Category: Economy

  • Theresa Villiers – 2023 Speech on the Budget

    Theresa Villiers – 2023 Speech on the Budget

    The speech made by Theresa Villiers, the Conservative MP for Chipping Barnet, in the House of Commons on 16 March 2023.

    The worst health emergency for 100 years and the worst energy price shock for 50 years have done severe damage to our economy in the last few years, but the Budget has demonstrated the positive impact of the difficult decisions taken in the autumn statement to repair the public finances and restore stability after the damage done by global economic turmoil. As we have heard, unemployment is near a 50-year low, productivity is higher now than it was before the pandemic, and the OBR predicts that we will not go into recession, that inflation will fall and that growth is returning. That means we are on track to meet the first three of the Prime Minister’s five priorities, which are to halve inflation, grow the economy, reduce debt, cut NHS waiting times and stop the boats.

    At the heart of the Budget and the Government’s wider economic policy is helping people with cost of living pressures. Taken together, the measures in the Budget and those previously announced are worth £94 billion over this year and next—one of the largest support packages in Europe—which is an average of more than £3,300 for every household in the country. In advance of his statement, I asked the Chancellor for the continuation of Government support for energy bills. I also made the case for families struggling with childcare costs, raising the issue alongside others in Parliament just a week or two ago, so I am really pleased with the plan to extend the 30 hours of free childcare for working parents to cover children from the age of nine months to four years. It is also very welcome that the childcare component of universal credit can now be paid up front.

    This package is a truly radical set of changes, and investing in early years education and childcare is a sound economic move. Not only will it bring more parents back into the workplace to help address labour shortages; high-quality early years provision can also be an engine of social mobility, helping children to get the best start in life in order to enable them to realise their potential and succeed in their aspirations. The increase in the rates to be paid to childcare settings for delivering the free entitlement is a crucial part of this endeavour. It has been a key ask of the sector, but what is now proposed is still a very big change and implementation will not be easy, so I will be scrutinising progress carefully as a member of both the all-party parliamentary group for nursery schools, nursery and reception classes, and the APPG on childcare and early education.

    I welcome the changes to the pension tax rules, which have been pushing experienced GPs and hospital doctors to cut their hours and retire early, just when we need them most. I have raised that problem with successive Health Secretaries and Chancellors of the Exchequer. The lifetime allowance is, I am afraid, a classic example of where taxes get so high that they deter work and depress economic activity. It is not just about the very high taxes paid if a person hits the lifetime allowance limit; it is also about the uncertainty, which means that doctors have cut their hours even if they have not hit the limit, because they fear reaching it. Both are causing problems with the retention of our hard-working doctors, so I believe that the changes announced by the Chancellor yesterday will play an important part in reducing those NHS waiting times in the way that we all want. I hope that it will also mean that my constituents have faster and better access to GP appointments.

    Finally, I want to highlight some areas where further action is needed in relation to Budget matters. Implementation of reforms relating to the regulatory climate for artificial intelligence and the approval of medicines, as announced yesterday, are welcome, but I would like to see a more concerted push to improve regulation to make it more targeted and more agile and to ensure that it keeps up with technological change. This area can play a crucial role in raising productivity, boosting growth and making this country the science super-power that the Prime Minister wants it to be. It is also crucial to raising living standards in the long term.

    The taskforce on innovation, growth and regulatory reform set out a blueprint for starting this reform process, and I would ask the Minister to report back on progress in implementation of the taskforce’s recommendations. I welcome the indication by the Chancellor that he will come back with a plan for one of TIGRR’s key proposals —to unlock productive investment from pension funds—but we do need to get on with this. The freedom to make our own choices on regulation and design these rules according to our own national interest is a key benefit from Brexit, and we need to grab the opportunity that it presents.

    Lastly, I fully back, of course, the caution shown in this Budget on the public finances. Bearing down on inflation and getting debt under control must be our top priority. But as the economic situation, I hope, continues to improve, I would ask my right hon. Friend the Chancellor to strive to find the room for further pay increases for the public sector and, of course, for wider tax reductions in the longer term.

  • Stephen Timms – 2023 Speech on the Budget

    Stephen Timms – 2023 Speech on the Budget

    The speech made by Sir Stephen Timms, the Labour MP for East Ham, in the House of Commons on 16 March 2023.

    Thank you, Mr Deputy Speaker, and I apologise for my late arrival in the debate.

    It is striking how hard it is for Conservative Chancellors to resist the temptation to hand out big tax cuts to the wealthiest while raising tax for ordinary people. We can sympathise with the Chancellor in that he meets many such people—many people among the 1% wealthiest pension savers in the country—who are very courteous and very nice to him over convivial dinners, and they explain to him their frustrations with the Government’s pensions tax policy. These are good eggs, and who could possibly begrudge them a £1.2 billion tax cut? But the reality is that pension tax relief is already massively skewed in favour of the best-off, and the Chancellor, when times are hard, has decided to give another billion to the wealthiest in pension tax relief.

    I do welcome the adoption of the Select Committee recommendations on support in universal credit for the costs of childcare, which was announced yesterday. As the Secretary of State explained, allowing the costs to be paid up front from universal credit and lifting the cap—absurdly, it had not been raised since 2005—will remove very important barriers to work, including a barrier to those who are working part-time from working full-time.

    There is much to welcome in the health and disability White Paper, which says that the system will be changed so that it focuses on

    “what people can do, rather than what they can’t”.

    That is laudable, but precisely the same form of words was used by Alistair Darling to introduce changes to the incapacity benefit system 25 years ago. Whether the detail turns out to be a good thing will depend on the detail, which is largely absent. The Secretary of State spoke about consultation. The Government’s ill-fated disability strategy came to grief in the courts because had not adequately consulted disabled people. We must hope that that lesson has been learned.

    Nobody will mourn the work capability assessment, which the White Paper says will be replaced by

    “a new personalised health conditionality approach”.

    Can Ministers tell us what that means? The White Paper goes on to explain that it

    “will provide more personalised levels of conditionality and employment support”,

    but I am afraid that leaves us none the wiser. The problem is that, despite being years late, much of the vital detailed work does not seem to have been done yet.

    I welcome some of the specific proposals to reform PIP—for example, I am pleased that the call to match people’s primary health condition with a specialist assessor will at least be tested. Many PIP assessments come up with the wrong answer, as we know, because when people appeal against the determination, the great majority win their appeal—in fact, the proportion who do so has been going up. The White Paper proposes to place more weight on the PIP assessment in future, so it is even more important that we get it right. The only way to do that is to record all the assessments, so that if the decision is subsequently found to be wrong, it is possible to go back, work out why and consider how to avoid the same mistake being made again in future.

    The White Paper says that there will be an increase in recording, which is a good thing, but the Select Committee proposed five years ago that all assessments should be recorded, with an opt-out for the claimant if they did not want their assessment to be recorded. In the new contract for assessments to be agreed this year, the Department should instruct providers to record assessments by default with a clear opt-out option. That proposition is supported by all three assessment providers. It will ensure that there is an objective record of the assessment, which will reassure claimants and allow assessment quality to be audited. When recordings are available and the findings of assessments are overturned, the recordings should be checked at least on a sample basis to see whether an erroneous outcome could have been avoided.

    I welcome the White Paper’s commitment to test the feasibility of sending a copy of the assessor’s report to claimants automatically before the decision is made, which was also recommended by the Select Committee five years ago. I hope that the feasibility testing will be brief so that that can be introduced across the system soon.

    It is disappointing that there is still not yet a target for disability employment in the White Paper. The Government congratulate themselves on achieving the previous very undemanding target early, but I am pleased that the White Paper says:

    “Our goal to reduce the disability employment gap remains.”

    In the 2015 election campaign, David Cameron announced a target to halve the disability employment gap. Unfortunately, that target was quickly scrapped as soon the general election was out of the way. I hope that a clear target on the disability employment gap will now be adopted.

    Much will depend on the support that disabled people receive from work coaches. Polling by the charity Scope found that half of jobseekers with complex disabilities do not feel supported by work coaches. The initial training for work coaches does not seem to cover the barriers to work faced by disabled people, and jobcentres lack the specialist assistive technology that many disabled people need to look for and apply for work.

    The White Paper refers to the potential of the UK shared prosperity fund to provide employment support. It is disappointing that there will be, I think, a two-year gap between the European social fund ending and the UK shared prosperity fund being allowed to support employment projects. A witness to the Select Committee yesterday suggested that the flexible support fund might be expanded, at least temporarily, to try to bridge that gap.

    That could lead to a large amount of important employment support capacity not being lost, which it will be if the gap is allowed to take effect.

    Lastly, I appeal to the Secretary of State to spare us the embarrassment of the Department’s appealing against the ruling this week by the Information Commissioner that the Department’s research on the impact of benefit sanctions must be published. The Department promised to publish it. As was her wont, his predecessor but one, the right hon. Member for Norwich North (Chloe Smith), decided to hide as much as possible if it contained any hint of a question mark about the Department’s policies. I welcome his review of that approach, and I hope he will show with this particular case that things have now changed.

