Energy
I will conclude with that. Thank you, Madam Deputy Speaker.
Showing every spoken contribution, including 5,750 under 12 words. Hide short remarks
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Independent Football Regulator
I like and respect the right hon. Lady and I do not doubt her sincerity, but I do wonder whether she would have been quite so forgiving had I chosen to appoint a Tory donor to lead this regulatory body. Moreover, although I supported the establishment of the regulator and, indeed, initiated it at the time of the risk of a European Super League, I fear that since then the regulator has become excessively bureaucratic. It risks deterring international investment and the broader investment in the game that has been so beneficial for it. Does the right hon. Lady think that it might be time to look again at this regulator, and to put more emphasis on self-governance in football? I think that in recent years, it has shown itself to be capable of stepping up to the challenge.
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Taxes
I beg to move, That this House calls on the Government to control public expenditure in order to keep the promise made by the Chancellor of the Exchequer at the Confederation of British Industry conference on 25 November 2024 that, after the last Budget, the Government would not raise taxes; and further calls on the Government not to break its manifesto commitment that it would not increase National Insurance, the basic, higher or additional rates of Income Tax or VAT. Right at the centre of this motion is the single word “trust”—the trust that Labour Members lost with the British electorate. They lost it when they promised not to put taxes on farms, and did so; when they said they would not be means-testing the winter fuel payment, yet did; and when they said they would not be putting up taxes left, right and centre, but did exactly that when they came into office. Indeed, in their own manifesto there were around £7 billion of tax increases, which by the time of the first Budget translated into some £40 billion of additional taxes. Of course, much of that related to employer national insurance—a clear breach of the Labour party manifesto. Do not take my word for it. Take the word of Paul Johnson, the former head of the Institute for Fiscal Studies, who said that that particular tax increase was a “straightforward breach” of the Labour party manifesto. The Chancellor also said that she would not take decisions that would affect working people, yet we know from the figures released just yesterday that unemployment is at a five-year high. There are 180,000 fewer jobs on payrolls on her watch. Some sectors are particularly badly impacted. Some 90,000 jobs in hospitality have been destroyed, which particularly affects the youngest people in our country, who are desperate to get on the first rung of the career ladder but are deprived of that opportunity by Ministers. After that calamitous Budget, there were further pledges and further promises from the Chancellor. She said to the Treasury Committee: “we are not going to be coming back with more tax increases”. She said on Sky News that she had “wiped the slate clean”. On 25 November, at the CBI’s annual conference, she said: “I’m not coming back with more borrowing or taxes.” There has been little of that language of late, and I think we all know why. At the October Budget, the Chancellor said something else that was telling and extremely important. It is worth my repeating it in full. It relates to her clear pledge not to extend the freeze in the personal allowance under the income tax regime. She said: “I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips. I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax and national insurance thresholds”.—[Official Report, 30 October 2024; Vol. 755, c. 821.] When the Minister comes to the Dispatch Box, will he reconfirm that solemn pledge the Chancellor made in the last Budget? [Interruption.] He could intervene now—that is true. We know that the Chancellor has messed up the economy, yet now, only about a year into the Government, we are already into the blame game. The Chancellor made an extraordinary and rather confusing address to the nation recently in No. 10 Downing Street, in which she sought to blame everybody for this fiasco except herself. She blamed Brexit. She blamed Donald Trump. And when it came to future downgrades of productivity by the Office for Budget Responsibility, she even had the temerity to blame those of us on the Conservative Benches—blaming the past for the future. I was half expecting her to blame world war two or the great war, or the Boer war, or perhaps the battle of Hastings, which surely, with the harrying of the north, must have scarred our economy and must still be being felt 1,000 years later.
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Taxes
It was the Korean war—my right hon. Friend is absolutely right. It is the Chancellor’s choices that have led to this situation. She was the person who chose to put up taxes on jobs, which has led to growth being anaemic. We know that taxes such as national insurance feed through to lower investment, higher inflation, higher unemployment and lower real wages. We know that the Government talked down the economy with the absurd and fictitious £22 billion black hole. In a sweet irony, when they asked the OBR to come in and opine on that number, it said that it would not legitimise it.
