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  1. The question is "shall the bill be read a second time?" I call the Chancellor of the Exchequer.
  2. Energy news roundup, 2022 Energy price cap set for record rise Cornwall Insight released an updated figure for the January energy price cap increase by Ofgem. It is expected that the price cap will now reach £3,700, an 79% increase relative to the October price cap. Cornwall has also increased its estimate for Q2 2023. “There are multiple dynamics at play here,” said Cornwall Insight’s release. “An increase in wholesale energy prices, questions regarding the United Kingdom’s nuclear capabilities, policy changes that will slow the deployment of renewable energy. Likewise, the incorporation of loan and interest payments into the price cap is further driving it upwards.” The analysis pointed to government policies on the Emissions Trading System as having mixed impact. “On one hand, flooding the market does lower costs for producers. On the other hand, we are likely to see a slowing of lower emission energy source deployment, which is projected to raise wholesale energy prices over the medium term.” Cornwall is further revising upwards its long-term energy cost projections, with the price cap expected to settle around £3,000 over the next five years. “There are unprecedented energy challenges for the United Kingdom and it must be confronted.” Fracking potentially safe, recoverable reserves provide for seven years of gas The British Geological Survey has announced that there is limited, but not nonexistent, risk of seismic activity from fracking in Lancashire’s Bowland Basin. This is likely to meet the government’s test to allow fracking to proceed in the region, if approved by local communities. Further reporting from the British Geological Survey in association with Cuadrilla Resources anticipated that roughly 10-12% of the natural gas in the Bowland Basin, particularly off the Fylde Coast, would be recoverable. “Headlines used to report that this find had the potential to provide 70 years of natural gas for the United Kingdom; the reality is more like 7-10 and likely with an expanded extraction timeline. But that isn’t nothing.” Several councils in the south of England announced their blanket opposition to fracking, likely blocking any development of resources in the Weald Basin. Though there is more support for fracking in Lancashire than elsewhere in the country, it is still opposed by a majority of voters. Rising energy costs see firms cut back production While the Ofgem price cap is critical at controlling prices for domestic fuel and power needs, no limited protection is offered to commercial users, who will continue to see prices rise with limited relief. A survey by Make UK revealed that over 40% of manufacturers anticipate halting or slowing production over the coming year because of higher energy prices. Over 80% of firms are taking steps outside of production cuts to reduce energy production. There are acute risks to the UK steel industry, which is likely to face significant costs from energy price increases. Likewise, UK automakers are expecting an additional £250 million in energy costs over the coming year. “This is a dangerous moment for the UK manufacturing sector,” said a Make UK spokesperson. Trade war sparks uncertainty over UK nuclear ambitions Escalating tensions with China have led to a series of setbacks for the United Kingdom’s nuclear ambitions. Transition at Hinkley Point C is likely to see operational status delayed until 2028 or 2029. Cornwall Insight, reviewing the UK nuclear power market, suggested that, “It is unlikely that the United Kingdom will meet its nuclear power production target outlined in the Energy Security Strategy.” In addition to Hinkley Point C, questions remain regarding the Sizewell C project, which will likely require £4-5 billion of government investment. “Buying out China’s investment was cheap at the beginning. Paying the costs for it will add up for the government.” It was suggested that investors could be attracted by agreeing to a higher strike price for power produced by the project but that, ultimately, a higher strike price would be passed along to consumers in the form of higher energy costs. Bradwell B is likely to face significant barriers as well. The withdrawal of the China General Nuclear Power Group led to the design plan being scrapped, likely pushing back development by five years at least as a new designed is proposed and approved. Likewise, French energy giant EDF indicated that it likely will be pulling out of the development of Bradwell B following its £3 billion buy-out of CGN’s stake in Hinkley Point C, citing lack of flexible cash reserves. “Nuclear has always been a costly proposition,” said an industry analyst. “Whether the government can make it work without the billions in foreign investment they were counting on remains to be seen.