  • Rachel Reeves – 2023 Speech on the Budget

    Rachel Reeves – 2023 Speech on the Budget

    The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, in the House of Commons on 16 March 2023.

    The reality of yesterday’s Budget is clear: long-term growth downgraded, household incomes falling, public services on their knees. Families are facing the biggest hit to living standards since records began. The only surprise was a huge handout to the richest 1% of pension savers. Yet again, working people and businesses—the key to our economic success—have been put at the bottom of the pile.

    The questions people will be asking themselves after 13 years of Conservative Government are these. Am I and my family better off? Are our school, hospitals and transport systems working any better than 13 years ago? Frankly, is anything in Britain working better today than it did when the Conservatives came into office? The answer to those questions is a resounding no.

    Labour believes that the tax burden must be shared fairly. That is why I have announced today that Labour will reverse the changes to tax-free pension allowances. It is the wrong priority, at the wrong time, for the wrong people. Instead, we would create a targeted scheme to encourage doctors to work overtime and not to retire early. That could be done at a fraction of the cost, as the British Medical Association has said.

    The Government’s policy to give tax cuts to the wealthiest 1% is unravelling before our eyes. Paul Johnson, the director of the Institute for Fiscal Studies, says that even on the “optimistic” Office for Budget Responsibility costings, it will cost an eye-watering £100,000 per job retained. The Resolution Foundation said:

    “The beneficiaries from these reforms stand to gain large amounts, and they are heavily concentrated among the very rich”.

    It added that

    “this giveaway could lead to inheritance tax ‘abuse’”.

    Pensions expert John Ralfe has said that

    “this is not about supporting a hard-pressed NHS, it is really a tax giveaway…for the very highest earners.”

    Labour recognises the mess that the Government have got into with our NHS workforce planning, and we have called for changes to doctors’ pensions, but we will oppose this untargeted scheme for the wealthiest and we will put this measure to a vote in Parliament next week. I defy Conservative Members to vote in favour of a policy that they know will do absolutely nothing to lift the living standards of their constituents.

    Last autumn we saw the Chancellor of the day announce reckless tax cuts to help the richest, too. Why does this keep happening? The reason why the Tories get the wrong answers is that they have the wrong priorities for our country and the wrong analysis of the economy. Wealth does not just trickle down from the top; it comes from the efforts of millions of working people and thousands of businesses. That is Labour’s approach to growth.

    Theresa Villiers (Chipping Barnet) (Con)

    The right hon. Lady denounces the abolition of the lifetime allowance, but it was actually something that never applied under Labour at all. If Labour is so concerned about its loss, why did it not introduce it in the first place?

    Rachel Reeves

    Gordon Brown introduced a lifetime allowance for pensions savings, as I am sure the right hon. Lady remembers. However, the point here is about priorities. For all our constituents, there is an average tax increase per household of £650, starting next month with the freezing of the tax thresholds and the increase in council tax. Yet yesterday, the only permanent tax cut provided in the Budget was for people who already have pensions savings of more than £1 million. I just do not believe that that is the priority for our constituents, and I think hon. Members right across the House, if they think about it, know that too.

    Mr Deputy Speaker—is that what I call you?

    Mr Deputy Speaker (Sir Roger Gale)

    Yes.

    Rachel Reeves

    It is wonderful to see you in your place. We were told that this was a “Budget for growth”, but the documents published with this Budget confirm that the UK economy will shrink this year. The Chancellor expects us to cheer at the news that the economy will shrink a little bit less than he previously thought. Is that really what “good” looks like for the British economy?

    The Office for Budget Responsibility also confirmed that we will have the weakest growth in the G7 this year and next year, and it saw growth downgraded for each of the last three years of the forecast period. All the while, the UK is the only G7 economy that is still smaller than it was before the global pandemic.

    Mr Tanmanjeet Singh Dhesi (Slough) (Lab)

    This Budget will not do a great deal for my Slough constituents who are really struggling to make ends meet and pay their bills, apart from a big tax cut for the very richest in our society. My constituents will have the highest tax burden and the biggest drop in disposable income since the second world war inflicted on them. Does my right hon. Friend agree that this Budget will not actually help to solve the cost of living crisis?

    Rachel Reeves

    I have spent time in my hon. Friend’s Slough constituency talking to working people and businesses. On the most recent couple of visits there, I do not remember anyone saying, “The big priority for families and businesses in Slough is a tax cut for the 1%.” Instead, they were saying, “Let’s have a targeted scheme for the NHS, as Labour has called for, instead of this blanket approach for the top 1%.”

    The Government have, to be fair, given us some growth: growth in stealth taxes, growth in mortgage costs and growth in NHS waiting lists. There is no plan for the future, just a Tory legacy of pain. It will take a Labour Government to spark and sustain growth, lift people’s living standards in every part of the country, meet the challenges of the future and achieve the change that our country desperately needs.

    When I meet people in industry, I hear frustration from employers who cannot get and retain the staff that they need. It is a feeling the Tories know all too well, with three Prime Ministers in one year, and the current Chancellor the fourth in that role since just last summer. Yet somehow, it is the same Tory Government. It is a bit like Trigger’s broom in “Only Fools and Horses”, with its 17 new heads and 14 new handles, only much less useful.

    After his five months as Chancellor, the right hon. Member for South West Surrey (Jeremy Hunt) might feel that he should qualify for a Conservative party long-service award. In fact, of the past three Chancellors, he is the first to deliver a Budget, although the last Chancellor did last long enough to deliver a mini-Budget that crashed our economy—an extreme experiment in ultra-Tory ideology, using Britain’s economy and people’s livelihoods as their laboratory. It must never happen again.

    Alex Cunningham (Stockton North) (Lab)

    Our country has some amazing assets and amazing opportunities to invest in the green industries of the future, but we see a lacklustre plan from the Tory Government to exploit them. Does my right hon. Friend agree that this Government of gimmicks have all but given up on leading the way and creating jobs and opportunities as we decarbonise our economy and, in reality, want to import everything from abroad? Surely it is time that they nicked our plan.

    Rachel Reeves

    I know that in my hon. Friend’s constituency, there are huge opportunities for the jobs and industries of the future—for example, in carbon capture and storage and in green hydrogen.

    I will not be churlish: I must admit that there were some good ideas in the Budget yesterday—the ones that my colleagues and I have announced in the last few months, which we are happy to support. There was a fairer deal for people on prepayment meters who are paying a premium—we called for this last August. There was also preventing a fuel duty increase, a plan to help the over-50s back into work and better childcare provision for working parents. They were all called for by Labour and are now backed by the Tories. The truth is, however, that after 13 years of Tory Government, people will rightly ask, “Is that it? Is that really all they think it takes to reverse 13 years of low growth, falling living standards and crumbling public services?”

    Of course, we welcome the freeze in energy prices—after all, we proposed it—but politics is about priorities. Labour first called for a windfall tax to help people with their bills 14 months ago. We were clear that keeping energy prices down was our top priority, and that it was wrong for oil and gas giants to profit from the windfalls of war at everyone else’s expense. Yet again, however, the Chancellor chose yesterday to leave billions of pounds of windfall profits on the table, which could be supporting families and businesses during this cost of living crisis. It is a question of who pays, and the Government are turning to the public and saying, “You.”

    There seems to be a disconnect between what I heard from the Chancellor yesterday and the experiences of my constituents and many people across the country. The Tories claim that their plan is working, but the Resolution Foundation says that the typical household will be £1,100 worse off as a result of the Government’s policies over the period of just this Parliament. Is that really what success looks like to them?

    The reality is that people are still weighed down by a prolonged cost of living crisis that is taking its toll. Debt advice organisations have faced a tidal wave of demand from people, but incredibly, the jobs of thousands of debt advisers are at risk. Let me be clear: more people are struggling not because they have forgotten how to budget, but because Tory Budgets are simply not working for them.

    One of the biggest costs people face is their monthly mortgage or rent. The Chancellor said yesterday that the impact of the mini-Budget had disappeared—seriously? He should tell that to the family facing a £2,000 hike in their mortgage payment, as confirmed by the Office for Budget Responsibility yesterday. That means less money to spend on the local high street, meals out with the family or an annual holiday. That is the lasting damage that the Conservatives have done to the living standards of working people. The last thing that the country needed in the middle of a cost of living crisis was a Tory mortgage penalty.

    Despite all the damage that the Tories have done, I am optimistic about the future for our country. I have had the privilege of seeing great innovation across Britain, from the development of battery operated trains at Hitachi in County Durham to hydrogen-powered engines at JCB in Staffordshire and pioneering research at Rolls-Royce into carbon neutral aviation. I know the potential that we have as a country. That is what Labour’s green prosperity plan is all about. It is a plan to decarbonise our economy, drive down bills and let British businesses and workers compete in the global race for the jobs and industries of the future.

    Iain Stewart (Milton Keynes South) (Con)

    The right hon. Lady rightly points to the great innovation, research and development that is happening in British companies. Does she not agree that the measures that the Chancellor announced to help to discount research and development will be a major boost to such industries?

    Rachel Reeves

    The problem is that last autumn, the Chancellor announced a scrapping of the R&D schemes, but then brought back something this week that we are supposed to cheer about. The plan that Labour has set out will rely on Government and business working and investing together.

