Economic Growth

1. What recent steps he has taken to increase economic growth.

15. What steps he is taking to help ensure that the UK remains the fastest growing economy in the G7.

May I start by paying tribute to my predecessor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves)? I am proud to have been a member of a Government with the first female Chancellor in 700 years. She did hard yards on the task of rebuilding Britain’s fiscal credibility, public services and levels of growth after 14 years of Conservative Governments’ failure. I now build on her work. Yesterday, I set out the Government’s determination to see the next chapter of Britain’s growth story written in more places. That means more devolution and the combined force of the Government to get things done, back businesses and get more investment, innovation and jobs across the UK.

Last week, the UK Government announced a financial boost of £11.8 million to support the regional economy across Ayrshire. The money will fund projects across Ayr, Carrick and Cumnock, supporting employability and business start-ups. Does my right hon. Friend agree that although the SNP is obsessed with centralising in Holyrood and taking away local powers, the route to regional economic growth lies in empowering local communities and local councils?

My hon. Friend does a great job of standing up for the people of Ayrshire. The £11.8 million will fund jobs, training and business start-ups right across Ayrshire. In England, this is a Government who are backing local areas to generate growth in more areas, and I would love to see the Scottish nationalist Government do the same.

Thank you, Mr Speaker—and happy Star Trek Day. Last week, the Opposition chose to Klingon to the Truss legacy, and what a damaging legacy that was. How can we engage in warp speed, so that our economy continues to grow the fastest in the G7?

Captain Kirk!

Mr Spock, I think some would say, Mr Speaker! My hon. Friend is right. Despite global conflicts, trade tensions and rising threats in the world, which are pushing up inflation, bearing down on growth and pushing up borrowing costs, the UK economy is demonstrating huge resilience. He is right that in the first six months of this year, the UK economy grew the fastest in the G7. I set out yesterday some early steps to back stronger growth in more places: backing innovation with more investment in fast-growth firms across the north; changing the Government’s Green Book discount rate so that projects across the country with long-term potential will get a fairer hearing; and taking an axe to the thicket of administration that too often slows down decisions, holds back growth and prevents the private investment that we need.

This week, Arthur Laffer, economic adviser to three former US Presidents, said Britain is being taxed to death under this Labour Government, so will the Chancellor rule out tax rises in the Budget?

The hon. Gentleman could have asked that question to any Chancellor at any time in the past few decades, and no Chancellor ahead of a Budget would have commented on speculation or ruled out measures. I will set out the decisions I take before the House on 28 October, and I look forward to him being there on that day.

The former Chancellor invested a significant amount of political capital into driving forward the white elephant project of building a third runway at Heathrow on the basis that it would deliver economic growth, but the Government’s appraisal report states that the net present value of expansion is between minus £23.4 billion and minus £62.5 billion. Will this Chancellor put an end to this absurd proposal?

After years of delay, indecision and often vexatious challenge, we have given the go-ahead to this project quite simply because the economic case stacks up and will help to bring growth.

I call the Chair of the Treasury Committee.

I welcome the Chancellor’s clampdown on speculation and leaks ahead of the Budget; it is certainly an important step he has taken. On the issue of certainty, the National Wealth Fund is a critical investor in crowding in private investment around the UK. I noted that he has changed the remit. How will he balance his desire to see change with ensuring that it is strong and stable and that there is certainty for businesses seeking to invest with the support of the National Wealth Fund?

I thank my hon. Friend for that, for the work she does in chairing the Treasury Committee and for her previous work on the Public Accounts Committee. She is right about the damage of speculation ahead of Budget. It led last year, for instance, to a large number of people cashing in pension pots, but the speculation was entirely unfounded. On my hon. Friend’s question about the National Wealth Fund, we have capitalised it by over £200 billion, and the challenge is to ensure that we get good value-for-money decisions, but decisions made quicker, so that we can get investment into local areas to see private investment bring the growth that we need.

I welcome the right hon. Gentleman to his position. I have known him for a long time—I wish him well. He has a huge task ahead of him. Earlier in the summer, the Prime Minister said that walking the streets of Makerfield lodged in his mind that so many working people want to see the personal allowance raised. In Reform, we want to do that as well; in fact, we want to raise it to £15,000 a year and to make work pay. Is it still the Prime Minister’s and the Chancellor’s ambition to raise the personal allowance?

At the Budget last year, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves) continued the freeze in the personal allowance, which was first brought in by the Conservatives, in order to help fund the improvements in health and schools that this country needs that the people voted for at the election just two years ago. We will keep all of this under review, as we always do. Reform is making promises that it simply cannot keep. The right hon. Gentleman is right that I have known him a long time; I say to him and to the country that he is also a man whose own party leader described as “a man that believed in nothing”.

The Chancellor does not need to worry; he has no responsibility for Reform. I call the shadow Minister.

I welcome the Chancellor to his new role. I paid close attention yesterday to the long speech he made to reset the narrative and drive growth Britain. In paying tribute to his predecessor, will he recognise that she left the highest tax burden on record? Instead of postponing the words he could utter to my hon. Friend the Member for Havant (Alan Mak), could he make a short speech today from the Dispatch Box to say that he does not plan to increase the tax burden further?

I could have spoken a lot longer yesterday. I am grateful to the hon. Member for watching or reading it. In the two years of this Labour Government, we have started to see this country beginning to turn a corner. That is a corner after 14 years in which the previous Tory Governments had a record of low growth and high debt, and a mini-Budget that crashed the British economy and collapsed confidence in Britain’s fiscal strength. This country has huge strengths in its people, its businesses and its communities, who want to seize the future. This is a country in which interest rates have been cut six times since the election; in which borrowing, which is still too high, is down to a six-year low; in which growth—still fragile and under pressure—was fastest in the first half of this year in the G7; and in which productivity and investment are finally, after long Conservative years, beginning to tick up. That is the basis on which we now build.

I call the Liberal Democrat spokesperson.

I welcome the Chancellor to his place. After two anti-growth Budgets, I genuinely wish him well and urge him to deliver a growth Budget this autumn, so that we can avoid more punishing tax rises or painful spending cuts. Last week, the Prime Minister acknowledged that Brexit had ushered in a “decade of low growth” but did not outline what he thinks is needed to tackle it. On Monday, the Chancellor made what was briefed as a major economic speech on growth, the product of deep thinking, and yet there was barely a mention of the impact of Brexit. Recent studies suggest that deeper alignment with Europe could boost GDP by at least 2.5% to 3.6%, so should the Chancellor’s plan for growth not include the growth and defence partnership with the EU that we have called for?

The hon. Lady is talking to the person who led the work to establish a defence and security partnership with the European Union and bilateral agreements with other countries, on which we now build both our economic strength and our national security strength. On the question of the Budget, I ask the hon. Lady to look at what we have done in the seven weeks of this Government. We know that we cannot relieve the cost of living and the cost of business pressures, but we will take steps where we can to do that. I will take that principle into the Budget, and we will back business and do what we can to see growth in more places across the country, because for too long this country has relied on too few of our major cities to drive national growth.