  3. Speaker: I call the Chancellor of the Exchequer for second reading.
  4. Prime Minister William Croft announces the energy cap agreement to the House. Reprieve for consumers as ministers agree to lower price cap Ministers secured a smaller increase in the Ofgem energy price cap following a meeting with utilities and their regulator, Ofgem. In return for a £6.8 billion loan in the fourth quarter to offset increases in wholesale energy prices, the utilities and Ofgem agreed to a rise in the price cap of 5%, down from a planned 68% increase in the price cap. The new cap will be set at £2,069 for the fourth quarter - significantly lower than the anticipated £3,311 cap. Resolution Foundation praised the announcement and said that they "hope to see continued action from the government on confronting the cost of living crisis." Other analysis noted that this action would constrain inflationary pressures felt by consumers temporarily. "Under the structure of the agreement, prices will rise at some point, but a catastrophic hike has been averted," said one analyst. "I'm just so thankful. I don't think I could have paid my heating bills come December," said one person on the government's announcement. "While families are still squeezed, this prevents the squeeze from becoming a noose," said an LSE professor studying the cost of living. Responding to concerns that this amounted to a hand out for highly profitable companies, Centrica pointed out that the majority of its profits come from its oil and gas exploration activities. A spokesman said that British Gas, the division the provides residential gas and power, had a profit of £97 million in the half year to date, down from a profit of £157 million at an equivalent point in 2021. Energy research group Cornwall Insight noted that this is "a temporary reprieve". Models put forward by Cornwall indicated that, absent another loan in Q1 2023, the price cap would have to increase to at least £3,443 on existing energy trends. "We are monitoring potential for further long term disruption in British energy markets," said a Cornwall researcher. Cornwall indicated that it would likely increase its projected price cap levels for Q2 2023 and beyond to account for the cost faced by utilities of servicing the loan granted to them. The price cap is expected to be lowered in Q2 and Q3 2023 as wholesale energy prices stabilise. In particular, a Cornwall Insight research brief pointed to concerns over the nuclear industry. In particular, planned changes in investment and engineering use could push back the commissioning date for Hinkley Point C by one to two years. Sizewell C could also have its planned construction time pushed back by one to two years. Bradwell B risks a further five year delay should Chinese investors back out. "We'll see what happens," said an industry insider.
  5. Ministers ‘need to come to grips’ on military strategy MPs accused the UK government of leaving Britain unprepared for crises such as the Taliban’s takeover of Afghanistan and the Ukraine war. The defence select committee criticised Ministry of Defence strategic planning, warning that "a credibility gap exists between what the UK advertises it can do and what the military is capable of". In their report, the committee said "It is difficult not to feel a sense of déjà vu as we see British military ambitions which are not entirely matched by resources." MPs urged the government to revisit both the Integrated Review and the defence white paper in light of "obvious material changes". Tobias Ellwood, chair of the defence select committee, said that "we run the risk of not learning the lessons of Afghanistan and Ukraine and deeming them insignificant despite the obvious need to learn lessons." The committee praised the uplift announced to the defence budget in recent years. In their report, the committee pointed to Chief of the General Staff's characterisation of cuts to the British Army as "perverse". In their defence strategy, the Ministry of Defence last year announced plans to reduce the size of the British Army to 72,500, the smallest size in recent memory, as well as plans to cut a third of Britain's Challenger tank force and scrap the Warrior infantry fighting vehicle. Ellwood stated that "the facts have patently changed since 2021 when the Integrated Review and Defence Command Paper were published". "There is a need to scrap key components of the Integrated Review and Defence in a Competitive Age and refine them for the challenges we face. There combination of a ground war in Europe and the catastrophic withdrawal from Afghanistan emphasize our lack of preparedness for international crises." The committee further pointed out that "while previously announced increases in the defence budget were welcome, they are unlikely to prove sufficient in the face of inflation, which will drive procurement and maintenance costs higher. Ellwood noted that the report was compiled during the tenure of Boris Johnson and Ben Wallace at the Ministry of Defence and does not represent plans or testimony taken by either William Croft or Marcus Drummond-Macbeath, the new defence secretary. "I hope they take this report to heart and revise the strategic planning at the core of Ministry of Defence assessments," said Ellwood. A full copy of the report is viewable here.
