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Commons Chamber

Volume 747: debated on Tuesday 19 March 2024

House of Commons

Tuesday 19 March 2024

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Treasury

The Chancellor of the Exchequer was asked—

Creative Industries

At the spring Budget, the Government announced a package of tax reliefs for our world-leading creative industries worth £1 billion over the next five years, including a 40% relief on business rates for eligible film studios in England and enhanced tax reliefs for visual effects.

As we know, the UK’s cultural offer is world-beating and, particularly through the performing arts, the UK projects soft power across the globe. While welcoming the progressive tax breaks for our incredible film industry, it would appear that our far-reaching, high-end television offer has been left behind in the recent Budget. Does my right hon. Friend have plans to redress this deficit to ensure that the UK remains first on screens around the world?

No one knows more about high-end TV than my hon. Friend. Whoever said that politics is showbusiness for ugly people was absolutely wrong in his case. I will take away what he says and consider high-end television as a potential future Budget measure.

The Chancellor will be aware of the award-winning film “The Windermere Children”, which talks about the legacy of those Jewish children who survived the death camps in central Europe and made a new life for themselves on the banks of Lake Windermere at Troutbeck Bridge. For the last several years, there has been an ongoing exhibition on their legacy at Windermere library, and now we look to build a lasting memorial alongside a rebuilt Lakes School at Troutbeck Bridge.

Will the Chancellor be interested in meeting the families of the Windermere children, and those behind the new build and the provision of a new lasting memorial to their legacy, at Windermere at some point in the foreseeable future?

That is a very tempting offer, and I will see whether my diary permits me to visit the hon. Gentleman in his constituency. I have not seen the film, but I have seen a film on a holocaust theme called “The Zone of Interest”, which is a remarkable British-led film that I thoroughly recommend to him.

Strength of the Economy

The economy is beginning to turn a corner after a series of unprecedented shocks. Inflation has more than halved, GDP grew in January and the economy is on a path to long-term growth.

The economy has grown at a snail’s pace under the Tories, but that snail is still 30% faster nationally than in the north-east, despite our strengths in clean energy, manufacturing, science and health. On average, my constituents are £11,500 worse off that they would have been had the economy grown at the same rate that it grew under Labour. Is it any wonder that the Public Accounts Committee found no compelling evidence of levelling up? Is a vote for the Tories not a vote for continued economic failure?

It is not, because we have grown faster than Spain, Portugal, France, Italy, Germany and multiple other countries since 2010. With respect to the north-east in particular, the hon. Lady is absolutely right to say that our vision is to spread growth into every corner of the country. That is why, in the last three months alone, both the Prime Minister and I have been to the Nissan factory in Sunderland to mark its decision to make two electric car models in the UK. Just last week, we announced the opening of a massive new film studio in Sunderland that will bring more than 8,000 jobs to the north-east.

According to the LSE’s Grantham Research Institute, the Government’s current programme for investment to mitigate the worst effects of climate change will still see climate change damage to the UK increase from 1.1% of GDP to 3.3% by 2050 and 7.4% by the end of the century. To put it into context, that is the United Kingdom’s entire social care budget of around £25 billion. The Climate Change Committee has said that the current approach to adaptation

“falls far short of what is required.”

Has the Treasury made any attempt to assess the cost to GDP, the public finances and jobs of failing to invest for climate adaptation?

We listen very carefully to what the Climate Change Committee says, and we are absolutely committed to net zero. In fact, a Conservative Government passed the law requiring Governments to commit to net zero. The hon. Gentleman will know that we have just become the first major industrialised country to decarbonise by more than 50% since 1990. As well as the costs, we are also mindful of the economic opportunities, which is why we are investing billions of pounds in our clean energy transformation.

My right hon. Friend will be aware that my constituency, which has Cambridge to the north, has fantastic new industries such as Johnson Matthey in Royston, which is at the forefront of hydrogen. We have pharma companies to the south and some of the best film studios in the world in Hertfordshire. Is he consciously trying to back those successful industries of the future so that our children and grandchildren have fantastic opportunities for the future?

That is absolutely what we are trying to do. Film and TV is a good example here, as it has now become an offshoot of the technology industry. Films such as “Barbie” have been filmed in Hertfordshire but have the look of the Californian sunshine; they can withstand the British rain because of the use of high-tech devices that simulate Californian sunshine, even in my right hon. and learned Friend’s constituency. What he sets out is our absolutely our plan and we will stick with it.

In response to covid, this Government introduced the furlough scheme, and delivered and funded the world’s first vaccine. In response to the energy price spike, this Government introduced comprehensive support for families. The Office for Budget Responsibility, so beloved of the shadow Chancellor, had its long-range forecast for 2025 to 2028 showing GDP increasing every year, GDP per capita increasing every year, average earnings increasing every year in real terms and productivity increasing in real terms. So does the Chancellor agree that when the shadow Chancellor says that we face a 1979 moment, she is right: a choice between a Labour party still in hock to its union bosses and a Conservative party committed to growth?

I have nothing to add to my hon. Friend’s brilliant list of statistics, except to cite another independent organisation, the International Monetary Fund, which says that in the next five years this country, under Conservative leadership, will grow faster than France, Germany, Italy and Japan.

The British people are paying the price for 14 years of Conservative economic failure, with lower wages, higher taxes and public services on their knees. Time and again, the Conservatives hide behind international factors and take no responsibility for their failures. Yet figures from the OECD confirm that the UK is the only G7 advanced economy now in recession and, according to the IMF, our economy is forecast to have the second slowest growth in the G7 this year. So can the Chancellor tell us: why is the UK so far behind other major economies under the Conservatives?

Well, it is not, because it is actually growing faster than France, Germany and a bunch of other countries. However, I am glad that the hon. Gentleman mentioned 14 years, because we can look at what has happened under 14 years of Labour in Wales, where unemployment is higher, NHS waiting lists are longer, school standards are worse and growth is lower. What is Labour’s reaction to that terrible record? It has just promoted the Economy Minister to First Minister.

Tax Policies: Impact on Living Standards

6. What recent assessment he has made of the potential impact of his tax policies on living standards. (902060)

12. What recent assessment he has made of the potential impact of his tax policies on living standards. (902068)

Thanks to the combined impact of national insurance cuts and above-inflation increases to thresholds since 2010, an average worker on £35,400 in 2024-25 will pay over £1,500 less in personal taxes than they otherwise would have done. These national insurance contribution cuts were possible due to the significant progress we have made in combating inflation.

I heard what the Minister has to say but does he not recognise the OBR’s assessment of the interplay between the Government’s threshold changes and NICs? The OBR concludes that for every 5p gain per year there is a 10p loss, particularly for those on lower wages. Does he accept the OBR assessment?

I am sure that if the hon. Gentleman looks carefully, he will see that the Government have demonstrated their commitment to supporting the most vulnerable in society. He will also have heard my hon. Friend the Member for North East Bedfordshire (Richard Fuller) explain the circumstances as to why we have higher taxes than we would desire. If the hon. Gentleman is telling me that Labour party policy is to change the thresholds, perhaps he can have that conversation with the shadow Chancellor, who can explain how she would pay for that.

The OBR has said that this will be the worst Parliament on record for living standards and the only one in which they have fallen: people are poorer after 14 years of this Government. We do not need fiscal tweaks; this economy needs renewal. It needs to bring in investment on a major scale, and a new age of education, training and employment in the real economy. My constituents cannot afford to wait while the Tory party looks for its polling fortunes to change. Have we not now reached the point where the best thing for the economy is a general election?

I completely disagree with the hon. Gentleman’s explanation. Not only will I repeat that our constituents completely understand the difficult global circumstances, with the pandemic and the cost of living challenges following the invasion of Ukraine, but I can say that we have grown faster since 2010 than many other major economies, and the IMF forecasts that we will grow faster than Germany, France, Italy and Japan. In the year to the third quarter of 2023, real household disposable income per person was around £1,100 higher than the Office for Budget Responsibility expected in its spring Budget 2023 forecast. We have turned a corner, and the best thing to do is to stick with the Conservatives.

The Minister says that the economy has turned a corner, but households will be £870 worse off on average under the Conservatives tax plan, and they will also be seeing their costs up by £110 a week compared with before the last election. Is the Minister proud of his record?

We are immensely proud of our record since 2010: living standards have increased, and growth is now better than that of many other major economies. Our absolute commitment to protecting the most vulnerable in society was shown recently when we provided an average of £3,400 in cost of living support for each household. We have turned a corner, and the economy is improving. I am just disappointed that the Opposition constantly talk down the UK economy and their constituents.

Will my hon. Friend confirm that, following the 4p cut in national insurance that the Chancellor has introduced, the tax take on workers will be the lowest it has been for 50 years? In St Austell and Newquay, two people in a household on average incomes will be paying £1,800 less this coming year than they did last year.

