The Secretary of State for Energy Security and Net Zero (Ed Miliband)
It is a privilege to open this Budget debate on a theme of paramount importance to our country: the cost of living crisis facing Britain’s families. Whatever our party, we should take a step back and think about the history of the last two decades since the financial crisis, during which we have seen: the stagnation of real wages, only this year getting back to their 2008 levels; the worst progress on living standards in the last Parliament since records began in the 1950s; an epidemic of in-work poverty such that, according to the Resolution Foundation, seven out of 10 families with children who live in poverty now have someone in work; home ownership falling from two thirds of young people in the early 1990s to less than half today; and the biggest rise in energy bills in generations earlier this decade when Russia invaded Ukraine, on top of public services facing strains as never before.
Each of those on their own would cause people to doubt whether this country really works for them. Together, they represent a perfect storm that makes people question their basic assumptions about our economy, society and country. This is the condition-of-Britain question of our time, and it is the backdrop against which this Government were elected 17 months ago. The mission—the driving purpose of this Government and this Budget—is to tackle that crisis. That starts from an understanding that this crisis is due to not accidental circumstances but a governing ideology, and that our response must be to change course in three ways.
First, we need to make fair choices that favour ordinary working people, not the rich and powerful, who have been favoured for too long. Secondly, we must invest in and rebuild our public services and infrastructure so that we never return to austerity, which was such a disaster for the social and economic fabric on which so many people rely. Thirdly, we must endeavour to change our economy so that it produces more good jobs at good wages that sustain a decent living for people, ending the hollowing out of our economy and our communities. That is what this Government are about; that is what this Budget seeks to deliver.
First, then, I want to talk about fair choices. An illuminating chart—I love charts—on page 33 of the Budget Red Book shows the impact of decisions since the 2024 autumn Budget. It shows the progressive approach of my right hon. Friend the Chancellor. It shows that every decile will be better off as a result of her measures, except the richest 10%, with the greatest gains as a percentage of income to lower and middle-income families. That includes raising the national living wage and the national minimum wage, freezing rail fares for the first time in 30 years and freezing prescription charges, as well as two measures I want to focus on.
The first measure is lifting the two-child limit in universal credit, which goes to the heart of the affordability crisis that so many face. I think we need to have a debate about this issue. According to a Department for Work and Pensions document published on the day of the Budget, since its introduction in 2017, the two-child cap has put 300,000 children into relative poverty. That is the equivalent, as the document says, of 100 children every single day—more than three primary school classes each day being pushed into poverty. It is also part of a wider picture. According to the Joseph Rowntree Foundation, 7.1 million low-income households—one in four across the UK—have gone without essentials in the last six months, in one of the richest countries in the world. That is why we have acted on the two-child limit. Two million children will be helped, and 450,000 fewer children will be in poverty by the end of the Parliament.
As I understand it, the Conservatives oppose the policy change because they claim it is about helping people out of work who are undeserving. We need to unpack this false claim. The inescapable fact that the Opposition want to run away from is that around 60% of families impacted by this policy are in work, not out of work. These are people for whom work simply does not pay, like in the case—highlighted by the Child Poverty Action Group—of Shauna and her husband, who have three children. Shauna’s husband works full time and she says,
“This will make a big difference because we’ve had to incur debts. Hopefully it will mean I can cover the last bills that come in each month instead of being in the red. I could buy a new mattress for two of my children. They can feel the springs on the mattresses they’ve got that they’ve had for many years.”
That is the condition-of-Britain question.
How does the Leader of the Opposition describe Shauna and her husband? She calls them “Benefits Street”. These are people working all the hours God sends, working hard, trying to do the right thing: the very people the Conservatives claim to stand up for. How dare she!
Dr Luke Evans (Hinckley and Bosworth) (Con)
When it comes to making decisions about poverty, it is difficult, so I would be grateful to understand the Secretary of State decision to change the winter fuel payments, which the Government’s own analysis said put 100,000 people into relative poverty and 50,000 people immediately into absolute poverty. Those are decisions that he and his Government made because they were concerned about the finances of the country. The Opposition now have similar concerns with regard to the child benefit cap changes, and yet the Government have made a different decision. Could he explain the reasons why there is a difference?
