Rachel Reeves (Leeds West) (Lab) (Urgent Question): To ask the
Chancellor of the Exchequer if he will make a statement on the UK
economy entering recession. The Economic Secretary to the Treasury
(Bim Afolami) High inflation remains the biggest barrier to growth,
which is why halving it is still our top priority. Thanks to
decisive action supported by the Government, inflation has fallen
from over 11% to 4%. The Bank of England is forecasting that it
will fall to...Request free trial
(Leeds West) (Lab)
(Urgent Question): To ask the Chancellor of the Exchequer if he
will make a statement on the UK economy entering recession.
The Economic Secretary to the Treasury ()
High inflation remains the biggest barrier to growth, which is
why halving it is still our top priority. Thanks to decisive
action supported by the Government, inflation has fallen from
over 11% to 4%. The Bank of England is forecasting that it will
fall to around 2% by early summer, in only a matter of months,
which is much faster than previously thought.
It is important to put all this in context. Just over a year ago,
the Bank of England was forecasting the longest recession in 100
years. That has not happened, and the British economy has proved
resilient in the face of unprecedented shocks. Forecasters,
including the Bank of England and the International Monetary
Fund, agree that growth will strengthen over the next few years,
with the IMF forecasting that we will grow faster than Japan,
Germany, France, Italy and many others, on average, over the next
five years. Wages have been higher than inflation for six months
in a row, unemployment remains very low, and we are backing
British business by delivering the biggest business tax cut in
modern British history and rewarding work by cutting taxes for
working people.
These are all reasons to be positive about the economy turning a
corner. If we stick to our plan, we can be confident of seeing
pressures reduce for families and of achieving healthy economic
growth. At the autumn statement, we unveiled 110 growth measures,
including unlocking £20 billion of business investment. This
includes a substantial labour market package, delivering a tax
cut to national insurance for 27 million people, as well as
reforming pensions and extending investment zones. The real risk
to economic growth and prosperity in this country is the fact
that the Labour party has no plan for growth—no plan at all.
While they may pretend that they have abandoned their £28 billion
pledge, they are still committed to their damaging 2030 energy
policy, which, as the Leader of the Opposition has said, costs
£28 billion. All of us across this House know what that means:
higher taxes and lower growth with Labour.
The Chancellor should be here explaining why Britain has fallen
into recession. Will the Minister explain why he has been left to
answer these questions, and where exactly the Chancellor is? The
Chancellor should be accountable to MPs and to our constituents,
and answer for his failure in the House. What an insult to all
those people who go to work every day and experience the reality
of 14 years of Conservative economic failure that he has simply
failed to turn up.
Does the Minister accept that the Prime Minister’s promise to
grow the economy is now in tatters? Will the Minister explain why
the economy is now smaller than when the current Prime Minister
entered 10 Downing Street? Does the Minister accept the misery
that this Government have caused homeowners with their kamikaze
Budget, leaving a typical family renewing their mortgage paying
an additional £240 every single month?
The Chief Secretary is also notable for her absence today, and
was last seen refusing or simply failing to recognise that their
target measure of debt as a share of GDP is rising, not falling.
Following her rebuke this morning from the chair of the UK
Statistics Authority about misleading the public, can the
Minister inform the House whether the Chief Secretary will again
be relying on incompetence as her best defence?
It is not good enough. The whole country knows that the economy
is not working for working people under the Conservatives. It is
time for change. If the Government seriously think everything is
fine, why do they not take their record of failure and let the
British people decide?
I thank the shadow Chancellor for her questions.
Answer them.
I am coming to that.
The right hon. Lady started by talking about the Chancellor; as
Economic Secretary, I am perfectly entitled to answer on behalf
of the Department and I will do so today. The main thrust of her
remarks was on growth; let me deal with that in detail.
