Public Finances: Borrowing Costs

10:40:00

(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the growing pressure of borrowing costs on the public finances.

Where is she?

I am always grateful to see Conservative Members welcome me to the House. Financial markets are always evolving, as the shadow Chancellor knows, so there is a long-standing convention that the Government do not comment on specific financial market movements, and I will not break that convention today. Financial market movements, including changes in Government bond or gilt yields, which represent the Government’s borrowing costs, are determined by a wide range of international and domestic factors. It is normal for the price and yields of gilts to vary when there are wider movements in global financial markets, including in response to economic data. In recent months, moves in financial markets have been largely driven by data and global geopolitical events, which is to be expected as markets adjust to new information. UK gilt markets continue to function in an orderly way. Underlying demand for the UK’s debt remains strong, with a generally well-diversified investor base. The Debt Management Office’s gilt sales operations continue to see strong demand. The latest auction, held yesterday, received three times as many bids as the amount on offer. The Chancellor has commissioned from the Office for Budget Responsibility an updated economic and fiscal forecast for 26 March incorporating the latest data. Only the OBR’s forecast can accurately predict the effect on the public finances of any changes in financial markets or the economy, and I will not pre-empt that forecast. There should be no doubt of the Government’s commitment to economic stability and sound public finances. That is why meeting the fiscal rules is non-negotiable. May I end by saying that I am pleased that the shadow Chancellor is holding this Government to account on our stewardship of the economy? It is important that he does so. He will remember when his party crashed the economy with unfunded tax cuts, unrealistic public spending plans and a clear disregard for the consequences on family finances. Families across the country are still paying the price for the Conservatives’ disastrous performance on the economy through higher mortgages and bills. If there was one clear reason why the Conservative party suffered such an historic defeat at the last general election, it was their performance on the economy. That is presumably why the shadow Chancellor himself admitted in December that the lack of trust in the Conservative party’s management of the economy has left a “deep and painful scar” in the pockets of every person across Britain. Let me tell the House what has changed. In our first six months, this Labour Government have exposed the £22 billion black hole in the public finances. Not only have we exposed it, but we have dealt with it: the Chancellor’s autumn Budget protects working people, wipes the slate clean of the mess the Conservative party left the country in, and invests in our NHS and schools. We have given the independent Office for Budget Responsibility enhanced powers of oversight, in law, so that we never again get into the situation where that lot left the country: a £22 billion black hole in the public finances. We have set tough new fiscal rules that are non-negotiable, with a budget settlement for public services that they must all live within. We have kick-started growth in this country—this Government’s No. 1 mission —by unlocking investment and bringing forward reforms, such as those to planning and in the Mansion House speech. May I say to the shadow Chancellor that that work stands in stark contrast to the negligent and shameful horror of a circus performance that the Conservative party in government unleashed on this country only a few years ago? Until he can come to the House with an apology for the British people, I will not take any lectures from the Conservative party about how to run the economy.

I call the shadow Chancellor of the Exchequer.

The performance we have just seen was a slightly anxious and breathless one, which leads me to the question: where is the Chancellor? It is a bitter regret that at this difficult time and given these serious issues, she herself is nowhere to be seen. In the last 48 hours, borrowing costs have reached a 27-year high, and it is the Chancellor’s decisions that have led us here. Before the election, the right hon. Lady promised that Labour would get debt falling, would not fiddle the figures, would not raise taxes and would grow the economy, but the economy is now flatlining. Survey after survey is showing that business confidence has simply evaporated, and at the Budget, the Chancellor hiked up taxes, increased borrowing by an average of £32 billion a year across the forecast, and conveniently adjusted her fiscal rules to allow her to do so. Higher debt and lower growth are understandably now causing real concerns among the public, among businesses and in the markets, and despite what the Chief Secretary has said about international factors, the premium on our borrowing costs compared with German bonds recently hit its highest level since 1990. With those rising costs, regrettably, the Government may now be on course to breach their fiscal rules. The Chancellor has committed to no further tax rises, so does the right hon. Gentleman stand by her commitment not to increase taxes even further? If so, does that mean that the public should expect cuts to public service spending if the OBR judges that her fiscal headroom has evaporated? There are media reports that the Chancellor will make an emergency intervention to soothe markets, but with no confirmation that such a statement will occur in this House. Will the right hon. Gentleman confirm that any such statement will be made first to Members in this House? Rates on Government bonds ultimately feed through to the broader credit market, so what estimates has the Treasury made of how recent market movements will impact mortgage costs and lending across the economy? I will make one final point, Mr Speaker. Every pound that we spend on debt interest is money that we cannot spend on the public’s priorities. The Government’s decision to let rip on borrowing means that their own tax rises will end up being swallowed up by higher borrowing costs, at no benefit to the British people. Far from this Government laying the foundations for a stronger economy, the Chancellor is squandering the endeavours of millions of hard-working people up and down our country, who are now having to pay the price for yet another socialist Government taxing and spending their way into trouble. Does the right hon. Gentleman not now accept that it is time to change course?

