Budget Resolutions

Nesil Caliskan Excerpts

Wednesday 30th October 2024 Commons Chamber

[Dame Harriett Baldwin]

Does the hon. Gentleman want to stand up for my farmers? My farmers are some of the most productive and hard-working people in this country. They are the ones who put food on our tables, and they are soundly disappointed with today’s Budget. There was no help or certainty for them in the Budget—no help for them through the agricultural property relief that allows them to hand on the family farm to the next generation. Labour Members should know that this Budget will mean that many family farms will be broken up, unable to be handed on to the next generation.

[Nesil Caliskan (Barking) (Lab)]

Will the hon. Lady give way?

[Dame Harriett Baldwin]

As the hon. Lady can see, I am not giving way at the moment.

As you know, Madam Deputy Speaker, the only way that we get true, genuine, sustainable growth in this country is through productivity and investment by the private sector.

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[George Freeman]

I thank the hon. Lady for her intervention and for her chairmanship of our Select Committee. I welcome bits of the Budget, including the £20 billion commitment. My right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), the former Prime Minister, and I secured an historic commitment to raise R&D investment to £20 billion when he was Chancellor, and I heard the Government ringfencing that amount today. I support the notion of an industrial strategy, as long as that does not involve earnest committees of Whitehall mandarins far away from the innovators, entrepreneurs and people on the ground. I support the wealth fund and the Mansion House reforms, but I have sincere concerns about the message that today’s Budget sends about innovators, entrepreneurs, wealth creators and businesses. They are the people who turn great science into great businesses that drive growth.

Let me talk about why the innovation economy is key. If we want to get out of debt, the innovation economy provides the only model of growth that will deliver the productivity increases we so urgently need. It will reduce our reliance on the low-wage labour that has been completely built into the service economy, which has dominated this country since the 1980s and since the Tony Blair and Gordon Brown years of “Cool Britannia”. That model was based on letting London boom and pulling in cheap labour, which drove an immigration crisis that my party got itself twisted up about and that put huge pressure on our public services. We have to get away from that model of growth, and move to a model of growth led by innovation, with higher skilled jobs, much greater efficiency and productivity.

Sectors are growing in this country that could attract billions of pounds of investment from all over the world. There is a wall of capital to invest in agritech, clean tech, fusion energy, satellite manufacturing—I could go on—and all the sectors where we are strong. That is the part of the economy that we should focus on, and it is the only bit of the economy that drives genuine regeneration. The sustainable levelling up is happening in Glasgow through the satellite manufacturing economy, in Edinburgh through quantum computing, in Newcastle through data, in Leeds through digital health and in Norwich through agritech. The R&D economy is the best mechanism for driving that levelling up and regeneration, and creating the opportunity society we all need. We cannot have an innovation economy without an opportunity society. I would go as far as saying that we cannot have an opportunity society without an innovation economy. That is key if we want to tackle the problem of debt.

[Nesil Caliskan]

Does the hon. Gentleman agree that supporting skills and employment is key to creating the sort of economic growth he talks about? Getting young people on a pathway to training and receiving the skills they need to secure jobs is critical.

[George Freeman]

I completely agree and the hon. Lady makes an important point. I was the Minister that covered that agenda. The science superpower piece is about our being a bigger player in the world, attracting billions into the country and using our science and research to solve global challenges. Our science ecosystem is not yet set up to do that—that is not even what it thinks it is there to do. The innovation economy piece is about using the science engine to drive economic advantage in this country through the catapult network, greater industrial R&D, investment in skills, ensuring we train the workforce for tomorrow’s industries, procurement and regulation, and supporting innovation clusters. Skills are key to that.

In that context, a Budget is an opportunity, but the Chancellor has missed the fact that to drive the innovation economy, we need entrepreneurs, innovators, and people who will take a risk and create a business. That does not happen in the Treasury or, dare I say it, in my beloved old Department for Science, Innovation and Technology. It does not happen in Whitehall. Our job is to create the conditions for innovation to flourish.

I fear that the signal that has gone out from today’s Budget is that although we have had a change of Government, we have not had a change in the core narrative. It feels to me as though Treasury orthodoxy has been reasserted. We will balance the books by making cuts, taxing existing wealth and chasing harder and harder after growth, but what we will see is growth down, inflation up, borrowing up, mortgages up and taxes up. We need to send a big signal that this country is open for business.

