Growing the UK Economy

Debate between Mel Stride and Darren Jones

Wednesday 29th January 2025 Commons Chamber

[Mel Stride (Central Devon) (Con)]

The Chief Secretary told us that growth is the No. 1 mission of this Government and added, “Now we must go faster”, which I have to tell him suggests a certain lack of ambition. What we do not need is some hasty mañana moment of unquantified, vague promises of a better tomorrow; we need action now to reverse the grievous damage that this Chancellor has wrought in just her first six months in office. Why did the Government deliver a Budget that the independent Office for Budget Responsibility said would lead to lower growth, higher inflation and higher interest rates and would cost jobs? I have to tell the right hon. Gentleman that “going for growth” in the 2030s means nothing to the businesses that have already stopped hiring, shed workers and put up prices thanks to Labour’s ruinous policies.

It is hard to escape the conclusion that these announcements have been hastily cobbled together by a Government who are under increasing pressure to change course but are seemingly incapable of doing so. Why have these announcements come only now? The Labour party had years in opposition and months in government leading up to its first Budget. If the Government really wanted to unleash investment, innovation and the private sector, they should not have decided in the autumn to increase substantially the tax burden and the size of the state. By doing so, far from encouraging private investment, they are actively squeezing it out. Will the Chief Secretary to the Treasury reassure businesses right now that there will be no further growth-destroying fiscal measures in the spring statement, including tax rises?

Is the truth not that the damage is already being done? Even before Labour’s tax rises bite in April, the economy is flatlining right now, so will any of the announcements have an impact within this Parliament, and what—if any—impact are they likely to have on the OBR’s forecasts in March?

Incredibly, the Chancellor said in her speech that businesses are what drive growth and that the Government should support them, yet this is a Government who have driven business confidence off a cliff. They have taxed businesses to the hilt and, through their upcoming employment legislation, will be hitting them still further with ever more job-destroying red tape. Can the Chief Secretary to the Treasury set out what the overall impact of Government policy decisions since July has been on regulatory costs for businesses? Does he agree with the Business Secretary’s extraordinary utterance on the media this morning that the Government have not hammered businesses?

The Chancellor claimed this morning that she has seen no alternative suggestions from the Opposition, so let me give her one now. Last year, the Conservative manifesto included £12 billion in welfare savings. At the time, the Labour party said that the money simply was not there. Now we are told that the Government will shortly be coming forward with plans for welfare reform— another damascene conversion. If they had grasped this issue when they came into office, they could have tackled the rising welfare bill, rather than taxing jobs and killing growth. The Government’s failure to act means that businesses and millions of people are paying the price, so can the Chief Secretary to the Treasury commit today to matching that £12 billion, or can he at least tell us the scale of savings that we can expect from his promised reforms?

Some of the announcements made today are of course welcome. The role of the Opposition is not to oppose for opposition’s sake, not least because many of the measures announced are reheated from the previous Conservative Government. The plans on pension investment, for example, seem oddly familiar to us, probably because they are simply to continue the reforms that I was bringing in when I was Secretary of State for Work and Pensions. Even in this area, though, we must wait and see before passing judgment, because this Government have shown that we simply cannot trust their word. They promised not to raise taxes, but they did. They promised not to cut winter fuel payments, but they did. They promised not to borrow more, but they did. We need to see action, not just words.

The Chancellor talks about removing barriers to growth—oh yes, she talks about it—but that talk comes from the same person whose Budget killed the economy and growth stone-dead. If we are looking to remove the greatest barriers to growth in this country, perhaps we should start with the Prime Minister and the Chancellor of the Exchequer.

[Darren Jones]

The House is indebted to the shadow Chancellor—Mr Melmentum himself—for his lecture on the need for speed from this Government. Let me tell him that we have done more in the last six or seven months than that lot did in the last 14 years.

