UK Infrastructure Bank Bill [ Lords ] (Second sitting)

James Murray Excerpts

Committee stage
Tuesday 22nd November 2022 Public Bill Committees

[James Murray (Ealing North) (Lab/Co-op)]

It is a privilege to serve under your chairmanship, Mr Bone, and to speak to this important but uncontroversial aspect of the Bill. As we have heard, clause 10 concerns interpretation. We do not oppose the definition of “activities”, “financial assistance”, “infrastructure”, “local authority”, “objectives” or “relevant public authorities”.

Clause 11 is a short clause concerning the extent and commencement of the Bill, as well as providing its short title. It stipulates that the Act extends to England, Wales, Scotland and Northern Ireland. The legislation comes into force two months after the date on which it is passed, and it is to be cited as the UK Infrastructure Bank Act 2022. Government amendment 7 simply removes the privilege amendment inserted by the Lords, and is a procedural necessity that we have no reason to oppose.

Question put and agreed to.

Clause 10, as amended, accordingly ordered to stand part of the Bill.

Clause 11

Extent, Commencement and short title

Amendment made: 7, in clause 11, page 5, line 11, leave out subsection (4).—(Andrew Griffith.)

This amendment would remove the privilege amendment inserted by the House of Lords.

Clause 11, as amended, ordered to stand part of the Bill.

New Clause 1

Businesses and bodies the Bank invests in

“(1) The Bank must publish an annual report setting out—

(a) the geographical spread of businesses and bodies it invests in, and

(b) the ownership of the businesses and bodies it invests in.

(2) The Bank must prepare and publish a “Good Jobs” plan for all businesses and bodies it invests in, which requires the business or body to improve productivity, pay, jobs and living standards.”—(Abena Oppong-Asare.)

This new clause ensures that the Bank considers the location and ownership of the businesses and bodies it invests in and only invests in businesses and bodies who create “Good Jobs” plans to improve productivity, pay, jobs and living standards.

Brought up, and read the First time.

[Abena Oppong-Asare]

I beg to move, that the clause be read a Second time.

New clause 1 supports amendment 23. It would require the bank to publish an annual report setting out the geographical spread of the businesses and bodies it invests in, and their ownership. To be clear, amendment 23 required the independent review, conducted over longer time frames, to consider those points. Our new clause requires the bank to report annually on those matters.

Subsection (2) of new clause 1 would require the bank to publish and invest in a good jobs plan for all businesses and bodies, which requires the business or body to improve productivity, pay, jobs and living standards. Before the Minister objects, I will say that the wording might be familiar to members of the Committee, particularly Conservative members, because it is the same wording they voted to remove from the Bill earlier in Committee. The wording will be familiar to Conservative Committee members because it is the first mission of the Government’s levelling-up agenda. Given their voting record in this Committee so far, I am not sure it is something they are committed to any more, but I am sure they can agree that they want the UK Infrastructure Bank to create highly-skilled, well-paid jobs in their constituencies and across the country. I know that constituents in Erith and Thamesmead want to see better job opportunities, whether for young people or older people who are looking to reskill and retrain.

As I said earlier, we do not believe in growth for growth’s sake. We believe in growth because it creates jobs and improves living standards. With fairer choices, we see our economy growing again, powered by the talent and effort of millions of working people and thousands of our businesses. Our new clause would ensure that the bank plays its part in its mission, creating new industries across the country and working hand in hand with businesses to create jobs for the future. Before the Committee concludes, I want to take the opportunity to make some closing remarks and thank some people.

Autumn Statement Resolutions

James Murray Excerpts

Monday 21st November 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Today’s debate has confirmed what we all knew immediately after the autumn statement last week: the Conservatives have no plan to get us out of the mess that results from 12 years of their economic failure. The Prime Minister and Conservative MPs may try to pretend that the mess that we are in is entirely the result of global factors—no one denies the deep impact of covid and Putin’s invasion of Ukraine, which we are all united in condemning—but the problems we face have much deeper roots.

After 12 years of the Conservatives in Downing Street, the UK economy is growing at a third less than the OECD average and at a third less than during the Labour years. We are now the only G7 economy that is still smaller than before the pandemic. The one thing that the last Chancellor got right during his brief time in office was to confirm that our economy has become trapped in a vicious cycle of stagnation. Of course, he and his Prime Minister made a bad situation much worse by crashing the economy and forcing up people’s mortgage bills.

This crisis has not come about overnight, however; it has been 12 years in the making. Through their decisions in office, the Conservatives have left us uniquely exposed to the inflationary shock of oil and gas prices rising. They took misguided, short-sighted and damaging decisions to shut down our gas storage, stall on nuclear power and ban renewable technologies such as onshore wind. As a result, the UK is being hit with the highest inflation forecast in the G7 for this year and next year.

