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Showing every spoken contribution, including 11,997 under 12 words. Hide short remarks
Order. As I said earlier in my introductory remarks, Sir Bernard, we do not intervene on Front-Bench speeches. The odd thing is that we went through this scenario this time last year. <em>[</em><em>Interruption.</em><em>]</em> We did, we did—yet here we are again.
Order. Mr Gareth Snell, moving three rows back does not mean I cannot see you or hear you. Let us try to simmer down.
I call Peter Kyle.
I call the Chair of the Business, Innovation, Science and Trade Committee, after which there will be a speaking limit of eight minutes.
May I also give my thanks to the Clerk of the House and convey to him, on behalf of those on my side of the House, our very, very best wishes for the future? There has been a bit of confusion this week, and I hope that the Prime Minister can clear it up. Does he or does he not want a referendum on rejoining the European Union?
It sounds as if the Prime Minister does not know whether he wants another EU referendum. I certainly do not. It is the Chancellor’s big week, and the Prime Minister popped up on telly and opened his mouth without engaging his brain, not for the first time. Can he explain why he decided, during Budget week, to reopen a debate on freedom of movement?
The Prime Minister keeps talking about our deal, but he is using our deal. He is using our Brexit freedoms to take VAT off energy bills. He used those Brexit freedoms just yesterday to scrap import taxes on hundreds of goods. What he should be saying is thank you. I asked the Prime Minister about freedom of movement. I do not think he has been talking to his Cabinet colleagues, because I will tell him who does not want a debate about freedom of movement: the Home Secretary—she has been very clear on that. The Business Secretary does not want it either. The Culture Secretary and I do not agree on much, but even she does not want the Prime Minister to restart this debate. What about his Back Benchers? Let’s have a show of hands—who wants free movement? I know the Prime Minister does not want to look behind him, but nobody raised their hand. There was someone else who did not want to reopen free movement: an ambitious candidate fighting a by-election earlier this year. He said “the last thing we should do right now is rerun those arguments.” Does the Prime Minister still agree with himself?
It sounds like the Prime Minister does not know if he agrees with himself or not. He wants to remind me about my words. I stand by my words. Where we make mistakes, we own up to them. Labour pretends that it never does anything wrong. <em>[</em><em>Interruption.</em><em>]</em> Yes, yes, yes. Indeed, that is the difference between him and me. He wants to remind me about what I said; I think it is worth reminding him what he said just this May about the Brexit referendum: “It’s going to undermine everything I’ve said about strengthening democracy if we don’t respect that vote.” But he does not respect that vote, does he?
I have said many times that, yes, it was, and the Prime Minister is using those freedoms today. He is using those very freedoms, but he does not want to admit that. He is the Prime Minister, not me. He wants to ask me questions. I am very happy to swap places with him, if that is what he wants. I am not talking about something that he might have said 10 years ago, although I can read out those quotes if he wants. I am talking about something that he said just a few months ago. The Prime Minister was not here for the 2017 Parliament, but many of us were. We do not want to go through that again. The country was paralysed—it was miserable, regardless of which side of the debate you were on. <em>[Interruption.] </em>It was, because Labour Members would not respect the result, and they are doing it again. Does the Prime Minister really think the country wants to reopen that debate?
I cannot believe that the Prime Minister actually said at that Dispatch Box that he wants to reopen the Brexit debate. He is in a different place from where he was in Question 1. Let me tell the Prime Minister: the country does not want to rerun this debate; neither, as it happens, do his Back Benchers. This country voted to leave the EU, and we should respect that decision. The Conservative party always has done. Our economy is facing serious challenges. The Prime Minister needs to get borrowing down, because of their stupid decisions. <em>[</em><em>Interruption.</em><em>]</em> One of them asks, <span id="294" class="column-number" data-column-number="294"></span>“Why?” It is because of their stupid decisions. They need to get borrowing down. He needs to get welfare down. He needs to get people’s taxes down. All of this can be done without reopening a debate on the EU, so instead of leaving it to his team again, I will give him one last chance to clear up the mess he has made: will he rule out, after his extraordinary comments, any referendum on the EU or the single market?
