Financial Statement and Budget Report

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Wednesday 6th March 2024 Commons Chamber

[The Chancellor of the Exchequer (Jeremy Hunt)]

As we mourn the tragic loss of life in Israel and Gaza, the Prime Minister reminded us last week of the need to fight extremism and heal divisions, so I start today by remembering the Muslims who died in two world wars in the service of freedom and democracy. We need a memorial to honour them, so following representations from my right hon. Friend the Member for Bromsgrove (Sir Sajid Javid) and others, I have decided to allocate £1 million towards the cost of building one. Whatever your faith, colour or class, this country will never forget the sacrifices made for our future.

In recent times, the UK—and the UK economy—has dealt with a financial crisis, a pandemic and an energy shock caused by war in Europe, yet despite the most challenging economic headwinds in modern history, under Conservative Governments since 2010 growth has been higher than in every large European economy, unemployment has halved, absolute poverty has gone down, and there are 800 more people in jobs for every single day that we have been in office. [Interruption.] Of course, interest rates remain high as we bring down inflation, but because of the progress we have made, because we are delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost of living support, but with permanent cuts in taxation. We do that to give much needed help in challenging times, and because Conservatives know that lower tax means higher growth, and higher growth means more opportunity, more prosperity and more funding for our precious public services. [Interruption.]

[Madam Deputy Speaker]

Order. The Chancellor has hardly said anything—[Interruption.] Order. You cannot get excited yet. Other people want to hear what the Chancellor has to say. It matters, so we will have a bit of good behaviour, please.

[Jeremy Hunt]

Thank you, Madam Deputy Speaker.

If we want that growth to lead to higher wages and higher living standards for every family in every corner of the country, it cannot come from unlimited migration; it can only come by building a high-wage, high-skill economy—not just higher GDP, but higher GDP per head.

That is the difference. The Labour party’s plans would destroy jobs, reduce opportunities and risk family finances with spending that pushes up taxes. Instead of going back to square one, the policies I announce today mean more investment, more jobs, better public services and lower taxes in a Budget for long-term growth.

I start with the updated forecasts from the Office for Budget Responsibility, for which I thank Richard Hughes and his team. First, inflation. When the Prime Minister and I came into office, it was 11%. The latest figures show—[Interruption.]

[Madam Deputy Speaker]

Order. This is not amusing any more. We need to hear what the Chancellor has to say. I can tell who is making the noise, and you simply will not get a chance to speak later. That is the end of it.

[Jeremy Hunt]

When the Prime Minister and I came into office, inflation was 11%, but the latest figures show it is now 4%—more than meeting our pledge last year to halve it. Today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time, nearly a whole year earlier than forecast in the autumn statement.

That did not happen by accident. Whatever the pressures, and whatever the politics, a Conservative Government, working with the Bank of England, will always put sound money first. We also understand that tackling inflation, while necessary, is painful. It means higher interest rates and a period of lower growth, so we have given the average household £3,400 in cost of living support over the past two years. Doing so makes economic as well as moral sense. The OBR predicted real household disposable income per person would fall by 2% in the past year; instead, after that support, it is on track to rise by 0.8%.

Today, I take further steps to help families with cost of living pressures, starting with measures to help the poorest families. We have already abolished higher charges for electricity paid by those on prepayment meters, increased the local housing allowance and raised benefits by double the expected inflation. Today, I focus on those falling into debt. Nearly 1 million households on universal credit take out budgeting advance loans to pay for more expensive emergencies such as boiler repairs or help getting a job. To help make such loans more affordable, I have decided to increase the repayment period for new loans from 12 months to 24 months.

For some people—[Interruption.] I thought Labour Members cared about people on the lowest incomes, but trust them not to want to hear about debt. For some people the best way to resolve debt is through a debt relief order, but getting one costs £90, which can deter the very people who need them most, so, having listened carefully to representations from Citizens Advice, I today relieve pressure on around 40,000 families every year by abolishing that £90 charge completely.

Next, the household support fund. It was set up on a temporary basis and due to conclude at the end of this month. Having listened carefully to representations from the Joseph Rowntree Foundation, the Trussell Trust, the right hon. Member for East Ham (Sir Stephen Timms), my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) and my hon. Friends the Members for Colchester (Will Quince) and for Ruislip, Northwood and Pinner (David Simmonds) among others, I have decided that, with the battle against inflation still not over, now is not the time to stop the targeted help that it offers. We will therefore continue it at current levels for another six months.

Next, I turn to a measure that will help businesses and households more broadly. In the autumn statement I froze alcohol duty until August of this year. Without any action today, it would have been due to rise by 3%. However, I have listened carefully to my right hon. Friends for Altrincham and Sale West (Sir Graham Brady) and for Vale of Glamorgan (Alun Cairns), and to my hon. Friend the Member for Moray (Douglas Ross), who is a formidable champion of the Scottish whisky industry. I also listened to Councillor John Tonks from Ash—a strong supporter of the wonderful Admiral pub—who pointed out the pressures facing the industry. Today, I have decided to extend the alcohol duty freeze until February 2025. That will benefit 38,000 pubs across the UK, on top of the £13,000 saving that a typical pub will get from the 75% business rates discount that I announced in the autumn. We value our hospitality industry. We are backing the great British pub.

Another cost that families and businesses worry about is fuel. The shadow Chancellor complained about the freeze on fuel duty. Labour has opposed it at every opportunity. The Labour Mayor of London wants to punish motorists even more with his ultra low emission zone plans. However, lots of families and sole traders depend on their car. If I did nothing, fuel duty would increase by 13% this month, so instead I have listened to my right hon. Friend the Member for Witham (Priti Patel), my hon. Friends the Members for Stoke-on-Trent North (Jonathan Gullis) and for Dudley North (Marco Longhi) and others, as well as to The Sun newspaper’s “Keep it Down” campaign. I have as a result decided to maintain the 5p cut and freeze fuel duty for another 12 months. That will save the average car driver £50 next year and bring total savings since the 5p cut was introduced to around £250. Taken together with the alcohol duty freeze, that decision also reduces headline inflation by 0.2 percentage points in 2024-25, allowing us to make faster progress towards the Bank of England’s 2% target.

There can be no solid growth without solid finances. An economy based on sound money does not pass its bills to the next generation. When it comes to borrowing, some believe that there is a trade-off between compassion and fiscal responsibility. They are wrong. It is only because we responsibly reduced the deficit by 80% between 2010 and 2019 that we could provide £370 billion to help businesses and families in the pandemic. Labour opposed our plans to reduce the deficit every single step of the way, but, to be fair, they were consistent. In coalition, the Lib Dems supported controlling spending, but now they say that they would prop up a party that will turn on the spending taps. It is the difference between no plan and no principles—and I am delighted that, for once, the right hon. Member for Kingston and Surbiton (Ed Davey) is here to hear that.

Today, we say something different: there is nothing compassionate about running out of money. With the pandemic behind us, we must once again be responsible and build up our resilience to future shocks. That means bringing down borrowing so we can start to reduce our debt, and today’s figures confirm that is happening. Ahead of my first autumn statement in 2022, the OBR forecast that headline debt would rise to above 100% of GDP. Today, it says that it will fall in every year, to just 94% by 2028-29. According to the OBR, underlying debt—which excludes Bank of England debt—will be 91.7% in 2024-25, then 92.8%, 93.2% and 93.2%, before falling to 92.9% in 2028-29, with final year headroom against debt falling of £8.9 billion. Our underlying debt is therefore on track to fall as a share of GDP, meeting our fiscal rule, and we continue to have the second lowest level of Government debt in the G7, lower than that of Japan, France or the United States.

We also meet our second fiscal rule—for public sector borrowing to be below 3% of GDP—three years early. Borrowing falls from 4.2% of GDP in 2023-24 to 3.1%, then 2.7%, 2.3%, 1.6%, and 1.2% in 2028-29. By the end of the forecast, borrowing is at its lowest level of GDP since 2001. None of that, of course, would be possible if Labour implemented its pledge to decarbonise the grid five years early, by 2030; by its own calculations, that costs £28 billion a year to do. Last month, after flip-flopping for months, Labour said that it is not going to spend the £28 billion after all, but will somehow meet its pledge. “Somehow” can only mean one thing: tax rises on working families. Same old Labour!

Today, in contrast, a Conservative Government bring down taxes with borrowing broadly unchanged—in fact, borrowing is slightly lower than in the autumn statement. The fact that we are bringing borrowing down is of particular importance to one very special person: Sir Robert Stheeman is the outgoing chief executive of the Government’s Debt Management Office, and after 20 years of exceptional public service, he is in the Gallery. Thank you, Sir Robert.

I now turn to growth. Just after I became Chancellor, the OBR expected GDP to fall by 1.4% in the following year; in fact it grew, albeit slowly. Now the OBR expects the economy to grow by 0.8% this year and 1.9% next year, which is 0.5% higher than its autumn forecast. After that, growth rises to 2.2%, 1.8%, and 1.7% in 2028. [Interruption.] Opposition Members do not want to hear this, but these are the facts. Since 2010, we have grown faster than Germany, France or Italy—the three largest European economies—and according to the International Monetary Fund, we will continue to grow faster than all three of them in the five years ahead. Surveys by Lloyds and Deloitte show that business confidence is returning. In other words, because we have turned the corner on inflation, we will soon turn the corner on growth.

Today’s OBR forecasts also show that we have made good progress on the Prime Minister’s three economic priorities. Compared to when the three pledges were made, inflation has halved, debt is falling in line with our fiscal rules, and growth is fully 1.5 percentage points higher than predicted. [Interruption.] Labour Members do not have a growth plan, so they might as well listen to ours. As growth returns, our plan is for economic growth, not growth sustained through migration, but growth that raises wages and living standards for families—not just higher GDP, but higher GDP per head. That means sticking to our plan, with a Budget for long-term growth: more investment, more jobs, better public services and lower taxes.

I start with investment. Economists say that stimulating investment is the most effective way to raise productivity, and therefore wages and living standards. Since 2010, we have been doing just that. Business—[Interruption.] Labour Members might want to listen to what I am about to say, because business investment has risen from an average of 9.3% of GDP under Labour to 9.9% under the Conservatives. This year, it will be 10.6% of GDP. That is £30 billion more business investment than if it had continued at Labour levels, and it is still going up.

In the short period since the autumn statement, Nissan has announced that it will build two new electric car models in the UK. Microsoft and Google have announced data centres worth over £3 billion. Thanks to my right hon. Friend the Business Secretary, the global investment summit unlocked £30 billion of investment. In fact, since 2010, greenfield foreign direct investment has been higher here than anywhere else in Europe, and for the last three years the UK has had the third highest levels in the world after the United States and China—and we are not stopping there.

