Business of the House

Sizewell C is a classic example. The document trumpets a near 16% increase in investment. In truth, spending over the period is falling by 3.7%. That is on page 44. Similarly, on police funding, the Chancellor was very careful in her language to say that there would be an increase in “police spending power”, but what she meant was that there would be an increase in the local authority precept: in plain English, a tax rise.

The same obfuscation was at work with overseas development aid. The Chancellor has always said that ODA cuts were needed to fund defence, but the reality is that defence increases are almost entirely in capital spending, while ODA is a cash line. Far from funding our national defence, what has actually happened is that overseas development aid has been cut to prop up other Departments’ day-to-day budgets.

The most obvious case is defence spending: we were told in grand rhetoric that it would rise to 2.5%, and later 3%, of GDP at some undefined moment when fiscal circumstances allow. In fact, it is unlikely that even 2.5% will be reached this Parliament. The 2.6% quoted includes the single intelligence account, which suggests that the number is below 2.5%. The defence investment plan—the plan that will release the money—is unlikely to appear until the end of the year. That is nearly 18 months after the 2024 general election—this at a time of war in Ukraine, and with China potentially positioning itself for conflict over Taiwan by 2027.

On Monday NATO Secretary-General Mark Rutte, echoed yesterday by no less than Lord Robertson, said that unless NATO members raise defence spending to 3.5%, with an additional 1.5% in wider support, we may as well “start learning Russian”. That is the strategic context. The Government’s response has been to dither and delay.

The Chancellor’s U-turn over the winter fuel payment badly damaged whatever credibility she ever had. Yesterday’s statement has compounded the problem for her and the Government. No mention was made of the estimated 5% annual council tax increases now expected, as flagged by Paul Johnson of the Institute for Fiscal Studies. No admission was made that the review will add £140 billion in new borrowing. That is an extra £10 billion a year in interest payments, at current rates, by the end of the period. Meanwhile, the supposed efficiency savings of nearly £14 billion are widely regarded as illusory.

As the Chancellor herself said about the spending review, these are her choices. But the truth is plain: there will be a tax cut for the people of Mauritius. For the rest of us, the spending review was a gigantic speculative splurge of spending, presented via smoke and mirrors, which will end up, as it always does with Labour, with higher taxes, and British taxpayers will have to bear the impact.

In my part of the world and yours, Mr Speaker, that has been particularly true. Towns and cities across the north and the midlands have been held back by woeful transport infrastructure that would be unacceptable to people in the south; held back by the lack of job opportunities near where they live; held back by poor, insecure and costly housing; held back because they are not getting the training and skills they need; and held back because their life chances are lower as a result of deep-seated inequalities.

That cannot be addressed overnight, and we are not pretending that it will be, but we have a long-term plan for renewal. That includes the biggest investment in affordable and social housing in 50 years; nuclear and renewable infrastructure transforming communities around the country; the north finally getting the rail connectivity it deserves; and every community getting better buses. Schools and hospitals are being rebuilt for the 21st century, based not on fictional budgets and economics but on actual plans to deliver them. We are addressing today’s cost of living crisis, too, with our warm homes plan to bring down bills, by extending free school meals and free breakfast clubs, with more free childcare, with a cap on bus fares and by increasing the wages of the lowest paid—with wages going up more in the first 10 months of this Labour Government than they did in 10 years of the Conservative Government. Finally, we continue to boost the NHS, which has already resulted in waiting lists coming down month after month.

The right hon. Gentleman wants to talk about choices, so let us talk about those choices. We would not have been able to set those things out if we had not made the difficult changes to taxes that we made in the Budget last year. He seems to want more spending for the police and defence—I think that is what he was saying—but he does not want to make the hard decisions about where the money will come from. He mentions yet again the 2.5% of spending on defence, which this Government are delivering, but he might want to remind himself of when defence spending reached 2.5% in the last 20 years. Was it in any of the 14 years for which his Government were in office? No, it was not. It was only when Labour was last in government that we reached the heights of 2.5%.

In contrast to the Conservatives’ fantasy economics, yesterday’s spending allocations were all within the envelope that we set out in the Budget last year, so we are really clear where the money is coming from. As ever, their economic argument is utterly incoherent. On the one hand, they say that we are spending too much, and on the other that we are not spending even more on police and defence. They criticise us on growth, yet they do not want the investment to turbocharge our productivity and, therefore, our growth. We are the party with a plan—a plan to renew Britain, a plan to raise living standards in every part of the country, a plan to get our public services back on their feet and a plan to give people the security they need in their homes.