Economic Responsibility and a Plan for Growth

Toby Perkins Excerpts

Wednesday 19th October 2022 Commons Chamber

[Rachel Reeves]

The truth is that a million people are missing from the labour market and half of those have long-term health conditions. We need to do much more to get those people back to work. One reason why unemployment is low is that so many people are not even looking for work because they are waiting for NHS operations, with waiting times at an all-time high.

Today, we learn that inflation has gone above 10% again; food inflation is at more than 14%; and in the last year alone, electricity prices are up 45% and gas prices have doubled. Despite all the extraordinary and unprecedented U-turns in recent days, the damage has been done. This Conservative Government have wrecked people’s finances and snuffed out the dream of home ownership for millions. Some 1.8 million people across the UK will pay higher mortgage bills by the end of next year—on average, they will pay £580 extra every single month—because of the reckless actions of the Government. In my Yorkshire constituency, the cost will be £360 extra a month. In the constituency of the Financial Secretary to the Treasury, the hon. Member for Arundel and South Downs (Andrew Griffith)—who is about to respond to me—it will cost people £640 extra every single month in higher mortgage payments. Families cannot afford to pay those higher mortgage costs, and they certainly cannot pay them with apologies from the Prime Minister. The public will not accept that the arsonists who inflicted this damage can put out the fire. The Tories can never be trusted with our economy again.

[Mr Toby Perkins (Chesterfield) (Lab)]

I congratulate my hon. Friend on the motion that she has tabled. It seems utterly unarguable that the crisis being wrought upon our constituents is to be laid squarely at the feet of the Government. It would appear that the Government agree, because according to briefings on Twitter, they do not intend to vote against the motion. Does my hon. Friend agree that the fact that the Chancellor has not turned up to defend the record and that Conservative Members do not even seem to disagree with the motion means that we can all agree that this is the Government’s fault?

[Rachel Reeves]

I agree that it is a shame that October’s Chancellor is not in his place today. This crisis has been co-written by every single member of the Cabinet and every single member of the Government. The Minister for the Armed Forces and Veterans was crystal clear yesterday in pointing out that all Cabinet Ministers had approved and are responsible for Government decisions, including the disastrous mini-Budget. There is no credibility or stability with this Government, just a shambles. All the time, businesses are looking at the state of the Government and deciding where and whether to invest. The Tories’ recklessness and enduring incompetence will cost jobs and investment here in Britain. The Conservatives should not be put in charge of a tombola, let alone the British economy.

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[Andrew Griffith]

The Chair of the Public Accounts Committee has made some fair points. We have acknowledged that mistakes have been made—the Prime Minister herself has said that—and I am happy to say it in the spirit in which the hon. Lady acknowledges that there are wider factors at work in the economy. It ill behoves the House to make those over-partisan points when our constituents are looking to us collectively for what we are able to do.

[Mr Perkins]

rose—

[Rushanara Ali]

rose—

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[Andrew Griffith]

I think we all have constituents who are rightly worried in these times of global turbulence and increasing interest rates in every part of the world. The hon. Lady will forgive me, I hope, if I do not comment on the specific operations of the Bank of England, which I think would be inappropriate—other than thanking hard-working officials for the intervention that they have made over the last couple of weeks.

[Mr Perkins]

rose—

[Andrew Griffith]

I will give way one more time, and then, if Members will forgive me, I will make some progress.

[Mr Perkins]

I am grateful to the Minister.

Of course global factors meant that the situation was dangerous, but will the Minister acknowledge that it is precisely because of those global factors that the new Prime Minister and Chancellor had to tread very, very carefully? That is why what they did was so reckless and so damaging.

[Andrew Griffith]

I am not sure that I can fully accept what the hon. Member says, but the Government are committed to the independence of our institutions. It is very important that people understand that. Both the Bank of England and the Office for Budget Responsibility have a valuable role to play, which is why when the Chancellor presents his forecast to the House in just eight parliamentary days’ time he will ensure that it has been fully presented to, and signed off by, the Office for Budget Responsibility.

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[Mr Toby Perkins (Chesterfield) (Lab)]

I rise to speak in support of the motion. I am glad to hear that it seems to be enjoying a lot of support, and I hope to see the Office for Budget Responsibility’s forecast published immediately after the motion is carried.

I have always opposed Tory Governments. I have long been of the view that a bad Labour Government is better than a good Tory one. I know what the Tories are about and I never expected them to do anything other than make life more difficult for the most vulnerable. In fact, if that were not the way the Tory party operated, we would never have needed to invent the Labour party in the first place. But having opposed many Conservative Governments, never before have I seen one so inept, yet so arrogant as the current Government; so damaging, yet so casual about their impact on people’s lives.

When the revisionism comes, as it undoubtedly will in the weeks and months to come, we must remember that this situation did not fall out of a clear blue sky. There was a clear mandate, because during that leadership contest the Prime Minister was clear about what she intended to do. It was Tory MPs who put her into the final two. Now we hear them say, “We must never again let the members choose the leader”, but they chose to put the right hon. Member for South West Norfolk (Elizabeth Truss) in the final two knowing full well what policies she would support. Huge revisionism is going on so that the next generation of Tory MPs will be able to say, “Oh, that was just a rogue Chancellor and a long-ago deposed Prime Minister. Forget about them—we changed after that,” but the right hon. Lady won a mandate from her party to pursue those policies.

