Regional Growth

Richard Fuller Excerpts

Wednesday 4th June 2025 Commons Chamber

[Richard Fuller (North Bedfordshire) (Con)]

I thank the Chief Secretary to the Treasury for his statement and for early sight of it. I will start with an area of agreement: it is a shared ambition to enable all parts of this country to participate in our growth and our future. Potential in the United Kingdom is everywhere, and it is right that the Government seek to unlock it with every means they have. Indeed, that was one of the guiding principles of the 2019-24 Conservative Administration’s levelling-up policy.

They always say that imitation is the sincerest form of flattery. Now, we know that this Chancellor has a reputation for copying, so I thought I would have a look at the statement made in 2023 on Network North allocations, which I am sure the Chief Secretary has seen. I thought I would compare those allocations with the Government’s announcement today. I have the Conservative announcements in one hand and the Labour announcements in the other. [Interruption.] Labour Members can shout all they want.

Here we go. In 2023, the Conservatives promised the west midlands £2.64 billion—[Interruption.] I say to Labour Members that the Chief Secretary is also only making a promise. In 2023, we promised £2.64 billion for the west midlands, and the Government have announced £2.4 billion for the west midlands today. We promised £2.1 billion for West Yorkshire; today, the Government have announced £2.1 billion. We promised £2.5 billion for Greater Manchester; they have announced £2.5 billion today. We promised £1.45 billion for South Yorkshire; they have announced £1.5 billion today. We promised £1.581 billion for Liverpool; they have announced £1.6 billion today. We promised £1.84 billion for the north-east; they have announced £1.8 billion today. We promised £0.752 billion for the west of England; they have announced £0.8 billion today. We promised £978 million for Tees Valley in 2023, and Labour has announced £1 billion today.

I know the Chief Secretary is occasionally good with numbers, but does he not agree that what he is announcing today is essentially nothing more than a rounding error on the Conservatives’ plans from 2023? The only difference between the 2023 and 2025 announcements is that we would have spelt Rotherham correctly in our announcement.

The truth is, the Chancellor will go around the country rewriting history as frequently as she writes her CV, but nobody believes in her £22 billion black hole. What people do believe is that this Chancellor is open to change. She is going to roll back the issues on the winter fuel allowance, her botched welfare reform and changes to the two-child policy. Look at those on the Treasury Bench—they have not got a spine. If Labour Back Benchers have an issue in their constituency and want to stand up for their constituents, they should make a bid to this Chief Secretary, because he will back down and give them the money. That is what we know from Labour.

We also know that in the Government’s analysis of the Green Book, they are looking to change the assessments of the cost-benefit analysis. My question to the Chief Secretary therefore is—[Interruption.] I do have a number of questions. First, will he publish the cost-benefit ratios for each of the projects he has announced today? Will he state whether they have been evaluated on the existing Green Book rules or on new rules? Will he give an indication today of what those rules might be?

Secondly, as the Labour Government try to decide whether their commitment on defence is for 2%, 2.5%, 3% or 3.5% of GDP, with both those numbers and today’s investments stretching into the next period of government—whoever is in government—can the Chief Secretary confirm that it is this Government’s intention that the investments made today will be secure, whatever the changes made on defence expenditure?

The Chief Secretary said that he is able to make this announcement because the Government changed the rules, which has enabled £113 billion more of investment. But that is not quite right, is it? The Government can afford the additional investment only if people are prepared to fund it, and there are two sources for funding: taxpayers or the bond market. Can the Chief Secretary therefore advise whether he is going to look for additional funding from taxes or additional borrowing, if there is a shortfall?

The truth is, despite what the Back Benchers say, this Labour Treasury team are out of their depth. They are addicted to tax increases and to more borrowing. The Chief Secretary can republish as many press releases as he likes, but we know that because of their reckless mismanagement of the economy, come the autumn, this Labour Government will be back for more.

[Darren Jones]

I am pleased to see the shadow Chief Secretary to the Treasury back in his place today; I always enjoy our exchanges. I welcome the fact that he supports our plans and sees the good value in them. I will respond to one particular question, and then answer the rest in the round: all the Green Book details will be published next week at the spending review, so we will be able to share them with him and the House at that time.

The shadow Chief Secretary said that we were imitating the Conservative party’s promise to level up the country, but I think the British people voted and gave their verdict on the Conservatives’ success in delivering that at the last election. Whereas their version of levelling up was a set of false promises, this Labour Government are delivering real change.

The shadow Chief Secretary—rightly, given his role—asked how we will fund the announcements we have made today. As I explained in my statement to the House, it is because of the Chancellor’s decisions to amend the fiscal rules and invest in Britain, instead of continuing with decline, that we have been able to do so.

The shadow Chief Secretary and the Conservative party have not said what they would do differently. They were against the change in the fiscal rules, against our increasing of taxes on the wealthiest people at the Budget and against every single measure we have taken to be able to pay for today’s announcements. Whether it is the Conservatives, Reform or any other party, they need to recognise that the Conservatives’ false promises led to their decline and their unfunded promises are disrespectful to the British people, and that this Labour Government promised change at the election and we are delivering it. These are fully funded promises, unlike the unfunded promises of the Conservatives, which posed a risk to the economy and a risk to family finances. The sooner the Conservatives learn from their lessons, apologise to the British people, and come forward with some serious proposals, the better for the debate in this House.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 20th May 2025 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

Of course, the best way to improve economic growth is for this Chancellor to stop punishing businesses with higher taxes. Within the spending review, the key is to improve public sector productivity. As the Chancellor knows, one of the key aspects in doing that is the use of technology. This Government have substantial advantages over the next few years with major advances in artificial intelligence technology, but those can only be captured if the Treasury sets clear directions for Departments, including incentives and penalties. What directives has His Majesty’s Treasury given to Departments to improve productivity through the adoption of artificial intelligence? Specifically, does that advice include a requirement for the use of agentic AI during the multi-year spending period?

[Rachel Reeves]

I thought the hon. Gentleman was going to welcome the investment of Universal Studios in Bedfordshire, which will be a massive boon to the county’s economy.

