Before I call the Chancellor of the Exchequer, I remind hon. Members that copies of the Budget resolutions will be available to them from the Vote Office in Members’ Lobby and online at the end of the Chancellor’s statement. I also remind hon. Members that interventions are not taken during the Chancellor’s statement, or during the replies of the Leader of the Opposition and the spokesman for the Scottish National party. I hope that the hubbub on my right will die down, and some politeness will prevail before I call the Chancellor of the Exchequer.

As we mourn the tragic loss of life in Israel and Gaza, the Prime Minister reminded us last week of the need to fight extremism and heal divisions, so I start today by remembering the Muslims who died in two world wars in the service of freedom and democracy. We need a memorial to honour them, so following representations from my right hon. Friend the Member for Bromsgrove (Sir Sajid Javid) and others, I have decided to allocate £1 million towards the cost of building one. Whatever your faith, colour or class, this country will never forget the sacrifices made for our future.

In recent times, the UK—and the UK economy—has dealt with a financial crisis, a pandemic and an energy shock caused by war in Europe, yet despite the most challenging economic headwinds in modern history, under Conservative Governments since 2010 growth has been higher than in every large European economy, unemployment has halved, absolute poverty has gone down, and there are 800 more people in jobs for every single day that we have been in office. [Interruption.] Of course, interest rates remain high as we bring down inflation, but because of the progress we have made, because we are delivering the Prime Minister’s economic priorities, we can now help families not just with temporary cost of living support, but with permanent cuts in taxation. We do that to give much needed help in challenging times, and because Conservatives know that lower tax means higher growth, and higher growth means more opportunity, more prosperity and more funding for our precious public services. [Interruption.]

Order. The Chancellor has hardly said anything—[Interruption.] Order. You cannot get excited yet. Other people want to hear what the Chancellor has to say. It matters, so we will have a bit of good behaviour, please.

Thank you, Madam Deputy Speaker.

If we want that growth to lead to higher wages and higher living standards for every family in every corner of the country, it cannot come from unlimited migration; it can only come by building a high-wage, high-skill economy—not just higher GDP, but higher GDP per head.

That is the difference. The Labour party’s plans would destroy jobs, reduce opportunities and risk family finances with spending that pushes up taxes. Instead of going back to square one, the policies I announce today mean more investment, more jobs, better public services and lower taxes in a Budget for long-term growth.

I start with the updated forecasts from the Office for Budget Responsibility, for which I thank Richard Hughes and his team. First, inflation. When the Prime Minister and I came into office, it was 11%. The latest figures show—[Interruption.]

Order. This is not amusing any more. We need to hear what the Chancellor has to say. I can tell who is making the noise, and you simply will not get a chance to speak later. That is the end of it.

When the Prime Minister and I came into office, inflation was 11%, but the latest figures show it is now 4%—more than meeting our pledge last year to halve it. Today’s forecasts from the OBR show it falling below the 2% target in just a few months’ time, nearly a whole year earlier than forecast in the autumn statement.

That did not happen by accident. Whatever the pressures, and whatever the politics, a Conservative Government, working with the Bank of England, will always put sound money first. We also understand that tackling inflation, while necessary, is painful. It means higher interest rates and a period of lower growth, so we have given the average household £3,400 in cost of living support over the past two years. Doing so makes economic as well as moral sense. The OBR predicted real household disposable income per person would fall by 2% in the past year; instead, after that support, it is on track to rise by 0.8%.

Today, I take further steps to help families with cost of living pressures, starting with measures to help the poorest families. We have already abolished higher charges for electricity paid by those on prepayment meters, increased the local housing allowance and raised benefits by double the expected inflation. Today, I focus on those falling into debt. Nearly 1 million households on universal credit take out budgeting advance loans to pay for more expensive emergencies such as boiler repairs or help getting a job. To help make such loans more affordable, I have decided to increase the repayment period for new loans from 12 months to 24 months.

For some people—[Interruption.] I thought Labour Members cared about people on the lowest incomes, but trust them not to want to hear about debt. For some people the best way to resolve debt is through a debt relief order, but getting one costs £90, which can deter the very people who need them most, so, having listened carefully to representations from Citizens Advice, I today relieve pressure on around 40,000 families every year by abolishing that £90 charge completely.

Next, the household support fund. It was set up on a temporary basis and due to conclude at the end of this month. Having listened carefully to representations from the Joseph Rowntree Foundation, the Trussell Trust, the right hon. Member for East Ham (Sir Stephen Timms), my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) and my hon. Friends the Members for Colchester (Will Quince) and for Ruislip, Northwood and Pinner (David Simmonds) among others, I have decided that, with the battle against inflation still not over, now is not the time to stop the targeted help that it offers. We will therefore continue it at current levels for another six months.

Next, I turn to a measure that will help businesses and households more broadly. In the autumn statement I froze alcohol duty until August of this year. Without any action today, it would have been due to rise by 3%. However, I have listened carefully to my right hon. Friends for Altrincham and Sale West (Sir Graham Brady) and for Vale of Glamorgan (Alun Cairns), and to my hon. Friend the Member for Moray (Douglas Ross), who is a formidable champion of the Scottish whisky industry. I also listened to Councillor John Tonks from Ash—a strong supporter of the wonderful Admiral pub—who pointed out the pressures facing the industry. Today, I have decided to extend the alcohol duty freeze until February 2025. That will benefit 38,000 pubs across the UK, on top of the £13,000 saving that a typical pub will get from the 75% business rates discount that I announced in the autumn. We value our hospitality industry. We are backing the great British pub.

Another cost that families and businesses worry about is fuel. The shadow Chancellor complained about the freeze on fuel duty. Labour has opposed it at every opportunity. The Labour Mayor of London wants to punish motorists even more with his ultra low emission zone plans. However, lots of families and sole traders depend on their car. If I did nothing, fuel duty would increase by 13% this month, so instead I have listened to my right hon. Friend the Member for Witham (Priti Patel), my hon. Friends the Members for Stoke-on-Trent North (Jonathan Gullis) and for Dudley North (Marco Longhi) and others, as well as to The Sun newspaper’s “Keep it Down” campaign. I have as a result decided to maintain the 5p cut and freeze fuel duty for another 12 months. That will save the average car driver £50 next year and bring total savings since the 5p cut was introduced to around £250. Taken together with the alcohol duty freeze, that decision also reduces headline inflation by 0.2 percentage points in 2024-25, allowing us to make faster progress towards the Bank of England’s 2% target.

There can be no solid growth without solid finances. An economy based on sound money does not pass its bills to the next generation. When it comes to borrowing, some believe that there is a trade-off between compassion and fiscal responsibility. They are wrong. It is only because we responsibly reduced the deficit by 80% between 2010 and 2019 that we could provide £370 billion to help businesses and families in the pandemic. Labour opposed our plans to reduce the deficit every single step of the way, but, to be fair, they were consistent. In coalition, the Lib Dems supported controlling spending, but now they say that they would prop up a party that will turn on the spending taps. It is the difference between no plan and no principles—and I am delighted that, for once, the right hon. Member for Kingston and Surbiton (Ed Davey) is here to hear that.

Today, we say something different: there is nothing compassionate about running out of money. With the pandemic behind us, we must once again be responsible and build up our resilience to future shocks. That means bringing down borrowing so we can start to reduce our debt, and today’s figures confirm that is happening. Ahead of my first autumn statement in 2022, the OBR forecast that headline debt would rise to above 100% of GDP. Today, it says that it will fall in every year, to just 94% by 2028-29. According to the OBR, underlying debt—which excludes Bank of England debt—will be 91.7% in 2024-25, then 92.8%, 93.2% and 93.2%, before falling to 92.9% in 2028-29, with final year headroom against debt falling of £8.9 billion. Our underlying debt is therefore on track to fall as a share of GDP, meeting our fiscal rule, and we continue to have the second lowest level of Government debt in the G7, lower than that of Japan, France or the United States.

We also meet our second fiscal rule—for public sector borrowing to be below 3% of GDP—three years early. Borrowing falls from 4.2% of GDP in 2023-24 to 3.1%, then 2.7%, 2.3%, 1.6%, and 1.2% in 2028-29. By the end of the forecast, borrowing is at its lowest level of GDP since 2001. None of that, of course, would be possible if Labour implemented its pledge to decarbonise the grid five years early, by 2030; by its own calculations, that costs £28 billion a year to do. Last month, after flip-flopping for months, Labour said that it is not going to spend the £28 billion after all, but will somehow meet its pledge. “Somehow” can only mean one thing: tax rises on working families. Same old Labour!

Today, in contrast, a Conservative Government bring down taxes with borrowing broadly unchanged—in fact, borrowing is slightly lower than in the autumn statement. The fact that we are bringing borrowing down is of particular importance to one very special person: Sir Robert Stheeman is the outgoing chief executive of the Government’s Debt Management Office, and after 20 years of exceptional public service, he is in the Gallery. Thank you, Sir Robert.

I now turn to growth. Just after I became Chancellor, the OBR expected GDP to fall by 1.4% in the following year; in fact it grew, albeit slowly. Now the OBR expects the economy to grow by 0.8% this year and 1.9% next year, which is 0.5% higher than its autumn forecast. After that, growth rises to 2.2%, 1.8%, and 1.7% in 2028. [Interruption.] Opposition Members do not want to hear this, but these are the facts. Since 2010, we have grown faster than Germany, France or Italy—the three largest European economies—and according to the International Monetary Fund, we will continue to grow faster than all three of them in the five years ahead. Surveys by Lloyds and Deloitte show that business confidence is returning. In other words, because we have turned the corner on inflation, we will soon turn the corner on growth.

Today’s OBR forecasts also show that we have made good progress on the Prime Minister’s three economic priorities. Compared to when the three pledges were made, inflation has halved, debt is falling in line with our fiscal rules, and growth is fully 1.5 percentage points higher than predicted. [Interruption.] Labour Members do not have a growth plan, so they might as well listen to ours. As growth returns, our plan is for economic growth, not growth sustained through migration, but growth that raises wages and living standards for families—not just higher GDP, but higher GDP per head. That means sticking to our plan, with a Budget for long-term growth: more investment, more jobs, better public services and lower taxes.

I start with investment. Economists say that stimulating investment is the most effective way to raise productivity, and therefore wages and living standards. Since 2010, we have been doing just that. Business—[Interruption.] Labour Members might want to listen to what I am about to say, because business investment has risen from an average of 9.3% of GDP under Labour to 9.9% under the Conservatives. This year, it will be 10.6% of GDP. That is £30 billion more business investment than if it had continued at Labour levels, and it is still going up.

In the short period since the autumn statement, Nissan has announced that it will build two new electric car models in the UK. Microsoft and Google have announced data centres worth over £3 billion. Thanks to my right hon. Friend the Business Secretary, the global investment summit unlocked £30 billion of investment. In fact, since 2010, greenfield foreign direct investment has been higher here than anywhere else in Europe, and for the last three years the UK has had the third highest levels in the world after the United States and China—and we are not stopping there.

In the autumn statement, I announced that we would introduce permanent full expensing, a £10 billion tax cut for businesses that gives the UK the most attractive investment tax regime of any large European or G7 country. It was welcomed by over 200 business leaders, with the CBI saying it was a game changer and the single most transformational thing we could do to fire up the British economy. Today, I take further steps to boost investment. Having listened to calls from the CBI, Make UK and the British Chambers of Commerce, we will shortly publish draft legislation for full expensing to apply to leased assets, a change I intend to bring in as soon as it is affordable.

We will also help small businesses, which is something close to my heart. As well as the business rates support, and the work on prompt payments that I announced in the autumn, I will provide £200 million of funding to extend the recovery loan scheme as it transitions to the growth guarantee scheme, helping 11,000 small and medium-sized enterprises access the finance they need. Following representations from the Federation of Small Businesses, as well as my hon. Friends the Members for Loughborough (Jane Hunt), for Southend West (Anna Firth), and for Rother Valley (Alexander Stafford), I will reduce the administrative and financial impact of VAT by increasing the VAT registration threshold from £85,000 to £90,000 from 1 April—the first increase in seven years. That will bring tens of thousands of businesses out of paying VAT altogether, and encourage many more to invest and grow.

I now move to measures to address historical under-investment in our nations and regions. Since we started levelling up in 2019, two thirds of all new salaried jobs created have been outside London and the south-east. We have announced 13 investment zones and 12 freeports, which continue to attract investment—including recently, thanks to the efforts of Mayor Ben Houchen, from the Pneuma Group, which is investing £15 million into the Tees Valley investment zone.

Today, working with the Levelling-Up Secretary, I devolve further power to local leaders, who are best placed to promote growth in their areas. I can announce the north-east trailblazer devolution deal, which provides a package of support for the region potentially worth over £100 million. I will devolve powers to Buckinghamshire, Warwickshire and the most beautiful county in England, Surrey. I see the Leader of the Opposition smiling because, like me, he is a Surrey boy. I know he has been taking advice from Lord Mandelson, who yesterday rather uncharitably said he needed to “shed a few pounds”. Ordinary families will shed more than a few pounds if that lot get in. If he wants to join me on my marathon training, he is most welcome.

