Charter for Budget Responsibility

Matt Rodda Excerpts

Wednesday 29th January 2025 Commons Chamber

[Matt Rodda (Reading Central) (Lab)]

It is a great pleasure to speak in the debate and something of a privilege to be the only Back-Bench speaker. I shall make a series of points, including welcoming the Chancellor’s commitment to growth and the announcements that she made today before moving on to a number of other areas.

I commend what the Chancellor said this morning in Oxfordshire and, in particular, what she said about the importance of investment in infrastructure for the long term, whether in transport, new powers to streamline the planning process or indeed attracting more tech investment to the UK. My Reading Central constituency and the whole of Berkshire benefits enormously from such investment, so I wholeheartedly welcome her announcements and commend her for her work on that.

If I may, I will somewhat cheekily ask the Chief Secretary to take a few points back to the Chancellor. In our area, we are looking for further investment to drive economic growth. I will highlight a couple of points of local importance. In particular, the western rail link to Heathrow scheme is supported by all Berkshire MPs and colleagues from across a much wider area. Heathrow airport is unusual in being a hub airport in western Europe without a rail link in both directions. A number of local authorities, parliamentary colleagues and the rail industry have pushed for this measure, which, compared with some points discussed in the Chancellor’s speech and more widely in the House this afternoon, would require only modest investment. A short stretch of railway line from Langley, just outside Slough, into the airport, where space for a station already exists, would significantly cut journey times for workers at the airport, commuters and many others, and attract business to Berkshire. The scheme is supported by local business groups.

To give an idea of the importance to Reading, at the moment it takes around 50 minutes from Reading station to travel to Heathrow by bus, but it would be just 15 minutes with a rail link. Many of the firms relocating to the Reading area from across the country would be encouraged further by that and have far greater connectivity to international markets through swift access to Heathrow. Equally, it would appeal to inward investors coming to our part of England. There would be an additional benefit—the Chief Secretary may know well know about this—for travellers from the west of England and south Wales in vastly speeding up their journeys to Heathrow airport. I want to flag that up to him.

May I ask the Chief Secretary to relay to the Chancellor my wholehearted support for the Oxford-Cambridge corridor? The area that I represent sits at the south-western edge of that corridor. Given the excellent rail and road connections between Reading, Berkshire and Oxford—it takes as little as 25 minutes to get from Reading town centre to Oxford city centre by rail—that route could extend the corridor, which will run through Northamptonshire and Bedfordshire, as the Chancellor highlighted. Indeed, the rail corridor into Berkshire and through southern Oxfordshire passes Culham, an area of significant science investment that was formerly the site of the UK and Europe’s Joint European Torus project. It also runs through Didcot, which is a major centre of inward investment, as well as to Reading. There would be enormous benefit to residents and businesses in Oxfordshire and to businesses in Berkshire if that were seen as a whole, rather than the line stopping in Oxford. I hope that he will take that back to his colleagues.

I appreciate that many colleagues may want to speak later on the welfare cap motion, so I will limit my remarks and not stray too far. I would, however, like to describe some of the benefits to the Berkshire local economy of the stability that the Chief Secretary outlined. We have a fundamentally strong local economy; we are lucky to have high levels of growth relative to other parts of the UK. We face the same challenges as areas from across the country, which he outlined earlier: the importance of stability and long-term investment, and making sure that businesses understand that there is stability so that they invest and spend their own money creating jobs.

Let me draw out some examples from local businesses. I represent a constituency that has high tech and telecoms employment. Something like 300,000 people work in those sectors in the county of Berkshire. In Reading, there is a significant cluster near the station, which has been fostered not just by the rebuilding of the station but by Reading being the western terminus of the Elizabeth line. That has led to a significant number of employers moving to the town centre. It is a good example of the benefits of investment that the Chancellor talked about earlier, and of the importance of high-speed rail and other improvements to rail and public transport, to connect major centres of employment and allow employers to recruit from a much wider pool. That is exactly the message I have been told when visiting employers in that area. They have based themselves near the station because they can access a much wider pool of workers with higher levels of skill, and that drives productivity and growth in their business. There are strong local examples which, at microeconomic level, make the point that the Chief Secretary has made today.

