More tax cuts for working people, more investment and a plan for better public services headlined Chancellor Jeremy Hunt’s ‘Budget for Long Term Growth’ today, Wednesday, March 6.
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00:00:00 >>Mr. Kerr (Glasgow North) (Lab/Co-op): As we mourn the tragic loss of life in Israel
00:00:11 and Gaza, the Prime Minister reminded us last week of the need to fight extremism and heal
00:00:16 divisions. I start today by remembering the Muslims who died in two world wars in the
00:00:24 service of freedom and democracy. We need a memorial to honour them, so following representations
00:00:30 from the right hon. Member for Bromsgrove and others, I have decided to allocate £1
00:00:35 million towards the cost of building one. Whatever your faith, colour or class, this
00:00:41 country will never forget the sacrifices made for our future.
00:00:50 In recent times, the UK and the UK economy have dealt with a financial crisis, a pandemic
00:00:57 and an energy shock caused by war in Europe. Yet, despite the most challenging economic
00:01:03 headwinds in modern history, under Conservative Government since 2010, growth has been higher
00:01:10 than in every large European economy. Unemployment has halved, absolute poverty has gone down,
00:01:22 and there are 800 more people in jobs for every single day that we have been in office.
00:01:39 Of course, interest rates remain high as we bring down inflation, but because of the progress
00:01:46 we have made and because we are delivering the Prime Minister's economic priorities,
00:01:54 we can now help families not just with temporary cost of living support but with permanent
00:02:01 cuts in taxation. We do this to give much-needed help in challenging times, but also because
00:02:12 Conservatives know that lower taxes mean higher growth, and higher growth means more opportunity,
00:02:24 more prosperity and more funding for our precious public services. If we want that growth—
00:02:32 >>Mrs Theresa May (Bury South) (Lab) Order. The Chancellor has hardly said anything.
00:02:42 >>Mr Speaker Order. You cannot get excited yet. Other people want to hear what the Chancellor
00:02:51 has to say, and it is an atlas. So we will have a bit of good behaviour, please.
00:02:56 >>The Chancellor of the Exchequer (Mr David Cameron)
00:03:01 If we want that growth to lead to higher wages and higher living standards for every family
00:03:08 in every corner of the country, it cannot come from unlimited migration. It can only
00:03:15 come by building a high-wage, high-skill economy—not just higher GDP but higher GDP per head. That
00:03:24 is the difference with the party opposite. Their plans destroy jobs, reduce opportunities
00:03:31 and risk family finances with spending that pushes up taxes. Instead of going back to
00:03:37 square one, the policies I announce today mean more investment, more jobs, better public
00:03:44 services and lower taxes in a budget for long-term growth. I start with the updated forecasts
00:03:53 from the OBR, for which I thank Richard Hughes and his team.
00:03:59 First, inflation. When the Prime Minister and I came to office, it was 11%. The latest
00:04:06 figures show—[Interruption.] I know that the party opposite—
00:04:12 >>Mrs Theresa May This is not amusing any more. We need to
00:04:16 hear what the Chancellor has to say. I can tell who is making the noise, and you simply
00:04:21 will not get a chance to speak later. That is the end of it.
00:04:26 >>The Chancellor of the Exchequer (Mr David Cameron)
00:04:28 When the Prime Minister and I came to office, inflation was 11%, but the latest figures
00:04:33 show that it is now 4%, more than meeting our pledge to halve it last year. Today's
00:04:40 forecasts from the OBR show it falling below the 2% target in just a few months' time—nearly
00:04:47 a whole year earlier than forecast in the autumn statement. That did not happen by accident.
00:04:58 Whatever the pressures and whatever the politics, a Conservative Government working with the
00:05:03 Bank of England will always put sound money first. We also understand that tackling inflation,
00:05:16 while necessary, is painful. It means higher interest rates and a period of lower growth.
00:05:23 We have given the average household £3,400 in cost-of-living support over the last two
00:05:30 years. Doing so makes economic as well as moral sense. The OBR predicted that real household
00:05:37 disposable income per person would fall by 2% in the last year. Instead, after this support,
00:05:44 it is on track to rise by 0.8%. Today, I take further steps to help families with cost-of-living
00:05:52 pressures, starting with measures to help the poorest families. We have already abolished
00:05:58 higher charges for electricity paid by those on prepayment meters, increased the local
00:06:03 housing allowance and raised benefits by double expected inflation. Today, I focus on those
00:06:10 falling into debt. Nearly 1 million households on universal credit take out budgeting advance
00:06:17 loans to pay for more expensive emergencies, such as boiler repairs, or help getting a
00:06:22 job. To help make such loans more affordable, I have today decided to increase the repayment
00:06:28 period for new loans from 12 months to 24 months. For some people, I thought they cared
00:06:37 about people on the lowest incomes, but trust the Labour party not to want to hear about
00:06:52 debt. For some people, the best way to resolve debt is through a debt relief order, but getting
00:07:01 one costs £90, which can deter the very people who need it the most. Having listened carefully
00:07:07 to representations from Citizens Advice, I today relieve pressure on around 40,000 families
00:07:13 every year by abolishing the £90 charge completely.
00:07:19 Next is the Household Support Fund. It was set up on a temporary basis and is due to
00:07:24 conclude at the end of this month. Having listened carefully to representations from
00:07:28 the Joseph Rowntree Foundation, the Trussell Trust and hon. Members from East Ham, Colchester,
00:07:34 Ryslip, Northwood and Pinna, and Suffolk Coastal, among others, I have decided that with the
00:07:39 battle against inflation still not over, now is not the time to stop the targeted help
00:07:46 it offers. We will therefore continue it at current levels for another six months.
