Energy (oil and gas) profits levy

Mark Fletcher Excerpts

Tuesday 22nd November 2022 Commons Chamber

[Mark Fletcher (Bolsover) (Con)]

“There is nothing in the autumn statement that shows compassion” was one of the last sentences from the hon. Member for Jarrow (Kate Osborne). With the triple lock protected, benefits up by 10.1%, the household energy cap extended, a £900 support package for households on means-tested benefits, £300 support payments to pensioners, £150 to individuals on disability benefits, energy bill support extended into next year, a below-inflation 7% cap on social rents that will save the average renter £200, the education budget protected at £2.3 billion—she did mention children—and an increase in NHS spending of £3.3 billion, is there anything but compassion running through this autumn statement?

I am happy to go so far on economic policy. There is a fair cop that we have made some mistakes on economic policy—that is a perfectly fair cop. But we cannot go into a different galaxy of common sense, where there is no economic credibility, and pretend that that is the reality. I have to question those on the Opposition Benches: if their solution to the economic crisis we face hinges on non-dom status and private schools and does not mention private enterprises, growth and global factors, we are in a different galaxy.

I will go back to where I was planning to start my speech by saying that I had the great pleasure of being parliamentary private secretary to the Chancellor—or more accurately Chancellors—in the build-up to the statement. I must say that my right hon. Friend the Chancellor is a fantastic Member of Parliament and last week delivered an incredibly difficult statement both eloquently and with an underlying level of compassion that we should be very proud of.

The Chancellor set out quite firmly the circumstances we face as a country. All these factors—the pandemic we have gone through, in which we spent £400 billion trying to keep the economy on track, the supply chain issues that came from that global pandemic, the damage that has done to the businesses up and down the country and the costs they face, the increases and challenges to shipping or the 630,000 people who have dropped out of the workforce since the pandemic—are inflationary and have created huge pressures. The OBR report, which I am sure the Labour party has read with great interest, clearly identifies global headwinds as the primary cause of the situation we are in. Does anybody from Labour want to challenge that? No—we are moving on.

The second thing we must look at is Vladimir Putin’s war. My right hon. Friend the Member for North Somerset (Dr Fox) made some interesting points about patriotism and how we address these economic circumstances. We have spent £2.3 billion as a country on the situation in Ukraine, but there has been something along the lines of £150 billion of additional spending on energy within our economy over the past year. That is a huge increase; as the Chancellor would quickly point out, it is another NHS, and £55 billion of that is coming from Government coffers—again, I would suggest compassionately—to households and businesses up and down this country.

We face a challenge of inflation, of war on our doorstep and of global markets losing confidence. That has a ripple-down effect and, unfortunately, the circumstances we find ourselves in mean that the Chancellor had to make some difficult decisions. I think he did so in a way that tries not only to help individuals and families with the cost of living but to provide confidence that Britain can pay its way in the world. When Opposition Members bandy around somewhat childish policies, whether on non-dom status or private schools—it doesn’t half feel as if we are back in the 2015 election with those two; I cannot wait to see the new version of the “Ed stone”—it seems to me as if we are on a different planet.

I wanted to add some notes of caution, however, because I was not entirely happy with everything in the statement. First, there are the labour shortages we face. We increased working-age benefits—I believe there is a compassionate argument for that—and the minimum wage, but our small businesses are struggling to recruit and retain staff, and I worry about the impact that that will have on the labour market. It will have to be monitored very closely.

Secondly, more money for the NHS is of course welcome, but only if we see a proportionate increase when it comes to outputs. We have left the NHS in a difficult situation: covid restrictions are still in place in a lot of venues, and we need to remove them as quickly as possible. Hospitals have been operating at around 80% to 85% of capacity en masse. We cannot get back to previous levels and clear the backlog, which requires us to go above 100%, if we are operating at an 85% building capacity.

However, I very much welcome the Chancellor’s comments on having a workforce plan, which will help to create a longer-term, sensible solution for the NHS, particularly in dentistry and mental health, in which our workforce numbers are woefully low.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

Will the hon. Gentleman give way?

