Budget Resolutions

Darren Jones Excerpts

Tuesday 12th March 2024 Commons Chamber

[Darren Jones (Bristol North West) (Lab)]

I am starting to worry about right hon. and hon. Members of the Conservative party—not just because there are so few of them here today to defend their Budget, but because of their state of mind. I am not sure whether it is confusion, delusion or denial, but whatever it is, they need an intervention from the public.

On Conservative confusion, the Chancellor called this a tax-cutting Budget, but the independent forecasts confirm that the tax burden is due to go up each and every year over the next five years. On Conservative delusion, the Chancellor called this a Budget for a long-term plan for growth, but in the middle of this recession, the growth forecast per person was downgraded once again, after seven quarters of decline. On Conservative denial, which is the worst of the three examples, the Conservative party came out of the Budget promising to abolish national insurance contributions altogether —an irresponsible, unfunded and massive spending commitment costing £46 billion a year, all without a plan to pay for it.

[Alan Brown]

The Budget bakes in post-election cuts of between £19 billion and £20 billion, and the Institute for Fiscal Studies has said that there is a conspiracy of silence from both the Conservatives and the Labour party. The Labour party has committed to sticking with the Tories’ spending plans. On the conspiracy of silence, will Labour keep the £20 billion of departmental cuts, or will it raise funds to offset that?

[Darren Jones]

Two short answers: first, we are not sticking to the Conservatives’ spending plans and, secondly, the OBR forecasts Conservative party failure, not the success that the Labour party will bring to this country and the economy.

I know that Conservative Ministers do not like to think about their fourth Prime Minister since 2010, who only recently crashed the economy off the back of unfunded tax cuts, sending mortgage bills rocketing, but they really do not need to look back far in history to understand the risks of a £46 billion unfunded tax cut promise. They do not even need to ask their predecessors about the consequences of such risky behaviour, because the British people are still paying the price today for their economic vandalism through higher mortgage and rent costs every single month. Conservative Ministers need to look at themselves in the mirror and ask whether they have learned anything from the last 14 years in office. I have given just a few examples of confusion, delusion, denial and risk-taking with the economy, which prove that the biggest threat to the economy is the Conservative party.

[Stephen Doughty]

On the subject of confusion and the unfunded £46 billion commitment on national insurance contributions, my hon. Friend will note that the Chief Secretary to the Treasury would not give clarity on the date for her Government’s promise, yet the Chancellor said in an email to Conservative party members that he wanted to make progress on that promise “in the next Parliament”. Other members of the Government are saying completely different things. Is this not an example of the chaos that the Conservatives are in?

[Darren Jones]

That is yet more evidence of the Conservatives’ ill discipline. Last time, they wanted to disregard the Office for Budget Responsibility, and announced unfunded tax cuts; now the former Chancellor supports these new, unfunded tax cuts, and yet again the Government are not giving the OBR the information that it needs to make policy forecasts.

[Steve Double (St Austell and Newquay) (Con)]

Does the hon. Gentleman understand the difference between an ambition and a promise?

[Darren Jones]

I would like the hon. Gentleman to explain that to the public. Given that the Conservative party makes promises at every single election and fails to deliver them, I think the public have the same question in mind.

Moving on to the confusion about this being a tax-cutting Budget, the Budget documents confirm that the United Kingdom has the highest tax burden in 70 years, and that burden rises each and every year for the next five years under the Conservatives, so overall, taxes are going up, not down. Figures from the Office for Budget Responsibility show that for every 10p extra in tax paid by working people, the Conservatives give only 5p back. That is why the public see the measures as a pre-election giveaway by the Conservatives—but it is no giveaway at all, given that successive Conservative Chancellors have taken double what they now promise to give back.

This is bad news, and not just for those already paying taxes. Tax thresholds are being frozen for the next five years, which will increase the tax take overall by an additional £40 billion, so 3.7 million people, including pensioners, who are not paying tax at all will do so by 2028-29 under the Conservatives. The tax burden is going up; Conservative Ministers are taking more in tax than they say they will give back; and more people will pay tax after this Budget, so I have to ask: why are Conservative Ministers calling this a tax-cutting Budget at all?

May I gently point out that the Scottish National party is just as bad? In Scotland, the SNP has increased taxes on working people, so that even the low paid pay more in tax in Scotland than they would in England, yet the SNP campaigns against the windfall tax on the big oil and gas companies. Are SNP Members really putting oil and gas company tax cuts ahead of tax cuts for working people?