Yes, absolutely, my hon. Friend has pointed out an important point on how we have had a laser focus on reducing the personal tax rates. Furthermore, the measures announced in the autumn statement and in the spring Budget will significantly add to economic activity, contributing about 200,000 full-time equivalent jobs to the economy, and I am sure that the whole House will welcome that.

Pensioners can often struggle because they have a fixed income, so I was pleased that the Chancellor stuck with the triple lock last year, guaranteeing an increase of 10.1%. Will the Minister explain how the 8.5% rise that people will be getting in a couple of weeks’ time will make a difference to their living standards?

My hon. Friend makes an important point. It is the case that not only have the measures in the autumn statement and the spring Budget helped workers, but we have also focused on helping pensioners. Those on the new state pension will benefit to the tune of about £900 a year, which is significant, and the national insurance cuts will benefit the average worker —27 million employees—by £900 a year. Therefore, we have implemented a fair and balanced Budget and fair and balanced measures.

Families in Stoke-on-Trent North, Kidsgrove and Talke have been supported by this national insurance cut, which means that the average family will be £1,800 a year better off. The freezing of the fuel duty means that motorists will be able to get around without being unfairly charged at the pump. Money from this Government has enabled Stoke-on-Trent to cut bus fares by a third, so that people can travel around. We have had £56 million from the levelling-up fund and £17.6 million for the Kidsgrove town deal, which means that the sports centre will be refurbished and reopened, improving people’s health chances. The Labour party closed it because it could not be bothered to pay a single pound to save it back in 2017. Is it not the reality that we have a clear plan that will help the families of our great constituencies, particularly in Stoke-on-Trent North, Kidsgrove and Talke, while Labour will borrow more, tax us higher and lead us back into recession, just as it did in 2008-09?

I could not agree more with my hon. Friend. This is fantastic, and I think it is a recurring pattern, Mr Speaker. We have positivity, optimism, and confidence in the future of the UK economy from Conservative Members, but absolute negativity from Opposition Members, because they have no plan, they have no clue and they have no hope. We have a plan and it is working.

As I said, we are turning a corner and have therefore made measures to put money back into people’s pockets. I do not think it would come as a surprise to the hon. Gentleman’s constituents, or to those of any Labour Member looking at the Labour Opposition’s recent record, that Labour claimed on the one hand that it was supportive of tax cuts, but last week failed to support those tax cuts when it came to it in Parliament.

The Minister did not answer the question about why the public feel worse off. We on the Labour side of the House know why. He mentions tax cuts, but he does not talk about the freezing of tax thresholds, or indeed about the council tax that is about to be levied on people, not just this year but each year for the next five years. Why cannot he admit that, for every 10p extra in the pound taken from people since 2010, the Government are only now giving back just 5p?

If I am hearing correctly, the Labour Front Benchers are announcing fundamental changes to policy that they have not yet costed. They did not object, as far as I am aware, to any of the measures required to support households and businesses during the pandemic, which necessitated increases in taxation. We are now reducing the level of taxation because we have turned a corner. They did not support that. It is interesting that they say one thing but then do not take action. I think they need to explain to their constituents why they failed to support the tax cuts last week.

Block Grant Funding

4. What assessment he has made of the potential impact of the Spring Budget 2024 on levels of block grant funding for Scotland. (902057)

11. What assessment he has made of the potential impact of the Spring Budget 2024 on levels of block grant funding for Scotland. (902066)

17. What assessment he has made of the potential impact of the Spring Budget 2024 on levels of block grant funding for Scotland. (902074)

As a result of decisions at the spring Budget, the Scottish Government are receiving around £295 million in additional funding in 2024-25 through the Barnett formula.

According to the Commons Library, the Government have cut the Scottish Government’s capital funding by 16% in real terms from 2022-23 to 2024-25. The Institute for Fiscal Studies forecasts that there will be a further 16% cut by 2029. After 14 years of austerity, inflation and covid, can the Minister tell me why the Chancellor is taking a hammer to our Scottish public services?

The hon. Gentleman is aware that the block grant has been going up in real terms. He will also be aware that the Scottish Government can switch resource to capital—unlimited amounts, if they choose to do so. He will also be aware, I am sure, that the Scottish Government can borrow up to £400 million of capital each year if they so wish.

The Tories have failed to invest in our public services and high-growth industries, dragging the nations of the UK into recession and increased income inequality. The UK Government continue to impose hard cuts to public services. The Commons Library has found that the Scottish block grant will have fallen in real terms in every year since 2020, yet UK Government Ministers continue to deny that fact. Does the Minister understand what “real terms” actually means, and does she see the devastating impact that this is having on public services?

Just to be absolutely clear, the Scottish Government’s total departmental expenditure limit is growing in real terms over this Parliament by over 1% a year on average.

Obviously, the Minister does not understand what “real terms” means after all. Analysis by the Institution of Civil Engineers shows a multiplier effect: every £1 spent in the construction industry brings in an additional £2 of spend. That means that the real-terms cut to the Scottish Government’s block grant for capital by £1.6 billion over two years further deprives our economy of a wider £3 billion. Why do this Government think that it is okay to decimate infrastructure spend in Scotland?

The Scottish Government are well funded to deliver their devolved responsibilities, and receive 25% more funding on average per person than the equivalent UK Government spending in other parts. That translates to £8.5 billion more a year on average.

Consequentials have consequences. The Chancellor announced in his Budget £20 billion of cuts for the public sector, including cuts of 13% in some Departments, and that defies logic. The public sector is crying out for funding, but his choices, if implemented, will lay waste to it. Does the Minister agree with the IFS, which said that it would be genuinely surprising if the Chancellor’s plans could be carried out, or with the Institute for Government, which said that

“these spending plans will be impossible to deliver”,

or with the Resolution Foundation, which said that the plans were fiscal fantasy?

Over the next Parliament, our plans are for spending to go up in real terms—I want to be absolutely clear about that. Equally, spending has gone up in real terms over this Parliament too. The hon. Gentleman will have noticed that at the beginning of my answers, I explained that Scotland is getting £295 million extra this year through Barnett consequentials.

It is no wonder that the Institute for Fiscal Studies says that there is a “conspiracy of silence” from both the Government and the Labour party over the scale of these cuts. As a percentage of UK spending, the Scottish block grant is set to fall to its lowest ever level under devolution, dwarfing its other plans. For Scotland, House of Commons Library figures show capital funding falling by 16% over the next two years. The Chancellor has already confirmed that the Scottish energy sector is the biggest loser from his Budget, and he is doubling down. Why are this Government and this Chancellor trying to be the new hammer of Scots?

The only area in which I agree with the hon. Gentleman is that I would love to know what the Labour party’s spending plans are for the next Parliament—perhaps Labour Members will enlighten us this evening. I will repeat what I said at the beginning about capital: the Scottish Government have unlimited ability to switch from resource spending to capital spending. That is a choice that they have.

Regional Economic Inequalities

15. What recent fiscal steps he has taken to help reduce the level of economic inequality between the north and south of England. (902072)

The Government continue to tackle regional economic inequalities and level up the United Kingdom. The Government are empowering local leaders through a range of devolution deals, regenerating places across the country and investing in vital infrastructure.

In response to this month’s Budget, the director of the Institute for Public Policy Research North has said that

“This Budget is the government’s admission that it has given up on levelling up this parliament, despite there being much left to do.”

Delivering on the Government’s levelling-up commitments would mean that my constituents would benefit from reduced social welfare dependency, increased earnings potential, and improved health and wellbeing. Does the Minister not think that my constituents and all citizens outside London and the south-east deserve the benefits that come with economic prosperity?

We are committed to levelling up, and are delivering on it across the country. Median pay growth has been higher in every region outside London and the south-east under this Government, and the hon. Gentleman’s constituency is receiving £19 million from round 1 of the levelling-up fund and £20 million from round 3. We have announced a Greater Manchester trailblazer devolution deal and a Greater Manchester investment zone, which will bring more jobs and prosperity for all of his constituents.

I have heard what Ministers have said this morning, and I must be living in an alternative universe. Liverpool has some of the most deprived wards in the country, which have experienced poverty and destitution over the past 14 years as a result of austerity. Some 300,000 people have accessed the household support fund, and while we are a resilient city and will continue to support those households, can the Minister explain what safety net will be put in place to support those in poverty and destitution when the household support fund ends in six months’ time?

The hon. Lady is right to highlight the fact that we have extended the household support fund for the most vulnerable. That is on the back of £96 billion of support during the energy crisis and nearly £400 billion of support through the global pandemic. I would just point out to the hon. Lady that the fundamental difference between Conservative Members and Labour Members is that we believe the best route out of poverty is through work, and our party is increasing employment.

