(2 days, 21 hours ago)
Commons ChamberWhat is the Chancellor’s definition of “working people”?
A working person is somebody who goes out every day to earn their income. They rely on prices that are affordable in the shops, low interest rates and taxes that are as low as possible, but also public services that work for them, like the NHS, where waiting lists have already come down by more than 200,000.
That is a very broad definition. Maybe the Chancellor should speak to the Prime Minister, the Transport Secretary, the Education Secretary and the Chancellor of the Duchy of Lancaster, who have all given different definitions of working people over the last 12 months. After last year’s Budget, the Chancellor said that she had wiped the slate clean, but that was not true, Chancellor, was it? She said that she would not be coming back with more taxes, but that was not true, Chancellor, was it? At the election, the Chancellor said that she would not raise taxes on working people, but that was not true either, was it, Chancellor? When will the Chancellor learn the truth that she is not a commentator on the country’s economic problems; she is the cause?
When we came into office last year, there was a £22 billion black hole in the public finances. The reserve that is set out for genuine emergencies had already been spent four times over only three months into the financial year. That is the reality. We increased taxes in the Budget last year to stabilise the public finances and to put a much-needed injection of cash into our public services, principally our national health service. Since then, anyone can see the big challenges facing the world, as well as the productivity that never materialised under the past Government.
(1 month, 4 weeks ago)
Commons ChamberUK long-term borrowing costs are now consistently above the range of G7 countries—something that did not occur at any time under previous coalition or Conservative Governments. It is because markets are pricing in the specific weakness of this Labour Government’s economic policies. The cost of that weakness means rising prices, lower investment and less money for public services in the long term. Having carpet-bombed the private sector with extra taxes, will the Chancellor rein back the splurge of unproductive public spending that she let rip last year?
The only person that carpet bombed our economy was Liz Truss and the Conservative party. The hon. Gentleman supported Liz Truss in leadership contest and throughout her time—
May I welcome the new members of the Treasury team, with their courage in joining it? I also do so for the shadow Chancellor of the Exchequer, my right hon. Friend the Member for Central Devon (Sir Mel Stride), who cannot be with us today. May I particularly welcome the new Chief Secretary, who replaces the old Chief Secretary, the right hon. Member for Bristol North West (Darren Jones), who is now another new Chief Secretary?
Earlier this year, Labour made a mess of its welfare reform proposals because they were rushed out to help plug a £5 billion gap in public finances. The result was chaos and a humiliating reversal for the Chancellor. Welfare spending is too high—it does need reform—and today the Leader of the Opposition has pledged Conservative support to help the Government to develop a thoughtful plan on welfare reform. Will the Chancellor take up this offer of support?
Order. I remind the shadow Minister that it is topicals for everybody.
While the Leader of the Opposition is talking down the British economy, we are setting our sights on growing the economy and making working people better off. No, we will not be taking any advice from the Leader of the Opposition, who was part of a Government who crashed the economy, sending mortgage rates spiralling and putting pensions in peril.
I fear that the Chancellor’s dismissive response fails to acknowledge either the serious state of public finances or the serious difficulties of her own position. Having extended economic uncertainty until just before Christmas, will the Chancellor at least confirm that the November Budget will include savings from welfare reform?
In the Universal Credit Act 2025, which passed before the summer recess, we reformed the universal credit system to reduce the gap between what people on the health element and those on the standard element got. That reform will help more people into work, as well as the £1 billion package of measures to help people—particularly those who have been long-term unemployed—get back to work. [Interruption.] The hon. Member for North West Norfolk (James Wild) says that that is spending. Actually, getting people into work and paying taxes, as well as paying less on benefits, is good for the economy and good for those people who get back into work.
(3 months, 3 weeks ago)
Commons ChamberWe have had an exciting and heartfelt debate. I commend for their speeches my right hon. Friends the Members for Sutton Coldfield (Sir Andrew Mitchell), for Wetherby and Easingwold (Sir Alec Shelbrooke), for Basildon and Billericay (Mr Holden), for Salisbury (John Glen) and for Beverley and Holderness (Graham Stuart), my hon. Friends the Members for Bromsgrove (Bradley Thomas), for Beaconsfield (Joy Morrissey), for Farnham and Bordon (Gregory Stafford), for Keighley and Ilkley (Robbie Moore), for South Northamptonshire (Sarah Bool) and for Bognor Regis and Littlehampton (Alison Griffiths), the hon. Members for Angus and Perthshire Glens (Dave Doogan) and for Ynys Môn (Llinos Medi), and the hon. and learned Member for North Antrim (Jim Allister).
