PARLIAMENTARY DEBATE
Economic Update - 17 October 2022 (Commons/Commons Chamber)

Mr Speaker, the central responsibility of any Government is to do what is necessary for economic stability. Behind the decisions we take and the issues on which we vote are jobs that families depend on, mortgages that have to be paid, savings for pensioners, and businesses investing for the future. We are a country that funds our promises and pays our debts. When that is questioned, as it has been, the Government will take the difficult decisions necessary to ensure that there is trust and confidence in our national finances. That means decisions of eye-watering difficulty, but I give the House and the public this assurance: every single one of those decisions, whether reductions in spending or increases in tax, will be shaped through core compassionate Conservative values that will prioritise the needs of the most vulnerable. That is why I pay tribute to my predecessors for the energy price guarantee, for the furlough scheme and, indeed, for earlier decisions to protect the NHS budget in a period in which other budgets were being cut.

I want to be completely frank about the scale of the economic challenge that we face. We have had short-term difficulties, caused by the lack of a forecast from the Office for Budget Responsibility alongside the mini-Budget, but there are also inflationary and interest pressures around the world. Russia’s unforgivable invasion of Ukraine has caused energy and food prices to spike. We cannot control what is happening in the rest of the world, but when the interest of economic stability means that the Government need to change course we will do so, and that is what I have come to the House to announce today.

In my first few days in the job, I have held extensive discussions with the Prime Minister, Cabinet colleagues, the Governor of the Bank of England, the OBR, the head of the Debt Management Office, Treasury officials and many others. The conclusion I have drawn from those conversations is that we need to do more more quickly to give certainty to the markets about our fiscal plans and to show through action and not just words that the United Kingdom can and always will pay our way in the world. We have therefore decided to make further changes to the mini-Budget immediately rather than waiting until the medium-term fiscal plan in two weeks’ time, in order to reduce unhelpful speculation about those plans.

I am very grateful for your agreement, Mr Speaker, about the need to give the markets an early brief summary this morning, and I welcome the opportunity to give this House details of those decisions now. We have decided on the following changes to support confidence and stability. First, the Prime Minister and I agreed yesterday to reverse almost all the tax measures announced in the growth plan three weeks ago that have not been legislated for in Parliament. We will continue with the abolition of the health and social care levy, changes to stamp duty, the increase in the annual investment allowance to £1 million and the wider reforms to investment taxes, but we will no longer be proceeding with the cuts to dividend tax rates, saving around £1 billion a year; the reversal of the off-payroll working reforms introduced in 2017 and 2021, saving around £2 billion a year; the new VAT-free shopping scheme for non-UK visitors, saving a further £2 billion a year; or the freeze on alcohol duty rates, saving around £600 million a year. I will provide further details—[Interruption.]

Order. Let’s just sort this telephone out. Has it been switched off all right? It is off. I am sorry, Chancellor, carry on.

I will provide further details on how alcohol duty rates will be uprated shortly.

Secondly, the Government are currently committed to cutting the basic rate of income tax to 19% in April of 2023. It is a deeply held Conservative value, a value that I share, that people should keep more of the money they earn, which is why we have continued with the abolition of the health and social care levy. But at a time when markets are asking serious questions about our commitment to sound public finances, we cannot afford a permanent discretionary increase in borrowing worth £6 billion a year. I have decided that the basic rate of income tax will remain at 20%, and it will do so indefinitely until economic circumstances allow for it to be cut. Taken together with the decision not to cut corporation tax and restoring the top rate of income tax, the measures I have announced today will raise about £32 billion every year.

The third step I am taking today is to review the energy price guarantee. That was the biggest single expense in the growth plan and one of the most generous schemes in the world. It is a landmark policy for which I pay tribute to my predecessor, my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng), and it will support millions of people through a difficult winter, reducing inflation by up to 5%. I confirm today that the support we are providing between now and April next year will not change, but beyond next April the Prime Minister and I have reluctantly agreed that it would not be responsible to continue to expose the public finances to unlimited volatility in international gas prices. I am announcing today a Treasury-led review into how we support energy bills beyond April of next year. The review’s objective is to design a new approach that will cost the taxpayer significantly less than planned while ensuring enough support for those in need. Any support for businesses will be targeted at those most affected and a new approach will better incentivise energy efficiency.

There remain, I am afraid, many difficult decisions to be announced in the medium-term fiscal plan on 31 October when, I confirm, we will publish a credible, transparent and fully costed plan to get debt falling as a share of the economy over the medium term based on the judgment and economic forecasts of the independent Office for Budget Responsibility. I would like to thank the OBR, whose director, Richard Hughes, I met this morning, and the Bank of England, whose Governor, Andrew Bailey, I have now met twice. I fully support the vital independent roles that both institutions play, which give markets, the public and the world confidence that our economic plans are credible and rightly hold us to account for delivering them.

I also want more independent expert advice as I start my journey as Chancellor, so today I am announcing the formation of a new economic advisory council to do just that. This council will advise the Government on economic policy, with four names announced today: Rupert Harrison, a former chief of staff to the Chancellor of the Exchequer; Gertjan Vlieghe from Element Capital; Sushil Wadhwani of PGIM Wadhwani; and Karen Ward of J.P. Morgan Asset Management.

We remain completely committed to our mission to go for growth, but growth requires confidence and stability, which is why we are taking many difficult decisions—starting today. But while we do need realism about the challenges ahead, we must never fall into the trap of pessimism. Despite all the adversity and challenge we face, there is enormous potential in this country, with some of the most talented people, three of the world’s top 10 universities, the most tech unicorns in Europe, one of the world’s great financial centres, and incredible strengths in the creative industries, science, research, engineering, manufacturing and innovation.

All that gives me genuine optimism about our long-term prospects for growth, but to achieve that, it is vital that we act now to create the stability on which future generations can build. The reason the United Kingdom has always succeeded is because, at big and difficult moments, we have taken tough decisions in the long-term interests of the country, and in a way that is consistent with compassionate Conservative values, that is what we will do now. I commend this statement to the House.

As I regularly say now, I welcome the new Chancellor to his place. He is the fourth in four months of chaos and fiasco as this Conservative Government spiral down the political plughole. But the damage has been done: this is a Tory crisis made in Downing Street, but ordinary working people are paying the price. All that is left, after these humiliating U-turns, are higher mortgages for working people and higher bonuses for bankers. The Government’s climbdown on energy support begs the question yet again why they will not extend the windfall tax on energy producers to help to foot the bill.

It is good to finally see the Prime Minister in her place and not, as the Leader of the House had to assure us earlier, under a desk. But what is she left with? She has no authority, no credibility and no plan for growth. It is clear to see that the people who caused the chaos cannot be the people to fix the chaos. They are out of ideas, out of touch and out of time.

The Prime Minister should have spoken to the House today, but we know that she could not do that with a shred of credibility, given that the survival of this Government now depends on smashing to smithereens everything that she stands for. Now she is attempting to reverse everything that she campaigned on—it is not just impossible; it is absurd. The Prime Minister is barely in office and she is certainly not in power. Only five days ago, the Prime Minister said at Prime Minister’s questions that there would be “absolutely” no public spending reductions, but after what we heard from the Chancellor today, every single public service is again at risk from the Conservatives—from our NHS nurses to our schools and our servicemen and women—with the country paying the price for the Conservatives’ incompetence.

