debt running at twice the defence budget, and today we have learnt from the OBR that debt interest is to increase still further—and none of this money will be spent on public services. It will be going down the drain.
The real black hole is not the one that the Chancellor invented; it is the one that the Chancellor created. Is not the central problem that this Chancellor is a gambler? Even with her fiddled fiscal targets, she left way too little headroom. Is not the truth that while the right hon. Lady said of the last Budget that it was a
“once-in-a-parliament reset”,
she rolled the dice on a wafer-thin margin, and she lost? Reckless, with her fingers crossed, she fiddled the targets and she missed them. [Interruption.]
Mr Speaker
Order. I am not sure about the language being used. I think there are better and more constructive words that the shadow Chancellor would prefer to use in future.
Mel Stride
May I just point out that all the Chancellor’s fiscal headroom disappeared, not just some of it? In fact, she went underwater to the tune of £4.1 billion. Reeling from one fiscal event to the next is not a way to run the public finances, and breaking your fiscal rules to the extent that the right hon. Lady has in just six months is a public humiliation.
May I now focus briefly on defence spending? We on this side of the House welcome the fact that the Government will reach 2.5% of GDP by 2027, as we pressed them to do, and we note the stepping stone along the way that the right hon. Lady has just announced, but we should go further than that. The 3% target should be brought forward to this Parliament. So may I ask the right hon. Lady: given the geopolitical tensions that she has raised, what provision she has made in her headroom, in her fiscal plans, for increasing defence spending more quickly in this Parliament, if that proves necessary? May I also ask her this: would she scrap the absurd Chagos deal, and put that money behind our armed forces?
The economy is in a perilous state, but there was a different way. There were different choices on taxing and spending and borrowing, and on productivity, and on welfare. Let me just say a few words about welfare. It was the privilege of my life to serve as the Secretary of State for Work and Pensions, and when it came to welfare reform, with that privilege came a deep responsibility: the responsibility for welfare reform to be properly thought through, with a very clear plan—[Interruption]—I know that Labour Members do not like it, because it is an alien idea to their party—so that we could be fair to the taxpayer, but equally fair to the many people up and down the country, some of whom are highly vulnerable. That was an approach, on our watch, that led to £5 million of savings across the forecast period, and 450,000 fewer people going on to long-term sickness and disability benefits as a direct consequence.
We would have gone further—much further—and we set out a clear plan in our manifesto to do exactly that, but those in the party opposite rushed their changes. They had no plan. There was not a single mention of the personal independence payment in the Labour party manifesto, and when they got into office, the Labour Government pussyfooted around and dithered. Why? Because it is deeply divisive within their rank and file. Then suddenly, when the Chancellor decided that she had run out of money, out went the word to find some savings in welfare, to scrabble around, to yank every lever possible.
Then there was the spectacle, frankly, of what the OBR has said about the simply shambolic changes that were announced only last week by the Secretary of State for Work and Pensions. We have gone from incompetence to chaos. There have been more changes to this policy than there were at the last minute to the right hon. Lady’s LinkedIn profile. The result is the worst of all worlds: a wholly inadequate level of savings on welfare, with welfare costs spiralling ever higher, and changes that are likely to harm many vulnerable people. May I ask the right hon. Lady: when the Secretary of State for Work and Pensions came to the House last week with these changes, she did not provide an impact assessment, but was this because the OBR had not signed off the numbers, was it because the Department did not have enough time to produce one, or was it only provided today, as many of us suspect, because this was thought to be a good time to bury bad news?
The forecast for growth is down, the forecasts for borrowing costs and inflation are up, and business confidence has been smashed into a million pieces. This Chancellor is constantly trying to blame forces beyond her control. The right response is not to duck responsibility, but to build a resilient economy. The right hon. Lady would have us believe that that is what she is doing, but how can we believe this Chancellor? How can we trust this Chancellor? She is the Chancellor who said she would not increase borrowing, but she did. She said she would not change her fiscal rules, but she did. She said she would not put up national insurance, but she did. She said she would not cut the winter fuel payment, but she did. She said she would not tax farmers, but she did, and she said she would not move to more than one fiscal event a year, and she just has. Now we are all paying the price of her broken promises. Today’s numbers confirm it. We are poorer and we are weaker. To govern is to choose, and this Chancellor has made all the wrong choices.