    As President Biden’s Inflation Reduction Act galvanises green energy in the United States and Governments from Europe to Asia and Australia respond, it is not enough here in Britain to cling to old ideas and old methods while other countries steal ahead in the global race. Our growth plans will be alongside a modern industrial strategy, reform of business rates, changes to the apprenticeship levy and measures to fix the broken Brexit deal in order to increase the order books for British industry. There is so much more that the Government could be doing to boost growth, create good jobs and get Britain’s economy firing on all cylinders, but I heard so little of that in the Chancellor’s Budget yesterday.

    The verdict is in. The Federation of Small Businesses says that the Budget leaves “many feeling short-changed” and that

    “the Government’s lack of support for small firms in critical areas is glaring.”

    It says that

    “trickledown economics here simply does not work.”

    The British Chambers of Commerce highlights that, yet again, the Government

    “failed to reform business rates”,

    and the Society of Motor Manufacturers and Traders says:

    “There is little that enables the UK to compete with massive packages of support to power a green transition that are available elsewhere.”

    The Institute for Fiscal Studies describes capital expensing as “temporary tweaks”, concluding that:

    “There’s no stability, no certainty, and no sense of a wider plan.”

    As for working people, the TUC points out that:

    “Real wages will not return to 2008 levels until 2026”

    and that

    “workers across the economy will have looked at this Budget and thought ‘was that it?’”.

    This is a Government who are struggling to paper over the cracks after their 13 years of neglect and shoddy workmanship. The roof is leaking, the windows are rotten and the foundations are suffering from subsidence. The Tories are totally incapable of building the country and economy that we need.

    Alex Cunningham

    I am grateful to my right hon. Friend for giving way a second time, even though she would rather not. I wonder whether she has seen the comments from the Federation of Small Businesses, which said that, on investment in the labour market, the measures that small businesses were looking for are missing, and that the measures are well wide of the mark and irrelevant to the 5.5 million-strong small businesses in our communities.

    Rachel Reeves

    Small businesses are the backbone of our economy, and the words from the Federation of Small Businesses should have a chilling effect on those on the Government Front Bench.

    Beyond the economy, growth rates and living standards, if we want any further evidence of the Government’s failure, just look at our public services. Public services play a crucial role in achieving a strong economy and a good society. They adapted during the pandemic and were critical to our response in the fight against covid, with people taking personal risks to keep others safe and supported. Thirteen years of Conservative Government has weakened our public services and devalued the people working in them. Labour would make choices in the national interest.

    Yet again, the Budget failed to abolish non-dom tax status. As we know, non-doms have no bigger champion than in Downing Street, but Labour believes that those who make Britain their home should pay their taxes here. The non-dom rules are costing us £3 billion every year. Ending that tax exemption could fund the biggest expansion of the NHS workforce in a generation.

    It is not just our NHS that has suffered. We have lost all kinds of community assets over the last 13 years, from libraries to Sure Start centres and youth clubs. Let us take one example: since 2010, 382 swimming pools have closed in England under the Tories. Yesterday, the Chancellor announced a £63 million package to keep the remaining ones open, but, at the same time, the Prime Minister has upgraded the local electricity network to heat his own swimming pool. I wonder whether he will be inviting the local kids who have lost their swimming pools to come and use his facilities.

    This Government have no plan to clean up the mess they have made over 13 years. Each and every time they promise to solve a problem, they fail and the country pays the price. We need a Budget for growth, yet growth has been downgraded. We needed to raise living standards, yet household incomes are falling at their fastest rate since records began. We needed a proper windfall tax on the energy giants, but instead they continue to enjoy the windfalls of war. We needed a Budget for home ownership, yet mortgage costs have risen because of the Tories’ kamikaze mini-Budget last year. We needed a Budget with a plan to invest in our NHS workforce, but the Prime Minister and Chancellor chose to defend the non-doms instead.

    The Tories have had their chance and they have blown it; they are out of ideas and they are out of time. We need a general election and a Labour Government to give our country its future back.

  • Tim Farron – 2023 Comments on the Spring Budget Speech

    Tim Farron – 2023 Comments on the Spring Budget Speech

    The comments made by Tim Farron, the Liberal Democrat MP for Westmorland and Lonsdale, on Facebook on 15 March 2023.

    It absolutely beggars belief that the Conservatives’ budget had next to nothing in it to address the NHS crisis in Cumbria and across the country.

    People are waiting for hours in A&E, weeks to see a GP, months for cancer treatment, and an eternity for mental health care.

    And what did the Chancellor announce to tackle this disastrous situation? Barely a word, barely a penny.

    Meanwhile the Conservatives have once again shown they don’t care about our rural communities. There was nothing to support us on the big issues we face whether it’s the crisis in farming or on the scandal of sewage being dumped in our lakes and rivers.

    Cumbrians are being taken for granted by this Conservative Government.

  • Richard Burgon – 2023 Comments on the Spring Budget Speech

    Richard Burgon – 2023 Comments on the Spring Budget Speech

    The comments made by Richard Burgon, the Labour MP for Leeds East, on Twitter on 15 March 2023.

    A year ago households had an energy bill price cap of £1,300.

    The Government is today bragging that it’s fixing the cap at £2,500 – nearly double what people paid a year ago.

    Once again the profits of greedy energy companies are being put before the needs of people. #Budget2023

  • Caroline Lucas – 2023 Comments on the Spring Budget Speech

    Caroline Lucas – 2023 Comments on the Spring Budget Speech

    The comments made by Caroline Lucas, the Green Party MP for Brighton Pavilion, on Twitter on 15 March 2023.

    Unbelievable listening to the chancellor claim the Govt are lifting children out of poverty – a government responsible for 3.9m children living in poverty in UK, that’s 27% of children. #SpringBudget #Budget2023

  • Jeremy Hunt – 2023 Spring Budget Speech

    Jeremy Hunt – 2023 Spring Budget Speech

    The speech made by Jeremy Hunt, the Chancellor of the Exchequer, in the House of Commons on 15 March 2023.

    Madam Deputy Speaker, in the face of enormous challenges I report today on a British economy which is proving the doubters wrong.

    In the autumn we took difficult decisions to deliver stability and sound money.

    Since mid-October, 10-year gilt rates have fallen, debt servicing costs are down, mortgage rates are lower and inflation has peaked.

    The International Monetary Fund says our approach means the UK economy is on the right track.

    But we remain vigilant, and will not hesitate to take whatever steps are necessary for economic stability.

    Today the Office for Budget Responsibility forecast that because of changing international factors and the measures I take, the UK will not now enter a technical recession this year.

    They forecast we will meet the Prime Minister’s priorities to halve inflation, reduce debt and get the economy growing.

    We are following the plan and the plan is working.

    But that’s not all we’ve done.

    In the face of a cost-of-living crisis we have demonstrated our values by protecting struggling families with a £2,500 Energy Price Guarantee, one-off support and the uprating of benefits with inflation.

    Taken together, these measures are worth £94 bn over this year and next – one of the largest support packages in Europe.

    That averages over £3,300 of cost-of-living help for every household in the country.

    Today, we deliver the next part of our plan.

    A budget for growth.

    Not just the growth that comes when you emerge from a downturn.

    But long term, sustainable, healthy growth that pays for our NHS and schools, finds jobs for young people, and provides a safety net for older people all whilst making our country one of the most prosperous in the world.

    Prosperity with a purpose.

    That’s why growth is one of the Prime Minister’s five priorities for our country.

    I deliver that today …

    …by removing obstacles that stop businesses investing;

    …by tackling labour shortages that stop them recruiting;

    …by breaking down barriers that stop people working;

    …and by harnessing British ingenuity to make us a science and technology superpower.

    Meeting the Prime Minister’s priorities

    I start with the forecasts produced by Richard Hughes and his team at the independent Office for Budget Responsibility whom I thank for their diligent work.

    They have looked in detail at the Prime Minister’s economic priorities.

    Halving inflation

    The first of those is to halve inflation.

    Inflation destroys the value of hard-earned pay, deters investment and foments industrial strife.

    This government remains steadfast in its support for the independent Monetary Policy Committee at the Bank of England as it takes action to return inflation to the 2% target.

    Despite continuing global instability, the OBR report today that inflation in the UK will fall from 10.7% in the final quarter of last year to 2.9% by the end of 2023.

    That is more than halving inflation.

    High inflation is the root cause of the strikes we have seen in recent months.

    We will continue to work hard to settle these disputes but only in a way that does not fuel inflation.

    Part of the fall in inflation predicted by the OBR happens because of additional measures I take today.

    Firstly, I recognise that even though wholesale energy prices have been falling, there is still enormous pressure on family finances.

    Some people remain in real distress and we should always stand ready to help where we can.

    So after listening to representations from Martin Lewis and other experts, I today confirm that the Energy Price Guarantee will remain at £2,500 for the next three months.

    This means the £2,500 cap for the typical household will remain in place when energy prices remain high, ahead of an expected fall in prices from July.

    This measure will save the average family a further £160 on top of the energy support measures already announced.