The shadow Chancellor asked me about our plans to work with business. The comments today from business leaders and investors speak for themselves: our plans are welcomed by businesses, and we will be working in partnership with them to deliver for this country. He also asked me about work. Those of us in the Labour party make no secret of the fact that we like to support people into work—strong, secure work with workplace rights and secure incomes to help make people’s family finances add up. That is why our party was created in the first place. The real truth from the data is that under the last Government, too many people were waiting at home sick, unable to get NHS appointments or access to mental health services so that they could be helped back into work. Too many people were waiting at home, waiting for training and unable to seize the opportunities advertised in front of them. This Labour Government will not treat those things as a luxury, but will work at speed to give people the work they deserve.

At the heart of the shadow Chancellor’s statement was a truth for the country to consider. Under the last Administration, it was promises cancelled; under this Administration, it is promises being delivered.

Public Finances: Borrowing Costs

Debate between Mel Stride and Darren Jones

Thursday 9th January 2025 Commons Chamber

[Mel Stride]

The performance we have just seen was a slightly anxious and breathless one, which leads me to the question: where is the Chancellor? It is a bitter regret that at this difficult time and given these serious issues, she herself is nowhere to be seen.

In the last 48 hours, borrowing costs have reached a 27-year high, and it is the Chancellor’s decisions that have led us here. Before the election, the right hon. Lady promised that Labour would get debt falling, would not fiddle the figures, would not raise taxes and would grow the economy, but the economy is now flatlining. Survey after survey is showing that business confidence has simply evaporated, and at the Budget, the Chancellor hiked up taxes, increased borrowing by an average of £32 billion a year across the forecast, and conveniently adjusted her fiscal rules to allow her to do so.

Higher debt and lower growth are understandably now causing real concerns among the public, among businesses and in the markets, and despite what the Chief Secretary has said about international factors, the premium on our borrowing costs compared with German bonds recently hit its highest level since 1990. With those rising costs, regrettably, the Government may now be on course to breach their fiscal rules. The Chancellor has committed to no further tax rises, so does the right hon. Gentleman stand by her commitment not to increase taxes even further? If so, does that mean that the public should expect cuts to public service spending if the OBR judges that her fiscal headroom has evaporated?

There are media reports that the Chancellor will make an emergency intervention to soothe markets, but with no confirmation that such a statement will occur in this House. Will the right hon. Gentleman confirm that any such statement will be made first to Members in this House? Rates on Government bonds ultimately feed through to the broader credit market, so what estimates has the Treasury made of how recent market movements will impact mortgage costs and lending across the economy?

I will make one final point, Mr Speaker. Every pound that we spend on debt interest is money that we cannot spend on the public’s priorities. The Government’s decision to let rip on borrowing means that their own tax rises will end up being swallowed up by higher borrowing costs, at no benefit to the British people. Far from this Government laying the foundations for a stronger economy, the Chancellor is squandering the endeavours of millions of hard-working people up and down our country, who are now having to pay the price for yet another socialist Government taxing and spending their way into trouble. Does the right hon. Gentleman not now accept that it is time to change course?

[Darren Jones]

I am pleased that the right hon. Gentleman enjoyed my performance—I have not even had my first cup of coffee yet this morning. Let me answer some of his questions. [Interruption.] Conservative Members might like to listen, if the questions are so important to them.

The right hon. Gentleman asked me about the fiscal rules. As I said in my statement, those rules are non-negotiable. As the Chancellor set out at the Budget, we have two fiscal rules: first, that day-to-day spending should be met by tax receipts, and secondly, that debt should be falling as a share of the economy.

The right hon. Gentleman talked about the debt burden that this country has. Maybe we should reflect a little on why we have so much debt—[Interruption.] From pre-pandemic, Mr Speaker. Let us look at the burden of debt inherited by this Government from the Conservatives. From 2010 onwards, why did the last Government have to borrow so much money every single month, not just to invest but to pay the day-to-day bills? Because of an absolute failure to get growth into the economy. They could not make the numbers add up. They stacked up the country’s credit card and left it to the Labour party to deal with, and we are going to deal with it. That is why those fiscal rules are non-negotiable, and it is why public spending will be within the numbers set out at the Budget.

We are starting the spending review now, and it will conclude in June. Public services will have to live within their means—the Chancellor has been very clear about that. That is why with this Government, you get economic stability and absolute clarity on public spending. That is why the British people trust this party and booted that lot out of office.