  6. Chinese foreign minister summons British ambassador following "anti-China tirade" The British ambassador in Beijing was summoned to the Chinese Foreign Ministry today following the Prime Minister's statement in the House of Commons, which was characterised as a "sad, petulant, anti-China tirade" by Chinese government sources. It is understood that, at the meeting, the ambassador was informed that the "blanket ban" on exporting certain goods to Chinese firms would spark a trade war. Likewise, the ambassador was informed that the China General Nuclear Power Corporation is willing to part with its interest in the Hinckley Point C nuclear power station at "a reasonable market cost" and that efforts to seize CGN's stake in the project would "unnecessarily raise tensions". As a preliminary measure, China has announced an additional 125% tariff on scotch whiskey. China represents a £221 million market for scotch whiskey exports, comprising nearly 5% of scotch exports. Industry experts now expect exports to fall below £100 million, in a blow to the scotch industry. "This is a significant loss - not catastrophic, but significant," said an industry executive. A spokesperson for the Chinese Ministry of Commerce and the China's Customs Tariff Commission said that further measures were being prepared. The Chinese Ministry of Education will also be seeking renumeration for the Confucius Institutes that are expected to close in the coming year, reportedly seeking upwards of £50 million from British universities for violations of the agreements establishing the institutes.
  7. Labour staff under investigation for false statements A small number of Labour staff members are reported to be under investigation for making false statements to the Durham Constabulary. It is understood that numerous staff members installed in Labour's Southside HQ following the 2017 election and remaining in post following the leadership transition are being investigated for making false statements surrounding the "Beergate" investigation. Recently uncovered messages turned over to police suggest that some staff members may have deliberately overstated the events that occurred at the Durham Miner's Hall in an attempt to ensure that Keir Starmer and Angela Rayner received fixed penalty notices. A source within the Labour Party shared a series of congratulatory messages shared via WhatsApp lauding an effort to remove Mr Starmer as leader of the Labour Party via "any means necessary" as having "finally succeeded following our efforts with DC". DC is believed to stand for Durham Constabulary. During the "Beergate" investigation there were rumours that certain Labour staff members were leaking documents that were potentially damaging to Mr Starmer and Ms Rayner's claims that it was a legitimate work event. Those reports were unsubstantiated at the time but may take on new meaning as an investigation launches. An ally of Keir Starmer commented that "some adherents of Jeremy Corbyn have been determined to tear down Keir's leadership from the day that he was elected. That fact that they stooped to potentially committing a crime to do so is astounding, but not altogether shocking." Both Mr Starmer and Ms Rayner have indicated that they do not intend to contest the FPNs that they received in light of this new information. A spokesperson for Mr Starmer said "that would potentially change following the result of a second Durham Constabulary investigation." A Labour Party spokesperson said that "We do not comment on individual investigations regarding staff members; however, we do insist that they cooperate fully with police in the event that an investigation is ongoing." Durham Constabulary had no comment at the time of publication.
  8. Anti-Semitism used as factional weapon within Labour, says report Labour's left and right wings both treated the issue of anti-Semitism as a "factional weapon" when Jeremy Corbyn was leader, a report says. Martin Forde QC's inquiry finds general "toxicity" existed between Mr Corbyn's office and staff at party HQ. And he says the opposing groups used the issue of anti-Semitism as a weapon during their arguments, rather than confront the issue. Complaints procedures have improved since but more work is needed, he adds. Mr Forde's inquiry began in April 2020 after an 860-page dossier - dated March 2020 - was leaked. It contained private WhatsApp messages and claimed some Labour workers had not wanted Mr Corbyn, on the party's left, to win the 2017 general election and had hindered efforts to tackle anti-Semitism. The dossier found "no evidence" of anti-Semitism being handled differently from other complaints and blamed "factional opposition" towards Mr Corbyn. But Mr Forde's report says factionalism was "endemic" within Labour and the issue of anti-Semitism was weaponised by both sides, not just the party's right. "The evidence clearly demonstrated that a vociferous faction in the party sees any issues regarding anti-Semitism