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Taxes
My right hon. Friend makes an extremely valid point. I shall come to those matters shortly, because there are alternatives to what the Government have decided to do. It was this Government who went on a reckless borrowing spree. This year, we have borrowed £100 billion—the highest borrowing in our history, excluding the pandemic. Why has that happened? Because the Chancellor has fiddled the fiscal rules. She changed the debt definition from public sector net debt, as it was under us, to public sector net financial liabilities, which allows far more borrowing. In fact, under the original definition that we had—which she, incidentally, said she would not change—she would have been underwater in just about every year of the forecast on the debt target. That recklessness has led to the Labour party having plans to borrow half a trillion pounds more over the period of this Parliament than we had in our plans that it inherited.
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Taxes
My hon. Friend is absolutely right. If we borrow more money, we pay more for that borrowing. Of course, that has fed through to inflation. We know that inflation this year, according to the International Monetary Fund, will be the highest in the G7. The IMF also says it will be the highest in the G7 next year. The consequence of that in monetary policy is interest rates being higher for longer. Of course, if we have a mountain of debt and add to it ruinously, the cost of servicing that debt goes through the roof. It now stands at about £100 billion a year, rising to £130 billion at the end of the scorecard. That is more than twice what we spend on defence every year.
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Taxes
My right hon. Friend makes an extremely incisive and correct point. If a Government spend huge amounts of money, there is an opportunity cost to that and it comes through in various forms, including, as he rightly says, raising the cost of capital and crowding out labour, skills and so on. It is a fine and important balance to get right and this Government, palpably, have got it wrong.
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Taxes
The hon. Gentleman’s question identifies the core of the fallacy of his Government’s approach, which is to assume that getting better outputs is all about spending ever more money. It is not. It is about what you do with that money; it is about productivity. One of the Government’s many mistakes when they came to office was to splash out on pay rises for their trade union paymasters—14% for the railways drivers and 22% for the junior doctors—with not one string attached in terms of improved productivity. Therein lies the answer to the hon. Gentleman’s question.
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Taxes
I am surprised that the hon. Gentleman would follow up what was not the strongest first question with that. The Government are naive enough to think that by simply buying people off with no strings attached, the problem would go away. It is like feeding meat to the wolf: when the wolf is fed meat, it will come back to the door the next day, and that is precisely what has happened here. Industrial relations are not improving at the moment. We have various unions in the public sector threatening to strike, including in the NHS, where the hon. Member for St Austell and Newquay (Noah Law) started in his first question. Where has all this led? It has led to lower growth. No matter how much those on the Front Bench may trumpet increased growth, the reality is that growth per capita—[Interruption.] The hon. Member for Bishop Auckland (Sam Rushworth) says it is the highest in the G7, but our growth per capita is the second lowest in the G7. What matters is growth per capita, because that is what drives an improvement in living standards. [Interruption.] I have more bad news for the hon. Gentleman, who continues to chunter from a sedentary position: the IMF says that growth per capita will deteriorate even further next year and be the lowest in the G7.
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Taxes
I agree. Of course, higher taxes are bearing down on living standards, but so is inflation. We have the highest level of inflation in the G7 and are forecast to have the highest in the G7 next year, too. Within that sits food inflation, which is running way above the headline rate of inflation. Who does that impact the most? It impacts the very people that Labour professes to stand up for the strongest: the poorest in our society. It is a direct consequence of the policies pursued by this Chancellor.
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Taxes
There were many great things that the previous Government did, not least creating employment as a job-making machine and, despite the Russia-Ukraine war, bringing inflation down at the back end of 2022 from 11% to 2%—bang on target—on the day of the general election. Where is inflation now? It is almost twice that level. We also improved education in our country beyond all measure; Labour is now undoing those reforms, and we will see the consequences of that for generations to come. We did many things of which we should be proud, not least getting us through covid and through the inflationary times. On the day of the general election, we had the highest growth in the G7, we had near record levels of employment and a near record low level of unemployment, and we had seen 13 consecutive months of improving real living standards. That is not a bad record.
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Taxes
My right hon. Friend is entirely right. The conclusion that one must draw on the mess that this Government have made of our economy is that it has become brittle, fragile and vulnerable to the kind of external shocks that it was able to withstand when the Conservatives were stewards of it. While per capita growth is almost on the floor, unemployment is at a five-year high; as we know, every Labour Government in history have left unemployment higher on leaving office than it was on entering office. Inflation is high and business confidence is at rock bottom. In a recent survey, the Institute of Directors found that business confidence among its members was the lowest in history. My right hon. Friend the Member for South West Wiltshire (Dr Murrison) refers to covid—according to the IoD, business confidence is even lower now than it was during covid, when the economy contracted by more than 10% overnight. That is how bad business sentiment is out there.
