Economic Update

Rachel Reeves Excerpts

Monday 17th October 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

As I regularly say now, I welcome the new Chancellor to his place. He is the fourth in four months of chaos and fiasco as this Conservative Government spiral down the political plughole. But the damage has been done: this is a Tory crisis made in Downing Street, but ordinary working people are paying the price. All that is left, after these humiliating U-turns, are higher mortgages for working people and higher bonuses for bankers. The Government’s climbdown on energy support begs the question yet again why they will not extend the windfall tax on energy producers to help to foot the bill.

It is good to finally see the Prime Minister in her place and not, as the Leader of the House had to assure us earlier, under a desk. But what is she left with? She has no authority, no credibility and no plan for growth. It is clear to see that the people who caused the chaos cannot be the people to fix the chaos. They are out of ideas, out of touch and out of time.

The Prime Minister should have spoken to the House today, but we know that she could not do that with a shred of credibility, given that the survival of this Government now depends on smashing to smithereens everything that she stands for. Now she is attempting to reverse everything that she campaigned on—it is not just impossible; it is absurd. The Prime Minister is barely in office and she is certainly not in power. Only five days ago, the Prime Minister said at Prime Minister’s questions that there would be “absolutely” no public spending reductions, but after what we heard from the Chancellor today, every single public service is again at risk from the Conservatives—from our NHS nurses to our schools and our servicemen and women—with the country paying the price for the Conservatives’ incompetence.

The Prime Minister said that she had an energy package for two years. Now that is being withdrawn on the very day it is supposed to be legislated for. She insisted that her Conservative mini-Budget would lead the country to the promised land. Instead it has led to the highest mortgages in 15 years and emergency interventions by the Bank of England to protect pensions. Then on Friday, there was the unedifying spectacle of the then Chancellor being dragged back from the IMF before he could do any more damage to our economy. So she has turned to a new Chancellor, who finished eighth out of eight in the Tory leadership contest, winning just 18 votes from MPs. The Tories have run out of credibility and now they are running out of Chancellors.

The latest office holder has been in the Cabinet for nine of the past 12 years, at the centre of a Government responsible for low growth and weakened public services, with him responsible for helping run the NHS into the ground. He was a big part of austerity season 1, and now he says the cure is austerity season 2. What was the Chancellor’s flagship policy in his own short-lived leadership contest? It was to reduce corporation tax in a totally unfunded manner, and not from 25% to 19%. The right hon. Gentleman called for it to be lowered to 15%, with not a single explanation of how it was to be paid for. The truth is that had he won the contest and implemented these policies, we would be in an even worse place than we are now. There is no mandate and no authority for any of this.

The Conservatives have put a lasting premium on people’s mortgages. Uncosted borrowing has sent interest rates spiralling. Millions of people’s mortgage deals will be coming to an end in the next few months, leaving many families forking out £500 more a month. People will be paying a Tory mortgage premium for years to come, so how does the Chancellor think ordinary people can possibly afford any more of this Conservative Government? We have heard no answers today. The Chancellor has said that growth requires “confidence and stability”. I agree, but where does he think the lack of confidence and stability has come from? It did not come from the sky; it came from the mini-Budget three weeks ago.

What does it say about our country that we are watching borrowing costs hour by hour? That is not the sign of a strong G7 economy; it is the exact opposite. Businesses are now saying that things are so unstable they are pausing investment here in Britain. The former deputy governor of the Bank of England Charles Bean has outlined the extraordinary damage that the Conservatives have done to our standing. In his words,

“we’ve moved from looking not too dissimilar from the US or Germany…to looking more like Italy and Greece.”

What a mess.

Where is the Office for Budget Responsibility forecast? Have this Government learnt nothing? Does the Chancellor really expect the country to take everything from him at face value? Last week, the Business Secretary was busy undermining the Office for Budget Responsibility. Today, we have received another massive fiscal statement with no forecast. What have this Government got to hide? They should publish the numbers so that we know the true state of the public finances after 40 days of this Prime Minister and after 12 years of Conservative Governments.

Today, the Chancellor has scaled back help with energy bills for families and pensioners. It prompts the question yet again: why will the Government not bring in a proper windfall tax on energy producers to help foot the bill for consumers, and when will the current Chancellor publish in full the Government’s estimates of the windfall profits of the energy giants over the next two years?