The first point to recognise is the international context that we
all find ourselves in. [Interruption.] It happens to be true. For
example—to describe that international context—10 EU countries
were in recession in 2023. In relation to forecasts, the Office
for Budget Responsibility’s original forecast was that there
would be a contraction of 1.5% in the economy; we have
significantly outperformed that. As I have said, the Bank of
England forecast the longest recession in 100 years; we have
significantly outperformed that. On wages, I think this is the
sixth month in a row when wages have been higher than inflation,
which, as I have said, we have more than halved.
On the Chief Secretary, what she was explaining is that we were
and are meeting our fiscal rule, which is that debt will be
falling in the fifth year of the forecast excluding the Bank of
England. That is what she explained, and that is what I am
reiterating for the House. [Interruption.]
Labour Members do not like hearing this, but they have absolutely
no plan on the economy. We have been clear about our plan, and it
is starting to bear fruit with wages, with cutting taxes for
working people starting in January, with higher business
investment as a result of our full expensing in the autumn
statement. The shadow Chancellor does not have to take it from
me; the Office for Budget Responsibility said that the two fiscal
events in 2023—the Budget and the autumn statement—would
represent the largest increase to GDP that it has ever scored.
What I say to her and the House is this: our plan is working;
stick with the plan and do not throw it away with the
Opposition.
(Wokingham) (Con)
It is good news that unemployment has stayed low by European
standards, and the economy is still generating plenty of job
vacancies. Will the Government take more steps to help more
people into those jobs, so that we can get faster growth, bring
down the benefit bill and boost their incomes?
The whole House knows that my right hon. Friend is somewhat of an
expert on matters relating to the economy. To answer his point
specifically, the national insurance tax cut was scored at the
last fiscal event—the autumn statement—as significantly
increasing the number of people in work. Although I will not
speculate on fiscal events, that point has been very much noted
by me and the whole Treasury.
Mr Speaker
I call the Scottish National party spokesperson.
(Dundee East) (SNP)
The Minister spoke about resilience, but the fourth quarter
contraction in the economy was the biggest quarterly fall since
early 2021 at the height of the covid pandemic, so I am not sure
he is quite right about resilience. He also spoke about growth,
but the Government told us in November that growth is not
forecast to exceed 2% in any year in the forecast period. How
modest the Minister’s ambitions are.
National debt is still approaching 100% of GDP—£3 trillion. The
consequences of Brexit are suppressing growth, and that poses a
challenge to the UK Government’s fiscal targets. Although it is
welcome that inflation has fallen, prices remain high. Prices are
not falling; they are simply going up slightly less steeply than
they were a month or two ago. It is obvious that what the economy
needs is growth, and the investment to generate that growth, but
given that business investment, according to the Government, is
forecast down this year by 5.6%, private dwelling investment is
forecast down this year by 6%, and flat at 0% next year, and
general Government investment is forecast down in ’25, ’26, ’27
and ’28, where will the investment for growth come from?
I deeply respect the right hon. Gentleman, and I will take his
points one by one. On resilience, the way we get resilience for
ordinary people and for households is to ensure that real
household incomes increase. Since 2010, they are up 12%. We are
trying to increase business resilience with our full expensing
regime, which is revolutionary in the advanced world. Full
expensing will enable more businesses to invest and will deal
with the chronic weakness of the British economy, which is weak
investment. That is why we are doing that.
The right hon. Gentleman mentioned growth. Growth is not as high
as we would like, and that is the case across the whole of Europe
and the whole of the industrialised world. That is why the
Chancellor in the last fiscal event put in place 110 growth
measures. We have a plan for growth over the long term, and we
will deliver it. The right hon. Gentleman mentioned debt. To
repeat the point I made to the shadow Chancellor, debt is falling
in the fifth year of the forecast according to our fiscal rule,
which excludes the Bank of England. That is not just the fiscal
rule now; it has always been the fiscal rule.