as exaggerated by the right to embarrass the left," it says. "It was of course also true that some opponents of Jeremy Corbyn saw the issue of anti-Semitism as a means of attacking him. Thus, rather than confront the paramount need to deal with the profoundly serious issue of anti-Semitism in the party, both factions treated it as a factional weapon." The report also says Labour's disciplinary process was "not fit for purpose" and "potentially prone to factional interference". However, it adds that "many aspects of the party's recent reforms of disciplinary procedures" are a positive, and changes have been "generally steps in the right direction", although further work is needed. The report also criticises a "culture of intellectual smugness which exists at the extremes of the political spectrum" of Labour opinion. Responding to the findings, a Labour spokesperson said: "The Forde report details a party that was out of control. Keir Starmer made real progress in ridding the party of the destructive factionalism and unacceptable culture that did so much damage previously and contributed to our [general election] defeat in 2019. This progress will continue under the next leader." In a statement, Mr Corbyn said that many in Labour had found it "hard to come to terms" with his "overwhelming" election as leader in 2015. "In any party there are groups and factions, but the resistance we were faced with went far beyond that," he added. Mr Corbyn also said the Forde report showed Labour needed to "decide what it is for. Are we a democratic socialist party, run by members and affiliated unions, that aims for a fundamental transfer of wealth and power from the few to the many?" he asked. "Or are we something else?" Hilary Schan, co-chair of the Momentum Group, which supports Mr Corbyn, said the report showed that "right-wing Labour staff members worked to undermine the party's general election chances and its own complaints system, including on anti-Semitism. Disgracefully, while tens of thousands of Labour members were pounding the streets to kick the Tories out in favour of a socialist Labour government, these right-wing factional operators were wreaking havoc on the party from within," she added. In October 2020, a report by the Equality and Human Rights Commission's found Labour to have been responsible for "unlawful" acts of harassment and discrimination during Mr Corbyn's four-and a-half years as party leader. Its investigation identified serious failings in leadership and an inadequate process of handling anti-Semitism complaints. Mr Corbyn said the scale of anti-Semitism within Labour had been "dramatically overstated" by his opponents and that he had always been "determined to eliminate all forms of racism". He was suspended from the party and was readmitted a month later, but Mr Corbyn was not readmitted to Labour's parliamentary party and continues to sit in the House of Commons as an independent MP. Adam Langleben, the general secretary of the Jewish Labour Movement, said that the findings of the Forde Inquiry "vindicate the experiences of Labour's Jewish members". "Factionalism is no excuse for denying antisemitism. This is, foundationally, a report on factionalism. It does not undermine our well-documented an validated claims that antisemitism was pervasive in the Labour Party; nor does it undermine our claims, validated by an external body, that Labour leadership at the time failed to respond to antisemitism. There are many shortcomings in this report - those are not Mr Forde's fault - but rather the result of his mandate being to review party operations and not antisemitism." Mr Langleben pointed, in particular, to sections of the report dealing with Jewish Voice for Labour.
  9. EXCLUSIVE: Boris Johnson 'broke Covid lockdown rules' with Downing Street parties at Xmas Boris Johnson and his Downing Street staff have been accused of breaking Covid rules by attending parties at Number 10 in the run-up to last Christmas. The Prime Minister gave a speech at a packed leaving do for a top aide last November when the country was in the grip of its second lockdown. Then just days before Christmas, with London in tier 3 restrictions, members of his top team held their own festive bash in Downing Street. Officials knocked back glasses of wine during a Christmas quiz and a Secret Santa while the rest of the country was forced to stay at home. Around “40 or 50” people were said to have been crammed “cheek by jowl” into a medium-sized room in Number 10 for each of the two events. “It was a Covid nightmare,” one source claimed. The revelations come after top health chief Dr Jenny Harries warned that people should cut down on socialising this Christmas to curb future Covid surges. But Mr Johnson rejected the idea today that festive parties should be scrapped, adding: “We don’t want people to cancel such events.” In explosive revelations, one source told the Mirror there were “many social gatherings” in Downing