Conduct of the Chancellor of the Exchequer
(Limited Text - Ministerial Extracts only)
Read Full debate18:59 - The House divided: - Ayes: 90 / Noes: 297 - Question accordingly negatived.
The Chief Secretary to the Treasury (James Murray)
I thank the Opposition for giving me another opportunity to remind Conservative Members how the Budget cut the cost of living, cut NHS waiting lists and cut Government borrowing.
I have seen the shadow Chancellor across the Dispatch Box so much in recent weeks, on what feels like a daily basis, that I might almost miss him over the recess—almost. No matter how many times I have seen him across the Dispatch Box, he has shown that he does not want to talk about the fact that this Budget takes £150 off energy bills, freezes rail fares and prescription charges, lifts 550,000 children out of poverty, increases our headroom to £21.7 billion, and gets debt falling and cuts borrowing in every year. This Budget invests in our NHS, our defence, our roads and our railways, and in every region and nation of the UK. The Conservatives do not want to talk about the substance of the Budget because they can see that the Chancellor has delivered a Budget that delivers for working people.
Dave Doogan
I did not expect the Minister to give way. He says that energy bill payers in the UK are now £150 better off, forgetting that energy bills are currently almost £600 higher than Labour promised they would be at the election. Ofgem has come in with an additional £108 for infrastructure charges. Energy bills will go up again in January and again in April. Does he want to reflect on what he has said? Is that really the record on which he is standing?
James Murray
I am unclear whether the hon. Gentleman supports our £150 off energy bills and our extra £150 off for those 6 million households on the lowest income. That will benefit people right across the UK with the cost of living challenges they face. We know that that is what matters to people right across Britain.
Instead of focusing on what this Budget means for people across Britain, we heard the shadow Chancellor’s comments on a motion that focuses so much on process. While I accept that process is very important, it has been covered extensively in recent weeks—indeed, most recently by the Chancellor in the Treasury Committee this morning—so let me put on record our response to the motion and to the comments that the shadow Chancellor made about process.
Let me begin by again addressing the speech that the Chancellor made on 4 November. When the Chancellor addressed the country that morning, her purpose was simple: to give the British people an honest sense of the circumstances we were facing and the principles that would guide her as she took decisions at the Budget. She wanted to highlight the challenges that our country was facing and her priorities in the face of those challenges, and that is exactly what she did.
Following the OBR’s review of productivity—the review of the impact of 14 years of the Conservatives being in power—the Chancellor knew that we faced a downgrade. To understand the scale of the impact, members of the Opposition need only to consult the Budget document. There, they will see that the OBR’s productivity review, which covered the Conservatives’ time in office, reduces
“the amount of revenue the OBR expects the government to collect by around £16 billion in 2029-30.”
Graham Stuart
I think it is the dishonesty that is catching at everybody’s throat. A year ago at the Budget, the Chancellor said that she was not going to freeze income tax thresholds because—I think I quote—it would be an additional tax on working people, and therefore in breach of the Labour manifesto. A year later, she did exactly that, and then claimed that it was not a breach of the Labour manifesto. That is rank dishonesty. That is why Madam Deputy Speaker is allowing language that would not normally be used in this Chamber: because this motion and this Government mean we have to address issues that normally do not occur.
James Murray
The right hon. Gentleman is mistaken. We have kept to our manifesto commitment not to raise the rates of income tax, national insurance on working people, and VAT. We also said in our manifesto that we would keep taxes on working people as low as possible, and we have been able to do that only because of the other fair and necessary choices that the Chancellor made on taxation.
James Murray
I will give way if the right hon. Gentleman will tell us whether he supports our changes to council tax on high-value properties.
Graham Stuart
On the issue of the manifesto, will the Minister confirm that it does not say that it would not raise the income tax rates? It just says that it would not raise those taxes. The word “rates” is not in there. It is that that is misleading. It is that that makes everyone outside throw things at their television, because they are disgusted by a Government who cannot face up to simple truths!
James Murray
The word “rates” is definitely in there. The manifesto talks about the income tax rates and additional, main and higher rates of income tax, and it is very clear that we were talking about the rates of tax on working people. As I said, the manifesto also says that we will keep taxes on working people as low as possible. I note that the right hon. Gentleman did not take my suggestion to comment on some of the other tax choices we took at the Budget—the fair and necessary choices. The Opposition are picking and choosing what they want to refer to in the Budget. The Budget is a package. If they do not like it, they should explain what they would do instead.