We know what a profound and shocking impact the current cost of living crisis and the Tories’ decisions over the last 12 years are having on many of our constituents, as we heard from many of my right hon. and hon. Friends today. My right hon. Friend the Member for East Ham (Sir Stephen Timms) spoke about the shocking impact of the number of people forced to rely on food banks in his constituency, and his neighbour, my hon. Friend the Member for West Ham (Ms Brown), spoke powerfully about her constituent Geetha, who is unable to cook food from the food bank as she is living in a hotel.

My hon. Friend the Member for Middlesbrough (Andy McDonald) spoke about the appalling housing conditions that some of his constituents have to face, and my hon. Friend the Member for Stockton North (Alex Cunningham) spoke about the lack of action on social care and health inequalities and its impact in his constituency. My hon. Friend the Member for Brent North (Barry Gardiner) spoke of how food price inflation is causing misery to so many people, particularly after 12 years of Conservative government. My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) spoke about the impact of the income tax personal allowance freeze on working people, and about how many students in his constituency are having to rely on food banks.

My hon. Friend the Member for Bristol South (Karin Smyth) spoke about social care and drew on her experience as a former co-chair of the APPG on apprenticeships to make some important points about apprenticeships. Her constituency neighbour, my hon. Friend the Member for Bristol East (Kerry McCarthy), spoke about the financial pressures their council faces in trying to protect vital services.

My hon. Friend the Member for Coventry South (Zarah Sultana) spoke about working people paying the price for the Conservatives’ economic failure while the Government insist on protecting non-dom tax status. Finally, my hon. Friend the Member for Swansea West (Geraint Davies) highlighted how we are the only G7 economy that is still smaller than before covid, and he spoke about the rising number of people using food banks in his constituency.

All the right hon. and hon. Members we have heard from today spoke about constituents across the country feeling the impact of this economic crisis on their household finances, and we know in this place that the Conservatives are offering no change. Real wages this year are lower than when the Tories came to power in 2010. This is the most profound period of wage stagnation in more than 150 years. Living standards will fall by 7% over the next two years, with real household disposable income per person set to be lower at the end of this Parliament than at the beginning.

Yet, despite the squeeze facing working people, the Conservatives chose in their autumn statement to raise stealth taxes on working people and to hike council tax. They chose to press ahead with tax rises that will cost an average earner more than £500 a year and will see the Government forcing a £100 tax rise on families in an average band D house. This will hit families and working people right across the country and, as my right hon. Friend the Member for Leicester South (Jonathan Ashworth) said, the income tax personal allowance freeze will see an extra 2 million pensioners being pulled into paying tax.

The Government have refused to follow our plans to make fairer choices. They refused to follow our plans such as those to raise billions by ending the large, untargeted tax breaks for oil and gas giants that are supposed to be paying a windfall tax. They could have stopped private equity fund managers who earn millions benefiting from a tax break on their bonuses. They could have closed the non-dom tax loophole to make sure people who make the UK their home pay tax on all their income here. Instead, the Conservatives’ choices will leave the British public, once again, paying the price for their economic failure.

As my right hon. Friend the Member for Leeds West (Rachel Reeves)—I am honoured to be able to refer to her for the first time as my right hon. Friend—warned last week, the Conservatives are picking the pockets of working people across the country. When she responded to the autumn statement last week, she quoted a timely warning from the police about the behaviour of pickpockets:

“You may have an idea of what a pickpocket looks like but they’re far less likely to stand out in a crowd than you might think…they may work in teams to distract the target…One of their tactics is…where a thief will appear to be over-friendly…while pickpocketing you.”

I would add to that list a further warning from the police:

“Pickpocket teams are adept at creating distractions.”

That advice feels well worth bearing in mind when listening to this Government. The truth is that, no matter how many distractions the Conservatives try to wave up and down, their rhetoric will come to nothing when people feel the impact of the Chancellor’s new stealth taxes.

The average earner faces a tax rise of more than £500 a year from the Government’s income tax threshold freeze. When combined with double-digit inflation, this double whammy makes it clear that the British public are paying the price for the Conservatives’ economic failure.

Alongside their unfair choices, it is clear that the Conservatives have no plan for growth. They have no plan to get us out of the economic mess in which they have landed us. The Office for Budget Responsibility made that clear when publishing its view on the Government’s prospects for delivering growth, confirming that the UK economy will not return to its pre-pandemic level until the end of 2024. The OBR confirmed that the UK is forecast to have the lowest growth in the G7 over the next two years and that the measures in the autumn statement will make no difference to growth in the medium term. Yesterday, the CBI’s director general, Tony Danker, said of the autumn statement:

“There was really nothing there that tells us the economy is going to avoid another decade of low productivity and low growth.”

The British people cannot afford another decade like the last. We know that getting our economy growing as it could do is not something that will happen overnight, but we also know that we need a serious long-term plan to build a fairer, greener economy. We need to create good jobs in every part of the country by insulating our homes, ramping up homegrown renewables and investing in the zero-carbon technologies of the future. We need a modern industrial strategy, where the Government work hand in hand with businesses toward our common goals. We need to fix business rates, we need to fix the holes in the Government’s Brexit deal and we need to make sure that Britain is the best place in the world to start and grow business.