Today, we continue to spread opportunity throughout the country by allocating £100 million of levelling-up funding to areas including High Peak, Dundee, Conwy, Erewash, Redditch and Coventry to support cultural projects in these communities. That is alongside support for capital projects across the country, including in Bingley. We are expanding the long-term plan for towns to 20 new places, including Darlington—home of the Treasury’s fantastic Darlington economic campus—Coleraine, Peterhead, Runcorn, Harlow, Eastbourne, Arbroath and Rhyl, providing each with £20 million of funding to invest in community regeneration over the next decade. We will provide £15 million in new funding to the West Midlands Combined Authority to support culture, heritage and investment projects, on the recommendation of our go-getting Mayor, Andy Street, and we will allocate £5 million to renovate hundreds of local village halls across England, so that they can remain at the heart of their communities.

Because this is a Conservative and Unionist Government, we will also set aside funding to support the SaxaVord spaceport in Shetland and an agrifood launchpad in mid-Wales, and funding to support Northern Ireland’s businesses in expanding their global trade and investment opportunities. As a result of the decisions we take today, the Scottish Government will receive nearly £300 million in Barnett consequentials; there will be nearly £170 million for the Welsh Government and £100 million for the Northern Ireland Executive. [Interruption.] I do appreciate that a tax-cutting Budget is very uncomfortable for the biggest tax-raisers in the United Kingdom. We also want to level up opportunity across the generations, including by building more houses for young people, and we are on track to deliver over 1 million homes in this Parliament.

Last week, the Levelling-Up Secretary allocated £188 million to supporting projects in Sheffield, Blackpool and Liverpool. Today I go further, allocating £242 million of investment to Barking Riverside and Canary Wharf, which together will build nearly 8,000 houses; Canary Wharf will also be transformed into a new hub for life science companies. We are launching a new £20 million community-led housing scheme that will support local communities in delivering the developments that they want and need. I am pleased to announce the next steps for Cambridge to reach its potential as the world’s leading scientific powerhouse. I confirm that there will be a long-term funding settlement for the future development corporation in Cambridge at the next spending review; there will be over £10 million invested in the coming year to unlock delivery of crucial local transport and health infrastructure.

The final levelling-up measures I announce today support north Wales, of which I have many happy childhood memories. In Mold, following representations from my hon. Friend the Member for Vale of Clwyd (Dr Davies), we will help fund the renovation of Theatr Clywd. I can announce that this week, the Government have reached agreement on a £160 million deal with Hitachi to purchase the Wylfa site in Ynys Môn and the Oldbury site in south Gloucestershire. Ynys Môn has a vital role in delivering our nuclear ambitions, and no one should take more credit for today’s announcement than my tireless, tenacious and turbocharged hon. Friend the Member for Ynys Môn (Virginia Crosbie). More investment by large businesses, more support for small businesses, promoting investment in our nations and regions—all part of a Budget for long-term growth that sticks to our plan to deliver more jobs, better public services and lower taxes.

I turn to one of the most powerful ways to attract investment: supporting our most innovative industries. Outside the US, we have the most respected universities, the biggest financial services sector and the largest tech ecosystem in Europe. We have double the artificial intelligence start-ups of anywhere else in Europe, double the venture capital investment, and a tech economy now double the size of Germany’s and three times the size of France’s. We are on track to become the world’s next silicon valley.

In today’s Budget for long-term growth, I take further steps to attract investment to our technology-related industries. I want our brilliant tech entrepreneurs to not just start here, but stay here, including when the time comes for a stock market listing, so we will build on the Edinburgh and Mansion House reforms to unlock more pension fund capital. We will give new powers to the Pensions Regulator and the Financial Conduct Authority to ensure better value from defined contribution schemes by judging performance on overall returns, not cost.

We will make sure that there are vehicles to make it easier for pension funds to invest in UK growth opportunities, so I am today publishing the names of the winners of the LIFTS—long-term investment for technology and science—competition. But I remain concerned that other markets, such as Australia, generate better returns for pension savers, with more effective investment strategies and more investment in high-quality domestic growth stocks. So I will introduce new requirements for defined-contribution and local government pension funds to disclose publicly their level of international and UK equity investments. I will then consider what further action should be taken if we are not on a positive trajectory towards international best practice.

I also want to create opportunities for a new generation of retail investors to engage with public markets, so we will proceed with a retail sale for part of the Government’s remaining NatWest shares this summer, at the earliest opportunity, subject to supportive market conditions and value for money. We will continue to explore how savers could be allowed to take their pension pots with them when they change job. We will make it easier for people to save for the long term with a new British savings bond, delivered through National Savings and Investments, offering savers a guaranteed rate, fixed for three years.

Today, following calls from over 200 representatives of the City and our high-growth sectors, I will reform the ISA system to encourage more people to invest in UK assets. After a consultation on its implementation, I will introduce a brand-new British ISA, which will allow an additional £5,000 annual investment for investments in UK equity, with all the tax advantages of other ISAs. That will be on top of existing ISA allowances and will ensure that British savers can benefit from the growth of the most promising UK businesses, as well as supporting those businesses with the capital to expand.

I now turn to our other growth industries, starting with clean energy. We want nuclear to provide up to a quarter of our electricity by 2050. As part of that, I want the UK to lead the global race in developing cutting-edge nuclear technologies. I can therefore announce that Great British Nuclear will begin the next phase of the small modular reactor selection process, with companies now having until June to submit their initial tender responses. Our brilliant Secretary of State for Energy Security and Net Zero will also allocate up to £120 million more to the green industries growth accelerator, to build supply chains for new technology, ranging from offshore wind to carbon capture and storage. By January next year, as promised in the autumn statement, we will have a new, faster connections process to the grid up and running. In advanced manufacturing we have announced a further £270 million of investment into innovative new automotive and aerospace research and development projects, building the UK’s capabilities in zero-emission vehicle and clean aviation technologies.

I now turn to our creative industries. We have become Europe’s largest film and TV production centre, with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here. Studio space in the UK has doubled over the last three years and, at the current rate of expansion, next year we will be second only to Hollywood globally. In the autumn statement I committed to providing more tax relief for visual effects in film and high-end TV. I can today confirm that we will increase the rate of tax credit by 5%, and remove the 80% cap for visual effects costs in the audio-visual expenditure credit. Having worked closely with the Secretary of State for Culture, Media and Sport, and listened carefully to representations from companies such as Pinewood, Warner Bros. and Sky Studios, we will provide eligible film studios in England with a 40% relief on their gross business rates until 2034. Having heard representations from the British film industry, Pact, and indeed the Prime Minister, we will introduce a new tax credit for UK independent films with a budget of less than £15 million. For our creative industries more broadly, we will provide £26 million of funding to our pre-eminent theatre, the National Theatre, to upgrade its stages.

I particularly want to recognise the contribution of our creative industries and the tourism that comes from orchestras, museums, galleries and theatres. In the pandemic, we introduced higher 45% and 50% levels of tax relief, which were due to end in March 2025. They have been a lifeline for performing arts across the country. Today, in recognition of their vital importance to our national life, I can announce that I am making those tax reliefs permanent at 45% for touring and orchestral productions, and 40% for non-touring productions. Lord Lloyd Webber says that this will be a once-in-a-generation transformational change that will ensure Britain remains the global capital of creativity.

I suspect that the new theatre reliefs may be of particular interest to the shadow Chancellor, who seems to fancy her thespian skills when it comes to acting like a Tory. The trouble is that we all know how her show ends: higher taxes, like every Labour Government in history—[Interruption.] I am delighted that Labour Members are cheering the fact that Labour Governments always put up taxes. They are right!

I want to mention our life sciences sector, where we will support research by medical charities into diseases such as cancer, dementia and epilepsy with an additional £45 million, including £3 million for Cancer Research UK. But I have long believed that we should be manufacturing medicines as well as developing them, so I can today also announce a brand-new investment by one of our greatest life science companies, AstraZeneca, led by mon ami the irrepressible Sir Pascal Soriot. AstraZeneca made its covid vaccine available to developing countries at cost, as a result saving over 6 million lives. Today, because of the Government’s support for the life sciences sector, it has announced plans to invest £650 million in the UK to expand its footprint on the Cambridge biomedical campus, and fund the building of a vaccine manufacturing hub in Speke in Liverpool. That is more investment and better jobs in every corner of the country in a long-term Budget for growth from a Conservative Government.

One of the biggest barriers to investment is businesses not being able to hire the staff they need. The economy today has around 900,000 vacancies. It would be easy to fill them with higher migration, but with over 10 million adults of working age who are not in work, that would be economically and morally wrong. Those who can work should work, and I have tackled that issue in every Budget and autumn statement I have delivered. A year ago, I abolished the pensions lifetime allowance, which had pushed doctors and others to take early retirement. Ask any doctor what they think about Labour’s plans to bring it back and they will say, “Don’t go back to square one.” In the autumn, with the help of our superb Secretary of State for Work and Pensions, we announced the back to work plan, which will support 1 million adults with medical conditions and reduce the number of people assessed as not needing to work by two thirds.

A year ago, I also announced the biggest ever expansion of childcare—[Interruption.] Just listen. Extending the 30-hour free childcare offer to all children of working parents from nine months. [Interruption.] We have not had a childcare plan from Labour, so Opposition Members might want to listen to ours. Our plan will mean an extra 60,000 parents enter the workforce in the next four years—a tremendous achievement for the Education Secretary, who I think is doing an effing good job. Today, following representations from many people, including the CBI, I announce measures to support the childcare sector to make the new investments it now needs to make. I am guaranteeing the rates that will be paid to childcare providers to deliver our landmark offer for children over nine months old for the next two years. That is more people in work and more jobs, sticking to our plan in a long-term Budget for growth.

I now turn to public services. [Interruption.] I thought they were supposed to be interested in public services—[Interruption.] I can wait.

Order. A little bit of murmuring is normal, but I should not be able to hear what Members are saying over there. That is clearly out of order. Let us have some courtesy.

Thank you, Madam Deputy Speaker.

Good public services need a strong economy to pay for them, but a strong economy also needs good public services. In 2010, schools in the UK were behind Germany, France and Sweden in the OECD’s PISA—programme for international student assessment—education rankings for reading and maths. Now, after Conservative reforms, we are ahead of them. Burglaries and violent crime have halved in the last 14 years after we invested in 20,000 more police officers. Our armed forces remain the most professional and best-funded in Europe, with defence spending already more than 2% of GDP. We are providing more military support to Ukraine than nearly any other country, and our spending will rise to 2.5% as soon as economic conditions allow. The NHS is still recovering from the pandemic but has 42,000 more doctors and 71,000 more nurses than it did under Labour—that is 250 more doctors and 400 more nurses for every single month that we have been in office.

Resources matter, of course, which is why, despite all the economic shocks we have faced, overall spending on public services has gone up since 2010—in the case of the NHS, by more than a third in real terms. Although spending has continued to rise every year, public sector productivity still remains below pre-pandemic levels by nearly 6%. This demonstrates that the way to improve public services is not always more money or more people; we also need to run them more efficiently. We need a more productive state, not a bigger state.

In autumn 2022, I set day-to-day spending to increase by 1% a year in real terms over the next Parliament. Some say that is not enough and we should raise spending by more, and others say it is too much and we should cut it to improve efficiency—neither are right. It is not fair to ask taxpayers to pay for more when public service productivity has fallen; nor would it be wise to reduce that funding, given the pressures that public services face. So I am keeping the planned growth in day-to-day spending at 1% in real terms, but we are going to spend it better. [Interruption.] The Opposition do not have a plan for public services, as with everything else, so why not listen to ours?

Today I am announcing a landmark public sector productivity plan that restarts public service reform and changes the Treasury’s traditional approach to public spending. I start with our biggest and most important public service: the NHS. One of my greatest privileges was to be Health Secretary. Thanks to the NHS, I have three gorgeous children, the oldest of whom has been patiently listening in the Gallery. The NHS is, rightly, the biggest reason most of us are proud to be British, but the systems that support its staff are often antiquated. Doctors, nurses and ward staff spend hours every day filling out forms when they could be looking after patients. [Interruption.]

Order. I do not like to interrupt the Chancellor, but Mr Streeting, you are too close to me to be shouting that loudly. If you want to shout that loudly, you should go away and sit up there. I apologise for interrupting the Chancellor.

When patients do not show up or one member of a team is ill, operating theatres are left empty despite long waiting lists. When we published the NHS long-term workforce plan, I asked the NHS to put together a plan to transform its efficiency and productivity. I wanted better care for patients, more job satisfaction for staff and better value for taxpayers. Making changes on the scale we need is not cheap. The investment needed to modernise NHS IT systems so they are as good as the best in the world costs £3.4 billion, but it helps unlock £35 billion of savings—ten times that amount—so in today’s Budget for long-term growth, I have decided to fund the NHS productivity plan in full.

With that new investment, we will slash the 13 million hours lost by doctors and nurses every year to outdated IT systems. We will cut down and potentially halve form filling by doctors by using artificial intelligence. We will digitise operating theatre processes, allowing the same number of consultants to do an extra 200,000 operations a year. We will fund improvements to help doctors read MRI and CT scans more accurately and quickly, speeding up results for 130,000 patients every year and saving thousands of lives, something that I know would have delighted my brother Charlie, who I recently lost to cancer.

