Government Performance against Fiscal Rules

15:43:00

(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the Government’s performance against the fiscal rules.

As the shadow Chancellor knows, it is a long-standing convention of this and previous Governments not to provide a running commentary on a fiscal forecast, and it is for the independent Office for Budget Responsibility to assess performance against the Government’s fiscal rules in its official economic and fiscal forecast. In the most recent forecast, published in March alongside the spring statement, the OBR confirmed that the Government were on track to meet their fiscal rules two years ahead of target. It also confirmed that the Government were on track to meet their fiscal rules early in the Budget last autumn. This is a choice—a responsible choice. When we contrast it with the actions of Conservative Members, who lost control of the public finances, we see working people across the country still paying the price. In line with the usual process, the Chancellor will ask the OBR to produce a new fiscal forecast in the autumn for the annual Budget. That forecast will include an updated assessment of the Government’s performance against their fiscal rules. As the Prime Minister confirmed last week, the Government are committed to their fiscal rules, which remain non-negotiable. We have seen what happens when fiscal rules are put to one side—[Interruption.] Conservatives Members may be chuntering from their sedentary positions, but families across the country are still paying the price of the consequences of Liz Truss’s experiment through higher mortgage payments, and we are not going to put the nation’s finances at risk as the Conservatives have done. In contrast, this Government are meeting their fiscal rules and, as a consequence of the Chancellor’s decisions, we are investing billions of pounds in the renewal of Britain: in schools, hospitals, affordable homes and public transport and in keeping the nation safe. Any future fiscal plans will be set out at the Budget in the normal way.

The Chancellor said that she would not make any commitments that were not “fully funded and fully costed”, but the Chief Secretary to the Treasury has just said that he now expects us to wait until the autumn to hear how the Government intend to cover the £6 billion of unfunded commitments that their U-turns have run up in the last month alone. A Government divided. A Government racking up unfunded spending. A Government wrecking the public finances. Why is the Chief Secretary not prepared to explain how they will fund these U-turns? There are surely only two possible answers: either the Treasury has made them without a clue as to how they will be funded, or it knows but is refusing to tell us. Either is completely unacceptable. Can the Chief Secretary set aside the usual blather that we have just heard and tell us whether he knows how these unfunded commitments will be paid for, or are his Government simply refusing to say? The House will also have noted the inherent contradiction in the Chief Secretary sticking to the line that decisions will be made at a fiscal event in the normal way, when that is precisely what the Government have not done. By losing control of the finances and of their own parliamentary party, the Government have made significant fiscal decisions outside of a fiscal event. The Chancellor said at the Budget that she would not be coming back with more tax rises. Is this still the position? Will the Chief Secretary rule out a wealth tax, along with reconfirming there will be no rise in income tax, national insurance or VAT? The Chancellor said that she would not extend the freeze on tax thresholds because it would hurt working people. Is this still the position? Can the Chief Secretary confirm that the Chancellor will not be adding to her fiscal black hole by scrapping the two-child benefit cap? Can I also ask whether consideration—

Order. The shadow Chancellor will know the time limit. I am sure that this will be his last sentence.

It certainly is now, Madam Deputy Speaker. If Ministers are to begin putting their house back in order, that must start right now with full transparency and proper answers.

I think the House knows what losing control of the public finances looked like, because under the previous Conservative Government interest rates went through the roof, families were paying higher mortgage rates and the Chair of the Treasury Committee was calling out the irresponsible behaviour of Liz Truss and her Ministers in the Treasury. That is what losing control of the public finances looked like and that is why the Conservative party lost control of Government and is in opposition today. The right hon. Gentleman asked me to comment on forecasts of annually managed expenditure and on future tax decisions. He knows how this works. All of that will happen with a forecast and a Budget, which will happen in the autumn.

We all know why the Government want to keep their fiscal rules tight, because we know what happens when the markets go wrong, but a lot of things have rocked the country since the Labour Government were elected a year ago. Will the Chief Secretary explain to our constituents what the benefits of the fiscal rules are for them in their day-to-day lives? This can seem a very remote and distant discussion for people who are living in overcrowded conditions or who need healthcare, for example.

