Budget Resolutions
Debate between Karin Smyth and Nigel Huddleston(8 months, 2 weeks ago)
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The Financial Secretary to the Treasury (Nigel Huddleston)
It is my pleasure to close the first full day of debate on this spring Budget, which my right hon. Friend the Chancellor of the Exchequer brought before the House yesterday. I thank everybody for their contributions today.
The past few years have been a sobering lesson in living through history. They have not been easy for the British economy or the British people, as we face the challenges and the legacy of covid, war in Ukraine and, now, war in the middle east. We all know that we are in an election year, but it is important that we focus on the policies as well as the politics, and on the facts, not just the spin, so let us have a look at some of the facts.
Inflation has fallen from 11% last year to 4% now. We knew that reduced inflation was the single most important thing for helping families, and it has happened. Real wages are now rising, and some mortgage rates are starting to come down. The economy has also performed better than forecast. It is projected to grow by 0.8% this year and by 1.9% next year, defying expectations that we would enter a long recession.
The International Monetary Fund forecasts that the UK will have the third-fastest cumulative growth in the G7 over the next five years, and will grow faster than Japan, Germany, France and Italy. We are on track to meet our fiscal rules, underlying debt is forecast to fall as a share of GDP in the fifth year of the forecast, and by the end of the forecast, borrowing will be at its lowest share of GDP since 2001.
Of course, it is only because we responsibly reduced the deficit by 80% between 2010 and 2019 that we were in a position to provide much-needed support, to the tune of £450 billion, during the pandemic and the recent cost of living challenges that followed the invasion of Ukraine. As has been repeated by many colleagues, we did not hear the Opposition complain about that support.
The support inevitably led to higher taxes, because public expenditure was higher. How on earth did the Opposition think all those interventions would be paid for? This reality has been forcefully emphasised today by my hon. Friends the Members for Folkestone and Hythe (Damian Collins), for The Cotswolds (Sir Geoffrey Clifton-Brown), for Devizes (Danny Kruger) and for Hastings and Rye (Sally-Ann Hart), all of whom made important contributions, but the job and the recovery are not yet done. Because of the progress we have made, though, the economy is turning a corner, and we have been able to afford tax cuts as part of our plan to reward work and grow the economy.
Karin Smyth
It is astonishing that on day two of the Budget, the Government still want to tell the country that it has never had it so good. Will the Minister address some of the points made by my hon. Friend the Member for Leicester West (Liz Kendall)? What does he say to those young people who cannot work because of disability or ill health? What does he say to women in their 50s who are not working? How does he propose to get those people back to work? We are the party of work, and we have heard a lot of myths today from Conservative Members. We believe in well-paid, good-quality work. The clue is in the name of our party. What will the Government do for those women, and for those young people with disabilities?
Nigel Huddleston
That is quite amazing. I opened my speech by saying, “Let’s focus on the facts.” Is Labour really claiming to be the party of employment? Every single Labour Government in history have left office with unemployment higher than they began with.
The Secretary of State for Work and Pensions outlined how we will help the very people whom the hon. Member for Bristol South (Karin Smyth) mentions. Far from saying that everything is fine and that people have never had it so good, we are being honest with the public by saying, “We know that you have been through an incredibly difficult time.” That is precisely why we intervened to such an extent, providing over £450 billion of support during the pandemic and since. It was out of necessity. That support was needed. It is important that we are honest with the British public that the money clearly needs to be paid back. We have higher taxes out of necessity, but as my hon. Friend the Member for Folkestone and Hythe said, we reduce taxes out of choice when we can. We increase them out of necessity, and we reduce them out of choice. The Opposition do not have that philosophy.
From April 2024, we are further reducing national insurance contributions, and employees across the UK will see their national insurance contribution rate cut from 10% to 8%. Alongside the cuts we already made to NICs at the autumn statement, this is a total annual tax cut of £900 for the average worker on £35,400 a year. Self-employed national insurance will be cut further too, to 6%; 2 million self-employed will also get a tax cut, worth, on average, £650 a year. Those measures will incentivise, encourage and support more people into work or to work longer hours. 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 latest cut to NICs is the latest step towards our long-term ambition to end the unfairness that means that if somebody gets their income for having a job, they pay two types of taxes—NICs and income tax—but if they get it from other sources, they pay only one. When it is responsible and when it can be achieved without compromising high-quality public services, we will continue to cut NICs, making work pay. I believe that my neighbour, my hon. Friend the Member for The Cotswolds, outlined the precise wording from the Chancellor yesterday on that.
Of course, this should be seen in the context of our overall record on jobs, which is impressive. Since 2010, more than 2.5 million more people are in work. That is equivalent to 800 jobs created every day of the Conservative- led Administrations.
