Budget Resolutions

John Hayes Excerpts

Tuesday 3rd November 2026 Commons Chamber

[Jonathan Reynolds]

I am extremely grateful to my hon. Friend for the question. The £2.5 billion investment will support thousands of jobs in the midlands, Bristol and across our country. The significance is that it is not just another public-private investment in an exciting area of the future. It is a genuine opportunity for a leading British firm to break into an incredibly lucrative market, which is currently dominated by two main players, where we could be significant in the future.

Last week, I visited the Rolls-Royce site in Derby with the Prime Minister and Chancellor to discuss this very issue: British industry, British talent and British jobs. Everyone in the House will be aware of how outstanding Rolls-Royce is on apprenticeships and opportunities for the next generation. It is excited about what the future holds for the UK, and the Government will work hand in hand with it to make its growth ambitions a reality.

We are backing British business not just through our industrial strategy, but by ensuring that we remain an outward and open-looking economy and that we stay true to the principles on which the modern British economy was built. We intend to reindustrialise our country, but we will not use punitive trade measures and tariffs to do so. In many cases, tariffs hinder businesses and hurt consumers far more than they help them. They are ultimately paid by our own people.

That is why the Government are using the Budget to suspend tariffs on more than 100 essentials, which will support farmers who import fertilisers and households who use heating oil; by lowering costs on products like baked beans, chocolate, marmalade and fruit, it will also support people with their supermarket shop. Government cannot reduce all the pressures on the family shop overnight, but we can use all the levers at our disposal to bring prices down, and that is exactly what we are doing.

While other nations turn inward, restricting trade with the rest of the world, we stand as a proudly internationalist country and global hub for trade and investment that is ready to deepen our partnerships with new friends and old allies—not least the European Union, which remains our largest trading market. That is the message we will be taking into the UK-EU summit later this month.

Our ambition is clear. We want to continue simplifying trade. We want to conclude negotiations on our sanitary and phytosanitary and emissions trading deals, which could add up to £9 billion a year to the UK economy and would be a huge win for small business.

[Sir John Hayes (South Holland and The Deepings) (Con)]

I wonder whether the right hon. Gentleman can reconcile what he has said about trade with the desire to reindustrialise, manufacture more in order to make more of what we consume. In an uncertain world, national economic resilience is more important than ever, and yet we run a huge trade deficit, which has grown year on year. Our dependence is on many countries who are not friends and could pull the plug on Britain at will.

[Jonathan Reynolds]

I agree with the sentiment put forward by the right hon. Gentleman, on one of the most substantive issues that the House must grapple with. There is no inconsistency in being proud of the services-led nature of the UK economy while recognising the essential contribution of advanced manufacturing. There are sectors of the UK economy that could gain from the current phase of innovation in artificial intelligence in goods; for instance, robotics could reduce our wage differential with low-wage economies and return industrial functions to the UK.

The basis of British industry will, however, always be export led—that is key in the automative or aerospace sector. I do not see a tension between strengthening our resilience and our domestic industrial capacity and being an outward-facing, internationalist country to the rest of the world. I believe the two things must go together.

I give the right hon. Member for South Holland and The Deepings (Sir John Hayes) a specific example: our critical minerals strategy. We cannot reduce our dependence on other countries entirely, but we can reduce the degree of exposure to individual markets and use the levers of Government, through investing in tungsten or lithium mining in the south-west of England, looking at how the refining process works, and working with allies. It is a balance between the two things. I recognise absolutely the substance of the right hon. Gentleman’s question and its importance to this debate.

On the UK-EU summit, in addition to the premise of the deal we seek to strike, we want to make progress on electric vehicle rules of origin, steel tariffs and economic security, recognising that in many cases we share similar challenges. We face those challenges together, and we can overcome them together. To that end, the Prime Minister will say more later this year about options for our long-term relationship with the EU—one that strengthens our collective security and our collective prosperity.

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[Sir John Hayes (South Holland and The Deepings) (Con)]

This Budget might be described as the “John Lennon Budget”—it expects us to imagine a better future. Actually, the Chancellor’s performance was more like a better Lennon lyric:

“Life is what happens to you

While you’re busy making other plans”,

because this Budget was long on platitudinous plans and short on decisive delivery. Leaving aside the self-evident exponential crisis of welfare spending—I say self-evident, but perhaps I should explain that benefits are due to hit £431 billion—there are three macroeconomic weaknesses in the Budget, which I will seek briefly to highlight.