I thank the Chair of the Treasury Committee for her question. The way I would describe it to the public is that when the Government lose control of the public finances, as the Conservative party did in government, it affects not only the accounts in the Exchequer and the Treasury but the family finances in every house across the country. People are still paying for the consequences of the last Government not sticking to their fiscal rules and acting irresponsibly. That is why our fiscal rules are non-negotiable, and we will stick to them.

I call the Liberal Democrat spokesperson.

We all know the Government had a terrible inheritance from the previous Government, whether it was the incompetence of covid contracts, the mini-Budget or the botched Brexit deal. But at the same time, last year’s Labour Budget was a Treasury tax grab with no vision for the economy and no regard to the impact on small and medium-sized businesses and key sectors like hospitality and social care. We Liberal Democrats want to see things getting better in this country for our constituents and for the country. In the spirit of constructive opposition, I will ask the Minister a number of questions. When will the Government get serious about growth through a much deeper trading deal with Europe? Will Ministers look at fairer revenue raisers, such as reversing the Conservatives’ tax cuts for the big banks and raising revenue from tech giants and online gaming and gambling companies? Will the Prime Minister make a public statement to calm the markets and avoid four months of speculation about what might be in the next Budget? Will the Government commission an interim Office for Budget Responsibility report now?

Order. The same strictures apply to the Liberal Democrats—one more sentence.

I am grateful for your guidance, Madam Deputy Speaker. Can the Government confirm that they will not raid capital budgets to fix crumbling hospitals and to pay for day-to-day spending, and will the Minister confirm the date for the autumn Budget?

The hon. Lady encourages me to act above my pay grade. The Chancellor will set out the date for the autumn Budget in due course. The hon. Lady invited me to explain to the House what our strategy was at the Budget—it was about investing in the renewal of Britain. That is why the Chancellor’s decision to update the fiscal rules to allow billions of pounds of investment in our capital infrastructure across the country, including into schools and hospitals, was the reason that the Budget was set out as it was. She also asked me about trade deals. I politely point to the three trade deals that the Government have already agreed with the European Union, India and the United States of America, saving thousands of jobs across the UK and generating growth in the years ahead.

Does the Chief Secretary to the Treasury agree that it is because of these fiscal rules that this Government have been able to establish firm foundations for future growth? Will he explain to the House how the Budget stability rule supports the Government with confidence of investors and businesses?

My hon. Friend knows from her work on the Treasury Committee that the fiscal rules are important because they prove that the Government are in control of the public finances. We saw what happened when the last Government lost control: the cost of Government borrowing went through the roof, and that takes money out of budgets before they even get to public services like the national health service. That is why this Government are committed to our fiscal rules and will ensure that they are being implemented.

The Chief Secretary will be aware from his previous role as Chair of the Business and Trade Committee that one of the things that those who create wealth and invest in our economy need is certainty. Before the next Budget, will he ensure that he consults with business leaders and that a proper impact assessment of whichever taxes he will increase is done so we can minimise the damage being done to the productive capacity of the UK economy?

The Treasury engages with business leaders and investors all the time, and the one thing they tell me is that they are grateful this Government have brought back long-term, multi-year budgets, that we have the fiscal rules in place, and that we are reforming things like the planning system to make it easier to do business in this country. As a consequence, business confidence is increasing under this Government, having dropped enormously under the right hon. Member’s Government.

My constituency faces a housing crisis, and inflation and out-of-control borrowing costs make it much more expensive to build social housing, and those costs are passed on to tenants. Does my right hon. Friend agree that that is precisely why the fiscal rules are critical?

The fiscal rules are important because when we control the nation’s finances, we bring stability to family finances. We have all experienced the consequences of previous Governments losing control, and our mortgage rates and rents have gone through the roof. This Labour Government will never let that happen again.