00:07:53 Next I turn to a measure that will help businesses and households more broadly. In the autumn
00:08:01 statement I froze alcohol duty until August this year. Without any action today it would
00:08:08 have been due to rise by 3%, but I have listened carefully to my right hon. Friends from Altrincham
00:08:14 and Sale West, the Vale of Glamorgan and my right hon. Friend the Member for Moray (Mr
00:08:19 Toms), who is a formidable champion of the Scottish whisky industry. I also listened
00:08:27 to Councillor John Tonks from Ash, a strong supporter of the wonderful Admiral pub, who
00:08:33 pointed out the pressures facing the industry. Today I have decided to extend the alcohol
00:08:40 duty freeze until February 2025. This benefits 38,000 pubs across the UK, and on top of the
00:08:49 £13,000 saving a typical pub will get from the 75% business rates discount I announced
00:08:58 in the autumn. We value our hospitality industry and are backing the great British pub.
00:09:09 Another cost that families and businesses worry about is fuel. The shadow Chancellor
00:09:16 complained about the freeze on fuel duty, and Labour has opposed it at every opportunity.
00:09:24 The Labour Mayor of London wants to punish motorists even more with his EULES plans,
00:09:30 but lots of families and sole traders depend on their car. If I did nothing, fuel duty
00:09:37 would increase by 13% this month, so instead I have listened to my right hon. Friends from
00:09:42 Stoke-on-Trent North, Dudley North, Wytham and others. As well as the Sun newspapers'
00:09:51 "Keep it down" campaign, I have as a result decided to maintain the 5p cut and freeze
00:09:59 fuel duty for another 12 months. This will save the average car driver £50 next year
00:10:08 and bring total savings since the 5p cut was introduced to around £250. Taken together
00:10:15 with the alcohol duty freeze, this decision also reduces headline inflation by 0.2 percentage
00:10:22 points in 2045, allowing us to make faster progress towards the Bank of England's 2%
00:10:29 target.
00:10:30 There can be no solid growth without solid finances. An economy based on sound money
00:10:39 does not pass its bills to the next generation. When it comes to borrowing, some believe there
00:10:46 is a trade-off between compassion and fiscal responsibility. They are wrong. It is only
00:10:54 because we responsibly reduced the deficit by 80% between 2010 and 2019 that we could
00:11:02 provide £370 billion to help businesses and families in the pandemic. The party opposite
00:11:09 opposed our plans to reduce the deficit every single step of the way, but in fairness they
00:11:19 were consistent. The Lib Dems supported controlling spending in coalition, but now say they will
00:11:26 prop up a party that will turn on the spending taps. It is the difference between no plan
00:11:31 and no principles.
00:11:32 I am delighted that the right hon. Gentleman from the Lib Dems was here to hear it for
00:11:53 us. Today we say something different. There is nothing compassionate about running out
00:12:03 of money. With the pandemic behind us, we must once again be responsible and build up
00:12:08 our resilience to future shocks. That means bringing down borrowing so that we can start
00:12:13 to reduce our debt, and today's figures confirm that that is happening. Ahead of my
00:12:18 first autumn statement in 2022, the OBR forecast headline debt would rise to above 100% of
00:12:24 GDP. Today it will fall in every year to just 94% by 2028-29. Underlying debt, which excludes
00:12:36 Bank of England debt, will be 91.7% in 2045, according to the OBR, then 92.8%, 93.2%, 93.2%
00:12:46 before falling to 92.9% in 2028-29, with final-year headroom against debt falling of £8.9 billion.
00:12:55 Our underlying debt is therefore on track to fall as a share of GDP, meeting our fiscal
00:13:00 rule, and we continue to have the second lowest level of Government debt in the G7—lower
00:13:06 than Japan, France or the United States. We also meet our second fiscal rule for public
00:13:13 sector borrowing to be below 3% of GDP three years early. Borrowing falls from 4.2% of
00:13:19 GDP in 2034 to 3.1%, 2.7%, 2.3%, 1.6% and 1.2% in 2028-29. By the end of the forecast,
00:13:33 borrowing is at its lowest level of GDP since 2001. None of that, of course, would be possible
00:13:41 if Labour implemented their pledge to decarbonise the grid five years early by 2030. By their
00:13:48 own calculations, that costs £28 billion a year to do, but last month, after flip-flopping
00:13:56 for months, they said they are not going to spend the £28 billion after all, but somehow
00:14:03 they will meet their pledge. Somehow, Madam Deputy Speaker, can only mean one thing—tax
00:14:09 rises on working families. Same old Labour. Today, in contrast, a Conservative Government
00:14:20 bring down taxes, with borrowing broadly unchanged. In fact, borrowing is slightly lower than
00:14:29 the autumn statement.
00:14:31 The fact that we are bringing borrowing down is of particular importance to one very special
00:14:37 person. Sir Robert Stamon is the outgoing chief executive of the Government's Debt
00:14:42 Management Office, and after 20 years of exceptional public service, he is in the gallery. Thank
00:14:49 you, Sir Robert.
00:14:52 I now turn to growth. Just after I became Chancellor, the OBR expected GDP to fall by
00:15:00 1.4% in the following year. In fact, it grew, albeit slowly. Now the OBR expects the economy
00:15:07 to grow by 0.8% this year and 1.9% next year, 0.5% higher than its autumn forecast. After
00:15:17 that, growth rises to 2.2%, 1.8% and 1.7% in 2028. Since 2010—[Interruption.] They
00:15:26 do not want to hear this, but these are the facts. Since 2010, we have grown faster than
00:15:31 Germany, France or Italy, the three largest European economies, and according to the IMF,
00:15:37 we will continue to grow faster than all three of them in the five years ahead. Surveys by
00:15:46 Lloyds and Deloitte show business confidence is returning. In other words, because we have
00:15:50 turned the corner on inflation, we will soon turn the corner on growth. Today's OBR forecasts
00:15:57 also show that we have made good progress on the Prime Minister's three economic priorities.
00:16:03 Compared with when the three pledges were made, inflation has halved, debt is falling
00:16:07 in line with our fiscal rules and growth is fully 1.5 percentage points higher than predicted.