In the autumn statement, I announced that we would introduce permanent full expensing, a £10 billion tax cut for businesses that gives the UK the most attractive investment tax regime of any large European or G7 country. It was welcomed by over 200 business leaders, with the CBI saying it was a game changer and the single most transformational thing we could do to fire up the British economy. Today, I take further steps to boost investment. Having listened to calls from the CBI, Make UK and the British Chambers of Commerce, we will shortly publish draft legislation for full expensing to apply to leased assets, a change I intend to bring in as soon as it is affordable.

We will also help small businesses, which is something close to my heart. As well as the business rates support, and the work on prompt payments that I announced in the autumn, I will provide £200 million of funding to extend the recovery loan scheme as it transitions to the growth guarantee scheme, helping 11,000 small and medium-sized enterprises access the finance they need. Following representations from the Federation of Small Businesses, as well as my hon. Friends the Members for Loughborough (Jane Hunt), for Southend West (Anna Firth), and for Rother Valley (Alexander Stafford), I will reduce the administrative and financial impact of VAT by increasing the VAT registration threshold from £85,000 to £90,000 from 1 April—the first increase in seven years. That will bring tens of thousands of businesses out of paying VAT altogether, and encourage many more to invest and grow.

I now move to measures to address historical under-investment in our nations and regions. Since we started levelling up in 2019, two thirds of all new salaried jobs created have been outside London and the south-east. We have announced 13 investment zones and 12 freeports, which continue to attract investment—including recently, thanks to the efforts of Mayor Ben Houchen, from the Pneuma Group, which is investing £15 million into the Tees Valley investment zone.

Today, working with the Levelling-Up Secretary, I devolve further power to local leaders, who are best placed to promote growth in their areas. I can announce the north-east trailblazer devolution deal, which provides a package of support for the region potentially worth over £100 million. I will devolve powers to Buckinghamshire, Warwickshire and the most beautiful county in England, Surrey. I see the Leader of the Opposition smiling because, like me, he is a Surrey boy. I know he has been taking advice from Lord Mandelson, who yesterday rather uncharitably said he needed to “shed a few pounds”. Ordinary families will shed more than a few pounds if that lot get in. If he wants to join me on my marathon training, he is most welcome.

Today, we continue to spread opportunity throughout the country by allocating £100 million of levelling-up funding to areas including High Peak, Dundee, Conwy, Erewash, Redditch and Coventry to support cultural projects in these communities. That is alongside support for capital projects across the country, including in Bingley. We are expanding the long-term plan for towns to 20 new places, including Darlington—home of the Treasury’s fantastic Darlington economic campus—Coleraine, Peterhead, Runcorn, Harlow, Eastbourne, Arbroath and Rhyl, providing each with £20 million of funding to invest in community regeneration over the next decade. We will provide £15 million in new funding to the West Midlands Combined Authority to support culture, heritage and investment projects, on the recommendation of our go-getting Mayor, Andy Street, and we will allocate £5 million to renovate hundreds of local village halls across England, so that they can remain at the heart of their communities.

Because this is a Conservative and Unionist Government, we will also set aside funding to support the SaxaVord spaceport in Shetland and an agrifood launchpad in mid-Wales, and funding to support Northern Ireland’s businesses in expanding their global trade and investment opportunities. As a result of the decisions we take today, the Scottish Government will receive nearly £300 million in Barnett consequentials; there will be nearly £170 million for the Welsh Government and £100 million for the Northern Ireland Executive. [Interruption.] I do appreciate that a tax-cutting Budget is very uncomfortable for the biggest tax-raisers in the United Kingdom. We also want to level up opportunity across the generations, including by building more houses for young people, and we are on track to deliver over 1 million homes in this Parliament.

Last week, the Levelling-Up Secretary allocated £188 million to supporting projects in Sheffield, Blackpool and Liverpool. Today I go further, allocating £242 million of investment to Barking Riverside and Canary Wharf, which together will build nearly 8,000 houses; Canary Wharf will also be transformed into a new hub for life science companies. We are launching a new £20 million community-led housing scheme that will support local communities in delivering the developments that they want and need. I am pleased to announce the next steps for Cambridge to reach its potential as the world’s leading scientific powerhouse. I confirm that there will be a long-term funding settlement for the future development corporation in Cambridge at the next spending review; there will be over £10 million invested in the coming year to unlock delivery of crucial local transport and health infrastructure.

The final levelling-up measures I announce today support north Wales, of which I have many happy childhood memories. In Mold, following representations from my hon. Friend the Member for Vale of Clwyd (Dr Davies), we will help fund the renovation of Theatr Clywd. I can announce that this week, the Government have reached agreement on a £160 million deal with Hitachi to purchase the Wylfa site in Ynys Môn and the Oldbury site in south Gloucestershire. Ynys Môn has a vital role in delivering our nuclear ambitions, and no one should take more credit for today’s announcement than my tireless, tenacious and turbocharged hon. Friend the Member for Ynys Môn (Virginia Crosbie). More investment by large businesses, more support for small businesses, promoting investment in our nations and regions—all part of a Budget for long-term growth that sticks to our plan to deliver more jobs, better public services and lower taxes.

I turn to one of the most powerful ways to attract investment: supporting our most innovative industries. Outside the US, we have the most respected universities, the biggest financial services sector and the largest tech ecosystem in Europe. We have double the artificial intelligence start-ups of anywhere else in Europe, double the venture capital investment, and a tech economy now double the size of Germany’s and three times the size of France’s. We are on track to become the world’s next silicon valley.

In today’s Budget for long-term growth, I take further steps to attract investment to our technology-related industries. I want our brilliant tech entrepreneurs to not just start here, but stay here, including when the time comes for a stock market listing, so we will build on the Edinburgh and Mansion House reforms to unlock more pension fund capital. We will give new powers to the Pensions Regulator and the Financial Conduct Authority to ensure better value from defined contribution schemes by judging performance on overall returns, not cost.

We will make sure that there are vehicles to make it easier for pension funds to invest in UK growth opportunities, so I am today publishing the names of the winners of the LIFTS—long-term investment for technology and science—competition. But I remain concerned that other markets, such as Australia, generate better returns for pension savers, with more effective investment strategies and more investment in high-quality domestic growth stocks. So I will introduce new requirements for defined-contribution and local government pension funds to disclose publicly their level of international and UK equity investments. I will then consider what further action should be taken if we are not on a positive trajectory towards international best practice.

I also want to create opportunities for a new generation of retail investors to engage with public markets, so we will proceed with a retail sale for part of the Government’s remaining NatWest shares this summer, at the earliest opportunity, subject to supportive market conditions and value for money. We will continue to explore how savers could be allowed to take their pension pots with them when they change job. We will make it easier for people to save for the long term with a new British savings bond, delivered through National Savings and Investments, offering savers a guaranteed rate, fixed for three years.

Today, following calls from over 200 representatives of the City and our high-growth sectors, I will reform the ISA system to encourage more people to invest in UK assets. After a consultation on its implementation, I will introduce a brand-new British ISA, which will allow an additional £5,000 annual investment for investments in UK equity, with all the tax advantages of other ISAs. That will be on top of existing ISA allowances and will ensure that British savers can benefit from the growth of the most promising UK businesses, as well as supporting those businesses with the capital to expand.

I now turn to our other growth industries, starting with clean energy. We want nuclear to provide up to a quarter of our electricity by 2050. As part of that, I want the UK to lead the global race in developing cutting-edge nuclear technologies. I can therefore announce that Great British Nuclear will begin the next phase of the small modular reactor selection process, with companies now having until June to submit their initial tender responses. Our brilliant Secretary of State for Energy Security and Net Zero will also allocate up to £120 million more to the green industries growth accelerator, to build supply chains for new technology, ranging from offshore wind to carbon capture and storage. By January next year, as promised in the autumn statement, we will have a new, faster connections process to the grid up and running. In advanced manufacturing we have announced a further £270 million of investment into innovative new automotive and aerospace research and development projects, building the UK’s capabilities in zero-emission vehicle and clean aviation technologies.

I now turn to our creative industries. We have become Europe’s largest film and TV production centre, with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here. Studio space in the UK has doubled over the last three years and, at the current rate of expansion, next year we will be second only to Hollywood globally. In the autumn statement I committed to providing more tax relief for visual effects in film and high-end TV. I can today confirm that we will increase the rate of tax credit by 5%, and remove the 80% cap for visual effects costs in the audio-visual expenditure credit. Having worked closely with the Secretary of State for Culture, Media and Sport, and listened carefully to representations from companies such as Pinewood, Warner Bros. and Sky Studios, we will provide eligible film studios in England with a 40% relief on their gross business rates until 2034. Having heard representations from the British film industry, Pact, and indeed the Prime Minister, we will introduce a new tax credit for UK independent films with a budget of less than £15 million. For our creative industries more broadly, we will provide £26 million of funding to our pre-eminent theatre, the National Theatre, to upgrade its stages.

I particularly want to recognise the contribution of our creative industries and the tourism that comes from orchestras, museums, galleries and theatres. In the pandemic, we introduced higher 45% and 50% levels of tax relief, which were due to end in March 2025. They have been a lifeline for performing arts across the country. Today, in recognition of their vital importance to our national life, I can announce that I am making those tax reliefs permanent at 45% for touring and orchestral productions, and 40% for non-touring productions. Lord Lloyd Webber says that this will be a once-in-a-generation transformational change that will ensure Britain remains the global capital of creativity.

I suspect that the new theatre reliefs may be of particular interest to the shadow Chancellor, who seems to fancy her thespian skills when it comes to acting like a Tory. The trouble is that we all know how her show ends: higher taxes, like every Labour Government in history—[Interruption.] I am delighted that Labour Members are cheering the fact that Labour Governments always put up taxes. They are right!

I want to mention our life sciences sector, where we will support research by medical charities into diseases such as cancer, dementia and epilepsy with an additional £45 million, including £3 million for Cancer Research UK. But I have long believed that we should be manufacturing medicines as well as developing them, so I can today also announce a brand-new investment by one of our greatest life science companies, AstraZeneca, led by mon ami the irrepressible Sir Pascal Soriot. AstraZeneca made its covid vaccine available to developing countries at cost, as a result saving over 6 million lives. Today, because of the Government’s support for the life sciences sector, it has announced plans to invest £650 million in the UK to expand its footprint on the Cambridge biomedical campus, and fund the building of a vaccine manufacturing hub in Speke in Liverpool. That is more investment and better jobs in every corner of the country in a long-term Budget for growth from a Conservative Government.