The right hon. Gentleman makes the fair point that lower
inflation does not mean that prices are falling. Indeed, lower
inflation is a lower rate of increase. We all know that in this
House. That is why bringing down inflation is so important, and
the Opposition, with their plan to recklessly jack up borrowing
and taxes to the extent of £28 billion, will increase
inflation.
I repeat that investment has been a long-term weakness of the
British economy. We are taking long-term measures to deal with
it, and I hope that in the next fiscal event—the Budget—we will
continue in that vein.
Sir (North East Somerset)
(Con)
May I thank my hon. Friend for his distinguished service as a
voice of His Majesty’s Government? I refer him to what the former
chief economist of the Bank of England, Andrew Haldane, said
today, referring to a “double blow” to the credibility of the
Bank of England, which was late to put interest rates up and
missed inflation, and has been slow to reduce them, hammering the
economy. Does my hon. Friend agree that the Bank of England is no
longer showing itself to be competent and that its independence
must be questioned?
I do not think that I will quite agree with my right hon. Friend.
It is very important that we leave the Bank of England to do its
work and respect its independent mandate, but that, from the
Treasury, we do what we can to bring inflation down and support
it in that mandate. As I said, the Labour party’s plans—whether
it claims to have dropped them or not—will lead to an increase in
borrowing or an increase in taxes, which will significantly
damage that aim.
Dame (Wallasey) (Lab)
I think the Minister is failing the audition. Labour will not
take lectures from him about borrowing, which was at 67% of GDP
when we left office and is now nearly 100%. He is claiming that
somehow growth is happening, but we are actually in a recession,
which means that there is no growth; in fact, there is negative
growth. GDP per capita fell in every quarter of last year,
meaning that everybody is getting worse off under his appalling
stewardship of the economy. Is it not time that the junior
Minister went back to his boss and told him, “It’s all over.
Time’s up. Call the general election.”?
It is definitely above my pay grade to call elections. In
relation to GDP per capita statistics, which are important—the
point of them is to try to get a sense of what is happening to
individuals or to individual households and families—I would
say—[Interruption.]Let me—[Interruption.] I wish the shadow
Chancellor would allow me to respond. Real household incomes,
which are as good a measure as any to see what is happening to
individuals and families in our economy, are up 12% since 2010.
If we are looking at people at the bottom of the income scale,
the rise in the national living wage that comes in in April will
mean a rise since 2010 of about 30% in real terms for people on
full-time minimum wages. Those two statistics are examples of
what has happened to real people on the ground.
(Redditch) (Con)
I thank the Minister for updating the House. Does he agree that
people in Redditch and elsewhere are concerned about negative
economic news—although it almost always turns out to be wrong?
Most of all, does he agree that the greatest risk to my
constituents in Redditch and those across the country is a Labour
Government? Labour has said it can somehow magically get £28
billion of green growth benefits without paying for them. We all
know that my constituents will be paying for that through extra
borrowing and higher taxes.
Mr Speaker
Order. The Minister has no responsibility for the Labour party.
Let us move on.
(Walthamstow) (Lab/Co-op)
The Minister says the Government’s priority is backing British
business, cutting inflation and reducing the pressure on British
families. When the Government admit this measure will increase
inflation, when British business is tearing its hair out at the
chaos caused by not knowing what the charge will be and who will
pay it—with less than 10 weeks to go—and when British consumers
will find that it causes food shortages and an increase in food
prices, why on earth are the Government going ahead with the
Brexit border tax? Will the Minister commit here and now to
cancelling it, so that we can stop this inflationary measure—yes
or no?
I thank the hon. Lady for focusing on inflation. She is right
that it is critical, and bringing it down is a focus for the
Government. The House has heard her point about the European
Union, but I would add that we have a clear plan for bringing
down inflation, which we will continue to carry out. She has to
ask those on her Front Bench why they do not have one.
