Autumn Statement

Jeremy Hunt Excerpts

Wednesday 22nd November 2023 Commons Chamber

[The Chancellor of the Exchequer (Jeremy Hunt)]

I come today with good news: it is my wife’s birthday and, unlike me, she is looking younger every year.

I turn to the statement. After a global pandemic and energy crisis, we have taken difficult decisions to put our economy back on track. We have supported families with rising bills, cut borrowing and halved inflation. Rather than a recession, the economy has grown. Rather than falling as predicted, real incomes have risen. Our plan for the British economy is working, but the work is not done. Others proposed a more short-term approach, but we have not made unaffordable pay offers to the unions, we have not stopped new oil and gas exploration, and we have not increased borrowing by £28 billion a year. That would have pushed inflation up just when we need to bring it down. Instead, under this Prime Minister, we take decisions for the long term.

In today’s autumn statement for growth our choice is not big government, high spending and high tax, because we know that that leads to less growth, not more. Instead, we reduce debt, cut taxes and reward work. We deliver world-class education, we build domestic sustainable energy, and we back British business with 110 growth measures. Do not worry; I am not going to go through them all—[Interruption.] Well, I will if you like! In summary, they remove planning red tape, speed up access to the national grid, support entrepreneurs raising capital, get behind our fastest-growing industries, unlock foreign direct investment, boost productivity, reform welfare, level up opportunity to every corner of the country, and cut business taxes.

The Office for Budget Responsibility says that the combined impact of these measures will raise business investment, get more people into work, reduce inflation next year and increase GDP, but Conservatives also know that a dynamic economy depends on the energy and enterprise of people more than any diktats or decisions by Ministers, so today’s measures do not just remove barriers to investment; they reward effort and work. I will go through the measures in three parts. In the first, I will use updated OBR forecasts to show the progress that we are making against the Prime Minister’s economic priorities. The second part will set out growth measures to back British business. Finally, I will conclude with measures to make work pay.

Before I start with the forecasts, I want to express my horror at the murderous attack on Israeli citizens on 7 October and the subsequent loss of life on both sides. I will remember for the rest of my life, as I know many other hon. Members will, being taken to Auschwitz by the Rabbi Barry Marcus and the remarkable Holocaust Educational Trust. I am deeply concerned about the rise of antisemitism in our country, so I am announcing up to £7 million over the next three years for organisations such as the Holocaust Educational Trust to tackle antisemitism in schools and universities. I will also repeat the £3 million uplift to the Community Security Trust. When it comes to antisemitism and all forms of racism, we must never allow the clock to be turned back.

I now move on to the OBR’s economic and fiscal forecasts, and I thank Richard Hughes and his team for their sterling work in preparing them. Three of my right hon. Friend the Prime Minister’s five pledges at the start of the year were economic: to halve inflation, grow the economy and reduce debt. Today I can report to the House that we are delivering on all three.

Let’s start with inflation. The shadow Chancellor did not mention it in her conference speech. My conference speech was before hers, so all she had to do was a bit of copying and pasting, which I have heard she is good at. But it speaks volumes that during the worst global inflation shock for a generation, it did not even get a mention. Well, if controlling inflation isn’t a priority for Labour, it is for us.

When the Prime Minister and I took office, inflation was at 11.1%; last week, it fell to 4.6%. We promised to halve inflation and we have halved it. Core inflation is now lower than in nearly half of the economies in the EU, and the OBR says that headline inflation will fall to 2.8% by the end of 2024, before falling to the 2% target in 2025. I will not take risks with inflation, and the OBR confirms that the measures I take today make inflation lower next year than it would otherwise have been. I thank the independent Bank of England Monetary Policy Committee for its crucial role in bringing inflation down, and we will continue to back it to do whatever it takes until the job is done. But as we do, we will continue to support families in difficulty, and today I add four further measures to help with the cost of living.

First, for those on the lowest incomes, I understand the concerns some have about the effect on work incentives of matching benefit increases to inflation, and I know there has been some speculation that we would increase benefits next year by the lower October figure for inflation. But cost of living pressures remain at their most acute for the poorest families, so instead the Government have decided to increase universal credit and other benefits from next April by 6.7%, in line with September’s inflation figure, an average increase of £470 for 5.5 million households next year—vital support to those on the very lowest incomes from a compassionate Conservative Government.

Secondly, because rent can constitute more than half the living costs of private renters on the lowest incomes, I have listened closely to many colleagues as well as the Institute for Fiscal Studies, the Resolution Foundation, Citizens Advice UK and the Joseph Rowntree Foundation, who said that unfreezing the local housing allowance was an “urgent priority”. I will therefore increase the local housing allowance rate to the 30th percentile of local market rents. This will give 1.6 million households an average of £800 of support next year.

Thirdly, although I am going to increase duty on hand-rolling tobacco by an additional 10% above the tobacco duty escalator, I know that for many people going to the pub has become more expensive. I have listened closely to the persuasive arguments on alcohol duties from my hon. Friend the Member for Moray (Douglas Ross) and my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), fierce champions of the Scotch whisky industry. I have also listened to defenders of the great British pint such as my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) and my hon. Friend the Member for Buckingham (Greg Smith), to Councillor Jane Austin who is a big supporter of the Jolly Farmer pub in Bramley in my constituency, and indeed to The Sun newspaper. So as well as confirming our Brexit pubs guarantee, which means the duty on a pint is always lower than in the shops, I have decided to freeze all alcohol duty until 1 August next year; that means no increase in duty on beer, cider, wine or spirits.

Finally, pensioners. The triple lock has helped to lift 250,000 older people out of poverty since it was instituted by a Conservative Government in 2011 and has been a lifeline for many during a period of high inflation. There have been reports that we would uprate it by a lower amount, to smooth out the effect of high public sector bonuses in July, but that would have been particularly difficult for 1 million pensioners whose only income is from the state.

So instead, today we honour our commitment to the triple lock in full. From April 2024, we will increase the full new state pension by 8.5% to £221.20 a week, worth up to £900 more a year. That is one of the largest ever cash increases to the state pension, showing that a Conservative Government will always back our pensioners.

Including today’s measures, our total commitment to easing cost of living pressures has risen to £104 billion. That includes paying around half the cost of the average energy bill since last October and amounts now to an average of £3,700 per household. We are able to do that only because we reduced the deficit by 80% ahead of the pandemic, which the Labour party might reflect on, having opposed us every step of the way.

Next, I turn to my right hon. Friend the Prime Minister’s pledge to reduce debt. Before I took difficult decisions at last year’s autumn statement, debt was predicted to rise to almost 100% of GDP by the end of the forecast. Since then, the economy has outperformed expectations and I have taken difficult decisions to reduce borrowing. As a result, headline debt is now predicted to be 94% of GDP by the end of the forecast.

The OBR today forecasts that underlying debt will be 91.6% of GDP next year, 92.7% in 2024-25 and 93.2% in 2026-27, before declining in the final two years of the forecast to 92.8% in 2028-29. That is lower in every year compared with forecasts in the spring. We therefore meet our fiscal rule to have underlying debt falling as a percentage of GDP in the final year of the forecast, with double the headroom compared with the OBR’s March forecast. We will continue to have the second lowest Government debt in the G7—lower than the United States, Canada, France, Italy or Japan.

I turn to borrowing. The right hon. Member for Leeds West (Rachel Reeves) said that when it comes to borrowing, she “will take it up” by £28 billion a year. Indeed, she has opposed every decision we have made to reduce our borrowing. The Government will bring borrowing down, because, as the late Lord Lawson said, borrowing is just a deferred tax on future generations.

I see the Leader of the Opposition shaking his head. In fact, we have something in common: both he and I wanted to make a Jeremy Prime Minister. In fairness, his party and mine are probably equally relieved that we failed but, whereas this Jeremy is growing the economy, his Jeremy would have crashed it.

The numbers show the contrast. According to the OBR, borrowing is lower this year and next, and on average across the forecast by £0.7 billion every year compared with the spring Budget forecasts. It falls from 4.5% of GDP in 2023-24 to 3.0%, 2.7%, 2.3%, 1.6% and 1.1% in 2028-29. That means we also meet our second fiscal rule that public sector borrowing must be below 3% of GDP, not just by the final year, but in almost every year of the forecast.

Some of that improvement is from higher tax receipts from a stronger economy, but we also maintain a disciplined approach to public spending. As I set out in the spring Budget, resource spending will increase by 1% a year from 2025-26 in real terms, and we are sustaining the record 2020 increase in capital spending in cash terms until the end of the forecast. Within this, we will meet our NATO commitment to spend 2% of GDP on defence—critical at a time of global threats to the international order, most notably from Putin’s evil war in Ukraine.

We also support a group of people to whom we owe our freedom: our brave veterans. I will extend national insurance relief for employers of eligible veterans for a further year, and provide £10 million to support the Veterans’ Places, Pathways and People programme. I thank our excellent Minister for Veterans’ Affairs, my right hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), for his championing of their cause.

We have shown that we are prepared to increase funding for vital public services, with record numbers of police officers, doctors, nurses and teachers. We are nearly doubling the numbers of doctors and nurses we train, having given the NHS its first ever long-term workforce plan, as I promised a year ago. We are also tackling the biggest single preventable cause of mortality that the NHS has to deal with by bringing forward plans for a smokefree generation.

However, alongside extra funding and support, we need to see reform. We need a more productive state, not a bigger one. That is why I want the public sector to increase productivity growth by at least half a percent. a year—the level at which the size of our state starts to reduce as a proportion of GDP. I have already announced plans to cap and reduce the size of the civil service to pre-pandemic levels. I pay tribute to the excellent former Chief Secretary to the Treasury, my right hon. Friend the Member for Salisbury (John Glen), who started our brilliant public sector productivity programme. That will now be pursued by his formidable successor, my hon. Friend the Member for Sevenoaks (Laura Trott), who has already been with me to meet police, fire and ambulance personnel to understand why bureaucracy is holding them back.

Through that vital work, we will ensure that, over time, the growth in public spending is lower than the growth in the economy, while always protecting the services that the public value. I will also provide His Majesty’s Revenue and Customs with the resources it needs to ensure that everyone pays the tax they owe, raising an additional £5 billion across the forecast period.

My right hon. Friend the Prime Minister also promised to grow the economy. Since 2010, despite inheriting what was then the worst recession since the second world war, Conservative Administrations have presided over faster growth than many of our major competitors, including Spain, Italy, France—[Interruption.] Well, the Opposition do not like to hear this, but let me tell them the list: Spain, Portugal, France, Italy, Netherlands, Austria, Germany and Japan. We have grown faster than all of them since 2010.

However, all those countries have faced a pandemic and an energy shock. As a result, last autumn the OBR forecast a recession in which the economy would shrink by 1.4% this year. Instead, it grew—in fact, it has grown faster than the euro area. Revised numbers from the Office for National Statistics now say that the economy is 1.8% larger than it was pre-pandemic. Looking ahead, the OBR expects the economy to grow by 0.6% this year and 0.7% next year. After that, growth rises to 1.4% in 2025, then 1.9%, 2%, and 1.7% in 2028.

If we want those numbers to be higher, we need higher productivity. The private sector is more productive in countries such as the United States, Germany and France because it invests more—on average 2 percentage points more of GDP every year. The 110 measures that I take today help to close that gap by boosting business investment by £20 billion a year. They do not involve borrowing more and ramping up debt, as some advocate. Instead, they unlock investment, with supply-side reforms that back British business in the following areas.

First: skills. No economy can prosper without investing in the potential of its people. Despite strong opposition, we took the difficult decisions to reform our schools. England’s nine to 10-year-olds are now the fourth best readers in the world, and since 2015, our 15 to 16-year-olds have risen seven places in the OECD rankings for maths— not least thanks to the efforts of my brilliant right hon. Friend the Member for Bognor Regis and Littlehampton (Nick Gibb). However, 9 million adults in England still have low basic literacy or numeracy skills, so last month the Prime Minister set out the new advanced British standard to ensure that all school leavers reach minimum standards in maths and English.

While the Labour party wants to reduce the number of apprentices, we want to increase it. Following engagement with Make UK and others, I am announcing a further £50 million of funding over the next two years to pilot ways to increase the number of apprentices in engineering and other key growth sectors where there are shortages. [Hon. Members: “Is that it?”] There are 110 of these measures, so be patient, folks.

I will move on to planning. It takes too long to approve infrastructure projects and business planning applications. Many businesses say that they would be willing to pay more if they knew their application would be approved faster. Therefore, from next year, working with the Secretary of State for Levelling Up, Housing and Communities, I will reform the system to allow local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines. If they fail, fees will be refunded automatically, with the application being processed free of charge—a prompt service or your money back, just as would be the case in the private sector.

Many planning applications are for house building. The Leader of the Opposition told us that he wanted to be a builder, not a blocker. That did not last long: just a few months later, Labour blocked reforms to the rules on nutrient neutrality, shamelessly preventing 100,000 houses from being built. Conservatives, on the other hand, are the builders, with more homes being completed in 2021-22 than in any single year of the last Labour Government.

Today, we take further decisions to unlock the building of more homes. We will invest £110 million over this year and next to deliver high-quality nutrient mitigation schemes, unlocking 40,000 homes. We will invest £32 million to bust the planning backlog and develop fantastic new housing quarters in Cambridge, London and Leeds, which will lead to many thousands of additional dwellings. We will allocate £450 million to the local authority housing fund to deliver 2,400 new homes, and we will consult on a new permitted development right to allow any house to be converted into two flats provided the exterior remains unaffected.

It is also taking too long for clean energy businesses to access the electricity grid, so after talking to businesses such as National Grid, Octopus Energy and SSE, we today publish our full response to the Winser review and the connections action plan. These measures will cut grid access delays by 90% and offer up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure. Taken together, those planning and grid reforms are estimated to accelerate around £90 billion of additional business investment over the next 10 years.

Next, on foreign direct investment, I am extremely grateful to Lord Harrington for his excellent report on how to increase foreign direct investment. We accept all his headline recommendations. In particular, we will put in place a concierge service for large international investors modelled on the best such services offered by our competitors, and we will increase funding for the Office for Investment to deliver it.

I now turn to reforms to pension funds that will increase the flow of capital going to our most promising growth companies in a way that also improves outcomes for savers. I will take forward my Mansion House reforms starting with measures to consolidate the industry. By 2030, the majority of workplace defined contribution savers will have their pension pots managed in schemes of over £30 billion, and by 2040 all local government pension funds will be invested in pools of £200 billion or more. I will support the establishment of investment vehicles for pension funds to use, including through the LIFTS competition—the long-term investment for technology and science competition, a new growth fund run by the British Business Bank—and by opening the Pension Protection Fund as an investment vehicle for smaller defined benefit pension schemes.

I will also consult on giving savers a legal right to require a new employer to pay pension contributions into their existing pension pot if they choose to do so, meaning that people can move to having one pension pot for life. These reforms could unlock an extra £75 billion of financing for high-growth companies by 2030 and provide an extra £1,000 a year in retirement for an average earner saving from 18. Alongside this, I am proposing further capital market reforms to boost the attractiveness of our markets and make sure the UK remains one of the most attractive places to start, grow and list a company. As part of this, I will explore options for a NatWest retail share offer in the next 12 months, subject to market conditions and achieving value for money. It’s time to get Sid investing again.

I now turn to measures to support our most innovative industries. In the last decade under the Conservatives, we have grown to become the third largest technology sector in the world—double the size of Germany and three times the size of France. We have the biggest life sciences industry in Europe, and we are Europe’s third largest generator of renewable electricity after Germany and Norway, and the eighth largest manufacturer in the world. When it comes to tech, we know that artificial intelligence will be at the heart of any future growth, and I want to make sure that our universities, scientists and start-ups can access the compute power they need. As such, building on the success of the supercomputing centres in Edinburgh and Bristol, I will invest a further £500 million over the next two years to fund further innovation centres to help make us an AI powerhouse.

Our creative industries already support Europe’s largest film and TV sector. This year’s all-Californian blockbuster “Barbie” was filmed in the constituency of my hon. Friend the Member for Watford (Dean Russell)—where, of course, the sun always shines. Even more could be invested in visual effects if we increased the generosity of the film and high-end TV tax credits, so I will today launch a call for evidence on how to make that happen.

British-discovered vaccines and treatments saved more lives across the world during the pandemic than those from any other country, and I am incredibly proud of our life sciences industry. To further support research and development, I am creating a new, simplified R&D tax relief that combines the existing R&D expenditure credit and small and medium-sized enterprise schemes. I will also reduce the rate at which loss-making companies are taxed within the merged scheme from 25% to 19%, and lower the threshold for the additional support for R&D-intensive loss-making SMEs that I announced in the spring to 30%, which will benefit a further 5,000 SMEs. And because 2028 marks the centenary of the invention of penicillin by Alexander Fleming, I am giving £5 million to Imperial College and Imperial College Healthcare NHS Trust to set up a Fleming centre to inspire the next generation of world-changing innovations.

International investors say that the biggest thing we could do for our advanced manufacturing and green energy sectors is announce a longer-term strategy for their industries, so with the Secretaries of State for Business and Trade and for Energy Security and Net Zero, I am today publishing those plans. I confirm that we will make available £4.5 billion of support over the five years to 2030 to attract investment into strategic manufacturing sectors. That includes: £2 billion of support for zero-emission investments in the automotive sector, which has been warmly welcomed by Nissan and Toyota; £975 million for aerospace, building on decades of success from firms such as Airbus and Rolls-Royce; and £520 million for life sciences, building on the strength of world-class British pharma companies such as AstraZeneca and GSK. We will also provide £960 million for the new green industries growth accelerator, focused on offshore wind; electricity networks; nuclear; carbon capture, utilisation and storage; and hydrogen. Those targeted investments will ensure that the UK remains competitive in sectors where we are already leaders, and innovative in sectors where we are not. Taken together, that support will attract an estimated £2 billion of additional investment across our fastest-growing innovation sectors every year over the next decade.

One reason why we support our manufacturing and clean energy sectors is that they help to level up growth across the United Kingdom, so I now turn to further levelling-up measures. In the spring, I announced that we would deliver 12 new investment zones—12 mini Canary Wharfs—where Government, industry and research institutes will collaborate across the UK. Since then, the Exchequer Secretary, my hon. Friend the Member for Grantham and Stamford (Gareth Davies), has done outstanding work across Government to bring that vision to fruition. Following tenacious representations from my hon. Friend the Member for Ynys Môn (Virginia Crosbie)—no Chancellor’s speech would be complete without a mention of my hon. Friend—and from the unstoppable Mayor of Tees Valley, I have today decided to extend the financial incentives for investment zones and the tax reliefs for freeports from five years to 10 years. I will also set up a £150 million investment opportunity fund to catalyse investment into that programme.

On Monday, I confirmed that there will be a new investment zone in West Yorkshire. Today, having listened to representations from the west midlands salesman-in-chief Andy Street, as well as my hon. Friends the Members for Mansfield (Ben Bradley) and for Bury North (James Daly), I am announcing three further investment zones focused on advanced manufacturing in the west midlands, east midlands and Greater Manchester. Together, local partners expect that those investment zones will help catalyse over £3 billion of private investment and 65,000 new jobs. Having listened to my hon. Friends the Members for Wrexham (Sarah Atherton) and for Clwyd South (Simon Baynes), I can announce a second investment zone in Wales in the fantastic region of Wrexham and Flintshire, which I will visit tomorrow.

We are publishing new devolution deals with four areas, including Hull and East Yorkshire, and offering devolved powers to even more county areas. One of those areas will be the leafiest and most charming county in the country, namely Surrey, where of course the Leader of the Opposition grew up—we do not get everything right. On Monday, we saw the announcement of £1 billion of funding through round 3 of the levelling-up fund, supporting projects following the campaigning efforts of Members from Keighley, Dewsbury, Doncaster, Scunthorpe—and of course, Mr Speaker, Chorley. I can also confirm that we will proceed with over £50 million of funding for high-quality regeneration projects in communities such as Bolsover, Monmouthshire, Warrington and Eden Valley, all of which have particularly effective local MPs as their champions. Because we are proudly the Conservative and Unionist party, I am announcing £80 million for the new levelling-up partnerships in Scotland, £500,000 to support the Hay festival in Wales, and £3 million of additional funding to support the successful tackling paramilitarism programme in Northern Ireland.

I turn next to small businesses—I ran my own for 14 years, and have always known that every big business was a small business once. The Federation of Small Businesses says that the biggest thing I could do to help its members is end the scourge of late payments. We passed the Procurement Act 2023, which means that the 30-day payment terms that are already set for public sector contracts will automatically apply throughout the subcontractor supply chain, but from April 2024 I will also introduce a condition that any company bidding for large Government contracts should demonstrate that it pays its own invoices within an average of 55 days. That number will reduce progressively to 30 days.

Any small business will also say that the biggest frustration it faces is the tax it pays before making a penny of profit, not least business rates. The Government have already taken a third of properties completely out of rates through small business rates relief. We have frozen the tax rate for the last three years, at a cost of £14.5 billion; we have removed downwards caps from transitional relief; and for retail, hospitality and leisure businesses, we have introduced a one-year 75% discount on business rates up to £110,000. Those measures have saved the average independent shop over £20,000. It is not possible to continue with temporary support measures forever, but while the standard multiplier—which applies to high-value properties—will rise in line with inflation, I have today decided that we will freeze the small business multiplier for a further year.

Following extensive discussions with the FSB and many colleagues in this House, I have also decided to extend the 75% business rates discount for retail, hospitality and leisure for another year. This will save the average independent pub over £12,800 next year and, at a cost of £4.3 billion, is a large tax cut that recognises the role of pubs and high street shops in our communities. I thank my hon. Friends the Members for Stockton South (Matt Vickers), for Barrow and Furness (Simon Fell) and for East Devon (Simon Jupp) for their tenacious campaigning on this issue.

Finally, I turn to the smallest of all businesses—those run by the self-employed. These are the people who literally kept our country running during the pandemic: the plumbers who fixed our boilers in lockdowns, the delivery drivers who brought us our shopping and the farmers who kept food on our plates. As part of our plans to grow the economy, I want to reform and simplify taxes paid by the self-employed, so today I am announcing a major reform of one of those taxes. It is one most people have not heard of, but it is a big deal for those who have to pay it.