We will improve the NHS app so that it can be used to confirm and modify all appointments, reducing up to half a million missed appointments annually and improving patient choice. We will set up a new NHS staff app to make it easier to roster electronically and end the use of expensive off-framework agencies. As a result of this funding, all hospitals will use electronic patient records, making the NHS the largest digitally integrated healthcare system in the world. Today’s announcement doubles the amount the NHS is investing on digital transformation over three years.

On top of this longer-term transformation, we will also help the NHS meet pressures in the coming year with an additional £2.5 billion. That will allow the NHS to continue its focus on reducing waiting times and brings the total increase in NHS funding since the start of the Parliament to 13% in real terms. The NHS was there for us in the pandemic, and today with nearly £6 billion of additional funding, a Conservative Government are there for the NHS.

The head of the NHS, Amanda Pritchard today said that this investment shows that

“the government continues to back the NHS”.

She said that, as a result of the investment, the NHS can commit to delivering 1.9% annual productivity growth over the next Parliament, more than double the average productivity growth in public services between 2010 and 2019.

But today is not just about the NHS. I want this groundbreaking agreement with the NHS to be a model for all our public services. Across education, the police, the courts and local government, I want to see more efficient, better-value and higher-quality public services, so today I can announce that in the next spending review, the Treasury will do things differently. We will prioritise proposals that deliver annual savings within five years equivalent to the total cost of the investment required, and today we make a start with some excellent proposals.

Violence reduction units and hotspot policing have prevented an estimated 136,000 knife crimes and other violent offences, as well as over 3,000 hospital admissions. Every crime costs money, so we will provide £75 million to roll that model out in England and Wales. Police officers waste around eight hours a week on unnecessary admin. With higher productivity, we could free the equivalent of 20,000 police officers over a year. We will spend £230 million rolling out time-saving and money-saving technology that speeds up police response times by allowing people to report crimes by video call and, where appropriate, use drones as first responders.

Too many legal cases, particularly in family law, should never go to court, and it would cost us less if they did not, so we will spend £170 million to fund non-court resolution, reduce reoffending and digitise the court process. Too many children in care end up being looked after by unregistered providers that are much more expensive, so we will invest £165 million over the next four years to reduce that cost by increasing the capacity of the children’s homes estate.

Special educational need provision can be excellent when outsourced to independent sector schools, but also expensive, so we will invest £105 million over the next four years to build 15 new special free schools to create additional high-quality places and increase choice for parents. We will also put in place a plan to realise the tens of billions of savings recommended in an excellent speech by the head of the National Audit Office.

The OBR says that a 5% increase in public sector productivity would be the equivalent of about £20 billion in extra funding. With these plans, we can deliver that and more. If we ensure that they are cash-releasing savings, as we are committed to doing, it will be possible to live with more constrained spending growth without cutting services valued by the public. So with the energy and drive of my talented Chief Secretary to the Treasury, we launch our public sector productivity plan in today’s Budget for long-term growth: more investment, more jobs, better public services and—one more thing—lower taxes.

Keeping taxes down matters to Conservatives in a way that it never can for Labour. We believe that in a free society the money people earn does not belong to the Government; it belongs to them, and if we want to encourage hard work, we should let people keep as much of their own money as possible. Conservatives look around the world at economies in North America and Asia and notice that countries with lower taxes generally have higher growth. Economists argue about cause and correlation, but we know that lower-taxed economies have more energy, more dynamism and more innovation. We know that is Britain’s future, too.

Before I explain how we will bring down taxes, I will start with some measures to make our system simpler and fairer. To discourage non-smokers from taking up vaping, we are today confirming the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design. Because vapes can also play a positive role in helping people quit smoking, we will introduce a one-off increase in tobacco duty at the same time to maintain the financial incentive to choose vaping over smoking. I will make a one-off adjustment to rates of air passenger duty on non-economy flights only to account for high inflation in recent years, and I will provide HMRC with the resources it needs to ensure that everyone pays the tax they owe, leading to an increase in revenue collected of over £4.5 billion across the forecast period.

Next, I turn to property taxation. In recent months, following tenacious representation from my hon. Friends the Members for St Austell and Newquay (Steve Double), for North Devon (Selaine Saxby), for Cities of London and Westminster (Nickie Aiken), for Torbay (Kevin Foster) and for Truro and Falmouth (Cherilyn Mackrory), I have been looking closely at our furnished holiday lettings tax regime. I am concerned that that regime is creating a distortion meaning that not enough properties are available for long-term rental by local people. So to make the tax system work better for local communities, I am going to abolish the furnished holiday lettings regime.

I have also been looking at the stamp duty relief for people who purchase more than one dwelling in a single transaction, known as multiple dwellings relief. I see the deputy leader of the Labour party, the right hon. Member for Ashton-under-Lyne (Angela Rayner), paying close attention, given her multiple dwellings—[Interruption.] She—[Interruption.]

Order. Too much excitement. We have not actually heard—because we cannot hear—what the Chancellor is trying to say. [Interruption.] Okay, I can hear who is shouting, and they will not get to speak later.

I am sorry to disappoint the right hon. Member, but multiple dwellings relief was not actually designed for her; it was intended—[Interruption.]. It was intended to support investment in the private rented sector, but an external evaluation found no strong evidence that it had done so, and that it was being regularly abused, so I am going to abolish it.

Finally, as part of our look at property taxation in this Budget, both the Treasury and the OBR have looked at the costs associated with our current levels of capital gains tax on property and concluded that if we reduced the higher 28% rate that exists for residential property, we would in fact increase revenues because there would be more transactions. For the first time in history, both the Treasury and the OBR have discovered their inner Laffer curve. So today I will reduce the higher rate of property capital gains tax from 28% to 24%—that really is for you, Angela. [Laughter.] I now—[Interruption.]

Order. I have had enough from Opposition Members and I am definitely not having it from Government Members.

I now turn to oil and gas. Unlike the Labour party, we want to encourage investment in the North sea, so we will retain generous investment allowances for the sector. Following representations from my hon. Friend the Member for Banff and Buchan (David Duguid), we will also legislate in the Finance Bill to abolish the energy profits levy should market prices fall to their historical norm for a sustained period of time. But because the increase in energy prices caused by the Ukraine war is expected to last longer, so too will the sector’s windfall profits, so I will extend the sunset on the energy profits levy for an additional year to 2029, raising £1.5 billion.

Next, I turn to the taxes paid by those who are resident in the UK but not domiciled here for tax purposes. [Hon. Members: “Ah!”] This is a category of people known as non-doms. Nigel Lawson wanted to end the non-dom regime in his great tax reforming Budget of 1988, which is where I suspect the Labour party got the idea from. I, too, have always believed that provided we protect the UK’s attractiveness to international investors, those with the broadest shoulders should pay their fair share. After looking at the issue over many months, I have concluded that we can indeed introduce a system that both is fairer and remains competitive with other countries, so the Government will abolish the current tax system for non-doms, get rid of the outdated concept of domicile—[Interruption.] I aim to please all parts of the House in all my Budgets. We will replace—[Interruption.]

Order. This is impossible. [Interruption.] Order. Could you please shout more quietly? [Laughter.]

We will replace the non-dom regime with a modern, simpler and fairer residency-based system. From April 2025, new arrivals to the UK will not be required to pay any tax on foreign income and gains for their first four years of UK residency: a more generous regime than at present, and one of the most attractive offers in Europe. But, after four years, those who continue to live in the UK will pay the same tax as other UK residents. Recognising the contribution of many of these individuals to our economy, we will put in place transitional arrangements for those benefiting from the current regime. That will include a two-year period in which individuals will be encouraged to bring wealth earned overseas to the UK, so it can be spent and invested here—a measure that will attract onshore an additional £15 billion of foreign income and generate more than £1 billion of extra tax.

Overall, abolishing non-dom status will raise £2.7 billion a year by the end of the forecast period. The Opposition planned to use that money for spending increases, but today a Conservative Government make a different choice. We use that revenue to help cut taxes on working families. Many of those families depend on child benefit, but the way that we treat child benefit in the tax system is confusing and unfair. It is a lifeline for many parents because it helps with the additional costs associated with having children. When it works, it is good for children, good for parents, and good for the economy because it helps people into work.

We currently withdraw child benefit when one parent earns over £50,000 a year. That means that two parents earning £49,000 a year receive the benefit in full, but a household earning a lot less than that does not if just one parent earns over £50,000. Today I set out plans to end that unfairness. Doing so requires significant reform to the tax system, including allowing HMRC to collect household-level information. We will therefore consult on moving the high-income child benefit charge to a household-based system, to be introduced by April 2026. But because that is not a quick fix, I make two changes today to make the current system fairer.

Following representations from my hon. Friends the Members for Penistone and Stocksbridge (Miriam Cates), for Carshalton and Wallington (Elliot Colburn), for Bassetlaw (Brendan Clarke-Smith) and for West Worcestershire (Harriett Baldwin), along with many others, I confirm that from this April, the high-income child benefit charge threshold will be raised from £50,000 to £60,000. We will raise the top of the taper at which it is withdrawn to £80,000. That means that no one earning under £60,000 will pay the charge, taking 170,000 families out of paying it altogether. Because of the higher taper and threshold, nearly half a million families with children will save an average of £1,300 next year. According to the OBR, this change will see an increase in hours among those already working to the equivalent of 10,000 more people entering the workforce. More investment, more jobs, better public services and lower tax.

There is one further set of changes that I want to make today. The way we tax people’s income is particularly unfair. Those who get their income from having a job pay two types of tax: national insurance contributions and income tax. Those who get it from other sources pay only one. This double taxation of work is unfair. The result is a complicated system that penalises work instead of encouraging it. If we are to build a high-wage, high-skill economy not dependent on migration and to encourage people not in work to come back to work, we need a simpler, fairer tax system that makes work pay. That is why I cut national insurance contributions in the autumn. By reducing the penalty on work, the OBR said that that tax cut would lead to the equivalent of 94,000 more people in work. In other words, it would fill more than one in 10 vacancies throughout the economy. Lower taxes, more jobs and higher growth.

Today, because of the progress that we have made in bringing down inflation, because of the additional investment flowing into the economy, because we have a plan for better and more efficient public services, and because we have asked those with the broadest shoulders to pay a bit more—[Interruption.]

Order. Mr Perkins—[Interruption.] I can manage, thank you very much. I have heard you five times. I have let you get away with it, but that is enough. One more strike and you’re out.

I know how hard it is for the Opposition to listen to arguments for lower taxes. That is the difference.

Because we have asked those with the broadest shoulders to pay a bit more, today I go further. From 6 April, employee national insurance will be cut by another 2p, from 10% to 8%, and self-employed national insurance will be cut from 8% to 6%. That means an additional £450 a year for the average employee, or £350 for someone who is self-employed. When combined with the autumn reductions, it means 27 million employees will get an average tax cut of £900 a year, and 2 million of the self-employed will get a tax cut averaging £650. Those changes will make our system simpler and fairer, and will grow our economy by rewarding work. The OBR says that, when combined with the autumn reduction, our national insurance cuts will mean the equivalent of 200,000 more people in work—filling one in five vacancies, and adding 0.4% to GDP and 0.4% to GDP per head.

This is the second fiscal event in which we have reduced employee and self-employed national insurance. We have cut it by one third in six months without increasing borrowing and without cutting spending on public services. That means that the average earner in the UK now has the lowest effective personal tax rate since 1975. Their effective taxes are now lower than in America, France, Germany or any G7 country. Because Conservatives believe that making work pay is of the most fundamental importance, and because we believe that the double taxation of work is unfair, our long-term ambition is to end this unfairness. When it is responsible, when it can be achieved without increasing borrowing and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today, so that we truly make work pay.

We stick to our plan with a Budget for long-term growth. It delivers more investment, more jobs, better public services and lower taxes. However, dynamism in an economy does not come from Ministers in Whitehall but from the grit and determination of people who take risks, work hard and innovate—not Government policies but people power. It is to unleash people power that today we put this country back on a path to lower taxes: a plan to grow the economy versus no plan; a plan for better public services versus no plan; a plan to make work pay versus no plan. Growth up, jobs up and taxes down. I commend this statement to the House.

Provisional Collection of Taxes

Motion made, and Question put forthwith (Standing Order No. 51(2)),

That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—

(a) Stamp duty land tax (first-time buyers’ relief: new leases acquired on bare trust) (motion no. 8);

(b) Stamp duty land tax (registered providers of social housing) (motion no. 9);

(c) Stamp duty land tax (purchases by public bodies) (motion no. 10);

(d) Value added tax (late payment interest and repayment interest) (motion no. 22).—(Jeremy Hunt.)

As many as are of that opinion say Aye—[Hon. Members: “Aye!”] Of the contrary, No—[Hon. Members: “No!”] [Interruption.] Order. Let me explain, for the clarification of the House, that the Question on the provisional collection of taxes is asked at this stage. All Members will have the opportunity, having heard the debate in detail, to vote on each of the motions on Tuesday 12 March, at the end of the Budget debate. I would hesitate to call a Division at this point, when the House and the world is awaiting the response from the Leader of the Opposition. [Interruption.]