[Angus Brendan MacNeil (Na h-Eileanan an Iar) (Ind)]

rose—

[Darren Jones]

I was waiting for an intervention from the SNP. Is the hon. Gentleman an SNP Member?

[Angus Brendan MacNeil]

I am not in the SNP, but I do like a bit of accuracy and proof. The reality is that those earning under £28,000 are not paying more tax. The hon. Gentleman’s reference is a straight lift from an article in the Holyrood magazine. It was a very good article otherwise, but on that little bit, it was not very accurate at all.

[Darren Jones]

I read the article on the BBC, which I can assure the hon. Gentleman is a pretty reliable source of information. If the SNP wants to tell teachers and nurses earning £28,000 a year that they are high earners, I encourage it to do so in the general election coming up this year.

Labour first called for a windfall tax on the profits of oil and gas companies in January 2022. The Conservatives finally agreed to introduce the energy profits levy in May that year, though there were significant holes in the Government’s approach. Since then, Labour Members have been pressing Ministers to close them. Ahead of the general election, we have set out our plans for an energy profits levy if we win. We will increase the levy to the same rate of tax as in Norway, end the windfall tax investment allowances, and maintain the levy until the end of the next Parliament, with a statutory sunset clause, if there continue to be windfall profits. We have set out our plans now to give those operating in the North sea as much certainty as possible when making future investment decisions. To give further certainty, I can put on record today that we fully support an energy security investment mechanism, and we will therefore support Budget resolution 18 today.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

My hon. Friend is making a powerful speech about how this has been a high-tax, high-debt Government, but at the same time they have been presiding over low living standards. Does he agree that the £17 rise in real weekly earnings under the Conservatives is in huge contrast to wages rising by £183 under Labour? While they have been presiding over low living standards without any plan to sort that out, we will have higher living standards and lower bills under Labour.

[Darren Jones]

I thank my hon. Friend for her intervention, which I think reflects the mood of the public. When Conservative Ministers stand up and say that we have never had it so good, people at home look at their payslip and their bank balance and realise that is not the case.

Let us now turn to the delusion of this Budget being a so-called long-term plan for growth. The independent evidence is clear: this will be the worst Parliament on record for living standards. It is the only Parliament where living standards have fallen instead of risen, with real pay having gone up by only £17 a week under the Conservatives, compared with £183 a week under the last Labour Government, as my hon. Friend has just pointed out. The Chancellor could not bring himself to say the R-word, but the Budget documents confirm that, despite 22 Budgets or statements from successive Conservative Chancellors over these past 14 years in which they promised they would get the economy growing, we are now in recession—a recession that for working people has been felt for some time.

We have had seven quarters of downgraded growth per person extended by a further downgrade in the Budget last week. That is the longest period of stagnation since the 1950s, with an economy that has shrunk on a per capita basis since the Prime Minister took office and overall GDP forecast to increase only because of a dependence on migrant labour. That is quite the record for a Conservative party that promised to reduce migration and get the economy growing.

[Tim Farron]

The issue in rural communities such as mine is that growth is being hampered, despite there being demand, because hospitality and tourism businesses do not have a big enough workforce to support it. In the Lakes, 63% of hospitality businesses are not at capacity because they do not have the staff. Part of that is a result of silly visa rules, so will he look at those again? The other reason is the lack of affordable housing for local families. Would he allow local authorities, and give them the finance, to once again build social rented homes, so that we have enough homes to enable people to work in communities such as ours?

[Darren Jones]

The hon. Member is right. What we need is a country that creates the opportunities and jobs for people who need them in the areas in which they live, whether that is about affordable housing, delivering transport infrastructure on time and on budget—something the Conservative party seems unable to do—or ensuring workers have access to skills and training so that they can take the jobs available in their local communities. The Conservatives have consistently failed on those measures, which is why they are so dependent on migrant labour to keep the economy above a recessionary level in the Budget forecasts.

Turning to the denial of the Conservative party, its £46 billion a year plan to abolish national insurance contributions altogether is an irresponsible, unfunded, massive spending commitment without a plan to pay for it. The public rightly look to their national insurance contributions as the bedrock of our welfare state, where working people and their employers all contribute towards funding our national health service and the state pension. It was originally designed as an insurance to give people the financial help they needed during illness and unemployment.

Given the Conservatives’ pledge—confirmed again across the Dispatch Box today—to abolish national insurance altogether, without a plan to pay for the £46 billion annual cost, what do they propose to cut? Will it be funding for our GPs, driving patients to pay for private health care? Will it be the right to be seen in the local hospital? Maybe they will cut support towards the cost of social care, or end incapacity benefit or jobseeker’s allowance. Maybe there would even be a reduction in the state pension itself. What is it? The public have a right to know—[Interruption.] I will happily give way to an intervention from Ministers if they can tell us how they are going to fund their £46 billion tax cut. There are no interventions.