Ed Miliband
Well, the hon. Gentleman’s question is out of date, because, in case he had not noticed, we changed the policy on winter fuel payments. Let me just say this to him: he will have to answer to his constituents. Some 1,500 children in his constituency will be helped by our changes to the two-child cap, and he is saying, “Rip that help away.” Let us have the argument about this.
Ed Miliband
I will in a moment.
On the one hand, 60% of these people are working—and the Conservatives do not really want to explain why they want to cut help for those people. But let us discuss the 40% of households that are not working and will be impacted. What we are seeing here—I am old enough to remember—is a re-run of the last Tory Government and their attempt to blame the poor for their poverty. Leaving that aside, however, what the Conservatives are actually saying is, in truth, that they believe in punishing the children of people who are out of work and on benefits—
Ed Miliband
The hon. Gentleman says from a sedentary position that that is absurd, but it is not. The Conservatives believe in punishing children—
Wendy Morton (Aldridge-Brownhills) (Con)
Will the Secretary of State give way?
Ed Miliband
I will give way in a moment—let me make my point.
The Conservatives believe in punishing children for having another brother or sister. Children with only one sibling—two children in total—get the full amount, but if they have two siblings, they do not. How is that fair? How is that right? As the Chancellor said very powerfully in her Budget speech, is that good for our economy and our society? Of course it is not.
Wendy Morton
If the policy is so good, how will the Secretary of State explain to working people that they will be £18,000 worse off than those on benefits? How can that be fair?
Ed Miliband
This is all about working people, as I tried to explain earlier in my speech. Sixty per cent of people—[Interruption.] Please listen for a second. Sixty per cent of families who will benefit from the measure are in work. If the right hon. Lady wants to ask about the Chancellor’s wider Budget strategy, let me say that I absolutely fully support it, because it was a fair Budget. Yes, it did raise taxes on those with expensive homes—a policy that I advocated for 10 years ago, as a matter of interest—as well as on gambling companies and on landlords. [Interruption.] Members should read the Red Book. The measure is part of a fair Budget. By the way, the Conservatives will have to explain to people up and down the country why they want to leave hundreds of thousands of children in poverty. That is not fair or right, and it is bad for our country.
Several hon. Members rose—
Ed Miliband
I will make a bit more progress.
The second policy I wish to focus on is the Chancellor’s decision to take £150 off the cost of energy bills—that will be important for families across the country. It has been possible only thanks to a principled decision that she made to shift the cost of some levies into public spending, which is itself possible only thanks to her Budget decisions, including raising taxes on the wealthiest, moving into public spending 75% of the cost to households of the renewables obligation, and abolishing the energy company obligation, with £1.5 billion extra allocated for the warm homes plan.
I notice that the Conservatives now seem to claim that that was their idea in the first place, but there is a crucial—
Harriet Cross (Gordon and Buchan) (Con)
Will the Secretary of State give way?
Ed Miliband
I will in a moment—let me develop my argument.
The Conservatives say that this was their idea in the first place, but there is a crucial difference: they proposed abolishing the renewables obligation—
Ed Miliband
But they had with no way of paying for it. “Yes”, says the hon. Gentleman. This is quite extraordinary—all the sins of opposition combined into one. The Conservatives had 14 years to do it, but they never did, and suddenly it is such a great idea to just abolish the renewables obligation.
Ed Miliband
“Yes”, says the hon. Gentleman—although, of course, he was an Energy Minister and he never did it. [Interruption.] He looks a bit sheepish now, doesn’t he? That is rare for him. Basically, I think the Conservatives’ argument is that they would just rip up all the contracts that the Government have signed—including lots of contracts that the Conservatives themselves signed—sending a message to every investor in Britain that the British Government will not honour the contracts that they sign. If it had been a remotely serious policy, they would have carried it out when in government, but it was not a remotely serious policy, because they are not a remotely serious party; that is the truth. In fact, it is all more Liz Truss. They will the ends; they want the cut in energy bills, which is good, but they do not have the foggiest idea of how to pay for it. Taken together, the choices made in the Budget, including on energy, will make life more affordable for people, and will begin to tackle the problems that I have outlined.
Harriet Cross
We are talking about £150 off energy bills that are already £200 higher than when the right hon. Gentleman came into government, and £300 was meant to come off those bills. Will bills be higher or lower than when he came into government last year?
Ed Miliband
If we look at the average of bills in 2025 versus 2024, they are lower. I hope that the hon. Lady will support our cuts to energy bills in April, when they come in.
