Full text of speech:
Thank you, Madam Deputy Speaker—and thank you, colleagues. So much to say, so little time to say it.
I agreed with the opening comments of the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband): we do have a problem with economic growth in the UK. Economic growth is incredibly important—it creates more jobs, it creates better-paid jobs, it helps with the cost of living crisis, and it helps to raise the taxes that we need to pay for public services—but it has been too slow over the 15 years that have elapsed since the financial crisis. What he failed to point out, however, is that this has been a problem across the developed world, and is not unique to the UK. The global economy has been hit by the triple whammy of the financial crisis, the covid pandemic, and the cost of living crisis that has resulted from the invasion of Ukraine. It has been like being hit by a hurricane, a tornado and an earthquake back to back, and it is not surprising that the entire world economy is feeling battered.
If the right hon. Gentleman wants to pin the blame on the Conservatives, which is what he was trying to do, what matters is how the UK has performed in comparison with the rest of the world. As I have said in the Chamber before, according to the International Monetary Fund, we had the fastest-growing economy in the G7 last year and the year before, but what is our record since 2010, when the Conservatives were elected? According to the IMF, the UK economy has grown by 21% during that period, which, although too low, compares extremely well internationally. In fact, the UK has had the fastest-growing major economy in Europe. Since 2010, we have grown faster than Germany, France, Italy, Spain and almost every other euro area country apart from the fast-growing economies of eastern Europe, and we have grown far faster than Japan. We have a track record that really holds its head up, and criticisms of Conservative Government policy really do not bear examination.
Our unemployment has gone down dramatically, and has halved since 2010. This has been an astonishing performance. Given the economic troubles that we have experienced since the pandemic, it is amazing that unemployment has not risen more than it has. Our unemployment rates compare very well with those in most other countries. This illustrates dramatically the point that we keep making about the Labour party: every time it has been in power, it has left office with unemployment higher than when it arrived, whereas with us it is the other way round.
So how do we achieve economic growth? That is the key challenge. There are two main steps that we need to take. First, we need to increase the participation rate of workers and, secondly, we need to increase business investment to improve productivity. Many of the measures in the Budget, which I highly commend, will increase the participation rate of workers—notably the childcare reforms, which many others have mentioned, and the abolition of the lifetime allowance for pension contributions, which the Backbench Treasury Committee, which I chair, recommended to the Government. The allowance is clearly a hindrance that prevents a great many people in a great many sectors from continuing to work, given the punitive tax penalty that they incur when their pension pot reaches £1 million. The Labour party has tried to bring the politics of envy into play, saying that it is a tax for the rich, but about half those involved work in the public sector—they are not just doctors, but senior civil servants, senior police officers, senior military personnel, air traffic controllers, Government scientists and so forth. Are all those the unacceptable 1%? It is a very ill-informed attack from Labour. This measure also constitutes a dramatic simplification of the system, which means that many more people can understand it and gauge what is best for their pensions.
As for increased business investment, that too was proposed by our committee, although we never dreamt that the Government would be courageous enough to go the whole way. Full expensing is far the most generous tax relief for business investment in any developed country. There was a tax penalty for business investment, but it is now the other way round. I would prefer not to see corporation tax rise to 25%, but that is still the most competitive rate in the G7, and full expensing goes a long way towards reversing its effect.
Given all these different policies—and I will not go through them all—I think that this is a powerful Budget which should go a long way towards promoting economic growth, and the Office for Budget Responsibility, in its analysis, has raised its economic growth forecast as a result of it. I strongly commend it to the House.