Financial Statement

Rachel Reeves Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Thank you, Mr Speaker. Today was the day that the Chancellor could have put a windfall tax on oil and gas producers to provide real help for families, but he did not. Today was the day he could have set out a proper plan to support businesses and create good jobs, but he did not. Today was the day that he could properly have scrapped his national insurance hike, but he did not. Labour said it was the wrong tax at the wrong time, and the wrong choice; and today the Chancellor has finally admitted that he got that one wrong. Inflation is at its highest level for 30 years, and rising. Energy prices are at record highs, and people are worried sick. For all his words, it is clear that the Chancellor does not understand the scale of the challenge. He talks about providing security for working families, but his choices are making the cost of living crisis worse, not better.

The situation following Putin’s criminal assault on Ukraine remains gravely serious. Just one month after the invasion, so much has changed, and there will be repercussions for years to come. The Chancellor has today failed to explain why he chose to sign off on a reduction in our country’s armed forces last October. Will he confirm whether the Government’s target Army size is still being reduced by 10,000 troops? I say this to the Chancellor: Labour will support whatever is needed on defence and security, in order to keep our country safe.

The tremors following Putin’s aggression will impact Britain, including economically, but the cost of living crisis predates Putin’s attack on Ukraine. In October, inflation was already forecast to be double the Bank of England’s target, yet the Prime Minister said that fears of inflation were unfounded. Today we learn that inflation has reached 6.2%, and it is expected to go higher in the coming months. People are rightly looking to their Government to help them weather this storm. Labour will support sensible measures to ease the pressure, but what the Chancellor has announced today says everything we need to know about his priorities.

The cost of living crisis is hitting people particularly hard because incomes have been squeezed during the past 12 years of Conservative Governments. Ordinary families, disabled people, and pensioners are facing difficult choices. Mums are skipping meals so that their children do not. Families are struggling to buy new school shoes and uniforms for their children. Older people are hesitating to put the heating on, because they are worried about the cost.

At the weekend, the Chancellor was asked about fuel poverty, and he did not even know the numbers. That is shameful, because when Martin Lewis predicts that 10 million people could be pushed into fuel poverty, the Chancellor should sit up and listen. We know that pensions and social security will not keep up with inflation, and pensioners and those on social security will be getting a real-terms cut to their income. What analysis has the Chancellor done on the impact of benefits being uprated by less than inflation? How many more children and pensioners will drift into poverty because of the choices of this Government?

Who does the Chancellor prioritise? He continues to defend the record profits of oil and gas producers, who themselves admit that they have more money than they know what to do with. BP describes this crisis as a “cash machine” for it, but it is British people who are paying out. It is deeply regrettable that the SNP has joined the Tories in wanting to shield oil and gas producers from Labour’s progressive measures. When I set out Labour’s plans for a windfall tax in January, we estimated that it would have raised £1.2 billion. Because of the continued rise in global oil and gas prices, it would today raise more than £3 billion. That money could be used to help families, pensioners and businesses, with a cut to VAT being a real Brexit dividend that would help working families and pensioners across our country. A targeted warm home discount would see families and pensioners on the lowest and modest incomes supported by £600.

Today the Chancellor comes along, after 12 years of failure on energy efficiency, and announces a VAT cut on building materials. That is wholly inadequate. A proper energy efficient scheme, such as that set out by Labour, could cut bills by £400 for people from next year. The silence from the Chancellor about our energy intensive manufacturing industries is appalling. At this time of national crisis, people and businesses need a Government who are on their side.

The Chancellor spoke of difficult choices, and I agree. There are always choices to be made, such as who to tax and who to shield. Despite his reluctant measures, he is still taking money out of people’s purses and wallets with an increase in national insurance contributions. The changes he is making today prompt a question about why he embarked on them in the first place, despite warnings from the Labour party and from many, many others. It is one thing for the Prime Minister and Chancellor to disagree with each other, but the centrepiece of the Chancellor’s statement today is based on a disagreement with himself. For all his tax rises for millions in the middle, where is the increased tax contribution from the wealthiest in society? A landlord with a large number of properties will not pay a penny more in taxes, but their tenants will. Someone with significant income from buying and selling stocks and shares will not be paying any more in tax, but those people powering our economy will be. The Chancellor has made the wrong choices.

The Chancellor says that we cannot help everyone, which is absolutely true. But who has he been helping out? Those who have been swindling the taxpayer. The Chancellor left open the vaults for widespread waste, crony contracts, and a frenzy of fraud. It was, as his former Tory Treasury Minister put it,

“happy days if you were a crook.”

Seven billion items of personal protective equipment—not usable—are now being burned. Taxpayers’ money is literally going up in smoke, and £3.5 billion worth of contracts were awarded to friends, donors and pub landlords. And it gets worse. The Chancellor has been signing cheques to fraudsters, including organised criminals and drug dealers. Let us put the Chancellor’s fraud failure in context. He has lost a staggering £11.8 billion of public money to fraud. That is twice the amount that a previous Conservative Government lost on Black Wednesday. As a result of—let us face it—that jaw-dropping incompetence, the Conservatives have been funding crime instead of fighting it. Now the Chancellor has the audacity to come to British taxpayers to ask them to pay more to fill his black hole. There can be no cover-up to hide political embarrassments, so let us call in the National Crime Agency to investigate. We need answers and people to be held to account, because—let us be clear—taxpayers want their money back.

The truth is that people can no longer afford the Conservatives. Working families cannot, pensioners cannot and businesses cannot. The weak growth forecasts we have seen today should be flashing red on the Chancellor’s desk. The Chancellor said, in his statement, that the work starts today. Is he serious? The Conservatives have been in government for 12 years, not 12 hours. What has taken them so long? Since his party entered government, the UK has experienced the biggest downgrade in growth of any major economy. Under the last Labour Government, economic growth was 2.1% a year. In the last 12 years under the Conservatives, it has averaged 1.5%. Now we know that growth has been downgraded this year too. Growth is essential for funding our public services, keeping taxes under control and keeping a handle on public finances too. That is why Labour has announced a tough set of fiscal rules to get our debt and our deficit down. The truth is that, because of the Government’s failure to get the economy growing, the Chancellor has had to put up taxes on families and businesses a staggering 15 times.

The Chancellor has raised taxes more in the last two years than any previous Chancellor in the last 50. He says it is all down to the pandemic, but the truth is that the Conservatives have become the party of high taxation because they are the party of low growth. I understand that the Chancellor has a portrait of Nigel Lawson above his desk. Well, today we have an energy price crisis, record prices at the pumps and inflation is back. The truth is that he is not Nigel Lawson: he is Ted Heath with an Instagram account.

Labour would get the economy firing on all cylinders, ensuring that we buy, make and sell more in Britain, scrapping business rates and replacing them with a fairer system fit for the 21st century, something that small and high street businesses are crying out for, and the Chancellor mentioned not at all in his statement today. Labour would make a climate investment pledge to decarbonise the economy, create good jobs in every part of Britain and strengthen our energy security too. Businesses are seeing unprecedented increases in their costs right now, but all we hear from the Chancellor today is the promise of jam tomorrow, not the support that is needed now. Today’s statement lacks the long-term plan for productivity, skills and growth. Where is it?

I cannot help but feel that in both the Chancellor’s recent Mais lecture and his statement today we are presented with increasingly incredible claims. Perhaps the Chancellor has been taking inspiration from the characters in Alice in Wonderland or should I say, Alice in Sunakland? Because nothing there is quite as it seems. It is the sort of place where a Chancellor celebrates giving people £200 to help them with their spiralling energy bills, before explaining that he needs it all back. In Sunakland, the Chancellor proclaims, “I believe in lower taxes”, at the same time as hiking Alice’s national insurance contributions. So Alice asks the Chancellor, “When did lower taxes mean higher taxes? Has down become the new up?” The Chancellor follows Humpty Dumpty’s advice and says,

“When I use a word…it means just what I choose it to mean—neither more nor less.”

Alice knows that under the Conservatives taxes are at their highest level in decades, as a result of the policies of this very same Chancellor. In fact, he was the only G7 finance Minister to raise taxes on working people during this crucial year of recovery. Curiouser and curiouser. As Alice climbs out of the rabbit hole to leave Sunakland, she recalls the words of the White Rabbit and concludes that perhaps the Chancellor’s reality is just different from hers.

The actual reality is that the Chancellor’s failure to back a windfall tax, and his stubborn desire to pursue a national insurance tax rise, are the wrong choices. In eight days’ time, people’s energy bills will rise by 54%. Two weeks today, the Chancellor’s latest tax hike will start hitting working people and their employers. His national insurance tax rise was a bad idea last September, and he has admitted that it is an even worse one today. The Chancellor is making an historic mistake. Today was the day to scrap the tax rise on jobs. Today was the day to bring forward a windfall tax. Today was the day for the Chancellor to set out a plan to support British businesses. But on the basis of the statement today and the misguided choices of the Chancellor, families and businesses will endure significant hardship. The Chancellor has failed to appreciate the scale of the challenge that we face and, yet again, he is making the wrong choices for our country.

[Rishi Sunak]

I thank the hon. Member for Leeds West (Rachel Reeves) for her reply. She raised several points that I will come to in due course, but listening to her speech it sounded as though covid, and the huge damage it did to our economy and public finances, had never actually happened. It sounded as though we did not have to introduce furlough, support businesses and provide emergency funding to schools, councils and, yes, the NHS. While her party supported all those policies at the time, it now seems unwilling to pay for them. There is a pattern there. Labour is always happy to spend taxpayers’ money, but not to take care of it.

On some of the hon. Lady’s specific points, it was telling that she opened her statement by yet again calling for a windfall tax. On this side of the House, we want to encourage more investment in the North sea, and we want more domestic energy and more jobs for the UK. A windfall tax would put that off, which is why the Prime Minister will bring forward a comprehensive energy security strategy in the coming weeks to address that.