The Prime Minister may say that he has to wait for the Milburn and Timms reviews, but while he is doing so and those plans are being hatched, 13.5% of all young people in the UK were not in education, employment or training in January to March this year. One million people aged 16 to 24 are without a job, training or education. To echo the comments of the hon. Member for Widnes and Halewood (Derek Twigg), this is a waste of talent on a scale that is a national scandal. The Budget represented a wasted opportunity to address those issues and, in particular, to build the skills that might enable those people to gain a necessary job. The failure to address that may become the defining characteristic of this Administration.

These are not new problems. I was the Skills Minister, as some people in the Chamber will know. I was well aware of the root causes of NEETs and how we might address them. We managed to reduce the number that we inherited in 2010 by almost 300,000 by 2015, and I was also able also to build up the number of apprenticeships to the greatest number in modern times: over 500,000. Since then, that number has dwindled. It is only by equipping people with skills that have economic value—skills that allow them to the best they can be—that we can also sustain an economy which is desperate for those skills.

What successive Governments have done instead is to import labour. Every time we import labour and every time we make it easier to do so, we displace the investment in our own workforce, both in the young people I described and in the existing workers who need to be reskilled or upskilled. The myth was perpetuated, largely by the Treasury—

[Suella Braverman (Fareham and Waterlooville) (Reform)]

Will my right hon. Friend give way?

[Sir John Hayes]

I am always happy to give way to my right hon. and learned Friend.

[Suella Braverman]

My right hon. Friend is making a very powerful speech. Does he share my disappointment and dismay with this fact—that, for every young Brit who is hired today, 27 young foreign workers are hired? Young people are being locked out of the labour market because of mass immigration.

[Sir John Hayes]

My right hon. and learned Friend is absolutely right. Young people are being forced to compete with those foreign workers for a scarce number of jobs. The only people who support that policy are dim-witted bourgeoise liberals and hard-hearted plutocrats, because both of them glory in the idea of foreign labour. That foreign labour is edging Britons out of jobs and, by so doing, weakening our economy.

[Daisy Cooper]

On that point, will the right hon. Gentleman give way?

[Sir John Hayes]

I happily give way.

[Daisy Cooper]

The right hon. Gentleman surely has not missed the evidence that, since his party’s botched Brexit deal, it has become more expensive to do business in the UK, businesses are wrapped up in red tape, and many businesses have moved abroad, taking good, high-quality jobs with them. We have a NEETs crisis in this country, caused by many different factors. One of the reasons that there are graduates who cannot get jobs is because his party’s ridiculous Brexit deal has driven businesses abroad. If we get back into the single market and make doing business cheaper, those businesses will come back here and create jobs for British young people.

[Sir John Hayes]

I was going to address the issue of trade later, but the hon. Lady has encouraged me to do so now. The truth is that the balance of payments has been a neglected subject in this Parliament and for successive Governments for decades. We never sold as much to Europe as Europe sold to us, and that balance was out of kilter for the whole time that we were members of the European Union.

[Daisy Cooper]

On that point, will the right hon. Gentleman give way?

[Sir John Hayes]

No, I will not give way again, because there is only so much you can teach the Liberal Democrats!

The balance of trade figures was once a pivotal announcement in Parliament and for Governments. That has been forgotten as we have chosen to import more and more goods into this country, and to make fewer and fewer. The hon. Lady will recognise that, given that I represent a rural constituency that grows a lot of the food we consume, I am particularly sensitive to the fact that we have made ourselves dependent on foreign food imports. That is preposterous. We need to shorten supply chains and make ourselves more economically resilient. As the Prime Minister said, actually—

[Daisy Cooper]

On that point, will the right hon. Gentleman give way?

[Sir John Hayes]

I was about to make a point, but I will then give way once more to see whether I can teach the hon. Lady something more. As the Prime Minister said, we must remanufacture—we must build our manufacturing capacity again. Successive Governments have failed to do this. I do not claim any credit for any political party, and I certainly claim no credit for the Liberal Democrats.

[Daisy Cooper]

The right hon. Gentleman is absolutely contradicting himself. He has simultaneously said that we need to shorten supply chains to improve our food security while defending the very trade barriers that prevent British importers and exporters from getting food to each other on a shorter supply chain. It was the right hon. Gentleman’s party that agreed the terrible trade deals with New Zealand and Australia that have put up food prices and undermined British farmers. Would he like to apologise for that? After 10 years, we are still teaching the Conservatives how damaging their trade deals were.

