Energy (oil and gas) profits levy

Lisa Cameron Excerpts

Tuesday 22nd November 2022 Commons Chamber

[Mark Fletcher (Bolsover) (Con)]

“There is nothing in the autumn statement that shows compassion” was one of the last sentences from the hon. Member for Jarrow (Kate Osborne). With the triple lock protected, benefits up by 10.1%, the household energy cap extended, a £900 support package for households on means-tested benefits, £300 support payments to pensioners, £150 to individuals on disability benefits, energy bill support extended into next year, a below-inflation 7% cap on social rents that will save the average renter £200, the education budget protected at £2.3 billion—she did mention children—and an increase in NHS spending of £3.3 billion, is there anything but compassion running through this autumn statement?

I am happy to go so far on economic policy. There is a fair cop that we have made some mistakes on economic policy—that is a perfectly fair cop. But we cannot go into a different galaxy of common sense, where there is no economic credibility, and pretend that that is the reality. I have to question those on the Opposition Benches: if their solution to the economic crisis we face hinges on non-dom status and private schools and does not mention private enterprises, growth and global factors, we are in a different galaxy.

I will go back to where I was planning to start my speech by saying that I had the great pleasure of being parliamentary private secretary to the Chancellor—or more accurately Chancellors—in the build-up to the statement. I must say that my right hon. Friend the Chancellor is a fantastic Member of Parliament and last week delivered an incredibly difficult statement both eloquently and with an underlying level of compassion that we should be very proud of.

The Chancellor set out quite firmly the circumstances we face as a country. All these factors—the pandemic we have gone through, in which we spent £400 billion trying to keep the economy on track, the supply chain issues that came from that global pandemic, the damage that has done to the businesses up and down the country and the costs they face, the increases and challenges to shipping or the 630,000 people who have dropped out of the workforce since the pandemic—are inflationary and have created huge pressures. The OBR report, which I am sure the Labour party has read with great interest, clearly identifies global headwinds as the primary cause of the situation we are in. Does anybody from Labour want to challenge that? No—we are moving on.

The second thing we must look at is Vladimir Putin’s war. My right hon. Friend the Member for North Somerset (Dr Fox) made some interesting points about patriotism and how we address these economic circumstances. We have spent £2.3 billion as a country on the situation in Ukraine, but there has been something along the lines of £150 billion of additional spending on energy within our economy over the past year. That is a huge increase; as the Chancellor would quickly point out, it is another NHS, and £55 billion of that is coming from Government coffers—again, I would suggest compassionately—to households and businesses up and down this country.

We face a challenge of inflation, of war on our doorstep and of global markets losing confidence. That has a ripple-down effect and, unfortunately, the circumstances we find ourselves in mean that the Chancellor had to make some difficult decisions. I think he did so in a way that tries not only to help individuals and families with the cost of living but to provide confidence that Britain can pay its way in the world. When Opposition Members bandy around somewhat childish policies, whether on non-dom status or private schools—it doesn’t half feel as if we are back in the 2015 election with those two; I cannot wait to see the new version of the “Ed stone”—it seems to me as if we are on a different planet.

I wanted to add some notes of caution, however, because I was not entirely happy with everything in the statement. First, there are the labour shortages we face. We increased working-age benefits—I believe there is a compassionate argument for that—and the minimum wage, but our small businesses are struggling to recruit and retain staff, and I worry about the impact that that will have on the labour market. It will have to be monitored very closely.

Secondly, more money for the NHS is of course welcome, but only if we see a proportionate increase when it comes to outputs. We have left the NHS in a difficult situation: covid restrictions are still in place in a lot of venues, and we need to remove them as quickly as possible. Hospitals have been operating at around 80% to 85% of capacity en masse. We cannot get back to previous levels and clear the backlog, which requires us to go above 100%, if we are operating at an 85% building capacity.

However, I very much welcome the Chancellor’s comments on having a workforce plan, which will help to create a longer-term, sensible solution for the NHS, particularly in dentistry and mental health, in which our workforce numbers are woefully low.

[Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)]

Will the hon. Gentleman give way?

[Mark Fletcher]

I am in full flow, but I am happy to give way.