Sir Mel Stride
On the matter of picking and choosing, the right hon. Gentleman is absolutely right that on 4 November, the Chancellor did point out that there was a downgrade in productivity; we now know that to be £16 billion, and she knew that at the time. Does the right hon. Gentleman accept, however, that she did not mention—it was omission—the upgrade to the number, which was twice as much as that £16 billion, and that she thereby gave an inaccurate reflection of the state of the public finances at that time?
James Murray
The Chancellor set out the productivity review that was under way by the OBR. In fact, if the right hon. Gentleman consults the OBR document published on Budget day, he will see in black and white that the productivity downgrade reduced tax receipts by £16 billion. The Chancellor was clear in her speech on 4 November that this, combined with the clear need to increase headroom to build resilience in public finances, would require everyone to contribute, and that is what happened.
James Murray
The right hon. Gentleman had a very long time to comment earlier in this debate—I may give way to him later.
Dr Murrison
The Minister is a reasonable man, and I imagine that he would subscribe to the Government’s much-vaunted duty of candour that they are selling in their Public Office (Accountability) Bill, which is currently in Committee. The Bill is so important to the Government that the Prime Minister himself had to introduce it on Second Reading. Will the Minister examine what has happened over the past couple of months? Does he really believe that the Treasury, and in particular the Chancellor of the Exchequer, can truly be said to have discharged that duty of candour in their dealings?
James Murray
As the right hon. Gentleman should know, this Government take our responsibilities to public office incredibly seriously, and we have made sure we focus on that in the way we conduct ourselves in office. In speaking to people on 4 November, the Chancellor was setting out the challenges that we knew we were facing and the principles that would guide her in approaching decisions ahead of the Budget. It was important to set out the priorities she would have in taking her decisions on Budget day.
Sir Mel Stride
The right hon. Gentleman is being very generous with his time. Does he accept that on 4 November, the Chancellor knew that there was an upgrade to the state of the public finances of around £32 billion due to additional tax, inflation and other factors? If he does accept that, could he explain to the House why no mention whatsoever was made of that fact by the Chancellor?
James Murray
What the Chancellor knew when she gave her speech on 4 November was that headroom stood at a precarious £4.2 billion, and that was before previously announced policy measures had been accounted for. As I have said before in this House, and as Professor Miles of the OBR said to the Treasury Committee, that was a very challenging fiscal situation. If I had been at this Dispatch Box trying to justify a headroom of £4.2 billion or less, that would have been completely indefensible. Doing nothing was not an option—£4.2 billion of headroom would have been insufficient and deeply irresponsible.
In her speech at the beginning of November, the Chancellor was clear that she would seek to build more resilient public finances, with headroom to withstand global turbulence. She set out her priorities for the Budget, and those priorities were exactly what the Budget delivered. The apparent astonishment of Conservative Members that a Government could set out circumstances honestly, explain their approach and then deliver as promised is very telling—it must be an alien concept that they never considered during their time in office. As the Chancellor set out on 4 November and then delivered in her Budget, she wanted to cut NHS waiting lists, and that is exactly what we are doing. Waiting lists are already down by 230,000, with an extra 5 million appointments delivered since the election and 250 new neighbourhood health centres on the way.
Antonia Bance (Tipton and Wednesbury) (Lab)
One of the things I am most proud of—having stood on doorstep after doorstep in Tipton, Wednesbury and Coseley at the general election, hearing people tell the dreadful stories of how long they and their relatives had been waiting for hospital treatment—is the 45% fall in people waiting more than a year for their operation in the Black Country, in our hospital trusts. I am glad the Chancellor made the decisions she did in the last Budget that have enabled that.
James Murray
I thank my hon. Friend for talking about the experience of her constituents. She is absolutely right that the NHS is so important to all of us, and it is so important for the Chancellor to protect it in the Budget. The decisions she took protect our investment in the NHS in order to get it back on its feet, which will improve people’s experiences right across the country.