Oral Answers to Questions
Debate between Mel Stride and Lindsay Hoyle(4 weeks, 1 day ago)
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Mel Stride (Central Devon) (Con)
How many jobs will the right hon. Lady destroy as a result of her jobs tax?
Oral Answers to Questions
Debate between Mel Stride and Lindsay Hoyle(2 months, 1 week ago)
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Mel Stride (Central Devon) (Con)
A moment ago, the right hon. Lady spoke about the importance of spending money wisely, so in the light of the Treasury Committee’s conclusion that her new Office for Value for Money is a waste of money, does she agree that one of its early actions should be to abolish itself in order to save money?
Public Finances: Borrowing Costs
Debate between Mel Stride and Lindsay Hoyle(2 months, 3 weeks ago)
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Mel Stride
The performance we have just seen was a slightly anxious and breathless one, which leads me to the question: where is the Chancellor? It is a bitter regret that at this difficult time and given these serious issues, she herself is nowhere to be seen.
In the last 48 hours, borrowing costs have reached a 27-year high, and it is the Chancellor’s decisions that have led us here. Before the election, the right hon. Lady promised that Labour would get debt falling, would not fiddle the figures, would not raise taxes and would grow the economy, but the economy is now flatlining. Survey after survey is showing that business confidence has simply evaporated, and at the Budget, the Chancellor hiked up taxes, increased borrowing by an average of £32 billion a year across the forecast, and conveniently adjusted her fiscal rules to allow her to do so.
Higher debt and lower growth are understandably now causing real concerns among the public, among businesses and in the markets, and despite what the Chief Secretary has said about international factors, the premium on our borrowing costs compared with German bonds recently hit its highest level since 1990. With those rising costs, regrettably, the Government may now be on course to breach their fiscal rules. The Chancellor has committed to no further tax rises, so does the right hon. Gentleman stand by her commitment not to increase taxes even further? If so, does that mean that the public should expect cuts to public service spending if the OBR judges that her fiscal headroom has evaporated?
There are media reports that the Chancellor will make an emergency intervention to soothe markets, but with no confirmation that such a statement will occur in this House. Will the right hon. Gentleman confirm that any such statement will be made first to Members in this House? Rates on Government bonds ultimately feed through to the broader credit market, so what estimates has the Treasury made of how recent market movements will impact mortgage costs and lending across the economy?
I will make one final point, Mr Speaker. Every pound that we spend on debt interest is money that we cannot spend on the public’s priorities. The Government’s decision to let rip on borrowing means that their own tax rises will end up being swallowed up by higher borrowing costs, at no benefit to the British people. Far from this Government laying the foundations for a stronger economy, the Chancellor is squandering the endeavours of millions of hard-working people up and down our country, who are now having to pay the price for yet another socialist Government taxing and spending their way into trouble. Does the right hon. Gentleman not now accept that it is time to change course?
Oral Answers to Questions
Debate between Mel Stride and Lindsay Hoyle(3 months, 4 weeks ago)
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Mel Stride (Central Devon) (Con)
What a pleasure it is to appear opposite the right hon. Lady for the first time. I was tempted to ask her how things were going, but I did not want to start out by being unkind. I will instead ask this: when she recently pledged to the CBI that she would not raise taxes again, did she mean it?
Oral Answers to Questions
Debate between Mel Stride and Lindsay Hoyle(5 months, 3 weeks ago)
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Mel Stride (Central Devon) (Con)
In the general election, the Labour party promised that it had no plans to means-test the winter fuel allowance, yet we learn that millions of pensioners are to be affected. Indeed, in 2017 the right hon. Lady’s party produced an analysis suggesting that around 4,000 pensioners would die prematurely were this policy to be brought into effect. Does she stand by that figure of around 4,000? If not, how many premature deaths does she believe will occur as a result of this policy?
Mel Stride (Central Devon) (Con)
On 10 September, two days before recess, I led a debate in this Chamber, secured by the Conservative party, on the winter fuel allowance. The right hon. Lady spoke just now about transparency, but there was no equality impact assessment made available for that debate. Indeed, on 30 August, by way of a written question, my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) established that the Government had no intention of publishing that particular report. Yet on 13 September—two days after the debate and the vote, and one day after Parliament had risen—the report was made available. It was clearly, in my opinion, deliberately withheld. Does the right hon. Lady agree?