Matt Western

It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson). I hope that in a few years’ time I will be joining him in celebrating growth rates that exceed the target objective. What a tour de force by the new Chancellor! If only we had had a general election back in the summer and autumn of 2022. There has never been a more important Budget in recent years. After more than a decade of decay, this Budget must herald a decade of renewal. As the previous Labour Government did from 1997 to 2010, this Government must rebuild our country by founding a stronger, more diverse and more balanced economy. As the Chancellor has spelled out, we will do so by investing in our country, growing the economy and attracting private investment. Only then will we be able to restore the public services that the public need and expect. This Budget sits in stark contrast to the 14 years of failure we have just suffered. It takes us beyond the absolute poverty, the waiting lists in our hospitals for surgery and cancer treatment, the decay in our crumbling schools, the teacher retention crisis, and an economy that has been virtually stagnant, boasting terrible productivity and income inequality. Those are the dreadful metrics of the last Government. The Institute for Fiscal Studies says that UK economic activity is 36% lower than it would have been if it had continued to grow in line with the 1997 to 2008 trend. That is a lower level than the eurozone or the United States, and when measured in terms of productivity, the latest 10-year average of growth in potential GDP per worker is zero, the second lowest level in the past 150 years. It is an economy still reeling from the events of Truss’s kamikaze Budget that sent mortgages soaring and prices skyrocketing. Turning to inequality, the UK now has the ninth most unequal incomes in the OECD. Wealth inequality is even more glaring, with the top fifth of the country owning 63% of its wealth, while the bottom fifth hold only 0.5%. That does not just impact the amount of money in people’s pockets: it impacts the economy, too. That is why I believe we must address the imbalance of regressive flat taxes. Council tax must be addressed in the future, and I am glad that the Chancellor has closed tax loopholes and rebalanced the burden of payments, placing it on those who can afford it. At the same time, this Budget will ensure that hard work pays off by raising the minimum wage. I welcome this—it is striking that many states in the US already pay a higher relative minimum wage than we in the UK do. Hard-pressed households facing the cost of living crisis will also welcome today’s Budget. The fact that we have frozen fuel duty is important, as is not having any increase in income tax, personal national insurance or VAT, as well as the penny off the pint. Those measures will all be welcomed by constituents of mine in Warwick and Leamington. However, it is through investment that we can grow and rebalance our economy. Strikingly, 14 years of the Conservatives’ economic policies have led to our having the lowest level of public and private investment in any G7 economy. That is why I am proud to be standing on the Government side of the House discussing this Labour Budget, because we understand the synergy between investing in people and investing in the economy. We have already put £7 billion into a sovereign wealth fund, we have set up GB Energy, and we will be establishing Skills England to ensure we have the skills for the next decade. The investment summit a few weeks ago announced £63 billion—an extraordinary achievement. That investment is desperately needed, as was pointed out by Gus O’Donnell, Jim O’Neill, Mariana Mazzucato and Mark Carney. They argue the case for loosening the fiscal rules, stating that “The current fiscal framework has helped to drive this short term thinking and created an inbuilt bias against investment”. That point is also supported by the International Monetary Fund. For years, economists have been calling for a radical shake-up of our economy: we need to shift from a consumption-driven economy to an investment-led one. As such, I welcome the Chancellor’s announcement of support for vital sectors, such as the energy transition and the automotive industry, through the advanced manufacturing plan. The opportunities are huge—that is why the Industrial Strategy Council is so important—so the support announced for green hydrogen, gigafactories, the life sciences and the aerospace sector, as well as the £2 billion promised for electric vehicles in the UK, are so important. We need investment in our schools, our infrastructure and our NHS. I am particularly pleased to see the additional investment going into our NHS, because we can only become wealthy as a nation if we are healthy as a nation. If we do not address our NHS, we will worsen people’s lives, but this will also have a significant impact on our economy. In 2023, the number of people economically inactive because of long-term sickness rose to over 2.5 million. I would love to talk about productivity, Madam Deputy Speaker, but perhaps I will do it another time. However, a London School of Economics report last year found that UK productivity is lower than that of France, Germany and the United States. That is why we need investment, and why we need to address the flexible labour laws in this country that have led or contributed to lower than average investment. I am conscious of time, but I welcome all the measures that my right hon. Friend the Chancellor has announced, particularly on addressing the issue of business rates, which is so important for our town centres up and down the country. I welcome the investment in local government —the additional moneys for potholes, for example—but also the support for families, carers and children with SEND. This Budget is about stability, certainty and credibility, and about investing in our economy, which is so important because, above all, we need to fix the foundations of our economy. The Chancellor has set out the plan to deliver that change, as was promised to the British people, and I commend the choices she has made.