Women’s Changed State Pension Age: Compensation

John Hayes Excerpts

Wednesday 15th January 2025 Westminster Hall

[Dr Andrew Murrison (in the Chair)]

We are massively oversubscribed. It is plain that we are not going to get everybody in. I remind those who wish to speak that they should bob. I also ask that, voluntarily, Members restrain themselves to two minutes. If we do that, we will get most people in, but not everybody.

[Sir John Hayes (South Holland and The Deepings) (Con)]

I beg to move,

That this House has considered compensation for women affected by changes to the State Pension age.

It is a pleasure to be able to speak in this Chamber and, as I often do, to draw a very substantial crowd. The genesis of betrayal is trust—the kind of trust that underpins the democratic legitimacy of Parliament and on which the authority of the Executive is founded, and the kind of trust that our constituents, when they send us to this place to exercise our judgment on their behalf, rely upon. Their faith in us is that we will honour what we say we will do and that when we make pledges, they are not empty pledges but are meaningful. When trust is breached and broken, the whole of that legitimacy is undermined.

That is precisely what has happened in the case of the so-called WASPI women—the Women Against State Pension Inequality Campaign. I will use the acronym, because it has become a familiar one to any of us who have taken an interest in this matter, as I have over some time, and as have the public. This campaign is a campaign for no less than justice, to restore trust.

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

The right hon. Member is speaking eloquently about trust. Does he agree that it is really important for the Government to help us to have trust in institutions such as the Parliamentary and Health Service Ombudsman by adhering to decisions made by it?

[Sir John Hayes]

Although that intervention was not orchestrated by me or choreographed by either of us, it leads me neatly to my next point, because there is an ethical case to be made of the kind the hon. Lady describes, there is a constitutional case to be made, and there is a practical case to be made. In the short time available to me—I know that many others want to contribute to the debate—I will try to make all three.

First, the ethical case is, exactly as the hon. Lady said, about honouring the pledges that were made and fulfilling rightful expectations. Not all expectations and hopes are well founded, but when people have worked all their lives and been told that at the end of their working life, they will be paid a pension at a particular time, it is not unreasonable for them to believe that that will come to pass.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

Given that the Government response to the Parliamentary and Health Service Ombudsman report said that a compensation scheme would be “impractical”, with “significant challenges” and the potential for “unjustified payments”, and that there were significant concerns about the robustness of the Department for Work and Pensions research in 2006, does the right hon. Gentleman agree that the Government’s position is untenable, given the stark contrast with the way that sub-postmasters were treated?

[Sir John Hayes]

I do agree, and the hon. Gentleman will not be surprised to know that I shall be speaking later in my remarks about the ombudsman’s report and findings, which will bring me to the constitutional matter I raised about the nature of accountability and scrutiny and how Governments are held to account, and whether ombudsmen are meaningful at all if their conclusions are entirely disregarded. He is right to raise that issue.

I want briefly to describe the events that provoked me to challenge the previous Government on this issue when my party held the reins of power. I am not a recent convert to this cause; I made the same argument then—that we needed to recognise the justice of this campaign and act accordingly—but I did so knowing the events that have occurred.

I will not go over things laboriously—because you would not want me to, Dr Murrison, given the number of Members who want to speak in this debate—but essentially, when pension ages were equalised, which was the result of two Acts of Parliament, the notice given to the people affected was inadequate.

I am not an unbridled advocate of the case that every woman who thought that they were going to retire at 60, and then found that they would have to retire at 65, should be compensated. If a woman was young or middle-aged when that happened, there is a fair case that they had time to adjust—they could re-prepare; they could make different plans.

However, if a woman was born in the 1950s and had anticipated retiring in two, three or four years’ time but then had to work up to five years’ longer, it is a very different matter, because many of those women, anticipating their retirement, had prepared for exactly that eventuality. Many of those women, of course, were no longer working. They had ended work to look after elderly parents; they were playing a caring role; or their skills were no longer relevant to the workplace, because they had taken time out of work, first to have children and then, as I have said, to embark on other social responsibilities. These were women who worked hard and had done the right thing, and they are not all, as they are sometimes characterised by their critics, drawn from the liberal bourgeoisie—who, as you know, Dr Murrison, I generally speaking despise.

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

rose—

[Sir John Hayes]

Having said that, I am happy to give way to the hon. Gentleman. [Laughter.]

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

The words “liberal bourgeoisie” made me think. I represent the mainland constituency that is furthest away from Westminster, and I will just point out that this issue affects women from all over the UK, be they “liberal bourgeoisie” or not. In my constituency—that far away—370 people have signed the petition. This issue is huge all over the UK.

