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My Lords, I thank the Minister for being here to repeat this Statement.
The new Prime Minister was in place for 42 days before meeting Parliament. That is an all-time record for a new Prime Minister and I trust it will never be equalled. So, we certainly need accountability and, having ordered his troops to vote down a debate in July, I thank the Captain of the Gentlemen-at-Arms for repenting a little and granting additional time for Back-Bench questions on the Statement today.
The Statement began with a tribute to Sir Keir Starmer. On hearing it, I was a little reminded of Brutus’s speech in Shakespeare’s Julius Caesar. The Prime Minister plotted to destroy Sir Keir, not because he did not love Sir Keir but because he loved No. 10 more. Sir Keir has responded to the loyalty that he was shown and, understandably, voted with his feet. We wish him well.
This Statement was grandly entitled “Direction of the Government”. So what is it? What will be different from what was done by the Starmer Government? If she answers nothing else today, can the Minister tell us three things Sir Keir was doing which will now be dropped and three things he was not doing which will now be done? After all, she is in the Cabinet; she must know.
The Prime Minister in the Statement made a lot of things going wrong over 40 years. He blamed Brexit, among other things, and then announced a reduction of VAT on energy prices—ironically, impossible without Brexit. He said that he wanted to help the hospitality industry. Your Lordships may ask who has been pummelling that and crushing summer jobs over the last two years. It is this Labour Government in their disastrous tax policies and the unemployment Act.
The Prime Minister used another Brexit freedom to cut VAT temporarily on pubs. They are now closing at the fastest rate ever known. We might call it “last orders with Reeves and Rayner”. But then the big new idea in the Statement to help hospitality is a tourism tax—that is a funny one.
Always, always, always with the party opposite, the answer is not a spending cut but a new tax. You cannot tax your way into growth. Jim Callaghan said that in the 1970s, as the Prime Minister recalls so fondly. The Prime Minister’s friend, the noble Lord, Lord O’Neill of Gatley, understands that equally well now. The noble Lord seems unwilling to serve under the Prime Minister’s leadership. Perhaps he is the canary in the wealth tax coal mine. Yesterday, he criticised the “tone” of the Prime Minister’s Statement, calling it the
“last thing investors wanted to hear”.
Business has heard the message of tax and spending loud and clear. We should beware, for this is the real danger to our country, to jobs, to mortgages and to business—tax, borrowing and spending running out of control just as they did under the Labour Government in the 1970s the Prime Minister recalls so fondly.
Let us come back to the “Direction of Government”, the title of the Statement. This Government have already added £74,000 million to the tax burden in two years. Some £130,000 million is already spent every year on servicing debt: that is over £1,800 a year for every man, woman and child in the country. We have more borrowing, more nationalisation, more spending, more intervention by civil servants, more tax and more state control.
Can the Minister confirm that that is the direction of the Government? It certainly sounds like the 1970s. Can she say whether the Government’s plan is to increase borrowing or reduce it? Do they plan to increase government spending to pay for all the new initiatives that the Prime Minister has announced, or to curtail spending? Will they address the burgeoning weight of welfare spending on the necks of the working man and woman, or reduce it? Come to think of it, can the Minister tell the House of one significant reduction in welfare that she is recommending to colleagues?
The Prime Minister makes a lot of this new No. 10 North. Well, it is nice to have your office just down the road. To give him credit, I am told that the replica front door cost a thousand quid. I wish somebody had told someone in this House about our new front door. We are told that everyone must now beat their path to No. 10 North to get subsidies, get spending, get more civil servants and get the right to put up tax. If Cornwall wants a so-called “devolution deal”, it must go up to Manchester. Can the Minister say whether these deals will let regional mayors reduce tax? If this is about the direction of the Government, what is the Government’s strategy on taxation? Is it for the taxation burden to go up or fall under this Government? Can the Minister tell the House? Hard-working people up and down the country, who are already paying the highest peacetime tax burden in history and the highest taxation on property in Europe or the G7, deserve to know the Government’s intentions.
National security is the first duty of any Government. The former Defence Secretary resigned over this Government’s failure to do enough. He is now the Chancellor. So, with that following wind in her sails, can the Minister commit to the defence funding that the Chancellor said was necessary to keep British troops safe? That is, 3% of GDP by 2030.
The ultimate test for any Government is whether people feel richer, freer and more prosperous. There is agreement across the House that this can be achieved only through growth. It can be achieved only through innovation and hard work by individuals and businesses. The Prime Minister admits that the cost of doing business is already too high. Yet, in the same breath, he apparently recommits himself in the Statement to the same net-zero policies that are driving up energy costs for households and businesses. Again, which is it? It cannot be both.
The direction of the Government in so many respects remains confused and unclear, but nothing would do this country more harm than the agenda of back to the high-tax, high-spending 1970s, which this Statement presages and which, in the last two days, the financial markets have ominously discerned.