Speaker’s Statement
Debate between Lindsay Hoyle and Mel Stride(1 month ago)
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Mel Stride (Central Devon) (Con)
I thank the right hon. Lady for advance notice of her comments.
This is a time of great concern for millions of people up and down our country, for businesses, and, as an open-trading nation, for our economy at large. Free trade has been the bedrock of prosperity for our country, and for many countries around the world, for decades. It has raised billions of people out of poverty. Tariffs are the enemy of free trade, and we on the Conservative Benches will do whatever we can to assist the Government in getting those tariffs down.
Having said that, of course we will never cease to be an effective Opposition who vigorously hold the Government to account—not least on the disastrous decisions that they have already taken in respect of our economy. We will be responsible when it comes to these matters, particularly where market sensitivities are engaged.
I want to ask the right hon. Lady the following questions. First, could she provide further details of the US negotiations and specifically whether further meetings with Scott Bessent and others have been arranged that involve her? Secondly, which areas beyond tariffs are being discussed in those negotiations? Thirdly, which sectors beyond cars and life sciences are being considered for potential Government support? Finally, could she update the House on what options there are for protecting sectors of the economy that might be affected by the dumping of goods as a consequence of trade diversion?
Rachel Reeves
I thank the right hon. Gentleman for that response and for his offer to work constructively. I know from my time as shadow Chancellor that those moments when we can work constructively together in the national interest, whether in response to covid or in supporting Ukraine against the aggression of Russia, are when this House is at its best.
The shadow Chancellor asked for further details in a number of areas. Discussions are ongoing across a range of Government Departments, including the Treasury, with the United States, and I will be meeting US Treasury Secretary Scott Bessent shortly. Beyond tariffs, we are discussing a range of different areas, but the focus is on reducing tariff and non-tariff barriers to trade, with a particular focus on those sectors that are subject to the higher tariffs.
Although the 10% tariffs are lower than those for many other countries around the world, and we welcome that, the additional tariffs on cars, on steel and potentially on life sciences pose a real challenge to our country, because those are some of our biggest export markets. That is why we made the announcements yesterday, and in those sectors—automotives, life sciences and steel—we will continue to take the action that is necessary, working in partnership with business and trade unions, to make sure we are addressing those issues. We are also using institutions such as the British Business Bank, the National Wealth Fund and UK Export Finance to help businesses through these times.
The shadow Chancellor also mentioned concerns around dumping. We are working with colleagues around the world to understand those implications, but our first priority is not to create more trade barriers but to reduce the ones that exist today.
Oral Answers to Questions
Debate between Lindsay Hoyle and Mel Stride(1 month ago)
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Mel Stride (Central Devon) (Con)
It was obvious to many before the emergency Budget that the President of the United States was going to be slapping tariffs on our exports. May I therefore ask the Chancellor why it was that she came forward at the emergency Budget with a recklessly slender slither of headroom—the same headroom that she had at the time of the autumn Budget, which proved then to be entirely inadequate. She blew that headroom and more due to her disastrous economic choices.
Darren Jones
I am sorry to disappoint the shadow Chancellor, but I am afraid that, because of the ordering of questions, he is stuck with me. To answer his question, he will have seen at the Budget that we increased the fiscal headroom back to our agreement of £9.9 billion, which was more than the headroom that we inherited from the Conservative party. The key difference is that this is a Government who take economic and political stability seriously, because when a Government lose control of the economy, they lose control of family finances and, ultimately, end up in opposition.
Mr Speaker
Just to correct the record, the Order Paper has not changed at all in topicals.
Mel Stride
You are quite right about that, Mr Speaker, as you are about everything. Indeed, the right hon. Gentleman is completely wrong when he says that he inherited less headroom than was the case at the autumn Budget. He inherited, on the current Budget, £23 billion, and he took it down to £9.9 billion to be precise. He also loosened the fiscal targets, which is why he is not underwater already on the targets that we had when we were in government.
May I ask him this: the fiscal targets are looking like they will be under a great deal of pressure come the autumn. There is a great deal of speculation and uncertainty among businesses as to whether this will lead to tax increases. Can he take away that uncertainty now, particularly given the tariffs and all the uncertainty that is vested in that, to make it clear at that Dispatch Box that there will be no further increases in taxation on businesses this Parliament?
Spring Statement
Debate between Lindsay Hoyle and Mel Stride(1 month, 2 weeks ago)
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Mel Stride (Central Devon) (Con)
At the last Budget, the right hon. Lady said that she would bring stability to the public finances, but this statement, more appropriately referred to as an emergency Budget, has brought her to a cold—[Interruption.]