The hon. Lady talked about business rates and supporting businesses. In just a week’s time, small businesses in the retail, hospitality and leisure sector will get a 50% discount on their business rates bill. It is the biggest cut to business rates outside of coronavirus since the business rate system was created—£1.7 billion. I know that she has said that she would like to abolish business rates. She also says she has some fiscal rules, but I have not quite figured out how she will pay for the £25 billion of tax cuts that that would involve—I look forward to hearing it. She talked about defence spending. It is all very well to talk about the size of the Army. At least Labour now seems to think that we should actually have an Army, which is a welcome conversion. It is because of how seriously we take the nation’s security that in 2020, when we had decided to do short-term spending settlements for most Departments, we singled out one Department for special treatment and gave it a four-year settlement in advance of everyone else—that was the Ministry of Defence. In that settlement it received £24 billion of new cash, the largest uplift to defence spending since the end of the cold war, ensuring that we are not just the second-largest spender in Europe in NATO but the fifth largest in the world, a record of which we on the Conservative Benches are very proud.

The hon. Lady talked about pensions. Again, thanks to the actions of Conservative-led Governments since 2010, we put in place the triple lock—not something the Labour party ever did when it was in power. It means that pensions are now £2,300 higher than they were in 2010 and £700 more than if the triple lock had not been in existence during that time. I am pleased to say that the state pension, relative to earnings, is now at its highest level in over 30 years. This party will always be on the side of pensioners.

Turning briefly to the hon. Lady’s comments on tax—fair enough, it is a short time in which to have to respond, but I am not sure if she fully understood the implications of the tax cut announced today. The increase in the national insurance thresholds to equalise them fully is a £6 billion tax cut for 30 million UK workers. It is the largest increase in thresholds ever, the biggest personal tax cut in a decade, and it is worth £330 for those workers. I do not know whether she realised this, because she talked about the levy and making sure that we direct our policy at those who need our help, but there is a reason the independent Institute for Fiscal Studies called this increase the best way to help low and middle earners through the tax system: 70% of workers will pay less tax, even accounting for the levy. It is more generous than the policy she is advocating. Combined with the other tax cuts we have announced today, this plan represents the biggest net cut to personal taxes in a quarter of a century.

Let me conclude by saying this. The plan we have announced today has only been possible because we have taken tough decisions with the public finances. They have not always necessarily been popular, but they always been responsible and always honest. It is two years to the day that the country first entered lockdown and suffered the biggest economic shock in over 300 years. An unprecedented collective national effort was undertaken and two years later this Government have not only fixed the public finances but people are back in jobs, debt is falling and taxes are now being cut. No Government can get every call right. We learn from our mistakes and we strive to improve. But even if they will not admit it, Labour Members will recognise this day as an achievement that we all can celebrate. I have said it before to the Labour party and I will say it again: there is a fine line between reasonable criticism and political opportunism, and in my experience the British people can always tell the difference.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 15th March 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend is right to point out the importance of fuel as a cost for both businesses and households. That is why I am proud that we delivered the eleventh freeze in fuel duty in a row. That has delivered huge savings for households and businesses over the past several years.

[Rachel Reeves (Leeds West) (Lab)]

Millions of people are worried sick about soaring bills. Meanwhile, BP says it has more cash than it knows what to do with and has compared its record profits from inflated prices to a cash machine. Those profits are not being used to fund new investment. They are going on dividends and share buybacks, so why will the Chancellor not make North sea oil and gas companies pay their fair share of taxes to tackle the enormous cost of living crisis?

[Rishi Sunak]

The hon. Lady talks about a fair share. It is worth bearing in mind that oil and gas companies are already taxed at double the rate of all other companies: 40% versus 19%, currently. Last year saw the lowest amount of investment in the North sea on record—just a few billion pounds. As my right hon. Friends who were at the roundtable yesterday know, there are billions of pounds of projects waiting to be unlocked. We want that investment and those jobs here in the UK.

[Rachel Reeves]

That is not happening with the share buybacks. The Chancellor is totally out of touch. He does not seem to understand how the cost of living crisis is affecting the least well off in society, as campaigner Jack Monroe highlighted. The Institute for Fiscal Studies confirmed that the poorest households face an inflation rate 50% higher than the richest households. The Resolution Foundation warns that between 2020 and 2022, 700,000 more children will have fallen into poverty. That is devastating, but it is not inevitable. The Chancellor can and must do more in the spring statement to provide people with real help, not just a loan. Why is he so intent on shielding oil executives, instead of protecting the poorest in society?

[Rishi Sunak]

The best way to help people cope with rising energy costs and bills over time is to make sure we have a diversified and secure supply of energy, more of which comes from here at home. I share the hon. Lady’s concern for those on the lowest incomes. I am proud that all the evidence points to the fact that the decisions made by this Government over the last few years have benefited those on the lowest incomes the most. We have protected those who need our help, and we will continue to do so.

National Insurance Contributions Increase

Rachel Reeves Excerpts

Tuesday 8th March 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House calls on the Government to cancel its planned 1.25 percentage point rise in National Insurance Contributions that will cost families an average of £500 per year from April 2022.

Six months ago today in this Chamber, I set out Labour’s opposition to the Conservatives’ national insurance tax hike. It was clear to us then that this was going to be a heavy burden on working people and businesses who could ill afford it. Since that time, the situation has worsened, but the Conservative party has not altered its wrong course. Filling up the car with petrol is more expensive, energy bills are soaring, and the cost of the weekly food shop is rising. It all adds up. Inflation is now 5.5%, the highest level since 1992, and is forecast to reach a massive 8% next month, outpacing people’s pay rises—if they get one at all. Growth is expected to slow further. The stark reality is that over the past 12 years, the Tories have become the party of high taxes because they are now the party of low growth.

This morning’s report by the Resolution Foundation finds that the average household will experience a £1,000 hit from tax rises and energy price increases this year under the Conservative Government. The Treasury Committee rightly highlighted the Office for Budget Responsibility’s forecast, which stated that

“the policy mix chosen by the Chancellor”

at the last Budget

“will act as a boost to inflation”.

Just focus on that for a moment: the Chancellor’s own policy choices are boosting inflation. The Government should have acted when the cost of living crisis started growing last September and well before it spiralled out of control in December, with costs soaring and inflation heating up.

The Russian invasion of Ukraine is devastating lives and livelihoods, and we must do all we can to stop Putin’s aggression. What is happening in Ukraine will have a cost of living effect here at home, too. When the facts change, so should the Government’s policies; people cannot afford Ministers carrying on regardless of worsening circumstances. The Chancellor must show some understanding of the real-world consequences of his policies for working people and businesses.

The spring Budget will take place two weeks tomorrow, on 23 March. If the Government cannot commit to halting the national insurance rise today, they must do so then, two weeks before it comes in on 6 April and hits working people and employers hard. Today is an opportunity for the Conservatives to show that they get it, and do not want to make the cost of living crisis even worse than it already is.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The hon. Lady is making an important speech. She is right that the national insurance rise will cripple families who are already struggling to get by, but does she agree that what makes it worse is that not a penny of the money raised will go into the hands of hard-working carers who desperately need it? In a community such as mine that is above the national average age, with a need for more carers, that means people without care or with inadequate care.

[Rachel Reeves]

The hon. Gentleman is absolutely right. That is the great deceit at the heart of this national insurance tax rise. I will address some of those details in a moment.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

I fully support what the hon. Lady is saying. Does she agree that some of the measures we have seen for dealing with the cost of living crisis—for instance, the energy rebate—might now make matters worse? That rebate works on the basis that it will be repaid over subsequent years, and will only really work if energy prices normalise or fall, but all projections now indicate that energy prices will rise and rise, so the Government’s interventions are going to be inflationary and add to the problems people are facing.

[Rachel Reeves]

I fully agree with the hon. Gentleman. A buy now, pay later scheme for energy prices, based on the premise that prices are going to fall, does not bear any relation to the facts. That is why I say, when the facts change, so should the Government’s policies. They should not just carry on steering the boat in the wrong direction, towards the storm.

It is fair to say that the Prime Minister’s word has recently been deeply discredited, but let me remind the Chamber what he previously said about tax:

“Read my lips: we will not be raising taxes on income, or VAT, or national insurance.”

This is not just another of the long list of broken vows from a leader who has a fleeting relationship with truth and accuracy. This manifesto breach now belongs to the entire Conservative Government and especially the Chancellor, who seems not to want to take responsibility for his own tax rises. Let us not forget that last March, a year into the pandemic, the Chancellor said,

“We’re not going to raise the rates of income tax, national insurance, or VAT.”

This is not just the wrong thing to do; it is a broken promise. It is a clear and flagrant breach of the Conservative party’s own manifesto. They promised the public that they would not do this, and now they are going back on their word.

The Chancellor is not here to defend his new tax on jobs—I do not know why—but it is becoming increasingly clear that rather than help people now when they really need it, the Chancellor is telling his colleagues and briefing newspapers that he will make people wait until an election, when he wants to make a new set of promises to win people’s votes. People need help now and the Government should act now, not play games with people’s living standards. Voters are smarter and savvier than the Chancellor assumes. They have already seen through his buy now, pay later loan scheme, meant to help with energy bills. It is not too late for the Government to look again at Labour’s proposal for a one-off windfall tax on oil and gas producers in order to cut household energy bills by up to £600 this year. The case for our proposal gets stronger by the day, and the Chancellor should adopt it, but instead of easing the cost of living crisis, the Conservatives are the cost of living crisis.

[Christine Jardine (Edinburgh West) (LD)]

The hon. Lady is making a very powerful speech and some excellent points with which I agree. Does she agree that the Government are gambling with taxpayers’ money, rather than investing it? They are gambling that the price will go down, when we all know it will go up, and they are not looking to those people who have made a massive profit over the past two years, both from the energy crisis and in the pandemic, to try to relieve the burden on those who have been hardest hit.

[Rachel Reeves]

Politics is about choices; the hon. Lady makes an important point. This Government are making the choice to increase taxes on ordinary working people and those who employ them, while on the Opposition Benches, we say that those who have benefited from the high energy prices should pay a bit more in tax to relieve the pressure on ordinary working people. We have a Conservative Minister who goes on the TV and radio and says that energy companies and the North sea oil and gas companies are struggling right now. Tell that to my constituents, the hon. Lady’s constituents and all our constituents who are struggling to pay the bills, while the profits keep coming in for the big oil and gas producers.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

Does the hon. Lady not agree that what she is saying is all smoke and mirrors? If a tax is put in for one year, that will not pay for the continuing costs over future years. What she is doing is simply misleading the public.

