(1 month ago)
Commons ChamberBefore I begin my statement, my thoughts and prayers are with those affected by the events in Southport, and I am sure that the whole House will join me in paying tribute to our emergency services who are dealing with this ongoing situation.
On my first day as Chancellor of the Exchequer, I asked Treasury officials to assess the state of public spending. That work is now complete and I am today presenting it to this House. In this statement, I will do three things. First, I will expose the scale—and the seriousness—of what has been uncovered; second, I will lay out the immediate action that we are taking to deal with the inheritance; and third, I will set out our longer-term plans to fix the foundations of our economy. Let me take each of these points in turn.
First, I turn to the inheritance. Before the election, I said that we would face the worst inheritance since the second world war: taxes at a 70-year high, debt through the roof, and an economy only just coming out of recession. I knew all of those things, and during the campaign, I was honest about them and about the difficult choices that they meant. The British people knew them too. That is why they voted for change. But upon my arrival at the Treasury three weeks ago, it became clear that there were things that I did not know—[Interruption.]
Order. This is an important statement for all constituents, including mine. If I am struggling to hear it, they are struggling at home as well. You will all get your chance to ask questions; I think it is more important to hear, and then comment.
There were things that the Conservative party covered up—covered up from the Opposition, from this House and from the country. That is why today we are publishing a detailed audit of the real spending situation, a copy of which will be laid in the House of Commons Library. I take this opportunity to thank the Chief Secretary to the Treasury, my right hon. Friend the Member for Bristol North West (Darren Jones), for his leadership, and Treasury officials for all their work in producing this document.
Let me now explain what that document has uncovered. The previous Government published their plans for day-to-day spending in the spring Budget in March, but when I arrived at the Treasury, I was alerted by officials on the very first day that that was not how much the Government had expected to spend this year. It was not even close; in fact, the total pressure on those budgets across a range of areas was an additional £35 billion. Once we account for the slippage in budgets that we usually see over a year and the reserve of £9 billion designed to respond to genuinely unexpected events, that means that we have inherited a projected overspend of £22 billion. That is a £22 billion hole in the public finances now—not in the future, but now. It is £22 billion of spending this year that was covered up by the Conservative party. If left unaddressed, it would mean a 25% increase in the budget deficit this year, so today I will set out the necessary and urgent work that I have already done to reduce that pressure on the public finances by £5.5 billion this year and over £8 billion next year.
Let me be clear: I am not talking about costs for future years that the previous Government signed up to but did not include, like the compensation for infected blood, which has cross-party support. I am not talking about the state of public services in the future, like the crisis in our prisons that they have left for us to fix. I am talking about the money that the previous Government were already spending this year and had no ability to pay for, which they hid from the country. They had exhausted the reserve and they knew that, but nobody else did. They ducked the difficult decisions, put party before country, and continued to make unfunded commitment after unfunded commitment, knowing that the money was not there. That has resulted in the position that we have now inherited: the reserve was spent more than three times over only three months into the financial year, and the previous Government told no one.
The scale of this overspend is not sustainable, and to not act is simply not an option. This month, we have seen official Office for National Statistics figures showing that borrowing is higher this year than the Office for Budget Responsibility expected, and the disaster of Liz Truss’s mini-Budget shows what happens if we do not take tough decisions to maintain economic stability. Some, including the Leader of the Opposition and the shadow Chancellor, the right hon. Member for Godalming and Ash (Jeremy Hunt), have claimed that the books were open. How dare they? It is not true, and I will tell the House why: there are very clear instances of specific budgets that were overspent and unfunded promises that were made, but that—crucially—the OBR was not aware of for its March forecast. I will take each in turn.
The first is the asylum system. The forecast for the number of asylum seekers has risen dramatically since the last spending review, and costs for asylum support have risen sevenfold in the past three years, but instead of reflecting those costs in the Home Office budget for this year, the previous Government covered up the true extent of the crisis and its spending implications. The document I am publishing today reveals a projected overspend on the asylum system, including the previous Government’s failed Rwanda plan, of more than £6.4 billion for this year alone. That figure was unfunded and undisclosed.
Next, in the wake of the pandemic, demand for rail services fell. Instead of developing a proper plan to adjust to that new reality, the Government handed out cash to rail companies to make up for passenger shortfalls, but failed to budget for this adequately. Because of that, and because of industrial action, there is now an overspend of £1.6 billion in the transport budget. That was unfunded and undisclosed.
Since 2022, the Government, with the support of the whole House, have rightly provided military assistance to Ukraine in response to the Russian invasion. The spending audit found that there was not enough money set aside in the reserve to fund all these costs. We will continue to honour these commitments in full, and unlike the previous Government, we will make sure that they are always fully funded.
On top of these new pressures, since 2021 inflation was above the Bank of England’s target for 33 months in a row—hitting 11% at its peak—but the previous Government had not held a spending review since 2021, which means that they never fully reflected the impact of inflation in departmental budgets. That had a direct impact on budgets for public sector pay.
When the last spending review was conducted, it was assumed that pay awards would be 2% this year. Ordinarily, the Government are expected to give evidence to the pay review bodies on affordability, but extraordinarily, this year the previous Government provided no guidance on what could or could not be afforded to the pay review bodies. That is almost unheard of, but that is exactly what they did. Worse still, the former Education Secretary had the pay review body recommendations sitting on her desk. Instead of responding and dealing with the consequences, the Government shirked the decisions that needed to be taken.
I will not repeat the previous Government’s mistakes. Where they provided no transparency to the public, and no certainty for public services, we will be open about the decisions that are needed and the steps that we are taking. That begins with accepting in full the recommendations of the independent pay review bodies. The details of these awards are being published today. That is the right decision for the people who work in, and most importantly the people who use, our public services. It gives hard-working staff the pay rises they deserve while ensuring that we can recruit and retain the people we need.
It should not have taken this long to come to these decisions and I do not want us to be in this position again, so I will consider options to reform the timetable for responding to the pay review bodies in the future. This decision is in the best interests of our economy too: the last Government presided over the worst set of strikes in a generation, which caused chaos and misery for the British public and wreaked havoc on the public finances. Industrial action in the NHS alone cost the taxpayer £1.7 billion last year. That is why I am pleased to announce today that the Government have agreed an offer to the junior doctors that the British Medical Association is recommending to its members.
My right hon. Friend the Health Secretary will set out further details. Let me pay tribute to him: his leadership on the issue has paved the way to ending a dispute that has caused waiting lists to spiral, operations to be delayed and agony for patients to be prolonged. Today marks the start of a new relationship between the Government and staff working in our national health service, and the whole country will welcome that.
Where the previous Government ducked the difficult decisions, I am taking action. Knowing what they did about the state of the public finances, they continued to make unfunded commitment after unfunded commitment that they knew they could not afford, putting party before country and leaving us with an overspend of £22 billion this year. Where they presided over recklessness, I will bring responsibility. I will take immediate action. Let me set it out in detail.
On pay, I have today set out our decision to meet the recommendations of the pay review bodies. Because the previous Government failed to prepare for these recommendations in the departmental budgets, they come at an additional cost of £9 billion this year. The first difficult choice I am making is to ask all Departments to find savings to absorb as much of this as possible, totalling at least £3 billion. To support Departments as they do this, I will work with them to find savings ahead of the autumn Budget, including through measures to stop all non-essential spending on consultancy and Government communications. I am also taking action to ask Departments to find 2% savings in their back-office costs.