[Dr Cameron]

I thank the hon. Gentleman for giving way and, in particular, for raising mental health. I have been looking just today at the startling figures stating that 215 young people took their lives in 2021—the highest figure since records began. The workforce needs nurses and doctors, but also psychologists and mental health professionals going forward—I refer the House to my entry in the Register of Members’ Financial Interests on that point. It is crucial that we address those issues to support young people and their potential.

[Mark Fletcher]

I completely agree. We have to be aware of the situation that the pandemic created in mental health. We talk about and acknowledge mental health a lot more, which is a positive thing for society, but our health workforce is well behind where we are as a society on conversational issues. We also have to address pressures relating to image and social media, which affect young people in particular, and the fact that, although we are all so much more connected through mobile devices, we are so much more isolated and judge ourselves in those circumstances. I thank the hon. Lady for raising that point.

--- Later in debate ---

[Aaron Bell (Newcastle-under-Lyme) (Con)]

Thank you very much, Mr Deputy Speaker. It is a pleasure to follow the hon. Member for Bradford East (Imran Hussain), although I utterly reject his thesis and characterisation of the response of those on the Government Benches; that is not appropriate in respect of this statement or the previous one. These are undoubtedly difficult times and they require tough decisions. That is what we saw from the Chancellor last week. The priority is to restore economic stability and sound money and, most of all, to tackle inflation.

I thank my hon. Friend the Member for Hitchin and Harpenden (Bim Afolami) for talking about inflation, as did my right hon. Friend the Member for North West Hampshire (Kit Malthouse). As my hon. Friend said, the inflation that we are experiencing, which is happening everywhere, is the most pernicious thing that we have to tackle right now. We have not had inflation at this level since I was in short trousers. The priority with inflation is to get on top of it quickly. If we allow it to persist, it will make everyone poorer again and again—it erodes people’s savings and the value of people’s salaries, which affects the cost of living—so we must tackle it. The measures that the Chancellor set out last week do that.

At the same time as tackling inflation, the Government are protecting people from inflation through the energy price guarantee—it is very expensive, which is another reason why we will need to make savings elsewhere—and maintaining the triple lock. A number of my constituents wrote to me about that—I have a considerably above-average number of pensioners in Newcastle-under-Lyme and had a lot of correspondence about it. I assured them that I would go to the Chancellor and fight for them. I am pleased that he listened to me and like-minded colleagues and that we will put up the state pension by inflation. We will also put up pension credit by inflation in the new year and all benefits, including in-work benefits.

I agree with my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) that we need to restore more conditionality. In a world where we have quite close to full employment at the moment—I accept that, as the OBR said, there may be some increase in unemployment—we need to encourage those who can take on more hours or go back into the labour market to do so. We are also being fair in protecting people from inflation through our biggest ever increase in the national living wage, which is now up to £10.42 an hour for those over 23—a boost of over £1,600 to annual earnings.

It is not just about stability; it is also about credibility and being honest with people, as the Exchequer Secretary said when opening the debate. It is about being honest and credible not only with the markets, but with the country. If we are to be honest and credible in this Chamber, we should acknowledge that mistakes were made in the mini-Budget. I thought the decision on the 45p tax rate was a mistake, and I communicated that privately to the Chancellor. That decision was reversed and now, contrary to what we have heard from some, we are asking those with the broadest shoulders to bear the burden of taxation and lowered the 45p rate threshold to £125,000. Overall, this statement is a mixture of spending restraint and tax rises, but we are making sure that the burden falls on those who are most able to afford it—completely contrary to what Opposition Members have said today.

The Opposition do not seem to have a plan of their own. We kept being promised one today by the shadow Minister, the hon. Member for Hampstead and Kilburn (Tulip Siddiq), but there never seemed to be one. The shadow Chancellor herself did not offer anything in her rather over-the-top response to the Chancellor’s statement last week. Again and again, people have brought up the last 12 years, but I repeat the point I made in an intervention: we inherited a £149 billion deficit and we worked hard to reduce it, repeatedly opposed by the Opposition. The national debt has increased because borrowing each year does that.

