Energy (oil and gas) profits levy

Pat McFadden Excerpts

Tuesday 22nd November 2022 Commons Chamber

[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.