00:16:16 As growth returns—[Interruption.] They do not have a growth plan, so they might as well
00:16:22 listen to us. As growth returns, our plan is for economic growth not sustained through
00:16:32 migration but one that raises wages and living standards for families—not just higher GDP
00:16:39 but higher GDP per head. That means sticking to our plan with a budget for long-term growth,
00:16:44 more investment, more jobs, better public services and lower taxes. I start with investment.
00:16:52 Economists say that stimulating investment is the most effective way to raise productivity
00:16:58 and therefore wages and living standards. Since 2010, we have been doing just that.
00:17:06 You might want to listen to what I am about to say. Business investment has risen from
00:17:14 an average of 9.3% of GDP under Labour to 9.9% under the Conservatives, and this year
00:17:22 it will be 10.6% of GDP. That is £30 billion more business investment than if it had continued
00:17:32 at Labour levels, and it is still going up. In the short period since the autumn statement,
00:17:37 Nissan has announced that it will build two new electric car models in the UK. Microsoft
00:17:43 and Google have announced data centres worth over £3 billion. Thanks to my right hon.
00:17:48 Friend the Business Secretary, the Global Investment Summit unlocked £30 billion of
00:17:54 investment. In fact, since 2010, Greenfield foreign direct investment has been higher
00:17:59 than anywhere else in Europe, and for the last three years we have been the third highest
00:18:04 in the world, after the United States and China, and we are not stopping there. In the
00:18:10 autumn statement, I announced that we would introduce permanent full expensing—a £10
00:18:17 billion tax cut for businesses—that gives the UK the most attractive investment tax
00:18:24 regime of any large European or G7 country. It was welcomed by over 200 business leaders,
00:18:31 with the CBI saying it was a "game changer" and the "single most transformational thing
00:18:36 we could do to fire up the British economy". Today I take further steps to boost investment.
00:18:42 Having listened to calls from the CBI, Make UK and the BCC, we will shortly publish draft
00:18:48 legislation for full expensing to apply to leased assets—a change I intend to bring
00:18:53 in as soon as it is affordable. We will also help small businesses—something close to
00:19:00 my own heart. As well as the business rate support and work on prompt payments I announced
00:19:06 in the autumn, I will provide £200 million of funding to extend the recovery loan scheme
00:19:11 as it transitions to the growth guarantee scheme, helping 11,000 SMEs access the finance
00:19:17 they need. Following representations from the Federation of Small Businesses, as well
00:19:23 as hon. Members for Loughborough, Southend West and Rother Valley, I will reduce the
00:19:29 administrative and financial impact of VAT by increasing the VAT registration threshold
00:19:36 from £85,000 to £90,000 from 1 April—the first increase in seven years. That will bring
00:19:44 tens of thousands of businesses out of paying VAT altogether and encourage many more to
00:19:50 invest and grow.
00:19:53 I now move to measures to address historic underinvestment in our nations and regions.
00:20:00 Since we started levelling up in 2019, two thirds of all new salaried jobs have been
00:20:11 created outside London and the south-east. We have announced 13 investment zones and
00:20:17 12 free ports, which continue to attract investment, including recently thanks to the efforts of
00:20:22 Mayor Ben Howcham from the Numa Group, which is investing £15 million into the Tees Valley
00:20:31 investment zone. Today, working with the levelling-up Secretary, I devolve further power to local
00:20:39 leaders who are best placed to promote growth in their areas. I can announce the north-east
00:20:45 trailblazer devolution deal, which will provide a package of support for the region that is
00:20:50 potentially worth over £100 million. I will devolve powers to Buckinghamshire, Warwickshire
00:20:57 and the most beautiful county in England, Surrey. I see the Leader of the Opposition
00:21:02 smiling because, like me, he is a Surrey boy. I know he has been taking advice from Lord
00:21:09 Mandelson, who yesterday rather uncharitably said he needed to shed a few pounds. Ordinary
00:21:16 families will shed more than a few pounds if that lot get in.
00:21:35 If he wants to join me on my marathon training, he is most welcome as well.
00:21:41 Today, we continue to spread opportunity throughout the country by allocating £100 million of
00:21:48 levelling-up funding to areas including Highpeak, Dundee, Conway, Erewash, Redditch and Coventry
00:21:55 to support cultural projects in these communities, alongside support for capital projects across
00:22:01 the country, including in Bingley. We are expanding the long-term plan for towns to
00:22:06 20 new places, including Darlington, home of the Treasury's fantastic Darlington economic
00:22:13 campus. Coleraine, Peterhead, Runcorn, Harlow, Eastbourne, Arbroath and Rill are providing
00:22:20 each with £20 million of funding to invest in community regeneration over the next decade.
00:22:26 We will provide £15 million in new funding to the West Midlands Combined Authority to
00:22:32 support culture, heritage and investment projects on the recommendation of our go-getting Mayor,
00:22:38 Andy Street. We will allocate £5 million to renovate hundreds of local village halls
00:22:44 across England so that they can remain at the heart of their communities. Because this
00:22:49 is a Conservative and unionist Government, we will also set aside funding to support
00:22:54 the Saxavore spaceport in Shetland, an agri-food launch pad in mid Wales and funding to support
00:23:02 Northern Ireland's businesses to expand global trade and investment opportunities.
00:23:06 As a result of the decisions we take today, the Scottish Government will receive nearly
00:23:11 £300 million in Barnett consequentials, with nearly £170 million for the Welsh Government
00:23:19 and £100 million for the Northern Ireland Executive. I appreciate that a tax-cutting
00:23:27 budget is very uncomfortable for the biggest tax risers in the United Kingdom. We also
00:23:35 want to level up opportunity across the generations, including by building more houses for young
00:23:43 people. We are on track to deliver over 1 million homes in this Parliament. Last week,
00:23:48 the levelling-up Secretary allocated £188 million to support projects in Sheffield,
00:23:55 Blackpool and Liverpool. Today, I go further, allocating £242 million of investments in
00:24:02 Barking Riverside and Canary Wharf, which together will build nearly 8,000 houses, as
00:24:08 well as transforming Canary Wharf into a new hub for life science companies. We are launching
00:24:13 a new £20 million community-led housing scheme, supporting local communities, to deliver the
00:24:18 developments they want and need. I am pleased to announce the next steps for Cambridge to
00:24:24 reach its potential to be the world's leading scientific powerhouse. I confirm that there
00:24:29 will be a long-term funding settlement for the Future Development Corporation in Cambridge
00:24:33 at the next spending review, with over £10 million invested in the coming year to unlock
00:24:38 delivery of crucial local transport and health infrastructure.
