Darren Jones MP: speeches

Speeches

• 4 Sept 2024 · Budget Responsibility Bill · Hansard source

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  I thank the hon. Gentleman for giving way, and for inviting me to suggest whether I should try to find a job in another Department. I just point out that, having arrived at the Treasury, I have seen the impact of fiscally significant levels of debt after 14 years of the Conservative Government. Has he got anything to say to the House on that matter?

• 4 Sept 2024 · Budget Responsibility Bill · Hansard source

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  The hon. Gentleman is enjoying himself, but he knows the answer: wait for the Budget. The amendments from the official Opposition are therefore not necessary. To answer the question from the shadow Financial Secretary, the hon. Member for Droitwich and Evesham (Nigel Huddleston), as I have been invited to do so, the Chancellor has already confirmed that the Government will set out the precise details of our fiscal rules at the Budget on 30 October, alongside an updated OBR forecast. amendments 6 and 7, tabled by my hon. Friend the Member for Walthamstow (Ms Creasy), focus on the definition of “fiscally significant” measures to which the fiscal lock will apply. They would extend the definition to include measures that have a cumulative effect on public sector net debt or contingent liabilities. I welcome my hon. Friend highlighting this issue, on which I know she has worked for many years. The draft charter text states that measures will trigger the lock when the combined costing is at least 1% of GDP in any year, and specifically: “The costing of a measure is the direct impact of a policy decision on the public finances”. It is difficult to set and interpret a threshold consistently for contingent liabilities as they can often be large in maximum exposure, but low in expected or reasonable worst-case losses. Effective management of contingent liabilities is important, and transparency is key to good fiscal management. The Government plan to announce new significant contingent liabilities at fiscal events to make sure there is transparency with Parliament. We will of course continue to notify Parliament of new contingent liabilities, as set out in “Managing Public Money”. The amendments would also place a condition on policies with a cumulative impact on public sector net debt, and my hon. Friend noted public-private partnerships as an example. She was referring to PFI and PF2 models, which the previous Government had no longer proceeded with, and there has been no change to this policy. As the Chancellor said in her Mais lecture earlier this year, we will also report on wider measures of public sector assets and liabilities at fiscal events to ensure transparency across the whole balance sheet, which includes non-debt liabilities. Reporting transparently on the Government’s stock of contingent liabilities is key to ensuring we do not take excessive risk. I can therefore confirm today that the Government will publish a report on our contingent liabilities. I expect the contingent liability central capability to do this in early 2025. Having said all that, I recognise the issues my hon. Friend raises, and I will arrange to meet her to discuss them further. Moving on to the Liberal Democrat amendments, amendment 2 was tabled by the hon. Member for Richmond Park (Sarah Olney). As she said, it would enable the OBR to notify the independent adviser on Ministers’ interests if the fiscal lock was triggered. I remind hon. Members that the purpose of this Bill is to ensure that never again do we find ourselves in a situation, like at the 2022 Liz Truss mini-Budget, in which fiscally significant measures are announced without accompanying OBR analysis. If a future Government were to act in this way, the Bill provides a clear remedy. The OBR is empowered to independently notify the Treasury Committee and to produce its own report. This would be available for full scrutiny by stakeholders and Parliament, which would be able to hold Ministers to account in the normal way. We therefore do not consider the amendment necessary. Amendment 1, also tabled by the Liberal Democrats, would broaden the definition of fiscally significant measures to cover anything that is likely to have an impact on the cost of Government borrowing, interest rates or economic growth. The Bill is focused on preventing irresponsible large-scale fiscal announcements that could undermine macroeconomic stability, such as at the mini-Budget. To support that, we need clear and robust legal frameworks that ensure the provisions are triggered only when appropriate. This requires precise definitions that everyone, including the OBR in particular, can understand clearly and work with practically. It would therefore not be helpful, in the Government’s view, to have a broader, vaguer definition that might repeatedly trigger the fiscal lock under many different circumstances. Amendments 3 and 4 would require the Treasury to consult the OBR and the Treasury Committee before the charter can be updated for the purposes of the fiscal lock, and to publish a report on the outcome of any such consultations. It is of course important that the views of the OBR and of Parliament are taken into account when making changes to the charter. However, I hope the hon. Member will accept that it will not be necessary to set out this specific process in primary legislation, because the Bill already includes an important safeguard on the fiscal lock, which is the requirement that any changes to the charter for budget responsibility are published in draft at least 28 days before they are laid in the Commons. That will ensure that the OBR, the Treasury Committee, this Parliament and all stakeholders will have a clear opportunity to make representations to the Treasury and to publish their views, as they see fit. Amendment 5, tabled by the hon. Member for North Herefordshire (Ellie Chowns), would require the OBR to take net zero targets into account when preparing a report on fiscally significant announcements. Strong legal frameworks are already in place in the Climate Change Act 2008 to support the transition to net zero in 2050. The Act legislates for interim five-year carbon budgets, and requires the Government to report on those periodically. Parliament and its Select Committees already scrutinise that in great detail. The Green Book, the Treasury’s guidance on how to appraise policies, projects and programmes, requires Departments to assess the climate and environmental impacts of policy proposals, with major bids and proposals at fiscal events being assessed accordingly in that way. We therefore do not consider the amendment to be necessary.