Nigel Huddleston
Yes, I hear my hon. Friend but, as I have said, there are some challenges in moving to a household system. There will be a consultation and I am sure that he and others will participate in that, and we will have further discussion in the House.
Nigel Huddleston
I do need to make some progress and respond to comments, and my right hon. Friend the Secretary of State was extraordinarily generous in taking interventions earlier on.
Nigel Huddleston
I am afraid that I cannot take any more interventions, as I have to respond to other colleagues’ questions.
My hon. Friends the Members for Christchurch, for The Cotswolds and the right hon. Member for Leeds West (Rachel Reeves) and others talked a lot about the tax burden. It is important to point out that, taken together, this Budget package and the autumn statement will reduce the tax burden by 0.6% in 2028-29. The tax burden is forecast to be lower than expected in the autumn. The tax system is competitive, when compared with other European nations, such as Germany, France and Italy, which have much higher tax-to-GDP ratios.
The hon. Member for Glenrothes (Peter Grant) and others raised the point about green policies and green energy. Of course, the UK has halved its emissions since 1990, which is faster than any other G7 country. Since September alone, companies have announced plans for £30 billion of new energy investment, and the Budget delivers on the green industry support announcements in the autumn statement 2023, including an additional £120 million for the green industries growth accelerator and other measures.
My hon. Friend the Member for Redditch (Rachel Maclean), who is my constituency neighbour on the other side, not only proudly quoted Margaret Thatcher, which of course always goes down well among Conservative Members, but gave her considered insight into mental health and resilience. She also mentioned productivity, as did several other Members, which was a key theme of the Chancellor’s speech yesterday.
My hon. Friend the Member for Thurrock (Dame Jackie Doyle-Price) and others made important points about the role of local government and local government finance. On 24 January, the Government announced an additional £600 million for local authorities in England. Taking into account that additional funding, the final local government finance settlement for 2024-25 is a 7.5% increase in cash terms on 2023-24.
Several hon. Members mentioned the importance of house building, which of course is a priority for this Government and a central part of our plans for growth. We are on track to deliver 1 million new homes in this Parliament, and have already delivered more than 233,000 homes on average each year since 2019.
The hon. Member for Bristol South said that there is nothing in the Budget for the people of Bristol South. I respectfully suggest that the national insurance cuts that we announced in the Budget will impact thousands of her constituents. She may not appreciate or value that, but I assure her that her constituents will.
Karin Smyth
My point was about the changes that we do not yet really understand in the Budget, and their effect on women in particular. Will there be an equality impact assessment showing how these changes will affect women?
Nigel Huddleston
As the hon. Lady knows, there are always tax information and impact notes—impact assessments —as part of the budgetary process.
My hon. Friend the Member for Folkestone and Hythe, in his very strong contribution, reminded us of not only the context in which we took power in 2010, which was far from the golden legacy that the Opposition received in 1997 when they took power, but the challenges that we have faced in power over the last few years. He was also very enthusiastic, as I am, about the opportunities and progress of the creative industries. That is exactly why we have focused on them, and provided more support measures in the Budget, following on from several measures over the last few years. The creative industries are vital to our economy and future growth, growing on average at about double the normal pace of the economy.
I have to call out the comments of the hon. Member for Warwick and Leamington (Matt Western) regarding the West Midlands Mayor, Andy Street, who has done so much to grow and attract investment in the west midlands. I gently remind the hon. Gentleman that the Labour council is not without its problems in Birmingham.
Football Governance
Debate between Karin Smyth and Nigel Huddleston(2 years, 7 months ago)
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Nigel Huddleston
The points raised by my hon. Friend are exactly why we are doing the right thing by providing further details in the White Paper, so that we can see exactly what the regulator’s remit and responsibilities will be. He also raises the important point that there other entities and bodies in football and we need to be clear where the roles and responsibilities lie. We have a pretty good picture of that now, and over the next few weeks and months I am sure it will become even clearer, hence the White Paper.
Karin Smyth (Bristol South) (Lab)
Bristol City are key to both the culture and the economy of south Bristol. I recently met the chief executive, who is keen on the work done by the hon. Member for Chatham and Aylesford (Tracey Crouch) and wants to see it progress. Rivalry in the city is intense, but will the Minister join me in supporting the work of Caz May and Lucy Ford, who are fans of Bristol Rovers and the founders of Her Game Too? May I press the Minister for details of the review of women’s football? I hope that the work of Her Game Too, and all the women and girls involved in grassroots football, are included in that review.
Nigel Huddleston
I thank the hon. Lady. She is right that ensuring a proper review of women’s football is of pivotal importance, and I know that has the support of the whole House. We will announce more information within the next few weeks. The scope will be different from the review of the men’s game, because the issues are slightly different. Football finance is always there, but there are other things, particularly sponsorship visibility and so on, that are pivotally important. I ask her to be patient a little bit longer and we will provide more information in due course.