00:24:43 The final levelling-up measures I announce today support North Wales, where I have many
00:24:48 happy childhood memories, in mould following representations from the hon. Member for the
00:24:53 Vale of Clwyd. We will help fund the renovation of Theatre Clwyd. I can announce this week
00:25:01 that the Government have reached agreement on a £160 million deal with Hitachi to purchase
00:25:08 the Wilfa site in Innisman and the Old Wilshire site in South Gloucestershire. Innisman has
00:25:29 a vital role in delivering our nuclear ambitions, and no one should take more credit for today's
00:25:30 announcement than my tireless, tenacious and turbocharged on-world friend, Innisman. More
00:25:31 investment by large businesses, more support for small businesses, promoting investment
00:25:36 in our nations and regions, all part of a budget for long-term growth that sticks to
00:25:41 our plan to deliver more jobs, better public services and lower taxes.
00:25:54 I now turn to one of the most powerful ways to attract investment, namely supporting our
00:26:00 most innovative industries. Outside the US, we have the most respected universities, the
00:26:06 biggest financial services sector and the largest tech ecosystem in Europe. We have
00:26:12 double the AI start-ups of anywhere in Europe, double the venture capital investment and
00:26:16 a tech economy now double the size of Germany and three times the size of France. We are
00:26:21 on track to become the world's next Silicon Valley.
00:26:25 In today's budget for long-term growth, I take further steps to attract investment
00:26:30 into our technology-related industries. I want our brilliant tech entrepreneurs not
00:26:36 just to start here but to stay here, including when the time comes for a stock market listing.
00:26:43 So we will build on the Edinburgh and Mansion House reforms to unlock more pension fund
00:26:47 capital. We will give new powers to the Pensions Regulator and Financial Conduct Authority
00:26:53 to ensure better value from defined contribution schemes by judging performance on overall
00:26:57 returns not cost. We will make sure there are vehicles to make it easier for pension
00:27:02 funds to invest in UK growth opportunities. I am today publishing the names of the winners
00:27:06 of the Lyfts competition.
00:27:09 But I remain concerned that other markets such as Australia generate better returns
00:27:12 for pension savers with more effective investment strategies and more investment in high-quality
00:27:18 domestic growth stocks. So I will introduce new requirements for DC and local government
00:27:23 pension funds to disclose publicly their level of international and UK equity investment.
00:27:29 I will then consider what further action should be taken if we are not on a positive trajectory
00:27:34 towards international best practice.
00:27:37 I also want to create opportunities for a new generation of retail investors to engage
00:27:42 with public markets. So we will proceed with the retail sale for part of the Government's
00:27:47 remaining NatWest shares this summer at the earliest opportunity, subject to supportive
00:27:53 market conditions and value for money. We will continue to explore how savers could
00:27:57 be allowed to take their pension pots with them when they change job. We will make it
00:28:01 easier for people to save for the long term with a new British savings bond delivered
00:28:06 through National Savings and Investment, offering savers a guaranteed rate fixed for three years.
00:28:11 And today, following calls from over 200 representatives of the city and our high-growth sectors, I
00:28:18 will reform the ISA system to encourage more people to invest in UK assets. After a consultation
00:28:26 on its implementation, I will introduce a brand new British ISA, which will allow an
00:28:31 additional £5,000 annual investment for investments in UK equity with all the tax advantages of
00:28:38 other ISAs. This will be on top of the existing ISA allowances, ensuring that British savers
00:28:45 can benefit from the growth of the most promising UK businesses, as well as supporting those
00:28:50 businesses with the capital to expand.
00:28:52 I turn now to our other growth industries, starting with clean energy. We want nuclear
00:28:58 to provide up to a quarter of our electricity by 2050. As part of that, I want the UK to
00:29:04 lead the global race in developing cutting-edge nuclear technologies. I can therefore announce
00:29:11 that Great British Nuclear will begin the next phase of the small modular reactor selection
00:29:16 process, with companies now having until June to submit their initial tender responses.
00:29:22 Our brilliant Energy Security and Net Zero Secretary will also allocate up to £120 million
00:29:28 more to the green industries growth accelerator to build supply chains for new technology,
00:29:33 ranging from offshore wind to carbon capture and storage. By January next year, as promised
00:29:38 in the autumn statement, we will have a new, faster connections process to the grid up
00:29:42 and running. In advanced manufacturing, we have announced a further £270 million of
00:29:47 investment into innovative new automotive and aerospace R&D projects, building the UK's
00:29:53 capabilities in zero-emission vehicle and clean aviation technologies.
00:29:59 I now turn to our creative industries. We have become Europe's largest film and TV
00:30:06 production centre, with Idris Elba, Keira Knightley and Orlando Bloom all filming their
00:30:11 latest productions here. Studio space in the UK has doubled in the last three years, and
00:30:17 at the current rate of expansion, next year we will be second only to Hollywood globally.
00:30:23 In the autumn statement, I committed to providing more tax relief for visual effects in film
00:30:31 and high-end TV. I can today confirm that we will increase the rate of tax credit by
00:30:36 5% and remove the 80% cap for visual effects costs in the audiovisual expenditure credit.
00:30:45 Having worked closely with the Culture Secretary and listened carefully to representations
00:30:50 from companies such as Pinewood, Warner Bros and Sky Studios, we will provide eligible
00:30:56 film studios in England with a 40% relief on their gross business rates until 2034.
