Economic Growth

Henry Smith Excerpts

Tuesday 14th November 2023 Commons Chamber

[Jeremy Hunt]

Because we believe in a progressive tax system, we introduced the changes that I just outlined, which mean that people on the lowest legal wage are getting 25% more after tax. That is a significantly bigger increase than for people on higher deciles.

One of the main things the shadow Chancellor mentioned was her amendment on the OBR. I understand the political game of trying to draw attention to the mini-Budget, but she should know that the OBR is already legally required to publish two forecasts a year, as will happen under this Government at successive autumn statements and spring Budgets. Today’s proposal is dangerous because, despite what she says, it would hamper the Government when acting in an emergency, as we did in the pandemic. I will tell her why. Instead of taking decisive action, Governments would feel obliged to enter a 12-week process with the OBR in case the outcome of the independent process that she advocates made any crisis worse by highlighting a significant loosening of the fiscal rules.

What is most extraordinary about the amendment is that, at the same time that the shadow Chancellor tries to claim the mantle of fiscal responsibility in this House, only this morning she briefed the papers that she wants to unfreeze income tax thresholds—a £9 billion commitment—and make full expensing permanent, which is a £10 billion commitment. That is all without an OBR forecast in sight. That kind of irresponsibility from Labour is exactly why we set up the OBR in the first place.

This is an argument not just about jobs and work but about poverty. Labour tried to eradicate poverty by tinkering with the benefits system and Gordon Brown’s tax credits. We all remember the “poverty plus a pound” idea, whereby if someone just below the poverty threshold is given £1, they are somehow magically lifted out of destitution. Instead, the Conservative Government have reduced the numbers in absolute poverty after housing costs by 1.7 million people by making work pay and by reducing the number of children living in workless households, because they are five times more likely to be in absolute poverty than households in which the adults work. Making work pay is a moral duty and not just an economic necessity, as only Conservatives understand.

[Henry Smith (Crawley) (Con)]

Work is the best way to eliminate poverty. What are the Chancellor’s reflections on the fact that every Labour Government have left office with unemployment higher?

[Jeremy Hunt]

My reflection is quite simply that the Labour party does not understand how to lift people out of poverty. Labour Members do not like us talking about the fact that nearly 2 million people have been lifted out of absolute poverty under Conservative Governments, because that does not fit their austerity story, but the reality is that a Conservative Government have been responsible for a very important piece of social progress.

I want to turn to the autumn statement, because as we start to win the battle against inflation we can focus on the next stage, which is growth. Next week, we will see an autumn statement for growth. Because no business can expand without hiring additional staff, I will address labour supply issues to help fill the nearly 1 million vacancies we have, working with the excellent Secretary of State for Work and Pensions. That will build on the 30 hours of free childcare offer that I announced for all eligible children over nine months in the spring Budget. I will also focus on increasing business investment, because despite the fact that our growth has been faster than that of many of our European neighbours, our productivity is still lower.

--- Later in debate ---

[Henry Smith (Crawley) (Con)]

I am grateful for the opportunity to speak in this debate on the King’s Speech. It was poignant to attend the House of Lords last week to hear His Majesty’s first King’s Speech. It is perhaps appropriate that this debate takes place on Charles III’s 75th birthday, and we all wish him a very happy day indeed.

At the beginning of this Parliament, almost four years ago, I do not think anyone could have predicted the events that would unfold after just a few months, with the global covid-19 pandemic. It is quite remarkable and not by accident that the UK economy has had one of the fastest and strongest recoveries of any in Europe, including Germany and France, and elsewhere in the world, including Japan. I welcome the investment of over £20 billion a year in research and development. It is no accident that this country is decarbonising and reaching our 2050 net zero carbon emission goals more than any other country in the G7.

I welcome the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill, which was announced in the King’s Speech. Yesterday evening, the New Zealand high commissioner was here in Parliament. I welcome the trans-Pacific partnership, which truly is a demonstration of global Britain and global reach post Brexit.

We are an island trading nation, and that is why economic growth has to be supported by a thriving British aviation sector. It has suffered hugely as a result of the pandemic but is coming back extremely strongly. I am delighted that later this month, Virgin Atlantic Airways, which is headquartered in my constituency, will be flying the first ever 100% sustainable aviation fuel fight, transatlantic from London to New York. However, we need to do more to support the sustainable aviation fuels industry, which has the potential to create over 100,000 jobs in this country. It is better for our economic and energy security to produce SAF here in the United Kingdom than to be reliant on importing it from abroad, with all the expense involved.

Another area in which we could boost our economic growth would be to use a Brexit freedom to introduce duty-free shopping on arrivals. Most of the rest of the world does so: parts of Europe that are not in the European Union have introduced duty-free shopping, including Norway and Switzerland, as have many other countries around the world. It is a freedom that we should be using. It would not cost the Treasury any lost revenue, but it would onshore those sales to UK shops and create employment.

Turning to animal welfare issues, I very much welcome the livestock exports Bill. Live animal exports for slaughter and fattening have not taken place for a number of years, but certainly in the past, that was an extremely cruel practice that caused great distress to animals who were trafficked over long distances to meet a very sad end. It is very good that that practice will come to an end in law, so that it can no longer take place. That is another Brexit animal welfare benefit, and something that my late mum would have been very pleased about. Many years ago, she often used to write to her local MP calling for an end to live animal exports. It is great that that is now being achieved.

Finally, a manifesto commitment that the Conservative party made four years ago and that featured in most of the main parties’ political manifestos, was the banning of trophy hunting imports—the import of endangered species’ body parts into Great Britain. In the last Session, I tabled such a ban in the form of a private Member’s Bill, but unfortunately that Bill was filibustered, blocked and eventually timed out by a very small number of peers—one of them a hereditary peer—in the other place. The ban passed this elected House unanimously, has widespread public support and was a Government commitment. If the Minister wants to intervene on me to say that the Government will bring forward that legislation in this Session, I would be delighted. I understand that she probably does not have that brief in front of her, but hopefully the Government can confirm that they will legislate in Government time to achieve that manifesto commitment, end what is a very cruel practice, and lead the world further in animal welfare measures.