I will put the Question again, and if it is very clear to me that there are more Ayes than Noes, I will take the decision on the voices. The Question is—

On a point of order, Madam Deputy Speaker.

No, I do not need a point of order, thank you. We are in the middle of putting the Question. As many as are of that opinion say Aye—[Hon. Members: “Aye!”] Of the contrary, No—[Hon. Members: “No!”]

We now come to the motion entitled Income Tax (Charge). It is on this motion that the debate will take place today and on succeeding days. The Questions on this motion and the remaining motions will be put at the end of the Budget debate on Tuesday 12 March.

I call the Leader of the Opposition.

There we have it: the last desperate act of a party that has failed—Britain in recession, the national credit card maxed out and, despite the measures today, the highest tax burden for 70 years. This is the first Parliament since records began to see living standards fall, as confirmed by the Budget today. That is the Conservatives’ record, and it is still their record—give with one hand and take even more with the other. Nothing they do between now and the election will change that.

Over 14 years, we have seen our fair share of delusion from the Conservative party: a Prime Minister who thinks the cost of living crisis is “starting to ease”, an Education Secretary who thinks concrete crumbling on our children deserves our gratitude, and a former Prime Minister who still believes that crashing the pound was the right path for Britian. Today, we have a new entry into this hall of infamy: the Chancellor, who breezes into this Chamber—in a recession—and tells the working people of this country that everything is on track. Crisis? What crisis? Or, as the captain of the Titanic and the former Prime Minister herself might have said, “Iceberg? What iceberg?” Smiling as the ship goes down, the Chuckle Brothers of decline dream of Santa Monica—or maybe just a quiet life in Surrey, with the Chancellor not having to self-fund his election—while the crew behind them scramble around for a GB News lifeboat.

If only it were not so serious. The story of this Parliament is devastatingly simple: a Conservative party stubbornly clinging to the failed ideas of the past, completely unable to generate the growth that working people need, and forced by that failure to ask them to pay more and more for less and less. As the desperation grows, the Conservatives torch not only their reputation for fiscal responsibility, but any notion that they can serve the country, not themselves—party first, country second, while working people pay the price.

Food prices are still 25% higher than they were two years ago. Rents are up by 10%. It will cost an extra £240 a month for a typical family remortgaging this year, because the Conservatives lost control of the economy. They sent interest rates through the roof, and they made working people pay. They should be under no illusion: that record is how the British people will judge today’s cuts, because the whole country can see exactly what is happening here. They recognise a Tory con when they see it, just as they did in November—give with one hand and take even more with the other.

People have been living through this nonsense for 14 years. They know that the thresholds are still frozen, dragging more and more people into higher taxes. They know that a Tory stealth tax is coming their way in the shape of their next council tax bill. The Levelling Up Secretary has told not just this House but every house in the country that he is coming for their council tax—give with one hand, Gove with the other.

Most insultingly of all, the British people know the only cause that gets this lot out of bed is trying to save their own skin. Take the desperate move, after years of resistance, to finally accept Labour’s argument on the non-dom tax regime. Has there ever been a more obvious example of a Government who are totally bereft of ideas? If they are sincerely in support of that policy, the question they must answer is: why did they not do it earlier? Why did they not stand up to their friends, their funders and their family? If they had followed Labour’s example, 3.8 million extra operations and 1.3 million dental emergency appointments would have taken place by now, and there would have been free breakfast clubs for nearly 4.5 million children. If instead this is just another short-term cynical political gimmick, honestly, what is the point? What is the point of a party that is out of touch, out of ideas and nearly out of road?

We saw this last year as well, when only Labour’s policies on the cost of living made the difference. I say to those on the Conservative Benches who are now a little downbeat about another intellectual triumph for social democracy, I say, “Get used to it!” With this pair in charge, it will not be long before you are asked to defend the removal of private school tax relief as well. The harder they try with cynical games like that, the worse it will get for them, because the whole country can see exactly who they are. Fighting for themselves. Politics, not governing. Party first, country second.

Because we have campaigned to lower the tax burden on working people for the whole Parliament—and we will not stop now—we will support the cuts to national insurance. But I noticed that in 2022 when the Prime Minister was Chancellor, he made this promise:

“I can confirm that…in 2024, for the first time…the basic rate of income tax will be cut from 20p to 19p”.—[Official Report, 23 March 2022; Vol. 711, c. 342.]

Having briefed all week that an income tax cut was coming, that promise is in tatters. Of course we support the fresh investment in our NHS, although I have to note that the Chancellor, when he was Health Secretary 10 years ago, promised to make the NHS paperless by 2018. I know the Prime Minister’s fondness for Elon Musk extends to an enthusiastic embrace of his Community Notes on fact checking, so I will say this bit slowly: Labour supports the fuel duty freeze. That is our policy. I look forward to the Prime Minister’s acknowledgement of that in the coming days. We ask the Chancellor to set out how he will ensure that the policy gets passed on to hard-pressed families at the pump.

For all the fanfare around the tax measures today, this straightforward story remains true: taxes at a 70-year high; the British people paying more for less; and an unprecedented hit to the living standards of working people. This is the first time the Government have gone backwards over a Parliament, and they were cheering that. The reason is equally simple: there is no plan for growth. How can there be? The Chancellor can say “long-term plan” all he likes, but—[Interruption.] Last year he announced 110 growth measures. He said that we had “turned a corner”, but where are we now? Britain is in recession, with an economy smaller than when the Prime Minister entered Downing Street—the textbook definition of decline. That is their record. After 14 years, who do they think feels better off?

Productivity is flat, mortgages are through the roof, house building is off a cliff, worklessness is rising and rising, homelessness has never been higher, crime goes virtually unpunished, children cannot see a dentist and there is sewage in our rivers. Billions and billions of taxpayers’ money has been wasted, including £7 billion by the Prime Minister on covid fraud alone and £500 million on the Rwanda scheme that has achieved precisely nothing. I can keep going. We have a railway line that will never reach our great northern cities. In fact, it might not even reach central London. Billions upon billions for a white elephant without a trunk, while today we learn that taxpayers are picking up the bill for the Science Minister’s libel. And all the time, one thing is growing: the waiting lists in our NHS, now standing at nearly 8 million.

The Government have had 14 years. They are running out of road. This is what decline looks like, and the complacency they have shown today takes your breath away. Britain deserves better than this. Britain deserves a real plan for growth; an end to 14 years of stagnation; wealth creation across the whole of the country; and higher living standards for working people. This is the mission we need, but yet again, what we got was the same tired old formula, the sticking plasters, the chopping and changing, and the party-first, country-second politics with no repudiation of the utterly discredited idea that economic growth is something that the few gift to the many.

Even then, the Chancellor’s Back Benchers are owed an explanation. He says that Britain has grown more quickly than countries such as Germany over the last 14 years, but I am sure they will be shocked to learn that this is a statistical sleight of hand. When it comes to GDP per capita—the growth that makes the difference to the pockets of working people—the Government’s record is much worse. Indeed, in per capita terms our economy has not grown since the first quarter of 2022—the longest period of stagnation Britain has seen since 1955. In fact, the Chancellor invited us to look at those figures. The Office for Budget Responsibility has said that GDP per capita will be 0.75% lower in 2028 than was forecast in November last year. That was the number he said we should watch: 0.75% lower in 2028. The Government can call this a technical recession, but there is nothing technical about working people living in recession for every second the Prime Minister has been in power. This is a Rishi recession.

If Conservative Members really want to know what hides in the Chancellor’s spreadsheets, they will see that it is only the record levels of migration they have delivered that have prevented an even deeper decline. That is the record they must stand on at the election. While we on these Benches do not demean for a second the contribution that migrants make to a thriving economy, it is high time that the Government were honest with the British public about the role migration plays in their economic policy, because right now, in terms of growth, that is all they have. There is nothing else. No plan to get Britain building again with a reformed planning system. No ambition to invest in clean British power for cheaper bills and energy security. No inclination to move away from insecure low-paid jobs and strengthen employment rights so that we can finally make work pay.

Where is the urgency on affordable housing? How can the Government look at Britain now and not see that as a massive priority? Never again will they be allowed to pose as the party of home ownership and aspiration, although I have to say, given the disaster that has befallen their childcare plans, perhaps that is for the best. The cost of childcare is a huge challenge for millions. Parents need the Chancellor to deliver on his promise. It seems that he has been taking lessons on marketing from the Willy Wonka Experience in Glasgow: all is not as it seems. With just over three weeks to go, he has to come clean, because up and down the country parents need to know: will they get their entitlement in April, or is this just another of the Government’s reckless promises on governing? Headlines over delivery. Promises without plans. Policies that unravel at the first contact with reality. The lesson is crystal clear that those who broke our economy cannot be trusted to repair it. The Tory credit rating is zero. It is time for change with Labour.

That is what today’s Budget should have been about: a last chance for the Government to show that they understand the economic reality of our volatile world, that global supply chains can be weaponised by tyrants like Putin, that a sticking-plaster approach to public investment will cost Britain more in the long run, and that trickle-down nonsense means that working people pay the price. It could even have been a moment of contrition, a reflection on their fiscal recklessness or perhaps an apology for the ridiculous chaos that they have inflicted on businesses, communities and investors in this country. And yet there is still no stable industrial strategy, still no national wealth fund to crowd in private investment, still no urgency on speeding up critical infrastructure projects and no recognition that they have left in tatters our standing as a country that always keeps its promises.

And if they do not like that accusation, they should look no further than the grotesque spectacle of the Government ducking their responsibility to the victims of the infected blood and Horizon scandals.

“This is one of the greatest miscarriages of justice in our nation’s history.”—[Official Report, 10 January 2024; Vol. 743, c. 288.]

Those were the Prime Minister’s words just two months ago. Today, justice has been kicked beyond the general election. Britain can see exactly who they are, and the reality is that there is no path to economic stability and no way to a calmer, less chaotic politics with the Conservative party in power, because chaos is now their worldview.

It is a mindset that sees Britain’s problems as opportunities that the Conservative party can exploit, whether, like the Chancellor, it is out of desperation because they cannot solve them, or whether, like the right hon. and learned Member for Fareham (Suella Braverman) and the right hon. Member for South West Norfolk (Elizabeth Truss), it is because they have no intention of solving them. For a party this weak and divided, the end result is always the same: a vicious downward spiral with chaos feeding off decline and decline feeding off chaos, while working people pay the price.

The British people know that this will not stop. Five more years and it will only get worse. There will be no change of direction without a change of Government, and that leaves Britain as a nation in limbo, unable to shake off the Tory chaos that dragged us into recession, loaded the tax burden on to the backs of working people and maxed out the nation’s credit card.

Britain deserves a Government who are ready to take tough decisions, to give our public services an immediate cash injection, to stick to fiscal rules without complaint, to fight for the living standards of working people and to deliver a sustainable plan for growth. We say to the Chancellor and the Prime Minister that it is time to break the habit of 14 years, to stop the dithering, the delay and the uncertainty, and to confirm 2 May as the date of the next general election, because Britain deserves better and Labour is ready. [Interruption.]

I will not demand silence now, as this is the moment for cheering.

I call the Chair of the Treasury Committee.

I know it has not been long since the autumn statement, but we have heard today that the Leader of the Opposition has no plan. It has not been very long since the last forecast from the Office for Budget Responsibility, so it is interesting to read today that, in the just over 100 days since its last forecast, there has been a lot of change for the better in the UK economy. In particular, the OBR is expecting a better inflation outturn than it had expected just over three months ago. It is expecting and has noted the sharper fall in the interest rates that we all pay on the national mortgage, and it has said that it expects the British people’s living standards to recover more quickly than it previously forecast. That is information that we can all welcome.

There will be a range of views across the Chamber on the role of the Office for Budget Responsibility. We all know, of course, that all forecasts are likely to be wrong. The Treasury Committee will scrutinise the Office for Budget Responsibility next Tuesday morning, and we look forward to asking questions about its assumptions. My view is that it is a bit like that quote of Sir Winston Churchill about democracy being the worst form of government except for all the others that have been tried: although all economic forecasts are likely to be wrong in some way, and the Office for Budget Responsibility’s forecasts are often not the most accurate, they are a lot better than the alternatives of either the Treasury marking its own homework or having a Budget with no forecast from the Office for Budget Responsibility. I think the OBR’s forecasts reassure the markets on which we are so dependent for our borrowing.

There has obviously been good progress on inflation since the peak of over 11% after Putin’s evil invasion of Ukraine, and it is vital that all of today’s Budget measures are seen through the lens of inflation, because we do not want anything that could prevent that progress towards the 2% that the Bank of England expects by the middle of this year.

The Chancellor told us that he was looking through that lens in announcing today’s measures, which contain a range of things that will really help, including continuing the 5p off fuel duty at the pumps for another year, which will be very helpful to drivers in West Worcestershire and elsewhere in the country. The freeze on alcohol duty will be welcomed in pubs in West Worcestershire and across the country. The public sector productivity plan is crucial to ensuring that we get value for money from our public services.