The Government committed to one fiscal event a year in the name of economic stability, but by having an OBR forecast and these constraints, they had only one lever to pull: spending cuts. This time, disabled people paid the price, and the Government have since had to row back. Does the Government regret placing those restraints on themselves over tax measures when OBR forecasts are published?

The Government are committed to the independence of the OBR. We will keep setting out future fiscal plans at one fiscal event a year.

Does the Chief Secretary agree that without the fiscal rules we would not have seen four interest rate cuts, which have benefited thousands of constituents across the country?

I agree with my hon. Friend that we have had four interest rate cuts under this Government which is good for mortgage holders and renters. Wages have increased faster than costs for the first time in many years, and the Chancellor has been able to invest billions of pounds in our country while keeping markets stable. That is the consequence of stability in our economy and in our politics and the fact that we are implementing our fiscal rules in the way we said we would.

With all due respect to the Chief Secretary, the Chancellor really should be here to answer this urgent question because the financial markets are extremely concerned about her wellbeing—the financial markets which, by the way, are asking for a 10-year yield now that is considerably higher than after the Liz Truss Budget. It is really important that the bond markets, which are aware of the hole in the Government’s finances, know how the Government are going to act, because otherwise we will see further fleeing of the millionaires and the wealth creators and the businesses whose investment we rely on for growth in this country.

I am not entirely sure what the question was, but I think the hon. Lady is exhibiting that she has learned some lessons from her party’s performance when she was last in government. Maybe she could share that with her Front-Bench colleagues in due course.

I am amazed that the Conservative party has brought an urgent question on fiscal rules. The Conservatives had seven sets of fiscal rules in 14 years; I mean, guys—and it is all guys—come on. The reason why they kept missing debt and deficit targets is because they kept cutting investment, meaning less growth and less tax revenue. Does the Chief Secretary agree that by investing to grow, we get our debt burden down?

This Government recognise that it was because of cuts, especially to capital investment through the austerity years under the Conservative Government, that we had such poor productivity in our economy. We are still suffering the consequences of that, which is why, as the Chancellor said at the Budget, we are choosing investment over decline.

A year ago we were promised radical change, but the only radical change appears to be in the Labour party itself, which has decided that if you are poor, old or disabled, it will be you who will bear the brunt of the cuts and on whose backs the books will be balanced. So were the fiscal rules always predicated on going after the most vulnerable and the weakest and those least able to organise and fight back, instead of taking on the rich, the powerful, the multinationals and the tax avoiders?

As a consequence of the Chancellor’s decisions, we gave Scotland the largest real-terms spending increase since devolution began, and the only radical change that we are now looking for is the Scottish National party to be kicked out of Holyrood next May.

As my hon. Friend the Member for Loughborough (Dr Sandher) mentioned, there were seven different sets of fiscal rules under the previous Government. The shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), has announced that he has reflected on the mistakes made by the Truss Government and I am sure that international investors watching what is happening in the Commons would like to see sensible debate from all parties in the Chamber on the most critical challenge facing our times. Will the Chief Secretary therefore set out the important ways in which capital investment unlocked under these fiscal rules are allowing for economic growth and development?

Because of the Chancellor’s decision to update the definition of debt—[Interruption.] We have been able to unlock billions of pounds of investment into houses and schools and hospitals and GP surgeries across the country. Opposition Members may laugh but, as my hon. Friend points out, they have no plan to share with anyone at all.

In November last year the Chancellor told the CBI conference that she was “not coming back with more borrowing or more taxes.” Will the Minister, as the Chancellor is not in the Chamber, reiterate that promise today, or has the Chancellor mishandled the economy so badly that she is now going to have to add this to the Government’s growing list of U-turns?

The Chancellor was very clear that the last Budget was a once-in-a-generation Budget because it had to deal with the sheer scale of negligence and mess that we had inherited from the party opposite. I am very grateful now that we are one year into a Labour Government we do not have to keep clearing up their mess year after year.

The Opposition have opposed all the tough decisions this Government have made to raise revenue, from VAT on private schools to the windfall tax. Has the Chief Secretary heard anything from the shadow Chancellor about how their plans would interact with the fiscal rules, if they plan on having any fiscal rules at all?

