Autumn Statement Resolutions

Peter Grant Excerpts

Thursday 23rd November 2023 Commons Chamber

[Kevin Hollinrake]

The hon. Gentleman raises a good point. I chair the Hospitality Sector Council and meet large and small hospitality businesses regularly, so I understand the pressure they are under. The hon. Gentleman has some such businesses in his constituency and I do too, so we know that is a problem. We have put a huge amount into supporting businesses with their energy costs, halving the cost of energy for most businesses. Energy is much more affordable than it was this time last year, which was an incredibly difficult time, but some businesses are locked into expensive energy contracts from the backend of last year, when prices were very high. If the hon. Gentleman has any examples of such businesses, he should bring them to me, as we have commitments from the energy suppliers, so we can challenge them and try to smooth the contracts over a longer period to ease the pain. I am happy to help him with any individual cases in his constituency.

On capital investment, the Prime Minister and the Secretary of State for Business and Trade will host 200 of the world’s leading investors at the Global Investment Summit this weekend and on Monday, which I hope to attend. It will showcase the UK as one of the world’s best places to do business, and drive billions of pounds of new and strategic investment into every corner of the economy.

The autumn statement has a host of innovative measures that will unlock investment and fuel growth. For example, our pension reforms will help unlock an extra £75 billion of financing for high-growth companies, while providing an even better deal for savers. Plans include a new growth fund within the British Business Bank to crowd in pension fund capital to the UK’s most promising businesses.

Another example is our plan for further funding for two British Business Bank programmes, including the long-term investment for technology and science competition. That will make £250 million available to successful bidders to increase investment in key science and technology sectors, with the private sector contributing at least as much again. Not only that—we have made £50 million available to extend the future fund breakthrough scheme, which backs businesses focusing heavily on research and development.

Although the Chancellor did not mention it yesterday, we have also introduced important measures for equity investments, including a 10-year extension to the enterprise investment scheme and the venture capital trust scheme, giving investors and businesses the confidence, certainty and stability to invest, which underpins the system.

Secondly, this autumn statement contains a series of measures that will provide smaller businesses with practical help. As we prepare to mark Small Business Saturday next weekend—I am sure that Members across the House will visit their small businesses on 2 December—it could not be a more timely moment to announce our business rates support package. It will help high streets and protect smaller firms, which are the life blood of our local communities, saving the average independent pub more than £12,000 a year, and the average independent shop over £20,000.

In addition, the autumn statement will include measures to toughen our regulations to tackle late payments. I have seen at first hand how this scourge can crush even the most determined of business owners’ dreams, so it is right that we act.

The Procurement Act 2023 means that the 30-day payment terms, which are already set for public sector contracts, will automatically apply through the subcontract supply chain. From April next year, any company bidding for large Government contracts will have to be able to demonstrate that they pay their own invoices within an average of 55 days and that will reduce progressively to 30 days.

[Peter Grant (Glenrothes) (SNP)]

I am grateful to the Minister for the steps that he has announced today, but of course the proof of the pudding lies in the enforcement. Sex discrimination at work has been illegal for almost 50 years, but it still happens. The Minister will be aware that, as well as calling for action on late payment generally, I have often raised an issue that we get in the construction and civil engineering sectors, where the main contractor is paid on time but keeps the money for an inordinate length of time. If the main contractor then does a Carillion and goes down, all the money becomes part of its administration and very often the subcontractors get nothing. Can we have legislation, a code of practice or something to protect small business subcontractors from being dragged down when the main contractor goes under?

[Kevin Hollinrake]

I know that the hon. Gentleman has campaigned on this for some time and I have great regard for the work he does. It is worth him reading the “Payment and Cash Flow Review”, which was published yesterday alongside the autumn statement. It includes some references to retentions, to which he refers. There are other measures from the small business commissioner as well as more transparency on late payments. I am happy to engage with him further on this issue.

Although taxes pay for vital public services, this Government are clear that they must not stifle business owners’ ambitions. Quite simply, our economy relies on those ready to take risks and to innovate. Time and again, these entrepreneurs tell me that a simpler tax system would make life easier for them. This autumn statement will not just reduce tax but reform it, while putting more money into employees’ pockets.

The abolition of class 2 national insurance will save the average self-employed person £192 a year. Alongside the 1% reduction in the rate of class 4 national insurance, some 2 million self-employed people will be saving an average of £350 a year from next April.

In addition, from next year we will merge the existing research and development expenditure credit and the small and medium-sized enterprise R&D scheme. This will allow companies to claim back a proportion of their spending in this area through their tax bill, further simplifying the system and boosting innovation.

Finally, and very significantly, we have unveiled game-changing plans to make full expensing permanent. As the Chancellor set out yesterday, expensing aims to stimulate investment by giving larger companies £250,000 off their tax bill for every £1 million they invest. It was introduced, as hon. Members know, by the Chancellor in the spring and was set to last for three years, but it has been such a success, and the calls for it to continue have been so loud and clear that yesterday the Chancellor made it a permanent policy. This is the largest single tax cut in modern British history. It means that we now have not just the lowest headline corporation tax rate in the G7, but the most generous capital allowances too. That is hugely appealing to any business looking for a home in a global market.

The Office for Budget Responsibility tells us that this move alone will increase annual investment by around £3 billion a year, and by £14 billion over the forecast period. We are able to do this only because we have met our borrowing rules early, have more than halved inflation, and are seeing our debt go down every year.

--- Later in debate ---

[Jonathan Reynolds]

Absolutely. I apologise in full, Madam Deputy Speaker.

The Government not only made that decision in their own short-term interests, which compares very poorly even with previous Conservative Governments, but by selling the land, they did so in such a way as to prevent a future Government from trying to correct it. That is the controversy that the Minister makes. Of course, we are still very much committed to Northern Powerhouse Rail—the Crossrail project for the north of England—which would be important for my constituency, but of course, that plan itself relies partly on what was going to be HS2 infrastructure.

As the Minister knows, his Government are making a series of quite bizarre short-term decisions, and trying to use those decisions to present themselves as the party of change at the next election. We all face the consequences, which is regrettable. If the Minister were being totally candid in private, I think he would acknowledge that the north of England has really suffered from those short-term decisions, which we should all very much regret.

The Chancellor spoke at length about long-term sickness yesterday, and again, he was right to do so. We are the only country in the G7 where the participation rate is still below pre-pandemic levels, with long-term sickness at an all-time high of 2.6 million. Unfortunately, all we got was the same old rhetoric and the same old policies. What we needed to hear are two things. First, we need to have some efforts to get people off NHS waiting lists. That is what we would do, by providing 2 million more NHS appointments from the revenue we would get from abolishing the non-dom rule.

Secondly, we need to focus on mental health. That is why we would guarantee people a mental health appointment within a month and make mental health support available in schools, paid for by ending the tax breaks for private education. That would be real support. They are better choices than those the Government have chosen to make, because we in the Opposition know that a strong economy, good public services and social justice are not competing demands; they are all integral to one another.

[Peter Grant]

The hon. Gentleman mentioned the need for further investment in the NHS, which we on the SNP Benches would certainly support, but can he confirm the words of the shadow Health Secretary, the hon. Member for Ilford North (Wes Streeting)? Is it the intention of the Labour party to fight the next election on a manifesto that says it will

“hold the door wide open”

to the private sector in our NHS?

[Jonathan Reynolds]

No, and I think the hon. Member is being a little bit mischievous there, and he is aware of that. What my hon. Friend the shadow Health Secretary has reaffirmed is Labour’s historic and enduring commitment to a national health service that is free at the point of use and is managed and run as a national public service. He has also said that there clearly needs to be reform of the NHS to take advantage of new treatments and new ways of doing things; some incredibly exciting developments in life sciences and genomics have to be part of that. I think we would all recognise from our own constituency experiences that the NHS could do better in terms of how it interacts with people and how it gets people the treatment they need in a timely fashion.

