MS3 - Spending Review and Budget

[Blakesley]

Madam Deputy Speaker

Before I call the Chancellor of the Exchequer to make his Budget statement, it is my duty to take the unusual step of saying a few words.

As Chairman of Ways and Means, the House knows I chair and have responsibility for the House’s proceedings on the Budget. I share the concern of many Members of this House about the apparent pre-briefing of Budget material to the media before any announcement has been made in this House. I understand the Chancellor’s position, and it is well understood that, for a number of years, elements of the Budget have been pre-briefed to the media on an embargoed basis to aid their coverage, but such pre-briefing, where the embargo makes it clear that the material can be used only after the Chancellor has addressed this House, is rather different from what we have apparently experienced this year, which is the briefing to the media of details of the Budget statement for publication before the statement is delivered.

As Mr Speaker has said, and as all Ministers know, important policy announcements should be made first to Parliament. [Hon. Members: “Resign!”] There should not be shouts of “Resign” from Opposition Members. That is not what we are talking about. We are just talking about courtesy to this House.

Given my responsibilities to the House with regard to the Budget, I must put on record my support for Mr Speaker’s stance on this issue and express a firm hope, which I believe is felt on all sides of the House, that we do not find ourselves in this position again at future Budgets. Chancellor, we are all very much looking forward to hearing the remainder of your announcement, which you are about to make to us. [Hon. Members: “We’ve already heard it!”] Oh no you haven’t. The Chancellor has still to give us the important parts of his Budget.

I remind hon. Members that copies of the Budget resolutions will be available from the Vote Office in Members’ Lobby after the Chancellor’s statement and, of course, online. I also remind hon. Members that we will have good behaviour over the next hour or so. Interventions are not taken during the Chancellor’s statement, nor during the replies on behalf of the Opposition and the SNP.

We will now put aside all the matters we have just addressed and concentrate. I call the Chancellor of the Exchequer to make his Budget statement.

[Blakesley]

Chancellor of the Exchequer, the Rt Hon Rishi Sunak

Madam Deputy Speaker, I have heard your words and those of Mr Speaker. I have the greatest respect for you both and want to assure you that I have listened very carefully to what you have said. May I also send my best wishes to the Leader of the Opposition? I know that the whole House will join me in doing that.

With your permission, Madam Deputy Speaker, let me turn to today’s Budget. Employment is up, investment is growing, public services are improving, the public finances are stabilising and wages are rising. Today’s Budget delivers a stronger economy for the British people: stronger growth, with the UK recovering faster than our major competitors; stronger public finances, with our debt under control; and stronger employment, with fewer people out of work and more people in work. Growth is up, jobs are up and debt is down. Let there be no doubt: our plan is working.

This Budget is about what this Government are about: investment in a more innovative, high-skilled economy, because that is the only sustainable path to individual prosperity; world-class public services, because they are the common goods from which we all benefit; backing business, because our future cannot be built by the Government alone but must come from the imagination and drive of our entrepreneurs; help for working families with the cost of living, because we will always give people the support they need and the tools to build a better life for themselves; and levelling up, because for too long—far too long—the location of your birth has determined too much of your future, and because the awesome power of opportunity should not be available only to a wealthy few but be the birthright of every child in an independent and prosperous United Kingdom.

Today’s Budget does not draw a line under covid; we have challenging months ahead, and I encourage everyone eligible to get their booster jabs as soon as possible. But today’s Budget does begin the work of preparing for a new economy post covid: the Prime Minister’s economy of higher wages, higher skills and rising productivity, and of strong public services, vibrant communities and safer streets—an economy fit for a new age of optimism, where the only limit to our potential is the effort we are prepared to put in and the sacrifices we are prepared to make. That is the stronger economy of the future, and this Budget is the foundation.

The House will recognise the challenging backdrop of rising inflation. Let me begin by carefully explaining what is happening in our economy and why. Inflation in September was 3.1% and is likely to rise further, with the Office for Budget Responsibility expecting the consumer prices index to average 4% over the next year. The majority of this rise in inflation can be explained by two global forces. First, as economies around the world reopen, demand for goods has increased more quickly than supply chains can meet. Having been shut down for almost a year, it takes time for factories to scale up production, for container ships to move goods to where demand is and for businesses to hire the people they need.

Secondly, global demand for energy has surged at a time when supplies have already been disrupted, putting a strain on prices. In the year to September, the global wholesale price of oil, coal and gas combined has more than doubled.

The pressures caused by supply chains and energy prices will take months to ease. It would be irresponsible for anyone to pretend that we can solve this overnight. I am in regular communication with Finance Ministers around the world and it is clear that these are shared global problems, neither unique to the UK nor possible for us to address on our own. But where the Government can ease these pressures, we will act. To address the driver shortage, the Transport Secretary is introducing temporary visas, tackling testing backlogs and changing cabotage requirements, and is today announcing new funding to improve lorry park facilities. We have already suspended the HGV levy until August, and I can do more today, extending it for a further year until 2023 and freezing vehicle excise duty for heavy goods vehicles.

To help with the cost of living, we have introduced a new £500 million household support fund, and today’s Budget will support working families further.

On our fiscal policy, we will meet our commitments on public services and capital investment, but we will do so keeping in mind the need to control inflation.

Finally, I have written to the Governor of the Bank of England today to reaffirm the Bank’s remit to achieve low and stable inflation. People should be reassured: it has a strong track record in doing so.

I understand that people are concerned about global inflation, but they have a Government here at home ready and willing to act. In a period of global uncertainty, we need to work hard to maintain a strong economy and be responsible with the public finances, and that is what we are doing. I am grateful to the OBR for its work, and I am pleased to say that it now expects our recovery to be quicker. Thanks to this Government’s actions, it forecasts the economy to return to its pre-covid level at the turn of the year—earlier than it thought in March.

Growth this year is revised up from 4% to 6.5%. The OBR then expects the economy to grow by 6% in 2022, and 2.1 %, 1.3% and 1.6% over the next three years. In July last year, at the height of the pandemic, unemployment was expected to peak at 12%.

Today, the OBR expects unemployment to peak at just 5.2%. That means more than 2 million fewer people out of work than previously feared. Wages are rising: compared with those in February 2020, they have grown in real terms by almost 3.5%. I can confirm for the House that the OBR’s forecast for business investment has been revised up over the next five years.

Because of the actions that we took to support our economy, we have been more successful than previously feared in preventing the long-term economic damage of covid.

The OBR has today revised down its scarring assumption from 3% to 2%. In the depths of the worst economic crisis on record, we set out a plan for jobs. It is a plan that was backed by business groups and trade bodies; a plan that has helped millions of people and saved millions of jobs; and a plan that the OBR has today described as “remarkably successful”. Today’s forecasts confirm beyond doubt that our plan for jobs is working.

Disruption in the global economy highlights the importance of strong public finances. Coronavirus left us with borrowing higher than at any time since the second world war. As the Prime Minister reminded us in his conference speech: higher borrowing today is just higher interest rates and even higher taxes tomorrow. We need to strengthen our public finances so that when the next crisis comes, we have the fiscal space to act. Today I am publishing a new charter for budget responsibility. The charter sets out two fiscal rules that will keep this Government on the path of discipline and responsibility. First, underlying public sector net debt, excluding the impact of the Bank of England, must, as a percentage of GDP, be falling. Secondly, in normal times the state should only borrow to invest in our future growth and prosperity. Everyday spending must be paid for through taxation. Both rules must be met by the third year of every forecast period, giving us the flexibility to respond to crises while credibly keeping the public finances under control. These rules are supplemented by targets to spend up to 3% of GDP on capital investment and to keep welfare spending on a sustainable path.