No one was talking about spending cuts until the Tories crashed the economy with their mini-Budget, so I ask the Chancellor: why should the British people pay the economic price for the Tories’ mistakes, and what spending cuts do the Government plan to make? We believe that the Government must honour their commitments to uprate benefits and pensions in line with inflation. Will the Chancellor make it clear today that is what he intends to do? What a contrast that cuts to benefits are still on the table, but the one thing the Chancellor could not bring himself to reverse today was lifting the cap on bankers’ bonuses. Why is this the last policy standing in this disastrous mini-Budget?

Let me come to credibility. Does the Chancellor accept that once credibility and trust have been destroyed, they cannot simply be regained by a series of zig-zagging, chaotic U-turns? Will he and the Prime Minister apologise for the costs and anxieties laid on families? Can he admit once and for all that the market turmoil we are in was directly caused by the disastrous decisions of his predecessor and of the Prime Minister? Can he guarantee that the Bank of England will not have to intervene again to save the Government, and what guarantee can he give people about their pensions, their mortgages and their household bills?

The Chancellor said today that everything is now on the table, but is that really the case? We know that abolishing the non-dom tax status will raise £3 billion a year, yet there was no mention of that. How can it be right that some of the richest individuals in society are allowed to buy their way out of paying the tax that should be paid here Britain? This would not be an eye-wateringly difficult decision, so why do not the Government just do it?

There is lasting damage which these policy U-turns will not change. They have set fire to everything; now they insist it is all fine. The truth is that an arsonist is still an arsonist even if he runs back into a burning building with a bucket of water. Because they cannot be trusted; the Tories are clinging on for themselves, regardless of the cost to the country.

Trickle-down economics will always fail; what drives forward our economy are the talents and efforts of millions of working people and thousands of ordinary businesses. The Government’s economic credibility has been destroyed. They have harmed our economic institutions, people are paying higher mortgages; the same set of people doing U-turns is not going to fix it. The only way to change this is a real change of Government.

[Jeremy Hunt]

I thank the hon. Lady for her questions, and I am sorry that, given the speed with which things moved at the weekend, I have not had time to sit down with her one to one as would normally be the practice before parliamentary exchanges.

I understand the role Opposition parties play—I have stood at that Dispatch Box myself—but behind the rhetoric, and I was listening very carefully, I do not think the hon. Lady disagreed with a single one of the decisions I announced to Parliament, and that is important for the country and markets to know. I think there is also agreement on the process of policy making. I support the independence of the Bank of England, introduced by Gordon Brown, and I know the hon. Lady supports the independence of the Office for Budget Responsibility, set up by George Osborne. The whole Government support the independence of those two important institutions.

I fully accept—I do not think I could have been clearer—that we have had to change some decisions made in the last few weeks, but I reject wholeheartedly the hon. Lady’s broader narrative about Conservative economic management. Let me remind her that the UK’s unemployment rate is the lowest since 1974; it is lower than that of France, Italy, Canada, Belgium, Sweden, Spain and the Netherlands and is massively lower than in 2010. Let me remind her that since 2010 our growth rate has been the third highest in the G7 —[Interruption.] She may not want to hear this, but these are the economic facts. Our growth rate since this party came into power has been higher than that of Germany, France, Italy and Japan and has been faster than that of any G7 country this year. Looking to the future, we have the largest technology sector in Europe and more foreign direct investment than anywhere in Europe bar one country. That is a legacy to be proud of.

I was listening carefully for some questions about the measures I announced, but the hon. Lady did not ask any and I think she agrees with them. I will pick her up on one point, however. She talked about the NHS; let me tell her—[Interruption.] Maybe they do not want to listen about the NHS. She talked about the NHS: because of the global financial crisis, which happened on her party’s watch, the NHS went through one of its most difficult periods ever, yet this party protected the NHS budget, and then in 2017 we were able to give it its biggest single increase in funding, because of the difficult decisions we took and the hon. Lady’s party opposed.

In conclusion, we inherited the financial crisis, we dealt with the global pandemic, and we have led the world in support of Ukraine, all possible because of difficult decisions taken over the last 12 years, each and every one opposed by the party opposite. So if the hon. Lady is preaching today the need for fiscal credibility, which I warmly welcome, may I just tell her this: the true test will be in two weeks’ time, to see whether she supports public spending restraint? I have showed Conservatives can raise taxes; will she show Labour is willing to restrain spending?

Economic Situation

Rachel Reeves Excerpts

Wednesday 12th October 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the current economic crisis.

[The Chief Secretary to the Treasury (Chris Philp)]

The Chancellor of the Exchequer is in Washington, having meetings with the IMF, and is—[Interruption.]—which have been—[Interruption.]—routine meetings, which have been long scheduled.