[Mark Fletcher]

I am in full flow, but I am happy to give way.

[Dr Cameron]

I thank the hon. Gentleman for giving way and, in particular, for raising mental health. I have been looking just today at the startling figures stating that 215 young people took their lives in 2021—the highest figure since records began. The workforce needs nurses and doctors, but also psychologists and mental health professionals going forward—I refer the House to my entry in the Register of Members’ Financial Interests on that point. It is crucial that we address those issues to support young people and their potential.

[Mark Fletcher]

I completely agree. We have to be aware of the situation that the pandemic created in mental health. We talk about and acknowledge mental health a lot more, which is a positive thing for society, but our health workforce is well behind where we are as a society on conversational issues. We also have to address pressures relating to image and social media, which affect young people in particular, and the fact that, although we are all so much more connected through mobile devices, we are so much more isolated and judge ourselves in those circumstances. I thank the hon. Lady for raising that point.

[Jonathan Gullis]

On mental health, I am sure that my hon. Friend will back the cross-party “No Time To Wait” campaign that I launched with my friend James Starkie. Our pilot from the Royal College of Nursing is ready to be picked up by the Government to get more mental health nurses into GP surgeries. We know that 40% of all GP appointments are now related to mental health. Will my hon. Friend be a doughty champion for that cause?

[Mark Fletcher]

Well, what choice do I have? As a note of caution, I think we get a little lost when we talk about GP practices. I am not sure that the model of primary care that we have become so used to is necessarily the most efficient. There are other models, and indeed, using online technology can sometimes be considerably better. I add that note of caution about using GP practices, but other than that, my hon. Friend is a fantastic champion and he has got his clip for social media.

I will add another note of caution, about education. The increase in the schools budget is incredibly welcome, but I am slightly concerned about the lack of mention of further education. Some of our colleges are in a very difficult situation, and I worry that we may not have addressed that in the autumn statement. That is also somewhat underlined by the investment zones and the fact that the Chancellor announced a shift towards using higher education in particular in less-well-off areas, which, I have to say, may be a mistake. If he had extended FE into that mix, it would perhaps have been a more interesting and appealing prospect.

My final note of caution is on levelling-up funding. Although the Chancellor announced that round 2 would be happening, he was silent on round 3, and I am slightly concerned that it will get lost in the mix.

There are positives, however. Capital expenditure is maintained, R&D is maintained and the gigabit roll-out is maintained. All those are incredibly important. The shift towards nuclear and the backing for Sizewell C are incredibly important. As a Derbyshire MP, I hope that we will go further on small modular reactors. We as a country need to pursue the fantastic prospect from Rolls-Royce because it will play a huge part in our energy mix. We are incredibly lucky that 40% of our energy now comes from renewables, but we can go much further. Nuclear plays a huge role in that, and we need to continue banging that drum.

I will finish on a positive note: energy efficiency. We had a policy that came out as a stimulus package. It was far from effective, actually, and if I have a note of agreement with those on the Labour Front Bench, it is around energy efficiency and the fact that we need to do more. We need to reduce demand for energy and make sure that homes, particularly for those who are less well off, are better insulated. I have seen some of that on the ground. The social sector part of that particular scheme was effective—it was the private sector bit that was terrible—and I would like to see more done on that front.

In short, with some notes of caution, I think the Chancellor did a rather good job. Tackling inflation will be incredibly difficult, but it is absolutely the right thing to solve. Alongside that, I would add, as my right hon. Friend the Member for North West Hampshire (Kit Malthouse) said so elegantly, that growth and confidence are vital for the future of the economy, and if we do not have those in the mix as well, I do not know what we are doing here.

--- Later in debate ---

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I am grateful for the opportunity to wind up on behalf of the Opposition. I welcome the new Minister to her place and wish her well. I also thank all right hon. and hon. Members who have contributed to the debate. We have heard many passionate speeches, appeals for different sectors—from cockles to hospitality, and from the gaming sector to many of the industrial sectors that make Britain great—and appeals for different areas. People spoke passionately about how the cost of living crisis is affecting their constituencies. We heard discussion of individual measures in the autumn statement and, of course, we have had lively debate on how we got here in the first place.