One of the biggest barriers to investment is businesses not being able to hire the staff they need. The economy today has around 900,000 vacancies. It would be easy to fill them with higher migration, but with over 10 million adults of working age who are not in work, that would be economically and morally wrong. Those who can work should work, and I have tackled that issue in every Budget and autumn statement I have delivered. A year ago, I abolished the pensions lifetime allowance, which had pushed doctors and others to take early retirement. Ask any doctor what they think about Labour’s plans to bring it back and they will say, “Don’t go back to square one.” In the autumn, with the help of our superb Secretary of State for Work and Pensions, we announced the back to work plan, which will support 1 million adults with medical conditions and reduce the number of people assessed as not needing to work by two thirds.

A year ago, I also announced the biggest ever expansion of childcare—[Interruption.] Just listen. Extending the 30-hour free childcare offer to all children of working parents from nine months. [Interruption.] We have not had a childcare plan from Labour, so Opposition Members might want to listen to ours. Our plan will mean an extra 60,000 parents enter the workforce in the next four years—a tremendous achievement for the Education Secretary, who I think is doing an effing good job. Today, following representations from many people, including the CBI, I announce measures to support the childcare sector to make the new investments it now needs to make. I am guaranteeing the rates that will be paid to childcare providers to deliver our landmark offer for children over nine months old for the next two years. That is more people in work and more jobs, sticking to our plan in a long-term Budget for growth.

I now turn to public services. [Interruption.] I thought they were supposed to be interested in public services—[Interruption.] I can wait.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. A little bit of murmuring is normal, but I should not be able to hear what Members are saying over there. That is clearly out of order. Let us have some courtesy.

[Jeremy Hunt]

Thank you, Madam Deputy Speaker.

Good public services need a strong economy to pay for them, but a strong economy also needs good public services. In 2010, schools in the UK were behind Germany, France and Sweden in the OECD’s PISA—programme for international student assessment—education rankings for reading and maths. Now, after Conservative reforms, we are ahead of them. Burglaries and violent crime have halved in the last 14 years after we invested in 20,000 more police officers. Our armed forces remain the most professional and best-funded in Europe, with defence spending already more than 2% of GDP. We are providing more military support to Ukraine than nearly any other country, and our spending will rise to 2.5% as soon as economic conditions allow. The NHS is still recovering from the pandemic but has 42,000 more doctors and 71,000 more nurses than it did under Labour—that is 250 more doctors and 400 more nurses for every single month that we have been in office.

Resources matter, of course, which is why, despite all the economic shocks we have faced, overall spending on public services has gone up since 2010—in the case of the NHS, by more than a third in real terms. Although spending has continued to rise every year, public sector productivity still remains below pre-pandemic levels by nearly 6%. This demonstrates that the way to improve public services is not always more money or more people; we also need to run them more efficiently. We need a more productive state, not a bigger state.

In autumn 2022, I set day-to-day spending to increase by 1% a year in real terms over the next Parliament. Some say that is not enough and we should raise spending by more, and others say it is too much and we should cut it to improve efficiency—neither are right. It is not fair to ask taxpayers to pay for more when public service productivity has fallen; nor would it be wise to reduce that funding, given the pressures that public services face. So I am keeping the planned growth in day-to-day spending at 1% in real terms, but we are going to spend it better. [Interruption.] The Opposition do not have a plan for public services, as with everything else, so why not listen to ours?

Today I am announcing a landmark public sector productivity plan that restarts public service reform and changes the Treasury’s traditional approach to public spending. I start with our biggest and most important public service: the NHS. One of my greatest privileges was to be Health Secretary. Thanks to the NHS, I have three gorgeous children, the oldest of whom has been patiently listening in the Gallery. The NHS is, rightly, the biggest reason most of us are proud to be British, but the systems that support its staff are often antiquated. Doctors, nurses and ward staff spend hours every day filling out forms when they could be looking after patients. [Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I do not like to interrupt the Chancellor, but Mr Streeting, you are too close to me to be shouting that loudly. If you want to shout that loudly, you should go away and sit up there. I apologise for interrupting the Chancellor.

[Jeremy Hunt]

When patients do not show up or one member of a team is ill, operating theatres are left empty despite long waiting lists. When we published the NHS long-term workforce plan, I asked the NHS to put together a plan to transform its efficiency and productivity. I wanted better care for patients, more job satisfaction for staff and better value for taxpayers. Making changes on the scale we need is not cheap. The investment needed to modernise NHS IT systems so they are as good as the best in the world costs £3.4 billion, but it helps unlock £35 billion of savings—ten times that amount—so in today’s Budget for long-term growth, I have decided to fund the NHS productivity plan in full.

With that new investment, we will slash the 13 million hours lost by doctors and nurses every year to outdated IT systems. We will cut down and potentially halve form filling by doctors by using artificial intelligence. We will digitise operating theatre processes, allowing the same number of consultants to do an extra 200,000 operations a year. We will fund improvements to help doctors read MRI and CT scans more accurately and quickly, speeding up results for 130,000 patients every year and saving thousands of lives, something that I know would have delighted my brother Charlie, who I recently lost to cancer.

We will improve the NHS app so that it can be used to confirm and modify all appointments, reducing up to half a million missed appointments annually and improving patient choice. We will set up a new NHS staff app to make it easier to roster electronically and end the use of expensive off-framework agencies. As a result of this funding, all hospitals will use electronic patient records, making the NHS the largest digitally integrated healthcare system in the world. Today’s announcement doubles the amount the NHS is investing on digital transformation over three years.

On top of this longer-term transformation, we will also help the NHS meet pressures in the coming year with an additional £2.5 billion. That will allow the NHS to continue its focus on reducing waiting times and brings the total increase in NHS funding since the start of the Parliament to 13% in real terms. The NHS was there for us in the pandemic, and today with nearly £6 billion of additional funding, a Conservative Government are there for the NHS.

The head of the NHS, Amanda Pritchard today said that this investment shows that

“the government continues to back the NHS”.

She said that, as a result of the investment, the NHS can commit to delivering 1.9% annual productivity growth over the next Parliament, more than double the average productivity growth in public services between 2010 and 2019.

But today is not just about the NHS. I want this groundbreaking agreement with the NHS to be a model for all our public services. Across education, the police, the courts and local government, I want to see more efficient, better-value and higher-quality public services, so today I can announce that in the next spending review, the Treasury will do things differently. We will prioritise proposals that deliver annual savings within five years equivalent to the total cost of the investment required, and today we make a start with some excellent proposals.

Violence reduction units and hotspot policing have prevented an estimated 136,000 knife crimes and other violent offences, as well as over 3,000 hospital admissions. Every crime costs money, so we will provide £75 million to roll that model out in England and Wales. Police officers waste around eight hours a week on unnecessary admin. With higher productivity, we could free the equivalent of 20,000 police officers over a year. We will spend £230 million rolling out time-saving and money-saving technology that speeds up police response times by allowing people to report crimes by video call and, where appropriate, use drones as first responders.

Too many legal cases, particularly in family law, should never go to court, and it would cost us less if they did not, so we will spend £170 million to fund non-court resolution, reduce reoffending and digitise the court process. Too many children in care end up being looked after by unregistered providers that are much more expensive, so we will invest £165 million over the next four years to reduce that cost by increasing the capacity of the children’s homes estate.

Special educational need provision can be excellent when outsourced to independent sector schools, but also expensive, so we will invest £105 million over the next four years to build 15 new special free schools to create additional high-quality places and increase choice for parents. We will also put in place a plan to realise the tens of billions of savings recommended in an excellent speech by the head of the National Audit Office.

The OBR says that a 5% increase in public sector productivity would be the equivalent of about £20 billion in extra funding. With these plans, we can deliver that and more. If we ensure that they are cash-releasing savings, as we are committed to doing, it will be possible to live with more constrained spending growth without cutting services valued by the public. So with the energy and drive of my talented Chief Secretary to the Treasury, we launch our public sector productivity plan in today’s Budget for long-term growth: more investment, more jobs, better public services and—one more thing—lower taxes.

Keeping taxes down matters to Conservatives in a way that it never can for Labour. We believe that in a free society the money people earn does not belong to the Government; it belongs to them, and if we want to encourage hard work, we should let people keep as much of their own money as possible. Conservatives look around the world at economies in North America and Asia and notice that countries with lower taxes generally have higher growth. Economists argue about cause and correlation, but we know that lower-taxed economies have more energy, more dynamism and more innovation. We know that is Britain’s future, too.

Before I explain how we will bring down taxes, I will start with some measures to make our system simpler and fairer. To discourage non-smokers from taking up vaping, we are today confirming the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design. Because vapes can also play a positive role in helping people quit smoking, we will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking. I will make a one-off adjustment to rates of air passenger duty on non-economy flights only to account for high inflation in recent years, and I will provide HMRC with the resources it needs to ensure that everyone pays the tax they owe, leading to an increase in revenue collected of over £4.5 billion across the forecast period.

Next, I turn to property taxation. In recent months, following tenacious representation from my hon. Friends the Members for St Austell and Newquay (Steve Double), for North Devon (Selaine Saxby), for Cities of London and Westminster (Nickie Aiken), for Torbay (Kevin Foster) and for Truro and Falmouth (Cherilyn Mackrory), I have been looking closely at our furnished holiday lettings tax regime. I am concerned that that regime is creating a distortion meaning that not enough properties are available for long-term rental by local people. So to make the tax system work better for local communities, I am going to abolish the furnished holiday lettings regime.

I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as multiple dwellings relief. I see the deputy leader of the Labour party, the right hon. Member for Ashton-under-Lyne (Angela Rayner), paying close attention, given her multiple dwellings—[Interruption.] She—[Interruption.]

[Madam Deputy Speaker]

Order. Too much excitement. We have not actually heard—because we cannot hear—what the Chancellor is trying to say. [Interruption.] Okay, I can hear who is shouting, and they will not get to speak later.

[Jeremy Hunt]

I am sorry to disappoint the right hon. Member, but multiple dwellings relief was not actually designed for her; it was intended—[Interruption.]. It was intended to support investment in the private rented sector, but an external evaluation found no strong evidence that it had done so, and that it was being regularly abused, so I am going to abolish it.

Finally, as part of our look at property taxation in this Budget, both the Treasury and the OBR have looked at the costs associated with our current levels of capital gains tax on property and concluded that if we reduced the higher 28% rate that exists for residential property, we would in fact increase revenues because there would be more transactions. For the first time in history, both the Treasury and the OBR have discovered their inner Laffer curve. So today I will reduce the higher rate of property capital gains tax from 28% to 24%—that really is for you, Angela. [Laughter.] I now—[Interruption.]

[Madam Deputy Speaker]

Order. I have had enough from Opposition Members and I am definitely not having it from Government Members.

[Jeremy Hunt]

I now turn to oil and gas. Unlike the Labour party, we want to encourage investment in the North sea, so we will retain generous investment allowances for the sector. Following representations from my hon. Friend the Member for Banff and Buchan (David Duguid), we will also legislate in the Finance Bill to abolish the energy profits levy should market prices fall to their historical norm for a sustained period of time. But because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits, so I will extend the sunset on the energy profits levy for an additional year to 2029, raising £1.5 billion.