Across Cornwall and the Isles of Scilly, most jobs are supplied by very small businesses, many of which fall below the VAT threshold. Given the economic inequalities around the region, the increase of the VAT threshold to £90,000 is very welcome, but the threshold being that low and the cliff-edge effect of going from zero to 20% have a chilling impact on growing small businesses and providing all-year-round jobs. Will the Minister consider introducing some sort of taper for that £90,000 threshold, and increasing the VAT threshold further—maybe in the region of £120,000?

My hon. Friend is right: we increased the VAT threshold for small businesses, which will benefit 28,000 businesses across the country. We feel that the £90,000 threshold strikes the right balance between managing public finances sustainably and supporting businesses, but as my hon. Friend knows, we keep these things under review.

The port of Milford Haven in my constituency has been right out in front, taking a lead in investing in decarbonisation and showing how it can boost the economy of Wales and reduce inequality. Yesterday, it was told that its bid to the Government’s floating offshore wind manufacturing investment scheme—its port funding scheme—had been rejected out of hand. Will my hon. Friend ask his good friend the Chancellor of the Exchequer to meet me to talk about the important work being done at the UK’s leading oil and gas port, and about how the UK Government can support those efforts financially?

FLOWMIS is an incredibly important scheme in improving and enhancing our ability to expand floating offshore wind. We are a huge supporter of my right hon. Friend’s constituents and of the whole of Wales. If the Chancellor cannot meet him, I would be very happy to do so.

High-income Child Benefit Charge

7. Good morning, just, Mr Speaker. What assessment he has made of the impact of raising the high-income child benefit charge threshold on household incomes. (902062)

The Government will raise the point at which child benefit is fully withdrawn to £80,000 from £60,000, and we will raise the high-income child benefit charge threshold to £60,000 from £50,000 from 6 April 2024, taking 170,000 families out of paying the charge. Overall, these changes mean that almost half a million hard-working families will gain an average of £1,260 towards the cost of raising their children.

Good afternoon, Mr Speaker. [Laughter.] These changes are welcome, and they mean that more Lincoln families will receive more support from the Government, as I told the Minister in Lincoln on Friday. Will my hon. Friend confirm when the formal consultation on basing child benefit on household income rather than on individual income will commence, if the civil servants in the Treasury will let him do it?

I thank my hon. Friend. It was a pleasure, as always, to meet him in his constituency on Friday, where we discussed this matter and many others. The Government will launch a consultation in due course on how to end this unfairness by administering the HICBC on a household rather than an individual basis. Doing so would require significant reform of the tax system, as our tax infrastructure does not currently have a mechanism to consider household income, but the Government plan to end the unfairness for single-earner families in the child benefit system by administering the HICBC on a household rather than an individual basis by April 2026.

I thank the Minister for that. Child benefit income is an integral part of how families make their money last through the whole week. If there are any changes that will reduce it in any way, is it the Minister’s intention to ensure that those who have questions, difficulties or concerns have their concerns and wishes taken on board? It is really important that those facing financial changes can cope with the changes to come.

I thank the hon. Gentleman. It is precisely because of the complexities involved that we will have the consultation. I am sure that his views and those of his constituents will be warmly welcomed in that.

Business Investment

At the autumn statement in 2023, the Chancellor set out ambitious growth packages designed to boost business investment, including making full expensing permanent and a tax cut to companies of over £10 billion a year to ensure we have one of the most generous capital allowances in the world. With further growth-enhancing measures set out in spring Budget 2024, the Office for Budget Responsibility estimates that Government policy announced at the past three fiscal events is expected to increase the size of the economy by 0.7% by 2028-29.

Like my hon. Friend the Member for St Ives (Derek Thomas), I was delighted to see the increase in the VAT threshold from £85,000 to £90,000 in the Budget. That will help small businesses invest for the future, such as the Two Doves café and gift shop in Overton, which is popular with people from both Clwyd South and North Shropshire. However, given the vital importance to small businesses, will my hon. Friend prioritise increasing the VAT threshold again in the next fiscal intervention?

My hon. Friend comes to this House with significant business experience, so when he talks, we certainly listen, and I am delighted to hear that he was pleased with the VAT threshold increase. I can tell him that, in addition to what I said to my hon. Friend the Member for St Ives (Derek Thomas) about the £90,000 threshold, this level is higher than that of any EU member state and is the joint highest in the OECD. Many of his businesses will be among the 28,000 that will benefit from the increase, so we have no plans at this stage to change it.

But the actual record of this Government over the past 14 years is abysmal. It is a fact that business investment has been consistently among the lowest in both the OECD and the G7, and now the Office for Budget Responsibility is forecasting a further 5% fall this year. Why?

Announcements in each of our last three fiscal events have enhanced our business investment environment for international investors: we have the second highest foreign direct investment stock in the world; we have some of the best universities in the world, which are attracting businesses; we have announced full expensing, which is a £10 billion-a-year tax cut; we have the lowest corporation tax in the G7; and we are reforming our energy grid, bringing investment into our net zero ambitions. We are reforming our systems, reducing our taxes, and encouraging investment.

Safe Hands Plans

9. Whether he has had recent discussions with the Financial Conduct Authority on the administration of Safe Hands Plans. (902064)

I recognise that this has been a very challenging time for Safe Hands customers. The hon. Member will be aware that the FCA, as the independent regulator of the funeral plan sector, is responsible for dealing with specific cases. However, the Treasury and the FCA have worked closely throughout the process of bringing the sector into regulation, as well as during the implementation of the new regulatory framework.

My experience of the FCA and the Safe Hands funeral plan fiasco is that it took six months to reply to my freedom of information request and pleaded commercial confidentiality to key questions, and that, despite being warned, the Treasury failed to support consumers moving from an unregulated sector into regulation. It appears to me that the Treasury missed opportunities to support consumers and is still shuffling its feet. At least 47,000 people are out of pocket to the tune of £60 million. They were trying to protect their loved ones from expensive funerals at the worst of times. Will the Minister consider an independent review of this matter? A constructive response is needed to ensure that Safe Hands victims can have confidence in a system that for too long has let them down.

I share the hon. Member’s anger at how Safe Hands customers have been treated. The business is under criminal investigation by the Serious Fraud Office and its administrators are bringing legal action against the former owner of the Safe Hands business. In the Treasury, we do not believe it is right to use taxpayer money to compensate consumers who lose out due to the conduct of unregulated firms; Safe Hands was not within the regulatory perimeter at that time. However, we have worked with the sector so that the two largest providers of funeral plans have agreed to provide significantly discounted replacement plans for the customers who have found themselves so badly treated.

Cost of Living

10. What assessment he has made of the potential impact of increases in the cost of living on households in 2024. (902065)

The rise in inflation caused by Putin’s illegal war in Ukraine and the subsequent energy price shock has put enormous pressure on households. Thanks to work by the Bank of England and the Government, the rate of inflation is going down, with the Office for Budget Responsibility expecting it to be back to target next autumn.

Since the disastrous Tory mini-Budget of 2022, households are continuing to feel the squeeze at the supermarket, with food prices continuing to rise and real wages falling for the longest unbroken run since records began. Food prices have risen by 26% over the last two years. When will the Government listen to those who wish to follow the lead of Canada and France by introducing a price cap on staple food items at the supermarket?

Real wages are now, happily, starting to rise and, as I have said, the OBR has said that inflation will be back to target next quarter. What would not help the cost of living is putting people’s taxes up, as the Scottish Government are doing.

The tax burden is at a record high, wages are stagnant, rents and mortgages are up by hundreds of pounds, and food prices have gone up by 25%. The Resolution Foundation has confirmed that this is the only Parliament on record during which living standards have fallen. Our constituents deserve better. When is the Minister going to give the British public a chance to vote for change and call for a general election?

We have talked a lot today about the £400 billion of support that we put in during the pandemic and the £100 billion of support that we put in to support people during Putin’s energy price shock. The Labour party did not disagree with any of those things, and I think the hon. Lady in her heart of hearts will know that we have to pay for that—at least, I hope she does. We have had to take some difficult decisions, but because of that, the economy is turning a corner. We are able to reduce working people’s taxes, and I hope that she and her party will find it within themselves to support us in that endeavour.

Support for Small Businesses

Small businesses drive our economy and we support them to thrive using levers across Government, whether that is through our small business rate relief, by increasing the VAT registration threshold, by providing reliefs such as the annual investment allowance or through various programmes offered by the British Business Bank.

The Welsh Government are increasing the burden on small businesses by reducing retail, hospitality and leisure business rates relief from 75% to just 40%, despite the UK Government rightly extending that relief in England in the Budget. That means that businesses in my constituency, such as the Little Cheesemonger, Now to Bed, Presents with a Difference and Tu Mundo, are all facing unsustainable business rates bills. One business has to find an extra £35,000 a year for business rates alone. What advice does the Minister have for small businesses in north Wales facing these onerous bills?

My hon. Friend is right that at the autumn statement, this Government extended the retail, hospitality and leisure relief in England—a tax cut worth £2.5 billion for small businesses. The Barnett formula applies to allow the Welsh Labour Government to offer similar relief if they want to. It is disappointing, if not surprising, that when given the opportunity, Labour decides not to cut taxes for working people.