Thank you, Madam Deputy Speaker. I would have thanked the Chancellor for advance sight of his statement, but it was so redacted it was like reading it in the dark. The only numbers were the page numbers, quite frankly. This is Labour’s third Budget in office—<em>[Interruption.]</em>
This is Labour’s third Budget in office, this time with a new Chancellor. I welcome the right hon. Gentleman to his place. I believe there is a term in rugby called a hospital pass, which sums up the inheritance he received from his predecessor, the right hon. Member for Leeds West and Pudsey (Rachel Reeves). Last year, she gave us the Budget for “Benefits Street”; I said that it would be her last Budget, and I was right. The Chancellor may want to blame external events, but Labour’s last two Budgets weakened our economy before any wars. He has got a big job to do cleaning up her mess, and this Budget fails to do it. The Chancellor is giving this Budget at a time of great economic danger. We are spending more on debt interest than on the Army and schools combined. The rate of interest we pay on our debts is higher than that in Greece, Latvia, Slovakia and even the Socialist Republic of Vietnam. Next year, under Labour, the tax burden will be the highest in our country’s history, and our benefits bill is going up by tens of billions of pounds because this Government have put welfare first. We are overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system, and this is the Chancellor’s answer? It is simply not enough—not good enough, not strong enough, and not bold enough. Last week, the Government published their resilience plan. I am afraid that three days of baked beans and a wind-up radio are not going to save us. Labour’s Britain has no resilience. There is no household resilience, because families are struggling to make ends meet. There is no fiscal resilience, because we are borrowing just to pay the interest on our debt. There is no economic resilience, because businesses have been taxed so much that they are closing down and shedding jobs, and there is no national resilience, because we are not ready to meet the security threats of today—certainly not after that speech. We all know why the Chancellor has delayed until tomorrow difficult decisions that he should have <span id="316" class="column-number" data-column-number="316"></span>taken today. It is because the Prime Minister wants to keep the option of an early general election open, putting his party’s interests before the country’s. There are, however, some things in this Budget that I welcome. Some of the Chancellor’s colleagues—the Deputy Prime Minister, the Defence Secretary and the Energy Secretary—were calling on him to increase capital gains tax. I thank him for ignoring them—they were wrong. Tens of thousands of wealth creators have already fled Labour’s Britain, and if he had listened to his colleagues’ bonkers ideas, many more would be heading for the departure lounge. I am also glad that he has broken Labour’s manifesto pledge on the minimum wage for young people; that pledge was wrong, and breaking it is the right thing to do to help young people get jobs. I welcome the Chancellor’s U-turn on ISAs. He is reversing his predecessor’s raid on ISAs—thank you—but his new tax on savers will penalise the prudent and all those people who have done the right thing. I am glad that he has agreed with our campaign on the previous Chancellor’s fuel duty rise. Motorists will be pleased—that rise would have inflicted real pain, especially while petrol prices are so high—but those prices will go up in July. Why? We froze fuel duty for 14 years; Labour can do better than that. I know that Labour MPs probably did not like those bits of the Budget, but can I take a moment to say to the right hon. Gentleman that I have been appalled to see the brutal briefing about him from his own side in this week’s papers? One Labour MP called him “slow”. “A dud.” “Visibly out of his depth”, said another. <em>[</em><em>Interruption.</em><em>]</em> We have all read it. They are not my words—they are Labour MPs’ words. One of them said it, and another came in after, but I can assure the Chancellor that he will not be hearing that kind of language from Conservative MPs today. With friends like that, who needs enemies? Most people in the country listening to the right hon. Gentleman’s Budget will be thinking to themselves, “Is that it? Really, is that it?” The Prime Minister came in promising to reverse “40 years of neoliberalism”; instead, we got 4p off gherkins. Unfortunately, just like every other Labour Budget, the headline story is the same: more borrowing, more tax rises and—surprise, surprise—more money on benefits. This Budget does not come close to meeting the moment. Last week, Labour MPs were asking for a Budget that did no harm. That shows how little ambition they have for this country. Let me tell them: the harm has already been done. Not facing up to the tough decisions we need to take is itself an act of immense harm. Many Labour MPs do not understand that our national debt is now more than £100,000 for every household in this country. They do not understand why it is a problem that a quarter of all working-age adults are now claiming some form of benefits. They do not understand that if Russia launches an attack on NATO in the next three years, as the Government’s own intelligence suggests, we will be at war without the means to properly defend ourselves. <em>[</em><em>Interruption.</em><em>]</em>
Look at them, Madam Deputy Speaker. If war comes, do we want this lot running the country—people so unserious that they do not understand that you cannot have social security without national security? If we cannot defend our country, there will be nothing left to defend. To be honest, I do not blame the Housing Secretary for stocking up on sauvignon blanc. If Russia attacks with these guys in charge, we will all need a drink.
The Defence Secretary is chuntering; he could not even commit to 3% on TV the other day. He is still not doing his job. The fact is that there are huge problems coming down the road, and this Budget is simply trying to get through today. It is a Budget for getting by, not for getting on. I was cautiously optimistic when the right hon. Gentleman was appointed Chancellor. This is a man who once seemed to grasp the danger that Britain is now in. I thought that he was putting country before party when he quit as Defence Secretary—he will remember that I said he was a man of principle. Let me remind him what he wrote in that resignation letter in June. He said: “I am certain that a…date for 3% of GDP on defence in 2030 is what Britain must set.” <em>[</em><em>Interruption.</em><em>]</em> I have not finished—Labour MPs will have to wait for the punchline. They are so slow. He went on to say that if that did not happen, he would be “forced to make decisions that would…increase the risk to personnel on operations, and could make the country less safe.” Today is the day he should have set that date. He is the man who has failed to set a plan for 3%. <em>[</em><em>Interruption.</em><em>]</em> Today is the day that we should have got the plan.