The Prime Minister said that she had an energy package for two years. Now that is being withdrawn on the very day it is supposed to be legislated for. She insisted that her Conservative mini-Budget would lead the country to the promised land. Instead it has led to the highest mortgages in 15 years and emergency interventions by the Bank of England to protect pensions. Then on Friday, there was the unedifying spectacle of the then Chancellor being dragged back from the IMF before he could do any more damage to our economy. So she has turned to a new Chancellor, who finished eighth out of eight in the Tory leadership contest, winning just 18 votes from MPs. The Tories have run out of credibility and now they are running out of Chancellors.

The latest office holder has been in the Cabinet for nine of the past 12 years, at the centre of a Government responsible for low growth and weakened public services, with him responsible for helping run the NHS into the ground. He was a big part of austerity season 1, and now he says the cure is austerity season 2. What was the Chancellor’s flagship policy in his own short-lived leadership contest? It was to reduce corporation tax in a totally unfunded manner, and not from 25% to 19%. The right hon. Gentleman called for it to be lowered to 15%, with not a single explanation of how it was to be paid for. The truth is that had he won the contest and implemented these policies, we would be in an even worse place than we are now. There is no mandate and no authority for any of this.

The Conservatives have put a lasting premium on people’s mortgages. Uncosted borrowing has sent interest rates spiralling. Millions of people’s mortgage deals will be coming to an end in the next few months, leaving many families forking out £500 more a month. People will be paying a Tory mortgage premium for years to come, so how does the Chancellor think ordinary people can possibly afford any more of this Conservative Government? We have heard no answers today. The Chancellor has said that growth requires “confidence and stability”. I agree, but where does he think the lack of confidence and stability has come from? It did not come from the sky; it came from the mini-Budget three weeks ago.

What does it say about our country that we are watching borrowing costs hour by hour? That is not the sign of a strong G7 economy; it is the exact opposite. Businesses are now saying that things are so unstable they are pausing investment here in Britain. The former deputy governor of the Bank of England Charles Bean has outlined the extraordinary damage that the Conservatives have done to our standing. In his words,

“we’ve moved from looking not too dissimilar from the US or Germany…to looking more like Italy and Greece.”

What a mess.

Where is the Office for Budget Responsibility forecast? Have this Government learnt nothing? Does the Chancellor really expect the country to take everything from him at face value? Last week, the Business Secretary was busy undermining the Office for Budget Responsibility. Today, we have received another massive fiscal statement with no forecast. What have this Government got to hide? They should publish the numbers so that we know the true state of the public finances after 40 days of this Prime Minister and after 12 years of Conservative Governments.

Today, the Chancellor has scaled back help with energy bills for families and pensioners. It prompts the question yet again: why will the Government not bring in a proper windfall tax on energy producers to help foot the bill for consumers, and when will the current Chancellor publish in full the Government’s estimates of the windfall profits of the energy giants over the next two years?

No one was talking about spending cuts until the Tories crashed the economy with their mini-Budget, so I ask the Chancellor: why should the British people pay the economic price for the Tories’ mistakes, and what spending cuts do the Government plan to make? We believe that the Government must honour their commitments to uprate benefits and pensions in line with inflation. Will the Chancellor make it clear today that is what he intends to do? What a contrast that cuts to benefits are still on the table, but the one thing the Chancellor could not bring himself to reverse today was lifting the cap on bankers’ bonuses. Why is this the last policy standing in this disastrous mini-Budget?

Let me come to credibility. Does the Chancellor accept that once credibility and trust have been destroyed, they cannot simply be regained by a series of zig-zagging, chaotic U-turns? Will he and the Prime Minister apologise for the costs and anxieties laid on families? Can he admit once and for all that the market turmoil we are in was directly caused by the disastrous decisions of his predecessor and of the Prime Minister? Can he guarantee that the Bank of England will not have to intervene again to save the Government, and what guarantee can he give people about their pensions, their mortgages and their household bills?

The Chancellor said today that everything is now on the table, but is that really the case? We know that abolishing the non-dom tax status will raise £3 billion a year, yet there was no mention of that. How can it be right that some of the richest individuals in society are allowed to buy their way out of paying the tax that should be paid here Britain? This would not be an eye-wateringly difficult decision, so why do not the Government just do it?

There is lasting damage which these policy U-turns will not change. They have set fire to everything; now they insist it is all fine. The truth is that an arsonist is still an arsonist even if he runs back into a burning building with a bucket of water. Because they cannot be trusted; the Tories are clinging on for themselves, regardless of the cost to the country.

Trickle-down economics will always fail; what drives forward our economy are the talents and efforts of millions of working people and thousands of ordinary businesses. The Government’s economic credibility has been destroyed. They have harmed our economic institutions, people are paying higher mortgages; the same set of people doing U-turns is not going to fix it. The only way to change this is a real change of Government.

I thank the hon. Lady for her questions, and I am sorry that, given the speed with which things moved at the weekend, I have not had time to sit down with her one to one as would normally be the practice before parliamentary exchanges.

I understand the role Opposition parties play—I have stood at that Dispatch Box myself—but behind the rhetoric, and I was listening very carefully, I do not think the hon. Lady disagreed with a single one of the decisions I announced to Parliament, and that is important for the country and markets to know. I think there is also agreement on the process of policy making. I support the independence of the Bank of England, introduced by Gordon Brown, and I know the hon. Lady supports the independence of the Office for Budget Responsibility, set up by George Osborne. The whole Government support the independence of those two important institutions.

I fully accept—I do not think I could have been clearer—that we have had to change some decisions made in the last few weeks, but I reject wholeheartedly the hon. Lady’s broader narrative about Conservative economic management. Let me remind her that the UK’s unemployment rate is the lowest since 1974; it is lower than that of France, Italy, Canada, Belgium, Sweden, Spain and the Netherlands and is massively lower than in 2010. Let me remind her that since 2010 our growth rate has been the third highest in the G7 —[Interruption.] She may not want to hear this, but these are the economic facts. Our growth rate since this party came into power has been higher than that of Germany, France, Italy and Japan and has been faster than that of any G7 country this year. Looking to the future, we have the largest technology sector in Europe and more foreign direct investment than anywhere in Europe bar one country. That is a legacy to be proud of.

I was listening carefully for some questions about the measures I announced, but the hon. Lady did not ask any and I think she agrees with them. I will pick her up on one point, however. She talked about the NHS; let me tell her—[Interruption.] Maybe they do not want to listen about the NHS. She talked about the NHS: because of the global financial crisis, which happened on her party’s watch, the NHS went through one of its most difficult periods ever, yet this party protected the NHS budget, and then in 2017 we were able to give it its biggest single increase in funding, because of the difficult decisions we took and the hon. Lady’s party opposed.

In conclusion, we inherited the financial crisis, we dealt with the global pandemic, and we have led the world in support of Ukraine, all possible because of difficult decisions taken over the last 12 years, each and every one opposed by the party opposite. So if the hon. Lady is preaching today the need for fiscal credibility, which I warmly welcome, may I just tell her this: the true test will be in two weeks’ time, to see whether she supports public spending restraint? I have showed Conservatives can raise taxes; will she show Labour is willing to restrain spending?

I call the Chair of the Treasury Committee.