[Sir John Hayes]

I meant no slight on the hon. Gentleman. He is right: it does affect women across the whole of the kingdom—and of course, he is much posher than bourgeois, so he could not be slighted by my remark.

[Susan Murray (Mid Dunbartonshire) (LD)]

I rise to speak as a WASPI woman myself, and I am very proud to associate myself with this campaign. I know that many people feel that perhaps we should perhaps not be entitled to compensation, because we were able to get mortgages and buy our own homes, we were able to generate more capital wealth, and many of us have private pensions. However, I personally had to stop work because my husband became ill, and I was looking forward to a retirement where my only income would have been the state pension. I am very thankful for my health; I knew that the retirement age had gone up, and when the right hon. Gentleman talks about skills and abilities—

[Susan Murray]

I am sorry, Dr Murrison.

I was able to use my skills and abilities to become a councillor in 2022, and I am now looking forward to a much better retirement. However, does the right hon. Gentleman agree that the Government should do a U-turn and implement the ombudsman’s recommendation?

[Sir John Hayes]

The hon. Lady’s intervention, though not pithy, was pertinent, because she is one of the 3.8 million women, of all kinds and types, who were affected. Many were not well-off; many did all kinds of jobs that could not be described as highly paid; and many found themselves in a position of financial hardship. That is why I stand here today—because this injustice affects all kinds of women, and it has been mischaracterised by some who do not want to face that fact. That makes me angry and righteously indignant, as I always am in the cause of the disadvantaged.

[Carla Lockhart (Upper Bann) (DUP)]

I thank the right hon. Gentleman for giving way; he is being very kind in doing so. In Upper Bann and indeed across Northern Ireland, thousands of women feel absolutely betrayed by this Government. Does he agree that those women are in financial hardship today because of that betrayal? It is morally indefensible that not a penny has been made available to these women.

[Sir John Hayes]

Yes, I agree. Some women were forced to carry on working, even when—as an earlier intervention suggested—they were not really in a position to do so, even when they had extra responsibilities, and even when they were not really fit to do so. That is just not acceptable. It is not right; it is not just.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

I note the right hon. Gentleman’s righteous indignation, but I question where it was in 2016, when the SNP tabled a motion in support of the WASPI women and he voted against it. Is he not really just a Johnny-come-lately, despite what he said earlier in his speech?

[Sir John Hayes]

I have been in this place a long time, as the hon. Lady knows, and she is here having first been endorsed by the electorate, then rejected, then re-endorsed. I have not had that difficulty myself; none the less, she will know that one learns and grows in this place. As I became more familiar with these arguments—I repeat this—I challenged the Conservative Government, my own party, on this issue, on the record, on the Floor of the House. It is not about this Minister; this is about any Minister who fails to recognise this matter.

[Warinder Juss (Wolverhampton West) (Lab)]

Will the hon. Gentleman give way?

[Sir John Hayes]

If I might make a little progress, then I will happily give way.

It is important to set out some of the detail. Some of the worst-affected women received just 18 months’ notice of a six-year increase in their state pension age. Just under 2 million women fall into that category. The WASPI campaigners acknowledge that some were going to retire only a matter of days, or perhaps weeks, later than expected, whereas those who were given very long notice were clearly in a rather different circumstance. The campaigners are not unrealistic about that. Having met them and discussed it, I know that they are very realistic about the difference between those two groups, and they therefore simultaneously recognise that the Government response needs to be tailored, and measured in the way it gauges the responsibility. The breach in trust is common, but the effect of that breach in trust is different in different cases.

I do not advocate a response to this problem in which every single case is dealt with individually, so that there are as many different settlements as individuals. That would be impractical and delayed, and I emphasise delay because one of these women dies every 12 minutes. There will be another WASPI woman lost during the course of my speech. That is the reality. These bald statistics mask lives—lives altered, lives damaged and lives restricted by this matter.

[Warinder Juss]

rose—

[Sir John Hayes]

That is what inspires me to speak today and, I am sure, inspires the hon. Gentleman, who is about to intervene to say just how much he supports me.

[Warinder Juss]

A lot of us have previously publicly supported the WASPI women, including by posting photographs on social media. The Government have acknowledged that there has been maladministration, but to have that acknowledgement without some kind of financial backing, even if minimal, not only undermines the process of the ombudsman, who so many of us rely on, but may undermine public confidence in politicians in general.