It is only by growing the economy that we will start to get out of the mess that the Tories have left us in. After 12 years, people are facing higher prices, higher mortgages and higher rents, and thanks to the autumn statement they are going to be facing even higher taxes, too. Only with Labour’s plan will we be able to start turning things around and finally delivering the higher growth that our country has been lacking for so long. Twelve years of economic failure is letting the British people down. The Conservatives failed to invest in what we need to protect our country and our economy from global shocks. They have failed our public services, they have failed to get wages rising and they have failed to set out a plan for growth. It is time for them to get out the way and let Britain succeed.

Oral Answers to Questions

James Murray Excerpts

Tuesday 15th November 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister, James Murray.

[James Murray (Ealing North) (Lab/Co-op)]

Two years ago, in a video entitled “Rishi Explains: Green Home Grants”, the current Prime Minister enthusiastically took credit for the green homes grant scheme. Six months later, the scheme collapsed and £1 billion was cut from its budget. The truth is that we have the draughtiest homes in Europe, but when it comes to insulating homes, the Government are nowhere to be seen. If the Government had followed our plan last year, 2 million of the coldest homes could already have been upgraded, saving households more than £2 billion on energy bills this year alone. Home insulation should be a no-brainer. Will the Chancellor explain why the Government will not follow Labour’s plans and get on with it?

[Jeremy Hunt]

There are all sorts of bigger reasons why we do not want to follow Labour’s plans, not least because they would bankrupt the economy. On the scheme to help people to insulate their homes, the picture that the hon. Gentleman presents is not correct. We are spending billions of pounds to help hundreds of thousands of families up and down the country to insulate their homes. We completely recognise that that is a vital part of our long-term energy policy.

Draft Financial Services (Miscellaneous Amendments) Regulations 2022

James Murray Excerpts

Tuesday 8th November 2022 General Committees

[James Murray (Ealing North) (Lab/Co-op)]

Thank you, Mr Robertson, and it is a pleasure to serve under your chairship.

As we have heard, the regulations concern miscellaneous amendments to the financial services regulations, and are made to address deficiencies in retained EU law arising from the United Kingdom’s withdrawal from the EU. The delegated legislation is technical in nature, and seeks to correct a “deficiency” through regulation 2, and to extend post-Brexit temporary recognition arrangements through regulations 3 and 4. The latter regulations relate to the requirement for institutional investors to carry out specific due diligence prior to investing in EU simple, transparent and standardised, or STS, securitisations. They will extend the exemption from the clearing obligation in relation to EU STS securitisations to those notified prior to 11 pm on 31 December 2024. That will ensure consistent treatment for EU STS securitisations notified before that date.

Regulation 2 of the instrument ensures that the Treasury and the FCA will be able to apply their powers through certain regulations to Gibraltarian firms in the UK financial services market. As we know, the Treasury has made a number of amendments to regulations since 2019 in attempting to ensure that the UK-Gibraltar regulatory framework for financial services continues to operate smoothly. Regulatory changes in the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 transferred powers from the EU to the Treasury and the FCA. Although the amendments made in 2019 caused the EU to cease having any regulatory oversight of Gibraltar, the regulations did not fully transfer all of the necessary powers and functions to the Treasury and the FCA that they should have done.

Clearly, the SI before us seeks to remedy the Government’s error. It is important that the financial services regulatory framework concerning UK-Gibraltar market access and oversight runs smoothly, so the Opposition will not oppose the measure.

UK Infrastructure Bank Bill [Lords]

James Murray Excerpts

2nd reading
Tuesday 1st November 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

I will set out the views of the Opposition. We will not oppose the Bill today, as it seeks to put the UK Infrastructure Bank, which has been operating on an interim basis since June 2021, as we heard, on a statutory footing. We support the establishment and strengthening of the bank, and we want the new institution to play its part in tackling climate change and supporting regional and local economic growth.

The need for economic growth is central to the challenges our country is facing today, and it comes after 12 years of low growth under the Conservatives. During the last Labour Government, despite the global financial crisis, the economy grew by 2.1% a year. Since 2010, however, the Tories have grown the economy by just 1.5% a year. The outlook under the Tories now is even worse, with growth forecast to be the worst in the G7 over the next two years. As the previous Chancellor recently admitted, under the Conservatives we have been stuck in a “vicious cycle of stagnation”.

That stagnation in our economy has seen real wages fall and the tax burden rise for working people in this country. Even before the disastrous mini-Budget, working people were paying the price for the Conservatives’ record of failure on the economy. What the then Chancellor announced on 23 September poured petrol on the fire, as Ministers unleashed a discredited and reckless economic approach on the British public. Trickle-down economics, unfunded tax cuts and an ideological slashing of protections for workers and the environment—no wonder the former Prime Minister and Chancellor were removed from office so quickly, and no wonder the current Chancellor has had to U-turn on almost every measure. The truth is that this economic crisis was created in Downing Street. The damage has been done, and working people will be paying the price for years to come.