Class 2 national insurance is a flat-rate compulsory charge, currently £3.45 a week, paid by self-employed people earning more than £12,570, which gives state pension entitlement. Today, after careful consideration and in recognition of the contribution made by self-employed people to our country, I can announce that we are abolishing class 2 national insurance all together, saving the average self-employed person £192 a year. Access to entitlements and credits will be maintained in full and those who choose to pay voluntarily will still be able to do so, but this change simplifies and cuts tax for nearly 2 million self-employed people, while protecting the interests of those on the lowest pay.

Because we value their work, I am also taking one further step for the self-employed. They also pay class 4 national insurance at 9% on all earnings between £12,570 and £50,270. Today, I have decided to cut that tax by one percentage point to 8% from April. Taken together with the abolition of the compulsory class 2 charge, these reforms will save around 2 million self-employed people an average of £350 a year from April.

We are backing small businesses by freezing their business rates, extending retail, hospitality and leisure relief, abolishing compulsory class 2 national insurance payments and reducing class 4 national insurance by one percentage point in today’s autumn statement for growth. Small businesses work so hard for us, and a Conservative Government today are working hard for them.

I turn now to my final measure to back British business. As I have said, since 2010 we have seen the second highest growth in investment of any G7 country. However, if we are to raise productivity, we need to increase business investment further. In 2021, my right hon. Friend the Prime Minister introduced the super-deduction for large businesses to further stimulate business investment, and this spring I introduced full expensing for three years. This means that for every £1 million a company invests, it gets £250,000 off its tax bill in the very same year.

The CBI, Make UK, the British Chambers of Commerce, Energy UK and 200 other business leaders from companies including BT Openreach, Siemens and Bosch, have said that making this measure permanent would be the “single most transformational” thing I could do for business investment and growth. The Centre for Policy Studies says it would

“maximise business investment, boost productivity and deliver…higher levels of GDP”.

But because it costs £11 billion a year, I made it clear that I would only do so when it was affordable. Well, with inflation halved, borrowing down and debt falling, today I deliver on that promise: I will today make full expensing permanent. That is the largest business tax cut in modern British history. It means we have not just the lowest headline corporation tax rate in the G7, but its most generous capital allowances.

The OBR says this will increase annual investment by around £3 billion a year and a total of £14 billion over the forecast period. We on this side of the House know that the way to back British business is not to borrow more or subsidise more, but to increase the incentives to invest. We do that today by introducing one of the most generous tax reliefs anywhere in the world, with a huge boost to British competitiveness in an autumn statement for growth—skills, planning and infrastructure reform, pension fund reform, support for innovation industries, levelling up, backing small business and full expensing.

Under Labour, business investment was 9.3% of GDP in real terms. Since 2010, it has been 9.8% of GDP. But today we go further because, taken together, the overall impact of today’s growth measures will be to increase business investment in the UK economy by around £20 billion a year within the decade—nearly 1% of GDP at today’s level. This is the biggest ever boost for business investment in modern times, a decisive step towards closing the productivity gap with other major economies, and the most effective way we can raise wages and living standards for every family in the country.

As well as backing business, Conservatives know that you need to back the people without whose effort no businesses can succeed: the entrepreneur taking risks, the builder working weekends, the nurse working nights, and the jobseeker leaving benefits behind. I will therefore conclude with three further supply-side reforms designed to improve the incentives to work in a modern, dynamic economy.

I begin with welfare, and I want to start by thanking the outstanding Work and Pensions Secretary for his help in developing these reforms. He builds on the work of my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who introduced universal credit. Those reforms helped reduce unemployment, which has fallen by over 1 million, but Opposition Members, to their shame, voted against them 30 times. They think compassion is about giving money; we think it is about giving opportunity.

However, post pandemic, we still have over 7 million adults of working age, excluding students, who are not working, despite there being 1 million vacancies in the economy. Many can and want to work, but our system makes that too hard. In the spring Budget, I announced 30 hours of free childcare for working parents of one and two-year-olds. That plan, still opposed by the party opposite, starts rolling out in April. It will help tens of thousands of parents return to work without having to worry about damaging their career prospects.

Today, we focus on helping those with sickness or disability and the long-term unemployed. Every year, we sign off over 100,000 people on to benefits with no requirement to look for work because of sickness or disability. That waste of potential is wrong economically and wrong morally. So with the Secretary of State for Work and Pensions, last week I announced our back to work plan. We will reform the fit note process so that treatment rather than time off work becomes the default, we will reform the work capability assessment to reflect greater flexibility and availability of home working after the pandemic, and we will spend £1.3 billion over the next five years to help nearly 700,000 people with health conditions find jobs. Over 180,000 more people will be helped through the universal support programme, and nearly 500,000 more people will be offered treatment for mental health conditions and employment support.

Over the forecast period, the OBR judges that these measures will more than halve the flow of people who are signed off work with no work search requirements. At the same time, we will provide a further £1.3 billion of funding to offer extra help to the 300,000 people who have been unemployed for over a year without any sickness or disability. But we will ask for something in return. If, after 18 months of intensive support, jobseekers have not found a job, we will roll out a programme requiring them to take part in mandatory work placement to increase their skills and improve their employability. If they choose not to engage with the work search process for six months, we will close their case and stop their benefits.

Taken together with the labour supply measures I announced in the spring, the OBR says we will increase the number of people in work by around 200,000 by the end of the forecast period, permanently increasing the size of the economy. I know that some on the Opposition Benches would prefer to fill those vacancies in a different way; they hanker after a more liberal immigration regime or even dream of bringing back free movement. But Conservatives say that we should unlock the potential we have right here at home. We do that with the biggest set of welfare reforms in a decade in today’s autumn statement for growth.

If we are to incentivise work, we must also tackle low pay. People who get up early, put in the hours and work hard for their families deserve to be paid fairly. Since 2010, those on the minimum wage—now the national living wage—have seen their hourly wage go up from £5.80 an hour to £10.42 an hour. That is a real-terms increase of more than 20%. Because we have also doubled the threshold at which they pay tax or national insurance, their after-tax income has gone up not by 20%, but by 25%—more than for any other income group.

Today, I confirm that we will go further and accept the Low Pay Commission’s recommendation to increase the national living wage by 9.8% to £11.44 an hour. That is the largest-ever cash increase in the national living wage, worth up to £1,800 for a full-time worker. Since the national living wage has been introduced, the proportion of people on low pay—defined as earning less than two thirds of national median hourly income—has halved, but at the new rate of £11.44 an hour it delivers our manifesto commitment to eliminate low pay altogether. That means that by next year someone working full time on the national living wage will see their real take-home, after-tax pay go up not by 25%, but by 30% compared with 2010.

And that is the difference: the Labour party tried to reduce poverty by tinkering with benefits and tax credits—they wanted to move people from just below the poverty line to just above it—but Conservatives know that the best way to tackle poverty is through work. By reforming the welfare system, reducing the number of workless households and tackling low pay, we have helped lift 1.7 million people out of absolute poverty since 2010, because a central part of our plan for growth is to make work pay.

I move to the final supply-side measure in today’s autumn statement for growth. Because of the difficult decisions that we have taken in the last year, today’s OBR forecast shows that borrowing will be lower than forecast in the spring, debt as a proportion of GDP will be lower than forecast in the spring, inflation will continue to fall and our fiscal headroom has doubled. I said I would cut taxes when we could, but only responsibly and only in a way that did not fuel inflation. The OBR today confirms that I can deliver a package that does that.

For businesses, I have today delivered the biggest business tax cut in modern British history, with the most competitive investment allowances of any large economy. For the self-employed, I have simplified and reformed their taxes by abolishing the compulsory class 2 charge and cutting class 4 national insurance. But high employment taxes on 27 million people working in the public and private sectors also disincentivise the hard work that we should be encouraging. On top of income tax at 20%, they pay 12% national insurance on earnings between £12,570 and £50,270. That is a 32% marginal tax rate. If we want people to get up early in the morning, if we want them to work nights, and if we want an economy where people go the extra mile and work hard, we need to recognise that their hard work benefits us all.

So today I am going to cut the main 12% rate of employee national insurance. If I cut it by one percentage point to 11%, that would be an extra £225 in the pockets of the average worker every year. But instead I am going to go further and cut the main rate of employee national insurance by two percentage points, from 12% to 10%. That change will help 27 million people. It means that someone on the average salary of £35,000 will save over £450. For the average nurse, it is a saving of £520. For the typical police officer, it is a saving of £630 every single year. I would normally bring in such a measure for the start of the new tax year in April, but instead I will tomorrow introduce urgent legislation to bring it in from 6 January, so that people can see the benefit in their payslips at the start of the new year.

The OBR says that reducing a tax on work means more people in work, and it says that today’s measures on national insurance alone will lead to the equivalent of 94,000 full-time employees in our economy, because lower tax means higher growth. That is the difference between those of us on this side of the House and those on that side. In 13 years, Labour raised taxes in every single Budget, but Conservatives cut taxes when we responsibly can, and today we do just that. We cut taxes to help bigger businesses invest. We cut taxes to help smaller businesses grow. We cut taxes for the self-employed who keep our country running, and from January we cut taxes for 27 million working people whose hard work drives our economy forward.

The best universities, the cleverest scientists and the smartest entrepreneurs have given us Europe’s most innovative economy, but we can be the most prosperous too. In the face of global challenges, we have halved inflation, reduced our debt and grown our economy. As a country, we are sticking to a plan that is working. This autumn statement for growth will attract £20 billion of additional business investment a year in the next decade, bring tens of thousands of people into work and support our fastest growing industries, in a package that leaves borrowing lower, leaves debt lower and keeps inflation falling. We are delivering the biggest business tax cut in modern British history, the largest ever cut to employee and self-employed national insurance, and the biggest package of tax cuts to be implemented since the 1980s. It is an autumn statement for a country that has turned a corner; an autumn statement for growth. I commend it to the House.

[Mr Speaker]

I call the shadow Chancellor of the Exchequer.

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[Rachel Reeves]

Next year, we are forecast to be the slowest growing economy in the whole of the G7. When it comes to economic growth, under the Tories, we are more world-following than world-beating.

Let us look at how the Conservatives’ record on growth compares to Labour’s record on growth. Under the Conservatives, GDP growth has averaged 1.5% a year. With Labour, it grew by an average of 2% a year in the 13 years that we were last in office. Had the economy continued to grow at the rate it did under Labour, it would now be £150 billion bigger. What is the Government’s economic record? Lower growth and higher borrowing, with debt more than doubling—it is now at almost 100% of GDP. That is a product of their failures over 13 years. A Tory Government who have failed on growth, failed on debt, failed on levelling-up and failed on the cost of living, too. Now they expect the British people to believe them when they say they will turn it all around, when they are the problem, not the solution.

If we are going to grow the economy, we must get more people into work. Let me be clear: people who can work, should work. That is why we have long argued that the work capability assessment needs replacing, because right now it is discouraging people from seeking work. But there is a wider problem that yet again the Government are failing to face up to. Britain is the only country in the G7 where the employment rate still has not returned to pre-pandemic levels, with the increase in the number of people out of the workforce due to long-term health issues costing the taxpayer a staggering £15.7 billion a year. NHS waiting lists have swelled to 7.8 million—an additional half a million since the Prime Minister said he was going to cut them—and 2.6 million people are out of work due to long-term sickness.

A healthy nation is critical to a healthy economy. That is why Labour has pledged to cut hospital waiting lists, investing an additional £1.1 billion a year to deliver 2 million more appointments, scans and operations. It will be funded by abolishing the non-dom tax status and replacing it with a modern scheme for people genuinely living in the UK for short periods. But, once again, we see that that policy has been vetoed by the Prime Minister. The best way to get people back to work is to get our NHS working, but the reality is you can never trust the Tories with our NHS.

The Chancellor has made great fanfare about public sector efficiency and value for money. That is from a Government who have blown £140 million on a discredited Rwanda scheme and yet are not able to send a single asylum seeker there, £7.2 billion of money lost on fraud during the pandemic—all those cheques were signed by the former Chancellor, the current Prime Minister—and £8.7 billion on personal protective equipment that has been written off. High Speed 2 is costing £57 billion, with not a single piece of track going north of Birmingham. No one can trust the Tories with taxpayers' money.

It says it all that after 13 years of Tory Government, there are still nearly 12,000 NHS computers running on outdated software that is vulnerable to cyber-attacks. Ten years ago, when he was Health Secretary, the now Chancellor promised a paperless NHS by 2018, yet today, in 2023, 26 NHS trusts are still using fax machines. Why on earth should people who experience deteriorating public services under this Conservative Government trust them to fix that, when his six years as Health Secretary make him one of the biggest architects of failure? Mr Speaker,

“if you put your hands into people’s pockets and take money out of them, and they do not see visible improvements in the services they receive, they get very angry indeed.”—[Official Report, 14 September 2021; Vol. 700, c. 851.]

Those are not my words but the Chancellor’s words two years ago. I agree with him. The Tories have had 13 years to improve public services and they have failed. This is too little and too late.

I do welcome the Chancellor’s announcement of additional funding to tackle antisemitism and Islamophobia to keep our communities safe, as well as the additional money for the Holocaust Educational Trust. There is no place for hate in our society, and I know that across the House we will work together to eliminate it.

The Chancellor calls this an autumn statement for growth, but it is Labour that has led the agenda on growth. Today, we see that the Conservatives have released their own poor cover version of what we have already announced. The Chancellor is talking about unlocking capital by reforming pensions, but Labour would go further, encouraging investment in British start-up and scale-up firms and introducing measures to ensure the consolidation of pension funds, so that our pensions system gets better returns for savers and for the UK economy.

On planning, the Conservatives are following Labour’s lead on taking money off bills for communities that host grid infrastructure and on speeding up planning decisions. What has taken them so long? Labour will get Britain building again, with a once-in-a-generation set of reforms to accelerate the building of our country’s national infrastructure and to build housing, too. We will fast-track battery factories, our life sciences and 5G technology, to grow our economy and provide good jobs in every part of our country.

We welcome the Chancellor’s announcement that he will make full expensing permanent—another thing that we have been calling for. But that does not make up for the years of uncertainty that businesses have faced, with taxes going up and down like a yo-yo. Small and medium businesses, which play a pivotal role in growing our economy, are left exposed to the Tories’ economic volatility. Labour’s partnership with business will get our economy firing on all cylinders. That is why this week we established a new British infrastructure council, with key investors in the UK economy focused on unlocking private investment by addressing the delivery challenges that businesses face when investing in Britain. Through Labour’s new national wealth fund, we will work alongside the private sector to back the growth of British industries, so that we can make the crucial transition to a zero-carbon economy. For every pound of public investment, we will leverage in three times as much private investment, while also getting a return for taxpayers. Labour’s plan will boost our economy, get debt falling and make working people better off.

If we listened to Members on the Government Benches, we would believe that the cost of living crisis was behind us. But inflation is still double the Bank of England’s target rate. I know the importance of low and stable inflation from my time as an economist at the Bank of England. It is welcome that the Chancellor has accepted this year’s recommendations from the Low Pay Commission—which we set up—on the minimum wage, but the reality of the Conservatives’ record is that average wages for working people have been held back. Under this Government, real average weekly wages have increased by just 3% in 13 years, compared with a 27% increase under the last Labour Government—worth an additional £120 every week for someone going out to work every day. Today is Equal Pay Day, so it is important to recognise that the living standards of working women have also been held back by a gender pay gap that I am determined to close.

The Chancellor and the Prime Minister say that the cost of living crisis has been dealt with. Everything might look a little better 10,000 feet up in a helicopter, but down here on planet Earth, people are approaching Christmas and the year ahead with worry and trepidation. The cost of living crisis has hit us harder because Tory mismanagement has left us so exposed. Some 11 million UK households do not have enough savings to cover three weeks of living expenses if they need it. Working families have been skating on thin ice for too long. As their resilience has been eroded, so has our national economy’s. Let us not forget that this Government oversaw the closure of our critical gas storage facilities, which left our country more exposed to huge fluctuations in international energy markets. The former Prime Minister—that is, four Prime Ministers ago—cut energy efficiency programmes, leading to higher bills for homeowners.

Just last year, we saw the true cost of the Conservatives when their kamikaze Budget crashed the economy, leading to market turmoil, pensions in peril and a spike in interest rates. Some 1.6 million families will see their mortgage deals end this year. Those re-mortgaging since July have seen their payments rocket by an average of £220 every month. Next year, 1.5 million families will face a similar fate. The Conservatives’ economic recklessness inflicted a Tory mortgage penalty on families across the country. In Wellingborough, families with a mortgage will be expected to find an additional £190 every single month. In Richmond, north Yorkshire, homeowners face £200 more a month on their mortgage. In the Chancellor’s own constituency—though maybe not for long—families with a mortgage will see an average increase of £420 a month because of this Conservative Government’s economic failure. Given increased costs for landlords—the Chancellor knows something about that—renters are paying a high price, too.

The truth is that working people just do not have that sort of money lying around. This is what we have come to after 13 years of Conservative Government. This is the record upon which people will judge the Conservatives at the next election. Tory economic recklessness is not a thing of the past. The British people are still paying the price. We say, never again. Last week, Labour tabled an amendment to the King’s Speech to put our fiscal lock into law. It would prevent a repeat of last year’s economic horror show, yet the Tories voted against it. It is clear that today, Labour is the party of economic and fiscal responsibility. What have the Conservatives learned? Absolutely nothing.

The country is crying out for change. A decaying Government can change their personnel but they have failed to change the direction of our country. In 13 years, we have had seven Chancellors. He would not run a business like this; he cannot run a country like it, either. The Prime Minister cannot even promise that this Chancellor will be in place at the next election. We have all heard the reports: when they first came together, it was a fairytale marriage, but one year on, the relationship has hit the rocks. The pair have grown apart, with rumours running rife that the Prime Minister already has his eyes on someone else.

Whoever this Prime Minister picks as Chancellor, the truth is that Britain is and will be worse off under the Conservatives. They have held back growth, crashed our economy, increased debt, trashed our public services, left businesses out in the cold and made life harder for working people. Our country cannot afford five more years of the Conservatives. The ravens are leaving the tower when even Saatchi & Saatchi says that the Tories are not working. The questions that people will ask at the next election, and after today’s autumn statement, are simple: do me and my family feel better off after 13 years of Conservative Government? Do our schools, hospitals and police work better after 13 years of Conservative Government? In fact, does anything in Britain work better today than when the Conservatives came into office 13 years ago? We all know that working people are worse off under the Conservatives, with growth down, mortgages up, prices up, taxes up and debt up. Their time is up. It is time for change—a changed Labour party to lead Britain and to make working people better off.

[Jeremy Hunt]

I am afraid that the shadow Chancellor has shown once again that Labour has nothing credible to say on the economy. She tells the papers this morning that she will accept these measures, as one would expect from a copy and paste shadow Chancellor. In all sincerity, I particularly welcome her conversion to supporting full expensing, which she voted against in the House; copying and pasting in the national interest is welcomed on the Government Benches. She compared growth rates under Labour and the Conservatives, but she carefully omitted one fact: Labour inherited a golden legacy from the Conservatives, and proceeded to trash the economy before handing it over.

On growth, the right hon. Lady did not like it when I reminded her that, under the Conservatives, we have grown faster than any other major European economy. She says she is now converted to Conservative supply-side reforms on welfare, so I look forward to her voting with us in the Lobby on those, but her main policy is a demand-side boost to growth, increasing borrowing by £28 billion a year, with absolutely no plans to repay it. The shadow Chief Secretary to the Treasury, the hon. Member for Bristol North West (Darren Jones), does not appear to be in his place. This morning he asked for more action on inflation. Well, the first thing Labour could do is drop its damaging inflationary plan to ramp up borrowing.

On the NHS, despite our having more doctors and nurses, and more patients treated in good or outstanding hospitals, what the right hon. Lady did not mention is that the only place where NHS funding has been cut—not once but twice—is Wales, with the longest hospital waits in Britain.

Perhaps we should talk about what has happened after 13 years, when we repaired Labour’s damage: unemployment down, poverty down, crime down, low pay down, schools funding up, NHS funding up, jobs up, growth up. Conservatives know that lower tax is the path to higher growth and today we make a start.

[Several hon. Members rose—]

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[Jeremy Hunt]

I thank my hon. Friend, who speaks very wisely about the economy as Chair of the Treasury Committee. The OBR is very specific about that. It says that the measures I take today will permanently increase GDP by 0.3% and that the measures I took in the spring Budget will permanently increase GDP by 0.2%. Taken together, those measures will increase GDP by 0.5%.

[Madam Deputy Speaker]

I call the SNP spokesman.

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[Jeremy Hunt]

I think the hon. Gentleman prepared his comments for the autumn statement that he wanted me to deliver, rather than the one that I actually delivered. For example, he complained about the tax burden being the highest for seven years, but what he did not say was that in Westminster we have taken difficult decisions and cut taxes, whereas in Scotland the SNP ran out of money and had to raise them. He talked about punishing the most vulnerable, but just look at the measures that we have taken. He talked about renters, but did not mention the fact that we have increased the local housing allowance, which will mean £800 of help for 1.6 million of our poorest people. He did not mention the fact that we have increased benefits by 6.7%, which is double next year’s expected inflation, and have increased the state pension through the triple lock by 8.5%, nearly three times next year’s predicted inflation.

Here is the most uncomfortable truth for the SNP. They have been in power in Edinburgh for longer than the Conservatives have been in power in Westminster, but Scottish GDP is still lower, Scottish employment is still lower, and Scottish inactivity is still higher. The reason is for that is very simple. They focus on separation, while we focus on growth. I know what is better for families in Scotland, who will today see us getting growth going, cutting taxes, and backing Scottish business.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the Father of the House.

[Sir Peter Bottomley (Worthing West) (Con)]

The Citizens Advice office covering my constituency will be grateful for that fact that the local housing allowance has been changed. The people who supply drink, and drinkers, will be pleased that alcohol duty is being frozen, at least for the time being. That will help drinkers, and will also not increase inflation.