[Sir John Hayes]

The hon. Gentleman is right and he encourages me to turn to the ombudsman’s report, which I have before me. Members will be pleased to note that, although I have inserted many tags into my copy of this report and the previous one, I will not refer to all of them. That would take forever.

Suffice it to say that the ombudsman found

“maladministration in DWP’s communication about the 1995 Pensions Act resulted in complainants losing opportunities to make informed decisions about some things and to do some things differently, and diminished their sense of personal autonomy and financial control.”

The ombudsman’s remedy is set out at the end of the second report. Ombudsmen recommend recompense on a scale—a series of levels, from 1 to 6. The report is here for everyone who has not studied it in detail to see: the ombudsman recommended a level 4 response. That means

“a significant and/or lasting injustice that has, to some extent, affected someone’s ability to live a relatively normal life.”

It suggests that the recompense might be between £1,000 and £2,950.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

Will the right hon. Gentleman give way?

[Sir John Hayes]

I will in a second.

That suggestion seems to me to be a pretty modest response. It is not extreme, extravagant, unrealistic or unreasonable. It is a modest, measured response borne of the fact that the ombudsman has found maladministration. I have read the two reports. Having been in this House for a long time, been on the Front Bench of my party for 19 years and been a Minister in many Departments, I have rarely seen an ombudsman’s report as clear as this one about maladministration by a Government Department. On that note, I give way.

[Manuela Perteghella]

I thank the right hon. Member for giving way. Does he agree that rejecting the ombudsman’s recommendations for the compensation of WASPI women undermines the role of independent bodies in holding the Government to account? If we cannot rely on the Government to implement such findings, what message does that send to the public about justice and fairness?

[Sir John Hayes]

That brings me to the constitutional point that I said I would make. I have established an ethical case, but there is a constitutional issue about the ombudsman. Over the years, we have developed a number of ways of holding the Executive to account. Parliament does that, of course, but there needs to be other means of doing so on particular and specific issues. That is why the Select Committee system emerged: as a way of studying what the Government were doing and making recommendations accordingly. That is also how ombudsmen began. They are an additional mechanism through which Government can be held to account, but for Select Committees and ombudsmen to have meaning, they must have teeth.

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

My right hon. Friend is making a very powerful case. Does he agree that this also undermines our roles as Members of Parliament? As a Member of Parliament, I supported the referral of this case to the ombudsman. Does it undermine our roles if when the report comes back it is just dismissed?

[Sir John Hayes]

Yes. My right hon. Friend is a refined Member of this House. To make a more refined argument in tune with his, I should say that the ombudsman’s report is, as he suggests, to Parliament. It is for Parliament to discuss, debate and make a decision on. The ombudsman’s report is about Government, but it is, exactly as he describes, to Parliament. I am grateful to him for refining my argument in that way.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

I can confirm that my right hon. Friend has campaigned on this issue for a number of years, and not just today. He will know that in July 2022, the Prime Minister—then the Leader of the Opposition—responded to Carol, a WASPI woman who rang BBC Merseyside to raise this issue. The Prime Minister said:

“It’s a real injustice, and we need to do something about it”.

What does my right hon. Friend think he meant by that?

[Sir John Hayes]

Well, it is not for me to second-guess the sentiments of the Prime Minister, but my right hon. Friend is certainly right to say that a number of promises and comments were made. I will talk about them in a little more detail, provoked by his very helpful intervention.

I see in the Chamber today the former shadow Chancellor of the Exchequer, the right hon. Member for Hayes and Harlington (John McDonnell). He will know that the Labour manifesto in 2019 was fulsome in its support for the WASPI women, promising a generous financial settlement. It is perfectly reasonable to say that parties move on; the new Leader of the Opposition, now the Prime Minister, may have taken a rather different view. He may have taken the opposite view.

[Dr Simon Opher (Stroud) (Lab)]

Will the right hon. Gentleman give way?

[Sir John Hayes]

I will just make this point, and then I will happily give way.

But that was certainly not the impression given by the current Prime Minister’s remarks. He said:

“Justice to end historic injustice”—

that was specifically about WASPI women. The now Deputy Prime Minister said that the Government “stole” the pensions of WASPI women and that Labour would compensate them. Therefore, one can understand why the women, some of whom are represented here today—they are being incredibly diligent and quiet, Dr Murrison, you will be pleased to know—feel that this was indeed a “betrayal”, to use the word that I used at the beginning of my remarks. An expectation was established, and then it was blighted by the decision made since the general election.

