Shadow Leader of the House Jesse Norman criticises the Government’s failure to manage the economy and calls for genuine leadership to stop taking politically driven measures that actively hurt the economy and instead address important issues like social care reform.
Jesse Norman (Hereford and South Herefordshire) (Con)
Madam Deputy Speaker, may I start by wishing you a very happy new year? I hope that all colleagues in the Chamber had a zestful and restful Christmas. I also pay tribute to those members of the House Service who were honoured in the recent honours list.
The new year is always a time for new starts and fresh beginnings; a time when people step back, look at themselves in the mirror, pinch an inch or two, and perhaps make a few resolutions—lay off the pies, resist the siren call of the cheeseboard, spend less on self-indulgences and more on things that matter, take themselves in hand, and perhaps try to manage things a bit better. The Government might consider adopting these new year’s resolutions for themselves. After all, by any standards, their first six months in office have been pretty catastrophic. They have had six happy months blaming everyone else; now they need to take responsibility and lead.
We have seen how the Budget continues to have devastating effects, both on key sectors and more widely. Just a few weeks ago the National Institute of Economic and Social Research warned that the UK economy did not grow at all in the fourth quarter of last year. High street retailers have reported their worst sales decline since covid, both offline and online. Business confidence is at a four-year low. Employment continues to fall, and job vacancies are at their lowest for three years.
Only this week we saw that long-term interest rates in the gilts market, as very well highlighted by the shadow Chancellor in this morning’s urgent question, have risen to their highest level since 1998, 27 years ago—that was before some Members of this House were born—reflecting severe investor worry about Labour’s spending plans and about increased UK vulnerability to increases in the national debt. The Government cannot blame that on the past. It is a straight judgment on their own credibility, and it is costing this country dearly every day.
The problem is not just that the Government have damaged key parts of the economy with their Budget decisions; it is that the long-term effect of those decisions is so counterproductive. The CBI has calculated that the Government’s raid on inheritance tax will cost £1.25 billion more than it raises. The Chancellor has said:
“I’m really clear, I’m not coming back with more borrowing or more taxes.”
Last month, she specifically ruled out an emergency Budget in the spring.
The effect of these rising interest rates is to reduce fiscal headroom and make new tax rises or spending cuts very possible—indeed, some would say almost inevitable. We must wait to see whether that means emergency tax rises or an unexpected fiscal event in the spring, with a detailed investigation by the Office for Budget Responsibility. That also raises the question: how can the Government plan a spending review at all if they are not in control of the public finances? The damage will not be just to the Chancellor’s own reputation; it will damage the pockets of every person in every household in this country.
As we think about the new year, what resolutions should the House encourage the Government to adopt? I suggest three. First, stop taking politically driven measures that actively hurt the economy. Stop punishing the retail and hospitality sectors, which give so many young people their first jobs. Stop attacking farmers and the rural economy. Stop the madness of the Employment Rights Bill, which will make it harder than ever to start and build a business. We should be celebrating and rewarding drive, energy, aspiration and entrepreneurship, not undermining them.
Secondly, come clean to the people of this country about the Government’s own uncertainty, conflicts and incompetence. We have had endless announcements about new commissions and initiatives, each testimony to Labour’s hopeless lack of planning before the election. We had a delayed autumn Budget and this year we will have a spending review that, if it is not derailed by fiscal events, could easily last until June or July, building up to a full year of stasis and stagnation since the general election.
A final resolution might be to show us some leadership. The Prime Minister pointed out, and rightly so, that in 2010 the incoming Government inherited public finances in desperate need of repair. He said
“we cannot tax our way to prosperity or spend our way to better public services.”
Those are refreshingly honest, cross-party recognitions of the difficulty of government, but when it comes to action, what have we seen? Dither, delay and divisive policy making. Reform of social care is a huge issue for millions of people across this country and could lift huge burdens from the NHS, yet this week we learned that, despite all Labour’s promises of change, it has been kicked into the long grass.
In closing, this Government were elected to own key issues and to address them, not to avoid the hard problems, parrot the usual political lines, blame other people and play nice to their friends in the unions. They need to stop blaming others, get on and show the country they can lead.