I am pleased that the right hon. Gentleman enjoyed my performance—I have not even had my first cup of coffee yet this morning. Let me answer some of his questions. [Interruption.] Conservative Members might like to listen, if the questions are so important to them. The right hon. Gentleman asked me about the fiscal rules. As I said in my statement, those rules are non-negotiable. As the Chancellor set out at the Budget, we have two fiscal rules: first, that day-to-day spending should be met by tax receipts, and secondly, that debt should be falling as a share of the economy. The right hon. Gentleman talked about the debt burden that this country has. Maybe we should reflect a little on why we have so much debt—[Interruption.] From pre-pandemic, Mr Speaker. Let us look at the burden of debt inherited by this Government from the Conservatives. From 2010 onwards, why did the last Government have to borrow so much money every single month, not just to invest but to pay the day-to-day bills? Because of an absolute failure to get growth into the economy. They could not make the numbers add up. They stacked up the country’s credit card and left it to the Labour party to deal with, and we are going to deal with it. That is why those fiscal rules are non-negotiable, and it is why public spending will be within the numbers set out at the Budget. We are starting the spending review now, and it will conclude in June. Public services will have to live within their means—the Chancellor has been very clear about that. That is why with this Government, you get economic stability and absolute clarity on public spending. That is why the British people trust this party and booted that lot out of office.

I call the Chair of the Treasury Committee.

We all know that fiscal rules and certainty are vital for the markets and the good stewardship of the public finances, so will the Chief Secretary to the Treasury explain what process he will be going through as he conducts the spending review, and what notice he will give to Departments about extra cuts that they may have to make in order to meet the fiscal rules? In addition, when the Chancellor comes in front of the House for the OBR forecast in March, will she be making a fiscal statement at that point?

I thank the Chair of the Select Committee for her question. As the House knows, we have started the second phase of the spending review, to set public sector budgets from 2026-27 onwards. The Chancellor confirmed in a written ministerial statement before the House rose for Christmas that there will be a forecast from the OBR and a statement on 26 March. As I said in my response, that will be the next time the OBR will give a view about the UK economy and the levels of funding for public services. Between the OBR forecast in March and the conclusion of the spending review in June, the House will be updated in the normal way.

I call the Liberal Democrat spokesperson.

I recognise that the Chancellor has a very difficult job. She inherited an economy on its knees, following the Conservatives’ mismanagement of the economy, from their terrible trade deal—[Interruption.] That extends from their terrible trade deal with Europe, which is holding back businesses in Wokingham, to soaring inflation, stagnant growth and the Liz Truss mini-Budget, which hit so many mortgage holders across the country. However, the Government seem to be repeating some of the same mistakes. Last night, the Treasury issued a statement saying that “meeting the fiscal rules is non-negotiable”. Will the Chief Secretary reassure this House that protecting the NHS and care is also non-negotiable, and will he rule out any cuts to those services as the Government try to balance the books? Will he work to repair our ties with Europe and cut trade-related red tape, especially in the face of Donald Trump and his oligarch allies such as Elon Musk?

I thank the hon. Member for his question. He will note from the Prime Minister’s plan for change that the NHS is the subject of one of this Government’s key commitments, with commitments to get the elective waiting list down and to invest in the national health service so that we can do so. He will have heard that from the Chancellor at the Budget in the autumn, and he will see that it is a continued commitment from this Government. We can do that because of our commitment to the fiscal rules and because of our investment to grow the economy, which is the only route to long-term, sustainable public financing. The hon. Member was very rudely groaned at by Conservative Members, but when it comes to their performance on the economy, it is not they who should be groaning, but the British people who should be groaning at them for what they did to their family finances.

US bond rates are rising as well as those in the UK, with higher than expected inflation and interest rates. I note that Conservative Members have not mentioned that; perhaps they have not looked. The best way to make our debt sustainable is to invest to get growth growing, and to get expected inflation down by investing in clean energy. Does the Minister agree that our plans to invest in growth and in lower-price, cleaner energy is exactly the way to make our debt sustainable?