I am glad that the Chancellor pointed out to the shadow Chancellor that the only time the Labour Government did really well was when they obeyed the Conservative rules between 1998 and 1999, before they let go of the valves and drove the economy to the point at which, when we took over, they were spending £4 for every £3 of Government revenue.

May I now ask the Chancellor to respond, not today but in time, to an injustice done to 500,000 pensioners overseas? Anne Puckridge, who was born five years before the Chancellor’s father, served in intelligence in the Navy, the Army and the Royal Air Force during the war, and retired to Calgary on a pension of £72 a week. It is still £72, instead of £156. That is an injustice which needs attention, and I hope Anne Puckridge will get it and we will have proposals that will enable us to change this bad situation.

[Jeremy Hunt]

I thank the Father of the House for his comments, and I will look into the issue of overseas pensioners as he requested. If I may, I will write to him, but I am also happy to talk to him about it. May I also thank him for his comments about what happened in 1997? Then as now, the Labour party was trying to say that its economic policies were basically the same as those of the Conservatives, but the reality was quite different. Because Labour did not fix the roof when the sun was shining, the recession after the financial crisis was much worse.

[Dame Angela Eagle (Wallasey) (Lab)]

The Chancellor did not mention the freezing of tax thresholds, which is due to rake in £52 billion in the next six years. Was that an omission, or is he leaving the freeze in place?

[Jeremy Hunt]

I have never hidden the fact that we took difficult decisions a year ago, such as freezing the thresholds, in order to get borrowing under control and in order to tackle inflation. However, because the economy since then has outperformed the expectations of nearly every independent body, we are able this time to reduce the tax burden, and I choose to reduce the things that will boost growth.

[John Redwood (Wokingham) (Con)]

Let me first declare my business interests.

I welcome the measures to promote more investment and more growth, which is vital. We have lost about 800,000 self-employed people since February 2020. The national insurance measure will help a bit, but will my right hon. Friend look again at the way in which IR35 prevents them from expanding their businesses and getting contracts? The measures to promote the growth of small businesses are also welcome, but the VAT threshold acts as a strong disincentive to expand a business when it reaches a certain point.

[Jeremy Hunt]

I thank my right hon. Friend. I had extensive discussions with him in the run-up to the statement, including many discussions about the self-employed. Indeed, it was partly his advocacy of the role of the self-employed that made me so enthusiastic about making the national insurance changes that I was able to make.

I hear what my right hon. Friend says about IR35. We took our decision partly because of concerns about avoidance, but I am happy to look at that again. As for the VAT threshold, many other colleagues have made the same point. We do have the highest threshold in any major European country, and, indeed, any G7 country, but there is always this issue of the cliff edge, and my right hon. Friend is right to draw my attention to it.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Can the Chancellor confirm that living standards will drop by 3% in the next year?

[Jeremy Hunt]

What I can confirm to the hon. Lady is that a year ago they were predicted to fall by 3.7%, and now the OBR says that they will increase this year by 2.5%.

[Alberto Costa (South Leicestershire) (Con)]

The people of Blaby and Glen Parva were listening attentively to the Chancellor’s welcome statement. They will go to the polls on 21 December for two by-elections, a county council and a ward by-election. What positive message has the Chancellor for the residents, the businesses, the pensioners and all the people of working age in Blaby and Glen Parva about his welcome financial statement?

[Jeremy Hunt]

What I would say to the businesses in Blaby and Glen Prva is that for every single small business we have frozen business rates, and we are rolling over a 75% discount on business rates for every pub, restaurant and high-street shop for another year. We want to do everything possible to back small businesses, because they are the lifeblood of our communities.

[Sarah Olney (Richmond Park) (LD)]

This statement is a deception from the Chancellor after years of unfair tax hikes. Under this Conservative Government, economic growth is flatlining and public services are on their knees. This year, 400,000 people are still on NHS waiting lists, having been on them when the Chancellor made last year’s autumn statement. These people have been cruelly let down. In his statement last year, the Chancellor said:

“you do not need to choose either a strong economy or good public services.”—[Official Report, 17 November 2022; Vol. 722, c. 856.]

Will he look the British people in the eye and admit that he has given them neither?

[Jeremy Hunt]

I think that the hon. Lady should be careful with her language when she is saying things like that. I am very clear when it comes to growth. We have grown faster than any major European economy since 2010. Yes, while interest rates are higher—as they need to be, because we are bringing down inflation—growth is more subdued, but if the hon. Lady listens to, for example, those in the International Monetary Fund, who are independent commentators, she will hear them say that when we have got inflation back down to target, we will have higher growth than France, Italy and Germany. When it comes to the NHS, we put an extra £3.3 billion into the NHS budget in the autumn statement last year. With doctors’ strikes happening in most of the period since then, it has been difficult to make progress on waiting lists, and I hope that the hon. Lady will address her comments to those doctors if she is going to be consistent.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

It is a pleasure to speak from the Back Benches for the first time in a while. I massively welcome the statement, and particularly the emphasis that the Chancellor has given to skills and the superb work that has been done by the Department for Education at the same time. In Herefordshire, we worry about the pollution in our River Wye. Will he consider talking further with the Secretary of State for Environment, Food and Rural Affairs about whether some package could be put in place to support the long-term improvement of that river?

[Jeremy Hunt]

I congratulate my right hon. Friend on his sterling work as a Minister. When it comes to pollution in the River Wye, he will know that the Government have made changes requiring the water companies to invest more than £50 billion in the years ahead, but he, like me, wants to see faster progress and I will happily give him any support I can.

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

I welcome the Chancellor’s announcement on benefit uprating. It is not, as he claimed, a mark of compassion but it is at least delivering the essential minimum, and I congratulate the Secretary of State for Work and Pensions on achieving that. For the past three years, the household support fund has enabled local councils to provide an important safety net for families facing the greatest hardship. Will there be a household support fund next year?

[Jeremy Hunt]

Yes, there will.

[Bob Blackman (Harrow East) (Con)]

That answer was quicker than I expected! My right hon. Friend proposes a whole series of planning reforms. One of the problems for local authorities up and down the country is a lack of planning officers to determine those planning applications, and it will clearly take time to recruit and train new people. There is also a risk that the premium service for large-scale developments will mean planning officers switching to those roles rather than determining the day-to-day planning applications. Does my right hon. Friend understand that we will need to recruit more people? Does this need legislation, and what is the timeframe for him to introduce these changes?

[Jeremy Hunt]

My hon. Friend asks an important question. I want to assure him that I have had extensive discussions with the Communities Secretary to ensure that we implement these reforms in a way that does not lead to unintended consequences. The most important thing is that by allowing the biggest applications to have full cost recovery with respect to local councils, we can start to get more resources, which will mean that we can train up more planning officers and avoid delays not just for the bigger applications but for all of them.

[Abena Oppong-Asare (Erith and Thamesmead) (Lab)]

Does the Chancellor agree that the Prime Minister was wrong last year to try to increase national insurance?

[Jeremy Hunt]

What the Prime Minister wanted to do then is what he has delivered as Prime Minister, which was to find a way to deliver extra funding to the NHS. What we as Conservatives believe is that taxing the economy more lightly will lead to higher growth, meaning that we can fund our public services better.

[Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I am sure that the people of the Cotswolds will welcome enormously many of the measures in this statement, but can I just mention one subject that is dear to my heart, the tourist tax? There was no mention in my right hon. Friend’s excellent statement of the tourist tax. British tourists going abroad spend billions of pounds, benefiting those countries, yet the figures show that we actively discourage high-spending tourists from coming from abroad to benefit our shops and hospitality venues.

[Jeremy Hunt]

I reassure my hon. Friend that we want to do everything possible to make our tourism and retail industry competitive. We want to encourage international visitors. We changed policy on this issue a year ago because it cost around £2.5 billion a year and we did not think we could afford to continue it, but we are looking again at the numbers in the light of the most recent data and we can see what has happened to comparative shops in Paris and Milan. We will review this to see if it is still that expensive, and I hope that it is not.

[Sammy Wilson (East Antrim) (DUP)]

Many of the measures in the statement today will have spending consequences that will apply to England and Wales. I welcome many of them, because they are growth measures, such as getting the long-term unemployed and long-term sick into work, helping the creative industries and supporting business rates. Will the Chancellor confirm that those measures will be subject to Barnett consequential payments, and if they are, will the freeze on Barnett consequential payments to Northern Ireland apply?

--- Later in debate ---

[Jeremy Hunt]

I can confirm that for reserved matters there obviously would not be Barnett consequentials, but where matters are not reserved, there would be consequentials. Our priority in funding for Northern Ireland remains the restoration and return of a locally elected and accountable Executive, but in the meantime we will continue to support the Province in every way we can.

[Sir Jacob Rees-Mogg (North East Somerset) (Con)]

Has my right hon. Friend given any consideration to, and has the Treasury carried out any analysis of, the effect on economic policy of mistaken forecasts from the Office for Budget Responsibility?

[Jeremy Hunt]

I thought my right hon. Friend might ask a question of that ilk. I would gently say to him that not just the OBR found that its forecasts were wrong; nearly every commentator as well as the Bank of England and the International Monetary Fund did too. I am pleased to say that, in every single case, they have found the British economy has outperformed their expectations.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I also welcome the increase in social security uprating by September’s inflation rate, but I agree with the Chair of the Select Committee, my right hon. Friend the Member for East Ham (Sir Stephen Timms), that it is the bare minimum. I am incredibly concerned about the proposals for a workfare approach. The Chancellor will be aware that Errol Graham weighed four and a half stone when he was found in his flat, having starved to death. That was because there had been no contact from Department for Work and Pensions officers and he had not been able to respond, so they just stopped his support. Given this, and given that so many Secretaries of State for Work and Pensions have said that we do not have a statutory safeguarding duty, what is the estimate of the number of social security claimants who will die as a consequence of these measures?

[Jeremy Hunt]

I know that the hon. Lady would not ask me to comment on an individual case, but I say to her that what we are introducing is not workfare; it is support to help people into work. We are spending £2.5 billion over the next five years to help more than 1 million people. We think that that is the route out of poverty and away from dependency.

[Mr Robin Walker (Worcester) (Con)]

I welcome the Chancellor’s comment that a world-class education is essential for economic growth, and there are many measures to welcome, including the extra funding for the Holocaust Educational Trust, the £50 million for apprenticeships and the tax cuts of more than £600 for teachers. Of course, many people working in education will also welcome the nearly 10% increase in the national living wage, but it will put great pressure on schools employing teaching assistants and on our nurseries, which we are so keen to expand and support. Can I urge the Chancellor to engage closely with the sector and with the Department for Education to make sure that we can meet those pressures when it comes to funding high needs in our schools and to growing the early years sector?

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[Jeremy Hunt]

My hon. Friend is a big expert on education and I always listen to what he says. He is right to say that the average teacher will see an increase of £630 in their take-home pay next year because of the 2% cut in national insurance contributions. When it comes to the national living wage, I absolutely hear what he says, but for many schools and nurseries the issue is recruitment—finding people to fill the roles. This change will make that much easier.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

The Chancellor mentioned support for carbon capture and storage and for hydrogen, and the Prime Minister earlier spoke of support for the oil and gas sector. The Chancellor will be all too aware of this morning’s announcement of the intended closure of the Grangemouth oil refinery, which represents a huge 4% of Scottish GDP and provides hundreds of jobs. What discussions has he had with the Energy Secretary, with Petroineos or with the Scottish Government with the aim of trying to stop this closure before its disastrous impact can come to pass?

[Jeremy Hunt]

We are obviously monitoring the situation extremely carefully, but it is our priority to support the oil and gas and refinery industries. We have made some big changes to do that, and we would welcome support from both sides of the House in doing so.

[Mr John Baron (Basildon and Billericay) (Con)]

I commend the Chancellor for the compassion and enterprise incentives that shine through his statement. I thank him for the UK retail disclosure framework, although I have not seen the detail, and for the promise of a statutory instrument to resolve the legislative issues with cost disclosure for investment companies. Can he assure me that that will correct the over-zealous regulation that is making investment companies look unduly expensive and thereby restricting investment?

[Jeremy Hunt]

I have had many discussions with my hon. Friend on this issue and he is absolutely right. There is a danger with over-zealous regulation that people are focused more on cost than on performance. Like him, I want to resolve the issue.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

The Chancellor talked about the creative industries but then announced only that he would look at improving film and high-end TV tax credits. The cultural tax reliefs continue to help our orchestras, theatres, museums and galleries to survive, and they protect jobs. At the 2023 Budget, he extended the uplifted rate of relief until March 2024, after which it will taper, but sadly he also introduced changes to limit what cultural organisations can claim for. Orchestra tax relief is a critical source of income; without it, some orchestras say they could fold, with musicians losing their jobs. Will he look not just at film and high-end TV tax credits but at all the cultural tax reliefs and how they can continue to support jobs in our creative industries?

[Jeremy Hunt]

Having only just delivered the autumn statement I do not want to pre-empt what might be in the spring Budget, but there will be another fiscal event before the end of the financial year in which all these things will be looked at. With respect to orchestras, which are fantastically important to our cultural landscape, I will just say that the typical person playing in an orchestra will get a £450 increase in post-tax pay next year, and that will help them greatly.

[Alun Cairns (Vale of Glamorgan) (Con)]

I congratulate my right hon. Friend on his statement, which will make a significant difference to investment levels, employment and living costs, recognising that it is all in the context of the cost of covid and the energy shock brought about by the conflict in Ukraine—that is something we often forget. May I pass on to him the appreciation of the beer and pub sector? The freeze in duty and continuation of the reduction in business rates is exactly what the sector asked for, and it is an early Christmas present to the many of us who want to celebrate in great style as we approach the festive season. Will my right hon. Friend please continue to engage with those in the sector and listen to what they have to say, so that they can share their investment ambitions?

[Jeremy Hunt]

I commit to my right hon. Friend that I will not just continue to engage with the sector, but continue to enjoy the odd glass of Penderyn, which is my favourite whisky.

[Clive Efford (Eltham) (Lab)]

Can the Chancellor confirm that, after today’s tax cuts, we will still have the highest tax burden for 70 years—up £4,000 per household on pre-pandemic levels—when we go into the next general election?

[Jeremy Hunt]

What I can confirm is that after today’s measures we will have the lowest income tax burden for someone on average pay in the G7—lower than Japan, America, France, Germany, Italy and Canada.

[Vicky Ford (Chelmsford) (Con)]

Our economy is growing rather than receding due to investment, innovation and millions of hard-working individuals across the country, as well as a Government who have focused on tackling inflation. Does the Chancellor agree that, on this side of the House, we get it that no country can spend its way to prosperity?

[Jeremy Hunt]

My right hon. Friend is absolutely right. High inflation is destabilising for an economy: it stops businesses investing, it stops families spending, and it causes misery to people who see the cost of their weekly shop go through the roof. That is why it has been our No. 1 priority. It would be great if it were Labour’s, too.

[Keir Mather (Selby and Ainsty) (Lab)]

It is frankly embarrassing that the Chancellor and the Prime Minister have spent this afternoon celebrating inflation staying 2% above target, while families in Selby and Ainsty face 10% food inflation every time they use the supermarket. What message does the Chancellor think his celebrations send to those hard-working families?

[Jeremy Hunt]

It is not celebrating that has halved inflation from 11.1% a year ago; it is hard work and difficult decisions, which unfortunately were mainly opposed by Labour.

[Scott Benton (Blackpool South) (Ind)]

I commend the Chancellor for his statement, which delivers for the people of Blackpool. Five thousand of my constituents will benefit from a boost to the national living wage and 12,000 pensioners in my constituency will be £900 per year better off, while those in work will be £450 better off as a result of the cut to national insurance. Does he agree that this is only possible because of the difficult long-term decisions that this Government have taken—an approach that stands in stark contrast to the tax, borrowing and spending offered by the Opposition?

[Jeremy Hunt]

The shadow Chancellor cannot hear these things too many times. She loves copying and pasting our policies, and there is another that she could merrily get copying and pasting. Here is the reason why my hon. Friend is absolutely right—[Interruption.] Let me tell the shadow Chancellor the reason—it is very straightforward. We had an economic crisis thanks to the energy shock and the pandemic; Labour had an economic crisis because of what happened in the financial markets. The difference is that we took tough decisions to bring back fiscal responsibility and they ducked every single one.

[Rachael Maskell (York Central) (Lab/Co-op)]

The biggest disparity in local housing allowance comes from the geography of broad rental market areas. In York, given the way these things are calculated, LHA is £650 but there is a £983 cost on top of that for a property. It is not working, so will the Chancellor review the BRMA?

[Jeremy Hunt]

I am happy to discuss that matter with the Secretary of State for Work and Pensions. I recognise that the hon. Lady has campaigned on the issue sincerely for some time. I will say, though, that the decision to increase local housing allowance to the 30th percentile will help 1.6 million families with an extra £800. I hope she recognises that that will make a difference.

[Greg Smith (Buckingham) (Con)]

From tax cuts for 27 million workers to incentives for business to grow, support for pensioners and a continued lifeline for our great British pubs and pints, I warmly welcome the good start that my right hon. Friend has made on reducing the tax burden as we recover from the pandemic and the energy shock. I thank him in particular for the recognition he has shown to the self-employed, not just by reforming class 2 and class 4 national insurance contributions to make them fairer, but by sending the signal that, just as the self-employed were an integral part of our recovery from the time the Labour party crashed the economy when they were last in government, we now need as many people as possible to take the step to start their own enterprise and help this country grow.

[Jeremy Hunt]

I could not agree more with my hon. Friend. The whole purpose of our approach is to make it easier for people who are prepared to take risks to work hard, and no one exemplifies those values better than the self-employed. I thank him for being one of this country’s greatest defenders of the great British pint.

[Marsha De Cordova (Battersea) (Lab)]

It really is a scandal that disabled people are being punished yet again for this Government’s economic failures, with today’s announcements of more cruel and callous cuts, and the announcement that they will be forced to work from home. Evidence shows that sanctions do not incentivise people to work but are harmful and counterproductive. The Chancellor’s plan will only further erode the social security safety net, following 13 years of austerity, the war waged against disabled people and the hostile environment. Does he not understand that his plan will only punish disabled people, pushing them further away from the labour market and leading to poorer health outcomes?

[Jeremy Hunt]

With the greatest respect to the hon. Lady, let me say that we introduced a plan to help disabled people to get back into work, as many of them say they would like to do, and in just four years it has got 1.4 million disabled people back into jobs.

[Ben Bradley (Mansfield) (Con)]

I welcome an autumn statement from the Chancellor that cuts taxes, invests in growth, seeks to shrink the size of the state and reforms welfare. It will go down well with the vast majority of my constituents who voted for a Conservative Government in 2019, and I very much welcome it too. I particularly thank him for his continued commitment to our east midlands investment zone and freeport, where he has listened to stakeholders in extending the time for and adding more investment to our major growth plans. Will he continue to work with us in the region to ensure that, alongside our development company and our new east midlands combined authority, we are able to properly harness these tools to deliver an amazing regional growth strategy and all the growth and investment that he wants to see?

[Jeremy Hunt]

I thank my hon. Friend for his role in the transformation of the east midlands, through his other responsibilities in the councils there. Levelling up will work only if we harness the enterprise and ideas of local civic leaders, and he is a fantastic example of that.

[Wendy Chamberlain (North East Fife) (LD)]

Today is Equal Pay Day, which means, because of the gender pay gap, it is the day on which women, based on their average earnings, stop being paid compared with men, who continue to be paid to the end of the year. More concerning is the pension gap, which is 35% and means female pensioners stop being paid on 26 August. That is often because older women have chosen, and sacrificed their earning potential, to care for loved ones. When will the Government consider reforming carer’s allowance, which is currently an active disincentive to carers going into work? When we will start addressing this cliff edge, rather than making it shorter and sharper?

[Jeremy Hunt]

I am always happy to engage with any hon. Members if they have concerns about the way the benefits system operates in terms of disincentivising people who would like to work but cannot do so. Caring responsibilities are an area that she has raised and I am happy to engage with her on that outside this House.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

Cumulatively, Manchester City Council’s and Trafford Council’s cuts since 2010 have been £443 million and £288 million respectively. The Local Government Association says that the funding gap will be £4 billion in the next two years. Was there anything in this statement that will stop the continuing crumbling of our local services?

--- Later in debate ---

[Jeremy Hunt]

The hon. Gentleman is omitting the fact that in the autumn statement a year ago, when I was having to make big cuts in public spending going forward, I found an increase of £4.7 billion from next year for adult social care, which will make an enormous difference to every council in the country.

[Stephen Farry (North Down) (Alliance)]

Further to the Chancellor’s answer on Northern Ireland and Barnett consequentials, he will be aware that Northern Ireland is facing an unprecedented budget crisis. Will he therefore confirm that he is open to discussions on a fiscal floor and an invest-to-save transformation package for any potential restored power sharing Executive?

[Jeremy Hunt]

The UK Government will continue to do everything we can to support the restoration of power sharing in the Province. All I will say is that the Treasury is actively involved in all those discussions.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

In recognition of the impact of electricity pylon development on properties, the Chancellor announced compensation of £1,000 per property per year for 10 years. Does the policy apply in Wales? If it does not, will the Welsh Government receive funding for developments where they have competence, such as the one in the Tywi valley in my constituency? Regardless of that, he knows that the fall in property values will be far more than the compensation, so would it not be better to remove detriment by cable ploughing, at a comparative cost to traditional pylon development?

[Jeremy Hunt]

My understanding is that this will apply to Wales in exactly the same way as it applies to the rest of the UK. As for how we do this, we need to work out the most sensible, proportionate and balanced way of solving the problem of having to double our electricity generation between now and 2050. We are going to have to do things differently as a result.

[Imran Hussain (Bradford East) (Lab)]

We are in the worst cost of living crisis that we have ever seen. The key takeaway from the just four measures the Chancellor announced to tackle the crisis is not investing in deprived communities, ensuring the richest pay their fair share or spreading economic growth across the whole country, but a commitment to stop a pint getting more expensive. Just what is that supposed to do for my constituents, who face crippling mortgage payments, who are paying 30% more for food, whose wages are stagnating and whose homes have been unaffordable to heat?