I will now deal with a series of commitments made by the previous Government that they did not fund, because if we cannot afford it, we cannot do it. First, at the Conservative party conference last year, the former Prime Minister announced the introduction of a new qualification: the advanced British standard. That is a commitment costing nearly £200 million next year, rising to billions across future years. This was supposed to be the former Prime Minister’s legacy, but it turns out that he did not put aside a single penny to pay for it. So we will not go ahead with that policy, because if we cannot afford it, we cannot do it.
Next, the Illegal Migration Act 2023, passed by the previous Government, made it impossible to process asylum applications or remove people who have no right to be here.
Instead, they relied on a doomed policy to send asylum seekers to Rwanda on planes that never took off, leaving tens of thousands of people stuck in hotels on the public purse. We need a properly controlled and managed asylum system where rules are enforced, so that those with no right to be here are swiftly removed. So we have scrapped their failed Rwanda scheme, which placed huge pressure on the Home Office budget. To bring down these costs as soon as possible, my right hon. Friend the Home Secretary has already laid legislation to remove the retrospective element of the Illegal Migration Act, which will significantly reduce the use of hotel accommodation. These measures will save nearly £800 million this year and avoid costs spiralling even further next year. This was a bad use of taxpayers’ money, and we will not do it.
The previous Government claimed they were levelling up the country. They made promise after promise to the British people, but the spending audit has uncovered that some of those commitments were not worth the paper that they were written on. At autumn statement last year, the former Chancellor announced £150 million for an investment opportunity fund, but not a single project has been supported from that fund.
So following discussions with my right hon. Friend the Deputy Prime Minister, I am cancelling it today, because if we cannot afford it, we cannot do it.
The previous Government also made a series of commitments on transport, promises that people expected to be delivered and promises that many Members across this House campaigned on in good faith, but the Conservative party has failed them. We have seen from the National Audit Office the chaos that the previous Government presided over, with projects over budget and delayed again and again. The spending audit has revealed £1 billion of unfunded transport projects that have been committed to next year, so my right hon. Friend the Transport Secretary will undertake a thorough review of these commitments. As part of that work, she has agreed not to move forwards with projects that the previous Government refused to publicly cancel, despite knowing full well that they were unaffordable. That includes proposed work on the A303 and the A27, and my right hon. Friend will also cancel the restoring your railway programme, saving £85 million next year, with individual projects to be assessed through her review. If we cannot afford it, we cannot do it.
The previous Government had plans for a retail sale of NatWest shares. We intend to fully exit our shareholding in NatWest by 2025-26. But having considered advice, I have concluded that a retail share sale offer would involve significant discounts that could cost taxpayers hundreds of millions of pounds. It would therefore not represent value for money, and it will not go ahead. It is a bad use of taxpayers’ money, and we will not do it.
Next, let me address the unfunded pressures in our NHS and our social care sector.
In October 2020, the Government announced that 40 new hospitals would be built by 2030. Since then, only one new project has opened to patients, and only six have started their main construction activity. The National Audit Office was clear that delivery was wildly off track, but since coming into office, it has become clear that the previous Government continued to maintain their commitment to 40 hospitals without anywhere close to the funding required to deliver them. That gave our constituents false hope. We need to be straight with the British people about what is deliverable and what is affordable, so we will conduct a complete review of the new hospital programme, with a thorough, realistic and costed timetable for delivery.
Adult social care was also neglected by the previous Government. The sector needs reform to improve care and to support staff. In the previous Parliament, the Government made costly commitments to introduce adult social care charging reforms, but they delayed them two years ago because they knew that local authorities were not ready and that their promises were not funded, so it will not be possible to take forward those charging reforms. This will save over £1 billion by the end of next year.
Order. I want Government Members to be quiet as well—I want to hear the Chancellor of the Exchequer.
I can understand why people, and Members, are angry. I am angry too. The previous Government let people down. The previous Government made commitment after commitment without knowing where the money was going to come from. They did this repeatedly, knowingly and deliberately.
Today, I am calling out the Conservatives’ cover-up and I am taking the first steps to clean up what they have left behind, but the scale of the inheritance we have been left means that the decisions we have so far announced will not be enough. This level of overspend is not sustainable. Left unchecked, it is a risk to economic stability—and unlike the Conservative party, I will never take risks with our country’s economic stability. It therefore falls to us to take the difficult decisions now to make further in-year savings.
The scale of the situation we are dealing with means incredibly tough choices. I repeat today the commitment that we made in our manifesto to protect the triple lock, but today I am making the difficult decision that those not in receipt of pension credit or certain other means-tested benefits will no longer receive the winter fuel payment, from this year onwards. The Government will continue to provide winter fuel payments worth £200 to households receiving pension credit or £300 to households in receipt of pension credit with someone over the age of 80. Let me be clear: this is not a decision I wanted to make, nor is it the one that I expected to make, but these are the necessary and urgent decisions that I must make. It is the responsible thing to do to fix the foundations of our economy and bring back economic stability.
Alongside this change, I will work with my right hon. Friend the Work and Pensions Secretary to maximise the take-up of pension credit by bringing forward the administration of housing benefit and pension credit, repeatedly pushed back by the previous Government, and by working with older people’s charities and local authorities to raise awareness of pension credit and help identify households not claiming it.
This is the beginning of a process, not the end. I am announcing today that I will hold a Budget on 30 October, alongside a full economic and fiscal forecast from the Office for Budget Responsibility. I have to tell the House that the Budget will involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax. [Hon. Members: “Ah!”] Mr Speaker, they still don’t get it, do they? Parties in Downing Street, crashing the economy, gambling on the election—party before country, every single time.
It will be a Budget to fix the foundations of our economy, and it will be a Budget built on the principles that this new Government were elected on. First, we will treat taxpayers’ money with respect by ensuring that every pound is well spent, and we will interrogate every line of public spending to ensure that it represents value for money. Secondly, I can repeat from the Dispatch Box our manifesto commitment that we will not increase taxes on working people. That means that we will not increase national insurance, the basic, higher or additional rates of income tax, or VAT. Today, my hon. Friend the Exchequer Secretary is publishing further detail on our manifesto commitments to close tax loopholes and clamp down on tax avoidance to ensure that we bring in that money as quickly as possible. My third principle is that we will meet our fiscal rules: we will move the current budget into balance and we will get debt falling as a share of the economy by the end of the forecast.
These are the principles that will guide me at the Budget, but let me be honest: challenging trade-offs will remain, so today I am launching a multi-year spending review. This review will set departmental budgets for at least three years, providing the long-term certainty that has been lacking for too long. As part of that process, final budgets for this year and budgets for next year, 2025-26, will be set alongside the Budget on 30 October.
I will look closely at our welfare system, because if someone can work, they should work. That is a principle of this Government, yet under the previous Government, welfare spending ballooned, while inactivity has risen sharply in recent years. We will ensure that the welfare system is focused on supporting people into employment, and we will assess the unacceptable levels of fraud and error in our welfare system and take forward action to bring that down.
To fix the foundations of our economy, we must ensure that never again can a Government keep from the public the true state of our public finances. The fiscal framework I have inherited had several flaws. It allowed the Government to run down the clock on departmental budgets to avoid difficult decisions and to push them back beyond the election, so I am announcing the most significant set of changes to our framework since the inception of the Office for Budget Responsibility. These changes will come into effect in the autumn.