    The second measure concerns over four million households on prepayment meters.

    They are often the poorest households, but they currently pay more than comparable customers on direct debit. Ofgem has already agreed with suppliers a temporary suspension to forced installations of prepayment meters.

    But today I go further, and confirm we will bring their charges in line with comparable direct debit charges. The energy premium paid by our poorest households is coming to an end.

    Next I have listened to representations from the hon members for East Devon, North Cornwall, Colne Valley and Central Suffolk and North Ipswich about the risk to community facilities, especially swimming pools, caused by high costs. When times are tough, such facilities matter even more.

    So today I am providing a £63m fund to keep our public leisure centres and pools afloat.

    I have also heard from my RHF the charities minister and his Secretary of State about the brilliant work third sector organisations are doing to help people struggling in tough times.

    They can often reach people in need that central or local government cannot, so I will give his department £100m to support thousands of local charities and community organisations do their fantastic work.

    I also note the personal courage of one of my predecessors, my RHF from Bromsgrove, in talking about the tragedy of suicide and the importance of preventing it.

    We already invest a lot in this area, but I will assign an extra £10m over the next two years to help the voluntary sector play an even bigger role in stopping more families experiencing such intolerable heartache.

    My penultimate cost of living measure concerns one of our other most treasured community institutions, the great British pub.

    In December, I extended the alcohol duty freeze until 1 August, after which duties will go up in line with inflation in the usual way.

    But today, I will do something that was not possible when we were in the EU and significantly increase the generosity of Draught Relief, so that from 1 August the duty on draught products in pubs will be up to 11p lower than the duty in supermarkets, a differential we will maintain as part of a new Brexit pubs guarantee.

    Madam Deputy Speaker, British ale may be warm, but the duty on a pint is frozen.

    And even better, thanks to the Windsor Framework negotiated by my RHF the Prime Minister, that change will now also apply to every pub in Northern Ireland.

    Finally, I have heard the representations from the Honourable Member from Stoke on Trent North, my Rt Hon Friend for Witham and my Rt Hon Friend from South Thanet and the Sun newspaper about the impact on motorists of the planned 11p rise in fuel duty.

    Because inflation remains high, I have decided now is not the right time to uprate fuel duty with inflation or increase the duty.

    So here’s what I am going to do: for a further 12 months I’m going to maintain the 5p cut … and I’m going to freeze fuel duty too.

    That saves the average driver £100 next year and around £200 since the 5p cut was introduced.

    Our Energy Price Guarantee, fuel duty and duty on a pint – all frozen in today’s budget.

    Something that doesn’t just help families, it helps the economy too because their combined impact reduces CPI inflation by nearly ¾% this year, lowering inflation when it is particularly high.

    Reducing debt

    I now turn to the Prime Minister’s second priority, which is to reduce debt.

    Here too our plan is on track.

    Underlying debt is forecast to be 92.4% of GDP next year, 93.7% in 2024-25; 94.6% in 2025-26, and 94.8% in 2026-27, before falling to 94.6% in 2027-28.

    We are meeting the debt priority.

    And with a buffer of £6.5bn, it means we are meeting our fiscal rule to have debt falling as a percentage of GDP by the fifth year of the forecast.

    As a proportion of GDP our debt remains lower than the USA, Canada, France, Italy and Japan.

    And because of the decisions I take today, and the improved outlook for the public finances, underlying debt in five years’ time is now forecast to be nearly three percentage points lower than it was in the Autumn.

    That means more money for our public services and a lower burden on future generations – deeply-held values which we put into practice today.

    At the Autumn Statement I also announced that public sector net borrowing must be below 3% of GDP over the same period.

    The OBR confirm today that we are meeting that rule with a buffer of £39.2 bn.

    In fact our deficit falls in every single year of the forecast, with borrowing falling from 5.1% of GDP in 2023-24, to 3.2% in 2024-25, 2.8% in 2025-26, 2.2% in 2026-27 and 1.7% in 2027-28.

    Even better in the final two years of the forecast our current budget is in surplus, meaning we only borrow for investment and not for day-to-day spending.

    Day to day departmental spending will grow at 1% a year on average in real terms after 2024-25 until the end of the forecast period, and capital plans are maintained at the same level set at Autumn Statement.

    We will uprate tobacco duty, and we will freeze the gross gaming duty yield bands. We are also maintaining the starting rate for savings and the ISA subscription limits, and we will bring forward a range of measures to tackle promoters of tax avoidance schemes.

    But Madam Deputy Speaker, taken together today’s measures lead to a slightly lower overall tax burden for the rest of the parliament compared to the OBR’s Autumn forecast.

    We are reducing borrowing and improving our public finances.

    By doing so we make sure we are on track to…

    … halve inflation

    … get debt falling

    …and grow our economy, which I turn to next.

    Growth

    Growth is the Prime Minister’s third priority and the focus of today’s budget.

    13 years ago, we inherited an economy that had crashed.

    But since 2010 we’ve grown more than major countries like France, Italy or Japan and about the same as Europe’s largest economy Germany.

    We’ve halved unemployment…

    … cut inequality

    …and reduced the number of workless households by one million.

    For the first time ever, because of the rises in tax thresholds made by successive Chancellors people in our country can earn £1,000 a month without paying a penny of tax or national insurance.

    Those tax reductions have helped lift 2 million people out of absolute poverty, after housing costs, including 400,000 pensioners and 500,000 children.

    That averages 80 pensioners and 100 children lifted out of poverty for every single day we’ve been in office.

    Today we face the future with extraordinary potential.

    The World Bank said that out of all big European countries, we are the best place to do business.

    Global chief executives say that apart from America and China, we are the best country to invest in.

    We became the second country in the world to have a stock of foreign direct investment worth 2 trillion dollars.

    And London has just pipped New York and 53 other global cities to be the best place in the world for female entrepreneurs.

    Declinists are wrong about our country for another reason, which is our newfound strength in the innovation industries that will shape this century.

    Over the last 13 years we have become the world’s third trillion-dollar tech economy after the US and China.

    We have built the largest life sciences sector in Europe, producing a Covid vaccine that saved six million lives and a treatment that saved a million more.

    Our film and TV industry has become Europe’s largest, with our creative industries growing at twice the rate of the economy.

    Our advanced manufacturing industries produce around half the world’s large civil aircraft wings.

    And thanks to a clean energy miracle we have become a world leader in offshore wind.

    Other parties talk about a green energy revolution, so I gently remind them that nearly 90% of our solar power was installed in the last 13 years – showing it’s this Government who fix the roof while the sun is shining.

    Let’s turn now to what the OBR say about our growth prospects.

    In November, they expected that the UK economy would enter recession in 2022 and contract by 1.4% in 2023.

    That left many families feeling concerned about the future.

    But today, the OBR forecast we will not enter a recession at all this year with a contraction of just 0.2%.

    And after this year the UK economy will grow in every single year of the forecast period: by 1.8% in 2024; 2.5% in 2025; 2.1% in 2026; and 1.9% in 2027.

    They also expect the unemployment rate to rise by less than one percentage point to 4.4%, with 170,000 fewer people out of work compared to their Autumn forecast.

    Defence

    Madam Deputy Speaker, that return to growth has direct consequences for our role on the global stage.

    I am proud we are giving the brave people of Ukraine more military support than anyone else in Europe.

    On Monday we were able to go further with my RHF the Prime Minister announcing a £5bn package of funding for the Ministry of Defence, an additional £2bn next year and £3bn the year after.

    Today, following representations from our persuasive Defence Secretary, I confirm that we will add a total of £11 bn to our defence budget over the next five years and it will be nearly 2.25% of GDP by 2025.

    We were the first large European country to commit to 2% of GDP for defence and will raise that to 2.5% as soon as fiscal and economic circumstances allow.

    Following representations from my RHF the Minister for Veterans Affairs, I am today also increasing support for our brave ex-servicemen and women.

    We will provide a package worth over £30m to increase the capacity of the Office for Veterans’ Affairs, support veterans with injuries returning from their service and increase the availability of veteran housing.

    But to be Europe’s biggest defender of democracy, we must build Europe’s most dynamic economy.

    That means tackling our longstanding productivity issues including two in particular which I address today: lower business investment and higher economic inactivity than other similar countries.

    Too often companies struggle to recruit and even when they do, output per employee is lower.

    So today I set out the four pillars of our industrial strategy to address these issues.

    Colleagues will know from my Bloomberg speech, they all start with the letter ‘E’: Enterprise, Employment, Education and Everywhere.

    I start with ‘Everywhere’, our measures to level up growth across the UK.

    Everywhere

    This government was elected on a mandate to level up.

    We have already allocated nearly £4bn in over 200 projects across the country through the first two rounds of the Levelling Up Fund. A third round will follow.

    Since we started focusing on levelling up, 70% of the growth in salaried jobs has come from outside London and the South-East.

    Today we take further steps.

    Investment Zones

    Canary Wharf and the Liverpool Docks were two outstanding regeneration projects.

    I pay tribute to Lord Heseltine for making them happen because they transformed the lives of thousands of people. They showed what’s possible when entrepreneurs, government and local communities come together.