I might suggest to my hon. Friend that the public are grateful not to hear very much from the Conservative party after 14 years of failure, but if Conservatives Members wish to be competitive again, I would encourage them to set out what they might actually do with the country.

Plans to plunder disability benefits and the decision to hike national insurance contributions are examples of policies that disproportionately hit Welsh communities. Instead, we need fair policies, such as a wealth tax on assets over £10 million, an end to Government subsidies for oil and gas giants, and a clampdown on tax evasion. When will the Government’s fiscal rules enshrine fairness, where the ultra-wealthy and large corporations pay their fair share?

The right hon. Lady seems to have missed the fact that this Government have changed the non-dom tax status, which had been used by some of the wealthiest people in our country for many years; we have introduced VAT on private schools; and it is now much more expensive to fly in a private jet than it was under the former Conservative Prime Minister. As a consequence of the decisions that the Chancellor took at the Budget last year, we have given the largest real-terms increase in spending to Wales since devolution began, and as a consequence of our reforms to the Bill that we will be discussing on Wednesday, we have increased the base rate of universal credit for the first time in many years.

It is extraordinary that the Tories have recovered so quickly from their economic mismanagement that they feel able to stop apologising, and even to offer advice—if only the economic wellbeing of my constituents had recovered as quickly. Does the Chief Secretary to the Treasury agree with me that the Office for Budget Responsibility, like economists the world over, finds it easier to measure the economic consequences of funding cuts, such as the proposed cuts to disability benefits, than the economic consequences of investments, such as investing in people getting into work?

This is the first opportunity I have had to congratulate my hon. Friend on her recent damehood, which is very well deserved. She invites me to comment on the independent Office for Budget Responsibility’s forecast methodology. Given its independence, I am afraid I will not to that, but I will point to the fact that in the last forecast, the OBR was able to forecast an increase in growth as a consequence of our reforms to the planning system, which we welcome very much.

Since April, eight companies have personally approached me to tell me that they have either laid people off or have had to close their businesses after decades of trading because of the rise in national insurance contributions. How many businesses in the Minister’s constituency have told him a similar story?

I will not give a running commentary on my conversations with businesses or constituents in my constituency, but what I have heard from businesses in the defence and infrastructure sectors is welcome news regarding our long-term spending commitments, our reform of the planning system and our commitment to spending more on capital across our country, which will generate good jobs and good skills in every part of the country.

There has been talk about the previous Prime Minister. As the MP for the constituency where the lettuce that lasted longer than the previous Prime Minister was located, I can confirm that we all know from our constituents that she did more damage. It is good to hear Conservative Members finally talking about the small businesses that are the backbone of the British economy, rather than worrying about the millionaires. Does my right hon. Friend agree that we need to give those businesses even more certainty and confidence about the road ahead? The EU trade deal that we have done is a brilliant start, but does he agree that there is now a case for also looking at things like alignment by default, so that they can confidently know what kind of future they have under this Government?

I thank my hon. Friend for welcoming the trade deals that this Government have entered into with the United States, India and the European Union, with whom we got a great deal, especially on food and drink imports and exports, which will result in lower prices on the shelves of our supermarkets across the country. As my hon. Friend knows, we have committed to an annual summit with our counterparts in the European Union, and I am sure that my ministerial colleagues will set out further detail on those negotiations in due course.

George is the fifth-generation owner of Knight’s fish and chip shop in Glastonbury. It is a much-loved business in the town, but it is under severe pressure after the NICs increases and business rates and some of the decisions made by Ministers on our economy. Hiking national insurance hurts our small businesses and economic growth. So will the Minister back small businesses by overhauling business rates and scrapping the NICs hike?