I welcome my right hon. Friend’s statement. It was both frank and bold, and it appears—in the very short term, at least—to have steadied the markets. One point that he raised at the Dispatch Box—although it was absent from his statement earlier today—was his renewed commitment to our financial institutions, and in particular the Bank of England and the Office for Budget Responsibility. He has also brought forward the economic advisory council, a number of whose members have appeared before the Treasury Committee; I think that he has chosen well. Will he reassure the House that the economic advisory council will not in any way conflict with the Bank of England, the Office for Budget Responsibility, the Financial Conduct Authority, the Prudential Regulation Authority or any of our institutions and that it will be there to complement and not work against any of them?

I thank my right hon. Friend, who in recent weeks has spoken wisely about the difficult issues that we face. I can absolutely give him that assurance. I want, to be frank, to ensure that I am getting advice from fantastic institutions such as the Treasury, the Bank of England and the Office for Budget Responsibility, but also advice that is independent of those institutions, because that is how we will get the best result. Rupert Harrison in particular has enormous experience of running the Treasury under George Osborne over many years, and I think that he will make an important contribution, as will his colleagues on the council.

With respect to the markets, my right hon. Friend is absolutely right to be cautious about what happens. They go up as well as they go down, and no Government can—or should seek to—control the markets. What we can do is the thing that is within our power, which is a very firm and clear commitment to fiscal responsibility.

I call the SNP spokesperson.

Thank you, Mr Speaker—[Interruption.] I see that the Prime Minister has urgently run off to something else rather than stay to listen.

When the previous Chancellor came to give his mini Budget three long weeks ago, I called it economic chaos. What an understatement that turned out to be. I am not sure that words have yet been invented to describe the scale of unmitigated disaster which the Prime Minister and her Chancellors have created in the past 24 days. We are back where we started but significantly worse off due to Tory incompetence. Is it not just as well that, in Scotland, the Scottish Government did not take Tory MPs’ advice to copy and paste from here before Government Front Benchers delete all? People will be paying the price for many years to come through higher interest and borrowing rates. Will the Chancellor apologise for the increased costs that his colleagues have inflicted on people? He has not been clear at all, so will he confirm the status of the bankers’ bonus cap—has it been scrapped or not?

There is little by way of detail from the current Chancellor about doubling down on austerity and what that will mean for people. However, the Institute for Government and the Chartered Institute of Public Finance and Accountancy have been clear that there is no fat left to cut after a lost decade for public services under the Tories. Where does the current Chancellor expect to make these cuts or “efficiency savings”? We know what he means when he says that. We already know the terrible price of austerity, because the Glasgow Centre for Population Health has attributed 330,000 excess deaths to Tory austerity policies: an unacceptable human cost. Again and again, the Tories bring forward harmful policies that they never feel the consequences of.

We know that guarantees mean nothing under the Tories, either. The so-called energy price guarantee turns out to be for six months, not two years, with a cliff edge looming next April. National Energy Action has said:

“Many vulnerable people were holding on by their fingertips. Government has to be very, very careful it doesn’t prise them away.”

Will the Chancellor tell us exactly what will happen for households in April? The scale of increases makes almost everybody vulnerable—except, perhaps, his banker pals. What will happen to the most vulnerable when inflation soars as a result of the return of spiralling energy costs?

The previous Chancellor never got round to telling me what will happen to businesses’ energy costs at the end of their six-month reprieve. Will the current Chancellor tell me what support businesses signing impossibly expensive contracts as we speak can expect? Will he, as the former, former, former Chancellor did, commit to uprating benefits with the rate of inflation? Will he also increase support for those languishing in the asylum system and end the punishing “no recourse to public funds” regime? Will he cancel the benefit cap and scrap the two-child limit, which is trapping so many children in poverty? Where is his compassion for them?

Will the Chancellor invest in renewables, carbon capture and storage, and a comprehensive energy-efficiency and insulation package? Does he really understand, when looking at broken Britain, the chaos that the Tories have wreaked and the prospect of a bleak Brexit future under both Labour and the Tories, that more and more of Scotland’s people are looking at the comprehensive independence prospectus set out by the First Minister today and moving towards the vision of a fairer, greener, more prosperous Scotland back in the heart of Europe where we belong?

It is a pleasure to exchange comments with the hon. Lady and I look forward to working with her closely in the months ahead. I remind her that this Conservative Government are spending £37 billion this year to support people across the United Kingdom with cost of living concerns. That is possible because of difficult economic decisions that the SNP has opposed at nearly every stage, and that includes large support for businesses up and down the country. The main thing I would say to her very gently is that she cannot claim to be concerned about the economic turmoil of the last few weeks when the central policy of the SNP—independence—would leave turmoil for Scotland not for a few weeks but for many, many years to come: a new currency; somehow finding a way to trade with the UK internal market but also the European single market; border checks between England and Scotland, as announced today by the First Minister; and a massive gap in public finances that would have to be breached. That is a recipe for precisely the austerity she says she is worried about. Let me say this: if we want economic stability and if Scotland wants economic stability, to coin a phrase we are stronger together.

What will the impact of these measures be on the growth rate, and will we still avoid recession?

I will publish the economic forecasts from the OBR when I make my statement in a fortnight’s time. I think it is better for me to wait until I hear that. The proper answer to my right hon. Friend’s question is that what we are seeking is a long-term sustainable increase in the economic growth rate. That is a central policy of the Prime Minister, which has my wholehearted support.

I think the country is feeling a sense of relief that trickle-down economics this time has been so quickly abandoned, but there was one element in the mini-Budget that the new Chancellor did not address: investment zones. We have great evidence all over the place about how, as a mechanism for encouraging growth, jobs and prosperity, that has failed from the Thatcher years onward. All that happens is that they are incredibly expensive, we lose income from them, they only lead to the transfer of jobs from one poor area to another, and they are a massive opportunity for every kleptocrat, oligarch and criminal to launder money into the UK. Will the Chancellor abandon that policy, too?

I have a great deal of respect for the campaigning the right hon. Lady has done over many years against people illicitly hiding wealth and not paying their share of tax. I totally support the benefits that investment zones can bring, but we will implement that policy in a way that learns the lessons of when similar models have been tried in the past and we will make sure they are successful.

I welcome the return of an iron-clad fiscal responsibility, albeit within the most velvet of gloves, for there can be no growth without economic credibility. Will my right hon. Friend answer this question? When, in a fortnight, he brings forward the forecasts made independently by the OBR, will he guarantee that they will show debt falling as a proportion of our income and that once we have the finances fully under control we will not be borrowing for day-to-day spending, because we cannot put the nation’s spending on the never-never?

Yes and yes.

People are already suffering from the damage caused by this Government’s economic mistakes. Hundreds of pounds have now been added to mortgage bills, pushing millions of families to the brink, on top of higher food prices, higher fuel costs and higher energy bills. Despite that, the Chancellor refuses to undo one of the Government’s biggest injustices: their failure to impose a proper windfall tax on the record profits of the oil and gas companies, earned only because Putin is killing innocent Ukrainians. After so many U-turns, surely the Chancellor can persuade the Prime Minister to do one more. Will he introduce a proper windfall tax and help struggling families?

Let me tell the right hon. Gentleman that I am not against the principle of taxing profits that are genuine windfalls, but as he will know well, the energy industry is very cyclical and there are businesses that have periods of feast and famine. We have to be very careful that we do not tax companies in a way that drives away investment. We have said that nothing is off the table.