On supporting the adoption of AI, we are doing two key things. First, we are supporting that sector investing in the UK, and the deal we secured with the US will help bring more investment into our digital sector. Secondly, and crucially, we are improving the productivity of our public services. The hon. Gentleman will see more about that when we publish the spending review on 11 June. We are absolutely determined to boost productivity in the public sector, after the mess in which it was left by the Conservatives.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 8th April 2025 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

Two weeks ago, the spring statement rushed through changes to disability benefits, or “pocket money” to the Chief Secretary to the Treasury, to help plug the £14 billion gap in public finances created by the first Labour Budget. Now we are already in the Office for Budget Responsibility’s scenario 2 on tariffs, and the Chancellor is once again forecast to be out of room on her fiscal targets. What does she plan to ask the Chief Secretary to the Treasury to do to update departmental budgets in his multi-year spending review in order to avoid punishing businesses and people once again with further taxes?

[Rachel Reeves]

The hon. Gentleman is jumping the gun somewhat. We delivered the spring statement just two weeks ago, in which we were able to restore the fiscal headroom after the change in global bond yields. We will set out the Budget in the autumn, moving to one fiscal event a year, which is very different from the multiple Budgets we had from the previous Government. We have set the spending totals for the spending review and we will be setting out the departmental allocations on 11 June.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Richard Fuller Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[James Murray]

The points I was making before I gave way to the right hon. Gentleman are recurrent features of the tax system. The support through the tax regime for charities and their donors, which was worth more than £6 billion in April 2024, is a feature of the system that happens every year. The increase in the employment allowance from £5,000 to £10,500, which will benefit hospices that are set up as charities, is a permanent change that we are making through the Bill.

[Richard Fuller (North Bedfordshire) (Con)]

As is evident to many hon. Members, the Minister has, for the first time, found himself unable to answer some very straightforward questions from Opposition Members about the difference between the allocation of funding for capital expenditure and for current expenditure, and the impact that that difference will have on our hospices, children’s hospices, GPs and others affected by Labour’s jobs tax.

I am sure Members of the House of Lords who brought these amendments back will also have noticed that the Minister has been unable to answer those questions. Prior to the Bill going back to the House of Lords, will the Minister agree to speak to the Chancellor or the Chief Secretary to the Treasury to get a clear answer to the questions that have been raised today about which money will be available for capital and which money will be available to offset the national insurance charge increase?

[James Murray]

I am sorry that the hon. Gentleman felt that I was being unclear—I think I was being perfectly clear on the Government’s position. He may not agree with that position—he is entitled not to—but on the employer national insurance contribution changes I have been very clear that the Government will provide support directly to central Government, local government and public corporations, such as Departments and other public sector employers, as was the case under his Government with the health and social care levy. That does not apply to GPs, dentists, hospices and the other organisations that we have been discussing today.

The important point that I was making, which I hope was clear to him and his colleagues on the Conservative Benches, was about the wider support that the Government are providing to hospices, the funding that we are providing to GPs and the discussions we are having with other primary care providers. That is the context in which the Bill has to be seen. We are able to take decisions around funding for public services because of the difficult decisions that we took at the Budget last year, and this Bill implements one of those decisions.

At Prime Minister’s questions earlier today, it was noticeable that when the Prime Minister asked the Leader of the Opposition whether she would reverse the national insurance contribution rise that we are bringing in through the Bill, she refused to commit to that. I am unclear exactly what the Conservative position is—[Interruption.]

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 4th March 2025 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

Improving public sector productivity was the No.1 ask of Institute of Directors’ businesses trying to weather Storm Rachel, but under Labour, public sector productivity has fallen further behind pre-pandemic levels. The number of civil servants working from home has gone up and, shockingly, as The Daily Telegraph has found, thousands of civil servants are being signed off to work from abroad. Therefore, whether it is on civil servants working from their bedrooms or from Benidorm, or on other blockers of public sector productivity, what has the Chief Secretary to the Treasury actually done in his last eight months in office, or is he too comfortable with what the Prime Minister calls

“the tepid bath of managed decline”?

[Darren Jones]

I thank the hon. Member for his question. My No. 1 ask is that he has another go at making better jokes in future. To answer the substance of his question, I agree with him that the state is not productive enough on a whole range of issues. He talks about civil service headcount, about Government offices and locations, and about working conditions. He could also talk about digital transformation. Frankly, we have an enormous amount of work to do, which will become evident through our spending review. It is something that is being taken very seriously not just by the Treasury, but from the Prime Minister downwards. I look forward to his reflecting on what we suggest is the answer to 14 years of failure from his party when it was in government.

Charter for Budget Responsibility

Richard Fuller Excerpts

Wednesday 29th January 2025 Commons Chamber

[Darren Jones]

I was always enamoured of your arguments, Madam Deputy Speaker, as I continue to be today. I look forward to the prospect of many interventions from Members across the House as part of this important debate, and I encourage the shadow Chief Secretary to intervene.

[Richard Fuller (North Bedfordshire) (Con)]

I am grateful for the opportunity to intervene. Can the Chief Secretary to the Treasury confirm whether the OBR validated his £22 billion claim?

[Darren Jones]

The OBR was very clear, as Members will see in its publications in the House of Commons Library, that the spending plans announced by the previous Government were—to quote the chair of the OBR in his evidence to the Treasury Committee—a “fiction.” The OBR forecast provided to the Government made it clear that had the in-year spending pressure been reported transparently, the last forecast under the previous Administration would have been “materially different”. That shows that the lack of transparency on in-year spending was a secret held by only a few Ministers in the last Government, and neither the public, Parliament, we in opposition nor the OBR knew about that problem. That is why this Government have already legislated to bring forward additional strengthened powers for independent checks and balances and transparency, and we have committed to sharing in-year spending pressures with the Office for Budget Responsibility so that we never end up in a situation like the one we inherited.