The House will be asked to vote on our charter, giving Members a simple choice—to abandon our fiscal anchor and leave our economy adrift with reckless unfunded pledges, or to vote for what we on the Government side of the House know is the right course: sound public finances and a stronger economy for the British people.

Important as the charter is, our credibility comes as much from what we do as what we say, so I am pleased to tell the House that, because our plan is delivering a stronger economy and because we have taken tough but responsible decisions on the public finances, the OBR reports today that all our fiscal rules have been met. Underlying debt is forecast to be 85.2% of GDP this year, then 85.4% in 2022-23, before peaking at 85.7% in 2023-24. It then falls in the final three years of the forecast, from 85.1% to 83.3%. Borrowing as a percentage of GDP is forecast to fall in every single year, from 7.9% this year to 3.3% next year, then 2.4%, 1.7%, 1.7% and 1.5% in the following years. Borrowing down, debt down: proving once again it is the Conservatives, and only the Conservatives, who can be trusted with taxpayers’ money.

I have made four fiscal judgements in this Budget. First, we will meet our fiscal rules with a margin to protect ourselves against economic risks. That is the responsible decision at a time of increasing global economic uncertainty, when our public finances are twice as sensitive to changes in interest rates as they were before the pandemic and six times as sensitive as they were before the financial crisis. Just a one percentage point increase in inflation and interest rates would cost us around £23 billion. My second judgment today is to continue to support working families.

Thirdly, as well as helping people at home, our improving fiscal position means that we will meet our obligations to the world’s poorest. I told the House that when we met our fiscal tests, we would return to spending 0.7% of our national income on overseas aid. Some people said this was a trick or a device. I told this House that it was no such thing, and based on the tests that I set out, today’s forecasts show that we are, in fact, scheduled to return to 0.7% in 2024-25—before the end of this Parliament.

My fourth fiscal judgment is this: today’s Budget increases total departmental spending over this Parliament by £150 billion. That is the largest increase this century, with spending growing by 3.8% a year in real terms. As a result of this spending review, and contrary to speculation, there will be a real-terms rise in overall spending for every single Department, and public sector net investment as a share of GDP will be at the highest sustained level for nearly half a century. If anyone still doubts it, today’s Budget confirms it: the Conservatives are the real party of public services.

Our stronger economy lays the foundation for everything that we want to achieve in today’s Budget: world class public services and more investment in our future growth. Before I turn to the details, I would like to thank the Chief Secretary to the Treasury, my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke). Completing the spending review in such challenging circumstances was a tall order—and thankfully we had just the man for the job.

At the start of this Parliament, resource spending on healthcare was £133 billion. Today’s spending review confirms that by the end of this Parliament it will increase by £44 billion to over £177 billion; and the extra revenue we are forecast to raise from the health and social care levy is going direct to the NHS and social care as promised. The health capital budget will be the largest since 2010: record investment in health R&D, including better newborn screening, as campaigned for by my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken); 40 new hospitals; 70 hospital upgrades; more operating theatres to tackle the backlog; and 100 community diagnostic centres, all staffed by a bigger, better-trained workforce, with 50,000 more nurses and 50 million more primary care appointments. As well as funding to deliver the Prime Minister’s historic reforms to social care, we are providing local government with new grant funding over the next three years of £4.8 billion—the largest increase in core funding for over a decade.

We are investing more in housing and home ownership too, with a multi-year housing settlement totalling nearly £24 billion—£11.5 billion to build up to 180,000 new affordable homes, the largest cash investment in a decade, 20% more than the previous programme. We are investing an extra £1.8 billion—enough to bring 1,500 hectares of brownfield land into use, meet our commitment to invest £10 billion in new housing, and unlock 1 million new homes. We are also confirming £5 billion to remove unsafe cladding from the highest risk buildings, partly funded by the residential property developers tax, which I can confirm will be levied on developers with profits over £25 million at a rate of 4%. We have already reduced rough sleeping by over a third, but we will go further, with £640 million a year for rough sleeping and homelessness—an 85% increase in funding compared to 2019.

Today’s Budget funds our ambition to recruit 20,000 new police officers; provides an extra £2.2 billion for courts, prisons and probation services, including £0.5 billion to reduce the courts backlog; pays for programmes to tackle neighbourhood crime, reoffending, county lines, violence against women and girls, victims’ services and improved responses to rape cases; and, over the next three years, commits £3.8 billion to the largest prison-building programme in a generation.

All Governments should aspire to provide greater life chances for future generations, but few Governments can match our ambition. So let me now turn to what this Budget does to support children. The evidence is compelling that the first 1,001 days of a child’s life are the most important. My right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) has recognised this with her inspirational report. We are responding today with £300 million for a start for life offer for families; high-quality parenting programmes; tailored services to help with perinatal mental health; and, I am pleased to tell my hon. Friend the Member for Congleton (Fiona Bruce), funding to create a network of family hubs around the country too. To improve the quality of childcare, we are going to pay providers more, with today’s spending review providing an extra £170 million by 2024-25. We are confirming £150 million to support training and development for the entire early years workforce. To help up to 300,000 more families facing multiple needs, we are investing an extra £200 million in the supporting families programme, and we will provide over £200 million a year to continue the holiday activities and food programme.

Today’s spending review also delivers our commitment to schools, with an extra £4.7 billion by 2024-25, which, combined with the ambitious plans we announced at spending review 2019, will restore per-pupil funding to 2010 levels in real terms, equivalent to a cash increase for every pupil of more than £1,500. For children with special educational needs and disabilities, we are more than tripling the amount we invest to create 30,000 new school places. We know that the pandemic caused significant disruption to children’s learning. We have already announced £3.1 billion to help education recovery. Today, as promised by the Prime Minister and the Education Secretary, we will go further, with just under £2 billion of new funding to help schools and colleges, bringing this Government’s total support for education recovery to almost £5 billion.

As we level up public services, we are also levelling up communities, restoring the pride people feel in the places they call home. To do that, we are providing £560 million for youth services, enough to fund up to 300 youth clubs in England; over £200 million to build or transform up to 8,000 state-of-the-art community football pitches across the UK; and funding to turn over 100 areas of derelict land into new “pocket parks”.

I am allocating the first round of bids from the levelling up fund—£1.7 billion to invest in the infrastructure of everyday life in over 100 local areas. With £170 million in Scotland, £120 million in Wales, and £50 million in Northern Ireland—more than their Barnett shares—this will benefit the whole United Kingdom. We are backing projects in Aberdeen, Bury, Burnley, Lewes, Clwyd South, and not one, not two, but three successful projects for the great city of Stoke-on-Trent. But that is not all. We are also going to fund projects in Ashton-under-Lyne, Doncaster, South Leicester, Sunderland and West Leeds. We are so committed to levelling up, we are even levelling up the Opposition Front Bench.