(Gainsborough) (Con)
For too long, too many people in the Treasury—not my hon. Friend,
who is an excellent Minister—have thought that the best way to
grow the economy is to fill the country with more and more
people. Will the Government recommit to insisting that anyone who
comes here to work should earn the average UK earnings of around
£33,000 a year? That means no shortage schemes and no exemption
for care workers or the NHS, but that in those sectors we pay
proper wages, we get people off benefits—too many people are on
them, dragging down our economy—and we seriously cut mass legal
migration; and, by the way, if there is a general election, let
us give our people something to vote for.
My right hon. Friend makes an important point about migration. I
completely agree that we need higher earnings for British people,
not an economy where we import too many people and keep earnings
down. That is why we have been focusing on raising the national
living wage and ensuring that ordinary household incomes will go
up as a result of this Government’s policies, as I have
explained. It is worth pointing out that certain things happened
last year, such as people fleeing Ukraine and Hong Kong, which
meant that the immigration numbers were particularly high. The
broad thrust of what my right hon. Friend said is correct: we
want a high-skill, high-wage economy.
(Kingston upon Hull West and
Hessle) (Lab)
I do not know whether the Minister realises quite how infuriating
people find watching his Government tell them, “Everything is
fine”, “It is all going really well” and “There’s nothing to see
here”, when every day they feel poorer and small businesses are
closing. If the Prime Minister and the Chancellor cannot face
reality, how on earth can anyone trust them to solve the economic
crisis that their Government created?
Let me be clear with the hon. Lady, whom I have a huge amount of
time for as a very good Member of Parliament: it is not our
position that everything is okay. There has been a challenging
international context: a once-in-100-years pandemic, and an
energy crisis caused by Putin’s war in Ukraine. This Government
have done everything we possibly can to build an economy for
growth, and I hope we have her support.
(New Forest West) (Con)
What distinguishes this recession is the 800 jobs that have been
created every day since this Government came to power in 2010—the
very antithesis of anything ever achieved by a Labour Government,
who have always left unemployment higher than they found it—is it
not?
It is—and I would add something else: the figures for home
repossession were much higher when there was a recession under
the Labour Government in 2008-09, in comparison with our record
now, and unemployment now is much lower than it was then. Though
we are in challenging times, the economy is turning a corner. Our
record compares very favourably Labour’s.
(Selby and Ainsty) (Lab)
The Chancellor said last May that he was comfortable with the
prospect of a recession. Now that my constituents in Selby and
Ainsty are suffering under that recession’s effects, would the
Minister chalk it up as a job well done?
The hon. Gentleman will do well. There is nobody on the
Government Benches who welcomes adverse economic situations for
anybody. That is why we are doing everything we can—straining
every sinew—to grow the economy. All the measures I have laid out
will continue, but they would be put at risk by those on his
Front Bench being in office.
(North Norfolk) (Con)
Before I came to this House, I was a director of quite a large
retail group in North Norfolk. No one has made the point that in
the last quarter of the year the country saw Babet, Ciaran, Debi,
Elin, Fergus and Gerrit—six major storms and floods. How many
were there in the previous year? Absolutely none at all. Will the
Economic Secretary tell everybody that of course the economy will
not function properly in the grip of storms and floods every
fortnight? We are not in recession, but the more we talk it up,
the more we will be.
I thank my hon. Friend for that question—I would say that the
loss of large retail groups in Norfolk is the House’s gain. His
point about the international context is serious and important.
Although Labour Members do not like to hear it, facing a
once-in-100-years pandemic and Putin’s illegal war in Ukraine,
which caused energy prices to skyrocket, will have adverse
impacts on the economy. The country understands that and the
House understands that; the Labour Front Bench should also
understand it.
(Bath) (LD)
This recession is a direct result of the choices that this
Government have made. Years of potential growth have been missed,
and the Government have failed particularly to capitalise on the
green transition. Green investment will be worth £1 trillion
globally by 2030, including half a million jobs in this country.
When will the Government bring forward a green investment
programme to match the ones in the US or in Europe?