[Rachel Reeves]

If we raised those taxes now on North sea oil and gas companies, we could bring in money that could be used to relieve pressure now. I think that the right hon. and learned Gentleman’s constituents in North East Hertfordshire would be pretty pleased to have money off their bills this year, rather than the buy now, pay later scheme that we get from this Chancellor.

Why is the Chancellor not listening? The Conservatives’ rise in national insurance will hit almost 30 million working people. The TUC rightly argues that it is wrong to hit young and low-paid workers while “leaving the wealthy untouched”. The British Chambers of Commerce describes the Government’s policy as

“a drag anchor on jobs growth”.

The CBI put it bluntly and said that it will

“hurt a business’s ability to hire staff”.

On Sunday, the Federation of Small Businesses warned:

“Slamming small firms with a jobs tax hike will put the brakes on investment, upskilling and growth within communities most affected by the pandemic.”

The Chancellor must know what business organisations and trade unions are saying. We can only conclude that he is consciously disregarding their experience and views. We know from research by the National Institute of Economic and Social Research that job-intensive sectors will be disproportionately hit hard. The Conservatives have deliberately designed a tax hike that will hit people working in hotels, restaurants, transport, retail and wholesale especially hard.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

rose—

[Jim Shannon (Strangford) (DUP)]

rose—

[Rachel Reeves]

I will give way to the hon. Lady, and then to the hon. Gentleman.

[Dr Johnson]

I wonder if the hon. Lady can help me, because I am slightly confused. She has talked about a windfall tax on the energy companies, but she is then conflating that with the NI rise. The NI rise is not to pay for energy bills, as I understand it, but to pay for health and social care. Last week, she wanted to use that windfall tax to spend on reducing energy prices, as she has said today. She cannot use one tax to do two things. What will she use the tax for, were she to bring it in? In particular, if she were to cancel the NI rise—I do not want to increase taxes; I am a Conservative, so of course I do not want to do that—how would she pay for the care and healthcare of those vulnerable constituents who we know need it so badly?

[Rachel Reeves]

The average household in the hon. Lady’s constituency will be £1,200 worse off because of the tax increases and the price rises happening as a result of her Government’s policies. As she well knows, we would use the windfall tax to relieve pressure on household gas and electricity bills. The hon. Lady might oppose that, but I suggest she puts that on her leaflets and puts that to the voters in her constituency at the next election.

[Several hon. Members rose—]

[Rachel Reeves]

Sorry, I said I would give way to the hon. Member for Strangford (Jim Shannon). I will do that and then I will make a little more progress.

[Jim Shannon]

I thank the hon. Lady for putting forward her point of view. My party and I supported her party on a previous Opposition day in relation to a tax on oil and gas. Today the hon. Lady is, on behalf of the Opposition, putting forward something that is equally important. In my constituency of Strangford, fuel prices are up 50% and grocery prices are up between 25% and 30%. Does she agree that while for some the national insurance contributions increase will be a weightless straw, it could well be the straw that breaks the camel’s back?

[Rachel Reeves]

The hon. Gentleman speaks powerfully on behalf of his constituents, who are struggling with the double whammy of prices increasing, particularly gas and electricity bills, at the same time as this Government are piling on pressure after pressure with higher taxes on the same people who are paying those higher bills. He is absolutely right that people can only take so much, and the national insurance contribution tax hike is, as he says, potentially the straw that breaks the camel’s back.

Politics is about priorities, and it is about choices. So who has the Chancellor chosen to protect—not to tax more? Those who earn huge incomes from a large portfolio of buy-to-let properties or those making large sums from selling stocks and shares will not pay a penny more tax on that income. The super-rich will not be paying more. Roman Abramovich and billionaire oligarchs are not being made to pay more tax. In fact, some of those trying to relinquish their assets now appear to be using offshore vehicles to avoid paying tax. Lubov Chernukhin, wife of Putin’s former finance Minister, and mega-donor to the Tory party, has reportedly lobbied Ministers against higher taxes for the wealthy. As luck would have it, she will not be paying any more tax, unlike people across Britain who work for a living and keep our economy going.

[Mr Clive Betts (Sheffield South East) (Lab)]

My hon. Friend has mentioned not taxing buy-to-let landlords who have a number of properties. I do not think she is aware that the permanent secretary for the Department for Levelling Up, Housing and Communities came to the Select Committee yesterday and confirmed that, where properties are let with council tax and rents being paid in the same bill, the council tax rebate of £150 will go not to the tenant, but the landlord. If the landlord owns multiple properties, as long as they are not owned by a corporate entity, they will get multiple amounts of £150. Some of the landlords are going to be extremely well off, and tenants will have to go and apply to the discretionary fund to get any help at all.

[Rachel Reeves]

I thank my hon. Friend for bringing that to the House’s attention. It is exactly why Labour said that the warm home discount should be expanded to ensure that the money goes to the people who need it, not the landlords.

At the same time as the Government are asking hard-working British people to pay more in tax, they are writing off billions of pounds in fraud. Ordinary people are paying for this Government’s waste. The Chancellor repeatedly ignored warnings about the holes in his covid business support schemes, resulting in £4.3 billion of public money being written off. That does not even include the amounts lost to bounce back loan fraud, including taxpayer cash handed out to drug dealers and organised criminals. That fraud currently stands at £4.7 billion, so that is £9 billion and counting handed to fraudsters. Then there is the colossal Government waste during the pandemic, with £8.7 billion lost on unusable personal protective equipment, all paid for by the taxpayer. Billions has been spent on crony contracts that have not delivered, and every single cheque has been signed by the Chancellor.

[Richard Graham (Gloucester) (Con)]

rose—

[Rachel Reeves]

Let me just finish this point. Yesterday, we saw a whole new meaning to burning through money. After wasting billions on unusable PPE, the Government are literally burning it to get rid of it—putting taxpayers’ money through the furnace. The Conservatives’ promise to get value for money for taxpayers has gone up in flames. Taxpayers do not want to keep picking up the price of these dodgy contracts, fraud and waste. I will be very interested to hear the hon. Gentleman’s views on that.

[Richard Graham]

I am grateful to the hon. Lady. The difficulty is that this is a debate about the national insurance contributions increase; it is not a debate about her wide range of thoughts on all sorts of other aspects of the economy. The problem with this particular debate is that this additional tax, which is hypothecated exclusively for health and care, will make a huge difference to millions of people across the country, including in Leeds, who have been waiting for elective surgery, want to see social care resolved and need the extra funds for it to happen. In addition, it is progressive, because the top 14% of taxpayers will pay half of the revenue raised. Surely she would approve of that.

[Rachel Reeves]

The hon. Gentleman knows that the average household in Gloucester will be £1,299 worse off because of the double whammy of tax increases and price increases. I think they would be pretty concerned about the amount of taxpayers’ money that is being written off in fraud and waste—money that is being burned by the Government.

Despite waste and fraud costing more than this year’s national insurance contribution rise will raise, the Prime Minister says that the tax rise is necessary. That is the great deceit. On the steps of Downing Street in 2019, he claimed to have a plan for social care. Yet almost three years on, we know that the Government’s approach to social care will not stop people selling their home to pay for care, it will not deliver a penny more to improve care today, and it will not add a single minute of care and support for those who need it. Even then, NHS waiting lists are set to rise even further for the next two years. The Government will not fix the problems with our social care sector or our NHS. Never before have taxpayers been asked to pay so much and got so little in return.

It is time for the Chancellor to urgently change direction. The national insurance tax rise was wrong in September and it is even worse in March. It is the wrong tax at the wrong time: the cost of living is higher, inflation is out of control, wages are not keeping up, energy bills are going through the roof and family finances are stretched, yet the Chancellor refuses to back our windfall tax plans to help.

The Chancellor has not turned up today, but my message to the Minister is that he must turn up to the spring Budget with a plan to make a difference to the cost of living. The Chancellor’s tax rise should not go ahead. MPs can send the strongest signal today by backing our calls to cancel the national insurance tax increase next month. They know full well that our country believes that it is time to change course.

The Conservative Government are not doing enough to cushion the blows. In fact, when it comes to the tax rise, they are piling on the pressure and making matters worse. They must think again and back Labour’s motion today.

Economic Update

Rachel Reeves Excerpts

Thursday 3rd February 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I thank the Chancellor for his statement.

We have known that this price rise was coming for months, and today we learn that the energy price cap will increase to £1,971 in April. In October, I called on the Government to provide immediate support for support for households, cutting VAT on their energy bills and saving £200, with £400 in extra targeted support for those who need it most, which would mean, for some of the poorest families in our country, almost no increase in energy bills from April. The Government have not done that today.

We all remember when the Prime Minister said that cutting VAT on energy bills was one of the benefits of Brexit. He said:

“When we Vote Leave, we will be able to scrap this unfair and damaging tax.”

Could there ever be a time when that policy is needed more than it is today? I should have thought that the Prime Minister, with his unblemished record of integrity, would defend the commitments he had made, but instead, that is another pledge thrown on to the bonfire of broken Tory promises.

The uncomfortable truth for the Chancellor is that even after what he has announced today, families in Britain—including some of the poorest—will still be paying hundreds of pounds more for their energy from April as a result of the breathtaking rise in energy prices just announced by Ofgem. Millions of people will be cutting back to pay the bills. Citizens Advice says that it saw a record number of people in January struggling with fuel debts, before the energy price increase. But what do the Government offer? A buy now, pay later scheme that loads up costs for tomorrow; high prices as far as the eye can see, this year, next year, and the year after that. It is a case of give with one hand now, and take it all back later with the other.

The Conservative party used to talk about the nation’s credit card. Today, we have seen the Chancellor force British households to load up their credit cards. By lending billions of pounds to energy companies, he is gambling that prices are going to fall, but they could go up further in October. What then? Billions more loaded on to people’s bills? The best way of targeting support to those who need it most would be an increase to £400 and an extension to 9 million households of the warm home discount, as Labour has proposed. The Government’s scheme is a pale imitation of Labour’s, especially for the households and pensioners on the most modest incomes, but the Chancellor is using council tax to target extra help. That will mean that many of the poorest households receive no extra support, while some of the richest do, and it is people living in the north and the midlands who will lose out most. The hypocrisy, the day after the publication of the Government’s levelling-up White Paper, is obvious. [Interruption.]