We have heard some excellent speeches from Members speaking with passion on behalf of the small businesses, farmers, workers and pensioners who have been hit by Labour changing its mind on taxes and doing things differently from what it said it would do at the election. We have also heard two new phrases today. Thanks to my hon. Friend the Member for Bognor Regis and Littlehampton, we now realise we have to challenge the Chancellor based on her “flagship failures”, not her flagship policies. With great passion, the hon. and learned Member for North Antrim told us how Labour’s tax on family businesses means that small businesses are no longer planning for growth; they are planning for death.
The public feel they were misled by Labour at the general election. They think those on the Labour Front Bench are incompetent. They think the Prime Minister is woefully out of touch and the Chancellor is out of her depth—and why shouldn’t they? A Prime Minister who needs multiple attempts to define a woman, and multiple attempts to define a working person, does not exactly inspire confidence; a Chancellor who says that she will not raise taxes on working people, and then hikes national insurance, costing working people their jobs and earnings, does not inspire trust.
Our motion provides the Government with an opportunity to draw a line, recognise the overreach and errors in their taxation policies, and give some hope to the makers in our society and those who work hard in our warehouses, offices, factories, shops, restaurants, and public services. They could recognise the errors in the Treasury’s assessment of the impact of the family farm tax on those who grow our food, and the trauma caused by the jobs tax for those who build our businesses. Those are the people who know how to grow our economy, not the numpties on the Front Bench, so why are the Government intent on holding them back?
Alas, the Chancellor thinks that she knows best, and despite taxes being at their highest rate on record, she is on the hunt for new taxes: wealth tax, capital gains tax, pensions tax, council tax, savings tax, tax, tax, tax, tax—it is always the same with a Labour Government. The Government’s strategy is to tax their way to growth, but I have to tell the Chancellor that that strategy will not work. No economy can tax its businesses out of existence and create growth.
Tonight the Chancellor starts her new tax campaign with a visit to the City. For the first time it will not be so much a Mansion House speech as a mansion tax assessment. The Chancellor will claim that the Government’s actions have brought about financial stability—well perhaps, but not in this country. The Government’s Chagos deal has eliminated income tax in Mauritius but given British taxpayers a new £30 billion tax bill, and the Government’s abolition of non-dom status is boosting the tax revenues of Portugal and Italy but will mean taxpayers here having to cough up billions a year more to plug the gap as people leave the UK, taking their tax payments with them.
The truth is that the Chancellor has done the complete opposite of her claims of stability. She is the eye of an instability storm of her own making, where nobody knows when her next tax raid will come, and who will get hit the hardest—a second summer of doubt and uncertainty caused by this Chancellor, and tolerated by this Prime Minister. Labour Back Benchers know it. They know all the times that the Chancellor has led them up the hill, only to lead them down again: the “once in a Parliament” tax hike, the removal of winter fuel payments, the blundered attempts at welfare cuts, and it has only been one year! Labour Members are limping towards recess—look at them, Mr Deputy Speaker. Napoleon’s troops were in better humour on their march back from Moscow than some Labour MPs are as they make their way back to their constituencies, and back to the people to whom they promised so much just one year ago, only to deliver oh so little. No wonder people feel so let down.
But let us be fair: some Labour Back Benchers are going back with a warm feeling. A reshuffle is coming soon, to clear away all the dead wood on the Front Bench —oh, so much dead wood—and some Labour Back Benchers have already had the tap on the shoulder. They already know who they are, and they are going home with great expectations of high office— [Hon. Members: “Ah!”] No, no, spare a thought, please, for the many other Labour MPs who have missed out. They felt that they were given a promise that if they did the right thing they would be looked after. Now they know that the Government have reneged on their promise, and that the change they hoped for will not come. For them, I am truly sorry. But there is one consolation: at least now they know how the rest of the country feels.
(4 months ago)
Commons ChamberLabour’s jobs tax has really clobbered British businesses. The Office for National Statistics says that the number of available jobs is collapsing. Perhaps the Chancellor has not updated herself on how British business thinks about confidence: the Institute of Directors has said today that business confidence has plummeted; the Bank of England is warning of significant declines in wage growth; and the British Chambers of Commerce says that taxes on businesses cannot be increased. The Chancellor has bungled welfare changes, eviscerating confidence in the Prime Minister and blowing an even bigger hole in the public financing, meaning that she will raise taxes yet again this autumn. Will she avoid creating the same damaging uncertainty she did last summer by ruling out from the Dispatch Box today any further tax increases on British businesses?