[Jeremy Hunt]

I think the hon. Gentleman has looked at the statement selectively, because our support for people struggling with cost of living pressures has risen, as a result of my decisions, to £104 billion. Let me just go through this: pensioners are going to get an increase next year that is three times the rate of inflation; people on benefits are going to get an increase in their benefits that is double inflation; people who are renting and on low incomes are going to see an £800 increase, on average, through the local housing allowance; and anyone on the lowest legally payable wage, where they are working full-time, could see an extra £1,800 from increases in the national living wage.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

As a so-called “prudent Chancellor”, he cancelled HS2 to Manchester because of the spiralling costs of that project. Yet despite the cost of the likes of Hinkley Point C rising from £18 billion to £33 billion, and the fact that there is no successful EPR—European pressurised reactor—project in the world, he has today confirmed yet again a blank cheque for the nuclear industry. Sizewell C is likely to cost £40 billion and he has a taxpayer 20% stake in it. If it is good enough for HS2, why does he not scrap Sizewell C and save us from that nuclear financial disaster?

[Jeremy Hunt]

Because if we want to get to net zero, we are going to have to have more renewable energy and, unfortunately for the hon. Gentleman and for me, there are days when the sun does not shine and the wind does not blow.

[Sam Tarry (Ilford South) (Lab)]

We have the lowest investment in the G7; on the Government’s own figures, it has fallen further and further. Currently, public sector investment is scheduled to fall by £14 billion in real terms over the next five years. Without serious investment in public services, we cannot hope to improve productivity, which the Chancellor spoke about today. We cannot just demand that people go back to work, and work harder and harder to compensate for this. We need £10 billion to match the OECD’s average public investment annual spend as a share of GDP. I would like to hear from the Chancellor why he has not taken the opportunity today to align ourselves with the rest of the G7?

[Jeremy Hunt]

Let me gently remind the hon. Gentleman that business investment has grown by more since 2010 than it grew under the Labour Government; we have the second highest growth in the G7, with ours faster than any country’s except America.

[Claudia Webbe (Leicester East) (Ind)]

The unionised manufacturing base of my constituency has long been diminished, having been replaced not by technology, innovation and good decent, modern jobs, but by fast fashion, sweatshops and unscrupulous employers. This is all exploited by brands like Boohoo and retailers who are in a race to the bottom for ever-increasing profits, all while their supply chains fail to pay the minimum wage. What action will be taken to regulate to ensure that brands and retailers are held to account for the sustainable outcomes of their products in their supply chains and for wage justice for the people who make their goods? What action will be taken to tackle those British brands and retailers who threaten to seek cheaper labour overseas in order to avoid paying the new minimum wage that the Chancellor has just announced?

[Jeremy Hunt]

If the hon. Lady has any examples of people not paying the national living wage who are legally obliged to do so, she should tell the authorities and we will sort it out. I just say to her that we have just overtaken France to become the eighth largest manufacturer in the world. We are making progress in the right direction, and the measures announced today will mean that we go even further.

[Madam Deputy Speaker (Dame Eleanor Laing)]

The prize for perseverance goes to Deidre Brock.

--- Later in debate ---

[Deidre Brock (Edinburgh North and Leith) (SNP)]

Thank you, Madam Deputy Speaker. The Chancellor announced £960 million for a new green industries growth accelerator focused on offshore wind; electricity networks; nuclear; carbon capture, usage and storage; and hydrogen. But there was no mention of reliable, clean, cheaper energy sources such as tidal or pump storage hydro. Why not?

[Jeremy Hunt]

We are always open to investing in new technologies, and in this country we are extremely good at developing them. We will continue to look at all new opportunities, including things like tidal.

Provisional Collection of Taxes

Motion made, and Question put forthwith (Standing Order No. 51(2)),

That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motion:—Rates of tobacco products duty (motion no. 1).—(Jeremy Hunt.)

Question agreed to.

Oral Answers to Questions

Jeremy Hunt Excerpts

Tuesday 14th November 2023 Commons Chamber

[Patrick Grady (Glasgow North) (SNP)]

20. What recent assessment he has made of the implications for his policies of trends in the level of food inflation.

[The Chancellor of the Exchequer (Jeremy Hunt)]

UK food inflation has been driven largely by global factors and has already fallen from 19.6% to 12.3%, and external forecasts expect it to continue to fall.

[Alison Thewliss]

Between March 2021 and April 2023, the cost of first infant formula increased by 24%, on average, with the cheapest formula on the market increasing by 45%. That is an absolute catastrophe for families who rely on infant formula, but a bonanza for the formula companies, which are making significant profits out of this. Can the Chancellor tell me why he believes it is right for companies to profit while families struggle to feed their babies?

[Jeremy Hunt]

The hon. Lady is absolutely right to draw attention to the pressures on families caused by very high food inflation in a number of areas, but I can tell her that the Competition and Markets Authority, which undertook a review of the groceries sector earlier this year, has not yet found evidence that high food price inflation is being driven by weak competition. But it is continuing its review and looking at the supply chain, and we will wait to hear what it says.

[Deidre Brock]

Recent research showed that the most significant decline in UK children’s height in the global ranking came after the UK coalition Government launched their austerity programme in 2010. An expert in child growth rates at the Great Ormond Street Institute of Child Health said of that 30-place drop in ranking that austerity

“has clobbered the height of children in the UK.”

What lessons has the Chancellor learned from the UK Government’s previous disastrous errors of judgment in this area, and how will he be supporting vulnerable groups in the future?

[Jeremy Hunt]

The lesson I have learned is straightforward: if we had not reduced the deficit by 80% between 2010 and the start of the pandemic, we would not have been able to help families across the United Kingdom with payments of more than £3,000, on average, including 700,000 households in Scotland and more than 1 million pensioners.

[Patrick Grady]

Even if the inflation rate is falling, food prices are still going up considerably. The Joseph Rowntree Foundation reckons that they have gone up at least twice as fast as the value of benefits since September 2021. At the very least, can the Chancellor commit to ensuring that the Department for Work and Pensions has enough resource to raise benefits at least in line with September’s inflation rate?

[Jeremy Hunt]

The Secretary of State for Work and Pensions is doing his review at the moment to decide the correct amount by which to uprate benefits. If the hon. Gentleman looks at this Government’s record, he will see that we took the decision a year ago to uprate benefits by inflation, and we committed to £94 billion of measures to help families get through the cost of living crisis.

[Greg Smith (Buckingham) (Con)]

Food inflation will only get worse if our self-sufficiency in food production drops. Will my right hon. Friend consider fiscal measures to discourage the transfer of food-producing land to other uses such as solar industrial installations?

[Jeremy Hunt]

My hon. Friend is right to say that our food industry is very important to food security. We need to keep the priorities constantly under review. Nature is a very important part of that, but so too is food production.

[Mr Speaker]

I call the SNP spokesperson.

[Jeremy Hunt]

I can tell the hon. Gentleman that we had the supermarkets in over the summer to make sure that they were doing everything they could to bear down on food price inflation. However, the correct way for politicians to look at this is at arm’s length. We have the independent Competition and Markets Authority, which does a rigorous job and often does things that politicians disagree with, and it is looking at the issue right now.

[Drew Hendry]

In Canada, Ministers met the five largest grocery chains to get commitments on stabilising food prices. Other Governments are doing similar things. France’s Finance Minister held extensive talks with the food industry to get it to commit to freezing or cutting prices on 5,000 everyday products. Is it not the case that, for people facing crushing food bills in Scotland and across the nations of the UK, this Westminster Government are doing absolutely nothing?

[Jeremy Hunt]

I think £94 billion of support to help families up and down the country, including with food prices and energy prices, is a rather different answer from saying that we are doing nothing.

[David Duguid (Banff and Buchan) (Con)]

5. What fiscal steps his Department is taking to support the growth of the energy sector.

--- Later in debate ---

[Chris Elmore (Ogmore) (Lab)]

10. What recent assessment he has made of the implications for his policies of the economic growth rate.

[The Chancellor of the Exchequer (Jeremy Hunt)]

Our policies are increasing economic growth, as the Office for Budget Responsibility confirmed following last year’s autumn statement and the spring Budget, but the only way to secure higher, sustainable, long-term growth is to bring down inflation.

[Chris Elmore]

The OBR judged the Chancellor’s last Budget to have no overall long-term impact on the level of potential productivity. Does he expect the OBR to make a similar judgment of his next Budget?

[Jeremy Hunt]

I remind the hon. Gentleman of what the OBR actually said about the spring Budget:

“the overall impact on GDP is around 0.2 per cent in 2027-28. This is the largest upward revision we have made to potential output within our five-year forecast as a result of fiscal policy decisions taken by a Government”.

[Martin Vickers (Cleethorpes) (Con)]

Economic growth in northern Lincolnshire will be severely impacted if changes go ahead at British Steel’s Scunthorpe works, which will result in redundancies and a massive impact on the supply chain. Will my right hon. Friend give an assurance that the Government will not proceed with any support for those changes until a full economic assessment of the impact on the local area has been carried out?

[Jeremy Hunt]

I thank my hon. Friend and, indeed, my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) for their extensive lobbying on this very important issue. I have had meetings with him and her, and with many others, to discuss it. I reassure him that we are absolutely committed to steel production in the United Kingdom, and to making sure that any changes that are necessary support the local communities that depend on steel production.

[Mr Speaker]

I call the shadow Minister.

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

I welcome the Chief Secretary to the Treasury, the hon. Member for Sevenoaks (Laura Trott) to her place. I look forward to holding her to account.

Last month, the Chancellor’s National Infrastructure Commission said that in order to unlock the billions of pounds of private investment that is available to get our economy growing, we need a Government who can “make good decisions, fast.” Why does the Chancellor think his Government have been making bad decisions slowly for quite so long?

[Jeremy Hunt]

It might help the hon. Gentleman if I tell him some of the facts on infrastructure. Since we made some reforms to the asset pooling framework in 2015, UK and global infrastructure investment by pension funds has grown from £1 billion to around £27 billion, and the Solvency 2 reforms could potentially unlock a further £100 billion-worth of investment.

[Darren Jones]

That, Mr Speaker, was a list of very slow decisions still being badly taken. The Labour party has a raft of plans available to help drive economic growth and investment in every corner of our country, from speeding up the grid to accelerating planning for critically important infrastructure. Today, I am making them available to the Chancellor for free. Would he like them, or would he rather call a general election?

[Jeremy Hunt]

Unfortunately, nothing is free from the Labour party. Funding plans by increasing borrowing by £28 billion a year leads to higher bills for families, higher energy prices and higher mortgages.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

11. What steps his Department is taking to encourage pension schemes to invest in the UK.

--- Later in debate ---

[The Chancellor of the Exchequer (Jeremy Hunt)]

In my speech at Mansion House in July, I announced reforms to boost pensions, increase investment in UK businesses, and improve UK capital market competitiveness. Those reforms could result in over £1,000 a year of additional retirement income and unlock £75 billion-worth of investment in high-growth businesses.

[David Simmonds]

Many local authorities have given the investment managers for their pension funds a mandate to invest in infrastructure. What plans does my right hon. Friend have to encourage greater infrastructure investment by UK public sector pension funds?

[Jeremy Hunt]

I thank my hon. Friend for his interest in this issue—of course, he has great experience of local government. Working with the former Economic Secretary to the Treasury, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), who I see is in the Chamber, we announced major reforms in July to help local government pension funds lead the way in the transformation we are looking for, in particular by sending a direction that they should invest in pools worth more than £50 billion. That will make it easier for them to have the expertise necessary to invest in infrastructure.

[Nadhim Zahawi]

I welcome the proposals that my right hon. Friend the Chancellor made in his Mansion House speech, which will increase investment in the United Kingdom. In his upcoming autumn statement, I implore him to build on his Budget announcement with a policy that was originally advocated for in a paper by the Adam Smith Institute, a think-tank I am proud to be patron of, as is set out in my entry in the Register of Members’ Financial Interests. I implore him to make full expensing permanent and to scrap the hated factory tax.

[Jeremy Hunt]

I have a very small bone to pick with my right hon. Friend, because when I became Chancellor I was hoping to say that I was the first Chancellor who was once an entrepreneur, but he pipped me to the post. However, he is absolutely right to say how important it is to have competitive business investment taxes. I was very proud in the spring Budget to introduce full expensing for three years, which gives us some of the most competitive business taxes in the OECD. Only five other countries do that, and I will of course keep under review any possibility to extend that tax break.

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

Is investment not needed in the UK given that 13 years of Tory rule have resulted in a £137 billion UK deficit? Meanwhile independent Ireland has a €10 billion surplus from its economic growth and investment. That is an Ireland without the oil or natural resources of Scotland, which is now about to start a sovereign wealth fund. Where did the failing crisis-hit UK go wrong and independent Ireland go right? The clue, by the way, is in the question.

[Jeremy Hunt]

I find that a very curious question. If the hon. Member is proud of Scotland’s natural resources, why does he want to cancel North sea oil and gas exploration, which is the very thing that can give families across the United Kingdom security from the energy shocks we have seen from things such as the invasion of Ukraine?

[Tim Farron (Westmorland and Lonsdale) (LD)]

There is encouraging news in that the Pension Insurance Corporation has recently announced that it is going to invest in helping to support the building of 1,200 new affordable homes in this city. Does the Chancellor agree that pension funds could be a very important source of capital for developing social rented housing around the country—Eden Housing Association, South Lakes Housing, and Westmorland and Furness Council, for example? Will he look at the rules and bring in greater incentives for pension investment funds to invest in affordable housing across the country?

[Jeremy Hunt]

We are already working on proposals in that very area. Broadly speaking, we have one of the most robust and resilient pension fund sectors in the world, but we are doing a lot of work to remove the barriers to investing back into the UK. Things such as affordable housing, infrastructure and our growth businesses are areas of great potential.

[Marco Longhi (Dudley North) (Con)]

12. What steps his Department is taking to increase public sector productivity.

--- Later in debate ---

[Marco Longhi (Dudley North) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Jeremy Hunt)]

As we have a debate this afternoon, I will limit my comments to welcoming my outstanding new colleagues. The new Chief Secretary to the Treasury, my hon. Friend the Member for Sevenoaks (Laura Trott), will brilliantly solve the problem of how we stop the state expanding, building on the work of her wonderful predecessor, my right hon. Friend the Member for Salisbury (John Glen). The new Economic Secretary to the Treasury, my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami), will single-handedly ensure that the City and stock market remain competitive, building on the superb foundations laid by his predecessor, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith). The job of the new Financial Secretary to the Treasury, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), will be to work out how to bring taxes down, following in the footsteps of his excellent predecessor, my hon. Friend the Member for Louth and Horncastle (Victoria Atkins), who as Health Secretary will no doubt be trying to push them up.

[Marco Longhi]

There is widespread consensus that growth is essential to the economy. With 800,000 fewer self-employed in the economy post covid and post IR35, does the Chancellor agree that increasing the VAT threshold to £250,000 for new registrations would boost growth and be a net gain in revenue terms in the long run?

[Jeremy Hunt]

I thank my hon. Friend for raising the support we give to small businesses. As he will know, supporting small businesses, particularly by rolling over the retail, hospitality and leisure business rates discount of 75%, was a major feature of the autumn statement. We will continue to keep under review anything that we can do to help our small businesses.

[Mr Speaker]

I call the shadow Chancellor.

[Rachel Reeves (Leeds West) (Lab)]

I welcome all the new Ministers to their roles and wish them well in them. The covid inquiry is uncovering unsavoury examples of Government mismanagement. We already know that Ministers ignored warnings that their business loan schemes were vulnerable to organised crime, yet the Prime Minister left the vaults open to fraudsters. Will the Chancellor update the House on the latest estimates of taxpayers’ money lost to fraud from the covid support schemes?

[Jeremy Hunt]

I am happy to tell the shadow Chancellor that as of September 2023, HMRC’s compliance effort on covid-19 support schemes, which started when the schemes were set up in spring 2020, had prevented the payment of or recovered the overpayment of more than £1.6 billion of grants.

[Rachel Reeves]

I thank the right hon. Gentleman for that answer, but according to the House of Commons Library’s most recent numbers, covid fraud losses total a staggering £7.2 billion—that is bigger than the fiscal headroom that he had in his spring Budget. More stories are coming to light about companies with undeclared interests and personal protective equipment contracts not delivering to the standards required. Ahead of the autumn statement, will he confirm that the Government have also had to write off more than £8.7 billion from pandemic PPE contracts?

[Jeremy Hunt]

Let me say two things. First, we have no quarter with any incidence of fraud. We have commenced 51 criminal investigations into suspected fraud cases and there have been a total of 80 arrests so far. Let me also say that during the pandemic we introduced £400 billion of support to businesses and families up and down the country and, according to the latest figures from the Office for National Statistics, the result is that our economy is nearly 2% bigger than pre-pandemic, while Germany’s, for example, is only 0.3% bigger.

[Andrew Selous (South West Bedfordshire) (Con)]

T3. Primary care capital allocation has pulled the short straw for decades. May I encourage Treasury Ministers to look across Government and with developers —retrospectively if necessary—to ensure that when we build huge new housing estates, the primary care promised in the planning permissions is actually provided?

[Jeremy Hunt]

I will take this question as well because my hon. Friend has lobbied me personally on this issue. Literally no one in this House has worked harder on it than he has. I have an example of the very problem he is talking about in my own constituency. He is right that it takes too long for housing development capital to reach NHS primary care projects. We will look into the issue carefully.

[Kim Leadbeater (Batley and Spen) (Lab)]

T2. In my constituency we are faced with the potential closure of vital public services such as Cleckheaton town hall, Claremont House dementia care home and Batley sports and tennis centre. Ultimately, that comes down to cuts imposed on Kirklees Council of more than £1 billion since 2010. Ahead of next week’s autumn statement, what conversations has the Chancellor had with his colleagues in the Department for Levelling Up, Housing and Communities to ensure that our local authorities are properly funded and the future of our vital public services is protected?

[Jeremy Hunt]

I am answering a lot of the topical questions today because I have a new team. I want to reassure the hon. Lady that we are very aware of the financial pressures that local authorities are under. I am having extensive discussions with the Communities Secretary.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

On the Conservative Benches we all agree that the way to sustainable economic growth without inflation is through business investment. It is early days, but I wonder whether we have indications of how well full expensing is working for encouraging business investment in this country. Is the Chancellor considering making that full expensing permanent next week at the autumn statement?

[Jeremy Hunt]

I welcome my hon. Friend’s interest in the topic. One of the reasons why our productivity is 15% lower than Germany’s, for example, is that it invests 2% more as a proportion of its GDP than we do in the UK. Improving the rate of business investment is one of the most effective ways to boost productivity and people’s real disposable income. We are proud of what we introduced in the spring Budget, and we will continue to see whether it is possible to extend it further.

[Mr Virendra Sharma (Ealing, Southall) (Lab)]

T4. London’s homelessness challenge is at crisis point. More than 1 in 50 Londoners is in temporary accommodation. That equates to one child in every classroom. Given that in some boroughs, only around 2% of properties are affordable for rent on local housing allowance, what assessment has the Chancellor made of the adequacy of local housing allowance rates?

[Jeremy Hunt]

With the Work and Pensions Secretary I continue to keep under review all the things that have an impact on poverty rates. We are proud to have made progress in reducing the number of people living in absolute poverty after housing costs by 1.7 million since 2010. When it comes to homelessness, we are investing £2 billion over the next three years. Rough sleeping is down 35% since its peak.

[Mr John Baron (Basildon and Billericay) (Con)]

I refer Members to my entry in the Register of Member’s Financial Interests. The Chancellor has acknowledged that investment trusts, which make up one third of all FTSE 250 companies, are being plagued by misguided cost disclosure legislation, which is making them appear unduly expensive. That is restricting investment and does not happen in any other country. In addition to the positive dialogue between us and with the Financial Conduct Authority, will he consider supporting the First Reading of Baroness Altman’s private Member’s Bill in the other place next week, which helps to address this issue? Will he also address it in his autumn statement?

[Jeremy Hunt]

I welcome my hon. Friend’s expertise in this area, which is of great benefit to the House and to me as I consider fiscal measures. As we are so close to the autumn statement, I would say that the way that we treat costs in our investment and pension funds industries is not optimal, and we need to reform it.

[Alex Cunningham (Stockton North) (Lab)]

T5. A short time after the former Chief Secretary to the Treasury, the right hon. Member for Salisbury (John Glen), said he was “alarmed” by the amount of tax people are paying, he was out of a job. Was he sacked for highlighting the Government’s tax burden, the highest for 70 years?

[Jeremy Hunt]

My right hon. Friend the Member for Salisbury (John Glen) did an excellent job and we all salute his brilliant work. If he were here now, he would remind the hon. Gentleman that we have the lowest tax burden of any European country in the G7.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I know that the Chancellor is aware of just how important the whisky industry is to the economy of rural Scotland. It was very disappointing that the policy of a duty freeze was not continued in the Budget. Can he offer any reassurance that we will return to the policy of duty freeze in the autumn statement, and in next year’s Budget?

--- Later in debate ---

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

While the shadow Chancellor was busy scrolling through Wikipedia to copy and paste, the actual Chancellor has to look no further than the New Conservatives tax plan, which outlines scrapping the IR35 reforms, increasing the VAT registration threshold to £250,000, and delivering on the Prime Minister’s pledge when he was Chancellor to bring a 1p cut in income tax in 2024.

[Jeremy Hunt]

I thank my hon. Friend for adding to the litany of options I have in front of me for the autumn statement. What I can say to him is what I said in my party conference speech: we are committed to lowering the tax burden and will do so as soon as it is responsible to do so.

[Samantha Dixon (City of Chester) (Lab)]

T9. Some 28% of people in Chester have a mortgage and they are still bearing the burden of the Government’s disastrous mini-budget. They deserve peace of mind that mortgage rates will come down soon, so what is the Chancellor going to do about it?

[Jeremy Hunt]

Can I say gently to the hon. Lady that interest rates have gone up by 3% in the UK since then? That is just above the United States and just below the eurozone, so this is a global phenomenon. There is no short cut to bringing down interest rates. We have to support the Bank of England as it bears down on inflation and then we can bring mortgage rates down.