Let me also draw the House’s attention to the importance of education, which the Chief Secretary hinted at, to managing public finances. In my experience, having a university in the constituency is a huge driver of economic activity, particularly for creating a skilled workforce, who often wish to remain in the constituency. That is certainly the case for many places the Chancellor described in her speech, particularly the great university cities of Oxford and Cambridge. It also applies to London and many other centres such as Manchester.

Higher education is central. It must be linked with employment and offer the right programmes to attract a wider range of young people into higher education. It was a privilege to meet staff at Reading University recently. They briefed me on some of their work to encourage young people from families who traditionally might not have thought about going to university to consider higher education at their local university. That is an important part of the bigger picture. I commend the Chief Secretary for his wider approach on the importance of investment and stability linked to investment, in transport infrastructure, as well as IT and tech infrastructure such as data centres, and a range of other forms of infrastructure.

Let me move on to some of the points made earlier. It is important to note that we are at a turning point. We have had a long period of low growth. The Government are right to make growth their top priority, to move on from 14 years of historically low growth compared with the UK average over the past 40 or 50 years and going back to the industrial revolution. The Chief Secretary rightly made the connection between growth and investment, and so did the Chancellor today.

I welcome and wholeheartedly support the Chancellor’s emphasis on releasing pension savings to drive economic growth. That has been a successful policy both in Canada and in Australia. Although they are much bigger countries and have more natural resources, they have significant similarities to the UK—the benefit of English common law and many other historical advantages of our system and history. There are some important points to be made on that front. Above all, we must avoid the mistakes of recent years—the instability, the disastrous mini-Budget, the gambling with public finances and the lack of transparency.

The Chief Secretary is right to commend this charter today. I will draw out two particular points to flag to the House that I think are vital. The first is reporting on capital investment, which is an important measure in the charter. The second is in-year pressures, which, from the point of view of managing public finances, is vital. As he rightly said, it will allow policymakers much greater insight into what is happening in near-real time, which is important in avoiding future problems. I commend those measures.

In summary, the macro-level changes that we have described today will do a great deal to support my local small business, as well as larger investors coming into my constituency. I wholeheartedly support and welcome the measures set out today, and I am grateful for the opportunity to speak.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

The charter for budget responsibility is at the heart of the OBR’s function, setting the Government’s fiscal rules, as well as the OBR’s broader remit and how it is to perform its duties. It is important to stress just how vital the OBR is for the sound management of our public finances and for the UK’s economic stability.

I am very proud that the OBR was set up during my party’s time in office, and the Liberal Democrats have backed it at every turn since. In our most recent general election manifesto we said that every fiscal event should be accompanied by an OBR report, and we are pleased that this Government are taking the same approach. We also called on the Government at the time to establish the OBR to assess general election manifestos independently.

Unfortunately, commitment to the OBR as an institution cannot be taken for granted, as we have seen over the past few years. We saw Liz Truss’s Conservative Government sideline the independent watchdog at the mini-Budget and cast doubt on its forecasts at every turn. Equally unfortunately, we all witnessed the consequences: soaring interest rates, sky-high mortgage bills and a spike in the cost of servicing our national debt. We Liberal Democrats are crystal clear that we can never have a repeat of that debacle.

[Matt Rodda]

The hon. Lady is making an excellent speech. Will she also reflect on the disastrous impacts on pensions savings, and particularly on people who were drawing their defined contribution pensions at that point in time? Some of my constituents had awful experiences, which they relayed to me.

--- Later in debate ---

[Darren Jones]

That is a great question. All these infrastructure opportunities will go through both value-for-money assessments and growth assessments. The argument that we have been making today is that initiating projects such as the East West Rail line in a co-ordinated way with private capital, universities and our house building plans lifts the growth opportunities that come from those projects. That is why Patrick Vallance has been appointed as the champion of the growth corridor. We will take a whole-corridor view on the investments and the opportunities across different investments, regardless of whether they are public or private, but they will all have to go through value-for-money and growth assessments.