Part of the reason for the Conservatives’ failure to grow the economy as it could have been growing over the last decade has been their failure to invest in the infrastructure our country needs. As we look ahead to the coming decade, investment in our country’s response to the climate emergency could not be more critical, both to protect the environment and to grow the economy.

That is why Labour’s green prosperity plan is so important. Under our plan, we would invest in wind, solar and nuclear power to make our electricity system zero-carbon by 2030, we would insulate 19 million homes across the country, bringing down carbon emissions and people’s home energy bills, and we would invest in new jobs in industries of the future, from electric vehicles to clean steel.

We recognise that the UK Infrastructure Bank can play an important role in supporting essential investment. We therefore welcome the fact that one of its objectives, set out in clause 2 of the Bill, is to help tackle climate change. But setting up the bank is not enough on its own; we need a Government who will drive forward the agenda of green investment that we need. Sadly, the Government’s record makes it clear that they will fail to rise to that challenge.

There is evidence of that failure littered throughout the past 12 years. Ten years ago, the Government set up the Green Investment Bank. Five years later, they sold it off to a private equity group. The Public Accounts Committee said that the bank had

“failed to live up to original ambitions”.

The Committee was clear that, in selling it off, the Government had been focused on

“how much money could be gained from the sale over the continued delivery of GIB’s green objective.”

Supporters of the current Prime Minister on the Conservative Benches may remember that, two years ago, the then Chancellor published a video on his YouTube channel titled: “Rishi Explains: Green Home Grants”. In that video, the now Prime Minister excitedly announced that the brand-new green homes grant scheme was open for applications. However, I was not able to find any videos of him explaining why the green homes grant scheme closed six months later and saw £1 billion cut from its budget. Although he seems to have forgotten to make a video explaining that, the Environmental Audit Committee was happy to set out its views. In its report, “Energy Efficiency of Existing Homes,” it concluded that the scheme had been

“rushed in conception and poorly implemented”

and described its administration as “nothing short of disastrous”.

[Richard Fuller]

The Opposition spokesman talks about the importance of sticking with plans and of permanence. That is quite right; this is infrastructure, which lasts a long time. Will he therefore use this opportunity on the Floor of the House to give the assurance that, should Labour form a Government in the near future, it will make no changes to the objectives listed in the Bill?

--- Later in debate ---

[James Murray]

It would be a strange parliamentary procedure for the Opposition to commit to a Bill that has not even passed into law yet; let us see what happens in Committee and on Report and what the Government do, and indeed what we inherit when we become the next Government if we win the next election. So much has changed over the last few weeks; we do not know exactly what we are going to inherit and it is not sensible to make commitments now. We will set them out in our own time ahead of the next election.

Of course, the Government’s record of failure over the last 12 years continues to this day. In January, the Government pledged £l00 million to help Britishvolt, a UK battery start-up company, to build its planned battery gigafactory in Blyth, but when Britishvolt faced a critical hurdle yesterday and needed to access some of that funding, the Government refused. If the Government are not prepared to back a British business investing in green technologies and new jobs in Blyth, what on earth are they doing? When this money was announced, the then Business Secretary said the new factory was

“exactly what levelling up looks like.”

It turns out he may have been right, as this is exactly what levelling up looks like under this Government: broken promises, a record of failure, and a Government unable to deliver the investment and jobs we need.

The truth is that the Government and the newly appointed Prime Minister have a record of failure on investing in green infrastructure for our country and our economy. So, while we welcome the new UK Infrastructure Bank and its focus on tackling climate change, we know that no matter how well it plays its part, the British people need a Government with an effective plan to make the investment in the jobs, homes and energy supplies of the future a reality.

I have focused so far on the first of the UK Infrastructure Bank objectives set out in this legislation: helping to tackle climate change. The second of the two objectives in the legislation is also critical for the bank’s success, and is described as being

“to support regional and local economic growth.”

We firmly support that objective, and we want to see all parts of the country benefit from investment in green jobs of the future, along with improved rail and other transport services, and other essential modern infrastructure, including broadband. But when it comes to supporting economic growth across the country—“levelling up” as the Government used to call it—we know that words ring hollow unless people see change. That is why clause 2(6) is so important, as it seeks to make sure the bank has regard to the first mission of the Government’s “Levelling Up” White Paper when exercising its functions under this Bill. We have heard rumours that the Government may seek to remove this new requirement from the Bill now that it is back in the Commons. I am sure the Minister will agree that doing so would make it clear the Government have abandoned their commitment to levelling up, so I urge him in his closing remarks to confirm that this requirement will remain in the Bill.

Finally, along with doing all it can to help tackle the climate crisis and to support economic growth, we believe that the UK Infrastructure Bank must also play its part in helping create good-quality jobs with decent pay and conditions. All businesses and bodies receiving public money from the UK Infrastructure Bank must have a plan to create those good jobs with decent conditions, and there must be tough contractual sanctions to make sure those commitments are honoured. To make sure the bank keeps that focus on good jobs at the heart of its approach, there must be a worker representative on its board.