First, our record on decarbonisation beats anywhere else in the
G7, so we do not take lessons from the United States or any other
country in that regard. In relation to the green investment plan
by 2030, the hon. Lady should direct her ire at those on the
Labour Front Bench for not being clear as to what their plan is.
The Leader of the Opposition says—[Interruption.] Well, it is
important because politics is a contest of ideas, as indeed it is
a contest between two parties. If Labour Members believe they can
spend an extra £28 billion without that having an impact on taxes
and borrowing, they are trying to pull the wool over the eyes of
the British people.
(Chelmsford) (Con)
The past couple of years have been very difficult economically,
and I certainly do not treat the state of our economy as the
giggle-fest that Labour Members seem to be having today. Over the
past few weeks, I have met many businesses in my
constituency—large and small—and a number have told me that they
feel conditions are getting better, demand is growing and orders
are coming back. Constituents have also told me that they have
noticed food prices dropping in our supermarkets. Does the
Minister agree that the most damaging thing that could happen to
our economy now would be for those on the Labour Benches to
continue to talk our economy down?
My right hon. Friend is correct that things are starting to get
better for many people across the country, including small
businesses. We have more than halved inflation, which is now down
below 4%; we think that in the coming months it will go to 2%,
which is the target. Of course, once it hits that target, we hope
that interest rates will also start coming down, which will make
a big difference to ordinary people up and down the country.
Sir (East Ham) (Lab)
I applaud the Minister’s willingness to take on this unenviable
assignment, unlike his right hon. Friends. The international
context that he refers to is that Japan and the UK are the only
G7 countries in recession. Inflation in the UK, which he has
referred to, is the highest in the whole G7. Why is the UK
economy doing so much worse than comparable economies
elsewhere?
The right hon. Gentleman makes an interesting point, but I would
say that our economy entered difficult times at a different point
in the cycle from certain other economies. To fully assess the
performance of all economies, we have to wait for the end of this
whole period, so I would not prejudge exactly at this stage. I
simply say that the difficulties we are facing have affected
every single economy, although the nature of different economies
means that they are affected at different times. We are putting
in place comprehensive growth measures and comprehensive measures
to bring inflation down. I also note that UK interest rates are
roughly middle-of-the-pack compared with other countries of
comparable size. We will keep all this under review and, at the
next fiscal event, will take further measures to increase our
potential growth rate over the long term.
(Rother Valley)
(Con)
Does the Minister welcome the news that the South Yorkshire Mayor
has finally recognised the economic importance of
Doncaster-Sheffield Airport and is at last starting to use the
powers given to him to begin the process of getting it up and
running again? Does he agree that that has taken far too long—it
is years since the airport closed —and that the South Yorkshire
Mayor should have used his powers years ago, rather than waiting
until nine weeks before he is re-elected?
I thank my hon. Friend for pointing out once again what a
brilliant champion he is for his constituency. I am sure his
constituents have heard that comment, and that he will continue
to make that point.
Sir (Rhondda) (Lab)
Lordy, lordy! It is like listening to the Red Queen in “Alice
Through the Looking Glass”, who invented six impossible things
before breakfast! How on earth can we have confidence in what the
Minister says when the UK Statistics Authority had to tell off
the Chief Secretary to the Treasury, the right hon. Member for
Sevenoaks (), for making false claims about
tax cuts; when Evan Davis had to school her at length and she
refused even to understand how wrong she was about debt falling
as a percentage of GDP, when it is going up; and when the
Minister himself actually said that the NHS accounts for 42% to
43% of everything the Government spend, when it is only 15%? Can
he confirm one fact: these two years will see the biggest fall in
living standards since records began? That is why people are
going to vote the Government out, isn’t it?
I have already explained the Chief Secretary’s comments. In
relation to my own, I was referring to current spending and not
overall spending. I clarified that as well. Look, there have been
difficulties for so many millions of people across the country
and, as the hon. Gentleman knows, I have never sought to minimise
that from this position or from any other position in the House.