Dr Ellie Chowns (North Herefordshire) (Green)
Will the right hon. Gentleman give way?
Ed Miliband
Let me make a bit more progress. My second point is about public spending. In the spending review and the Budget, my right hon. Friend the Chancellor made the crucial decision not to return to austerity. She could have made a different choice and cut public services—I think that is what Conservative Members would go back to doing—but we know the impact of that approach from the last 14 years. This is about the living standards of millions of people across our country who cannot buy their way into private health care or private schools. This can be hidden by the smokescreen that Conservative Members want to put up, but the Chancellor has made the incredibly important decision to invest in the future. That has enabled the Government to cut NHS waiting lists by more than 200,000, roll out free breakfast clubs in schools, expand free school meals, fund the expansion of free childcare, and announce the biggest boost to investment in social and affordable housing in a generation. Conservative Members are back to austerity.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State very much for what he is saying, but on the £150 energy dividend for people across the United Kingdom, the Red Book lacks detail about how the policy will work in Northern Ireland. Perhaps he could indicate whether the support will be £150 in Northern Ireland, as it will in England. We must ensure that people receive the same in Northern Ireland as they do on the mainland.
Ed Miliband
The hon. Gentleman asks an important question; let me write to him with the detail on his point. We want as many people as possible across our country to benefit from this policy. By making different choices from those made in the past, my right hon. Friend the Chancellor is able to invest in the long term. She is delivering the highest levels of public investment that this country has seen in four decades.
Jerome Mayhew (Broadland and Fakenham) (Con)
At the last general election, the Secretary of State and all his colleagues said that they would raise taxes by £7 billion, and that their plans were fully funded and costed. What democratic mandate does he claim to have for increasing taxes by £66 billion, and debt by a further £70 billion?
Ed Miliband
The mandate that the British people voted for was a mandate to change this country, given the problems that we inherited from the last Government.
Several hon. Members rose—
Ed Miliband
Let me develop my argument, because this point is crucial: we can tackle the affordability crisis that people face only by investing in the future. Our vision of what makes an economy succeed is different from that of Conservative Members. We believe that public investment crowds in and does not crowd out private investment; that the only route to economic success is a Government who support industry and workers with a proper industrial strategy; and that rights at work and strong trade unions are not an impediment to a good economy but an essential ingredient of it. Nowhere is that more apparent than in clean energy. Since the election, we have seen the largest public investment in home-grown clean energy in our history, leveraging private sector investment—that is the point—of more than £60 billion. We have the largest nuclear building programme in half a century, with Sizewell C, small modular reactors, and fusion at West Burton, which the Conservatives failed to deliver. There is funding for carbon capture in Teesside, Humberside, Scotland and the north-west, which the Conservatives failed to deliver, and we have the first new publicly owned energy company in more than 70 years in Great British Energy, which they opposed.
Pam Cox (Colchester) (Lab)
In the east of England, we welcome the Government and private sector investment in Sizewell C, and a clean energy supply chain that will stretch from Suffolk through to Essex. Does my right hon. Friend agree that the Budget offers tax incentives to start-ups and scale-ups in that sector, which will help that supply chain to flourish and bring energy bills down even further?
Ed Miliband
My hon. Friend is absolutely right. When we recently announced the small modular reactor fleet at Wylfa in north Wales, we saw the huge opportunities, not just for the areas where nuclear power stations are being built, but rippling across the supply chain. That is why I am so proud of the investments that we have been able to make. What is the result?
Ed Miliband
I will not, for a few minutes. The result is new jobs building wind turbines at Siemens Gamesa in Hull, new jobs making transformers in Stafford, new jobs making heat pumps in Derby, and new jobs at Sumitomo’s new factory at the Port of Nigg—some of the 400,000 additional clean energy jobs that we expect our mission to support by 2030. That is the difference.
What is the Conservatives’ policy? They want to rip up the Climate Change Act 2008 and abandon net zero by 2050, which was their legacy. As a result, they have been roundly condemned by British business. Energy UK says that abandoning that target will scare off investors. The Confederation of British Industry says that it is a “backwards step”, because the Climate Change Act is
“the bedrock for investment flowing into the UK”.
Baroness May—they do not like to talk about her—called it a “catastrophic mistake”. And get this: even Boris Johnson —rarely have I quoted Boris Johnson—says that
“in my party, it’s all about bashing the green agenda, and personally I don’t think we’ll get elected on…saying what rubbish net zero is.”
