💸 Oral Answers to Questions

• Government Debt: The Chancellor, Rachel Reeves, emphasized the high debt levels inherited from the previous government. She stressed her commitment to reducing debt to sustainable levels, following global financial trends, and stated that the upcoming Office for Budget Responsibility (OBR) forecast on March 26 would guide future actions.

• Economic Growth: Despite criticisms from the opposition, the Chancellor highlighted positive economic indicators, such as the UK being named the second most attractive place for global investment by PwC and a forecast from the International Monetary Fund (IMF) predicting the UK as Europe’s fastest-growing major economy next year.

• Public Sector Funding: In response to concerns about economic growth and public sector funding, Reeves pointed to initiatives like the planning and infrastructure Bill and a pensions Bill as measures to unlock growth and capital.

• Tax and Borrowing Decisions: The Chancellor defended her fiscal policies, including raising taxes and borrowing, as necessary steps to repair public finances and promote stability. She argued that these measures are essential to prevent cuts in public services or increased borrowing.

• Official Development Assistance (ODA): The government aims to restore ODA spending to 0.7% of Gross National Income (GNI) once fiscal conditions allow. The Chief Secretary to the Treasury noted that current forecasts do not support this increase in the current parliamentary term.

• Green Infrastructure: Over £2 billion has been committed to increase community flood resilience over the next two years. The Chancellor recognized the importance of green investments and protective measures against future flooding events.

• Rural and Local Economic Growth: The government has provided funding for local transport and regional development, such as through the UK shared prosperity fund and investment zones, to stimulate growth in areas like rural constituencies and cities like Stoke-on-Trent.

• Steel Industry and Carbon Policies: The UK’s carbon border adjustment mechanism, set for 2027, aims to protect domestic steel producers from carbon leakage and support decarbonization efforts.

• Money Laundering: Efforts to combat money laundering in retail involve close cooperation with law enforcement to manage risks effectively and ensure businesses can operate fairly.

• Mineworkers’ Pensions: The government has already uplifted mineworkers’ pensions by transferring the investment reserve fund to members. Discussions continue for further improvements for beneficiaries under the British Coal staff superannuation scheme.

• Support for SMEs and Key Sectors: Measures in the autumn Budget to support small and medium-sized enterprises (SMEs) include increased employment allowances, frozen business rates, and specific reliefs for retail, hospitality, and leisure sectors.

• Inflation and Living Standards: The recent decrease in inflation rates was welcomed, but the Chancellor emphasized ongoing efforts to control prices and support working families through measures like increasing the minimum wage and extending the household support fund.

• HMRC Services: There is a commitment to improve customer service at His Majesty’s Revenue and Customs (HMRC) through digital transformation and reviewing accountability to taxpayers.

• Healthcare and Education Funding: In response to concerns over funding for hospices and schools, the government has allocated funds to support these sectors amidst wider public finance restructuring.

• Rail Infrastructure in Wales: Acknowledgment of under-investment in Welsh rail infrastructure was made, with assurances that upcoming decisions would address these issues as part of a broader investment strategy.

• Industrial Strategy: The government’s modern industrial strategy focuses on promoting growth in key sectors, including manufacturing, to bolster local economies like that of Dudley.

• Financial Markets Access: Emphasis was placed on improving retail investor participation in financial markets as a means to support broader economic growth and democratize wealth.

The parliamentary session displays a moderate level of disagreement among the Members of Parliament. Here’s a detailed analysis of the disagreements observed:

1. Servicing Government Debt:
   • Mr Richard Holden (Con) criticizes the Labour government’s impact on economic growth, arguing that they have ‘kicked growth into the gutter’ and questioning how public services will be funded without economic growth.
   • Rachel Reeves (Chancellor) responds by citing positive economic indicators from the PwC report and IMF, suggesting that her policies are on track.
2. Debt Interest and Fiscal Policy:
   • Dr Luke Evans (Con) challenges the Chancellor’s approach to debt, urging her to be ‘real’ about the potential for increased taxes, service cuts, or further borrowing.
   • Rachel Reeves defends the inheritance of high debt levels and reiterates her commitment to fiscal rules without providing specific answers to Dr Evans’s query on the three choices.
3. Borrowing and Private Investment:
   • Sir Desmond Swayne (Con) claims that increased government borrowing crowds out private investment, with some Members responding with ‘No.’
   • Rachel Reeves acknowledges global financial movements but defers a detailed response to the upcoming Office for Budget Responsibility (OBR) forecast.
4. Economic Policy Impact:
   • Sir Ashley Fox (Con) blames the Chancellor’s policies for increased taxes, borrowing, and costs to employers, suggesting they lead to a loss of confidence in the economy.
   • Rachel Reeves refutes this, asserting that global market movements are beyond the control of the government and highlights the UK’s attractiveness to investors according to the PwC report.
5. Official Development Assistance (ODA):
   • There is a disagreement between Emily Darlington (Lab), who pushes for returning to 0.7% GNI for ODA, and Darren Jones (Chief Secretary to the Treasury), who states that fiscal conditions do not allow for this return within the current parliament, though they are committed to reviewing it annually.
6. Farming Support and Taxation:
   • James Wild (Con) criticizes the proposed ‘family farm tax’, calling it damaging and based on flawed assumptions, and urges a rethink.
   • Rachel Reeves defends the tax by arguing it is part of necessary fiscal measures to address the inherited financial black hole, and highlights increased funding for farmers.
7. Business Rates and Taxation:
   • Bobby Dean (LD) questions the government’s commitment to reforming the business rates system, suggesting only minor changes might occur.
   • James Murray (Exchequer Secretary) defends the planned reforms as fundamental changes and invites feedback on the discussion paper.
8. Employment and Economic Impact:
   • Richard Fuller (Con) argues that the national insurance hikes are causing retailers to raise prices, suggesting the government’s economic strategy is failing.
   • James Murray defends the hikes as necessary for stabilizing the economy, which, in turn, benefits business investments.

These points of contention show a clear divide in opinion on government policy concerning debt management, economic growth, taxation, and fiscal responsibility. However, the session doesn’t escalates into high levels of conflict, maintaining a moderate disagreement level. Given the number of instances and the intensity of disagreements, a rating of 3 out of 5 seems appropriate.