We have faced once-in-a-hundred-years challenges. The Government
have faced them and taken the right action to deal with them. The
cost of living support package is worth over £100 billion, to the
tune of more than £3,700 per person. We have dealt with those
challenges and we have a plan now to grow the economy to grow our
way out of them. I am afraid that Labour Members and the Labour
Front Bench do not have that sort of plan, which is why I would
not make the assumption that he makes about the election.
(Blackpool South) (Ind)
The number of those who are on long-term sickness benefits in
Blackpool has increased fourfold over the last few decades. That
represents an enormous loss of potential, and it is also hurting
economic growth and productivity. The Government’s proposed
reforms in this area are to be welcomed, but rather than delaying
them until next year, what is preventing the Government from
bringing them in this year?
I will take that point away. I think the hon. Gentleman is
referring to the next financial year. At the next fiscal event,
the Budget, the Chancellor will bear what he has said in
mind.
(Worsley and Eccles South)
(Lab)
Fourteen years of Conservative mismanagement of the economy are
having disastrous impacts on working people. For
example, musicians are waiting
months to be paid because HMRC is failing to process A1 forms on
time for musicians touring in
Europe. The trade body LIVE—Live music, Industry Venues and
Entertainment—told me that in one case 26 musicians performers
and sound engineers were not paid for more than three months
after their tour to Spain, due to delays in processing A1 forms.
Even worse, in response to written questions, I have been told
that service standards for those forms will not be met by HMRC
until at least April 2024. Does the Minister agree that those
delays are totally unacceptable, particularly when
our musicians are already
having to cope with a challenging financial landscape, made worse
now by the news of a recession?
I agree that we need to speed up the processing of A1 forms, as
the hon. Lady describes. I am sure the Treasury heard that point
and I will ensure my ministerial colleagues take what she says
very seriously indeed.
(Dwyfor Meirionnydd)
(PC)
Whatever spin the Government may put on it, forecasts show that
the economy has officially entered a recession. However, people
out there have been suffering grinding economic pressure for
years. Average energy bills are 59% higher than they were in
2022, and more than 600,000 Welsh households are in fuel poverty.
Meanwhile, the profits of energy companies such as British Gas
have increased tenfold to £750 million. This is the Minister’s
chance to make a difference to every household. He has referred
to the next fiscal event. Will he act to extend and backdate the
windfall tax on energy companies that are currently profiteering
from households everywhere?
The right hon. Lady is right that many people have had very
challenging times over the last couple of years. Let me correct
something that I previously said to the House: the increase in
real household incomes since 2010 is actually 8%, while the
increase in GDP per capita is 12%. I wanted to put that on the
record. As for taxes, I cannot speculate about what will happen
at the next fiscal event.
(Eltham) (Lab)
According to the forecast, in five years’ time debt will be
higher than it is now. Is this a reasonable time to be talking
about tax cuts, and does their doing so not suggest that the
Government have learnt nothing from the Budget of September
2022?
I assure the hon. Gentleman that this Chancellor and this
Government are very different from those in September 2022 to
which he refers. As for debt, I repeat that we are keeping to our
fiscal rule, which is and has always been that debt will be
falling in the fifth year of the forecast—falling, once we
exclude the Bank of England. That has always been our position,
and it will continue to be the case.
(East Lothian) (Alba)
The Minister has made no mention of the importance to the UK
Treasury of North sea oil, and indeed the danger to the Scottish
economy of the closure of Grangemouth Refinery. Given that the UK
Treasury received £8 billion in revenues from the North sea last
year and is expected to receive £6.1 billion this year, can it
not find the tens of millions—not the tens of billions that it
will receive in revenue—to ensure that the HydroCracker can be
restarted and the profitability of the refinery increased
threefold?
I will take away the hon. Gentleman’s specific point and ensure
that the Treasury gets back to him, but his broader point about
offshore oil and gas in the North sea is very important. It is
critical that we support the oil and gas sector, not just for the
tax revenues but for the livelihoods and prosperity of the United
Kingdom, and this Government stand four-square behind it.