Does my hon. Friend agree that one of the best steps that the Government can take to support small businesses in Eastleigh, Hedge End and Botley is through a package of business rate reductions? Will he outline to the House the progress the Government have made in this regard, which was desperately needed?

My hon. Friend is right. Business rate relief is a great way to support small businesses in Eastleigh and across the country. Our small business rate relief means that one third of all properties in England already pay no business rates at all. We have frozen the small business multiplier, protecting more than 1 million properties from a multiplier increase. As I was just saying, we are supporting high streets with our retail, hospitality and leisure relief.

Just after the Budget, I met some of the small businesses in my constituency at the Flower Pots in Cheriton. While they were pleased with some of the Budget, they talked about improving productivity and growth by raising the VAT threshold far beyond £90,000, and possibly to £250,000. They felt that that would incentivise sole traders and small businesses to expand and work longer hours. They feel at present that growth is restricted because of the level of the VAT threshold. Has the Chancellor given any thought to increasing the threshold to improve productivity?

My hon. Friend is right to engage in the way that she is with her small businesses. We believe that the £90,000 threshold, which has just been increased, strikes the right balance between managing the public finances and supporting small businesses. I encourage her to look at the wider package of support that the Government are providing for small businesses, not least the business rate relief that I was just talking about.

Will the Minister have discussions with his counterparts in the devolved institutions to ensure that the likes of sole traders and small businesses see a reduction in bureaucracy to make them more profitable, offering more business opportunities to more people across the United Kingdom?

I can assure the hon. Gentleman that the Government engage frequently with our counterparts in the Northern Ireland Administration, and that will continue to be the case.

According to the Federation of Small Businesses, two in three small businesses are suffering from late payments. We are now 14 years into a Tory Government. Why do the Government not follow Labour’s lead and strengthen the law on this?

We are acutely aware of this issue, and I have had meetings with the FSB. That is why the Chancellor has announced plans to improve the situation for small businesses. I am happy to outline that in writing to the hon. Gentleman.

One of the requests from female-led businesses in my constituency, including Cùrlach and Rock’n Rollers, was for a VAT cut for hairdressing businesses. Can the Minister tell me why that was not considered in the Budget? These businesses are an important part of our high streets and they are often led by women, who have missed out significantly in the Chancellor’s Budget.

We of course support hairdressers, our high streets and women-run businesses, which is why we have extended the retail, hospitality and leisure relief to 75%. Cutting taxes for hard-working people is what the Conservative Government do.

Income Tax Policies: Pensioners

The Government have nearly doubled the personal allowance since 2010, and in 2024-25 it will be more than 20% higher in real terms than if it had been uprated by inflation since 2010-11. The personal allowance is currently set at a high enough level to ensure that pensioners whose sole income is the full rate of the new state pension, or the basic-rate pension, do not pay any income tax.

I have been contacted by pensioners in my constituency who get a full state pension plus protected payments from the old scheme. The increase in their pensions in line with inflation has put them over the personal allowance threshold for paying income tax, which has eaten away at that increase. Was it the Minister’s intention in the Budget to drag pensioners into paying income tax?

As I have outlined, and as the Resolution Foundation and others have pointed out, pensioners have gained about £1,000 on average as a result of the Government’s decisions since 2010 to increase thresholds. Some pensioners rely solely on the state for their incomes, and we are supporting pensioners through a variety of other measures: not only the triple lock but pension credit and cost of living support. Pensioners across the country will benefit from the 8.5% increase coming in April.

I welcome the recent tax cuts. We need to ensure that those who work hard and do the right thing are rewarded in their old age. Can the Treasury please stop allocating funds to France, which is clearly not stopping the boats, stop extortionate amounts being spent on hotels for illegal migrants, and reduce the foreign aid budget? Maybe then we can give even more to our pensioners.

My hon. Friend will be well aware that Government Members are implementing measures to tackle the very problems she outlines while turning the corner in the economy and doing everything we can to put more money back in people’s pockets, whether workers or pensioners.

Tax-free Shopping

20. What assessment he has made of the potential merits of reintroducing tax-free shopping for international visitors. (902077)

As set out at the spring Budget, we are considering the findings of the Office for Budget Responsibility’s review of the original costing of the withdrawal of tax-free shopping, alongside industry representations and broader data. The Government welcome further submissions from stakeholders in response to the OBR’s findings as we keep all taxes under review.

Last week, the OBR informed the Treasury Committee that it has not assessed the Treasury’s forecast that it would cost £900 million to extend tax-free shopping to EU visitors. The OBR has also failed to support the Treasury’s assumption that EU visitor behaviour and costs can be extrapolated from assessed non-EU data. The UK retail industry firmly believes that it will cost as little as £50 million to reintroduce tax-free shopping for tourists. As we mark English Tourism Week, is it not time that we had a full, independent review of the Treasury’s data on tax-free shopping?

I thank my hon. Friend for her consistent championing of tourism, particularly during English Tourism Week. It is not in the OBR’s remit to consider the effect of alternative policies and, as expanding tax-free shopping to EU visitors is not current Government policy, it has not considered that. However, the findings of the review will be useful in giving insights on the overall behavioural incentives of the policy, which will be relevant for both EU and non-EU populations. It is therefore right that the Government take time to consider the OBR’s findings along with other representations and within the context of broader data, as announced in the Budget.

Topical Questions

With your permission, Mr Speaker, I would like to update the House on living standards in the UK. The most recent data suggest that despite a tough couple of years caused by the pandemic and the energy crisis, living standards will return to their pre-covid peak next year: a full two years earlier than originally predicted by the OBR. They have risen by £1,700 a household in real terms since 2010, and this year’s cut in national insurance will increase living standards by 1%. In other words, to coin a phrase, now is not the time to go back to square one.

Given that the Prime Minister has been forced to abandon his plans for an election on 2 May and could soon be facing a leadership challenge, does the Chancellor of the Exchequer believe that his Budget landed well with the public or even his colleagues on the Government Benches?

I say very simply to the hon. Gentleman, who used to be an hon. Friend, that the Budget will mean that the UK economy will grow faster than that of France, Germany, Italy or Japan in the next five years. That is doing the right thing for the country.

T3. I would like to thank the Minister for the opportunity to meet UK Finance yesterday, which told me and other MPs that the industry plans to roll out 225 banking hubs in the next 18 months. Given that my constituency has lost every single bank branch over the last few years, will the Minister help me to make sure that Leigh-on-Sea, which has 250 retailers, will get one of those 225 banking hubs? (902080)

I thank my hon. Friend for her question. First, it is important to note her consistent championing of this issue for her constituents, for which she deserves huge commendation. To her precise question, it is important that industry, not the Government, makes decisions about bank branches or banking hubs, but she has made her case very ably. I urge her to work with Cash Access UK and LINK to ensure that she has the best chance of securing one of those new 225 banking hubs, as outlined by the industry, in her constituency.

After the Budget, the Chancellor wrote to Conservative party members telling them that the Government planned to abolish national insurance. The Economic Secretary said that “national insurance will vanish”, and the Prime Minister said it was his “ambition” to abolish it. Will the Chancellor confirm whether he asked the Office for Budget Responsibility to cost the Government’s unfunded plan to abolish national insurance contributions?

I am very glad that the right hon. Lady asks about national insurance cuts, because first she supported them, then she abstained in the Lobby, and now she appears to be against them—like the bankers’ bonus tax, which she was strongly in favour of and then strongly against; like £28 billion of borrowing, which she was strongly in favour of and then strongly against. Is not the actual truth that, where Labour should have an economic policy, there is just a black hole filled with platitudes?

The Chancellor did not even attempt to answer the question. The chair of the OBR told the Treasury Committee the week after the Budget:

“It was not a measure given to us to cost”.

Even the Chancellor’s predecessor, the right hon. Member for Spelthorne (Kwasi Kwarteng), who was sacked for his own kamikaze Budget, said, “If you’re going to reduce taxes, you have to show at least partially where the money’s going to come from.” So I ask the Chancellor: where will the money come from? Will it come from cuts to the NHS, the state pension and public services? Will it come from increasing taxes, including for pensioners? Or will it come from increasing borrowing? Which one, Chancellor?

Even Torsten Bell from the left-leaning Resolution Foundation said that the right hon. Lady’s argument that this was a mini Budget-style black hole was nonsense, because we specifically said that we would not fund national insurance cuts from increasing borrowing or cutting spending on public services. I gently ask her, if she wants to put on the mantle of fiscal rectitude, where is Labour going to find literally billions of pounds to fund unfunded spending pledges, from grid decarbon-isation to NHS waiting lists? We all know what that will lead to: higher taxes, like under every Labour Government in history.