Normally—I have experience of this—Oppositions stick by what they did right in government, and trash what they did wrong. The right hon. Member for East Surrey (Claire Coutinho) is pursuing a novel approach to opposition: trash anything that they did right, and double down on everything that they did wrong. Nowhere is that more true than in our dependence on fossil fuels.
At this point, I express my sincere thanks to the right hon. Lady’s colleague on the Front Bench, the hon. Member for South Suffolk (James Cartlidge), who sadly is not here. Last week, I was talking about the causes of the energy bills crisis of 2021. He shouted out—I checked Hansard—“Because Putin invaded Ukraine!”. Obviously, he is one of the finest minds on the Opposition Front Bench, and he is right about that, but he has given the game away. This relates to affordability and this Budget debate. The lesson from the worst cost of living crisis in generations is this: it came about because Putin invaded Ukraine. What was the cause of higher bills? Why were we worse hit than many others? Because we were so exposed to fossil fuels. It was not the price of renewables that soared; it was the price of gas, including from the North sea, priced and sold on the international market. That is what happens when we do not have clean, home-grown power, and when we are at the mercy of petro states and dictators. What is the strategy of right hon. Member for East Surrey now? To double down on the Conservatives’ failure. She literally says that we should cancel the allocation round 7 auction.
Ed Miliband
Yes, the right hon. Lady says. The Conservatives are the people who lost it all in the fossil fuel casino, and now they say, “Let me just have one more go at the roulette wheel. This time it will be different. Cross your fingers and hope for the best.” Let us think about this. What are they betting on? In today’s world, at this moment of all moments, with the world at its most perilous for generations, their policy is to cross their fingers and hope for everlasting peace in the world and no geopolitical instability.
Ed Miliband
I have already given way to the hon. Gentleman. With Russia still at war in Ukraine, with deep tensions in the middle east, and with NATO being tested, this is ridiculous irresponsibility from the Conservatives. [Interruption.] The hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) should listen to this. We know that half our recessions since the 1970s have been caused by fossil fuel shocks, and the world is so much more unstable. Here is the worst thing of all: it was not the Conservatives’ energy bills that they were betting with; it was the British people’s. Families, business and the public finances are still paying the price of their failure, and there has not been a word of apology or contrition.
The right hon. Member for East Surrey now has to pretend that black is white, ignore the dangers, and claim that fossil fuels are cheaper, when actually strike prices for solar and onshore wind in last year’s auction were nearly 50% cheaper than the levelised cost estimate of building and operating a new gas plant. The truth is that the Conservatives have learned nothing and must never be let near the levers of power again. The difference between us is that we make fair choices; they would double down on unfair choices. We invest in the future; they would return us to austerity. We are building an economic future for the country; they would destroy the economic opportunities and security of the clean energy economy.
To conclude, this is a Budget that, despite the challenges, provides a clear direction of travel on the biggest issue of our time: the affordability crisis. This is a Budget that shows a Government who are acting on the No. 1 issue facing the British people. This is a Budget for fair choices, for investing in public services, and for creating a better economy. That is why this Budget deserves support in the Lobby tomorrow night.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Justin Madders (Ellesmere Port and Bromborough) (Lab)
It is a pleasure to see you in the Chair, Madam Deputy Speaker.
As always with a Budget, there is far more to say than one can fit in a speech, but I just want to start by saying that the decision by the Chancellor to increase the headroom is not one that will garner many headlines or capture the public’s imagination, but it is probably one of the single most important things in the Budget. We simply could not have had another year where every bit of speculation on policy led to speculation on the markets, pushing up borrowing costs and leading to a constant cycle of uncertainty. I hope that this increased buffer and the move to annual forecasts will mean that we get some stability back, and that we will see the OBR—under new leadership—make far more accurate predictions and forecasts in the future than it has made to date.
I support the measures in the Budget that have been introduced to put more money into people’s pockets. My constituents will welcome another above-inflation increase in the minimum wage and the freeze to prescription charges, as well as the £150 reduction to average household energy bills, rising to £300 for the poorest households. Energy and transport costs make up a significant proportion of household expenditure, particularly for those on the lowest incomes. I hope that the rail freeze will also apply to Merseyrail, which is the main rail line for my constituents. It did seem a bit odd that we could not get confirmation from the Government last week that the freeze would apply to Merseyrail, but I see that the Transport Secretary is present—hopefully she will be able to confirm by the end of the debate that she does indeed have good news for my constituents on that score.