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Taxes
To be fair, I think the Prime Minister was referring to facial hair growth, rather than growth in the economy. They are distinctly different things.
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Taxes
Well, he may or may not be—it remains to be seen. What all this ends up with, of course, is lost fiscal headroom. That is the story so far. We had a Budget last October with about £10 billion against the debt target; that vanishes, with 50% on top as well. It is rebuilt in the spring, and now it has all disappeared, and we are waiting to find out how deep that black hole is. We have entered something of a doom loop, with higher taxes destroying growth, leading to a loss of fiscal headroom, requiring—in the Chancellor’s terms at least—further tax increases, leading to further destruction of growth, and around and around we go.
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Taxes
I am pleased that the hon. Gentleman has given me an opportunity to correct the record, because I know this has been spun by the Labour party. At a fringe meeting at the Conservative party conference, there was a long, extended debate about just how bad things are, with speculations about all the “what ifs” and “maybes” of different scenarios. If the hon. Gentleman reads the full transcript of those exchanges, he will see that the point I was very clearly making was that there is an alternative to putting up taxes, which is controlling spending. That is the point I was making. What is happening to the wealth creators in our country? About 16,000 of them have fled—they are going by the day. These are the people who generate the wealth, jobs and growth that we are all striving to achieve. Look at the cumulative tax take that has just walked out of the door with the 16,000 who have gone—it would probably require a third of a million to half a million people on average earnings to fill that gap. It is not sustainable. There is an alternative. The Conservatives set out this alternative at our party conference: a way forward through control of Government spending. Government spending could be controlled to the tune of at least £47 billion, which were the savings we identified. Of the £47 billion, £23 billion can be found from the welfare budget by getting people off benefits and into work. It is better for the economy, but equally, for those who have mild mental health conditions such as mild anxiety, mild depression and ADHD, it is a better outcome than parking them on benefits, which the Government are doing through time. By focusing on actual need rather than simply transfer payments and on medical diagnosis rather than self-assessments and by not paying benefits to non-UK citizens, we can make real savings. In some cases they are tough choices, absolutely. However, these are decisions that the Government have made.
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Taxes
I am glad the hon. Gentleman has raised my tenure at the Department for Work and Pensions, when I was the Secretary of State. I was very clear that we needed to arrest the rising welfare bill, and—
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Taxes
We did, actually. We did arrest it. We made changes to the work capability assessment, which the OBR scored at £5 billion-worth of savings. The OBR also scored the fact that there would be 450,000—almost half a million—fewer people going on to those benefits as a consequence. We had already started a consultation on personal independence payment, which I will come back to in a moment, but it was interrupted by the general election. The first thing the Labour Government did when they came into office was scrap all of that and then come forward with some ill-thought-through proposals that did not survive contact with their own Back Benchers. There are other areas where we can make savings. The size of the civil service is one. The civil service has grown by 37% since 2016. We could cut it back by 25% and make about £8 billion—[Interruption.] The hon. Member for Halesowen (Alex Ballinger) should listen carefully to this, because he is about to sit on those benches on the 26th of this month and listen to his Chancellor come up with some pretty unpalatable things. These are good alternatives that should be taken seriously. Raising taxes is simply a choice. The Labour Government are too weak to make the choice to control spending, so they fall back on taxes. They had to U-turn on the welfare reforms they brought through, and £5 billion was added to Labour’s black hole in an instant. We have seen the terms of reference for the Timms review of personal independence payment. They show quite clearly that there is no intention of saving any money from the PIP budget. That is grossly irresponsible. It is spiralling ever skyward. From what we hear, it is highly likely that the two-child limit will be scrapped and abolished. Why? Probably because the Prime Minister, shackled to his Chancellor, is feeling that he is being squeezed halfway out the door of No. 10 and thinks he had better do something to settle the troops on the Back Benches. But that comes with a price tag of £3.5 billion. The only choice that this Chancellor is taking is to fail to get on top of spending and to put up taxes in order to fund ever more welfare.
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Taxes
My hon. Friend absolutely gets to the core of it. This is an extraordinary point to have arrived at, but this Government, despite their majority, do not have the plan, political will or, seemingly, even the ability now to command enough support on their own Benches to push through vital spending controls that would allow us to get the taxman off the back of businesses and people up and down our country.