What is relevant to this debate in particular is that, as well as being important issues about people needing healthcare and how they get it, these are economic issues. We want to get waiting lists down because we want people to have the medical treatment they need, but we also recognise that with so many people out of work and wanting to get back to work when they are waiting for treatment, it is imperative to get those waiting lists down. Under the last Labour Government, we saw tremendous progress in using the capacity available out there as part of a nationally run and nationally managed national health service to deliver that. Having successfully done that before in government, we believe we can successfully do it again, and that is what we intend to do.

Yesterday really lifted the lid on 13 years of Conservative economic failure. It laid bare the full scale of the damage that this Conservative party has done to our economy, and nothing that has been announced will remotely compensate for those 13 years. Only the Conservatives could preside over the greatest fall in living standards and call it a victory. Only the Conservatives could burden the country with the highest tax bill since the war and then pat themselves on the back for a cursory 2p national insurance cut. Only the Conservatives could crash the economy and send mortgages, food bills and energy costs rocketing and have the audacity to ask the country to trust them on the economy ever again.

As the credits roll on 13 years of Conservative failure, the reviews are in too: business has lost confidence in them, the public have lost patience with them, and even those on their own Benches know that this will not be enough to save them. While the Tories try to kid themselves, I do not believe the British public will be taken for fools. They know that after 13 years, we are all worse off under the Conservatives, and the only way we can truly turn the corner on this litany of failure is with a new and Labour Government—a Government who would put working people first, get energy bills down and get wages up; a Government who would give business the confidence to choose Britain again; a Government rebuilding our crumbling public services and getting waiting lists down; a Labour Government with the ambition, the ideas and the energy to get Britain’s economy really moving and deliver the real change our country is crying out for.

--- Later in debate ---

[Peter Grant (Glenrothes) (SNP)]

As with any major political announcement, the Government clearly had a whole series of long-term and short-term objectives for the autumn statement. I am pleased to confirm that the statement has already achieved what was probably the Government’s single biggest objective: it got good headlines right across the front pages of the right-wing press. They were not true headlines—they were completely untrue —but when did that worry the present Conservative Government? On the one hand, we have The Sun, The Times, the Daily Mail and the Daily Express—all bastions of responsible journalism—celebrating a tax-cutting Budget, and on the other hand, we have the BBC, Channel 4 news, Sky News, the Office for Budget Responsibility, the Institute for Fiscal Studies and the Resolution Foundation all saying that it is a tax-increasing Budget and we are heading for the highest tax burden any of us can remember. Who do we believe? That is a difficult question: who do we believe?

[Matt Western (Warwick and Leamington) (Lab)]

On that point, is it not a godsend that we do actually have something from the OBR this time, when 12 months ago we had nothing? That was a determined effort by the then Prime Minister and Chancellor not to have anything, so as to deceive the public.

[Peter Grant]

I do not know if I am allowed to repeat the verb that the hon. Member used—perhaps we should make it “persuade” the public, rather than “deceive” them, which I do not think we are allowed to say in this place—but I think the covid inquiry has blown that wide open. We have a Prime Minister who, as Chancellor, deliberately avoided asking for advice from the experts when he knew he was not going to like the advice he would get. It is barely a year since the Government Benches were full of people denouncing the idea of having an OBR because, in their words, “Economic forecasts are always wrong,” but as soon as economic forecasts begin to suggest that things may be improving, they suddenly want us all to believe them.

It is clear that by the end of this period of Tory rule, people will be paying more in tax in real terms than they were before. I am not against asking people to pay tax if they can see some benefit to the general welfare as a result, but that is not what is happening. We are looking at the largest reduction in real living standards since the 1950s. I did a quick check, and that is before either I or the Minister was even born. Perhaps there are one or two Members here who were alive at that time—I will not look at anyone in particular—but there are not very many. This is what has been described to us in Scotland as the “broad shoulders of the Union”. However, the broad shoulders of the Union have delivered the biggest reduction in real living standards in Scotland since before most of us were born.

While there are some aspects of this statement that we certainly welcome, the good bits do not go nearly far enough and the bad bits go far too far. I welcome the cut in national insurance, but let us not forget that that puts back into the pockets of workers only a quarter of the amount they are losing because tax thresholds have been frozen during a time of high inflation. When people have been getting 5% or 10% pay rises recently, it has not been a pay rise; it has just been trying to keep up with rising costs. Leaving the tax thresholds where they are means that somebody who in real terms is getting less top-line pay than they were two years ago is still having to pay more tax as a result.

The Chancellor boasted about the national insurance cut giving back, in his words, “nearly £450 per year” to average earners. Somehow he did not have time to mention that that drops to just £36 a year by the time we take account of the increases in real levels of income tax. Of course, as of this morning, it has been wiped out completely by the increase in fuel bills that we are all going to face next year. So this is not a giveaway budget; it is a pickpocket budget. It uses the classic pickpocket technique of using a nice thing to distract us—a tuppence cut in national insurance—while someone slips around the back and swipes the higher fuel bills, the higher income tax and higher everything else out of our back pocket at the same time.

We could have seen real action to address what is still the single biggest crisis affecting tens of millions of people on these islands, which is the very real panic people are in every week over the cost of living. We could have seen a continuation of the £400 energy bill rebate for households. We could have seen the Government funding a council tax freeze in the way the Scottish Government have done, meaning that Scotland now has the lowest—yes, the lowest—average council tax in the United Kingdom. They could have followed the SNP’s example and brought in a UK child payment similar to the game-changing Scottish child payment, lifting thousands of children out of poverty.

I welcome confirmation that benefits and pensions will not be cut in real terms. They are not increasing; they are being pegged in real terms, and that is all. However, the fact that that was under serious consideration until about 24 hours before the Chancellor’s statement tells us everything we need to know about where this Government’s values lie, and they do not lie in the same place as the values of Scotland. Alternatively, maybe there was never any danger of that cut being implemented, and they were just threatening it so they could make themselves look good when they announced no change. In the words of the Child Poverty Action Group:

“Struggling families have been worrying themselves sick for months about whether an unmanageable…cut was coming in order to provide the government with a rabbit-out-of-the-hat moment.”

Just as over the last few years we have seen the Tories wanting to punish homeless people for daring to be homeless and wanting to punish asylum seekers for daring to flee certain death, they are now planning to punish people who are ill and people with disabilities for daring to want to have a living at the same time as being ill or having a disability. We know what we should expect and what is coming next. The press were all trained to respond today, so we can expect an avalanche of rhetoric in the right-wing press denouncing anybody on disability benefits, in the same way that they have denounced migrants and asylum seekers for years and years. They denounced them as scroungers and fraudsters, all to give cover to a brutal and inhumane attack by a brutal and inhumane Government.

The party that last year demanded that all civil servants returned to full-time office working immediately, because working from home is not properly working, is now saying that people on disability-related benefits will face the choice between taking up a—non-existent—working from home vacancy or literally facing starvation. Yesterday, the Prime Minister either would not or could not tell us how many vacancies currently being advertised in DWP jobcentres would be suitable for home working, or maybe he just did not care enough to bother finding out. The answer, incidentally, is that about one in 20 of those vacancies might be suitable for home working, which is not nearly enough to get the number off benefits that the Chancellor claims to think is realistic.

More than 100 disability organisations have warned that the Government’s inhumane policy could lead to unnecessary deaths, and that is not a blank threat. Last year, a study by the Glasgow Centre for Population Health and Glasgow University found that over 300,000 deaths in Britain could be attributed to Government austerity policies. Austerity is not an economic necessity. Austerity is unnecessary, and those 300,000 deaths were unnecessary as well.