Chris Vince (Harlow) (Lab/Co-op)
On the topic of the NHS, the point I made in the previous debate is really important. The investment in the NHS is not just an investment in buildings; it is an investment in people, including working people. I have lots of people in my constituency who are self-employed—sole traders, as we call them. Does my right hon. Friend agree that those people having to wait years for an NHS appointment is bad for the economy and bad for their pockets?
James Murray
My hon. Friend is absolutely right that although improving the NHS is a clear priority, because of all of our experiences and because of our reliance on it to keep ourselves and our families healthy. Investing in the NHS is also an economic investment, because people being out of the workforce due to ill health is a serious drag on our economy—that is the situation we inherited from the previous Government. Our investment in the health service and our desire to get the NHS back on its feet is the right thing to do, not just for families across the country but for economic growth.
Steff Aquarone
On the same topic, the way this Budget was handled has undermined public confidence in North Norfolk in many ways, few more so than the fact it produced radio silence on our long-pledged dental school at the University of East Anglia. Does the Minister agree that if the Treasury had spent a little less time on its fiscal fandango and more time on delivering dentistry improvements in North Norfolk, this Budget might have gone down better with many of my local residents?
James Murray
I would take the hon. Gentleman more seriously if he spent a little less time opposing the decisions we take on tax to fund public services, because we are taking fair and necessary decisions on tax precisely to fund the NHS and the other public services on which we all rely.
I have set out at length what we are doing to protect the NHS, but the Chancellor’s second priority going into the Budget was to tackle the cost of living, and that is exactly what we are doing. At this Budget, the Chancellor chose to freeze rail fares for the first time in 30 years, to extend bus fare caps, to freeze prescription charges, to increase the basic and new state pension, to raise the minimum and living wages, to extend the fuel duty cut, to help more than half a million children who would otherwise live in poverty, and to save the average household £150 off their energy bills. As the Bank of England deputy governor told Members yesterday, this Budget will reduce inflation by between 0.4% and 0.5%.
The Chancellor’s final priority going into the Budget was to cut our national debt and Government borrowing, and that is exactly what we are doing.
Sean Woodcock (Banbury) (Lab)
The Conservatives have spent a lot of this debate saying that apologies are due from the Government, yet under them £11 billion of taxpayers’ money was lost in covid fraud. Does the Minister agree that if an apology is due from any party in the House, it is them?
James Murray
My hon. Friend is absolutely right. Sorry seems to be the hardest word to say for Opposition Members when it comes to covid fraud, the state in which they left the NHS, the Liz Truss mini-Budget and everything they did to public services and our economy, writing off the next generation and vast swathes of our nation. They should stand up and say sorry.
The priority for the Chancellor at the Budget was also to make sure that we cut our national debt and Government borrowing. Because of choices that the Chancellor made at the Budget, borrowing will fall as a share of GDP in every year of this forecast. Net financial debt will be falling as a share of GDP by the end of this Parliament, and will be lower by the end of the forecast than when we came into office. As I have said already, our headroom now stands at £21.7 billion, meeting our stability rule a year early, giving businesses the confidence to invest and leaving Government freer to act when the situation calls for it.
Whatever mischief the Conservatives try to make and however personal they make their attacks, the truth is that the Chancellor was clear about the challenges the country faces. She set out her priorities in taking those challenges head-on, and she delivered a Budget that meets the priorities of the British people now and in the future.
Paul Holmes (Hamble Valley) (Con)
As usual, the Chief Secretary to the Treasury is out here defending the Chancellor. I feel quite sorry for him. He has reeled off a number of policies that his Chancellor and his Government have made a choice about, but before the election, the Chancellor said that those choices would be on the back of a fully costed manifesto. Instead, taxes have gone up to pay for those choices, and that means that the manifesto was not fully costed. The motion therefore is correct, is it not, that the Chancellor misled the country before the election and in this Budget?
James Murray
The hon. Gentleman said he feels sorry for me—he needn’t. I am proud to be defending a Labour Budget in this Chamber. Frankly, I might repay the sympathies to him: I feel sorry for him to be stuck on the Opposition Benches, where I fear he may be for a long time.
The other point of process in the motion, to which the shadow Chancellor referred in his comments, is speculation ahead of the Budget. Let me start by addressing the premature publication of the “Economic and fiscal outlook”. We know that the EFO is a highly sensitive document, which is obviously not meant to be published until after the Chancellor has finished presenting the Budget to the House. The fact that it was accessed online before she began her Budget speech was a serious matter.