The infrastructure strategy will be a 10-year strategy. It will give a long-term view on economic, housing and social infrastructure, but they will be underpinned by longer-term capital budgets. The capital budget that we will set in June will be for four years, until 2029-30, but the normal approach, as set out in the charter, will be that the capital budgets will be for five years. As the House knows, we have committed to doing the next spending review every subsequent two years. In 2027, when we conduct the next spending review, we will have the 10-year infrastructure strategy but also pretty much 10 years of capital budgets being allocated for those projects. That is a hugely important signal to investors.

We are working with industry and investors on what the biannual pipeline might look like, so that we can publish in real terms the investable propositions, but also so that businesses know that work is coming if they invest in their supply chain or their workforce. That is a crucial part of unlocking investment in skills and training in our country. Much like we have just seen in the water industry, which has agreed a longer-term investment settlement, suppliers are already telling us that they are now able to invest in staff, training and capabilities, because they know that the flow of investment will be coming over a period of time. We are seeking to do that across a range of infrastructure in order to unlock the investment that this country needs.

[Matt Rodda]

I should like to ask my right hon. Friend some further questions on the points he is making. The Elizabeth line demonstrates the case that he is making for the importance of place-based investment and the way in which houses, flats and businesses have been built near stations. There has been a combination of public and private investment in the project, which is arguably part of its success. So I welcome the points he is making about the longevity of the infrastructure investment, the role of the joint investment or co-ordinated investment with the private sector and, above all, the place-based nature of this. The role of Patrick Vallance, in particular, is an important one in that corridor. I would also urge my right hon. Friend again to look at the far ends of the corridor, both at the Oxfordshire and Berkshire end and also possibly towards Norwich and further into East Anglia. I know that a former Minister in the previous Government has been highlighting the potential benefits of investment along rail in East Anglia.

[Darren Jones]

I thank my hon. Friend for his intervention. He reminds me that the right hon. Member for Islington North (Jeremy Corbyn) asked me about broader reform to ensure that infrastructure is delivered differently from how it has been in the past, and I would point the House to the action that Ministers have already taken to call in projects that have been gummed up in the system for a long time, which we have allowed to take place, and also to the Planning and Infrastructure Bill that will be presented to the House in due course, which will show the level of ambition this Government have for streamlining planning and consenting processes so that we can get things built. As I have already mentioned, I think today in the House, the fact that we can build a house for someone in 14 to 16 weeks but it seems to take years to get planning approved shows the size of the prize for delivering for people across the country.

I will end by thanking the Liberal Democrat spokesperson, the hon. Member for St Albans, for her comments and for reminding the House why this debate matters and why the fiscal rules matter. Because, as we saw under the last Administration, this is not an obscure debate here in the House of Commons, or a kind of Whitehall guidance debate; this is important to people’s lives, because when Governments lose control of the economy nationally, it hits family finances.

We all know from talking to our constituents how stressful it was when the Conservative party lost control of the economy and when inflation went through the roof. It had a direct impact on people’s mortgages and on their ability to buy a house. So many people lost their mortgage offers overnight because of the actions of the last Government. It also affected people in the private rented sector when their landlords increased the rent, and because no-fault evictions were allowed under the last Government, many people lost their homes. This fundamental insecurity in people’s lives stems from the actions of politicians here in Government.

That is why the fiscal rules are so important and why the Chancellor—and indeed the whole Government—are so iron-clad in their commitment to them. That is why the fiscal rules are non-negotiable. [Interruption.] Shadow Ministers on the Conservative Benches laugh, but I would encourage them to meet some of our constituents and to explain why their actions led to such hardship for them. I have not even started to talk about the cost of energy bills or the food inflation that we are still struggling with today, directly as a consequence of the mismanagement of the economy under the last Administration. The sooner the Conservatives—should they wish to receive advice from me—apologise for the consequences of their actions, the sooner the public might start to listen to them again.

But while they are listening to this Labour Government, I can reassure hon. and right hon. Members in the House today that the fiscal rules are non-negotiable. They are the bedrock of economic stability. They enable us to invest in our public services in a sustainable way, to secure growth in the economy and, ultimately, as set out in the Prime Minister’s plan for change, to deliver for working people so that they will know in the years ahead that life is better under a Labour Government than it is under a Conservative Government.

Question put and agreed to.

Resolved,

That the Charter for Budget Responsibility: Autumn 2024, which was laid before this House on 22 January, be approved.