First, we have introduced legislation to ensure that we can never again see a repeat of the mini-Budget. Secondly, we will require the Treasury to share with the Office for Budget Responsibility its assessment of immediate public spending pressures, and we will enshrine that rule in the charter for budget responsibility, so that no Government can ever again cover up the true state of our public finances. Finally, we will ensure that never again do public service budgets get set at only a few months’ notice. Instead, spending reviews will take place every two years, with a minimum planning horizon of three years, to avoid uncertainty for Departments and to boost stability for our public finances. I have already spoken to the chair of the Office for Budget Responsibility to brief him on the findings of our audit and our reforms.
By launching the spending review, I am also today starting the firing gun on a new approach to public service reform to drive greater productivity in the public sector. We will embed an approach to government that is mission-led, that is reform-driven, with a greater focus on prevention and the integration of services at a national and local level, and that is enabled by new technology, including through the work of my right hon. Friend the Secretary of State for Science, Innovation and Technology on the opportunities of artificial intelligence to improve our public services. We will establish a new office of value for money, with an immediate focus on identifying areas where we can reduce or stop spending, or improve its value.
We will appoint a covid corruption commissioner to bring back money that is owed to taxpayers after contracts worth billions of pounds were handed out by the previous Government during the pandemic. Ahead of the spending review, I will also review the cost of our political system, including restricting eligibility for ministerial severance payments based on time in office. I expect all levels of government to be run effectively and efficiently, and I will work with leaders across our country to deliver just that. That means effective local government, a civil service delivering good value for the British taxpayer and reform of our political institutions, including the House of Lords, to keep costs as low as possible.
The Budget and spending review will also set out further progress on our No. 1 mission: to grow our economy. Economic growth is the only way to sustainably improve our public services and our public finances, so we will use the spending review to prioritise specific areas of capital investment that leverage in billions more in private investment. It will not happen overnight—it will take time and it will take focus—but we have already made significant progress, including: planning reforms to get Britain building; a national wealth fund to catalyse private investment; a pensions investment review to unlock capital for our businesses; Skills England to create a shared national ambition to boost skills across our country; and work across government on a new industrial strategy, driven forward by a growth mission board, to ensure that we deliver on our commitments.
Our country has fundamental strengths on which we can build, and I look forward to welcoming business leaders to the international investment summit in Britain later this year. I know that if we can create the stable conditions that investors need to thrive, we will return confidence to our economy so that entrepreneurs and businesses big and small know that this is the best place in the world to start and grow a business. That is the bedrock on which economic growth must be built.
The inheritance from the previous Government is unforgiveable. After the chaos of partygate, when they knew that trust in politics was at an all-time low, they gave false hope to Britain. When people were already being hurt by their cost of living crisis, they promised solutions that they knew could never be paid for, roads that would never be built, public transport that would never arrive and hospitals that would never treat a single patient. They spent like there was no tomorrow because they knew that someone else would pick up the bill. Then, in the election—perhaps this is the most shocking part—they campaigned on a platform to do it all over again, with more unfunded tax cuts and more spending pledges, all the time knowing that they had no ability to pay for them. No regard for the taxpayer. No respect for ordinary, hard-working people.
I will never do that. I will restore our country’s economic stability. I will make the tough choices. I will fix the foundations of our economy so that we can rebuild Britain and make every part of our country better off. I commend this statement to the House.
The Chancellor says that the information is new, but she told the Financial Times:
“You don’t need to win an election to find”
out the state of public finances, as
“We’ve got the OBR now.”
Paul Johnson of the Institute for Fiscal Studies has said:
“The state of public finances were apparent pre-election to anyone who cared to look”
which is why he and other independent figures say that her argument is not credible and will not wash.
Those public finances were audited by the OBR just 10 weeks before the election was called. We are now expected to believe that, in that short period, a £20 billion black hole has magically emerged, but for every single day in that period—in fact, since January, in line with constitutional convention—the right hon. Lady had privileged access to the Treasury permanent secretary. She could have found out absolutely anything she needed. Will she confirm to the House that she did have meetings with the permanent secretary of the Treasury before the election? Will she tell the House whether they discussed public finances? Will she tell the House whether they discussed any of the pressures that she is talking about today? If so, why are we only hearing today what she wants to do about them? That is why today’s exercise is not economic—it is political.
The Chancellor wants to blame the last Conservative Government for tax rises and project cancellations that she has been planning all along. The trouble is, even her own published numbers expose the fiction behind today’s announcement. Just four days ago, she presented to the House the Government’s estimates of spending plans for the year. Those estimates are a legal requirement. The official guidance manual is clear that Departments are responsible for ensuring that estimates are consistent with their “best forecast of requirements”. They are signed off by the most senior civil servants—the accounting officers—in every Department. Yet, four days on, she is saying that those estimates are wrong. Who is right: politically neutral civil servants or a political Chancellor? If she is right, will she ask the cabinet secretary to investigate those civil servants and apologise to the House for laying misleading estimates? Of course not, because she knows that those civil servants are right and today’s black hole is spurious, just like when she says that she inherited the
“worst set of economic circumstances”
since the second world war. When BBC Verify asked a professor at the London School of Economics about that claim, he responded:
“I struggle to find a metric that would make that statement correct.”
The metrics speak for themselves. Inflation is 2% today —nearly half what it was in 2010 when we had to clear up the mess inherited from a Labour Government. Unemployment is nearly half what it was then, with more new jobs than nearly anywhere else in Europe. So far this year, we are the fastest growing G7 economy. Over the next six years, the IMF says that we will grow faster than France, Italy, Germany and Japan.
Just two days before the election was called, the managing director of the IMF praised the previous Government’s handling of the economy, and said it was in a good place. This week, the Institute for Fiscal Studies said that it was
“not a bad situation to take charge of”
and certainly not comparable to the 1940s or 1970s. If the right hon. Lady is in charge of the economy, it is time to stop trash talking it. What is the point of going to New York or Brazil to bang the drum for more investment if she comes home with a cock and bull story about how bad everything is? She should stop playing politics with Britain’s reputation and get on with running the economy.
When it comes to public finances, will the Chancellor confirm to the House that, far from being broke and broken, as Downing Street briefed the media, the forecast deficit today is 4.4%, compared with 10.3% when Labour left office in 2010? In other words, when Labour was last in office, we were borrowing double the current levels. Will she confirm another difference between today and 2010? The Conservatives came to office then, honest about our plans and saying straightforwardly that we needed to cut the deficit. She has just won an election telling us repeatedly that taxes will not go up. How many seats were won on the back of commitments not to raise tax, while she is quietly planning to do the exact opposite?
On the details that the Chancellor has announced today, will she confirm that around half of today’s fictitious black hole comes from discretionary public sector pay awards—in other words, not something that she has to do, but something where she has a choice? Will she confirm to the House that, apart from the teachers recommendation, none of the other pay review body recommendations was seen by the last Government, as they arrived after the election was called? Today she has chosen to accept those recommendations, but before doing so, was she advised by officials to ask unions for productivity enhancements before accepting above-inflation pay awards, to help to pay for those awards, as the last Government did? If she was advised to do that, why did she reject that advice and simply tell the unions, “Here’s your money, thanks for your support”? Will she confirm—[Interruption.] I know Labour Members do not like the truth, but here it is. Will she confirm that one of the reasons for her funding gap is that she has chosen to backdate a 22% pay award to junior doctors, to cover the time when they were striking?
We are just three months into the financial year, so why did the Chancellor not mention today that, at the start of the year, the Treasury had a reserve of £14 billion for unexpected revenue costs, and £4 billion for unexpected capital costs? Additionally, why has she not accounted for the Treasury’s ability to manage down in-year pressures on the reserve—last year alone by £9 billion? Why has she apparently not accounted for underspends—typically £12 billion a year? Has she totally abandoned the £12 billion of welfare savings planned by the last Government? If so, will she confirm that to the House? Has she also abandoned £20 billion of annual productivity savings planned by the last Government? If not, why are they not in her numbers? Finally, for someone who claims continuously the mantle of fiscal rectitude, will she confirm that in order to pay for her public spending plans, she will not change her fiscal rules to target a different debt measure, so she can increase borrowing and debt by the back door?