[Dr Luke Evans (Bosworth) (Con)]

Will the Chancellor look at the red tape around the apprenticeship levy? Many businesses in my area, such as Asda, Amazon and DPD, all say that they want to take on more apprenticeships but that the red tape around how they spend the money is very difficult. This is something that he could change overnight, and really help to grow and boost our economy.

[Jeremy Hunt]

I thank my hon. Friend for drawing attention to the apprenticeship levy, which has been a tremendous success in bringing a rigour to technical qualifications that was not there before. We are very open to reforms to the apprenticeship levy, providing they stick to the fundamental principle that any investment is not in in-house training that would otherwise have happened, but in transferrable, passport-able training that someone can take with them if they move to another business.

[Rachael Maskell (York Central) (Lab/Co-op)]

T10. The NHS dental plan has been stuck in the Treasury for months, while my constituents are waiting years to see an NHS dentist. When the Chancellor makes his autumn statement, will he also release the dental plan with the funding that is required so that we can get dental treatment back on track for our constituents?

[Jeremy Hunt]

I will not pre-empt what I am going to say next week, but I will say to the hon. Lady that, as a former Health Secretary, I am well aware of the pressures on NHS dentistry and its importance to all our constituents.

[Mr Ranil Jayawardena (North East Hampshire) (Con)]

Given that inheritance tax is the least popular of all taxes at every income decile and that scrapping it would not be inflationary, will my right hon. Friend consider doing so?

[Jeremy Hunt]

That was a very nice try, but my hon. Friend will have to wait for a week.

[Gareth Thomas (Harrow West) (Lab/Co-op)]

Opt-out savings are a little like auto-enrolment in pensions. They help those on lower incomes to save for a crisis—for the proverbial rainy day. Given that more than 9 million people in this country are in work with no savings at all, will the Chancellor note the impressive results of a small trial of the opt-out savings system in Manchester, and encourage its expansion?

[Jeremy Hunt]

I would be happy to do that. The hon. Gentleman is right: if we are to grow faster as an economy, the other side of the coin is we that need to save more, and we should be encouraging everyone in all income groups to do so.

[Greg Smith (Buckingham) (Con)]

Will my right hon. Friend seek to fix the anomaly that sees man-made fully synthetic fuels taxed at the same rate as their fossil equivalents?

[Jeremy Hunt]

I shall be happy to look into that issue in detail and get back to my hon. Friend.

[Alison McGovern (Wirral South) (Lab)]

Yesterday in the House, in the context of Labour’s plan for a health service, the Secretary of State for Work and Pensions referred to the “poor old non-doms”. Does the Chancellor agree with his colleague that people who live in this country but do not pay their taxes here can be accurately described as poor?

[Jeremy Hunt]

Because we attract wealth creators from all over the world—and this may be uncomfortable for those on the Opposition Benches—we generate huge amounts of tax revenue. Financial services pay for half the cost of running the NHS. I am in favour of getting everyone to pay their fair share of tax, but I will not make reforms that mean less tax revenue for the NHS.

[Mr Speaker]

I call David Linden to ask the final question.

[David Linden (Glasgow East) (SNP)]

The Westminster-made cost of living crisis is having a devastating impact on household incomes, particularly in Broomhouse, where many young homeowners are seeing mortgage prices soaring. Will the Chancellor use the autumn statement to introduce mortgage interest tax relief to help people across Glasgow to deal with the cost of living crisis?

[Jeremy Hunt]

As the hon. Gentleman knows, we have taken enormous steps over the past year to help families throughout Scotland to deal with cost of living pressures. If he really thinks that people in Scotland believe that this was a “made in Westminster” problem, when we have experienced an invasion of Ukraine and a global pandemic, I simply say to him in return that after 16 years of SNP rule, GDP per head in Scotland is lower, productivity is falling, employment is lower, and inactivity is higher—[Interruption.]

[Mr Speaker]

Members need to give me a good reason not to bring them in at the end again: be careful! Let us come to the statement—[Interruption.] Angus, you’ll find the door, I think, in a minute.

Economic Growth

Jeremy Hunt Excerpts

Tuesday 14th November 2023 Commons Chamber

[The Chancellor of the Exchequer (Jeremy Hunt)]

It is an honour to speak in the first King’s Speech debate for more than 70 years. Her late Majesty was a figure of grace and continuity, and we now look forward to His Majesty the King leading us, as she did, through troubled times.

It is always a pleasure to debate with the shadow Chancellor, although in a whole year of my being Chancellor, this is the first time we have had an economy debate, and now we know why: she has been busy writing a book, or, rather, Wikipedia has been busy writing her book. Today, I see she has been busy copying and pasting Conservative language about tax. May I tell her gently that that will take her only so far? Conservative Members will never forget what happened under Gordon Brown, who she campaigned for: income tax up, national insurance up, stamp duty up, fuel duty up, pensions up and multiple other taxes up.

Let us turn to some of the shadow Chancellor’s assertions. She said that the economy was flatlining. What she did not tell the House was that since Labour left the economy in the deepest recession since the second world war, we in this country have grown faster than Spain, Portugal, Italy, France, the Netherlands, Austria, Germany or Japan. She did not mention that after a global pandemic and energy shock, our economy is nearly 2% bigger than it was pre-pandemic. That is higher, for example, than countries such as Germany, whose economy is only 0.3% larger, not least thanks to the furlough scheme introduced by my right hon. Friend the Prime Minister.

The shadow Chancellor also did not mention that when it comes to the fastest-growing industries, we are doing even better. In the last 13 years under Conservative Governments, we have built Europe’s largest tech sector—double the size of Germany’s and three times that of France; it is the third-largest in the world. We also have Europe’s largest life science sector, saving more lives than any other country globally with vaccines and treatments discovered in Britain. We have more offshore wind than anywhere in Europe bar Germany and Norway—it is the third-largest sector in the continent. We also have a world-leading creative industries sector, including Europe’s largest film and TV industry and a thriving publishing industry that has even produced a book written by the shadow Chancellor, which helpfully collates some fascinating information from the world wide web.

[Mr Betts]

The Chancellor talks about what he sees as some successes. Why does he not address the problems of small modular reactors? Sheffield Forgemasters in my constituency could be building SMRs, but it has been waiting for months for the Government to make a decision on a go-ahead for the right techniques. ITM Power, which is a leader in green hydrogen, is building plant in Germany, which is spending £7 billion on it in the next few years, while in this country we are spending £1 billion, so we are losing the international race on that.

[Jeremy Hunt]

The first big infrastructure decision that I took was on nuclear, when I assigned £700 million to Sizewell C. I completely agree with the hon. Member about the potential of SMR. That is why we set up a competition, and with the previous Energy Secretary I stipulated that it should finish by the end of this calendar year so that we can proceed as quickly as possible on SMR, because it could be an important part of our net zero future.

The shadow Chancellor’s central argument is that we can get growth only by borrowing £28 billion a year more. [Interruption.] Well, I was listening to her words. She may not have mentioned this in her speech, but on 9 October she said on the “Today” programme that she wanted to take borrowing “up”—her word. We delivered all those achievements in technology, life science, creative industries and advanced manufacturing industries during a time when we were cutting borrowing, which went down by 80% between 2010 and the start of the pandemic. That is the difference. Unlike Labour, the Conservatives know that we cannot borrow our way to growth. We have to do the hard work to support entrepreneurs and innovators, including by keeping their taxes down, which Labour has never wanted to do. Because we have done just that, the International Monetary Fund says that after inflation has been brought to target from the end of 2025, this country will have faster growth than France, Germany or Italy. No shortcuts; just hard work to get one of the fastest growth rates in Europe.

[Alan Brown]

On investment in renewable energy, EY has confirmed today that the UK has slipped further back on the attractiveness index, so it is now behind India, China and Australia. On offshore wind, the Chancellor knows that allocation round 5 was a disaster. What will he do to rectify that? On nuclear, he talks about SMRs being the future, but they are not. There is not a successful SMR anywhere in the world, and NuScale in the United States has just been abandoned after rising to an estimated cost of $9 billion.

[Jeremy Hunt]

I do not accept that we are not an extremely attractive place. We have third largest renewables sector in Europe and are the largest European provider of offshore wind. Can we do more? Yes, we can, particularly by improving access to the grid. The House should expect to hear more from us on that.

We had a lot of talk from the shadow Chancellor about the cost of living crisis, but she barely mentioned that the biggest pressure on the cost of living is caused by the rise in inflation—in fact, it did not get a mention at all in her conference speech. Because we have taken difficult decisions, inflation has fallen by 40% since its peak. Core inflation is now lower than in nearly half the entire EU membership. I say gently to her that if she were to reflate the economy by ramping up borrowing by £28 billion a year, prices would go up and families would end up paying more for their petrol, their food, their electricity and their mortgages. That is why that is the wrong approach.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

One issue on borrowing that has not been talked about is that it is now four years since this place agreed that we should regulate the buy now, pay later lenders. Under this Government’s watch, the number of people borrowing from these companies to make ends meet during the cost of living crisis has doubled, and 40% of those people are struggling and borrowing from other lenders to pay their debts, yet we have still seen no regulation at all from the Government. If the Chancellor wants to prove that he is actually on the side of the people and understands the bills that they have racked up paying for this Tory Government’s failures, will he finally commit to regulating these loan sharks?

[Jeremy Hunt]

As the hon. Member might have heard if she had been at oral questions, we are acting on this and have been consulting on a solution since March this year—I started that at the spring Budget—but we want to get the answer right. We want to crack down on rogue lenders but also ensure that the financing that appropriate people can offer responsibly is available.

I want to talk about the pressures on ordinary families, because the shadow Chancellor also talked about incomes and the tax burden on working families. What has happened since 2010 to adults on the lowest legally payable wage? When we took over from Labour, that wage was £5.93 an hour; today, it is £10.42 an hour. After inflation, gross pay for those on the lowest legally payable wage has gone up by 20%. The number of people on low pay, defined as less than two thirds of median hourly earnings, has halved. At the same time, because Conservative Governments want to make work pay, we increased the thresholds before which people start to pay tax or national insurance from £5,700 to £12,570. Take-home pay after tax for people on the adult main minimum wage has therefore gone up by more than 25% after inflation. That is a bigger percentage increase than for people on much higher incomes.

[Christine Jardine (Edinburgh West) (LD)]

Notwith-standing what the Chancellor has said, my constituents in Edinburgh West, like those in much of the rest of the country, were listening intently to the King’s Speech for a Bill or anything that might help them with the cost of food and specifically energy this coming winter, but there was nothing, and it has been admitted that the petroleum Bill will not do anything to help households in this country. Does he appreciate why ordinary working families think that the Government are simply out of touch?

[Jeremy Hunt]

With respect, I think the hon. Member needs to look at the facts. We have given an average of £3,300 in cost of living support to families across the country this year and last. In Scotland, 700,000 households have benefited from our cost of living payments, which have reached more than 1 million pensioners.

I want to return to my main point about the impact of making work pay. As a result of that change, not only have a lot of people been lifted out of poverty, but unemployment has gone down by a million, after going up by nearly half a million under Labour, and the unemployment rate has halved. That is the difference: if we make work pay, as the Conservatives do, we lift people out of poverty and put people into work.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

What would the minimum wage be worth now if the right hon. Member’s party had succeeded in its attempts to wreck the legislation when it was introduced by the last Labour Government?

[Jeremy Hunt]

I simply say that we did not just build on that reform but improved it massively more than Labour proposed, because we turned it into the national living wage, which is far more generous than the original minimum wage.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

According to the House of Commons Library, in 2022 the tax burden on the lowest income decile was 25.5%. On the top income decile, it was 12.5%. Is that fair?

[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.

[Holly Mumby-Croft (Scunthorpe) (Con)]

My right hon. Friend talks about growth and productivity, and he knows that it is my strong view that steel is an incredibly important material for growth here in this country. Will he reassure the very concerned steelworkers in Scunthorpe that he is concentrating on that, and working on it on our behalf?

[Jeremy Hunt]

My hon. Friend has talked to me consistently and powerfully since I became Chancellor about the issues facing the steel industry. She is a strong advocate for her constituents. It is at the top of my mind, as we try to chart a better future for British Steel. We will bear in mind the many comments she has made.

The shadow Chancellor said in her conference speech that she would remove the barriers to business investment, by

“backing the builders not the blockers”.

Only weeks later, her party promptly U-turned and became a blocker by watering down changes to the rules on nutrient neutrality, which would have unlocked the building of 100,000 homes. That is 100,000 families whose future is on hold because of Labour’s political games.

On top of all the measures in the autumn statement, we will have the Bills from the King’s Speech, including a trade Bill that will confirm our membership of the comprehensive and progressive agreement for trans-Pacific partnership, making us part of a group that wields a combined GDP of £12 trillion and a presence in the Indo-Pacific, where the majority of global growth will be. The Automated Vehicles Bill, which the shadow Chancellor mocked, will make the UK one of the first countries in the world to have a legal structure to allow driverless cars. The Digital Markets, Competition and Consumers Bill will modernise our digital laws to boost online shopping by making it safer. The Offshore Petroleum Licensing Bill will secure our energy independence by replacing imported oil and gas with domestically produced fuel as we transition to net zero.

The Leader of the Opposition called the King’s Speech something that will only bring more of the same. In a way, he is right: more growth, more jobs, more pay, more opportunity and more prosperity. We are not following the easy path of opening the national cheque book and maxing the country’s credit card by borrowing £28 billion a year more; we are taking a path that is more difficult, yes, but more durable, and one that will turn us into one of the most prosperous countries in Europe. I commend it to the House.

[Several hon. Members rose—]

Contingent Liability Notification

Jeremy Hunt Excerpts

Wednesday 8th November 2023 Written Statements

[The Chancellor of the Exchequer (Jeremy Hunt)]

The independent Monetary Policy Committee (MPC) of the Bank of England (“the Bank”) decided at its meeting ending on 3 February 2022 to reduce the stocks of UK Government bonds and sterling non-financial investment-grade corporate bonds held in the Asset Purchase Facility (APF) by ceasing to reinvest maturing securities. The Bank ceased reinvestment of assets in this portfolio in February 2022 and has since commenced sales of gilts acquired for monetary policy purposes on 1 November 2022. The Bank commenced the sale of corporate bonds on 28 September 2022 and has since sold the majority of its holdings, with a small number remaining due to mature by April 2024.



The Chancellor at the time agreed a joint approach with the Governor of the Bank of England in an exchange of letters on 3 February 2022 to reduce the maximum authorised size of the APF for asset purchases every six months, as the size of APF holdings reduces.



Since 28 April 2023 when I last reduced the maximum authorised size of the APF, the total stock of assets held by the APF for monetary policy purposes has fallen further from £821.3 billion to £750.9 billion. In line with the approach agreed with the Governor, the authorised maximum total size of the APF has therefore been reduced to £750.9 billion.



The risk control framework previously agreed with the Bank will remain in place, and HM Treasury will continue to monitor risks to public funds from the APF through regular risk oversight meetings and enhanced information sharing with the Bank.



There will continue to be an opportunity for HM Treasury to provide views to the MPC on the design of the schemes within the APF, as they affect the Government’s broader economic objectives and may pose risks to the Exchequer.



The Government will continue to indemnify the Bank, the APF and its directors from any losses arising out of, or in connection with, the facility. Provision for any payment due under the liability will continue to be sought through the normal supply procedure.



A full departmental minute has been laid in the House of Commons providing more detail on this contingent liability.

[HCWS17]

Oral Answers to Questions

Jeremy Hunt Excerpts

Tuesday 5th September 2023 Commons Chamber

[Deidre Brock (Edinburgh North and Leith) (SNP)]

12. What recent assessment he has made of the potential impact of withdrawal from the EU on the economy.

[The Chancellor of the Exchequer (Jeremy Hunt)]

Good morning, Mr Speaker. Brexit was a choice made by the British people and it remains a big opportunity for the economy. Rather than relitigating that debate, this Government are committed to embracing those opportunities.

[Dr Whitford]

Prior to the EU referendum, the Bank of England warned that Brexit would seriously damage the UK economy, weakening the pound and causing inflation. The Government have now delayed import checks on animal and food products for the fifth time, because the costs would add to inflation. Does that mean the Chancellor finally accepts that Brexit is contributing to the UK’s cost of living crisis?

[Jeremy Hunt]

No, but of course we are sensitive about the timing of introducing those changes because of cost of living pressures. I am sad to have seen, since we last met in the House, the hon. Lady announce that she is stepping down; we have much in common on patient safety. On the NHS, she will know that because of Brexit an extra £14.6 billion is being directed to public services every year, including the NHS and including in Scotland.

[Alison Thewliss]

Adam Posen, a former member of the Monetary Policy Committee, has described Brexit as a

“trade war by the UK on itself”.

This unnecessary trade war has had a real impact on small businesses in my constituency such as Guild Antiques & Restoration, which has found that its orders from the EU have fallen off a cliff edge and its costs have increased. Scotland did not choose Brexit and we are all worse off as a result. What can the Chancellor do to fill the economic gaps his hard Brexit has caused?

[Jeremy Hunt]

There is a certain irony in the Scottish National party opposing Brexit at the same time as advocating a far more draconian separation for Scotland, including a new currency and border checks. On businesses in Scotland, as part of the UK, Scotland is now an independent coastal state for the first time in nearly half a century; the 21,000 people in Scotland who work in financial services are benefiting from the Brexit freedoms in the Edinburgh reforms; and there is extra support for Scottish pubs, because, for the first time, we have a lower beer duty relative to supermarkets.

[Deidre Brock]

It is not just Brexit trade barriers having a devastating impact on Scotland’s economy, because the loss of freedom of movement has hugely damaged our businesses’ ability to recruit staff. Many businesses have had to reduce their offer, cut their opening hours or close altogether. It is estimated that over the bank holiday UK pubs alone lost out on £22 million because of staff shortages. Does the Chancellor accept that small businesses such as those cannot keep picking up the tab for his Government’s disastrous Brexit? What is he doing to solve these staff recruitment problems?

[Jeremy Hunt]

May I gently say to the hon. Lady that this country has actually grown faster than France or Germany since we left the single market? This is a bit of a smokescreen for the SNP’s economic policies, which have led to more people out of work and fewer people in work in Scotland than in England.

[Theresa Villiers (Chipping Barnet) (Con)]

Leaving the EU gives us the opportunity to modernise our regulations and adapt them to local and national domestic interests, but we will seize the benefits of doing that only if we deliver on regulatory reform. So will my right hon. Friend drive that across Departments so that we can increase prosperity and raise living standards as a result?

[Jeremy Hunt]

No one knows more about regulatory reform than my right hon. Friend, who wrote an excellent booklet on it. We look at that booklet ahead of every fiscal event, be it autumn statement or Budget. I hope that she noticed in the Budget big reforms to our medicines regulation. We will continue to learn from the things she advocates.

[Vicky Ford (Chelmsford) (Con)]

For generations, Britain’s world leadership on financial services and financial markets has been a key part of our economy. I agree that the post-Brexit initiatives such as the Edinburgh review have made excellent strides on making sure that we keep that world leadership. May I encourage my right hon. Friend to look at the report from UK Finance on the tokenisation of markets, as being the world leader in that innovative area would reduce costs for investors, enable money to flow into less liquid assets and fundamentally unlock future growth?

[Jeremy Hunt]

I thank my right hon. Friend for her question. Thanks to the excellent work of the Economic Secretary to the Treasury, we have repealed 100 EU rules and regulations in the financial services sector, and we will look very closely at the opportunities when it comes to tokenisation.

[Mr Speaker]

I call the shadow Economic Secretary to the Treasury.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

Last week, the Government admitted that their planned introduction of food import checks from the EU would lead to an increase in inflation, hitting the pockets of ordinary people during the worst cost of living crisis in our lifetimes. In the Labour party, we believe that a bespoke veterinary agreement would cut red tape from business and avoid pushing costs on to ordinary people. Are the Government planning to negotiate a veterinary agreement, and if not, why not?

[Jeremy Hunt]

I gently say to the hon. Lady, who I have a lot of time for, that the last thing business wants is the upheaval of a huge renegotiation of our trading arrangement with the EU, which is the largest tariff-free free trade deal by volume in the world.

[Mr Speaker]

I welcome the Scottish National party spokesperson to his place.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Thank you, Mr Speaker. The Chancellor claims that it is a success that inflation in the UK has risen higher and remains more stubbornly so than in the EU. Adam Posen, formerly of the Bank of England, has underlined that up to 80% of the UK’s additional inflation woes can be laid at the door of Brexit—something the Tories and Labour are united on. All the while, food price inflation is crushing household budgets. So why have this Government done nothing? Why have this Government learned nothing from countries such as France, which has worked with food suppliers to keep food prices capped to help those most in need?

[Jeremy Hunt]

I welcome the hon. Gentleman to his position. His constituency predecessor served as a Minister in the Treasury—whatever greatness the hon. Gentleman goes on to, I am sure he will not sully himself with that role. When it comes to inflation, we have a high level of imported food, like Germany; a high level of imported gas, like Italy; and low unemployment, like the United States. These factors have come together to give us the inflation rate we have. When it comes to growth, the hon. Gentleman will have noted last week’s numbers, which show that we have recovered better from the pandemic than France, Italy or Germany, and we are doing extremely well, despite all the pressures we face.

[Drew Hendry]

I notice that the Chancellor did not say anything about food inflation hurting families. Well, Tory and Labour “little Britain” attitudes do not stop at food price inaction. Energy costs are a key driver of inflation and costs for families. Energy bills are too high. The Spanish have taken bold steps by cutting VAT and introducing a social tariff to help their people. This Government plan to do nothing for this winter, which is particularly galling for people in Scotland who will continue to pay more for their energy than elsewhere in the UK. Will the Chancellor act on our demands for a £400 energy price grant to be introduced this winter?

[Jeremy Hunt]

Let me tell the hon. Gentleman what we are doing for his constituents, and indeed all the people of Scotland: around £3,000 of support for the average family up and down the country, including in Scotland; paying half people’s energy bills, on average; and a huge amount of support through the benefits system. Nearly £100 billion of support shows that we are stronger together.