I welcome some of the measures announced to support small businesses. As I mentioned in an intervention, we still need to see real action to protect small subcontractors involved in big infrastructure projects, so that they do not go down if the main contractor goes down. A lot of small businesses have now stopped bidding for that kind of work because they are worried that it may put them out of business, rather than keep them in business.

It is disappointing that, yet again, there is no movement on the determined calls from the hospitality industry to reduce or abolish VAT on that sector, even temporarily. A few weeks ago, I lost yet another award-winning small business café in my constituency, because such people just cannot continue working eight hours a day and earning less than the legal minimum wage. It is a bit ironic that the Government who caused rampant inflation now expect us to cheer when they start to bring it down. It is a wee bit like an arsonist expecting a medal for helping to put out half the fire.

We welcome additional support for green industries, but look what is happening among our competitors. In the UK, the figure is £960 million in total by 2030—yes, very nice—but the equivalent figure in Germany is €4.1 billion and in France it is €500 million every year, according to the Institute for Public Policy Research.

What has happened to the hydrogen town announcements we were promised in March 2023? I have world-leading work going on in my constituency as part of the H100 project, which is a much smaller-scale project to assist in conversion from natural gas to hydrogen. That is a chance for Scotland, for Fife and for Methil to be at the centre of one of the world’s leading industries. Whether a bid from Fife or a bid from somewhere else is going to be successful we do not know, and we do not even know who has bid yet. That announcement was due in March, and it is now too late for that work to be done according to the original timetable. Can the Minister give us an update, or are the Government planning to just walk away from green hydrogen in the same way that they walked away from wave and tidal power in the 1980s and 1990s?

By comparison, despite the fact that the Scottish Government do not have anything like the borrowing power or indeed the legislative power of this place, and despite the fact that more and more of Scotland’s funding is having to go into the funding holes left by the policy failures of the UK Government, we now have 1.2 million people under the protection of a Scottish benefits system that explicitly on its home page puts “dignity, fairness and respect” at its heart. Those are not words that many people who use DWP services would use.

As I have said, the Scottish Government have frozen council tax, and are lifting children out of poverty with the Scottish child payment. They are providing support to mitigate the additional heating costs that households with very severely disabled children and young people face through the winter heating payment, and free school meals to all children in primary 1 to 5 and eligible children throughout school. Scotland has a much more widespread and more widely available bus concession scheme than the rest of the United Kingdom.

The Child Poverty Action Group has calculated that these policies mean that the cost of raising a child in SNP-governed Scotland is £27,000 less in total than for an equivalent family living under Tory rule in England. Is it any wonder that the Tories have no chance of being elected any time soon, or any time ever in Scotland? The Chancellor could have extended those benefits to hard-pressed families in England but he chose not to do it. It is not that he could not do it; it just was not important enough to him.

People in Scotland cannot afford to wait for a change in Government policy in Westminster to make things better. One of the features of this autumn statement is that things look bad enough just now, but they will get a million times worse immediately after the next election, so regardless of what the Opposition think they are going to be able to do if they win it, their hands will be tied. The warning to people in Scotland is, “You might think you’re voting for a change, but if you vote Labour, you’ll be voting for more of the same.”

We are calling on the UK Government to transfer to the Scottish Parliament permanently the powers to act on energy, employment, welfare and the economy, so that Scotland gets the policies it votes for and that it needs. We must reinstate the £400 energy bill rebate, and follow the example of other countries such as France in taking proper action to bring food prices down. Increasing food prices are not making life any easier for farmers; they are losing out. They are not making bigger profits; the supermarkets might be but the farmers certainly are not. The Government could boost people’s incomes by introducing a proper living wage that is actually enough to live on. They could also increase benefits in line with inflation and maybe a bit more, and match the Scottish child payment UK-wide.

Those policies represent our values; they represent the values of the Scottish National party, because they are the values of Scotland’s people. It is becoming increasingly clear that no Westminster Government will ever deliver to Scotland the policies it votes for. The only way to have a set of Government policies that embeds the values of Scotland’s people is to put those policies firmly into the hands of an independent Scottish Government.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

In these unprecedented times, we stand at the crossroads of recovery and resilience, and the autumn statement gives us a clear road map for the challenging economic terrain we still find ourselves in. I have a lot of time for the shadow Secretary of State for Business and Trade, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), but I gently remind him that when we came to power in 2010, the former Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne) had left a note saying there was no money left. We have made a lot of progress since then and taken long-term decisions, and it was only thanks to that that we were able to pay for the substantial financial support we rightly gave to families and businesses during the covid pandemic. But we are still paying for that support and that is part of the challenge we face. Targeted support schemes such as the furlough scheme demonstrated a deep understanding of the challenges faced by businesses and employees, and I remind the House that no such scheme was put in place after the financial crash overseen by the previous Labour Government.

We still have an aftershock from covid at home in terms of economic productivity, but we are much boosted by the new trade deals that have been secured and I look forward to our taking advantage of that. The key issue, however, is the illegal invasion of Ukraine by Putin and the impact on energy costs. Again, we have given unprecedented financial support in the past few years to households and businesses. I was, frankly, somewhat shocked by the hon. Member for Glenrothes (Peter Grant); I never thought of him as a Putin apologist. To try to suggest that this Government stimulated the inflation is far from the truth, and he knows it is that energy challenge that has really made the difference. That is why it is right that the Government are investing in the energy of the future while also making sure that we can keep the lights on.

I welcome the measures in the Chancellor’s statement yesterday. They reflect a profound understanding of the evolving needs of our society and economy, highlighting the imperative to adapt and evolve.

[Peter Grant]

Will the right hon. Lady give way?

[Dr Coffey]

No, I will not.

The autumn statement unveiled a comprehensive plan that addresses immediate needs while also putting in place the foundations for long-term growth. The measures outlined in it serve as pillars of stability, fostering hope and laying the true foundations for a resilient and prosperous future. There are 110 measures, and I must admit that I have not read the entire Green Book, but some parts stood out to me, particularly those on backing business and making work pay. This autumn statement clearly sets the way for growth.

Given the challenges facing business, the full deduction is welcome and this is a good moment to make it permanent, especially as the UK will be hosting the global investment summit this coming Monday. I used to work for Mars, Incorporated and I know its investment in capital was pivotal to its manufacturing industry productivity and financial success, so I welcome this improvement and the long-term confidence in investment in manufacturing capital and other areas.

Businesses in my constituency, particularly those in hospitality and tourism, will welcome the business rates measure. It will help with cash flow, but I have heard today from Andrew Dalby, managing director of Brafe Engineering in my constituency, a very successful business largely driven by exports, and he has made a point to me that I want to share with the House. He says:

“The R&D tax credits…must run in parallel to see the development through to profitability to then permit the investment in the selected capital equipment needed to boost production efficiency.”

There are other substantial elements, but Brafe Engineering needs to make its components part of the system in providing skills and equipment to energy companies. It needs to enhance how it manufactures those complex components, but there is no grant system to support that and to help its customers succeed. For that business, I encourage my right hon. Friend the Chancellor to consider further work on the benefits of adjusting the R&D tax credit claims. I am aware that when they were introduced about 15 years ago, there was abuse of them, particularly by financial firms, so I think the Treasury will continue to be cautious, but we need to make sure that in R&D we focus not just on research but on development too, because that is where the value will come from.

I am thrilled that we are finally getting on with the reforms to solvency II. I remember a meeting in Downing Street just after COP26. I had been encouraging a lot of financial institutions there to raise this issue, and I am very pleased that—after some resistance, I think, from some of the institutions in Government because of the uncertainty it would bring, and indeed some concerns on pension fiduciary duties—we have found a way through, as we must unlock that investment for the long term. This has always seemed odd to me: we want things such as the local government pension scheme, so why do they not invest in the infrastructure they want if they believe it represents good value for taxpayers’ money? I am not just referring to local government. There are plenty of other insurers and others who can try to get a better return from long-term investment and long-term pension increases.