Every Chancellor faces pressures on public finances. After a pandemic and an energy crisis, those pressures are particularly challenging, which is why in autumn 2022, the previous Government took painful but necessary decisions on tax and spend. But we knew that, if we continued to take difficult decisions on pay, productivity and welfare reform, we could live within our means and start to bring taxes down. She, on the other hand, knew perfectly well that a Labour Government would duck those difficult decisions. She has caved in to the unions on pay, left welfare reform out of the King’s Speech and soft-pedalled on our productivity programme. That is a choice, not a necessity.
That choice means that taxes will have to go up and the right hon. Lady chose not to tell us before the election. Instead, in 24 days—just 24 days—she has announced £7.3 billion for GB Energy, £8.3 billion for the national wealth fund and around £10 billion for public sector pay awards. That is £24 billion in 24 days: around £1 billion for every day she has been in office, leaving taxpayers to pick up the tab for her profligacy.
Doing it this way, she makes the first major misstep of her time as Chancellor, because that great office of state depends more than any on trust—[Interruption.] In her first big moment, she breaks that trust with an utterly bogus attempt to hoodwink the public about the choices she has. Over 50 times in the election, Labour told us it had no plans to raise taxes. Now, in a U-turn that will forever shame this Labour Government, she is laying the ground to break her word. When she does, her first Budget will become the biggest betrayal in history by a new Chancellor. Working families will never forgive her.
The shadow Chancellor had an opportunity this afternoon to admit what he had done, the legacy he had left. Instead, he takes no responsibility. The word the country was looking for today was sorry. He could not find those words; no wonder the Conservative party so definitively lost the trust of the British people at the election three and a half weeks ago. We say never again. [Interruption.] Never again should a party that plays fast and loose with the public finances be in charge of the public finances—[Interruption.]
Order. Can I just say to the Whips, who hold responsible jobs and I expect them to keep them that way, that just because they might not be at the end of the Bench does not mean they have to chunter all the way through and pass comment? I don’t need it and I won’t put up with it.
First, specifically on the black hole, we could not have known these numbers because the Conservative party did not tell the OBR these numbers. That is why we are in the position we are in today. That is the biggest scandal of them all.
The shadow Chancellor asks about the estimates. He should recognise the estimates we laid yesterday because he produced them. We had to lay those estimates to allow public spending to continue, but since those estimates were produced, information was given to us by Treasury officials about the true scale of the overspending by the Conservative party.
The shadow Chancellor mentions the IFS. Paul Johnson from the IFS has just said that it appears that these overspends are genuinely unfunded—words not from me, but from the independent IFS, which the shadow Chancellor referenced.
The shadow Chancellor mentions what happened to the reserve. Well, the reserve has been spent, shadow Chancellor. It was spent by you three times over. That is why we are in a position of a £22 billion in-year gap between spending that was happening and the funding to produce it.
If the shadow Chancellor could do all the things he spoke about today, why were they not in the forecasts? If he was able, as he says, to make those in-year changes on welfare and productivity, they would have been in the forecasts. They were not.
On the issue of the pay review bodies, the previous Government set the remit for those but they refused to give them any indication of affordability. That is almost unprecedented. The teachers reported before the election and that recommendation sat on the former Education Secretary’s desk. Today, we are drawing a line on the industrial action: the £1.7 billion cost to the NHS alone last year and 1.4 million cancelled appointments. We are incorporating a third of those pay increases into efficiencies in our public services, as the shadow Chancellor suggested we should.
When it comes to tax, I am not going to take any lessons from the Conservative party. The Conservative party took the tax burden to the highest level in 70 years.
The response of the shadow Chancellor just confirms what we already knew: the previous Government were deluded, out of touch and grossly irresponsible. Today, we begin to fix the mess that they have created.
I can confirm that we will be arranging multi-year settlements with local authorities, as well as with Departments. It is extremely important that both Departments and authorities can plan for the future knowing what money is available, rather than running down the clock towards the end of the year.
I thank my hon. Friend for welcoming the announcement that I made today about working with local government to improve the take-up of pension credit. It is woeful that it is so low. It is vital that everyone receives the money to which they are entitled, especially pensioners, which is why we have taken on those recommendations from elderly people’s charities today to ensure that we work with local government to boost take-up of that benefit.
(3 months, 3 weeks ago)
Commons ChamberAt the Budget, the Chancellor set out his intention to abolish national insurance—a £46 billion annual commitment with no clear plan as to how it would be paid for. One way to do it would be to merge income tax and national insurance. Does the Chancellor agree with analysis from the House of Commons Library that shows that merging those two would increase income tax by 8p in the pound?
(5 months, 2 weeks ago)
Commons ChamberAfter the Budget, the Chancellor wrote to Conservative party members telling them that the Government planned to abolish national insurance. The Economic Secretary said that “national insurance will vanish”, and the Prime Minister said it was his “ambition” to abolish it. Will the Chancellor confirm whether he asked the Office for Budget Responsibility to cost the Government’s unfunded plan to abolish national insurance contributions?
(6 months, 4 weeks ago)
Commons ChamberLast week, at Prime Minister’s questions, when asked about the Tory mortgage penalty, the Prime Minister boasted that someone coming off a fixed-rate mortgage
“will be able to save hundreds of pounds.”—[Official Report, 31 January 2024; Vol. 744, c. 857.]
But the small print was that they had to add many years to their mortgage. Three million people have been coming off fixed-rate mortgage deals this year and last, so does the Chancellor agree with the Prime Minister that British homeowners have never had it so good?
(9 months, 2 weeks ago)
Commons ChamberToday the Chancellor has lifted the lid on 13 years of economic failure. We were told that this was to be an autumn statement for growth, but the economy is now forecast to be £40 billion smaller by 2027 than the Chancellor said back in March. Growth has been revised down next year, the year after, and the year after that too. The Chancellor claims that the economy has turned a corner, yet the truth is that, under the Conservatives, growth has hit a dead end.
What has been laid bare today is the full scale of the damage that this Government have done to our economy over 13 years, and nothing that has been announced today will remotely compensate. We see mortgages rising, taxes eating into wages, inflation high, with prices still going up in the shops, public services on their knees, and too many families struggling to make ends meet. As the sun begins to set on this divided, out-of-touch, weak Government, the only conclusion that the British people will reach is this: after 13 years of the Conservatives, the economy is simply not working and, despite all the promises today, working people are still worse off.
The centrepiece of today’s autumn statement is a cut in the headline rate of national insurance. I am old enough to remember when the Prime Minister wanted to put up national insurance. As recently as January last year he said:
“We must go ahead with the”
increase in the—
“health and care levy. It is progressive, in…that the burden falls most on those who can most afford it.”
Utter nonsense. It was a tax on working people, and we opposed it for that very reason. Yet again, the Prime Minister is left arguing against himself.
In response to last year’s autumn statement, I warned that the Government were pickpocketing working people through stealth taxes. I have long argued that taxes on working people are too high. Indeed, I said in my conference speech that I want them to be lower. From the Conservatives’ failure to uprate income tax or national insurance bands to their forcing councils to raise council tax, they have pushed the costs of their failure on to others. The British people will not be taken for fools—they know that what has been announced today owes more to the cynicism of a party desperate to cling on to power than to the real priorities of this high tax, low growth Conservative Government—so we can forgive taxpayers for not celebrating when they see the truth behind today’s announcements.