T4. St Mary’s in Paddington is a much-loved, much-used hospital in my constituency. Although it was taken off the list of 40 new hospitals to be redeveloped, I am delighted to be working with my hon. Friend the Member for Kensington (Felicity Buchan) and the Minister in the Lords responsible for hospitals to make a case with the trust to ensure that it is redeveloped. Could the Chief Secretary to the Treasury please update the House on the timeframe for making available Government funding so that we can submit the planning business case for the redevelopment? (902082)

I commend my hon. Friend and my hon. Friend the Member for Kensington (Felicity Buchan) on their great work on this project. There appears to be a compelling case, and I know that the programme team at the Department of Health and Social Care is looking closely at the proposal.

T2. The Fife whisky festival took place in Cupar earlier this month, and was a great success. The industry welcomes the freeze in alcohol duty, but notes that it is only for six months. When will the Government provide the longer term consistency that the industry needs? (902079)

Our support for the Scotch Whisky Association is long-standing, and it was a pleasure to meet its representatives recently. We have frozen or cut duty for Scottish whisky in fiscal events going back many years. We are representing the Scotch Whisky Association in trade agreements, and that support will endure long into the future.

T5. In response to the spring Budget, I have heard from constituents who feel that they may have been forgotten. Under the Conservatives, the number of pensioners living in absolute poverty has been slashed by 200,000 across the country, and we have protected the triple lock, but could my right hon. Friend please remind me of all the steps that his Department is taking to support Hartlepool’s pensioners, so that I can tell them on the doorsteps this weekend? (902083)

I would be delighted to do that. The independent Resolution Foundation said that, because of measures that this Government have taken, pensioners are £1,000 better off in real terms than in 2010. We did two things specifically in the Budget: we put £6 billion into the NHS, which is used more by pensioners than anyone else; and we backed workers’ tax cuts to support growth in the economy, which means that we can continue to fund the triple lock for many years to come.

T6. One of my constituents wrote to me last week about her son Fred. He has Down’s syndrome and severe learning disabilities, is profoundly deaf and has an autism diagnosis. His parents and grandparents did the right thing and put money into a child trust fund for him. Fred will be 18 next month, but he lacks the capacity to access his money and there is no easy way for his parents to do so. Will the Chancellor work with colleagues in the Department for Work and Pensions and the Ministry of Justice to unlock the money for Fred and an estimated 80,000 disabled young people? (902084)

I am happy to meet the hon. Member to discuss the precise circumstances of his constituent’s case. In general terms, it is a priority for us to ensure that people get access to that money if it is due to them.

Did the Chancellor see an article yesterday in which the independent director of the Institute for Fiscal Studies confirmed that the average earner in the UK now has the lowest effective personal tax rate since 1975—lower than in America, France, Germany or any G7 country? Someone on £35,000—the average earnings for those working full time—faces an income tax and national insurance bill of nearly £2,000 less than they would have done on the same real earnings back in 2010. Does the Chancellor agree that now he has changed the rules on residence and domicile, the Opposition’s unfunded spending plans could lead to higher taxes—

Order. These are topical questions, and I want to get to the Members who have not yet been called.

I thank my hon. Friend for her excellent question. She is right that it is not just the lowest effective tax rate for someone on average earnings since 1975, but the lowest headline tax rate and the lowest tax rate in the G7. That is the fundamental divide in British politics: taxes have gone up, and on the Government Benches we do not think that we have to accept the status quo; on the Opposition Benches they do. Why is that? Because lower taxes mean higher growth.

T7. A recent survey from the Debt Justice campaign has shown that 13% of adults have missed three or more bill or credit payments in the past six months, and 6.7 million people are now in financial difficulty. Does the Chancellor accept that for millions of people, getting from one end of the month to the next under the Tories is a nightmarish struggle, and that people feel worse off because they are worse off? (902085)

May I gently correct the hon. Lady? As I said, living standards have risen by £1,700 per household since 2010, and the number of people in absolute poverty is down by 1.7 million. She is right to talk about the debt pressures that people face, which is why in the Budget we abolished the £90 fee for debt relief orders, having talked to Citizens Advice.

The proposed changes to wine duty will add huge costs and complexity to business. Further to my Westminster Hall debate, will my hon. Friend meet me and representatives of wine businesses to hear their concerns, and make permanent the easement that is due to end on 1 February next year?

My hon. Friend is talking about the largest and most significant reform of our alcohol duty system in 140 years. We are making it more simple by saying: the stronger the alcohol by volume, the more duty paid. We introduced the wine easement to give the wine industry two years to prepare for the changes. I continue to engage with the industry, and I will continue to engage with him.

T8. Two years ago, P&O Ferries sacked 786 workers and replaced them with agency staff paid less than the minimum wage. After that fiasco, the Government promised to review all contracts with the company. Why is it that, since then, the Government have spent £900,000 directly with P&O Ferries? Why are the Conservatives so comfortable spending taxpayers’ money on rewarding the appalling treatment of working people? (902086)

Let me say to the hon. Lady, who I very much enjoyed working with on the Select Committee, that our record is 800 more people in work for every single day of Conservative government since 2010. What will wreck that is Labour’s new deal for workers, which the president of the CBI says will destroy the job-creating machine that the UK has become.

I commend the Treasury for good fiscal policies that have resulted in inflation falling significantly since the pandemic. When might we see a commensurate fall in interest rates?

I am very sorry to disappoint my hon. Friend, but Chancellors never comment on decisions made by the Bank of England on interest rates. What I can say is that the Office for Budget Responsibility predicted at the Budget that inflation would fall to around target in the next few months. That gives the best possible prospect of interest rates starting to fall.

Last night on BBC’s “Newsnight”, it was clear that the needs of Wales, in particular on health, are not met in the UK. When has the UK Government ever given England Barnett consequentials based on needs in Wales, Scotland or Northern Ireland? Surely the model of spending under which the Government in England decides for England, and everyone else gets a consequential of that, must end. Nordic countries do not calculate spend as a percentage of their neighbours’ spend. Why is the spending of Scotland, Wales and Northern Ireland dependent on what England decides to spend?

The Barnett consequentials formula is long established. It gives a clear framework, through which we can understand spending in the devolved nations. The hon. Gentleman will know that it means higher per-person funding in each of the devolved nations than in England.

I am delighted that my right hon. Friend the Chancellor is seeking to make the tax system more family friendly, including by collecting household data in the years ahead, but being family friendly includes looking after the family home. Sweden abolished inheritance tax in 2004. The result was a boom in entrepreneurship, economic growth and higher tax revenues. Will he, or one of the excellent ministerial team, meet me to discuss that further?

I thank my right hon. Friend for his advocacy in support of families. We have had conversations, and I know that he very much welcomes the changes to the high-income child benefit charge and child benefit. We always keep taxes under review, and I am always delighted to meet him.

Does the Chancellor accept that he has caused a great deal of anxiety and further distrust among those who have been infected and affected by the contaminated blood scandal by not making any provision in his Budget for compensation, although the recommendations for compensation were made to the Government last April?

I gently say to the right hon. Lady that I stand by every word I said when I gave evidence, twice, to the infected blood inquiry. The Government have an absolute moral responsibility, not just to pay the compensation owed, but to pay it as speedily as possible.

I would like to join the Economic Secretary to the Treasury and my hon. Friend the Member for Southend West (Anna Firth) in discussing the closure of banks. Barclays bank, in particular, is both shameful and shameless in this regard. Does my hon. Friend agree that we need full transparency on the decisions made by Link and the Financial Conduct Authority? Something we learned yesterday that may be of interest to those in Chorley, Mr Speaker, is that the criteria take into consideration only the town plus areas within a 1 km circumference. That is not how the rural economy works. Will the Economic Secretary work with me to ensure that the criteria take into account the wider economy?

My right hon. Friend is another good example of a Member who is an excellent champion for her constituents, on this issue and so many others. As for her specific point, it is right for the industry to work out how it will increase provision and adapt the criteria for rural areas, but I will work with her to ensure that the banking hubs are rolled out in an equitable way, to rural as well as more urban areas.

Israel and Gaza

I thank the right hon. Gentleman for his question.

Israel suffered the worst terrorist attack in its history on 7 October last year. The scenes that we saw on that day were appalling, and Hamas’s disregard for civilian welfare continues today, more than five months later. We remember all the time those who are still being held hostage and their families, and we call once again for their immediate release. However, we naturally remain deeply concerned about the humanitarian situation in Gaza and the impact of the conflict on all Palestinian civilians. We have borne witness to death and displacement on a vast scale. More than 1,700,000 people have had to leave their home, many on multiple occasions. We are deeply concerned about the growing risk of famine, exacerbated by the spread of disease, and, of course, about the terrible psychosocial impacts of the conflict, which will be felt for years to come.