00:31:04 Having heard representations from the British Film Industry Pact and, indeed, the Prime
00:31:08 Minister, we will introduce a new tax credit for UK independent films, with a budget of
00:31:15 less than £15 million. For our creative industries more broadly, we will provide £26 million
00:31:22 of funding to our pre-eminent theatre, the National Theatre, to upgrade its stages.
00:31:28 Today I particularly want to recognise the contribution of our creative industries and
00:31:34 the tourism that comes from orchestras, museums, galleries and theatres. In the pandemic, we
00:31:43 introduced higher 45% and 50% levels of tax relief, which were due to end in March 2025.
00:31:52 They have been a lifeline for performing arts across the country. Today, in recognition
00:31:58 of their vital importance to our national life, I can announce that I am making those
00:32:03 tax reliefs permanent at 45% for touring and orchestral productions and 40% for non-touring
00:32:11 productions. Lord Lloyd-Webber says that this will be a "once-in-a-generation transformational
00:32:17 change that will ensure Britain remains the global capital of creativity".
00:32:27 I suspect that the new theatre reliefs may be of particular interest to the shadow Chancellor,
00:32:33 who seems to fancy her thespian skills when it comes to acting like a Tory. The trouble
00:32:40 is that we all know how her show ends—higher taxes, like every Labour Government in history.
00:33:01 I am delighted that they are cheering the fact that Labour Governments always put up
00:33:05 taxes—they are right. I also want to mention our life sciences sector, where we will support
00:33:16 research by medical charities into diseases such as cancer, dementia and epilepsy, with
00:33:24 an additional £45 million, including £3 million for Cancer Research UK.
00:33:30 I have long believed that we should be manufacturing medicines as well as developing them, so I
00:33:37 can today also announce a brand-new investment by one of our greatest life science companies,
00:33:45 AstraZeneca, led by mon ami, the irrepressible Sir Pascal Soirieu. AstraZeneca made its covid
00:33:52 vaccine available to developing countries at cost, as a result saving over 6 million
00:33:59 lives. Today, because of the Government's support for the life sciences sector, they
00:34:05 announced plans to invest £650 million in the UK to expand their footprint on the Cambridge
00:34:13 biomedical campus and fund the building of a vaccine manufacturing hub in Speak in Liverpool.
00:34:19 More investment, better jobs in every corner of the country, and a long-term budget for
00:34:25 growth from a Conservative Government.
00:34:33 One of the biggest barriers to investment is businesses not being able to hire the staff
00:34:38 they need. The economy today has around 900,000 vacancies. It would be easy to fill them with
00:34:46 higher migration, but with over 10 million adults of working age who are not in work,
00:34:53 that would be economically and morally wrong. Those who can work should, and this is an
00:34:59 issue I have tackled in every Budget and autumn statement I have delivered. A year ago, I
00:35:05 abolished the pensions lifetime allowance, which pushed doctors and others to take early
00:35:10 retirement. Ask any doctor what they think about Labour's plans to bring it back, and
00:35:14 they will say, "Don't go back to square one." In the autumn, with the help of our
00:35:22 superb Work and Pensions Secretary, we announced the back-to-work plan, which will support
00:35:28 1 million adults with medical conditions and reduce the number of people assessed as not
00:35:33 needing to work by two-thirds. A year ago, I also announced the biggest ever expansion
00:35:39 of childcare, extending the 30-hour free childcare offer to all children of working parents from
00:35:52 nine months. We have not had a childcare plan from Labour, so you might want to listen to
00:35:57 ours. Our plan will mean that an extra 60,000 parents enter the workforce in the next four
00:36:07 years—a tremendous achievement for the Education Secretary, who I think is doing an effing
00:36:12 good job. Today, following representations from many people, including the CBI, I announced
00:36:21 measures to support the childcare sector to make the new investments it now needs to make.
00:36:26 I am guaranteeing the rates that will be paid to childcare providers to deliver our landmark
00:36:31 offer for children over nine months old for the next two years, which is more people in
00:36:36 work, more jobs, and sticking to our plan in a long-term budget for growth.
00:36:42 I now turn to public services. I thought that they were supposed to be interested in public
00:36:53 services. I can wait.
00:37:12 A little bit of murmuring is normal. I should not be able to hear what you are saying over
00:37:18 there. That is clearly out of order. Let us have some courtesy.
00:37:24 >>The Chancellor of the Exchequer (Mr David Cameron)
00:37:30 Good public services need a strong economy to pay for them, but a strong economy also
00:37:37 needs good public services. In 2010, schools in the UK were behind Germany, France and
00:37:44 Sweden in the OECD's PISA education rankings for reading and maths. Now, after Conservative
00:37:51 reforms, we are ahead of them. Burglaries and violent crime have halved in the last
00:38:00 14 years, after we invested in 20,000 more police officers. Our armed forces remain the
00:38:10 most professional and best funded in Europe, with defence spending already more than 2%
00:38:15 of GDP. We are providing more military support to Ukraine than nearly any other country,
00:38:20 and our spending will rise to 2.5% as soon as economic conditions allow.
00:38:25 The NHS is still recovering from the pandemic, but has 42,000 more doctors and 71,000 more
00:38:33 nurses than it did under Labour. That is 250 more doctors and 400 more nurses for every
00:38:43 single month that we have been in office. Resources matter, of course, which is why,
00:38:52 despite all the economic shocks we have faced, overall spending on public services has gone
00:38:58 up since 2010—in the case of the NHS, by more than a third in real terms. Although
00:39:05 spending has continued to rise every year, public sector productivity still remains below
00:39:12 pre-pandemic levels, by nearly 6%. This demonstrates that the way to improve public services is
00:39:19 not always more money or more people; we also need to run them more efficiently. We need
00:39:28 a more productive state, not a bigger state.
00:39:34 In autumn 2022, I set day-to-day spending to increase by 1% a year in real terms over
00:39:42 the next Parliament. Some say that is not enough and we should raise spending by more.
00:39:48 Others say it is too much and we should cut it to improve efficiency. Neither are right.