At the time of the mini-Budget statement, some voices were expressing disquiet, but I recall the support we heard from many Tory Members. It was when I heard how happy the mini-Budget had made the right hon. Member for Wokingham (John Redwood) that I knew how bad it would be for the British people. I remember the hon. Member for Don Valley (Nick Fletcher), who was in his place a few minutes ago, claiming that the whole of Doncaster would support the mini-Budget. I have not heard him say that today. As the hawks of the right-wing press circle over the Prime Minister, let us not forget that they were the loudest cheerleaders for this mini-Budget. The day after the statement, the Daily Mail proclaimed, “At last! A true Tory Budget”. The Express was equally triumphant—“Big tax cuts to herald new era”.

[Janet Daby (Lewisham East) (Lab)]

Does my hon. Friend agree that the then Chancellor was carrying out what the Prime Minister had said she would do? She made sure that he lost his job, but she should be the one taking responsibility and, indeed, resigning.

[Mr Perkins]

I could not agree more. The right hon. Member for Spelthorne (Kwasi Kwarteng) is the first politician in history to have had to resign for doing what he said he was going to do, which was precisely what the Prime Minister said she was going to do. The mini-Budget was born of the recklessness of the previous Prime Minister having pursued so much, so confidently, with so little evidence.

Make no mistake: I will spend every day between now and a general election making sure that the people of Chesterfield know that the higher interest rates, the tax rises, the cuts to our threadbare services and even, shamefully, the prospect of disabled people on benefits and impoverished pensioners suffering further cuts to their real-terms income, are all the result of this arrogant recklessness. This did not need to happen. Yes, there are global issues, but the central banks in America and Germany did not have to bail out the pension funds. Of course we welcome the fact that the Government have undone some of the measures, although it was bizarre to hear the Chancellor say on Monday how pleased he was that Labour were supporting his plans. They were our plans a few weeks ago! Now, the Tory Government see it as a success that they are trying to put out the fire that they lit in the first place, but the damage has already been done.

The logical call for a windfall tax made by my hon. Friend the Member for Leeds West (Rachel Reeves) continues to be rejected. What objection do the Government have to asking the energy generators to contribute some of their vast excess profits to help to fund the cost of ensuring that people can stay warm this winter and enabling businesses to keep their doors open?

[Paula Barker]

Does my hon. Friend agree that when even the CEO of Shell is advocating a windfall tax—we truly have gone through the looking glass—it is time the Tories did the right thing?

[Mr Perkins]

It absolutely is. I suspect that, ultimately, they will. I am a great student of history and I can remember all the way back to January this year, when the Labour party called for a windfall tax. I remember the then Prime Minister standing at the Dispatch Box mocking us and saying that Labour always wants to raise taxes, and the then Chancellor saying the same thing. A few months later, reluctantly they had to announce precisely that. The right hon. Member for Uxbridge and South Ruislip (Boris Johnson) used to stand at the Dispatch Box criticising the policy—our policy—that he later adopted. That is how bizarre this Government’s behaviour has been. Now we have to go through the same damaging charade again. It is clear that ultimately the Government will adopt Labour’s policy of a windfall tax, but in the meantime their resistance will cost our country and our people dear.

Just a week ago, the Prime Minister was boasting that she was guaranteeing people’s energy bills for the next two years, so why were Labour only going to guarantee them for six months? Then on Monday the Chancellor comes here and says, “All right—six months.” That is how this Government are running our economy. You would not run a whelk stall like that.

Government policies change at a bewildering rate, but they do not seem to understand that it is not just that the policies are wrong; it is the clear demonstration that they do not have a clue what they are doing that is unsettling the markets. In Chesterfield, 3,352 households face a hike in their mortgage payments next year. It is quite unforgiveable. My hon. Friend the Member for Liverpool, Wavertree (Paula Barker) said that this is 2011 all over again, but that is not so. In 2011 we were coming off the back of 13 years of Labour investment in our public services, so there was a chance that our health services, our schools and our Sure Starts could withstand the cuts. Not now. Our public services cannot tolerate the sort of cuts that the Chancellor has warned might be coming our way.

The idea that this Government can restore confidence in our nation’s finances by having two more years to demonstrate the ineptitude that in the past 12 years has brought us to our present state would be laughable if it were not so serious. There is no mandate for the approach that they are now pursuing. If the Tories think that they can quietly euthanise the career of the latest Prime Minister and have another go, they are further removed from reality than even I believe they are.

We need a Government who are truly committed to growth, to a green recovery and to rebuilding our public services. We need a Government whose policies last beyond the ink drying on the growth document they have just printed. We need a Government whose plans are robust and whose leader is strong. We need a Government who are willing to lead in the national interest, and not just in the narrow interest of their party. That means we need a Labour Government led by my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer). We need that general election now.