[Sir John Hayes]

I mentioned my record on apprenticeships. I was in the coalition Government when I was able to bring about that outcome, with the full support of Liberal Democrat Ministers. It was Vince Cable, actually, as Secretary of State, who understood the need to build skills and train domestic workers so that we were not dependent, in the way that I described, on European goods or goods from anywhere else in the world. We just need to make more of what we consume. It is not hard to work out.

I said that I would deal with one or two other things, and time is pressing. Productivity is a macroeconomic problem that has faced all Governments. Declining productivity over time means that we spend a great deal of money on things from which we do not get a great deal of outcome. Our productivity is worse than some of our key competitors. The Government need to focus on that; the previous Prime Minister and his Ministers said that they would, but there was little about that in the Budget.

To summarise, I think it was Disraeli who said, “Men are not the victim of circumstances; they create circumstances.” It is not enough to blame context for the failure to address the macroeconomic problems of skills, productivity and immigration. More must be done, and done soon.

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[Perran Moon (Camborne and Redruth) (Ind)]

It will come as no surprise to hear that I will talk largely about Cornwall. This Budget brings welcome hope to Cornwall; we also have a bespoke devolution deal on a Cornwall-only strategic authority footprint, which respects our unique identity, and we do not face the futility of having a mayor acting in parallel to our single unitary authority. That fresh hope comes with £2.7 million of good growth funding, a share of the £150 million uplift to capacity funding, and local control of the new overnight visitor levy.

Cornwall welcomes millions of visitors, but our communities carry that pressure without receiving the investment needed to manage it. If properly designed, the levy could be a revenue stream that funds the infrastructure needed to unlock Cornish reindustrialisation and build fresh hope across our communities. The Government must recognise that if we have a single-foundation strategic authority, it is a pointless waste of taxpayers’ money to install an elected mayor in parallel, as an ideological quid pro quo for accessing extra funding and powers.

[Sir John Hayes]

Cornwall is similar to Lincolnshire in some of the challenges that it faces, particularly regarding the delivery of public services in a scattered rural area. Will the hon. Gentleman join calls for more action on heating oil? Many of his constituents will be dependent on heating oil, as people are in my constituency, but there is precious little about that in the Budget. I hope that we can create cross-party consensus that more must be done.

[Perran Moon]

I thank the right hon. Gentleman for his intervention, but I remind him that there was a support package in the Budget, which I will talk about a little later.

I welcome the Government’s focus on fiscal prudence and economic competence, and their determination to crowd in private investment in order to rebuild our economy. Since 2024 the Government have doubled the fire power of our financial institutions to more than £200 billion. Cornwall has seen the value of anchor investment in our tin, lithium and tungsten industries. Additional capital for the national wealth fund sends a signal of confidence in Cornwall’s critical minerals and their contribution to Britain’s economic security and energy resilience.

Cornwall has vast untapped economic potential through our internationally renowned resources of critical minerals. The Conservatives ignored those resources and abandoned Cornwall, but this Government are taking welcome action to bring back Cornish tin mining and bring back fresh hope to our communities. However, the Government must go further and faster to ensure that these vast resources are not offshored by competitive nations, to the detriment of UK plc.

There is also a risk that Cornwall will be disadvantaged precisely because we have chosen a model of devolution that reflects our national minority status. A key offer for foundational strategic authorities has been business rates retention, but Cornwall council has had that since 2017. Mayoral strategic authorities can also access a £1.5 billion borrowing facility and negotiate strategic place partnerships with Homes England, but Cornwall cannot currently do that either. With 25,000 homes on the social housing register, getting the deal and its associated funding would be transformative for Cornish house building and we will not stop demanding that.

In Camborne, Redruth and Hayle, house prices have risen almost 18% in five years, compared with 6.4% across England and Wales. Young people increasingly feel that owning a home where they grew up is beyond their reach, so the first-time buyer ISA and the £4.7 billion Your First Home scheme offer fresh hope. Alongside the 100% council tax premium on empty homes, they could make home ownership possible again for a new generation of Cornish families.