I am also proud that Labour is treating child poverty with the seriousness that it deserves. I welcome the measure announced by the Chancellor to scrap the two-child benefit cap that has forced so many families into hardship and harmed children through no fault of their own. This measure alone will lift 450,000 children out of poverty, meaning that, alongside other measures previously announced, we will see more than half a million children taken out of poverty. More than 2,000 children in my constituency alone will be lifted out of poverty as a direct result of this Budget.
I have heard commentators say that scrapping the cap was a measure simply to appease Back Benchers like me, but I think that really belittles the moral case for action. Let us be clear: this cruel policy did not achieve its initial aims, often punished families for changes in circumstances that were beyond their control, and ultimately cost our economy far more than the £3 billion a year that it saved.
Mr Luke Charters (York Outer) (Lab)
I wonder if my hon. Friend will allow me to raise the case of a single mum in my constituency who unexpectedly became pregnant a third time. It was a time of anxiety for her. She used food banks periodically and worried that she would not be able to afford toys for her kids at Christmas. Does my hon. Friend agree that the two-child benefit cap imposed by the Conservatives is the cruellest Tory policy of all?
Justin Madders
My hon. Friend is right to point out that the policy punished children for being born, which is not something any Labour Government should be part of.
We hear that this decision may encourage people not to work, but we all know from the statistics that a majority of people in receipt of benefits are in some form of employment. As for the wider cost, the Child Poverty Action Group estimates the cost of child poverty to the country to be about £40 billion a year, so not only is scrapping the cap the morally correct thing to do; it is also the best thing for our country economically.
While I understand the pressures facing the Government, I hope that the fiscal circumstances will improve in such a way to see income tax thresholds readjusted to take account of the inflationary pressure recently experienced. Going forward, we must continue to ensure that those with the broadest shoulders carry the burden to ensure that more and more working people are not dragged into paying tax by fiscal drag.
I have to say, I would like an explanation of the Chancellor’s comments about how those in receipt of the state pension will not have to pay any tax at the point that the state pension reaches the tax threshold in future. Of course they should not have to pay any tax on it, but why should a pensioner who might have a small private pension of £20 a week have to pay tax on that and their state pension? Once we start to look at some of the implications of the policy, it becomes clear that there are a number of unintended consequences. I hope that when the extra headroom that has been created by this Budget goes on to inspire further ideas in future Budgets, we can look at stopping some of the anomalies that the fiscal drag has created.
I will conclude with a few words on the automotive sector. I am proud to have in my constituency a Stellantis factory—or a Vauxhall Motors factory, as it is more commonly known round where we live. It is a site I have fought hard for over the years. Of course, the factory now manufactures electric vehicles. I welcome that the Budget reinforces the commitments that were made to our automotive sector in the industrial strategy for manufacturers. I am pleased that funding for DRIVE35 has been expanded by £1.5 billion, providing £4 billion over the next 10 years, which will help to build on the important investment the automotive sector needs.
I am also happy that plans to change the rules for the employee car ownership schemes have been delayed from next year until 2030, as that would undoubtedly have left many of my constituents hundreds of pounds a month worse off. Having now seen the impact of that policy, I hope the Government go the whole hog and cancel it altogether.
Dr Luke Evans
I have the automotive industry in my area too, and electric vehicles are really important. The implementation of the pay-per-mile change for electric vehicles is causing huge anxiety, as is the impact on the second-hand car market. We do not understand how this measure will work. Does the hon. Gentleman agree that the Government must be clear on this, as it will have a big impact over the next two to three years while it is discussed?
Justin Madders
The hon. Gentleman must have seen my speech, because I am just about to talk about that issue. He is right that there are a number of unanswered questions.
First, it is important to say that we do need to change to a pay-per-mile system for electric vehicles. The revenue we raise from fuel duty is clearly going to go down over the coming years, so there has to be a change.
Several hon. Members rose—
Justin Madders
I am sorry; I am not going to take any more interventions.