Levelling up is also about protecting our unique culture and heritage. The British Museum; Tate Liverpool; the York Railway Museum: we are investing £850 million to protect museums, galleries, libraries, and local culture. Thanks to the Culture Secretary, over 100 regional museums and libraries will be renovated, restored and revived; and she has secured up to £2 million to start work on a new Beatles attraction on the Liverpool waterfront. We are also going to review our museum freedoms and make our creative tax reliefs more generous. On current plans, the tax relief for museums and galleries is due to end in March next year, just as exhibitions are starting to tour again, so I have decided to extend it for two years to March 2024. To support theatres, orchestras, museums and galleries to recover from covid, the tax reliefs for all those sectors, from today until April 2023, will be doubled, and they will not return to the normal rate until April 2024. That is a tax relief for culture worth almost a quarter of a billion pounds.

This is a Budget for the whole United Kingdom. Through the Barnett formula, today’s decisions increase Scottish Government funding, in each year, by an average of £4.6 billion, Welsh Government funding by £2.5 billion, and £1.6 billion for the Northern Ireland Executive. This delivers, in real terms, the largest block grants for the devolved Administrations since the devolution settlements of 1998. The whole of the United Kingdom will benefit from the UK shared prosperity fund, and over time we will ramp up funding so that total domestic UK-wide funding will match EU receipts, averaging around £1.5 billion a year. We will fund projects across the UK, including funding for the Extreme E race in Scotland—the 2022 Hebrides X-Prix—accelerating funding for the Cardiff city region deal in Wales, and funding in Northern Ireland for community cohesion. While today demonstrates the indisputable fiscal benefit of being part of the United Kingdom, this is and always will be secondary to the simple truth that we are bound together by more than transactional benefit. It is our collective history, our culture and our security. We are, and always will be, one family and one United Kingdom.

While today’s Budget delivers historically high levels of public spending, its success will be measured not by the billions we spend, but by the outcomes we achieve and the difference we make to people’s lives. The budgets are set; the plans are in place; the task is clear. Now we must deliver because this is not the Government’s money—it is taxpayer’s money.

Our stronger economy allows us to fund world-class public services—the people’s priority—but over the long-term, the only way to pay for higher spending is economic growth. If we want to see higher growth, we have to tackle the problem that has been holding back this country for far too long: our uneven economic geography. As we come out of the worst economic shock we have ever seen, we have a choice—to retrench, or to invest. This Government choose to invest: to invest in our economic infrastructure, to invest in innovation, to invest in skills and to invest in a plan for growth that builds a stronger economy for the future. That is what this Budget is about and that is what this Government are about.

Infrastructure connects our country, drives productivity and levels up. That is why our national infrastructure strategy invests in economic infrastructure such as roads, railways, broadband and mobile—over £130 billion. To connect our towns and cities, we are investing £21 billion on roads and £46 billion on railways. Our integrated rail plan will be published soon, dramatically improving journey times between our towns and cities. Today, we are providing £5.7 billion for London-style transport settlements in Greater Manchester, the Liverpool city region, the Tees Valley, South Yorkshire, West Yorkshire, the west midlands and the west of England. We are helping local transport everywhere with £2.6 billion for a long-term pipeline of more than 50 local roads upgrades, over £5 billion for local roads maintenance—enough to fill 1 million more potholes a year—and funding for buses, cycling and walking totalling more than £5 billion. The Prime Minister promised an infrastructure revolution. This Budget delivers an infrastructure revolution.

Investment in our infrastructure is just the first step. We need to do what the people of this country have always done: invent, discover, and create the ideas and technologies that will change the world. So we will also invest more in innovation. The UK is already a world leader. With less than 1% of the world’s population, we have four of the world’s top 20 universities, 14% of the world’s most impactful research and the second most Nobel laureates. We want to go further. I can confirm we will maintain our target to increase research and development investment to £22 billion. But in order to get there, and deliver on our other priorities, we will reach the target in 2026-27, spending, by the end of this Parliament, £20 billion a year on R&D. That is a cash increase of 50%—the fastest increase ever. I can confirm for the House that this £20 billion is in addition to the cost of our R&D tax reliefs. Combined with those tax reliefs, total public investment in R&D is increasing from 0.7% of GDP in 2018 to 1.1% of GDP by the end of the Parliament.

How does 1.1% compare internationally? Well, the latest available data shows an OECD average of just 0.7%. Germany is investing 0.9%, France 1% and the United States just 0.7%. This unprecedented funding will: increase core science funding to £5.9 billion a year by 2024-25, a cash increase of 37%; meet the full costs of associating with Horizon Europe; establish the new Advanced Research and Invention Agency with £800 million by 2025-26; and strengthen our focus on late-stage innovation, increasing Innovate UK’s annual core budget to £1 billion, double what it was at the start of the Parliament.

There is more to becoming a science superpower than just what the Government spend on R&D. Our ambitious net zero strategy is also an innovation strategy, investing £30 billion to create the new green industries of the future. We have just issued our second green bond, making us the third-largest issuer of sovereign green bonds anywhere in the world. London last week was named the best place in the world for green finance. On Monday, the new UK Infrastructure Bank announced its first ever investment: £107 million to support offshore wind in Teesside. To build on this work, one week today I will be hosting global finance ministers and businesses at COP26.

Innovation comes from the imagination, drive and risk-taking of business. That is why we have launched Help to Grow to turbocharge SME productivity and started a new co-investment venture capital fund, Future Fund: Breakthrough. It is why I am announcing today that we will consult on further changes to the regulatory charge cap for pensions schemes, unlocking institutional investment while protecting savers. It is why we are introducing a new £1.4 billion global Britain investment fund, supporting transformative economic activity in our world-leading sectors, such as life sciences. It is why today’s Budget increases the British Business Bank’s regional financing programmes to £1.6 billion, expanding their coverage and helping innovative businesses get access to the finance they need, across the whole United Kingdom.

A third of our science Nobel laureates have been immigrants. Half of our fastest growing companies have a foreign-born founder. So an economy built on innovation must be open and attractive to the best and brightest minds. Thanks to our brilliant Home Secretary, today’s Budget confirms the eligibility criteria for our new scale-up visa, making it quicker and easier for fast-growing businesses to bring in highly skilled individuals. The Trade Secretary’s new global talent network, launching initially in the Bay Area, Boston and Bangalore, will identify, attract and relocate the best global talent in science and tech sectors. It is all part of our plan to make our visa system for international talent the most competitive in the world.

If we want greater private sector innovation, we need to make our research and development tax reliefs fit for purpose. The latest figures show the UK has the second highest spending on R&D tax reliefs in the OECD. Yet it is not working as well as it should; UK business investment in R&D is less than half the OECD average. We have reviewed the reliefs and identified two issues we are solving today. First, the reliefs need to reflect how businesses conduct research in the modern world. So, as many companies have called for, I am expanding the scope of the reliefs to include cloud computing and data costs.

The second problem is this: companies claimed UK tax relief on £48 billion of R&D spending, yet UK business investment was around half of that, at just £26 billion. We are subsidising billions of pounds of R&D that is not even happening here in the United Kingdom. That is unfair on British taxpayers and it puts us out of step with places like Australia, Canada, Hong Kong, Singapore, Switzerland and the USA, which have all focused their R&D tax reliefs on domestic activity. So from April 2023, we are going to do the same, and incentivise greater investment here at home. So a £22-billion investment in R&D, the net zero strategy, the future fund, Help to Grow, more regional finance, unlocking institutional capital, a more competitive visa system and a modernised R&D tax credits regime—enough action to prove the hypothesis that we are making this country a science and technology superpower.