[Chris Philp]

Thank you, Mr Speaker. They are routine meetings that have been long scheduled, and are certainly not a cause for exuberance or over-excitement from the Opposition.

As we know, the world has faced surging energy prices since Putin’s illegal invasion of Ukraine. We have seen very high inflation across the western world, and we have seen a cycle of increasing interest rates across western economies as well—across many western economies. But let me reassure the House that the fundamentals of the United Kingdom’s economy remain resilient. Unemployment, at 3.5%, is the lowest it has been in my lifetime—and for the record, I was born in 1976. Economic growth last year, the calendar year 2021, was the highest of any G7 country—7.5%. Just yesterday the IMF forecast that economic growth—GDP growth—this current year in the UK would be at 3.6%—once again, for the second consecutive year, the highest of any G7 country. So our economy is in resilient condition.

But I know that many families are worried about the challenges we face, and that is why, just a few weeks ago—two or three weeks ago—we introduced the energy price guarantee. Families were genuinely fearful that they might face this winter energy bills of three, four, five, six or even seven thousand pounds per year, but that energy price guarantee will ensure that the average household sees energy prices no higher than £2,500 on average—not for six months, like the Labour plan, but for two years.

We also introduced a growth plan to get our economy growing, to see wages sustainably rising, to see good jobs created and to create a sustainable tax base to fund our public services. This Government have a growth plan; the Opposition have no plan.

We intend to do this in a way that is fiscally responsible, and that is why—[Interruption.]—and that is why, on 31 October, in less than three weeks’ time, the Chancellor of the Exchequer will set out the medium-term fiscal plan, explaining to the House exactly how he will do that, and how we will continue the UK’s track record of having the highest growth in the G7, not just last year but this year as well.

[Rachel Reeves]

People are facing insecurity, instability and deep anxiety and they deserve answers. Conservative economic policy has caused mayhem with financial markets, pushed up mortgage costs and put pension funds in peril, and it has wiped £300 billion off the UK’s stock and bond markets—all directly caused by the choices of this Government. The mini-Budget, just 19 days ago, was a bonfire made up of unfunded tax cuts, excessive borrowing and repeated undermining of economic institutions. It was built and then set ablaze by a Conservative party totally out of control—not “disrupters” but pyromaniacs. And that fire has now spread. Yet Government deny all responsibility.

So will the Minister tell the House, what guarantees will the Government give that the currency slide will stop, and that people’s pensions are safe? How do they expect people to pay £500 more a month, on average, on their mortgages? How many more repossessions of family homes will there be if the Government do not change course? How much more are the Government spending on debt interest because of higher borrowing costs?

While Ministers desperately try to blame global conditions, why is it that no other central bank in the world has had to step in three times in less than three weeks to protect financial stability?

The country now faces a very serious situation. Ahead of the ending of the Bank of England’s emergency operations this Friday, what action will the Government take to ensure that their Budget does not have further consequences for financial stability, or for people’s pensions?

This is a Tory crisis made in Downing Street, but it is ordinary working people who are paying the price. It can be resolved only when the Conservatives put aside their pride and reverse this catastrophic mini-Budget, and they must do so now.

[Chris Philp]

The shadow Chancellor calls for a reversal of the growth plan, yet at the first opportunity—last night—the Labour party voted for it. She asks about mortgage rates, so let me point out to her that mortgage rates around the world have been on an upward trajectory all year. In fact, if we compare base rates in the United Kingdom with those in the United States, we see that in both countries, as she will be aware, the base rate started this year at 0.25%. In the UK the base rate is currently 2.25%, and in the US it is 3.25%, a full percentage point higher.

The shadow Chancellor referenced borrowing costs. I am sure she is aware that two-year Government bond yields are about the same in the US as they are in the UK—US bond yields have been going up over the course of this year as well. She referenced the currency: the dollar has shown strength against a basket of currencies throughout this calendar year. If she looks at the dollar strengthening against the euro, she will see that it strengthened about 15% this calendar year, and strengthened about 15% against sterling—very similar figures.

The shadow Chancellor also asked about the cost of living. We are very mindful of that, which is why we have introduced a £37 billion package to help people, disproportionately targeted at those on lower incomes, so that people on the lowest third of incomes receive £1,200. It is why we introduced the energy price guarantee on our second or third day in office, ensuring that people do not pay, on average, more than £2,500, instead of facing bills of £5,000 or £6,000—and not for six months, as the Labour party offered, but for two years. It is why the national minimum wage was increased by a large amount last April. It is why the national insurance threshold was increased to £12,500 in July, so people on lower incomes now pay virtually no national insurance or income tax. That is the package of measures that this Government have introduced, because we stand on the side of working people and have taken the steps needed to support them.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 11th October 2022 Commons Chamber

[Mr Speaker]

I call the shadow Chancellor, Rachel Reeves.