The hon. Lady will know that when the changes in national insurances contributions for employers were implemented, the scheme was designed so as to protect smaller businesses, in relation to bigger business. She points to our fish and chip shops, which are often beloved in all our communities. I know from fish and chip shops in my own constituency that the price of fish, for example, has gone from about £100 to £300 a box. The price of oil has gone up following the Russian invasion of Ukraine, and even the price of potatoes has gone up, often because those products are imported from the European Union into the UK. That is why our trade deal on food and drink with the EU as well as our investment into cheaper renewable energy will make a big difference to fish and chip shops such as the one that the hon. Lady mentioned.

It is always amusing to hear the shadow Chancellor, who presided over a crisis in the welfare system, complain about this Government’s actions to restore fiscal stability. It is like listening to an arsonist complaining about the fire brigade. Does my right hon. Friend agree it is difficult to take the Conservatives seriously when they will not tell us what their plans are or even whether they support the spending laid out in the spending review?

My hon. Friend is right. If any party on the Opposition Benches wants to be competitive in the next election, it needs to set out what it proposes to do with the country and how it will pay for it. Time and again, whether it is the Conservative party, Reform UK, the Green party or any other party, it is all promises of jam tomorrow, with no idea about how to pay for it. The public have been burned by that already because of the last Government, and they will not be burned by it again.

Has the Chief Secretary seen the much longer-term forecasts by the OBR for the growth in public spending and the growth in debt rising to more than 250% of GDP in decades to come and the debt interest rising to 12% of GDP? Now that there is a gaping hole in the Government’s financial plans because of the votes last week and the U-turns on welfare reform, why does he think that he can play for time, instead of acting to give the markets confidence before they lose confidence?

The Treasury obviously monitors all OBR forecasts and considers them in detail. As the hon. Gentleman knows, it is right and proper that the Treasury looks at OBR forecasts in an orderly way when it produces its forecast in line with the fiscal forecast. That is how we bring stability back to the public finances, and that is what we will be doing.

The Leader of the Opposition has appointed every member of Liz Truss’s Treasury team to her Front Bench, apart from those booted out by the public. Does my right hon. Friend agree that a party that has no fiscal strategy but to believe “In Liz We Truss” cannot be trusted on any of it?

In a more conciliatory tone to Conservative Members, let me say that they have so few MPs they had no choice.

Since the Budget, some 270,000 jobs have been lost and borrowing is up by tens of billions of pounds. Just last week, the Office for Budget Responsibility indicated that it will lower its forecast for the second time since the Budget. Does the Chancellor still have confidence in the OBR, or has she lost confidence in it?

The Chancellor has confidence in the OBR.

The consequences of losing control of the country’s finances, as the Conservatives did, caused real pain and a cost of living crisis for my constituents. Does my right hon. Friend agree it is only because of our sound economic management that we have seen wages rise for working people at a faster rate in the first 10 months of this Labour Government than in the last 10 years of the Conservative Government?

My hon. Friend is right. Whether it is investors, market traders or our constituents, they got sick to the back teeth of chaos under the Conservatives, whether it was the mess of Brexit or the change in Prime Minister and Chancellor every five minutes. Ultimately, that resulted in a Parliament in which people were worse off at the end of the Conservative Administration than they were at the start, and our mortgages and rents were higher as a cost of the loss of control in the public finances. This Labour Government will never let that happen again.

A £6 billion hole has been opened up because those on the Labour Front Bench cannot get those on the Labour Back Benches to vote for their own policies. As a result, No. 10 is today conspicuously refusing to rule out a wealth tax. If we tell business people and wealth creators that their money will get taxed if they leave it in this country, we drive even more investors away. Is it not the case that even if this measure is not ultimately put in place, over the next couple of months the speculation about a wealth tax itself will drive investment away from this country?

The hon. Member knows that the Chancellor will set out any decisions on tax one way or the other in the Budget, which she will do in the autumn.

Does the Chief Secretary agree that this Government have had the courage to make the difficult but necessary decisions in an effort to ensure sound public finances and improve the economy, while the Opposition have hid behind their mistakes and have no credible economic plan of their own?

My hon. Friend knows that this Labour Government are committed to fiscal and political stability, because that is what matters for family finances and getting this country back on track after years of chaos under the Conservatives.