[Mary Kelly Foy (City of Durham) (Lab)]

6. What recent discussions he has had with the Secretary of State for Health and Social Care on the potential impact of inflation on public health and wellbeing.

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[Simon Baynes (Clwyd South) (Con)]

15. What progress he has made on the introduction of investment zones.

[The Chancellor of the Exchequer (Jeremy Hunt)]

Investment zones are part of our industrial strategy to make sure that the benefits of our national strengths in our five growth priority sectors are spread throughout the UK.

[David Duguid]

I thank my right hon. Friend for his response. The north-east of Scotland has long been an exemplar of innovation in the fields of food and drink and energy, to name a few. Can he confirm that the north-east Scotland investment zone will lead to more innovation to promote these key industries not just in Aberdeen City, but in the wider north-east, including my constituency of Banff and Buchan?

[Jeremy Hunt]

I know that the Acorn carbon capture, usage and storage project is based at St Fergus in my hon. Friend’s patch, and that Banff and Buchan is within the north-east of Scotland region, which is one of two eligible areas and has been a long-standing global centre for excellence in clean energy, so I wish him every success as those discussions with the Scottish Government continue.

[Simon Baynes]

Does the Chancellor agree that my constituency of Clwyd South, that of my hon. Friend the Member for Wrexham (Sarah Atherton) and the rest of north-east Wales represent one of the best candidates for a new investment zone? Will he also consider making this cross-border, given our very close economic, commercial and cultural ties with the north-west of England?

[Jeremy Hunt]

I know there are some great businesses in my hon. Friend’s constituency—I much enjoyed meeting Robin and Helen Jones of Jones’ Village Bakery at a recent reception in No. 10, and I know they are going from strength to strength. I holidayed in Clwyd last year, and from the top of Moel Famau I saw a very impressive offshore wind farm. I completely agree that there is enormous potential in Clwyd for clean energy and, as discussions continue about investment zones, I wish him every success as well.

[Dan Jarvis (Barnsley Central) (Lab)]

The UK’s first investment zone is in South Yorkshire, where the Mayor is working hard to develop our world-leading advanced manufacturing and innovation district. I am sure the Chancellor will agree that if we are going to create a growth area, we need to make sure people can access the jobs there via transport links, particularly by bus. Will he make sure that included within the financial package available is money to assist with local public transport?

[Jeremy Hunt]

I very much enjoyed my visit to South Yorkshire to open that investment zone. It is incredibly impressive what is happening there and it was wonderful to welcome new investment by Boeing as part of that. The hon. Gentleman is right to talk about transport; that is why we involve local authorities in all our investment zone decisions. It is also vital to have universities involved, which is why the University of Sheffield is playing such a key role.

[Mr Clive Betts (Sheffield South East) (Lab)]

I was present on the day the Chancellor came to launch the investment zone in my constituency, and of course I too welcome the investment into Boeing there. Does he accept that one of the other areas for future development in the investment zone is small modular reactors? A consortium is being developed in Sheffield with Sheffield Forgemasters, Rolls-Royce and GE Hitachi Nuclear Energy to look at the future—not merely to develop the techniques for SMRs, but to start building SMRs in Sheffield. Would he be willing to look at that proposal and hopefully offer support for it?

[Jeremy Hunt]

I enjoyed meeting the hon. Gentleman when we opened that investment zone. Let me reassure him that I am a big supporter of nuclear and I am very excited about the potential of SMRs. There is a competition going on this year, which we hope will be completed by the end of the year, to assess the viability of the various SMR manufacturers, and we want to get going as quickly as we can.

[Marco Longhi (Dudley North) (Con)]

8. What discussions he has had with representatives of the financial sector on freedom of speech.

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[Elliot Colburn (Carshalton and Wallington) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Jeremy Hunt)]

On Friday, the Office for National Statistics published an update to the UK’s GDP growth figures, which shows that the UK economy was 0.6% larger than pre-pandemic levels by the fourth quarter of 2021. It means that our economy had the fastest recovery from the pandemic of any large European economy, thanks to decisions such as furlough that protected millions of jobs. For that growth to continue, we need to halve inflation, which I am pleased to report is now nearly 40% below its 11% peak. I can also tell the House that I will deliver the autumn statement on 22 November.

[Elliot Colburn]

Staying on the subject of pubs, Carshalton and Wallington is also lucky to be home to some excellent pubs, including the Hope, which is this year’s Campaign for Real Ale Greater London pub of the year recipient. Will the Chancellor expand a bit more on the work that the Treasury is doing to support pubs not just in the tax system but further afield, and will he join me in wishing Carshalton and Wallington’s pubs good luck in the local pub of the year competition later on?

[Jeremy Hunt]

I very much wish my hon. Friend’s local pubs the best of luck in that competition, second only to my desire to encourage South West Surrey pubs to do well. I want to reassure him that we believe that pubs are central to our national life. That is why we have provided relief on business rates of up to 75% for pubs, and as we heard earlier, the Brexit pubs guarantee helps on their duty pricing.

[Mr Speaker]

I call the shadow Chancellor.

[Rachel Reeves (Leeds West) (Lab)]

Last week, thousands of parents were told that their children’s schools were unsafe and at risk of collapse. The defining image of 13 years of Conservative government: classrooms propped up to stop the ceilings from falling in. Capital budgets have halved in real terms since 2010, with warnings ignored and repair programmes slashed. Do this Conservative Government take any responsibility for any of this?

[Jeremy Hunt]

Let me start by reassuring the right hon. Lady that the vast majority of pupils in the 156 schools affected are at school normally, and we are acting fast to minimise the impact on the rest.

Let me answer the more general question that the right hon. Lady raised. Yes, we made cuts in spending in 2010 because, as she knows well, the last Labour Government left this country with an economic crisis. Despite that crisis, the Department for Education budget has gone up by 15% in real terms, and overall capital spend—

[Mr Speaker]

Order. This is topicals. All your colleagues on both sides of the House want to get in. Topicals are meant to be very short, not a full debate between both sides. I say to everybody: think about others. I think we can move on. I call Rachel Reeves.

[Rachel Reeves]

I will repeat: capital budgets have halved in real terms since 2010. I understand—indeed, I know—that in the lead-up to the 2021 spending review, the Department for Education made a submission to the Treasury about the dangers of the deteriorating school estate, including from reinforced autoclaved aerated concrete. Those warnings were ignored by the then Chancellor—the current Prime Minister—and we have seen the consequences, so will today’s Chancellor do the right thing and publish the Department for Education’s submission to the last spending review?

[Jeremy Hunt]

Capital spending at the Department for Education went up 16% in real terms in that review. Is the difference not that, with the fastest recovery in Europe, the Conservatives build an economy that can pay for our schools and hospitals, and Labour runs out of money?

[Richard Fuller (North East Bedfordshire) (Con)]

T2. For months, we have had the Labour economics team running down British businesses, berating them for not growing fast enough and ignoring the fact that the OECD shows that the British economy has grown faster since 2010 than Germany, Italy, Spain or France. With the recently announced Office for National Statistics upgrade that the Chancellor just referred to, what is his more hopeful message to British businesses?

[Jeremy Hunt]

It is very simply this: since 2010, we have become the strongest economy in Europe in film and television, life sciences and technology, and the opportunities are great with a Conservative Government.

[Ian Lavery (Wansbeck) (Lab)]

T3. This week, schools have failed to reopen due to the threat of collapse. Worryingly, the danger does not end there, because 95% of schools and public buildings are estimated to contain asbestos, which is described by Mesothelioma UK as a “silent killer”. Will the Chancellor stop ignoring his own Department and commit to providing the necessary funding so that our children can be prevented from being taught in crumbling, asbestos-ridden deathtraps?

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[David Duguid (Banff and Buchan) (Con)]

T7. Can I ask my right hon. Friend when a fiscal review of all offshore energy activity will be carried out to ensure that we are maximising investment opportunities in critical energy infrastructure such as offshore wind, carbon capture and storage and hydrogen, as well as—while we still need it—domestic oil and gas?

[Jeremy Hunt]

My hon. Friend is absolutely right to raise that issue. I actually had a breakfast with clean energy industry representatives this morning to discuss their concerns. There is a huge amount of potential investment, and he is right to say that maximising the use of our own oil and gas reserves during transition is a vital part of our energy security policy.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Will the Chancellor consider introducing a windfall tax on banks’ excess profits? The profits of the big four banks for the first half of this year were up 700% compared with 2020, yet the Bank of England is forecast to pay out as much as £42 billion in interest on reserves to banks in 2023, at the same time as the Government have cut the level of surcharge on banks’ profits by 60%.

--- Later in debate ---

[Mr Gregory Campbell (East Londonderry) (DUP)]

Does the Chancellor accept that many people see income tax rates at the moment as exceptionally punitive, and does he also accept that there is a need to move as quickly as possible into a growth-based economy and to supercharge our economy in the United Kingdom?

[Jeremy Hunt]

As a Conservative, I want to bring taxes down as soon as we can afford to do so, and I am very proud that for the first time ever people can earn £1,000 a month without paying a penny of tax or national insurance.

[Bob Blackman (Harrow East) (Con)]

As we want to expand our financial services industry not only in this country but abroad, we need to build confidence among consumers that the right thing to do is invest. Does my hon. Friend therefore agree that it is vital that regulators respond to and deal with complaints to them and actually impose sanctions against those who breach the regulations?

--- Later in debate ---

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Over the summer ports have been bidding to the Government’s infrastructure fund to help them get ready for the delivery of the new floating offshore wind industry. May I encourage Ministers to look favourably on the bids from the Celtic sea ports of Milford Haven and Port Talbot, because those two ports are key to unlocking the enormous economic benefits of this new clean energy industry?

[Jeremy Hunt]

I am absolutely happy to do that, and I agree with my right hon. Friend about the enormous potential of those areas.

[Daisy Cooper (St Albans) (LD)]

Some GP practices are at risk of being priced out of city centres, including in places like St Albans, because of outdated Treasury rules that prevent integrated care boards from spending the money they want to on a GP practice location. Health Ministers have confirmed to me that their officials are happy to work with Treasury officials. May I ask for a personal assurance from Treasury Ministers that they will encourage their officials to look at this and resolve it by the end of this year at the absolute latest?

--- Later in debate ---

[Saqib Bhatti (Meriden) (Con)]

Andy Haldane, the former Bank of England chief economist, recently said in a Sky News interview that the Bank of England kept on printing money for longer than it needed to. It is clear that central banks across the world have been addicted to cheap money and that this has contributed to inflation across the world. Does the Chancellor agree that printing cheap and easy money has not been without consequence, and instead our monetary policy must focus on important growth factors such as productivity?

[Jeremy Hunt]

I agree with what my hon. Friend says. The Bank of England itself has said there were problems with its inflation forecasting. It is learning the lessons from that and we must support it every step of the way as it brings down inflation.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Sorry I was late today, Mr Speaker: British Airways cancelled my flight.

When the Chancellor’s predecessor, now the Prime Minister, was Chancellor there was huge fraud in the bounce back loans. Has he got any of that money back yet?

[Jeremy Hunt]

We are always ferociously determined to recover money obtained through fraud, but because of those bounce back loans we have the fastest recovery of any major European country.

[James Sunderland (Bracknell) (Con)]

I have recently been contacted by several self-employed constituents expressing concern about heavy fines being imposed for filing tax returns late even though no moneys are owed. Will the Treasury meet me with a view, perhaps, to reviewing this policy?

Consultation on tax incentives for occupational health

Jeremy Hunt Excerpts

Thursday 20th July 2023 Written Statements

[The Chancellor of the Exchequer (Jeremy Hunt)]

The Government are consulting on the case for further support through the tax system to encourage greater employer provision of occupational health services, as a means of reducing labour market inactivity in the UK. The Government are also consulting separately on wider interventions to incentivise investment in and provision of occupational health and longer-term options to boost the workforce capacity to meet increased demand. Together these consultations will inform the Government approach to supporting occupational health provision and supporting individuals to remain and thrive in work.

The consultation is available on gov.uk.

[HCWS988]

Fiscal Risks and Sustainability Report 2023

Jeremy Hunt Excerpts

Thursday 13th July 2023 Written Statements

[The Chancellor of the Exchequer (Jeremy Hunt)]

The Office for Budget Responsibility’s (OBR) Fiscal Risks and Sustainability Report (FRS) [CP 870] has been laid today. It examines three main risks to the public finances through chapters on inactivity and health, energy and debt sustainability, as well as providing an update on the other risks in its fiscal risks register. This fulfils the OBR’s obligation to examine and report on the sustainability of, and risks to, the public finances as laid out in the Charter for Budget Responsibility. I would like to thank the OBR’s staff and the Budget Responsibility Committee for their efforts in producing this report.

As the OBR highlights in its report, the UK has, in common with other countries around the world, experienced a “rapid succession of shocks” in recent years. Putin’s illegal war in Ukraine has contributed to a surge in energy prices, driving higher inflation across the world. Central banks are raising interest rates to get global inflation under control, which has pushed up the cost of borrowing for families, businesses and Governments. The Government have acted to support households and businesses through these shocks, including most recently through energy support schemes and targeted cost of living support, while taking fiscally responsible decisions that ensure the public finances are on a sustainable footing and avoiding adding to inflationary pressure.

The FRS highlights the importance of tackling economic inactivity, as helping more people into work also reduces pressure on the public finances. The Government have already started to take action to address the rise in inactivity, including through the labour supply package announced at spring Budget 2023, which includes the new 30 hours a week of free childcare for working parents of nine-month to two-year-olds and a new disability employment programme. The OBR forecasts that this package will increase employment by 0.3% by 2027-28, with an overall impact on GDP of around 0.2% in the same year. This is the largest upward revision the OBR has made to potential output within its forecast as a result of fiscal policy decisions since its creation in 2010. In June, the NHS in England published the first ever long term workforce plan, which was developed by the NHS and backed by the Government. It sets out a path to put staffing on a sustainable footing and improve patient care and the Government are backing this plan with more than £2.4 billion funding over the next five years to deliver this planned transformation in NHS training and recruitment.

While energy prices have fallen back recently, they remain above pre-pandemic levels following Russia's invasion of Ukraine. In response, the Government are providing £94 billion of cost of living support, including direct help for energy bills across 2022-23 and 2023-24. Indeed, the OBR acknowledges in the FRS that the

“level of fiscal support with energy costs provided in the UK has been among the most generous in Europe”.

To increase the UK’s resilience to future energy price shocks, the Government are committed to transitioning to clean energy sources and is working to deliver tangible progress while bringing down energy bills. Between 1990 and 2021, the UK has cut emissions by 48% whilst growing the economy and decarbonising faster than any other country in the G7. The Government committed £30 billion of domestic public investment for the green industrial revolution at spending review 2021, as well as £6 billion for energy efficiency at autumn statement 2022 for the next spending review, and up to £20 billion for carbon capture usage and storage announced at spring Budget 2023. Over 80,000 green jobs across the UK economy are currently being supported or are in the pipeline as a result of new Government policies and spending since November 2020. What really matters is not just public investment, but total public and private investment. Since 2010, public and private investment alongside consumer levies has seen investment of £198 billion in our green industries. The Government have set out detail on the policies and programmes to reach net zero, including via the net zero strategy 2021, the net zero growth plan 2023, and specific sectoral strategies.



In common with many advanced economies, the UK’s level of debt remains elevated following recent global shocks, including the pandemic and energy prices. As the OBR highlights, Government spending on servicing this elevated level of debt is rising due to higher inflation and rising borrowing costs. The OBR notes that higher inflation will not erode the real value, or “inflate away”, debt. This highlights why it is important to deliver on the Prime Minister’s priority to get debt falling and to control borrowing to avoid adding inflationary pressures and risk prolonging higher inflation. That means taking difficult but responsible decisions on the public finances, including public sector pay, because more borrowing is itself inflationary.

While the start of this century has seen an increased frequency of global shocks as outlined above, there are also a wider set of risks to the public finances that the Government need to remain mindful of, which the OBR outlines in its fiscal risks register. The Government will respond to the FRS at a subsequent fiscal event, to provide an update on the actions being taken to mitigate the risks identified by the OBR.

[HCWS939]

Financial Services Reforms

Jeremy Hunt Excerpts

Tuesday 11th July 2023 Written Statements

[The Chancellor of the Exchequer (Jeremy Hunt)]

On 10 July 2023, I set out in a speech at Mansion House the Government’s progress in delivering a financial services sector that is globally competitive, while retaining our commitment to high international standards.

Building on the Edinburgh reforms announced in December 2022, the Mansion House reforms will enable our financial services sector to unlock capital for our most promising industries and increase returns for savers, supporting growth across the wider economy.

First, I announced a series of measures to boost outcomes for savers and increase funding liquidity for high-growth companies through reforms to the UK’s pension market.

Secondly, I set out ways the Government are incentivising companies to start and grow in the UK by strengthening our position as a listing destination.

Finally, I set out the Government’s action to seize the opportunities of the future by reforming and simplifying our financial services rulebook to ensure we have the most growth-friendly regulation of any financial services centre.

These plans have the potential to increase retirement income by over a £1,000 a year over the course of a career and unlock up to £75 billion of additional investment from defined contribution and local government pensions.

The full list of the measures launched at Mansion House, along with supporting technical documents, can be found at: https://www.gov.uk/government/collections/mansion-house-2023.

[HCWS927]

Mortgage Charter

Jeremy Hunt Excerpts

Monday 26th June 2023 Commons Chamber

[The Chancellor of the Exchequer (Jeremy Hunt)]

Mr Speaker, last week the Bank of England increased interest rates to 5% as the UK, like other countries, grapples with high inflation. We are steadfast in our support for the independent Monetary Policy Committee as it takes whatever action is necessary to return inflation to the 2% target in the medium term.

None the less, I know that higher inflation and interest rates cause anxiety and concern for many families. That is why the Government are already supporting families with one of the largest support packages in Europe, worth £94 billion, or £3,300 per household on average. As interest rates rise, I will not take action that undermines the Bank of England’s monetary objectives, but where we can take non-inflationary measures to relieve the anxiety faced by families, we will do so. That is why on Friday, I met the UK’s principal mortgage lenders, alongside senior representatives from the Financial Conduct Authority and UK Finance, to agree new support for people struggling with their mortgage payments. At that meeting, I secured agreement from lenders to a new mortgage charter that sets out what support customers will receive, which we are publishing today. The charter has been signed by lenders covering 85% of the UK market, and provides support for two groups of people in particular.

The first group is those who are worried about their mortgage repayments. If they want to switch to an interest-only mortgage or extend their mortgage term to reduce their monthly payments, they will be able to do so, with the option of switching back to their original mortgage deal within six months without any affordability check or credit score impact. For most people, the right course of action will be to continue to make payments on their current mortgage. That will always be the best option, and will always mean that they pay less interest overall. However, this new measure means that people will be able to opt for a lower-cost approach for six months with full reversibility, giving them the peace of mind of knowing they can try out a new approach and still change their mind later.

The measure will take effect in the next few weeks. It means that a homeowner with a £200,000 property with £100,000 outstanding on their mortgage over 15 years can change their payments—with no immediate impact on their credit rating—by extending the mortgage term by 10 years, which could save over £200 a month, or moving to interest-only payments, which could save over £350 a month.

A further measure for this group of customers means that if they are approaching the end of a fixed-rate deal, they will be offered the chance to lock in a new deal with the same lender up to six months ahead. However, they will still be able to apply for a better like-for-like deal with the same lender, with no penalty if they find one, until their current deal ends. That will provide people with more flexibility and optionality to find the best deal for their circumstances.

The second group of people we are supporting is those who are at real risk of losing their home because they fall behind in their mortgage payments. Mortgage arrears and defaults remain at historically low levels, with under 1% of residential mortgages in arrears in 2023, and are at a level lower than just before the pandemic. None the less, for the families involved it is extraordinarily distressing to lose their house, so we will do all we can to support people who find themselves in such a challenging financial position.

As part of our strong regulatory framework for mortgage holders, banks and lenders already provide tailored support for anyone who is struggling and deploy highly trained staff to help such customers. Support offered includes temporary payment deferrals and part-interest part-repayment, as well as extending mortgage terms or switching to interest-only payments. To supplement that, we have agreed as part of the mortgage charter that in the extreme situation in which a lender is seeking to repossess a home, there will be a minimum 12-month period from the first missed payment before there is a repossession without consent. Anyone at all who is worried that they could be in this situation should know they can call their lender for advice without any impact whatsoever on their credit score. Lenders will also provide support to customers who are up to date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability test, and provide well-timed information when their current rate is coming to an end.

Taken together, these measures should offer comfort to those who are anxious about the impact of higher interest rates on their mortgages, and provide support to those who do get into any extreme financial difficulties. The mortgage market itself remains robust, and the average homeowner remortgaging over the last year had close to 50% loan to value, indicating that most people have considerable equity in their homes.

Tackling inflation is the Prime Minister’s and my No 1 priority. We said we would halve inflation not because it was an easy thing to do, but because it is the right thing to do, and we will not flinch in our resolve, because we know getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses. That is why we will seek to remove inflationary pressures in our economy, not stoke them. That is what the measures I have set out today will help to do, and I commend this statement to the House.

[Mr Speaker]

I call the shadow Chancellor of the Exchequer.

[Rachel Reeves (Leeds West) (Lab)]

Thank you, Mr Speaker. I would like to thank the Chancellor for advance sight of his statement this afternoon.

Families are worried sick to their stomach about what is happening at the moment, but the Prime Minister says, “Don’t worry—it will all be okay”. However, it is not going to be okay for the millions of homeowners who face an average increase in mortgage costs of £2,900 this year—all of this during a wider cost of living crisis. The Prime Minister told the country yesterday to hold its nerve, but where are people meant to find the money in the meantime to pay for the Tory mortgage bombshell? The Chancellor and the Prime Minister have not yet said.

For many, the Tory mortgage bombshell will mean holidays cancelled, family savings draining away and missing out on days spent with family and friends, but for others it could be much worse—not moving up the housing ladder, but heading down it through no fault of their own. The Chancellor does not need to take my word about how many people will be facing the Tory mortgage bombshell. He could speak to any of the 11,600 families in his own constituency who will be paying £450 more every month in mortgage costs alone as a result of this Conservative Government.