00:39:53 It is not fair to ask taxpayers to pay for more when public service productivity has
00:40:00 fallen, nor would it be wise to reduce that funding given the pressures public services
00:40:05 face. So I am keeping the planned growth in day-to-day spending at 1% in real terms, but
00:40:11 we are going to spend it better.
00:40:20 They do not have a plan for public services like everything else, so why not listen to
00:40:28 ours? Today I am announcing a landmark public sector productivity plan that restarts public
00:40:38 service reform and changes the Treasury's traditional approach to public spending. I
00:40:45 start with our biggest and most important public service, the NHS. One of my greatest
00:40:51 privileges was to be Health Secretary. Thanks to the NHS, I have three gorgeous children,
00:40:59 the oldest of whom has been patiently listening in the gallery.
00:41:04 The NHS is rightly the biggest reason most of us are proud to be British, but the systems
00:41:11 that support its staff are often antiquated. Doctors, nurses and ward staff spend hours
00:41:18 every day filling out forms when they could be—
00:41:20 >>Mrs Thea-Streeting, you are too close to me to be shouting that loudly. If you want
00:41:32 to shout that loudly, you should go and sit away up there. I apologise for interrupting
00:41:38 the Chancellor.
00:41:46 >>Mr Speaker When patients do not show up or one member
00:41:49 of a team is ill, operating theatres are left empty despite long waiting lists. When we
00:41:54 published the NHS long-term workforce plan, I asked the NHS to put together a plan to
00:41:59 transform its efficiency and productivity. I wanted better care for patients, more job
00:42:05 satisfaction for staff and better value for taxpayers. Making changes on the scale we
00:42:11 need is not cheap. The investment needed to modernise NHS IT systems so that they are
00:42:18 as good as the best in the world costs £3.4 billion, but it helps unlock £35 billion
00:42:27 of savings—ten times that amount. In today's budget for long-term growth, I have decided
00:42:34 to fund the NHS productivity plan in full. With that new investment, we will slash the
00:42:44 13 million hours lost by doctors and nurses every year to outdated IT systems. We will
00:42:51 cut down and potentially halve form-filling by doctors using AI. We will digitise operating
00:42:58 theatre processes, allowing the same number of consultants to do an extra 200,000 operations
00:43:04 a year. We will fund improvements to help doctors read MRI and CT scans more accurately
00:43:10 and quickly, speeding up results for 130,000 patients every year and saving thousands of
00:43:16 lives—something I know would have delighted my brother Charlie, whom I recently lost to
00:43:21 cancer. We will improve the NHS app so that it can be used to confirm and modify all appointments,
00:43:30 reducing up to half a million missed appointments annually and improving patient choice. We
00:43:35 will set up a new NHS staff app to make it easier to roster electronically, and end the
00:43:39 use of expensive off-framework agencies. As a result of this funding, all hospitals will
00:43:46 use electronic patient records, making the NHS the largest digitally integrated healthcare
00:43:52 system in the world. Today's announcement doubles the amount the NHS is investing on
00:44:00 digital transformation over three years. On top of this longer-term transformation, we
00:44:06 will also help the NHS meet pressures in the coming year with an additional £2.5 billion.
00:44:12 This will allow the NHS to continue its focus on reducing waiting times and brings the total
00:44:18 increase in NHS funding since the start of the Parliament to 13% in real terms. The NHS
00:44:24 was there for us in the pandemic, and today, with nearly £6 billion of additional funding,
00:44:30 a Conservative Government are there for the NHS. The head of the NHS, Amanda Pritchard,
00:44:39 today says that this investment shows that the Government continue to back the NHS. She
00:44:45 says that as a result of it, the NHS can commit to delivering 1.9% annual productivity growth
00:44:52 over the next Parliament, more than double the average productivity growth in public
00:44:56 services between 2010 and 2019.
00:45:00 But today is not just about the NHS. I want this groundbreaking agreement with the NHS
00:45:07 to be a model for all our public services. Across education, the police, the courts and
00:45:13 local government, I want to see more efficient, better value and higher quality public services.
00:45:20 So today I can announce that in the next spending review, the Treasury will do things differently.
00:45:25 We will prioritise proposals that deliver annual savings within five years, equivalent
00:45:31 to the total cost of the investment required. Today we make a start with some excellent
00:45:38 proposals.
00:45:40 Violence reduction units and hot spot policing have prevented an estimated 136,000 knife
00:45:47 crimes and other violent offences, as well as over 3,000 hospital admissions. Every crime
00:45:55 costs money, so we will provide £75 million to roll that model out in England and Wales.
00:46:03 Police officers waste around eight hours a week on unnecessary admin. With higher productivity,
00:46:08 we could free the equivalent of 20,000 police officers over a year. So we will spend £230
00:46:16 million rolling out time and money-saving technology, which speeds up police response
00:46:22 times by allowing people to report crimes by video call and, where appropriate, use
00:46:27 drones as first responders.
00:46:29 Too many legal cases, particularly in family law, should never go to court, and it would
00:46:35 cost us less if they did not. So we will spend £170 million to fund non-court resolution,
00:46:43 reduce reoffending and digitise the court process. Too many children in care end up
00:46:48 being looked after by unregistered providers that are much more expensive, so we will invest
00:46:53 £165 million over the next four years to reduce that cost by increasing the capacity
00:47:00 of the children's homes estate.
00:47:03 Special education need provision can be excellent when outsourced to independent sector schools,
00:47:09 but also expensive, so we will invest £105 million over the next four years to build
00:47:15 50 new special free schools to create additional high-quality places and increased choice for
00:47:24 parents. We will also put in place a plan to realise the tens of billions of savings
00:47:30 recommended in an excellent speech by the head of the National Audit Office.
00:47:34 The OBR says a 5% increase in public sector productivity will be the equivalent of around
00:47:41 £20 billion in extra funding. With these plans, we can deliver that and more. If we
00:47:48 ensure that they are cash-releasing savings, as we are committed to doing, it will be possible
00:47:54 to live with more constrained spending growth without cutting services valued by the public.