[Rachel Reeves (Leeds West) (Lab)]

Since the Chancellor’s disastrous mini-Budget just 18 days ago, we have seen wild swings in the value of the pound, gilt yields up 100 basis points in a single day and the Bank of England stepping in because of, in its words,

“a material risk to UK financial stability”.

The International Monetary Fund has now said that UK growth is to slow further next year. This is a British crisis, made in Downing Street; no Government are sabotaging their own country’s economic credibility as this Government are. Are the Chancellor and the Prime Minister the last people left on Earth who think their plan is working?

[Kwasi Kwarteng]

To pick up on a point, the IMF said today that the plan—the mini-Budget—has increased the forecast for growth. That is precisely the opposite of what the hon. Lady has said. It is very clear where we stand on this. We have pro-growth, pro-enterprise, pro-business Conservatives on one side and the anti-growth coalition on the other—they want to tax more and commit us to low growth.

[Rachel Reeves]

The Chancellor is in a dangerous state of denial, but the costs of these mistakes are all too real for everyone else: borrowing costs up; growth down; and mortgage payments set to increase by £500 a month. Now the Government scrabble around looking for cuts, hitting the most vulnerable and our public services. It does not need to be this way. Will the Chancellor put aside his pride, do the right thing for our country, end this trickle-down nonsense and reverse the Budget?

The Growth Plan

Rachel Reeves Excerpts

Friday 23rd September 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

Thank you, Mr Speaker. I welcome the right hon. Gentleman to his place. I thank the Chancellor for his comprehensive demolition of the record of the last 12 years—their record; their failure; their vicious circle of stagnation.

The Chancellor has confirmed that the costs of the energy price cap will be funded by borrowing, leaving the eye-watering windfall profits of the energy giants untaxed. The oil and gas producers will be toasting the Chancellor in the boardrooms as we speak, while working people are left to pick up the bill. Borrowing is higher than it needs to be just as interest rates rise, yet the Chancellor refuses to allow independent economic forecasts to be published, which would show the impact of this borrowing on our public finances, on growth and on inflation. It is a Budget without figures, a menu without prices. Mr Speaker, what has the Chancellor got to hide?

This statement is an admission of 12 years of economic failure. Now, here we are: one last throw of the dice; one last claim that these Ministers will be different. For all the chopping and changing, all the chaos and confusion, one person has been there throughout: the Prime Minister. She has been a Minister for a decade and defended every single economic decision. So when the Prime Minister says that she wants to break free from the past, what she really means is that she wants to break free from her own failed record, because where have the last 12 years left us? Lower growth, lower investment, lower productivity, and today we learn that we have the lowest consumer confidence since records began. The only things going up are inflation, interest rates and bankers’ bonuses—[Hon. Members: “And borrowing.”] And borrowing.

As the Tories become more and more detached from reality, millions of people—our constituents—are lying awake at night, worried about how they are going to make ends meet. Labour won the argument that action on energy bills was necessary, but the question is, who pays? The energy producers who have profited so much from the price rises should make a contribution, but when the country asked who should foot the bill for their energy rescue package, the Conservatives responded, “You, the British people.”

Instead of standing up for working people, the Conservatives chose to shield the gigantic windfall profits of the energy giants, leaving tens of billions of pounds on the table and pushing all the costs on to Government borrowing, to be paid for by current and future taxpayers. The Prime Minister and Chancellor have no regard for taxpayers’ interests or the concerns of working people. It is not just that the Conservative party is not working for ordinary families; it is actively working against them. We have had six so-called plans for growth from the Conservatives since 2010. Here they are: a litany of failure, every single one of them.

I do at least commend the Chancellor for his ambition to achieve 2.5% growth a year—that was the last Labour Government’s rate of economic growth—but to achieve that sort of growth, and for it to be sustainable, he needs a credible plan, and the truth is that the Government do not have one. The Prime Minister and Chancellor are like two desperate gamblers in a casino, chasing a losing run. The argument peddled by the Chancellor today is not a great new idea, or a game-changer, as he said, much though he would like us to think so. The plan adds up to keeping corporation tax where it is, and taking national insurance contributions back to where they were in March. Some new plan! It is all based on an outdated ideology that says that if we simply reward those who are already wealthy, the whole of society will benefit.