One of the big highlights of the autumn statement were the big tax cuts, for employees in particular. That is very welcome. I will be surprised if any Member votes against the legislation announced for next Thursday, because it is very important that we help people in these challenging times with more money in their pockets.

I welcome the announcements about stability in benefits and pensions. We have twice voted in this Parliament to set aside the earnings lock, recognising what happened with the dip in earnings where if we had not changed the law we would have frozen pensions. That would not have been the right thing to do, so we put in place our triple lock and lifted pensions then by 2.5%. That was followed by a year when there was a surge or spike—almost a covid-related distortion—when again the House agreed to set aside the normal earnings link. I was in the Government then and I did say that that would be it and we would apply the triple lock policy for the remainder of the Parliament. I am conscious that this is one of the biggest earnings uplifts that people will enjoy and it is right that pensioners share in that success. I am delighted we have kept to our commitments, therefore.

The Government have wisely recognised the need for a change to the local housing allowance. We made a shift during covid but then froze that change. Increasing interest rates have led to challenges in terms of rents, so I am pleased we have reinstated that. It represents a large sum of money. When we did this a few years ago, it cost an extra £1 billion just for the following year. There will be an extra £1.3 billion of spending, so I expect the amount of money taxpayers now pay in housing support will probably rise to about £32 billion or £33 billion a year. That is a substantial sum to help others, but I am conscious that there have been particular challenges with regard to local housing allowance and finding appropriate accommodation in various parts of the country.

The broader aspects of the back to work plan that have been announced and the reforms to welfare are welcome. Some of the catcalls directed at the Chancellor yesterday were completely undeserved. There is no greater dignity than being in work. Many people want to work, but feel that they cannot. They struggle to do so, and it is absolutely right that we help people into work. During my three years in the Department for Work and Pensions —we were in the covid pandemic for part of that—it was critical to try to help people’s mental health and wellbeing to support them to get back into work.

I am conscious of the issues that people have raised about access to mental health appointments and so on, but such things as the expansion of individual placement and support and other aspects of universal support go straight to the heart of trying to tackle some of the barriers that people face. Instead of focusing on some of the changes that will happen to fit notes, the whole focus has been—I worked on this for some time, and I am delighted that policies came through last year and we are seeing the funding to support them—on what people can do, not what they cannot.

I am conscious that GPs do not like to be the barrier to the gateway to benefits, but it must be good for their patients if, instead of just signing them off with even more time out of work, they were helping them to find a way through. If we wanted to be radical, perhaps the NHS budget should pay for disability benefits of people of working age. That would bring it together. I appreciate that may be a step too far at this moment, but it is about working together so that people have a fulfilling life. That is not only about being in work and away from social isolation, but the extra financial rewards that come from it.

[Peter Grant]

We are all in favour of helping people back to work, but is it not the case that by focusing on the punishment aspect, as the Chancellor and Prime Minister have done, we are talking not about helping people back to work, but about starving them back to work, whether or not they are fit to go back to work?

[Dr Coffey]

I am not sure why I gave way. I should have expected a low-quality comment like that.

In terms of the thinking about when we were coming out of covid, I worked with the now Prime Minister on the Way to Work, and we got 500,000 people back into jobs. A lot of that comes with support, but there were other aspects, such as bringing interviews into the jobcentres so that people actually turned up. I commend in particular our frontline work coaches. Candidly, if any Member of Parliament has not been to the jobcentre in their constituency or nearby, I strongly urge them to do so. They are a beacon of hope for people who are often desperate, but those who work there are frustrated by the fraud they experience, and they would like to do more about it. This sort of approach—not a stick, but a carrot—helps people. It gives a lot of time and support.

I note the expansion of the restart programme, which is to be improved, and that is good, but it has been successful in getting people back into work. There are a few ghosts, I suppose, within the benefits system, and it can be challenging to identify them. I am conscious that the Department for Work and Pensions considers the vulnerability of its claimants. It is a sensible approach and a step forward, and I know it will be undertaken with great care.

One of the other aspects I will talk a bit more about is planning and energy. I commend the Secretary of State for Energy Security and Net Zero and the Government more broadly on one aspect: finally, we will have a much more co-ordinated approach on the national grid. I have been trying to get that sorted for my constituents for six or seven years, and the proposed reforms have come too late for them. We still have a disconnected element and we still have projects that should have come in as direct current, where the infrastructure was built to support that and the developer then changed their mind. New infrastructure then had to be built for the same developer. There are no jobs that come with that. It is not about being a nimby, but about trying to make sure that we have a co-ordinated grid for the future, recognising the dynamic change that has happened, instead of the traditional coal and gas plants that we had. We have moved to a situation where a lot more of our energy will be coming in directly from the coast.

I encourage the Government to look again at considering existing brownfield sites where there are already energy connections, whether that is the Isle of Grain or Bradwell in Essex, rather than ploughing up acres and hectares of land that is otherwise used for agricultural production. Indeed, I recognise my constituents’ concerns about the change in status of a lot of this network to almost default approval; that goes against the normal way of doing planning. I understand why the Government are considering this, but it will be unwelcome in my constituency. We will be debating the national policy statements on energy at another time, so I will not dwell on that now. I understand that we have to move as quickly as possible, but I think that a more holistic approach, even for projects that are in the pipeline now, should be undertaken. My understanding is that that will not delay the connections in the future.

The port of Felixstowe is part of a freeport, and I welcome the extensions there, given the benefits. I ask the Minister to work with other Departments, particularly the Department for Levelling Up, Housing and Communities, to ensure that the freeports are effective and flowing, and to listen to the feedback from people in East Anglia about how we think some aspects could be improved. We will discuss the local government finance settlement on another occasion, but when it comes to spending I am conscious of the challenge that county councils in particular face on social care, special education needs and disabilities, and transport to school.

Historically, a constituency like mine would be seen as exceptionally prosperous; it always surprises people when I tell them that the median salary is far higher in Liverpool—apart from in Liverpool, Walton—than in my constituency. That is because a lot of people come to my part of the world to retire. There is quite long life expectancy in the area, but people in the health system know that as soon as someone goes past 80, the likelihood that they engage the NHS and social care is much higher. This long life that people enjoy—I continue to welcome people who come to see the special coast of Suffolk Coastal—needs to be taken account of, rather than some of the traditional assumptions. Indeed, the chief medical officer Sir Chris Whitty recently highlighted that in his annual report.

I encourage the Government to go even further on a few things, on top of their 110 measures. One is continuing to focus on supply-side reform. We have already seen what is being proposed for energy, and trying to get a connection timeline down from five years to six months is sensible because it can be very frustrating for people wanting to connect. But we should go further. Yesterday I spoke in a Westminster Hall debate on the apprenticeship levy. Let us also go a bit further on childcare; the Government have done some really good things, but let us go further and see whether we do need Ofsted to be the arbiter. Why can we not rely on our local councils, which already have a statutory duty for children and adults? We could consider that, as it would localise provision as well.

I could go further. I have a particular pet project for the Department for Transport, which the Transport Secretary well knows. People who passed their driving test before 1997 can drive a D1, which is basically a minibus not for hire, and a C1, which is a typical Tesco or Ocado delivery van; they are also used by many other firms, like Amazon, DPD and so on. A European regulation then required people to undertake the expensive tests needed for HGVs. I think that is unnecessary. At the time, I guess it must have been a Labour Government, or perhaps it was still a Conservative one; I cannot quite remember—[Interruption.] I apologise: it must have been a Conservative Government who thankfully negotiated to keep grandfather rights. I say that we should get on and repeal this unnecessary law, as that would allow many more people into the market to drive these sort of vans. This is a particular issue for rural communities, which do not have extensive public transport, because so much community transport relies on volunteers to drive minibuses so that people can get to a variety of activities, and those areas are currently having to pay quite a lot of money to train people to do that. This is a really easy win. I keep being told that primary legislation would be required, but let us do that, if that is what is needed to boost that aspect of productivity.