• 4 Sept 2024 · Budget Responsibility Bill · Hansard source

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  Briefly.

• 4 Sept 2024 · Budget Responsibility Bill · Hansard source

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  I always welcome the opportunity to return to the Dispatch Box, and I thank the shadow Minister for inviting me to do so. Opposition provides an opportunity for reflection. While he is offering his thoughts on our two months in office—two months of great relief for the British people—does he have anything to say about his 14 years in office before the election?

• 4 Sept 2024 · Budget Responsibility Bill · Hansard source

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  rose —

• 4 Sept 2024 · Budget Responsibility Bill · Hansard source

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  I beg to move, That the Bill be now read the Third time. I will not take up too much more time, but I will provide a final reminder of how important this legislation is. At the general election, the Government received a mandate for economic growth. Sustained growth is the only route to improve prosperity and to improve the living standards of the British people. It is now our national mission. Economic stability is key to achieving this. We have seen what happens without it, when huge, unfunded fiscal commitments are made without proper scrutiny and when key economic institutions such as the OBR are sidelined. We cannot let ourselves get into that position again. Unfunded, unassessed spending commitments not only threaten the public finances, they can threaten people’s incomes and mortgages, as we saw under the previous Government. I therefore encourage Conservative Members—who have told us today that, after 14 years of Conservative government, the economy has never been so good—to reflect, if only for a moment, on why they lost all credibility for economic competence and suffered the worst election result in their history. Once again, I congratulate all my hon. Friends and other hon. Members on their excellent maiden speeches today. I thank hon. and right hon. Members on both sides of the House for their contributions, and I thank the Clerks and officials who have supported the Bill’s rapid passage. The Budget Responsibly Bill forms a small but vital part of our plan to restore economic stability and deliver economic growth. For these reasons, I commend it to the House.

• 4 Sept 2024 · Budget Responsibility Bill · Hansard source

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  My hon. Friend has hit the nail on the head. Indeed, I might go so far as to say that that was one of the reasons we achieved such a large mandate at the last general election, with so many hon. Friends on the Government Benches. We will never play fast and loose with the economy, as Members on the Conservative Benches did, and this Bill will prevent that from happening again in the future. I start with amendments 9 and 10, tabled by the shadow Chancellor. They would require the OBR to publish a report whenever His Majesty’s Treasury announces new fiscal rules. The purpose of the Bill is to ensure that no Government can make large-scale announcements of tax and spending without being subject to independent assessment. The Government’s robust fiscal rules will support economic stability, but do not change tax and spending. It is those decisions that matter, as we saw when the previous Conservative Government announced £45 billion of unfunded commitments in the 2022 mini-Budget.

• 3 Sept 2024 · Topical Questions · Hansard source

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  The Government’s spending review is currently under way. All decisions on official development assistance spending will be taken in the round as part of that process. I would be delighted to meet my hon. Friend and her colleagues to discuss this issue.

• 3 Sept 2024 · Topical Questions · Hansard source

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  We are appointing a fixed-term covid fraud commissioner through an open competition that is now running as of this morning. The commissioner will make sure everything is done to return money owed to the taxpayer. It will report to the Chancellor, working with the Secretary of State for Health and Social Care, and will report to Parliament in due course.