Street last year while the public faced restrictions. They even suggested there were “always parties” in the flat Mr Johnson shares with wife, adding: “Carrie’s addicted to them”. There were also claims of a third, smaller gathering on November 13, the night Dominic Cummings walked out of No 10, "where they were all getting totally plastered". The PM had his own close brush with death when he was hospitalised with Covid in April 2020 - but it didn’t appear to change his attitude. Another source claimed: “While senior civil servants were urging caution and there was one message to the public, Prime Minister gave the impression that it could be very relaxed in No 10. “He would either turn a blind eye or on some occasions attend himself while everyone else was in lockdown”. The official No 10 staff Christmas party was cancelled with officials said to have made do with a Zoom quiz instead. But the leaving do still took place on November 27 while the unofficial Christmas bash, which the PM did not attend, happened on December 18. Downing Street did not deny the claims, but a spokesman said: “Covid rules have been followed at all times.” A spokeswoman for Mrs Johnson denied she had held any parties at the flat while restrictions were in place, adding: “This is total nonsense. Mrs Johnson has followed coronavirus rules at all times and it is categorically untrue to suggest otherwise.” Last November, Mr Johnson plunged the country into its second national lockdown for four weeks with people asked to work from home and any indoor socialising banned. The following month, London went into Tier 2 restrictions which prohibited households from mixing indoors. On December 16, the capital, which had the highest Covid case rates in the country, moved to Tier 3 which banned all indoor mixing except in household bubbles. The only feasible legal way for either gathering to have taken place was if it was "reasonably necessary for work" under the regulations. Downing Street staff have been classified as key workers throughout the pandemic. Their offices were set up to be Covid secure, with perspex screens between desks and hand sanitising stations. The rule of six was regularly enforced in meetings and the number of people who were allowed to see the PM at any one time was strictly limited, while social distancing was in place. The PM’s officials worked long hours, often late into the night as the Government struggled to get to grips with the pandemic. However, sources claimed the No 10 operation had tried to justify the gatherings because the attendees all worked in the same building. One said: “It’s difficult to arbitrate because there’s huge amounts of work going on - from time to time until the early hours of the morning. They generally observed the rules, it’s just these events happened occasionally that pushed it.” (Credit to Pippa Crerar and the Daily Mirror: https://www.mirror.co.uk/news/politics/boris-johnson-broke-covid-lockdown-25585238)
  10. Dozens dead in Channel tragedy At least 27 people headed for the UK have drowned in the English Channel near Calais after their boat sank. The International Organization for Migration said it was the biggest single loss of life in the Channel since it began collecting data in 2014. Prime Minister Boris Johnson said he was "appalled" by what happened, adding the UK would leave "no stone unturned" to stop human trafficking gangs. Five women and a girl were among the dead, France's interior minister said. Gerald Darmanin also said two people were rescued and one was missing. It was earlier reported 31 people had died, but the total was revised down overnight on Thursday. Four people had been arrested near to the Belgian border, he added, saying: "We suspect that they were directly linked to this particular crossing." On Wednesday evening, Mr Johnson and French President Emmanuel Macron agreed to step up joint efforts to prevent the crossings and stop the gangs putting people's lives at risk, Downing Street said. A fishing boat sounded the alarm on Wednesday afternoon after spotting several people at sea off the coast of France. French and British authorities are conducting a rescue operation by air and sea to see if they can find anyone. Mr Johnson said the deaths were a "disaster", adding that it was vital to "break" the people trafficking gangs which, he said, were "literally getting away with murder". Speaking after chairing an emergency Cobra meeting, the prime minister said more needed to be done to stop criminals organising crossings. "It also shows how vital it is that we now step up our efforts to break the business model of the gangsters who are sending people to sea in this way," he said. (BBC credit: https://www.bbc.com/news/uk-59406355)
  11. An event jointly hosted by Open Labour and the Labour Campaign for International Development. Labour MPs are invited to contribute speeches on what a progressive, ethical foreign policy for the post-Brexit would will consist of.
