Autumn Statement Resolutions

Debate between Carol Monaghan and Anthony Browne

Monday 21st November 2022 Commons Chamber

[Anthony Browne (South Cambridgeshire) (Con)]

I very much welcome this carefully crafted and carefully balanced autumn statement. I welcome the fact that, at its heart, its No. 1 priority is balancing the books. The reason that is so important is shown by chart 19 of the OBR report, if people read it, which shows that debt interest payments as a proportion of Government revenue are at record high levels. As the Chair of the Treasury Committee, my hon. Friend the Member for West Worcestershire (Harriett Baldwin), pointed out, our interest payments are heading for being almost as much as is spent on the NHS.

We have to fill that fiscal black hole, and the Chancellor has managed to do it in a way that the Office for Budget Responsibility has said will lead to lower inflation than would otherwise be the case, a shorter, shallower recession than would otherwise be the case and lower unemployment than would otherwise be the case. Those from the Office for Budget Responsibility are coming before us on the Treasury Committee tomorrow, and I look forward to grilling them then.

The Chancellor has also done this in a way that is fair. I notice that the right hon. Member for Newcastle upon Tyne East (Mr Brown) welcomed many of the measures. In fact, it is noticeable that virtually none of the Opposition Members has attacked any of the substantial measures in the autumn statement: the pensioner triple lock being continued, we welcome it, they welcome it; benefits being uprated with inflation, we welcome it, they welcome it; and the energy price guarantee, we welcome it, they welcome it. The windfall tax has been a bit controversial at some points, but there we are, and it is there. I do not know how they are planning to vote tomorrow—I do not know if they have said which way they are going to vote—but I would be very surprised if they vote against all these measures that they clearly welcome.

The Opposition have called for more money on the NHS, without explaining how they are going to pay for it—whether they are going to cut spending elsewhere, raise taxes in other places, or borrow more—but I do say this. As I pointed out in one of my interventions, despite the Labour party repeatedly accusing the Conservatives of starving the NHS of money, spending on the NHS is at record high levels not just in cash terms or in real terms adjusted for inflation, but as a percentage of GDP. Never has more of the UK economy been spent on health than now—it is now 10% of GDP. The latest international figures that I have seen—they are from 2019 —show that the UK Government were spending more of their money on health and the NHS than the European average. The Guardian—hardly a Conservative-supporting newspaper, and a doughty defender of the NHS—recently published analysis showing that, as a result of the autumn statement, spending on the NHS between 2010 and 2024 will have increased by 35% in real terms after inflation. That is from The Guardian, and that is to be welcomed.

I will make some substantive points, but I have one more observation about the Labour party. The shadow Secretary of State, the right hon. Member for Leicester South (Jonathan Ashworth), talked in his opening comments about the economic crisis made in Downing Street—a theme of many Opposition interventions—and the Conservatives’ terrible economic track record since coming to power in 2010. He mentioned the mini-Budget and blamed that for the economic crisis. I agree that we have an economic crisis—inflation is at its highest level for 40 years and disposable incomes are falling rapidly—but that is nothing to do with the mini-Budget.

Let me share a little secret with the House: almost nothing in the mini-Budget was actually implemented. Almost all of it has been ditched. It is absolutely true that it did cause turmoil in the bond markets for a few weeks and it pushed up mortgage rates. For those who renewed a fixed-rate mortgage in that period, yes, it would have pushed up the cost. However, just last week, Andrew Bailey, the Governor of the Bank of England, went before the Treasury Committee and both the Chair and I grilled him on whether the mini-Budget had pushed interest rates up higher than they would otherwise be and whether there were any long-term consequences for the economy. He said, “Absolutely not.” He was explicit.

[Carol Monaghan]

rose—

[Anthony Browne]

I will give way to the hon. Member. I do not expect her to agree with me.

[Carol Monaghan]

I thank the hon. Gentleman for giving way, but of course there were long-term consequences. I have been contacted by a number of people who have lost out on mortgage deals, and some of them were first-time buyers who lost out on properties because of the chaos created.

[Anthony Browne]

I agree with the point made. As I said, there was a temporary period of a few weeks when there was a rise in interest rates. Some people renewed mortgages in that time and some people lost mortgages. That is terrible for those people, but there are no ongoing, long-term consequences because virtually none of the mini-Budget was implemented.

Many Opposition Members have referred to the Tories’ economic record since 2010. The fact is, we have had a series of extraordinary economic hurricanes. In 2010, we inherited an economy in recession—by Labour’s own admission, we had run out of money—and the 2008 economic crisis was so profound and deep that it led to the longest, deepest recession since the second world war. It took about a decade for the structural changes to the economy to play through, and gradually we returned to growth. Since then, as many have mentioned, we have had the once-in-100-years pandemic followed back to back by the once-in-50-years energy price shock.

During the pandemic, we spent £400 billion supporting households and businesses. I do not think Labour has complained about that too much, but that has led to higher national debt. The pandemic also led to problems with global supply chains that hit countries across the world. On the energy price shock, we are an energy importer, so inevitably we are poorer as a country and inflation has shot up. The question is this: if you are in a plane in a hurricane, or repeated hurricanes, and the plane gets struck by lightning and the engine catches fire and explodes, do you attack the pilot and ditch them because they happened to be in the pilot’s seat when all that happened or do you judge them on their performance and how they managed to get through those crises?

There are two things. First, this is not a UK crisis at the moment. Inflation has shot up around the world and is at roughly the same level in America and Germany as it is here. The IMF has said that one third of the global economy is going into recession this year. The downturn in Germany is faster than it is here. In America, they are putting up taxes by $800 billion to pay for it all. This is a worldwide phenomenon.

Secondly, as many Opposition Members keep going back to 2010, I have been checking my data—I like data. Between 2010 and 2019—the latest international figures I could find while sitting in the Chamber—the UK’s GDP growth per capita was lower than that of the US and Germany, but higher than that of every other G7 country. It was higher than that of Japan, Canada, France, Italy, and every other major European economy, including Spain. Our economic track record between 2010 and 2019 was better than all those countries, so the Conservative Government have a lot of which to be proud.

I want to make a couple—I see you waving your hand at me, Madam Deputy Speaker—of substantive points. The autumn statement does increase taxes; no Conservative Government like increasing taxes, but it is far better to iron out tax distortions before, or indeed while, raising them. The capital gains tax system, for example, has many distortions and is not indexed with inflation, which it should be. It works in a very perverse way. Inheritance tax, which has effectively been increased because the threshold has been frozen, is riddled with issues. There is a potentially exempt transfer scheme where many people do not pay any inheritance tax at all. We need to get rid of all these exemptions, smooth things out and fix inheritance tax before raising it. I also urge the Government to look at marginal rates of taxation that are more than 50%. Increasing numbers of people are falling into that bracket because of the freezing of the thresholds.

Finally—thank you for your patience, Madam Deputy Speaker—I welcome the protection of capital budgets. In particular, I urge the Government to protect the funding for Cambridge Children’s Hospital.