Budget Resolutions and Economic Situation
Ed Davey Excerpts(2 weeks, 3 days ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Ed Davey (Kingston and Surbiton) (LD)
It is always a pleasure to follow the Chair of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier). I am glad she committed to looking at the devil in the detail of this Budget, because when one looks at the fine print there are quite a few things for her Committee to scrutinise. In particular, I hope that she will look at the very disappointing growth forecasts, because I think this Budget will be defined more by Labour’s red lines on Europe and the Conservatives’ Brexit red tape than by faster growth.
At the root of so much of what has gone wrong in our country—the cost of living crisis, higher taxes, broken public services, empty high streets, and the lack of jobs and opportunity—is the lack of economic growth. Our economy is being held back. British business is being held back. It is being held back above all by the terrible damage of the Conservatives’ Brexit deal: a deal, let us never forget, that was backed by the leader of Reform and voted for by Labour—a deal that put up pointless new barriers to trade, tied up British firms in extra costs and red tape, and pushed up prices on our supermarket shelves.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Will the right hon. Gentleman give way?
Madam Deputy Speaker
Order. As I said earlier in my introductory remarks, Sir Bernard, we do not intervene on Front-Bench speeches. The odd thing is that we went through this scenario this time last year. [Interruption.] We did, we did—yet here we are again.
Ed Davey
Thank you, Madam Deputy Speaker. I am always happy to talk to the hon. Gentleman in the Tea Room.
As I was saying, our economy is being held back by Brexit, so the biggest single thing the Government could do to fix our economy is to fix our trading relationship with Europe and take us back into the single market and a customs union, giving us the growth and the money to cut people’s taxes. [Interruption.]
Madam Deputy Speaker
Order. Mr Gareth Snell, moving three rows back does not mean I cannot see you or hear you. Let us try to simmer down.
Ed Davey
Thank you, Madam Deputy Speaker.
Unless and until a Government have the courage to do just what I have outlined, I am afraid that any Budget will only be tinkering around the edges, because it will not provide the growth our country so desperately needs.
The Prime Minister, to be fair, has rightly talked about the economic damage caused by Brexit, but in answer to my questions he still refuses to drop Labour’s red lines set down by Keir Starmer more than five years ago. The world has changed so much since then and it is long past time that Labour policy changed with the world. I welcome the Prime Minister talking more openly this week about the need to move forward on Europe, but can I say to the Chancellor and the Prime Minister that it is just too urgent to wait until the next Parliament? Today’s Budget shows why.
I remember when 2% growth was nothing special. When we were in government that was the average, but since we left the EU, it has been less than half that—less than 1% growth a year. Today’s forecasts show things starting slowly to move in the right direction, but they still show growth well below 2% every year for the next five years. What used to be average growth now feels like a pipe dream, so we need a real growth plan with Europe at its heart: a plan that only our party has set out—an economic plan to make Britain richer, safer and stronger.
Our plan would also tackle one of the great hidden tax injustices not just of this Budget, but of every Conservative and Labour Budget since 2021: frozen income tax thresholds. They are a stealth tax rise that has dragged millions of the lowest paid into paying income tax and millions of ordinary people—nurses, teachers, police officers—into the higher 40p tax band. Millions are paying higher taxes for the cost of Government economic failure. I have to say to the Chancellor that this Budget, which freezes the income tax allowance of people in work while raising the personal allowance for some pensioners, is not the answer. Income tax thresholds should rise for everyone—the fairest tax cut possible—letting people keep more of what they earn, rewarding hard work and giving individuals more power in our economy. That is a profoundly Liberal thing to do. If we grow the economy by trading more with Europe, we can afford to do that—a real plan to turn the economy around and cut taxes fairly.
Our plan would also tackle one of the biggest headaches the Chancellor is facing in this Budget: the cost of Government borrowing. We clearly cannot go on spending £1 in every £12 just on interest payments on the national debt. That is money that should be going on schools, on hospitals, or back into people’s pockets. We just cannot go on with the Government borrowing money at interest rates of over 5%. Some of the cost is down to global factors, as the Chancellor talked about, and a lot of it is down to Donald Trump’s war with Iran, but there is no doubt that the bond markets would look more favourably on the UK if our growth prospects were better. Just as for growing the economy, the single biggest thing the Government could do to cut their own borrowing costs, and the interest rates faced by homeowners and businesses, would be to take up our growth plan, and join the single market and customs union.