Mr Speaker
Order. Rightly, I wanted to hear the Chancellor, and I now want to hear the shadow Chancellor. [Interruption.] I do not need any help.
Mel Stride
This emergency Budget has brought the right hon. Lady to a cold hard reckoning. She has become fond recently of talking about the world having changed, and indeed it has. This country was growing at the fastest rate in the G7 only about a year ago. Just as the OECD, the Bank of England and other forecasters—including, we learn today, the OBR—have stated, growth has been halved for this year. It has been cut in two as a consequence of the decisions and the choices that the right hon. Lady has made on her watch. Inflation was down to 2%—bang on target—under a Conservative Government on the very day of the last general election. We are now told that this year we will be running at twice the level as was forecast under us in 2024. That will mean prices bearing down on households and on businesses right across the country, because of her choices.
The OBR also says that unemployment will be rising this year, next year and the year after. In fact, across the forecast period it will not decline at all. So much for the right hon. Lady’s back to work plans. We have already seen what it means when it comes to controlling borrowing under this Chancellor. She has come forward now with a plan to squeeze spending later on in the forecast period, and she has of course told the OBR that these are the elements of spending restraint to which she will stick, but what do the markets think? Given her track record, and the fact that she has failed to control spending and borrowing to date, what does the right hon. Lady think the markets will make of her latest promises?
Of course, the right hon. Lady says that none of this is her fault. It is the war in Ukraine, it is President Trump; it is tariffs; it is President Putin; it is the Conservatives; it is her legacy; it is anyone but her. What the British people know, however, is that this is a consequence of her choices. She is the architect of her own misfortune. It was the right hon. Lady who talked down the economy so that business surveys and confidence crashed through the floor. It was the right hon. Lady who confected the £22 billion black hole, a smokescreen that was only ever there to cover up for the fact that she and the Prime Minister reneged on their promises to the British people during the last general election, and a black hole that the Office for Budget Responsibility itself—ironically, at the Government’s behest—has said it will not legitimise. She chose to be reckless with a sliver of headroom against her fiddled targets. She borrowed and spent and taxed as if it were the 1970s. Little wonder that the Chancellor has tanked the economy, little wonder that we have an emergency Budget, all because of her choices.
The Chancellor likes to tour the television studios and tell everyone that they should be thankful that she will not be ramping up taxes in this emergency Budget as she did before, but that will be cold comfort to the millions up and down the country who are waiting in fear and trepidation for the start of the new tax year, buckling under the burden of tax that will rise to the highest tax burden—on her watch—in the history of our country. May I ask the right hon. Lady whether, when she replies, she will give that much-needed reassurance, particularly to businesses, that she will not be ramping up taxes still further in the autumn? Even a basic economist knows that if you tax something, you get less of it. You do not need to have worked at the Bank of England for 10 years to know that.
So what did the Chancellor tax? She taxed jobs and wealth creation. She has destroyed livelihoods. Businesses have been clobbered, big and small—small companies, the backbone of our economy—and enterprise has been crushed on the altar of her ineptitude. The Chartered Institute of Personnel and Development has told us that a third of the businesses affected will shed labour, with Morrisons losing 200 jobs, Tesco 400, and Sainsbury’s 3,000. No wonder the Federation of Small Businesses has said that outside the pandemic, business confidence has been left at its lowest level on record. However, it is not just businesses. It is charities, it is GPs, it is pharmacies, it is those who transport children with special educational needs, and it is hospices caring for the sick and the dying. In this House, the Labour party had the opportunity, yesterday and last week, to stop that, but they voted our amendments down, and we will never let their constituents forget it.
If you ramp up taxes, Mr Speaker, and if you ramp up borrowing and spending without any commensurate improvement in productivity, it leads to growing inflation, and inflation has been increasing on this Government’s watch. It means that interest rates stay higher for longer. The Chancellor has just trumpeted the fact that there have been three interest rate cuts since the Labour party came to office. She knows full well that there would have been more than that had she managed—[Interruption.] She knows full well that interest rates are higher for longer because of the choices that she made. This has led to servicing costs for our national debt running at twice the defence budget, and today we have learnt from the OBR that debt interest is to increase still further—and none of this money will be spent on public services. It will be going down the drain.