The Conservatives must answer this question. After their previous Prime Minister and their previous Chancellor crashed the economy through a £45 billion tax cut, they are now celebrating the latest form of a £46 billion tax cut. How will it be funded? Surely not through higher taxes or higher borrowing, given that both are at record highs already.

[Ruth Jones (Newport West) (Lab)]

Does my hon. Friend agree that the Conservatives should come clean about whether their plan to abolish £46 billion of national insurance contributions will mean putting up taxes on working people, cutting spending on public services or borrowing billions, like the previous Prime Minister, and risking crashing the economy again?

[Darren Jones]

My hon. Friend is right. Ministers should answer this question and I am repeatedly giving them the opportunity to do so. What is the answer to the question? How will the Conservatives fund their £46 billion unfunded tax cut commitment? We can only assume, given that taxes are the highest they have been for 70 years and borrowing is the highest it has been for many decades, that further cuts must be coming from the Conservatives to our national health service and our state pension. The fact of the matter is that the Conservatives’ plan to abolish national insurance is not just fiscally irresponsible but morally abhorrent. In contrast, the Labour party will never promise to do anything it cannot pay for—[Interruption.] I seem to have woken them up on the Government Benches. I encourage them to continue to try to answer the questions we put to them.

[Sir Stephen Timms (East Ham) (Lab)]

My hon. Friend is making a powerful case on national insurance. Does he agree that the plan to abolish national insurance raises fundamental questions about the future of the state pension? Even if income tax were increased by 8p in the pound to pay for it, the question of eligibility for the state pension and other contributory benefits would be very difficult to address.

[Darren Jones]

I thank my right hon. Friend, the Chairman of the Work and Pensions Committee, for raising that important and, I might say, obvious question. The public will want to know the answer. Why are Conservative Ministers not telling the Office for Budget Responsibility how they plan to pay for this £46 billion unfunded tax cut? When do they plan to do so? Why can they not tell the House today how they will pay for this £46 billion unfunded tax cut? The public will have to look at what the Conservatives are offering, and at their record in office over these past 14 years, and make a judgment call.

I started my speech by highlighting my concern for Conservative Ministers, given their obvious state of confusion, delusion and denial, but my real concern is elsewhere. My concern is for working people who are paying more in tax than ever before; for pensioners who are dragged into paying tax out of their fixed income for the first time; for families who are struggling with the cost of living crisis and seeing the economy going in the wrong direction; for our national health service that is now presumably at threat from the £46 billion unfunded promise to abolish national insurance contributions with no plan for how to pay for it; and for our country which, after 14 years of Conservative failure, is exhausted, on its knees and staring into the abyss.

We are all fed up with the weak leadership that the latest Conservative Prime Minister is offering our country. We are bored to the back teeth with the Conservative party’s chaos and infighting taking priority over the country. We want to get our economy back on track and our public services back on their feet, to close the book on 14 years of Conservative failure and to get Britain its future back. I have only one ask of the Conservative party today: to set the date for the general election.

--- Later in debate ---

[Darren Jones]

I am happy to be welcomed to intervene, but the debate is about the Conservative Budget here in Westminster. If the SNP has questions to answer about its performance in Government, it should do so in Scotland.

[Richard Thomson]

That was absolutely ridiculous—a complete waste of time. The reason I brought it up was that the hon. Gentleman brought it up; clearly his memory is very short.

Scotland needed much more money for investment in infrastructure, the public sector and public services, but the UK Government have let us down again in this Budget. Any attempt at boosting productivity—that is the subject of this debate, although I did not hear a great deal of mention of productivity from either Front Bencher—will run headlong into the effects of the austerity that has been prevalent since the financial crisis of 2008.

We know from first hand the impact that austerity has had on public services across the UK. As a result of those spending choices, investment levels in the UK remain the lowest of any country in the G7. Research by the UK in a Changing Europe group has found that investment is 10% lower than it would have been if we had remained in the EU. and that our GDP is already 5% lower. If the Government want to increase productivity and drive investment, it is clear that they to do more to recognise the vital role they have to play through their capital expenditure.

Capital expenditure is what maintains our infrastructure. It is what builds houses, replaces hospitals and schools, maintains roads and, crucially, drives and encourages private investment. It is utterly bizarre that as a consequence of their spending decisions here, the UK Government will be cutting the Scottish Government’s capital budget in real terms by 10% over the next five years.