The hon. Member for Birmingham Edgbaston (Preet Kaur Gill) made an interesting point about the global investment summit, which we set up and which is now called the international investment summit. It is good news that that money is coming in, but I have to say that, in 30 years in the innovation economy, I have never seen so many people decide that they are going to sell their businesses and leave the country than I have over the past three or four months. The Government thought that they were playing a clever political trick of rolling the pitch, so that, on Budget day, the news would not be so politically damaging. However, they have misunderstood how mobile capital and talent are in the global economy.

We need people to want to come to this country. Often they want—I did not—to put their children into independent schools. They want to make money here. They want to build businesses here. We need to attract them. We have no right to just assume that they will come. If we are to build an innovation economy, we need a tax regime that is fair. No one wants this to be the home of Russian money-laundering, international criminals and abuse of the non-dom system, but we have to build an economy that is attractive for innovators.

We also need to better connect the City to our science, research, technology and innovation sector. It is shocking to me, and it should be to this House, that, in 1997, 73% of the £3 trillion-odd held in the City—our money that is invested in pensions—went into equities, 53% of which went into UK equities. That figure today is just under 4%. In the past 25 years, we have seen the most extraordinary globalisation, digitalisation and indexation of the City. The City has not been encouraged by successive Governments, and has not itself been investing actively in the productive businesses of this country. We have seen a hollowing out in the City of its commitment to support British industry and British companies, and it is an accelerating model. In every month over the past four years, we have seen a net outflow of investment in UK equities.

I hugely support the work that the fantastic Parliamentary Secretary, His Majesty's Treasury, the hon. Member for Wycombe (Emma Reynolds) is doing on taking forward our Mansion House reforms. We must better connect our capital in the City of London to our productive innovation economy. I am not for a minute suggesting that everyone’s pension should go into one biotech company—quite the opposite—but if we connect some of that money with our innovation economy, we will unlock tens of billions of private money—our money—to drive growth in this country. At the moment, we incubate world-class businesses and then watch the Australian and Canadian pension funds buy them, or American investors buy them out and float them.

I worry about today’s inheritance tax and capital gains tax announcements. We will find that the devil is in the detail when we read the Red Book tomorrow. If we kill the engine that drives the people who create the companies of tomorrow, we will end up with a big science investment and not enough actual innovation in the economy.

To close, I want speak briefly about the issues in Mid Norfolk. It is a rural, sparse, disconnected place—it is something of a backwater—in the middle of East Anglia with poor traditional access. I am afraid that today’s Budget will hit the two key groups in my constituency. Many pensioners have been hit by the winter fuel changes, and huge damage has been inflicted on the small businesses on the high street, including the hospitality businesses and the pubs. They were looking for relief—not just a penny off beer duty but real relief for businesses out in rural areas. The agricultural property relief hit will damage the rural economy of Mid Norfolk. I hope that when we read the Red Book we will see some better news, but my fear is that we have a change in Government, but all too little change in our economic orthodoxy. Just like a company, this country is running out of cash. We need to unlock much more innovative and enterprising models of economic growth.

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[Nigel Farage]

Maybe one or two Members of the House ought simply to grow up, but there we are—it’s a bit sad. I have worked in private business, and I do think picking winners is wrong. I think we leave that to the free market, and we let people either make money or lose money. Frankly, if they do their dough, well, that’s just the way these things work.

Any business employing five or more people has been hammered today. I have set up and run companies, but nobody on the Government Front Bench has ever worked in private business. None of them understands what genuine risk capital is. From what I can make out, our Business Secretary has never even had a job.

[Nesil Caliskan]

Have you ever had a job?

[Nigel Farage]

I have had plenty of jobs—well, apart from being in the European Parliament, which doesn’t really count, obviously.

What is dismal about this Budget is the growth forecast. If the ambition of our Chancellor is that in four years’ time growth should be 1.5%, that is very bad news for everybody, particularly because it takes no account of the rise in population that will happen through legal immigration. It basically means a rise of 0%. Nobody has even mentioned the fact that gross domestic product per capita—wealth per capita—has been falling consistently nearly every quarter for the past two years. The bigger our population becomes the poorer we are becoming, and we must wake up to that reality.

