Energy (oil and gas) profits levy

Laura Farris Excerpts

Tuesday 22nd November 2022 Commons Chamber

[Laura Farris (Newbury) (Con)]

Stability, growth and public services: those were the three objectives that the Chancellor set himself in preparing his statement. Overall, in the face of enormous global challenges, he can be proud of how the statement has been received by the markets and by the Office for Budget Responsibility, which estimated, after considering it, that inflation would fall by 30% next year.

I understand the attraction for the Opposition of attributing the current economic situation to the Conservative Government. I repeat what I said on the Floor of the House last week: mistakes were made in the mini-Budget. However, Opposition Front Benchers must get to grips with the fact that those mistakes were quickly corrected. Almost none of the measures that were controversial were ever implemented.

The Opposition will have to say soon why this Government are the cause of the current crisis, when every expert—from the Bank of England to the Office for Budget Responsibility to the market—says otherwise. I gently draw the Opposition’s attention to the fact that since the autumn statement was published, sterling has continued on its upward trajectory back to its March rate, gilt yields have fallen 15% from their peak after the mini-Budget, and the Chancellor’s decisive action has stabilised the mortgage market.

The Opposition do not have to take my word for it. I invite them to consider the language used by the Governor of the Bank of England when he appeared before the Treasury Committee last week. The Chair of the Committee, my hon. Friend the Member for West Worcestershire (Harriett Baldwin), asked:

“on this important question of mortgages, because it matters so much to our constituents...how much of the increase that you see in the mortgage market today has come from that independent decision by the Bank of England to tighten monetary policy and how much has been due to the disruption to the gilt market that we saw in September and early October?”

The Governor answered:

“I think the September-October thing was obviously a short-lived thing...It is pretty much on the way to being gone. That was a thing that ran from...September through to the middle of October.”

With respect, if the Opposition are going to keep parroting the line that this was a crisis made in Downing Street, it is incumbent on them to say why the Governor of the Bank of England is incorrect. It is also incumbent on them to explain why, despite everything, the Conservative party is still ahead on British trust in our ability to manage the economy.

I want to touch on three important points that came out of the autumn statement. The first relates to the cost of living. I said last week that I was pleased to see the triple lock protected and benefits uprated, costly though that has been, because inflation has a disproportionate impact on those on the lowest incomes. I have to align myself with the comments of my right hon. Friend the Member for Epsom and Ewell (Chris Grayling): it is right that the uprating is balanced by a review of the workforce, because since the pandemic began there has been a 25% increase in the number of people out of work by reason of long-term sickness. It is fair that that receives some serious scrutiny from the Department for Work and Pensions. I also welcome the increase in the national living wage to more than £10 an hour: the case for a minimum wage above £10 an hour has been quite strong for some time, but it is now overwhelming.

I hope that when the Chancellor returns to the House in the spring, he will say something about childcare. I have been working on the issue across the parties, particularly with Conservative colleagues, and with think-tanks and campaign groups; only last week I met the Women’s Budget Group and Pregnant Then Screwed. One of the most important takeaways is that, whatever cuts households make to their discretionary spending on leisure, holidays or other luxuries, one area that they are not cutting is childcare. I diverge slightly from the Opposition on this point, because I think some of the solutions are not monetary and we are not exploring all the opportunities with childminders, who offer an affordable and flexible form of childcare. I hope that the Government are thinking about the issue seriously. I think they are. I would rather they came back with a comprehensive package than with something piecemeal; I hope that that will come soon.

I also want to touch on the commitment to research and development that was made for the most dynamic sectors of our economy. Science, technology, life sciences and green industries all got a mention in the autumn statement, and all of them thrive in west Berkshire, including Stryker medical technology, Edwards Lifesciences, Vodafone, Roc Technologies, Fuel Cell Systems and Anesco. They are the great innovators of west Berkshire and they employ more than 5,000 people in my constituency alone.

The decision to protect the £20 billion R&D budget is about more than just meeting a manifesto commitment; it speaks to our ambition for those sectors, our direction of travel as a nation and our faith in the private sector to really drive growth. It also dovetails with the £800 million commitment that the Government have already made to supporting new frontiers through the Advanced Research and Invention Agency, which remains one of the most exciting innovations since I arrived in Parliament. It remains the case, though, that investment budgets are still stubbornly underused, and I hope that the Government will go further in this area and continue to expand the qualifying criteria of R&D for tax credit purposes, because there are real opportunities for our economy if we can do that.