My hon. Friend knows very well that this Government’s approach has been about stability, investment and reform: the stability we have brought following the chaos of the years under the Conservative party, as has been recognised by the British people and by the markets; the investment we have been unlocking, from our global investment summit all the way through to the work we have been doing in the Budget and since; and the reforms we are bringing forward—for example, planning reform—to make sure we can deliver infrastructure better in this country and unlock the investment that private capital has wanted to put forward in the UK for many years, but could not because of the chaos from the Conservatives when they were last in government.

I call the Father of the House.

On 6 November, the Chancellor said: “We have now set the envelope for spending for this Parliament, and we are not going to be coming back with more tax increases or, indeed, with more borrowing.” I am sure, because the Chancellor is an honourable lady, that she will not be opening that envelope, putting her sticky fingers inside and coming out with more borrowing or tax increases. Will the Minister give an absolute assurance of no more tax increases or borrowing?

I can absolutely assure the Father of the House that we are working through this spending review on the basis of the envelope set at the Budget. Public services will have to operate within the means that we are providing to them. The OBR forecast will come in March, which will give us the latest set of information, and we will work to that with Departments. This is why we have set up organisations such as the Office for Value for Money, why we have set tough productivity and efficiency targets for Departments and why we are investing in, for example, technology to improve the productivity of the public services we provide. Public services must live within their means, as set out in the Budget, and that is an absolute guarantee from this Government.

I thank the Chief Secretary for his response. I have just sat through Transport questions, or some of them, during which I repeatedly heard calls for more spending from Conservative Members, but they oppose every single tax rise to pay for that spending. Does the Chief Secretary agree that one of the lessons from global developments in recent days is that we must pay for day-to-day public spending through tax rises, however tough that is?

I very much agree with my hon. Friend. We have to pay day-to-day bills with the income we generate day to day. The lesson that we learned from the Opposition was about what they were happy to do, but this Government are not. They were happy to announce plans and programmes to make promises to the British people, even though they knew they did not have the money to pay for it. That will never happen under this Labour Government.

When the Chancellor set the envelope for spending for this Parliament, and said to the Treasury Committee on 6 November that she would not come back for more tax increases or more borrowing, that was based on her assumptions about the cost of borrowing. Those are manifestly in significant doubt, to look at it in the most charitable way. I have sat in the Chief Secretary’s position, and I know he will want to equivocate and push decisions to the next OBR assessment and the next fiscal event, but the truth is surely this: this Government have to cut spending, increase taxes or borrow more. If the cost of borrowing is increasing, that moment will come sooner. Which of those choices is he inclined to make, and when will he tell the British people honestly what this Government have done?

I have been clear to the House, as has the Chancellor, that the fiscal rules are non-negotiable. Public services will have to live within their means. We set the Budget in the autumn last year, and we have the OBR forecasts coming in March. Those are the numbers that Departments are working to in the spending review, and those are the numbers that we will hold public services to when we conclude the spending review in June.

We thought we knew the dire economic situation when the general election was called, but on entering government, we found the real consequences of the previous Tory Government’s addiction to unfunded spending announcements. The people of Newcastle upon Tyne Central and West are paying the consequences for the Truss-Kwarteng economic crash. With the imminent entry into the White House of a President also committed to significant unfunded tax cuts, the economic stability of the UK becomes even more important. Will my right hon. Friend confirm that this Government are absolutely committed to fiscal responsibility and rising living standards, and that the plan for growth will deliver both?

I thank the Chair of the Science, Innovation and Technology Committee for her question. She will know that our first commitment in the Labour party manifesto at the last election was to fiscal responsibility. It is the bedrock of this Government and the bedrock of every decision we take. As the Prime Minister set out in his plan for change, the reason people will know the difference that a Labour Government make is that they will have more money in their pockets by the end of this Parliament than when it started.

In yesterday’s extraordinary emergency statement from the Treasury to try to calm the markets, it paid tribute to the fact that the Government inherited the second-lowest debt in the G7. Is the reason the Government Front Bench is so empty today and the Chancellor has fled to China that she has realised that her Budget means she now is the arsonist?

I must say I am rather surprised by the inflammatory language of the former Chair of the Treasury Committee, which is clearly no reflection of reality. The Chancellor is going on her trip to China. It has been well documented for many weeks, and it is an important visit for trade and investment in the UK economy. May I say that there was no emergency statement or emergency intervention? Those are make-believe words being propagated by Opposition Members. The Treasury responded to requests from journalists about headroom, as we might do in the normal way. There is no need for any emergency intervention, and there has not been one.

