Autumn Statement Resolutions

Bim Afolami Excerpts

Wednesday 22nd November 2023 Commons Chamber

[The Economic Secretary to the Treasury (Bim Afolami)]

I am delighted to bring today’s debate on the measures in the autumn statement to a close, and also to pay tribute to my shadow, my good friend the hon. Member for Hampstead and Kilburn (Tulip Siddiq). I am very glad to follow in the footsteps of Members as eminent and as good at this job as my right hon. Friend the Member for Salisbury (John Glen). He was excellent in his job, and I am happy to follow his example.

[Tulip Siddiq]

I miss him!

[Bim Afolami]

Don’t miss him; he’s still here.

Make no mistake, Madam Deputy Speaker: this is an autumn statement for growth—one that supports entrepreneurs, cuts business tax, rewards work and brings prosperity to every corner of our wonderful country, and one that the OBR says will permanently increase the size of our economy. [Interruption.] That is what the OBR says. As my right hon. Friend the Chancellor said this afternoon, the Government understand that a successful economy depends less on the decisions and diktats of Ministers than on the “energy and enterprise” of its people, and that is the thrust of this autumn statement. It is about a Government taking action that reduces the burdens on businesses, while also empowering people and getting Great Britain growing and moving again.

But the context really matters. We are only able to pursue these policies now because of what the Government, under our Prime Minister, have achieved up to this point. We have brought inflation down from 11.1% to 4.6%, meeting the Prime Minister’s pledge, and we are on track to meet the 2% target by the middle of 2025. The OBR has confirmed that the measures announced today will make inflation next year lower than it would otherwise have been. We have achieved this while growing our economy, which is already bigger than it was pre-pandemic, contrary to what was often said on the Opposition Benches in debates in recent weeks and months. Our economy has grown faster than many of our competitors since 2010, which is when this Government first came into office.

[Ian Blackford]

I welcome the Minister to his position. Will he not acknowledge that, under the current plans, it will take until 2028 for wages to get back to their 1998 levels in real terms—a 20-year absence? That is the reality.

[Bim Afolami]

The measures here are designed to grow the economy, to make us more prosperous, to make businesses invest more and to cut taxes for working people, so I am confident that that prediction will not be borne out in the way that the right hon. Gentleman suggests. This autumn statement provides the foundation for the next decade of growth—not just for next year or the year after that. Next year, just as a start, the economy will be 2% higher—that is worth around £40 billion—than was forecast only in March this year. That is a result of the actions we have taken today.

I have been hearing about what the shadow Chancellor said to the parliamentary Labour party earlier this week. I am told that this is what she said, but I am happy to be intervened on if it is incorrect. She said that the next election would be a fight on the economy, a fight on fiscal responsibility, a fight on making working people better off and a fight on who would be the party to show that it backed British business. This autumn statement firmly shows that this Government and this party are the only choice for the British people and the British economy on these measures—[Interruption.] I see chuntering among Opposition Front Benchers. If they and the shadow Chancellor wish to fight an election on those matters, I say bring it on.

Let us talk about fiscal responsibility—[Interruption.] The Opposition do not want to hear about that. This Government have brought inflation down by half. Debt is falling by the end of this forecast period. We have the second lowest debt in the G7. We are only able to have this sort of growth Budget because of the prudence and careful measures that we have so far undertaken. Indeed, if I may use language that the Opposition might understand, this is prudence with a purpose. Let us contrast that with the record of the Labour party and Opposition Members. They are still saying that, on top of everything we have heard today, they are going to borrow an extra £28 billion. That will lead to higher debt, because they are borrowing, and higher inflation, which will lead to high interest rates for longer.

[Dame Angela Eagle]

I also welcome the Minister to his position. Does he not distinguish between borrowing for capital investment and borrowing for current expenditure? If he does not, he has a very peculiar view of the national accounts.

[Bim Afolami]

Of course I understand that distinction, but that does not take away from the fact that if we are borrowing, it has to be paid for. Unless the Labour party can show how it is going to raise that money—[Interruption.] Look, the non-dom tax has been used about 15 times to pay for 15 different things; that is not going to cut it. Unless the Labour party can say how it is going to pay for that extra £28 billion, it is not fiscally responsible. So on that measure, I say bring it on.

Let us look at whether working people will be better off as a result of this autumn statement. My right hon. Friend the Member for North Somerset (Dr Fox) talked about the need to responsibly bring down taxes for working people, and that is what we have done. The cut in the national insurance rate, worth £450 to the average worker, will benefit 29 million people. That matters to my constituents and to all the constituents we represent in this House. That is what this autumn statement delivers. The national living wage is up 30% in real terms—30% after inflation—in this Parliament. Again, that is what this autumn statement delivers. As a result of the measures on the local housing allowance, 1.6 million of the most vulnerable households in this country are all going to get an extra £800.

Contrast that with the record of the Labour party. Do not let them fool you, Madam Deputy Speaker; Labour Members do not believe in tax cuts. They do not believe in low tax. They are trying to pretend that they do, but we all know that they do not. They believe—and it is a reasonable, principled position—in ever greater, ever expanding Government control, debt and tax. That is their position.

Those of us on this side of the House and this Government have a different philosophy and a different policy. We believe in backing British business. We believe in backing the British people. We believe in cutting taxes for working people. We faced a once-in-a-lifetime pandemic earlier in the Parliament, and we spent over £450 billion supporting the lives, jobs and health of our constituents. That has led to an increase in our tax burden. But that is why this autumn statement is so important—because we are turning the corner.

[Dame Meg Hillier]

Will the Minister give way?

[Bim Afolami]

I will not.

Members may wonder how we are able to cut taxes and bring our debt down at the same time in a fiscally responsible way. We are able to do it because we back British business. There are over 100 growth measures in this autumn statement. The policy of full expensing means that for every pound that our businesses are able to invest, they will get 25p off their tax bill. There are measures to protect small businesses on business rates; on R&D tax credits, we are reducing the rate at which the credit is taxed from 25% to 19%; and we have introduced investment zones across huge swathes of our country. A few years ago, I co-authored with the Chief Secretary to the Treasury a policy on accelerator zones. These have been ideas on this side of the House for a long time, and this autumn statement puts them into practice. My good friend and constituency neighbour, my hon. Friend the Member for North East Bedfordshire (Richard Fuller), knows that I share his view that we need to make sure that regulators adhere to the need to focus on growth and competitiveness.

It would be remiss of me not to address some of the comments made during the debate. The Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), addressed many points. I listened carefully to her concerns about the welfare measures, which were shared by the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms). I say gently to them both that what we are trying to do with the back to work plan and reform of the work capability assessment is to support the most vulnerable while making sure that taxpayers’ money is used sensibly and that only those who need it are given that support.

My right hon. Friend the Member for Witham (Priti Patel), who is a good friend, focused in her excellent speech on the need for a low-tax economy. She said that she would like to see some more “cheeky measures”—her words, not mine—to get personal tax down. I assure her that I will constantly listen to her and take her advice. Given her great experience, I am sure others on the Treasury Bench will do so too.

This country is full of potential, with the most innovative industries in Europe and the best minds in the world. With this autumn statement, this Government are backing this country. Labour do not have a plan. They do not understand the economy. They want to borrow £28 billion extra, yet they want to take everything in the autumn statement. How are they going to pay for it? We have a plan; they do not. I commend the autumn statement to the House.

Ordered, That the debate be now adjourned.—(Mark Fletcher.)

Debate to be resumed tomorrow.