There is much in the autumn statement of which I am proud, and I commend the Chancellor and the Prime Minister on their extensive work on it. The autumn statement resonates with compassion and foresight. It acknowledges the hardships faced by individuals and businesses alike Our commitment to bolstering our economy while extending support to those most affected by recent upheavals is commendable and a clear demonstration of the principles of a Conservative Government. I commend the resolutions to the whole House.

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[Andrew Western (Stretford and Urmston) (Lab)]

After 13 long years of Conservative economic failure, Britain is stuck in a cycle of low growth and high taxes, with working people across the country paying the price. This autumn statement was a chance for an economic reset, but instead we got yet another political reset. The Chancellor is, I hope, good at maths, so perhaps he can count how many there have been so far.

It is the Conservatives’ election strategy that has shaped this statement, not the needs of the country, but my constituents will not be fooled by minor tax giveaways in an election year from the same party that has raised their taxes 25 times since 2019—and they are minor giveaways, given that they represent less than a quarter of the personal tax rises that the Conservatives imposed on working people last year, with fiscal drag hitting millions of households. We should be under no illusion: the Tories are still the party of high tax if they massively hike people’s taxes, but then give them a little bit back before an election. Of course, the reason they are a high-tax party is the fact that their record on growth is so poor. If the economy had continued to grow at the rate that it did under the last Labour Government it would now be £150 billion larger, but instead growth in the UK has stagnated in the last 13 years, and is projected to be the lowest in the G7 next year.

When the Conservatives cannot generate the growth to fund public services, they raid the pockets of working people instead, but those people will rightly wonder where their hard-earned money is going, given that the NHS, our schools, local government and the courts are all on their knees. The situation for public services appears set to become bleaker still, given that yesterday's tax cuts are to be funded by a projected £19 billion of cuts in departmental spending—spending cuts that look eerily similar to those made by the now Lord Cameron. The Conservatives are not just resurrecting former Prime Ministers to serve in this Government; they are resurrecting their failed and discredited policies too. Perhaps the Minister can shed some light on how and where they envisage these cuts being made—or does he accept that, as the Resolution Foundation has said, the cuts are “implausible” and

“rest on the fiscal fiction”

that higher inflation will not increase public spending? Is not the truth that there is no long-term commitment to these measures, that they are simply a pre-election cover, and that the fiscal black hole they create is likely to be someone else’s problem?

As the Leader of the Opposition asked yesterday, how can a labourer or a nurse contribute to economic growth if they are one of the 7.8 million people on an NHS waiting list in desperate need of an operation? A healthy society and a healthy economy are two sides of the same coin, but the NHS did not receive the support that it needs yesterday, and there are many other public services of which we could say the same. What of local government, for so long the poor relation, ruthlessly targeted by the Conservatives since 2010, with their Liberal Democrat friends complicit at the outset? I should state for the record that I am a vice-president of the Local Government Associations and a former chair of its resources board, as well as being a previous leader of my own local authority, Trafford Council.

For local government as a sector, the autumn statement was wholly depressing. There were no significant new funding announcements, there was nothing new on special educational needs and disability funding, and there was silence on the continuation of the household support fund. There was not a word about public sector pay. My local authority is assuming a 3% pay award, but higher inflation for longer has the potential to affect the 2024-25 pay negotiations. There was no mention of the impact of the living wage increase—welcome as it is—and what it will mean for social care contracts: a 9.8% uplift will blow a £2 million hole in my local authority’s assumptions.

Trafford’s position is not unique, but it is especially acute. Low levels of Government funding mean that we have the lowest spending power of all the 36 metropolitan districts. A recent study by the Institute for Fiscal Studies showed that Trafford has one of the largest funding shortfalls in relation to need, equivalent to £35 million in comparison with national averages; and, unsurprisingly, it is one of the F20 group of lowest-funded local authorities, with the prospect of a £55 million budget deficit over the next three years. The delivery of meaningful services will become unsustainable in the short term if this position is not addressed for Trafford and councils like it, but it was thin gruel yesterday for local authorities up and down the land, to whom Trafford’s position sounds all too familiar.

It was thin gruel, too, for our broken housing market and our dysfunctional planning system. A desire to speed up business planning applications is welcome, but local authorities simply do not have the planners or the capacity to process the applications, a problem the Chancellor did not acknowledge or do anything to remedy yesterday. If the Government were serious about increasing housing supply, they would reverse their decision to scrap housing targets and build on parts of the green belt that offer nothing in environmental value, but plenty in economic potential. Perhaps we would then start to see the economic growth that we so desperately need.

There was some positive news on housing that I want to acknowledge: I do welcome the increase in local housing allowance rates. It is overdue, but it will be a vital tool in preventing homelessness. However, that is a silver lining among the very, very dark clouds of this autumn statement, because for all the bluster, there is no getting away from the most telling statistic to come out of yesterday. Between 2019 and 2025, families will experience the biggest drop in living standards since records began, and the tax burden as a percentage of GDP will be higher at the end of this Parliament than it was at the start.

[Peter Grant]

I commend the hon. Gentleman for picking up the point about the local housing allowance. Does he agree that if it is a good idea to unfreeze it for one year, it is not a good idea to refreeze it again in the following year?

[Andrew Western]

The hon. Gentleman has made his own case, but as a keen campaigner on all aspects of our housing crisis, I very much agree with his sentiment.

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[John McDonnell (Hayes and Harlington) (Lab)]

Mr Deputy Speaker, you and I have been here for a couple of decades, and I have never known a second-day debate on an autumn statement to involve only one Government Back Bencher. The emptiness of the Chamber reflects that we are at the fag end of this Government, and people realise that. The seriousness of the Government’s intentions in the coming months almost warrants despair among their own supporters, as well as in this House.

I sat through the Chancellor’s statement yesterday, and he set the scene of an economy that has turned the corner and is looking for technology-fuelled sunny uplands. I have been here a while and have listened to previous autumn statements, so I can recognise a pre-election speech when I see one, and that is what it was.

The Prime Minister basically set out the Conservatives’ election strategy the day before, and it is not a novel playbook—it is one they have used consistently. It is the same old Tory strategy. First, there are tax cuts as a pre-election bribe, then it goes on to the scapegoating of some vulnerable group, before making ludicrous claims about Labour’s plans to try to petrify people into not voting for change. Even with the media that we have, I do not think that strategy is going to work this time.

On economic growth, the Chancellor’s image of the economy turning a corner was absolutely shattered when the OBR report was published as soon as he sat down. It massively downgraded the growth forecast for every year of the forecast period. I listened to him talk on the radio this morning about how his investment in the economy will increase GDP by 0.5% over the coming four years. According to the Institute for Fiscal Studies, 0.5% produces about £7 billion of income tax returns to the Government, so there is no way this growth will somehow provide the resources we need to fund our public services.

I doubt any amount of tax cutting will restore confidence in a party that has doubled our debt, brought our public services to their knees and crashed our economy with the madcap escapades of the last two Prime Ministers. The cuts to national insurance were the headline proposal in yesterday’s autumn statement, but in the cold light of day, less than 24 hours later, the analysis shows that all the benefit has been swept away by the continuing freeze on tax thresholds. The IPPR analysis demonstrates that even the national insurance cuts will benefit the highest earners and the richest, and then the energy cap was lifted this morning. There is no way these tax cuts will restore a feelgood factor among the general public.

