Topical Questions

T1. If she will make a statement on her departmental responsibilities.

This Government have the right economic plan—the fastest growth in the G7 at the start of this year, the second fastest rate of growth in the G7 since the election, and inflation lower than forecast, with food inflation at its lowest level for 17 months despite the disruption in the middle east. Wages have risen faster than prices in every single month since I became Chancellor. I am tackling the cost of living challenges with rail fares, prescription charges and fuel duty frozen, and with money off energy bills. Our economic plan is the right one, and I will continue to deliver for the British people.

Sometimes we do not say thank you enough, so I would like to offer my heartfelt thanks to the Chancellor for listening. She listened to me, my fellow MPs, our pottery workers, our GMB union and especially Sharon Yates by offering a £120 million support and growth package for our ceramics sector. Can the Chancellor now outline how she will ensure that smaller manufacturers benefit from this fantastic new scheme?

I thank my hon. Friend for that question and for the representation that he and other MPs representing ceramics constituencies have made. It was a real honour for me to meet the impressive force of nature that is Sharon Yates when I visited Dunoon, a ceramics business in Staffordshire, a couple of months ago. I pay tribute to her and the campaigning trade union, GMB, Ceramics UK and all campaigning Labour MPs on their efforts. As a result, they have been heard, and our £120 million package of support for ceramics announced earlier this year will give a positive future for the sector.

May I remind everybody that we are on topical questions, and lots of Members need to get in? I call the shadow Chancellor.

Given all that is going on, this could be the last time. The legacy of this Chancellor has been the highest taxes on record, a benefits bill spiralling out of control, and unemployment 300,000 higher than it was at the last general election. The right hon. Lady trumpets 2.8% inflation, but that is still well above target, and only last year it was the highest in the G7, to the detriment of millions up and down our country. Under her plans, how much more does she intend to borrow in this Parliament than under the plan she inherited?

Let’s talk about my record: six cuts in interest rates; wages rising faster than inflation; trade deals secured; investment delivered; support for our energy intensive industries; half a million children lifted out of poverty; record investment in our national health service; more money for local transport infrastructure right around the country; the biggest uplift in defence spending since the end of the cold war; and an economy that has constantly beaten the forecasts—an economy that is growing, and an economy where inflation has come down. Compared with the disastrous 14 years when the Conservatives were in office, I would take our record any day.

May I repeat what I just said? Chancellor, there are lots of Government Members who need to get in. I have to get through this list. You have to help me to help them ask their questions.

The right hon. Lady cannot bring herself to answer the simple question I asked. I will tell her: she is borrowing one quarter of a trillion pounds more than the plans that she inherited—that is her legacy. We hear that the right hon. Member for Makerfield (Andy Burnham) is considering borrowing even more. Does she agree that that would be utterly reckless and that the bond markets will not wear it?

When the Conservatives were in office, in the last Parliament they borrowed more than the G7 average every single year. This year we are borrowing less than the G7 average and have brought down Government borrowing to 4.2% of GDP in the most recent data. We have brought forward our fiscal rules so that they kick in two years earlier, and we are meeting those fiscal rules, to ensure that we have sustainable public finances—a far cry from those that I inherited.

T2. Staffordshire’s MPs hunt as a pack, and we are all grateful for the package of support for the ceramics industry. It is important for jobs and livelihoods in Newcastle under Lyme, where we make excellent British bricks. May I urge the Chancellor to do whatever possible to increase the use of British made bricks in construction projects right across our United Kingdom?

I thank my hon. Friend for the representation that he makes on behalf of the ceramics industry in Newcastle under Lyme. The £120 million funding will be launched in the autumn. We are working with the sector now, and it will be available for firms of all sizes, because it is important that small ceramics manufacturers can benefit, as well as larger ones.

I call the Liberal Democrat spokesperson.

Today is exactly 10 years since the country voted to leave the EU, and thanks to the Conservatives, the post Brexit red tape has created 2 billion pieces of extra paperwork for British businesses—enough to stretch around the world 20 times. The hit to growth is the equivalent of the Treasury losing out on £90 billion every single year. Surely by now the Labour Government and the Labour party must recognise that if they want to go for growth and raise revenue, they should drop their red lines on Europe.

With all respect, the Liberal Democrats backed that referendum 10 years ago, and they were part of the Government who legislated for it. Unlike the Liberal Democrats, the Labour party actually sticks to its manifesto commitments.

T4. The loss of Grangemouth’s refinery was a loss to Scotland’s economy. The Chancellor rightly consulted on including refined products in the carbon border adjustment mechanism to level the playing field for domestic refining—a level playing field the Tories did not pursue before the closure of Grangemouth was announced in 2023. Will the Chancellor meet me and other colleagues to discuss the merits of accelerating the inclusion of refined products in the CBAM?

I thank my hon. Friend for his strong representation on behalf of his constituency and the important refining industry. I have seen the letter to the Chancellor that has been sent by colleagues and I would be very happy to meet my hon. Friend and other interested Members.