• 3 Sept 2024 · Topical Questions · Hansard source

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  The Government are reviewing the new hospitals programme as part of our spending review. We will undertake a full and comprehensive review while continuing to deliver the most advanced and most urgent hospitals in a realistic timeframe.

• 3 Sept 2024 · Topical Questions · Hansard source

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  Water companies are commercial entities. It would therefore not be appropriate for me to comment on that. It is for the company and its investors to resolve their possible issues.

• 3 Sept 2024 · Topical Questions · Hansard source

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  I championed this issue in the last Parliament as Chair of the Business and Trade Committee. I am pleased to confirm that I am working with colleagues across Government to make progress, and I will update the House further in due course.

• 3 Sept 2024 · Planning Reform: Fiscal Steps · Hansard source

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  The issue of so-called hope value was referenced in the Labour party’s manifesto, and the Government will set out further detail in due course.

• 3 Sept 2024 · Planning Reform: Fiscal Steps · Hansard source

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  We have committed ourselves to delivering 1.5 million new homes as part of our mission to achieve economic growth across the country, and we have already announced reforms of national planning policy that will help to get Britain building. They include the reintroduction of mandatory housing targets, and the removal of the effective ban on onshore wind in England.

• 3 Sept 2024 · Planning Reform: Fiscal Steps · Hansard source

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  I thank my hon. Friend for her follow-up question and welcome her to her place. As she knows from the Chancellor and the Deputy Prime Minister, this Government take seriously our target to deliver 1.5 million new homes, and we will look at each and every opportunity across the country to do so. That includes making improvements to the system of developer contributions for community benefit to support the delivery of affordable housing and local infrastructure.