Next, I turn to the taxes paid by those who are resident in the UK but not domiciled here for tax purposes. [Hon. Members: “Ah!”] This is a category of people known as non-doms. Nigel Lawson wanted to end the non-dom regime in his great tax reforming Budget of 1988, which is where I suspect the Labour party got the idea from. I, too, have always believed that provided we protect the UK’s attractiveness to international investors, those with the broadest shoulders should pay their fair share. After looking at the issue over many months, I have concluded that we can indeed introduce a system that both is fairer and remains competitive with other countries, so the Government will abolish the current tax system for non-doms, get rid of the outdated concept of domicile—[Interruption.] I aim to please all parts of the House in all my Budgets. We will replace—[Interruption.]

[Madam Deputy Speaker]

Order. This is impossible. [Interruption.] Order. Could you please shout more quietly? [Laughter.]

[Jeremy Hunt]

We will replace the non-dom regime with a modern, simpler and fairer residency-based system. From April 2025, new arrivals to the UK will not be required to pay any tax on foreign income and gains for their first four years of UK residency: a more generous regime than at present, and one of the most attractive offers in Europe. But, after four years, those who continue to live in the UK will pay the same tax as other UK residents. Recognising the contribution of many of these individuals to our economy, we will put in place transitional arrangements for those benefiting from the current regime. That will include a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK, so it can be spent and invested here—a measure that will attract onshore an additional £15 billion of foreign income and generate more than £1 billion of extra tax.

Overall, abolishing non-dom status will raise £2.7 billion a year by the end of the forecast period. The Opposition planned to use that money for spending increases, but today a Conservative Government make a different choice. We use that revenue to help cut taxes on working families. Many of those families depend on child benefit, but the way that we treat child benefit in the tax system is confusing and unfair. It is a lifeline for many parents because it helps with the additional costs associated with having children. When it works, it is good for children, good for parents, and good for the economy because it helps people into work.

We currently withdraw child benefit when one parent earns over £50,000 a year. That means that two parents earning £49,000 a year receive the benefit in full, but a household earning a lot less than that does not if just one parent earns over £50,000. Today I set out plans to end that unfairness. Doing so requires significant reform to the tax system, including allowing HMRC to collect household-level information. We will therefore consult on moving the high-income child benefit charge to a household-based system, to be introduced by April 2026. But because that is not a quick fix, I make two changes today to make the current system fairer.

Following representations from my hon. Friends the Members for Penistone and Stocksbridge (Miriam Cates), for Carshalton and Wallington (Elliot Colburn), for Bassetlaw (Brendan Clarke-Smith) and for West Worcestershire (Harriett Baldwin), along with many others, I confirm that from this April, the high-income child benefit charge threshold will be raised from £50,000 to £60,000. We will raise the top of the taper at which it is withdrawn to £80,000. That means that no one earning under £60,000 will pay the charge, taking 170,000 families out of paying it altogether. Because of the higher taper and threshold, nearly half a million families with children will save an average of £1,300 next year. According to the OBR, this change will see an increase in hours among those already working to the equivalent of 10,000 more people entering the workforce. More investment, more jobs, better public services and lower tax.

There is one further set of changes that I want to make today. The way we tax people’s income is particularly unfair. Those who get their income from having a job pay two types of tax: national insurance contributions and income tax. Those who get it from other sources pay only one. This double taxation of work is unfair. The result is a complicated system that penalises work instead of encouraging it. If we are to build a high-wage, high-skill economy not dependent on migration and to encourage people not in work to come back to work, we need a simpler, fairer tax system that makes work pay. That is why I cut national insurance contributions in the autumn. By reducing the penalty on work, the OBR said that that tax cut would lead to the equivalent of 94,000 more people in work. In other words, it would fill more than one in 10 vacancies throughout the economy. Lower taxes, more jobs and higher growth.

Today, because of the progress that we have made in bringing down inflation, because of the additional investment flowing into the economy, because we have a plan for better and more efficient public services, and because we have asked those with the broadest shoulders to pay a bit more—[Interruption.]

[Madam Deputy Speaker]

Order. Mr Perkins—[Interruption.] I can manage, thank you very much. I have heard you five times. I have let you get away with it, but that is enough. One more strike and you’re out.

[Jeremy Hunt]

I know how hard it is for the Opposition to listen to arguments for lower taxes. That is the difference.

Because we have asked those with the broadest shoulders to pay a bit more, today I go further. From 6 April, employee national insurance will be cut by another 2p, from 10% to 8%, and self-employed national insurance will be cut from 8% to 6%. That means an additional £450 a year for the average employee, or £350 for someone who is self-employed. When combined with the autumn reductions, it means 27 million employees will get an average tax cut of £900 a year, and 2 million of the self-employed will get a tax cut averaging £650. Those changes will make our system simpler and fairer, and will grow our economy by rewarding work. The OBR says that, when combined with the autumn reduction, our national insurance cuts will mean the equivalent of 200,000 more people in work—filling one in five vacancies, and adding 0.4% to GDP and 0.4% to GDP per head.

This is the second fiscal event in which we have reduced employee and self-employed national insurance. We have cut it by one third in six months without increasing borrowing and without cutting spending on public services. That means that the average earner in the UK now has the lowest effective personal tax rate since 1975. Their effective taxes are now lower than in America, France, Germany or any G7 country. Because Conservatives believe that making work pay is of the most fundamental importance, and because we believe that the double taxation of work is unfair, our long-term ambition is to end this unfairness. When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today, so that we truly make work pay.

We stick to our plan with a Budget for long-term growth. It delivers more investment, more jobs, better public services and lower taxes. However, dynamism in an economy does not come from Ministers in Whitehall but from the grit and determination of people who take risks, work hard and innovate—not Government policies but people power. It is to unleash people power that today we put this country back on a path to lower taxes: a plan to grow the economy versus no plan; a plan for better public services versus no plan; a plan to make work pay versus no plan. Growth up, jobs up and taxes down. I commend this statement to the House.

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 motions:—

(a) Stamp duty land tax (first-time buyers’ relief: new leases acquired on bare trust) (motion no. 8);

(b) Stamp duty land tax (registered providers of social housing) (motion no. 9);

(c) Stamp duty land tax (purchases by public bodies) (motion no. 10);

(d) Value added tax (late payment interest and repayment interest) (motion no. 22).—(Jeremy Hunt.)

[Madam Deputy Speaker (Dame Eleanor Laing)]

As many as are of that opinion say Aye—[Hon. Members: “Aye!”] Of the contrary, No—[Hon. Members: “No!”] [Interruption.] Order. Let me explain, for the clarification of the House, that the Question on the provisional collection of taxes is asked at this stage. All Members will have the opportunity, having heard the debate in detail, to vote on each of the motions on Tuesday 12 March, at the end of the Budget debate. I would hesitate to call a Division at this point, when the House and the world is awaiting the response from the Leader of the Opposition. [Interruption.]

I will put the Question again, and if it is very clear to me that there are more Ayes than Noes, I will take the decision on the voices. The Question is—

Autumn Statement

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Wednesday 22nd November 2023 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Financial Statement and Budget Report

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Wednesday 15th March 2023 Commons Chamber

[The Chancellor of the Exchequer (Jeremy Hunt)]

Madam Deputy Speaker, in the face of enormous challenges, I report today on a British economy which is proving the doubters wrong. In the autumn, we took difficult decisions to deliver stability and sound money. Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked. The International Monetary Fund says our approach means the UK economy is on the right track, but we remain vigilant and will not hesitate to take whatever steps are necessary for economic stability.

Today, the Office for Budget Responsibility forecasts that, because of changing international factors and the measures I take, the UK will not now enter a technical recession this year. It forecasts we will meet the Prime Minister’s priorities to halve inflation, reduce debt and get the economy growing. We are following the plan and the plan is working. But that is not all we have done. In the face of a cost of living crisis, we have demonstrated our values by protecting struggling families with a £2,500 energy price guarantee, one-off support and the uprating of benefits with inflation. Taken together, these measures are worth £94 billion over this year and next—one of the largest support packages in Europe. That averages over £3,300 of cost of living help for every household in the country.

Today, we deliver the next part of our plan: a Budget for growth. Not just the growth that comes when you emerge from a downturn, but long-term, sustainable, healthy growth that pays for our NHS and schools, finds jobs for young people and provides a safety net for older people, all while making our country one of the most prosperous in the world—prosperity with a purpose. That is why growth is one of the Prime Minister’s five priorities for our country. I deliver that today by removing obstacles that stop businesses investing, by tackling labour shortages that stop them recruiting, by breaking down barriers that stop people working and by harnessing British ingenuity to make us a science and technology superpower.

I start with the forecasts produced by Richard Hughes and his team at the independent Office for Budget Responsibility, whom I thank for their diligent work. They have looked in detail at the Prime Minister’s economic priorities. The first of those is to halve inflation. Inflation destroys the value of hard-earned pay, deters investment and foments industrial strife. This Government remain steadfast in our support for the independent Monetary Policy Committee at the Bank of England as it takes action to return inflation to the 2% target. Despite continuing global instability, the OBR reports today that inflation in the UK will fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023. That is more than halving inflation. High inflation is the root cause of the strikes we have seen in recent months. We will continue to work hard to settle those disputes, but only in a way that does not fuel inflation. Part of the fall in inflation predicted by the OBR happens because of additional measures I take today.

First, I recognise that even though wholesale energy prices have been falling, there is still enormous pressure on family finances. Some people remain in real distress and we should always stand ready to help where we can. So after listening to representations from Martin Lewis and other experts, I today confirm that the energy price guarantee will remain at £2,500 for the next three months. This means the £2,500 cap for the typical household will remain in place when energy prices remain high, ahead of an expected fall in prices from July. This measure will save the average family a further £160 on top of the energy support measures already announced.

The second measure concerns over 4 million households on prepayment meters. They are often the poorest households, but they currently pay more than comparable customers on direct debit. Ofgem has already agreed with suppliers a temporary suspension of forced installations of prepayment meters, but today I go further and confirm that we will bring their charges in line with comparable direct debit charges. Under a Conservative Government, the energy premium paid by our poorest households is coming to an end.

Next, I have listened to representations from my hon. Friends the Members for East Devon (Simon Jupp), for North Cornwall (Scott Mann), for Colne Valley (Jason McCartney) and for Central Suffolk and North Ipswich (Dr Poulter) about the risk to community facilities, especially swimming pools, caused by high costs. When times are tough, such facilities matter even more. [Interruption.] Today, I am—[Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We want to hear what the Chancellor of the Exchequer is actually saying. Enough.

