Economic Responsibility and a Plan for Growth

Richard Holden Excerpts

Wednesday 19th October 2022 Commons Chamber

[Rachel Reeves]

Levelling up has truly been replaced by trickle down, and my hon. Friend’s constituents are paying the price.

We need strong public services focused on early intervention and prevention, reducing greater demand with better outcomes for people. We need the Government to stick to their manifesto commitments, including uprating benefits and pensions in line with inflation. It should not be working families, pensioners and the most vulnerable who pay the price for these Tory mistakes.

[Mr Richard Holden (North West Durham) (Con)]

Will the hon. Lady give way?

[Rachel Reeves]

I will make a bit more progress.

Labour will get value for every pound of taxpayers’ money. That is why I announced last year that a Labour Government will introduce an office for value for money, tackling the endemic waste that we have seen under the Tories. Under the Conservatives, £11.8 billion of public money was handed to fraudsters and organised criminals because of a refusal to include the most basic security checks for covid support. That is before we get to the £7 billion spent on unusable personal protective equipment, the £13 billion wasted on failed defence procurements and the millions and millions flushed down the drain by this Government’s outsourced Serco test and trace system.

This week, we have read reports that the Treasury is shutting down the taxpayer protection taskforce that it belatedly set up in March to try to retrieve the money that the Government gave to the fraudsters. The taskforce should not be shut down; it should be empowered to get taxpayers’ money back.

As for the £3.5 billion handed out to friends of and donors to the Conservative party, many of whom failed to deliver on those contracts, in business if you award a contract and it does not deliver, you claw the money back. The Government must now strain every sinew to get that money back, because taxpayers demand it, and that comes before the cuts and the austerity that this Government are about to unleash.

The Government say that working people now have to put up with eye-wateringly difficult decisions, but there are so many easy decisions that the Government could make to stop families feeling the pain. Why keep in place an outdated and unjustifiable non-dom tax status loophole which means that some of the wealthiest pay no tax on their incomes while ordinary working people face the highest tax burden in 70 years in this low-growth, high-tax economy? Labour’s principle is clear: if you make Britain your home, you should pay your taxes here. Research carried out at the London School of Economics and Warwick University has shown that the UK’s non-dom system costs us £3.2 billion a year.

Look at the tax break for private equity managers, which was cooked up in the 1980s by a Conservative Government—a tax break of nearly £200,000 each for 2,000 private equity bosses every single year! It is not right that bosses pay a lower rate of tax on their bonuses than workers do on their wages. It is indefensible, so Labour will abolish it. At present, private schools enjoy charitable status which makes them exempt from both business rates and VAT at a cost of £1.7 billion every year, but here is the truth: private schools are not charities. We will end that exemption, and put that money back into our state schools.

That is what a fair tax system looks like, and that is what Britain will get with a Labour Government: fiscal responsibility, and a fair tax system that puts working people first. Labour will stabilise the economy by being responsible with public finances through our strong fiscal rules. It is on that foundation that our green prosperity plan will invest in the jobs and industries of tomorrow as we meet our climate obligations and secure our energy supply here in Britain. There are great opportunities for the industries of the future, and opportunities for Government to partner with industry and invest in, for instance, domestic renewables such as wind, hydrogen and carbon capture, and nuclear as well. Labour will create a national wealth fund so that when we build British industry, the public will have a stake and receive a return on those investments. The next Labour Government will buy, make and sell more here in Britain, with an industrial strategy that is pro-worker and pro-business. We will breathe new life into our high streets by calling time on the outdated model of business rates. That is a real plan for the future, not lurching from crisis to crisis like the Conservatives.

[Mr Holden]

Will the hon. Lady give way?

[Rachel Reeves]

No. I have almost run out of time. I have been speaking for 20 minutes, and I have taken a great many interventions.

So much damage has been done to our economy by the Conservatives’ reckless mini-Budget, but the Government can prevent things from becoming even worse. Today they can show that they have listened, and publish the OBR forecasts and assessments that they are sitting on so we can know the true state of our public finances and our economy. They should publish the assessments that they already have of the windfall profits of the energy giants in the next two years, and then set out clear steps to introduce a proper windfall tax. It is a sign of how far off the road of competence and responsibility this Conservative Government are that they have not already done those basic things.

People can no longer afford the cost of Tory failure. We need a stronger and fairer economy from a Government committed to financial responsibility, and a serious plan for growth that puts working people first. The very least the Government can do is publish the numbers, and I urge all Members to support this motion to ensure that they do exactly that.

[The Financial Secretary to the Treasury (Andrew Griffith)]

Our constituents are worried about what the current global turbulence in the economy means for their jobs, their prospects and their families. They want to know that they can afford to get by, and that once the economic storm clouds have passed—which they will—they can thrive. It is these concerns, those of our constituents, that we are thinking about, rather than—I say this in all due seriousness to the hon. Member for Leeds West (Rachel Reeves), because I think she knows better—misrepresenting global trends. We are focused on protecting the most vulnerable and looking after our economy.

[Mr Holden]

I wonder whether my hon. Friend noted, as I did, how little was said about the real cause of the current issues in the global markets: Russia’s illegal invasion of Ukraine, driving energy prices up across the globe, driving inflation up across the globe, and driving interest rates up. There was no mention of that from the Opposition. Whose side are they on when it comes to these situations? It is clear to me that they are not paying attention to the real issues underlying the global markets, and they do not understand what is going on.

[Andrew Griffith]

My hon. Friend has made a very important point. I think the whole House will want to acknowledge not only the impact on our economy of covid and the measures that Members on both sides of the House supported, but Putin’s invasion of Ukraine. It does us a great disservice to try to be over-partisan about the impacts of global trends that are happening in every western economy.