The Government have decided to replace “levelling up” with “trickle down”. President Biden said this week that he is

“sick and tired of trickle-down economics”,

and he is right to be. It is discredited; it is inadequate; and it will not unleash the wave of investment that we need. It is not just Opposition Members who have these concerns; the right hon. Member for Surrey Heath (Michael Gove) described the Prime Minister’s economic plans as a “holiday from reality”. The right hon. Member for Richmond (Yorks) (Rishi Sunak), who was Chancellor two Chancellors ago, was perhaps too honest with his party. He said:

“we tried having a…low corporation tax rate as a means of getting businesses to invest”,

but

“it hasn’t worked.”

The new Chancellor and new Prime Minister used to agree with that. Indeed, they voted for a corporation tax rise. Labour supported it, too. Government Members might have changed their mind, but we have not, because the evidence shows that low rates of corporation tax are not the best way to boost investment and productivity, and the Tories’ record shows that.

Britain has the lowest headline rate of corporation tax in the G7, but we also have the lowest rate of business investment in the G7. That is why Labour would do what businesses are actually asking for: use targeted investment allowances to boost productivity and growth, scrap outdated and unfair business rates that harm our high streets and small businesses, and replace them with a system that is fit for the 21st century.

What about the Government’s other policies? Let us take the so-called investment zones. Again, these are nothing new. Every time that they have been tried, all that they have done is move growth around the country; they have not created it. The best way out of the high-tax, low-growth spiral that the Conservatives have created is to get the economy firing on all cylinders in all parts of the country. It will take much more than a stamp duty cut to get our country back on track, and to get home ownership back to levels last seen under a Labour Government.

These stamp duty changes have been tried before. The last time the Government did it, a third of the people who benefited were buying a second or third home, or a buy-to-let property. Is that really the best use of taxpayers’ money, when borrowing and debt are already so high? Can the Chancellor confirm today how much of the stamp duty cut will go to those purchasing multiple properties? Instead of letting stamp duty go up and down like a yo-yo, we need to get building. We need to target support at first-time buyers and tackle the issue of homes being sold to overseas investors.

Today, the Chancellor has made it clear who his priorities are. This is not a plan for growth, but a plan to reward the already wealthy. It is a return to the trickle down of the past. It is back to the future, not a brave new era. The Chancellor and the Prime Minister proclaimed in “Britannia Unchained” that

“the British are among the worst idlers in the world.”

To prove that they mean it, instead of supporting working people, this Government are cutting their rights at work. Working people are the backbone of Britain, and they should be respected, not sneered at. Labour will always stand up for their rights.

The Chancellor has in effect today admitted that he has broken his own fiscal rules. This is now the 10th time the Tories have broken their own fiscal rules—something I am sure the Office for Budget Responsibility would have confirmed, had it been allowed to publish its forecasts today. It is unprecedented to have a fiscal statement of this scale with no independent forecasts from the Office for Budget Responsibility. Never have a Government borrowed so much and explained so little. Economic institutions matter, yet this Government have undermined the Bank of England, sacked the respected permanent secretary at the Treasury and silenced the Office for Budget Responsibility. That is no way to build confidence; that is no way to build economic growth.

Labour believes in wealth creation. We will always support enterprise, creativity and hard work. We want British businesses to grow, to be successful and to contribute to our country’s prosperity. What we do not believe, as the Chancellor and Prime Minister do, is that British workers are idlers. We understand that it is the workers, who turn up every day to make a great product at a factory or deliver a great service in the store, who generate growth. It is the teachers giving the young people the skills they need, and the doctors and nurses keeping people well. It is the entrepreneur taking a personal risk to start a new business. These are the people who generate growth, and they all deserve to share in it too.

This statement is more than a clash of policies; it is a clash of ideas—two different ideas about how our country prospers. If you are a pensioner worried about the cost of living, a working family seeing your mortgage rate going up or a small business whose costs are spiralling, the Government’s announcements today do little to reassure you: bigger bonuses for bankers, huge profits for energy giants shamelessly shielded by Downing Street, and all the while Ministers pile the crushing weight of all those costs on to the backs of taxpayers. The value of sterling has fallen. We can see it, half the Chancellor’s colleagues suspect it and the financial markets know it. The verdict is clear: when it comes to the economy this Tory leadership do not know what they are doing. The Conservatives cannot solve the cost of living crisis; the Conservatives are the cost of the living crisis. Our country cannot afford them anymore.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 28th June 2022 Commons Chamber

[Mr Speaker]

I call the shadow Chancellor.