Going into the statement, the Government had already put in place tax increases worth the equivalent of a 10p increase in national insurance, so today’s 2p cut will not remotely compensate for the tax increases put in place by this Conservative Government. The fact is that taxes will be higher at the next election than they were at the last. This is the legacy of the Conservatives, and that is their record.
The Chancellor and the Prime Minister have spent the last two weeks marching their MPs up a hill only to march them down again on inheritance tax. Let us not forget that when they realised that they had money to spend—[Interruption.]
Order. Mr Cairns, I have heard you chirping all the way through. Either go and get yourself that cup of tea or be quiet.
When the Government realised that they had money to spend, their first instinct was a tax cut for millionaires. In the end, even they realised that they could not get away with it in the middle of a cost of living crisis. Will the Chancellor tell the House whether cutting inheritance tax is a decision delayed or a decision abandoned?
This autumn statement for growth is now the 11th Conservative economic growth plan from the fifth prime minister, the seventh Chancellor and the ninth Business Secretary. What do those numbers add up to? According to the most recent GDP data, a big fat zero. That is zero growth in the most recent data for the third quarter of this year. The Chancellor mentioned some countries that we are outperforming in growth, but I could not help but notice that he failed to mention any of the many advanced economies that have grown faster than the UK. Over the last 13 years of this low-growth Conservative Government, the UK languishes in the bottom third of OECD countries when it comes to growth. There are 27 OECD economies that have grown faster than us in the 13 years since 2010: the US, Australia, Canada, Sweden, Slovenia and 22 others. In fact, over the next two years, no fewer than 177 economies are forecast by the IMF to grow faster. [Interruption.]
It bothers me. I am not being funny. I expect courtesy to be shown to the shadow Chancellor of the Exchequer. Those who do not wish to give that courtesy, please go and find something else to do. My constituents are interested, even if yours are not.
Next year, we are forecast to be the slowest growing economy in the whole of the G7. When it comes to economic growth, under the Tories, we are more world-following than world-beating.
Let us look at how the Conservatives’ record on growth compares to Labour’s record on growth. Under the Conservatives, GDP growth has averaged 1.5% a year. With Labour, it grew by an average of 2% a year in the 13 years that we were last in office. Had the economy continued to grow at the rate it did under Labour, it would now be £150 billion bigger. What is the Government’s economic record? Lower growth and higher borrowing, with debt more than doubling—it is now at almost 100% of GDP. That is a product of their failures over 13 years. A Tory Government who have failed on growth, failed on debt, failed on levelling-up and failed on the cost of living, too. Now they expect the British people to believe them when they say they will turn it all around, when they are the problem, not the solution.
If we are going to grow the economy, we must get more people into work. Let me be clear: people who can work, should work. That is why we have long argued that the work capability assessment needs replacing, because right now it is discouraging people from seeking work. But there is a wider problem that yet again the Government are failing to face up to. Britain is the only country in the G7 where the employment rate still has not returned to pre-pandemic levels, with the increase in the number of people out of the workforce due to long-term health issues costing the taxpayer a staggering £15.7 billion a year. NHS waiting lists have swelled to 7.8 million—an additional half a million since the Prime Minister said he was going to cut them—and 2.6 million people are out of work due to long-term sickness.
A healthy nation is critical to a healthy economy. That is why Labour has pledged to cut hospital waiting lists, investing an additional £1.1 billion a year to deliver 2 million more appointments, scans and operations. It will be funded by abolishing the non-dom tax status and replacing it with a modern scheme for people genuinely living in the UK for short periods. But, once again, we see that that policy has been vetoed by the Prime Minister. The best way to get people back to work is to get our NHS working, but the reality is you can never trust the Tories with our NHS.
The Chancellor has made great fanfare about public sector efficiency and value for money. That is from a Government who have blown £140 million on a discredited Rwanda scheme and yet are not able to send a single asylum seeker there, £7.2 billion of money lost on fraud during the pandemic—all those cheques were signed by the former Chancellor, the current Prime Minister—and £8.7 billion on personal protective equipment that has been written off. High Speed 2 is costing £57 billion, with not a single piece of track going north of Birmingham. No one can trust the Tories with taxpayers' money.
It says it all that after 13 years of Tory Government, there are still nearly 12,000 NHS computers running on outdated software that is vulnerable to cyber-attacks. Ten years ago, when he was Health Secretary, the now Chancellor promised a paperless NHS by 2018, yet today, in 2023, 26 NHS trusts are still using fax machines. Why on earth should people who experience deteriorating public services under this Conservative Government trust them to fix that, when his six years as Health Secretary make him one of the biggest architects of failure? Mr Speaker,
“if you put your hands into people’s pockets and take money out of them, and they do not see visible improvements in the services they receive, they get very angry indeed.”—[Official Report, 14 September 2021; Vol. 700, c. 851.]
Those are not my words but the Chancellor’s words two years ago. I agree with him. The Tories have had 13 years to improve public services and they have failed. This is too little and too late.
I do welcome the Chancellor’s announcement of additional funding to tackle antisemitism and Islamophobia to keep our communities safe, as well as the additional money for the Holocaust Educational Trust. There is no place for hate in our society, and I know that across the House we will work together to eliminate it.
The Chancellor calls this an autumn statement for growth, but it is Labour that has led the agenda on growth. Today, we see that the Conservatives have released their own poor cover version of what we have already announced. The Chancellor is talking about unlocking capital by reforming pensions, but Labour would go further, encouraging investment in British start-up and scale-up firms and introducing measures to ensure the consolidation of pension funds, so that our pensions system gets better returns for savers and for the UK economy.
On planning, the Conservatives are following Labour’s lead on taking money off bills for communities that host grid infrastructure and on speeding up planning decisions. What has taken them so long? Labour will get Britain building again, with a once-in-a-generation set of reforms to accelerate the building of our country’s national infrastructure and to build housing, too. We will fast-track battery factories, our life sciences and 5G technology, to grow our economy and provide good jobs in every part of our country.
We welcome the Chancellor’s announcement that he will make full expensing permanent—another thing that we have been calling for. But that does not make up for the years of uncertainty that businesses have faced, with taxes going up and down like a yo-yo. Small and medium businesses, which play a pivotal role in growing our economy, are left exposed to the Tories’ economic volatility. Labour’s partnership with business will get our economy firing on all cylinders. That is why this week we established a new British infrastructure council, with key investors in the UK economy focused on unlocking private investment by addressing the delivery challenges that businesses face when investing in Britain. Through Labour’s new national wealth fund, we will work alongside the private sector to back the growth of British industries, so that we can make the crucial transition to a zero-carbon economy. For every pound of public investment, we will leverage in three times as much private investment, while also getting a return for taxpayers. Labour’s plan will boost our economy, get debt falling and make working people better off.
If we listened to Members on the Government Benches, we would believe that the cost of living crisis was behind us. But inflation is still double the Bank of England’s target rate. I know the importance of low and stable inflation from my time as an economist at the Bank of England. It is welcome that the Chancellor has accepted this year’s recommendations from the Low Pay Commission—which we set up—on the minimum wage, but the reality of the Conservatives’ record is that average wages for working people have been held back. Under this Government, real average weekly wages have increased by just 3% in 13 years, compared with a 27% increase under the last Labour Government—worth an additional £120 every week for someone going out to work every day. Today is Equal Pay Day, so it is important to recognise that the living standards of working women have also been held back by a gender pay gap that I am determined to close.