After 12 years of low growth from the Conservatives, there is a vital need to invest in the infrastructure of the future. We need to invest across the country in new transport, new digital infrastructure, new sources of energy that are sustainable and secure, and new high-quality jobs with decent pay. That is why we support the establishment of the UK Infrastructure Bank and this Bill’s aim of putting it on a statutory footing.

We will of course press Ministers in the Commons Committee and Report stages to improve this legislation, and, as well as seeking changes from Ministers, we will defend changes made in the Lords that we believe have improved the Bill. Alongside the insertion of levelling up targets that I have mentioned, we welcome the amendment that changed the definition of “infrastructure” to refer to the circular economy, nature-based solutions and energy efficiency. We further support those amendments that strengthened requirements on the Government to have a more regular and meaningful review of the bank’s effectiveness and impact.

However, even if we succeed in strengthening this Bill and the operation of the bank, we know the country needs far more from its Government. We need a Government who will use this bank as part of a far more ambitious plan to grow the economy, to make the transition to net-zero, and to create jobs and industries in all parts of the country.

The record of this Government to invest in greener homes, energy, and jobs is one of failure. The latest so-called “growth plan” from the Conservatives crashed the economy, and their newly appointed Prime Minister is doomed to fail, as he is trapped so tightly by a need to put his party first, leaving the country second. The truth is we need a fresh start to face the challenges of the future, and the sooner the British people get the chance to have their say, the better.

Out-of-Turn Supplementary Estimates 2022-23

James Murray Excerpts

Monday 24th October 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Today’s debate is unusual in terms of parliamentary process. The last time that supplementary estimates were considered out of turn was in October 2008, when an estimate was presented to give the Treasury funding to meet costs during the financial crisis. This is no small matter. These out-of-turn estimates will increase overall spending by £71.4 billion, and I would like to briefly raise certain points on behalf of the Opposition so that they are put on record and the Minister has a chance to respond.

First, the largest component of these estimates is the £60 billion that the Department for Business, Energy, and Industrial Strategy is seeking through its resource annually managed expenditure budget. This funding is due to be split almost equally on implementing a per unit price cap for domestic energy users and a per unit price cap for non-domestic energy users. The Opposition have been calling on the Government since August to implement an energy price freeze, so we are glad that support for businesses and families with energy bills is finally being implemented.

Of course, as my right hon. Friend the Member for Doncaster North (Edward Miliband) set out a week ago, the passage of this energy support package through Parliament has been typical of the Tories’ hallmark chaos. During the debate on the legislation for this energy support, he pointed out that the now outgoing Prime Minister had gone

“on and on about her decisive action of a two-year guarantee”,

and he reminded us that she had

“even derided the Opposition’s approach of a six-month freeze”.—[Official Report, 17 October 2022; Vol. 720, c. 441.]

That was before U-turning and following our lead by implementing a six-month package. However, despite the U-turns, the Government’s approach differs in crucial respects from ours. Our plan was for a real freeze, whereas the Government’s approach still sees a rise, and of course the Government have refused to use a windfall tax on oil and gas producers’ excess profits to help fund this financial support.

Moving on, the second component of these estimates comprises just over £11 billion of capital annually managed expenditure to fund payments to the Bank of England’s asset purchase facility under the terms of its indemnity by the Treasury, as the Minister set out. This part of the debate is particularly laden with financial terminology, but I will make my point to the Minister as simply as I can. The Bank of England has used quantitative easing to support the economy through lending to households and businesses. This has been carried out by buying Government bonds or other financial assets from private investors through the vehicle known as the asset purchase facility. The asset purchase facility borrows the money to buy these bonds from the Bank and pays the Bank rate—the headline rate set by the Monetary Policy Committee—on that loan. It can therefore make profits or losses, as we have heard, depending on the difference between the Bank rate and the return on the assets it holds.

The Treasury has indemnified the asset purchase facility against any losses it incurs, and of course it receives any running profits. A crucial determinant of whether the Treasury—the public purse—receives profits or losses is therefore the Bank rate. No one is denying that, since the scheme’s inception, it has been expected that, after receiving profits during years of the Bank rate being set low, at some point the Treasury would need to pay out on its indemnity of losses as, for instance, the Bank rate was expected to rise. However, if people thought the public finances were likely to pay for those losses in a relatively stable and orderly fashion, it seems extremely unlikely that the Government would have needed to make the payment by way of an out-of-turn estimate—the first such emergency payment in 14 years.

As the House of Commons Library put it in its briefing, published on Friday, the speed and scale of this cash flow appears to have been unexpected. In the briefing, the House of Commons Library acknowledged that it has been known for a long time that the Treasury would eventually need to make cash payments to the asset purchase facility, but:

“Despite that, the scale and speed of the impact leading to cash flowing from HM Treasury to APF may have been unexpected by HM Treasury, leading to this out-of-turn Estimate. It is also not clear how much of the impact may have been caused by events after the publication of the Main Estimate, for instance the hit to the gilt markets after the publication of the Government’s Growth Plan in September 2022.”