This debate, like the autumn statement itself, has covered a lot of ground. But for all the individual parts of last week’s autumn statement, in the end the Chancellor’s speech was an hour-long reckoning with the Conservatives’ 12 years in office. It was not meant to be like this. The promise was of a better tomorrow; the good times were supposed to be coming. Instead, there was a more bitter conclusion: the Government have failed. They have failed over 12 years, and the autumn statement sent the bill for that failure to the British people. With every measure, every leak and every warning of the decisions in the weeks beforehand, all the Chancellor and the Prime Minister were doing was confirming the weakness of their record and the destruction of the Conservative party’s reputation, such as it was, for sound economic management. Try as it might, when a party have been in office for 12 years, there is no one left to blame.

Let me address directly the subject that has been at the heart of today’s debate: the balance of global and national factors in all of this. Of course, the Chancellor tried desperately last week to claim it was all about global factors—a plea for the defence that was repeated yesterday by the Chief Secretary to the Treasury in his opening speech. There is no doubt that the experience of covid and the consequences of Putin’s invasion of Ukraine have been very costly for many countries. All major countries have had to borrow money to help their businesses and to support their citizens—no one is denying that—but only in Britain, which is among the largest economies of the world, and under the stewardship of this Government, have we failed to recover our pre-covid economic position.

The Governor of the Bank of England last week described the difference between our recovery from covid and that of our peers as “dramatic”. The Office for Budget Responsibility’s report—it was allowed to issue one this time—suggests that it will be another two years before we even recover our pre-covid position. It is here in Britain, under this Government, that we had a mini-Budget resulting in carnage, causing a run on the pound, the IMF to hit the panic button, emergency interventions from the Bank of England and rocketing mortgage rates for our constituents. This country was used as a giant experiment by a Prime Minister and Chancellor desperate to enact the pamphlet fantasies of their dreams.

This month’s crop of Ministers—in today’s Tory party, everyone gets to be famous for 15 minutes—would like to tell us that it was all a bad dream and it fell from the sky, and they want to bury it under 10 feet of concrete, but it was a Conservative mini-Budget delivered by Conservative Ministers, voted in by Conservative party members and cheered on by Conservative MPs.

I have some of the quotes. The hon. Member for South Cambridgeshire (Anthony Browne) said:

“I strongly welcome this radical and generous package of measures”.—[Official Report, 23 September 2022; Vol. 719, c. 947.]

The hon. Member for South Dorset (Richard Drax) said:

“How refreshing it is to hear some Conservative policies at last.”—[Official Report, 23 September 2022; Vol. 719, c. 950.]

The hon. Member for Buckingham (Greg Smith) said:

“I warmly welcome…the return to the low-tax free market principles that we on the Conservative Benches know will lead to growth and prosperity for everybody in our country.”—[Official Report, 23 September 2022; Vol. 719, c. 954.]

The hon. Member for Mansfield (Ben Bradley) declared how “refreshing” it all was and said to us, “I am excited.” All of this was days before the whole thing drove the UK economy off a cliff.

[Mark Fletcher]

The right hon. Gentleman is having great fun, and the whole House is in raptures—please try to find my quotes in that pile; I do not think there are any. Not so long ago the Labour party was slagging us off for too many tax rises. We tried tax cuts and they did not work, and now he seems to be in the strange position of arguing with one hand and then with the other. What is the Labour party’s position when it comes to taxation?

[Mr McFadden]

I will tell the hon. Member one thing about taxation: the burden is much higher under this Government than it was under the Government in which I served as a Minister. That mini-Budget was a mistake for which the country and the public will be paying for a long time. In every one of the constituencies of Government Members, the two-year and five-year rates on mortgage renewals are still higher today than they were before that mini-Budget. Their constituents are still paying the price for their economic irresponsibility. Apart from the economic effects, it also caused damage to the international standing of our country. We became a poster child for economic mismanagement—a point that the Prime Minister himself admitted at last week’s G20 summit in Bali.