[Jeremy Hunt]

Today I am providing a £63 million fund to keep our public leisure centres and pools afloat. I have also heard from the charities Minister, my right hon. Friend the Member for Pudsey (Stuart Andrew), and his Secretary of State, my right hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), about the brilliant work that third sector organisations are doing to help people struggling in tough times. They can often reach people in need that central or local government cannot, so I will give his Department £100 million to support thousands of local charities and community organisations to do their fantastic work.

I also note the personal courage of one of my predecessors, my right hon. Friend the Member for Bromsgrove (Sajid Javid), in talking about the tragedy of suicide and the importance of preventing it. We already invest a lot in this area, but I will assign an extra £10 million over the next two years—nearly a million pounds for every year that he has been in Parliament—to help the voluntary sector play an even bigger role in stopping more families experiencing that intolerable heartache.

My penultimate cost of living measure concerns one of our other most treasured community institutions, the great British pub. In December, I extended the alcohol duty freeze until 1 August, after which duties will go up in line with inflation in the usual way. But today I will do something that was not possible when we were in the EU and significantly increase the generosity of draught relief, so that from 1 August the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets. It is a differential a Conservative Government will maintain as part of a new Brexit pubs guarantee. [Hon. Members: “More.”] British ale is warm, but the duty on a pint is frozen. And even better, thanks to the Windsor framework negotiated by my right hon. Friend the Prime Minister, that change will now apply to every pub in Northern Ireland.

Finally, I have heard the representations from my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis), my right hon. Friend the Member for Witham (Priti Patel), my hon. Friend the Member for South Thanet (Craig Mackinlay) and The Sun newspaper about the impact on motorists of the planned 11p rise in fuel duty. I notice the party opposite called for a freeze on this duty. Somehow they forgot to tell the British people they have voted against every single fuel duty freeze for the last 12 years. Because inflation remains high, I have decided now is not the right time to uprate fuel duty with inflation or increase the duty, so here is what I am going to do: for a further 12 months I am going to maintain the 5p cut and I am going to freeze fuel duty too. That saves the average driver £100 next year and around £200 since the 5p cut was introduced.

Our energy price guarantee, fuel duty and duty on a pint, all frozen in today’s Budget. That does not just help families: it helps the economy too, because their combined impact reduces CPI inflation by nearly three quarters of a per cent. this year, lowering inflation when it is particularly high.

I now turn to the Prime Minister’s second priority, which is to reduce debt. Here too our plan is on track. Underlying debt is forecast to be 92.4% of GDP next year, then 97.3%, 94.6%, 94.8%, before falling to 94.6% in 2027-28. We are meeting the debt priority. And with a buffer of £6.5 billion, it means we are meeting our fiscal rule to have debt falling as a percentage of GDP by the fifth year of the forecast.

As a proportion of GDP, our debt remains lower than the USA, Canada, France, Italy and Japan and, because of the decisions I take today and the improved outlook for public finances, underlying debt in five years’ time is now forecast to be nearly 3 percentage points of GDP lower than it was in the autumn. That means more money for our public services and a lower burden for future generations—deeply held Conservative values which we put into practice today.

At the autumn statement, I also announced that public sector net borrowing must be below 3% of GDP over the same period. The OBR confirmed today that we are meeting that rule, with a buffer of £39.2 billion. In fact our deficit falls in every single year of the forecast, with borrowing falling from 5.1% of GDP in ’23-24, to 3.2%, to 2.8%, to 2.2% and 1.7% in ’27-28.

Even better, in the final two years of the forecast, our current budget is in surplus, meaning we only borrow for investment and not for day-to-day spending. Day-to-day departmental spending will grow at 1% a year on average in real terms after ’24-25 until the end of the forecast period. Capital plans are maintained at the same level set at the autumn statement. We will uprate tobacco duty and we will freeze the gross gaming duty yield bands. We are also maintaining the starting rate for savings and ISA subscription limits, and we will bring forward a range of measures to tackle promoters of tax avoidance schemes. Taken together, today’s measures lead to a slightly lower overall tax burden for the rest of the Parliament compared with the OBR’s autumn forecast. Other parties run out of money, but a Conservative Government are reducing borrowing and improving our public finances. By doing so, we are on track to halve inflation, get debt falling and grow our economy, which I turn to next.

Growth is the Prime Minister’s third priority and the focus of today’s Budget. Thirteen years ago, we inherited an economy that had crashed—[Interruption.] Opposition Members might want to listen to this, because since 2010, we have grown more than major countries like France, Italy or Japan, and about the same as Europe’s largest economy, Germany. We have halved unemployment, we have cut inequality and we have reduced the number of workless households by 1 million.

For the first time ever, because of rises in tax thresholds made by successive Conservative Chancellors, people in our country can earn £1,000 a month without paying a penny of tax or national insurance. The Labour party opposed those tax reductions, but they have helped lift 2 million people out of absolute poverty, after housing costs, including 400,000 pensioners and 500,000 children. That averages 80 pensioners and 100 children lifted out of poverty for every single day we have been in office.

Today, we face the future with extraordinary potential. The World Bank said that of all big European countries, we are the best place to do business. Global chief executives say that apart from America and China, we are the best country to invest in. We became the second country in the world to have a stock of foreign direct investment worth $2 trillion, and London has just pipped New York and 53 other global cities to be the best place in the world for female entrepreneurs.

Declinists are wrong about our country for another reason, which is our strength in new industries that will shape this century. Over the last 13 years, under Conservative leadership, we have become the world’s third trillion-dollar tech economy after the US and China. We have built the largest life sciences sector in Europe, producing a covid vaccine that saved 6 million lives and a treatment that saved 1 million more.

Our film and TV industry has become Europe’s largest, with our creative industries growing at twice the rate of the economy; our advanced manufacturing industries produce around half the world’s large civil aircraft wings; and thanks to a clean energy miracle, we have become a world leader in offshore wind. Other parties talk about a green energy revolution, so I gently remind them that nearly 90% of our solar power was installed in the last 13 years—showing it is the Conservatives who fix the roof when the sun is shining.

Let us turn now to what the OBR says about our growth prospects. In November, it expected that the UK economy would enter recession in 2022 and contract by 1.4% in 2023. That left many families feeling concerned about the future. But today, the OBR forecasts we will not enter a recession at all this year, with a contraction of just 0.2%. After this year, the UK economy will grow in every single year of the forecast period, by 1.8% in 2024, then 2.5%, 2.1%, and 1.9% in 2027. It also expects the unemployment rate to rise by less than one percentage point to 4.4%, with 170,000 fewer people out of work compared with its autumn forecast.

That return to growth has direct consequences for our role on the global stage. I am proud that we are giving the brave people of Ukraine more military support than anyone else in Europe. On Monday, we were able to go even further, with my right hon. Friend the Prime Minister announcing a £5 billion package of funding for the Ministry of Defence—an additional £2 billion next year and £3 billion the year after. Today, following representations from our persuasive Defence Secretary, I confirm that we will add a total of £11 billion to our defence budget over the next five years, and it will be nearly 2.25% of GDP by 2025.We were the first large European country to commit to 2% of GDP for defence, and we will now raise that to 2.5% as soon as fiscal and economic circumstances allow.

Following representations from the equally persuasive Minister for Veterans’ Affairs, I am today also increasing support for our brave ex-servicemen and women. We will provide a package worth over £30 million to increase the capacity of the Office for Veterans’ Affairs, support veterans with injuries returning from their service and increase the availability of veteran housing.

But to be Europe’s biggest defender of democracy, we must build Europe’s most dynamic economy. That means tackling our long-standing productivity issues, including two in particular which I address today: lower business investment and higher economic inactivity than other countries. Too often companies struggle to recruit, and even when they do, output per employee is lower. So today I set out the four pillars of our industrial strategy to address these issues. As colleagues will know from my Bloomberg speech, they all conveniently start with the letter E: enterprise, employment, education and everywhere. I start with everywhere—[Interruption.] Well, Opposition Members may not want to level up growth across the United Kingdom, but we do.

This Government were elected on a mandate to level up. We have already allocated nearly £4 billion to over 200 projects across the country through the first two rounds of the levelling-up fund. A third round will follow. Since we started focusing on levelling up, 70% of the growth in salaried jobs has come from outside London and the south-east, and today we take further steps. Canary Wharf and the Liverpool docks were two outstanding regeneration projects that happened under a previous Conservative Government. I pay tribute to Lord Heseltine for making them happen, because they transformed the lives of thousands of people. They showed what is possible when entrepreneurs, Government and local communities come together.

So today I announce that we will deliver 12 new investment zones—12 potential Canary Wharfs. In England, we have identified the following areas as having the potential to host one: west midlands, Greater Manchester, the north-east, South Yorkshire, West Yorkshire, east midlands, Teesside and, once again, Liverpool. There will also be at least one in each of Scotland, Wales and Northern Ireland. To be chosen, each area must identify a location where it can offer a bold and imaginative partnership between local government and a university or research institute in a way that catalyses new innovation clusters. If the application is successful, it will have access to £80 million of support for a range of interventions, including skills, infrastructure, tax reliefs and business rates retention.

Working together with our formidable Levelling Up Secretary, I also want to give some further support to levelling up areas under the E of everywhere. First, I will invest over £200 million in high-quality local regeneration projects across England, including the regeneration of Tipton town centre and the Marsden New Mills redevelopment scheme. I am also announcing a further £161 million for regeneration projects in mayoral combined authorities and the Greater London Authority, and I will make over £400 million available for new levelling-up partnerships in areas that include Redcar and Cleveland, Blackburn, Oldham, Rochdale, Mansfield, south Tyneside and Bassetlaw.

Having listened to the case for better local transport infrastructure from many hon. Members, I can announce a second round of the city region sustainable transport settlements, allocating £8.8 billion over the next five-year funding period. Following a wet then cold winter, I have also received particularly strong representations from my hon. Friends the Members for North Devon (Selaine Saxby), for South West Devon (Sir Gary Streeter) and for Newton Abbot (Anne Marie Morris), as well as Councillor Peter Martin from my own constituency, about the curse of potholes. The spending review allocated £500 million every year to the potholes fund, but today I have decided to increase that fund by a further £200 million next year to help local communities tackle this problem.

For Scotland, Wales and Northern Ireland, this Budget delivers not only a new investment zone but an additional £320 million for the Scottish Government, £180 million for the Welsh Government and £130 million for the Northern Ireland Executive as a result of Barnett consequentials. On top of that, in Scotland I can announce up to £8.6 million of targeted funding for the Edinburgh festivals as well as £1.5 million funding to repair the Cloddach bridge. I will provide £20 million of funding for the Welsh Government to restore the Holyhead breakwater, and in Northern Ireland I am allocating up to £3 million to extend the tackling paramilitarism programme and up to £40 million to extend further and higher education participation.