Just look at the alternative put forward by the terrible twins of British politics, the Conservatives and Reform. They are in a bidding war of unfunded fantasy promises. We have seen where that sort of fiscal irresponsibility ends; Liz Truss’s mini-Budget sent mortgage rates rising. Yet now we face the threat of a Tory-Reform Government doing it all over again. The British people simply cannot afford that.
That brings me back to the cost of living. Why are so many bills going up again? Because Donald Trump chose to start his idiotic war with Iran, which has pushed up our energy bills and hiked diesel and petrol prices to painful levels. When that war began, the Conservatives and Reform were lining up to say that Britain should be backing President Trump. Just imagine if they had been in charge. We would have been dragged into fighting a war that no one wants and paying for it with even higher bills and higher taxes. Britain needs a Government who stand up for British interests, not one who make us ever more dependent on an unreliable, out-of-control American President.
With Donald Trump pushing up petrol and diesel prices, the Chancellor’s freeze on fuel duty is welcome, but it is not enough. I urge him to look again at our emergency transport package, which would cut prices at the pumps by 12p a litre and bring down the cost of travel by bus, train and electric vehicle, too—a real breathing space for families and businesses. With energy bills forecast to rise by more than 25% in January, the Chancellor’s promise to break the link between gas prices and electricity bills cannot come soon enough, but he is right to reject the siren song from those on the Conservative and Reform Benches who want Britain to be even more dependent on dirty fossil fuels and their volatile prices. Once again, they are copying Donald Trump, and their energy plan would be a disaster for our environment, our economy and for everyone struggling with the cost of living. The right answer is to invest instead in clean home-grown renewable power, energy efficiency and battery storage, so that the prices we pay do not depend on Trump’s latest Truth Social post, but instead come down quickly as technology continues to slash the cost of renewable energy and of batteries.
In a world where Trump is deserting Ukraine, praising Putin and selling out on European security, we must move far more quickly on defence. When the Defence Secretary says we must be ready for war within 1,000 days, our armed forces cannot wait years for the investment they desperately need now. The Chancellor’s announcement of some extra funding is welcome as far as it goes, but why has he not taken up our plan for defence bonds to invest £20 billion in Britain’s defence over the next two years? And since he has ruled out joining Canada’s defence bank, will he now take up our plan and push for a European rearmament bank that goes so much further than what he announced today? Instead of signing up to one country’s version, surely the right answer is to bring our allies together behind a shared vision of defence investment to protect our continent from Putin.
The defence of our country needs serious answers like these, not fantasy pledges like the Conservatives’ “iron dome”, which they say is not an iron dome—except when it is. What a shambles! No wonder they left Britain’s armed forces in such a mess, something for which they have not yet apologised.
It will not surprise the House to hear that we on the Liberal Democrat Benches are delighted to hear talk of fiscal devolution. Taking money and power out of a few hands in Whitehall and giving it to communities to make their own decisions is something that we, as Liberals, have always championed. There is a right way to do devolution and a wrong way, so we will have three tests for the Government’s plan as it develops. First, does it give councils enough money to fulfil the responsibilities they are being given? Secondly, does it reach beyond mayors to councils and communities everywhere? Thirdly, is it fair, so that those areas that are already struggling do not find themselves with even less? Done properly, this could be the start of something really big; done badly, it is simply passing the buck.
The same goes for welfare reform. Of course it needs to be done, but it needs to be done right: cutting the bill by helping people into work and giving people the care and support they need so that they can work, like fixing carer’s allowance to help people juggle care with work. I am glad that the Chancellor has listened to carers on the need to scrap the unfair cliff edge of carer’s allowance. As I said to the Prime Minister earlier, this cannot wait another four years, and we cannot see a 100% tax rate on working carers. I urge the Chancellor and the Prime Minister to look at our alternative plan instead, which we put forward to Liz Sayce when she did her review. I hope to bring it to the meeting that the Prime Minister has promised.
Whether on carer’s allowance or other benefits, let us reform welfare right, so that the system helps people into work and then rewards them for working. The country needs this new Chancellor and Prime Minister to succeed, because the livelihoods of everyone in our country are at stake. The Liberal Democrats will work constructively with the Government wherever we can. We will oppose them when they get things wrong, of course, but we will also support them when they get things right and push them to go further when they are too timid.
In that spirit, I say to the Chancellor that this Budget is far too timid. The Government have recognised the scale of the challenge, but like Keir Starmer before them, they still have not risen to it. They have not fixed the terrible damage that they did with their tax rises, from the family farm tax to the jobs tax. I urge them to be bolder—be bolder on energy and defence; be bolder on devolution, and get it right; be bolder on cutting income tax; and be bolder on Europe and growth—because after so many years of pain, so many years of being held back, the British people need real change, and fast.