  12. Foreign policy Going global (won't be cheap) In comparison to the relative quiet of the Labour conference, the Conservatives are nurturing a next generation of foreign policy talent. Juliet Manning and Marcus Drummond-MacBeath both articulated a view of foreign affairs that demonstrated command of the issues. It remains to be seen whether they're prepared to comprehend the cost. Both Ms Manning and Mr Drummong-MacBeath announced support for greater spending on foreign aid, with a particular focus on confronting Xi Jinping's Belt and Road Initiative. This comes following the Chancellor's decision to cut foreign aid last year and maintain foreign aid spending at 0.5% of GDP for the next three years. Andrew Mitchell, a former international development secretary, lauded the stand and declared he hoped it gained more prominence in the Conservative Party. Likewise, both also called for significant increasing in defence spending in order to match their greater ambitions for "Global Britain". Ms Manning offered a more focused discussion of a vision for the Armed Forces: broadening capabilities and transforming the military into one that could confront all-hazards. Mr Drummond-MacBeath, alternatively, offered the "more is more" case in making his argument. Neither of these commitments come particularly cheap. Combined, restoring spending on foreign aid to 0.7% of GNI and increasing defence spending to 2.5% of GDP will cost approximately £16 billion this year. Presuming that the economy continues to grow, that number will only increase. The money to pay for those increases will have to be found somewhere and its unclear that the Chancellor, Rishi Sunak, will provide them. There is also the alternate question: where do we invest that money. Mr Drummond-MacBeath had perhaps the most notable answer in advocating for a firm pivot to great power competition against China and Russia. His brash statements about the Chinese Communist Party earned him plaudits from Neil O'Brien, the co-founder of the hawkish China Research Group. "It was one of the more strident speeches that we've heard on China," said a Chatham House researcher. Surely we can expect to see Mr Drummond-MacBeath advocate for more engagement in the Indo-Pacific - perhaps an enduring presence there being a focus of his proposed defence investments. Nonetheless, it remains to be seen whether Whitehall will take this advocacy to heart. Competing forces, ranging from foreign secretary Liz Truss, who is viewed as more militant and less keen on development, to Mr Sunak, will determine the direction that the United Kingdom takes. Whether the backbenches - either a cautiously internationalist Ms Manning or a vocally hawkish Mr Drummond-MacBeath - can alter that course remains to be seen.
  13. The Hon Ms Rachel Reeves Thank you, Madam Deputy Speaker. Families struggling with the cost of living crisis; businesses hit by a supply chain crisis; those who rely on our schools, our hospitals and our police—they will not recognise the world that the Chancellor described. They will think that he is living in a parallel universe. The Chancellor decided in this Budget to cut taxes for banks, so at least the bankers on short-haul flights sipping champagne will be cheering it. And he had the arrogance, after taking £6 billion out of the pockets of some of the poorest people in this country, of expecting them to cheer today for £2 billion given to compensate. In the long story of this Parliament, never has a Chancellor asked the British people to pay so much for so little. Time and again today, he compared the investments that he is making to the last decade, but who was in charge in that lost decade? They were. Let us just reflect on the choices that the Chancellor has made today. We have the highest sustained tax burden in peacetime—and who is going to pay for it? It is not international giants such as Amazon; no, the Chancellor has found a tax deduction for them. It is not property speculators; they have already pocketed a stamp duty cut. And it is clearly not the banks, even though bankers’ bonuses are set to reach a record high this year. Instead, the Chancellor is loading the burden on working people, with a national insurance tax rise on working people, a council tax hike on working people, and no support today for working people with VAT on their gas and electricity bills. And what are working people getting in return? There is a record NHS waiting list with no plan to clear it, no way to see a GP, and people are still having to sell their home to pay for social care. We have community policing nowhere to be seen, a court backlog leaving victims without justice, and almost every rape going unprosecuted. There is a growing gap in results and opportunities between children at private and state schools, a soaring number of pupils in super-size classes, and no serious plan to catch up on learning stolen by the virus. The £2 billion announced today is a pale imitation of the £15 billion catch-up fund that the Prime Minister’s own education tsar said was needed. No wonder he resigned. The Chancellor talks about world-class public services. Tell that to a pensioner waiting for a hip operation. Tell that to a young woman waiting to go to court to get justice. Tell that to a mum and dad waiting for their child to get the mental health support that they need. The Chancellor says today that he has realised what a difference early years spending makes. Has he ever heard of the Sure Start programme that this Tory Government cut? Why are we in this position? Why are British businesses being stifled by debt while Amazon gets tax deductions? Why are working people being asked to pay more tax and put up with worse services? Why is billions of pounds in taxpayers’ money being funnelled to friends and donors of the Conservative party while millions of families are having £20 a week taken off them? Why can’t Britain do better than this? The Government will always blame others: “It’s businesses’ fault”; “It’s