The Opposition like to blame global financial circumstances for situation—they like to say it was made in America—but the truth is that, as the International Monetary Fund said, by 2007 we were running the biggest structural deficit of any country in the G7. The idea that we should put the Labour party back in charge of another difficult situation is for the birds.

We are genuinely dealing with a situation largely caused by unprecedented external economic shocks. The biggest of those shocks was covid—a once-in-100-years event. That cost £400 billion—money we ultimately have to pay back, and as interest rates on Government debt rise, repaying those debts becomes more burdensome. I believe that £400 billion was money well spent: it saved jobs, it saved businesses and it saved lives. We should all be proud of what we did through covid, but we have to face the fact that there will be a reckoning.

The same is true of the energy shock. We have the first war in Europe for 75 years, and a once-in-50-years energy shock has followed. I think we can be proud of our response, both abroad in our support for the Ukrainians, in materiel and training for their armed forces and diplomatic support for Volodymyr Zelensky, and at home in shielding people, households and businesses from that shock, but it is expensive. As my hon. Friend the Member for Bolsover (Mark Fletcher) said, that costs an extra £150 billion; the Government are bearing a third of the cost, but it is a cost for everybody to bear, equivalent to an extra NHS. We need to find ways to pay for that.

Speaking of the NHS, the Chancellor—as befits a former Health Secretary and a former Chair of the Health and Social Care Committee—has protected our NHS in these difficult times, giving an extra £7.7 billion over the next two years to tackle precisely the issues we have heard about today, which I recognise in my own constituency. It is difficult for ambulances to get into hospitals because hospitals are operating beyond capacity, and it is difficult to get people out of hospital and into social care.

The ABCD plan proposed in the summer is the right approach; we need to tackle the backlog and get people seeing their GPs again. Putting extra money into the health service, even in these difficult economic times, is the right thing to do, as is the £4 billion we are putting into schools. We are protecting the budgets that matter the most to our constituents in places such as Newcastle, and no doubt Bradford East as well. The money will put real-terms per pupil funding back up to above 2010 levels—more than the Labour party has pledged to give schools.

We are also protecting the commitments we made during the general election to level up. Newcastle-under-Lyme has secured £34 million through the future high streets fund and the towns fund. Speaking of high streets, which are critical in constituencies such as mine, the business rates package we have offered—£14 billion over the next five years—and the long overdue revaluation, which will make a huge difference to business rates in the centre of Newcastle-under-Lyme, are extremely welcome, as is the new relief for retail, hospitality and leisure being extended 50% next year and 75% the year after. That will make a real difference to the viability of existing shops in my town centre and the viability of the new shops that people open.

[Dr Cameron]

I thank the hon. Gentleman for setting out clearly a number of the financial issues that have been impacting the cost of living and need to be addressed. Does he agree that, in addition, we need to look at decentralised finance? With the collapse of FTX, and the fact that almost 10% of the UK population have some kind of engagement with the cryptocurrency markets, we need to ensure that consumer protection is at the forefront of what we are doing, have a deeper look at regulation and move that forward at speed.

[Aaron Bell]

I thank the hon. Lady for raising cryptocurrency, FTX and so on. She may know that I recently held a Westminster Hall debate on the pernicious reach of cryptocurrency into sport, and that one of her SNP colleagues held a separate debate on it. The Treasury needs to listen carefully to the issues being raised around cryptocurrency, and particularly the damage it is doing to young men, who are very susceptible to “get rich quick” schemes.

I am pleased that the Government resisted the temptation to cut long-term capital budgets, such as Sizewell C, the levelling-up fund and our investment in R&D, which is where we will get growth from in the future.

To conclude, these are difficult times, but I think we are taking action that is appropriate and fair. We are making sure that those with the broadest shoulders who can bear the burden do so. We are splitting the cost of covid and the energy price shock between tax rises and spending restraint. The OBR itself expects our package to reduce peak inflation and peak unemployment, and the Bank of England now expects lower inflation and lower peak interest rates, which will look after mortgage holders. All the while, we are looking after the NHS and our schools, as our constituents expect us to do. I have every confidence in the Chancellor and his statement, and in our ability to steer the economy through these troubled times.