Remembrance, UK Armed Forces and Society
Ed Davey Excerpts(6 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ed Davey (Kingston and Surbiton) (LD)
Our annual remembrance services and traditions, from the laying of wreaths to the wearing of poppies, must be permanent in the life of our nation, even as those who lived through those wretched times leave us, for we must continue to remember—remember what prices were paid and remember what sacrifices we still demand of the men and women of our armed forces.
Like other Members, I see these moments through the stories of those from my constituency who died, including the 623 men of Kingston borough who died in the great war, the 6,000 officers and men of our former local regiment, the East Surrey Regiment, who were killed, and Squadron Leader Ian Bazalgette, a Canadian-British pilot who grew up in New Malden in my constituency. His Lancaster bomber was severely damaged by anti-aircraft flak prior to arrival at his target on 4 August 1944, but he nevertheless continued to the target and completed his task before ordering his crew to bale out. When he found that two of his crew were too injured to bale out, he attempted to land the burning plane to save the crew members rather than baling out himself. He died in the attempt and was awarded the Victoria Cross posthumously. So when I deliver my election leaflets in Bazalgette Gardens, New Malden, named after that brave pilot, I think of him and thank him for his sacrifice for democracy. I thank them all for their sacrifices for our freedoms.
There have been many wars in our country’s history, across many centuries, but the first and second world wars stand out for the dreadful death tolls and for what was at stake. They also stand out for another reason. Those wars touched the lives of every non-combatant: not only the families who were bereaved but the whole country, whose lives were on hold for the duration of the conflict. Whether or not they were directly involved in the war effort, they had to live with the restrictions, the rationing, the lights out and the wide-scale suspension of liberty as people collectively fought to preserve their freedoms.
It would be crass and wrong to draw direct parallels between the deprivations we are now suffering during this pandemic and the sacrifices and hardships that those millions suffered for years during those bloody wars, but we can learn lessons and perhaps draw some comfort, even inspiration, from them, not least because this pandemic is also affecting everyone. It has forced millions of people across our country and across our world to take a stand and do their bit, and while this pandemic is different in so many ways, we need that collective courage and discipline to beat the virus.
Today, we rely especially on people serving on the modern frontline: those working in our hospitals and the careworkers in our care homes. They are today’s civilian heroes. We also rely on some very clever people, such as our amazing scientists, to find a solution. They are part of the amazing international effort to find a vaccine to shorten the life of the pandemic, like some modern-day Alan Turing and the amazing people who served at Bletchley Park who shortened the second world war. Today’s enemy may be invisible, but it is deadly and it is impacting the everyday lives of millions.
Over the years when I have paid my respects at war memorials, my own personal thoughts have been influenced by my nana’s wartime stories. It was my granddad who went to fight in the Army, driving lorries in north Africa and Italy, but my nana, left at home to look after my mother, was also profoundly impacted by the war. It is her stories of looking after evacuees from London’s east end that have, for some reason, always stuck with me. She told stories of how she had to give up her own rations to feed and care for not only her own children—my mother—but the children of strangers, of how she took up smoking to calm her nerves and of her 10-mile cycle ride to the factory making radios for the submarines her younger brother, my Uncle Sam, was serving on. When my grandmother died, aged 90, I was so proud that in the congregation of 12 were two of her evacuees, who had come to say thank you. We are inspired by all their service.
Middle East: Security
Ed Davey Excerpts(6 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Wallace
My hon. Friend makes a point about the deaths of United States personnel. We should not forget, and we should pay tribute to, the 179 UK defence personnel who died in operations in Iraq and the 454 who died in operations in Afghanistan. He will remember, like me, that many of the tragic deaths of UK personnel in Iraq happened in Basra, where the Shi’a militia were supported and instigated by members of the Iranian revolutionary guard.
Sir Edward Davey (Kingston and Surbiton) (LD)
I thank the Secretary of State for his statement, in particular his emphasis on de-escalating tension, and acknowledge his genuine expertise on Iran. Given how damaging the Iraq war was to security in the middle east and given the Government’s support for reducing tension, will he now rule out any British involvement in any attack on any site in Iran?
Mr Wallace
I am not going to rule out anything. The UK will do what it has to do to defend its persons—its citizens—wherever it needs to; that is our duty. We cannot say what is in the minds of Iran or anybody else in the future, and that is why we will always reserve our right to take that decision at the time.