The Chancellor’s autumn Budget put the public finances back on track, and we will keep them there. Our commitment to sound public finances is non-negotiable. Our new charter for Budget responsibility, underpinned by the new fiscal rules, ensures a more transparent fiscal framework and provides a stable foundation for growth. Today I will outline the changes that we have made to the charter for Budget responsibility, as published in draft at the autumn Budget 2024 and laid before this House last week.

Fiscal rules are a key part of the UK fiscal framework. At the autumn Budget in 2024, the Chancellor confirmed the Government’s fiscal rules as set out in our manifesto, which will play a vital role in unlocking investment. These rules will put the public finances on a sustainable path and prioritise investment to support long-term growth. They consist of two rules: the stability rule and the investment rule.

The stability rule aims to move the current Budget into balance so that day-to-day spending is met by revenues, meaning that the Government will borrow only for investment. We will meet this rule in 2029-30, until that becomes the third year of the forecast. From that point on, we will balance the current Budget in the third year of every Budget, held annually each autumn. This will provide a tougher constraint on day-to-day spending so that difficult decisions cannot be constantly delayed or deferred, as they were under the last Government.

I am sure the House would recommend that the Government should live within their means. That means that public services have to be able to live within their budgets, and it means that tax revenues have to pay for day-to-day spending. Never again will we end up in the position the country ended up in under the last Government, when every week and every month the country borrowed more and more in order to pay the day-to-day bills. That is why when hon. Members on the Opposition Benches complain about the debt burden this country is having to deal with, they should look in the mirror, because they built up that debt burden. The people responsible for filling up the country’s credit card just to pay the bills every month, even in advance of the pandemic, were Conservative Ministers. That will never happen under a Labour Government because of our clear fiscal rules. It is why for the first time in 17 years we are doing a zero-based review of all public spending, not once done under the last Administration but done in the first spending review of this Labour Government.

Secondly, our investment rule requires the Government to reduce net financial debt, defined as public sector net financial liabilities, as a share of the economy. Public sector net financial liabilities is an accredited official statistic, produced by the Office for National Statistics since 2016; based on international statistical guidance, it has been forecast by the OBR since that time. The Institute for Fiscal Studies has noted that the metric offers a

“more complete picture of the Government’s financial position, while removing some of the perverse incentives associated with a narrow focus on PSND”—

public sector net debt.

This rule keeps debt on a sustainable path while allowing the step change needed in investment by targeting a measure of debt that captures not just the debt that Government owe, but financial assets that are expected to generate future returns. By targeting net financial debt for the investment rule, the Government are prioritising investment to drive long-term growth while getting debt falling as a share of the economy.

The move to net financial debt will be supported by a comprehensive set of guardrails to give confidence that there are rules around the investments the country can make. Like our stability rule, our investment rule will apply in 2029-30 until that year becomes the third year of the forecast, and from that point onwards net financial debt will fall in the third year of every forecast.

The move to net financial debt means that at the autumn Budget the Government were in a position to confirm public investment that will be £100 billion higher over the forecast period compared to the previous Government’s plans. I am pleased to say that in its autumn forecast the OBR confirmed that the Government are on track to meet both fiscal rules two years early, in 2027-28, displaying the Government’s commitment to sound finances.

The Chancellor has asked the OBR to produce a forecast on 26 March, which will assess us against these rules once again. Our commitment to these fiscal rules is iron-clad. The UK has changed its fiscal rules in the past more than any other country, but this Government know that stability matters. That is why the new charter sets out clearer circumstances under which the fiscal rules can temporarily be suspended through a new strengthened escape clause. The new escape clause requires a decision on suspension be supported by the OBR’s analysis so that the rules can be suspended only with sufficient justification.

As well as new fiscal rules, the updated charter for budget responsibility includes a set of wider reforms that ensure a more stable and transparent fiscal framework. Because fiscal responsibility is so central to this Government’s mission, the first piece of legislation passed in this Parliament was the Budget Responsibility act 2024. It delivered our manifesto commitment to introduce a fiscal lock. I do not think Members on either side of the House need reminding of what happens when huge unfunded fiscal commitments are made without proper scrutiny and key economic institutions such as the OBR are sidelined. We will not let that happen again. The fiscal lock therefore guarantees in law that from now on every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR.

The charter sets out the details of how the fiscal lock will operate. As well as the new guiding fiscal principles to move towards only borrowing for investment and to keep debt on a sustainable path, the OBR will monitor progress against a dashboard of key debt sustainability metrics to ensure the Government are taking a broad view of fiscal sustainability. A broader view will allow the Government to form a full assessment of the sustainability of the public finances and support us in seeking to improve sustainability over time.

We are also enhancing fiscal and economic stability by confirming in the charter today that the Government’s intention to move to one major fiscal event per year will be honoured, giving families and businesses certainty on tax and spending plans, as will the requirement on the Treasury to conduct regular spending reviews every two years and setting spending for at least three years, ensuring public services have certainty on their funding and that spending decisions cannot again be repeatedly delayed. In addition, it guarantees a three-year rolling budget for the OBR, to support its independence. We are further strengthening fiscal transparency and accountability by accepting all the recommendations of the OBR review of the March 2024 forecast for departmental expenditure limits, including to improve the spending information the Treasury shares with the OBR.

The OBR is widely recognised as providing independent, credible and high-quality analysis. It is a guarantor of economic stability. Going forward, the Treasury will provide the OBR with information on the in-year position, allowing it to forecast underspending and overspending against departmental expenditure limits where appropriate. This will ensure the unfunded pressures identified at the public spending audit never happen again. We are a Government who will consider the impact of our current spending decisions on future generations, and to show how the long-term health of the public balance sheet is bolstered by sound investments, the charter requires the OBR to report on the long-term impact of capital investment and other policies at fiscal events.

Finally, I turn to the welfare cap, which we are also debating today. The Government are retaining the welfare cap within our fiscal framework to support our ambitions to keep welfare spending sustainable in the medium term. The OBR will assess whether the new cap has been met at the first fiscal event of the next Parliament. The latest OBR forecast judged the previous welfare cap to be breached by £8.6 billion, following a trend of forecast breaches by the previous Government. This is clearly an unsustainable path for welfare spending. This breach underlines the inheritance left by the previous Government: a failure to control welfare spending and to bring forward radical reform, and, crucially, a failure by the last Government to support people to get the treatment or skills they need to return to work.