One would think, from listening to Opposition Members, that they had not crashed our economy and presided over high taxes, high debts and falling living standards, which affect my constituents and, I expect, some of theirs, too. [Interruption.] That is the Tory cycle. Will the Minister confirm that the route out of that is growth, and that remains our No. 1 mission?

My hon. Friend is right. May I offer some probably unwelcome advice to Opposition Members? The sooner they stop groaning and stop laughing about their performance when they were last in government, and the sooner they apologise for it, the sooner the British people might start listening to them again.

Public services are at breaking point after the previous Government’s mishandling of the economy and budgets locally. However, does the Minister recognise that scaling back investment in vital public services risks even more devastating consequences for our local communities?

At the autumn Budget, the Chancellor invested in frontline public services, because we recognise that people rely on them, but also because functioning public services are an important route to growth in the economy. If people are sick and cannot get to work, they need to be able to see a doctor in a timely fashion, so that they can get back to work. That is the priority of this Government, as well as investing in modernising our public services, so that they are fit for the future.

My constituents suffered real hardship as a result of the disastrous mini-Budget pursued by the Conservative party. Does the Chief Secretary to the Treasury agree that in order to improve living standards for my constituents, we must stick to our fiscal rules, maintain fiscal discipline and invest in our public services?

I very much agree. That is why fiscal stability and economic responsibility are at the heart of this Labour Government and the Chancellor’s agenda. Members on the Opposition Benches may want to pay attention to that.

There is no point beating around the bush: the Chancellor has just lost over £9.9 billion of headroom, and stands on the cusp of breaking her own fiscal rules. She said last year that she would not come back for more tax rises. Will the Chief Secretary be honest and admit, just as the former Bank of England rate setter Martin Weale said today, that this leaves only the option of more austerity? Will he level with people about when and where the next round of cuts will fall?

As I said, the fiscal rules are non-negotiable. The only reliable sources on future financing will be the OBR forecast on 26 March, the conclusion of the spending review in June, and the Budget, which the Chancellor will present in the autumn. The hon. Gentleman mentioned austerity, but I remind him that this Labour Government have given the Scottish Parliament the largest real-terms increase in funding since devolution. He should be grateful for that.

This Labour Government have been in power for six months, and we are having to deal with 14 years of Conservative chaos. Does the Chief Secretary agree that the Government’s plan for change, which aims to provide a stable economy and raise living standards in every part of the United Kingdom, and has economic growth as the No. 1 mission, is the right approach to ensure that the United Kingdom can weather the global uncertainty that we face?

My hon. Friend is absolutely right. Let me set out the difference that the British people will experience. At the end of 14 years of Conservative Government, they had higher mortgages, higher bills, a higher cost of living and public services on their knees. At the end of this Labour Government, pointing towards the next general election, as set out in the Prime Minister’s plan for change, they will have more money in their pocket, public services will be functioning again, and they will be proud once again of their Government, and of the British economy.

Having listened very carefully to the right hon. Gentleman’s responses, I believe that he is making a more significant statement than many of his colleagues might realise. By underlining that there will not be any tax or borrowing increases, he is, in effect, saying that austerity is back, because there is no way that the public finances can be remedied by another Budget of wishful thinking that pretends that increased borrowing and spending will produce growth. That is once again being proved by a Labour Government to be a false way of leading the economy.

I am always grateful to the hon. Gentleman for thinking that I am making such substantive interventions, and for his continued support in that respect. This is not austerity, as he will know full well. Austerity was ideological cuts to public financing and the size of the state. It was 3% cuts, irrespective of what that meant for public services or for people across the country. That is far from what the Chancellor unveiled in her autumn Budget. That was the absolute opposite of austerity; we increased financing for frontline public services, and will continue to do so.

Will the Chief Secretary outline the steps that this Government have already taken to fix the fiscal foundations and put this country on a stronger footing for growth?

My hon. Friend asks an important question. Why did we have to take that action? Why was this Government’s first Bill about fiscal responsibility? It was because of the mess that Conservative Members left this country in. That is why we have given the Office for Budget Responsibility stronger, independent powers of oversight in statute—something that the shadow Chancellor presumably welcomed, given his comments criticising Liz Truss and her Budget when he was Chair of the Treasury Committee. We brought that change forward, which the Conservative party failed to do. That is why we have set fiscal rules that are non-negotiable, why public services must live within their means, and why the Government’s absolute focus is on securing growth, investment, reform and long-term sustainability for public finances.

