Economic Stability

Noah Law (St Austell and Newquay) (Lab) asked the Economic Secretary to the Treasury, Tulip Siddiq, what steps the Government is taking to help ensure economic stability. Tulip Siddiq responded that the Government is taking a new approach to growth with three pillars: stability, investment, and reform. She stated that sustainable public finances are necessary for economic stability and long-term growth, and the Government will set out the difficult decisions needed to secure the public finances in the Budget on 30 October. The Government has also announced a fiscal lock to support policy stability by ensuring that fiscally significant announcements are subject to an independent Office for Budget Responsibility assessment. Noah Law followed up, noting the fiscal inheritance the Government has been left with and the difficult decisions the Chancellor has had to make. He asked what steps the Government is taking to ensure that if there is further fiscal drag, those just above the personal allowance threshold, who have already borne much of the burden of the previous Government's cost of living crisis and fiscal drag, are prevented from shouldering further burdens. Tulip Siddiq acknowledged the difficult situation they have inherited, stating that the previous Government's decision to maintain tax thresholds at their current levels until 2028 means they cannot undo everything. However, she said the Prime Minister has been clear that those with the broadest shoulders should bear the heavier burden. The Government is providing £0.5 billion, including the estimated Barnett consequential, to extend the household support fund in England for another six months to 31 March 2025 to support the most vulnerable households. Josh Babarinde (Eastbourne) (LD) then raised the issue of the spiralling cost of temporary accommodation, which is a source of economic instability for local government. He asked the Chancellor to meet with him and local government leaders, including Eastbourne's, to discuss what immediate support can be provided to help councils across the country tackle the temporary accommodation crisis. Tulip Siddiq acknowledged the problem and said she would refer his comments to the Secretary of State for Housing, Communities and Local Government to ensure he gets the response he should have had before. Bill Esterson (Sefton Central) (Lab) then highlighted the importance of transparency and independent analysis of economic decisions, referring to the £22 billion black hole in the public finances left by the previous Government. Tulip Siddiq agreed, stating that upon taking office, they discovered this £22 billion black hole and a litany of unfunded Conservative spending commitments. She said they will rectify this and set out a clear spending plan and an ambitious plan to get the country back into stable economic conditions at the Budget. Finally, Sir Julian Lewis (New Forest East) (Con) questioned how the £22 billion black hole figure could be so low, given the estimated £315 billion to £415 billion cost of the COVID-19 disaster. Tulip Siddiq responded by pointing out that had the economy grown at the average rate of other OECD economies over the last 13 years, it would have been £140 billion larger. She also noted that under the Conservatives, the tax burden rose to its highest level for 70 years, and she said she would take no lessons from the Conservative party, as the last Government oversaw the biggest drop in household real disposable incomes since records began.