Mr Louie French (Old Bexley and Sidcup) (Con)
The Minister refers to the accidental or deliberate release of this information, but we know that on 14 November the press were briefed, clearly with incorrect information. Will he confirm to this House today who gave authority for that press briefing to go ahead, which misled not only the press, but the country?
James Murray
I think the hon. Gentleman is incorrect in what he said. He said that I may have implied the premature publication was deliberate; I certainly did not. It is none the less a serious matter, which is why we are responding to it with the commensurate seriousness that it deserves. We know that the OBR rightly took responsibility for this mistake, and soon afterwards—while we were discussing the matter at these Dispatch Boxes last Monday—its chair, Richard Hughes, resigned. That, of course, is a matter for Mr Hughes, and is his decision. The Chancellor wrote to him to thank him for his professionalism and dedication. Many Members and I have made clear our gratitude for his work as a public servant. Nonetheless, it was a serious breach, and the Government are acting with seriousness in response.
Chris Vince
I read the OBR report with interest. One of its recommendations that caught my attention was this:
“We recommend that the process for publishing the EFOs…should immediately be removed from the locally managed website and conducted in an environment more appropriate to the nature of the task”.
May I ask the Chief Secretary, or his Treasury colleagues, to find out whether “immediately” means that that has been done?
James Murray
My hon. Friend is right to point out that the OBR’s report contains a series of recommendations. It was, in fact, published within a few days of the premature publication. We are acting on its recommendations, including the recommendation that we should determine whether this has happened before, at previous fiscal events. While the OBR indicated that it might have happened earlier this year, at the time of the spring statement, it did not look into previous fiscal events, either under this Chancellor or under Chancellors in the last Government. We are looking into that to find out what happened.
More widely, beyond the EFO and the OBR, we put the utmost weight on Budget security, as I told the House last week. That is why, as I have told the House, a leak inquiry is under way, with the full support of the Chancellor and the whole team at the Treasury. In addition, the permanent secretary to the Treasury will conduct a review of its security processes, which will inform future fiscal events. The Budget security review will happen in the new year, and we will publish the outcome once it has concluded. More immediately, however, while recognising the seriousness of what happened with the OBR’s forecast, we remain fully committed to working with an independent OBR, and we recognise its vital role as a core part of our fiscal framework. The Government will soon launch a competitive external recruitment process to appoint a new chair, subject to the consent of the Treasury Committee. In the meantime, Professor David Miles and Tom Josephs will jointly lead the OBR until the new chair is in place.
I am happy to come here every day to explain the decisions that we took in the Budget in the interests of the British people. It is clear that the Conservatives do not want to talk about £150 off energy bills, freezes in prescription charges and rail fares, our investment in our NHS, and the fact that we are cutting debt. They do not want to confront the fact that this is a Budget that not only delivers for Britain, but does so in challenging times. It is a Budget that invests in Britain, supports the NHS, helps people with the cost of living, and gets our debt and borrowing down. It is a Budget delivered by a Chancellor who takes challenges head-on, makes the right decisions for our country, and meets the priorities of the British people. It is a Budget from a Government who will not let Britain’s future be defined by the failures of Governments past. This is a Budget that we are proud of, and we reject the Opposition motion.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I thank the Chief Secretary to the Treasury, my right hon. Friend the Member for Ealing North (James Murray), for his earlier remarks, which framed today’s debate rather well. As he set out, we have here an Opposition day debate, a chance for Members to really interrogate Government policy, to challenge our decisions, to say what they would do differently and to paint a picture of the kind of country that they would build if they were in charge. Oh, what a sight it would be! In short, an Opposition day debate is a chance to be a serious Opposition, but as my right hon. Friend set out in his opening remarks, they have not chosen to do that, instead preferring to rehash their already discredited complaints about process, which we have already addressed extensively, rather than talk about the Budget.
Dan Tomlinson
I am going to make some progress, if that is okay, because my hon. Friend will know that many other Members have not yet spoken and I might give way to them later.