[Dr Opher]

I thank the right hon. Member for giving way. Could I make an appeal to all of us? I do not think that either side of this debate has covered itself in glory. I agree that this is a very dangerous precedent about the ombudsman, but let us not make this party political, please. Let us make this about the WASPI women. Is there not a way, at least, of compensating the very worst off among the WASPI women? I would appeal for that.

[Sir John Hayes]

That is a measured intervention, and I thank the hon. Gentleman for it. It is true that a package could be put together and discussed with the campaign group and the women concerned; one would expect Government to do that. As a Minister, I would have had submissions. I have no doubt that this Minister has had them, and the Secretary of State must have had submissions that gave her options, before she said what she said when she let the WASPI women down. Those options would no doubt have included a series of ways through this. I know the Minister will be eager to explore those options with us when he sums up the debate. I have no doubt about that because he is a diligent and decent man; he will not want to betray those women again in what he says today because he is not that kind of character.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

The Government’s position appears to be that they accept that the failures between 2005 and 2007 constitute maladministration. All of us can see in our inboxes the number of women who, as result of decisions taken on the basis of that failure, suffered as a result. But the Government’s position seems to be that there should be no remedy because it would be too difficult to get it right. What kind of justice is that?

[Sir John Hayes]

There are several arguments used by those who do not want to get it right, to use my hon. Friend’s term. One is that the public do not care, although all the survey evidence suggests the opposite: that 75% of people think that WASPI women should be treated fairly. Another argument is that it will be too expensive. I could make all kinds of rather spiteful remarks about the Government’s decisions about public sector pay, but I will let them stand as a contradiction, without adding to them.

[Ayoub Khan (Birmingham Perry Barr) (Ind)]

I thank the right hon. Member for giving way. He makes a very eloquent and persuasive statement. The current Government use compensation as an excuse, saying it is too expensive, but we have seen, for example, train drivers being given an additional £600 a day. We have seen Government intervene on the Post Office scandal. Does the right hon. Member agree that the argument can be easily disabused by looking at the track record on assistance for those who have found themselves at the forefront of injustice?

[Sir John Hayes]

I had alluded a moment ago to the choices that Government make about how they spend money. Of course it is true that Government priorities will determine where money is spent. The issue is clearly not a priority for the Government. It is difficult, of course: Governments face all sorts of challenges that require investment, and this Government have chosen not to invest in this area. Frankly, it is as plain as that.

[Sorcha Eastwood (Lagan Valley) (Alliance)]

Will the right hon. Member give way?

[Sir John Hayes]

With respect, I am going to conclude because I know so many want to speak; I do apologise. [Interruption.] All right, I will briefly give way, but it is the last time.

[Sorcha Eastwood]

I am so grateful to the right hon. Member for giving way and indulging me. I simply want to add to his conclusion. These women have been part of a generation of women who have been discriminated against by statutory provisions over their lifetimes—whether by the reprehensible marriage bar, the gender pay gap or now this. I am sure the right hon. Gentleman would agree. [Applause.]

[Sir John Hayes]

I am grateful to the hon. Lady; I am slightly jealous that I have not managed to attract any kind of applause, but no doubt that will come at the end of my peroration. The hon. Lady is right: that generation of women, born after the war, did not have straightforward lives. That was a difficult time in this country, particularly for women. I talked earlier about their hard work and diligence, and their role as homemakers, mothers and grandmothers. They just deserve better; that is what has driven and inspired me to bring this debate.

I will end on this note. The Minister will not be surprised to hear that I am mindful of the words of Edmund Burke, who said:

“Your representative owes you not only his industry, but his judgement”.

In the end, this is a matter of judgment. Do we think the issue matters or do we not? Exercising judgment, I leave him with this further quote, from J.R.R. Tolkien:

“False hopes are more dangerous than fears”.

We gave these people false hope. I fear that we will not now put this matter right by realising the rightful hope that they had in thinking they were going to retire at a certain time but then ended up doing so at an entirely different time due to a change of Government policy. That was because of nothing they did, nothing they changed, nothing they chose; it was a change in the law.

I hope that when the Minister sums up he will recognise the strength of feeling across the House, and across this country: that this injustice must be put right, in the name of democratic legitimacy and the trust that I set out at the beginning of my peroration.

--- Later in debate ---

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

It is a pleasure to serve under you today, Dr Murrison.

I thank the right hon. Member for South Holland and The Deepings (Sir John Hayes) for securing a debate on this important topic. I also thank him, if slightly less enthusiastically, for its timing, which is on my first day in office. That fact also explains the delay in answering the named day question put by the hon. Member for Torbay (Steve Darling), which he referred to in his contribution to the debate.