I congratulate my right hon. Friend on his statement, which is both wise and necessary. There will be great relief across the House that the markets have responded to the statement positively, not least thanks to his economic leadership and political skill. In the run-up to 31 October, will he reassure us and the markets that the Treasury, the OBR and the independent Bank of England will work closely together and in total lockstep?

I absolutely want to give my right hon. Friend that reassurance and I thank him, as someone who has enormous experience of how the City works, for the advice that he gave me over the weekend. One of the best things about the economic structures that we have is the interaction between institutions that have independence and that are able to give independent advice and Treasury and the Government. It has helped to create stability and I hope that what I have said today will bolster that further.

I congratulate the Chancellor on his appointment and I hope that he lasts longer than his predecessors. Five million people will see their mortgages go up, and the mini-Budget fiasco means, on average, £500 more on payments and, in London, nearly £900. Can the Chancellor assure us that he will look at how he will take that additional Prime Minister’s mortgage premium off people’s bills and take action to protect them in these difficult times? If he cannot, should they send the bill to him?

We have an absolute responsibility as a Government to do everything we can to hold increases in mortgage rates down as much as is possible, insofar as the Government have an influence on them through their actions. That is why I have taken, I think, very strong and quick steps to demonstrate the Government’s commitment to fiscal balance, but we are in a world in which, unfortunately, interest rates are going up everywhere and everyone is having to deal with increases in mortgage rates. We are thinking about the challenge for people who have those mortgages, but I want to make sure that that does not happen as a result of actions by this Government.

I welcome all the measures in the Chancellor’s statement. It is absolutely right that we look for better value for the taxpayer through spending restraints, but will he confirm that any cuts to spending will not impact on capital expenditure—infrastructure expenditure, particularly across the north—and that we will fully deliver on projects that we have already committed to, such as Northern Powerhouse Rail?

As my hon. Friend will know—sorry; my voice is a bit croaky at the moment, because I have probably been talking too much over the last few days—there are very important projects that we all care about a great deal, but given the severity of the situation at the moment, we are not taking anything off the table, whether that means tax increases or spending reductions. But I do not believe that it is possible to have a long-term, credible economic growth strategy that does not recognise the vital importance of capital spending.

Even a screeching U-turn cannot repair the damage when we have already had the crash. When the Chancellor dismantled Trussonomics overnight, why on earth did he decide to carry on boosting bankers’ bonuses in the heart of a cost of living crisis?

Because the policy did not work, and we will get more tax from rich bankers with the policy that we now have.

I welcome the Chancellor’s statement. If further steps are required, will he do whatever it takes to restore the UK’s fiscal credibility?

I will.

I welcome the Chancellor’s appointment and wish him well in his job, because on his success depends the success of all our constituents in meeting the cost of living. While inflation cannot be blamed on the Government, because it is an international thing, and while interest rates are going up across the world, the one thing for which the Chancellor is fully responsible is today’s increase in taxation. It will take money from people at a vital time, meaning that they are unable to pay their bills or pay for their investment plans. I assume that he has done some economic modelling on that. What impact does he believe it will have on growth and on the burden of debt in relation to GDP over the next two years?

The right hon. Gentleman asks a very important question. I remind him that what I have announced today has been very largely the cancellation of planned tax cuts, rather than being new tax increases. This has a very important impact, in a positive direction, on national finances, but unfortunately it will not be the end of the story. If we are to deliver a credible Budget in which we can demonstrate—my right hon. Friend the Member for West Suffolk (Matt Hancock) asked about this earlier—that debt is falling as a percentage of GDP by the end of the period, we will have further difficult decisions ahead. This Government will not shirk from them.

My hon. Friend and I have had very many discussions about social care over the years, mainly when I was a Back Bencher and she was a Minister. The sector is in great difficulty at the moment; I am very aware of those concerns, and I am also very aware of the pressures in the NHS at the moment. I am not making any commitments as to what exactly we will do, but as I said earlier, all these decisions will be taken through the prism of what matters most to the people who need help the most.

The Chancellor has put a brutal end to the self-proclaimed new era of Trussonomics with his announcements. He has taken away £32 billion-worth of planned cuts. According to the Institute for Fiscal Studies, that still leaves a hole of £30 billion in his sums, and if rumours are correct—if the OBR calculations that I have heard about are correct—it could be as much as £40 billion. Surely that means austerity 2.0, of at least the same size as the first round of austerity from 2010 to 2015. Surely the Chancellor must know that public services simply cannot deal with that level of cuts when they have been so weakened by the first round of austerity.

I was a Cabinet Minister in 2010 when we had very difficult decisions to take in the wake of the financial crisis, and my Department’s budget was cut by 24%. I do not believe that we are talking about anything on that scale; I think it likely that cash spending will continue to go up. That being said, I want to be completely frank with people: we are going to have very difficult decisions, both on tax and on spending, in the next couple of weeks. We will try to take those decisions as compassionately as possible. So it is going to be tough going forward, but I do not expect it to be on the scale that the hon. Lady suggests.

I congratulate the Chancellor on his soothing and competent tone, and of course we have to calm the markets, but what is our vision? Of course we accept the shortcomings of the mini-Budget, but does the Chancellor accept that we cannot just slide into a second-rate economy and go in the direction of France, with a bloated public sector, the highest taxes for 70 years and gross inefficiencies? By the time of the next election, can we as a Conservative party promise to get taxation back to at least its level at the start of the current Parliament, and get corporation tax back to being one of the most competitive in Europe? Otherwise, what is the point of a Conservative party? [Interruption.]

There is the problem, with all the noise from the Opposition. This compassionate Conservative Government were able to step in with massive help for members of the public, with the furlough scheme and the energy price guarantee, because we took difficult decisions on the economy in the preceding years, each and every one of which was opposed by the Labour party. I say to my right hon. Friend that the point of a Conservative Government is to build a strong economy, and that is what we will do. It is the job—[Interruption.] This is an important point that I wish to make. It is the job of the Chancellor not just to balance the books but to have a vision for economic growth, and I hope I will persuade my right hon. Friend in two weeks’ time that I have just that vision.

Does the Chancellor agree with the Prime Minister, who confirmed that the state pension would rise with inflation in April? If he does agree with her, can he commit himself to that today?

I am very aware of how many vulnerable pensioners there are, and of the importance of the triple lock. As I said earlier, I am not making any commitments on any individual policy areas, but every decision we take will be taken through the prism of what matters most to the most vulnerable.

I thank the Chancellor for his robust defence of Conservative economic policy over the last 12 years. More of that, please! My inner chartered accountant cannot but welcome the fact that he has reassured me that it is the Treasury’s job—its essential task—to ensure that the sums add up.

May I ask the Chancellor to say a little bit about the review of the energy price guarantee? It is right to focus taxpayer support on those who need it most, but may I draw his attention to the fact that one seventh of the population are not on the gas grid, and 40% of my constituents are not? As he designs that system to protect the most vulnerable, can he ensure that it works for everyone in the country, wherever they live and however they heat their homes?

I look forward to lots of useful advice from my right hon. Friend’s inner accountant in the months and years ahead, and I will certainly bear his points in mind. The issue with the revised scheme that we want to announce for the energy price guarantee is that, while I think most people agree with the logic of targeting support where it is needed the most, we need a scheme which works practically, and it is not particularly easy to design that kind of scheme. We are going to do as much work as we can, and we will announce what we are going to do as soon as we can; but we will certainly bear in mind the points that my right hon. Friend has made.