As well as investing in infrastructure and innovation, there is one further part of our plan for growth that is crucial: providing a world-class education to all our people. Higher skills lead to higher regional productivity and higher productivity leads to higher wages. With 80% of the UK’s 2030 workforce already in work, our future success depends on not just the schooling we give our children but the lifelong learning we offer to adults.

We have already done a lot. Our plan for jobs invested in apprenticeships, traineeships and the kickstart scheme, but we need to go further. Today’s Budget invests in the most wide-ranging skills agenda this country has seen in decades. We are increasing skills spending over the Parliament by £3.8 billion—an increase of 42%. We are expanding T-levels, building institutes of technology, rolling out the Prime Minister’s lifetime skills guarantee, upgrading our further education college estate, quadrupling the number of places on skills bootcamps and significantly increasing funding for apprenticeships.

We are also going to tackle a tragic fact: millions of adults in our country have numeracy skills lower than those expected of a nine-year-old. According to the leading charity National Numeracy, this costs individuals with poor numeracy up to £1,600 a year in lost earnings. People with poor numeracy skills are more than twice as likely to be unemployed as their peers. So today, I can announce a new UK-wide numeracy programme: Multiply. With £560 million, Multiply will improve basic maths skills and help to change people’s lives across the whole United Kingdom.

So we are building our infrastructure with new roads, railways and broadband; cementing our status as a science and technology superpower; and strengthening the skills of our people, the country’s greatest asset. That is a real plan for growth and that is how this Government are building a stronger economy for the British people.

World class public services are the people’s priority. Investment in infrastructure, innovation and skills will create the growth that we need to pay for them. But as Conservatives, we know that Government action alone will not be enough to create a stronger economy. We want this country to be the most exciting and dynamic place in the world for business. Now that we have left the EU, we have the freedom to do things differently and deliver a simpler, fairer tax system.

I want to begin with one of our smallest taxes, but a tax that plays an important role in one of our pre-eminent industries: shipping. Now that we have left the EU, today we start reforming our tonnage tax regime to make it simpler and more competitive. And we are also making it fairer for UK taxpayers.

When we were in the old EU system, ships in the tonnage tax regime were required to fly the flag of an EU state, but that does not make sense for an independent nation. So I can announce today that our tonnage tax will, for the first time ever, reward companies for adopting the UK’s merchant shipping flag, the red ensign. That is entirely fitting for a country with such a proud maritime history as ours. I am sure that the Opposition will be delighted that red flags are still flying somewhere in this country, even if they are all at sea.

Let me turn now to air passenger duty. Right now, people pay more for return flights within and between the four nations of the United Kingdom than they do when flying home from abroad. We used to have a return-leg exemption for domestic flights, but we were required to remove it in 2001. But today I can announce that flights between airports in England, Scotland, Wales and Northern Ireland will, from April 2023, be subject to a new lower rate of air passenger duty. This will help to cut the cost of living, with 9 million passengers seeing their duty cut by half; it will bring people together across the United Kingdom; and because they tend to have a greater proportion of domestic passengers, it is a boost to regional airports like Aberdeen, Belfast, Inverness and Southampton.

Airports are major regional employers, so to help them get through the winter I am also extending our support for English airports for a further six months. We are also making changes to reduce carbon emissions from aviation. Most emissions come from international rather than domestic aviation, so we are introducing, from April 2023, a new ultra-long-haul band in air passenger duty covering flights of over 5,500 miles, with an economy rate of £91. Less than 5% of passengers will pay more, but those who fly furthest will pay the most.

Our approach to corporate taxation strikes a responsible balance between funding public services and encouraging the investment we need for a stronger economy. At the March Budget, we took the difficult but necessary decision to increase the rate of corporation tax to 25% from 2023, which is still the lowest rate in the G7 and the fifth lowest rate in the G20. Alongside, I introduced the new super deduction—the biggest business tax cut in modern British history—and extended, to the end of this year, the annual investment allowance at its higher level of £1 million. Now is not the time to remove tax breaks on investment, so I can confirm today that the £1 million annual investment allowance will not end in December as planned. It will be extended all the way to March 2023.

I also said in March that I would review the bank surcharge within corporation tax to maintain the competitiveness of our financial services industry. We will retain a surcharge of 3%. The overall rate for corporation tax on banks will, in 2023, increase from 27% to 28% and will remain higher than the rate paid by other companies. Small challenger banks are improving banking competition, which is good for the sector and good for consumers, so to help them, I will also raise the annual allowance to £100 million.

Our manifesto promised to review business rates. We are publishing our conclusions today. Before I set out our plans, let me say this: we on the Conservative Benches are clear that reckless, unfunded promises to abolish a tax that raises £25 billion every year are completely irresponsible. It would be wrong to find £25 billion a year in extra borrowing, cuts to public services or tax rises elsewhere, so we will retain business rates, but with key reforms to ease the burden and create stronger high streets.

First, we will make the business rates system fairer and timelier with more frequent revaluations every three years. The new revaluation cycle will be delivered from 2023. Secondly, as called for by the Federation of Small Businesses and the British Property Federation, we are introducing a new investment relief to encourage businesses to adopt green technologies such as solar panels.

I am announcing today that we will accept the CBI and the British Retail Consortium’s recommendation to introduce a new business rates improvement relief. From 2023, every single business will be able to make property improvements and, for 12 months, pay no extra business rates. That means that a hotel adding extra rooms, a manufacturer expanding their factory, and an office adding new air conditioning, CCTV or bike shelters will all pay no extra rates.

Together with the new green investment relief, we are introducing investment incentives totalling £750 million. This will make a difference, but without action, millions of businesses would see their tax bills going up next year because of inflation. I want to help those businesses right now, so our third step is that next year’s planned increase in the multiplier will be cancelled. That is a tax cut for businesses worth, over the next five years, £4.6 billion.

I have one final measure to help those businesses hardest hit by the pandemic. I am announcing today, for one year, a new 50% business rates discount for businesses in the retail, hospitality, and leisure sectors: pubs, music venues, cinemas, restaurants, hotels, theatres and gyms. Any eligible business can claim a discount on their bills of 50%, up to a maximum of £110,000. That is a business tax cut worth almost £1.7 billion. Together with small business rates relief, this means that over 90% of all retail, hospitality and leisure businesses will see a discount of at least 50%. Apart from the covid reliefs, this is the biggest single-year cut to business rates in over 30 years. Taken together, today’s Budget cuts business rates by £7 billion.

We are unleashing the dynamism and creativity of British businesses with a simpler, fairer and more competitive tax system: the biggest business tax cut in modern British history; the biggest single-year cut to business rates for 30 years; a £1 million investment allowance; tonnage tax reformed; air passenger duty cut. That is the way to back business and build a stronger economy.

Let me turn now to alcohol duties. First introduced in 1643 to help pay for the civil war, our alcohol duty system is outdated, complex and full of historical anomalies. The Institute for Fiscal Studies has called it “a mess”; the Institute of Economic Affairs said that it “defies common sense”; and the World Health Organisation has warned that countries such as the UK which follow the EU rules are:

“unable to implement tax systems that are optimal from the perspective of public health.”

So today, we are taking advantage of leaving the EU to announce the most radical simplification of alcohol duties for over 140 years. We are taking five steps today to create a system that is simpler, fairer, and healthier.