I am under no illusion that everyone in this Chamber, or almost everyone in this Chamber, will agree with everything that I am about to say. However, all of us who have listened to this debate and to the important points made by right hon. and hon. Members have benefited from it, and we all recognise the context of this debate, which is the squeeze on living standards that has affected women born in the 1950s just as it has the entire country.

The issues that we are discussing today are important to many women, including my aunt in west Wales, who was born in 1955 and who pays particularly close attention to these issues. I spoke to her last night as part of my preparation for this debate and she would agree with the points made by the hon. Member for Lagan Valley (Sorcha Eastwood), and by my hon. Friend the Member for Clapham and Brixton Hill (Bell Ribeiro-Addy), that women of her generation have faced many difficulties and particular discrimination. People have spoken powerfully about that.

It is therefore right that this debate gives the long-held concerns of those women the consideration they deserve, just as it was right that the Government considered those concerns in making the decision that we are debating today. That is also why my predecessor, my hon. Friend the Member for Hampstead and Highgate (Tulip Siddiq), was the first Minister in eight years to meet WASPI Ltd, why the Government considered the ombudsman’s investigations and reports in detail, and why we look closely at what Parliament has said on this subject. Although I understand that the outcome was disappointing for many, the decision was based on the evidence.

Before I set out how we reached that decision, as the hon. Member for East Wiltshire (Danny Kruger) requested, it is worth reiterating the point that several Members have made: the ombudsman’s report was not about the decision in 1995 to increase the state pension age for women, or the decision in 2011 to accelerate that increase. Those decisions were the focus of remarks by many Members, including my hon. Friend the Member for South Shields (Mrs Lewell-Buck). They were taken by Parliament, including by many Members who are here today, and they were upheld by the Court of Appeal in 2020.

[Sir John Hayes]

I welcome the Minister to his place; I appreciate that this debate is his first outing and his comments about the timing are well made. However, the WASPI campaigners have never made that case; they have never said that they were against the equalisation. What they said, and rightly so, is that they were not properly informed and that is precisely what the then ombudsman confirmed in his report. Will the Minister just answer this simple question? The ombudsman said that he felt it was unlikely the DWP would respond to his report—it was sad that he should have to say that. The ombudsman proposed—unusually, in his words—that the matter be laid before Parliament. Will the Minister use his endeavours to ensure Parliament gets to vote on the ombudsman’s recommendations?

[Torsten Bell]

We have already had a long statement in the main Chamber. The point of debates like this one today is to make sure that the Government are held accountable for their decisions.

--- Later in debate ---

[Torsten Bell]

If my hon. Friend will allow me to make some progress, I will come to exactly that point shortly.

There was considerable awareness that the state pension age was increasing. I think everyone agrees on that even if they do not agree about the research itself. The research used by the ombudsman, from 2004, shows that 73% of people then aged 45 to 54 were aware that the state pension age was going up. Further research shows that, by 2006—when the ombudsman finds that the direct mailing should have begun—90% of women aged 45 to 54 were aware that the state pension age was increasing. We therefore cannot accept that, in the vast majority of cases—and I appreciate it is in the vast majority of cases—sending letters earlier would have affected whether women knew their state pension age was rising or increased their opportunities to make an informed decision. It would not be reasonable—

[Sir John Hayes]

I am extremely grateful to the hon. Gentleman for giving way to me for a second time. To be clear about this: there are two issues at stake here—how many women knew, and how communications would have affected that. The fact of the matter is that the ombudsman’s report—I have it in my hand—says

“Research reported in 2004 showed that only 43% of all women affected by the 1995 Pensions Act knew their State Pension age was 65, or between 60 and 65.”

That is a clear majority of women who did not know. Therefore the only debate is whether communicating with them would have been effective. As my hon. Friend the Member for East Wiltshire (Danny Kruger) said, if it would not have been effective, what is the point in Government communicating at all?

[Torsten Bell]

I was not going to go into this detail, but the right hon. Member for South Holland and The Deepings is inviting me to return to some of my past lives with the details of surveys. The 43% figure that he is referring to refers to all women. What the ombudsman did not do is look at the same survey and look at the women who were affected by this change, who were obviously slightly later in life and much more likely to know about their state pension age. That is where the higher figures I am quoting come from. It is from the same survey as used by the ombudsman, but it is focused on the women who are actually affected by the change.

--- Later in debate ---

[Sir John Hayes]

I thank all hon. Members who have contributed to today’s debate. It has shown that the sense of injustice felt by the WASPI women is shared by Members on both sides of the House of Commons. Sadly, however—I am sorry to say this to the Minister—it is not shared by those in the driving seat who are making the decisions.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

Will the right hon. Gentleman give way? I will be quick and nice.