[Rachel Reeves (Leeds West) (Lab)]

Consumer confidence is at its lowest level since records began because working people have less money to spend, but we are not all in this together. Pay for the top 1% of earners is increasing at 20 times the rate for the bottom 10%, and all the while the Prime Minister eyes up luxury tree houses instead of fixing the broken economy. Does the Chancellor realise that, to avoid a cost of living calamity, he must address the stagnant wage crisis created by Tory policies?

[Rishi Sunak]

On wage policy, this is the Government who introduced the national living wage and, this year, increased the national living wage by about £1,000 a year. Combined with the cut to the universal credit taper rate and the increase in the national insurance threshold, that is significant support to those on the lowest earnings. It is right that we increase people’s wages, but the hon. Lady should start in her own office, where, I heard, she is perhaps not quite paying her own staff properly.

[Rachel Reeves]

Some 4.8 million people in Britain are paid less than a real living wage. That includes cleaners, caterers and security guards employed by the Government. They work hard, they pay their taxes—in Britain, Chancellor—and they have been taken for granted for far too long. Will the Chancellor guarantee that all those who work for Government, whether directly or through a contractor, will be paid a real living wage from now on so that they can afford their bills, put food on the table and support their families?

[Rishi Sunak]

We want everyone to be paid the national living wage. That is the law in this country. I am proud that we have increased it by £1,000 this year, which, combined with our tax cuts, is putting more money in the pockets of the lowest paid. I say again that there are lots of people being paid less than the national living wage but they should not include people in the hon. Lady’s own office.

North Sea Oil and Gas Producers: Investment Allowances

Rachel Reeves Excerpts

Monday 6th June 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on North sea oil and gas producers’ use of investment allowances to minimise their liability under the energy profits levy.

[The Financial Secretary to the Treasury (Lucy Frazer)]

Less than a fortnight ago, my right hon. Friend the Chancellor set out a series of measures to help British people at what we know is a difficult time. The oil and gas sector is making extraordinary profits, not as a result of recent changes to risk taking, innovation or efficiency, but as the result of surging global commodity prices, driven in part by Russia’s war. The Chancellor reassured the House that the Government

“will make sure that the most vulnerable and the least well off get the support they need, and we will also turn this moment of difficulty into a springboard for economic renewal and growth.”

He also made the point that it

“is possible to both tax extraordinary profits fairly and incentivise investment.”.—[Official Report, 26 May 2022; Vol. 715, c. 449-450.]

That is why we have introduced the energy profits levy—a new 25% surcharge on the extraordinary profits that the oil and gas sector is making. At the same time, the new 80% investment allowance will mean that businesses will get a 91p tax saving for every pound that they invest, providing them with an additional, immediate incentive to invest. That nearly doubles the tax relief available, and means that the more investment a firm makes, the less tax it will pay.

The levy took effect from 26 May this year, and will be legislated for via a Bill to be introduced shortly. It will be phased out when oil and gas prices return to historically more normal levels, with a sunset clause written into the legislation. The levy will raise about £5 billion in revenue over the next year, so that we can help families with the cost of living in the shape of significant, targeted support to millions of the most vulnerable.

[Rachel Reeves]

I am here to talk about the cost of living crisis, but where are Tory MPs today? On 26 May, the Chancellor announced a welcome U-turn on his party’s opposition to a windfall tax—a policy for which we had been calling since January. At the same time as that handbrake turn, however, he created a tax giveaway for oil and gas producers that undermined that tax. Only this morning, in a statement to shareholders, the head of Serica Energy said that these measures would offset a “large element” of the energy profits levy.

All in all, we calculate that a third or more of any revenue from the new levy might be handed straight back in tax breaks. This cashback policy is typical of the sleight of hand that we have come to expect from this Conservative Government, so can I ask the Minister how much these tax breaks will cost? When will the Government have the courtesy of sharing that analysis with the House? How can the Minister be sure how much this new levy will raise when the Chancellor has added this gigantic get-out clause? Why are the Government incentivising investment in fossil fuels over investment in home-grown renewables, which do not benefit from the tax breaks in this announcement? Have the Government even bothered to check what this means for our country’s net zero target and climate commitments?

It is not just the cashback to oil and gas producers. Can the Minister confirm that someone who owns three homes will receive £1,200 of support for their energy bills —more than a low-income family will get? This incoherent policy package was born from Conservative chaos and also from the Chancellor’s embarrassment and stubbornness. Rather than simply admitting that a windfall tax was the right idea all along, he has introduced one with a great big, costly, gaping hole in the middle of it.