On the second economic objective of growth, we can all welcome the fact that employment growth has been so strong. The economy has created more than 800 jobs a day over the past 14 years. We have seen steps taken in previous fiscal events to grow the size of the UK’s productive economy. Now that we are at full employment, productivity becomes incredibly important, because it helps to sustain non-inflationary growth.

To stimulate all-important investment in the economy, last year’s big announcement of full expensing was made permanent in the autumn statement. Today, we have heard that full expensing will be extended to leased assets. The BBC fact check noted that when the measure was first announced, it was expected that the economy would benefit greatly. The Chancellor said that its impact on the economy would be huge, and the Office for Budget Responsibility said that it would increase business investment by 3% a year. The policy came into force on 1 April, and in fact business investment for the whole of last year was 6.1% higher than in 2022.

Today we heard about further welcome steps to increase business investment and other investment in the UK economy—tax reliefs for some creative industries, British individual savings accounts to encourage more long-term investment in our economy, the back-to-work plan, the childcare plan, and many other measures that will unlock growth.

Is the Chancellor, and indeed the hon. Lady, being a little complacent about investment? Although it is true that business investment is higher than it was in 2010, our business investment is still the lowest in the G7 and among the lowest in the OECD. Why did we not see more public investment from the Chancellor today? We know that public investment will crowd in private investment, so why have we not seen much bolder and more ambitious work on investment? That is what the economy is crying out for.

We heard the Chancellor talk about how strong the growth in UK investment has been. We heard about additional investment in the productivity of our national health service and, crucially, about measures that will increase the attractiveness of investing in some of the fastest growing sectors of the economy.

Does my hon. Friend agree that it is extraordinary that the hon. Member for Brighton, Pavilion (Caroline Lucas), representing the Green party, did not welcome the £270 million for advanced manufacturing in clean aviation and clean vehicles, and the £120 million for clean tech manufacturing? That is the UK investing in the technology of clean growth, is it not?

It is indeed, and I am glad that my hon. Friend welcomes that, even if it was not welcomed by the representative of the Green party.

I want to take my hon. Friend back to what she said about investment in childcare. I remind her that this week brings International Women’s Day, and the cost of childcare is such an important issue for so many mums in this country. Of course, it was the Conservatives who rolled out 30 hours of free childcare, and who are rolling out free childcare for two-year-olds and nine-month-olds. We absolutely must welcome that additional investment in childcare, and indeed the investment in families through support for child benefit, which will help mums get into well-paid jobs.

I wholeheartedly endorse what my right hon. Friend said. She is right to highlight the importance of investment in childcare in helping female employment growth, which has been remarkably strong in the past 14 years. I am confident that the measures announced will allow us to make further progress with the increasingly non-inflationary growth capacity of the UK economy.

Other measures announced today will help on the growth front. Cutting national insurance is also a smart way to help growth. It not only puts more money in working people’s pockets—27 million people across this country will see an extra £900 a year in their bank account—but will make work more attractive. We have heard from the Office for Budget Responsibility that cutting national insurance has the biggest marginal impact on bringing people back into work; the figure from the last cut was 94,000. It will be interesting to see whether the OBR continues to expect this to have a significant impact. It is a really smart way to cut taxes for working people—and the measure is UK-wide, so the effect will be felt in Scotland as well.

I turn to the issue of debt falling. We can see that the bond markets have stabilised, and OBR numbers confirm progress on debt. I draw the House’s attention to a report that our Committee recently published on the Bank of England and its quantitative tightening. It is selling £100 billion of gilts into the market this year, and it has acknowledged that that increases the cost to the Exchequer of borrowing by between a tenth and a quarter of a percentage point. Our Committee wanted to flag up the impact that that could have, and to send a message to the independent Bank of England about some of the ways in which quantitative tightening has an impact on the real economy. As a cross-party Committee, we were obviously never going to agree on the level or scope of taxes, but one thing we have unanimity—

rose—

Does the right hon. Gentleman wish to intervene on the fact that the rate of tax is higher in Scotland?

I wish to raise a point about quantitative easing, which the hon. Lady mentioned. Obviously, there will be a very significant supply of gilts in the coming period, which will have an impact on yields. That will influence what the Bank of England does on the interest rate cycle, and crucially, it will make it difficult to see any material growth in the money supply, particularly in M4, in the coming period. That will have an impact on growth, given where we are.

I am sorry that the right hon. Gentleman did not acknowledge that income tax is higher in Scotland, but he makes a good point about quantitative tightening and its impact on the real economy. It is potentially a factor that can have a real impact, and our Committee will watch it closely.

As I was saying, as a cross-party Committee, we were never going to agree on the level and scope of taxes, but we do agree that the tax system is too complicated. We have a very complicated tax system in this country, and well over 1,000 different tax reliefs. Despite the abolition of the Office of Tax Simplification, there have been some major tax simplifications under this Chancellor. We have heard about the way in which he eliminated, in the autumn statement, the national insurance class; about how he has simplified the lifetime allowance for pensions; and, today, about how he has started to tackle some of the perverse cliff edges, high marginal tax rates and disincentives to work in the tax system. By raising the VAT threshold, he has helped small businesses, which might otherwise have held back because they did not want to go through that threshold. On universal credit, we have done so much over the years to reduce high marginal tax rates and disincentives.

It was great to hear the Chancellor really focus today on addressing the high-income child benefit charge. When we introduced it—I voted for it at the time—£50,000 a year was a high rate of income. With the progress on higher incomes, the median income has increased from about £22,000 in those days to about £35,000 now. These days, £50,000 is not more than about 40% over the median income. It was right for the Chancellor to recognise that today in his Budget statement. He has made the taper that much less of a disincentive to taking on work above that income level. Of course, I would have loved him to have done even more, but I am very grateful for all that he has done.

Let me come to a rapid close by saying that it is clear that the Conservatives have a plan. It is clear that there is a plan to get inflation down; to increase the growth rate and the growth capacity of the UK economy, without sparking inflation again; and to get debt falling. I think we can all see that the plan is working. We should stick to that plan and not go back to square one.

Order. Before I call the spokesman for the Scottish National party, it might be helpful for hon. Members to know that I hope to be able to manage the debate, certainly at the beginning, without a formal time limit. If everybody speaks for about six to seven minutes, we will manage without a formal time limit. If they do not, we will set one. It will begin by being about seven minutes, but will reduce as the day goes on. I call Drew Hendry.

Traditionally, at this point I would thank the Chancellor for advance sight of his redacted statement, but having seen the statement, I realise that I was given an entirely different redacted document. Not to worry, as we have seen all the details in the press over the past day or so. Seeing the unredacted words would be nice, but it is not essential for this response.

I thank the Chancellor for his courtesy in staying in the Chamber, unlike some of his colleagues, to listen to the words of the third party. That does not happen all the time, but it is very good practice for those who might well be in the third party after the next election.

The Chancellor said that his autumn statement was a “statement for growth”, but what have we seen since then? Growth has gone down; it is has grown into recession. Today, the OBR says:

“Having steadily declined since early 2022, real GDP per person is forecast to trough at 1¼ per cent below its pre-pandemic peak in the first half of 2024.”

So that was not a statement for growth, and this is not a Budget for growth.

I start by welcoming some of the measures that the Chancellor has announced today. He at least addressed the non-dom status, which is a positive move forward, although he gave them the softest possible landing. He announced changes to child benefit that are very good. We must give credit to Paul Lewis for his campaigning on that issue. He tweeted today, as other members of the press have done, that he was tipped off by the Chancellor that the change was coming. The move on lifetime ISAs is welcome. The R&D support for the aerospace industry, although it is the smallest possible step that could have been taken, is welcome, as is any further investment in life sciences.

The Chancellor set a lot of store on productivity today—he is going to solve everything with productivity. Yet if we look back over the past 14 years, and indeed before that, we see that the UK has been exceptionally poor on productivity. The figures on productivity have not budged at all. [Interruption.] The Chancellor is saying, “What about Scotland?” He should look at the figures for Scotland over the past 14 years and then we can have that debate.

The Chancellor said that vacancies would be easy to fill through immigration, but his party, joined by the Labour party and now the Lib Dems, imposed Brexit and stopped free movement. Of course it would have been easy to fill vacancies with skilled people who want to do the jobs we have, including vital jobs in tourism, hospitality, the national health service, the care service and across many other sectors, if that possibility had not been taken away by decisions made in this place.

Economists who are looking at his national insurance cuts have said that the gains will be cancelled out, as they were last time, by the freeze on thresholds. There is very little for people on low incomes, and zero for 17.8 million people on less than £12,750 a year, so there is not a lot of sense in that measure. He boasted that he had taken over as Chancellor when inflation was at 11%, but we must remember that the Tory Government were in charge when inflation was at that level. The problem with inflation is their child. They also suggest that 4% is somehow a triumph, but 4% inflation means prices still go up. Let us face it, this is a last-ditch, tone-deaf approach to desperately try to recover in the polls. It is the embodiment of putting the Tory party before the people.

Where are the real measures that would have a real impact on the cost of living, which is what people need the most direct help with? For those living in fear of their energy bills, who are being told, once again, that their direct debits are increasing, slicing more off their take-home pay, none of this is more than cold comfort. For those staring in disbelief as they realise that their shopping bills are more than 25% higher than they were a couple of years ago, this will stick in their throats. For those trussed to their new, much higher mortgages and rents directly because of reckless decisions made in this place, the walls are closing in.

On public services, the Chancellor has failed people again. Paul Johnson of the Institute for Fiscal Studies has noted that the Chancellor would have to explain how public services, which are already on their knees, could possibly take more cuts. Let us not forget the £19 billion he slashed from public spending in the autumn statement. The IFS continued:

“The economic case for tax cuts is weak. The public finances remain in a poor position.”

The Chancellor today promoted a further £20 billion cut, according to the IFS. Public services have been left struggling after 14 years of underfunding, economic chaos and blunder, from mini-Budgets to Brexit, colossal wastes of hundreds of billions of pounds, fraud and cronyism. Public finances are now so pared to the bone that we can see the marrow. Is it any wonder that a growing number of English councils, whether run by the Tories, Labour or the Lib Dems, are now effectively bankrupt?

People in Scotland needed a Budget that delivered funding that would allow investment for our public services, including real investment in the NHS, that supports families with the cost of living, and that properly invests in green energy, not another austerity Chancellor taking an even bigger axe to investment than his predecessors.

When it comes to the election in Scotland, those people will have their say and make their choice. There is a clear choice between that and the SNP’s calls to invest in public services, the economy and our communities, in our town and city centres, in our manufacturing future and our rural areas, in our tourism industry, in our food and drink sector, and in the priorities and values they hold dear. Those will be the major dividing lines at the general election.

The Scottish Government are committed to protecting people from some of the worst Westminster policies and are making a real difference to the lives of people in Scotland, despite their limited powers. The Prime Minister may be under the impression that the cost of living crisis is easing, but that assessment will be a slap in the face for households across Scotland that are still facing the consequences of over a decade of Tory cuts and mismanagement of the economy. People will see straight through attempts by the Chancellor to make up for falling living standards, underfunded public services and wage stagnation with these poorly timed national insurance cuts, which will not improve overall standards of living for most households.

Leaving aside the Chancellor’s failure to deal with fiscal drag, which wipes out much of the benefit of the NI cuts, the vast inequality in benefits for the better-off and the geographical impact that means London benefits much more than anywhere else, he cannot escape the fact that the Government have now imposed the highest tax burden since the end of the second world war.

I want to tackle the issues of tax in Scotland. Our progressive moves in Scotland mean that not only do the majority of people pay less tax, but they also pay far lower council tax than in England. They are supported with free prescriptions, do not have to pay tuition fees and get the game-changing Scottish child payment and more. That is about doing what is right: investing in our people, not leaving them high and dry.

While the Tories cut public funding in England, the Scottish Government’s progressive approach to income tax has raised significant revenue to invest in public services in Scotland. The Scottish Government’s tax regime means that, on average, households in the lower half of the income distribution are £400 a year better off than they would be in the rest of the UK. Around 58% of households are better off under the Scottish tax and social security system than they would be in the rest of the UK. Taking a different, progressive course on income tax in Scotland means that the Scottish Fiscal Commission estimates that in 2024-25 the Scottish Government will have around £1.5 billion of additional revenues, compared to if they had followed UK Government tax policies.

The Scottish Government continue to reaffirm their social contract with the Scottish people, with people across Scotland reaping the benefits through free prescriptions, free university tuition, free school meals, free bus travel for under-22s and free dental care until 26, as well as publicly owned rail services, free childcare for two, three and four-year-olds, and seven additional welfare payments, including the revolutionary Scottish child payment.

Before I move on to other economic matters, the Chancellor mentioned freezing tax on Scotch whisky. As in the autumn statement, we say that is not enough. That industry is massive for Scotland. Scotch whisky is a massive export for both Scotland and the UK, yet it is still taxed at around 70%. We needed a cut in that tax today so that the industry could deliver its potential. The fact that that was not addressed in the Budget is a shame on the Government.

Austerity is an ever-decreasing circle. It is fiscal madness to pursue the same policies that have been failing so obviously for many years, yet none of the other parties can bear to face the truth: for an economy to grow, it needs proper investment; for public services to deliver, to free up the potential of our people, they need to be supported, not asset stripped and starved of resources.