I find it highly alarming that the Chief Secretary to the Treasury does not seem to realise that the cost of Government borrowing is higher now than at any time since the last Labour Government. All of this comes back to decisions about spending, so why, when Labour’s manifesto said that it would limit spending increases to £9.5 billion a year, did it increase spending by eight times as much—£76 billion a year—three months later in its Budget?

Because the Conservative party had not done a spending review since 2021 and let inflation go through the roof, and the cost of doing business was higher, along with a whole string of broken promises from the Conservatives. The sooner they reflect on their mistakes and apologise to the country, the better for all of us.

With major investments announced by this Government that will directly benefit my constituents—such as the lower Thames crossing, Darent Valley hospital and school building renewal—does the Chief Secretary agree that this Government have the fiscal rules in place to provide the economic stability we need to renew our social and economic infrastructure, which was left in a terrible state by the last Government?

I thank my hon. Friend for demonstrating the real consequences of fiscal discipline, but also the fact that the Chancellor updated the fiscal rules to allow for investment in precisely the kinds of projects my hon. Friend mentions in his constituency—in hospitals, schools, better roads, public transport and more affordable housing across the country.

With its NI rises, among other measures, last year’s Budget skewed the tax burden on to small companies. My hon. Friend the Member for St Albans (Daisy Cooper) has just laid out some measures that would skew that burden towards bigger companies and multinationals. Given that the Government’s No. 1 priority is growth, could the Chief Secretary explain why we are taxing small companies over big companies?

I think the hon. Member is referring to employer’s national insurance contributions, which—as I have set out to the House—were designed to limit the burden on smaller businesses, with bigger businesses paying more. That was the way that the system was designed, and that was the system that the Chancellor put forward.

The only way out of the economic doom loop that the previous Government got us into is by growing the British economy again. If the British economy had grown over the past 10 years as quickly as the OECD national average, there would be £40 billion more sitting in the Exchequer without having to touch spending or taxes at all. [Interruption.] The Conservatives talk about the fastest growth in the G7—that is like walking the first 26 miles of a marathon and then bragging about jogging over the finish line. Growth was unacceptably slow under the previous Government, so can the Chief Secretary let us know what he is doing to get the British economy growing again, particularly changing the broken planning system so that we can build more homes and energy infrastructure here in the UK?

My hon. Friend speaks passionately, because his constituents know that they were worse off at the end of 14 years of the Conservatives than when they started. He knows that this Labour Government are committed to making his constituents better off at this end of this Parliament than they were at the start. That is what our investment in the renewal of Britain is about, and it is what this Labour Government will deliver.

We all know that taxes are coming; we just do not know on whom they are going to fall hardest. The country is nervous, with every family and every business wondering how much those taxes are going to cost them. Does the Chief Secretary regret the fact that that is leading to reduced domestic spending and reduced business investment, and is dragging the economy down overall?

I do not disagree with this Government’s fiscal policies, no.

I always listen attentively to the shadow Chancellor, in this place and in his many media rounds. Sadly, what is missing is a costed economic policy of his own. Does my right hon. Friend agree that the shadow Chancellor might be wise to spend some quality time in his beautiful Dorset constituency—

Devon.

Apologies—in his Devon constituency over the summer to develop some credible policies of his own? If he does not, he is not credible from the Dispatch Box.

I agree with my hon. Friend. It will be a benefit to the whole House that the shadow Chancellor will be in his Devon constituency for the whole of August.

The Chief Secretary talks about fiscal stability and fiscal discipline. He will be aware that Labour-run Birmingham city council has been declared bankrupt, so I wish that skillset would be transferred to some of the people running that council. On a serious note, we still have a bin crisis in Birmingham; bin workers are still on strike, and it is forecast that they will not go back to work until Christmas this year. Local businesses and residents are absolutely fed up, so on a sincere note, will the Chief Secretary or his staff meet me and Birmingham MPs to bring this misery to an end?