The backdrop to today’s statement is not just the chaos of the last fortnight. It is also the report of three weeks ago which demonstrated that, as a result of austerity, there have been more than 300,000 excess deaths. May I ask the Chancellor to recognise, during his preparations for 31 October, that, unless he increases benefits by at least the rate of inflation, there will be more excess deaths and suffering?

The right hon. Gentleman will know, because I have said it many times today, that I am not making firm commitments on any individual elements of tax and spending, but I hope he is reassured by the fact that I have been very clear about the values through which we will take those decisions.

I congratulate my right hon. Friend: he has hit the ground running in his job. These are difficult decisions, but they are the correct decisions right now. We all aspire to tax cuts in the future, but he is right to say that we have to have the money to pay for them. May I ask him, as he prepares for 31 October, to look in detail at how we should address what is the most—in my view—deep-rooted problem that the country faces and has faced for decades, which is our current account deficit? We will not truly get rid of these issues until we restore a better balance in our national finances, and I ask him to make that a priority.

I thank my right hon. Friend for his question. I agree: ultimately, it is not sustainable to have a permanent current account deficit and that is something that we need to address.

The Chancellor announced that he would be reviewing the energy price guarantee, but do the Government have any plans to review the level of support offered to off-grid properties for the cost of their heating bills this winter? There is cross-party consensus that the £100 payment is inadequate to meet the rising bills, so will he bring forward further support in advance of this winter?

I have listened carefully to what the hon. Gentleman has said, as I did to my right hon. Friend the Member for Forest of Dean (Mr Harper), and we will certainly look carefully at what can be done for off-grid properties.

I welcome the necessary but vigorous course corrections that my right hon. Friend has introduced. He began his statement by describing the central responsibilities of any Government. They also include security: the defence of Britain, supporting our allies and standing up to our adversaries, as we have done in Ukraine. He knows that the world is getting more dangerous, not less, so will he commit to continuing the promise of 3% of GDP on the Defence spend?

It will not have been a secret to my right hon. Friend that I am sympathetic to that, because I campaigned for it very loudly and visibly when I was a Back Bencher, but all these things have to be sustainable. Any increase in Defence spending has to be an increase that we can sustain over many years. I agree with him entirely that the duty of a Government is to provide security for the population, in all senses of the word.

Does the Chancellor’s compassionate conservatism extend to raising the minimum income component of pension credit, or is he prepared to let the poorest pensioners in the land be sacrificed on the altar of Trussonomics?

I would gently say to the hon. Gentleman that, while I completely understand how important it is to support our most vulnerable pensioners, what they need more than anything is a strong economy that can pay for the support that we would want to give them.

I welcome my right hon. Friend to his place and breathe a sigh of relief at the grown-up and sensible approach he has taken to the issues at hand. I also echo the remarks of my right hon. Friend the Member for Forest of Dean (Mr Harper) and the hon. Member for Ceredigion (Ben Lake) about the need to take into account those who are off grid and using heating oil. They deserve as much support as possible.

My right hon. Friend is newly empowered and he is able to slay many dragons. Could he slay the dragon of fracking, which was not in our manifesto?

This is an issue that has raised its head in my own constituency. Let me simply say to my hon. Friend that the Government’s position is clear: we will not proceed unless there is local support.

In the bonfire of Government policy that has just taken place, the Chancellor was not very specific about what would happen to the Prime Minister’s investment zones policy. Personally, I was hoping that it would be incinerated as well, not least because it is designed to undermine environmental regulation, to avoid fair taxation and to bypass local democracy. In the past, he has said that he is a green Tory. I have to put it to him that that is sadly an endangered species right now, but if he is serious about being a green Tory, will he now take steps to demonstrate it by ruling out any policies that will undermine nature protection and restoration, and will he accept there is no financial capital that is not entirely dependent on a thriving natural capital?

I am absolutely committed to protecting our green spaces and boosting biodiversity, but I also think it is important to look at environmental regulations to see if they can be streamlined in a way that is consistent with allowing the natural world to flourish as well as the economy.

I welcome the Chancellor and thank him for bringing calm reassurance to the markets and to this crisis so quickly. Does he agree that economic crises based on political confidence mean that everybody in this Chamber, on both sides of the House, has a duty to reassure the markets that we are capable of taking tough decisions? Does he also agree that, as we look to grow as he has highlighted, the technology and science sectors provide huge opportunities and that we should resist the opportunity to cut their funding?

There is no more formidable an advocate of science and technology than my hon. Friend, and he knows that I also care very much about the sector. With respect to reassuring the markets, the most important thing is, as we said earlier, that there is no disagreement about the policies announced today. It is important for the markets to know that there is that consensus in the House.

Last month, the Prime Minister told the BBC in Hull that we would be included in Northern Powerhouse Rail despite not being included in the Government’s integrated rail plan. Was the Prime Minister wrong to say that?

I do not know, but I will write to the right hon. Lady.

May I warmly welcome the Chancellor’s remarks about defence and security? As it took us very many years to pay off this country’s colossal second world war debt, am I right in thinking that the huge costs of covid and Putin’s aggression in Ukraine cannot possibly be cleared completely in the short to medium term?

I wish I could answer that question. As my right hon. Friend will know better than me, this appalling saga is far from over, so we do not know what the total costs will be. I thank him for his rapid and not entirely unexpected lobbying on defence budget issues since I took up this post. I think the job of the Chancellor of the Exchequer is to make sure that our economy is strong enough to fund the role that Britain wants to play in defence of democracy and freedom all over the world.

I have worked with and against the Chancellor of the Exchequer on many occasions, and I have learned that he is an honest man, but he said in his opening remarks that this country is always good at rising to the challenge of big and difficult times. What I hate about what he said today—I really do hate it—is that there was no note of contrition. This big and difficult was started by his lot only two weeks ago. It is not just big and difficult; it is a national disaster. He spoke not one word of contrition about the mess that his party has made of this country.

I have the greatest respect for the hon. Gentleman, and we have had many exchanges in this House over the years. I think actions speak louder than words, and I do not think I could have been plainer in going out this weekend and today to accept that mistakes were made. The country wants to see us correcting those mistakes, and that is what we have done.

My right hon. Friend knows that I am very pleased to see him in Downing Street. The sense of relief expressed to me this weekend as I was out and about in my constituency was palpable. I welcome his statement—I welcome its realism and honesty—and I welcome his trademark sense of optimism in his final remark, from which I could certainly learn. He is right that growth demands confidence. Does he have confidence that, when the Bank makes its decisions a week or so after his statement in two weeks’ time, the rise in interest rates, the mere prospect of which is terrifying my constituents, is not inevitable?

I thank my hon. Friend for his generous comments. It is not for the Government to say what the Bank of England does when the Monetary Policy Committee makes its decision on interest rates, but of course I have had conversations with the Governor about what the Bank needs to hear for it to feel that the inflationary pressures will be lower and so it will not have to make as high an increase as some people are predicting. Our constituents’ mortgages are at the top of my mind.