The real black hole is not the one that the Chancellor invented; it is the one that the Chancellor created. Is not the central problem that this Chancellor is a gambler? Even with her fiddled fiscal targets, she left way too little headroom. Is not the truth that while the right hon. Lady said of the last Budget that it was a
“once-in-a-parliament reset”,
she rolled the dice on a wafer-thin margin, and she lost? Reckless, with her fingers crossed, she fiddled the targets and she missed them. [Interruption.]
Mr Speaker
Order. I am not sure about the language being used. I think there are better and more constructive words that the shadow Chancellor would prefer to use in future.
Mel Stride
May I just point out that all the Chancellor’s fiscal headroom disappeared, not just some of it? In fact, she went underwater to the tune of £4.1 billion. Reeling from one fiscal event to the next is not a way to run the public finances, and breaking your fiscal rules to the extent that the right hon. Lady has in just six months is a public humiliation.
May I now focus briefly on defence spending? We on this side of the House welcome the fact that the Government will reach 2.5% of GDP by 2027, as we pressed them to do, and we note the stepping stone along the way that the right hon. Lady has just announced, but we should go further than that. The 3% target should be brought forward to this Parliament. So may I ask the right hon. Lady: given the geopolitical tensions that she has raised, what provision she has made in her headroom, in her fiscal plans, for increasing defence spending more quickly in this Parliament, if that proves necessary? May I also ask her this: would she scrap the absurd Chagos deal, and put that money behind our armed forces?
The economy is in a perilous state, but there was a different way. There were different choices on taxing and spending and borrowing, and on productivity, and on welfare. Let me just say a few words about welfare. It was the privilege of my life to serve as the Secretary of State for Work and Pensions, and when it came to welfare reform, with that privilege came a deep responsibility: the responsibility for welfare reform to be properly thought through, with a very clear plan—[Interruption]—I know that Labour Members do not like it, because it is an alien idea to their party—so that we could be fair to the taxpayer, but equally fair to the many people up and down the country, some of whom are highly vulnerable. That was an approach, on our watch, that led to £5 million of savings across the forecast period, and 450,000 fewer people going on to long-term sickness and disability benefits as a direct consequence.
We would have gone further—much further—and we set out a clear plan in our manifesto to do exactly that, but those in the party opposite rushed their changes. They had no plan. There was not a single mention of the personal independence payment in the Labour party manifesto, and when they got into office, the Labour Government pussyfooted around and dithered. Why? Because it is deeply divisive within their rank and file. Then suddenly, when the Chancellor decided that she had run out of money, out went the word to find some savings in welfare, to scrabble around, to yank every lever possible.
Then there was the spectacle, frankly, of what the OBR has said about the simply shambolic changes that were announced only last week by the Secretary of State for Work and Pensions. We have gone from incompetence to chaos. There have been more changes to this policy than there were at the last minute to the right hon. Lady’s LinkedIn profile. The result is the worst of all worlds: a wholly inadequate level of savings on welfare, with welfare costs spiralling ever higher, and changes that are likely to harm many vulnerable people. May I ask the right hon. Lady: when the Secretary of State for Work and Pensions came to the House last week with these changes, she did not provide an impact assessment, but was this because the OBR had not signed off the numbers, was it because the Department did not have enough time to produce one, or was it only provided today, as many of us suspect, because this was thought to be a good time to bury bad news?
The forecast for growth is down, the forecasts for borrowing costs and inflation are up, and business confidence has been smashed into a million pieces. This Chancellor is constantly trying to blame forces beyond her control. The right response is not to duck responsibility, but to build a resilient economy. The right hon. Lady would have us believe that that is what she is doing, but how can we believe this Chancellor? How can we trust this Chancellor? She is the Chancellor who said she would not increase borrowing, but she did. She said she would not change her fiscal rules, but she did. She said she would not put up national insurance, but she did. She said she would not cut the winter fuel payment, but she did. She said she would not tax farmers, but she did, and she said she would not move to more than one fiscal event a year, and she just has. Now we are all paying the price of her broken promises. Today’s numbers confirm it. We are poorer and we are weaker. To govern is to choose, and this Chancellor has made all the wrong choices.
Rachel Reeves
I know that the shadow Chancellor has not been in his role for very long, but at least he is not misquoting Shakespeare today. If this was a Budget, it would be the Leader of the Opposition responding. I am glad that she is still in her place, but I know she will want to get back to her office for a lunchtime steak soon.