The Chancellor should have set out a plan for 3% today. Now he is the man who is increasing risk to personnel on operations. He is the man who is making our country less safe. He has failed his own test. This is on him, and no one will ever forget. If he had any decency, he would resign again today. Yes, the Chancellor has funded the defence investment plan, and that is welcome, and yes, there is more support for Ukraine, and that is welcome, but he said himself in June that that was not enough. He has given himself a bit of breathing space until next year. Instead what we have is a plan to have a plan. I bet Putin is really scared now. We know that finding the money is difficult, but it can be done. On the Opposition Benches, we have found the savings to get to 3%, because we know Britain is facing very serious threats. The defence funding that the Government have announced today relies on more borrowing. Let me explain why that will only make us weaker. The OBR confirmed today that Britain’s national debt is forecast to increase again. We are borrowing just to pay the interest on that debt. The credit card has been maxed out and the Chancellor is taking out new <span id="318" class="column-number" data-column-number="318"></span>credit cards just to pay the interest on the old ones. The three Labour Budgets will have added more than £260 billion to the national debt. Our great grandchildren will be paying for Labour’s total lack of self-restraint. Meanwhile, the Prime Minister is fantasising about rejoining the EU. There is just one problem: under Labour, Britain is now borrowing so much that we would not even qualify for EU entry. The Chancellor clings to the IMF’s praise of the Government’s deficit reduction plans, but the truth is that the IMF has to take at face value the idea that Labour will cut public spending massively just before the next election. Really? Are these MPs signed up to the cuts in those plans? These are the same MPs who voted down the most modest welfare reforms in the history of this House. They are never going to cut spending. That is why this month, the IFS described the Government’s plans as “a work of fiction”. I can tell the House who else is not fooled by Labour’s fantasy figures: the bond markets. Britain is now paying more to borrow than at any point in the past 30 years. Those borrowing costs are hurting people today. Businesses are struggling to afford loans because of rising interest rates. Five-year mortgage rates are now above 6%. Rates are far higher now than they ever were under us. We have the utter cheek of the Chancellor and Labour MPs raising the mini-Budget when Government borrowing rates are far higher now. They are higher than under any Conservative Prime Minister. These are their interest rates; these are their borrowing costs; and this is their mess—they need to own it. The Chancellor knows that next week interest rates are expected to rise again. Only the Labour party would think that the answer is to spend more money. <em>[</em><em>Interruption.</em><em>]</em> I know the Education Secretary cannot count, so she thinks this is all fantastic. Come on, have you got something more to add? Can you add?
They love to dish it out, Madam Deputy Speaker, but they cannot take it. <em>[</em><em>Interruption.</em><em>]</em> What was that from the Education Secretary? I am sorry, but I cannot hear her, because the rest of the class are making too much noise. Inflation is eating away at our standard of living. Labour’s friends in the Joseph Rowntree Foundation have said that this could be the worst Parliament on record for living standards, but Labour has looked after its people. There have been plenty of pay rises for the unions. Benefits will go up. <em>[</em><em>Interruption.</em><em>]</em> It is true, there have been plenty of pay rises for Labour’s friends in the unions. Benefits will go up by inflation in April, but private sector wages this year are below inflation. People in the private sector are getting poorer. They can all feel it. Those on benefits are getting an increase, while those going out to work will not. That is not fair. The problem is that Labour is addicted to spending other people’s money and addicted to welfare. The welfare Secretary said it himself. Talking about Labour MPs, he said: “Every meeting I have is: ‘Who can we tax in order to pay benefits to others?’”<span id="319" class="column-number" data-column-number="319"></span> Since the last Budget just 11 months ago, the equivalent of the entire city of York has signed on to disability benefits. And why would they not, when sickness benefits pay more than the minimum wage? Jobs have been destroyed by Labour, and this Government have made it easier than ever to claim. It is honestly like their policies are designed to get people off work and on welfare. Just because it is called universal credit does not mean that everyone in the universe should be on benefits. The issue is not just about cutting the benefits bill. This welfare burden is deeply unfair to those who are working hard and making ends meet—those people making tough decisions about whether they can move home or afford to have children. How do Members think they feel when they hear that working-age welfare is now costing every taxpayer £4,000 a year? Cutting welfare is not just about saving money. A million young people in this country wake up with nothing to do and nowhere to go. Unemployment among 20 to 24-year-olds is now higher in London than in Bulgaria, the second-poorest country in the EU. Labour is creating a lost generation, isolated and powerless over their futures. Britain is about to collapse under the weight of welfare. We have to start showing people some tough love. Deep down, the Chancellor knows that spending more money is not the answer. He talks about giving people breathing space, but the Government are the ones choking the economy. We have seen £70 billion of new taxes in just two years, and they have put them up again today. He said he would not be putting taxes on working people. That is what the last Chancellor said, too, but he has, because the Government are taxing everything that they can get their hands on. They have taxed jobs, pensions and cars. They have taxed the rental market today. They have taxed savings, investments and homes. He asked me whether I support the action that they are taking today. No, I do not support the action that they are taking today. The Chancellor also said that this is a Budget for business that will unleash enterprise. That must be why the entrepreneurship adviser quit this week. There is nothing for business here. He wants to charge them more for the union learning fund, was it? Business does not want these random new schemes. Let me tell him: business confidence is negative not just this quarter, and not just the last quarter, but for seven quarters in a row. That has never happened before. In case Labour MPs do not understand what that means, the last time business confidence was positive was when we were in charge. The Chancellor says that he is helping with the cost of doing business. Businesses need cheaper energy, flexible labour markets and lower taxes. They are getting none of those. Nearly half of businesses say that they have cut employment because of Labour’s jobs tax. There are now fewer vacancies in the economy than at any point in the last 12 years, outside the pandemic. Graduate vacancies are down by almost 50% this year. They were the