[Mr Speaker]

Order. Mr Holden, I think we need to be a little calmer. I am sure you will want to catch my eye, and that is not the way to do so.

[Rachel Reeves]

Can the Chancellor confirm how many people who are fuel-poor will miss out on council tax support compared with the warm home discount support that Labour has announced?

The Government had a choice. Only today, Shell announced that its profits have quadrupled to $20 billion. It described its results as “momentous”—dividends up, profits up, and people’s energy bills up too. Labour’s plan would impose a one-off windfall tax on those excess profits, but this Chancellor would rather shield the oil and gas producers while at the same time loading the cost on to working people and pensioners. Cabinet Ministers have described the oil and gas producers as “struggling”. Tell that to the one in five people who are already skipping meals so they can pay their energy bills.

This energy crisis has not happened overnight. A decade of dither and delay from the Conservative party has brought us to this point: a decade of failure to regulate our energy markets; a decade in which they have slashed our gas storage capacity, leaving us more reliant than ever on Russia for our gas imports; a decade of failure to make the most of solar, tidal and wind energy; and a decade of stalled progress on insulating our homes to keep bills low, not just for one year but into the future. It has been the Tory decade that has led to this announcement of the biggest increase in the price of domestic energy since records began. That is what the Chancellor should acknowledge and apologise for today. The Conservatives are not solving the cost of living crisis, because the Conservatives are the cost of living crisis.

[Rishi Sunak]

The Opposition may have some soundbites but they certainly do not have a policy. [Interruption.] In contrast, this Government have announced measures—[Interruption.]

Tackling Fraud and Preventing Government Waste

Rachel Reeves Excerpts

Tuesday 1st February 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House agrees with the remarks of Lord Agnew of Oulton in his resignation letter that the Government’s record on tackling fraud is lamentable; recognises the vast amount of taxpayers’ money that has been lost to waste and fraud since the start of the coronavirus pandemic, including the estimated £4.3 billion recently written off from Treasury-backed Covid business support schemes; notes the Government’s unacceptable record of poor procurement over the last decade, including £13 billion wasted on defence projects; further notes the warnings the Chancellor received in 2020 regarding the serious weaknesses allowing for public funds to be diverted to criminal enterprises; calls on the Government to set out a strategy to recover all taxpayers’ money obtained by criminal groups and to fully engage with a thorough National Crime Agency investigation into all issues related to the fraudulent exploitation of the covid-19 support schemes; and further calls on the Chancellor of the Exchequer to make a statement to this House before 31 March 2022 detailing how much taxpayers’ money has been successfully retrieved.

Millions across our country are facing a cost of living crisis, but while many are worried about soaring energy and food bills, the Government are preparing to hike taxes for working people and businesses. It will be the biggest tax burden in 70 years, yet while the Government are delving into people’s pockets for their hard-earned cash with one hand, they are throwing it away with the other. With endemic waste and fraud, taxpayers’ money is being poured down the drain. We see billions of pounds of waste on vanity projects, crony contracts and poor procurement. Basic checks and measures on who was handed covid support are completely ignored. We have had £4.3 billion in fraud written off by the Chancellor—that is a third of the tax hike that the Conservatives are about to impose on working people and the businesses that employ them.

The truth is, that is only the tip of the iceberg. That is why Labour has brought this motion before the House, calling on the Government to come back by 31 March with a clear answer on the true extent of fraud in their covid support schemes and to report back on how much taxpayers’ money has been clawed back from the criminals. It is because the Chancellor has lost a grip—and he seems to have fled the scene—that the motion calls on the Government to allow the National Crime Agency full access to investigate all aspects of fraud within covid support, not just the mere 13 cases that the Chancellor suggested they are looking at.

[Dame Angela Eagle (Wallasey) (Lab)]

Was my hon. Friend as surprised as me not only by the terms with which Lord Agnew, the Minister in the Lords, resigned—the “schoolboy errors” made—but to learn that the National Crime Agency was shooed away by the Treasury when it offered help to try to get back some of the fraudulently taken money?

[Rachel Reeves]

It was nice to see a Government Minister with a bit of integrity doing the right thing and resigning because of the errors that the Government are making.

Let us look at the details. On 12 January, the following details were published on gov.uk: £5.8 billion of fraud, with—yes—£500 million already retrieved and up to £1 billion to be clawed back by the end of 2023. That leaves an outstanding £4.3 billion of fraud written off by the Government. The grants number refers to the assessment of the losses made by Her Majesty’s Revenue and Customs from just three schemes: the coronavirus job retention scheme, which was £5.3 billion; the self-employment income support scheme, which was £493 million; and eat out to help out, which was £71 million. That fraud adds up to a combined £5.8 billion. In addition, page 121 of the Department for Business, Energy and Industrial Strategy’s annual report states that bounce back loan fraud is estimated to be 11% of the total. When the Minister comes to the Dispatch Box, will he tell us whether he recognises those figures? Does he understand what an affront that is to taxpayers and to those who were excluded from Government support during the pandemic?

[Catherine West (Hornsey and Wood Green) (Lab)]

The shadow Chancellor is making an excellent speech. Does she agree that not only is it a disgrace to write off all those billions, but, to add insult to injury, working people will have to pay for that with the national insurance tax rise and through a lack of help on energy bills, which is another worry for households all around the country?

[Rachel Reeves]

My hon. Friend is exactly right. The Government say that they need to raise taxes to fund public services, and yet at the same time they are writing off billions of pounds-worth of taxpayers’ money. That is why I say it is an affront to taxpayers and to all those businesses who were excluded from Government support when they most needed it. They now know that criminals got their hands on the money while genuine businesses and self-employed people could not get a penny.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Given the rate of return for every pound spent by HMRC in compliance, is my hon. Friend puzzled about why money is not being invested to get back furlough fraud?

[Rachel Reeves]

My hon. Friend is absolutely right that it is good value for money to invest in HMRC to get that money back, but the truth is that it did not need to be like this in the first place. The Government could have avoided these enormous levels of waste and fraud, but they set up the covid support scheme without proper checks and balances. It is not beyond the wit of Government to direct money where it is needed without giving it to organised criminals and fraudsters. It is incredible that the Government were dishing out lump sums of £50,000 to businesses that were not even trading at the start of the pandemic. It just does not make any sense. The Treasury did not even require checks with Her Majesty’s Revenue and Customs to see that self-certifying businesses had made a tax return as proof that they were genuine. What on earth was going on in Government? Those checks take just a matter of minutes. The result of those failures was that criminals created fake companies to receive public money and that is a disgrace.

[Stephanie Peacock (Barnsley East) (Lab)]

My hon. Friend the shadow Chancellor is making an incredibly powerful speech on the eye-watering sums that have been wasted by this Government. The amount of funding that has been lost in Barnsley since 2018 is £30 million. In that context, is it not outrageous that the Chancellor, who cannot even be bothered to turn up today, has wasted so much public money?

[Rachel Reeves]

As an hon. Member mentioned earlier today, this morning was the first we had seen of the Chancellor at the Dispatch Box since the beginning of December—perhaps we were lucky to see him today.

Disturbing reports of court cases are now emerging. They reveal how an organised crime leader, with no less than 48 previous criminal convictions, was handed £50,000 of taxpayers’ money. If only that were a one-off case. The same judge had seen, two months prior, a case where a drugs gang had been given a £25,000 Treasury bounce back loan. Well, good for them to bounce back! What about those who were excluded?

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

I thank my hon. Friend for making an incredible speech. What we cannot forget are the stories we have heard, like the one from a woman in my constituency who had set up a business as a driving instructor. The rules the Government set meant that she was entitled to no compensation and no support whatever. She was left with no income and had to rely on food banks. As my hon. Friend says, at the same time that drug barons were being given taxpayers’ money, people in my constituency were given absolutely nothing and were forced to rely on charity. It is a disgrace.

[Rachel Reeves]

My hon. Friend speaks powerfully. I would like the Minister to explain, at the Dispatch Box, why drugs gangs got tens of thousands of pounds of taxpayers’ money when my hon. Friend’s constituents could not get a penny.

The Chancellor and other Ministers were warned repeatedly about the risk of fraud. In June 2020, the Chancellor was advised by the Fraud Advisory Panel, Transparency International, Spotlight on Corruption and the former director of the Serious Fraud Office that there were

“serious weaknesses that enable fraudsters and corrupt insiders to exploit the bounce back loan scheme and the covid business interruption loan scheme.”

and that that would create a “risk to the taxpayer”. They offered to provide the Chancellor with information, advice and support to improve the control of the funds, yet it seems the Government were not interested in that advice.

[Richard Fuller (North East Bedfordshire) (Con)]

Stripping away the political rhetoric, the hon. Lady is making some very serious points for the Government to consider. However, on reflection, does she now think it was wrong for her Labour colleagues in 2021 to call so readily for the Government to use taxpayers’ money to support GFG Alliance, which was subsequently investigated by the Serious Fraud Office?

[Rachel Reeves]

I understand that MPs want to represent businesses employing people in their constituencies, but it is the role of the Chancellor and the Government to make sure that money goes only to people who deserve it, not fraudsters. The hon. Gentleman was a member of the Business, Energy and Industrial Strategy Committee, which I chaired. The Committee did ask the Government to get money to businesses that needed it, like those mentioned by Labour Members, but basic checks that could have been done in a matter of minutes were not done. He will know, because of this Government’s tax rises and the increase in energy prices, that an average household in his constituency will, from April, be £1,378 worse off.

[Kim Johnson (Liverpool, Riverside) (Lab)]

Does my hon. Friend agree that the £4.3 billion that has been written off is a disgrace, given that the austerity that local authorities have suffered over the past 12 years has had a major impact on the people they serve and our communities?

