Management of the Economy and Ministerial Severance Payments

Clive Efford Excerpts

Tuesday 15th November 2022 Commons Chamber

[Sarah Owen (Luton North) (Lab)]

Thank you, Mr Deputy Speaker. I am proud to respond to the debate on behalf of Labour. Despite what Government Members may say, this is an important debate. Why? Because it reflects the discussions being had around every kitchen table by parents with hushed voices behind closed doors so as not to worry their children. It is the sinking feeling that people are getting every time another bill comes through their letterbox. As we have heard throughout the debate, that is especially so with mortgages.

Under the Tories, we have seen next to no growth for the last 12 years and the economic picture is about to get worse. Over the next two years, the IMF predicts that the UK will see just a third of the growth of Canada and Japan, and less than half that of France and the US. The most recent GDP figures show the UK’s economy shrinking by 0.2%. We are teetering on the edge of what is predicted by some to be one of the longest and deepest recessions in history and, as my hon. Friend the Member for Bradford West (Naz Shah) rightly said, it is a problem made at No. 10. It is not a problem made solely by Russia’s war with Ukraine—if it was, surely every country would be enduring the levels of next-to-no growth that we have had to experience.

[Clive Efford (Eltham) (Lab)]

My hon. Friend points out that this is a problem created in No. 10. On Thursday, after we have taken into account the reversal of the unfunded tax cuts that the mini-Budget put in place, the Chancellor will be dealing with the £30 billion gap left from that Budget, and taxpayers will have to pay for that in the months to come. On top of paying higher mortgages, therefore, people will be paying higher taxes because the Government frittered away £30 billion in a matter of weeks.

[Sarah Owen]

Unfortunately, my hon. Friend is absolutely right. As my hon. Friend the Member for Rhondda (Chris Bryant) has said, even an 11-year-old knows that the Tories “broke the money”. While our European neighbours are working with mortgage rates of about 2.2%, a two-year fixed-rate mortgage in the UK is currently 6.3%. What makes the UK so different from other countries to the extent that our mortgage rates are more than double those of France, Germany, Sweden and Norway? The list goes on. What they do not have to contend with, though—unfortunately, we do—is a Tory Government weighing down our country with more than a decade of stagnation and failure, a shockingly ill-judged mini-Budget and the distraction of scandal after scandal.

--- Later in debate ---

[Alex Burghart]

I will make just a little progress, but don’t worry—we have plenty of time.

In a debate like this, it is important to be clear and a bit careful. There are two things going on when we talk about the economy in general: the international situation and the effect of decisions made by the previous Administration. It is true that both have had an effect; Conservative Members accept that. The Opposition will know that, having heard what the Chancellor said in this House on 17 October and what the Prime Minister said on the steps of Downing Street on 25 October. Listening to many Opposition Members’ speeches this afternoon, however, one would be forgiven for thinking that they had either not heard those statements or completely chosen to ignore them.

The fact is that the Chancellor and the Prime Minister have accepted that mistakes were made in the previous Administration, but it is also the case that a very serious international situation is affecting all major economies. That is why the IMF expects one third of the world to go into recession. It does hon. Members on either side no credit not to acknowledge those facts.

The shadow Secretary of State, the hon. Member for Wigan (Lisa Nandy), talked about a £30 billion figure, but she was not able to identify the source of that analysis or how it was calculated. [Interruption.] From a sedentary position, the hon. Member for Luton North says, “Her brain.” No doubt the brain of the hon. Member for Wigan is very large, but it is not itself the source of the analysis. Were she to footnote her brain in a report, she would rightly be called up on it.

The motion, from which we have strayed repeatedly during the debate, is about severance pay, about mortgages and about an attempt to censure two Members of this House. As my right hon. and learned Friend the Minister of State made clear at the start, payments connected to the loss of ministerial office are defined in legislation that has been passed by Parliament and has been in effect for successive Administrations.

[Clive Efford]

The Minister asks where the figure of a £35 billion gap comes from. It comes from the Resolution Foundation, which states that £45 billion is attributable to the unfunded tax cuts. The higher interest rates account for £30 billion. Offset against the £29 billion for the mini-Budget U-turns and £11 billion for the lower interest rates, that leaves a £35 billion gap entirely attributable to the mini-Budget—a waste of £35 billion that taxpayers are going to be asked to pay for on Thursday.

[Alex Burghart]

I do not believe that the hon. Gentleman’s figures take account—

[Clive Efford]

Read what the Resolution Foundation says.

[Alex Burghart]

I certainly will, but I do not believe that the hon. Gentleman’s figures take account of the fact that many of the measures in that mini-Budget have now been reversed.