I think the pay-per-mile system is the right thing to do, although I do have concerns about the timing and how it will work in practice. I have to say, I did enjoy putting the question to Conservative Treasury Ministers when they were in government and never getting any answer at all, so I am pleased that this Government are at least acknowledging that this is an issue that needs tackling.
The hon. Member for Hinckley and Bosworth (Dr Evans) is right to raise concerns about what the change will mean for the sector. The OBR has forecast that there could be around 120,000 fewer electric car sales over the forecast period, which of course will not be welcome news, and certainly is not helpful for our emissions targets. It is worth pointing out that the automotive sector is already at a precariously low level of production, and of course not all sales of EVs will be for UK-manufactured vehicles. In my opinion, we really ought to be giving generous discounts—the majority of those cars are built here, so we absolutely need to see more done to boost demand. Measures such as the electric car grant, which was launched earlier this year, continue to support people who want to switch to EVs, particularly with vehicles actually made in this country—that is a very important part of the scheme. However, even with that generous incentive, the pay-per-mile proposals will see us lose ground.
The Budget also contained measures on boosting charging infrastructure, which is really important, as it will give people confidence to make a purchase, but we cannot pretend that everything in this Budget goes all the way. That is, of course, before we get into the practicalities, so we need further thoughts on implementation.
This is a progressive Budget. It is a Budget that protects the most vulnerable, puts money into workers’ pockets and begins to rebalance the tax system and to make it fairer. There is no doubt that there is much more to be done in the longer term: we need to see faster improvements in our crumbling public services; food inflation remains stubborn, and is predicted to continue to be high over the medium term; housing costs mean that for many, renting—let alone buying—is still out of reach; and social care costs still mean that many people lose their home at the end of their lives, so we need that review of social care to deliver. Those are longer-term challenges, but for today, I believe the Chancellor has played a difficult hand pretty well.
Harriet Cross
Yes, absolutely. Many flights that take off from Aberdeen are full of workers who are leaving north-east Scotland for Norway, taking their skills and taxable income with them. Norway welcomes the opportunity for investment in its energy sources. Norway drilled more than 30 new exploration wells in its North sea this year. We drilled zero. That is not because the North sea is different on either side of the boundary line, but because of the United Kingdom’s fiscal and regulatory regime. We are banning ourselves from our own resources.
We are making it so financially unviable to get at our own resources that we are becoming more and more reliant on other countries for our energy security. That does not make sense. Even if we come at the issue from a green angle and pretend that we are helping the climate, imports are more carbon intensive. We are bringing more carbon-intensive energy, which we need, into the UK. The Government love telling us that we will need oil and gas for years to come. We will, but we will not be using UK oil and gas for years to come. We will be using oil and gas from Norway, Qatar, Mexico or America, and we will import it at a huge carbon cost, and at a huge cost to the Treasury through loss of tax, other revenue and investment.
Offshore Energies UK states that £50 billion of investment will be lost because of the EPL being kept in place. That £50 billion could go to a huge number of schools, roads or NHS projects, or it could fill any deficit that we have, but no, it is being left, because the ideology of this Government is to run down our domestic oil and gas sector.
When I am out having constituency meetings in north-east Scotland, I spend most of my time listening to people who are worried about their jobs. They are worried about when—not if—their job will be lost, and where they will get another one. There are no new jobs in the oil and gas sector. They are not being created. When a job is lost in north-east Scotland, or in any other constituency with oil and gas jobs, there are no replacement jobs. Our skilled workers are moving abroad. That expertise and those skills—the ones that will drive the transition and keep our communities together—are moving away.
One of the most cynical things that the Government did on Wednesday last week, when they chose to keep the EPL, was to release their consultation results for the future of the North sea. They thought that the people of north-east Scotland were so dim, so stupid, that they would not realise that keeping the EPL in place was going to have a destructive impact. They thought that they could wave a little flag with “North sea future plan consultation” written on it, and it would distract us, but guess what? We are not distracted. We know that it does not matter how many tie-backs are allowed, or whether we rename a licence as a certificate; that will not make any difference when it comes to how long the North sea lasts, because we do not have the fiscal regime to make it viable.
I met representatives of a large oil and gas producer on Friday—I am sure that no Government Members did, because they do not actually engage with the sector or listen to it.
Harriet Cross
Well, in that case, the Minister will have heard exactly the things that I hear from it, so why has he not acted on them? I asked the company I met on Friday what it thought about the North sea future plan paper. Its words to me were: “We didn’t need 170 pages, we just needed a fair fiscal regime.” That is all it wants. It wants the EPL to be taken away, and it needs the fiscal regime to make sense.