The Chancellor has pledged a new wave of austerity, with public spending cuts squeezing services that have already been cut to the bone over the past 12 years. This is without a mandate and, as before, this round of austerity is a political choice not an economic necessity. Instead of cutting our services, the Government could raise taxes on the super-rich. If the Chancellor believes in his approach, why does he not put it to the people and call for a general election?

With the greatest respect to the hon. Lady, I did not pledge a new wave of austerity. If she does not like austerity, she should look at the generosity of the furlough scheme and what we are doing on the cost of living crisis. This has all been done because of difficult decisions she opposed every time.

I welcome my right hon. Friend to his place. He talks about growing the economy and a strong economy, and I agree with that. May I remind the House, particularly those on the Opposition Benches, that it is, in the main, the private sector that raises the money that pays the tax for the public sector? We cannot go on hammering the private sector if we want to see the growth we want. As he takes his place, will he bear that in mind and reduce taxation as soon as he is able?

The answer is yes. To demonstrate that I understand what my hon. Friend is talking about when he talks about the private sector, I am going to say some words I have always dreamed of saying from this Dispatch Box: I used to be an entrepreneur.

The Chancellor spoke about difficult questions to be faced in the future, and I hope he is not going to fall into the old trap of trying to cut his way to growth, because that cannot work and it never works. May I welcome what he did today: the screeching U-turn on the vast majority of the mini-Budget from the Prime Minister and his predecessor? Given that he has done that—I do welcome it—may we have a guarantee from him today that for as long as he has anything to do with it, there will never be a return to extremist, crank, experimental, think-tank economics?

I am happy to offer that guarantee if the right hon. Gentleman will agree to explicitly reject the extremist, crank, think-tank economics of Scottish independence.

I welcome the direction of travel of my right hon. Friend and the reinstatement of compassionate conservatism, which is at the heart of this political party. When the Conservative Government under Chancellor George Osborne had rightly to cut the deficit and cut debt, they also helped the most needy with the cost of living, introducing the living wage and cutting taxes for lower earners, introducing a fuel duty freeze, and investing in skills and apprenticeships. I know that my right hon. Friend is not going to give me an answer now, but may I ask him: will that be his guiding philosophy as he goes forward in his new role?

I always listen to my right hon. Friend carefully on these issues. Let me say to him this: I do not think we will solve the growth paradox of this country, raising our long-term rate of economic growth to 2.5% from under 1%, unless we tackle the skills issue—that is central. I do not promise that I can give him an entire solution to that in two weeks’ time, but it is something I would very much like to talk to him more about.

Government insiders are busy telling the press that the Bank of England is “playing roulette” with the British economy. Is that helpful or unhelpful?

Those comments have not been coming from the Government since I have been a part of the Government. I cannot talk about what happened before, but what I will say is that I am working extremely closely with the Bank of England, and we are both absolutely aligned on the need for stability.

I congratulate my right hon. Friend and welcome him to his post. Is a crucial point not that one weakness of the plan for growth is that fiscal and monetary policy were, in effect, contradicting one another? When we talk about working with the Bank of England, what that really means is fiscal and monetary policy working in lockstep so that we deal with inflation, which is the biggest economic challenge we face.

My hon. Friend has actually answered the previous question much better than I did—the answer is yes.

It is right that the Chancellor is seeking to reassure the markets, but will he take the opportunity today also to reassure the millions of people who rely on benefits, both those who are in work and those who are out of work? The UK has some of the lowest benefits in Europe. There are people on benefits with no plan B and no savings, and huge anxiety at present, given the current situation. So will he pledge that benefits will increase in line with existing Government policy—in line with the consumer prices index? Will he also reverse what the previous Chancellor said in his mini-Budget about the more punitive approach to be taken against those on benefits?

What I will say to the hon. Gentleman is straightforward. It is because I want us to be able to support the poorest, the most vulnerable and those in the greatest difficulties in society that the most important thing I can do right now as Chancellor is what I can to create economic stability, and that is what I am doing.

I warmly welcome the Chancellor’s swift and decisive action today, but also the tone and, above all, the candour of his remarks. Does he agree that the best way in the long term to build a strong economy and a fair society for my constituents in Cheltenham, many of whom he met recently, is to repair the public finances in the short term? That is the Conservative way; that is what builds prosperity in the long term.

Absolutely, and only a couple of weeks ago I was sitting in a café in Cheltenham having a cold sandwich with my hon. Friend. I want to thank him for his incredible articulacy in lobbying for the needs of the people of Cheltenham.

Does the Chancellor think that it is morally justifiable to lift the cap on bankers’ bonuses while refusing to confirm that he will link benefits to inflation?

I understand why the hon. Gentleman has asked the question. I believe that wealthier people should pay more as we go through a difficult period, but the mechanism of the cap, with which we were doing that, was not working. We will get more money out of the pockets of those rich bankers through what we are going to do now.

Many of our more advanced manufacturing businesses are in the defence sector, and they welcome our commitment to growing defence spending. They have no problem with paying more corporation tax, as long as there are incentives to support their cutting-edge research and development. Will my right hon. Friend commit to ensuring that those incentives are available across all industries?

That is a very important point. We have an issue in that we need our companies to invest more in R&D. We have a fantastic opportunity to be the world’s next silicon valley, with all the potential of our great universities and incredible levels of innovation, but I absolutely think there is more that we can do, and I will bear in mind my hon. Friend’s comments.

Since 2015, the value of the pound has dropped about 30% compared with the dollar. After this Government’s mini-Budget, the pound hit an all-time low against the dollar. Given that oil and gas, and other, related energy products are traded in dollars, is it not the case that, by absolutely tanking the pound against the dollar, this Government have added other costs to the cost of energy in the UK?

I am delighted that someone from the SNP is worried about the value of the pound, which I think shows that it matters to all of us. I would say to the hon. Gentleman, in all seriousness, that Governments cannot control the value of currency and should not seek to do so, but in so far as our actions affect the stability of our markets, including the currency markets, the one thing we can do is to show that we are balancing the books.

I would like to welcome my right hon. Friend—my friend—to his new position as Chancellor. Madam Deputy Speaker, you would not know this, but my right hon. Friend should have been coming to Morecambe on Thursday, but of course last weekend has changed these things. However, I extend the invitation to come to Morecambe so that he can see how much money has been spent there and how well it has been doing since 2010, and also see the Eden Project North site and the stakeholders.

I would be delighted to accept my hon. Friend’s invitation. He might not want to tell me what he would like as a christening present for his daughter, because I now have a trillion pounds at my disposal.

In the history of British democracy, have we ever had such a calamitous start for a Prime Minister? We have now had four Chancellors in four months, but it was a majority of Conservative MPs and members who inflicted fantasy trickle-down economics upon our country, when they naively decided to take a holiday from reality, which has left many of my Slough constituents struggling to pay their bills. Given that the new Chancellor has effectively dumped the kamikaze mini-Budget, does he agree that he and the Prime Minister no longer have a democratic mandate to continue in their positions and that they should step aside and let the exasperated British people make their decision?

Order. Just before the Chancellor answers that question and responds to the very neat speech that the hon. Gentleman has just made, I must appeal to colleagues for quick questions. We have had all the speeches; we do not need to hear all the same things all over again. We need quick questions so that the Chancellor can give brief replies, because otherwise we will never get on to the other business.

A general election would not contribute to stability if people had to worry about the disastrous policies of a future Labour Government.

