Economic Stability

The Government are already taking action to fix Britain’s economic foundations, with a new approach to growth with three pillars: stability, investment and reform. Sustainable public finances are necessary for economic stability and long-term growth, and the Government will set out the difficult decisions needed to secure the public finances in the Budget on 30 October. The Government have already announced a fiscal lock to support policy stability by ensuring that fiscally significant announcements are subject to an independent Office for Budget Responsibility assessment.

Given the fiscal inheritance that we have been left, the Chancellor has already had to make some difficult decisions to ensure that economic stability. Workers and pensioners just above the personal allowance threshold have already borne much of the brunt of the previous Government’s cost of living crisis and fiscal drag, putting many in a precarious position. What steps are the Government taking to ensure that, if there is to be further fiscal drag, these groups are prevented from shouldering further burdens?

I should have welcomed my hon. Friend to his place. It was the previous Government’s decision to maintain tax thresholds at their current levels until 2028. We have inherited an extremely difficult fiscal situation, meaning that we cannot undo everything they did, but the Prime Minister has been clear that those with the broadest shoulders should bear the heavier burden. The Government are providing £0.5 billion, including the estimated Barnett consequential, to extend the household support fund in England for another six months, to 31 March 2025. It continues to be our aim to support those who are most in need. The household support fund is specifically used by local authorities to help the most vulnerable households cover the cost of essentials such as food, energy and water.

The cost of temporary accommodation is spiralling out of control, and it is a source of economic instability for local government. Eastbourne borough council leader Stephen Holt, together with 118 cross-party council leaders, wrote to the last Government to ask for urgent support and to propose a number of solutions, but they were completely ignored. Will this Chancellor meet me and local government leaders, including Eastbourne’s, to discuss what immediate support she can provide to help councils across the country to tackle the temporary accommodation crisis?

I thank the hon. Gentleman for his question. Having served as a local councillor for many years, I very much recognise the problem that he describes. I am sorry to hear about this troubling situation, and I will refer his comments to the Secretary of State for Housing, Communities and Local Government and make sure that he gets the response he should have had before.

The Minister refers to the £22 billion black hole in the public finances left by the last Government, and which they hid from the British public. Does that not highlight just how important it is to ensure transparency and independent analysis of economic decisions?

I thank my hon. Friend for his question. Upon taking office, as he says, we discovered a £22 billion black hole in the public finances that had been left by the previous Government, and we have now uncovered a litany of unfunded Conservative spending commitments. We recently learned that the deficit is now £4.7 billion higher than the OBR forecast in March because of the previous Government’s economic recklessness. We will rectify this, and we will set out a clear spending plan, and an ambitious plan to get the country back into stable economic conditions, at the Budget.

Given that the House of Commons Library estimates that the covid disaster cost the country between £315 billion and £415 billion, can the Minister explain how it is that even her own questionable figure of a £22 billion black hole is not a great deal higher?

I think I thank the right hon. Gentleman for his question, but may I point out gently to him that, had our economy grown at the average rate of other OECD economies over the last 13 years, it would have been £140 billion larger? I also point out that under the Conservatives the tax burden rose to its highest level for 70 years. I will take no lessons from the Conservative party, because the last Government oversaw the biggest drop in household real disposable incomes since records began.