worst on record last year, and under Labour they are again even worse—the worst on record this year. I was hoping that the Chancellor would do something on plan 2 student loans today, but he has not even done that. When was the last time any of them spoke to a <span id="320" class="column-number" data-column-number="320"></span>graduate looking for a job? Parents are watching their children receive rejection after rejection. Companies report 140 applicants chasing every job. Unemployment has risen by a quarter of a million people since Labour came in: a quarter of a million people, under this lot. So let me tell them some home truths. They have made wages expensive with their jobs tax. They have made energy expensive with their net zero policies. They have made capital expensive by increasing the cost of borrowing. What happens when wages, energy and capital are expensive? Nothing gets built. That is why the economy is grinding to a halt. Labour said that it was going to build 1.5 million new homes. I remember when the Housing Secretary first started, and I told her that she had been stitched up. Do you know what she is saying now, Madam Deputy Speaker? She says that now there is a “slim chance” that Labour will build 1.5 million new homes. They are not going to build them. They are not even going to build as many as we did, despite their lofty ambitions. They promised to secure the future of Britain’s steel industry. Now taxpayers are spending £1.3 million a day propping up British Steel alone. They promised to create 650,000 clean energy jobs. Where are they? Nothing has been created except unemployment. Let me tell you, Madam Deputy Speaker, what has actually happened since last year’s Budget for “Benefits Street”. Inflation—[Hon. Members: “Up!”] Government spending—[Hon. Members: “Up!”] They can join in now on the Labour side, because they know the words—we heard them. Debt interest—[Hon. Members: “Up!”] Mortgage rates—[Hon. Members: “Up!”] Benefits claims—[Hon. Members: “Up!”] Unemployment—[Hon. Members: “Up!”] Welfare spending—[Hon. Members: “Up!”] The report card is not looking good. They are making the same mistake with banking that they made with oil and gas: tax one of Britain’s flagship industries until it packs up and leaves. The result? The country gets less money in tax. <em>[</em><em>Interruption</em><em>.]</em>
I see that the Minister for Pensions is leaving. I guess he could not handle the truth. Everything in our economy is being made more expensive by Labour’s taxes. Next year, under Labour, Britain will have the highest tax burden in our country’s history—higher than in the 1970s, higher than in the second world war, higher than in the Napoleonic wars. <em>[</em><em>Interruption</em><em>.] </em>She asks, “Whose fault is that?” It is your fault. She is asleep at the back of the class. The Education Secretary might want to take a look at that student. What have we learned from the Office for Budget Responsibility today? Growth next year: downgraded. Inflation: up every year until 2030. Real household disposable income: lower every year. We have learned that the Chancellor’s debt interest bill will be £14 billion higher than expected, and the debt will be higher in every single year compared to the previous plan. How is this giving us breathing space? There is a better way that would actually deliver for the people of this country. There is a logical order to creating growth in an economy. You have to create <span id="321" class="column-number" data-column-number="321"></span>value, prosperity and wealth first, before you distribute it. That is how it works. Labour is only interested in the distribution; it has no plan to create any value at all. We on the Conservative side of the House want to see Britain richer, more prosperous and thriving—not just a little bit of breathing space. That is why Conservatives are proposing tough love. We will cut spending by £70 billion, including £36 billion from welfare—cuts that are fair to taxpayers, and fair to those who really need support. We would use half of that money to cut the deficit, so that Britain does not go bankrupt and borrowing rates start to come down. That is how we get cheaper mortgages. And we will fund our defence properly, because keeping our country safe should be the first priority of any Government. Getting the public finances under control and living within our means will allow us to cut taxes, because that is what really gives people breathing space. Scrapping the carbon tax to bring down energy bills, scrapping stamp duty, abolishing inheritance tax on family homes—that is what people want. So let us cut spending, cut the deficit, fund defence, and cut people’s taxes. That is the Budget that the Chancellor should have delivered today. That is the Budget that Conservatives would have delivered. And that is going to be the choice at the next election.
Will the right hon. Gentleman give way?
The hon. Gentleman will be aware that a key part of the deficit reduction strategy—according to the Red Book—is a reduction of 2% a year in the annual spend on mainstream schools after 2028-29. Will he go into the next general election promising that in his manifesto?
The disappointment of today’s Budget is that, having put on his running shoes for the media earlier this week, the Chancellor spent his statement running away from the big challenges facing the country and ducking each difficult decision. The first big challenge that he ducked was getting a proper grip on the public finances, so that we do not have to leave our children and grandchildren with spiralling national debt. He tells us that everything is under control because the OBR says that his fiscal rules have technically been met, but the public are not fooled by Treasury scorecards, and neither are the markets. Just like his predecessor, the Chancellor promises to bring borrowing down right at the end of the period covered by his fiscal rules, in this case with the hidden promise of 2.6% annual spending cuts, which includes those 2% a year cuts from mainstream schools every year, after the next general election. Those steep cuts will clearly never happen, and the markets know it. In the meantime, he did not say that he was increasing borrowing from 2.9% to 3.4% next year, and from 2.5% to 2.9% the year after—billions in extra borrowing. Like his predecessor, the Chancellor seems to take his inspiration from St Augustine: “Oh Lord, help me to be pure, but not yet.” Every year, the date for that fiscal restraint is pushed back another 12 months and borrowing revised up in the meantime. He speaks of fiscal discipline, but this is fiscal policy on the never-never. Nowhere is the reason for that fiscal timidity clearer than on welfare. All hon. Members know that public spending cannot be controlled and Britain cannot get back to work without proper structural reform to a ballooning welfare bill, but where we needed action, all we got were yet more taskforces, reviews and procrastination. That failure on welfare leads directly to the most sorrowful failure in the Chancellor’s entire Budget: national defence. The Chancellor knows the urgent need for an immediate plan to increase defence spending to 3% of GDP by 2030 better than anyone; it is why he said he resigned as Defence Secretary earlier in the year. He knew the Government were playing Treasury accounting tricks—tucking MI5, pensions, the Chagos Islands bills and even £200 million for doing up Barrow-in-Furness high street under the badge of “defence spending” to pad out a press release—but when we strip out those tricks, our armed forces are facing a real-terms cut in their day-to-day running costs over the next three years. Finally, the Chancellor had the chance today to undo the terrible damage done by his predecessor and inject real, sustainable growth into our economy. Business distress is at a 20 year high. High street names like Poundland are collapsing, and young people have paid the heaviest price of all, with surging numbers of NEETs and a genuine youth jobs crisis. Nowhere feels the triple whammy of high employment costs, punitive business <span id="393" class="column-number" data-column-number="393"></span>rates and relentless regulation more acutely than our hospitality sector. Our pubs, bars and restaurants are the heart and soul of communities like mine in Kingswinford and South Staffordshire—