I know the Chancellor will not have taken the decisions that he has today easily, but he will recognise that the planned increases in alcohol duties will have a devastating impact on many small pubs, small brewers and hospitality businesses. Will he look at how the changes he is making to beer duty in particular can be structured to help rather than harm small hospitality businesses, and perhaps bring forward the implementation of draught beer duty?

I hear my hon. Friend. The hospitality industry is incredibly important to our economy. I have two things to say. As he knows, we are reviewing the whole structure of alcohol duties, and as part of that process we will be keeping the levels of duty under constant review.

We have had many U-turns, but there is one that the Chancellor has not made that is massively relevant to Cumbria and other rural communities. The cut in stamp duty will help nearly nobody who can currently not afford a home to be able to afford one. What it will do is add fuel to the fire of a second home ownership and Airbnb disaster in areas such as the lakes and the dales. Does he understand the damage that excessive second home ownership and Airbnb do to communities such as mine and other parts of the country? Will he think again and do something to support our communities and stop the housing catastrophe?

I entirely understand the concerns about second home ownership, and the Government have been looking at that policy in enormous detail over recent months. However, I gently say to the hon. Member that it would be wrong to be dismissive of the concerns of young people desperately trying to get onto the housing ladder, and the help that we are giving them with the stamp duty reforms will make a significant difference.

I pay tribute to the Chancellor for his statement and for the urgency with which he has acted. The energy price guarantee was welcomed across the House, although it was probably the policy that created the greatest uncertainty in the financial markets. Does he agree that, as he reviews the policy, there will continually be challenges in this area so long as Putin maintains his aggressive conflict in Ukraine?

Absolutely. I am very pleased that my right hon. Friend has made that point. We should remember that Putin’s gain is to try to turn economic instability into political instability, and we must not play along with it.

The chaos in the bond markets impacting on pensions was a result of decisions by the right hon. Gentleman’s Government, his party and his Prime Minister. Can he now tell us whether all pension funds are secure, what is the value of the total losses, and what actions will he be taking to ensure that people can have confidence in their pensions? Why should they ever trust the Tories with their pensions again?

I am afraid that I do not accept at all the hon. Member’s analysis of why those problems happened, but I do not deny that we have had some issues with pension funds. I point him to today’s statement by the Governor of the Bank of England that says we are well on our way to resolving them.

People and businesses across Stoke-on-Trent are incredibly thankful for support with their energy bills throughout the winter. When my right hon. Friend comes to review those policies in April, will he make sure that those who most need that support are protected the most, particularly energy-intensive businesses such as ceramics in Stoke-on-Trent?

My hon. Friend will be pleased to know that I have already had extensive discussions with my Treasury officials about the needs of energy-intensive industries and we are very well aware of those issues.

I welcome the Chancellor to his place, but it seems quite baffling to me that everybody is giving him plaudits for all the work that he is doing—well done—when the thing that he is undoing is the Prime Minister’s Budget. It is as if the past four weeks have not happened, and I feel a tiny bit gaslit by that, I have to say. Why is he spending £2 billion a year on unfunded stamp duty cuts when he said today that he could not announce unfunded tax cuts? How will he pay for that?

The hon. Lady will find out in two weeks.

It is good to see my right hon. Friend in his place. Does he agree that, as well as support for families and businesses with energy bills now, the need for long-term energy resilience is as urgent as ever? Will that be one of his priorities?

It will. It is not just my responsibility, but that of the whole Government. Good government is about fixing long-term issues as well as dealing with short-term crises, and that is definitely an important long-term issue.

We live in a deeply divided country and a deeply divided society. There are more poor people than ever, more people accessing food banks than ever before and more children growing up in absolute poverty and, as a result, not achieving their best in life. Twice the Chancellor has refused to answer the question whether he will raise benefits in line with inflation. I ask for the third time: can he please assure people who rely on benefits for their very existence that they will be increased at least in line with inflation, to tackle the appalling poverty so many people face?

I respect the right hon. Gentleman for pressing me on that issue, because I understand how important it is. The reason I am not able to give him the answer he seeks is that I am not giving that answer on any area of spending or tax policy. The situation we face is extremely grave, and we must look at those issues in the round. We will come to the House with those decisions just as soon as they have been made and then independently audited by the Office for Budget Responsibility.

I welcome the rapid grip my right hon. Friend has exerted on the public finances, which has been reflected throughout the day by the rally in sterling and gilts. However, I seek clarification of his comments on investment relief. Will he maintain his commitment to seed enterprise investment schemes focused on science and technology? Those are thriving sectors in my constituency and, as he alluded to, they are the engines of our future economic success.

I ran a small technology business for 14 years, so that is very much where my heart is. There is a massive opportunity for the UK to create something a bit like the City of London, something that will pay an enormous amount of corporate tax for many years to come. Although I cannot give my hon. Friend the answer, I am determined to grip that opportunity.

Will the Chancellor take this opportunity to concede that he is now the de facto Prime Minister and that it is he who calls the shots in government, in what must be the most bizarre and surreal coup in political history? In this new role, does he think the current Prime Minister is a help or a hindrance to his economic objectives?

I will just say this: it is the most challenging form of leadership to accept that a decision one has made has to be changed. The Prime Minister has done that, and she has done so willingly, because she understands the importance of economic stability. I respect her for it.

I welcome my right hon. Friend to his place. Will he please give my constituents an assurance that this Conservative Government will continue to support the most vulnerable in society with their energy bills in the months ahead?

I will absolutely give that assurance. My hon. Friend’s own background is in mental health and he understands just how vulnerable people can get. Those concerns will be topmost in our mind.

Before the Chancellor goes on a spending cut spree of public services, will he look at the analysis in today’s Financial Times that says that every £1 invested in the NHS generates £4 in growth? Will he also do what he can to protect poorly paid health workers who are facing much higher mortgage costs due to his Government?

Until the hon. Gentleman got to the end bit, I was going to say that that sounded like the question I should have been asking the previous Chancellor as Chair of the Health and Social Care Committee. I am very aware that the NHS does not just cost us money but can contribute to our growth. There is an enormous opportunity for this country to become one of the life science giants of the world.

I welcome my right hon. Friend to his place and I welcome his focus on both fiscal responsibility and compassionate conservatism. Further to his welcome answer to my right hon. Friend the Member for Harlow (Robert Halfon), does he agree that money invested in the skills and education of the most disadvantaged is money well spent and will benefit the future fiscal growth and stability of our country?

I absolutely do, and I think that there are many economists, such as Paul Johnson, who would say that if we really want the productivity, levels of wealth and prosperity of places such as Germany and Singapore, the skills gap is the biggest gap that we have. It is scandalous that for decades Governments from all parts of the House have not been able to deal with the fact that about 100,000 people leave school every year unable to read. These are important issues, but I want to be honest: this is not something that the Government or I can address in the next two weeks, but it is absolutely something that we will have to come back to.

For all the hand-wringing and soft soap, I am afraid that I do not think that this Chancellor is any better than the last one. [Interruption.] Well, he has been present at all the failures over the past 12 years: the failure to invest in the NHS; the failure to make sure that we had personal protective equipment in time for a pandemic; the failure to deal properly with the invasion of Ukraine and the annexation of Crimea. In all those things, he has been at the scene of the crime. The biggest problem is that, as a result of 12 years of Tory economics, we will have the highest tax take in our history and still the highest borrowing in our history and probably the largest tax cuts in our history. Why is this the only major economy in the world that has not yet grown to the level that it occupied before the pandemic?