[Rachel Reeves]

My hon. Friend makes an important point. Her council in Liverpool and all our councils have lost money, and this Government are handing it out to criminals. Billions of pounds of taxpayers’ money has been written off, but it was not the Chancellor’s money to write off; it is the public’s. The Government have clearly lost their grip. We must restore faith and confidence in how taxpayers’ money is spent.

We have a National Crime Agency in our country for a reason: to tackle serious and organised crime. It should be the National Crime Agency that the Government ring first on such occasions, but instead there are reports that they do not even want it to look into the matter. The Chancellor said earlier that just 13 cases are being looked at by the National Crime Agency. That is why Labour has brought our motion to the House today: to call on the Government not only to come back by 31 March with a clear answer about how much of their money has been clawed back from criminals, but to allow the National Crime Agency full access to investigate all aspects of fraud within covid support. The Government should not be resisting any effort whatever to retrieve taxpayers’ money and to hold people responsible. We need to know how it is so easy for organised criminals to steal from right under the Treasury’s nose.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

As a point of correction, the hon. Lady says that the Chancellor said that only 13 cases were being looked into by the National Crime Agency, but what he said was that 13 people have been arrested. Many more cases have been looked into.

I think the hon. Lady is in danger of missing the point. Lord Agnew actually said that the Government did a very good job of rolling out the schemes; his problems were with the checks and balances afterwards on banks drawing on the guarantee. Two banks were responsible for 81% of claims on the guarantee. That is where our attention should be focused: what are the banks doing about getting the money back?

[Rachel Reeves]

Lord Agnew did not resign from the board of a bank; he resigned as a Government Minister because of

“schoolboy errors…indolence and ignorance.”—[Official Report, House of Lords, 24 January 2022; Vol. 818, c. 20-21.]

How does the hon. Gentleman explain to constituents in Thirsk and Malton that they will be £1,175 worse off in April because of the energy price hike and the tax increases from this Government, who all the while are giving money away to criminals? That is why Labour has brought our motion to the House.

[Fleur Anderson (Putney) (Lab)]

The shadow Chancellor is giving an excellent speech exposing the systemic problems with the Government’s schemes. Does she share my concern that the emergency procurement procedures and the crony contracts given out for personal protective equipment meant that £280 million-worth of substandard masks were contracted for, with £100 million on unusable gowns and £200 million to Conservative party friends and donors, yet those shady and untransparent emergency procurement procedures are still being used?

[Rachel Reeves]

My hon. Friend is absolutely right. What we are talking about would be appalling even if it were a one-off example of waste, but it has become the hallmark of this Government that they waste money and treat taxpayers’ cash with a lack of respect: £13 billion was wasted on failed defence procurements, including £4.8 billion of taxpayers’ money handed out for cancelled contracts. If that waste of public money had been avoided, more money would surely have been available for our armed forces, whose budget was cut by the Chancellor in October.

As my hon. Friend says, that just scratches the surface. Some £3.5 billion went on crony contracts, £300,000 went from the levelling-up fund to save a Tory peer’s driveway and £500,000 went on the Foreign Secretary’s flight to Australia, ignoring her own advice from 2009:

“Every public sector worker should feel personal responsibility for the money they spend and the money they save. They should spend taxpayers’ money with at least the care they would give to their own.”

I do not know what care the Foreign Secretary gives to her own money, but I would not spend £500,000 of taxpayers’ money like that. Some £900,000 was spent on working out whether a bridge between Scotland and Northern Ireland was remotely viable and cost-effective. I could have given that advice for nothing.

It all adds up to a total disrespect for taxpayers’ money—and it all matters, because if a Government Minister wastes money by letting it slip through the net into the hands of fraudsters and wastes huge sums of taxpayers’ money on vanity projects, they have to raise taxes to find the money. The fact that taxes are at a 70-year high is the other side of the coin from the waste that we are talking about. With one hand, the Government raise taxes; with the other, they throw away taxpayers’ money.

Labour would treat taxpayers’ money with respect. We care about value for money because we respect taxpayers and we respect our public services, which have been starved of funds by 12 years of Conservative Governments. We want to break our economy out of the cycle of low growth and high taxes. We will build a stronger economy, in which prosperity and security are enjoyed all across our country. That is why we will tax fairly, spend wisely and get our economy firing on all cylinders. People are facing a cost of living crisis. Labour’s answer is not to dip into their pockets even more or waste their money on vanity projects or fraud. As the Conservatives ask families and businesses to pay even more, the very least the Government can do is try to get their stolen money back. That is why I urge all Members to support the motion.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 1st February 2022 Commons Chamber

[Rishi Sunak]

My hon. Friend makes an excellent point about giving local councils that certainty to plan budgets years at a time. That is why I am pleased that last year’s spending review was a multi-year spending review—the first we have had in some time—so there are now three-year budgets in place to enable that planning. In terms of the overall quantum, it is £2.7 billion, which represents a 10% increase on the amount we spent on local maintenance in the last Parliament. Hopefully that is reassuring to her and her local council.

[Rachel Reeves (Leeds West) (Lab)]

Mr Speaker:

“Schoolboy errors… a combination of arrogance, indolence and ignorance… nothing less than woeful.”—[Official Report, House of Lords, 24 January 2022; Vol. 818, c. 20-21.]

Those are not my words, but those of former Treasury Minister, Lord Agnew. Some £4.3 billion of taxpayers’ money has been written off as a result of the Chancellor’s fraud failures; a thousand loans were made to companies that were not even trading at the start of the pandemic; and £50,000 was awarded to a person with 48 criminal convictions, and £25,000 to a drugs gang. Is the Chancellor really saying that such examples strike the right balance between getting money to the businesses that need it and looking after the public finances? Will he inform the House of the total amount lost to fraud underwritten by the Treasury and the amount recovered to date?

[Rishi Sunak]

First, I take this opportunity to pay tribute to Lord Agnew for all his work. I am very grateful to him for everything that he did, and of course we will listen to what he has to say. With regard to the hon. Lady’s questions, she talked about fraud estimates. It is important to be clear, as my right hon. Friend the Chief Secretary to the Treasury said, that nothing has been written off in that regard—we are going after each and every person we suspect of defrauding the taxpayer. I am pleased to tell her that the original estimate of £4.9 billion of fraud—it was an estimate, independently provided—has already been revised down by a third since it was first published, thanks to the actions that we are taking. She asked how much has been paid out already, and I can confirm that the sum total to date is £13 million.

[Rachel Reeves]

It is in black and white on the Government’s own website still today, and in the Government accounts—£4.3 billion written off. Despite the Chancellor’s words, “written off” means giving up on that money. This is just the tip of the iceberg. [Interruption.] It is on the Government’s website and in the Government’s accounts. Can he tell us how many of the covid fraud cases have gone to court? Given his failure, will he ask the National Crime Agency to conduct a full investigation into all cases of covid fraud and ensure that those responsible are held to account? It is not the Chancellor’s money to write off; it is the public’s money, and the public want their money back.

[Rishi Sunak]

It is great that the Labour party has realised that it is the taxpayer’s money and not the Government’s money. I am glad that it has joined us in recognising that. I can say categorically that no one has written this off; we are going after it, as the Chief Secretary said. We invested £100 million last March in creating a taxpayer protection taskforce staffed with over 1,200 people to recover hopefully up to £1 billion. That is just one of the many things we are doing, as well as taking more powers to go after rogue directors, enabling Companies House to do exactly that. The hon. Lady asked about the National Crime Agency. I am pleased to tell her that it has already helped in investigations that have led to 13 arrests with regard to bounce back fraud, so that work is already under way.

Household Energy Bills: VAT

Rachel Reeves Excerpts

Tuesday 11th January 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House calls on the Government to cut the rate of VAT for household energy bills as soon as possible; and makes provision as set out in this Order:

(1) On Tuesday 1 February 2022:

(a) Standing Order No. 14(1) (which provides that government business shall have precedence at every sitting save as provided in that order) shall not apply;

(b) any proceedings governed by this order may be proceeded with until any hour, though opposed, and shall not be interrupted;

(c) the Speaker may not propose the question on the previous question, and may not put any question under Standing Order No. 36 (Closure of debate) or Standing Order No. 163 (Motion to sit in private);

(d) at 3.00 pm, the Speaker shall interrupt any business prior to the business governed by this order and call the Leader of the Opposition or another Member on his behalf to present a Bill concerning a reduction in Value Added Tax on energy of which notice of presentation has been given and immediately thereafter (notwithstanding the practice of the House) call a Member to move the motion that the Value Added Tax (Energy) Bill be now read a second time as if it were an order of the House;

(e) in respect of that Bill, notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.

(f) any proceedings interrupted or superseded by this order may be resumed or (as the case may be) entered upon and proceeded with after the moment of interruption.

(2) The provisions of paragraphs (3) to (18) of this order shall apply to and in connection with the proceedings on the Value Added Tax (Energy) Bill in the present Session of Parliament.

Timetable for the Bill on Tuesday 1 February 2022

(3) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings up to and including Third Reading shall be taken at the sitting on Tuesday 1 February 2022 in accordance with this Order.

(b) Proceedings on Second Reading shall be brought to a conclusion (so far as not previously concluded) at 5.00 pm.

(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings up to and including Third Reading shall be brought to a conclusion (so far as not previously concluded) at 7.00 pm.

Timing of proceedings and Questions to be put on Tuesday 1 February 2022

(4) When the Bill has been read a second time:

(a) it shall, notwithstanding Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put;

(b) the Speaker shall leave the Chair whether or not notice of an Instruction has been given.

(5) (a) On the conclusion of proceedings in Committee of the whole House, the Chairman shall report the Bill to the House without putting any Question.

(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

(6) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (3), the Chairman or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment, new clause or new schedule selected by The Chairman or Speaker for separate decision;

(d) the Question on any amendment moved or Motion made by a designated Member;

(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other Questions, other than the Question on any motion described in paragraph (16) of this Order.

(7) On a Motion made for a new Clause or a new Schedule, the Chairman or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

Consideration of Lords Amendments and Messages on a subsequent day

(8) If any message on the Bill (other than a message that the House of Lords agrees with the Bill without amendment or agrees with any message from this House) is expected from the House of Lords on any future sitting day, the House shall not adjourn until that message has been received and any proceedings under paragraph (10) have been concluded.