The Chancellor and the Prime Minister say that the cost of living crisis has been dealt with. Everything might look a little better 10,000 feet up in a helicopter, but down here on planet Earth, people are approaching Christmas and the year ahead with worry and trepidation. The cost of living crisis has hit us harder because Tory mismanagement has left us so exposed. Some 11 million UK households do not have enough savings to cover three weeks of living expenses if they need it. Working families have been skating on thin ice for too long. As their resilience has been eroded, so has our national economy’s. Let us not forget that this Government oversaw the closure of our critical gas storage facilities, which left our country more exposed to huge fluctuations in international energy markets. The former Prime Minister—that is, four Prime Ministers ago—cut energy efficiency programmes, leading to higher bills for homeowners.
Just last year, we saw the true cost of the Conservatives when their kamikaze Budget crashed the economy, leading to market turmoil, pensions in peril and a spike in interest rates. Some 1.6 million families will see their mortgage deals end this year. Those re-mortgaging since July have seen their payments rocket by an average of £220 every month. Next year, 1.5 million families will face a similar fate. The Conservatives’ economic recklessness inflicted a Tory mortgage penalty on families across the country. In Wellingborough, families with a mortgage will be expected to find an additional £190 every single month. In Richmond, north Yorkshire, homeowners face £200 more a month on their mortgage. In the Chancellor’s own constituency—though maybe not for long—families with a mortgage will see an average increase of £420 a month because of this Conservative Government’s economic failure. Given increased costs for landlords—the Chancellor knows something about that—renters are paying a high price, too.
The truth is that working people just do not have that sort of money lying around. This is what we have come to after 13 years of Conservative Government. This is the record upon which people will judge the Conservatives at the next election. Tory economic recklessness is not a thing of the past. The British people are still paying the price. We say, never again. Last week, Labour tabled an amendment to the King’s Speech to put our fiscal lock into law. It would prevent a repeat of last year’s economic horror show, yet the Tories voted against it. It is clear that today, Labour is the party of economic and fiscal responsibility. What have the Conservatives learned? Absolutely nothing.
The country is crying out for change. A decaying Government can change their personnel but they have failed to change the direction of our country. In 13 years, we have had seven Chancellors. He would not run a business like this; he cannot run a country like it, either. The Prime Minister cannot even promise that this Chancellor will be in place at the next election. We have all heard the reports: when they first came together, it was a fairytale marriage, but one year on, the relationship has hit the rocks. The pair have grown apart, with rumours running rife that the Prime Minister already has his eyes on someone else.
Whoever this Prime Minister picks as Chancellor, the truth is that Britain is and will be worse off under the Conservatives. They have held back growth, crashed our economy, increased debt, trashed our public services, left businesses out in the cold and made life harder for working people. Our country cannot afford five more years of the Conservatives. The ravens are leaving the tower when even Saatchi & Saatchi says that the Tories are not working. The questions that people will ask at the next election, and after today’s autumn statement, are simple: do me and my family feel better off after 13 years of Conservative Government? Do our schools, hospitals and police work better after 13 years of Conservative Government? In fact, does anything in Britain work better today than when the Conservatives came into office 13 years ago? We all know that working people are worse off under the Conservatives, with growth down, mortgages up, prices up, taxes up and debt up. Their time is up. It is time for change—a changed Labour party to lead Britain and to make working people better off.
(9 months, 3 weeks ago)
Commons ChamberI welcome all the new Ministers to their roles and wish them well in them. The covid inquiry is uncovering unsavoury examples of Government mismanagement. We already know that Ministers ignored warnings that their business loan schemes were vulnerable to organised crime, yet the Prime Minister left the vaults open to fraudsters. Will the Chancellor update the House on the latest estimates of taxpayers’ money lost to fraud from the covid support schemes?
(12 months ago)
Commons ChamberLast week, thousands of parents were told that their children’s schools were unsafe and at risk of collapse. The defining image of 13 years of Conservative government: classrooms propped up to stop the ceilings from falling in. Capital budgets have halved in real terms since 2010, with warnings ignored and repair programmes slashed. Do this Conservative Government take any responsibility for any of this?
Let me start by reassuring the right hon. Lady that the vast majority of pupils in the 156 schools affected are at school normally, and we are acting fast to minimise the impact on the rest.
Let me answer the more general question that the right hon. Lady raised. Yes, we made cuts in spending in 2010 because, as she knows well, the last Labour Government left this country with an economic crisis. Despite that crisis, the Department for Education budget has gone up by 15% in real terms, and overall capital spend—
Order. This is topicals. All your colleagues on both sides of the House want to get in. Topicals are meant to be very short, not a full debate between both sides. I say to everybody: think about others. I think we can move on. I call Rachel Reeves.
I will repeat: capital budgets have halved in real terms since 2010. I understand—indeed, I know—that in the lead-up to the 2021 spending review, the Department for Education made a submission to the Treasury about the dangers of the deteriorating school estate, including from reinforced autoclaved aerated concrete. Those warnings were ignored by the then Chancellor—the current Prime Minister—and we have seen the consequences, so will today’s Chancellor do the right thing and publish the Department for Education’s submission to the last spending review?
(1 year, 2 months ago)
Commons ChamberWhile the Government squabble over parties and peerages, mortgage products are being withdrawn and replaced by mortgages with much higher interest rates. This is a consequence of last year’s Conservative mini-Budget and 13 years of economic failure, with inflation higher here than in similar countries. Average mortgage payments will be going up by a crippling £2,900 this year, so where does the Chancellor think families will get the money to pay the Tory mortgage penalty?
(1 year, 3 months ago)
Commons ChamberThe Conservatives have now had 13 years in office—wages lower, the weekly food shop astronomical, energy bills unprecedented, 24 Tory tax rises and the national debt has ballooned —so can I ask: after 13 years of Conservative Government, does the Minister think that people feel better off, or worse off?
(1 year, 5 months ago)
Commons ChamberConfidence has been shaken by the recent bank failures and stock market falls across the world. Is the Chancellor confident that our ringfencing regime is adequate to protect taxpayers and depositors, when we have seen how fast these problems can spread? Can the Chancellor reassure the House that there are no other UK banks or subsidiaries that are vulnerable, and in light of recent developments, is he confident about the Financial Stability Board, or does it need to widen the number of banks regarded as systemically important?
(1 year, 6 months ago)
Commons ChamberLast week, Shell announced profits of £32 billion, the highest in its 115-year history. Today, BP announced profits of £23 billion, the highest in its history. Meanwhile, in April, energy bills for households will go up by £500. The cost of living crisis is far from over, so will the Government follow our lead and impose a proper windfall tax to keep people’s energy bills down.
(1 year, 9 months ago)
Commons ChamberToday’s numbers show that real wages are down £1,000 a year. The Chancellor himself has admitted that the NHS is on the brink of collapse, and he is preparing for more stealth taxes on working people later this week. Getting our economy firing on all cylinders is essential for fixing this mess, so will the Chancellor tell the House where the UK is projected to finish in OECD growth rates over the next year?
(1 year, 10 months ago)
Commons ChamberSince the Chancellor’s disastrous mini-Budget just 18 days ago, we have seen wild swings in the value of the pound, gilt yields up 100 basis points in a single day and the Bank of England stepping in because of, in its words,
“a material risk to UK financial stability”.
The International Monetary Fund has now said that UK growth is to slow further next year. This is a British crisis, made in Downing Street; no Government are sabotaging their own country’s economic credibility as this Government are. Are the Chancellor and the Prime Minister the last people left on Earth who think their plan is working?