No, we are coming to the end of the debate. Those pubs, bars and restaurants are the No.1 place where young people get their first foot on the jobs ladder. The Chancellor’s announcement on small business relief will clearly be welcomed by those firms that qualify, but the truth is that it will do little to help most hospitality businesses. Fewer than one in 10 restaurants and licensed premises are set to benefit, with the rest continuing to suffer from Labour’s business rates bill hike. The Chancellor had a simple, practical lever right in front of him today—a meaningful increase in the alcohol duty differential for draught beer and cider pulled across the bar in a well-run local pub or restaurant, compared with cheap bottles and cans stacked high in supermarket aisles. It would have helped our British breweries, helped save community pubs and protected hospitality jobs for young people. Again, the Chancellor knows that: in opposition, he called for cuts in beer duty, but in the Treasury he is hiking the main beer duty rate. He ignores the cross-party pleas for big reductions in draught beer duty, and instead hammers publicans and brewers once again, with another hike in the beer duty he used to say should be cut. The Chancellor needed to step up and take the decision needed to help pubs and hospitality. Instead, just like on debt, on welfare and on defence, he ducked it. Our businesses, our young people and our armed forces cannot afford to wait in a holding pattern until this Government discover their courage.
One of the benefits of Brexit to my constituency has been the establishment of the Humber freeport. Can the Prime Minister give an assurance that any reset with Europe will not prevent freeports from operating as they do at the moment?
It is a pleasure to serve under your chairmanship, Ms Lewell, and to take part in this debate about the national scheme of delegation. I thank my right hon. Friend the Member for Aldridge-Brownhills (Wendy Morton) for securing this important debate. I know that my right hon. Friend always fights to protect the green belt in her constituency. I was sitting here reflecting on what Members have said, and I do not think that there is much that I disagree with. I know that a number of Members from across the Chamber were on the Planning and Infrastructure Bill Committee, and it took me back to some of the arguments we thrashed out during those debates. When I speak to constituents right across Broxbourne, planning is one of the biggest issues that comes up, door after door, election after election. We know from hearing the accounts from Members from across the House today that that is also the case elsewhere across the United Kingdom—right from Aldridge-Brownhills to Hamble Valley, to name a few. The Government would love for everyone to think that local councillors are the main barrier to house building. They want to move to a system where new applications all over the green belt are rubber-stamped by officials instead. The truth of the matter, as has already been said, is that the vast majority of planning decisions are already made by officers—as many as 96%, according to the Government’s own figures. The national scheme of delegation will not magically fix the Secretary of State’s failure to build the 1.5 million new homes that she promised. What these measures will do is undermine local government and expand the state even more. Unfortunately, we see it time and time again. The same developer comes along with a plan that is entirely inappropriate for the local area. Perhaps there are vague promises for a school or a park that we know will never get built. The local community then makes its view very clear that it does not want to see the plans happen. Even when the council’s planning committee votes against them, it gets overruled by the Planning Inspectorate as it decides that some bit of land is grey rather than green belt—often, as has already been said, without even visiting the site. That is just not right. The Labour Government are forcing massive new housing developments on areas such as Goffs Oak in my constituency, while reducing targets in London to cover up Sadiq Khan’s failings. This is at the same time that we have a Prime Minister going on and on about devolution and how local leaders are the ones best placed to make local decisions. That is so inconsistent.
I completely agree with my right hon. Friend. She is right to mention the duty to co-operate. Local leaders must step up to the plate. That is what they are elected to do, and that is what their residents expect. Residents expect their local councillors to represent them, not to hide behind the duty to co-operate. They must co-operate across borders. They do not need powers taken away from them and given to unaccountable bureaucrats in distant council headquarters. Under the national scheme of delegation, proposals for under 10 properties will only be looked at by planning officers. This means that only in very limited circumstances will there be a way for local councillors to bring those decisions before a planning committee. Planning officers are not elected and are not accountable to voters. Everyone knows that sometimes planning officers get things wrong and the decisions need to be overturned. I have seen it. I have served on a planning committee and the trouble is that, once a planning application gets approval and gets built, it is there for a very long time. It is very difficult to rectify it once it goes wrong. Do the Government really think that unelected officials are better placed to make decisions on local issues than elected councillors? People vote for their councillors to represent them on planning issues and can hold their councillors accountable at the ballot box. However, it is not just planning that is at stake, but trust in politics as a whole. Removing powers from elected representatives is an attack on British democracy, and the British people can see right through it. Local action groups such as Goffs Oak Community Association are already fighting tooth and nail to stop their towns and villages being wrecked by inappropriate developments, which are often proposed without any sort of adequate infrastructure. The Government clearly do not care about their views, otherwise they would not be bringing in this national scheme of delegation. These changes also ignore the fact that planning committees are not just there to approve or deny applications. Councillors talk with local people and can address their concerns by putting conditions on development.
