Income Tax (Charge)

Debate between Edward Miliband and Jamie Stone

Thursday 28th October 2021 Commons Chamber

[Edward Miliband]

The hon. Lady is completely right about that. She anticipates my next point brilliantly; it is a useful segue. If we want to understand why growth is so anaemic, she is right that we need look no further than the Chancellor’s failure to seize the opportunities for green growth. This is an important point: the prudent and responsible economic call—I suspect the Business Secretary agrees—for economic growth is to invest at scale in the transition to a zero-carbon economy. Let us be honest, it is now a completely open secret that the problem is that the Chancellor is not a believer, and it showed yesterday. As we prepare to host the most important international summit ever on climate change, as delegates gather from all around the world, and as the eyes are on Britain, what did he unveil as his flagship measure yesterday? To cut air passenger duty for domestic flights. You literally could not make it up. People want good and affordable rail services, but the plan for rail seems to have been postponed again, and instead there will be 400,000 more domestic flights as a result of that decision. Once again, that shows that the Treasury is not signed up to the agenda.

I am such a nerd that I was reading the OBR report last night and there is an interesting and illuminating bit on, I think, page 176—Members can check—which says, in OBR language:

“the…costs involved in getting the rest of the way”—

to net zero—

“remain significant and their apportionment between businesses, households, and government…remains largely unclear. This leaves the costs associated with the transition to net zero as a major source of longer-term fiscal risk.”

Let me underline that point for the House. The July 2021 OBR report, which for the nerds among us is brilliant, and which I strongly recommend to Members as bedtime reading—Madam Deputy Speaker is laughing at me, or perhaps with me—warned of the danger of not acting on the climate and of debt climbing to eye-watering levels as a result. When my hon. Friend the Member for Leeds West said yesterday that debt would rise to 300%, I noticed a Conservative Member at the back look at his hon. Friend and say, “Oh that can’t be right,” but that is what it says. The interesting thing about that report is that it warns not just about the danger of not acting, but about the danger of delay. It says that delaying action on the climate by a decade will double the cost of the transition as we lock in high-carbon choices.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Does the right hon. Gentleman share my disappointment that the Budget had so little for the potentially huge industry for the UK of offshore floating wind energy? He talks about delay. If we delay, we will lose out to other countries in that race, and they will not show any mercy on that front.

[Edward Miliband]

The hon. Gentleman makes an important point. We have been successful in offshore wind generation, and it is right to acknowledge that. The ground was laid by the last Labour Government, but I will leave that to one side. We have been successful at generating the wind energy, but not the jobs. He is completely right that we have not delivered for many people when it comes to jobs.

As I was saying, not acting increases the cost, so the prudent responsible choice is to invest. I will mention some key sectors, because again, there has been a deafening silence. I come back to the steel industry, which is such a litmus test. It needs about £6 billion of investment to get to net zero by 2035. The view is shared on both sides of the House that it needs to get to net zero and that it is a foundational industry that we need and that is incredibly important to communities across the country. There are 20 demonstration projects around Europe but none here at the moment. It requires a partnership of the public and private sectors and needs both sides to invest. There is a crucial role for the Government in that.

We have set out a commitment of up to £3 billion over a decade to create that partnership with the steel industry so it can make the transition and we can keep those good jobs with good wages that are vital to many communities. It is a test of us as a House of Commons.

The Government talk about a £250 million clean steel fund, but even that has still not been delivered. I hope that it is still Government policy, but it seems to be in the balance and might have been got rid of. That is not good enough. The Treasury has to understand that unless we invest in steel, automotive and hydrogen, we will fall behind in the global race, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said.

--- Later in debate ---

[Edward Miliband]

I completely agree. I actually take a crumb of comfort from the Business Secretary, when he defends the sorry saga of the green homes grant, pointing to some of the money given to local authorities and what they did. That is what we need at scale—locally led, house by house, street by street. We are miles behind other countries.

On green investment, a philosophical difference is emerging. I worry that the Government will increasingly leave individuals and industries on their own to face the costs. I do not think that is true of the whole of Government, but the Treasury remains a fundamental block to the green investment that we need. There was a whole saga about its net zero review and the fact that it emphasises short-term costs rather than long-term gains. Frankly, that is a big problem for our country.

[Jamie Stone]

rose—

[Edward Miliband]

I will make some progress and finish.

Labour would deliver a climate investment pledge of £28 billion extra every year for the rest of the decade. That is an investment in bringing down energy bills; delivering affordable public transport and cleaner air; and backing British industries with a real plan for jobs and wages. That is what real action on the climate emergency and industrial strategy looks like.

Given the cost of living crisis, the immediate issues facing business, and the need for longer-term investment, this is not the Budget we require. It does not make choices to help working people; it hits working people. It cuts taxes for the banks but raises taxes for workers. It deserts key British industries and it fails to invest, as we need to, in the green transition. If the big challenge of the future is how we build an economic model that rights the wrongs of the past, this Government cannot be the answer and nor was this Budget.