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[Mr McFadden]

We have never argued that there was no need for borrowing. The point we made was that much more of this could be funded by a windfall tax. If the hon. Gentleman thinks that that is some sort of revelation, I can only ask him where he has been living for the last few months.

The Prime Minister and the Chancellor of September behaved like student pamphleteers. When the Prime Minister stood up at her conference and attacked

“vested interests dressed up as think tanks”,

it was an announcement worthy of the gold medal for lack of self-awareness, for never has there been a Government more symbolic of the failure of think-tanks on influential thinking than the one that she leads.

The Prime Minister and her ideological soulmate got the keys to the Treasury Ferrari, took it for a joyride and then crashed it into a ditch. Now, belatedly, by commissioning the OBR report and singing the praises of an independent Bank of England after spending all the summer undermining it, they have signed themselves up for the speed awareness course; but it is too late, because people will continue to pay the price of what they have done.

We have now had two fiscal events with no report from the OBR. This was not just about what was done, but about how it was done. The whole country is paying a price for the Conservative party’s contempt for the institutions that safeguard our economic credibility. And where does it all leave the Prime Minister? The mini-Budget was not a surprise to her; it was not imposed on her; she was 100% its co-author. It embodied her beliefs, her world view, the central core of the campaign on which she fought and won the leadership contest. Now everything she believes in has had to be burned in front of her to try to keep this zombie Government carrying on. This is not a case of “too far, too fast”, as she has claimed, or of a minor policy U-turn. It is a repudiation of everything that she stands for. It is a total and utter reversal.

The one surviving policy that the Prime Minister keeps praying in aid, the energy price guarantee, is the one policy that she campaigned against throughout her leadership campaign, saying that she was opposed to handouts. The question now is, what is her premiership for? Is it for the policies that she really believes in—those in the mini-Budget, now rejected and lying in ashes—or is it for the revenge of the orthodoxy that she so disdains? Each dose of the medicine she takes entails embracing that which she has so publicly rejected. Her argument, in effect, is “Please keep me here so that I can be what I am not.”

[Mr Perkins]

Is not the truth that what the Prime Minister’s leadership is for is for the moment? She is here for a very short period, until the Tories can find an excuse to get rid of her.

[Mr McFadden]

My hon. Friend is right. In fact, the only discussion on the Conservative Benches is about how to do precisely that.

We cannot believe anything the Prime Minister says. Only seven days ago, she stood at that Dispatch Box and promised there would be “absolutely” no spending cuts.

Five days later, the new Chancellor—October’s Chancellor—told us that the cuts had to be eye-watering. Conservative Members know that this is an impossible basis for leadership, and that it leaves the Prime Minister in an untenable position. They are remembering the words of the song that was played at their party conference as she came on to the stage:

“You've done me wrong, your time is up…there's no way back…you’re movin' on out”.

Three cheers for M People: not just a great band, but one with the political foresight of Nostradamus.

Now the new Chancellor has been sent down from the mountain, come among us, as he says, to restore confidence and stability—but who destroyed confidence in the UK? Who created the instability? Who fashioned the Tory risk premium? I am too polite to call it what they are calling it in the City, which is “the moron premium”. It was the new Chancellor’s own Government.

Let us be clear: no one was talking about spending cuts before the mini-Budget of 23 September, so the cuts are a result of what the Government have done. There has been no emergency central bank intervention to rescue pensions in the United States, Germany or France. The global circumstances that the Government refer to were the reason not to take such reckless risks with the public finances.

I have noticed one thing about the new Chancellor, though: he is not pretending that it is year zero. He is owning the record—all 12 years of it—and he now wants to implement a version of what was done after 2010. We have gone from an economic policy of having to borrow from communities such as mine in Wolverhampton South East to fund a tax cut for people earning over £150,000 to a policy of those communities having to pay for the chaos caused by the first policy.

We can see what the plan is. Having crashed the economy and brought a new dimension of pity, bemusement and risk to the term “global Britain”, the Government now want the acid test to be support for their public expenditure cuts. They have already made people pay once for their mismanagement through higher mortgage rates. Now they want to make people pay twice through cuts to public services. It is the ultimate in governmental arrogance. They get to mess up the country through a giant ideological experiment and then ask everyone else to pay the price. That is not a political virility test; it is a candid admission of failure.

The roots of that failure lie not just in one or two policy errors but in something deeper. They lie in the triumph of ideology over evidence. They lie in the view that all that is needed is blind faith—the test that someone is a true believer—and the view that anyone who questions or points out inconvenient truths is a doom-monger, part of the blob, and not a proper patriot. That destructive ideology has done great harm to our politics. It has reduced the Conservative party to its current abject state, and has served as the rationale for attacking one institution after another.

Politics begins with wanting to change the world, but what have this Conservative Government been reduced to? Attacking tofu. What other forms of food will now be lined up in the culture war that is all that is left for them? The disaster of the past few months should result not just in a few policy U-turns, but in turning away from the politics that drove those decisions and has done such harm to the country. This country has great strengths: world-leading services, great high-value manufacturing, creative industries with global reach, some of the best universities in the world, and a fantastic workforce. It deserves much better than this Conservative Government.