On energy, this Budget fully demonstrates how this Government are on the side of remote communities such as ours in Cornwall. One in seven households in Camborne, Redruth and Hayle rely on heating oil, compared with one in 29 nationally. With heating oil prices up 82% since the start of the Iran war, the two-year suspension of tariffs on kerosene is welcome, but I hope that is a first step and not a final destination. The same is true for the £100 household energy payment for over 43,000 households in my constituency, the additional £100 million for targeted energy support, the commitment to abolish domestic gas standing charges and the extension of zero VAT on electricity to July.

However, in my capacity as chair of the APPG on electric vehicles, I have some concerns about the signals we are sending to the automotive sector. The continued uncertainty over the zero emission vehicle mandate risks weakening investment in Britain’s position in export markets. Charging 20% VAT on public charge points penalises drivers without a driveway or a home charger. Although an eventual road tax for EVs is understandable, introducing it in 2028 through an unwieldy scheme risks discouraging adoption when demand needs to accelerate.

All things considered, this Budget is welcome for Cornwall. Each of the wins, from heating oil to energy bills, and from housing to devolution, comes alongside a vast improvement in the fundamentals of the British economy since the last election, despite strong global headwinds. The Government are restoring credibility and competence to the British economy, we are creating breathing space for our constituents, and we are rebuilding our reputation with our closest neighbours, our allies and our friends in the European Union. It is in the British national interest to do so. Rather than the withering disdain and distrust of the Conservative Government, this Government are engaging proactively, and I thoroughly welcome that.

[Suella Braverman (Fareham and Waterlooville) (Reform)]

One million—that is the number of young people who are not in education, employment or training. Youth unemployment stands at 14%. That is a scandal and a crisis. Far from giving young people hope, this Budget throws them under a bus, frankly, because it is fundamentally unfair. We are losing a generation.

This Budget is unfair to the 16-year-old who has finished their GCSEs and wants to start working, but who faces zero opportunities to find an apprenticeship or learn a skill. It is unfair and offers no hope to the 21-year-old who has done the right thing and studied for a degree, but who has come out with a qualification that is not opening any doors and has instead saddled them with crippling debt and directed them to the welfare office to claim out-of-work benefits.

This Budget is also unfair to the British taxpayer, who currently lays out £22 billion a year in student loan payments. That is a taxpayer who will see hundreds of billions of pounds never repaid; a taxpayer who faces chronic shortages in our labour market, particularly in the NHS, construction and hospitality. We have a lost generation, and this Budget does nothing for our young people.

[Sir John Hayes]

My right hon. and learned Friend will know that we need to recalibrate our economy around the highest level of skills. Too many young people are directed into academic education—I use “academic” in the broadest sense—only to find themselves jobless, and too few have the opportunity to learn something vocational, technical or practical that would give them the chance to get a job and not take on huge debts.

[Suella Braverman]

The right hon. Gentleman is absolutely right. That is exactly the point that I am about to make.

How did we get to this youth unemployment crisis? For the past 30 years, starting with Tony Blair, we have sold one promise to young people: that they need to get a degree, regardless of what it is or where it is from, and they will be set up for life. However, for so many young people today, that has been exposed as a lie. We have 700,000 graduates currently unemployed, some 400,000 of whom are claiming welfare. Average graduate debt stands at £50,000, average graduate salaries are falling, and graduate hiring is disappearing.

For many of those young people, it is not so much that they have taken out a student loan; they have been saddled with a life sentence. It is no wonder they cannot start saving, buy a house, get married or think of starting a family. They are being crippled by the system, and this Budget does nothing to support them.

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[Peter Swallow (Bracknell) (Lab)]

This is a Budget that puts community first. It is a Budget for families, who will benefit from support on energy costs over the cold winter, and for much-loved high street businesses, with cuts to business rates. With the announcement of a Thames Valley mayoral strategic authority, it is a Budget that delivers devolution, so that decisions that affect Bracknell Forest and our wider region can be taken in our region.

I have heard from countless families across Bracknell Forest about the cost of living pressures that they face because of skyrocketing fuel and energy costs as a result of the war in Iran, so I strongly welcome the announcement of a new £2.6 billion energy bills breathing space scheme, which will provide £100 in direct support for over 30,000 families in Bracknell Forest, helping them to keep their homes warm this winter. I also welcome the extension of the 0% rate of VAT on electricity until July 2027, and the removal of gas standing charges so that people are charged only for what they use.

I know that the prices we have seen at the pumps in recent months are a huge source of anxiety for many across Bracknell Forest. I am pleased that the Government have recognised the pressures on motorists that have been caused by increasing fuel prices, and have extended the 5p cut on fuel duty to July 2027. They have also frozen rates, and made permanent the more generous mileage rates for both employees and self-employed people who use their own vehicles for work. These measures will have a real impact on households across Bracknell Forest, especially over the coming winter months.