My hon. Friend is absolutely right. If local people—including local councillors with input from the local community and MPs—do not have a say over planning applications, development will not come forward with the appropriate infrastructure. That is what our constituents right across the country expect. I am pleased to say that my party has firmly stood against these proposals from the start. If the Minister really wants to deliver on the Government’s promise to devolve power to every postcode across the United Kingdom, she will stop this attack on local democracy and bin this scheme once and for all.
I did not want to interrupt the Minister’s flow, but she said that planning officers are there to serve their community. Could she explain what the community can do if it is not happy with the decisions that the planning officer makes?
It is a pleasure to follow the hon. Member for Carlisle (Ms Minns), although she will not be surprised to hear that she and I have very different views about the Budget. I draw the House’s attention to my entry in the Register of Members’ Financial Interests as a business owner and, frankly, to my interest as a father, although that is not because I think I am going to be particularly affected—I do not think anybody will be particularly affected by this rather bland bowl of muesli of a Budget from a Chancellor who was quite obviously decaffeinated this morning. I am quite exercised about the Budget because, while a number of colleagues have said it is a missed opportunity, I think it is a lot worse than that. In many ways it is profoundly negligent of a Government to produce such a Budget in the face of three distinct emergencies—three distinct fires burning in the basement of the British economy—some of which have been made worse and are forecast to be worse because of the Budget. The first of those, which a number of hon. Members have raised, is our debt. It is worth remarking, as some have, that the OBR has said that we will borrow even more in every year of the forecast—particularly next year. Combined with the massive downgrade of growth for next year, that is alarming. It is worth colleagues remembering that the OBR has quite a poor record in medium-term forecasting—it is generally optimistic. We can broadly agree that it gets the year 1 forecast right, plus or minus, but after that it is wildly optimistic, and every year it get the forecast completely wrong, particularly on debt. That matters, because the country is effectively running a structural deficit at the moment, and because of some of the measures in this Budget and the previous two, the public sector is basically eating the private sector every year we proceed. The private sector’s ability to support the public sector is reduced as a result, and we find ourselves caught in a weird kind of vice, exacerbated by the second emergency, which I will come to.<span id="386" class="column-number" data-column-number="386"></span> Even in some of the measures today, there seems to be no contemplation of that problem. Who does the Chancellor think will pay the bank levy—this 3% extra on corporation tax? Certainly not the international banks—they will manage to retain their return on capital. It will be the businesses, and the consumers who bank with them, who will see higher mortgage rates and higher interest rates on their loans. That money will be extracted from the private sector and sent directly to the public sector to be spent. If we continue on this path, I am afraid that the IMF has forecast that by 2050, well over half our GDP will be spent by the Government. That is a disaster, because once in that vortex it is hard to come out of it. The second emergency, which is exacerbating the first—there was no talk of it today and, in fact, there were no measures to try to help with it—is our demographic problem. I am afraid we are not having enough children in this country. We are now down to 1.39 children born to every mother, which is below replacement rate, so we have a shrinking body of workers who are having more and more difficulty supporting an expanding body of retirees. The pyramid is inverting, as we have seen in other countries, such as Japan, to disastrous effect. If the public sector and the retired sector suck more and more money out of the private sector, we will find ourselves in a downward spiral, which will be much to our detriment. The third emergency is one of capital. The Chancellor raised the issue of capital and spoke of trying to set entrepreneurs free. I have been a moderately successful entrepreneur during my life, and I can tell hon. Members that nothing in the Budget has done anything to reverse the assault on the return on risk that, sadly, has taken place over the last 20 years under Governments of all stripes.
I am glad that the hon. Gentleman has raised that point. If he looks at the founders’ relief in the scorecard and puts it against the reduction in business asset disposal relief, he will see that effectively there has been a straight transfer of value from family businesses, high street shops and smaller businesses to the tech bros who are going to benefit from founders’ relief. We have yet to see the detail on that relief, but the scorecard shows a net cost to the Government of about £200 million. That is negligible in the face of an economy the size of ours. That is a real problem, because we are standing at the bottom of the ellipse of human achievement, the like of which we have not seen since the industrial revolution. This country has got its capitalism wrong in the past. We missed the IT revolution of the ’80s and ’90s because we were too busy worrying about house prices. British capital has kind of stultified and failed to take advantage of these massive advances in technology, much to our detriment in terms of national wealth. We still live off, to a certain extent, the wealth that was created during the Victorian era. Many of our largest companies came about because of British <span id="387" class="column-number" data-column-number="387"></span>capitalism—naked capitalism—during that era. The palaces we live in, the Cavendish Laboratory at Cambridge, King’s College, Cambridge, and the NHS—all of that built from the profits of British capitalism. We have neglected it over the last 20 years or so, particularly by attacking the return on risk. The rise in taxation on dividends, the rises in capital gains tax, the reduction in any kind of relief for entrepreneurs, and the complexity of the enterprise investment scheme and the seed enterprise investment scheme—all that is a massive deterrent to anybody who wants to start a business and take a risk. Until we realise that we will not get growth until we set capital free, we will continue to be trapped in this vortex of a demographic pyramid inversion and ever-mounting debts as the public sector consumes the private sector. The last thing I want to raise is the new powers that are being granted to the Revenue. All Members should beware of what is hidden in the detail of those new powers. We are getting to a situation where our economy is existing to support the Revenue rather than the other way around.