Is the Chief Secretary aware that the last two months’ GDP figures, for September and October, are both down? Is he aware that sterling is falling—in fact, almost collapsing? Confidence is falling and investors are fleeing. The only things going up are inflation, wasteful public spending and the cost of debt. Be under no illusion: we are heading towards a financial crisis. Will he ask the Chancellor to return from her ridiculous trip to China, to reverse course, and to cut daft spending and wasteful regulations, so that we can create some growth?

I think the question was whether I was going to demand that the Chancellor come back from her trade trip to China. I will not, no.

Does the Chief Secretary agree that there is an irony in the Conservatives raising concerns about the cost of borrowing, when they oversaw debt rising from 64.7% of GDP to more than 96% of GDP and left a £22 billion unfunded black hole in public finances—and now continue to oppose the tough decisions that we are making on tax and spend to fix their mess?

That is exactly why our fiscal rules are non-negotiable. While the Conservatives borrowed to pay the bills every month because they did not have enough money to pay for all their promises, this Government are investing in the future of our country, whether through reforming public services or investing in infrastructure and opportunities for growth. That is exactly the right approach to the economy; it is what our fiscal rules demand, and what we will be held to.

Next has said that it will increase prices by 1%, directly because of the increases to national insurance contributions, and has warned of slowing growth. With business confidence plummeting, gilts at a 26-year high and growth stagnating, do the Government still maintain that they have an iron grip on public finances, or will they admit that their Budget has done exactly what the Conservatives warned: increase costs, increase prices and reduce growth?

The question was whether the Government have an iron grip on public finances; the answer is yes.

Meur ras ha myttin da, Mr Speaker. Does the Chief Secretary agree that the only way that we can wrest the economy out of the clutches of the Conservatives’ doom loop is to go for growth? The Government’s new industrial strategy will be a core foundation underpinning that growth.

My hon. Friend is absolutely right. Our industrial strategy, through which we will invest alongside businesses and industries of the future, and our infrastructure strategy, which sets out how we will get Britain building again, are two examples of the Government playing their part by bringing economic and political stability. By, for example, reforming the planning system, we will unlock billions of pounds of private sector investment in UK plc—something that did not happen under the previous Government.

I completely sympathise with the Chief Secretary about the incredible brass neck of the official Opposition. He talks about kick-starting growth, but can he give us any evidence that growth has been kick-started? Does he not realise that the only way to kick-start growth in the near future is to re-engage with Europe?

The hon. Gentleman will know that this Government’s approach to stimulating growth in the economy is about stability, investment and reform—the political and economic stability the Chancellor has brought to this country; the investment from private sector partners, as well as from the state, where appropriate; and the reform of policy areas such as the planning system, or the financial services reform that the Chancellor set out in her Mansion House speech. He is also right, of course, that we need to improve our trading relationship with countries around the world, which is why the Chancellor is going to China today, and why we have begun negotiations with our friends in the European Union on how we can improve our relationship on a whole host of issues, including trade, energy, defence and security.

Does the Chief Secretary agree that the Conservatives, having added gutter politics to their fantasy economics and unfunded spending commitments, can no longer call themselves the party of decency in public life, and of sound money?

Yes.

It is deeply disappointing that the Chancellor is not here to answer questions in the House on such an important topic, so I shall have to ask my question to the Chief Secretary to the Treasury instead. It is quite a simple one. Will he stand by the Chancellor’s comment that she will not come back with more tax increases?

I am sorry to disappoint the right hon. Member, but I will answer the question none the less. She asked me whether I stand by the Chancellor’s statements, and the answer is yes.

I want us to get serious for a minute here. [Interruption.] Many of my constituents in North East Derbyshire, who will have just heard the guffawing from the Opposition, have been really struggling with the cost of living crisis. They voted the Government in, and we are committed to restoring the foundations of our economy. Will the Minister assure me that we are doing everything we can to deliver on that promise?

It is absolutely right that the Labour Government are bringing fiscal and economic stability back to this country, because we know that when you play fast and loose with the nation’s finances, you play fast and loose with family finances. That is what voters in every constituency experienced when the Conservatives were last in government. They will not experience that under this Labour Government.

We are looking at higher interest rates, lower growth and a higher cost of borrowing to the Government; as my hon. and right hon. Friends have said, we are grateful to the Chief Secretary to the Treasury for being so honest with the House. It is clear that if he sticks to his word, there will not be any more borrowing, or any more tax rises. Given the numbers, that leaves only one option: cuts in public services. I wonder whether his colleagues behind him on the Government Benches realise that reality. What word other than “austerity” will he use to describe it?