[Lucy Frazer]

The hon. Lady mentions that Labour has been calling for this levy since January. She will know that January was not the right time to introduce it because we did not know then what the price cap would be. Ofgem estimated that in the week when this announcement was made. She will also know that in January, inflation was not at 9%. The Chancellor has taken this decision carefully, considering the circumstances and not just making policy on the basis of ideology.

I am sure the hon. Lady will know that Labour has made £100 billion of spending commitments, with less than £10 billion fully funded. That would almost double our current borrowing. We Conservative Members are aiming to ensure that we are fiscally responsible with taxpayers’ money.

Let me respond to two other points that the hon. Lady made. First, she will remember that when the policy was announced, we said we had estimated that it would raise £5 billion for the package of measures that we had put forward to support people with the cost of living—as she said, that is what we are talking about today. Secondly, she mentioned the importance of reaching our net zero targets. She will know that the UK, under this Government, has already decarbonised faster than any G7 economy, and that there are many other tax levers for green energy, including the super deduction and research and development tax reliefs. She will know that we are consulting on broadening the emissions trading scheme and that we have committed £1 billion to a carbon capture and storage infrastructure fund, as well as £140 million to the industrial decarbonisation and hydrogen revenue support fund. We are ensuring that we tax extraordinary profits at the same time as protecting those who are struggling with the cost of living.

Economy Update

Rachel Reeves Excerpts

Thursday 26th May 2022 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

After today’s announcement, let there be no doubt about who is winning the battle of ideas in Britain—it is the Labour party. Today, it feels as though the Chancellor has finally realised the problems the country is facing. We first called for a windfall tax on oil and gas producers nearly five months ago, to help struggling families and pensioners. Today, he has announced that policy but he dare not say the words; it is a policy that dare not speak its name for this Chancellor. It was also Labour that first highlighted the unfairness of this Government’s buy now, pay later compulsory loan scheme. It should not have taken a rocket scientist to work out that this would not cut it, and we pointed that out at the time, but that is the mark of this Klarna Chancellor: announce now, ditch later. Here he is, once again, the Treasury’s one-man rebuttal unit, the Chancellor himself.

For months, it has been clear that more was necessary to help people bring their bills down, so what took this Government so long? Every day that they have refused to act, we have had £53 million added to Britain’s household bills during this cost of living crisis. This Government’s dither and delay has cost our country dearly. Labour welcomes the fact that the Government are finally acting on our calls to introduce a windfall tax, and it is good to see the SNP U-turning today and saying that they, too, are in favour of a windfall tax on oil and gas profits—well done to the SNP.

It was a painful journey to get the Government to this point. First, Conservative Ministers said that oil and gas producers were “struggling”—that was the Education Secretary, I think—but then the BP chief executive said that the energy crisis was a “cash machine” for his business, so the Government moved to the second defence. Ministers claimed that a windfall tax would put off vital investments, but the industry said that it would not even change its plans. Then the Government said that a windfall tax would be “un-Conservative”. It is so un-Conservative that Margaret Thatcher, George Osborne and now this Government are doing exactly that. Finally, the Chancellor said that it would be “silly” to offer help now, given that he did not know the full scale of the challenge. What nonsense! It should not take half a million pounds of publicly funded focus groups for the Chancellor to realise that helping families and pensioners is exactly the right thing to do.

Every day for five months, the Prime Minister sent Conservative MPs out to attack the windfall tax and yet defend an increase in taxes on working people. He has made them vote against the windfall tax not once, not twice, but three times. For months, he has sent his MPs to defend the litany of rule-breaking in No. 10 Downing Street that was set out in the Sue Gray report yesterday. There is a lesson here for Conservative MPs: you cannot believe a word this Prime Minister says, and as long as he is in office, he will continue making fools out of each and every one of you. If they keep him there, that is their choice. The problem is that you cannot fake fairness—you either believe in it or you don’t.

Labour called for a windfall tax because it is the right thing to do. The Conservatives are bringing it in because they needed a new headline. We see that, too, from all the other things that the Chancellor did not address today: the non-doms keeping their tax privileges while the Government increase taxes on working people; young working people paying more, but those who earn money buying and selling stocks and shares not paying a penny more; contracts handed out to Conservative friends and donors while British businesses miss out; global tech giants making billions in profits while smaller businesses and the energy-intensive industries struggle with higher bills and higher taxes from the Conservative party; and £11.8 billion lost in fraud because of a total lack of respect for taxpayers’ money. That is why we should have had an emergency Budget today that spikes the hike in national insurance, cuts business rates for high-street and small businesses, provides help for energy-intensive firms and ensures that every pound of taxpayers’ money is spent wisely.