It is a pleasure to be able to contribute so early in this debate. I speak as a former Treasury Minister in the previous Government who sat behind four Chancellors in different scenarios. I acknowledge the enormous challenge that every Chancellor faces in trying to reconcile so many competing pressures, but when I reflect on my experience of listening to this Budget, I am left with a great sense that it has been a Budget of missed opportunities. It has 98 measures where the value of each individual measure is at a record low. It is a Budget that has not taken the opportunity that is necessary for our economy. All Governments face different circumstances. I was in the Treasury when covid occurred, and we had to make interventions on a scale that had never been seen before, and that obviously resulted in significant scarring to the economy. This Government face different challenges in terms of energy security as well as a fundamentally transformed context when it comes to national security risks. I was left feeling that, as Helen Miller of the IFS <span id="346" class="column-number" data-column-number="346"></span>says, there has been a lack of a “coherent vision”. It is as if everything has been kicked further down the road. That leads me to conclude that we are warming up for a general election, which will be framed around the need for more taxes to reset the economy. For a Chancellor to come in with a new Prime Minister and make 98 measures, all of which have a record low level of impact, speaks to a lack of ambition, while a position is held—on the back of £66 billion of tax rises—so that more can be done on the basis of whatever comes out of the summit with the EU next week. That is what I am anticipating. Of course, some of these small measures will be welcome, but when the effects of the tariff changes amount to 40p a week, for most people they will not be significant. I want to look at some of the tax measures. The increase in tax on savings is not a good thing. That higher level of tax take will risk incentives within the system, constraining economic activity by more than expected. That is what people are saying about this Budget. There is the renter tax—it has been determined that measures in the Budget collectively risk leading to a steady rise in rents, building on the additional taxes of last year. I take a close interest in financial services, having had some experience in that sector as the Minister. I note what the Chair of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), said about the rise in some share prices this morning. I think those services probably anticipated a larger increase in the surcharge, back up to 8%; the increase to 6%, therefore, and its time-limited nature, were reflected in a bump, as it was felt that that was not as bad as it could have been. However, looking at what UK Finance says about the implications of this change, I note that we need only a modest change—that is, if 7.4% of internationally mobile banking were to leave the UK—for the tax increase to generate zero net revenue. This is not some insignificant industry that is wholly located in London; it is an industry that provides the infrastructure for the wider economy. We will see the impact of that decision on interest and saving rates. When I was the Minister in this area, I used to have conversations with the CEOs of global banks, and they pointed out the aggregate tax rate—looking at corporation tax, the surcharge, the levy and the national insurance rate—and then compared our situation with others internationally. Our aggregate rate is now going to look really bad, after what has already happened with the national insurance increases. I want to reflect on what the Budget has not done for small businesses in my Salisbury constituency. I have been particularly impressed by one small businessman who I have got to know over the last few years, Ethan Davids. He is very young—in his early 30s—and has 15 hospitality venues, which are growing rapidly. He says to me that the combined effect of the increase on employer national insurance, the Employment Rights Act 2025 and the previously above-inflation increases in the national living wage, alongside the challenges of a reliable outcome from the planning process, actively discourages him from making investments. I fail to see anything in this Budget that has made a significant impact on the context in which his business operates and on the decisions he will make.
Yes, a small measure like that will make some impact, but we need to look at the context—at what we have seen previously. As the hon. Gentleman will know, the manifesto he stood on two years ago implied a modest increase in taxes of about £7 billion, and we actually had increases of £66 billion. The scale of the burden placed on those businesses means they are disinclined to continue to invest. I want to say a few words about defence. It is a massive part of the world in Wiltshire, including in south Wiltshire. Again, the context is changing, and it is doing so rapidly. The commitment given so far to raise defence expenditure is, of course, welcome, but in June the departing Defence Secretary was pretty explicit in insisting that a date be given by which 3% of GDP would be secured. A date has not been given today. I accept that there is a pathway to 3.5% and that a taskforce to get to 3% has been announced, but that is very different. I think that we, in this country, are rather complacent about the nature of the risks we face. Just over two years ago, I visited the Nordics in one of my last months as a Minister. In Sweden and Norway, I was struck by the sense of anxiety and readiness over what Russia was capable of doing and how imminent the threat was. Of course I acknowledge the progress made, but the urgency and reality of the situation in which we now find ourselves necessitates a step change in the urgency of the Government’s response.
Of course I recognise the mistakes and choices made in previous Governments, but as I was trying to indicate, the world has materially changed since the general election—I think that is pretty obvious to most people, given what is happening in geopolitics—and that necessitates a suitable response from the Government. Indeed the Chancellor insisted on that when he left his position as Defence Secretary. In conclusion, if a party comes into government and secures the massive majority that this Government secured, it is pretty painful for the country to see the lack of ambition in the choices made in the three Budgets so far. The downgrade from 1.6% to 1% growth next year is massive, and it still implies a 2.6% per year spending cut in unprotected Departments from 2028-29 to 2031-32. I do not see that as politically realistic for the Labour party, and that is why I anticipate that the next step after the summit next month will be the call for a general election.
