Rishi Sunak

Today, the Chancellor has launched an enormous borrowing spree, saddling our children and grandchildren with billions upon billions of pounds of more debt, pushing up interest rates, leaving our economy more exposed to future shocks and leading the OBR today to now forecast higher inflation in every year of the forecast. Her decision to let borrowing rip makes a total nonsense of her claims on the state of the public finances. If they truly were in such a dire state, as she has said, what we should have seen today is a significant reduction in borrowing to repair them, not the splurge she has just unleashed. Instead, what we see is borrowing higher in every year of the forecast and debt higher in every year of the forecast. Now, the Chancellor has tried to cover up that splurge by fiddling the fiscal rules. According to the Institute for Fiscal Studies, the new measure will not actually even be a constraint on the amount she can borrow. It says it is: “hard to escape the suspicion” that the Government are attracted to this change “by the fact that it would allow for significantly more borrowing…without any need for tough choices elsewhere.” “Fiscal fiddling” is what it has called it. The Chancellor herself actually agrees. She specifically told the British people she would not change the debt target. She said she was “not going to fiddle the figures” to get better results, but that is exactly what she has done. She has gone back on her word and fiddled the figures so she can borrow billions more—broken promise after broken promise, and working people will pay the price. The reason the Chancellor has increased borrowing and increased taxes is because she has totally failed to grip public spending. First, she has no meaningful plan to deliver the £20 billion-worth of savings available if the public sector simply returned to its pre-pandemic levels of productivity. Instead, one of the first things the Chancellor did was to hand out inflation-busting pay rises to the unions without getting any productivity-enhancing reforms in return. The Chancellor also scrapped her predecessor’s plan to get the civil service back to its pre-pandemic numbers. She does not seem to think that the civil service can be reduced by a single person. And the Chancellor has no plan to control welfare spending. Yet if we simply got working age welfare spending on people with a disability or health condition back to pre-covid levels, that would free up £30 billion-worth of savings. Whether it is scrapping our plans to shrink the civil service or their failure to control welfare spending, this is not her inheritance, these are her choices. The result: higher spending, higher borrowing, higher taxes. It is broken promise after broken promise, and working people paying the price. Let me turn next to growth, and remind the Prime Minister and Chancellor that they did, in fact, inherit the fastest-growing economy in the G7. That is testament to the last Government boosting investment by introducing full expensing, increasing the labour supply by expanding childcare, reforming welfare and cutting tax on work—all decisions the OBR said would increase growth. The Chancellor has said that growing the economy is the Government’s No. 1 priority. The Prime Minister even said that higher growth would come “very quickly”. To be fair, the Prime Minister and Chancellor have had a rapid impact on growth. As their plans for the economy became clear, survey after survey showed business confidence plummeting. No wonder the Government’s own assessment says their French-style labour laws will impose a £5 billion—[Interruption.] Labour Members will be explaining it to the businesses in their constituencies that their labour laws, by their own assessment, will impose a £5 billion direct cost on business, disproportionately hitting smaller businesses. As business group after business group has pointed out, the tax rises on jobs and enterprise in today’s Budget will “hobble growth”—a “poll tax on business” is what they have called it. Despite the record-breaking tax rises, despite fiddling the figures and despite letting borrowing soar, today the OBR has forecast that growth will be lower under this Government than it was forecast to be under the Conservatives. That is the change they have wrought. This is what happens when the Labour party is led by people who have no experience of business and enterprise: relentlessly talking down our economy, delivering a tidal wave of anti-business regulations, destroying our flexible labour market and raising taxes to the highest level in our country’s history. It is the classic Labour agenda: higher taxes, higher borrowing, no plan for growth, and working people paying the price. During the election campaign, the Prime Minister specifically said there would be no tax surprises under Labour. The Chancellor went even further, saying she wanted to bring taxes down. Each time they made those promises, we warned that they were not telling the truth. Today, the Chancellor and Prime Minister have done what they were always planning to do, but chose to keep hidden from the British people. Far from reducing taxes, as a result of today’s Budget never in the history of our country have taxes been higher than they are under this Labour Government. They specifically promised that they would not raise tax on working people. The Chancellor said: “Labour will not put up your income tax, national insurance or VAT.” Just this month, the Prime Minister gave an “absolute commitment” to not raising tax on working people. What does today’s Budget do? It raises tax on working people by increasing national insurance and breaking Labour’s promise. As the independent Institute for Fiscal Studies has said, this is a straightforward breach of Labour’s manifesto, because, as the Office for Budget Responsibility has made clear, this tax rise is “passed through entirely” to working people. Even since the Chancellor started speaking, the IFS has already confirmed that the vast majority of this tax increase will hit working people through lower pay. However, we do not need to take it from the IFS or even the OBR; we can take it from the Chancellor herself. She has previously described her tax rise as a “jobs tax” which “takes money out of people’s pockets”.—[Official Report, 19 October 2021; Vol. 701, c. 675.] And not only that—the Chancellor also said that the problem with national insurance “is that it is a tax purely on people who go to work and those who employ them”. Far from protecting working people, she is literally raising the only major tax that exclusively hits working people. But it does not stop there. Businesses on the British high street: your taxes are going up. Businesses investing in British energy: your taxes are going up. The small business owner looking to reap the rewards of years spent growing a business and creating jobs: your taxes are going up. The young couple saving to buy their first home: your taxes are going up. The family—[Interruption.]