As I have said, it seems that the Conservative party is proud of its record on austerity. We do not support austerity, which was blind ideological cuts to public services—3% cuts—irrespective of the outcome for the people who rely on public services. The Chancellor increased investment in public services at the Budget in the autumn, and we will continue to increase investment in them, because we need to get them back on their feet, and they are an important foundation for economic growth. I am pleased that the right hon. Gentleman recognises my statements, and says that they are honest, because of course they are. I look forward to coming back to the House in future months and years to show him the progress that the Government are making.

It is a relief for me and my constituents in Doncaster Central that we finally have a Labour Government providing economic stability and investing in the industry of the future. [Interruption.] It is all right for Conservative Members to chunter, but after the mess they made, a period of silence on their part is warranted. Will my right hon. Friend lay out the action that he will take to ensure that all regions of the country, including places like Doncaster and South Yorkshire, benefit from growth?

My hon. Friend is right to point out that the Government are in the service of working people. What does that mean? It means that people’s lives—the money they have in their pocket, and the ability to pay the bills, get a roof over their head and seek opportunity—are at the very heart of what it means to be in the Labour party and in this Labour Government. Conservative Members might not have suffered from higher mortgage bills or worried about the cost of living during their supermarket shop each month, but people across the country did, and they suffered as a consequence of the Conservatives’ behaviour. I welcome my hon. Friend’s comment that they should have a period of silence while they learn the lessons.

I think that I heard the Chief Secretary say that the Chancellor has not gone to China. Will he confirm first that she is still planning to go? Secondly, if she has not gone to China yet, why is she not here? Lots of people would like to hear from her. Thirdly, has the Chancellor talked to the Governor of the Bank of England about market turbulence at any point in the last seven days?

The Chancellor is going to China, as has been well documented. Again, I am sorry that it disappoints the hon. Member that I am here. I refer him and his colleagues to the urgent question, which is about a statement on borrowing costs and public finances. He will know that I am the Minister for public finances, which is why I am here answering his questions.

Will the Chief Secretary to the Treasury confirm that the Government’s No. 1 mission is still growth? That is the only way that we can break out of the Tory inheritance of low growth, high borrowing, high taxes and squeezed living standards for people in my constituency in Livingston, and across the UK.

My hon. Friend is absolutely right. His constituents will know from their family finances that they cannot just put the bills on the credit card every month without having a plan for how to pay it off. That is not a sustainable way to manage household finances, and it is the same for the country. One of the reasons why we have such a mess left to us by the Conservative party is that it did just that—borrow money every month to pay for the day-to-day bills, and stack up the promises. That is why in the end there were so many promises and not enough pounds to pay for them. That is not a way to run the economy or family finances. That is why fiscal responsibility is at the heart of the approach taken by the Chancellor and the Government. We will never play fast and loose with the nation’s finances, as the Conservative party did.

According to media reports today, the former Member of Parliament for South West Norfolk is issuing cease and desist letters to those who have accused her of crashing the economy

Be careful or you might get one!

I hope not. Members will be conscious that I am being very careful with my wording. I wonder whether the Chief Secretary might wish to take advantage of parliamentary privilege to compare and contrast the impact of her disastrous mini-Budget with what is being discussed today.

You will correctly tell me, Mr Speaker, that it would not be right for me to comment on legal proceedings, but I am happy to say that one of the huge lessons for the country, for the British voting public and perhaps, one day, for the Conservative party is that the actions that the Conservative party took were not just reckless and negligent, but had a direct impact on public finances in every single constituency. There was a direct connection: it was Conservative Ministers’ hubris, ego and lack of focus on working people that ruined the lives of people across the country. I say that today and I will say it every day, because the British people must never forget the recklessness of the Conservative party.

I thank the Chief Secretary for his statement—

Order. It is an urgent question, not a statement.

I am sorry, Mr Speaker. During these exchanges on the urgent question alone, we have heard chuntering from Opposition Members about the cut in the winter fuel payment. We have heard them oppose the tax increases that have been introduced to pay for public spending, and we have heard them urge the Government to call off talks with economic partners including China. Is it any wonder that the GDP-to- debt ratio rose by a full 30 percentage points under the Conservative Government?

It might have been legitimate for the Conservatives to say that their economic policy was to borrow for day-to-day costs—as they did. That could be a decision that they took. What is not forgivable is the fact that they reached a point at which they were making promises to the British people that they knew they did not have the money to pay for, and that is where the £22 billion black hole came from. They should be ashamed of their record on the economy, and they should apologise to the British people.

When will the Chief Secretary take responsibility for the actions of his own Government? We had a general election, and that is when the public held the previous Government to account. They gave their verdict, and the Labour party is in power now. What the public want is accountability for this Government’s reckless decisions: the national insurance increases are an attack on jobs; there has been an attack on the farming community; and business confidence is at an all-time low.