the EU’s fault”; “It’s the public’s fault”; “They’re global problems”—the same old excuses. But the blunt reality is this. Working people are being asked to pay more for less, for three simple reasons: economic mismanagement, an unfair tax system, and wasteful spending. Each of those problems is down to 11 years of Conservative failure. Government Members shake their heads, but the cuts to our public services have cut them to the bone. While the Chancellor and the Prime Minister like to pretend that they are different, this Budget will only make things worse. The solution starts with growth. The Government are caught in a bind of their own making, because low growth inexorably leads to less money for our public services unless taxes rise, and under the Conservatives Britain has become a low-growth economy. Let us look at the last decade. The Tories have grown the economy at just 1.8% a year. If we had grown at the same rate as other advanced economies, we could have had an additional £30 billion to invest in public services without raising the taxes that the Tories are raising on working people today. Let us compare growth under the last 11 years of Conservative government to that under the last Labour Government. Even taking into account the global financial crisis, Labour grew the economy much faster—by 2.3% a year. If the Tories matched that record, we would have £30 billion more a year to spend on public services. It could not be clearer: the Conservatives are now the party of high taxation, because the Conservatives are the party of low growth. The Office for Budget Responsibility confirmed that today. We will be back to anaemic growth—[Interruption.] Conservative Members might not like this, but the Office for Budget Responsibility said that by the end of this Parliament, the UK economy will be growing by just 1.3%. That is hardly the plan for growth that the Chancellor boasted about today; it is hardly a ringing endorsement of his announcements. Under the Tory decade, we have had low growth, and there is not much growth to look forward to. The economy has been weakened by the pandemic, but also by the Government’s mishandling of it. Responding to the virus has been a huge challenge. Governments around the world have taken on more debt, but our situation is worse than in other countries. It is worse because our economy was already fragile going into the crisis, with too much inequality, too much insecure work and too little resilience in our public services. And it is worse because the Prime Minister dithered and delayed against scientific advice, egged on by the Chancellor, and we ended up facing harsher and longer restrictions than other countries. So as well as having the highest death toll in Europe, Britain has suffered the worst economic hit of any major economy. The Chancellor now boasts that we are growing faster than others, but that is because we fell the furthest. While the US and others have already seen their economy bounce back to levels seen before the pandemic, the UK has not. Our economy is set to be permanently weaker. On top of all that, the Government are now lurching from crisis to crisis: people avoiding journeys because they cannot fill up their petrol tank is not good for the economy; people spending less because the cost of the weekly shop has exploded is not good for the economy; and British exporters facing more barriers than their European competitors because of the deal the Government did is not good for our economy. If this were a plan, it would be economic sabotage. When the Prime Minister is not blagging that this chaos is part of his cunning plan, he is saying he is not worried about inflation. Well, tell that to families struggling with rising gas and electricity bills, rising petrol prices at the pump and rising food prices. He is out of touch, he is out of ideas and he has left working people out of pocket. Conservative mismanagement has made the fiscal situation tight. When times are tight, it is even more important to ensure that taxes are fair and that taxpayers get value for money. The Government fail on both fronts. We have a grossly unfair tax system, with the burden being heaped on working people. Successive Budgets have raised council tax and income tax. Now they have raised national insurance, too. But taxes on those with the broadest shoulders, those who earn their income from stocks and shares and dividends and property portfolios, have been left nearly untouched. Businesses based on the high street are the lifeblood of our communities and are often the first venture for entrepreneurs, but despite what the Chancellor said today, businesses will still be held back by punitive and unfair business rates. The Government have failed to tax the online giants and watered down global efforts to create a level playing field. Just when we needed every penny of public money to make a difference, we have a Government who are a byword for waste, cronyism and vanity projects. We have had £37 billion for a test and trace system that the spending watchdog says treats taxpayers like an ATM cash machine, a yacht for Ministers, a fancy paint job for the Prime Minister’s plane, a TV studio for Conservative party broadcasts that seems to have morphed into the world’s most expensive home cinema, £3.5 billion of Government contracts awarded to friends and donors of the Conservative party, a £190 million loan to a company employing the Prime Minister’s former chief of staff, and £30 million to the former Health Secretary’s pub landlord—and every single one of those cheques signed by the Chancellor. Now the Chancellor comes to ordinary working people and asks them to pay more than they have ever been asked to pay before, and, at the same time, to put up with worse public services, all because of his economic mismanagement, his unfair tax system and his wasteful spending. Of course, there are some welcome measures in the Budget today, as there are in any Budget. Labour welcomes the increase in the national