<Question HRSContentId="{F50F32DD-E4E8-48F7-AE84-35006ACD2DC7}">7. <QuestionText HRSContentId="{9C1065C6-9D31-4AAC-BD17-AFA7A83033D7}">What discussions he has had with Cabinet colleagues on levels of employment in the oil and gas sector in Scotland.</QuestionText> </Question>
<Question HRSContentId="{0BC82081-7CDA-4AFE-84BB-47D51C889F99}">14. <QuestionText HRSContentId="{34B42D6C-FBF7-4B4F-BA07-61482986AD51}">What discussions he has had with Cabinet colleagues on levels of employment in the oil and gas sector in Scotland.</QuestionText> </Question>
The Government spent two and a half years virtue signalling about the North sea. They said there was no future for oil and gas and had a ban on licences, as well as increasing taxation. The result has been 25,000 job losses—1,000 every month and counting—not because of an external shock, but because of a crisis 100% caused by Government policy. When will this Government leave their student politics behind, back British business and get us drilling again?
My hon. Friend is making a very good point. I wonder whether he is aware that since the last election, the minimum wage for 18 to 20-year-olds has risen by 30.1%, which is coincident with youth unemployment rising by 54,000. Does he think there is a link?
I will go out on a limb and say that this is a terrible Budget. It is not just a “steady as it goes” Budget, because everyone in this Chamber knows that we have got some serious problems that have to be addressed by this country, both politically and economically. This will be known as the “kick it down the road” Budget. It has its eyes covered and its fingers in its ears, pretending that these problems are not real and are not now, and that we can afford to push them all down for another 12 to 18 months. Look at national debt. We have already peaked above £3 trillion of national debt in the past couple of weeks, yet this Parliament is now on course to increase borrowing above what was planned in 2024 by £308 billion. That is an increase of more than a quarter of a trillion pounds in borrowing, with no plan to get it down and no credible plan to reduce welfare spending, which is the next major issue that we have to address. Welfare dependency now makes it reasonable for 1,000 people a day to apply for the personal independence payment, because they know that they will get paid more on benefits than if they got a job. The Government recognised that needs to change and tried to make a very modest change last year, but that was voted down by Government Members, and it led to the defeat of the previous Prime Minister. What was the Government’s answer? The Timms report, which was created out of the failure of the debate last time round, and part of its objective is not to reduce spending—<em>[</em><em>Interruption.</em><em>]</em> I would be grateful if Members listened to the speech being made, rather than making their own from the Government Front Bench.<span id="398" class="column-number" data-column-number="398"></span> Welfare dependency has to be addressed, yet we are waiting for a report, and then a response from the Government, and then a White Paper sometime next year, apparently. Then, after that, there will potentially be legislation to go through this House. That is no way to address this issue. This country faces a key and present economic, social and moral danger, and this Government are pretending that it is not there. Then we come to defence. We are told by this Government that we must prepare for a war within 1,000 days, but do we have a plan to get to spending 3% of GDP on defence by 2030? Not a bit of it. We have a plan for next year, so we are supposed to be satisfied with a plan to get to a plan. This is ridiculous. We have Ministers telling us that we have to stockpile food, but we have capital expenditure that is due to take place after that 1,000-day period. This is back-to-front government, and it is a negligent Treasury that is imposing this on our defence sector. We have a plan that reduces next year’s economic growth from 1.6%, which is pretty anaemic, down to 1%, and at no point during the forecast period does it get as far as 2%. This is outrageous.
I will not. I have only a minute left. We have tax rises being imposed on savers. What a weird argument that is—that increased taxes should be imposed on people who are doing the right thing. As for banks, which are the funders of growth, the CEO of one UK bank is reported to have said: “Taxing the engines of growth to reduce VAT on gherkins is end-of-Rome level of stupidity.” It is hard to disagree, is it not? We have four really serious issues for our country, and a Budget that pretends they are not there. It is a Budget that kicks the can down the road. It is a Budget that says “steady as she goes” is the right answer. I could not disagree more.
I thank my right hon. Friend for her important speech. Recently, a development in my constituency for 8,500 homes that was due to go to the local planning committee was suddenly taken away from it, having been called in by my constituency neighbour, the hon. Member for Sittingbourne and Sheppey (Kevin McKenna). The decision now sits with the Secretary of State, taking this important decision, which will have a huge impact on the area, out of local hands. This is clearly denying local democracy, given that we have locally elected councillors who know the impact this development will have on my constituency. Does my right hon. Friend agree that it is completely wrong to take those powers to influence local planning decisions away from local councillors, and that it is absurd that a Government who talk about increasing devolution are the ones taking these powers away from local councillors?
Almost two weeks ago, the Prime Minister gave a speech about devolution in Scotland. Since then, the Government have not clarified anything. Is the Prime Minister suggesting more powers to Scotland, or does he think that just by asking nicely the SNP will stop hoarding so many powers at Holyrood? Holyrood is already one of the world’s most devolved Parliaments; the issue is not the powers but the party in power there that has created Europe’s most centralised Government. Will the Secretary of State confirm that this Labour Government will not devolve any further powers to the Scottish Parliament?
Last week, the Government finally approved Jackdaw. The Secretary of State called that “a win for Aberdeen, a win for Scottish workers and a win for Britain’s energy security.” But there can be many more wins: Rosebank and other fields can also protect jobs and supply chains, secure investment and tax returns, and boost our energy security. Based on his own logic from last week, will he confirm that he fully supports approving Rosebank and ending Labour’s ban on new licensing?