We are totally committed to getting humanitarian aid to all those people in Gaza who desperately need it, doing so either ourselves or through UN agencies and British or other charities. We and our partners are pushing to get aid in through all feasible means, by land, sea and air. We have trebled our aid funding to the Occupied Palestinian Territories this year, providing just under £100 million, of which £70 million has been delivered as humanitarian assistance. On 13 March a further 150 tonnes of UK aid arrived in Gaza, including 840 family tents, 13,440 blankets, nearly 3,000 shelter kits and shelter fixing kits, 6,000 sleeping mats, and more than 3,000 dignity kits. A field hospital, provided through UK aid funding to UK-Med, arrived in Gaza from Manchester last Friday. This facility, staffed by UK and local medics, will be able to treat more than 100 patients a day. Along with Cyprus, the United States, the United Arab Emirates and others, Britain will help to deliver humanitarian aid by sea to a new temporary US military pier in Gaza via a maritime corridor from Cyprus.

We have made it clear, however, that air and sea deliveries cannot be a substitute for the delivery of aid through land routes. Only through those routes can the demand for the volume of aid that is now required be met. We continue to press Israel to open more land crossings for longer, and with fewer screening requirements. There is no doubt that land crossings are the most effective means of getting aid into Gaza, and Israel must do more. There is also no doubt that the best way to bring an end to the suffering is to agree an immediate humanitarian pause, and progress towards a sustainable, permanent ceasefire without a return to destruction, fighting and loss of life. Reaching that outcome is the focus of all our diplomatic efforts right now, and a goal that is shared by our international partners. We urge all sides to seize the opportunity, and continue negotiations to reach an agreement as soon as possible.

Yesterday, a UN-backed report revealed the shocking reality that famine in Gaza is imminent. Half the population is expected to face catastrophic levels of hunger—the highest number of people ever recorded as being in that category under this system. Only twice in 20 years have famine conditions been reached, but what distinguishes the horror in Gaza from what has come before is that it is not driven by drought or natural disaster; it is man-made. It is the consequence of war. It is the consequence of aid that is available not reaching those who need it. Food is piled up in trucks just a few kilometres away, while children in Gaza are starving. It is unbearable, and it must not go on.

International law is clear: Israel has an obligation to ensure the provision of aid. The binding measures ordered by the International Court of Justice require it. The world has demanded it for months, yet still aid flows are woefully inadequate. Aid actually fell by half between January and February. That is outrageous. The continued restrictions on aid flows are completely unacceptable, and must stop now—just as Hamas must release the hostages now. I do not doubt that the Minister agrees with me, but will he have the courage to say that the ICJ’s orders, including on aid, are binding, and that Israel must comply with them? Do the lawyers at the Foreign, Commonwealth and Development Office believe that Israel is currently in compliance with its obligations?

Amid this accelerating hunger crisis, Prime Minister Netanyahu reportedly approved plans for an offensive against Rafah. That would risk catastrophic humanitarian consequences. It would be a disaster for civilians and a strategic mistake. How are the Government working to prevent a further attack on Rafah? The truth is this: it will not be possible to address the crisis in Gaza if the fighting does not stop—and that is also the best way to secure the release of hostages. Will the Government finally join us and dozens of countries, and call for an immediate humanitarian ceasefire?

I thank the right hon. Gentleman for his questions and comments, which I will try to deal with more or less sequentially. First, he asked me about the reports of famine. The Integrated Food Security Phase Classification, or IPC, report is clear: it says that famine is a very real scenario. We are doing everything we can to try to head that off, as I set out in my response to the urgent question. In addition to famine, there is also the danger of disease, the lack of health services, and the acute danger from the lack of clean water and effective sanitation. We are doing everything we can to head off the appalling circumstances that the right hon. Gentleman set out.

The right hon. Gentleman asked about the number of trucks. I can tell him that on Sunday, 192 trucks did get in, but that is woefully short of what is required. It is more than have been getting in in March, which has averaged 165 each day so far, and in February that figure was only 97—although he will be well aware that before the crisis, more than 500 trucks a day were getting in.

The right hon. Gentleman also asked about the ICJ. As everyone in the House will know, the ICJ judgment is binding. In respect of the offensive against Rafah, the Foreign Secretary and the Prime Minister, and indeed all our allies, have consistently warned that an offensive against Rafah at this time would have the most appalling humanitarian consequences.

May I finish by taking the point that the right hon. Gentleman again made about a ceasefire? As far as I am aware, the position of the Labour Front Bench is still the same as the position of the Government: we are calling for an immediate pause so that we can get the hostages out and aid in—followed, we hope, by a sustainable ceasefire. That is what we are working towards.

May I start by putting on the record my gratitude to the Minister for the Middle East, who made significant representations ahead of Ramadan to reduce tensions in Jerusalem and allow access to the Al-Aqsa mosque, which so far remains calm? The IPC report makes for breathtakingly difficult reading and the humanitarian situation is catastrophic, but it need not be. May I ask that we please push harder on truck entry from Jordan and ensure that it is fully operationalised, and can my right hon. Friend tell me when the House will be formally updated on whether Israel is demonstrating commitment to international humanitarian law?

I thank my hon. Friend for her comments about my colleague Lord Ahmad, the Minister for the Middle East, which I will pass on to him. In respect of international humanitarian law, we are going through the necessary legal processes, which are complex, but I can tell her that as soon as we are in a position to update the House on what we have set out clearly before, we will do so.

I take absolutely no satisfaction in saying that a month ago in this Chamber I said that innocent people will die because of Israel’s decision to prevent food from getting to those who need it. The reports of an imminent famine should surprise no one; we have all known that this deliberate, man-made famine was coming. The Foreign Affairs Committee has just returned from al-Arish, on the Egypt-Gaza border, where we saw hundreds and hundreds of lorryloads of food and aid waiting for permission to get into Gaza.

Let us be very clear about our language here: the people of Gaza are not starving; they are being starved. Does the Minister accept that there is no food shortage in the region? Does he accept that people are starving to death just 44 miles from Tel Aviv—the distance between Glasgow and Edinburgh—as a direct result of the Israeli siege and the premeditated decision to cut off food supplies? Does he also accept that starving a civilian population to death is a war crime? Finally, does he still believe that the UK is right, both legally and morally, to continue selling weapons to Israel?

On the hon. Gentleman’s final point, he is well aware of the arms sales regime that Britain adopts. As I have said to him before from the Dispatch Box, it is the toughest regime anywhere in the world. [Interruption.] If I may say so, the difference between him and me is that he sees things as we would wish them to be, but we in the Government have to deal with them as they are. That is why we are taking so many steps to try to achieve the release of the hostages, and to get aid and support into Gaza.

One of the points the hon. Gentleman makes is right, and it is echoed by the shadow Foreign Secretary: the way to get aid into Gaza is by road and by truck. Of course we are doing everything we can to explore every way, including the maritime route and dropping aid from the air, but at the end of the day, aid is delivered by road. That is one reason why we are working so closely with Jordan to ensure that the aid route into Gaza by road is enhanced. At the end of the day, that is the right route to get aid in, and we are doing everything we can to try to make sure that it is pursued.

Last time, I asked my right hon. Friend about progress on trying to have a hostage transfer, because right at the core of this conflict is the visceral feeling of the Israelis that they want their people home, which anyone can understand. Has any progress been made, and would he like to update the House on where we are with that?

I completely agree with my right hon. and learned Friend, which is why trying to get the hostages home and out of Gaza, and trying to get food in, are absolutely our twin objectives. In an extremely difficult circumstance, Britain is certainly right at the front of all countries in trying to achieve that. It would not be sensible for me to give the House a running commentary on hostage release, but he will have seen that negotiations have resumed in Qatar. Obviously, everyone in the House will hope that those negotiations are both speedy and successful.

A new independent multi-agency investigation by the United Nations into an Israeli military airstrike on a residential compound housing an emergency medical team—including from Medical Aid for Palestinians, a UK charity—has found that it most likely involved a 1,000 lb US-manufactured bomb fired from an F-16 jet. Those F-16s include parts supplied by the UK. Can the Minister today set out conclusively that no parts supplied by the UK were used to bomb a compound housing medical staff from a UK charity—will he rule that out?

The events that the hon. Gentleman describes are appalling, and what the British Government would say is that there must be a full and transparent inquiry and examination into how those events took place.

It remains incredible that some people in this place can barely utter a word of criticism of the Hamas regime in Gaza, who themselves are being accused of stealing and hoarding aid. With regard to the operation in Rafah, the Israeli Government have been very clear that hostages are being held there and that some of them have been subjected to sexual violence and other abuse. Are we saying to the Israeli Government that they have no right to go in and seek to rescue those hostages?

No. As my hon. Friend knows, we have been absolutely clear throughout that Israel has the right to self-defence, and what he is describing is covered by the right to self-defence. He sets out eloquently that absolute blame for what has happened lies with Hamas for perpetrating the events of 7 October, and once again he is absolutely right to set out that context.