The EPL windfall tax was brought in when there were record prices. Last week, the Government defined “windfall” as $90 a barrel and 90p a therm, yet we have to wait until 2030 to get that. We therefore now have a windfall tax on $68-a-barrel oil and about 80p-a-therm gas. Why do we need to wait until 2030? Why are we doing that to our oil and gas sector? Why are we making sure that they are completely taxed into the ground? Why are we making investment unviable, ensuring companies move abroad and undermining our industry? We have defined what a windfall is, but we will still tax companies on windfall profits now. That does not make sense. There is no windfall. We are now taxing the oil and gas sector so much that the tax revenues are falling. The decrease in revenue from the oil and gas sector last year was 40%. Why was that? It is because investment is going abroad and production is falling. It is because it is not viable to invest in the UK any more.
A company I met last week said that it is more stable to invest in west Africa than the North sea. That is the situation that is being created by this Government. That is the issue that we see in north-east Scotland, and it is my constituents and the constituents of neighbouring MPs who are feeling the brunt. My constituents do not talk about career progression, but about career survival: “How much longer will my job last? How many more redundancy rounds will I survive?” Those are the conversations we have in north-east Scotland. That is the reality of the oil and gas sector in north-east Scotland, and that is the absolute madness of the policies that this Government are following.
Will the Government, please, for the future security of our energy, for £50 billion of investment that could come into our energy systems, and for the survival of tens of thousands of jobs, scrap the EPL? It must be scrapped. In no other sector in any other part of the country would this Government allow that many jobs to be lost, yet they are willing to do that to the energy sector in north-east Scotland, and to our oil and gas workers, and that is completely irresponsible.
The Secretary of State for Transport (Heidi Alexander)
It is a privilege to respond to today’s debate on the Budget. We have heard some excellent contributions from many colleagues, particularly those on this side of the House, and I hope my hon. Friends will forgive me if I do not mention them all by name. I will respond in writing to the specific questions put to me by my hon. Friends the Members for Ellesmere Port and Bromborough (Justin Madders), for Bathgate and Linlithgow (Kirsteen Sullivan) and for Brentford and Isleworth (Ruth Cadbury).
We have also had some thoughtful and measured contributions from Opposition Members, including the hon. Member for Dorking and Horley (Chris Coghlan) and the right hon. Member for Belfast East (Gavin Robinson). It is a shame that some of the other contributions from those on the Opposition Benches can best be described as heavy on indignation and light on contrition. You would have thought that the right hon. Members for Salisbury (John Glen) and for North East Cambridgeshire (Steve Barclay), as well as the shadow Transport Secretary, had no responsibility whatsoever for the economic inheritance that the last Government passed on to this one. We all know that the last Parliament saw living standards fall, and it is not a record to be proud of.
This Government were elected on a promise of change, which was the demand of a weary public. People were fed up with rising bills and falling real wages, fed up with schools and hospitals that had been cut to the bone, and fed up with trains and buses that they could not rely on. The economy—indeed, the country—felt broken in the very places that mattered most. In this Budget, I am proud that we are answering the public’s call for change, and making the fair and necessary choices to repair our public finances and deliver on the nation’s priorities.
We are cutting the cost of living through cheaper energy bills, frozen prescription charges and frozen rail fares. We are putting record investment into our NHS, bringing waiting lists down and creating 250 new neighbourhood health centres. We are righting a moral wrong by lifting hundreds of thousands of children out of poverty, not just through school breakfast clubs and by lifting the minimum wage, but by scrapping the two-child universal credit cap. And we are doing all this while meeting our fiscal rules. After years of decline, this is what rebuilding our country looks like.
Gavin Robinson
I understand that the Government want to accelerate their plans to remove the two-child limit as soon as possible, and it may be too soon to get a legislative consent motion passed by the Northern Ireland Assembly. May I ask the Secretary of State to undertake to engage with the Social Security Minister? If there is political willingness at Stormont for this to proceed quickly, perhaps she could do it on our behalf.
Heidi Alexander
I will certainly undertake to have those conversations with colleagues.
Heidi Alexander
In the interests of time, I will not give way.