First, to radically simplify the system, we are slashing the number of main duty rates from 15 to just six. Our new system will be designed around a common-sense principle: the stronger the drink, the higher the rate. This means that some drinks, like stronger red wines, fortified wines and high-strength white ciders will see a small increase in their rates because they are currently undertaxed, given their strength. That is the right thing to do, and it will help to end the era of cheap, high-strength drinks which can harm public health and enable problem drinking. Because this is a more rational system, the converse is also true: many lower-alcohol drinks are currently overtaxed—and have been for many decades. Rosé, fruit ciders, liqueurs, lower strength beers and wines—today’s changes mean that they will pay less.

The second step I am taking today will encourage small, innovative craft producers: I am announcing proposals for a new small producer relief. This will extend the principle of the small brewers relief to include for the first time ever small cider makers and other producers making alcoholic drinks of less strength than 8.5%.

Thirdly, I am going to modernise the system to reflect the way people drink today. Over the last decade, consumption of sparkling wines like prosecco has doubled. English sparkling wine alone has increased almost tenfold. It is clear they are no longer the preserve of wealthy elites, and they are no stronger than still wines. So I am going to end the irrational duty premium of 28% that they currently pay. Sparkling wines, wherever they are produced, will now pay the same duty as still wines of equivalent strength. Because growing conditions in the UK typically favour lower-strength and sparkling wines, this means English and Welsh wines, compared with stronger imported wines, will now pay less. Sales of fruit cider have increased from one in a thousand ciders sold in 2005 to one in four today, but they can pay two or three times as much duty as cider made with apples or pears, so we are cutting the duty on them too.

The fourth step I am taking today would directly support the home of British community life for centuries: our pubs. Even before the pandemic, pubs were struggling: between 2000 and 2019, consumption in the on-trade fell by 40%. Many public health bodies recognise that pubs are often safer drinking environments than being at home. As my hon. Friends the Members for Dudley South (Mike Wood) and for North West Durham (Mr Holden) will agree, a fairer, healthier system supports pubs, so I can announce today draught relief.

Draught relief will apply a new lower rate of duty on draught beer and cider. It will apply to drinks served from draught containers over 40 litres. It will particularly benefit community pubs that do 75% of their trade on draught. Let me tell the House the new rate: draught relief will cut duty by 5%. That is the biggest cut to cider duty since 1923; the biggest cut to fruit ciders in a generation; the biggest cut to beer duty for 50 years. This is not temporary. It is a long-term investment in British pubs of £100 million a year and a permanent cut in the cost of a pint of 3p. I cannot wait for the Opposition to accuse me tomorrow of beer-barrel politics.

These much needed reforms will come into effect in February 2023, but I want to help the hospitality industry right now, so for my final announcement on alcohol duties today, I can confirm that the planned increases in duty on spirits like Scotch whisky, wine, cider and beer will all, from midnight tonight, be cancelled. That is a tax cut worth £3 billion.

Our reforms make the alcohol duty system simpler, fairer and healthier; they help with the cost of living while tackling problem drinking; they support innovative entrepreneurs and craft producers; they back pubs and public health; and they are only possible because we have left the European Union.

World-class public services; investment in infrastructure, innovation, and skills; simpler, fairer taxes to support businesses and consumers: all built on the foundation of a stronger economy and responsible public finances. That is our vision for the future and that is what this Budget delivers.

This Budget also supports working families. With fuel prices at the highest level in eight years, I am not prepared to add to the squeeze on families and small businesses, so I can confirm today that the planned rise in fuel duty will be cancelled. That is a saving over the next five years of almost £8 billion. Compared to pre-2010 plans, today’s freeze means the average tank of fuel will cost around £15 less per car; £30 less for vans; and £130 less for HGVs. After 12 consecutive years of frozen rates, the average car driver will now save a total of £1,900.

I can also announce today that public sector workers will see fair and affordable pay rises across the whole spending review period as we return to the normal, independent pay-setting process, and I can take action to help the lowest paid as well. It was a Conservative Government who introduced the national living wage in 2016, a Conservative Government who, according to statistics published just yesterday, have overseen the proportion of people in low-paid work falling to its lowest level since 1997, and it is a Conservative Government who are increasing the wage floor again today. The independent Low Pay Commission brings together economists, business groups and trade unions. The Government are accepting its recommendation to increase the national living wage next year by 6.6%, to £9.50 an hour. For a full-time worker that is a pay rise worth over £1,000. It will benefit over 2 million of the lowest paid workers in the country, it is broadly consistent with previous increases, it keeps us on track for our target of two thirds of median earnings by 2024, and it is a major commitment to the high-wage, high-skill, high-productivity economy of the future.

As we build this stronger economy, we are doing so at the end of an extraordinary 18 months. Covid was not just a public health challenge and an economic challenge—it was a moral challenge, too. We had to show we could pull together as a country, and we did. We had to put aside questions of ideology and orthodoxy to do whatever it took to care for our people and each other, and we did.

There is a different moral dimension to the economic challenge we face now. Last year, the state grew to be over half the size of the total economy, and taxes are rising to their highest level as a percentage of GDP since the 1950s. I do not like it, but I cannot apologise for it: it is the result of the unprecedented crisis we faced and the extraordinary action we took in response. But now we have a choice: do we want to live in a country where the response to every question is “What are the Government going to do about it?”, where every time prices rise, every time a company gets in trouble, every time some new challenge emerges, the answer is always that the taxpayer must pay? Or do we choose to recognise that Government has limits?

Government should have limits. If this seems a controversial statement to make, then I am all the more glad for saying it because that means it needed saying. And it is what we believe. There is a reason we talk about the importance of family, community and personal responsibility. We do so not because these are an alternative to the market or the state, but because they are more important than the market or the state. The moments that make life worth living are not created by Government, are not announced by Government, are not granted by Government: they come from us as people—our choices, our sacrifices, our efforts—and we believe people should keep more of the rewards of those efforts. Yes, we have taken some corrective action to fund the NHS and get our debt under control, but as we look towards the future I want to say this simple thing to the House and the British people: my goal is to reduce taxes. By the end of this Parliament, I want taxes to be going down, not up. I want this to be a society that rewards energy, ingenuity and inventiveness, a society that rewards work. That is what we believe on this side of the House. That is my mission over the remainder of this Parliament.

The final announcement in today’s Budget takes a first step. For many of the lowest paid in society there is a hidden tax on work: the universal credit taper withdraws support as people work more hours. The rate is currently 63%, so for every £1 someone earns, their universal credit is reduced by 63p. Let us be in no doubt: this is a tax on work—and a high rate of tax at that. Organisations as varied as the Trades Union Congress, the Joseph Rowntree Foundation, the Resolution Foundation, the Centre for Policy Studies, and the Centre for Social Justice have all said it is too high. So, to make sure work pays and help some of the lowest-income families in our country to keep more of their hard-earned money, I have decided to cut this rate, not by 1%, not by 2%, but by 8%. This—[Hon. Members: “Hear, hear.”] This is a tax on working people and we are cutting it from 63% to 55%, the rate originally envisaged by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). And because I am also increasing the work allowances by £500, this is a tax cut next year worth over £2 billion. Nearly 2 million families will keep on average an extra £1,000 a year. Changes like this normally take effect at the start of the new tax year in April, but we want to help people right now, so we will introduce this within weeks and no later than 1 December.