Supporting households is an essential and extremely welcome priority in this Budget, but I also welcome the clear signals that this Government have given to local businesses. Wonderful local cafés, restaurants, pubs and shops drive our local economy, but I have heard from too many that are struggling in this challenging environment and that have been forced to consider raising prices or cutting staff. For that reason, I was delighted to see the Chancellor announce that he will increase the small business rates relief thresholds for eligible retail, hospitality and leisure properties, meaning that about 47% of all RHL properties in the south-east will pay no business rates at all.

[Sir John Hayes]

The hon. Gentleman is right about small businesses, particularly small retail businesses, playing a pivotal role in the health of communities, and that the Government have done the right thing in the way he described. However, those businesses are also suffering from online competition and edge-of-town or out-of-town development that is taking footfall away from town and city centres. Does he support a call for the Government to be tougher on edge-of-town development, so that we concentrate footfall where it is needed most?

[Peter Swallow]

Absolutely, which is why I welcome the measure in this Budget. It means a direct tax cut for over 250 small businesses in Bracknell Forest, directly funded by increasing VAT compliance on those online marketplaces. It is right that the small businesses that thrive on Crowthorne High Street in my constituency, and across Bracknell and Sandhurst, do not face unfair competition from the big online marketplaces. That is a decision that this Government have rightly made in this Budget.

This Government do not just talk about growth in every postcode, but recognise that our high streets are at the heart of achieving that growth. On that note, growth in every postcode means recognising the unique barriers holding back growth in every region of the UK. For the south-east, one of the biggest barriers to regional growth has been the slow progress of devolution. That is why I am delighted that this Budget also commits to a mayoral strategic authority for the Thames valley. Nobody knows the specific local and regional challenges we face better than our own local community, and no one is better placed to solve them. Devolution will bring more powers for Berkshire, Oxfordshire and Swindon, more funding for our region and a more joined-up approach on regional transport, skills and public services.

This is not just about local business. In the south-east, we can proudly say that we are home to some of our most loved and most critical national businesses from Waitrose, which has its headquarters in my constituency, to our defence sector whose contribution to the economy is estimated to be £3.6 billion in 2025. We are also home to one of our greatest and most innovative British assets—our life sciences sector. So I welcome the opportunities that a more regional approach to our economy will create. This is a Budget that backs our region to do what it does best, which is to drive growth across the Thames valley and the whole of the UK.

All these measures will strengthen our social fabric, boost our local economies and build resilient communities in these challenging times, but there is no community without security. As war continues to rage in Ukraine and the middle east, and as hostile actors swamp our information sphere and sow division in our society, we cannot afford to delay delivering the support we need for defence. That is why it is so important that the Chancellor has put forward a Budget that delivers fully on our commitment to fund the defence investment plan, and ensures we remain on track for the NATO target for defence spending to reach 3.5% of GDP by 2035. Alongside plans for a new multilateral defence mechanism and additional investment through the National Wealth Fund and the British Business Bank, this Budget treats our security with the gravity it deserves, after decades of underfunding by the Conservative party.

The Budget is a clear demonstration that this Government have listened to the concerns of families and businesses in Bracknell Forest, and have decided to act on them. It meets the challenge of today with pragmatism and the promise of tomorrow with ambition. I know it will not solve all the challenges facing businesses and families in Bracknell Forest, but gosh, it is a darn good start.

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[Dr Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)]

I welcome much of what the Chancellor of the Exchequer has said in the Budget, but tonight I will speak of our NHS, for we will not grow our economy if we are not well.

Norfolk and Suffolk foundation trust is the mental health trust that serves my constituents, and it has been transformed thanks to its brilliant staff and inspired leadership—I thank all of them. Last week I learned that some of the teams have been early adopters of AI, using it to transcribe patient consultations. More time with the patients and less time staring at computers—imagine that!

Some of us remain suspicious of AI in healthcare, but who here has not asked their phone about a symptom or a medical worry? Many GPs already use AI-assisted triage to tackle the dreaded 8 o’clock rush. I am therefore pleased to hear that we will fund the technology that will increasingly shape our health service. Let us embrace it, not fear it.