We are talking as if famine is imminent, but the fact is that the UN reports that 27 Palestinian children have already died from starvation and hunger. Josep Borrell has said that hunger should not be used as a weapon of war, and I hope that the Minister would agree. We need that ceasefire immediately. We need it to get the hostages out, we need it to get aid in, and we need it to get all the killing to stop. My question to the Minister is simple. What we are doing is not working, but there is one more thing we can do, which is to change how we vote at the Security Council. Will the UK stop abstaining and join the rest of the world in calling for that immediate ceasefire now?

The hon. Lady speaks on these matters with great knowledge and great sincerity, and I greatly respect what she says. The problem with calling for an immediate ceasefire is that it may salve our consciences but it is not deliverable, because neither side in this appalling brutality is willing to embrace a ceasefire. That is why the policy of the British Government is to argue in every way we can for a pause, so that we can get the hostages out and get aid in, which can then lead to a sustainable ceasefire. That is what we will continue to do in all international fora, including the United Nations.

Over the past few months we have all listened to the Minister explaining that the Government have been begging, pleading with and pressing the Israeli Government to allow more aid in, but seemingly to little effect. Has he now reached the conclusion that the Israeli Government are wilfully obstructing the entrance of aid into the Gaza strip? If so, that would presumably be a breach of the International Court of Justice’s ruling, and indeed of international humanitarian law. What would be the consequence of that conclusion?

I do not agree with my right hon. Friend’s premise, because I do not think we are in the position to reach that judgment, but the point he is making is that it is essential to get more food, aid, support and medicine into Gaza, and every day the British Government are working intently to that end.

Mr Speaker,

“Famine is a reality…the highest hunger level of anywhere else in the world in terms of total numbers…all manmade…A ceasefire is an absolute requirement”.

Those are the words of Matthew Hollingsworth, the country director of the World Food Programme, and of the UN Secretary-General. Starvation is indeed being used as a weapon of war. In Gaza, it is clear that Israel is engineering a famine for more than 2 million civilians. It is also clear that UK diplomacy has failed, so the Minister must now indicate what action the Government will take to escalate pressure to stop Israel’s military assault, to demand a ceasefire and to ensure that emergency assistance is provided through UNWRA to those being starved to death.

I think that many people in Israel and elsewhere will find part of what the hon. Lady has said profoundly offensive. She is right to say that the characteristics of famine are present in Gaza, as I set out in my earlier response, and that is why we are doing everything we can, together with our allies, to get as much food and support into Gaza as possible.

Officials on the ground have stated that Hamas are appropriating —or misappropriating—as much as 60% of the humanit-arian aid entering the Gaza strip. This is part of a long pattern of prioritising fighters, abusing aid to produce rockets and using construction materials to build hundreds of miles of tunnels for their terror activities. We know that they do it; they have done it for years and they are doing it now. Does my right hon. Friend share my concern that Hamas are flagrantly disregarding the humanitarian needs of the people of Gaza, while Israel has been increasing the amount of aid going in exponentially?

I very much agree with my right hon. and learned Friend that Hamas are using ordinary people in Gaza as a human shield. It is utterly repugnant as well as completely against international humanitarian law and, like him, I condemn it.

Humanitarian organisations have been warning repeatedly that this would happen. A group of us met them last week, and when this conflict started I met Islamic Relief, which is based in my constituency. We now end up here, where we are seeing healthcare being attacked and systematically degraded. We are seeing no safe zones left. We are told of the onset of famine, and that the number of people being killed keeps rising. Will the Minister finally please listen to the calls of Members across this House, of the international communities and of the people working on the ground and call for an immediate ceasefire and unrestricted aid?

I have set out several times already today why calling for an immediate ceasefire may make us feel better but is not a practical resolution. That is why—[Interruption.] There is no difference between the analysis that the hon. Lady makes, and the NGOs in her constituency, and my analysis. The question is: what do we do about it? That is why Britain, along with our allies, is continuously, on a 24/7 basis, doing everything practical that we can to get more food and support into Gaza.

My right hon. Friend has mentioned the floating pier to be constructed by the United States. What assurances has he received that the pier will be used solely for the delivery of humanitarian aid and not, as has been suggested, subsequently repurposed for military use?

It is early days yet to see precisely how that maritime initiative will deliver, but I do not believe that what my right hon. Friend fears will be allowed to happen as we tackle that issue. We are giving strong support to all mechanisms for getting aid into Gaza—air, sea and land—but he, like me, will understand that the best mechanism is always by land.

I do not think I have ever received as many emails of concern from constituents as I have about the situation in Gaza. As has already been said, over 500,000 Palestinians are at starvation levels and 27 children and three adults have died so far as a result of starvation and dehydration. In the words of Medical Aid for Palestinians:

“This is not happening because the rains have failed or there has been a poor harvest. It is because…the Israeli authorities refuse to allow enough food into Gaza”.

So I have this question for the Minister, and my Edinburgh South West constituents will be listening to the answer: does he agree that starvation as a weapon of war is a war crime?

The point that I hope the hon. and learned Lady will make to her Edinburgh constituents is that she and I, the Government and the whole House are intent on ensuring that more food and more support get into Gaza as rapidly as possible. That is what the Government are doing every day.

I welcome the hard work that the Minister is doing to get more aid in, to bring an end to the fighting and to get the hostages released, but it is appalling to think that large numbers of innocent people, including children, are about to starve when there is aid just over the border. He is right that aid must flow across the border and that it is better to transport it in trucks, but if that is not possible, we must think of this like the Berlin airlift. We have to get aid in by sea and by airdrops. I welcome what the Americans are doing to drop aid on the shore, and we have to do whatever it takes to get the aid to the kids who are going to starve unless we get it to them.

I completely agree with the sentiments that my hon. Friend expresses so profoundly. He is right that every single mechanism must be explored, but he will know that the amount of aid we can drop from the air, the danger to those underneath and the danger of the aid being misappropriated and stolen by Hamas are very real difficulties. He will also be fully aware of the difficulties of maritime entry. That is why we are doing everything we can to argue for more points of entry into Gaza, more trucks and more land routes to get the aid in that is desperately needed.

The ICJ’s interim ruling makes it clear that the killing of Palestinians in Gaza must stop, but it has not; that immediate humanitarian aid must be allowed into Gaza, but it is not; and that the safety and security of civilians must be guaranteed, but it is not. As a result, more than 1 million Palestinians in Gaza are left starving and on the brink of famine, as confirmed by today’s IPC report.

The Israeli Government continue to flout international law by using starvation as a weapon of war. Children are starving, civilians are being killed and medical facilities are being attacked. What will it take for this Government to stand with international humanitarian law and oppose the actions of the Israeli military? How many more innocent Palestinians must be massacred? How many more children must die through starvation? When will the Government call for an immediate ceasefire?

The one thing that is missing from the hon. Gentleman’s list is an urgent call for the release of the hostages.

In answer to the hon. Gentleman’s question, Israel must do more. We set out very clearly the five steps it needs to take: an immediate humanitarian pause; increased capacity for aid distribution inside Gaza; increased humanitarian access through land and maritime routes; expanded types of humanitarian assistance allowed into Gaza, such as shelter and items critical for infrastructure repair; and the resumption of electricity, water and telecommunications services. I hope that we can unite with everyone else in this House on going after those five key aims.

The Israeli hostages must be released, and innocent Palestinians in Gaza must be supported. The Foreign Affairs Committee met Egyptian President el-Sisi when we were in the Gaza border region a fortnight ago. What particular support can this country provide to the Egyptians on delivering aid and averting a potential humanitarian and refugee crisis if the situation is not stabilised?

I thank my hon. Friend and all the Select Committee members for their work, their visits and the powerful arguments they have added to those of the Government.

In response to my hon. Friend’s direct question, I met the head of the Egyptian Red Crescent in Egypt. We are in very close contact to make sure that British aid and British support enhance the excellent efforts that the Red Crescent is doing everything it possibly can to prosecute.

It is clear that Prime Minister Netanyahu has not taken the slightest notice of anything the British Government or even the Americans have been saying. Mrs Thatcher suspended arms sales to Israel in 1982, and Tony Blair did the same in 2002. What on earth would it take for this Government to follow their example?

The right hon. Gentleman refers to the views of Prime Minister Netanyahu, and he will know that both our Prime Minister and the Foreign Secretary have engaged directly with Prime Minister Netanyahu to ensure that he is fully aware of what Britian thinks.

The right hon. Gentleman will also be aware that Israel is a pluralist democracy—the only one in the region. He will be aware that Israeli Minister Benny Gantz, whom the Foreign Secretary recently met in London, has different views from Prime Minister Netanyahu. There are many different views, and Britain strongly supports the views that I have set out to the House today.

It is not for Ministers to make policy on arms sales and the arms regime from the Dispatch Box. It is for the proper due processes—as laid down and approved by Parliament, and as laid down in law—and that is what we follow.