• 30 Jul 2024 · Budget Responsibility Bill · Hansard source

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  I beg to move, That the Bill be now read a Second time. I congratulate you and welcome you to your place in the Chair, Madam Deputy Speaker. It is a privilege to open this debate in my first appearance at the Dispatch Box as a Minister in this new Labour Government. At the general election, the British people voted for change, and this new Labour Government began work immediately to deliver on that mandate. Sustained growth is the only route to the improved prosperity that this country needs and to improve the living standards of the British people. After 14 years of Conservative failure, this work is urgent—it is now our national mission. To deliver on that mission, as my right hon. Friend the Chancellor set out days after taking office, we must fix the foundations of the economy and restore economic stability. She emphasised that commitment to delivering economic stability by meeting with the Office for Budget Responsibility soon after becoming Chancellor. Under the legal framework we inherited from the Conservative party, there is no requirement on the Treasury to subject fiscally significant announcements to independent OBR scrutiny. We all experienced what happens when huge unfunded fiscal commitments are made without proper scrutiny and key economic institutions such as the OBR are sidelined. The country cannot afford a repeat of the calamitous mini-Budget of September 2022, when Liz Truss and Kwasi Kwarteng’s reckless plans unleashed economic turmoil that has loaded hundreds of pounds on to people’s mortgages and rents. Conservative Ministers put ideology before sound public money and party before country. This Labour Government are turning the page: we will always put the country first and party second. Our commitment to fiscal discipline and sound money will never waver. That is why we are firmly committed to the independence of the OBR, and to the important principle that in normal times, the announcement of a fiscally significant measure should always be accompanied by an independent assessment of its economic and fiscal implications, in order to support transparency and accountability. That is why we made a commitment in our manifesto to strengthen the role of the OBR, and it is why we have acted quickly to deliver on that commitment today. This action will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to an independent fiscal assessment. As Richard Hughes, the chair of the OBR, reiterated in his recent letter to the Chancellor, “it is a good principle of fiscal policymaking that major fiscal decisions should be based upon, and presented alongside, an up-to-date view of the economic and fiscal outlook”. In line with this, the Chancellor yesterday commissioned a full forecast to accompany our Budget on 30 October, following the important principle that significant fiscal policy decisions should be made at a fiscal event and accompanied by an independent OBR assessment. That fiscal lock is an essential part of our mission to deliver economic stability. It is one of our first steps towards fixing the foundations of the economy, and it is our guarantee to the British people that this Labour Government are a responsible Government who will never play fast and loose with public and family finances, as the Conservative party has done before. The Bill sets the legal framework for the operation of the fiscal lock. It builds on the Budget Responsibility and National Audit Act 2011, which established the OBR. In line with that, the technical detail underpinning the fiscal lock will be set out via an upcoming update to the charter for budget responsibility. The charter sets out the Government’s fiscal framework, including guidance on how the OBR performs its duties within that framework. To support scrutiny of the Bill during its passage through Parliament, the Treasury has published a draft of the relevant charter text, which will make clear exactly how the Government plan to implement the fiscal lock. A full update to the charter will be published in due course, and Members will vote on it in the usual way. The Bill itself does five things to ensure that proper scrutiny of fiscal plans will take place. First, it requires the Treasury, before the Government make any fiscally significant announcement in Parliament, to request that the OBR presents an assessment taking the announcement into account. This builds on the usual process whereby the Chancellor commissions the OBR for an economic and fiscal forecast to accompany a fiscal event. It guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. Secondly, the Bill gives the OBR new powers to independently decide to produce an assessment if they judge that the fiscal lock has been triggered. If a fiscally significant announcement is made without the Treasury having previously requested a forecast from the OBR, the OBR is required to inform the Treasury Committee of its opinion and then prepare an assessment as soon as is practicable. That means that, come what may, the OBR, through Parliament, will be able to hold the Government to account. Thirdly, the Bill defines a measure, or combination of measures, as “fiscally significant” if they exceed a specified percentage of GDP, with the charter then setting the precise threshold itself. Setting the threshold in this way provides clarity for both the OBR and external stakeholders about what constitutes a “fiscally significant announcement”—that is, when the fiscal lock has been triggered—and it ensures that the Government can set it at the right level going forward, recognising economic conditions. The threshold level will be set at announcements of at least 1% of nominal GDP in the latest OBR forecast. As an example, this year the 1% threshold would be £28 billion. This will ensure that we properly capture any announcements that resemble the growth plan of former Members Liz Truss and Kwasi Kwarteng in 2022, with the broader risks to macroeconomic stability that this entailed. Fourthly, the Bill ensures that the fiscal lock does not apply to Governments responding to emergencies, such as the covid-19 pandemic. The Bill does so by not applying in respect of measures that are intended to have a temporary effect and which are in response to an emergency. The charter will define “temporary” as any measure that is intended to end within two years. This recognises that it is sometimes reasonable—for example during a pandemic—for the Government to act quickly and decisively without an OBR assessment, if that is needed in response to a shock. Of course, in emergencies it may be appropriate for the Chancellor to commission a forecast from the OBR to follow measures that needed to be announced or implemented rapidly, and that would happen in the usual way. Alongside any such announcement, the Treasury will be required to make it clear why it considers the situation to be an emergency. As set out in the updated charter, the OBR will have the discretion to trigger the fiscal lock and prepare a report if it reasonably disagrees. Fifthly and finally, the Bill requires the Government to publish any updates to the detail of the fiscal lock—such as the threshold level at which it is triggered—in draft form at least 28 days before the updated charter is laid before Parliament. This is an essential safeguard in the Bill, preventing any future Government from choosing to ignore the fiscal lock by updating the charter without the consent of Parliament.

• 30 Jul 2024 · Budget Responsibility Bill · Hansard source

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  I thank the hon. Gentleman for his contribution. As I am sure he knows, the Chief Secretary to the Treasury is traditionally the lead Minister in Government for relationships with the Finance Ministers in the devolved Governments. I have already met a number of times with counterparts in the Northern Ireland Executive, as well as those in Scotland and Wales. I look forward to meeting them in person in Northern Ireland, I hope in September, for further such discussions. To conclude, people across the country are still suffering the consequences of the Conservative party’s economic experiment in 2022. Conservative Ministers took the most reckless decisions without any thought for their real-life impact on the British economy and on family finances. Astonishingly, they have still made no apology. With this Labour Government, our commitment to fiscal discipline and sound money is the bedrock of our plans. The Budget Responsibility Bill guarantees in law that, from now on, every fiscally significant change to tax and spending will be subject to scrutiny by the independent OBR. The Bill will reinforce credibility and trust by preventing large-scale unfunded commitments that are not subject to the scrutiny of an OBR fiscal assessment. This delivers on a key manifesto commitment to provide economic stability and sound public finances by strengthening the role of the independent OBR. This is a crucial first step to fix the foundations in our economy, so that we can achieve sustained economic growth and make every part of the country better off. For those reasons, I commend the Bill to the House.