(9) On any day on which such a message is received, if a designated Member indicates to the Speaker an intention to proceed to consider that message—

(a) notwithstanding Standing Order No. 14(1) (which provides that government business shall have precedence at every sitting save as provided in that order), any Lords Amendments to the Bill or any further Message from the Lords on the Bill may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly;

(b) proceedings on consideration of Lords Amendments or on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement; and any proceedings suspended under subparagraph (a) shall thereupon be resumed;

(c) the Speaker may not propose the question on the previous question, and may not put any question under Standing Order No. 36 (Closure of debate) or Standing Order No. 163 (Motion to sit in private) in the course of those proceedings.

(10) If such a message is received on or before the commencement of public business on Tuesday 8 February 2022 and a designated Member indicates to the Speaker an intention to proceed to consider that message, that message shall be considered before any order of the day or notice of motion which stands on the Order Paper.

(11) Paragraphs (2) to (7) of Standing Order No. 83F (Programme orders: conclusion of proceedings on consideration of Lords amendments) apply for the purposes of bringing any proceedings on consideration of Lords Amendments to a conclusion as if:

(a) any reference to a Minister of the Crown were a reference to a designated Member;

(b) after paragraph (4)(a) there is inserted—

“(aa) the question on any amendment or motion selected by the Speaker for separate decision;”.

(12) Paragraphs (2) to (5) of Standing Order No. 83G (Programme orders: conclusion of proceedings on further messages from the Lords) apply for the purposes of bringing any proceedings on consideration of a Lords Message to a conclusion as if:

(a) any reference to a Minister of the Crown were a reference to a designated Member;

(b) in paragraph (5), the words “subject to paragraphs (6) and (7)” were omitted.

Reasons Committee

(13) Paragraphs (2) to (6) of Standing Order No. 83H (Programme orders: reasons committee) apply in relation to any committee to be appointed to draw up reasons after proceedings have been brought to a conclusion in accordance with this Order as if any reference to a Minister of the Crown were a reference to a designated Member.

Miscellaneous

(14) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings on the Bill to which this Order applies.

(15) No Motion shall be made, except by a designated Member, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.

(16) (a) No dilatory Motion shall be made in relation to proceedings on the Bill to which this Order applies except by a designated Member.

(b) The Question on any such Motion shall be put forthwith.

(17) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

(18) No private business may be considered at any sitting to which the provisions of this order apply.

(19) In this Order, “a designated Member” means— (a) the Leader of the Opposition; and (b) any other Member acting on behalf of the Leader of the Opposition.

(20) This order shall be a Standing Order of the House.

Prices are rising, bills are soaring, inflation is at its highest level for three decades and the growing cost-of-living crisis is leaving families across our country worse off. People deserve security, prosperity and respect, but what does the Chancellor give them? The highest tax burden in 70 years and no action on rising costs. The Chancellor’s national insurance rise is a tax on jobs, it is unfair and it is yet another broken promise.

The Conservatives are becoming the high-tax, high-inflation party because they have become a low-growth party. Today they can take a straightforward step to show they want to start breaking us out of that cycle. Voting for Labour’s motion would allow us to bring forward legislation to cut VAT on household energy bills from 5% to 0% for one year, and it would reserve parliamentary time on 1 February to do just that.

[Gary Sambrook (Birmingham, Northfield) (Con)]

The Labour party has spent the past six years campaigning against Brexit, which is the only reason we can do what Labour wants us to do today. Will the hon. Lady be honest with the House and say, from her heart of hearts, the measure she proposes would not be possible if we went back into the European Union?

[Rachel Reeves]

We want to make Brexit work. We have this power, so let us use it now. A VAT cut is something practical that the Government could do right now, and it would be felt automatically in all our constituents’ bills. It would give security to people across our country, and I urge all hon. Members to back Labour’s motion today.

[Harriett Baldwin (West Worcestershire) (Con)]

Does the hon. Lady accept, however, that cutting VAT on household energy bills would give a disproportionate tax break to those with the biggest houses and the deepest pockets?

--- Later in debate ---

[Rachel Reeves]

In fact the poorest households spend a higher proportion of their income on gas and electricity bills, with pensioners spending the highest proportion, so the beneficiaries of this measure would be the people we know need that support more than anyone.

We have had a decade of dither and delay from the Conservatives on energy policy. There is indeed a global price spike for gas, but this Government have left Britain uniquely exposed. They have failed to insulate homes properly and they have failed to invest in the new nuclear or renewables that we need. They have failed on gas storage, leaving us reliant on Russia and Qatar for our gas supply. They have failed to regulate the market, with 27 companies now having gone bankrupt, which has left rising prices hitting millions.

[David Linden (Glasgow East) (SNP)]

Does the shadow Chancellor share my incredulity at the suggestion by the hon. Member for West Worcestershire (Harriett Baldwin) that, somehow, giving assistance to people in big houses is the wrong thing to do when the Conservatives are giving them £300,000 of levelling-up money to do up their driveways?

[Rachel Reeves]

That is levelling up in action, filling in the potholes at the Lord’s manor.

On this side of the House we want to keep bills low, which is why Labour is bringing forward this vote to reduce VAT on home energy bills to 0% for a year. It is why we would spread out the price increase that is about to hit bill payers because of the collapsing energy firms, and it is why we would help the squeezed middle, those on lower incomes and pensioners by increasing and expanding the warm homes discount to 9 million people. Our plan would save households £200 from their bills, and up to £600 in total for those who need it most. We would pay for this with a windfall tax on North sea oil and gas profits. These companies have profited massively because of exploding prices, so much so that some in the industry have referred to soaring energy prices as a “cash machine” for producers and their shareholders.

[Jim Shannon (Strangford) (DUP)]

I welcome the hon. Lady’s proposals but, although I welcome and support the green energy push as the only way forward, does she agree that the Government should, in these extreme circumstances, consider removing the green tax during the current fuel crisis to bring down prices and thereby prevent the £750 bill increases that each household will receive this year?

[Rachel Reeves]

I welcome the hon. Gentleman’s concern for reducing gas and electricity bills for his constituents and all our constituents, and we are willing to consider anything that can be done to keep bills low this year. Our proposals would take £200 off everybody’s bill and £600 off the bills of those who need support the most. Labour thinks it is only right that cash from the companies that have done well from this price spike should go back to hard-pressed families, yet this Government seem to think differently. In fact, the Education Secretary said on Sunday that he thinks that oil and gas companies are “struggling”, even when they are expected to report “near record” incomes this year. Struggling—really? The people struggling in our country right now are those seeing their bills going up and up.

[Alex Cunningham (Stockton North) (Lab)]

My constituent Gillian Fish from Billingham has seen her dual fuel bill go up from £39 to £94.28 a month, and she fears that, with just £33 left each month from her employment and support allowance after she has paid her essential bills, she will not be able to afford to leave her home. She does not smoke, she does not drink and she is ill enough to need a mobility scooter. I do not know what to say to her. Can my hon. Friend offer me some advice?

[Rachel Reeves]

I would say to my hon. Friend’s constituent that, under Labour’s plans, £600 would be taken off her bills in April compared with what will happen without Government action. That protects my hon. Friend’s constituent and many millions of constituents like her who are struggling through no fault of their own right now.

During his Budget speech, the Chancellor said that the role of “Government should have limits.” I wonder if the Chancellor’s refusal to act so far is because he does not politically believe it is the role of Government to help alleviate soaring energy bills, or is it just that it is not a priority for him right now? The complete absence of action from Government speaks for itself. People deserve a Government who are on their side. Labour has a plan for action now to help with bills and to prevent the Government’s mistakes of the last decade from being repeated again. We want to give support and security to families now and to keep bills low for the future. That is why Labour will reduce our reliance on imported gas by accelerating home-grown renewables and new nuclear. Our plan to make sure that 19 million homes are warm and well insulated will save households £400 not just for one year, but each and every year on their bills. We will regulate the market better, with a pledge to never again let energy companies make promises to working families that they cannot keep.

[Dame Andrea Leadsom (South Northamptonshire) (Con)]

I am grateful to the hon. Lady for giving way, but I am incredibly disappointed. She is making some very good points about the cost of living, but today’s motion is cynical. It has nothing to do with trying to save costs for consumers, and everything to do with Labour Members trying to make a point about taking control of the Order Paper, just as they tried to do during the Brexit debate, to try to undermine the Government. They know full well that the Government cannot possibly accept such a cynical tactic from Labour, so we will have to vote it down without any consideration whatsoever. She knows that. This is not about Labour trying to save costs for consumers; this is just about Labour playing politics, is it not?

[Rachel Reeves]

On 9 June 2016, the right hon. Lady said:

“We are unable to get rid of VAT on fuel bills”

because the EU prevents us from doing so, despite fuel poverty, but nothing prevents the right hon. Lady from doing the right thing today by voting with us this evening.

There is a straight choice in today’s vote. A cut in VAT will make a real difference. If someone is on a lower income, they will feel the benefit of a VAT cut on their bills because they spend more of their household budget on energy. If someone is a pensioner, they spend twice as much on energy and will be hit even harder by the rising energy price cap. A cut on VAT for home energy bills would be an immediate relief for all. I can understand why the Government do not want to back Opposition policies, as the right hon. Lady has said. However, they would in fact only be honouring the Prime Minister’s own commitments, because the Prime Minister was once the greatest advocate of the VAT cut on home energy bills. In 2016, he said:

“When we Vote Leave, we will be able to scrap this unfair and damaging tax.”

Not once, but three times he has backed a VAT cut on energy bills. Many on the Government Benches have since joined that call. The Chief Secretary went halfway there just last year when he said that VAT on electricity should be cut. But now that the Prime Minister has a chance to actually do something, and he and his Chancellor say no. The problem is that you cannot pay bills on broken promises.

Speaking of the Chancellor, yet again he is in hiding. He was not here yesterday when we debated fiscal responsibility, and he is not here today to debate the cost of living. Maybe he has gone back to California. Had he been here, I would have asked him not just about his broken promises on VAT; I would also have asked, given that he lives and works next door to No. 10 Downing Street, how long he has known about the party on 20 May 2020, and what he has done or said about this disgraceful breach of lockdown rules. Was he at the party when it happened next door, or was he at his window taking the pictures? He might not want to answer my questions, but the country deserves to know whether he too has colluded in the 18-month cover-up.