The right hon. Gentleman may not wish to reflect on his party’s performance in government, but I am afraid he has to. Although this is a new Government—we have been in office for six months—the reality is that we are having to clear up the mess that the last Government left us. That is why we have to talk about it, and explain to the country why the actions taken by the Conservative party not only affected family finances, but decimated the British economy and pushed public services on to their knees. We are taking responsibility for clearing up their mess, and that is why we will keep talking about it.

A key ingredient of economic growth has to be responsible government. People in Stevenage and across the country are still paying the price for 14 years of irresponsible government—the terrible decisions, the mini-Budget—and now we have a party in opposition that still does not get it. Opposition Members responded to this party’s Budget by saying that they accepted the improvement in public services, but they would not say how they would pay for it. Can my right hon. Friend assure us that this Administration will be committed to responsible government for the rest of the parliamentary term?

Yes, I can. There is no denying that the economic inheritance that we were given by the Conservative party makes life very difficult for us: it means that we have to take difficult decisions. The fiscal rules are non-negotiable and public services have to live within their means because that is that the bedrock of any approach in government. Is that going to be easy for us? No, it is not, but it is part of our responsibility in clearing up the mess left by the Conservatives, and from that we can build for the future, as is set out in the Prime Minister’s plan for change.

The issue here is spending. Will the Chief Secretary confirm that the Labour manifesto said that a Labour Government would increase spending by £9.5 billion a year, and the Treasury Red Book is increasing that to £76 billion? Is that not the issue?

One of the issues was that the Conservative party made a whole list of unfunded spending commitments. They promised hospitals and train stations, they had unsettled pay disputes with public sector workers— I could go on and on. That is why the Chancellor took the decision at the Budget to wipe the slate clean, to deal with the mess that we inherited and then to bring forward the manifesto commitments that we set out at the election. If the hon. Gentleman wishes to see more detail about our public spending plans, he is very welcome to come to my statement in June.

Conservative Members talk about economic stability, but they seem to have forgotten that they were swapping out Chancellors every five minutes. Does the Chief Secretary agree that it is this Government who are restoring stability to our economy?

Restoring economic and political stability is important. When the markets observed the behaviour of the Conservative party in government, it is no wonder they did not want to invest in the UK, and that is why the market crashed, to the detriment of working people across the country. It is very clear that under this Labour Government, not only do we have stable leadership; we have a stable set of policies in our plan for change and fiscal responsibility as the bedrock for the Chancellor’s action. That is a country people can believe in, trust in and invest in, unlike the country that was left to us by the Conservative party.

Every Labour Government leave office with unemployment higher and the economy in a worse condition than they inherited, but I think this Labour Government are taking the record for doing that the fastest—within just six months, we see borrowing costs spiralling out of control, GDP growth tanking and the bosses of some of the biggest recruitment firms in the UK warning of job postings plummeting and that a recession is just around the corner. I look forward to seeing how the Chancellor spins this period of employment on her CV in the future. If the Government breach their own fiddled fiscal rules so ingloriously and so quickly, who on the Treasury Bench is going to update their CV and take responsibility?

The fiscal rules are non-negotiable, and they will be met.

Does the Minister agree that the reckless ideological austerity measures taken by the Conservative party in government have directly led to my constituents being significantly worse off and made it harder for them to get on in Darlington? Can he outline the impact that the new Office for Value for Money will have on the huge inefficiencies and waste that the last Government presided over?

The Office for Value for Money is an important part of our spending review process, as we undertake for the first time in 17 years a zero-based review of every single pound of public spending. We should focus on that for a moment: not once under the last Conservative Government was there a zero-based review. Not once did they go line by line through every pound of taxpayers’ money and public spending to check it was being spent in the people’s interests. Not once did they think that was a responsible thing to do. That is the first thing we are doing in government.

At the back end of last year, borrowing figures were the second highest monthly figures on record. That was in no small part driven by the Chancellor’s decision to give inflation-busting pay rises to unions. Given that we have more union pay negotiations this year, should my constituents be braced for the Government giving into those union demands, at risk to taxpayers?

I think the hon. Member might want to ask his constituents whether they appreciated their doctors and nurses being on strike for so long or whether they wanted them to be able to see their patients. He may want to ask his constituents whether they were grateful to have the trains not working for so many months because the train drivers were on strike. He may want to ask his constituents how pleased they were with the performance of their public services over the last 14 years of government. I think I know the answer they would give him. That is going to change under this Labour Government.