Let me tell the House what these changes mean. A single mother of two renting and working full-time on the national living wage will be better off by around £1,200. A couple renting a home with their two children, one parent working full-time, the other working part-time, will be better off every single year by £1,800. This is a £2 billion tax cut for the lowest paid workers in our country. It supports working families, it helps with the cost of living and it rewards work.

So, fuel duty cut, air passenger duty cut, alcohol duty cut, the biggest cut to business rates in 30 years, growth up, jobs up, wages up, public finances back in a better place, more investment in infrastructure, innovation and skills, a pay rise for over 2 million people, and a £2 billion tax cut for the lowest paid. This Budget helps with the cost of living. This Budget levels up to a higher-wage, higher-skill, higher-productivity economy. This Budget builds a stronger economy for the British people. I commend it to the House.

[Blakesley]

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.

[Blakesley]

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.

[Amanda Stockley]

Thank you Mrs. Deputy Speaker.

May I first echo the words of yourself and the Chancellor and Shadow Chancellor about the speedy recovery of the leader of the Opposition? I think the whole house will be on the same side on this. Now, unto the budget. Deputy Speaker, my interests within this House are varied, but I would like to focus my speech on a particular problem that is close to my heart: climate change and our nature. I read in the Spending Review the funds allocated to DEFRA. Let me start by thanking the Chancellor for providing funds to support the Species Recovery Programme: it is vital that we protect endangered species in this country. And secondly, I agree to the plan to remove landfills completely by 2028. But  Deputy Speaker, the government must be asleep at the wheel if thinking that it can do all these things while still relying on Oil for our products.

It is time that we end our complete addiction to Plastics and Concrete. The UK is the fifth largest economy in terms of plastics production. And less 40 percent of all of our plastics are recycled, meaning that still, millions of tonnes of plastics are wasted on landfills, or worse, in plastic soup around the world's oceans. And at the same time, the government wants to continue trading with economies across the world which have a terrible reputation regarding plastics recycling. And this is the same government that lowered corporate taxes, while at the same time not implementing radical new targets for businesses to improve their environmental standards. Industries still keep dumping toxic waste into our waterways and our rivers, and now they don't even have to pay the taxes to incentivize the stopping of this practice. Deputy Speaker, I am quite frankly perplexed. Just as I predicted from the Queen's Speech, the government doesn't want to reduce the use of Plastics. It doesn't want to reduce the use of Concrete either. These two are the biggest source of CO2 emissions in the world, next only to coal and natural gas.

Deputy Speaker, last time I asked the government about our goals towards a biobased economy, I got an answer only about our Energy market. But I didn't even ask about that. I was asking what will be done to remove our use of single-use plastics. I am standing up here today because the government is doing nothing to lower our use of plastics, to reduce our impact on the plastic soup, or to finally invest in the use of biodegradable plastics.

Now plastics are not my only concern. They are bad enough for the environment, killing our marine life and our birds. Not to mention their lasting stay in the environment. I am also talking about other harmful products. We need to rethink our construction methods. Making Concrete, Steel, Glass Wool and Bricks are some of the most CO2-emitting processes in the industry. Especially weaponised concrete, the staple of our modern skyscrapers, is a harmful product. And miss Deputy Speaker, we could do that a lot cleaner, and a lot less dangerous, if we rid ourselves of using Cokes for steel, using glass fibres for Glass Wool, and using Gravel for concrete. Biobased products are available. We can use them to make products which are non-toxic, and still as strong as these products. But for that, we need to rethink our cities. The time of endless weaponised concrete flats must be over. If anyone is particularly interested in which products I am speaking of, then they must actually look at old processes. Whatever happened to making things from wood? And these don't need to be tall buildings: skyscrapers are a solution for a city of high density, and little space. But we need to design our cities to be breathing: a new model, where we can build houses not for one family, but for entire communities. That way, we can also improve our social cohesion. And not only wood is an alternative: I am particularly interested in scientists who have made Hempcrete: a product that replaces gravel with hemp, to make a sustainable concrete material that is just as strong. Now that is Real Levelling Up. The government wants to revamp high streets and reduce rough sleeping: but if the houses are made from harmful concrete and steel, then these houses deliver for the people, but destroy the environment in the process.

Then I come unto my final point, miss deputy speaker. Because I cannot shake the feeling that the government is failing in their parts to return services to the whole of the UK. They want to bring back railways to all of England, but yet High Speed 2, which is classified as an 'England and Wales project' has no dedicated line to Wales. In fact, Wales is not receiving any dedicated railway program this year. Luckily we have some good news: the government finally got rid of their failing rail franchising system. But I fear for the future of British railways. In Birmingham, we have identified some six vital railways which are yet to reopen. Together, they represent some 600,000 people who want to be reconnected to the railway, not least of all Dudley. Yet the only project we heard is the Brierley Hill metro line. And we have to rely on the government's Levelling Up Bid to go through to get this funded.

And then we come to the big issue of two of the major problems in our cities: Bicycles and Metro. The Prime Minister will probably tell you how he, as major of London, made a massive contribution with the 'Bicycle Superhighways'. The truth is: they failed miserably. They are nothing more than bike lanes painted unto existing roads. In multiple places, you have to cross the street to get to the next. Even worse, there are speed bumps, which are harmful for cyclists. And then there was the apparent refusal of Kensington and Chelsea to allow CS9 through their borough. The network is disconnected, dysfunctional, and disingenuous for cyclists. Why can't we produce true dedicated bikeways in our cities? London is not the only one: Birmingham, Manchester, and Liverpool suffer from the same problem. And is Britain truly incapable? If we look at Europe...yes I know, the Chancellor rather wouldn't because Europe apparently has only bad ideas...then we can see cities with sprawling dedicated bike lanes, metro and tram links, and good accessible Train Stations. I never quite understand why our cities need more than One Central Station? London has fourteen terminal stations. Birmingham has three, and Courzon Street, for HS2, will become the fourth. Is it not better to create an interconnected network of train stations, so that we can create a truly united mass transit network? And why don't we build bypasses so that we don't have to travel all the way to the Inner City to transfer to new lines? For example, HS1 and HS2 won't be connected directly. One has to transfer from St. Pancras International, to Euston. Why don't we relay HS1 to St. Pancras, via Camden Road? That way, one can travel High Speed lines from the Channel all the way to Birmingham, and beyond, to Manchester. I hope the government will consider this and other railway projects, not just through the Levelling Up Fund, but through a dedicated Railway Reopening Fund. Thank you deputy speaker.

[Recks]

Madam Deputy Speaker,

I rise today with the recognition that this budget has made a vital choice in a critical time in our nation's history. Britain is coming out of the worst throws of a global pandemic - thanks to this Government's strong support for vaccination research and development. But, as the saying goes, we are out of the kettle and into the fire. In addition to the lingering health needs of our society, which have been largely put on hold during the depths of the pandemic, we face supply chain challenges that the on-again, off-again economy has wrought. When it is harder to go to the local grocer and find goods on the shelves, the true origin of this cost-of-living crisis begins to rear its ugly head.

Madam Deputy Speaker, this is a time for a bold, forward-looking Government. This is the time for a future-orientated Budget. Indeed I am proud to stand here today to express my belief that this Budget does what it must: it invests wisely in Britain today to prepare ourselves for tomorrow's future.

