Mel Stride
Main Page: Mel Stride (Conservative - Central Devon)Department Debates - View all Mel Stride's debates with the HM Treasury
(3 weeks, 2 days ago)
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Sir Mel Stride (Central Devon) (Con)
I thank the Chancellor for advance sight of her statement—although the press, of course, got even more advanced sight of it.
The decision taken to cancel the increase in fuel duty is welcome—it has been a long time coming. The Conservative party has been campaigning against the fuel duty rise for months, but the Chancellor has defended that policy repeatedly, leaving motorists and businesses worried about even higher fuel prices in September. It was always obvious that the fuel duty increase would need to be cancelled—obvious to everyone except the Chancellor. Why did she fight us on fuel duty for so long? Why has she been so hellbent on raising fuel duty during an energy crisis?
Well, the inevitable U-turn has finally come, but it is astonishing to hear the Chancellor claiming that the Government can afford to help households because the forecasts have improved. Is she seriously suggesting that the economic outlook is now better than at the time of the last fiscal forecasts when we have had the Iran conflict, to which our economy is highly exposed thanks to this Government’s ruinous choices? The Chancellor has just pointed to the IMF forecast being upgraded this week. Let us be very clear about what is going on here: the IMF adjusted its growth forecast for this year up slightly to 1%, but until April it was forecasting 1.3%. Where exactly is the supposed growth dividend? Will the Chancellor directly address that point?
This is exactly the same game that the Government played last year when they U-turned on cuts to the winter fuel payment. They claimed then that they were U-turning because the economy was improving when, of course, they were doing it due to political pressure. Nobody bought it then and nobody is buying it now. Once again, we have a weak Government caving in to the inevitable after spending months defending a truly terrible decision.
The Chancellor claims that the measures announced today will be funded by a number of different tax measures, but most of the ones she mentions are already in place and baked into the OBR’s forecasts. Given that the Chancellor has not announced any measures to control Government spending, will she confirm that, in fact, the measures that she is announcing today will be funded, at least in part, by yet more Government borrowing? Will she also confirm whether fuel duty rates will still rise to the same level as previously planned after December, or will today’s announcement mean a permanent reduction in fuel duty?
Although we in the Opposition welcome some of the measures that the Chancellor has taken today, such as the increase in mileage allowances, it is all very minor compared with the inflation this Government have fuelled since coming into office and the tax rises that the Chancellor has imposed. Today’s announcements will bring little comfort to the hundreds of thousands of people who have lost their jobs, the countless businesses that have folded and the high streets that are now hollowed out. The reality is that we are in a terrible position to deal with the consequences of the latest energy crisis, thanks to the actions that this Government have taken.
The Chancellor claimed that growth is up; it is actually down. She claimed that borrowing is down; it is 75% up compared with the plans that she inherited. She claimed that she is fighting inflation; we have the highest inflation in the G7. She claimed that she is cutting energy bills; energy bills have gone up under this Labour Government. And of course, she did not mention unemployment.
On energy, this Government have made a conscious decision not to exploit our own natural resources in the North sea, weakening our economy and our energy security while importing oil from Putin’s Russia at the cost of Ukrainian lives. Families and businesses are facing rising costs and rising taxes. People are losing their jobs. The country is hurting. If the Chancellor were serious about the challenges we face, she would commit to getting spending down, tackling the benefits bill and getting taxes down to strengthen our economy. Yet thanks to the Chancellor’s mistakes and the weakness of this dying Government, today’s statement is all we get. Does the Chancellor really think that that is enough?
Rachel Reeves
Let me take the issues that the shadow Chancellor has raised. On fuel duty, when I became Chancellor of the Exchequer, the freeze in fuel duty was due to expire, under the plan set out in the Conservatives’ final Budget, within a matter of months. I have frozen fuel duty twice already and I have frozen it again today; indeed, I have frozen it with more than three months to go before the increase was due to happen, giving people plenty of time.
I have always said, since the middle east conflict began, that I would keep an eye on what was happening to oil and gas prices and set out plans ahead of the change due to come into effect in September. That is exactly what I have done. I have also gone further in three specific areas, with additional support for hauliers, additional support for red diesel—particularly helping the rail freight industry and farmers—and the higher mileage rates. The shadow chancellor says he welcomes the changes on mileage rates. It is the first time they have been increased since 2011, so if he welcomes them so much, why did the Conservatives not increase them when they had 14 years in government?
On the Iran conflict, let us remember that this is a war that the UK did not start and this Government chose not to join, whereas the Conservatives and Reform were cheering on the conflict every step of the way. The impact on the UK and global economies would be much more severe if we had heeded the pleas of Reform and the Conservatives to join that conflict.
The shadow Chancellor talks about inflation and growth. Yesterday, the numbers showed that inflation had fallen; we are the only country in the G7 where inflation fell last month. The IMF has revised up our growth forecast and we had the fastest growth of the G7 in the first quarter of this year. The shadow Chancellor asks whether that will be paid for with new borrowing. No, it will not. If he had been listening, he would have heard the changes we are making around the foreign branch exemption. That will raise hundreds of millions of pounds a year, which is why we are able to afford the package that we have announced today.
The shadow Chancellor mentioned high streets. Because of the Pride in Place money that I announced at the Budget, the banking hubs and the changes that we made to business rates, which have seen those rates for retail and hospitality come down significantly compared with the plans we inherited from the Conservative Government, we can reinvigorate our high streets.
The shadow Chancellor mentioned borrowing. Borrowing has fallen below 5% for the first time since 2019 because of the actions that I have taken as Chancellor. Borrowing is expected to fall in every year of this Parliament—very different from what happened under the Conservatives. Employment and activity remain in the top half of the OECD and the G7. The biggest benefits boom came under the last Conservative Government, when the shadow Chancellor was the Work and Pensions Secretary.
Oil and gas will play an important role in our economy for many years to come, but we also need to invest in renewable energy, which is why we announced yesterday restrictions in the number of judicial reviews, which are holding up investment in clean energy. It is a shame that the Conservatives voted against our Planning and Infrastructure Act 2025 and it is a shame that the Liberal Democrats abstained on it. We are determined to get Britain building, including building the energy infrastructure we need to get bills down.
Just a couple of weeks ago, I announced changes around tie-backs to make it easier for oil and gas companies to exploit their reserves of oil and gas in the North sea. Jackdaw and Rosebank would have gone ahead if it had not been for the last Government messing up the way they legislated. We will shortly announce the decisions, which the Secretary of State for Energy and Net Zero will make. I am very clear that oil and gas will play an important role in the UK for many years to come, adding to our energy security alongside investment in nuclear, small modular reactors, floating offshore wind and onshore wind and solar, opposed by the Conservative party.