[Sir John Hayes]

No—forgive me, but my time is very short.

I sincerely hope that we will get a parliamentary vote on this issue and I will use every endeavour to ensure that we do. The WASPI women deserve better than the explanation we heard today, which was essentially somewhere between, “We’re not sure that their case is justified, because we think that most of them did know,” and, “We can’t afford it even if their case is justified.” Frankly, neither of those arguments will wash. The Minister, who is, as I said earlier, a decent man, must know that, just as the Prime Minister certainly feigned to know it before the general election. The question must therefore be asked, did the Prime Minister not know or did he not care? Was he careless about the support that he offered the WASPI women or did he not know what the Minister has just said?

I end with Winston Churchill, because I can do no better. He said:

“There is no worse mistake in public leadership than to hold out false hopes soon to be swept away. The British people can face peril or misfortune with fortitude and buoyancy, but they bitterly resent being deceived”.

This is deceit—nothing less, nothing more.

Question put and agreed to.

Resolved,

That this House has considered compensation for women affected by changes to the State Pension age.

Income Tax (Charge)

John Hayes Excerpts

Monday 4th November 2024 Commons Chamber

[Sir John Hayes (South Holland and The Deepings) (Con)]

Aristotle said that the state exists to advance the wellbeing of its members; a state that fails to advance its people’s wellbeing is not merely a state that acts badly, but an institution that has failed to achieve its defining purpose. Such a positive vision of the state requires strong institutions that are able to act, with a Government accountable to the people but free to take actions driven by what Disraeli understood to be the social welfare of the people.

A Chancellor who hides behind the supposedly impartial pronouncements of the OBR is incapable of delivering real, meaningful change. Restoring accountability in practice requires two parallel processes: first, political control of decision making must be rebuilt; secondly and equally importantly, a greater sense that the public have a stake in society—and by implication the state that serves it—must be engendered.

Restoring political accountability means removing what the economist and writer Dan Davies has termed “accountability sinks”: the mechanisms that ensure that nobody is to blame when things go wrong. Accountability sinks are one of the greatest banes of modern life, from automated call centres to computers that say no to applications for loans or other financial services. They are a matter of design, not accident. In the private sector, they can shield organisations from legal liability, as happened in the Post Office scandal. A decision made by an individual is much more open to question than one that is the consequence of a general policy.

In the public sphere, accountability sinks often shield politicians and other public servants from genuine accountability for Government policy. Privatisation, contracting out and private finance initiatives have all been used as ways of shifting responsibility from Government to market forces. The establishment of an independent Bank of England with an arbitrary inflation target is a classic example of a generalised policy that has replaced specific individual decision making and responsibility. Similarly, the Office for Budget Responsibility was established explicitly to protect the Treasury from taking responsibility for Budget forecasting. As Davies notes, the role of the courts and international bodies is similar.

[Sir Julian Lewis (New Forest East) (Con)]

Is my right hon. Friend suggesting that we ought to replace those bodies and have the Government re-adopt responsibility for economic policy in the round, such as by setting targets for inflation, instead of saying, “It’s all down to an unelected body”?

[Sir John Hayes]

Absolutely. Restoring accountability means reversing many of the processes that have been taken as read in recent years. Democracy is dependent on clear lines of accountability, but in the past 40 years they have been either diluted or displaced. Is it any wonder that the public feel disillusioned with the exercise of power as a result?

The British economy has suffered more at the hands of neoliberal globalisation than those of most of our competitors. Foreign ownership of UK public firms has risen from just over 10% in 1990 to 55% in 2020. Ownership has become remote and unaccountable to workers, customers and even shareholders. Credit creation has facilitated the growth of private equity and leveraged buy-outs. Private equity firms have been able to take on vast amounts of debt in order to take over businesses.

Our economy is controlled by oligarchies careless of their customers and their employees. The result has been to make all other business objectives secondary to the imperative of having enough cash to survive. As Davies puts it, the debt burden “creates an ultimatum”: if companies do not put their efforts into making profits, they go bust. Our constituents can see the increasing power of unaccountable globalist enterprises and can see the Government’s inability to do anything about it, just as farmers can see that the Government’s policy on inheritance is completely belied by the fact that most asset-rich farms do not make a lot of money. It is not about assets; it is about income. Such disillusionment is socially corrosive, but it is justifiable when the most important economic decisions are taken by commercial entities with no regard for the needs and values of the people.