In just 80 days’ time, on 1 April, working people will be hit—[Interruption.] Get on your feet. Tell your constituents why you will not be voting for a reduction in VAT this evening. Be my guest.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

I am very grateful to the hon. Lady for giving way. She talks about levelling up, but it is Stoke-on-Trent’s Conservative-led council and this Conservative Government that have delivered £56 million from the levelling-up fund, £29 million from the transforming cities fund, and 550 brand-new Home Office jobs. The only Stoke that the hon. Lady knows is Stoke Newington, not Stoke-on-Trent.

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Let us just take the temperature down a little. I did not want to interrupt the hon. Lady when she was in full flow, but she must not call the hon. Gentleman “you”, because that might confuse him with me, and we would not want that.

[Rachel Reeves]

Literally no one would want that, Madam Deputy Speaker. I look forward to seeing the leaflets in Stoke-on-Trent at the next election and seeing how the hon. Member will justify not voting to keep VAT down on gas and electricity bills for his constituents.

In April we will see a national insurance hike and a council tax hike, and gas and electricity bills are going up too. Together we can today force the action that would reduce those bills for all our constituents—for people across our country—and ease the burden of a cost-of-living crisis that is spiralling out of control.

The Prime Minister seems to think that a cost-of-living crisis is when he cannot find a friend to pay for the luxury refurbishment of his flat, but for working people in our country it means struggling to pay gas and electricity bills. When it comes to the energy crisis, as with so much else, the Conservatives have been asleep at the wheel, and now it is ordinary people who are picking up the bill for their failures.

There is a clear choice with today’s vote: MPs can either vote for this motion, allowing us to bring forward legislation to cut VAT on household energy bills from 5% to 0% for one year, or they can vote against it and block bringing in the practical, automatic and immediate support that would give security to all our constituents. People will soon be hit by yet more rising bills, rising prices and rising taxes. These are the everyday worries that politics must address. People want a Chancellor who understands this and has a practical plan to help. The Chancellor might not care about turning up the heating, but the very least he could do is turn up for this debate and take the action needed to help our constituents.

[Several hon. Members rose—]

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 7th December 2021 Commons Chamber

[Rishi Sunak]

Our reforms of the alcohol duty system usher in a system that is simpler, fairer and better for public health. I am not entirely sure that the hon. Lady has got the details right on this. In fact, for Scotch whisky, this is an improvement because we have levelled the playing field for higher-strength drinks, which the Scotch Whisky Association had been calling for. With regard to the differential between domestic and foreign producers, because English sparkling wine is produced to a lower alcohol content naturally than foreign sparkling wine, it will actually, for the first time, enjoy a tax advantage under the new system. Perhaps most relevant immediately, we also froze all alcohol duties—a half-a-billion-pound tax cut for British people this year.

[Rachel Reeves (Leeds West) (Lab)]

I want to take this opportunity to put on record my thanks to the Mother of the House, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), who, in the nearly 40 years that she has been in this place, has done more for the rights and representation of women than anyone else.

At the weekend it was briefed that the Government will set up a star chamber to crack down on waste—which, frankly, has been the hallmark of this Government. Indeed, the Government’s own accounts show that the incompetent way in which the business support schemes were structured meant that the Chancellor has allowed fraudsters to walk away with £6.5 billion of taxpayers’ money. That would be more than enough to cut the basic rate of income tax by a penny in the pound, worth £370 a year to basic rate taxpayers. So can the Chancellor explain why quick electronic checks such as cross-referencing with HMRC tax data were not conducted before money was handed out? Given this huge waste of taxpayers’ money, can the Chancellor confirm that he will be the first witness in front of his own star chamber?

[Rishi Sunak]

The hon. Lady would usually be on top of the numbers. She will understand that there is a difference between a one-off saving of £6 billon and an annual saving on a tax cut of £6 billion. Those two things are not like-for-like comparable. On the numbers she refers to, I am happy to tell her that in the most recent analysis from the Department for Business, Energy and Industrial Strategy’s independent adviser, the estimate of fraud was reduced by a third because of the actions that the Government had taken, which is welcome news. But of course we remain committed to tackling fraud. That is why in the spring Budget we invested an extra £100 million in HMRC, with 1,200 new people to tackle fraud, and they are expected to recover over £2 billion over the next 12 months. With regard to bounce back loans, 55,000 loans worth up to £2 billion were recovered and stopped. We are absolutely committed to tackling fraud wherever we see it.

[Rachel Reeves]

The Chancellor might be relaxed about handing out £6.5 billion, or perhaps it is £4 billion, to companies that did not deserve it, but we on this side of the House are absolutely not. It is reported that a £4.7 million loan was given to a business founded just two days before it was handed the cash. It should not be beyond the wit of Government to get money to where it needs to go—to great British business—without allowing fraudsters to steal taxpayer funds. Leaving the till open and unattended for thieves to clear out would be a sackable offence for a shop worker, yet apparently it is acceptable for the Chancellor of the Exchequer. Staggeringly, only one in 40 cases where fraud has been reported is actually being pursued. Let me ask the Chancellor this: when was he first alerted to this fraud, and how much does he think taxpayers will get back from the billions of pounds lost to fraudsters?

[Rishi Sunak]

As I have said, the new taxpayer protection taskforce at HMRC is expected to recover between £1 billion and £2 billion in the next 12 months, and has already made a good start on that. It is fair to reflect on where we were in spring 2020. I remember being at this Dispatch Box every other day. I remember Members from all parts of the House rightly holding the Government to account for getting money to businesses in a matter of hours and days, not weeks. In fact, I heard from the hon. Member for Oxford East (Anneliese Dodds), the shadow Chancellor at the time:

“We need a full guarantee for…some loans…We are running out of time, so how will the Chancellor ensure that the bounce-back loans get to the businesses that need them?”—[Official Report, 27 April 2020; Vol. 675, c. 110.]

The then shadow Business Secretary, the right hon. Member for Doncaster North (Edward Miliband), said that the Government should:

“urgently look at 100% underwriting of loans and simplified lending criteria.”

Indeed, the hon. Lady herself wrote to me and said that

“the process for SMEs to apply for such loans appears cumbersome.”

I make no apology for making sure—

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Rishi Sunak]

It is obviously difficult for me to comment on the case of a particular individual. The previous Chancellor, my right hon. Friend the Member for Bromsgrove (Sajid Javid), asked Lord Morse to conduct an independent review and the Government accepted and implemented the vast majority of its recommendations. People who settled early had the benefit of certainty from their settlement, but my hon. Friend should write to the Financial Secretary to the Treasury and we will ensure that we look at that case, as he requests.

[Rachel Reeves (Leeds West) (Lab)]

According to the Office for Budget Responsibility, the Government’s supply chain chaos, woefully inadequate post-Brexit planning and a lack of HGV drivers have contributed to higher inflation. The cost of the weekly shop is already going up and up, as the Chancellor will have heard from shoppers in Bury last week. Does he have any idea of how much the average weekly supermarket shop is expected to increase in the next year for a typical family?

[Rishi Sunak]

We are cognisant of and aware that there is price inflation; indeed, last week’s Budget addressed that and explained to the British people some of the global factors that are behind the rise in prices and are not unique to this country. As I said then, where this Government can act, we will. Whether it is the interventions for HGV drivers that my hon. Friend the Exchequer Secretary to the Treasury set out, the £0.5 billion household support fund or, indeed, the freezing of fuel duty, this Government are doing what they can to help with the cost of living.

[Rachel Reeves]

Let me help the Chancellor with the answer to that question. The typical family shop is likely to go up by £180 more next year. It is not just food prices that are rising: gas and electricity bills are already up by £139 and they are only going to go up more. The Chancellor had the opportunity in the Budget to help people with their gas and electricity bills by reducing VAT to 0% through the winter months—something that Labour has called for and that the Prime Minister backed when he was campaigning to leave the European Union. Who should the public blame for VAT on heating bills not being cut: the Prime Minister, for not keeping his word, or the Chancellor, for choosing to cut taxes for bankers instead?

[Rishi Sunak]

With regard to a VAT cut for fuel, perhaps I should point out to the hon. Lady some of the remarks from independent commentators about what that would do. The Institute for Fiscal Studies said that the benefit would accrue “to higher-income households.” The Resolution Foundation said a VAT cut

“would not be targeted and would be quite expensive”.

Tax Research UK said:

“This cut will not help the poorest much…this plan is a subsidy to the best-off, not the least well off.”

Instead, we have provided £0.5 billion, targeted at those who need our help. The hon. Lady mentioned £108; the household support fund will be able to provide £150 to between 2 million and 3 million of the most vulnerable families in our country. Indeed, the national living wage is going up next year, which will ensure a £1,000 increase for someone who works full time on the national living wage, and because of the cut to the universal credit taper a single mother with two kids who works full time and rents will be £1,200 better off.

Budget Resolutions

Rachel Reeves Excerpts

Wednesday 27th October 2021 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Thank you, Madam Deputy Speaker.

Families struggling with the cost of living crisis; businesses hit by a supply chain crisis; those who rely on our schools, our hospitals and our police—they will not recognise the world that the Chancellor described. They will think that he is living in a parallel universe.

The Chancellor decided in this Budget to cut taxes for banks, so at least the bankers on short-haul flights sipping champagne will be cheering it. And he had the arrogance, after taking £6 billion out of the pockets of some of the poorest people in this country, of expecting them to cheer today for £2 billion given to compensate. In the long story of this Parliament, never has a Chancellor asked the British people to pay so much for so little. Time and again today, he compared the investments that he is making to the last decade, but who was in charge in that lost decade? They were.

Let us just reflect on the choices that the Chancellor has made today. We have the highest sustained tax burden in peacetime—and who is going to pay for it? It is not international giants such as Amazon; no, the Chancellor has found a tax deduction for them. It is not property speculators; they have already pocketed a stamp duty cut. And it is clearly not the banks, even though bankers’ bonuses are set to reach a record high this year. Instead, the Chancellor is loading the burden on working people, with a national insurance tax rise on working people, a council tax hike on working people, and no support today for working people with VAT on their gas and electricity bills.