The right hon. Gentleman talks about Budgets. Let me remind the Conservative party that the only emergency Budget we have seen in recent years was in response to their party’s disastrous mini-Budget—a mini-Budget that crashed the economy, sent mortgage bills spiralling and left a £22 billion black hole in our nation’s finances. Conservative Members may have forgotten about the damage that they did to our country, but the British people never will.
As always, the shadow Chancellor talked a lot, but he did not offer a single alternative. He says he opposes our tax rises, but he cannot tell us whether he would cut the NHS to reverse them. He says he wants economic growth, but Conservative Members abstained on the very planning reforms that the OBR has said will kick-start growth. Mr Speaker, you do not change the country by abstaining or by sitting on the fence; you change the country by leading and by taking action, and that is what this Government are doing. The shadow Chancellor says he wants businesses to trade, but he does not want us to talk to the second largest economy in the world or, indeed, our biggest trading partners in the European Union. He simply is not serious. Four months into the job, and he has got no clue.
The right hon. Gentleman wants to talk about growth, but he does not say anything about the fact that the OBR has upgraded growth next year and every single year after. He talks about pensioners, but he forgets that it is his party’s policy to scrap the triple lock, which we are protecting and which will mean the state pension rising next month by over £400. He talks about wages, but he forgets the fact that we are boosting wages by boosting the national living wage from next month. The shadow Chancellor says nothing about living standards or this morning’s fall in inflation, because the last Parliament was the worst on record, and the OBR has today revised up its forecast for family finances. Working people are always better off with Labour.
The right hon. Gentleman is learning something, because at least this time he has asked a couple of questions, so let me respond to them. He asked what the markets should make of this. What the markets should see is that, when I have been tested with a deterioration in the headroom, we have restored that headroom in full. That is one of the choices that I made. He says that it is a sliver of a headroom. Well, it is 50% more headroom than I inherited from the Conservative party. When I was left with a sliver of headroom, I rebuilt it after the last Government eroded it. That is the difference that we have made. While they left the public finances and the public services in a mess, we wiped the slate clean, which means that we have the flexibility now to increase defence spending, as the leader of the Labour party has done. The Conservatives had 14 years to increase defence spending, and now they lately come to the party.
The shadow Chancellor mentions welfare reform and his time at the Department for Work and Pensions. What a legacy: one in eight young people not in education, employment or training, and 1,000 people a day going on to personal independence payments. The OBR says today that welfare spending as a share of GDP will now start falling—a far cry from what we had under the Conservative party. The shadow Chancellor speaks about employment. The OBR says that employment will increase, that wages will increase and that living standards will increase. What a change, after 14 years of the Conservative party.
The world is changing, and no one can be in any doubt about it, but the Conservative party is stuck in the past—divided, out of touch and carping from the sidelines. Conservative Members have no plan: no plan to kick-start growth, no plan to fix our public services and no plan to keep our country safe. The only plan for change they are working on is a plan to change their party leader, and we cannot blame them for that.
If the Opposition have no plan, let me remind them about ours. The minimum wage up, real wages up, house building up, NHS investment up, investment in our schools up, investment in our roads up, defence spending up—and every single one of those policies is opposed by the party opposite. They are opposed by the Conservatives, opposed by Reform, opposed by the SNP, opposed by the Liberal Democrats and opposed by the Greens. It is the anti-growth coalition in action. They are the blockers. We are the builders—securing Britain’s future, protecting working people and delivering change.
Oral Answers to Questions
Debate between Lindsay Hoyle and Mel Stride(2 months ago)
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Mel Stride (Central Devon) (Con)
How many jobs will the right hon. Lady destroy as a result of her jobs tax?
Oral Answers to Questions
Debate between Lindsay Hoyle and Mel Stride(3 months, 2 weeks ago)
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Mel Stride (Central Devon) (Con)
A moment ago, the right hon. Lady spoke about the importance of spending money wisely, so in the light of the Treasury Committee’s conclusion that her new Office for Value for Money is a waste of money, does she agree that one of its early actions should be to abolish itself in order to save money?
Public Finances: Borrowing Costs
Debate between Lindsay Hoyle and Mel Stride(4 months ago)
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Mel Stride
The performance we have just seen was a slightly anxious and breathless one, which leads me to the question: where is the Chancellor? It is a bitter regret that at this difficult time and given these serious issues, she herself is nowhere to be seen.