It is worth recounting just how many times Conservative Members have chosen in the last few days to major on process rather than policy. They are very interested in what was said by whom and on what day, so let us recount it. On Wednesday 26 November, the Leader of the Opposition, in response to the Budget, raised process multiple times, introducing to Hansard the somewhat intriguing phrase “fiscal fandango”. No, me neither! Admittedly, this was immediately after the OBR had dumped the Budget just before the Chancellor stood up, so that is fair.
But then the Tory process paso doble—two can play at this game—really began. Thank you, everyone! On 27 November, the shadow Chancellor raised process in a Budget debate. On 2 December, the shadow Chief Secretary to the Treasury raised it in a Budget debate. On 3 December, the Leader of the Opposition raised it at Prime Minister’s questions. This was the same day that the Opposition called an urgent question on the resignation of the chair of the OBR, which had coincidentally happened during a statement two days earlier by the Chief Secretary to the Treasury on the OBR and its forecast. Yesterday, the Opposition Front Bench raised this at Treasury orals, and today we are having an Opposition day debate on the same topic after the Chancellor took questions on it this morning in the Treasury Committee.
All this political dancing has denied the Opposition the chance to scrutinise the Budget. I am not sure how much of it they have read. Let me remind them that the Budget will cut the cost of living, raise pay for those earning the least and invest in our NHS. It meets our fiscal rules and delivers £21.7 billion of headroom. It is a Budget that delivers on the promise of this Government and delivers for the British people. By contrast, the Opposition are stuck in the past, playing the songs of old again and hoping for a new audience.
Shaun Davies
There are 4,600 reasons in my constituency why this Budget is the right thing to do: 4,600 children who will be lifted out of poverty by the Budget. On the basis of the Opposition’s remarks, it is my understanding that the Conservative party would plunge those 4,600 children back into poverty as part of a £46 billion welfare cut if it were to win the next general election—as well as potentially scrapping the triple lock. Does my hon. Friend agree that that is morally bankrupt?
Dan Tomlinson
I agree with my hon. Friend, who is a strong advocate of ensuring that we do all we can to support people, lift people out of poverty, and grow our economy and our towns and cities across the country.
By contrast, the Opposition are stuck in the past, playing the songs of old again and hoping for a new audience. After a year and a half on the Opposition Benches, the Conservative party knows that all it has to offer the country is the same as it offered before: a reheated and not renewed set of Conservative policies, tax cuts for the wealthy, wages held down for the poorest, cuts to public services and a rise in child poverty.
The problem is not just that the Conservative party is playing the old tunes but that half the old band has jumped ship to join the more extreme party, which has not even bothered to show up to this debate. I do not know how the band will manage to perform without the likes of the hon. Members for Ashfield (Lee Anderson) and for East Wiltshire (Danny Kruger), Jonathan Gullis, Dame Andrea Jenkyns, Nadine Dorries, Ann Widdecombe, Sir Jake Berry, Mark Reckless, Maria Caulfield and Marco Longhi—those are just the Tory-to-Reform switchers I have heard of. There are many more who I think are probably as well known as I am, so I do have a soft spot for them. For completeness, let me remind the House of their service and their defection, too: Lia Nici, Chris Green, Anne Marie Morris, Graham Simpson, Adam Holloway, Alan Amos—
Graham Stuart
On a point of order, Madam Deputy Speaker. Last time I checked, this debate was supposed to be about the conduct of the Chancellor of the Exchequer. I know the Minister is relatively new to the Dispatch Box; perhaps he may need a little guidance.
Madam Deputy Speaker (Judith Cummins)
I thank the right hon. Gentleman for his point of order. I am sure the Minister has heard it and will return to his speech.
Dan Tomlinson
Indeed; I heard the point of order loud and clear. It is worth remembering that this is an Opposition day debate—I think it is within the remit to talk about the Opposition and the fact that they have lost all their players to the other team.