--- Later in debate ---

[Richard Fuller (North Bedfordshire) (Con)]

As the Chancellor scours the nation turning over every stone in her desperate effort to mitigate the damage from her choices in last year’s Budget of broken promises, it falls to the Chief Secretary to the Treasury to keep his face straight as he lectures the House on the importance of fiscal responsibility. He has shown the performative skills of one of the greats of the west end, but his mouthing of the words of economic stewardship, even as his audience of wealth creators get up out of their seats and leave the show, leaves few of us impressed. They know what the British public know: that this is a Treasury team and a Government who, day after day, create more problems and, day after day, demonstrate that they are clearly out of their depth.

[Darren Jones]

As the shadow Minister and, I hope, the House knows, I am a humble man and am always ears-open to advice, wisdom and feedback on how we can do things better. Given his opening remarks on fiscal stability, I wonder whether he has any reflections to offer the House from the time of his party being in government and, indeed, from his time in the Treasury under former Prime Minister Liz Truss about what went wrong and what we might do differently.

[Richard Fuller]

The Chief Secretary to the Treasury, like so many on the Labour Benches, loves to talk—almost fondly—about the former Prime Minister Liz Truss. Well, at least she knew her time was up after 50 days; we are stuck with the Chancellor for five years.

When it was noted a few months back that the entire Labour Cabinet could barely scrape together a year’s worth of business experience between them, it was thought to be just a curiosity. Little did we know it was an early warning sign of their lack of suitability for the task of managing the British economy: business confidence down, job losses up, consumer confidence in the gutter and Government debt spiralling further upwards—and they are just getting started.

There are, of course, potential benefits from the investments that are being announced today. We share a desire for a more competitive, less regulated economy based on a passion for free enterprise, but while Labour celebrates the exodus of millionaires from our country, we recognise that it represents a loss of skills, lower job creation, and the evaporation of potential future taxation to support public services. While Labour sees the attack on family farms and family businesses as a vital part of its warped class-war ideology, we recognise that putting family at the heart of enterprise is a critical piece of our nation’s proud heritage of freedom.

[Daisy Cooper (St Albans) (LD)]

The shadow Minister talks fondly about the importance of family farms. Where were his comments on that topic when his party was negotiating trade deals with Australia and New Zealand that have sorely impacted farms around the country?

[Richard Fuller]

My friend, the Liberal Democrat spokesman on economics, makes a fair point about the impact of trade agreements on family finances. However, as she knows, that is very different from the pain that farmers are feeling right now about Labour’s attack on the ability of families to pass on their farm to their children—it is different in scale and in type. It is a damaging policy by the Labour party that we know, or at least hope, that Labour will change in due course.

I am sure that today, the Chief Secretary to the Treasury is also engaged in a series of phone conversations with his departmental colleagues as, ahead of the March update on the OBR’s financial forecast, they review what it will mean for their departmental expenditures. As he has those difficult phone conversations, I say to the Chief Secretary that we stand ready to support effective steps on prudent financial responsibility.

[Darren Jones]

On the point of prudent financial responsibility—[Interruption.] I think the House is interested in a long and detailed debate this evening, so it is important that we dive into the details. On this issue of prudent fiscal responsibility, the hon. Gentleman presumably welcomes our fiscal rule that day-to-day costs will be met by revenues, as opposed to having to borrow money all the time to pay those day-to-day costs. That is something that consistently happened under the last Conservative Administration, which was a mistake in the context of fiscal responsibility, was it not?

[Richard Fuller]

I am aware that the Chief Secretary to the Treasury is interested in a prolonged debate today—I am not sure whether that is because of the content of the debate, or for other reasons. I would say gently to him that writing rules is different from following rules, so he will be judged by this House on how he meets the rules that he has set. My purpose today is to cover some of those rules, and I will have some comments on them, but first, although we will be having a separate debate on the welfare cap, the Chief Secretary to the Treasury made some points about it. My hon. Friend the Member for Faversham and Mid Kent (Helen Whately) will respond formally on that issue, so these are just my thoughts, really.

The welfare cap, of course, was introduced in 2014 by Conservative Chancellor George Osborne, who recognised the particular difficulties with forecasting and managing certain welfare budgets. At the 2014 Budget, he explained his rationale:

“Britain should always be proud of having a welfare system that helps those most in need, but never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work. In future, any Government who want to spend more on benefits will have to be honest with the public about the costs, will need the approval of Parliament, and will be held to account by this permanent cap on welfare.”—[Official Report, 19 March 2014; Vol. 577, c. 785.]

George Osborne’s initiative has shown its value over the past decade, and it is right that the new Government are following its intent in principle and, one hopes, also in practice. Our task today is to listen to the explanations for the breaching of the welfare cap for fiscal year 2024-25 and the rationale for the particular limits that the Chief Secretary’s Government will set on the welfare cap for future fiscal years through 2029-30.

As the Chief Secretary said, in October, as part of the first Budget of the Parliament, the OBR provided its assessment of the status of welfare spending compared with the cap that was set in 2024. That assessment was an excess of £8.6 billion, which indicated a breach. With the country now spending over £156 billion on welfare every year and with the obvious pressures on public expenditure, there should be a determination to find savings in the welfare budget. Indeed, that was the intention of the Conservative party at the last election, with a commitment to reduce expenditure by £12 billion through better targeting of disability benefits, amending the levels of payments for those whose disabilities would not routinely be expected to lead to additional life expenses, overhauling the fit note process, and introducing tougher sanctions on those who shirk the opportunity to work and contribute to society.

But the Labour Government today appear to be set on a different course, with a pathway for the welfare cap that is up, not down, growing from this year’s cap of £137 billion to reach £195 billion by 2029-30. That is a 42% increase in the welfare cap. It is important to note that at the same point in the last Parliament, when the Conservative party set the rules on the welfare cap, that increase was limited to 15%.