We will look closely at the detail of today’s announcements. Of course, most of them seem to be written by us, but so far we have seen nothing to suggest that this Conservative Government have the ideas or the energy to tackle the challenges we face as a country. A Labour Government would have addressed the underlying weaknesses in our economy, so that we can stop this spiral of inflation, lift wages and provide greater security for families and for our country. The truth is that the Conservatives are running our economy, and people’s living standards, into the ground. We are forecast to have the slowest growth and the highest inflation in the G7. This Government have weakened the foundations of our economy, leaving us exposed to shocks as we lurch from crisis to crisis, and still they refuse to come forward with a real plan to fix our broken system and provide the security we need to face the future with confidence. That means boosting our energy security too. We need to do much more to reduce our reliance on imported oil and gas. That is why Labour’s energy security plan includes a programme of home insulation, to reduce bills not just for one year, but for years to come and to get us all the way to net zero. It is why we have urged the Government to double onshore wind capacity and to end the delay on nuclear power. [Interruption.] And while we are at it, why did this Tory Government get rid of our gas storage—[Interruption.]

[Madam Deputy Speaker]

Order. It is important that we also hear the shadow Chancellor.

[Rachel Reeves]

While we are at it, why did this Tory Government get rid of our gas storage, which would have left us better protected from wild fluctuations in prices? When will this Government provide the strong leadership that this country needs?

There are a number of questions for the Chancellor about his announcement today. How many people are still waiting for the support they were promised in March? A third of his constituents are still waiting for their council tax discounts. Are households still being asked to pay the supplier of last resort costs for those energy suppliers that have gone bust as a result of a decade of failed energy market regulation? How is this package being funded, outside of the proceeds of a windfall tax? If someone has more than one home, do they get multiple discounts on their energy bills? I know that the Chancellor has adopted two of our ideas today, but may I ask why he has not adopted a third: a cut in VAT on energy bills? It was once touted as the big Brexit bonus, but he has ditched that too. This is a discredited, chaotic and rudderless Conservative Government, whose policies rarely last more than a few months. We pushed for a windfall tax and they adopted it. We said the buy now, pay later scheme was wrong and now they have ditched it. This Government are out of ideas, out of touch and out of time. When it comes to the big issues facing this country, the position is now clear: we lead, they follow. [Hon. Members: “More!”]

[Madam Deputy Speaker]

Order. We are not going any further unless you are quiet. I call the Chairman of the Select Committee, Mel Stride. [Interruption.] I beg your pardon. It would be best if I allowed the Chancellor first to reply to the shadow Chancellor. I am not trying to change the rules; I am just trying to go a bit faster. I call the Chancellor of the Exchequer.

Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 17th May 2022 Commons Chamber

[Mr Speaker]

We now come to the shadow Chancellor, Rachel Reeves.

[Rachel Reeves (Leeds West) (Lab)]

At the spring statement, the Chancellor confirmed that the Conservative Government’s rise in national insurance—a tax increase on working people and the businesses that employ them—will go ahead. Since then, retail sales are falling, consumer confidence is tanking and GDP is falling. We are the only G7 country that is increasing taxes on working people in the middle of a cost of living crisis. National insurance is the wrong tax increase at the wrong time. Does the Chancellor still think that his tax rises on working people are the right approach?

[Rishi Sunak]

The hon. Lady fails to mention what is about to happen, which is the biggest tax cut for working people that we have seen in decades: the rise in the national insurance threshold to £12,500. That means that 30 million people in work will receive, on average, a £330 tax cut and, contrary to what she has just said, it ensures that 70% of people in work will pay less tax this year than they paid last year.

[Rachel Reeves]

The Chancellor expects people to thank him for increasing their taxes only then to decrease them a couple of months later. The truth is that the Chancellor should be asking those with the broadest shoulders to pay a bit more in tax—such as the North sea oil and gas companies that are making record profits—yet he chooses not to tax them. Will the Chancellor explain today why he will not close the outdated, unfair and unjustifiable tax loophole that sees 70,000 people benefit from non-dom tax status?

[Rishi Sunak]

The hon. Lady says that we should be asking those with the broadest shoulders to pay, but that is exactly what we are doing. The NHS and social care levy means that those with the broadest shoulders, the top 15% of earners, will pay more than half the money raised from that levy. I think that she believes that that levy should be scrapped. It is an entirely progressive way to raise money to fund the tackling of NHS backlogs, for which there is, I know, huge support in this House. The Government are keen to get on and fix the pressing challenges of this country. We will fund those things in a responsible and progressive way, and that is exactly the plan that we have put in place.

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.