I know that the hon. Member and colleagues in Birmingham are in correspondence and communication with relevant Ministers in the Ministry of Housing, Communities and Local Government. I point him to the fact that this Government have increased the local government grant by up to £2 billion by the end of this period—by 2028-29—and that we have given local government long-term certainty with multi-year budgets for the first time in many years, to allow them to plan for the future.

I have raised in this House on a number of occasions the many children in my constituency of Ealing Southall sleeping on the floor or on the sofa in mouldy temporary homes, due to 14 years of inaction and financial mismanagement by the Conservatives. Does the Chief Secretary to the Treasury agree that it is only because of the fiscal and budgetary decisions that this Labour Government have made that we have been able to invest a record almost £11 billion in building new affordable and social homes for homeless London families, like those in Ealing Southall?

I thank my hon. Friend for pointing out the legacy of the past 14 years, where so many of our constituents are waiting for secure, affordable housing. That is why the Chancellor’s decision not only to update the definition of debt, but to allow for the creation of a new national housing bank means that we can direct billions of pounds into building affordable and social housing again. Those record levels of investment will make a real difference to the lives of families across the whole country.

The Chief Secretary to the Treasury seems to have only one line to survive this urgent question on behalf of the Chancellor, and that is to make reference to the former Prime Minister. Can he answer a simple question, to which we have already heard the answer today? Are Government borrowing costs higher now under him, or under the former Prime Minister in September 2022?

I refer the hon. Lady to my previous answer.

The Conservatives are responsible for the dangerous dismantling of all our public services, stagnant wages and inflation rates that peaked at 11%. Does the Chief Secretary to the Treasury agree not just with me, but also with former Chancellor George Osborne, who said that the Leader of the Opposition has no “credible economic plan”? We should not be taking advice from a party responsible for 14 years of degradation.

I can reassure my hon. Friend that we are taking no advice from the Conservative party on our approach to the economy, given their dismal record.

Before the general election, the Chancellor said that this would be the most pro-business Government ever. She spoke recently at The Times CEO summit. Before she was introduced to the CEOs, the host asked how many of them thought that this Government are still pro-business, and not a single hand went up. Why does the Chief Secretary to the Treasury think that is?

I was not at the event, so I cannot comment on those discussions, but I point the hon. Member to record levels of investment in this country. We have £120 billion of investment from the private sector in the first year of this Labour Government—including, as the Prime Minister said last Wednesday at Prime Minister’s questions, £40 billion from Amazon. We can look at water infrastructure, housing or digital infrastructure. The United Kingdom is a country that people now want to invest in. It is a stable country with a long-term strategy and with lots of great potential and assets, and we look forward to working with those business partners and investors to get the best deal for Britain.

The Institute for Government’s review of the Government’s performance against fiscal rules found that the previous Conservative Government changed their rules in 2014, 2015, 2016, 2019, 2021, 2022 and 2024. In fact, all of the sets of rules that existed under the Conservatives were abandoned because at least one rule could not be met. Does the Chief Secretary to the Treasury agree that the Conservatives have not met a fiscal rule they did not change, break or, in the case of Liz Truss, blow up?

I thank my hon. Friend for his pertinent question. It rather begs the question of whether the last Conservative Government had any fiscal rules at all. Based on the experience of all of us paying our mortgages and rent, and looking at the cost of inflation at the back end of the last Parliament, the answer is no.

Who does the Chief Secretary to the Treasury think is most responsible for the extra 276,000 people unemployed since the time of the Budget? Is it the national insurance jobs tax, is it the business rates increases, or is it the attacks that the Government have made on long-term investment, whether through agricultural property relief or business property relief?

I disagree with the premise of the question. We are not attacking investment in this country; we are welcoming it. We are increasing public investment, we are doing deal after deal with the private sector, and we are welcoming significant amounts of foreign direct investment that will create good jobs with good wages in every part of the country.