00:48:01 So with the energy and drive of my talented Chief Secretary to the Treasury, we launch
00:48:06 our public sector productivity plan in today's Budget for long-term growth—more investment,
00:48:12 more jobs, better public services and, one more thing, lower taxes. Keeping taxes down
00:48:27 matters to Conservatives in a way it never can for Labour. We believe that in a free
00:48:36 society the money you earn does not belong to the Government; it belongs to you. If we
00:48:43 want to encourage hard work, we should let people keep as much of their own money as
00:48:50 possible. Conservatives look around the world at economies in North America and Asia and
00:48:58 notice that countries with lower taxes generally have higher growth. Economists argue about
00:49:04 cause and correlation, but we know that lower-taxed economies have more energy, more dynamism
00:49:11 and more innovation, and we know that that is Britain's future too.
00:49:18 Before I explain how we will bring down taxes, I will start with some measures to make our
00:49:24 system simpler and fairer. To discourage non-smokers from taking up vaping, we are today confirming
00:49:31 the introduction of an exercise duty on vaping products from 26 October and publishing a
00:49:36 consultation on its design. Because vapes can also play a positive role in helping people
00:49:42 quit smoking, we will introduce a one-off increase in tobacco duty, at the same time
00:49:46 to maintain the financial incentive to choose vaping over smoking. I will make a one-off
00:49:52 adjustment to rates of air passenger duty on non-economy flights only to account for
00:49:57 high inflation in recent years, and I will provide HMRC with the resources it needs to
00:50:01 ensure that everyone pays the tax they owe, leading to an increase in revenue collected
00:50:06 at over £4.5 billion across the forecast period.
00:50:11 Next I turn to property taxation. In recent months, following tenacious representation
00:50:18 from the hon. Members for St Austell and Newquay, North Devon, cities of London and Westminster,
00:50:25 Corbeil, Truro and Falmouth, I have been looking closely at our furnished holiday lettings
00:50:32 tax regime. I am concerned that this tax regime is creating a distortion, meaning that there
00:50:38 are not enough properties available for long-term rental by local people. To make the tax system
00:50:44 work better for local communities, I am going to abolish the furnished holiday lettings
00:50:49 regime.
00:50:50 I have also been looking at stamp duty relief for people who purchase more than one dwelling
00:50:58 in a single transaction, known as multiple dwellings relief. I see the Deputy Leader
00:51:04 of the Labour party paying close attention, given her multiple dwellings.
00:51:29 >> The Prime Minister Too much excitement. We have not heard
00:51:34 what the Chancellor is trying to say. I can hear who is shouting there. You will not get
00:51:43 to speak later.
00:51:44 >> Mr Speaker I am sorry to disappoint the right hon. Lady,
00:51:50 but multiple dwellings relief was not actually designed for her. It was intended to support
00:52:04 investment in the private rented sector, but an external evaluation found no strong evidence
00:52:09 that it had done so and that it was being regularly abused, so I am going to abolish
00:52:14 it.
00:52:15 Finally, as part of our look on property taxation, both the Treasury and the OBR have
00:52:23 looked at the costs associated with our current levels of capital gains tax on property. They
00:52:29 have concluded that if we reduced the higher 28% rate that exists for residential property,
00:52:37 we would in fact increase revenues because there would be more transactions. For the
00:52:43 first time in history, both the Treasury and the OBR have discovered their inner Laffer
00:52:47 curve. So today I am going to reduce the higher rate of property capital gains tax from 28%
00:53:04 to 24%. That really is for you, Angela.
00:53:31 >> Mr Speaker Order. I have had enough from over there;
00:53:40 I am definitely not having it from here.
00:53:43 >> Mr Speaker I now turn to oil and gas. Unlike the party
00:53:50 opposite, we want to encourage investment in the North Sea, so we will retain generous
00:53:55 investment allowances for the sector. We will also legislate in the Finance Bill to abolish
00:54:00 the energy profits levy should market prices fall to their historic norm for a sustained
00:54:05 period of time, after representations from the hon. Member for Banff and Buchan. But
00:54:09 because the increase in energy prices caused by the Ukraine war is expected to last longer,
00:54:16 so too will the sector's windfall profits, so I will extend the sunset on the energy
00:54:20 profits levy for an additional year to 2029, raising £1.5 billion.
00:54:29 >> Mr Speaker Next I turn to the taxes paid by those who
00:54:35 are resident in the UK but not domiciled here for tax purposes. This is a category of people
00:54:50 known as non-doms. Nigel Lawson wanted to end the non-dom regime in his great tax-reforming
00:55:04 Budget of 1988, which is where I suspect the Labour party got the idea from. I too have
00:55:12 always believed that, provided we protect the UK's attractiveness to international
00:55:17 investors, those with the broadest shoulders should pay their fair share. After looking
00:55:24 at the issue over many months, I have concluded that we can indeed introduce a system that
00:55:36 is both fairer and remains competitive with other countries. So the Government will abolish
00:55:43 the current tax system for non-doms, get rid of the outdated concept of domicile, and I
00:55:57 aim to please all sides of the House in all my Budgets.
00:56:07 >> Mr Speaker Order. This is impossible. Order. Could
00:56:17 you please shout more quietly?
00:56:20 >> Mr Speaker Thank you, Madam Deputy Speaker. We will
00:56:27 replace the non-dom regime with a modern, simpler and fairer residency-based system.
00:56:33 From 25 April, new arrivals to the UK will not be required to pay any tax on foreign
00:56:41 income and gains for their first four years of UK residency—a more generous regime than
00:56:47 at present and one of the most attractive offers in Europe. But after four years, those
00:56:53 who continue to live in the UK will pay the same tax as other UK residents. Recognising
00:56:59 the contribution of many of these individuals to our economy, we will put in place transitional
00:57:05 arrangements for those benefiting from the current regime. That will include a two-year
00:57:11 period in which individuals will be encouraged to bring wealth earned overseas to the UK,
00:57:17 where it can be spent and invested here—a measure that will attract onshore an additional
00:57:22 £15 billion of foreign income and generate more than £1 billion of extra tax.