Another key area where the Budget does nothing to shift the dial is research and development, as I have said before. The UK lags behind our European competitors when it comes to overall levels of investment in research and development, but London and the south-east are taking the lion’s share of even that reduced amount. Wales and the north of England lag behind. Scotland holds its own, but if the Government genuinely want to level up—not words we hear paired with each other terribly often these days—they need to shift the dial and start to address inequalities inherent in the way the Government carry out business as usual.

Let me turn to energy. The decision to continue the energy profits levy can only be described as a slap in the face for all the bold and brave Scottish Conservative politicians who were boasting about how they were going to personally oppose it and get rid of it. However, the Labour proposals to increase its level further risks killing the goose that laid the golden egg. I am a big fan of the way the Norwegians have run their oil and gas sector. Scotland and the UK would be in a much better place if we had done the same, but the UK basin is closer to the end of its life than much of the Norwegian basin. Simply saying everything will be alright on the night if we tax at the same level as Norway puts investment decisions on a precipice. I caution the Labour party to think about that carefully if or when it forms the next Government. Increasing taxes beyond their current level in that industry risks putting tens of thousands of jobs on the line.

Finally, we are all quite bored with weak leadership, but does leadership get any weaker than a party taking its one and only identifiable policy—investing £28 billion in renewable energy—and throwing it on the fire because its leader is absolutely terrified of losing political ground to the weakest and worst Conservative Government any of us have the misfortune to remember in our lifetime?

It is absolutely vital not just for the country, but particularly for the north-east of Scotland, to get the energy transition right. Labour is absolutely correct to say that it will have a pretty dismal economic inheritance from the current UK Government, but, my goodness, what a dismal legacy Labour will leave for the Government who eventually replace it if it continues on the current path. That is why Scotland needs to be away from both the Labour and Conservative Front-Bench teams and making decisions for ourselves as a fully sovereign independent country.

--- Later in debate ---

[Bim Afolami]

It is not our plan to resurrect anything from the mini-Budget. We have our plan and we set it out in our Budget.

As the son of a doctor and a pharmacist, as many of us are on the Government Benches, I am mindful that any good doctor will say that in order for the medicine to work, one has to complete the course and stick to the plan. This Budget sticks to the plan we set out in 2023 and has three key objectives: to reward work, to grow the economy and to improve productivity. Before I get on to those points, I will address some of the remarks made by hon. Members during the debate.

The hon. Member for Makerfield (Yvonne Fovargue) made a point about some of the most vulnerable in our country and their access to credit. I commend her long-standing support for her constituents, including the most vulnerable. We are extending the household support fund, as she will know, and we are making it easier to access the debt relief order. The right hon. Member for East Ham (Sir Stephen Timms) welcomed the decision to extend the household support fund. In response to his question about making the fund permanent, that is a decision for the next fiscal event, whenever that will be.

I say to Members of all parties who are concerned for the most vulnerable that this is a Budget and a Government for them. Since 2010, the real income—the take-home pay—of those working full time on the national living wage is 35% greater than it was in 2010. On rewarding work, thanks to the actions that this Government have already taken, falling inflation means that wages in real terms are on the up, even while unemployment is low. In response to the question raised by the hon. Member for Liverpool, Walton (Dan Carden), real household incomes overall have increased by 8% since 2010. But we all know that we can go further. The simplest and most effective way to do so is by reducing people’s taxes and getting rid of the double taxation on work, which means reducing national insurance.

I was listening carefully to the shadow Chief Secretary to the Treasury, who is a man I rather like. [Hon. Members: “Ah!”] I rather admire him. We came to the House at the same time. We are practically the same age—he is about five months younger than me, but let us not go into that. But I was very surprised to hear him say—he can intervene on me if this is not correct—that it was “morally abhorrent” to cut national insurance.

[Darren Jones]

I always welcome the chance to return to the Dispatch Box. Just to answer the hon. Gentleman’s question, I said that it was morally abhorrent to abolish national insurance contributions at a cut of £46 billion a year with no plan to pay for it. The Minister has the opportunity once again to tell us how he is going to fund the £46 billion.

[Bim Afolami]

This is great fun, Mr Deputy Speaker. I say to the shadow Chief Secretary that we have been very clear about this. We have cut national insurance by a third in the last two fiscal events. It is our long-term ambition to do so and to eliminate this double taxation on work. If Labour Members do not believe that we should eliminate this double taxation, they should say so.