The Resolution Foundation estimates that millions of households will have to pay a combined total of £15.8 billion more in mortgage payments a year by 2026. That is just devastating. The Tories gambled last autumn with people’s livelihoods, and since then things have got worse, not better, yet Ministers take no responsibility for the damage that they have caused, and blame anything and everyone else. Again today, the Government claim that this is all due to global factors, yet the latest data show that a typical household in Britain are now paying over £2,000 more per year for their mortgage than in France, over £1,000 more per year than in Ireland or Belgium, and over £800 per year more than in Germany. The Chancellor is going to need a better scapegoat.

Labour set out our plans last week. Our measures were a requirement—yes, a requirement—because all lenders need to play their part when people are struggling. Our plan would have provided real help, but the Government have provided just a bad cover version. While many banks and building societies are doing the right thing by their customers, a voluntary set of measures is just not good enough. The Chancellor said today that the voluntary measures would cover 85% of the mortgage market, but what is his answer for the more than 1 million families who are missing out because their lender has not signed up to this scheme—tough luck? Just how bad does it have to get before the Chancellor recognises that mandatory action is needed to provide meaningful assistance?

I would like to ask the Chancellor the following questions. Can he confirm what consequences there are for firms who have not signed up to this scheme? Where is the plan for renters? The Chancellor did not even mention them in his statement, but many of them are paying higher rents because the mortgage costs of their landlords have gone up? Why does the Chancellor think that savers are not enjoying the full benefits from rising interest rates in the same way that mortgage holders are feeling the full pain? Why does the Chancellor think that the UK has the highest inflation in the G7, and does he still think the Government are on track with their target of halving inflation by the end of the year? How does the Chancellor think getting rid of house building targets will help increase home ownership? Finally, six days ago the Chancellor said that he was “proud” of this Government’s economic record. With energy bills twice as high as last year, food inflation close to 20% and millions hit by the Tory mortgage bombshell, is he seriously saying he is proud of that record?

People work hard to get on to the housing ladder, yet there is now a risk that dreams will become nightmares due to the decisions of this Conservative Government. The Chancellor today has come to the House with a watered-down package that does not meet the task of dealing with the Tory mortgage bombshell.

[Jeremy Hunt]

I will deal with the right hon. Lady’s specific points first. She says these measures should be mandatory, so why did Labour oppose the intervention power in the Financial Services and Markets Bill that would have made that possible? She said she wants action for savers, and I have indeed been talking to banks about action for savers and will keep the House updated. What she carefully did not mention is that we secured on Friday more than Labour committed to, because our measures provide protection for people who miss payments not for six months, but for 12 months.

The main point is that the right hon. Lady wants people to think she is fiscally responsible and will not take risks with inflation, so why on earth is she committed to borrowing £28 billion more a year when, as a former Bank of England economist, she should know that that will be inflationary and push up the cost of mortgages? Members need not listen to me; they should listen to people such as Paul Johnson of the Institute for Fiscal Studies, who said about Labour’s plans that

“additional borrowing both pumps more money into the economy, potentially”—[Interruption.]

The right hon. Lady might not want to hear this but this is what Paul Johnson says about Labour’s plans:

“additional borrowing both pumps more money into the economy, potentially increasing inflation, and also drives up interest rates.”

It is Labour’s mortgage bombshell, hidden in plain sight.

The right hon. Lady does not want people to notice the real comparison here, which is that her party faced an economic crisis in 2008, just as this Government did last year, but we are taking the difficult decisions to restore sound money and the public finances while they ducked each and every one of those decisions, ran out of money and left it to others to clear up the mess.

[John Redwood (Wokingham) (Con)]

Given that we do not want too much pressure on mortgage holders, who will be struggling, will the Government launch a series of supply-side measures to increase the supply of things that are short, to promote more home-grown food and home-produced energy, and above all to work with public sector employees and managers to have a productivity revolution in the public services where there has been a collapse in output?

[Jeremy Hunt]

As so often, my right hon. Friend is absolutely right and it is in supply-side measures that we see the long-term solution to the inflation problem that we and many other countries face. That is why the Budget was focused on labour supply measures such as a massive reduction in the cost of childcare—a reduction of up to 60% for families with young children—and it is why my right hon. Friend the Chief Secretary to the Treasury is launching the very productivity review my right hon. Friend the Member for Wokingham (John Redwood) has called for many times, to make sure we are getting better value for public money spent.

[Mr Speaker]

I call Scottish National party spokesperson.

[Stewart Hosie (Dundee East) (SNP)]

With a debt to GDP ratio of 100%, the Chancellor was rather brave to talk about sound money. However, I welcome the statement and early sight of it. Notwithstanding the fact that it was described by Reuters as a package of limited relief measures, it is none the less necessary and welcome, with support from lenders, no repossession within 12 months of a missed payment, the chance to lock in a deal six months early, a temporary move to interest-only, and no impact on customer credit scores. The Chancellor’s words about anxiety and concern struck the right tone, unlike his Prime Minister yesterday.

However, that that does not begin to answer some of the fundamental questions. Given that the base rate drives the mortgage rate, and the base rate, as the Chancellor knows, is the primary tool that the Bank has to tackle rising inflation, is this now not the time to review the Bank of England’s targets and tools? Secondly, are the Government genuinely convinced that using a rising base rate to tackle input inflation caused by external shocks is the best approach we have, other than to tip the economy into recession, as some people are suggesting? I hope the Chancellor would agree that that would be an idiotic and catastrophic thing to do. Thirdly and finally, should we now not revert to forward guidance on base rates from the Bank of England, as we had under Mark Carney during the financial crisis? It may not affect the trajectory of interest rates and mortgage rates initially, although it might, but it would certainly provide certainty to business, retail and mortgage borrowers.

[Jeremy Hunt]

I often do not agree with what the right hon. Gentleman says, but I thank him for the constructive tone of his comments this afternoon, because he is absolutely right to talk about external shocks. He will know, as we do, that interest rates have gone up by similar amounts in the United States, Canada, Australia and New Zealand and that core inflation is higher in 14 EU countries. We need to look at all the tools at our disposal. Whether the Bank of England Governor issues forward guidance is a matter for the Governor, but I am sure he will have heard the right hon. Gentleman’s comments. It is important, because we respect and support the independence of the Bank of England, that I allow the Governor to make those judgments. I disagree with the right hon. Gentleman’s suggestion of reviewing the target for inflation. That target is the right target, and it is important that we give everyone confidence of our total commitment to hitting that target, which we will.

[Sir Desmond Swayne (New Forest West) (Con)]

Given the significant tightening in the measures of monetary growth, is the Chancellor absolutely sure that the Bank of England has got it right?

[Jeremy Hunt]

The Bank of England Governor himself has been very open about the fact that the Bank’s inflation forecasting has not been accurate, and it is conducting an independent review to see how it can do that better. It is clear that there have been some issues with how that process has worked, but what I would say to my right hon. Friend—

[Mr Speaker]

Order. The Chancellor should be making his remarks to the Chair.

[Jeremy Hunt]

Mr Speaker, you are absolutely right to correct me on that point. What I would say to you about the point raised is simply that in my dealings with the Bank of England, I have never once had any reason to question its resolve to hit the target, but we need to ensure that the forecasting is better.

[Dame Angela Eagle (Wallasey) (Lab)]

Some 8,600 families in Wallasey are facing increases in their mortgage bills of up to £1,800 in a year. That is a huge extra chunk of worry. I welcome the Chancellor’s statement, but does he not worry that the banks are being very slow to pass on interest rate rises to those who are saving, while almost immediately passing interest rate rises on to those who borrow? That makes the interest rate mechanism much less effective in dealing with the inflation situation. Did he notice, as I did, that the banks this autumn made more than £4 billion extra on the differential between those interest rates? Should he not have been much tougher on the banks? What will he to do to stop this profiteering?

[Jeremy Hunt]

The right hon. Lady is absolutely right. It is taking too long for the increases in interest rates to be passed on to savers, particularly with instant access accounts. The rates are more frequently being passed on to those with fixed-term and notice accounts. She is right that there is an issue there, which I raised in no uncertain terms with the banks when I met them. I am working on a solution, because it is an issue that needs resolving.

[Sir Bill Wiggin (North Herefordshire) (Con)]

My right hon. Friend will know that increasing liquidity in the housing market will give homeowners more options and choices. Will he look at reducing the burden of stamp duty to help both current and future homeowners?

[Jeremy Hunt]

I thank my hon. Friend for his comment. The level of stamp duty is, as with all taxation measures, kept under review. We make decisions at the time of fiscal events, whether autumn statements or spring Budgets, and we will continue to do that.

[Sarah Olney (Richmond Park) (LD)]

The root cause of soaring interest rates—other than the shambles of the mini-Budget—is the Government’s failure to control inflation. The Prime Minister took personal responsibility for halving inflation this year. Will the Chancellor explain why the Government are refusing to take obvious steps to tackle inflation such as reinstating energy support for farmers and businesses, cutting import costs for small businesses and bringing down the NHS waiting list to alleviate the squeeze on our workforce?

[Jeremy Hunt]

I find it strange that the hon. Member should be criticising the Government’s failure to tackle inflation when her party is suggesting a multi-billion-pound package of mortgage support that would increase inflation. I must say that the Liberal Democrats are positioning themselves brilliantly as the pro-inflation party.

[Mark Pritchard (The Wrekin) (Con)]

I welcome the new mortgage charter, but may I say, along with all Members across the House, that constituents are suffering and that they are very concerned? Many are having to choose between food, clothes and shoes and paying the mortgage or the rent, and decisions that we make here, either as the governing party or cross-party, are having a direct impact on individuals’ lives every single day. I join cross-party with the hon. Member for Wallasey (Dame Angela Eagle), who is absolutely right that, so often, when the base rate rises, lenders are quick to raise those interest rates on our constituents. Will my right hon. Friend ensure that when interest rates fall, as they surely will—hopefully they will soon; possibly in the autumn, but we will see—those reductions are passed on to our constituents as quickly as possible?

[Jeremy Hunt]

My right hon. Friend is right to draw attention to the human consequences of any economic shock. I am extremely proud that, under the Government since 2010, 1.7 million people have been lifted out of absolute poverty, including 400,000 children. That is why in the autumn statement we prioritised those facing the biggest challenges with a £94 billion package of support to help people through the cost of living crisis. But one thing that can definitely happen better than it is now is passing on increases in the base rate to savers.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

One reason nearly 10,000 of my constituents will be hit by the Tory mortgage bombshell is that many deals ending in this 12-month period were taken out when interest rates were below 2%; they are now at 5%. Will the Chancellor set out clearly his private analysis of the likely rises in arrears and repossessions over the next few months?

[Jeremy Hunt]

I do not have any private forecasts that I have not shared with the House. What I can say is that about 0.9% of families with mortgages are currently in arrears, and that is nearly four times fewer than in 2009.

[Anna Firth (Southend West) (Con)]

I thank the Chancellor for his statement. A third of my constituents have mortgages and will welcome this range of measures. Now that the majority of the mortgage market is fixed, not floating, does he agree that rising short-term interest rates will not necessarily result in falling inflation and that we need to look at other measures such as making sure that interest rate increases are passed on to savers so that they keep their money in the bank?

[Jeremy Hunt]

My hon. Friend is absolutely right. Notwithstanding the fact that 85% of mortgages are now fixed to some degree, an extra 1.2 million families will feel the increase in interest rates over the months between now and the end of the year. That will be felt by many families, but we should do everything in our power to tackle inflation, because in the end that is the only way to end the misery for so many people.

[Richard Burgon (Leeds East) (Lab)]

Many of the banks that the Chancellor has been talking about are raking in bumper profits by refusing to pass on higher interest rates to their savers. Surely, a windfall tax on those additional profits would allow the Government to provide mortgage holders with the kind of support they really need at this time. Before the Chancellor dismisses that idea, may I gently remind him that even Margaret Thatcher imposed such a windfall tax on banks’ excess profits?

[Jeremy Hunt]

I hear what the hon. Gentleman says, but he will be pleased to know that banks already pay a 3% surcharge on their corporation tax—they pay 3% more than everyone else—as well as a levy on their balance sheets.

[Mr Philip Hollobone (Kettering) (Con)]

I welcome the action that the Chancellor has taken on this issue. Increasing the flexibility of mortgage terms and conditions will provide welcome relief to homeowners who are struggling with anxiety at the present time. The mortgage charter sounds great. What obligations has he insisted on with the mortgage companies to get that information out to mortgage holders to inform them of the extra flexibility available?

[Jeremy Hunt]

My hon. Friend makes a good point. All lenders had some of those measures to a lesser or greater extent. What is significant about Friday is that they aligned their offer so that it is much easier to communicate to all families with mortgages. The charter has been agreed by 85% of the market, so a very large majority of mortgage lenders are agreeing to a simple set of terms that they will all follow so that it is easy for people to understand their rights.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

The people watching this who have too much month at the end of their money need better and straight answers from the Chancellor. He has ducked the question about whether he thinks the Government will reach their own target to halve inflation, and he needs to be honest about what he thinks the consequences will be of only reaching an inflation target of 5%.

I join colleagues across the House who have raised concerns about the fact that the vast majority of mortgages are fixed. People facing the possibility of eviction even in a year’s time will be sick with worry. What assessment has he made of the impact if inflation only gets down to 5%? When will he learn the lessons from the energy companies, and not wait to hold the banks responsible for their role in all this?

[Jeremy Hunt]

I have a lot of respect for the hon. Lady, but she is being a little churlish about what the Government have done. I have not waited; I called in the banks and the lenders on Friday, and I got them to commit to a set of terms that will make life easier for 85% of families with mortgages if their mortgage comes up for renewal. On the Government’s target to halve inflation, both the Bank of England and the International Monetary Fund have said that we are on track.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

I have never forgotten the anxiety caused to my parents in the late 1980s, after they bought their current home and interest rates soared. Does my right hon. Friend agree that the package of measures that he has announced will help enormously to alleviate the anxiety that many households are feeling, without allowing rampant inflation to put my constituents’ dreams of home ownership even further out of reach?

[Jeremy Hunt]

I thank my hon. Friend for a thoughtful question. The measures agreed by the banks and principal lenders on Friday will make a big difference, particularly for people who are genuinely in arrears, who now know that their house will not be forcibly repossessed for 12 months. That is an important reassurance, and gives people longer to get their finances in order. It also encourages people who are worried about the impact on their credit score that the simple fact of having a conversation if they are in distress will not have any impact on it. For people in a similar situation to his parents, this is an important set of measures.

[Brendan O’Hara (Argyll and Bute) (SNP)]

In his statement, the Chancellor said that there will be a minimum 12-month period from the first missed payment before a repossession without consent. Does that come into effect from today, or will it apply retrospectively? What will that mean for hard-pressed families who, because of soaring costs, missed August but managed to pay September, October, November and December, and missed January? At what point does the clock start ticking on their repossession?

[Jeremy Hunt]

The agreement will take effect in the next few weeks, but the context of the agreement with the banks and lenders is one where they are agreeing to do everything they possibly can to give people longer to get their affairs in order so that repossessions are reduced or eliminated altogether. I think it will be a positive step forward.

[Siobhan Baillie (Stroud) (Con)]

I listened very carefully to the shadow Chancellor, because I want to hear serious ideas. The public are not daft; they can see there are incredible pressures across the world. But not only is Labour not coming up with ideas, it is breaking its own economic pledges. It made me think of the latest Labour councillor to step down, who said recently that she watched Keir Starmer’s leadership with increasing concern and frustration because of a “lack of policy” to help those most affected by the cost of living. Does my right hon. Friend agree with me? Will he say more about how we can keep working with lenders—so it is not just a one-off conversation—to create solutions to help with some of the problems ahead of us?

[Jeremy Hunt]

I am happy to give my hon. Friend that reassurance. I will continue to talk not only to the lenders but the regulators, who I am meeting later this week, to see if there are any areas at all where price reductions that should be passed on to consumers are not being passed on. I hope to update the House further.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I will put aside the fact that the Chancellor did not answer my right hon. Friend the Member for Leeds West (Rachel Reeves) on what happens to the 1 million people who are outside the 85% of mortgage providers, or why we have higher borrowing costs than France, Germany and Ireland. Some 9,200 families are affected by the increase in interest rates and the mortgages they are paying. We know, for example from the prompt payment codes, that voluntary codes have a limited impact, so who will monitor the compliance of the code? How many people will have to be disappointed by their lender before the Chancellor puts it in statutory form?

[Jeremy Hunt]

It is generous of the hon. Lady to put aside so many things. I will also put aside the fact that Labour opposed the powers that would have meant the mandatory imposition of the charter on the banks and lenders would have been possible. What I will say to her is that the charter will be monitored by the Financial Conduct Authority. It will take appropriate action if it thinks that banks and lenders are in breach of their statutory duties.

[Jane Hunt (Loughborough) (Con)]

I recently met constituents in The Wolds villages who have shared ownership arrangements for their properties with a housing association. They have never missed a payment. Please will my right hon. Friend confirm that the mortgage charter will assist those across the country with shared ownership schemes?

[Jeremy Hunt]

I am absolutely delighted to give that confirmation.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

During the 2008 credit crunch, Plaid Cymru, as part of the One Wales Government, developed a mortgage rescue scheme. Through the co-operation agreement, we have now secured £40 million to support Welsh mortgage holders in difficulty. People look to Government to help them to keep their homes in a crisis. Will the Chancellor follow where Plaid Cymru led and implement direct protections for those hardest hit by interest rate increases?

[Jeremy Hunt]

We will do everything we possibly can to help people in difficulties, except measures that are themselves inflationary.

[Mr Robin Walker (Worcester) (Con)]

I welcome the fact that my right hon. Friend, in tackling this huge challenge, is determined not to increase inflation. Does he recognise, however, that with so many people owning their properties outright and not having a mortgage on them today, increasing the payment for people who save is a very important element in tackling inflation? I wish him every success in his further conversations to encourage the banks to pass on interest rates to savers.

[Jeremy Hunt]

My hon. Friend is absolutely right. If more people are encouraged to save, that is technically counter-inflationary and something to be encouraged.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

Due to the disastrous policies of Conservative Governments, including eventually crashing the economy, hard-working Brits, including people in my Slough constituency, are having to pay the price via painful premiums on their mortgage or rent. Why does the Chancellor think that the latest data shows that someone with a £200,000 loan is paying over £800 more annually in the UK than in Germany and over £2,000 more than somebody in France?

[Jeremy Hunt]

If the hon. Gentleman wants to look further at Europe, he will see that 14 EU countries have higher core inflation than we do. As for interest rate rises, they have been at similar levels in Australia, New Zealand, Canada and the United States.

[Simon Fell (Barrow and Furness) (Con)]

I thank my right hon. Friend for his statement and for his hard work in securing the new mortgage charter, which will give people certainty and comfort in globally uncertain times. The simplification of the terms and the coverage of 85% of the market are welcome, but what are my right hon. Friend’s views on the 15% who are not currently round the table, and what message does he think he should be sending to their customers?

[Jeremy Hunt]

We will be making big efforts to sign up any remaining lenders who have not subscribed to the charter. To reach a level of 85% over a period of four days is a good start, but we would love to get the other 15% on board. I should add that if they are not on board, that will make their mortgage offer less competitive from the viewpoint of the many thousands of families who will want to arrange their new mortgage with a lender who makes an effort to reduce the anxiety they may feel.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

My constituents who are facing eye-watering increases in their mortgage repayments are asking—as have other Members—how they can square those increases with the increased profits that the banks and building societies are making, and are also asking whether this pain is for any gain. Inflation has not fallen in the way that the Government hoped. Is the current mortgage market not fundamentally different from that of the early 1990s, when we last had spiralling interest rates, and is this tool not merely hammering a group of people rather than tackling the core problem? Does the Chancellor believe there is an element of truth in that, and does he believe that there are other tools at his disposal to get inflation down?

[Jeremy Hunt]

The hon. Gentleman is entirely right to say that the mortgage market has changed, given that 85% of deals now involve a fixed-rate element, but I still think that interest rates are the most effective tool. Other countries that have used them are seeing their inflation starting to fall, and I would expect it to do so here.

[Alison Thewliss (Glasgow Central) (SNP)]

The mortgage crisis is not the only crisis over which this Government are presiding. According to StepChange Debt Charity, 45% of mortgage holders—some 7 million—are now struggling to keep up with all their other bills following the rise in interest rates. What conversations is the Chancellor having with companies providing other forms of consumer credit, and with debt advice charities which are giving support on the frontline to many people who have never had to call on their services before?

[Jeremy Hunt]

We continue to have conversations with everyone who is involved in relieving families who are in distress because of debt arrears, whatever they may be, but I think the most important help we can give people is cost of living support. The extension of the energy price guarantee has reduced people’s electricity bills, and means overall that we have paid about half people’s electricity bills over the last year.

[Paula Barker (Liverpool, Wavertree) (Lab)]

Last week the Bank of England confirmed that the rise in interest rates has been worst here in the UK, with overnight swaps—the key driver of mortgage rates—rising by twice as much in the UK as in the United States. What assessment have the Chancellor and his Department made of the reasons why the UK has been so much worse hit than other countries, and will he finally admit that that is the case? Will he also indulge me by explaining the difference between poverty and his new catchphrase, “absolute poverty”?

[Jeremy Hunt]

The hon. Lady may want to belittle the fact that 400,000 more children and 200,000 more pensioners have been taken out of absolute poverty, but I think that that is an important achievement, and I am proud of it. I also think the hon. Lady should recognise that the primary causes of the inflation we are seeing are international factors that are affecting many other countries, which is why we are also seeing interest rates rise across the world.

[Mr Toby Perkins (Chesterfield) (Lab)]

The 8,600 mortgage holders in Chesterfield whose mortgages have increased by an average of £1,900 a year will be very conscious that in the Chancellor’s responses he has been very happy to blame global factors, but that when he is asked about specific countries such as France and Germany—the major European nations where outcomes are not as bad as in the UK—he quickly deflects and says, “Let’s talk about Australia or Canada.” Will he answer the question that my right hon. Friend the Member for Leeds West (Rachel Reeves) asked? Will he explain why it is worse for my constituents in Chesterfield than it is in France, in Germany and in other countries he has been asked about?