But for levelling up to truly succeed, we need to unleash the civic entrepreneurship that is only possible when elected local leaders are able to fund and deliver solutions to their own challenges. That means giving them responsibility for local economic growth and the benefit from the upside when it happens. So this Government will consult on transferring responsibilities for local economic development from local enterprise partnerships to local authorities from April 2024.

I will also boost Mayors’ financial autonomy by agreeing multi-year single settlements for the west midlands and the Greater Manchester Combined Authority in the next spending review, something I intend to roll out for all mayoral areas over time. I have also agreed a new long-term commitment so that they can retain 100% of their business rates, something I also hope to expand to other areas. Investment zones, regeneration projects, levelling-up partnerships, local transport infrastructure and business rates retention—more control for local communities over their economic destiny, so we will level up wealth and opportunity everywhere.

Today’s priority is the Prime Minister’s promise to grow the economy. We have talked about making that growth happen everywhere, so I now move on to my second E—enterprise. We need to be—[Interruption.] Well, this has never been something of interest to the Labour party, but the Conservatives will not rest until we are Europe’s most dynamic enterprise economy, and under a Conservative Government that is exactly what has been happening. Since 2010, we have 1 million more businesses in the UK—a bigger increase than Germany, France or Italy—but I want another million and another million after that. So today I bring forward enterprise measures in these three areas: to lower business taxes, to reduce energy costs and to support our growth industries.

Let us start with business taxation. Conservatives know the importance of a competitive tax regime. We already have lower levels of business taxation than France, Germany, Italy or Japan, but I want us to have the most pro-business, pro-enterprise tax regime anywhere. Even after the corporation tax rise this April, we will have the lowest headline rate in the G7—lower than any period under the last Labour Government. Only 10% of companies will pay the full 25% rate, but even at 19% our corporation tax did not incentivise investment as effectively as countries with higher headline rates. The result is less capital investment and lower productivity than countries like France and Germany.

We have already taken measures to address this. For larger businesses, we had the super deduction, introduced by my right hon. Friend the Prime Minister, which ends this month. For smaller businesses, we increased the annual investment allowance to £1 million, meaning 99% of all businesses can deduct the full value of all their investment from that year’s taxable profits. If the super deduction was allowed to end without a replacement, we would have fallen down the international league tables on tax competitiveness and damaged growth. As a Conservative, I could not allow that to happen.

Today, I can announce that we will introduce a new policy of full capital expensing for the next three years, with an intention to make it permanent as soon as we can responsibly do so. That means that every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits. It is a corporation tax cut worth an average of £9 billion a year for every year that it is in place, and its impact on the economy will be huge. The OBR says that it will increase business investment by 3% for every year that it is in place. This decision makes us the only major European country with full expensing and gives us the joint most generous capital allowance regime of any advanced economy.

I understand that the Labour party is reviewing business taxes. Let me save it the bother. It puts them up, and we cut them.

I also want to make our taxes more competitive in our life science and creative industry sectors. In the autumn, I said I would return with a more robust research and development tax credit scheme for smaller research-intensive companies. Today, I am introducing an enhanced credit which means that if a qualifying small or medium-sized business spends 40% or more of its total expenditure on R&D, it will be able to claim a credit worth £27 for every £100 that it spends. That means an eligible cancer drug company spending £2 million on R&D will receive over £500,000 to help it to develop breakthrough treatments. That is a £1.8 billion package of support helping 20,000 cutting-edge companies who, day by day, are turning Britain into a science superpower.

The Government’s audio-visual tax reliefs have helped to make our film and TV industry the biggest in Europe. Only last month, Pinewood announced an expansion which will bring another 8,000 jobs to the UK. To give even more momentum to this critical sector, I will introduce an expenditure credit with a rate of 34% for film, high-end television and video games, and 39% for the animation and children’s TV sectors. I will maintain the qualifying threshold for high-end television at £1 million. Because our theatres, orchestras and museums do such a brilliant job at attracting tourists to London and the UK, I will extend for another two years their current 45% and 50% reliefs.

An enterprise economy needs low taxes, but it also needs cheap and reliable energy. We have already announced billions of support to help businesses reduce their energy bills through the energy bills relief scheme and the energy bills discount scheme. We have appointed Dame Alison Rose, chief executive of NatWest, to co-chair our national energy efficiency taskforce and help deliver our national ambition to reduce energy use by 15%. To support her efforts, I will extend the climate change agreement scheme for two years to allow eligible businesses £600 million of tax relief on energy efficiency measures. But the long-term solution is not subsidy, but security. That means investing in domestic sources of energy that fall outside Putin’s or any autocrat’s control. We are world leaders in renewable energy, so today I want to develop another plank of our green economy: carbon capture usage and storage. I am allocating up to £20 billion of support for the early development of CCUS, starting with projects from our east coast to Merseyside to north Wales, paving the way for CCUS everywhere across the UK as we approach 2050. That will support up to 50,000 jobs, attract private sector investment and help capture 20 to 30 million tonnes of carbon dioxide per year by 2030.

We have increased the proportion of electricity generated from renewables from under 10% when we came into office to nearly 40%, but because the wind does not always blow and the sun does not always shine—even under the Conservatives—we will need another critical source of cheap and reliable energy, and that is nuclear. There have been no more powerful advocates for this than my hon. Friends the Members for Ynys Môn (Virginia Crosbie), for Copeland (Trudy Harrison), for Hartlepool (Jill Mortimer) and for Workington (Mark Jenkinson). They rightly say that increasing nuclear capacity is vital to meet our net zero obligations. To encourage private sector investment into our nuclear programme, I today confirm that, subject to consultation, nuclear power will be classed as environmentally sustainable in our green taxonomy, giving it access to the same investment incentives as renewable energy.

Alongside that will come more public investment. In the autumn statement, I announced the first state-financed investment in nuclear for a generation, a £700 million investment in Sizewell C. Today, I can announce two further commitments to deliver our nuclear ambitions. First, following representations from our energetic Energy Security Secretary, I am announcing the launch of Great British Nuclear, which will bring down costs and provide opportunities across the nuclear supply chain to help provide one quarter of our electricity by 2050. [Interruption.] It is so good to hear that the Labour party is in favour of nuclear energy. [Interruption.] It is just a shame that it never did any. Secondly, I am launching the first competition for small modular reactors. It will be completed by the end of this year and if demonstrated as viable we will co-fund this exciting new technology.

Finally, under the E of enterprise, I come to our innovation economy: a central area of national competitive advantage for the United Kingdom. Over the weekend, I worked night and day with the Prime Minister and the Governor of the Bank of England to protect the deposits of thousands of our most cutting-edge companies. We successfully secured the sale of the UK arm of Silicon Valley Bank to HSBC, so the future of those companies is now safe in the hands of Europe’s biggest and one of its most creditworthy banks. But those events show that we need to build a larger, more diverse financing system, where the benefits of investment in high-growth firms are available to more investors. I will return in the autumn statement with a plan to deliver that. It will include measures to unlock productive investment from defined contribution pension funds and other sources, make the London Stock Exchange a more attractive place to list, and complete our response to the challenges created by the US Inflation Reduction Act.

When it comes to our innovation industries, however, I want to make progress on two areas today. Nigel Lawson made the City of London one of the world’s top financial centres by competitive deregulation. With our Brexit autonomy, we can do the same for our high-growth sectors. Today, I want to reform the regulations around medicines and medical technologies. We are lucky to have, in the Medicines and Healthcare products Regulatory Agency, one of the most respected drugs regulators in the world—indeed, the very first anywhere to license a covid vaccine. From 2024, it will move to a different model, which will allow rapid, often near-automatic sign-off for medicines and technologies already approved by trusted regulators in other parts of the world such as the United States, Europe and Japan. At the same time, it will set up a swift new approval process for the most cutting-edge medicines and devices to ensure that the UK becomes a global centre for their development. With an extra £10 million of funding over the next two years, they will put in place the quickest, simplest regulatory approval in the world for companies seeking rapid market access. We are proud of the life science sector, which received more inward investment than any in Europe last year. Today’s change will make the UK an even more exciting place to invest, using our Brexit freedoms and speeding up access for NHS patients to the very newest drugs.

Today, with our talented Science, Innovation and Technology Secretary, I also take measures to strengthen our position in artificial intelligence, where the UK hosts one third of all European companies. I am accepting all nine of the digital technology recommendations made by Sir Patrick Vallance in the review that I asked him to do in the autumn statement. I can report to the House that we will launch an AI sandbox to trial new, faster approaches to help innovators get cutting-edge products to market. We will work at pace with the Intellectual Property Office to provide clarity on IP rules so that generative AI companies can access the material they need. We will ask Sir Patrick’s successor, Dame Angela McLean, to report before the summer on options around the growth duty for regulators.

Because AI needs computing horsepower, I today commit around £900 million of funding to implement the recommendations of the independent “Future of Compute” review for an exascale computer. The power needed by AI’s complex algorithms can also be provided by quantum computing, so today we publish a quantum strategy, which will set out our vision to be a world-leading quantum-enabled economy by 2033, with a research and innovation programme totalling £2.5 billion.

I also want to encourage the best AI research to happen in the UK, so will award a prize of £1 million every year for the next 10 years to the person or team that does the most groundbreaking British AI research. The world’s first stored-program computer was built at the University of Manchester in 1948, and was known as the Manchester baby. Seventy-five years on, the baby has grown up, so I will call this new national AI award the Manchester prize in its honour. We want the UK to be the best place in Europe for companies to locate, invest and grow, so today’s enterprise measures strengthen our technology and life science sectors, invest in energy security and—for three years, but I hope permanently—cut corporation tax by £9 billion a year, to give us the best investment incentives of any advanced economy.

An enterprise economy can only grow if it can hire the people it needs, which brings me to my third pillar after everywhere and enterprise. [Interruption.] I said it was a growth budget. We are talking about the E of employment. I am going to talk about a difficult topic for the Labour party. Brexit was a decision by the British people to change our economic model. In that historic vote, our country decided to move from a model based on unlimited low-skill migration to one based on high wages and high skills. Today, we show how we will deliver that, with a major set of reforms. The OBR says that it is the biggest positive supply-side intervention that it has ever recognised in its forecast.

We have around 1 million vacancies in the economy but, excluding students, more than 7 million adults of working age are not in work. That is a potential pool of seven people for every vacancy. Conservatives believe that work is a virtue. We agree with the road haulage king Eddie Stobart, who said:

“The only place success comes before work is the dictionary.”