The Chancellor mentioned £2.5 billion for digitisation of the NHS in order to get those so-called productivity gains. I wonder how much of that will go to private companies once the dust settles. He should have boosted NHS spending by £15 billion—to improve healthcare after the UK Government imposed real-terms cuts this year. He should have funded NHS pay properly so that it matched that of Scotland, where there have been no NHS strikes, and caught up with previous cuts. Where was the announcement on settling with the victims of the contaminated blood scandal? Missing!

Moving on to the economy, the Chancellor should have turbocharged investment in green energy, by investing at least £28 billion per year to compete in the global green energy goldrush and to secure sustained economic growth. Where else is the serious high-return growth supposed to come from? We have not heard it mentioned here today. We do not know where it is. That £28 billion is needed. Labour advisers have told the Labour party that that £28 billion is needed. Everybody knows that that £28 billion a year is needed, yet no one in the Labour party is willing to make the investment that is needed to protect it. This is the abandonment of the just transition. [Interruption.] We are hearing chuntering from the Labour Front Benchers. [Interruption.] Oh dear, imagine picking up on that one. Their big U-turn, their big abandonment of the just transition—[Interruption.] Well, it is a pretty big U-turn. I know that it is one of many, but it is also pretty big.

The fact that Labour Members are rattled shows how much they feel this. This abandonment of the just transition and the fantastic opportunity that it promises, by both the Tories and those in the shadows of the Labour party, is reckless and stupid. Not only will it be felt economically, but it ignores the desperate need to act on climate change. The failure to invest in this will hold Scotland back from reaching our green energy ambitions and will leave households vulnerable to future energy crises.

The Chancellor must finally match the level of ambition that we are seeing in other countries. The Government have been shown by the European Union, and by the United States with its Inflation Reduction Act 2022, that this issue needs to be taken seriously, yet they are sitting on their hands.

Scotland can be at the forefront of the green energy revolution thanks to our incredible natural resources in onshore and offshore wind, and in wave, tidal and hydro power. But with Labour and the Tories intent on pulling the rug from under industry’s feet, we risk seeing yet another generation of energy potential wasted by Westminster. The Chancellor must commit to investing properly in renewables and must decouple the price of gas from the price of electricity. We cannot ensure a just transition from oil and gas—for the people and communities who rely on them—if we squeeze the life out of the sector overnight.

We know that households across Scotland have been badly hit by the energy crisis, and that proper investment in renewables can reduce the bills for households. Citizens Advice Scotland has revealed that, in the past four years, it has seen the number of people requesting advice and support with energy bills increase by 14 times. Labour Members are again chuntering from a sedentary position, saying that I am going on for too long. I take that as a sign that they are not comfortable with what I am saying.

I am just bored by it.

They are bored by the just transition! They are bored by the cost of energy that people have to pay. They are bored by all these things.

Bored, bored!

Order. I was about to ask for order so that the hon. Gentleman could be heard, but I think that the noise is coming from immediately behind him. [Interruption.] The hon. Member for Coatbridge, Chryston and Bellshill (Steven Bonnar) must not shout at me. He can shout at other people, but not at me.

Thank you, Madam Deputy Speaker. I can make more progress if I am not interrupted, so I do appreciate your advice on that.

Talking about advice, I want to return to Citizens Advice Scotland. It revealed that, in the past four years, it has seen the number of people requesting advice and support on energy bills increase by 14 times. That is a shocking increase. Proper investment in green energy can make sure that people in Scotland never have to face an energy crisis of this scale again.

As I have said, the Chancellor could have helped families with the cost of living by scrapping grossly unfair and unequal energy bill standing charges and using a £12 billion wealth tax to fund a £400 annual energy discount for households; reintroducing mortgage interest tax relief; capping supermarket food prices; and matching the Scottish child payment UK-wide. He could have boosted UK finances, but he chose not to do so. He could have introduced the long-overdue essentials guarantee while scrapping callous policies such as the two-child limit and the benefit cap. One of the most game-changing things he could have done is to finally give up on the failed experiment that has been Brexit, rejoin the EU single market and deliver economic growth.

The Chancellor must help businesses and introduce measures to support the tourism and hospitality industries. We know that businesses have faced a very challenging period with covid, Brexit and the increased costs from all sides, making life more difficult for people across Scotland. That is why the SNP is calling on the Chancellor to reduce the rate of VAT for the tourism and hospitality sector—it is not too late for him to do that; reinstate VAT-free shopping for international visitors; and implement VAT-free streets to support struggling town centres and high streets. If nothing is done to halt their decline and they continue to be ignored, as they have been for too long, communities will suffer and far more tax will be lost in the longer term than it would cost to provide them with some support.

The Government could choose to construct mini enterprise zones, working with devolved Governments and local authorities to agree on which sectors and areas are most in need of support. These sectors could benefit from reductions in VAT or from no VAT at all if the need is great enough. That could be tied to businesses agreeing to pay the real living wage. The chief executive of Marks & Spencer yesterday described operating under the current Government as

“like running up a downwards escalator with a rucksack on your back.”

If the Government can roll out freeports, then why not freeports for people? They could reduce alcohol duty for whisky and other spirits to support Scotland’s thriving whisky sector that adds £7.1 billion to the UK economy. Businesses in Scotland can no longer afford to be held back by the UK’s low-growth economy. The Chancellor should bring in measures to support businesses that have been left paying the price for the UK Government’s disastrous Brexit. It is clear that the SNP is the only party committed to rejoining the EU and giving Scottish businesses the chance to access goods and talent from our 27 closest neighbours.

The Scottish Government are committed to protecting the people of Scotland from some of the worst Westminster policies and are making a real difference to the lives of people in Scotland, despite their limited powers. The cut to the Scottish Government’s capital budget and financial transactions have meant that they have had to take some difficult decisions in this year’s budget, but they are still committed to delivering for the people of Scotland. The SNP fully support the £3.3 billion package the UK Government have delivered for Northern Ireland, and urge the Chancellor to make similar funding available—in line with the Barnett formula—to help the Scottish Government deal with the budget pressures they face.

The Scottish Government are freezing council tax—except in Tory, Liberal Democrat and some Labour councils where those councils think that people should pay more. The Scottish Government are also lifting 100,000 children out of poverty with measures such as the Scottish child payment; providing child winter heating payments to help mitigate additional heating costs for households with the most severely disabled children; providing free school meals to all children in years 1 to 5 and to all eligible children throughout the school; providing all babies in Scotland with the essentials needed for the first six months of a child’s life through the baby box; introducing 1,140 hours of funded early learning and childcare to all three and four-year-olds and eligible two-year-olds; and making bus travel free for 2 million people in Scotland, including all children and young people under the age of 22, eligible disabled people, and anyone aged 60 or over.

That is just a snapshot of some of the landmark policies that the Scottish Government have brought in, and all of them have been achieved against the backdrop of limited powers and being tied to a Westminster system that, as we have seen from today’s Budget, continues to do nothing for the people of Scotland.

Just to emphasise what the Chairman of Ways and Means said, it would be helpful if colleagues confined their remarks to about six minutes, so that we can get everybody in with equal time.

I call the Father of the House.

It is interesting to follow the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). I was waiting to hear how the experiment with higher taxation is going. I invite the SNP to publish the figures showing how many of the top 10 philanthropists in Scotland five years ago are still paying tax in Scotland, and how the top 10 individual taxpayers in Scotland five years ago are doing now. [Interruption.] It is an example. SNP Members do not like having questions put to them, but there we are.

When the Leader of the Opposition started speaking, it sounded to begin with as though it was his Health spokesman who was speaking. I also reflected on the journey of the Leader of the Opposition over the last few years. In 2017 and 2019—within the memory of the House—he wanted his right hon. Friend the Member for Islington North (Jeremy Corbyn) to be Prime Minister. When there was a vacancy to succeed the right hon. Member for Islington North as the leader of the Labour party, the candidate who was closest to him was the person who is now the Leader of the Opposition. His journey over the last couple of years in changing his views, or his approach, is quite significant.

I think people can believe that the Labour party wants to change. For example, in the other Worthing constituency—I represent two thirds of the town—none of the local councillors was judged suitable to be put on the shortlist for selection as the parliamentary candidate. That shows central power in the hands of the Leader of the Opposition and his national executive. I think most people will have found that surprising. Had I been one of the Labour councillors told I could not apply, I would have been pretty upset.

The reaction I have received from my constituents to the financial statement and the Budget has come down to one particular point. Someone said, “Could there please be a change on the level of pension pot that requires financial advice?” When it was introduced in 2015, the level was £30,000. My constituent, who has a pension pot of £32,500, has been quoted £7,000 for advice on how to realise that relatively small pension pot. I ask Treasury Ministers to consider whether in the Finance Bill they could lift that figure to £40,000 or £50,000, so that people who want to gather up a small part of their defined-benefit pension can use it.

The second reaction that I had from a constituent was that, since Labour took control of Worthing Borough Council, two thirds of the reserves have gone within two years. People are worrying whether the council can remain solvent. If that is a test of what Labour might do in government, it is a pretty good reason to follow the Chancellor and the Prime Minister, and to re-elect us so that we can go on trying to raise the levels of productivity and growth, reform and develop public services, and get more people into work, with higher tax revenues and preferably lower rates of tax.

The Chancellor announced changes to the penalties on child benefit. I go back far enough to remember when most of the value of child benefit came in the child tax allowance. Children cannot work. If I had a dependent pensioner in my household, an income would come with them. Any family who have a child under working age ought to be able to get that kind of support, so that over a family’s lifecycle they receive support when they need it and pay back in when they are more able to work. I hope that we can move to a stage where the child benefit penalty goes completely. There is no philosophical or economic justification for it. It was an error, and I hope that I voted against it when it came in.

You didn’t.

I probably did, you know. I am that sort of person.

There are many things on the environmental side that I will not go into due to the limitations on time. I hope that the proposed district heating scheme, which the Government want to be one of their flagship projects, supported by local authorities, can go ahead. There is a problem with the cost of lane rental to put hot pipes under our roads, but we need to give serious attention to how we get major investment so that nearly all our homes come off burning hydrocarbons, whether it is gas or the like, and get on to solar heating or heat pumps—either air or ground source heating. That will require major effort, especially for residential leasehold properties.

The Chancellor announced more money for more free schools. I hope that one of them will be the special educational needs and disabilities school proposed in Worthing, on the new Durrington estate. Nearly one child in five in West Sussex has some kind of statement or need They deserve specialist support. It is good for them, and good for the other children. I hope that we will get an announcement on that very soon. Having said that, I welcome the Government’s plans. Those who say that Labour would take us back to square one are exactly right.

This was a Budget entirely focused on the electoral prospects of the Conservative party, not the needs of the country or our people. The Chancellor decided that his only chance to get his party through the election was to trumpet so-called tax cuts, but the tax burden is actually going up. He has made an incredible series of assumptions about departmental spending up to five years in the future, and then blown all the money that he saved by making those assumptions on pre-election giveaways. It was obvious from the moment he sat down last November that this early Budget would contain more so-called cuts to personal taxes, albeit against a background of rising taxes. As the OBR confirms in paragraph 1.21 on page 12 of its report, taxes will rise as a percentage of GDP all the way up to 2028-29.

The Chancellor said that he was seeking tax cuts before the OBR had even produced its current forecasts. He said it before the UK’s economic situation deteriorated, leaving our economy in a technical recession and wiping out his expected fiscal headroom, and he hinted at tax cuts before it emerged that our economy is now smaller than when the Prime Minister first walked into Downing Street. In recent days, we have observed the Chancellor and Prime Minister engaged in an unedifying, increasingly frantic search for tax rises and future spending cuts to top up the kitty for personal tax giveaways. They have come up with a vape tax and changes to non-dom status that were proposed by Labour and long ridiculed by the Chancellor himself. Perhaps a Minister will indicate whether those who no longer have non-dom status will pay inheritance tax. We have also had changes to the tax treatment of the holiday lets regime.

While the Conservative party cheered the tax cuts sleight of hand, let us bear in mind some facts. Despite all the Chancellor’s smoke and mirrors, the tax burden at the end of this Parliament will be higher than it has been since the second world war, yet our public services are crumbling around us, with one in 10 local authorities on the verge of bankruptcy, and our infrastructure and public realm falling apart. The cost of living crisis persists, with the UK’s real wage growth the slowest it has been since the Napoleonic wars. No wonder we have a flatlining economy.

The freeze to income tax and national insurance thresholds is due to raise £44 billion in the next five years, as millions of people are dragged into higher-rate tax. The personal tax cuts that the Chancellor is brandishing today are, in other words, completely drowned out by the other huge increases in tax—and the Chancellor and his predecessor have announced even more. The Chancellor has claimed that it is his moral duty to cut taxes, but in reality he has put them up, and just hopes that nobody will notice.

The hon. Lady is making a powerful case for the need for investment in public services, but in that context, I wonder why the Labour party appears to be supporting the freezing of fuel duty. We know that the cost of freezing fuel duty since 2010 is a staggering £90 billion and that climate emissions since 2010 are 7% higher than they would have been had that policy not been in effect. Precisely because she wants more money to go into public services, can she explain why Labour is supporting this extraordinary policy?