[Jeremy Hunt]

The truth is that Members can pick countries in Europe where things have not been as severe as they have here, but they can also pick countries in Europe where things have been more severe, such as the 14 EU countries that have higher core inflation.

[Bill Esterson (Sefton Central) (Lab)]

The Chancellor is not going to get off with not answering that question. We are going to keep asking him again and again until he answers. Why is it that people are paying £800 less in Germany, £1,000 less in Ireland and Belgium, and £2,000 less in France than they are paying here? What is it that their Governments and their economies are doing differently—or is it just that they do not have the problem of 13 years of this Tory Government? What is behind it?

[Jeremy Hunt]

Let me give the same answer that I gave to the hon. Member for Chesterfield (Mr Perkins). Core inflation is higher in more than half the EU countries, so it is not just about us.

[Beth Winter (Cynon Valley) (Lab)]

We have had 13 interest rate rises in a row, yet little help for those in housing need, and 13 years of public sector pay cuts. All the Tory Government have done is double down on more real-terms pay cuts. When will this Government take action to tackle the cost of living crisis by raising incomes? Having bailed out the banks in 2008 and 2009 to the tune of hundreds of billions of pounds, should the Government not now deal with the causes of inflation by controlling bank profiteering and redistributing the extreme wealth that exists to the millions of people, including people in my constituency of Cynon Valley, who are suffering and at serious risk? They are petrified of losing their home through no fault of their own.

[Jeremy Hunt]

The hon. Lady is absolutely right to be concerned, as we all are, about families in her constituency who are worried about the impact of rising interest rates on their mortgage repayments. She is wrong to suggest that this Government have not been extremely generous in our cost of living payments, which at £94 billion are more, actually, than her party was calling for. If she wants to talk about the last 13 years, maybe she should reflect on why a Conservative-led Government were elected in 2010: it was to pick up the pieces of the terrible economic mess that her party left behind.

[Chris Stephens (Glasgow South West) (SNP)]

Citizens Advice Scotland has reported that requests for advice from people who are homeless or at risk of homelessness reached their highest ever level in May this year and were up 30% from May 2022. What additional measures is the Chancellor planning to protect the most vulnerable households from the impact of soaring interest rates on their mortgage repayments?

[Jeremy Hunt]

Let me tell the hon. Gentleman what we have done for those families. This year, families on means-tested payments will get a payment of £900, pensioner families will get a payment of £300 and families with someone who is disabled will get an extra payment of £150, alongside a lot of other measures.

[Alex Cunningham (Stockton North) (Lab)]

Two of my constituents face a near tripling of their mortgage payments to over £2,600 a month. It is easy for me to talk about the Tory mortgage bombshell and rightly blame the Government for crashing the economy, but what does the Chancellor have to say to my constituents? Why do they have to pick up the bill for Government incompetence?

[Jeremy Hunt]

What I would say to the hon. Gentleman’s constituents is that we are taking the difficult decisions to deal with inflation in this country, as other countries are doing. We will do what it takes, because dealing with inflation is the only way in the long run that we can stop more families going through what is happening to the constituents he mentions.

[Helen Morgan (North Shropshire) (LD)]

I have constituents whose mortgages were with Northern Rock when it collapsed back in 2008. They have been moved against their will to inactive lenders that have not allowed them to remortgage on fixed rates. They are now, and will continue to be, trapped paying variable rates for a long time. Is there any help for mortgage prisoners in the measures that the Chancellor has announced today?

[Jeremy Hunt]

The hon. Lady raises a very fair point. I will write to her with some details of what we are thinking in that area.

[Rachael Maskell (York Central) (Lab/Co-op)]

Private rents go up when mortgages go up, yet local housing allowance disparity is growing faster in places like York than anywhere else in the country. What process has the Chancellor set in train to review local housing allowance and the broader rental market, which is out of kilter in places like York compared with surrounding areas?

[Jeremy Hunt]

The hon. Lady is absolutely right to talk about the impact on renters because of the high prevalence of buy-to-let landlords and the pass-through effect. That is an area we are looking at in great detail, and I will write to her with some of the things we are looking at and planning to do.

[Martin Docherty-Hughes (West Dunbartonshire) (SNP)]

The Chancellor said in his statement that

“this new measure means that people will be able to opt for a lower-cost approach for six months with full reversibility, giving them the peace of mind of knowing they can try out a new approach and still change their mind later.”

Going back to mortgage prisoners, why does he not know about the assistance he is able to give them as Chancellor of the Exchequer? Why does he not have an answer to that question, given the statement he has just given?

[Jeremy Hunt]

It is a very complicated issue. I have said I will write to the hon. Member for North Shropshire (Helen Morgan), and I am also happy to write to the hon. Gentleman. If he is saying that we are doing nothing to help people who are struggling or worrying about mortgage repayments, I urge him to read the statement in full.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

The so-called mortgage time bomb will hit younger generations in particular, so what fiscal measures is the Chancellor considering to help younger generations and to address the intergenerational financial unfairness that exists in the UK?

[Jeremy Hunt]

The hon. Gentleman is right to draw attention to that issue, and I simply say that the biggest measure in the spring Budget was the childcare measure that will mean families with young children can get up to £6,500 of help with their childcare costs to help them go back to work. That will help those families and help to tackle inflation.

[Jim Shannon (Strangford) (DUP)]

I thank the Chancellor for his statement and for the clear help he is trying to provide. I very much welcome the move to ensure that, in the extreme situation of a repossession, there will be a minimum of 12 months from the first missed payment. Can he confirm whether it will be 12 months from any first missed payment or 12 months from a specific time? Some people may have missed a payment, say, five months ago and missed none since. If they lose their job or become ill, will this extension and compassion be shown if more than one payment is missed within a year? How will the Chancellor ensure that his goal of giving people time in exceptional circumstances is not circumvented by the banks and others?

[Jeremy Hunt]

The hon. Gentleman is right to raise this issue. I reassure him that banks are required by the FCA to offer a tailored solution to people who get into arrears, specific to their circumstances, to make sure that precisely the kind of thing he worries about does not happen.

Oral Answers to Questions

Jeremy Hunt Excerpts

Tuesday 20th June 2023 Commons Chamber

[Richard Thomson (Gordon) (SNP)]

12. What recent assessment he has made of the potential effects of his policies on inflation on the cost of living.

[The Chancellor of the Exchequer (Jeremy Hunt)]

We know the pain that households up and down the country are going through as a result of the cost of living pressures at the moment, and have announced one of the largest support packages in Europe, worth around £3,300 per household this year and last.

[Ian Byrne]

The latest report from Which? highlights that even supermarkets’ own budget brands of food have increased in price by 26.6%. There are security locks on baby formula milk, at the same time as corporations are making vast profits. The Government have signed up to the United Nations’ sustainable development goal of eradicating poverty by 2030. Surely, in the light of those commitments, now is the time for the Chancellor to act. Will he cap essential food prices and tackle the grotesque profiteering in the food industry that is driving many of my constituents in Liverpool, West Derby into poverty?

[Jeremy Hunt]

I totally respect the hon. Gentleman for raising the concerns of his constituents in the way that he has done. I do not believe that capping prices is the right long-term solution, but we are doing a lot, including payments of £900 per household for people on means-tested benefits, £150 for households with someone disabled living in them and £300 for households with pensioners living in them, precisely because we want to help the people that the hon. Gentleman is talking about. I will be meeting the regulators next week to talk further about what needs to be done with respect to supermarkets.

[Patricia Gibson]

Over the weekend, the former Governor of the Bank of England, Mark Carney, spoke about how before the Brexit referendum, the Bank of England had set out that the likely consequences of Brexit were

“a weaker pound, higher inflation and weaker growth”.

Does the Chancellor think it is fair that the UK Government’s decision to ignore the stark warnings from the Bank of England are now being paid for by the households who can least afford it?

[Jeremy Hunt]

I am afraid that I do not buy this Brexit narrative from the SNP. Food price inflation has been around 20% in Germany, Sweden, Portugal and Poland in recent times, so this is not a UK-specific issue. We are all dealing with the consequences of Putin’s invasion of Ukraine and the aftermath of the pandemic, and we are all tackling it with one central focus, which is to bring down inflation as our overriding priority.

[Richard Thomson]

The former US Treasury chief said earlier this month that Brexit was a “historic economic error”, and described the UK Government’s economic policy as having been

“substantially flawed for some years”.

Will the Chancellor finally face up to what the rest of the world can see, and admit that leaving the world’s largest single market has not only had a significant impact on inflation, but a deleterious impact on household finances across the country?

[Jeremy Hunt]

The issue with that argument is that the UK has actually grown faster than France or Italy since we left the single market, and according to the managing director of the International Monetary Fund, the UK economy is “on the right track”.

[Sir Jake Berry (Rossendale and Darwen) (Con)]

I thank my right hon. Friend for all he has done for people in Rossendale and Darwen to help them through this cost of living crisis, but people are very concerned about what is being described as the mortgage bomb about to go off. Is now the time for him to look at reintroducing the bold Conservative idea of mortgage interest relief at source? If we do not help families now, all the other money that we spent to help them will have been wasted if they lose their home.

[Jeremy Hunt]

No one in Rossendale and Darwen could have a more doughty champion than my right hon. Friend, and I listen to what he says carefully, but I think he will understand that those schemes that involve injecting large amounts of cash into the economy right now would be inflationary. So much as we sympathise with the difficulties and will do everything we can to help people seeing their mortgage costs go up, we will not do anything that would mean we prolonged inflation.

[Mr Speaker]

I call the SNP spokesperson.

[Stewart Hosie (Dundee East) (SNP)]

The cost of a two-year fixed mortgage in March 2021 was 2.57%; this week, it reached 6%. The Chancellor and the Economic Secretary have said there are no plans to change the Bank of England inflation target, meaning that the base rate that drives the mortgage rate will continue to rise as inflation stays stubbornly high, and mortgages will go up. In the absence of such a change, what do the Government plan to do to actually tackle the mortgage pain people are suffering?

[Jeremy Hunt]

First, I would say to the right hon. Member that he is talking about something that is being experienced across the world. In fact, interest rates have risen faster in the United States and Canada than they have here. The answer is that we will look at doing everything we can to help people under pressure, but we will not do things that would prolong the inflationary agony that people are going through. We have to be very careful, because a lot of the schemes that are being proposed would actually make inflation worse, not better.

[Stewart Hosie]

On the issue of inflation, the Office for Budget Responsibility said in March that inflation was due to peak at 2.9% at the end of this year. By May, the Bank of England had forecast that it would be 5% at the end of this year, so it had almost doubled in the space of two months. Given that headline inflation is still 8.7% and food inflation is 16.5%, will the Chancellor guarantee today that inflation will be halved to 5%, as promised by the Prime Minister in January of this year?

[Jeremy Hunt]

The IMF, the OBR and the Bank of England all predict that we will hit our target to halve inflation, and I give the right hon. Member this guarantee: we will stick to the plan to do so.

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[Laura Farris (Newbury) (Con)]

15. What fiscal steps he is taking to support the technology sector.

[The Chancellor of the Exchequer (Jeremy Hunt)]

I have set out our national ambition to be the world’s next silicon valley. We are making good progress; last year we were ranked the world’s third largest technology market after the United States and China.

[Alexander Stafford]

Ultimate Battery in Thurcroft in Rother Valley is developing groundbreaking battery technologies and is on track to create 500 new jobs by 2025. What help can the Department give me and my constituents to help burgeoning businesses such as Ultimate Battery, to make Rother Valley and other places across the north technology hubs?

[Jeremy Hunt]

I thank my hon. Friend for his support for this really important sector in Rother Valley. We have a number of schemes, including £541 million of funding available in the Faraday battery challenge. We also have the £1 billion automotive transformation fund. As a result of the efforts that he and many others have made, we now get 40% of our electricity from renewable sources—the second highest in Europe—and much more progress is to come.

[Laura Farris]

I recently convened a roundtable in my constituency with the Minister for Science, Research and Innovation, my hon. Friend the Member for Mid Norfolk (George Freeman) and a number of science and tech businesses. Their No. 1 question was what fiscal support was available for their sector. I am aware that there are numerous schemes, grants and tax relief, but it was notable that they were not well understood by the businesses, and I could not find them published anywhere on the new Department’s website. Could my right hon. Friend put together and publish a package of all the support available to investors and innovators, and how it can be applied for, to maximise the potential of this vital new frontier in west Berkshire and beyond?

[Jeremy Hunt]

That is a fair point. I thank my hon. Friend for the fact that Newbury is a hotbed of technology businesses, with Roc Technologies, Stryker, Edwards Lifesciences and a range of other businesses that she gives a lot of support to. I will write to her listing all those things and I will make sure that it is available on the website of the Department for Science, Innovation and Technology.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The tech sector in rural Cumbria depends on reliable broadband. Communities in Warcop, Sandford, Coupland Beck, Blea Tarn and Ormside in Westmorland have signed up to the community interest company and volunteer group B4RN to provide a gigabit connection for just £33 a month, but the communities have been suddenly designated a low priority area, which means that their vouchers have been removed, putting the whole project at risk. Will the Chancellor commit to supporting those communities, residents and businesses to ensure that they get the vouchers that they were initially promised?

[Jeremy Hunt]

I will happily look into what has happened. We strongly support all rural areas having access to gigabyte broadband, as an important part of our policy. We have made a lot of progress on that. I will look into detail of what is happening in the hon. Gentleman’s area and get back to him.

[Ben Lake (Ceredigion) (PC)]

11. What fiscal steps he is taking to support hospitality businesses.

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[Mr John Baron (Basildon and Billericay) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Jeremy Hunt)]

We will not hesitate in our resolve to support the Bank of England as it seeks to strangle inflation in the economy, and the best policy is to stick to our plan to halve inflation. I also want to make sure that we do everything possible to help families paying higher mortgage rates in ways that do not themselves feed inflation, so later this week I will be meeting the principal mortgage lenders to ask what help they can give to people who are struggling to pay more expensive mortgages and what flexibilities might be possible for families in arrears.

[Mr Baron]

Despite being the gateway to most financial services in the City, I suggest that the London stock exchange is ailing, with CRH and Arm being the latest canaries in the coalmine. While welcoming the Edinburgh reforms, what further consideration has the Chancellor given to my suggestion that tax incentives be introduced to encourage our British pension funds—the big beasts—to invest more in UK equities, given that, since the financial crisis of 2008-09, they have reduced their exposure to equities by 90%, unlike in most other developed economies?

[Jeremy Hunt]

My hon. Friend always speaks extremely wisely on financial matters, and he is absolutely on the money when he talks about the opportunity that would present itself by unlocking £3 trillion of pension fund assets, many of which would get a better return for pensioners if they were invested more in our high-growth businesses, as well as that being a good outcome for the London stock market. All I will say is: watch this space.

[Mr Speaker]

I call the shadow Chancellor.

[Rachel Reeves (Leeds West) (Lab)]

While the Government squabble over parties and peerages, mortgage products are being withdrawn and replaced by mortgages with much higher interest rates. This is a consequence of last year’s Conservative mini-Budget and 13 years of economic failure, with inflation higher here than in similar countries. Average mortgage payments will be going up by a crippling £2,900 this year, so where does the Chancellor think families will get the money to pay the Tory mortgage penalty?

[Jeremy Hunt]

At the autumn statement, we announced £94 billion of support to help families going through very difficult times. That is more support than was ever proposed by Labour. The answer to these pressures is not borrowing an extra £28 billion a year, as people like Paul Johnson are saying that more borrowing means higher inflation, higher interest rates and higher mortgage rates.

[Rachel Reeves]

Is the Chancellor for real? These are the real-life consequences of what is happening under the Conservative Government today, so do not try to pass the buck.

Let me bring this home. In Selby and Ainsty, 12,000 households will be paying, on average, £2,700 more on their mortgage. In Uxbridge and South Ruislip, 10,000 households will be paying, on average, £5,200 more. Each and every family know who is responsible for trashing the economy: the Conservative party. Will the Chancellor apologise for the harm that his Government have caused with the Tory mortgage penalty?

[Jeremy Hunt]

I am proud of our economic record, which has seen our economy grow faster than those of France and Japan since 2010, and at the same rate as Germany. Those mortgage holders in Selby, Uxbridge or Mid Bedfordshire will be paying even more for their mortgages if a Labour Government borrow £100 billion more in the next Parliament, and we will not let that happen.

[Craig Tracey (North Warwickshire) (Con)]

T3. As the Minister knows, having a strong insurance and financial services sector is vital to the growth of our economy, which is one of the Prime Minister’s pledges. So will the Minister confirm that he is doing everything in his power to make that happen, particularly with a view to our international competitiveness in those key sectors?

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[Ian Byrne (Liverpool, West Derby) (Lab)]

T2. I recently met the Minister for Schools to present him with a costed proposal for piloting universal free school meals in Liverpool. He said that he was not ideologically opposed to that but all roads lead to the Treasury, so here we are. Will the Chancellor work with me and that Minister to enable this pilot, which would transform the education, health and wellbeing of thousands of children across my great city?

[Jeremy Hunt]

I will be happy to write to the hon. Gentleman to talk to him about that initiative. We are making great progress in our schools—we have risen to fourth in the global league table for reading—but we can always do more.

[Sir David Evennett (Bexleyheath and Crayford) (Con)]

T6. I welcome my right hon .Friend’s commitment to making inflation and the cost of living his top priority, as it is also a top priority of my constituents. Does he agree that the Institute for Fiscal Studies is entirely correct to say that Labour’s plans for £28 billion of borrowing in its green prosperity plan would simply lead to higher rates of interest and higher inflation?

[Jeremy Hunt]

My right hon. Friend is absolutely right; the answer to inflation is to tackle it, not to make it worse.

[Ian Lavery (Wansbeck) (Lab)]

T4. Real-terms wages are lower now than they were in 2008, which is a disgrace. The north-east has been hit harder than other regions, worst of all on child poverty. The rates of child poverty have shot up, with the result that we have 67% of children in working families living in poverty. Is the Chancellor’s deliberate, brutal policy of wage suppression working? If so, who for?

[Jeremy Hunt]

We understand the pressures that families are going through up and down the country, but we have responded with generous support this year and last of more than £3,000 for the average household. Not only that, but since 2010 the number of children in absolute poverty has fallen by 400,000.

[Theresa Villiers (Chipping Barnet) (Con)]

T7. Paying around half the cost of people’s energy bills and freezing fuel duty has been crucial in helping people with the cost of living, but is there further action the Government can take to get inflation down? Are we on track to halve it by the end of the year?

[Chris Elmore (Ogmore) (Lab)]

T5.   How on earth can the Chancellor begin to understand the worries of ordinary homeowners when it would seem that in 2018 it slipped his mind to declare that he had spent £3.5 million buying seven luxury flats in Southampton as an investment opportunity? Is the reality not that he and the Treasury Front-Bench team are completely out of touch with what homeowners are facing?

[Jeremy Hunt]

With respect to the hon. Gentleman, he should get his facts right before making that kind of suggestion. He got them wrong.

[Anna Firth (Southend West) (Con)]

In-person banking facilities are vital to everyone in Southend West, yet in recent years we have lost all but one of our bank branches. A new community-based post office banking hub model is being rolled out, so will the Minister support my efforts to get one of those into Leigh-on-Sea?

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[Matt Hancock (West Suffolk) (Ind)]

I welcome the work that the Chancellor and the Prime Minister have done to promote work on artificial intelligence done here, and in developing an ecosystem for that. It is clear that the UK has an opportunity to lead on this, especially on regulation, if we get it right, but only if we seize that opportunity now. What is the Chancellor doing to make that happen?

[Jeremy Hunt]

My right hon. Friend is right to say this is a big opportunity. We are home to a third of Europe’s AI start-ups, but we are very aware of the risks of AI. The Government are hosting a global AI summit, with the support of President Biden, this autumn, to ensure we get that regulation absolutely right.

[Sammy Wilson (East Antrim) (DUP)]

Quite rightly, this Question Time has been dominated by questions about inflation and the cost of living. One policy that has not been mentioned is the Government’s net zero policy and the inflationary costs included in it, from green levies of £12 billion to the cost of strengthening the infrastructure and the favourable treatment given to renewable energy firms. While the Minister may condemn the Labour party for its £29 billion green policy spending plan, what is the cost of the Government’s net zero policies to consumers? Are they not picking their pockets dry?

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[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

Ever-increasing food prices mean that some families are having to cut down on the amount they eat. Will the Minister support Labour’s plan to negotiate a new veterinary agreement for agriculture products to reduce the cost for food producers and bring down those crippling food prices?

[Jeremy Hunt]

We will always look at Labour policies, but they are normally not right.

[Alun Cairns (Vale of Glamorgan) (Con)]

Clear policy direction and a strong regulatory framework have led to the UK being the world’s leading centre in financial technology. Does my hon. Friend agree that the crypto industry offers the same opportunity for the UK to exploit?

[Clive Efford (Eltham) (Lab)]

In 2016, Exercise Cygnus tested the country’s preparedness for a pandemic. Was the Government’s response at that time adequate, and what can the Chancellor do in his current role to make sure that we are properly prepared in the future?

[Jeremy Hunt]

I am looking forward to answering questions about that tomorrow afternoon at the covid inquiry. We did what was recommended following Exercise Cygnus. Certainly, Ministers did what they were advised to do, but the operation was focused on pandemic flu. The question that we must ask ourselves is why we did not have a broader focus on the different types of pandemic that could have happened, such as covid.

[Daisy Cooper (St Albans) (LD)]

The Government’s business rates review last autumn was anything but fundamental, because it did not even look at the calculations for fair and maintainable trade, which are hammering the viability of pubs in St Albans. If the Chancellor has in fact abandoned his commitment for a fundamental review of business rates, which he himself called for last summer, will he at least look at the calculations for fair and maintainable trade before any more of our valuable pubs have to close?

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[Jeremy Hunt]

No.

[Mr Speaker]

I call Jim Shannon.