Turning the ship around requires radical concerted action, not just platitudes. We need a new economic model—one that harnesses the power of the state to break up the power of rentier capitalism and restore an economy that works for society, not against it. Fraternal economics is the means; popular wellbeing is the end.

--- Later in debate ---

[Blake Stephenson (Mid Bedfordshire) (Con)]

Let me start with some positives, because I do not want the Government to think that I do not recognise the challenges that they face. I welcome the efforts to tackle NHS maintenance backlogs, which will help constituents in Mid Bedfordshire who use Luton and Dunstable hospital and Bedford hospital. I welcome the Government’s commitment to improving rural broadband and funding for flood defences and nature restoration. As the MP for the Marston Vale line, I look forward to constructive engagement on East West Rail, making sure that communities in my constituency are heard through the consultation process later this year.

I welcome the fact that this Government acknowledge the importance of economic growth, but I am concerned that, beyond acknowledging it, there is nothing really in the Budget to deliver it. Despite the warm words and platitudes of the Labour party during the election campaign, this is a deeply socialist Budget, with an ever-increasing share of our economy moving into the ambit of Government, only to be distributed by Government into areas that are unproductive of economic growth.

[Sir John Hayes]

My hon. Friend makes an excellent point about growth. The elephant in the room is productivity. He will know from the House of Commons Library figures that productivity fell in the past year, and we are lagging behind many competitive countries. In both public sector and private sector productivity, it is critical that we take further steps to develop skills to drive growth.

[Blake Stephenson]

I agree that productivity is essential, and everyone in the House needs to focus on it.

This is a dishonest and a damaging Budget. This Government promised that they would protect working people; instead, they have delivered a Budget that is tough on work and tough on the causes of work. This is a Budget that taxes employment, with 1 million employers now set to lose out. Combined with an estimated £5 billion cost of expansive employment rights, our economy will be less flexible and starved of risk capital, jobs and investment in our communities. This is a job-cutting Budget.

This is a Budget that attacks our farming families, our rural economy and our rural communities—men and women working hard day in, day out, in some of the most challenging economic circumstances, at considerable risk and with low margins, all to put food on our tables three times a day. We simply would not survive without our farmers—it is that simple. But this Government are choosing to hit those very people with a family farm tax, which will drive asset disposals, splitting up land farmed by the same families for generations. It will discourage the next generation from taking up the mantle, and tear apart the communities that these farms are integral to. Last year, the now Prime Minister said:

“Every day seems to bring a new existential risk to British farming.”

Today, the existential risk is this socialist Government.

This Budget fundamentally attacks the heart of economic growth. It crowds out private investment and reduces real business investment by £25 billion. The OBR notes:

“by the forecast horizon, government spending comprises a larger part of little-changed real GDP.”

When the Government promised growth, the British people might have hoped that it would be growth in the wealth of our country, not just the size of the state. Their own words sum that up best—the Budget says:

“Rewarding work with a fair wage is the best way to improve living standards”.

This Budget achieves none of that. Instead, it delivers lower real wages, lower real household disposable income, higher inflation and higher mortgage rates. After the Budget, the Chancellor told the British public that working people will not face higher taxes in their payslips, but she knows that is not true. More than 4 million extra taxpayers will be dragged into tax because she has kept the freeze on tax thresholds.

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[The Parliamentary Under-Secretary of State for Work and Pensions (Emma Reynolds)]

I am proud that last week we saw the first Labour Budget in almost 15 years delivered for the first time by a woman, my right hon. Friend the Chancellor. This was recognised by my hon. Friends the Members for Monmouthshire (Catherine Fookes), for Basingstoke (Luke Murphy) and for Paisley and Renfrewshire South (Johanna Baxter), and indeed by Members across the House including the hon. Members for South West Hertfordshire (Mr Mohindra) and for South Devon (Caroline Voaden).

This is a Budget for jobs, opportunities, investment and economic growth that drives down poverty and protects the payslips of working people. It is a Budget that invests in skills and our economic foundation and delivers the change that we promised during the election. Crucially, it is a Budget that restores economic stability and begins the vital work needed to rebuild our public services, which were left in a state of ruin by the Conservatives. The NHS, schools, roads, affordable housing: that is the difference that a Labour Government make.