I think that the costing of the policy in the forecast ought to be more honest and it should be taken out of the scorecard if it is not to be put into effect.

Taxes are still higher than they have been since the second world war, and the Government have continued to fritter billions on fraud and waste. Only today, we learned that taxpayers have had to pick up the bill for the legal costs of the Secretary of State for Science, Innovation and Technology and for the damages in a libel case. How much has that debacle cost us?

First, the Conservatives gave us the catastrophic mini-Budget with its unfunded tax cuts, which spooked the markets and sent mortgage costs and rents soaring for millions; and now the current Chancellor has decided to fund his election giveaways with the fiscal fiction of huge cuts in planned departmental spending scheduled to last the whole of the next Parliament. There are no detailed plans for how those cuts in spending can be safely delivered, because we are not to have a spending review. Today, the Chancellor confirmed that there will not be a spending review until after the next general election. He pencilled in a so-called increase of nearly 1% for departmental budget spending, but has not compensated for higher than expected inflation or population growth, or any extra cost pressures.

Departmental spending is not just flatlining at 1%; if my hon. Friend looks at capital on page 27 of the Red Book, she will see that most Departments are staying still or, in some cases—such as the Home Office, Education and Defence—having their budgets cut by 2024-25.

My right hon. Friend must be able to read my mind, because that was exactly the point I was coming on to make: in real terms, there are cuts of up to 18% in unprotected Departments, going all the way through to the end of the next Parliament. That has been described by David Gauke, the Tory ex-Treasury Minister as the height of “fiscal irresponsibility”.

The legacy of this Government is burgeoning Government debt, up from 64.7% of GDP when Labour left office in 2010 to 95% now. The Chancellor will barely meet his own self-imposed fiscal rules by the tiniest of margins. Meanwhile, his neglect means that NHS waiting lists have soared, with 7.8 million treatments outstanding, and despite publishing 11 plans for growth since 2010, the trend growth rate is down from 2.3% in the 2000s to 0.8% this year. There is no regional plan, no working industrial strategy and no sign of levelling up—regional disparities are widening, not closing—and GDP is now £400 billion less than expected from the 2010 OBR growth rate forecast. Wages have stagnated, and the Government have delivered deepening levels of poverty, caused by low wages and real-terms benefits cuts, which have reduced the incomes of the poorest 20% and seen the number of people relying on food banks go from 60,000 to nearly 3 million. We have seen the last desperate throw of the dice from a failing, discredited Government, who have long since run out of ideas and are finally running out of road.

I have declared my business interests in the Register of Members’ Financial Interests.

I am pleased that the Chancellor started by reminding the nation that, under Conservative leadership, Governments since 2010 have presided over the creation of 800 new jobs every day, every week, every month and every year, and have halved unemployment. The scourge of worklessness, which was inherited, has been banished. We now have the less worrying problem that we cannot get enough people to fill all the jobs, rather than the other way around of not having enough jobs for the people.

I am pleased that the Chancellor reminded the House that, in growth, we have outperformed all the major European nations, although I am sure he would agree with me that that is a feeble target to set ourselves; we are now free to do so much better. The question we need to ask is: why has the United States of America outperformed Europe so comprehensively for so long, and what can we learn?

The first thing we can learn from the United States is a better system of economic policy guidance and control. The requirements on the Federal Reserve Board, the US central bank, are a balanced mandate: not just 2% inflation, which is a necessary target that we share, but the promotion of growth and of growth in employment, so the board understands the trade-offs and can adjust policy accordingly. As our way of steering the economy, I would love us to get rid of fanciful, made-up figures by the OBR for five years’ time, which are always wrong, and to have two main aims: that 2% inflation target binding not merely on the Bank but on the whole Government, because Government have a big impact on prices and wages; and a 2% growth rate target, or a considerably higher growth rate than European countries have been achieving in the past decade. That is achievable if we take the right actions.

To do that, we need the Bank of England to work in sympathy with the Government’s policy. I remind the House that there is a dual mandate on the bond portfolio, the so-called APF or asset purchase facility. The Bank of England, having bought far too many bonds at ridiculously high prices on very low yields and run a very loose policy that gave us inflation, has now lurched too far the other way and is running too tight a policy, selling far too many bonds at much lower prices—prices it deliberately lowered in the market—and saddling us with losses. The Budget documents confirm that the accumulated losses paid so far, which taxpayers and the Treasury have to pay, amount to £49 billion since the thing flipped over in 2022. The last figure I saw was £34 billion, year to date—unaffordable and unnecessary, quite the wrong policy, meaning that we have less growth and a far bigger bill.

I am glad that the Government have decided to major on productivity in general, and in particular on public sector productivity. Some months ago, I stumbled across a well-concealed Office for National Statistics figure saying that in the three years since covid, we had lost 7.5% productivity in our public services. I did a quick back-of-the-envelope calculation, and that is roughly £30 billion, which means that it costs £30 billion more today to produce the same level and range of public service as it did before covid, as well as the many tens of billions more on top of that we had to pay because of all the inflation. It was a £30 billion hit.

The Government now more or less agree. The Chancellor has costed the loss in his figures at 6% rather than 7.5%, but he has said that he wants to eliminate a 5% productivity shortfall out of the 6%, and he costs that at £20 billion, which is exactly the same as my £30 billion for 7.5%. That is felicitous indeed. The issue is, how will they go about doing that?

I hear that the scheme for the NHS is elaborate expenditure on wide-ranging centralised computerisation—good luck with that—but I would not rely on that alone for my productivity package for the public services. We do not actually need new investment to get ourselves back to the productivity level we were at in 2019. We do not need to use all today’s wonderful artificial intelligence; we just need to use what we already had, which we had in 2019. It is about management, personnel and giving the personnel the right tasks. We have seen a huge increase in managerial and administrative positions, but far from managing things better, they are being managed less well.

We had a shocking case in the press recently, where an awful lot of managers were presiding over a prison that had gone wrong. They were not able to do the more important day-by-day things that were needed in order to resolve the problem. If we look at the huge expansion in the civil service and other public administration during the covid period, we will see a big increase not only in numbers, but in those who have been promoted up the grades for whatever reason. We need enough people for someone to supervise, however, and we do not need all supervisors, because they are often too posh to do the work. We need to manage things better, and that is the productivity challenge before us.

I also urge the Government to abolish UK Government Investments. It is a very expensive body that has a completely dreadful track record. It presided over the Post Office and did nothing to deal with the sub-postmasters; it presided over £1.4 billion-worth of accumulated losses, bankrupting the corporation; and it presides over Network Rail, and the whole rail industry, Network rail and High Speed 2 are absorbing £33 billion of public money this year. I do not think we are getting value for money for that.

My time is up. I urge the Government to redouble efforts on productivity, to understand that it is mainly about whom we hire and what we ask them to do, and to get rid of UKGI, and I ask Ministers to take responsibility for the dreadfully badly performing nationalised industries.

What we heard from the Chancellor was a Budget that reeks of desperation and deceit from a Government who know that they have lost the trust of the British people. It is a bottom-of-the-barrel Budget, with nothing to make families truly better off after the catastrophic fall in living standards under the Conservatives, and no plan for long-term economic growth, no real extra support for the NHS and our public services, and no end in sight for the years of unfair tax hikes—just a last ditch attempt from the Conservative party to cling on to power.

People have had enough of this Government’s empty promises. What they want is a general election to get this out-of-touch Government out of Downing Street. They are sick and tired of a Government who promised in last year’s Budget to grow the economy only to plunge it into recession, who promised to bring down NHS waiting lists only to let them continue to go up and up, and who promised to cut tax but have instead hit families with years of unfair stealth tax rises.

Never before have I seen a Government deliver weaker public services, higher taxes and zero growth all at the same time, and all in the middle of a cost of living crisis. I fear that, by designing his economic policy to give a short-term sugar rush to Conservative Back Benchers, the Chancellor is condemning millions of families to high mortgage rates for much, much longer. The House need not take my word for it; just look at the OBR, which forecast mortgage rates staying at 4% or more for the next five years at least. That is a disaster for homeowners across the United Kingdom.

Let us look at taxes. The Chancellor seems desperate to convince people that he is letting them keep more of their own money, but he is fooling no one. Everyone can see his supposed tax cut for what it really is: a badly executed conjuring trick, giving with one hand but taking away twice as much with the other. Since last April, a typical household has already paid £1,500 extra because of his stealth tax on income tax thresholds. That is money that they are simply not going to get back. Even after today’s announcements, that same family will pay an additional £366 in tax next year because the Chancellor has frozen their tax-free allowance. On top of that, they have soaring mortgage payments, food prices and energy bills to worry about. This tax cut had already been wiped out by the time the ink dried on the Chancellor’s speech.

People were also looking for investment in our public services, especially our NHS. Across our country, I see more and more frustration that nothing seems to work anymore under this Government. People cannot get a hospital appointment in time, they cannot see their GP in time, and they cannot get an ambulance on time. In Hampshire, the local NHS is so stretched that there is a proposal to close the A&E at the Royal Hampshire County Hospital. In Manchester, Stepping Hill Hospital has had an entire out-patient ward closed for months because it is unsafe for patients and staff. In south London, St Helier Hospital has been left to crumble, with no sign of the investment promised by the Government, and A&E and maternity services are at risk of closure. When the Chancellor makes cruel cuts to vital services, it does not just affect numbers on a spreadsheet; it affects people’s lives. Either he does not get that, or he just does not care.

I hear what the right hon. Gentleman says about investment, but from 2010 to 2015 he was part of the coalition that savagely cut services in the north-east, including expenditure in local government and health. The consequences are now having to be addressed because that austerity has continued. Does he take any responsibility for his role in our crumbling infrastructure?

First, I say quite gently to the right hon. Gentleman that the spending plans proposed by the Labour party going into the 2010 election were worse than what actually happened. Moreover, when in government, we fought the Conservatives on maintaining education spending, which we did maintain. They then cut it after 2015.

Let us look now at the economy. Perhaps the most out-of-touch claim by the Chancellor is that the economy is “turning a corner.” The only corner the economy is turning under this Government is from stagnation to recession. They have left our economy smaller than it was in 2022, when the Prime Minister took office. The best growth rate they have achieved in the past three quarters of 2023 is 0%. GDP per capita—people’s share in our country’s wealth—has been falling for nearly two years in a row. That is the longest stretch on record, and it has left the average household £1,500 poorer. There is worse to come. Nearly 5 million mortgage holders will soon see their repayments skyrocket by an average of £240 a month because of the high interest rates.

That is the Government’s real track record: a recession made in Downing Street with no hint of a chance to turn things around. The Chancellor could have stood up today and given people a fair deal. He could have cancelled the unfair tax hike that he has planned for April, and raised the tax-free personal allowance. He could have properly funded the NHS, to bring down waiting lists and let more people return to work, helping to grow our economy. He could have championed unpaid carers and raised the carer’s allowance. He could have supported people with the cost of living and those struggling with their mortgage payments by reversing his tax cuts for the big banks. He could have presented a serious plan for economic growth by launching an industrial strategy, reforming business rates and standing up for our small businesses. Instead, he went for one last roll of the dice in a desperate attempt to cling on to power.

I think people have already made up their minds. The Government must do the right thing and call a general election right now before they do even more damage to our wonderful country.

I obviously heard a different Budget from the one heard by the right hon. Member for Kingston and Surbiton (Ed Davey). I think that a lot in this Budget is very good and to be commended.

As someone who read economics at the London School of Economics many years ago, I understand and appreciate the economy and the challenges that my right hon. Friend the Chancellor had to confront. I welcome his announcements today, as well as the sensible and measured approach that he has taken. I commend him for his performance and his proposals. I will concentrate on a few key issues that are vital for my constituents.

Our country and the whole world have experienced unprecedented difficulties in recent years owing to matters out of our control: the covid-19 pandemic and the wars in Ukraine and the middle east. We are suffering the consequences, so it remains as important as ever to practise fiscal responsibility. As we continue to see the results of the Conservative Government’s efforts to bring inflation under control, grow the economy and reduce debt, I believe that our country is looking towards a better future.

I was at the Department for Education when the right hon. Member for Kingston and Surbiton was in the coalition Government. I would ask him to re-look at the record in relation to some of what he said.

Inflation has fallen from over 11% to 4%, the economy is now performing better than forecast, wages are increasing and we are seeing mortgage rates come down. As we heard from the Chancellor, our economy has outperformed those of European neighbours, and the OBR forecasts that we will meet our fiscal rule to have debt falling as a share of the economy. That is all positive news, and the measures in the Budget will enhance it, which is welcome. I very much look forward to seeing the benefits of today’s announcements for my Bexleyheath and Crayford constituents. High inflation is a bad thing for everybody; it affects and causes problems for individuals, businesses and communities everywhere. I was rather sorry that neither the Leader of the Opposition nor the SNP spokesperson could even praise the fact that inflation has fallen to 4%, which is a real achievement.