In the last 12 months, the Government have invested £5 million in North Tees hospital, £20 million in Billingham town centre and another £20 million in Stockton town centre—with police patrols seven days a week—£1 billion in local transport in Teesside and £4 billion in carbon capture and storage, and have rescued British Steel. Does my right hon. Friend agree that it is the market’s confidence in this Government and this Chancellor of the Exchequer that gives us the fiscal ability to invest in Stockton, Billingham and Norton in my constituency?

I congratulate my hon. Friend on being so successful. The amount of investment that he has secured for his constituency is clearly a testament to his ability to represent it. He is right to point to all those investments, because part of the Chancellor’s economic strategy is investing in the renewal of Britain to benefit not just his constituents, but all our constituents across the country.

Although I very much welcome the Government’s decision last week to roll back on proposed welfare changes, it has undoubtedly put considerable pressure on the fiscal rules. I have the greatest concern for the middle class, who get little help to raise their children, pay for their education or feed them other than child benefit, and who will feel the squeeze of a wage increase without an increase in the child benefit threshold. With respect to the Chief Secretary, and always conscious of the importance of looking after people who need help, may I ask how he will ensure that middle-class families are not squeezed further, which can only have the effect of them robbing Peter to pay Paul, thereby landing themselves in debt to both?

Let me point to the fact that wages are now increasing faster than costs—for the first time in many years. He also invited me to comment on childcare provision, which the Government agree is important to families, whether middle-class or otherwise. We have extended school-based nurseries and breakfast clubs in schools, and have subsidised childcare in nurseries across the country to help working families get to work and be able to afford to do so.

Following the election, I was deeply disturbed to discover that the close to £20 million of towns fund money that had been promised for Coatbridge by the last Government did not actually exist. It had been announced with much fanfare, but had not been budgeted for. However, thanks to this Government and their plan for neighbourhoods, that £20 million is now coming to Coatbridge. Does my right hon. Friend agree that we must never go back to the fiscal irresponsibility of the Conservative party, which was always keen to promise but always failed to deliver?

I congratulate my hon. Friend on securing investment in his constituency from this Labour Government. He is right to point out that in the past his constituents have been given failed promises, whereas this Labour Government are delivering on their promises.

I thank the Chief Secretary for his statement. My thoughts today are with the family of Anne Moffat of Old Harlow, who lost her life 20 years ago in the 7/7 attacks. Does the Chief Secretary agree that part of the reason we have been left with such a fiscal mess is the previous Government’s decision to cut the number of HMRC compliance officers by 1,200? I declare an interest, because one of them was my mum.

I share the sympathies of the House with the family of my hon. Friend’s constituent. My hon. Friend is right to point out that investment in HMRC had been cut over many years, which made it harder for tax to be collected from those who needed to pay it. The Chancellor has invested significant sums in HMRC to improve customer services for everybody who uses it, and to ensure that we are getting in the tax receipts that will pay for our public services.

Does the Chief Secretary agree that it is the very decisions made by the Chancellor at the time of the last Budget, including those on the fiscal rules, that have enabled this Government to invest £190 billion in day-to-day spending and £113 billion in long-term investment, and that this simply would not have happened had the Conservative party been in power?

I agree. As the House knows, when the Chancellor presented the Budget last year, she said that this Government “chooses investment over decline” for Britain. That was reflected in our spending review, which was investing in the renewal of Britain, unlocking billions of pounds as a consequence of the fiscal rules that the Chancellor had set out in the Budget—which were non-negotiable, and will therefore stay in place.

In the context of spending decisions taken by the Johnson Government, the last Conservative Rail Minister, Huw Merriman, told the Transport Committee last week: “A lot of promises were made to MPs and others as to the ambition, but it did not match the amount that was actually being set down.” He went on to say: “By the time I came into post I ended up with a list that was much longer than could be funded.” Does the Chief Secretary share my anger at the way that the Conservative party tried to take all our constituents for fools?

I do. It is good that my hon. Friend has been able to raise that testimony from the Transport Committee, because it reminds us why the British people were so angry with the Conservative party after 14 years of failed promises, and why this Labour Government will always make sure that we deliver on our promises.

I thank the Chief Secretary for his answers this afternoon.