Economic Update — House of Commons, 2022-02-03
Topic: Macroeconomics
Rishi Sunak (Conservative, Centre-right): In contrast, this Government have announced measures to share the burden with consumers and help manage the global price rise. Despite the faux outrage from the Opposition Benches, I am sure that even they would admit privately that the support just announced is both generous and comprehensive Let me take some of the hon. Lady’s points in turn. First, on VAT, may I say how very welcome it is that the Opposition are recognising the benefits of Brexit? I hope they will join me in celebrating the fact that we have been able to change mass migration to this country after decades, that we can create new freeports in places such as Teesside, that we can sign new free trade deals, and that we can deregulate our economy to drive faster growth. She talked about VAT. VAT will, on average, be worth £90 to every household. We are providing £150 to those households that really need it and delivering that support quicker Secondly, the hon. Lady tried to claim that it was the Government’s responsibility to manage global gas prices. I outlined in my statement that it is very clear, as any person looking at this sensibly will acknowledge, that global factors are causing the increase in gas prices. No British Government or Chancellor can change what is happening in Asia or, indeed, stop a nuclear power plant going offline in Germany, and the hon. Lady should acknowledge that. Even in places such as Norway, electricity bills are rising because global factors are in play. She would do well to acknowledge that—and the right hon. Member for Doncaster North (Edward Miliband), sitting next to her, will know that, having spent a lot of time on this Thirdly, I want to address the point about our support for the most vulnerable, because I am proud of this Government’s record in supporting those who need our help. The policies we have announced today are progressive in their nature. A flat rate will, of course, mean far more to those on lower incomes or with lower energy bills. It is worth five times as much as a percentage of income for those in the lowest incomes as for those on the highest incomes. The hon. Lady talked about insulation. Over this Parliament, we are spending £3 billion to improve energy efficiency and insulation for over half a million households in fuel poverty. That is the right thing to do and it will save those vulnerable families, on average, £300 a year, not just this year but every year going forward. We have already announced those plans Lastly, to address the hon. Lady’s point on a windfall tax, of course that sounds superficially appealing, but we on the Government Benches deal with complex problems in a responsible way. The obvious impact of a windfall tax would be to deter investment—it is as simple as that. At this moment I want to see more investment in the North sea, not less. Last year we saw the lowest amount of investment on record in the North sea, as my right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy pointed out just the other day. There are £11 billion of projects lined up to go. I want to unlock that investment because that is good for this country, good for British jobs and good for our energy security. We will pursue policies that are good for the interests of this country not just today but in the future. My right hon. Friend the Energy Secretary is working very hard to make sure we have an energy market that is fit for the future. We have made investments in nuclear, which, as he rightly pointed out, were ignored by the Labour party when it was in power, but which we are now fixing In conclusion, I am not blind to the challenges we face. I have to say to the hon. Lady and her colleagues, however, that we on this side of the House did not have the luxury of sitting on the sidelines and throwing stones. Faced with the gravest of crises, this Government chose to protect millions of jobs. We chose to support millions of businesses, we chose to invest in a world-leading vaccination programme, and we chose a balanced approach to covid so we could open up faster than anywhere else in Europe. We did those things at record speed and at a time of great uncertainty, and we will always strive to learn from mistakes. Nothing is ever perfect when responding to a crisis, but I say to the Labour party that there is a fine line between reasonable criticism and political opportunism, and in my experience the British people can always tell the difference.