(Oldham East and
Saddleworth) (Lab)
There is overwhelming evidence that the lower the economic
inequalities, the higher economic growth will be. We know from
the Office for National Statistics that between 2021 and 2022 the
disposable incomes of the poorest fifth of households shrank by
3.4% while those of the richest fifth increased by 3.3%, and that
reflected the position in the preceding 10 years. What assessment
has the Minister, or the Chancellor, undertaken to estimate the
impacts of these increasing inequalities on our shrinking
growth?
When we are talking about people at the bottom end of the income
scale, it is important to note that those on the full-time
national living wage—which we will be increasing by the largest
ever amount in April this year—will be 30% better off than they
were in 2010.
(Warrington North)
(Lab)
News that the UK is officially in recession comes as no surprise
to my constituents, who have been battered by this Tory cost of
living crisis. Food inflation is still double the headline rate
of inflation, and that is not only affecting the price of the
weekly shop but having a hugely negative effect on my local pub
and hospitality sector, with many businesses on the brink.
Instead of their fantasyland spinning that everything is going
fine, what measures will the Government introduce to bring food
inflation down?
As I have said many times this afternoon, inflation is a target
for this Government: we aim to ensure that we continue to bring
it down, and indeed we expect it to get to 2% in the coming
months. In relation to food inflation specifically, at the last
fiscal event we introduced full expensing, which will enable food
manufacturers, supermarkets and others to increase their
investment hugely, because it completely nets off against their
tax—100% of the cost of their investment is netted off. The
impact will be increased investment that will reduce their costs
and reduce the cost of food in our shops. That is one of many
measures that we are introducing to reduce food inflation.
(Reading East) (Lab)
The Prime Minister said he was going to grow the economy and he
has obviously failed: we are now in recession. In my
constituency, families and small businesses are under severe
pressure. Can the Minister possibly explain how he is going to
address these very serious problems?
All I would say to the hon. Gentleman is that we are in a very
challenging international context and we have performed better
than the international forecasts. We had high inflation, which
really bedevilled this economy a couple of years ago, but we have
more than halved it. We have a plan to grow our way out of this,
as was shown by the last fiscal event, where we unveiled, I
think, 110 growth measures. That is our plan. The Labour
Opposition do not have a plan. If this country sticks with our
plan, we will grow our economy significantly over the coming
months and years.
(Glasgow North) (SNP)
The Minister keeps trying to hide behind the war in Ukraine and
the impact of the pandemic, but the reality is that those are
affecting every country in the world. Would he not admit that the
exacerbating factor—the thing that has led most to economic
decline, to massive labour shortages and to rampant inflation
here in the UK—is Brexit?
No, I would not.
(Kingston upon Hull North)
(Lab)
The economy is in recession and the consequences for the public
finances are not the fault of those people infected and affected
through the contaminated blood scandal, the largest treatment
disaster in the NHS. I was hoping to ask the Chancellor this
question, but can the Minister confirm whether money has already
been ringfenced to pay compensation to those people, as set out
in the final recommendations on compensation by Sir Brian
Langstaff in April 2023?
I believe that the right hon. Lady asked a similar question of
the Chancellor at the last Treasury questions, and the Chancellor
responded by saying that he was absolutely clear about the need
to compensate people in the way that she has described. He will
update the House in due course and indeed update her with further
details in response to her question.
Dame (Llanelli) (Lab)
The Prime Minister has failed to get growth and industry has
completely lost confidence in this Government. With projects
cancelled, HS2 cancelled, Building Schools for the Future
cancelled, hospitals never built and an absolute failure to bring
down high energy prices, it is no wonder that business investment
forecasts are down. With the US and the EU incentivising
investment, what is the Minister now going to do to get the
investment we need in the green manufacturing industries of the
future?