The most nauseating element of yesterday’s appalling announcement was the scapegoating of the sick, the disabled and those with mental health problems. It is gutter politics. The Conservatives first tried to scapegoat asylum seekers, but that has not worked because, actually, people recognise that asylum seekers are coming to this country from war zones across the world, and they empathise with them. So the Government have now turned on the disabled, the sick and people struggling with their mental health. Hidden in yesterday’s autumn statement is the reality that the Government are cutting £1.2 billion from benefits paid to people with disabilities. As my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) said, it heralds the return of the nasty party.

I met the Public and Commercial Services Union last week, and the chronic staffing crisis in the Department for Work and Pensions means that the implementation of last year’s sanctions policy is floundering because of the massive casework backlogs. Individual members of DWP staff have case loads of 2,000 cases, and obviously the system is collapsing. Loading more work on those workers will intensify the delays and will result—let us be honest—in more stress for the disabled, the sick and those with mental health problems.

Exactly as is predicted by a number of disability organisations, I fear this will push people over the edge. Those of us who were in the House remember what happened when the work capability assessment was first introduced. People were pushed so far over the edge that we saw a rise in the number of people taking their own life.

The Government have ludicrously claimed that Labour’s plan to borrow to invest in greening our economy will somehow push up interest rates and borrowing costs. That is a bit rich coming from the Conservative party, under which the country’s debt has risen. Let me be clear that Labour’s plan to borrow to invest will generate green growth in the economy. It is not like what the Tories have done in the past, which is to borrow for day-to-day expenditure—in other words, borrowing to cover the costs of failure.

The cost of borrowing £28 billion, even at the current high interest rates, is just above £1 billion, which is readily recouped—that is what investment is all about—as a result of the multiplier effect of this investment and the increased tax income it will generate. The comments of even senior Ministers have been inane in the extreme and lower the level of debate on the future of our economy.

I thought the real question yesterday was whether the Chancellor would do the right thing with the additional headroom that the OBR found as a result of inflation, interest rates and rising tax receipts, and where that additional money would go. Last week, I went to a concert by the brilliant Liverpool singer Jamie Webster. He sang a song called “Voice of the Voiceless”. Yesterday’s autumn statement made it clear to me that, as the Chancellor decided where to spend the new money that had been found, the voices of those most in need of those additional resources went unheard. I therefore think Members have a responsibility to be the voice of the voiceless in this debate.

I think we should be the voice of children. According to the Child Poverty Action Group, over 4 million children are currently living in poverty in the United Kingdom, the sixth richest country in the world. The Joseph Rowntree Foundation has found that more than 1 million children are living in and experiencing destitution. Last week, I met people from Buttle UK, the charity supporting children in poverty, and they explained what destitution means. It means children going without the basic essentials needed to eat, stay warm and dry, and keep clean. That is why so many charities, religious groups, trade unions and others have called for a Government—any Government—to prioritise children in poverty for support. One straightforward suggestion is to lift the two-child limit, which would immediately lift 250,000 children out of poverty. This is why so many are campaigning for free school meals, to ensure that our children get at least one decent meal a day. It is also why many of us have called on the Chancellor to restore the £20 that the Government cut from universal credit after the pandemic.

We need to be the voice of disabled people, the sick and the mentally ill, who were under attack yesterday. The new onslaught against disabled people and the sick clearly provided evidence that their voices have been ignored again. If the Government were listening, they would have heard how those receiving benefits have already had to fight their way through a brutal benefits system to secure the help they have gained. The Government would have heard about many of the experiences with the work capability assessment, which has caused so much human suffering and harm—so much so that, as Members may recall, we discovered that the DWP was secretly monitoring coroners’ reports on the suicide of people on benefits. David Cameron has just been reappointed, so I hope he points this out in government now. I remember when a person whose benefits had been cut starved to death in his constituency. The coroner’s report related that to the withdrawal of benefits.

Disability groups are rightly predicting that, as sure as night follows day, this new round of dangerous threats to the benefits of the sick and the disabled, and especially those with mental health problems, will cause serious harm again.

[Peter Grant]

I am reluctant to intervene, as the right hon. Gentleman is, as always, giving a passionate and well-informed speech. Does he share my concern that one inevitable consequence of the propaganda onslaught is that people will be scared to claim the benefits they are entitled to, because they think they will be branded as cheats and fraudsters simply for claiming what is theirs by right?

[John McDonnell]

A wonderful piece of work was undertaken about the role the media and politicians played in stigmatising disabled people. This resulted, exactly as the hon. Gentleman said, in people not coming forward to claim their benefits. It also resulted in their ostracisation in their own community and the hardship that that caused, not only to them, but to their children when they went to school—this stuff is all coming back.

The irony has been pointed out by Members from across the House: wherever someone can work, we want to encourage them to do so and give them all the support they need, but people are being targeted with threats when we have 7.9 million people on the NHS waiting list—these are the very people who are waiting for the treatment to enable them to get back to work. This approach is particularly illogical and brutal. I urge hon. Members to look at the figures: 4 million people are already looking for additional hours of work in our economy, and unemployment has increased by a quarter of a million since the last autumn statement. These people will be struggling to compete for work that does not exist.

I want to be the voice of carers as well. I chair an unpaid carers group; we come together regularly and we have published our manifesto. There are 5 million unpaid carers in our community who are looking after their relatives and living off a miserly carer’s allowance of just under £80 a week. As a result, many of them live in poverty and hardship. The last estimate, in the Carers UK survey, was that they save the country some £160 billion a year. That survey also demonstrated just how many of them are struggling to make ends meet. We did not hear a single word yesterday about these heroes and heroines; there was not a single measure in the autumn statement that will move forward their simple demand for a level of financial support that will lift them out of poverty.

We should also be the voice of the homeless. We now have 105,000 families in our community living in temporary accommodation. Some 131,000 children are being brought up without a secure roof over their heads, often in overcrowded and run-down accommodation—all of us have seen these places, some of which are dangerous to live in. Putting the local housing allowance back to the 30th decile, after freezing it for years and after it having been at the 50th decile only a few years ago, goes nowhere near to giving those families any hope of securing a decent and secure home. What we really need now, as an emergency measure, are rent controls. We also want a massive council house building programme, but what was offered yesterday, in the detail, was funding for 2,400 council homes, at a time when we need hundreds of thousands.

As others have said, we also need to be the voice for public services. The fact that there is no additional funding for them and instead a projected £19 billion cut confirmed that the voices of the nurses, doctors, paramedics, social care workers, teachers, council workers and council leaders themselves went completely unheard. As we have said, there is to be a £4 billion funding cut, which means the erosion of some of the basic services people rely on in order to have some form of quality of life.

To conclude, there is a lot of speculation that the autumn statement presages an early election, and I think it probably does. I pray that it does, because my community cannot take this any more. I have never witnessed such a level of disillusionment with politics, such a lack of hope that things can get better. It is not just generating anger; what worries me more is that it is generating absolute apathy among our communities. There is a great responsibility on our shoulders now to restore that hope and to do so soon. I urge the Government: bring on the election, let the people have their voice, and let us have it as soon as possible.

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[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure to follow the hon. Member for Bradford East (Imran Hussain). I hope those on his Front Bench were listening to the contributions from him and some of his fellow Labour Members, because it is important that we talk about plans to remedy things and help the poorest in our society.

This is clearly a zombie Budget from a zombie Government —a Budget so good that, as others have said, the Back Benches on the Government side are practically empty. If it was meant to be a pre-election Budget, it is a pre-election Budget that is not generating any confidence among Conservative Back Benchers, because none of them wants to be here to debate it and try to talk it up.