We will again cut taxes for 27 million working people from next month by cutting the main rate of employee national insurance contributions by 2p in the pound. Together with the cut announced at the autumn statement, that equates to a tax cut of over £900 for the average worker—that is really good news. Personally, I have always disliked national insurance: as the Chancellor said, it is an unfair double tax on work. Therefore, what he is doing through this Budget is creating a fairer system. It is the best way to incentivise work, which is something we have to do: we have to get more of the people who are not working active and into the labour force. In my opinion, that is the way to drive growth and get a fairer, simpler and more understandable tax system, which I think we would all welcome.

From April, a full-time national living wage worker’s take-home pay will be 35% greater in real terms than in 2010, due to the successive increases in the national living wage and the tax cuts we have delivered. I particularly welcome my right hon. Friend the Chancellor’s commitment to supporting parents; I have long campaigned for a change in the system to end the unfairness caused to single-income families by the high income child benefit charge. Families are the foundation of our society: we value them, and we need to support them as much as we possibly can. Almost half a million families will benefit from the increase in the threshold for the high income child benefit charge, with some 170,000 families no longer having to pay that charge. It is also right that we look to end the unfairness faced by single-earner families by moving towards a household system by April 2026. Many of my constituents have raised that issue in the past; I have raised it with this Chancellor and previous ones, so we are delighted that he has listened, taken it on board and acted. I commend him for that.

As my constituency and Bexley borough does not have an underground, people are dependent on either Southeastern—a mixed blessing, as it has been somewhat problematic; my right hon. Friend the Member for Witham (Priti Patel) is nodding in my direction—or their car. Maintaining the cut in fuel duty and freezing rates for the 14th consecutive year is, therefore, to be commended, as is the freeze on alcohol duty, which many of my Conservative colleagues have campaigned for vigorously and with justification. Every time I visit two of the excellent pubs in my constituency, the Penny Farthing, a micropub in Crayford, and the Kings Arms in Bexleyheath—I assure you that I do not do so too often, Madam Deputy Speaker—they are campaigning for a freeze. It is good news for everyone in the alcohol industry and for those who drink in our pubs. Pubs are social hubs in our area, offering good publicans and good company; unfortunately, we are too busy working to be able to go in too often. I know that those publicans will welcome these measures when they notice them on the news later.

The other thing I was particularly interested in was the new British ISA, which provides an extra £5,000 tax-free allowance. I see that Madam Deputy Speaker is nodding to indicate that I must stop, but I welcome that additional tax relief for savers and the increase in the VAT registration threshold for small businesses. There is so much in the Budget that is good—so much that will make a difference to our economy and our country—and I welcome it.

The context in which I speak to today’s Budget is one of chaos and instability, following 14 years of Conservative failure on the economy. This Budget has not changed the dial; the reality is that people will still be worse off after the last 14 years. Sky’s Ed Conway has shared a graph that he says

“the Chancellor didn’t want to talk about”,

which shows that after the Budget, the UK tax burden will still be heading up to the highest level since the aftermath of the second world war. This is not a turning point: household mortgage costs are up, prices are still rising, and the tax burden is at a 70-year high. The Chancellor likes to speak of stability, but he seems to forget that he comes from the same party that gave us the former Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss)—who was beaten by a lettuce—and her disastrous mini-Budget, with its impact on our national debt, our businesses, our local council finances and our family finances. Those consequences are still playing out, and will be for years to come.

What Britain needs, first and foremost, is a serious plan for growth. We should be in no doubt that our low-growth, high-tax economy is the endgame of 14 years of Conservatism: the result of the hollowing out of our public sphere, the stripping back of businesses’ potential and the levelling down of hope. Official figures show that people are worse off at the end of this Parliament than they were at the start. The consumer prices index’s average hourly pay for residents of Feltham and Heston has fallen by 6% since 2019, when it was around £17 in today’s prices, and has fallen by 20% since 2010. The number of small businesses in Feltham and Heston has been falling for the past two years running, and is now lower than it was in 2019. Some 40% of children are in relative poverty after housing costs, and it is no surprise that the average family will be £1,200 worse off under the Conservatives’ tax plan, given the 25 Tory tax rises since the last election.

But it does not have to be this way—that is the point, is it not? There is an alternative to the choices that the Conservatives are making, which have left people in Britain worse off while friends and donors do well out of that VIP fast lane. Labour has a plan for growth—growth that leads to businesses thriving, stronger public services, more money in ordinary people’s pockets, good and secure jobs, and an end to people and businesses paying more and getting less. It is a plan for stability and growth that commands national and international confidence and makes Britain the best place to invest and to start and grow a business, where we become leaders in the green economy of the future, creating opportunity for all.

Under Labour, we will have stable and competent political leadership and stable and competent stewardship of the economy, and we will see the strengthening of our economic institutions, such as the Bank of England, the OBR and our new industrial strategy council. How we do politics and how we govern really matters, but under the Tories, business investment has been lagging for years. Today’s Budget brings more sticking-plaster politics, but nothing on support for the co-operative sector and growth.

Let me say a few words about skills, because we cannot grow our economy without investing in our people. The biggest opportunity we have for inclusion, productivity, economic growth and the competitiveness of our nations is a strategy for human talent. A few years ago, a Boston Consulting Group report highlighted how human capital is under intense pressure worldwide, as powerful forces—globalisation, demographic and regional shifts, and digitisation—gain momentum. As such, nation states need a national plan, but this Budget comes on the back of years of failure and gives no answers to the skills challenges that we face.

New official data from September shows worrying trends since 2017, when the last survey was done. The proportion of employers with a skills shortage vacancy has gone up from 6% to 10%; the proportion of the workforce with a skills gap, where an employee is judged by their employer to lack full proficiency, has gone up from 4.4% to 5.7%; and the proportion of employers that have provided training for their staff has fallen from 66% to 60%. Meanwhile, the number of apprenticeship starts has plummeted under the Tories by over 200,000 since 2017, with more than £3 billion of the apprenticeship levy unspent since 2019.

I recently visited South and City College Birmingham with our superb West Midlands mayoral candidate, Richard Parker. Apprenticeship starts in the west midlands have fallen by over 30% since 2010. Small business engagement with apprenticeships has dropped by a staggering 49% since 2016, which we must change. This decline has not been an equal one. In 2015, more apprenticeships were started by learners in the bottom 40% of the income distribution; now they are started by those in the top 40%.

The Chancellor rightly talked about the productivity challenge, with some improvement coming from digitisation and artificial intelligence, but over half of secondary schools in the UK were not even offering a computer science GCSE in 2021, and the number of 14 to 19-year-old students taking technical, IT or computing qualifications has fallen by a third since 2015. To tackle our productivity, we need a plan for our young people.

Under a Labour Government, Britain’s skills plans will be led by a new national skills taskforce, Skills England. That will go alongside our industrial strategy, and bring together businesses, training providers and unions to meet the skills needs of the next decade across all our regions. We will recruit over 1,000 new careers advisers for our schools and colleges, and deliver two weeks of work experience for every young person, so that young people know the pathways that are available to them.

We will better support our further education sector to meet local skills needs, where local skills improvement plans demand it, by putting in place new technical excellence colleges. We will transform the apprenticeship levy to bring more flexibility. Up to 50% of the levy will be spent more flexibly, on courses, which is what Tesco, the Co-op, the British Retail Consortium, techUK, City & Guilds, the British Chambers of Commerce, Superdrug, the Chartered Institute of Personnel and Development and many others have called for.

Britain needs a change, and only our changed Labour party will deliver it, with our costed plan for all our policies, which will drive the change that we need in our economy, our NHS, our public services and our communities. The Government are out of ideas and out of time. More than anything, this Budget has shown that what my constituents need, what our economy needs, and what our country needs is a Labour Government.

As a former Treasury Minister, I want to thank the Chancellor, but also other Treasury Ministers and Government Departments, because I know how hard it is to put a Budget together and the number of representations that are made. I must thank the Chancellor for the due consideration—that is a polite way to put it—that he has given to the representations that I have consistently made about supply-side reforms and lower taxes. He knows exactly what case I make on fiscal drag, in particular. I also thank him for delivering greater efficiencies in Government.

The Chancellor has put forward a clear plan for the economy, made targeted tax cuts, which I will come to in a moment, and provided support for businesses, and for efficiencies across the board, including in the public sector. On days like today, we never get the benefit of a discussion of the ins and outs of the Red Book and the OBR—I give the assurance that we would all love that, if we had much more time—but we must all recognise that our economy faces fundamental challenges that the Budget has sought to address.

The Chancellor understands that he is walking a tightrope, and that we should also tackle some of the big issues to do with the size of the state and public spending. When we look at the rate of public spending growth, we see that it has constantly exceeded the rate of inflation and economic growth. Public spending is now in excess of £1.2 trillion per year, which is approximately 44% of GDP. I am old enough to remember that back in 1997, public spending was around 35% to 36% of GDP. What a contrast that is. There are consequences to sustaining high levels of public spending.

Tax receipts have risen to over £1.1 trillion, and we know what that means for delivering a balance on taxation. I maintain that the situation is very burdensome. We have to get tax rates down. However, I very much pay tribute to the Chancellor for listening to comments about efficiencies. He spoke today about a public sector productivity plan. The details will be fundamental, and really important to hear.

I was really pleased to hear that the Chancellor is looking at cash savings in public spending across the economy, but will also grow aspects of Government spending—for example, there will be an expansion in violence reduction units. Pilots across certain Government Departments have worked well, and we now have to look at how we get better delivery from public spending, and how that can drive real outcomes in Government. I have spoken to the Chief Secretary to the Treasury about that in recent months, and I am pleased there are concrete proposals that will take us in the right direction, but of course we have a long way to go.

I come to the subject of people keeping more of what they earn, which is clearly a fundamental Conservative principle. This is where national insurance contributions come back into play. I have seen the numbers, and clearly we could move in the direction of lower rates of national insurance. Yet again, we have seen those rates go down, and the debate when the Bill comes forward will be very interesting. Back in the autumn, I was here when only about three people spoke in favour of national insurance coming down and in support of the legislation on that; we want much more support for this measure next week.

It is important that we get the balance right when it comes to incentivising work. Getting national insurance down is fundamental, but we must tackle fiscal drag, and the number of people who get caught up in higher rates of taxation. The figures given last autumn would bring 4 million more people into higher rates of tax by 2029. We will go through the OBR and see what the measures mean this time round, but the issue is still significant, and we know that more work is required in this area. It will be interesting to see whether the Government will bring national insurance down again in successive future autumn statements.

I welcome the decision to maintain the 5p reduction in fuel duty, and we have already heard what that means for working households. I have made representations on that issue, and will continue to do so. Fiscal events are huge for business taxation, and I welcome today’s announcements on increasing the registration threshold, freezing alcohol duty, tourism and lowering corporation tax, which I have spoken about many times. We are now tied into OECD rates of minimum corporation tax, and my views on that are known. I want greater changes, so that businesses can benefit from our Brexit freedoms.

I would like to speak about many issues today, but broadly speaking, the direction of travel is important. I heard Opposition Members speaking about local government finance; I welcome the announcement of £5 million that will be made available, through the levelling up fund, for cultural projects, as that will come to my area and to Maldon. Important measures have been announced today. It is a tough time, but the Chancellor has announced a plan. We must stick with that plan and make sure that it delivers for working families.

In his statement, the Chancellor mentioned “not just higher GDP, but higher GDP per head.” There is just one slight snag: figures published today for GDP growth per capita from 2024 to 2027 are lower for every year than figures published only a year ago, so we are talking about not higher GDP per head, but lower GDP per head. I use that as an example; we hear the rhetoric and hyperbole of the Budget statement, but it rarely stands any scrutiny when one reads the Budget documentation. The Government can claim that they will meet both their fiscal targets at the end of a five-year rolling forecast period—indeed, every Government could say they will meet their targets at the end of a five-year rolling forecast period—but it is what happens in between those points that is important.

The Government told us a year ago that net debt would fall as a share of GDP in 2024-25, and that net borrowing would fall below 3% of GDP in 2025-26. However, by the autumn statement, only five months ago, we were told that debt would not fall until 2025-26, a year later—and they still forecast that the deficit would fall below 3% of GDP in the same year. We were also told in spring that GDP growth would exceed 2% in two of the next five years, and that productivity would sit between 1% and 1.3% every year across 2024 to 2027. By November, growth was not forecast to exceed 2% in any of the forecast years, and the productivity growth forecast was down for every single year. Today, the Chancellor announced that while the Government would still meet their primary debt target in 2025-26, the percentage of debt to GDP would be higher than it was only five months ago, so debt is not really falling; at best, it is stagnating. GDP growth would still not exceed 2% in any year to 2028, and that is important. That is another half-decade in which GDP growth will not even reach historical trend growth rates. That is absolutely shameful.

The figure for productivity per hour—a metric that the Government like—is lower cumulatively over today’s new forecast period than the figure was that they announced last November. The Chancellor said this was a Budget for growth, productivity and long-term investment, but debt is not really falling as a share of GDP. The deficit is not getting smaller—it is actually getting worse, compared with the forecast last year—and productivity growth, that perennial problem that we all recognise exists, is cumulatively lower over the entire forecast period than the Government announced last November.