    So today I announce that we will deliver 12 new Investment Zones, 12 potential Canary Wharfs.

    In England we have identified the following areas as having the potential to host one: West Midlands, Greater Manchester, the North-East, South Yorkshire, West Yorkshire, East Midlands, Teesside and, once again, Liverpool. There will also be at least one in each of Scotland, Wales and Northern Ireland.

    To be chosen, each area must identify a location where they can offer a bold and imaginative partnership between local government and a university or research institute in a way that catalyses new innovation clusters.

    If the application is successful, they will have access to £80m of support for a range of interventions including skills, infrastructure, tax reliefs and business rates retention.

    Local investment

    Working together with our formidable Levelling Up Secretary, I also want to give some further support to levelling up areas under the ‘E’ of everywhere.

    First, I will invest over £200m in high quality local regeneration projects across England including the regeneration of Tipton town centre and the Marsden New Mills Redevelopment Scheme.

    I am also announcing a further £161m for regeneration projects in Mayoral Combined Authorities and the Greater London Authority.

    And I will make over £400m available for new Levelling Up Partnerships in areas that include Redcar and Cleveland, Blackburn, Oldham, Rochdale, Mansfield, South Tyneside, and Bassetlaw.

    Having listened to the case for better local transport infrastructure from many hon members, I can announce a second round of the City Region Sustainable Transport Settlements, allocating £8.8 billion over the next five-year funding period.

    And following a wet and then cold winter, I also received particularly strong representations from my hon friends from North Devon, South-West Devon and Newton Abbot as well as councillor Peter Martin from my own constituency about the curse of potholes.

    The Spending Review allocated £500m every year to the Potholes Fund but today I have decided to increase that fund by a further £200m next year to help local communities tackle this problem.

    For Scotland, Wales and Northern Ireland this Budget delivers not only a new Investment Zone but an additional £320m for the Scottish Government, £180m for the Welsh Government and £130m for the Northern Ireland Executive as a result of Barnett consequentials.

    On top of which in Scotland, I can announce up to £8.6m of targeted funding for the Edinburgh Festivals as well as £1.5m funding to repair the Cloddach Bridge.

    I will provide £20m of funding for the Welsh Government to restore the Holyhead Breakwater and, in Northern Ireland, I am allocating up to £3m to extend the Tackling Paramilitarism Programme and up to £40m to extend further and higher education participation.

    Local leadership

    But Madam Deputy Speaker, for levelling up to truly succeed we need to unleash the civic entrepreneurship that is only possible when elected local leaders are able to fund and deliver solutions to their own challenges.

    That means giving them responsibility for local economic growth and the benefit from the upside when it happens.

    So the government will consult on transferring responsibilities for local economic development currently delivered by Local Enterprise Partnerships to support local economic development to local authorities from April 2024.

    I will also boost Mayors’ financial autonomy by agreeing multi-year single settlements for the West Midlands and the Greater Combined Manchester Authority at the next spending review, something I intend to roll out for all Mayoral areas over time.

    I have also agreed a new long-term commitment so that they can retain 100% of their business rates, something I also hope to expand to other areas over time.

    Investment zones, regeneration projects, levelling up partnerships, local transport infrastructure and business rates retention…more control for local communities over their economic destiny so we will level up wealth generation and opportunity everywhere.

    Enterprise

    Today’s budget is about the Prime Minister’s promise to grow the economy.

    We’ve talked about making that growth happen everywhere, so I now move on to my second ‘e’. Enterprise.

    We need to be Europe’s most dynamic enterprise economy.

    And under this government that is exactly what’s been happening.

    Since 2010 we have one million more businesses in the UK, a bigger increase than in Germany, France or Italy.

    But I want another million and another million after that.

    So today I bring forward enterprise measures in these threeareas: to lower business taxes, reduce energy costs and support our growth industries.

    Business taxes

    Let’s start with business taxation.

    We know the importance of a competitive tax regime. We already have lower levels of business taxation than France, Germany, Italy or Japan.

    But I want us to have the most pro-business pro-enterprise tax regime anywhere.

    Even after the corporation tax rise this April, we will have the lowest headline rate in the G7.

    Only 10% of companies will pay the full 25% rate.

    But even at 19% our corporation tax regime did not incentivise investment as effectively as countries with higher headline rates.

    The result is less capital investment and lower productivity than countries like France and Germany.

    We have already taken measures to address this.

    For larger businesses we have had the super deduction, introduced by my RHF the Prime Minister, which ends this month.

    For smaller businesses we have increased the Annual Investment Allowance to £1m, meaning 99% of all businesses can deduct the full value of all their investment from that year’s taxable profits.

    If the super deduction was allowed to end without a replacement, we would have fallen down the international league tables for tax competitiveness and damaged growth.

    I could not allow that to happen.

    So today, I can announce that we will introduce a new policy of “full expensing” for the next three years, with an intention to make it permanent as soon as we can responsibly do so.

    That means that every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profits.

    It is a corporation tax cut worth an average of £9 bn a year for every year it is in place.

    And its impact on our economy will be huge. The OBR says it will increase business investment by 3% for every year it is in place.

    This decision makes us the only major European country with full expensing…

    …and gives us the joint most generous capital allowance regime of any advanced economy.

    Madam Deputy Speaker, I also want to make our taxes more competitive in our life science and creative industry sectors.

    In the Autumn, I said I would return with a more robust R & D tax credit scheme for smaller research-intensive companies.

    So today, I am introducing an enhanced credit which means that if a qualifying small or medium-sized business spends 40% or more of their total expenditure on R & D, they will be able to claim a credit worth £27 for every £100 they spend.

    That means an eligible cancer drug company spending £2 million on research and development will receive over £500,000 to help them develop breakthrough treatments.

    It is a £1.8 billion package of support helping 20,000 cutting edge companies who day by day are turning Britain into a science superpower.

    This government’s audio-visual tax reliefs have helped make our film and TV industry the biggest in Europe. Only last month, Pinewood announced an expansion which will bring another 8,000 jobs to the UK.

    To give even more momentum to this critical sector I will introduce an expenditure credit with a rate of 34% for film, high end television and video games and 39% for the animation and children’s TV sectors. I will maintain the qualifying threshold for high-end television at £1 million.

    And because our theatres, orchestras and museums do such a brilliant job at attracting tourists to London and the UK, I will also extend for another two years their current 45% and 50% reliefs.

    Energy

    Madam Deputy Speaker, an enterprise economy needs low taxes. But it also needs cheap and reliable energy.

    We have already announced billions of support to help businesses reduce their energy bills through the Energy Bills Relief Scheme and the Energy Bills Discount Scheme.

    We have appointed Dame Alison Rose, Chief Executive of NatWest, to co-Chair our national energy efficiency taskforce and help deliver our national ambition to reduce energy use by 15%.

    To support her efforts, I will extend the Climate Change Agreement scheme for two years to allow eligible businesses £600 million of tax relief on energy efficiency measures.

    But the long-term solution is not subsidy but security.

    That means investing in domestic sources of energy that fall outside Putin or any autocrat’s control.

    We are world leaders in renewable energy so today I want to develop another plank of our green economy, Carbon Capture Usage and Storage.

    I am allocating up to £20 billion of support for the early development of CCUS, starting with projects from our East Coast to Merseyside to North Wales – paving the way for CCUS everywhere across the UK as we approach 2050.

    This will support up to 50,000 jobs, attract private sector investment and help capture 20-30 million tonnes of CO2 per year by 2030.

    We have increased the proportion of electricity generated from renewables from under 10% to nearly 40%.

    But because the wind doesn’t always blow and the sun doesn’t always shine, we will need another critical source of cheap and reliable energy.

    And that is nuclear.

    There have been no more powerful advocates for this than the hon members for Ynys Mon, Copeland, Hartlepool and Workington.

    They rightly say that increasing nuclear capacity is vital to meet our Net Zero obligations.

    So to encourage the private sector investment into our nuclear programme, I today confirm that subject to consultation nuclear power will be classed as “environmentally sustainable” in our green taxonomy, giving it access to the same investment incentives as renewable energy.

    Alongside that will come more public investment.

    In the Autumn Statement, I announced the first state-financed investment in nuclear for a generation, a £700 million investment in Sizewell C.

    Today I can announce two further commitments to deliver our nuclear ambitions.

    Firstly, following representations from our energetic Energy Security Secretary I am announcing the launch of Great British Nuclear which will bring down costs and provide opportunities across the nuclear supply chain to help provide up to one quarter of our electricity by 2050.

    And secondly, I am launching the first competition for Small Modular Reactors. It will be completed by the end of this year and if demonstrated as viable we will co-fund this exciting new technology.

    Boosting innovation

    Finally under the ‘e’ of Enterprise I come to our innovation economy, a central area of national competitive advantage for the United Kingdom.

    Over the weekend, I worked night and day with the Prime Minister and the Governor of the Bank of England to protect the deposits of thousands of our most cutting-edge companies.

    We successfully secured the sale of the UK arm of Silicon Valley Bank to HSBC, so the future of those companies is now safe in the hands of one of Europe’s biggest and most creditworthy banks.