I welcome the Government’s approach to healthcare, but much remains to be done. Too many of our patients are being asked to be just that: patient. We have record NHS staffing and resources since the pandemic, yet activity has not increased proportionately. Why is that? How much genuinely improves people’s health? We know that health depends on housing, wealth and much else besides. Falling life expectancy in some of our communities and the problems in maternity services demand urgent political attention.

I welcome the Chancellor’s announcement of funding for surgical robots, having heard how they are helping patients at West Suffolk hospital, but frankly, if I were asked where I would invest taxpayers’ money, my answer would be: in primary care and neighbourhood health centres.

[Sir John Hayes]

Of course I respect the hon. Gentleman’s professional expertise, which I do not share, but much of what he has said so far is counterintuitive. My constituents tell me that what they want from the health service is personal interaction—to form a meaningful relationship with a GP, surgeon or specialist. That is how trust is built, not through machines, AI and robots.

[Dr Prinsley]

If the right hon. Gentleman simply listens to the next part of my speech, he may be reassured. Let us build on GP partnerships and shift resources from hospitals to communities. We could have centres that are open in the evening, at which there are specialist nurses, mental health professionals and pharmacists. These would be places where the patients know their doctor, and the doctor knows their patients.

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[The Chief Secretary to the Treasury (Emma Reynolds)]

This Budget provides breathing space now and fresh hope for the future, which is the focus of today’s debate. I thank all hon. and right hon. Members across this House who have made contributions—not only today, but over the four days of the debate on this Budget—on the action we are taking in government to steer Britain through the global economic storms, kick-start good growth in every postcode, strengthen our national security and chart a new course for our country in the years ahead.

Many Members, including my hon. Friends the Members for Barrow and Furness (Michelle Scrogham) and for Rossendale and Darwen (Andy MacNae), rightly stressed the challenges we are facing because of the storms in the global economy. We have heard a lot from Opposition Front Benchers—most of it hot air—but there was not a word of apology for calling on this Government to join the war in the middle east that is driving up energy costs, inflation and the cost of Government borrowing. We cannot wish away these global economic storms. Instead, my right hon. Friend the Chancellor has set out a course to steer this country through them.

We have chosen to use some of the fiscal headroom established last year to absorb the impact of the Iran war and to protect the economy, British businesses and family budgets. As my hon. Friends the Members for Cities of London and Westminster (Rachel Blake) and for Darlington (Lola McEvoy) rightly said, fiscal discipline underwrites every policy of this Government. We will meet the fiscal rules in full, and for the first time, in the third year of the forecast. Last year, borrowing fell to its lowest level in six years as a percentage of GDP, and it continues to fall across the forecast.

We will not take any lectures from the shadow Chancellor, the hon. Member for Arundel and South Downs (Andrew Griffith) or the shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire (Richard Fuller). They like to claim that they were innocent bystanders who just happened to be Treasury Ministers at the time of the Liz Truss mini-Budget. We all know that they were the architects of the mini-Budget. The shadow Chancellor still maintains, and said as recently as September, that there were a “lot of good things” in the mini-Budget, and to this day the British people are paying the price for his failure. Liz Truss’s stint in office might have been short-lived, but the impact was long-lasting.

The contrast with this Labour Government could not be clearer. I am proud that the IMF has said that the UK stands out as a country where

“action to reduce debt and deficit has been taken decisively”.

It has said that we will have the lowest deficit in the G7 by 2029. As my hon. Friend the Member for Macclesfield (Tim Roca) rightly said, the British economy has proven more resilient than many predicted, including Opposition Members. Indeed, it has defied expectations. The Tories and Reform like to talk down our economy, but the fundamentals of the British economy are strong. Public investment is up. Business investment is up to its highest level in 10 years. Productivity has finally turned a corner, and we had the joint-fastest growth in the G7 in the first half of this year.

[Sir John Hayes]

The Minister talks about people talking down the economy, but the Joseph Rowntree Trust says that Labour is overseeing the sharpest fall in living standards in 65 years. I wonder whether she thinks it is wrong. If she does, how much are the Government overseeing in terms of declining living standards?

[Emma Reynolds]

The last Parliament was the worst Parliament on record for living standards. Since the last election, living standards have increased by 1.8%. I urge the right hon. Gentleman to read the executive summary from the OBR, which stated:

“As a net importer of energy, the rise in energy prices constitutes a negative terms-of-trade shock for the UK, which pushes up on inflation and lowers real household disposable incomes.”

Those are the global headwinds we are facing.