It is because we understand what life is like for ordinary people that we have taken decisions in this Budget to provide real help with the cost of living. We know that an average household spends more than 10% of its income on getting around, getting to work and school, and making essential daily trips. That is why this Budget has not only extended the fuel duty freeze beyond the spring of next year, but restated our commitment to protect the bus fare cap.
For the first time in 30 years, we are freezing rail fares. If someone has a season ticket, is a commuter on a peak return or is travelling off-peak between major cities, they will get to keep more of their hard-earned cash. It is good news for millions of passengers, some of whom will save hundreds of pounds a year. That means extra money in people’s pockets, and it means that we will continue to keep a lid on everyday costs that drive inflation.
Heidi Alexander
I am not going to give way.
Budgets are about choices, and I know that not everyone agrees with our decision to freeze rail fares. Indeed, just days before the Budget, I received a letter from the shadow Transport Secretary effectively proposing a 4.8% hike in fares. I considered his request, but an increase in line with the retail prices index, as the right hon. Member pretty much suggested, would have put passengers’ fares up by hundreds of pounds next year. We should not be surprised that the shadow Transport Secretary wanted passengers to pay more—after all, his party increased fares by 60% when it was in office—but Labour Members believe in cutting the cost of living and putting money back into passengers’ pockets. As we set up Great British Railways, bringing together 17 different organisations into one public organisation, we will build a railway where passengers, not profits, come first.
While rail may often dominate newspaper headlines, this Government will never ignore the roads that carry most of our daily journeys. That is why, earlier this year, I gave the green light to the lower Thames crossing. After years of being stuck in planning limbo under the Conservative Government, it is now set to become the largest road building project in a generation. Thanks to this Budget, we are confirming a further £891 million of public funding, after which the private sector will take forward construction and long-term operation. Along with our commitment to extend the docklands light railway to Thamesmead, this is further proof that this Government are firmly on the side of the builders, not the blockers.
Before we came into power, our roads were a symbol of national decline. Poorly maintained and riddled with potholes, they were a nuisance at best and downright dangerous at worst. That is why, by the end of this Parliament, we will commit over £2 billion annually for local road maintenance, doubling funding since coming into office. We will fill millions of potholes every year, protecting drivers from having to shell out hundreds of pounds on costly repairs.
Investment and reform are my watchwords as we work to improve everyday journeys, but throughout all this we cannot be blind to the impact of transport on our climate. The truth is that most transport emissions come from our roads, which is why reducing costs for drivers while cutting emissions will be at the heart of the EV transition. The trends are already clear. EVs are often cheaper to run and maintain than more polluting cars, and consumers have noticed that, with EV sales accounting for a quarter of new car purchases in October.
However, this Budget enables us to go further. By committing an extra £1.3 billion to the electric car grant, we will keep saving buyers thousands of pounds on dozens of EV models. We will increase the expensive car supplement threshold for EVs to £50,000, and invest a further £200 million in the roll-out of EV charging infrastructure. My ambition is to make it as easy to charge up as it is to fill up, so I am pleased that the Budget confirmed a decade of 100% business rates relief for eligible EV charge points, and a review of the cost of public charging, including the impact of energy prices. Fairness remains at the heart of this Budget, and as the Chancellor rightly said, “everyone must contribute”, so electric and plug-in hybrid vehicles will start paying a new electric vehicle excise duty from April 2028. Above all, that ensures that all those who use our roads and all those who depend on our roads help to maintain our roads.
For years, the British people were resigned to poorer living standards, stagnant wages and public services that were not fit for purpose. This Government promised change, and despite the state of the economy when we entered office, we are delivering that change and doing so fairly. We promised no return to the long winters of austerity, and we meant it. An extra £120 billion in public capital investment over this Parliament will build new infrastructure and homes across the country. It will strengthen our energy security, and it will give the NHS its biggest ever capital settlement. For transport, it is a downpayment for better, more reliable journeys—trains people can rely on, buses that turn up on Sundays, roads that make driving easier and infrastructure that connects not just people with places, but the aspirations of the next generation to the opportunities of tomorrow. That is what this Budget is about: fair choices for a fairer Britain, where the cost of living falls, real wages rise, and our towns and cities get the connectivity they deserve. This is a Budget that delivers on the public’s priorities, and I am proud to support it.
Ordered, That the debate be now adjourned.—(Deirdre Costigan.)
Debate to be resumed tomorrow.