Today, I bring forward reforms to remove the barriers that stop people who want to work from doing so. I start with over 2 million people who are inactive due to a disability or long-term sickness. Thanks to the reforms courageously introduced by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), the number of disabled people in work has risen by 2 million since 2013. But even after that, we could fill half the vacancies in the economy with people who say that they would like to work, despite being inactive due to sickness or disability. With Zoom, Teams and new working models that make it easier to work from home, that is possible now more than ever.

For that reason, the ever-diligent Work and Pensions Secretary today takes the next step in his groundbreaking work on tackling economic inactivity. I thank him for that, and today we publish a White Paper on disability benefits reform. It is the biggest change to our welfare system in a decade. His plans will abolish the work capability assessment in Great Britain and will separate benefit entitlement from an individual’s ability to work. As a result, disabled benefit claimants will always be able to seek work without fear of losing financial support.

Today, I am going further by announcing that, after listening to representations from the Centre for Social Justice and others, in England and Wales we will fund a new programme called universal support. This is a new, voluntary employment scheme for disabled people, where the Government will spend up to £4,000 a person to help them find appropriate jobs and put in place the support that they need. It will fund 50,000 places every single year.

We also want to help those who are forced to leave work because of a health condition such as back pain or a mental health issue. We should give them support before they end up leaving their job, so working with our Health Secretary, I am also announcing a £400-million plan to increase the availability of mental health and musculoskeletal resources, and expand the individual placement and support scheme. Because occupational health provided by employers has a key role to play, I will also bring forward two new consultations on how to improve its availability and double the funding for the small company subsidy pilot.

Another group that deserves particular attention is children in care. They, too, should be given all possible help to make a normal working life possible when they reach adulthood. Often, they depend on foster families, who do a brilliant job, so today I am nearly doubling the qualifying care relief threshold to £18,140 which will give a tax cut to a qualifying carer worth an average of £450 a year. I will also increase the funding that we provide to the Staying Close programme by 50%, to help more care leavers into employment, and I will support young people with special educational needs and disabilities with a £3-million pilot expansion of the Department for Education’s supported internship programme, to help those people to transition from education into the workplace. No civilised society can ignore the contribution that can be made by those with challenging family circumstances, a long-term illness or a disability, so today we remove the barriers that we can, with reforms that strengthen our society as well as our economy.

The next set of employment reforms affects those on universal credit without a health condition, who are looking for work or on low earnings. There are more than 2 million jobseekers in this group—more than enough to fill every vacancy in the economy. Independence is always better than dependence. [Interruption.] With some exceptions, Madam Deputy Speaker. That is why a Conservative Government believe that those who can work, should. Sanctions will be applied more rigorously to those who fail to meet strict work search requirements or choose not to take up a reasonable job offer. For those working low hours, we will increase the administrative earnings threshold from the equivalent of 15 hours to 18 hours at national living wage for an individual claimant, meaning that anyone working below that level will receive more work coach support, alongside a more intensive conditionality regime.

The next group of workers I want to support are those aged over 50. My younger officials have termed these people “older” workers, although as a 56-year-old I prefer the term “experienced”. Fully 3.5 million people of pre-retirement age over 50 are not part of the labour force—an increase of 320,000 since before the pandemic. We now have the 23rd highest inactivity rate for over 55s in the OECD. If we matched the rate of Sweden, we would add more than 1 million people to our national labour force.

Madam Deputy Speaker, I say this not to flatter you, but older people are the most skilled and experienced people we have. [Hon. Members: “Oh!”] No country can thrive if it turns its back on such a wealth of talent and ability. But for too many, turning 50 is a moment of anxiety about the cliff edge of retirement rather than a moment of anticipation about another two decades of fulfilment. I know this myself. After I turned 50, I was relegated to the Back Benches and planned for a quiet life, but instead I decided to set an example by embarking on a new career in finance.

[Jeremy Hunt]

It’s going well, thank you. So today I take three steps to make it easier for those who wish to work longer to do so.

First, we will increase the number of people who get the best possible financial, health and career guidance ahead of retirement by enhancing the Department for Work and Pensions’ excellent mid-life MOT strategy. It will also increase by fivefold the number of 50-plus universal credit claimants who receive mid-life MOTs from 8,000 to 40,000 a year.

Secondly, with the Secretary of State for Education, my right hon. Friend the Member for Chichester (Gillian Keegan), who has a deep personal commitment to this area, we will introduce a new kind of apprenticeship, targeted at the over 50s who want to return to work. They will be called returnerships and operate alongside skills boot camps and sector-based work academies. They will bring together our existing skills programmes to make them more appealing for older workers, focusing on flexibility and previous experience to reduce training length.

Finally, I have listened to the concerns of many senior NHS clinicians, who say unpredictable pension tax charges are making them leave the NHS just when they are needed most. The NHS is our biggest employer, and we will shortly publish the long-term workforce plan I promised in the autumn statement. But ahead of that, I do not want any doctor to retire early because of the way pension taxes work. It is an issue I have discussed not just with the current Secretary of State for Health and Social Care, my right hon. Friend the Member for North East Cambridgeshire (Steve Barclay), but a former Health Secretary who kindly took a break from WhatsApping his colleagues to consider it.

As Chancellor, I have realised the issue goes wider than doctors. No one should be pushed out of the workforce for tax reasons. So today I will increase the pensions annual tax-free allowance by 50%, from £40,000 to £60,000. Some have also asked me to increase the lifetime allowance from its £1 million limit. But I have decided not to do that. Instead I will go further and abolish the lifetime allowance altogether. It is a pension tax reform that will stop over 80% of NHS doctors from receiving a tax charge, incentivise our most experienced and productive workers to stay in work for longer, and simplify our tax system, taking thousands of people out of the complexity of pension tax. [Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Just because the Chancellor of the Exchequer is either unpopular or popular, we still need to keep the noise down because we still have to hear what he has to say. He has more to say.

[Jeremy Hunt]

This is a comprehensive plan to remove the barriers to work facing those on benefits, those with health conditions and older workers. That is the E of the employment pillar of today’s growth budget.

Which brings me to the final pillar of our growth plan. After employment, enterprise and everywhere, I turn to the E of education. Over more than a decade, this Conservative Government have driven improvement in our education system. We have risen by nearly 10 places in the international league tables for English and maths since 2015.

In the autumn statement, I built on this progress with an extra £2.3 billion annual investment to our schools. We are reviewing our approach to skills with Sir Michael Barber. We have set out our plans to transform lifelong learning with a new lifelong loan entitlement and my right hon. Friend the Prime Minister announced plans to make maths compulsory until 18. But today I want to address an issue in our education system that is bad for children and damaging for the economy. It is an issue that starts even before a child enters the gates of a school. Today I want to reform our childcare system.

We have the one of the most expensive systems in the world. Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.

For many women, a career break becomes a career end. Our female participation rate is higher than average for OECD economies, but we trail top performers, such as Denmark and the Netherlands. If we matched Dutch levels of participation, there would be more than 1 million additional women working. And we can do that.

So today I announce a series of reforms that start that journey. I begin with the supply of childcare. We have seen a significant decline in childminders over recent years— down 9% in England in just one year. But childminders are a vital way to deliver affordable and flexible care, and we need more of them. I have listened to representations from my hon. Friend the Member for Stroud (Siobhan Baillie) and decided to address this by piloting incentive payments of £600 for childminders who sign up to the profession, rising to £1,200 for those who join through an agency.

I have also heard many concerns about cost pressures facing the sector. We know that is making it hard to hire staff and raising prices for parents, with around two thirds of childcare providers increasing fees last year alone. So we will increase the funding paid to nurseries providing free childcare under the hours offer by £204 million from this September, rising to £288 million next year. That is an average of a 30% increase in the two-year-old rate this year, just as the sector has requested.

I will also offer providers more flexibility in how they operate in line with other parts of the UK. So alongside that additional funding, we will change minimum staff-to- child ratios from 1:4 to 1:5 for two-year-olds in England as happens in Scotland, although the new ratios will remain optional with no obligation on either childminders or parents to adopt them.

I want to help the 700,000 parents on universal credit who, until the reforms I announced today, had limited requirements to look for work. Many remain out of work because they cannot afford the upfront payment necessary to access subsidised childcare. So for any parents who are moving into work or want to increase their hours, we will pay their childcare costs upfront. And we will increase the maximum they can claim to £951 for one child and £1,630 for two children, an increase of almost 50%.

I turn now to parents of school-age children, who often face barriers to working because of the limited availability of wraparound care. One third of primary schools do not offer childcare at both ends of the school day, even though for many people a job requires it to be available before and after school. To address this, we will fund schools and local authorities to increase the supply of wraparound care so that all parents of school-age children can drop their children off between 8 am and 6 pm. Our ambition is that all schools will start to offer a full wraparound offer, either on their own or in partnership with other schools, by September 2026.

Today’s childcare reforms will increase the availability of childcare, reduce costs and increase the number of parents able to use it. Taken together with earlier Conservative reforms, they amount to the most significant improvements to childcare provision in a decade. But if we really want to remove the barriers to work, we need to go further for parents who have a child under 3. For them childcare remains just too expensive.

In 2010, there was barely any free childcare for under-fives. A Conservative-led Government changed that, with free childcare for three and four-year-olds in England. It was a landmark reform, but not a complete one. I do not want any parent with a child under five to be prevented from working if they want to, because it is damaging to our economy and unfair, mainly to women, so today I announce that in eligible households in which all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for three and four-year-olds, but for every single child over the age of nine months.

The 30 hours offer will now start from the moment maternity or paternity leave ends. It is a package worth on average £6,500 every year for a family with a two-year- old child using 35 hours of childcare every week, and it reduces their childcare costs by nearly 60%. Because it is such a large reform, we will introduce it in stages to ensure that there is enough supply in the market. Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping about half a million parents. From September 2024, that 15 hours will be extended to all children from nine months up, meaning that a total of nearly 1 million parents will be eligible. From September 2025, every single working parent of under-fives will have access to 30 hours of free childcare per week.

[Mr Toby Perkins (Chesterfield) (Lab)]

You’ll be gone by then.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Mr Perkins, stop it.

[Jeremy Hunt]

Today we complete a landmark Conservative reform. We help the economy, transform the lives of thousands of women and build a childcare system comparable to the best, with a major early years reform for our education system—the E of education, alongside the three other pillars of our growth plan: enterprise, employment and everywhere.

In November we delivered stability; today it is growth. We are tackling the two biggest barriers to businesses growing—investment incentives and labour supply—with the best investment incentives in Europe and the biggest ever employment package. For disabled people, more help; for older people, barriers removed; for families feeling the pinch, fuel duty frozen, beer duty cut and energy bills capped; and for parents, 30 hours of free childcare for all under-fives. Today we build for the future, with inflation down, debt falling and growth up. The declinists are wrong and the optimists are right. We stick to the plan because the plan is working. I commend this statement to the House.