On the economy, as with so much else, does my right hon. Friend agree that Conservative Members should sip from the elixir of personal responsibility and that the two words we most need to hear from them are, “We apologise”?

That’s not a question.

Order. Mr Stuart, I need no advice from you. I think you are on the Panel of Chairs, and I need to see some better behaviour if you are going to stay on it.

Thank you, Mr Speaker. It is important, when you are paid by the House, to act responsibly; I agree with you. My hon. Friend the Member for Rugby (John Slinger) makes a really important point, and Conservative Members who have their head in their hands may wish to listen to him. It will be important for the Conservatives to apologise for their behaviour before the British people start listening to them again, but for as long as they wish to grunt and groan and claim that everything was wonderful, the better for us, so long may it continue.

I have heard that the Minister is the future, but all he wants to talk about is the past. The fact of the matter is that, today, borrowing costs are up, business confidence is down and growth is going nowhere. Is it not time to admit that this lefty economic experiment is not working? It is time to cut taxes and cut spending.

I did not realise that the hon. Member knew my mum and that I am apparently the future. It is very kind of him to say so; very few have that in their thoughts. He talks about lefty experiments. Fiscal responsibility is not a lefty ideology. Economic responsibility is not a lefty ideological and political experiment; it is what the British people expect. One of the reasons why the Conservatives had such a historic defeat at the last election is that they lost all control and all sense when it came to the public finances. For a party that is supposedly the best-performing in western democracy, and which has had great leaders in the past, is it not a great shame what the Conservative party has become? Given its performance over 14 years and its descent into disinformation, I feel very sorry for Opposition Members.

I hope that the Minister can quickly turn this situation around for my constituents and the country, and I wish him all the best in doing so. Given the challenges of business confidence and the markets, I had hoped that he would come to the House this morning with a plan that lays out the scope of the problem and the solution to fix it. Instead, he has spoken more about the Conservative party, rather than Labour’s plan for the economy. Is that because the Chancellor is not here today? When will she come back?

I am very happy to set out the Government’s plan, as I have done repeatedly today. The hon. Member will have seen in the Chancellor’s Budget last autumn a clear plan to wipe the slate clean, to deal with the mess that we inherited, to protect working people, and to invest in our public services. He will have seen it in the Prime Minister’s plan for change, which sets out the direction of this Government over the years ahead. We will put more money in working people’s pockets across the country, get our public services back on their feet and make sure that this country is in a strong position. The hon. Member will know that the Government are working through our spending review, which I run as the responsible Minister. I have already confirmed that we will come back in June to confirm the spending plans for Departments, which will have to live within their means and in line with the fiscal rules in the years ahead. I cannot think what more he would want.

Order. I hope that people who are standing were here at the beginning.

Within the last week, has the Chancellor spoken to the Governor of the Bank of England about the impact of soaring borrowing costs?

The Chancellor meets the Governor of the Bank of England on a regular basis and will continue to do so.

It has been widely reported that the Chancellor now faces a choice between raising taxes or cutting public spending if she is to stay within her non-negotiable fiscal rules. Given reports that she will now conduct group meetings with Ministers, rather than the less combative approach of one-to-one meetings conducted by the right hon. Gentleman, to discuss departmental cuts, it sounds as if Government spending is being dictated by the Ministers with the sharpest elbows. Can he reassure the House that there will not be any departmental cuts?

I am pleased that the hon. Member can afford the subscription to Bloomberg News; I cannot, unfortunately, so I could not read the article to which he refers. He inadvertently asks me a question about the process of the spending review. [Interruption.] That was the question. We are embedding mission-led government, which is what the Prime Minister set out in his missions in his plan for change. That requires Departments to work together to make sure that they are absolutely focused on the delivery of the plan for change priorities, which is why the spending review is being done on a multilateral basis in a new way. I will be giving a speech on this issue in a couple of weeks’ time, and I will make sure that the hon. Gentleman gets an invitation.

I thank the Minister for all his answers this morning. The UK’s public debt has risen sharply over the decades. At the moment, it is reaching levels not seen in the post-world war two era, meaning that a large proportion of our expenditure is focused on paying back, as opposed to public spending. I always try to be constructive, as the Minister knows. Nowhere will the impact—on health and education, for example—be greater than in Northern Ireland. I have a very specific question for the Minister: what discussions has he had with Departments, and particularly the Finance Department, at the Northern Ireland Assembly?

I lead for the Treasury on inter-ministerial relationships with Finance Ministers in the devolved Governments. I regularly meet my counterparts, and I will meet them in Wales in the coming weeks to talk about our spending plans for the future.