(2 years, 2 months ago)
Commons ChamberConsumer confidence is at its lowest level since records began because working people have less money to spend, but we are not all in this together. Pay for the top 1% of earners is increasing at 20 times the rate for the bottom 10%, and all the while the Prime Minister eyes up luxury tree houses instead of fixing the broken economy. Does the Chancellor realise that, to avoid a cost of living calamity, he must address the stagnant wage crisis created by Tory policies?
(2 years, 3 months ago)
Commons ChamberAt the spring statement, the Chancellor confirmed that the Conservative Government’s rise in national insurance—a tax increase on working people and the businesses that employ them—will go ahead. Since then, retail sales are falling, consumer confidence is tanking and GDP is falling. We are the only G7 country that is increasing taxes on working people in the middle of a cost of living crisis. National insurance is the wrong tax increase at the wrong time. Does the Chancellor still think that his tax rises on working people are the right approach?
(2 years, 7 months ago)
Commons ChamberI thank the Chancellor for his statement.
We have known that this price rise was coming for months, and today we learn that the energy price cap will increase to £1,971 in April. In October, I called on the Government to provide immediate support for support for households, cutting VAT on their energy bills and saving £200, with £400 in extra targeted support for those who need it most, which would mean, for some of the poorest families in our country, almost no increase in energy bills from April. The Government have not done that today.
We all remember when the Prime Minister said that cutting VAT on energy bills was one of the benefits of Brexit. He said:
“When we Vote Leave, we will be able to scrap this unfair and damaging tax.”
Could there ever be a time when that policy is needed more than it is today? I should have thought that the Prime Minister, with his unblemished record of integrity, would defend the commitments he had made, but instead, that is another pledge thrown on to the bonfire of broken Tory promises.
The uncomfortable truth for the Chancellor is that even after what he has announced today, families in Britain—including some of the poorest—will still be paying hundreds of pounds more for their energy from April as a result of the breathtaking rise in energy prices just announced by Ofgem. Millions of people will be cutting back to pay the bills. Citizens Advice says that it saw a record number of people in January struggling with fuel debts, before the energy price increase. But what do the Government offer? A buy now, pay later scheme that loads up costs for tomorrow; high prices as far as the eye can see, this year, next year, and the year after that. It is a case of give with one hand now, and take it all back later with the other.
The Conservative party used to talk about the nation’s credit card. Today, we have seen the Chancellor force British households to load up their credit cards. By lending billions of pounds to energy companies, he is gambling that prices are going to fall, but they could go up further in October. What then? Billions more loaded on to people’s bills? The best way of targeting support to those who need it most would be an increase to £400 and an extension to 9 million households of the warm home discount, as Labour has proposed. The Government’s scheme is a pale imitation of Labour’s, especially for the households and pensioners on the most modest incomes, but the Chancellor is using council tax to target extra help. That will mean that many of the poorest households receive no extra support, while some of the richest do, and it is people living in the north and the midlands who will lose out most. The hypocrisy, the day after the publication of the Government’s levelling-up White Paper, is obvious. [Interruption.]
Order. Mr Holden, I think we need to be a little calmer. I am sure you will want to catch my eye, and that is not the way to do so.
Can the Chancellor confirm how many people who are fuel-poor will miss out on council tax support compared with the warm home discount support that Labour has announced?
The Government had a choice. Only today, Shell announced that its profits have quadrupled to $20 billion. It described its results as “momentous”—dividends up, profits up, and people’s energy bills up too. Labour’s plan would impose a one-off windfall tax on those excess profits, but this Chancellor would rather shield the oil and gas producers while at the same time loading the cost on to working people and pensioners. Cabinet Ministers have described the oil and gas producers as “struggling”. Tell that to the one in five people who are already skipping meals so they can pay their energy bills.
This energy crisis has not happened overnight. A decade of dither and delay from the Conservative party has brought us to this point: a decade of failure to regulate our energy markets; a decade in which they have slashed our gas storage capacity, leaving us more reliant than ever on Russia for our gas imports; a decade of failure to make the most of solar, tidal and wind energy; and a decade of stalled progress on insulating our homes to keep bills low, not just for one year but into the future. It has been the Tory decade that has led to this announcement of the biggest increase in the price of domestic energy since records began. That is what the Chancellor should acknowledge and apologise for today. The Conservatives are not solving the cost of living crisis, because the Conservatives are the cost of living crisis.
(3 years, 2 months ago)
Commons ChamberThank you, Mr Speaker.
Whether on social care, on Northern Powerhouse Rail or on tackling climate breakdown, there is a growing gap with this Government between what is promised and what is actually delivered. The Treasury’s response to the net zero review was first due to be published in autumn last year, yet it is nowhere to be seen. The COP26 climate summit begins in November. While the UK is hosting, the Government cannot lead with authority, because the fact is that we cannot have a climate strategy without a sustainable economic plan behind it. Will the Chancellor please tell the House on what date he will publish the final report of the net zero review?
(4 years, 7 months ago)
Commons Chamber(4 years, 10 months ago)
Commons ChamberThat is not a matter for the Chair. It is not for me to speculate on the Privy Council. I am sure that you will not take your eye off your mobile phone, to ensure that that first-line knowledge will be through to your good self once you see it there. But it is not a matter for the Chair, as much as it is frustrating. As a member of the Privy Council, I have to say that I have no further information to add.
On a point of order, Mr Deputy Speaker. Lots of people will be watching Parliament on television today, but, of course, that was not possible 30 years ago. Twenty-seven years ago, Baroness Betty Boothroyd became the first female Speaker of the House of Commons. Today is her 90th birthday. I wondered what pieces of advice you could give on how we could all go about wishing her a happy birthday.
One of them is not to sing in the Chamber. I would say that I have the greatest respect for Baroness Boothroyd. She is one of my idols. She is somebody who I look up to and who set an agenda in this House that we can all respect—the first woman Speaker. It is a privilege to have known her; it is a privilege to have been in this House when she was in this Chair. Everybody who ever worked with her held her in the highest esteem and respect. The one other thing I would say is happy 90th and many more to come, because she is a great lady who I will always respect. I always remember her fighting the by-elections of Nelson and Colne, which my father took over as the MP afterwards. So, yes, we do have a great affinity.
(5 years, 2 months ago)
Commons ChamberI call the Chair of the Business, Energy and Industrial Strategy Committee, Rachel Reeves.
Thank you very much, Mr Deputy Speaker.
When our Select Committee looked into this issue, many small businesses insisted on giving evidence in private, so worried were they about retaliation from the big businesses that they supplied. Larger businesses, including Morrisons, Aldi and WH Smith, are not signatories to the prompt payment code, while Boots pays suppliers at a discount for the privilege of their being paid on time. The power imbalance is so great now between bigger and smaller businesses that. I urge the Government and the Minister to look again, make the prompt payment code mandatory and bring down the period to a benchmark of 30 days.
(6 years, 3 months ago)
Commons ChamberOn a point of order, Mr Deputy Speaker. At 10 minutes past 3 this afternoon, just after the Secretary of State for Transport left the Chamber, he issued a press release on plans to tackle poor performance at Northern Rail. I wonder whether the Secretary of State, who is almost back in his place, has indicated any intention to make a statement to the House allowing right hon. and hon. Members to question the Government on those plans, which are of huge significance to many of our constituents.
I have certainly not been given any notification that the Secretary of State wants to come back at this moment, but there is a good chance tomorrow morning at business questions, when I have no doubt you will be able to raise this again.