This was a lively debate with many contributions from across the House and I want to congratulate all hon. Members, even if I did not agree with them all, on keeping to strict time limits of two or three minutes. I particularly welcome my three hon. Friends who gave excellent maiden speeches. My hon. Friend the Member for Huddersfield (Harpreet Uppal) spoke movingly and proudly about her late mum’s role as a care worker, and spoke proudly about the industrial and sporting heritage of her constituency. My hon. Friend the Member for North Somerset (Sadik Al-Hassan) spoke proudly of his constituency being home to the first mass production of penicillin. His experience as a pharmacist will be very valuable to this House. My hon. Friend the Member for Wrexham (Andrew Ranger) explained that Wrexham association football club is the third oldest in the world. That was news to me, and I was glad to hear about that. He also said that his constituency is home to the world’s oldest lager brewery and to other thriving breweries and major manufacturing companies. I would like to thank my hon. Friends for those maiden speeches.

Many hon. Friends and Members across the House welcomed the Government’s allocation of funding to two vital compensation schemes: those for the contaminated blood scandal and the Horizon Post Office scandal. The previous Government talked about those schemes but did not allocate any money for them.

I know that many hon. and right hon. Members are concerned about the changes to agricultural property relief, so I want to say something about these changes and in particular to answer the hon. Member for Mid Buckinghamshire (Greg Smith), one of my neighbours. A couple who jointly own a farm will be able to pass on land and property valued up to £3 million to a child or a grandchild tax-free. That is made up of £1 million when they combine their standard £500,000 tax-free allowances and an additional £1 million tax-free allowance each for agricultural property inheritance. I hope that gives some comfort to hon. Members across the House. At least the former Chancellor but one, Kwasi Kwarteng, was honest about the track record of the previous Government when he said last week:

“We Tories have to be honest—Rachel Reeves is dealing with our mess”.

This is a once-in-a-generation Budget that turns the page on Tory austerity and economic chaos. In addition to the £20 billion black hole in our public finances, with the last Government spending Treasury reserves three times over, there is also a record number of people relying on food banks, 700,000 more children growing up poor, the biggest increase in economic inactivity in the UK for 40 years, millions on NHS waiting lists, crumbling schools and overflowing prisons. We are determined to fix these problems.

Many hon. Friends mentioned the increase to the national living wage that we have introduced, by 6.7% to £12.21 per hour, which will be a pay rise for 3.5 million people across the country. We are also moving towards a single national minimum wage for all eligible adults, starting with the biggest-ever increase to the rate of pay for 18 to 20-year-olds, which will help nearly 200,000 young people—that is a difference that a Labour Government will make. In addition, our youth guarantee will help young people to fulfil their potential and follow their dreams.

[Sir John Hayes]

I am grateful to the hon. Lady for giving way, as she does not have much time. As an economist, she knows that it is not what we spend but what we get for it—it is value for money that counts. What is she specifically doing about productivity, which is a perennial problem in many countries, including our own?

[Emma Reynolds]

First, we want to escape the doom loop of low growth and low productivity that we inherited from the previous Conservative Government. Each Department will have to meet a 2% productivity challenge. This is not a cut to departmental spending but a Treasury requirement to ensure better productivity across the civil service.

Our Get Britain Working White Paper, which we will announce in the coming weeks, will set out reforms to our jobcentres and will empower local leaders to tackle economic inactivity in their towns and cities. This is backed by £240 million of new funding for 16 trailblazer projects. It is because we recognise that many working people face extra barriers to taking up work or increasing their hours that the Chancellor announced the biggest-ever rise in the earnings limit for carer’s allowance to help carers balance work and caring responsibilities. That is a difference that a Labour Government will make.

We will also tackle poverty and help those most in need, which is why this Budget extends the household support fund in England and discretionary housing payments in England and Wales. After conversations with the Trussell Trust, the Joseph Rowntree Foundation and many others, we are introducing our new fair repayment rate, which will reduce the cap on deductions from universal credit from 25% to 15% of the standard allowance. This will help 700,000 of the poorest households with children. And because people who have worked hard and saved all their lives deserve security and dignity, we are maintaining the triple lock, which will see state pension rises of around £1,700 over the course of this Parliament.

This is the first Labour Budget in almost 15 years. We shun the choices of the last Conservative Government. They chose low growth, low productivity and decline in our public services. We choose investment and growth, restoring economic stability, fixing the foundations, rebuilding the NHS and our other public services, pushing forward with a decade of national renewal, recruiting more teachers, bringing down NHS waiting times, building more affordable homes and, yes, filling more potholes.

This is a Budget that makes a choice about rebuilding our public services, rebuilding Britain and investing in vital infrastructure. This is a Budget that invests in the future of our country, and I commend it to the House.

Ordered, That the debate be now adjourned.—(Anna Turley.)

Debate to be resumed tomorrow.