In the last 48 hours, borrowing costs have reached a 27-year high, and it is the Chancellor’s decisions that have led us here. Before the election, the right hon. Lady promised that Labour would get debt falling, would not fiddle the figures, would not raise taxes and would grow the economy, but the economy is now flatlining. Survey after survey is showing that business confidence has simply evaporated, and at the Budget, the Chancellor hiked up taxes, increased borrowing by an average of £32 billion a year across the forecast, and conveniently adjusted her fiscal rules to allow her to do so.
Higher debt and lower growth are understandably now causing real concerns among the public, among businesses and in the markets, and despite what the Chief Secretary has said about international factors, the premium on our borrowing costs compared with German bonds recently hit its highest level since 1990. With those rising costs, regrettably, the Government may now be on course to breach their fiscal rules. The Chancellor has committed to no further tax rises, so does the right hon. Gentleman stand by her commitment not to increase taxes even further? If so, does that mean that the public should expect cuts to public service spending if the OBR judges that her fiscal headroom has evaporated?
There are media reports that the Chancellor will make an emergency intervention to soothe markets, but with no confirmation that such a statement will occur in this House. Will the right hon. Gentleman confirm that any such statement will be made first to Members in this House? Rates on Government bonds ultimately feed through to the broader credit market, so what estimates has the Treasury made of how recent market movements will impact mortgage costs and lending across the economy?
I will make one final point, Mr Speaker. Every pound that we spend on debt interest is money that we cannot spend on the public’s priorities. The Government’s decision to let rip on borrowing means that their own tax rises will end up being swallowed up by higher borrowing costs, at no benefit to the British people. Far from this Government laying the foundations for a stronger economy, the Chancellor is squandering the endeavours of millions of hard-working people up and down our country, who are now having to pay the price for yet another socialist Government taxing and spending their way into trouble. Does the right hon. Gentleman not now accept that it is time to change course?
Darren Jones
I am pleased that the right hon. Gentleman enjoyed my performance—I have not even had my first cup of coffee yet this morning. Let me answer some of his questions. [Interruption.] Conservative Members might like to listen, if the questions are so important to them.
The right hon. Gentleman asked me about the fiscal rules. As I said in my statement, those rules are non-negotiable. As the Chancellor set out at the Budget, we have two fiscal rules: first, that day-to-day spending should be met by tax receipts, and secondly, that debt should be falling as a share of the economy.
The right hon. Gentleman talked about the debt burden that this country has. Maybe we should reflect a little on why we have so much debt—[Interruption.] From pre-pandemic, Mr Speaker. Let us look at the burden of debt inherited by this Government from the Conservatives. From 2010 onwards, why did the last Government have to borrow so much money every single month, not just to invest but to pay the day-to-day bills? Because of an absolute failure to get growth into the economy. They could not make the numbers add up. They stacked up the country’s credit card and left it to the Labour party to deal with, and we are going to deal with it. That is why those fiscal rules are non-negotiable, and it is why public spending will be within the numbers set out at the Budget.
We are starting the spending review now, and it will conclude in June. Public services will have to live within their means—the Chancellor has been very clear about that. That is why with this Government, you get economic stability and absolute clarity on public spending. That is why the British people trust this party and booted that lot out of office.
Oral Answers to Questions
Debate between Lindsay Hoyle and Mel Stride(5 months, 1 week ago)
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Mel Stride (Central Devon) (Con)
What a pleasure it is to appear opposite the right hon. Lady for the first time. I was tempted to ask her how things were going, but I did not want to start out by being unkind. I will instead ask this: when she recently pledged to the CBI that she would not raise taxes again, did she mean it?
Oral Answers to Questions
Debate between Lindsay Hoyle and Mel Stride(7 months ago)
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Mel Stride (Central Devon) (Con)
In the general election, the Labour party promised that it had no plans to means-test the winter fuel allowance, yet we learn that millions of pensioners are to be affected. Indeed, in 2017 the right hon. Lady’s party produced an analysis suggesting that around 4,000 pensioners would die prematurely were this policy to be brought into effect. Does she stand by that figure of around 4,000? If not, how many premature deaths does she believe will occur as a result of this policy?
Mel Stride (Central Devon) (Con)
On 10 September, two days before recess, I led a debate in this Chamber, secured by the Conservative party, on the winter fuel allowance. The right hon. Lady spoke just now about transparency, but there was no equality impact assessment made available for that debate. Indeed, on 30 August, by way of a written question, my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) established that the Government had no intention of publishing that particular report. Yet on 13 September—two days after the debate and the vote, and one day after Parliament had risen—the report was made available. It was clearly, in my opinion, deliberately withheld. Does the right hon. Lady agree?