[Madam Deputy Speaker]

I thank the Chancellor of the Exchequer for his Budget statement. [Interruption.] I hope the House will settle down, please. Under Standing Order No. 51, the first motion, entitled—[Interruption.] The bad behaviour is now on the Government side of the House! Let us have a bit of decorum, please, while we go through the necessary procedure.

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 motions:—

(a) Stamp duty land tax (transaction funded with the assistance of a subsidy) (motion no. 39);

(b) Fuel duties (excepted machines) (motion no. 44);

(c) Rates of tobacco products duty (motion no. 46);

(d) Late payment interest (value added tax) (motion no. 57);

(e) Charities (value added tax etc) (motion no. 65).—(Jeremy Hunt.)

Question agreed to.

Autumn Statement

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

This year we have supported the poorest families with £1,200 to deal with an exceptional increase in the cost of living. We have the household support fund, which we are giving to councils so that they can help to ensure that people do not fall between the cracks, and there is money for the NHS and care system, which is also targeted at the most vulnerable and people living in poverty.

We are doing a great many things today. There is always more that we can consider, but strong public services need a strong economy, and that is what you get with the Conservatives.

[Madam Deputy Speaker (Dame Eleanor Laing)]

And the prize for patience and perseverance goes—as so often—to Margaret Ferrier.

--- Later in debate ---

[Jeremy Hunt]

I thank the hon. Lady for her patience in waiting all this time to ask her question. The issues that she has raised are going to be looked at by the Secretary of State for Work and Pensions in the review that he is conducting for the Prime Minister on the increase in the number of economically inactive adults and what we can do to improve incentives, but today we have announced—exceptionally—an increase in the benefit cap to ensure that the families who depend most on the benefits system are given all the extra help that we are promising today.

[Madam Deputy Speaker]

I thank the Chancellor for his statement, and I thank everyone who, for three hours and five minutes, has held him to account at the Dispatch Box.

Economic Update

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Monday 17th October 2022 Commons Chamber

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

In the history of British democracy, have we ever had such a calamitous start for a Prime Minister? We have now had four Chancellors in four months, but it was a majority of Conservative MPs and members who inflicted fantasy trickle-down economics upon our country, when they naively decided to take a holiday from reality, which has left many of my Slough constituents struggling to pay their bills. Given that the new Chancellor has effectively dumped the kamikaze mini-Budget, does he agree that he and the Prime Minister no longer have a democratic mandate to continue in their positions and that they should step aside and let the exasperated British people make their decision?

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Just before the Chancellor answers that question and responds to the very neat speech that the hon. Gentleman has just made, I must appeal to colleagues for quick questions. We have had all the speeches; we do not need to hear all the same things all over again. We need quick questions so that the Chancellor can give brief replies, because otherwise we will never get on to the other business.

[Jeremy Hunt]

A general election would not contribute to stability if people had to worry about the disastrous policies of a future Labour Government.

--- Later in debate ---

[Jeremy Hunt]

Before I was Chancellor, with great respect to the hon. Gentleman, I think I did put my money where my mouth was. When I became Health Secretary we were funding the NHS at the OECD average and now it is the fifth highest in the OECD, so I have started to fix years of disastrous Labour underfunding.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call Jim Shannon. [Interruption.]

--- Later in debate ---

[Jeremy Hunt]

We have had very decisive action from the Bank of England to do exactly that, and I hope the hon. Gentleman is encouraged by what the Governor of the Bank of England said today about his belief that he has largely solved those issues.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Finally, the prize for patience and perseverance goes to Daisy Cooper.

[Daisy Cooper (St Albans) (LD)]

Thank you, Madam Deputy Speaker; I now know what it feels like to have the knees of the hon. Member for Strangford (Jim Shannon). [Interruption.] It is a fleeting thought, but it has gone.

Pubs and hospitality businesses in my seat of St Albans are really up against it. Suckerpunch is a bar that closed its doors just a couple of days ago because it can no longer continue. Others are clinging on until Christmas and we know that around the country hospitality businesses are saying that they are going to go into complete hibernation until the spring, and that means redundancies. Will the Chancellor confirm that he understands that hospitality is one of the sectors that is most affected and will therefore attract support, and will he look again at the broken business rates system, which is killing our pubs and high streets while letting multinationals off the hook?

[Jeremy Hunt]

Another of the promises I now vainly wish I had not made in the summer as to policies we should do is a fundamental review of business rates, so I have a great deal of sympathy for the hon. Member on that front and I will happily look at those issues. I do not want to promise we are going to make any progress in the next two weeks because there are so many other things we have to consider, but what she has said has been well heard—and I, too, congratulate her on her patience.

[Madam Deputy Speaker (Dame Eleanor Laing)]

That concludes the statement. I thank the Chancellor for taking questions for a whole two hours—perfect timing.

Bill presented

Benefit Cap (Report on Abolition) Bill

Presentation and First Reading (Standing Order No. 57)

David Linden presented a Bill to require the Secretary of State to report to Parliament on the likely effects of the abolition of the benefit cap, including on levels of absolute and relative poverty, poor mental health, food bank use, borrowing of money from friends and family, evictions from homes and problem debt, and on different groups including women, lone parents and people from Black and minority ethnic backgrounds; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 21 October, and to be printed (Bill 161)

Covid-19: Vaccinations

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Monday 11th January 2021 Commons Chamber

[Madam Deputy Speaker (Dame Eleanor Laing)]

We now go to the Chairman of the Health and Social Care Committee, Jeremy Hunt.

[Jeremy Hunt (South West Surrey) (Con) [V]]

I congratulate the Minister on getting this programme off to a flying start: to vaccinate 2 million people, including a third of over-80s, six weeks after the first dose was approved is an extraordinary achievement unmatched by any similar country. May I ask him about the speed of the roll-out? Many people want teachers to be jabbed as quickly as possible, but is it the case that all those in groups 1 to 4 will need their second jabs before we can make real inroads into other key groups? And will he publish the breakdown of numbers vaccinated not just by region but by local authority area, because a lot of people would like to know just how many people have been vaccinated in their local area?

NHS: Learning from Mistakes

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Wednesday 9th March 2016 Commons Chamber

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before the Secretary of State answers that important question, I remind the House that we have a lot of business to get through today. Shorter questions and correspondingly shorter answers would be welcomed by those who are waiting to take part in other debates.

[Mr Hunt]

As ever, I commend the right hon Gentleman’s interest in mental health. May I reassure him that this is very much about what happens in mental health and also the area of learning disabilities? In fact, some of the thoughts were prompted by what happened at Southern Health. It is absolutely vital that we investigate unexpected deaths in mental health as much as we do in physical health. The measures we take will go across those areas, and I am more than happy to meet him to discuss the very laudable aim of zero suicides.

--- Later in debate ---

[Mr Hunt]

My hon. Friend is absolutely right. I thank him for his work in this area. Maternity—stillbirths, neonatal deaths, neonatal injuries and maternal deaths—is the area where I hope we make the most rapid early progress in developing this new learning culture. There is so much to be gained. We can be the best in the world, but the truth is that we are a long way down international league tables in this area. None of us want that for the NHS. There is a real commitment to turn that around and I thank him for his support.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

The prize for perseverance and patience goes to Mr Mark Spencer.

[Mark Spencer (Sherwood) (Con)]

I am grateful, Madam Deputy Speaker, even if my knees are not.

I congratulate the Secretary of State on providing a protected space for doctors, so they will be able to be honest and upfront when things go wrong, and on striking the right balance so that relatives and people who suffer wrongs in the NHS get to the bottom of what went wrong, why it went wrong and why it will not happen again.

Mental Health

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Wednesday 9th December 2015 Commons Chamber

[Mr Hunt]

rose—

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. Before the Secretary of State answers the intervention, let me say that long interventions are not appropriate on a day when so many Members wish to speak. If Members wish to make a speech, they may do so, but an intervention has to be short.

[Mr Hunt]

If the hon. Gentleman has listened to what I have been saying, he will know that I have been very honest about the problems and about the gap between what we want to deliver and what we are delivering. I shall come on to talk about some solutions, but it is important that Opposition Members recognise that we have had a real and specific focus on mental health over the last five years, during which very important progress has been made. If we continue to broaden out our focus, we hope we can make progress in other areas as well.

Let me talk openly about where more progress needs to be made. First, we have far too much variation in the quality of services across the country, and opacity about where services are good and where they are unsatisfactory. It is wrong that I, as the person responsible for the health service, cannot tell people in simple terms the relative quality of mental health provision in North Shropshire versus South Shropshire or in Cirencester versus Sheffield. We need to know that. We know from other areas of the health service that once we can be transparent about the variations in care, people will measure themselves against their peers and huge improvement can be made.

NHS Services (Access)

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Wednesday 15th October 2014 Commons Chamber

[Lilian Greenwood]

Will the Secretary of State give way?

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. The right hon. Gentleman is not giving way. He must be allowed to speak.

[Mr Hunt]

The Government are proud of our record on the NHS in England: more operations for more people; three quarters of a million more people getting the cancer treatment they need; record numbers being seen promptly in A and E; record numbers getting treatment for dementia; and the first ever introduction of maximum waiting times for mental health conditions. It is an NHS under pressure, yes, but it is an NHS preparing for the future, with higher-quality care in hospitals, integrated health and social care, and personal care driven by a much bigger role for GPs.

Some of those changes need money, and we have delivered that, but some of them need a change in culture, different ways of working, more transparency and a more patient-centred approach. That can mean challenging the system, which the right hon. Member for Leigh has never been prepared to do, but which this Government will always do if it is right for patients. We want an NHS building for the long term and an NHS with the confidence of a strong economy behind it. Under this Government, the NHS is independently rated as the best in the world. I oppose the motion.

Phone Hacking and the Media

Debate between Jeremy Hunt and Baroness Laing of Elderslie

Monday 11th July 2011 Commons Chamber

[Mr Hunt]

It is stretching it a bit to say that this is a Westminster issue and not something that affects the whole of the United Kingdom. We have to sort it out, and we are absolutely determined to do so.

[Mrs Eleanor Laing (Epping Forest) (Con)]

The House fully appreciates why the Secretary of State cannot give his opinion on the BSkyB matter. Is he aware that the vast majority of people out there in the country are not the least bit interested in party political point-scoring, but believe that if Mr Murdoch had any decency at all, he would withdraw his bid for BSkyB?

[Mr Hunt]

As I said in my statement, I completely understand the horror with which many people viewed the thought of a company allegedly responsible for these appalling actions taking over what would become Britain’s biggest media company. I completely understand where the public are on that. We now have a lengthy process that will get to the bottom of the media plurality issues. If any of the appalling events that have come up in the past week are linked to media plurality, I am sure that they will be considered in their entirety.