It is a bold Chancellor who tells us that he is cutting taxes when we still have the highest tax burden in 70 years, with more tax rises on the way, and at the same time living standards continue to fall. Just today, Ofgem has announced that the energy cap will increase again in January—it will still be approximately double what energy costs were two years ago. It is little wonder that the OBR predicts that living standards this year will be 3.5% lower than before the pandemic.

The Chancellor was bold enough to talk about wage growth, but let us look at the detail. The Resolution Foundation confirmed that it will take until 2028 to get overall wages back to 2008 levels—two lost decades of wage growth. At the next general election, it will be the first time ever that household incomes have been lower at the end of a Parliament than they were at the start.

It is clear that the Budget does nothing for the approximately 6.3 million fuel-poor households. Ofgem has confirmed record cumulative energy debts of £2.6 billion, so we are still in the grip of a cost of energy crisis. The Tories tell us that we should be grateful for the energy support package, which cost in the order of £40 billion, but let us look at the example of Norway, which is drawing a further £30 billion from its sovereign wealth fund this year alone. That will not even make a dent in its £1.1 trillion sovereign wealth fund—yes, £1.1 trillion, which makes it the biggest such fund in the world. Energy-rich Scotland still exports six times more oil and gas than it consumes, and yet we are supposed to be grateful that the UK as a whole is planning to slightly reduce its £2.5 trillion debt. All those oil and gas revenues have been frittered away through short-term planning. Norway did not create its fund until the 1990s, so it is a disgrace that we do not have a North sea legacy to fall back on in these hard times.

We are also supposed to be grateful about the 2% cut to national insurance contributions, and that the Tories have—so they claim—reduced inflation from 11.4%, even though they were partly responsible for the high rate because of the disastrous mini-Budget and the impacts of Brexit. It is curious that the Government tell us that they are not responsible for high inflation as it is a global issue, and that high interest rates are set by the wholly independent Bank of England, but now that inflation is falling, we are to believe from the autumn statement that the Government’s actions have brought it down. The Government appear to be responsible for inflation rates only when it is good news and they are going down—that is quite a trick.

Let me return to household energy. It is a scandal that about a fifth of UK households are living in fuel poverty. It is a bigger scandal that energy-rich Scotland has fuel poverty at all, as well as the highest energy bills and some of the highest standing charges just to access the energy grid. Those standing charges mean people cannot afford to heat their homes properly. Indeed, the Joseph Rowntree Foundation estimates that 2 million people are switching off their fridges and freezers intermittently to save on energy costs. This autumn statement will do nothing to help those people—or, if it does, any money that goes into their pockets in January will quickly be removed in April as the tax threshold freeze means more people become liable for income tax. Households are paying on average £800 a year more on energy costs than two years ago, but the warm home discount scheme has increased from £140 to £150 a year. It is plain: the sums do not add up. However, the Government have also reneged on their pledge for a social tariff to help the most vulnerable with their energy costs.

Let us look at the national insurance cut in the round. Although hard-working people, especially those on the eligibility threshold, will of course welcome having to pay less, it is unfortunately no coincidence that the £19 billion package to support the cut will be offset by £19 billion of public spending cuts that are still to be determined. Who is most affected by public spending cuts? Of course, it is the lowest paid and the poorest in our society. Such spending cuts make a further mockery of the Government’s so-called levelling-up agenda. The budget of the Department for Levelling Up, Housing and Communities was halved in the statement, which says everything about levelling-up targets. If the Government introduce a tax cut via emergency legislation, only to pay for it through future departmental cuts, they cannot possibly claim that that is part of responsible Government taking long-term decisions for the economy. It is quite clearly a gimmick to capture headlines.

In Scotland, of course, we are also meant to be grateful for the Barnett consequentials, which have already turned out to be lower than was announced. The Scottish block grant itself is being cut in real terms in the autumn statement. Next year, the grant increases from £35.8 billion to £36.9 billion, but if we compare that increase with headline inflation from September, it is clearly a real-terms budget cut of about 3.5%, or £1.3 billion, for Scotland.

Then there is the capital budget allocated to the Scottish Government, which is being cut outright from £6.2 billion to £5.6 billion in two years’ time. That is not even a real-terms budget cut, but a hugely damaging slashing of the budget, at a time when the Scottish Tories demand that the Scottish Government invest in all sorts of infrastructure projects. I am sure that the Scottish Tories will recognise this conundrum of a cut budget, demand that the capital budget is restored, and recognise the pressures on the Scottish Government, let alone the inflationary pressures on projects that are already under way. [Interruption.] As my hon. Friend the Member for Glenrothes (Peter Grant) points out, no Scottish Tories are even here to talk about the statement.

On infrastructure, we are yet again being let down by the lack of progress on agreeing an electricity cap and floor mechanism for pumped storage hydro. That means further delays to SSE’s Coire Glas scheme and Drax’s Cruachan dam extension. We keep hearing that the Government want to unlock private investment. In pumped storage hydro, private investment in the order of £2 billion to £2.5 billion would be unlocked by agreeing an electricity export mechanism for those schemes. That would create jobs in the highlands of Scotland and, importantly, provide better balance for the grid, reducing bills overall. Why the continued intransigence from the Government on pumped storage hydro?

Despite talk of investment in green energy, the statement and the Green Book do not mention energy storage even once—that is a dereliction of duty. Tidal stream, in which Scotland leads the way, is not mentioned either. Looking at the statement in detail, the so-called £4.5 billion manufacturing investment and the £960 million green growth accelerator do not have corresponding budget lines, so those announcements are clearly recycled announcements, in the finest style of this Government.

As we have heard, the indicative blank cheque for nuclear was mentioned once again. We have the fantasy of small modular reactors, but they are not actually small. First, they exceed the industry definition in terms of generation capacity, and secondly, they are the size of two football pitches, which is not exactly a small footprint. The terminology is designed to make them sound small and cosy when they are anything but.

Let us look at the evidence on the development of these projects. The most advanced SMR project in the world, NuScale in Utah, has just been shelved because capital costs have increased to $9 billion—the equivalent of over £7 billion. That is evidence that SMRs are too expensive to progress, but the UK Government are pretending they can deliver them for about £2 billion per reactor. That makes no sense, especially when nuclear technology is generally more expensive in the UK anyway.

We now come to my hobby-horse: Sizewell C. Despite the cost of Hinkley Point C increasing from £18 billion to £33 billion, the rampant inflation we still have and Sizewell C being built on an area subject to coastal erosion and flood risk, we are told that it will magically provide value for money and be cheaper than Hinkley Point C. It is truly delusional. No pension funds want to invest in Sizewell C, and the Government have the begging bowl out. Despite introducing the regulated asset base model and transferring further risk to bill payers, they are still struggling to raise finance.

It is time that the Government ended this charade. It is bad enough that over £1 billion has already been spent just on design development for Sizewell C. That is £1 billion that could have been spent on energy efficiency measures, infrastructure or even further energy support schemes.

[Peter Grant]

Is my hon. Friend surprised or disappointed, or is it purely to be expected, that there is not a single word about insulation or energy efficiency measures anywhere in the autumn statement?

[Alan Brown]

All of the above. It is infuriating. If the Government were to listen, even the energy supply companies want them to invest more in energy efficiency and insulation. Right now, in the ECO4 scheme—energy company obligation 4—the companies cannot even find the requisite number of properties to upgrade. As that goes on, we are losing the supply chain instead of building it up.

If we really want green growth, green jobs and lower energy bills, it is perfectly obvious that more money should be spent on energy efficiency. Ironically, the Government never listen to that, but they should listen to the third sector and the energy companies who praise the Scottish Government for their direct investment in support of energy efficiency programmes. In contrast to the Government’s blank cheque for nuclear, Scottish renewable projects still have to pay the grid charging penalty, making it harder for them to compete in the contract for difference auctions.