minimum wage, but the Government need to go further and faster. If they had backed Labour’s position of an immediate rise to at least £10 an hour, a full-time worker on the national minimum wage would be in line for an extra £1,000 a year. Ending the punitive public sector pay freeze is welcome, but we know how much this Chancellor likes his smoke and mirrors, so we will be checking the books to make sure that the money is there for a real-terms pay rise. Labour also welcomes the Government’s decision to reduce the universal credit taper rate, as we have consistently called for, but the system has got so out of whack that even after that reduction working people on universal credit still face a higher marginal tax rate than the Prime Minister. Those unable to work through no fault of their own still face losing more than £1,000 a year. For families who go out to work every day but do not get Government benefits, who are on an average wage, who have to fill up their car with petrol to get to work, who do that weekly shop, and who see their gas and electricity prices go up, the Budget today does absolutely nothing. We have a cost-of-living crisis. The Government have no coherent plan to help families cope with rising energy prices. Although we welcome the action taken today on universal credit, millions will still struggle to pay the bills this winter. The Government have done nothing to help people with their gas and electricity bills through the cut in VAT receipts that Labour has called for—a cut that is possible because we are outside the European Union and could be funded by the extra VAT receipts of the last few months. Working people are left out in the cold while the Government hammer them with tax rises. National insurance is a regressive tax on working people: a tax on jobs. Under the Chancellor’s plans, a landlord renting out dozens of properties will not pay a penny more in tax, but their tenants, in work, will face tax rises of hundreds of pounds a year. The Chancellor is failing to tackle another huge issue of the day: adapting to climate change. Adapting to climate change presents opportunities—more jobs, lower bills and cleaner air—but only if we act now and at scale. According to the Office for Budget Responsibility, failure to act will mean public sector debt explodes later to nearly 300% of GDP. The only way to be a prudent and responsible Chancellor is to be a green Chancellor: to invest in the transition to a zero-carbon economy and give British businesses a head start in the industries of the future. But with no mention of climate in his conference speech and the most passing of references today, we are burdened with a Chancellor unwilling to meet the scale of the challenges we face. Homeowners are left to face the costs of insulation on their own. Industries like steel and hydrogen are in a global race, but without the support they need. In the week before COP26, the Chancellor has promoted domestic flights over high-speed rail. It is because of this Chancellor that in the week when we are trying to persuade other countries to reduce their emissions, the Government cannot even confirm that they will meet their 2035 climate reduction target. Everywhere working people look at the moment, they see prices going up and they see shortages on the shelves, but this Budget did nothing to address their fears. Household budgets are being stretched thinner than ever, but the Budget did nothing to deal with the spiralling cost of living. It is a shocking missed opportunity by a Government who are completely out of touch. There is an alternative. Rather than just tweak the system, Labour would scrap business rates and replace them with something much better by ensuring online giants pay their fair share. That is what being pro-business looks like. We would not put up national insurance for working people. We would ensure that those with the broadest shoulders pay their fair share. That is what being on the side of working people looks like. We would end the £1.7 billion subsidy that the Government give to private schools and put it straight into our local state schools. That is what being on the side of working families looks like. We would deliver a climate investment pledge of £28 billion every year for the rest of this decade: gigafactories to build batteries for electric vehicles; a thriving hydrogen industry creating jobs in all parts of our country; and retrofitting so that we keep homes warm and get our energy bills down. That is what real action on climate change looks like. This country deserves better, but it will never get it under this Chancellor, who gives with one hand but takes so much more with the other. What you get with these two is a classic con game, like one of those pickpocketing operations you see in crowded places: the Prime Minister is the front man distracting people with his wild promises, and all the while his Chancellor is dipping his hand in their pockets. It all seems like fun and games until you walk away and find that your purse has been lifted. But people are getting wise to them. Every month, they feel the pinch. They are tired of the smoke and mirrors. They are tired of the bluster, of the false dawns and of the promises of jam tomorrow. Labour would put working people first, and would use the power of government and the skill of business to ensure that the next generation of quality jobs are created right here in Britain. We would tax fairly, spend wisely and, after a decade of faltering growth, get Britain’s economy firing on all cylinders. That is what a Labour Budget would have done today.
  14. Madam Deputy Speaker At this point I would normally call the Leader of the Opposition to respond to the Chancellor’s statement. As Mr Speaker announced earlier, the Leader of the Opposition is sadly isolating—we all wish him a speedy recovery—and therefore, to answer on behalf of the Opposition, I call the shadow Chancellor, Rachel Reeves.
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