[Darren Jones]

rose—

[Richard Fuller]

That difference between 15% and 42% is important, is it not?

[Darren Jones]

It is important. I think we should reflect on what some of the drivers are behind the increased spend in the welfare budget, because the evidence is very clear. For people who can be—and indeed wish to be—economically active but are in receipt of universal credit support and other forms of payment, the main reasons are being unable to get access to the treatment they need in the health and mental health services space or being unable to access training opportunities for the jobs that are available in the market. Without diving too much into the weeds, that is the issue about the difference between the approach to austerity in day-to-day resource spending—where we cut spending to frontline public services—and annually managed expenditure.

[Richard Fuller]

That is all very well, but the Chief Secretary is talking about the wrong budget. He is talking about increases to the health budget or changes to aspects of the DWP budget; he is not talking about why this Government are allowing an increase of up to 42% in welfare payments in this country. That is a different issue. It shows laxity on the part of the Government. Serious questions need to be asked, and I am sure will be asked, in the next debate.

Let me return to the charter for budget responsibility, which was established by former Chancellor George Osborne as part of the Budget Responsibility and National Audit Act 2011. On Second Reading, the Economic Secretary to the Treasury explained why the measure was necessary:

“We inherited the largest budget deficit in our peacetime history, we inherited a budget deficit forecast to be the largest in the G20, and we inherited the largest structural deficit in the whole of Europe.”—[Official Report, 14 February 2011; Vol. 523, c. 746.]

She did not have to make up numbers, as this Government have done, about some fanciful black hole; these were facts, and my former colleague, Justine Greening, was telling the truth to the nation.

Indeed, truth is the foundation upon which any charter for budget responsibility is based. Let me be clear: when the Chancellor said on 13 November 2023 that she was

“not going to fiddle the figures or make something to get different results”,

the fiscal rules included in this charter demonstrate that she was not telling the truth. In this charter, the Chancellor has changed the rules on the measurement of debt from public sector net debt, or PSND, excluding the Bank of England, to public sector net financial liabilities, or PSNFL. This fiddling of the figures opened the taps for the Chancellor to borrow more, even while our debt to GDP ratio stands at historically high levels following the pandemic and the Ukraine war.

The Guardian newspaper, which I am sure the Chief Secretary reads avidly, reported on 24 October 2024 that if my right hon. Friend the Member for Godalming and Ash (Jeremy Hunt), the former Conservative Chancellor, had acted similarly to the current Chancellor, his fiscal headroom would have ballooned from £9 billion to £49 billion, but he knew better than the current Chancellor.

The Chancellor has even had to create her own name for things, just so that she can claim she is getting debt falling. She said in her Budget statement that she will call PSNFL

“net financial debt, for short.”—[Official Report, 30 October 2024; Vol. 755, c. 823.]

The reality is that the proper measure of Government debt, as per the previous fiscal rules, is rising in every single year of the forecast. The OBR has confirmed that on the previous definition, which she had said she would keep to, the fiscal rules are being broken. At the last election, Labour said it would get debt falling, and the Government continue to claim that they are delivering that. They are doing nothing of the sort. Let us be very clear: debt is rising, and it is forecast to continue to rise. We will be spending nearly £50 billion more on debt interest over the next five years as a result of their first Budget alone.

There are also concerns about the rolling three-year targets for the rule that the current Budget should be in surplus and the rule that debt—the Government’s dubious definition of debt—should be falling as a share of the economy. Like the water and fruit for Tantalus, the rules permit these reasonable targets to remain just out of reach every time—they are always there but never met. To extend my similes, the charter rules are to the Chancellor and the Chief Secretary as St Augustine regarded self-control: “Grant me chastity and self-control, but not yet.”

The charter begins on shakier ground with a weaker Treasury team, but it remains an important part of our country’s fiscal framework. Under the rules of the House, the motion is not amendable, so we shall not oppose the measure. We do need fiscal rules, but we condemn the Government’s approach of fiddling the figures to add more borrowing. They promised that they would not, but, as so many times before, they have broken their promises once again.

--- Later in debate ---

[Darren Jones]

I thank right hon. and hon. Members for this afternoon’s debate. I will reflect on some of their questions and comments in winding up the debate.

To begin, I can provide assurance to the shadow Chief Secretary, the hon. Member for North Bedfordshire (Richard Fuller). He was concerned that the Labour party had misled the public. There could not be anything further from the truth. In the manifesto, the wording was very clear. We would have two fiscal rules: first, to bring day-to-day spending in line with receipts; and secondly, that debt would fall as a share of the economy. Those are our fiscal rules. Now, he is right that we defined debt at the Budget, but that did not change the fiscal rule. The fiscal rule is that debt should be falling as a share of the economy. That is the fiscal rule. [Interruption.] It is the fiscal rule; there is no debate about it. It is as clear as the letters on a page. As was alluded to in the debate, the Chancellor chose a well-established metric for debt—PSNFL, public sector net financial liabilities—which recognises the fact that a competent Government can invest in the country and get a return for the taxpayer.

[Richard Fuller]

The Chief Secretary to the Treasury is making a bizarre comment. The point is that the Chancellor stated in 2023 that she would not fiddle the figures. She has now changed the numbers. The definition of debt for public sector net debt excluding the Bank of England is different from her PSNFL. They are different. It enables the Chancellor to borrow more. That is fiddling the figures to achieve an objective. It is not the same, and she did not tell the truth when she said that she would not fiddle the figures.

[Darren Jones]

That is a very strong accusation, which I refute in the strongest terms. The Chancellor was very clear that debt would be falling as a share of the economy. That is the fiscal rule. As predicted by the OBR, we will deliver on that promise. It is right that the Chancellor chose at the Budget to define debt as public sector net financial liabilities. The big question is why. As the Liberal Democrat spokesperson, the hon. Member for St Albans (Daisy Cooper) said, it is because having a Government with stability and competence at their core means that we are borrowing not to pay for out of control day-to-day spending, which I think everyone in the House would agree is an unsustainable path to higher debt burdens, but instead borrowing responsibly within guard rails for investments, predominantly alongside the private sector, to enable, for example, infrastructure delivery across the country or investment in businesses, for example, through the national wealth fund.