This Budget wisely recognizes that the human element is what drives a nation and an economy forward. You can have all the equipment, technology and machinery that you want, but without the talent, entrepreneurship and skill of human beings, the economy cannot grow. That is why, Madam Deputy Speaker, I am glad to see this budget making meaningful reforms to the Universal Credit taper rate. By reducing the disincentive to work from 63% to 55% and increasing the work allowance, my Rt Hon friend, the Chancellor, is supporting our lowest income workers with nearly £2 billion in additional support. This is real money that will  not only put food on the table and heat homes, it will be real money to confront the cost of living situation that so many Britons are facing as the globe exits a pandemic.

As the workers of today re-enter the marketplace for meaningful employment, this Government recognizes that the workers of tomorrow faced unprecedented challenges in their education. Pandemic-induced disruptions have undeniably led to learning loss despite the best efforts of educators and teachers across this nation. The Conservative Budget before us today will invest nearly £2 billion of new education funding to boost our pupils in classrooms across Britain. As the Rt Hon Chancellor notes, that means a total investment just shy of £5 billion since the pandemic began. Madam Deputy Speaker, this includes a Recovery Premium and extra time in classes for our older pupils as they prepare to enter university or undertake an apprenticeship. And speaking of apprenticeships, this Budget substantially increases skills spending.

Madam Deputy Speaker, these investments in human capital are exceptionally important, and are something I have long pushed for in my quest to enhance social mobility. If you'll indulge me for a minute, I want to personally thank the Chancellor - and indeed this Government - for their recognition that social mobility can mean more than just going to a top university and moving to the City of London. Social mobility must be accessible throughout our United Kingdom, from Land's End to John o' Groats. And that is where the Rt Hon Prime Minister's commitment to levelling up, which is reflected here today, comes into play.

The creation of a Levelling Up Fund, with £1.7 billion in disbursements made today in this first tranche, is an important commitment that this Government cares about the success and well-being of all communities across Great Britain. I have been a firm supporter of lending tools to local authorities and other local and regional economic development actors to empower them. Whether it is lowering stamp duty in these areas or allowing local control over VAT, whether its reducing red tape and regulatory burdens, or continuing private-public partnerships, these are steps that this Government could choose to take in the future. But for now, this budget makes concerted efforts at investment, and that is laudatory.

These three decisions undertaken by the Rt Hon Chancellor - making work pay, helping students play catch-up, and levelling up communities in need - will all prove to have a high return on investment in the coming years and decades. That is why I am proud to support this budget, even when it spends more than normal times. Because, let's face it, Madam Deputy Speaker, these are no ordinary times.

But this Budget is accompanied by a future plan to restore fiscal accountability to the United Kingdom. I look forward to being able to vote on a Charter for Budget Responsibility, as has been promised here. I hope that this whole House will join me in voting in support of keeping control over the deficit and public debt.

Today, we have a grand opportunity to invest in the future economy, one that is stronger and can support a low-tax, low-inflation, and low-debt society. That is what this Conservative Budget promises to deliver: recovery today and prosperity into the future.

[Steve]

Mr Speaker,

This Budget was an opportunity to reset out economy after the pandemic. To take a look at the gross inequities in our economy - the rising poverty, the millions using foodbanks, the average family just trying to get by and finding it harder year after year - and fix it. History will judge that the Chancellor has sorely failed. They will instead remember his hubris and his arrogance. The hubris in believing that he can sneak record tax rises past the British public. The arrogance in believing that he can do that while handing out tens of billions in dodgy contracts and not adding a penny to the tax bill of the richest while he expects minimum wage earners to cough up more and more.

There is no greater example of this, Mr Speaker, than the Chancellor's bait-and-switch with Universal Credit. Naturally, I welcome the fact that he has cut the taper rate - a tax rate on low income earners that is far higher than any faced by the richest in this country. But his giveaway is dwarfed by the £1,000 a year he just took away from Universal Credit claimants, including those on the lowest incomes or out of work. He has taken away £6 billion from people in desperate need and now wants applause and acclaim for deigning to hand some back. He will get no acclaim from this side of the House or the country, Mr Speaker. We can see through his smoke and his mirrors. Here's the fact - 75% of claimants will still be worse off because of the decisions that he has made.

In many ways, Mr Speaker, this Chancellor seems to be playing the hokey-cokey with the economy.

It's one foot in - cut Universal Credit. One foot out - cut the taper rate.

One foot in - cut foreign aid. One foot out - increase it after immense pressure from this House.

One foot in - raise taxes to their record level. One foot out - claim you're a low tax Chancellor and hint at future tax cuts. 

He's turning all around but we've no idea what it's all about.

This is serious, Mr Speaker, because none of us in this country have any idea what direction this Chancellor is taking the economy. It is undermining anyone interested in investing in our country, causing uncertainty for ordinary families, and giving us all the all too true impression that the Chancellor's decisions are driven by political necessity from No10 rather than what our country needs. 

The Chancellor's hubris disguises how dire the Office for Budget Responsibility judges the outlook for the economy to be. The members opposite - I can hear them jeering already - don't want to know the truth. The probably won't believe me. So I want to quote from the independent Institute of Fiscal Studies. Their assessment is blunt. "A middle earner is likely to be worse off next year than this... This of course comes on top of a decade of historically feeble increases in real incomes. The gap between what we might have expected on the basis of pre financial crisis trends and what is actually happening is staggering. Average gross earnings could have been some 40% higher had pre crisis trends continued."

40% Mr Speaker. That is the price of the austerity of this Government, and the hubris of this Chancellor. £13,000 for every single hosuehold in the country. A decade and more squandered. An economy limping along, and the ordinary and low income families of this country paying the price - because the city investors and wealthy elite surely aren't. While average incomes have stagnated, wealth has grow by a staggering £4.6 trillion. A pale fraction of that wealth could have been a pay rise for every family in Britain. It could have eliminated the need for foodbanks. It is a choice that this Government has made that it has not.

The Government will claim that it's all down to the last Labour Government, or the pandemic. But incomes have not stagnated in Germany. Or in France. Or even in Italy. Britain is once again earning the title of the sick man of Europe. Not because our economy isn't growing, although it is growing much more slowly than it ought to. But all growth seems to be going to the wealthy and not to the working families trying to get by. What possible justification can the Chancellor give for an extra £5 trillion of wealth swimming around the top of our economy while millions are using foodbanks?

The Government's tax rises in the last year are a wonderful insight into this fact. Looking at the economy and where the money and wealth is accumulating, the Chancellor has chosen instead to raise taxes on average and low income earners.

Take the health and social care levy.

A family with two minimum wage earners will pay an extra £250 next year. A family with two average earners over £500 more. A pensioner having to pick up 25 hours a week to supplement his state pension will pay more than £100. 

But what will the investor selling his shares or flipping his properties pay, Mr Speaker?

Nothing.

But what will the landlord with five properties pay, Mr Speaker?

Nothing.

But what will the pensioner who doesn't need to work to supplement his pension pay, Mr Speaker?

Nothing.

What kind of Chancellor would look at this and say it was fair? Only one blinded by the arrogance to believe that this inequity would go unchallenged, unnoticed.

In short, Madam Deputy Speaker, this Budget puts on full display the hubris and arrogance of this Government and this Chancellor. he has cut Universal Credit, he hasn't increased it. He is presiding over a historic stagnation in living standards, not heralding a golden age. He is increasing taxes on ordinary working families, not cutting them. And the worst thing about it, Mr Speaker? He isn't telling the British public the truth. He's hiding the substance behind the spin. I think it is very clear that sooner rather than later, when their pay packets fall and their taxes go up, the public will see through it. 