Royal Assent
(10 years, 6 months ago)
Commons ChamberOrder. You are both up at the same time. Is the hon. Lady giving way?
Order. There can be only one person on their feet at a time. It is up to Rachel Reeves whether she wants to give way to the Secretary of State. She has given way to him once already and it is for her to judge whether she will do so again.
I shall not give way to the Secretary of State, because he will have a chance to respond in a few minutes and I look forward to hearing what he has to say.
Let us take a moment to reflect on what this means. The Government have been telling local authorities to take housing benefit away from people who were in fact legally entitled to it all along. Most of these people were already in vulnerable positions and will have been pushed even further into severe hardship as a result of this Government’s errors.
Let us look at a few examples. A widower in Staffordshire suffering from mental health problems told of the sacrifices he had to make to find the extra £14 a week he needed to stay in his home. A 56-year-old woman from Rotherham, who receives support for health-related problems, has had to pay more than £700 in extra rent, which we now know was unlawful. In Greater Manchester, a grandmother who looks after her granddaughter, has been diagnosed with depression and anxiety and who paid £200 in additional rent as a result of the bedroom tax fell into arrears and was threatened with eviction from the home she has lived in for 26 years. These people and many like them are now due a rebate, but nothing will compensate for the distress they have been caused or the time and money that the council will have to spend sorting out the mess this Government have caused. And now the Government want to apply the bedroom tax again to these people and thousands of others like them.
That is what we are calling on the Government to do today—to scrap the bedroom tax altogether.
We had no idea of the numbers affected and the Government clearly did not have a clue, so we asked the question that they should have asked: we asked local authorities how many people have been affected. Of 378 local authorities, 197 have now responded, including Birmingham city council, where 2,100 households are affected, Cardiff with 220 and Glasgow with 913, as well as Tory local authorities, such as Cheshire West and Chester council, where 275 households are affected, Tory Peterborough with 200 and Tory Wandsworth with 234—the list goes on. In total, our replies so far suggest that 21,655 households have been affected. That is on the basis of responses from barely half the councils, while many of them have said that they cannot give complete answers that include housing association tenants. It is therefore already clear that not only have this Government made a complete mess of their own policy, but they do not even have a clue how many people are affected by the loophole.
The Government have responded to this fiasco by scrambling to cover up their own mistake. They introduced a statutory instrument to close a loophole in their own legislation, without even giving this House an opportunity to scrutinise and debate it; it is only through this Opposition day that we can have a vote, which is why we called this debate today.
The bedroom tax was misconceived from the start, and it has been incompetently executed every step of the way. The chaos, confusion and extra costs are mounting, with the heaviest price being paid by the poorest and most vulnerable. The Government should scrap the bedroom tax today, but instead they are making it apply to an extra 40,000 households. If this Government will not scrap the bedroom tax, the next Labour Government will do so.
I call Mr Peter Lilley to make a six-minute speech.
(11 years, 11 months ago)
Commons ChamberI thank my hon. Friend for that intervention. It is not just people in the public sector; people in the private sector, particularly in construction, which has shed 120,000 jobs since the Government came to power, are also worried about their jobs and futures and about how they will get the money to feed and house their families. There is real concern and a real lack of confidence among households and businesses.
This summer showed that things could be done differently. The Olympics showed what can be achieved with an inspiring vision—the right combination of public, private and social enterprise, with the nation united behind it. We delivered on time and on budget, and it was a perfect platform for Britain at its best. Let us hope that the Olympics provided a much-needed boost for our economy, but the lesson to learn is not that we can now rest; if we really want to seize the economic opportunities before us and build a better future, we need to repeat that effort on a much bigger scale, with a nationwide plan for jobs and growth. Let that be the lesson for today and let us get to work on laying the foundations of the economy we need to build for the next generation. Let us have a Government who follow up their rhetoric with real action.
Before I call the next speaker, I inform the House that the limit on Back-Bench speeches will be nine minutes.
(14 years, 2 months ago)
Commons ChamberOrder. Only one Member can be on their feet at any one time. Please allow the Member to finish before rising again.
Thank you, Mr Deputy Speaker. I am sorry for my enthusiasm.
I welcome the clarification from the hon. Member for West Suffolk that regions will be able to make their own decisions, but that was not my understanding of what the Secretary of State for Business, Innovation and Skills said earlier. [Interruption.] If he did say that, I think that everyone on the Opposition Benches would welcome that. If our regions will be able to make the decisions about our regional development agencies and their future, I welcome that. I am grateful for that clarification, but that was not my understanding of what the Business Secretary said in his statement.
I know that Conservative Members will disagree with this, but I am sorry to say that we do not hear enough from them about growth. They cite the G20 advice about reducing deficits while consistently forgetting about or ignoring the advice in the G20 communiqué for
“credible, growth-friendly measures, to deliver fiscal sustainability”.
That omission on growth is worrying from the perspective of industry and jobs—the subject of today’s debate—because the greatest risk we face is that of a double-dip recession, with the job losses, business failures and higher budget deficits that that would bring.
On Monday, the Chancellor dismissed the possibility of a second recession, but businesses in my constituency are less certain that we are out of the woods. Key to the recovery and to bringing down the budget deficit—we hear a lot about that from Conservative Members—are growth and having a regionally strong and diverse economy. That will not happen by chance; it depends on a strategic Government policy supporting industry in all our regions.
Order. Hon. Members can, by all means, seek to intervene, but if the Member does not give way, they just have to leave it there. We cannot have two Members on their feet at the same time.
Thank you, Mr Deputy Speaker. This Government—the party of the hon. Member for West Worcestershire (Harriett Baldwin)—have called for £293 million of cuts from the regional development agencies. Yorkshire Forward was asked to make £44 million of cuts. It was written to and asked to come back with those cuts within two weeks—it had two weeks to determine cuts that will affect 24,000 businesses in my region. These are not Labour cuts; they are Conservative cuts.
I ask the Secretary of State for Business, Innovation and Skills to give my constituents some commitment and some hope and certainty that the work that Yorkshire Forward does to support innovation, manufacturing, jobs and skills will continue. I urge the Government not to destroy the support for jobs and growth that the Labour Government put in place. Without Yorkshire Forward, we would not have brought clean coal to our region and the 1,000 jobs that that means in South Yorkshire. Without Yorkshire Forward, we would not have negotiated a deal with Siemens and GE to bring offshore wind, with thousands of much-needed jobs, to Hull, Grimsby and Scunthorpe.
I thank the hon. Gentleman for that intervention. I hope that I have made it clear that I support the private sector’s coming to our region and bringing jobs with it. However, that requires a Government on the side of our communities and of businesses. That means encouraging jobs to come to this country when they could go to any other country in the world. If we were in Germany or China, we would be urging jobs to come to those countries. If we want a level playing field, we need a Government who support industry.
In Yorkshire, we look to Government for support—to honour the commitments on high-speed rail and on Sheffield Forgemasters. They are key to Yorkshire’s future and good for the British economy, too. Yorkshire Forward and regional development agencies have fought our corner in a way that Whitehall simply cannot. The support is critical and it is good for all of Britain. The short-term hatchet job pursued by the Government risks the recovery and will put Britain in the slow lane of the global economy, making reducing the deficit harder because there will be higher unemployment and tax revenues will be weaker. Growth is the essential ingredient that is missing from the Government’s strategy.
Now is the time for some more ambition. In the wake of the recession, we can build a fairer, stronger and more diverse economy, built on skills and high-end manufacturing, if the Government put in place the policies—