The reason that the public sector net financial liabilities debt rule is important in that context is because it reflects the fact that, where Government have an equity stake or have provided debt for non-commercial terms, there is a rate of return. The taxpayer receives some of the benefit of that investment and growth in the economy, which I am sure we would all welcome. There is the important difference about the type of debt. Under the last Administration, debt was spiralling out of control because the last Government could not pay their day-to-day bills. Everybody knows, whether they are running their household finances or the country’s finances, that that is not a sustainable thing to do.

That has changed under this Government. Debt will be for productive investment only and day-to-day costs will be met by revenues. Yes, that means that public services have to live within their means, and often that means difficult discussions in the spending review that I have to conduct with Secretaries of State, to which the hon. Gentleman alluded. However, all of us around the Cabinet table recognise not only the non-negotiable nature of the fiscal rules, which are the foundation of economic stability, but the prize of the modernisation and reform of our public services. He will have heard the Prime Minister and other Secretaries of State talk about just that fact. There is a huge amount of opportunity to achieve better outcomes for people at lower cost, not just through basic technology but by improving the way we deliver public services. That means delivering services designed around the person and how they wish to interact with the Government. It means that people can receive support from different Departments and different functions, and they can receive the information they need at the time they need it.

Let me give one example. In the constituency of my hon. Friend the Member for Filton and Bradley Stoke (Claire Hazelgrove)—just north of my Bristol North West constituency—I visited a community diagnostic centre. The CDC programme began under the last Administration, but we have committed ourselves to it. The provider works in partnership with the NHS trust, charging exactly the same rate as the hospital for a diagnostic scan. The company involved does not make profits in comparison with the hospital costs; it is the same NHS tariff rate. People can have MRI and CT scans, gastroscopies, and other tests. The centre is attached to a branch of Asda and there is plenty of free parking.

I asked the owners, “Why are you able to charge the same rates as the hospital in my constituency while running this service more effectively?” They said, “We are open for 14 hours a day from Monday to Saturday and for 12 hours on Sunday, we sweat the assets more than a hospital can, and we have new bits of kit with AI that are more productive to use”—which is why the Health Secretary wants to roll those out across the NHS. They also said that the customer service was the key driver for productivity, because customers could book their appointments and move them if necessary, they could visit the centre after work, and they could go there between shopping trips. Essentially, the service has been designed around the patient. Patients turn up pretty much all the time, and they are never not able to do so. That is just one example of the way we are modernising public services.

--- Later in debate ---

[Darren Jones]

I thank the right hon. Member for his question, because he invites me to talk the House through our infrastructure strategy. For the first time, we are bringing together Government plans on economic infrastructure, housing and social infrastructure in the same place. It means that when we go through the spending review in the Treasury, working with colleagues across Whitehall, we will be much better than the previous Government at taking place-based decisions. In the past, it was a bilateral discussion between a Department and the Treasury, with no dots being connected between different types of infrastructure. That has led to the failure to capture the growth potential in different places.

We will take a different approach and make sure that infrastructure investments relating to public investment are capped by the numbers set out in the Budget. That is the spending envelope that we have, and we have to prioritise those investments, but they will be based on driving growth and opportunity for people in the places in which they live.

My hon. Friend the Member for Reading Central made a great point about the Oxford-Cambridge growth corridor, the role of connecting some of our great universities, and unleashing the opportunity that exists between them. As I said to the House earlier, the living connectivity arrangements between Oxford and Cambridge are basically non-existent. By connecting these two hubs of innovation and investment, the opportunities are endless.

[Richard Fuller]

I have to be careful, because I have a significant constituency interest in this issue, but I want to ask a more general question about the role of infrastructure investments and the fiscal rules. East West Rail’s proposal to complete the railway line had a benefit-cost ratio of 0.3 in its last business case: building it would basically lose 70p of every pound of taxpayers’ money. Does the Chief Secretary to the Treasury regard that as a loss? If not, will there be a business case that shows that the project has a benefit-cost ratio that does not lose taxpayers’ money?

[Darren Jones]

That is a great question. All these infrastructure opportunities will go through both value-for-money assessments and growth assessments. The argument that we have been making today is that initiating projects such as the East West Rail line in a co-ordinated way with private capital, universities and our house building plans lifts the growth opportunities that come from those projects. That is why Patrick Vallance has been appointed as the champion of the growth corridor. We will take a whole-corridor view on the investments and the opportunities across different investments, regardless of whether they are public or private, but they will all have to go through value-for-money and growth assessments.

The infrastructure strategy will be a 10-year strategy. It will give a long-term view on economic, housing and social infrastructure, but they will be underpinned by longer-term capital budgets. The capital budget that we will set in June will be for four years, until 2029-30, but the normal approach, as set out in the charter, will be that the capital budgets will be for five years. As the House knows, we have committed to doing the next spending review every subsequent two years. In 2027, when we conduct the next spending review, we will have the 10-year infrastructure strategy but also pretty much 10 years of capital budgets being allocated for those projects. That is a hugely important signal to investors.

We are working with industry and investors on what the biannual pipeline might look like, so that we can publish in real terms the investable propositions, but also so that businesses know that work is coming if they invest in their supply chain or their workforce. That is a crucial part of unlocking investment in skills and training in our country. Much like we have just seen in the water industry, which has agreed a longer-term investment settlement, suppliers are already telling us that they are now able to invest in staff, training and capabilities, because they know that the flow of investment will be coming over a period of time. We are seeking to do that across a range of infrastructure in order to unlock the investment that this country needs.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 21st January 2025 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

Confidence on Britain’s high streets is sliding faster than the Chancellor will be down the ski slopes of Davos later today. With retail sales down—rather than up, as expected in the run-up to Christmas—and with the British Retail Consortium saying that two thirds of stores will raise prices to cover her national insurance increases, when will the Minister accept that the Chancellor’s economic strategy of raising taxes and increasing regulations is not working?