T3. Will the Chancellor explain why she is now clawing back VAT on the compassionate medicines scheme, which means that this Labour Government are taxing free cancer drugs given to children? Will she reverse that decision? Patients are starting to miss out on the treatments they really need.

I regret to inform the hon. Gentleman that that policy was implemented by his Government—[Interruption.] It was in 2023 that HMRC wrote to businesses that were not paying the VAT, unlike some others that were, and began the enforcement action—it started under his Government. However, I recognise the challenges that these rules are causing, so today I confirm that the Government will soon bring forward a new approach, consisting of either changes to the VAT rules or a reimbursement scheme. The changes will be effective for donations of medicines made on or after today.

T6. In all our constituencies, small hospitality businesses, such as Shotsmiths in Beckenham and the Alma pub in Crystal Palace, provide important third spaces, bringing life to our high streets and providing good jobs. The Chancellor has visited my constituency to outline additional support for local pubs. Will she set out what further steps she is taking to ensure that these small businesses can grow and thrive?

I have not only visited my hon. Friend’s constituency, but I went to school there and I am well aware of many of the pubs in Beckenham and Penge. This summer, from this Thursday, the great British summer savings programme will benefit businesses in Beckenham and Penge and around the country. VAT rates on children’s food in restaurants, pubs, cafés and bars will be cut, and children’s entertainment venues in Beckenham and Penge and around the country will also see cuts in VAT.

T5. Today marks 10 years since the Brexit referendum. Since that date, we have had 10 Home Secretaries, nine Foreign Secretaries, eight Chancellors, seven Defence Secretaries and 6 Prime Ministers. Does the Chancellor agree that such instability has acted as a break on growth in this country and can she set out what she plans to do to reverse that trend?

In the first quarter of this year we were the fastest growing economy in the G7. Since I became Chancellor, we have had growth of 2.3%, which is the second fastest rate of growth in the G7. We are growing our economy by bringing investment and stability back to the UK, and businesses are following our lead by investing in our country.

T7. Last week, the Chancellor announced the biggest insourcing of Government caterers, cleaners and security officers that we have seen in a very long time, when the current contract ends. Does she agree that that move will finally recognise workers who have been undervalued and under appreciated for far too long?

When we were in opposition, I promised the biggest wave of insourcing in a generation, and we are now working in government to deliver exactly that. The Government Property Agency contract that expires in 2028 will come back in house, so people working at around 40 locations across government in London and around the country will find that instead of being employed by an outsourcing company, they will be employed directly by the Government. They will have the same terms and conditions as other civil servants, making a huge difference to them and their families.

In an earlier answer, the Minister ruled out a VAT reduction for hospitality businesses across the United Kingdom. Will he at least meet me, Hospitality Ulster and the Northern Ireland Food to Go Association to discuss the concept of a Northern Ireland specific pilot?

I would of course meet the hon. Member.

T8. My constituency has been extremely lucky in getting £20 million for Glascote Heath and Stonydelph under the Pride in Place programme, which gives local people the ability to choose how the funding is to be spent. Will there be more rounds of this funding or similar schemes so that local people can be put in charge of how their money is spent?

The Pride in Place programme provides £5.8 billion of support to 284 neighbourhoods right across the country, including five places in my hon. Friend’s constituency, which she does so much to advocate for. We will set out more details of further funding in the Budget.

In my constituency, we have lost the Scotbeef abattoir and the famous Donald Russell butchers in recent months, both of which were crucial to the agricultural supply chain. Both blamed high energy costs and the increased costs of doing business, such as the huge rises in national insurance under this Government and big business rate rises under the SNP. What steps is the Treasury taking to support, not suffocate, the agricultural supply chain and other crucial elements of the farming sector?

I thank the hon. Member for the representations she makes on behalf of the businesses in her constituency. This Government are taking every step we can—within the tight fiscal constraints that we inherited from the previous Government—to reform, and invest in, our business rates system so that we can raise revenue in a fair and sustainable way. I am sure that the Chancellor and colleagues across Government will continue to listen to representations and consider what further changes we can make at the Budget to support businesses.

T10. The Tory Government squandered billions of pounds of public money on covid fraud, waste and corruption. Will the Chancellor tell the House what measures she is taking to address this issue on behalf of taxpayers?

Today the Government have responded to the covid counter fraud commissioner’s recommendations in a report that I commissioned, which confirms that the Conservative Government left the door open to more than £10 billion of pandemic fraud. That is money that could have gone into our NHS and our schools, and we have acted in the last two years to claw it back. Today we set out how we will go even further, launching a powerful new public authorities fraud investigation and enforcement service, with new powers to ensure that we get that money back directly from fraudsters’ bank accounts. Nearly 2,000 directors have been disqualified and 86 criminals have been prosecuted in actions that will bring more money back to the public purse. I want those who have defrauded the taxpayer to know: there is nowhere to hide; we are coming after you; you will pay that money back.