    But those events show that we need to build a larger, more diverse financing system, where the benefits of investment in high growth firms are available to more investors.

    So I will return in the Autumn Statement with a plan to deliver that. It will include measures to unlock productive investment from defined contribution pension funds and other sources, make the London Stock Exchange a more attractive place to list, and complete our response to the challenges created by the US Inflation Reduction Act.

    However when it comes to our innovation industries, there are two areas I want to make progress on today.

    Nigel Lawson made the City of London one of the world’s top financial centres by competitive deregulation.

    With our Brexit autonomy, we can do the same for our high growth sectors.

    So today I want to reform the regulations around medicines and medical technologies.

    We are lucky with the MHRA to have one of the most respected drugs regulators in the world, indeed the very first to licence a Covid vaccine.

    From 2024, they will move to a different model which will allow rapid, often near automatic sign-off for medicines and technologies already approved by trusted regulators in other parts of the world such as the United States, Europe or Japan.

    At the same time from next year they will set up a swift new approval process for the most cutting-edge medicines and devices to ensure the UK becomes a global centre for their development.

    And with an extra £10m of funding over the next two years they will put in place the quickest, simplest, regulatory approval in the world for companies seeking rapid market access.

    We are proud of our life sciences sector which received more inward investment than any in Europe last year.

    Today’s change will make the UK an even more exciting place to invest – as well as speeding up access for NHS patients to the very newest drugs.

    Today together with our talented Science, Innovation and Technology Secretary, I also take measures to strengthen our position in artificial intelligence, where the UK hosts one third of all European companies.

    I am accepting all nine of the digital technology recommendations made by Sir Patrick Vallance in the review I asked him to do in the Autumn Statement.

    That means I can report to the House that we will:

    …launch an AI sandbox to trial new, faster approaches to help innovators get cutting edge products to market;

    …work at pace with the Intellectual Property Office to provide clarity on IP rules so Generative AI companies can access the material they need;

    ……and ask Sir Patrick’s successor, Dame Professor Angela McLean, to report before the summer on options around the Growth Duty for regulators.

    Because AI needs computing horsepower, I today commit around £900m of funding to implement the recommendations in the independent Future of Compute Review for an Exascale supercomputer.

    The power that AI’s complex algorithms need can also be provided by quantum computing.

    So today we publish a quantum strategy which will set our vision to be a world leading quantum enabled economy by 2033 with a research and innovation programme totalling £2.5 billion.

    I also want to encourage the best AI research to happen in the UK so will award a prize of £1m every year, for the next ten years, to the person or team that does the most ground-breaking British AI research.

    The world’s first stored-programme computer was built at the University of Manchester in 1948, and was known as the “Manchester baby”.

    75 years on, the baby has grown up, so I will call this new national AI award “the Manchester Prize” in its honour.

    Madam Deputy Speaker we want the UK to be the best place in Europe for companies to locate, invest and grow so today’s enterprise measures strengthen our technology and life science sectors, invest in energy security and for three years – but I hope permanently – cut corporation tax by £9 bn a year to give us the best investment incentives of any advanced economy.

    Employment

    An enterprise economy can only grow if it can hire the people it needs, which brings me to my third pillar after ‘Everywhere’ and ‘Enterprise’, the ‘E’ of Employment.

    Brexit was a decision by the British people to change our economic model.

    In that historic vote, our country decided to move from a model based on unlimited low skill migration to one based on high wages and high skills.

    Today we show how we will deliver that with a major set of reforms. The OBR say it is the biggest positive supply side intervention they have ever recognised in their forecast.

    We have around one million vacancies in the economy…

    … but excluding students there are over seven million adults of working age who are not in work.

    That is a potential pool of seven people for every vacancy. We believe work is a virtue.

    We agree with the road haulage king Eddie Stobart who said: ‘the only place success comes before work is the dictionary.’

    So today, I bring forward reforms to remove the barriers that stop people who want to from working. I start with over 2 million people who are inactive due to a disability or long-term sickness.

    Long term sick and disabled

    Thanks to the reforms courageously introduced by the Rt Hon Member for Chingford and Woodford Green, the number of disabled people in work has risen by two million since 2013.

    But even after that we could fill half the vacancies in the economy with people who say they would like to work despite being inactive due to sickness or disability.

    With Zoom, Teams and new working models that make it easier to work from home this is more possible than ever before.

    So for that reason, the ever-diligent Work and Pensions Secretary, today takes the next step in his ground-breaking work on tackling economic inactivity.

    I thank him for that, and today we publish a White Paper on disability benefits reform.

    It is the biggest change to our welfare system in a decade.

    His plans will abolish the Work Capability Assessment in Great Britain and separate benefit entitlement from an individual’s ability to work. As a result, disabled benefit claimants will always be able to seek work without fear of losing financial support.

    Today I am going further by announcing that in England and Wales, after listening to representations from the Centre for Social Justice and others, we will fund a new programme called Universal Support.

    This is a new, voluntary employment scheme for disabled people where the government will spend up to £4,000 per person to help them find appropriate jobs and put in place the support they need. It will fund 50,000 places every single year.

    We also want to help those who are forced to leave work because of a health condition such as back pain or a mental health issue.

    We should give them support before they end up leaving their job, so I am also announcing a £400m plan to increase the availability of mental health and musculoskeletal resources and expand the Individual Placement and Support scheme.

    And because occupational health provided by employers has a key role to play, I will also bring forward two new consultations on how to improve its availability and double the funding for the small company subsidy pilot.

    Young people in care

    There is another group that deserves particular attention, which is children in care. They too should be given all possible help to make a normal working life possible when they reach adulthood.

    Often, they depend on foster families who do a brilliant job, so I am today nearly doubling the Qualifying Care Relief threshold to £18,140 which will give a tax cut to a qualifying carer worth an average of £450 a year.

    I will also increase the funding we provide to the Staying Close programme by 50% to help more care leavers into employment.

    And I will support young people with Special Educational Needs and Disabilities with a £3m pilot expansion of the Department for Education’s Supported Internship programme to help them transition from education into the workplace.

    Madam Deputy Speaker, no civilised society can ignore the contribution that can be made by those with challenging family circumstances, a long-term illness or a disability.

    So today we remove the barriers we can with reforms that strengthen our society as well as strengthening our economy.

    Welfare recipients

    The next set of employment reforms affects those on Universal Credit without a health condition who are looking for work or on low earnings.

    There are more than 2 million jobseekers in this group, more than enough to fill every single vacancy in the economy.

    Independence is always better than dependence, which is why we believe those who can work, should.

    So sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer.

    And for those working low hours, we will increase the Administrative Earnings Threshold from the equivalent of 15 hours to 18 hours at National Living Wage for an individual claimant, meaning that anyone working below this level will receive more work coach support alongside a more intensive conditionality regime.

    Older workers including doctors

    The next group of workers I want to support are those aged over 50.

    My younger officials have termed these people “older workers”, although as a 56-year-old myself I prefer the term “experienced.”

    Fully 3.5 million of pre-retirement age over 50 are not part of the labour force, an increase of 320,000 since before the pandemic.

    We now have the 23rd highest inactivity rate for over 55s in the OECD.

    If we matched the rate of Sweden, we would add more than one million people to our national labour force.

    Madam Deputy Speaker, I say this not to flatter you, but older people are the most skilled and experienced people we have.

    No country can thrive if it turns its back on such a wealth of talent and ability.

    But for too many, turning 50 is a moment of anxiety about the cliff edge of retirement rather than a moment of anticipation about another two decades of fulfilment.

    I know this myself from personal experience. After I turned 50, I was relegated to the backbenches and planned for a quiet life. But instead I decided to set an example by embarking on a new career in finance.

    So today I take three steps to make it easier for those who wish to work longer to do so.

    First, we will increase the number of people who get the best possible financial, health and career guidance ahead of retirement by enhancing the DWP’s excellent “Mid-life MOT” Strategy.

    They will also increase by fivefold the number of 50+ Universal Credit claimants who receive mid-life MOTs from 8,000 to 40,000 a year.

    Second with my RHF the Education Secretary, we will introduce a new kind of apprenticeship targeted at the over 50s who want to return to work.

    They will be called Returnerships, and operate alongside skills boot camps and sector-based work academies.

    They will bring together our existing skills programmes to make them more appealing for older workers, focussing on flexibility and previous experience to reduce training length.

    Finally, I have listened to the concerns of many senior NHS clinicians who say unpredictable pension tax charges are making them leave the NHS just when they are needed most.

    The NHS is our biggest employer, and we will shortly publish the long-term workforce plan I promised in the Autumn Statement.

    But ahead of that I do not want any doctor to retire early because of the way pension taxes work.

    As Chancellor I have realised the issue goes wider than doctors.

    No one should be pushed out of the workforce for tax reasons.

    So today I will increase the pensions annual tax-free allowance by 50% from £40,000 to £60,000.

    Some have also asked me to increase the Lifetime Allowance from its £1 million limit.

    But I have decided not to do that.

    Instead I will go further and abolish the Lifetime Allowance altogether.