But the failure is not just over 12 weeks; it is year on year. The UK economy’s growth has been consistently weaker than the OECD average, and that difference is now worth £10,000 per year for every household. We do have global pressures—no one denies them—but think how much stronger people would feel in facing today’s pressures if incomes had been that much higher. That is the ghost of growth past, and the forecast for the ghost of growth future is for the UK to be at the bottom of the OECD growth league, with the possible exception of Russia, for the next two years.

All of this is felt in people’s pockets. Income is set to decline by 7% in real terms over the next two years. That is a £1,700 per household reduction in spending power. Things people cannot buy, bills they cannot pay, places they cannot go, coping with worries they never previously had to think about—all of this is the price of lower incomes, and those lower incomes are the result of 12 years of anaemic economic growth. This is the Conservative party’s mess, and the British people are being asked to pay the bill.

The Chief Secretary to the Treasury quoted Ronald Reagan in his opening speech yesterday, but there is another Reagan quote that should haunt the Government right now. He asked, “Are you better off than you were before?” and the answer is no. The Chancellor announced a series of tax rises, asking the British people to pay more, and he did so at a time when inflation is already making it harder to pay the bills.

What will the Government do to recover as much as possible of the estimated £6.7 billion lost to fraud and waste in the covid loan schemes? Why is the unit set up to chase that money, announced with great fanfare by the current Prime Minister and established in HMRC, being closed down? The Government’s own former fraud Minister described the controls as being like a “Dad’s Army operation” and said it was a “happy” time to be a crook, and still the Government are asking people to pay more. Should as much of that money as possible not be recovered before asking our constituents to pay more? What of the figure in the OBR report showing that the administration of the energy company Bulb will now cost the taxpayer £6.5 billion? Why is that cost to the public so huge? Is the Prime Minister really the hedge fund manager who forgot to hedge? Once again, the British people are being asked to pay the price.

The point of all this, according to the Prime Minister and the Chancellor, is to restore financial stability, but the UK only needs to restore its financial stability because the Conservative party destroyed that financial stability. If that is all the Conservatives have to offer, then all they have to offer is managing decline. The weakness of the Prime Minister in trying to build a platform for growth was also laid bare in the autumn statement. They persist in a ban on onshore wind when the country urgently needs a transition to cleaner power in the interests of both our energy security and lower bills for consumers. They fight plans to build more houses —indeed, they might have to pull their own legislation on this—because Government Members always want them elsewhere. The previous Prime Minister talked about an anti-growth coalition—it is sitting there on the Government Benches.

On trade, the Prime Minister wants to tell the European Union that the grown-ups are back in charge and, at the same time, convince his Back Benchers that he is really a true believer—well, good luck with that. The Chancellor, who loves all things Swiss, is going to buy them all cuckoo clocks for Christmas.

The point of financial stability is that it has to be a platform for better growth in the future. Financial stability has to be a platform for hope. It has to be the basis for wealth creation, for better long-term growth and for a way to escape the doom loop in which the Conservative party has left us. That is what we must secure to make the country more prosperous and our citizens better off.

This country can do so much better through the skills and talents of our workers; through modern supply-side economics that supports help to get the hundreds of thousands of people who have left the labour market since covid back into work, as my right hon. Friend the Member for Leicester South (Jonathan Ashworth) said in his opening speech yesterday; through making the transition to cleaner energy a UK industrial and economic success story; not through rerunning the Brexit argument, but by having an adult and responsible relationship with our neighbours and allies; through making this country the best place to start and grow a business—the home of enterprise and wealth creation; through the reform of business rates; and through making sure that when we get economic growth, every part of the country can be part of it.

The fundamental difference between Labour and the Conservatives is that they believe that growth comes only from unleashing the animal spirits at the top, while we believe that growth comes from the efforts of each and every person who goes to work every day, from the entrepreneurs who start a business to the teachers who equip children with new skills. That is the point of financial stability; it is not an end in itself but a platform for a better tomorrow. Maybe that is the lasting verdict on this autumn statement: it was an admission that not only have the Conservatives failed in the past but they now have nothing to offer for the future.