[James McCluskey]

Madame Deputy Speaker,

As we begin to move away from the pandemic, we face many challenges and opportunities. Challenges, yes, after exiting the worlds largest trade bloc, of our post-pandemic recovery and of the monumental threat of climate change which is not just a threat that we will face in the future, but something we are experiencing right now. But opportunities from the chance to reset after the pandemic and create a new, fairer world, using the lessons we have learnt in recent years to embolden our approach to dealing with the challenges we face.

Instead, what we got, was this budget, papering over the cracks with the lines that we expect from a government with no ambition beyond its own self-preservation. This is not a budget that provides the necessary economic basis for the changes our country needs to see, it is a budget aimed at helping out this government’s polling numbers.

The Chancellor makes references, firstly, to the forecasts of the Office for Budget Responsibility, bragging on how our economy is set to return to pre-pandemic levels in March and how growth is up. But, after the initial recovery bump in growth, the OBR also shows how we will return to the sluggish growth of just over 1% in 2024, something we have become accustomed to during the previous decade of austerity cuts.

As the Chancellor continued, he stated that we will see an increase in real terms spending for every department. Unfortunately, even in 2024, that still leaves many departments worse off than in 2010. As Ben Zoranko of the Institute for Fiscal Studies said, “austerity is over but not undone”. According to the IFS, spending at the Department for Housing & Communities will be over 60% worse off, Transport 25% worse off and Defence 10.4% worse off than in 2010. In education, we will only see a return to 2010 levels by 2024. This is a decade and a half of lost investment in education. That is a disgrace, and it has occurred on the Conservative Party’s watch.

But what is even more infuriating is the gall of the Chancellor to claim his is “the party of public services” after 40 years of advocating for cuts, privatisation and deregulation leaving the British people worse off. 1 year of slight spending increases does not make up for 4 decades of failure.

But, whilst this budget fails to deliver, we see the British public forking out more in taxes. We currently see the highest level of tax as a percentage of GDP since the 1940s and together in the March and October budgets, the Chancellor has raised taxes more this year than in any single year since the two budgets of 1993 in the aftermath of Black Wednesday. The Shadow Chancellor was absolutely right when she said “never has a Chancellor asked the British people to pay so much for so little”.

Not only do we see taxes up and spending on many vital departments still less in real terms than in 2010, but wage growth has also flatlined. The OBR forecast means real wages will be lower in 2026 than they were in 2008. Average wages in 2026 will be around £18. If we instead had continued on the trend of wage growth from 1997 until 2008 then wages would be closer to £30 an hour, a difference of £11.70 an hour. This is not a consequence of the global financial crisis, this is a consequence of the ideological choice to implement austerity after the Conservatives came to power in 2010. It is a consequence of the policies of the party opposite, supported every step of the way by those occupying cabinet jobs now.

The final point I want to address is that of the cut to air passenger duty. In the year which we host the climate summit, COP26, in Glasgow, the Chancellor is, instead of being serious about tackling the issue, cutting tax on internal flights. It is a kick in the teeth to people up and down the country who want to see action to tackle the existential threat of climate change, and this shows how little the government actually cares. We are in the last decade we have for the government to take the necessary radical action to evade the worst excesses of climate breakdown. At this point in time, the government should not feel able to do something like this, regardless of the pressure from the aviation lobby. Urgent action is required right now, and the government are not taking that action.

Many aviation workers will be understandably worried about their career prospects in a post-carbon, post-fossil fuel economy, but the way to put their concerns at ease is not to bring them closer to climate breakdown. Instead, the government should aiding those workers to retrain and redeploy in alternative sectors of our economy. Instead of internal flights, we should be looking towards train travel as the more sustainable alternative. However, it instead continues to be of poor quality and high prices. This is the great Tory rail rip-off whilst bending to the will of the aviation lobby. Bringing transport into public ownership would allow the government to make public transport cheaper for working people whilst also allowing it to be planned and delivered for public good not private profit. If the Chancellor really wants an “infrastructure revolution” as more than just a soundbite, then he should actually take the necessary action to bring about a green infrastructural and industrial revolution. Instead, the Chancellor panders to the climate-sceptics and small-state Thatcherites in his party as he prepares for a leadership run.

To close, Madame Deputy Speaker, this budget is not only a missed opportunity to bring our economy and our country forward, it actively hurts our efforts to combat the climate crisis whilst not even reversing the worst cuts of austerity that we saw in the decade of Conservative government before the pandemic. This is not even “too little too late”, it is an act of sabotage against our country and future generations.

[Redgrave]

Madam Deputy Speaker,

I rise today in order to commend my Right Honourable Friend, the Chancellor of the Exchequer, for his delivery of a budget that will steward this nation into the post-COVID era. Indeed, this is true to form for the Chancellor, as it follows on from his leadership of our economy during the pandemic that helped safeguard businesses and jobs, as well as supporting the scientific innovations that led to the successful development of vaccinations for COVID-19.

So, as we look towards this post-COVID reality, I’m proud that the Chancellor has once again shown his economic credibility and that this Government, led by the Prime Minister and Cabinet, are boldly planning for the future.

When it comes to planning for such a future, this Budget quite rightly places an emphasis on investing into innovation and development first and foremost. In the area of R&D, It is of vital importance that we build upon our success with the vaccination program by tackling other pressing issues that have long plagued our society, whether they are chronic health problems or longstanding issues with manufacturing and production. The power of British universities and our world leading companies has been well supported by this government to date, but the cash increase of 50% for R&D investment, the fastest ever such increase, is an even greater step and I commend the Chancellor for this.

Development has also further been supported by the creation of the Levelling Up Fund, and I’m glad to see that a strong, positive statement has been made through the £1.7 billion in disbursements made today. It’s not just a positive statement however, it’s also meaningful, genuine investment across our entire United Kingdom. With totals exceeding Barnett shares across Scotland, Wales and Northern Ireland, alongside comparatively meaningful investment in England, we’re seeing much welcome steps in the bold agenda laid out by the Prime Minister when he came to Downing Street over two years ago. Now that we are beyond COVID, we’re rightfully seeing unfortunately delayed work now take place and I commend the Government for their swift action here.

Naturally, it would be remiss of me, Madam Deputy Speaker, to stand here and not mention healthcare, given my former profession as a GP. Having been on the frontlines part-time during the pandemic, I saw first hand the sheer, tireless dedication from each and every worker in NHS and social care. They kept the NHS running at a time when it was under its greatest ever pressure and so I am proud to see that the Government are acting boldly to support and boost the NHS and social care now that we are moving into the post-COVID era. With the health capital budget being the largest since 2010 and resource spending being over £177 billion by the end of this Parliament, I’m confident that health and social care will be in a strong position over the coming years. In particular, the commitments to ensure 50 million more primary care appointments and 100 community diagnostic centres are particularly close to my heart and I look forward to working with ministers over the coming months in developing this pledge into reality.

From tax relief for R&D and investment in schools through to business rate reforms and support for working families, there is so much more in this Budget to support and praise. Of course, I sadly do not have time to wax lyrical about all of these but in brief conclusion, I’m proud to be supporting a budget that robustly addresses the challenges of our post-COVID reality and which lays groundwork for success not just in this generation, but for many generations to come.