The implication is very clear: this payment to the Bank of England is being made urgently and unexpectedly—the first such out-of-turn payment in 14 years—and it comes straight after the kamikaze mini-Budget. What we are seeing is yet more of the damage done by the Conservatives. The £11 billion bill before us today is a brutal reminder that the Tories created this economic crisis and that working people are paying the price.

Stamp Duty Land Tax (Reduction)

James Murray Excerpts

Monday 24th October 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

The last time we debated a stamp duty cut in this House was summer 2020. During that debate, my hon. Friend the Member for Liverpool, Walton (Dan Carden) made it clear that we do not oppose the principle of additional support for homeowners and buyers, and action to stimulate the housing market. The same principle applies today. At the time, however, my hon. Friend rightly questioned why the Government’s plans include such significant support for second home owners, landlords and holiday home buyers. Why have the Government today designed a scheme that gives so much help to second home owners?

We estimate that the Bill means subsidising second home owners to the tune of £300 million a year. That is not only a very significant amount of public money, but an amount that will be paid out each and every year. How can the Government justify that spending?

What is more, any benefit that the stamp duty changes may have for first-time buyers, or for the housing market in general, will pale into insignificance when compared with the havoc that the Government’s kamikaze mini-Budget unleashed on our economy. The Conservatives’ recklessness has seen more than 40% of available mortgages withdrawn from the market. It has seen lenders begin to price in interest rates of over 6% for two-year, fixed-rate deals. It has led to families facing their mortgage repayments increasing by £500 a month.

Despite the inevitable U-turns on all but a few measures, the damage has been done. No matter how much the Conservatives shuffle the personalities in Downing Street, as the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), put it a week ago:

“People will be paying a Tory mortgage premium for years to come”.—[Official Report, 17 October 2022; Vol. 720, c. 398.]

So we come to the fundamental question behind this resolution: whether spending public money on this stamp duty cut is the right priority in the midst of an economic crisis that the Conservatives have thrust upon us.

Under Labour, all our proposals are fully funded. Our approach is governed by clear fiscal rules and value for money is at the heart of how we would manage the public finances. Our approach to the economy will be even more important than ever, given the damage that the Tories have caused and the mess they have made. In truth, we still do not know just how big that mess will prove to be. As we stand here today, we still have not seen the forecasts from the Office for Budget Responsibility in relation to the damage that the Tories have caused.

The easy thing for the Opposition to do would be simply to vote for the stamp duty cut today, but that would not be right or responsible. At a time when our economy is reeling from the long-term damage that the Conservatives have done, when current and future homebuyers are facing spiralling and prohibitive mortgage costs, and when we are still flying in the dark as the Tories refuse to publish the OBR forecasts, it is not the time to spend £1.7 billion a year on this tax cut. We will be opposing the Government’s plans.

Stamp Duty Land Tax (Reduction) Bill

James Murray Excerpts

2nd reading
Monday 24th October 2022 Commons Chamber

[James Murray (Ealing North) (Lab/Co-op)]

Yesterday was one month since the previous Chancellor delivered his mini-Budget. Since then we have had a month of utter chaos, a month of the most extraordinary U-turns and a month in which the Conservative party recklessly inflicted damage on our economy—damage that the British public will be paying for and that will take years to fix, yet the Conservatives are clinging on to power, putting their party’s interest before the country’s. We are here today debating one of the very few remaining pieces of the former Chancellor’s mini-Budget.

As hon. and right hon. Members will know, the current Chancellor—I assume he is still in post as we speak—U-turned on almost all his predecessor’s plans. One of the measures he decided to keep was lifting the cap on bankers’ bonuses. It is particularly hard to understand why he chose to do so when even bankers themselves do not seem to have been advocating for it. In fact, it could involve reputational damage that I know many of them fear. None the less, lifting the cap remained a priority for the previous and current Chancellors.

As we know, the current Chancellor also decided to keep the legislation that reversed the national insurance rise and repealed the health and social care levy. We are glad that the Government finally followed the position that Labour set out over a year ago that raising taxes on working people in a cost of living crisis is wrong. The decision to reverse the national insurance rise was itself a U-turn by the current Chancellor, the outgoing Prime Minister and their colleagues on the position they held just last year. At least by doing the right thing the right hon. Member for South West Surrey (Jeremy Hunt) avoided doing a U-turn on a U-turn in this particular instance.

The current Chancellor also decided to keep the changes to stamp duty that were announced on 23 September and that we are debating today. Under these changes, which are the subject of the resolution we have just debated and the Bill that is now to be read a Second time, the nil rate threshold for stamp duty payments on residential properties is increased, effectively by removing the existing lowest band. There are consistent changes to the higher rates for additional dwellings and changes to the threshold and limits for first-time buyer relief.

Before I address the substance of the proposed changes, I would like to ask the Minister about the process of the legislation before us. In the business of the House statement on Thursday 13 October, the Leader of the House of Commons said that we would today be debating

“a resolution relating to stamp duty land tax (reduction), followed by all stages of the Stamp Duty Land Tax (Reduction) Bill.”—[Official Report, 13 October 2022; Vol. 720, c. 258.]