00:57:29 Global abolishing non-dom status will raise £2.7 billion a year by the end of the forecast
00:57:38 period. That is money the party opposite planned to use for spending increases, but today a
00:57:45 Conservative Government make a different choice. We use that revenue to help cut taxes on working
00:57:52 families. Many of those families depend on child benefit, but the way we treat child
00:58:06 benefit in the tax system is confusing and unfair. It is a lifeline for many parents
00:58:13 because it helps with the additional costs associated with having children, and when
00:58:17 it works it is good for children, good for parents and good for the economy because it
00:58:21 helps people into work. We currently withdraw child benefit when one parent earns over £50,000
00:58:29 a year. That means that two parents earning £49,000 a year receive their benefit in full,
00:58:37 but a household earning a lot less than that does not if just one parent earns over £50,000.
00:58:43 Today I set out plans to end that unfairness. Doing so requires significant reform to the
00:58:52 tax system, including allowing HMRC to collect household-level information. We will therefore
00:58:58 consult on moving the high-income child benefit charge to a household-based system, to be
00:59:04 introduced by April 2026. But because that is not a quick fix, I make two changes today
00:59:14 to make the current system fairer. Following representations from my right hon. Friends
00:59:19 from Pennystone and Stocksbridge, Carshalton and Wallington, Bassetlaw and West Worcestershire,
00:59:28 along with many others, I confirm that from this April the high-income child benefit charge
00:59:34 threshold will be raised from £50,000 to £60,000. We will raise the top of the taper,
00:59:41 at which it is withdrawn, to £80,000. That means that no one earning under £60,000 will
00:59:47 pay the charge, taking 170,000 families out of paying it altogether. Because of the higher
00:59:55 taper and threshold, nearly half a million families with children will save an average
01:00:00 of £1,300 next year. According to the OBR, this change will see an increase in hours
01:00:08 among those already working to the equivalent of 10,000 more people entering the workforce—more
01:00:15 investment, more jobs, better public service and lower tax.
01:00:22 There is one further set of changes I want to make today. The way we tax people's income
01:00:29 is particularly unfair. If you get your income from having a job, you pay two types of tax—national
01:00:36 insurance contributions and income tax. If you get it from other sources, you pay only
01:00:41 one. This double taxation of work is unfair. The result is a complicated system that penalises
01:00:48 work instead of encouraging it. If we are to build a high-wage, high-skill economy that
01:00:54 is not dependent on migration, and if we want to encourage people not in work to come back
01:00:59 to work, we need a simpler, fairer tax system that makes work pay. That is why I cut national
01:01:07 insurance contributions in the autumn. By reducing the penalty on work, the OBR said
01:01:14 that that tax cut would lead to the equivalent of 94,000 more people in work. In other words,
01:01:21 it would fill more than one in 10 vacancies throughout the economy—lower taxes, more
01:01:27 jobs and higher growth.
01:01:30 Today, because of the progress we have made bringing down inflation, because of the additional
01:01:35 investment that is flowing into the economy, because we have a plan for better and more
01:01:40 efficient public services, and because we have asked those with the broadest shoulders
01:01:45 to pay a bit more—
01:01:46 >> Mr Speaker Order. Mr Perkins—
01:01:47 >> Mr Speaker Order. I can manage—thank you very much. I have heard what you said five
01:02:00 times. I let you away with it. That is enough. One more strike and you are out.
01:02:09 >> Jeremy Corbyn (Islington North) (Lab)
01:02:15 I know how hard it is for the Government to listen to arguments for lower taxes, but that
01:02:21 is the difference. Because we have asked those with the broadest shoulders to pay a bit more,
01:02:28 today I go further. From 6 April, employee national insurance will be cut by another
01:02:34 2p, from 10% to 8%, and self-employed national insurance will be cut from 8% to 6%. That
01:02:45 means an additional £450 a year for the average employee, or £350 for someone self-employed.
01:02:54 When combined with the autumn reductions, that means 27 million employees will get an
01:03:00 average tax cut of £900 a year, 2 million self-employed will get a tax cut averaging
01:03:09 £650—changes that make our system simpler and fairer and that grow our economy by rewarding
01:03:17 work. The OBR says that when combined with the autumn reduction, our national insurance
01:03:23 cuts will mean the equivalent of 200,000 more people in work, filling one in five vacancies,
01:03:31 adding 0.4% to GDP and 0.4% to GDP per head. This is the second fiscal event where we have
01:03:42 reduced employee and self-employed national insurance. We have cut it by one third in
01:03:46 six months without increasing borrowing and without cutting spending on public services.
01:03:53 That means the average earner in the UK now has the lowest effective personal tax rate
01:03:59 since 1975. Their effective taxes are now lower than in America, France, Germany or
01:04:09 any G7 country. Because Conservatives believe that making work pay is of the most fundamental
01:04:19 importance, because we believe that the double taxation of work is unfair, our long-term
01:04:25 ambition is to end this unfairness. When it is responsible, when it can be achieved without
01:04:30 increasing borrowing, when it can be delivered without compromising high-quality public services,
01:04:36 we will continue to cut national insurance, as we have done today, so that we truly make
01:04:40 work pay.
01:04:46 We stick to our plan with a budget for long-term growth. It delivers more investment, more
01:04:52 jobs, better public services and lower taxes. But dynamism in an economy does not come from
01:04:59 Ministers in Whitehall; it comes from the grit and determination of people who take
01:05:05 risks, work hard and innovate—not Government policies but people power. It is to unleash
01:05:12 people power that we today put this country back on the path to lower taxes. A plan to
01:05:20 grow the economy versus no plan; a plan for better public services versus no plan; a plan
01:05:27 to make work pay versus no plan; growth up, jobs up, taxes down. I commend this statement
01:05:35 to the House.