This autumn statement means that we still have an incoherent energy policy. It does nothing for Scotland. Hard-working families are still going to suffer, living standards are still falling, and the disabled are now threatened with losing support unless they are forced into jobs not of their choosing. It is not difficult to choose a different path for Scotland—it is a path that other smaller countries in western Europe are already on, so why not Scotland? It is time we took that different route.

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[The Exchequer Secretary to the Treasury (Gareth Davies)]

I think this is my first opportunity to welcome the hon. Member for Slough (Mr Dhesi) to his position, and I wish him well in it, but obviously not too well.

I pay tribute to the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who opened this debate brilliantly. He is someone who knows business because he comes from business. I also want to thank all right hon. and hon. Members from across the House who have spoken for their very detailed and thoughtful contributions, and I will try to respond to as many points as I can.

Before I do that, I want to reflect on the measures that we are here to discuss and which were set out in the Chancellor’s autumn statement yesterday. I take the view that everyone in this House wants the best for their communities and the people of this country, and I think we broadly agree on several points in that regard. I think we agree that we want a thriving economy, with well-paid reliable work available in every corner of the country for years to come. We want households to be better off than they were in years gone by, and we want opportunities for everyone to progress in life and to provide for the people they care about. If we can agree on that, I would hope that we all agree that this is an autumn statement that delivers, and principally delivers growth.

This autumn statement announces a range of measures to grow the supply side of our economy by supporting increased business investment. Taken together, these measures will build over time to raise business investment by some £20 billion per year and reduce the business investment gap that has grown to what we have today. It is because we are backing business—British businesses—that our economy and our investment levels will rise. It is business that creates jobs, which raise household incomes. It is businesses that design and build the technologies of tomorrow, and level up our towns, our committee and our villages. It is businesses that contribute billions and billions in tax revenue, which pays for our public services. To back our businesses is to back our economy and our country’s prospects for the future.

Businesses are vital to our future technology and our future ambitions when it comes to net zero, as was mentioned by the hon. Member for Bath (Wera Hobhouse). The £4.5 billion we are making available to our strategic manufacturing sectors over five years will mean more zero-emission vehicles. It will mean more aerospace and life sciences technologies, and more green energy solutions built right here in this United Kingdom. We are providing £960 million for the green industries growth accelerator, pushing even further on our advantages in offshore wind, nuclear, CCUS and hydrogen. I just say to the hon. Member for Kilmarnock and Loudoun (Alan Brown), who is a long-standing campaigner on energy, that we do need a balanced mix in our energy provision, and that is key to our national security as part of our energy security.

Businesses are vital for our high streets, so we have extended the 75% business rates discount for retail, hospitality and leisure businesses for another year, saving the average pub more than £12,800 next year. I pay tribute to my hon. Friend the Member for Broxtowe (Darren Henry) not just for the speech he made, but for the campaign he led on that measure. Businesses are vital for spreading opportunities, so my right hon. Friend the Chancellor has extended the investment zones programme and the freeport tax reliefs from five years to 10 years. He announced plans to set up a new £150 million investment opportunity fund to capitalise further investment in that programme. That goes alongside the 13 new investment zones—in west Yorkshire, the east midlands, the west midlands, Greater Manchester, Wrexham and Flintshire and several other places—which will generate billions of pounds in investment and create thousands of jobs throughout the country.

However, what is most eye-catching for all businesses is that we have listened to the asks of the CBI, Make UK, Siemens and more than 200 business leaders and industry bodies who said that the single most transformational thing we could do for business and investment growth was make full expensing permanent, so that is exactly what we did. It is something we can only do because of the strong economic position we have built in this country, and I pay tribute to my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) for her support for this measure. Every £1 million a company invests as a result of this measure means they will get £250,000 off their tax bill the very same year. This gives us the lowest headline corporation tax in the G7, as well as the most generous plant and machinery capital allowance anywhere. Again, the OBR says that this will make a huge contribution to our economy, increasing annual investment by £3 billion a year and a total of £14 billion in the forecast period.

While the United States, Canada and Australia are all dispensing with full expensing, we are making this a cornerstone of our economic approach, giving a clear welcome to international businesses that want to come here, set up and employ our people. Coupled with the headline recommendations of the Harrington review, this can make the UK a brilliant place for international investment—even more so than it already is today.

But our plans are not only for large businesses. By cutting class 4 national insurance by 1%—again, as referenced by my hon. Friend the Member for Broxtowe—and abolishing the class 2 national insurance entirely, we are saving some 2 million self-employed people an average of £350 a year from April. Together with our national insurance cut for 27 million workers, this is proof that, whether people work for themselves or for someone else, under this Government work will always be rewarded.

We on the Conservative side of the House believe in the dignity of work and the security of a regular pay cheque. That is why we did not just cut national insurance; we have increased the national living wage by a record amount. But we know that inflation has hit families hard. It has hit individuals and businesses throughout this country. Inflation makes everybody poorer. It was caused by a global pandemic and a global energy shock, and although we have seen it come down, we need to keep on going.

The hon. Member for Leeds East (Richard Burgon), the right hon. Member for Hayes and Harlington (John McDonnell), the hon. Member for Glenrothes (Peter Grant) and others have all raised concerns about living standards, and I share them. It is why we have increased pensions by 8.5%, as referenced by my hon. Friend the Member for Poole (Sir Robert Syms), it is why we have uprated benefits by 6.7%, and it is why we have uprated the local housing allowance. That is on top of the £94 billion on energy support and the £900 cost of living payments that are going out throughout the country.

[Peter Grant]

Is it correct that the prediction that we are going to see the biggest fall in living standards that most of us have ever lived through is after all the things in the autumn statement the Minister has just referred to, so even taking into account all the good measures he has mentioned today and his colleague the Chancellor outlined yesterday, people are going to be poorer, with the biggest drop in living standards that any of us has ever seen?

[Gareth Davies]

As I have said, we know that families have suffered through a period of dramatic inflation. It peaked at 11%. We made a commitment at the start of this year to cut it in half and we met that commitment last week. The No. 1 thing we can do to make people feel better is bring down inflation. The provisions in the autumn statement will undoubtedly put money in the pockets of the people who need it most, but ultimately on this side of the House we believe in the dignity of work; we believe that the best route out of poverty is through a job, and the growth that we will boost through these measures will help achieve that.

We have made inflation our top priority and we have delivered on that commitment, as I just mentioned to the hon. Gentleman. I want to pick up, however, on one point raised throughout the debate, not least from the Opposition, who implied that the Government had done nothing to bring down inflation and that was nothing to do with this Government. I want to stress that the International Monetary Fund disagrees with them. The IMF has said that we have taken decisive action to bring down inflation, complementing the Bank of England. The Bank of England has the primary monetary policy tool of interest rates, but we in the Treasury and across Government have taken incredibly difficult decisions to ensure that we do not exacerbate inflation. We have also introduced measures such as the energy price guarantee, which essentially paid for half of people’s energy bills across the country. That, by the way, was referenced by the OBR as knocking 2% off headline inflation.

--- Later in debate ---

[Alan Brown]

rose—

[Peter Grant]

rose—

[Gareth Davies]

I do not know how they want to fight it out. I will take the hon. Member for Glenrothes (Peter Grant).

[Peter Grant]

On the question of dependency on gas, the Minister’s country might be dependent on imported gas, but can he explain to constituents in Scotland how a country that has more energy than it needs should be so badly affected when the price of that energy increases?

[Gareth Davies]

I simply point out that that did not stop the Scottish Government accepting our energy price guarantee for Scottish households, where we paid half of energy Bills. However, the hon. Member makes a broader point about energy supply. We on the Government Benches fully support the Scottish oil and gas industry. We believe that we will need oil and gas for years to come, and we will support the 200,000 jobs that the industry supports.