And what are working people getting in return? There is a record NHS waiting list with no plan to clear it, no way to see a GP, and people are still having to sell their home to pay for social care. We have community policing nowhere to be seen, a court backlog leaving victims without justice, and almost every rape going unprosecuted. There is a growing gap in results and opportunities between children at private and state schools, a soaring number of pupils in super-size classes, and no serious plan to catch up on learning stolen by the virus. The £2 billion announced today is a pale imitation of the £15 billion catch-up fund that the Prime Minister’s own education tsar said was needed. No wonder he resigned.

The Chancellor talks about world-class public services. Tell that to a pensioner waiting for a hip operation. Tell that to a young woman waiting to go to court to get justice. Tell that to a mum and dad waiting for their child to get the mental health support that they need. The Chancellor says today that he has realised what a difference early years spending makes. Has he ever heard of the Sure Start programme that this Tory Government cut?

Why are we in this position? Why are British businesses being stifled by debt while Amazon gets tax deductions? Why are working people being asked to pay more tax and put up with worse services? Why is billions of pounds in taxpayers’ money being funnelled to friends and donors of the Conservative party while millions of families are having £20 a week taken off them? Why can’t Britain do better than this?

The Government will always blame others: “It’s businesses’ fault”; “It’s the EU’s fault”; “It’s the public’s fault”; “They’re global problems”—the same old excuses. But the blunt reality is this. Working people are being asked to pay more for less, for three simple reasons: economic mismanagement, an unfair tax system, and wasteful spending. Each of those problems is down to 11 years of Conservative failure. Government Members shake their heads, but the cuts to our public services have cut them to the bone. While the Chancellor and the Prime Minister like to pretend that they are different, this Budget will only make things worse.

The solution starts with growth. The Government are caught in a bind of their own making, because low growth inexorably leads to less money for our public services unless taxes rise, and under the Conservatives Britain has become a low-growth economy. Let us look at the last decade. The Tories have grown the economy at just 1.8% a year. If we had grown at the same rate as other advanced economies, we could have had an additional £30 billion to invest in public services without raising the taxes that the Tories are raising on working people today.

Let us compare growth under the last 11 years of Conservative government to that under the last Labour Government. Even taking into account the global financial crisis, Labour grew the economy much faster—by 2.3% a year. If the Tories matched that record, we would have £30 billion more a year to spend on public services.

It could not be clearer: the Conservatives are now the party of high taxation, because the Conservatives are the party of low growth. The Office for Budget Responsibility confirmed that today. We will be back to anaemic growth—[Interruption.] Conservative Members might not like this, but the Office for Budget Responsibility said that by the end of this Parliament, the UK economy will be growing by just 1.3%. That is hardly the plan for growth that the Chancellor boasted about today; it is hardly a ringing endorsement of his announcements. Under the Tory decade, we have had low growth, and there is not much growth to look forward to.

The economy has been weakened by the pandemic, but also by the Government’s mishandling of it. Responding to the virus has been a huge challenge. Governments around the world have taken on more debt, but our situation is worse than in other countries. It is worse because our economy was already fragile going into the crisis, with too much inequality, too much insecure work and too little resilience in our public services. And it is worse because the Prime Minister dithered and delayed against scientific advice, egged on by the Chancellor, and we ended up facing harsher and longer restrictions than other countries. So as well as having the highest death toll in Europe, Britain suffered—[Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. We have to be able to hear the hon. Lady. Rachel Reeves.

[Rachel Reeves]

So as well as having the highest death toll in Europe, Britain has suffered the worst economic hit of any major economy. The Chancellor now boasts that we are growing faster than others, but that is because we fell the furthest. While the US and others have already seen their economy bounce back to levels seen before the pandemic, the UK has not. Our economy is set to be permanently weaker.

On top of all that, the Government are now lurching from crisis to crisis: people avoiding journeys because they cannot fill up their petrol tank is not good for the economy; people spending less because the cost of the weekly shop has exploded is not good for the economy; and British exporters facing more barriers than their European competitors because of the deal the Government did is not good for our economy. If this were a plan, it would be economic sabotage. When the Prime Minister is not blagging that this chaos is part of his cunning plan, he is saying he is not worried about inflation. Well, tell that to families struggling with rising gas and electricity bills, rising petrol prices at the pump and rising food prices. He is out of touch, he is out of ideas and he has left working people out of pocket.

Conservative mismanagement has made the fiscal situation tight. When times are tight, it is even more important to ensure that taxes are fair and that taxpayers get value for money. The Government fail on both fronts. We have a grossly unfair tax system, with the burden being heaped on working people. Successive Budgets have raised council tax and income tax. Now they have raised national insurance, too. But taxes on those with the broadest shoulders, those who earn their income from stocks and shares and dividends and property portfolios, have been left nearly untouched. Businesses based on the high street are the lifeblood of our communities and are often the first venture for entrepreneurs, but despite what the Chancellor said today, businesses will still be held back by punitive and unfair business rates. The Government have failed to tax the online giants and watered down global efforts to create a level playing field.

Just when we needed every penny of public money to make a difference, we have a Government who are a byword for waste, cronyism and vanity projects. We have had £37 billion for a test and trace system that the spending watchdog says treats taxpayers like an ATM cash machine, a yacht for Ministers, a fancy paint job for the Prime Minister’s plane, a TV studio for Conservative party broadcasts that seems to have morphed into the world’s most expensive home cinema, £3.5 billion of Government contracts awarded to friends and donors of the Conservative party, a £190 million loan to a company employing the Prime Minister’s former chief of staff, and £30 million to the former Health Secretary’s pub landlord—and every single one of those cheques signed by the Chancellor. Now the Chancellor comes to ordinary working people and asks them to pay more than they have ever been asked to pay before, and, at the same time, to put up with worse public services, all because of his economic mismanagement, his unfair tax system and his wasteful spending.

Of course, there are some welcome measures in the Budget today, as there are in any Budget. Labour welcomes the increase in the national minimum wage, but the Government need to go further and faster. If they had backed Labour’s position of an immediate rise to at least £10 an hour, a full-time worker on the national minimum wage would be in line for an extra £1,000 a year. Ending the punitive public sector pay freeze is welcome, but we know how much this Chancellor likes his smoke and mirrors, so we will be checking the books to make sure that the money is there for a real-terms pay rise. Labour also welcomes the Government’s decision to reduce the universal credit taper rate, as we have consistently called for, but the system has got so out of whack that even after that reduction working people on universal credit still face a higher marginal tax rate than the Prime Minister. Those unable to work through no fault of their own still face losing more than £1,000 a year. For families who go out to work every day but do not get Government benefits, who are on an average wage, who have to fill up their car with petrol to get to work, who do that weekly shop, and who see their gas and electricity prices go up, the Budget today does absolutely nothing.

We have a cost-of-living crisis. The Government have no coherent plan to help families cope with rising energy prices. Although we welcome the action taken today on universal credit, millions will still struggle to pay the bills this winter. The Government have done nothing to help people with their gas and electricity bills through the cut in VAT receipts that Labour has called for—a cut that is possible because we are outside the European Union and could be funded by the extra VAT receipts of the last few months. Working people are left out in the cold while the Government hammer them with tax rises. National insurance is a regressive tax on working people: a tax on jobs. Under the Chancellor’s plans, a landlord renting out dozens of properties will not pay a penny more in tax, but their tenants, in work, will face tax rises of hundreds of pounds a year.

The Chancellor is failing to tackle another huge issue of the day: adapting to climate change. Adapting to climate change presents opportunities—more jobs, lower bills and cleaner air—but only if we act now and at scale. According to the Office for Budget Responsibility, failure to act will mean public sector debt explodes later to nearly 300% of GDP. The only way to be a prudent and responsible Chancellor is to be a green Chancellor: to invest in the transition to a zero-carbon economy and give British businesses a head start in the industries of the future. But with no mention of climate in his conference speech and the most passing of references today, we are burdened with a Chancellor unwilling to meet the scale of the challenges we face. Homeowners are left to face the costs of insulation on their own. Industries like steel and hydrogen are in a global race, but without the support they need. In the week before COP26, the Chancellor has promoted domestic flights over high-speed rail. It is because of this Chancellor that in the week when we are trying to persuade other countries to reduce their emissions, the Government cannot even confirm that they will meet their 2035 climate reduction target.

Everywhere working people look at the moment, they see prices going up and they see shortages on the shelves, but this Budget did nothing to address their fears. Household budgets are being stretched thinner than ever, but the Budget did nothing to deal with the spiralling cost of living. It is a shocking missed opportunity by a Government who are completely out of touch.

There is an alternative. Rather than just tweak the system, Labour would scrap business rates and replace them with something much better by ensuring online giants pay their fair share. That is what being pro-business looks like. We would not put up national insurance for working people. We would ensure that those with the broadest shoulders pay their fair share. That is what being on the side of working people looks like. We would end the £1.7 billion subsidy that the Government give to private schools and put it straight into our local state schools. That is what being on the side of working families looks like. We would deliver a climate investment pledge of £28 billion every year for the rest of this decade: gigafactories to build batteries for electric vehicles; a thriving hydrogen industry creating jobs in all parts of our country; and retrofitting so that we keep homes warm and get our energy bills down. That is what real action on climate change looks like.

This country deserves better, but it will never get it under this Chancellor, who gives with one hand but takes so much more with the other. What you get with these two is a classic con game, like one of those pickpocketing operations you see in crowded places: the Prime Minister is the front man distracting people with his wild promises, and all the while his Chancellor is dipping his hand in their pockets. It all seems like fun and games until you walk away and find that your purse has been lifted.

But people are getting wise to them. Every month, they feel the pinch. They are tired of the smoke and mirrors. They are tired of the bluster, of the false dawns and of the promises of jam tomorrow. Labour would put working people first, and would use the power of government and the skill of business to ensure that the next generation of quality jobs are created right here in Britain. We would tax fairly, spend wisely and, after a decade of faltering growth, get Britain’s economy firing on all cylinders. That is what a Labour Budget would have done today.