The big picture is that we are in decline. We are getting poorer. There is no £22 billion black hole—that is nonsense. It is £2.7 trillion. Our debt repayments are £90 billion a year, and from all the figures I have seen today, that will be worse in five years’ time than it is today. We need a complete change of culture. We need to start saying that success is a good thing, and making money is a great thing. People becoming rich is something we should encourage. We have to change our culture of work. There is this idea, “Oh yes, work from home, do a four-day week, get your work-life balance right”—well actually, why do we not say to young people that hard work is a good thing? Hard work is the only way that anybody succeeds individually, and the only way that we will have a chance as a country to turn any of this around.

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[Mike Wood]

My right hon. Friend is absolutely spot on. We do not need to take his word for it, definitive though it is. The Chancellor herself was clear that many of the tax rises that she has introduced today are taxes on jobs and can only find their way out of people’s pay packets.

People were sold a false prospectus on our national finances. Before the election, the then shadow Chancellor promised that Labour would be the party of “fiscal responsibility” and that she would have “iron discipline”. Well, at least Gordon Brown was faithful to prudence for a full term. It looks as though fiscal responsibility has been jilted at the altar by the Chancellor within her first few months. Page 6 of the OBR outlook makes it clear that the measures in this Budget will increase borrowing by £150 billion over the course of this Parliament.

[Nesil Caliskan]

If the hon. Gentleman thinks that taxes on businesses should not increase, where should the tax burden lie? If he does not think that borrowing should increase, what would he cut from the Budget?

[Mike Wood]

We have yet to see the departmental allocations. It is clear in the OBR’s projections that there are massive increases in borrowing, but even the savage tax rises that have been set out today are dwarfed by the increases in spending. The choices that the Chancellor has made are not to do with any black hole; they have been made because of her priorities, which were set out before the election. People were told that taxes would not have to rise under a Labour Government, but they are now seeing the reality. The current budget deficit will increase by £9.3 billion a year.

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[Nesil Caliskan (Barking) (Lab)]

I begin by putting on record my congratulations to my right hon. Friend for being the first female Chancellor to stand at the Dispatch Box. It was a historic moment in the mother of all Parliaments. After 14 long years of low growth, low investment and failing public services, we are now turning the page. This Budget is about fixing the fundamentals of our economy, demonstrating responsible governance by sticking to tough fiscal rules and investing for the future. Those are all necessary to achieve sustainable economic growth. In the end, economic growth is what will improve people’s living standards and life chances, and it will certainly benefit my constituents in Barking. Crucially, this Budget ensures that working people in my constituency are protected as we stabilise, fix and grow the economy.

On tax, let me just say this. If Opposition Members do not want to borrow to invest and do not want to tax business, they should tell us what in the Budget they would cut. They are simply out of touch. They moaned and groaned earlier, but the people in my constituency and the country as a whole will not forget that when the Conservatives were in power, they caused inflation to hit the roof and interest rates rose. Almost 12,000 people in my constituency saw their mortgage rise by over £3,000, and rents have soared. Wage stagnation has cost working people £11,000 on average. As for tax increases, it was the Conservative Government who increased taxes on working people and left the £22 billion funding gap. We on the Labour Benches will take no lectures from those on the Conservative Benches who supported the chaos of a Liz Truss Budget that crashed this economy, yet they have the audacity to stand up with zero humility after their Government left this country in a worse state than they found it.

Politics is full of choices, and the Conservatives played their politics in this place at the expense of British people. In contrast, today’s Labour Budget will make my constituents in Barking better off. The pay increase for public sector workers and the increase in the national living wage will put money in the pockets of working people. Those increases in people being paid a decent wage are vehemently opposed by those on the Conservative Benches, with such disdain it is unbelievable.

We know that the damage of the last Government cannot be undone with one Budget and that the Chancellor has to set tight fiscal rules, but we will rescue both the economy and public services. We must also invest for the future, and I particularly welcome the Chancellor’s steps today to unlock more investment for our public services. Much of it is capital spend, which is really an investment for people—additional money for schools and local authorities. This country has to invest or it will decline. That is what this Labour Budget delivers, and I am deeply proud to support it.