    It’s a pension tax reform that will…

    … stop over 80% of NHS doctors from receiving a tax charge.

    … incentivise our most experienced and productive workers to stay in work for longer.

    … and simplify our tax system, taking thousands of people out of the complexity of pension tax.

    Madam Deputy Speaker, a comprehensive plan to remove the barriers to work facing those on benefits, those with health conditions and older workers. That is the ‘e’ of the employment pillar of today’s growth budget.

    Education

    Which brings me to the final pillar of our growth plan. After Employment, Enterprise and Everywhere I turn to the ‘e’ of Education.

    Over more than a decade, this government has driven improvement in our education system.

    We have risen by nearly 10 places in the international league tables for English and maths since 2015 alone.

    In the Autumn Statement, I built on this progress with an extra £2.3bn annual investment to our schools.

    We are reviewing our approach to skills with Sir Michael Barber.

    We have set out our plans to transform lifelong learning with a new Lifelong Loan Entitlement…

    …and My RHF the PM announced plans to make maths compulsory till 18.

    But today I want to address an issue in our education system that is bad for children and damaging for the economy.

    It’s an issue that starts even before a child enters the gates of a school.

    Today I want to reform our childcare system.

    We have the one of the most expensive systems in the world.

    Almost half of non-working mothers said they would prefer to work if they could arrange suitable childcare.

    For many women, a career break becomes a career end.

    Our female participation rate is higher than average for OECD economies, but we trail top performers like Denmark and the Netherlands.

    If we matched Dutch levels of participation, there would be more than one million additional women working.

    So today I announce a series of reforms to start that journey.

    Supply

    I begin with the supply of childcare. We have seen a significant decline in childminders over recent years – down 9% in England in just one year.

    But childminders are a vital way to deliver affordable and flexible care and we need more of them.

    I have listened to representations from my hon friend from Stroud and decided to address this by piloting incentive payments of £600 for childminders who sign up to the profession, rising to £1,200 for those who join through an agency.

    I have also heard many concerns about cost pressures facing the sector.

    We know this is making it hard to hire staff and raising prices for parents, with around two thirds of childcare providers increasing fees last year alone.

    So we will increase the funding paid to nurseries providing free childcare under the hours offer by £204m from this September rising to £288m next year.

    This is an average of a 30% increase in the two-year-old rate this year, just as the sector has requested.

    I will also offer providers more flexibility in how they operate in line with other parts of the UK. So alongside that additional funding, we will change minimum staff-to-child ratios from 1:4 to 1:5 for two-year-olds in England as happens in Scotland, although the new ratios will remain optional with no obligation on either childminders or parents to adopt them.

    UC claimants

    I want to help the 700,000 parents on universal credit who, until the reforms I announced today had limited requirements to look for work. Many remain out of work because they cannot afford the upfront payment necessary to access subsidised childcare.

    So for any parents who are moving into work or wants to increase their hours, we will pay their childcare costs upfront.

    And we will increase the maximum they can claim to £951 for one child and £1,630 for two children, an increase of almost 50%.

    School age children

    I turn now to parents of school age children, who often face barriers to working because of the limited availability of wraparound care.

    One third of primary schools do not offer childcare at both ends of the school day, even though for many people a job requires availability throughout the working day.

    To address this, we will fund schools and local authorities to increase supply of wraparound care so all school-age parents can drop their children off between 8 am and 6 pm.

    Our ambition is that all schools will start to offer a wraparound offer, either on their own or in partnership with other schools, by September 2026.

    Pre-school children

    Madam Deputy Speaker, today’s childcare reforms will increase the availability of childcare, reduce costs and increase the number of parents able to use it.

    Taken together with earlier reforms, they amount to the most significant improvements to childcare provision in a decade.

    But if we really want to remove the barriers to work we need to go further for parents who have a child under 3.

    For them childcare remains just too expensive.

    In 2010 there was barely any free childcare for under 5s.

    The government changed that with free childcare for 3- and 4-year-olds in England.

    It was a landmark reform.

    But not a complete one.

    I don’t want any parent with a child under 5 to be prevented from working, if they want to, because it is damaging to our economy and unfair, mainly to women.

    So today I announce that in eligible households where all adults are working at least 16 hours, we will introduce 30 hours of free childcare not just for 3-and-4 year-olds, but for every single child over the age of 9 months.

    The 30 hours offer will now start from the moment maternity or paternity leave ends.

    It’s a package worth on average £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week…

    … and reduces their childcare costs by nearly 60%.

    Because it is such a large reform, we will introduce it in stages to ensure there is enough supply in the market.

    Working parents of two-year-olds will be able to access 15 hours of free care from April 2024, helping around half a million parents.

    From September 2024, that 15 hours will be extended to all children from 9 months up, meaning a total of nearly one million parents will be eligible.

    And from September 2025 every single working parent of under 5s will have access to 30 hours free childcare per week.

    Today we complete a landmark reform…

    …we help the economy

    …transform the lives of thousands of women

    …and build a childcare system comparable to the best.

    A major early years reform for our education system, the ‘E’ of education alongside the three other pillars of our growth plan, enterprise, employment and everywhere.

    Madam Deputy Speaker in November we delivered stability.

    Today it’s growth.

    We tackle the two biggest barriers that stop businesses growing – investment incentives and labour supply.

    The best investment incentives in Europe.

    The biggest ever employment package.

    For disabled people, more help.

    For older people, barriers removed.

    For families feeling the pinch…

    …fuel duty frozen.

    …beer duty cut.

    …energy bills capped.

    And for parents, 30 hours of free childcare for all under 5s.

    Today we build for the future with…

    …inflation down

    …debt falling

    …and growth up.

    The declinists are wrong, and the optimists are right.

    We stick to the plan because the plan is working.

    And I commend this statement to the House.

  • Jeremy Hunt – 2023 Comments on Silicon Valley Bank UK

    Jeremy Hunt – 2023 Comments on Silicon Valley Bank UK

    The comments made by Jeremy Hunt, the Chancellor of the Exchequer, on 13 March 2023.

    The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.

    Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order.

    HSBC is Europe’s largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them.

  • Andrew Griffith – 2023 Speech at a FIX Trading Conference

    Andrew Griffith – 2023 Speech at a FIX Trading Conference

    The speech made by Andrew Griffith, the Economic Secretary to the Treasury, on 9 March 2023.

    Introduction

    Good morning everyone and thank you for the invitation to speak to you today.

    I am also glad to see that Professor Hübner will be speaking afterwards, in a reflection of our shared commitment to the highest standards of global market regulation.

    And we couldn’t be in a better place to discuss these issues.

    No one is sure how the market got its name, but Old Billingsgate has been synonymous with fish since the 16th Century, and it was the century after that Parliament passed an act to make it a “free and open market for all sorts of fish whatsoever”.

    There was one exception: the sale of eels from Dutch fisherman.

    As London boomed, the city’s population began eating so many eels that the domestic stock couldn’t keep up.

    And over time, the Dutch had shown they were the only people who knew how to transport live eels in bulk. British ships couldn’t manage it. And so, the Dutch established a de facto monopoly on eel sales in London.

    There’s two pertinent points here.

    One, this venue, having dealt with slippery animals before is well suited to accommodating politicians.

    And two: some countries are better in certain sectors. The Dutch had the eel trade, and we have financial services.

    But jokes aside (because, of course, the Dutch do share with us a long-standing tradition in financial services) this sector is incredibly valuable to our country.

    This is an industry that contributes 12% of the UK’s total economic output and employs over 2.2 million people.

    It’s the UK’s largest net exporting industry and its largest taxpayer.

    So let me start by saying “thank you”. Thank you for taking risk, employing and developing your people and the valued contribution you make. I never forget that you have a choice where to locate or to raise or invest capital.

    Because it’s a competitive world out there and the UK must and will compete for every pound, dollar or euro of business.

    And it’s my job to make sure we put in place the support environment in which you can do so.

    Led by the Prime Minister, supported in lockstep by the Chancellor and me, this government firmly believes that financial services and private capital are at the heart of the solutions to the national and international challenges we face, from aging populations to protecting nature, from supporting left behind communities to conquering diseases.

    So, I want to assure you of the importance that the government places on this sector. Not just through my words today, but through our actions.

    Capital Markets

    In particular, one of the UK economy’s great strengths is its capital markets.

    The UK is blessed with capital markets that are among the deepest, most liquid and most competitive anywhere in the world.

    We are Europe’s leading hub for investment, and the second largest globally. We have the most international equities market and two of the world’s largest clearing houses.

    Our capital markets are relied upon by some of the world’s largest businesses – and, by the way, will be crucial in funding the global transition to clean, low carbon energy.

    It explains why, in 2021 alone, more than £17bn of new capital was raised for firms in the UK on the London Stock Exchange alone, a 15-year high, with over 120 deals completed.

    How do we account for this achievement?

    It’s through our fundamental strengths such as the rule of law, English language, a fortuitous time zone, and the fact that London is one of the world’s most diverse and liveable cities.

    It’s through the expertise of firms that base themselves here, whether that be in finance itself or all the services that support it, from legal to accounting.

    But this strength is also fostered through innovation, competition and high regulatory standards.