Four days later, the current Chancellor confirmed that the stamp duty changes would proceed. However, during her next business of the House statement on 20 October, the Leader of the House said that we would no longer be considering all stages of the Bill today, only its Second Reading. That most recent statement by the Leader of the House did not set a date for the Bill’s remaining stages. What message does that send?

Treasury Ministers will know that, across the country, families and businesses are crying out for stability. In the housing market, as in many parts of the economy, certainty is prized. That is why, when the stamp duty cut was announced, it took effect straight away. It had to be in place immediately to avoid giving people a reason to delay their home purchases as they waited for an announced change to come into force. Indeed, the policy paper published alongside this announcement on 23 September confirmed that no consultation had been carried out on the measure. The reason stated was:

“It would not be in the public interest to consult, as this may have an adverse effect on the housing market if buyers delayed purchases during the consultation period.”

Yet now, the remaining stages of the Stamp Duty Land Tax (Reduction) Bill have been delayed.

This last-minute flip-flop of parliamentary business sends the message that it is open to the new Prime Minister and whoever his Chancellor might be to change their mind over these stamp duty changes. By delaying the Bill’s remaining stages, the Government have introduced more uncertainty into the housing market, which is the last thing anyone needs. I do not know what the Economic Secretary to the Treasury, the hon. Member for North East Bedfordshire (Richard Fuller), will be able to say that will give homebuyers any confidence in this matter, but I urge him to try to give them and the housing sector whatever assurances he can.

I fear that the Government have learned nothing from the mistakes they made two years ago about uncertainty when it comes to stamp duty. As hon. Members may remember, when stamp duty was last changed in the summer of 2020, the legislation was rushed through Parliament earlier than planned. This happened after someone thought they were being clever by briefing the press about the plans of the then Chancellor—now the incoming Prime Minister—three months ahead of their being implemented. In that debate, the former Member for South West Hertfordshire and Chief Secretary to the Treasury, David Gauke, was quoted as having said that this trailing of plans months ahead would be “hugely counter-productive”. He said that even “two days of speculation” over such plans would be “unhelpful”. So this concern is nothing new. It is crucial that stamp duty changes are not left hanging. Decisions either way must be executed swiftly and with certainty. These last-minute changes to parliamentary business seem to be another reminder that the Conservatives are not fit to govern.

As I said in the previous debate, it would be easy for us as the Opposition simply to vote for the stamp duty cut today, but it would not be right and it would not be responsible. At a time when our economy is reeling from the long-term damage the Conservatives have done, when current and future homebuyers are facing spiralling and prohibitive mortgage costs and when we are still flying in the dark as the Tories refuse to publish the Office for Budget Responsibility’s forecasts, this is not the time to spend £1.7 billion a year on this tax cut.

There is so much else the Government could be doing to support the housing market and to help people to get a secure and decent home that they can afford. Beyond restoring financial stability, they could go further and adopt some of our plans to introduce a mortgage guarantee scheme, to raise stamp duty for foreign buyers and to give first-time buyers first dibs on newly built properties. Those are some of the plans we need after 12 years under the Tories, during which home ownership rates have fallen. Compared with when the Conservatives came to power in 2010, there are now 800,000 fewer households under 45 who own their own home. At the same time, nearly 1 million more people are renting privately. Some of them might once have been hopeful that the Government would deliver on their commitment to ban no-fault section 21 evictions, but that promise was made more than three years ago. It was pushed into the long grass, and it was rumoured a few weeks ago that it was about to be dropped. Now, with a new Prime Minister coming through the revolving door, its fate is anyone’s guess. The only safe conclusion is that the Tories cannot deliver the security, stability and affordability that people need.

This debate is focused on the stamp duty changes that the Government are seeking to approve, but it cannot be taken outside the context of their disastrous mishandling of the economy. After 12 years of failure, the Conservatives have shredded any claim to economic competence they might once have thought they had. We are suffering an economic crisis created in Downing Street. The damage has been done and working people are paying the price. The Conservatives can rearrange the personalities in Downing Street, but they have inflicted damage on our country and have no mandate to govern. It is time for the British people to have a say on our country’s future. It is time for a fresh start with a Government who are ready to sort out the Tories’ mess, to grow the economy for working people and to build a fairer, greener future. It is time for general election.

Cost of Living: Support for Young People

James Murray Excerpts

Tuesday 18th October 2022 Westminster Hall

[James Murray (Ealing North) (Lab/Co-op)]

It is a pleasure to speak in this debate with you as Chair, Ms Ali. I congratulate my hon. Friend the Member for Leeds North East (Fabian Hamilton) on securing this important debate and comprehensively setting out the need to support young people through the cost of living crisis. Growing up at any time brings its challenges, but young people today are living through a time of particularly great turbulence and uncertainty. We know that today’s young people will feel the impact and cost of 12 years of Conservative rule and the economic chaos of recent weeks longer than any of us. After 12 years of presiding over low economic growth and of undermining our public services, in the past few weeks the Conservatives have crashed the economy. Their unfunded tax cuts for the wealthiest and their reckless approach to public finances have caused enormous damage that will be felt well into the future. The new Chancellor’s U-turn in the past few days had become unavoidable, but the damage had already been done. That damage will be felt by working people across this country for many months and years. Let me be clear: this is a Tory crisis, made in Downing Street and being paid for by working people, many of whom are just starting out in adult life.