To increase investment we brought in full expensing at the last
fiscal event, which should represent an increase over the
forecast period of £14 billion of investment and deal with the
chronic weakness of our economy over generations. That is what we
are doing to increase investment. In relation to green investment
in particular, what we are not doing is having a huge unfunded
£28 billion plan—or maybe now it is not Labour’s plan; maybe it
is a secret plan or maybe the Labour Front Benchers have stopped
their plan. We have a responsible costed plan to increase
investment; the Opposition do not have one.
(Bury South) (Lab)
Let’s try this again. Public sector net debt is set to rise from
89% of GDP this year to 92.8% of GDP in 2028-29, according to the
most recent Office for Budget Responsibility forecast. In case
the Minister does not understand, that number is higher than
today’s. The Prime Minister promised to reduce debt, but it is
increasing. The plan isn’t working, is it?
The Prime Minister and the whole Government are committed to
reducing debt as we get to the end of this economic forecast
period, which is what we are doing.
(Ellesmere Port and Neston)
(Lab)
The Minister’s rosy picture of the economy shows a complete lack
of awareness of what is actually going on in this country. He
claims that the Labour party is somehow a risk to growth, but it
is his party that has taken the country into recession. That
shows a complete lack of self-awareness, too. That is the nub of
the matter.
We are in a recession, yet the Chancellor is nowhere to be seen.
I would have thought this was important enough for him to be here
to answer questions. Given that growing the economy is yet
another of the Prime Minister’s pledges that has not been met,
who does the Minister think should carry the can for this
failure: the Prime Minister or the Chancellor?
I will have to take the hon. Gentleman’s criticism of my
self-awareness on the chin, but his broader point is serious. He
is asking whether the Government and I are light-hearted or think
that everything in the economy is absolutely fantastic, but it is
not. That is why we have taken the measures that we have. It is
why we cut tax for working people, beginning in January. It is
why we are increasing business investment. It is why we had a
more than £100-billion package of cost of living support, because
we know how much many ordinary people in this country are
suffering. And it is why we are trying to grow our economy
overall, because that will result in greater prosperity for the
country and more money for our public services. The Labour party
puts all that at risk.
(Lewisham East) (Lab)
The Government are failing. An 81-year-old constituent told me
that he cannot remember the economy and living standards ever
being this bad. Can the Minister not see that, under his
Government, Britain is worse off?
I do not agree with the hon. Lady. I will not repeat everything I
just said to the hon. Member for Ellesmere Port and Neston
(), but this Government and
this Treasury are sticking to our plan for growth. That is all
put at risk by the Labour party.
(Tiverton and Honiton)
(LD)
The Office for Budget Responsibility assessed Boris Johnson’s
trade and co-operation agreement, which sets out the trading
relationship between the UK and the EU, at the beginning of last
year, and it said that the TCA has reduced long-run productivity
by 4%. Why does the Minister think that is?
We built on the trade and co-operation agreement through the
Windsor framework, and the Opposition do not propose to change
it. Indeed, the TCA is fundamental to the stability of our
relationship with the European Union, and I do not think the
country would benefit from unpicking it once again.
(Strangford) (DUP)
I thank the Minister for all his answers. The questions have not
been easy. The Office for National Statistics has revealed that
there was a 0.3% decline in GDP between October and December
2023. Given that the strength of the economy was, and still is,
the subject of one of the Prime Minister’s pledges, what steps is
the Minister taking to reverse this decline, and to re-instil
confidence in the Government’s economic plans?
I have already laid out the steps that we are taking, and there
is a critical need to make sure that all the regions of our
country benefit from those steps. That is one of the reasons why
we put so much effort and focus into investment zones over the
last couple of years. We hope that these investment zones will
continue to increase growth in the economy, not only at a macro
level, but for people in every region of this
country—particularly in Northern Ireland and the other regions
that perhaps did not benefit from this country’s previous growth.
We are committed to strengthening that regionally.
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