[James Murray]

I am glad to know that the shadow Minister’s morning was well spent cooking up that line about the Davos ski slopes. What he will know, and what sectors across the economy will know, is that having a stable economy is a prerequisite for the investment we need to get the economy growing. That is why we had to take difficult decisions at the autumn Budget, including those to increase the rate of employer national insurance contributions. Alongside that increase, however, we more than doubled the employment allowance and set out our plans to have permanently lower tax rates for high street RHL properties from April 2026.

Financial Assistance to Ukraine Bill

Richard Fuller Excerpts

Committee of the whole House
Wednesday 18th December 2024 Commons Chamber

[Darren Jones]

I welcome the hon. Gentleman’s encouragement, which I take in good faith. He will know that these matters are multilateral and subject to negotiation with other allies and G7 colleagues, but he will also know, as I am sure the whole House does, that we go into 2025 with a strength of resolve across those G7 countries to do all that we can to help Ukraine continue to mount its defence against the illegal invasion from Russia.

Any other payments beyond the extraordinary revenue acceleration loans to Ukraine or any other country that are unrelated to the ERA scheme are not covered by the provisions of the Bill; this money is in addition to other grants and payments that have been referred to in the House previously.

The clause contains provision for the UK to provide funding towards subsequent arrangements that are supplemental to, modify or replace the ERA. This provision allows for flexibility in the unlikely event that the scheme itself should significantly alter. It is not intended to be used without this change in circumstances.

Clause 2 simply sets out the short title of the Bill.

[Richard Fuller (North Bedfordshire) (Con)]

I thank the Minister for opening the debate. The Conservative Government were a vociferous advocate for mobilising Russia’s frozen sovereign assets to support Ukraine. We drove G7 and European partners to try to coalesce around the most ambitious solution possible to achieve that outcome. The announcement on 22 October marked progress on that journey and is a step in the right direction. We understand that the Government’s position is that the United Kingdom’s contribution should be earmarked for supporting Ukraine’s military expenditure, including on air defence, artillery and other equipment. The Opposition would support that. We need to persevere with our efforts to put Ukraine in the strongest possible position to counter Russia’s unprovoked and illegal invasion.

Matters since Second Reading have been fast moving, so let me pose some questions to the Minister. Since Second Reading, the United States has given Ukraine $20 billion, funded by the profits of frozen Russian assets. That economic support forms a significant part of the overall $50 billion package agreed by G7 member nations and announced in June. The US Treasury said that it had transferred the $20 billion to a World Bank fund, where it will be available for Ukraine to draw. Money handled by the World Bank cannot be used for military purposes.

The US Administration had initially hoped to dedicate half the money to military aid, but that would have required approval from Congress, which the President did not seek. Perhaps the Minister can update the House on what discussions the UK Government have had with the US Administration, Canada and the European Union about the use of funds provided for military purposes. Are any strings attached to the funds that will be provided by the UK? As the US has already provided its share of moneys anticipated in the G7 package, can the Minister advise the House on the timing of the UK’s contribution? I think it was made clear on Second Reading, but it would be helpful to have an update, given the move by the US since then.

As the Minister and the Government have advised, the loans that the UK will pay will form part of the extraordinary revenue acceleration loan agreement by the G7. The loans that the UK will provide will be repaid by the Ukraine loan co-operation mechanism, established by the European Union under regulation 2024/2773 on 24 October. The ability of the UK to have its loans repaid depends in large part on a decision by the European Union to maintain its freeze on Russian assets. The EU renews Russian sanctions every six months, and efforts to extend that to a three-year review cycle were rebuffed by Hungary earlier this year. Will the Minister confirm that there is a risk, in the event that the EU does not extend its sanctions on Russia, that the costs of the loan will be borne by UK taxpayers, and what mitigations he might consider if that situation arises?

Finally, the EU controls more than two thirds of Russia’s $300 billion of sovereign assets that have been frozen by western allies following Russia’s full-scale invasion of Ukraine. Of those EU-held frozen assets, 90% are held by the Belgian-based financial services company Euroclear. The profits from the EU-held assets, estimated to be between $2.6 billion and $3.2 billion per year, have been used to arm Ukraine and finance its post-war reconstruction. We understand that the EU’s top diplomat, Kaja Kallas, said in an interview with The Guardian on 12 December that the European Union should use the billions in frozen state assets to aid Ukraine. She emphasised that Ukraine had a legitimate claim for compensation, and described the Russian assets held in the EU as

“a tool to pressure Russia.”

The Minister responded to earlier interventions, but can he confirm the UK Government’s position? Has he discussed the matter with the EU and Belgium, and does he have any plans for the UK to go further on the use of those assets?

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I want to speak to new clause 1, which I have signed, but I first want to reiterate my support for the Government and the Bill. As I said on Second Reading, it is absolutely right and proper that Russia pays for the damage it has done to Ukraine and its people. The Bill is an important first step in providing that financial assistance from Russian assets to Ukraine. Echoing the comments from around the Chamber, we need to move with allies towards a position of seizing Russian assets, but it is a positive first step that we are using the proceeds of the interest on those assets to support Ukraine.

On Second Reading, I mentioned that

“Canada has passed the Special Economic Measures (Russia) Regulations, which collects data on Russian assets, freezes them and publishes the value, which currently stands at 135 billion Canadian dollars”.—[Official Report, 20 November 2024; Vol. 757, c. 312.]

I asked if the Government could disclose Russian assets held in the UK in the same way. New clause 1 goes a long way to providing that. It would ask the Government to lay a copy of a report before Parliament showing under the Act, as it will hopefully become,

“monies provided by the United Kingdom to Ukraine”

to the following level of disclosure:

“the United Kingdom’s share of the principal loan amount and interest accrued under the scheme”

and

“receipts of extraordinary profits from the Russian immobilised sovereign assets under the scheme.”

It would to an extent mirror what our close ally Canada has done. Although I do not expect to divide on new clause 1, I would appreciate it if the Minister would comment on how he will report progress to the House, disclose the level of Russian state assets that are here, and state how much of the interest accrued from those assets has been mobilised to support Ukraine in its war efforts.