I am not going to take lessons from the Conservatives: they increased taxes 25 times. When they increased taxes, it was always ordinary working people who paid the price. In our Budget last year, we protected the payslips of ordinary working people by not increasing their income tax, their national insurance or their VAT, and we did not go ahead with the increase in fuel duty that the Conservatives had planned. Instead of talking down the British economy, why do the Conservatives not back the plans that are backed by British businesses to grow our economy and make working people better off?
(4 months, 2 weeks ago)
Commons ChamberI thank the Chief Secretary to the Treasury for his statement, and for providing early sight of it.
Our ability to invest in public infrastructure is a positive for individuals, communities and the country as a whole, and it is right that the new Government set out their strategy. The last Government had to deal with a series of economic disruptions, including the impact of covid, the unwinding of quantitative easing across all advanced economies, and the consequences of Russia’s invasion of Ukraine. The global impact was disrupted supply chains, increased inflation and raised interest rates. Notwithstanding those shocks, under the last Government, public sector expenditure on capital increased in real terms, from £81.7 billion in 2019-20 to £117.8 billion in 2024-25—an increase of 44%. Today, the Chief Secretary has confirmed expenditure of £725 billion, but has provided very little detail. There is no project pipeline today; will he commit to coming back to this House when it is published?
In 2024, the last infrastructure pipeline analysis included an investment pipeline of 660 projects over a 10-year period, commencing from 2024-25. The Chief Secretary’s last statement to the House was, in very large part, a restatement of the investments in local transportation projects that had already been announced by the previous Conservative Government. Will he confirm how many of the 660 projects in the previous pipeline will be retained? Will he advise the House which major projects are being abandoned, and give some insight into his reasoning for doing so?
Translating a pipeline into reality requires a labour force of sufficient size and with a range of skills—in construction, project management and engineering, for example. Again, the 2024 analysis by the Construction Industry Training Board indicated that that project pipeline would create labour pressures in many of those skills areas. Since coming to office, this Labour Government have increased national insurance and are proposing new regulations on employment, both of which will disproportionately affect the construction sector. Does the Chief Secretary have any concerns about the impact of those changes on the availability of labour? Will he advise the House what assessment he has made of skills pinch points and what steps the Government are taking to alleviate them? Fulfilling these plans will require investment by taxpayers and private capital. Will the Chief Secretary advise the House on whether there has been any significant change in the mix of private and public investments—within discrete sectors or overall—compared with the last pipeline analysis in 2024?
The Government created the National Wealth Fund, and said that it was their principal investor—a critical part of the Government’s growth strategy for infrastructure. The Chief Secretary has given the National Wealth Fund £7 billion, but has made no mention of it today. Why has there been no mention of the National Wealth Fund?
We are moving through an era with a rapidly accelerating pace of change, in which the period from technological innovation to obsolescence can be vanishingly short. The risk that public investment in new technology solutions will become redundant is increasing. While being forward-looking, the Government should also be careful to nurture both existing technologies and new but proven ones, so what are the Government’s priorities for technology choices in the energy sector, and what actions will he take to protect taxpayers from technology redundancy risk?
The Pension Schemes Bill, introduced by this Government, includes a reserved power for the Government to mandate the investments of pension schemes. Has the Chief Secretary had any discussions about—or had the Treasury do any analysis of—the use of mandation powers to provide financing to the capital investments he has announced today? Have the projects announced today been assessed according to the revised Green Book rules? If not, will they be reassessed at some point on the revised basis, and what assurance can the Chief Secretary provide that these projects will give value for money to taxpayers? As this Government have stated, and as we acknowledge, when pressures on public expenditure increase, it is frequently capital expenditure that suffers. What actions is the Chief Secretary willing to take if finances are tight to protect the budgets for the projects he has announced today?
Investment in infrastructure benefits from a stable economic background, a clear set of priorities, efficient delivery, and optimal returns for taxpayers and investors. Madam Deputy Speaker, I miss the Chief Secretary in his old guise as Chairman of the Business Select Committee, when there was less of the rhetoric and the partisanship. These big decisions need open communication and critical analysis if we are to improve value for money and get projects delivered on time and on budget. In those endeavours, the Chief Secretary will always have our support.
As Mr Fuller knows, there were three of us on that Committee back in those good old days.
(5 months ago)
Commons ChamberI 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.
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.
(5 months, 2 weeks ago)
Commons ChamberOf 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?
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.
(6 months, 4 weeks ago)
Commons ChamberTwo 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?
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.
(7 months, 2 weeks ago)
Commons ChamberThe 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.
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?
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.]
(8 months ago)
Commons ChamberImproving 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”?
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.