Achieving Economic Growth

I inform the House that I have selected amendment (w) in the name of the Leader of the Opposition, which will be moved at the start of the debate, and amendments (m) and (s) which will be moved at the end of the debate. I call the shadow Chancellor of the Exchequer, Rachel Reeves.

I beg to move amendment (w), at the end of the Question to add:

“but respectfully regret that the Gracious Speech fails to bring forward immediately an emergency budget to tackle the cost of living crisis or to set out a new approach to the economy that will end 12 years of slow growth and high taxation under successive Conservative Governments.”

We meet today when inflation has hit its highest level for 40 years. Every pound that people had last year can purchase only 91p-worth of goods today; that is what inflation of 9% means. Our country has a cost of living crisis and a growth crisis, with prices rising, growth downgraded and no plan for the future. None of this, though, is inevitable. It is a consequence of Conservative decisions and the direction they have taken our economy in over the past 12 years.

The Government are increasingly a rudderless ship, heading to the rocks, while they are willing to watch people financially drown in the process. Where is the urgency and the action? The time to change course is now. We need an emergency Budget to deal with the inadequacy of the Chancellor’s spring statement, with a windfall tax to help to get bills down and to help families and pensioners to weather the storm. On the day that inflation has reached a 40-year high, the Chancellor is missing in action. As energy bills and anxiety levels soar, the response from the Government diminishes in comparison.

The hon. Lady asks where the action is. Will she accept that today £150 is going into the bank accounts of people in council tax bands A to D from councils across this country?

The action that Labour proposes is a windfall tax to take up to £600 off people’s bills. As the hon. Lady knows, energy bills have gone up 54%, by an average of £693. With all respect, £150 just does not cut it.

Labour first proposed a windfall tax on 9 January, more than four months ago, and what was the first response from a Conservative Minister? It was to insist that a windfall tax would be unfair because Shell and BP were “struggling”. North sea oil and gas producers are making £32 million a day in unexpected profits. Meanwhile, parents trying to pay their bills are going without food so that their children do not miss meals—that is struggling. We now know that each and every day the Conservatives delay introducing a windfall tax, families and pensioners are forking out £53 million more in their energy bills.

Last night, my party supported the amendment relating to oil and gas that was moved by the right hon. Member for Doncaster North (Edward Miliband). The hon. Lady is right: there is a real need to protect our pensioners. This morning, a constituent told me that his brother, a pensioner, sleeps in a sleeping bag to keep warm; another pensioner tells me that she can turn the heating on in her house for only one hour a day. One way of helping our pensioners would be through the proposal that the hon. Lady refers to: a windfall tax on those who are making exorbitant profits.

I thank the hon. Member for speaking so powerfully about his constituents. After years of work and contribution to this country, a pensioner is sleeping in a sleeping bag to keep warm.

The Government got rid of the triple lock, and now they are refusing to implement a windfall tax. Every day, the case for Labour’s windfall tax gets stronger, while the Tory defence for refusing to act gets weaker and weaker, yet last night every single Conservative MP voted against a windfall tax for the third time. People can no longer afford to pay for the Government’s mistakes. The Government should put the national interest first and follow Labour’s advice. It is time to do the right thing; it is time to put the needs of people first; it is time to introduce a windfall tax to get bills down.

Will the hon. Lady clarify one thing? There is a bit of dispute about how much a windfall tax would raise per household. There are about 25 million households in the UK. Will the hon. Lady confirm how much money per household a windfall tax would actually raise?

A windfall tax would raise about £3 billion. That, combined with the extra VAT that the Government are receiving because prices have gone up so much, could go directly towards taking money off people’s bills. It would make a real impact now. Every single day, the energy companies are making £32 million in unexpected profits. This Government increase taxes on working people; a Labour Government would increase taxes on the big oil and gas companies.

The cost of living crisis is being made worse by a wage crisis, as years of Conservative Governments have failed to stand up for working people. At the Conservative party conference last year, the Prime Minister bragged of plans for a high-wage economy. How is that going? Let me update the House. In the six months since then, average real-terms pay has not risen, but fallen. Behind the headline figures, data released yesterday by the Institute for Fiscal Studies shows not only that workers are experiencing a fall in their real pay, but that the gap between those earning most and those earning least is widening. For the hospital porters, the supermarket assistants, the delivery drivers—the very people who worked tirelessly through the pandemic to keep this country going—wages are in no way keeping up with the rising cost of living.

I just want clarification of the figures, because they are very important. The hon. Lady said that a windfall tax would raise £3 billion; among 25 million households, that is just over £100 each, which is less than the Government are giving. She then said that there would be £600 for each household, but that would cost about £18 billion, which is £15 billion more than the windfall tax would raise. Where would that extra £15 billion come from? Would it come from an increase in Government borrowing?

Our scheme is very clear. We would introduce a windfall tax, use that money to reduce VAT on gas and electricity bills from 5% to zero, and expand the warm home discount from the measly £140 that people get today to £400. We would fund that through the windfall tax, through the additional VAT receipts that the Government are getting in at the moment because prices are so high, and through receipts from the additional corporation tax that the oil and gas companies are paying. The Government will end up doing this. The only question is when they will get on and deliver for their constituents. Oil and gas companies are making record profits and people are paying record bills. It is a question of whose side you are on. The Government are very clear that they are on the side of the oil and gas companies; the Opposition are very clear that we are on the side of ordinary families and pensioners.

The Government have failed to introduce not only the windfall tax, but the employment Bill that has been repeatedly promised. There is a real-world price: allowing scandalous threats of fire and rehire to continue to drive down conditions at work, not just in the appalling P&O case, but in other sectors. Fire and rehire should have been outlawed, but thanks to this Government’s actions it is being encouraged. Employment rights for the modern world of work will not just protect workers, but boost growth and financial security. That makes for a stronger economy with firm foundations, rather than allowing a race to the bottom that takes away dignity as well as eroding family finances.

I give way to my hon. Friend the Member for Lewisham West and Penge (Ellie Reeves).

As well as struggling with rising fuel bills and food prices, many of my constituents are worried about their precarious work, about not knowing from one week to the next what hours they will get, and about being fired by unscrupulous employers. Does my hon. Friend agree that the Queen’s Speech was a missed opportunity to introduce the long-awaited employment Bill, which would ensure that workers get the dignity and security that they desperately need?

The sad truth is that the Government used to agree. Introducing an employment Bill was in their manifesto; in fact, they have been promising it for five or six years. Let us have that employment Bill to protect people at work, so that working people do not have to resort to food banks, and so that they have the security and dignity that work should provide.

April’s International Monetary Fund data show that families in Britain are more exposed to the cost of living crisis than countries such as Germany, France and the US because of depleted savings. Savings are declining and household debt is on the rise, not because millions of people can no longer manage a budget, but because millions of people cannot afford a Conservative Government. Working families are increasingly struggling with their budgets because the Chancellor has failed to act in his Budgets. The Food Foundation believes that since January, 2 million people have not eaten food for at least a whole day, because they could not afford to.

I give way to my hon. Friend the Member for Swansea West (Geraint Davies).