Energy (oil and gas) profits levy

Debate between Sarah Olney and Liam Fox

Tuesday 22nd November 2022 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

This is a cost of chaos Budget. Everyone is now paying the price for Conservative incompetence. This Conservative Government crashed our economy with their reckless, unfunded tax cuts. They have presided over years of low growth, low investment and declining productivity, and now they are eroding our public services and hiking taxes on ordinary people, all while slashing taxes on the big banks and refusing to close the windfall tax loophole that has allowed Shell to avoid paying a single penny.

The British people need a Government with a plan for a fairer economy that can secure future prosperity.

[Dr Fox]

Will the hon. Lady give way?

[Sarah Olney]

I will not give way, as the right hon. Gentleman has just spoken.

The British people need a Government who truly value public services, and who focus on removing barriers to economic growth by tackling workforce issues and rebuilding trade, yet all we have instead is Conservative chaos and incompetence. Thanks to the Conservatives’ economic mismanagement, Britain is getting poorer; we are all getting poorer.

Families across the UK are set for the largest fall in living standards since records began. The coming months will see family budgets put under extreme pressure. Mortgage payments are set to explode, doubling to their highest level on record next year. Energy bills will be almost £2,000 a year higher than they were in 2021, and the weekly shop is becoming more and more expensive. This is simply unmanageable with the tax rises announced by the Chancellor.

The Conservatives’ disastrous mini-Budget cost the public finances £30 billion, and now the Government have hiked taxes by £24 billion, forcing the public to clean up their mess. Everyone will be hit by unfair stealth tax rises, and more than 5 million people will be dragged into a higher band as a result, yet they will not see any benefit from the higher taxes they pay.

The Conservative Government are trying to pin the blame for all our economic woes on global factors, but the fact is these global challenges are hitting the UK harder than other major economies. We are set for the worst GDP decline in Europe next year, we are the only G7 country to have a smaller economy than before the pandemic and we have the third lowest growth forecast in the OECD.

Businesses are also really struggling right now. Conservative chaos and incompetence are forcing small businesses to suffer under crippling uncertainty, and many have already closed their doors. Last week, I spoke to a group of independent publicans in my constituency, and every single one had grave concerns about the future viability of their business. One publican told me that their current situation is 10 times worse than during the pandemic, because this time round they have no support from the Government. The business rates relief announced in the autumn statement is cold comfort to a sector that was promised a fundamental review of the unfair rates system. The previous reduction of VAT to 5% gave hospitality a lifeline during the pandemic, and the publicans I speak to say that a return to this rate would provide much-needed relief in the new year as the cost of living really starts to bite.

Publicans also need urgent clarity on energy bill support after April, as they will not be able to survive without continued assistance. I urge the Government to listen to the concerns of the hospitality sector, which is so integral to business, British industry and local communities. I would welcome a statement from the Minister for Enterprise, Markets and Small Business, the hon. Member for Thirsk and Malton (Kevin Hollinrake), on the steps the Government will take to support hospitality in the months ahead.

I was pleased to hear the Chancellor finally acknowledge workforce constraints in his speech last Thursday. Economic inactivity is a huge barrier to growth, and I welcome the review of the issues holding back workforce participation. In his review, I urge the Secretary of State for Work and Pensions to consider the impact of our inadequate childcare system on women’s participation in the labour market.

The Conservatives must also accept that their failure to deliver effective public services has led to a dramatic increase in the number of people who are long-term sick. The OBR forecasts that an additional 1.1 million people will need health and disability benefits in four years’ time, taking the number registered as unable to work to a record high of 3.5 million.

The UK’s labour shortages cannot be filled by a review of workforce participation alone. We must also look at our broken visa and immigration system, and acknowledge the impact that Brexit has had on our labour market. Brexit has also been disastrous for UK trade. Rather than opening up opportunities for global trade, businesses have been inundated with red tape. The OBR forecasts that the UK’s trade intensity will be 15% lower in the long term than if we had remained in the EU. Trade is vital for economic growth. It is way beyond time that the Government finally got a grip and started rebuilding our trading relationships.

The Liberal Democrats are the only party with a comprehensive plan to rebuild trust and co-operation with Europe, to rebuild ties with our largest trading partner and to grow our economy. The Conservatives have no plan for future prosperity. We need a plan for an innovation-led economy aligned to net zero; one that sustains economic growth and fuels a fairer society with high-quality public services. Instead, the Conservatives have inflicted higher taxes and weaker public services on everyone, all without a proper mandate and all to pay for the damage that they caused in the first place.