Given the impending famine in Gaza, as outlined by the IPC report, will the UK align with the EU, Sweden, Australia, Canada and many other countries by restoring funding to UNRWA as the most effective way to urgently and immediately scale up the delivery of aid, food and medical supplies to Gaza?

As my hon. Friend knows, we expect the report from the United Nations Office of Internal Oversight Services and, indeed, the interim report from Catherine Colonna, the former Foreign Minister of France, tomorrow, and we will read it with very great interest. Catherine Colonna is working with the Raoul Wallenberg Institute in Sweden, the Chr. Michelsen Institute in Norway and the Danish Institute for Human Rights, and we hope that her report will show a road map by which funding to UNRWA from Britain and many other countries can be restored.

My hon. Friend will equally be aware that UNRWA is fully funded for some months hence, and that British funding is fully paid up until into the next financial year.

It is estimated that people in northern Gaza have gone entire days and nights without heating at least 10 times over the last 30 days. Lord Cameron has said that UNRWA is the only body with a distribution network in Gaza, and the Minister mentions the report that will hopefully be available tomorrow. Will he assure the House that the UK Government will take a decision on resuming funding as soon as possible, and at least before the end of this month, which is only 12 days away?

I cannot give the hon. Gentleman a precise timetable, but I can answer yes to his question about it being done as soon as we think it is possible to do so.

Every life matters, whether Muslim, Christian, Jewish, another faith or no faith. At the centre of this crisis—a crisis started on 7 October by Hamas’s unprovoked attack on innocent civilians—whatever their faith or lack of faith, are children, women, men and vulnerable people who are suffering right now as we go off to our lunch or afternoon tea.

The Minister will know that I have been supportive of the Government, and that I will continue to be, but I hope he will note a change in tone. The figures vary, but it is estimated that 30,000 civilians and roughly 10,000 Hamas terrorists have been killed in Gaza. If it is true that 10,000 other terrorists are despicably hiding in Rafah among the civilian population, making it difficult to deliver aid, are we likely to see another 30,000 civilians killed so that Israel can find those terrorists? What is the British Government’s position? Is this something the Minister would support?

The awful symmetry that my right hon. Friend sets out is certainly one that no one wants to see. But the point he made so eloquently earlier in his question, setting out the views and feelings he holds, is widely reflected across the House, and I agree with him.

Half the population of Gaza is at risk of imminent famine, described by Melanie Ward of Medical Aid for Palestinians as meaning starvation, destitution, acute malnutrition and death. So does the Minister agree that all available aid corridors must be opened without delay and that there must be an immediate ceasefire, to enable food, water and urgent medical supplies to reach more than 1 million people in desperate need? All hostages must be released and this living hell must end.

I agree with almost everything the hon, Lady has said, but she will be aware, from what I have said today and previously, that calling for an immediate ceasefire is not, in the opinion of the British Government, a practical proposition. That is why we continually argue for a humanitarian pause, so that we can get the hostages out and food in, followed by a sustainable ceasefire.

Yesterday, the Israeli Prime Minister vowed to press ahead with the assault on Rafah, despite warnings from the international community. The prospect of millions in Rafah, who are there only as they desperately escape conflict to the north, being subjected to further suffering is intolerable. Will the Minister update the House on work that is going on with our international partners to make clear those concerns to the Israeli Government, while continuing to press Hamas to release the hostages?

I am grateful to my hon. Friend for her call for the release of the hostages. In respect of any military operations in Rafah, may I draw her attention to the words of the Foreign Secretary and the Prime Minister about the terrible dangers, loss of life and humanitarian consequences involved in that? She, like me and, I hope, everyone else in the House, will be hoping that no such operation goes ahead.

I have no problem condemning Hamas, but I also have no problem condemning the use of starvation as an act of war. Israel has control on the ground in Gaza—enough to oversee the distribution of aid and to make sure it gets to the people who need it most. Do the Government agree that Israel, as the occupying force, has a legal duty to oversee the distribution of that aid?

The important point about the distribution of aid is that it should be able to get into Gaza, preferably through road and land routes. I set out for the House earlier the amounts that are getting in. Although they are increasing, they are nothing like adequate and do not come anywhere near the numbers before 7 October. That is why the Government are doing everything they can to augment those figures.

We all want to see a ceasefire that is sustainable and holds out the prospect of a lasting peace. But the very definition of the word “ceasefire” means that both sides have to agree to end hostilities. Does my right hon. Friend agree that anyone calling for an immediate ceasefire needs to make it clear that that must include Hamas releasing the hostages, ceasing all hostilities and committing to a future peace?

My hon. Friend is correct in what he says, but the important point, which I have repeatedly made in the House, is that in order to have a ceasefire we have to have agreement from those taking part in these actions that they will abide by a ceasefire. Israel has the right of self-defence and the right to protect itself from the appalling acts that Hamas perpetrated on 7 October ever taking place again. Hamas have made it clear that they wish to repeat those awful acts. Those things do not sound to me like a strong basis for having a ceasefire.

Three standout statements from today have been that starvation is being used as a weapon of war; Israel is provoking famine; and the UK is still selling arms to Israel. When will the Minister understand the damning nature of this and the damage it is doing to the UK’s international reputation—or, rather, what is left of it?

We have been clear that Israel has the right of self-defence but it must abide by international humanitarian law and the rules of war. Britain is one of the leading nations on finding ways to get aid into Gaza and helping our allies and other regional powers to do everything we can to get the hostages out. I hope that the hon. Gentleman is proud of our country’s intervention in both those respects.

I welcome the recent news that the UK will be sending a UK Aid field hospital to Gaza. What assurances have been sought and what assurances have been given in respect of sufficient force protection for all the staff there, some of whom may be British?

We are acutely conscious of the way in which humanitarian workers—not just in Gaza, but all around the world—put themselves, unarmed, in harm’s way for the sake of their fellow human beings. My hon. Friend is right to say that a field hospital provided by UK Aid funding to UK-Med arrived in Gaza from Manchester last Friday. That facility is staffed by UK and local medics, who will be able to treat more than 100 patients a day. We are acutely conscious of the contribution they are making and we do everything we can to ensure that they are protected.

To any reasonable and informed observer, the conduct of the war in Gaza by Israel contravenes basic international humanitarian law, in failing to distinguish between armed combatants and civilians, in using force beyond what is militarily necessary, and in offences against the prohibition of inflicting unnecessary injury, and it is wholly disproportionate. More than 100,000 Palestinians have now been killed or injured by Israeli forces in Gaza since last October. The Minister relies on Israel being a democracy that is capable of abiding by its legal obligations, but the overwhelming evidence is that it is not doing so, so what legal advice has he received about the complicity of and dangers to our country in failing to take sufficient action under the relevant treaties to which this country is a signatory, to deter such gross breaches of international humanitarian law?

As I said, we continue to assess Israel’s commitment and capability to comply with international humanitarian law. Those assessments are supported by a detailed evidence base, conflict analysis, reporting from charities, non-governmental organisations, international bodies and partner countries, statements and reports by the Israeli Government, and their track record of compliance. We take all of that into account in making our judgments. I point out to the hon. Gentleman that when it comes to targeting and military action, the Israel Defence Forces have their own lawyers embedded in those units, in much the same way of prudence that the British military do. That is not something we see in any other force in the region and it should give some confidence that the Israelis are seeking to abide by international humanitarian law.

I welcome reports that Israel is opening new routes to directly deliver humanitarian aid into northern Gaza, amid a slowdown in UN operations and the widespread Hamas misappro-priation of that aid, which was referenced earlier. Significantly, at the same time, every day the IDF documents more and more Hamas infrastructure, weapons and missiles within civilian buildings—this week at al-Shifa Hospital and last month underneath UNRWA’s own headquarters. So is the grim reality not that as long as Hamas remain in control of Gaza, no matter how many times people cry for a ceasefire, there can be no peace?

As my hon. Friend sets out, it is clear that there is no place for Hamas in any future for Gaza. What happened on 7 October is uniquely appalling and I agree with him that until Hamas are removed from Gaza, the opportunity of peace is very limited.

The UN’s special rapporteur has been crystal clear that arms sales to Israel for use in Gaza are unlawful, given the clear risk that they will be used to violate international humanitarian law. Yet the Government have consistently refused to disclose whether licences, for example, for F-35 fighter planes, have been reviewed, let alone amended. Will the Minister take the opportunity finally to give Parliament a straight answer on this? I do not want to be told that reviews are possible, because we know that. I want to know whether those reviews have happened and whether he is going to publish the details. I do not want him to tell us simply that the arms regime in the UK is the toughest in the world. I know that, but it gives no reassurance at all to the more than 1 million people facing famine in Gaza right now.

The hon. Lady asks me whether these matters are kept under review, and I can assure her that they are always kept under review. Equally, they are not decided at the whims of Ministers standing at the Dispatch Box; they are decided through a detailed, proper, legally governed, code-governed process, and that, as always, is what the Government are doing.