    The government of which I am a part has a clear vision: making UK regulation more proportionate and simpler… keeping it relevant for a modern world and enabling innovation.

    This government is focused on delivering this vision for the financial services sector. And when I say focussed on delivering, that’s exactly what I mean. My mantra is delivery, delivery, delivery.

    Capital Markets reforms

    So, building on the strengths of capital markets, we are pressing ahead with an ambitious programme of capital markets reforms.

    We are implementing the practitioner led reforms suggested by Lord Hill and Mark Austin – who have provided concrete steps to help us be more competitive.

    This includes completely overhauling the UK’s Prospectus Regime to widen participation in capital markets, improve the efficiency of fundraising for companies and improve the quality of information investors receive.

    We will do this by repealing the existing Prospectus Regulation and replacing it with a new regime tailored to the UK. Our new regime will be simpler, more agile, and more effective, and we have already published draft legislation to do that.

    We aren’t stopping there – we are also keen to accelerate the settlement of financial trades, and as part of the Edinburgh Reforms we announced the creation of an industry taskforce to see how we can do so, such as by moving to a ‘T+1’ standard.

    Faster settlement could reduce counterparty risk, increase efficiency and promote greater automation of back office processes.

    It will ensure that the UK continues to be a world leader in this area.

    The taskforce is being chaired by Charlie Geffen, who is bringing together the industry to recommend an approach that works for the UK.

    Separately, we have also set up the Digitisation Taskforce, which will drive forward the digitisation of all remaining paper share certificates in the UK.

    It will also set out how we can improve communications between different parts of the market, and how investors will be able to have far better interactions with the companies they invest in.

    This work is being led by Sir Douglas Flint and I am looking forward to receiving his interim report this spring.

    I know that some of those in the room are already involved in these initiatives. Thank you for your insight and I look forward to seeing your recommendations.

    We are also reforming our rulebook for wholesale markets through the Financial Services and Markets Bill.

    Those changes will boost liquidity by giving greater choice to firms on where and how to trade.

    To give you one example which I know is of particular interest to many of you.

    The Bill will allow the Treasury and the FCA to put a framework in place to facilitate the development of a consolidated tape by 2024.

    Transparent and timely data plays a key role in helping markets to function efficiently and the tape, by acting as one single source, will improve liquidity and lead to lower trading costs.

    This is particularly true for the fixed income markets, given how fragmentated the data currently is.

    And there’s more…

    In December, we announced that we are taking a closer look at retail disclosure and short selling.

    On retail disclosure, the government is committed to repealing the current PRIIPs regulation as a matter of priority and replacing it with an alternative framework that works for the UK.

    As for short selling, I see it as an important tool in financial markets. The UK should therefore have regulations that support it and do not place excessive burdens on market participants.

    Both of these areas are ripe for reform with the common theme of reducing red tape and making markets work better.

    Let me also share with you some news that I am announcing this morning.

    To ensure that the UK continues to be one of the best places for companies to list and trade, we need to ensure that investors have access to the information they need to make investment decisions.

    Companies need to feel confident that their investors will understand them, their goals and ambitions, and embark with them on their growth journey.

    This is why the volume and quality of research matters. That translates into more liquid markets and can help obtain higher valuations.

    I am therefore pleased to announce that another City expert … Hogan Lovells Partner and financial services regulatory expert Rachel Kent, will lead the Investment Research Review.

    The Review will gather evidence on the impact that the UK’s investment research offering has on both public and private markets, recognising the role that research plays throughout a company’s life cycle. While a lot broader in scope, Rachel will also look specifically at the impact of the MiFID unbundling rules when considering solutions.

    With her experience and knowledge of the sector, as well as the regulatory framework, I have every confidence that Rachel will do a fantastic job at convening the sector, looking at the evidence and finding solutions to improve the UK market for investment research, before delivering her recommendations in June.

    FSM Bill

    As previously mentioned, a key part of delivering our reform agenda is the Financial Services and Markets Bill, currently progressing through its final weeks in Parliament.

    Without getting into the weeds of the Bill, it will enable us to progress our ambitious plan to replace retained EU law with an approach that is tailored to the needs of UK markets.

    Central to this is the new duty on the FCA and PRA to facilitate the international competitiveness of the UK and its growth in the medium-to-long term.

    We will do this in a balanced, ordered way – and will only target policy change where there are clear benefits to the sector and the wider economy.

    Of course, as the regulators take on more responsibility for setting rules once we repeal retained EU law, it is right that their objectives reflect the critical role of the financial services sector in supporting the wider economy.

    Increased responsibility for the regulators must be balanced with clear accountability, appropriate democratic input, and transparent oversight.

    To that end, the Bill includes measures to increase the accountability of the regulators to Parliament, strengthen their relationship to the Treasury, make them publish more of their performance metrics and enhance their engagement with stakeholders – including many of you here today.

    A sector at the forefront of technology and innovation

    And in changing – or innovating – our regulation, we are simply in keeping with the innovative traditions of this sector.

    We are one of the world’s top two financial hubs and the world’s largest net exporter of financial services.

    Your capability to deploy capital behind innovation combined with our research strengths, makes the Prime Minister – the entire Government’s – aspiration to be a technology superpower by 2030 ambitious but highly achievable.

    The financial services sector is driving this agenda, and leading the change brought by technology and innovation.

    And the government is there to help you drive that change…

    We are creating a Financial Market Infrastructure Sandbox, which will help industry adopt and scale digital solutions that could radically change the way markets operate, and lead to markets that are more efficient, transparent and resilient.

    The first FMI Sandbox will be up and running this year. And as we learn from the outcomes of this flagship initiative, more can be established.

    We’re looking forward to watching firms grow in the sandbox, moving on from buckets and spades to world beating technological tools.

    We have recently published a wide-ranging consultation paper, setting out our proposals to establish a comprehensive framework for regulating cryptoasset activities in the UK, providing clarity for consumers and firms.

    By capitalising on the potential benefits offered by crypto – and the underlying technology – we are strengthening our position as a world-leader in fintech and unlocking further growth opportunities and innovation.

    And last month, the Treasury and the Bank of England issued a joint consultation on a potential digital pound in the UK.

    This is a major milestone in our work in this area, marking the end of the research and exploration phase and the beginning of the design phase of work.

    We are also taking forward other initiatives in the innovation space, such as the new Centre for Finance, Innovation and Technology – or CFIT -launched last week and backed by £5 million of Treasury seed funding. CFIT will champion the UK’s world-leading fintech sector, helping firms to create high-skilled jobs across the country and to achieve truly global scale.

    Concluding remarks

    Ladies and gentlemen, this is an exciting time.

    We face challenges, yes.

    But in confronting them we also find opportunity.

    Opportunity to do things differently…

    …to seize the moment…

    …to make our country the world’s most competitive location for financial services.

    It’s an ambitious, yet achievable agenda.

    It will require our joint enterprise and industry.

    But I know that together we can achieve great things. Thank you again for your welcome, and all that you do.

  • Liz Truss – 2023 Article Reflecting on Her Time as Prime Minister

    Liz Truss – 2023 Article Reflecting on Her Time as Prime Minister

    A small section of the article written by Liz Truss, the former Conservative Prime Minister, in the Sunday Telegraph published on 5 February 2023.

    The date of what inevitably became known as the mini-Budget was set for Sept 23. In hindsight, perhaps we could have delayed it for a few days. However, much longer than that would have meant not sticking to our commitments.

    There were concerns in some quarters that the announcement would not be accompanied by forecasts from the Office for Budget Responsibility (OBR). However, the OBR’s core purpose is to produce twice-yearly forecasts on whether the Government is on track to meet its fiscal targets. Commissioning a report at that juncture would not have been appropriate, given that the forecast would have been unable to take into consideration the future spending decisions we planned to outline in the Medium Term Fiscal Plan a few weeks later.

    It’s also worth recalling that no OBR forecast has accompanied many other fiscal announcements, not least the Covid-19 furlough scheme, which cost £70 billion.

    As I had spelled out during the leadership campaign, I wanted to go for growth by reversing the proposed rises to corporation tax and National Insurance and implementing a programme of economic reform in order to prevent recession and stagnation and put the UK on a positive path.

    But this was not in line with the instinctive views of the Treasury or the wider orthodox economic ecosystem.

    I saw first-hand during my two years as chief secretary to the Treasury that pessimism and scepticism about the growth potential of the British economy are sadly endemic at the Treasury: serious planning reform was dismissed as not politically deliverable; discussing monetary policy was a taboo; deregulation of financial services and other industries was viewed as undermining the prospects of a deal with the EU; and Brexit was seen as a damage-limitation exercise rather than a once-in-a-generation opportunity.

    Instead, the focus from the Treasury was on micro, top-down tinkering such as productivity initiatives trying to encourage firms to become more efficient, along with government intervention.

    Our Plan for Growth was a conscious break from this orthodoxy – focused instead on stimulating competition and economic freedom with incentives from the ground up. The plan comprised the energy package, reversing the tax rises, some additional tax simplification measures, and a package of economic reforms to help grow the economy and build long-term gains in its growth potential.