I also think it is time to move on from talking about process, because on this side of the House, we have a country to run, an economy to build and public services to mend. Instead of this subject, we could have talked about whether it is right to raise wages for those on the lowest incomes, but the Opposition did not want to bring that up. Maybe that is because wages have risen faster in the first 10 months of this Government than they did in the first decade of the Conservative Government, or maybe it is because it turns out that their latest policy is a real-terms cut to the living wage. We could have talked about the cost of living, but again, the Conservatives did not choose that as a topic because its mini-Budget crashed the economy and added thousands of pounds to mortgages, and since this Government have come to power, the Bank of England has cut interest rates.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
The Minister makes a point about the previous disastrous mini-Budget of September 2023. The shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), said at that time,
“I welcome much in this statement. There is a great deal that will help millions of families and businesses up and down the country.”—[Official Report, 23 September 2022; Vol. 719, c. 942.]
Does the Minister agree that the reason the right hon. Member focused on process is that his judgment on policy is so poor?
Dan Tomlinson
I agree entirely with my hon. Friend. Too many Conservative Members defended the mini-Budget, which crashed the economy and added thousands of pounds to mortgages. In contrast, since this Government have come to power, the Bank of England has cut interest rates five times, taking £1,200 off a typical two-year fixed rate mortgage. At this Budget, we cut £150 from the average energy bill, froze rail fares and prescription charges, and extended bus fare caps and fuel duty cuts, but the Conservatives do not want to talk about that either. They could have chosen in their Opposition day debate to talk about fiscal stability and increased headroom, but again, they chose not to do that because of the £21.7 billion of headroom that the Chancellor secured at the Budget, which will help protect our country from global shocks and unforeseen challenges.
Of course, the Conservatives do not want to talk about child poverty either because they know that this Budget has lifted 550,000 children out of poverty, whereas the last Government were content to leave them, preferring instead to rebrand the hungry children who they let down while in power as benefit scroungers. They should be treated as our future, not as our opponent.
I have a couple more minutes, so let me address some of the points made during the debate. I thank the Liberal Democrat spokesperson, the hon. Member for St Albans (Daisy Cooper), for engaging on policy. We have had conversations on business rates already this week, and I am sure that we will have more. We have begun the work to rebalance the system with a £900 million switch from the highest value properties to those on the high streets.
I thank my hon. Friend the Member for Harlow (Chris Vince) for his Thatcher quote. It was a good quote that bears repeating. She said,
“I always cheer up immensely…if they attack one personally, it means they have not a single political argument left.”
I thank the hon. Member for West Worcestershire (Dame Harriett Baldwin) for going through every single tax change and saying that she opposes them all. That is the sort of opposition we have got used to. Rather than constructive opposition, which comes forward with proposals that would raise revenue in a fair way, such as the changes on electric vehicle excise duty, which will stop us losing £12 billion of fuel duty revenue in the coming years, we just hear, “No, no, no,” over and over again. I thank my hon. Friend the Member for Loughborough (Dr Sandher). His experience in economics is richly valued in this place, and I enjoyed his speech, as I always do.
Finally, it has been a short debate, has it not, Madam Deputy Speaker? I am glad that the right hon. Member for Beverley and Holderness (Graham Stuart) took the time during the debate to read the Labour manifesto—that was much appreciated—and that he was able to clarify for the House that my right hon. Friend the Chief Secretary was right to say that we have stuck to our manifesto commitment.
James Wild
To bring the Minister back to the debate, it is about honesty and the real-world consequences of the briefing that happened around the Budget. Does the Treasury accept that hundreds of thousands of people drew down their pensions, which is an irrevocable decision—yes or no?
Dan Tomlinson
What the Treasury does accept is that at this Budget, the Government had to make the decisions to ensure that we could increase our fiscal stability and get borrowing falling in every single year. The previous Government were not able to control our public finances, and yet in every year of this forecast, borrowing will be falling, and we have more than doubled our headroom to £21.7 billion.
Dr Arthur
I always try to be helpful, and I thank the Minister for giving way.
There was a lot of speculation about the Budget, but a lot of that came from the Opposition Benches. Every single clickbait headline was repeated in the Chamber to fuel speculation. It was incredibly damaging—does the Minister not agree?
Dan Tomlinson
I agree that the Opposition are incredibly damaging for the economy.
The clean-up operation of the disaster zone that was the last 14 years is well and truly under way. Our economic plan is working, with growth up, employment up, interest rates down and borrowing falling, with a Labour Budget focused on the British people delivered by a Labour Chancellor making the fair and right choices. We reject this absurd monologue of emotion from the Conservatives, and we will stick to our plan for a better Britain.
Question put.