The former Chancellor’s disastrous mini-Budget shattered the plans of many young first-time home buyers, as the reaction to the Conservatives’ recklessness saw more than 40% of available mortgages withdrawn from the market and saw lenders begin to price in interest rates over 6% for two-year fixed rate deals. For many young people who have been able to get over the hurdle of saving for a deposit, they have fallen at a new hurdle put in their way by the Government. This follows 12 years during which home ownership rates have fallen. There are now 800,000 fewer households under 45 who own their own home, and nearly a million more people rent privately than when the Conservatives came to power in 2010. We have seen the prospect of home ownership slipping out of reach of more and more young people. In contrast, at the recent Labour party conference, we set out our plans to introduce a mortgage guarantee scheme, raise stamp duty on foreign buyers and give first-time buyers first dibs on newly built homes. Labour is the party with a plan to increase the rate of home ownership and support councils in making social housing the second tenure in our country.

Of course, many young people across the country are renting privately, often out of necessity rather than choice. They are left vulnerable to unaffordable rent rises and no-fault evictions. We are concerned by the confusion about the reports that the Government have U-turned on their commitment to scrap section 21 no-fault evictions—although they have subsequently U-turned on that apparent U-turn. As things are changing so rapidly, I would be grateful if the Minister could confirm that—assuming the current Prime Minister is still in office, which I realise is a dangerous assumption—the Government can give a cast-iron guarantee that they will introduce a rental reform Bill in this Parliament.

We know that another reality of the Conservative cost of living crisis is food poverty. A recent survey of 2,000 young people carried out by the Prince’s Trust found that a quarter said they had skipped meals to cut back on spending, and 14% had used a food bank at least once in the past 12 months. Furthermore, a third said they could not afford to turn the heating on, while a similar proportion have struggled to afford the cost of travelling to work. Just yesterday, representatives from the Trussell Trust, Independent Food Aid Network and Feeding Britain delivered a letter to the Prime Minister signed by more than 3,000 food bank volunteers, in which they called for urgent help as they face “breaking point”. The letter warned that food banks are “struggling to cope” as demand outstrips donations. The volunteers said they were “overstretched and exhausted”, and urged the Government to take action to

“end the need for charitable food aid by ensuring everyone has enough income, from work and social security, to buy the essentials.”

According to the Children’s Society, a third of children were living in poverty prior to the cost of living crisis and, as my hon. Friend the Member for Leeds North East mentioned, that is why Labour’s commitment to breakfast clubs in every primary school in England is so important. More widely, the continued failure of the Conservative Government to commit to uprating benefits in line with inflation will leave families with children significantly worse off. Does the Minister personally agree that benefits should now rise with inflation?

Finally, we know that the cost of living crisis has had an impact on mental health, particularly the mental health of young people. I know from speaking with young people in my constituency how aware they are of the need to look after their mental health, and since I was elected I have often been struck by how clear so many young people are about what support they need. That is why I am glad that we have been able to set out our plan to use funding from closing tax loopholes for private equity fund managers, and removing the VAT exemptions from private schools, to strengthen mental health services for young people. This funding would improve mental health services, particularly those for young people—from guaranteeing mental health treatment within a month to all who need it to ensuring there is a full-time mental health professional in every secondary school and a part-time professional in every primary school.

Young people today face great uncertainty and insecurity after 12 years of the Conservatives, and never more so than after the damage caused by the economic chaos of recent weeks. Changing the Chancellor and making U-turns will not undo the damage that has been done by this Prime Minister and Conservative Government. The damage they have caused has come from Downing Street, but it will be paid for by working people, and young people will face the impact and the costs for longer than any of us. Only a Labour Government will support young people with the jobs, homes, public services and stability they need to succeed.

Oral Answers to Questions

James Murray Excerpts

Tuesday 11th October 2022 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[James Murray (Ealing North) (Lab/Co-op)]

The Chancellor’s refusal to publish OBR forecasts just over two weeks ago played a key role in falling confidence in the pound, rising borrowing costs and market panic. His woeful decision to avoid scrutiny by gagging the OBR helped to increase mortgage costs for working people, who are now paying the price for Conservative failure.

The Chancellor’s behaviour has been described by the former Bank of England Governor Mark Carney as “undercutting” economic institutions. Jonathan Haskel, a member of the Monetary Policy Committee, has made it clear that a

“sidelined OBR generates more uncertainty”.

Does the Chancellor accept that they are right?

[Kwasi Kwarteng]

As I have repeatedly said today, the OBR will have a fully forecasted and scored response to the medium-term fiscal plan in less than three weeks.