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Taxes
If the hon. Gentleman looks at absolute poverty after housing costs, he will find very significant reductions for children, pensioners and across the piece during the vast majority of our time in office.
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Taxes
Madam Deputy Speaker, that is a great shame. The hon. Gentleman has not been here for any of the debate, but that does not mean that he might not have given the best possible intervention from the Labour Benches so far. Perhaps he may like to come in a little later. We have a Government who are engaged in serial breaches, who have no backbone to take the right decisions, and who will always fold to pressure, including from their own Back Benchers—and all at the expense of businesses and hard-working people up and down our country.
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Taxes
My hon. Friend is absolutely right. He will have heard the various quotations at the beginning of my contribution exactly to that effect. The motion on the Order Paper asks a simple question. It is essentially this: even at this late stage, will the Government stand by their word, or will they dragoon those on the Benches behind them through the wrong Lobby tonight? If they vote with us, millions will heave a huge sigh of relief. If they vote against, the people will have their answer, and they will never forget.
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Taxes
As somebody who has been around a long time and remembers when Chancellors used to have to resign for leaking things about the Budget in advance, may I ask the Minister to explain how it has been possible for the present Chancellor to make speeches about what may or may not be in her Budget in advance with no consequences forthcoming whatsoever?
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Taxes
rose—
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Taxes
May I try to find some common ground with the hon. Gentleman? As has been pointed out, his party was in coalition with the Conservatives for five years. Can we at least agree that Nick Clegg’s decision to vote for trebling tuition fees, thus breaking a manifesto commitment, was a disaster for his party’s ratings? Can we also agree that if the Government do the same in respect of what they have pledged to do, it will be a disaster for their ratings as well?
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Taxes
There is, of course, a third possibility, which some people with twisted minds have been suggesting: that the Government plan to do some pretty terrible things in the Budget but are setting up a strawman that they are going to break their manifesto promises. Then, when they do not do so, everybody will swallow those other terrible things. Is that too Machiavellian?
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Energy
Can my hon. Friend throw any light on the apparent contradiction whereby the Government seem prepared to import fossil fuels—thus exporting our carbon footprint—but not to allow us to develop our own fossil fuel resources? Is it because they are afraid that, once we develop them, we will not want to stop using them, or is there some other explanation?
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SEND Provision: Kent
I remind the hon. Gentleman that interventions should be short—but I am a kind and generous Chairman.
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SEND Provision: Kent
I call Neil Duncan Jordan.
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SEND Provision: Kent
Order. I remind Members to bob if they wish to be called in the debate. I ask the hon. Member for Bexleyheath and Crayford (Daniel Francis) to forgive me; I should have recognised that the hon. Member for Poole (Neil Duncan-Jordan) is nowhere near as glamorous or youthful as him. The hon. Gentleman can put that on his leaflets if he likes.
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SEND Provision: Kent
Before I call the shadow Minister, I point out to the hon. Lady the courtesies and behaviour in the House. If you are going to name another Member, you should notify them in advance. Did you do that?
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SEND Provision: Kent
Right. I suggest you drop the hon. Member for Clacton a note to say that you raised him in the House and copy it to me. That would be wonderful.
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SEND Provision: Kent
Excellent. I call the shadow Minister, Saqib Bhatti.
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Public Bodies: Governance and Accountability
I will call Valerie Vaz to move the motion, and I will then call the Minister to respond. Other Members may intervene only with the permission of the Member in charge. As is the convention with these half-hour debates, there will not be an opportunity for the Member in charge to wind up.
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Public Bodies: Governance and Accountability
I probably ought not to say so, Valerie, but that is music to my ears.
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Carbon Budget Delivery Plan
Order. I see that quite a lot of people want to speak. I will not set a time limit, but if you can be disciplined in how long your contributions last, that would be very helpful.
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Carbon Budget Delivery Plan
Order. There is a Division in the House. We will suspend for 15 minutes, and when we return Ellie will draw her speech to its conclusion reasonably speedily.
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Carbon Budget Delivery Plan
About six people want to contribute, so they each have about four minutes. I will not make it formal, but I know I can rely on you not to let me down.
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Carbon Budget Delivery Plan
Order. I said four minutes a speech. This is partly a debate about targets and figures, Barry, and the difference between four and nine is five.
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Carbon Budget Delivery Plan
Order. Can you bring your remarks to a close, otherwise no one else will be able to get in?
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Carbon Budget Delivery Plan
I call Susan Murray—you have a couple of minutes.