--- Later in debate ---

[Richard Fuller]

On behalf of the official Opposition, I thank the Government for bringing forward the Bill and concluding its stages in this House before we break for Christmas. I also thank the Chief Secretary to the Treasury, the right hon. Member for Bristol North West (Darren Jones), for the way he has handled the discussions on the Bill at each stage, providing Members with all the information they need at any stage and in answer to all questions. He has done an exemplary job.

I note the uniformity of support across this House from Members, whichever party they represent. However, it goes deeper than that: since former Prime Minister Boris Johnson galvanised the west into defence of Ukraine, through former Prime Minister Liz Truss, to my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak), and now, with our current Prime Minister, the right hon. and learned Member for Holborn and St Pancras (Keir Starmer), the United Kingdom Government have been determined in support of the people of Ukraine. It says something of the depth of support in this country for the people of Ukraine that if we swept away a large proportion of the Members of this House and replaced them with different representatives from across the country, the resolve in support for Ukraine would remain the same.

We must not give up our efforts. Since we started our debates, there have been further actions in Ukraine. I will quote the latest summary from the Institute for the Study of War, which demonstrates the urgent need for the support set out in the Bill that we are passing today:

“on December 14…Russian forces fielded more than 100 pieces of equipment in a recent assault in the Siversk direction and noted that there were 55 combat engagements in this direction on December 13—a significant increase in tempo in this area of the frontline.”

It goes on:

“The GUR reported that a contingent consisting of Russian and North Korean servicemen in Kursk Oblast lost 200 personnel as of December 14 and that Ukrainian drones swarmed a North Korean position, which is consistent with recent reports of North Korean forces engaging in attritional infantry assaults.”

Our support, the military support the United Kingdom provides under this measure, is desperately needed, but the need goes further. Since Russia’s invasion of Ukraine, an estimated 8 million Ukrainian citizens have been displaced and 6 million people have left the country as refugees, with many still unable to return. As hon. Members have said, over 200,000 Ukrainian citizens are living in the United Kingdom. Our thoughts and prayers are with them and their families. We should also note the work of British charities and non-governmental organisations, including the British Red Cross, which estimates that, with other Red Cross and Red Crescent societies around the world, assistance has been provided to over 18 million people in Ukraine.

As we take our break, many of us will be celebrating Christmas. I hope that the Christian message of peace and hope will resonate in the new year, and that all of us in western Europe and particularly in Ukraine can look forward to a peaceful future.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

Draft Double Taxation Relief and International Tax Enforcement (Ecuador) Order 2024

Richard Fuller Excerpts

Monday 9th December 2024 General Committees

[Richard Fuller (North Bedfordshire) (Con)]

I echo the Minister in saying it is a pleasure to serve on the Committee under your chairmanship, Mrs Harris.

The Minister will be pleased to know that it is not the intention of the official Opposition to divide the Committee on this tax treaty. However, I have a number of questions —he may be able to answer them today, but I am perfectly happy if he wants to reply in writing subsequently.

This treaty follows on from the agreement signed in Quito on 6 August this year. Can the Minister provide us with an update on the status of Ecuador’s ratification of this treaty? As I understand it, that will be subject to its National Assembly, but there are elections to the National Assembly coming up in March next year and the President only holds a majority through a coalition. I would be grateful for any update on the status and expected date of ratification.

I echo the Minister’s comments about the importance of stimulating exports and trade with Ecuador. We have very limited trade at the moment, and hopefully this agreement will help from the point of view of both imports and exports, and of direct investment.

The Minister mentioned that this agreement was based on the OECD model tax convention. That model, as hon. Members probably know, has been in place for 30 or 40 years—maybe even longer—and many tax treaties around the world are signed around these conventions. However, there is a slight deviation in part of this agreement. In paragraph 5.16 of the explanatory memorandum, relating to article 5 on permanent establishment, it says that the agreement

“has a wider scope than the OECD Model, reflecting Ecuador’s preference. In particular, it has a lower threshold of 183 days for a building site to give a PE. It also deems there to be a PE where services are provided by an enterprise in the other territory for more than 183 days in total in a 12-month period.”

As there is very little for the Committee to note that is different from the OECD model, I hope the Minister does not mind me asking about that one point I have highlighted.

Furthermore, Ecuador is, as best I know, not a member of the OECD, or certainly has not signed up to pillar 2, the agreement on global minimum taxation for multinational enterprises. Any implication in this tax treaty relating to Ecuador’s status on that question would be of interest, but again that is not a matter for us to divide the Committee on today.

Oral Answers to Questions

Richard Fuller Excerpts

Tuesday 3rd December 2024 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

A cornerstone of sound management is economic certainty, but this Government seem to specialise in creating economic uncertainty; most recently they did so by delaying the date for the critical multi-year spending review. It looks like the Chancellor does not have a grip on either her Cabinet colleagues’ spending plans or her own plans for public sector productivity. Which is it—or is it both?

[Rachel Reeves]

The hon. Gentleman talks about uncertainty, but he was a Minister in the Treasury under Liz Truss, when huge damage was done to families’ and businesses’ finances. Frankly, I will take no lessons from Conservative Members on how to run the economy. We have already done phase 1 of the spending review; phase 2 will begin shortly and be concluded next year, when we will make multi-year settlements on resource departmental expenditure limits and capital budgets for the next few years.

[Richard Fuller]

The Chancellor may find that in her job, she needs to listen and learn lessons. One of the many criticisms of the last Budget was that the Government fiddled the figures to borrow more money, and still left little headroom for if their forecast went wrong. Since the Budget, business confidence has collapsed, putting further pressure on that headroom. Does the Chancellor have a problem with balancing her books, and will she, like Oliver Twist, be coming back for more?

[Rachel Reeves]

The hon. Gentleman will know that there is more headroom in our Budget in October than was left by the previous Government. The lesson I have learned is that I will never play fast and loose with the public finances, as the Conservative party did, because when it did, interest rates went through the roof and inflation topped 11%, and families and businesses in our country are still paying the price for its disastrous economic management.