I have a lot of respect for the hon. Gentleman as a great parliamentarian, but will he allow me to say that there is not really a polite word to describe the nonsense that he has just uttered? We inherited the worst financial crisis since the second world war from his party, and since then, we have become the third-fastest growing country in the G7. He talked about the NHS, which had a £20 billion increase in funding on my watch—40,000 more doctors, nurses and other clinicians—and there is more to come if we take the difficult decisions to grow our economy that his party always opposes.

My right hon. Friend the Chancellor knows very well the importance of steel, both to my Scunthorpe constituency and to our country. Will he confirm that the energy support package for business remains unaltered, and that when the Treasury enters into the three-month review it will do so mindful of the strategic value of steel?

Yes and yes.

First, when the Chancellor rises to respond to this question, will he withdraw the claim that Labour opposed furlough? We did not—we supported it. Secondly, the previous Chancellor took the view that if we reduced corporation tax more money came back in revenue. Indeed, in his own short-lived leadership contest the Chancellor seemed to be saying the same thing and proposed even greater cuts to corporation tax. Will he now tell us whether he believes that an increase in corporation tax will raise more revenue or, as he has previously said, less?

I did not say that Labour opposed the furlough scheme. What I said was that Labour Members like it when we spend money, but they oppose all the measures necessary for the economy to be able to afford them.

When it comes to corporation tax, I would love to reduce it. In the long run, I think we do get more money. [Interruption.] Well, I am answering the hon. Gentleman’s question. We do get more money back, but that has to be on money that we actually have—it cannot be on borrowed money, which is why we have changed direction.

I am utterly delighted to see my right hon. Friend in his place. It was an honour to be on his campaign team at the very beginning.

May I add one small point? Last week, I met representatives from the hospitality and tourism sector, which sees the possibility of 10,000 businesses going out of business. Will he meet me and representatives from the sector to talk about what we can do to keep it open, because it is absolutely the powerhouse of the British economy?

After my hon. Friend’s generous comments, the answer is absolutely, yes.

The Chancellor has raised the prospect of further departmental savings—he means cuts—but from the TUC to the Institute for Government and the Welsh Local Government Association, people agree that there is nothing left to cut. When will the Chancellor listen to the Wealth Tax Commission and others who urge the Government to raise tax on wealth and non-earnings income, rather than decimate public services on which our constituents rely?

We already, with Conservative support, ask wealthier people to pay far more tax than people on low means, but the kind of taxes that the hon. Lady is advocating would destroy the wealth of the overall economy, so we would have less money for the NHS and the people who need it most.

I appreciate that the Chancellor has some really difficult decisions to make on tax and spending, but if we are to grow the economy, we must maintain capital expenditure. Up and down the country, there are a number of projects to which we allocated funding three or four years ago. They are now out to tender and can be built in the next 12 to 18 months, but they may have a slight shortfall. Will the Chancellor be sensitive to those projects, because if we are to grow the economy, it is those sorts of capital projects that we need to commence?

I absolutely agree about the importance of capital to the long-term growth of the economy—indeed, not just those projects, but many other projects. So, yes, we will be sensitive to that, but that does not mean that we will not have to make difficult decisions.

I call Brendan O’Hara. [Interruption.] The hon. Gentleman disappeared before my very eyes. I call Ronnie Cowan. [Hon. Members: “He is not here either.”] Fine—they are falling like ninepins. Goodness me, we had better try something different. I call Kirsten Oswald.

Thank you, Madam Deputy Speaker. It has been reported that No. 10 was briefing that the Chancellor’s statement was due to unspecified global headwinds, rather than the mini-Budget, but the former deputy governor of the Bank of England, Charles Bean, disagreed and said that the Prime Minister’s insistence that the UK’s economic turmoil was part of a global phenomenon was “disingenuous”. To be clear, what does the Chancellor believe has happened? Who does he agree with? Who does he think is responsible for the terrible financial thumping that now affects my constituents?

I do not think I could have been clearer in my statement. I said that the turmoil we have had is the result of international and domestic factors.

The Chancellor will be aware that his actions over the past few days have already lowered long-term expectations for interest rates. Can he set out for the House what impact he anticipates that that will have on mortgage rates in my constituency and across the country, as well as on the Government’s ability to fund future services?

I absolutely salute my hon. Friend for thinking about the needs of families having to pay mortgages, which have an enormous impact on their finances. As I have learned in my short time in this job, Chancellors never comment on what mortgage rates or interest rates should be, but I absolutely want to make sure, in so far as the Government can influence it, we make sure that they are held down as low as possible.

I will be a bit more generous. I genuinely welcome the re-emphasis on market stability, sound economic finance and ensuring that our country genuinely has an economic policy that is not going to frighten the markets.

The Chancellor says that he is reviewing all tax and spending before the Budget, and he wants to ensure that he takes communities with him. May I impress on him the very real damage that was done in lots of communities across the country that one might call red wall seats, although not all of them voted for the Conservatives in 2019, as a result of the cuts to local government—60p in the pound. Local government cannot take that level of cuts again. May I ask him at least to consider ensuring that those communities are protected?

I am not making any commitments on individual areas of any tax or spend, but yes, I absolutely understand the pressures faced in local government.

I welcome the Chancellor to his place. I welcome what he said about economic stability, the stability he has brought, and what he said about protecting the most vulnerable, which my constituents will welcome. When the people of Newcastle-under-Lyme voted for me and for the Government in 2019, they wanted us to deliver Brexit, deliver them from the Labour party, and deliver levelling up. Despite the difficult economic circumstances, can the Chancellor reassure me that the Government will continue to spread opportunity, growth and investment across the nation?

I am absolutely delighted to give that assurance. It is a fundamental part of the Conservative philosophy that economic opportunity should be evenly shared across the country, and we accept that it is not at the moment.

The chief executive of the Scotch Whisky Association made the point this morning that, time after time, freezes in spirits duty have delivered more revenue to the Treasury, contrary to all the forecasts from the Treasury. The Chancellor will know that that is correct, so why does he think that it would be different this time?

I will happily take that piece of wisdom away to the Treasury and ask them to relook at the figures, but I do not think that it is likely that they would have advised me to take the measures I took today if that was the case. I will go and ask them to look at it again.

I welcome my right hon. Friend to his new role and commend him for the prompt and decisive action he has already taken. He has rightly said that the Government wish to protect the most vulnerable. With that in mind, taking into account the parameters he has already set out, may I urge him to confirm as soon as practically possible that benefits will be uprated in line with inflation? In doing so, he will remove the burden of worry and anxiety that is hanging over a great many people in this country.

That issue has been raised by several colleagues from across the House and, as I have said previously, I thank my hon. Friend for raising it and understand how important it is. He will understand that I am not in a position to make any commitments in any area today. We will make our decisions as soon as we can and bring them back to this House, but I hear what he says.

SE20 Cycles in my constituency is a popular bike shop and the proud home of Penge cycle club, but owner Winnie faces an energy bill of £11,000 before winter has even started. It is only through the support of a local crowdfunder that Winnie is able to keep his doors open. What does the Chancellor have to say to SE20 Cycles and the thousands of other small businesses that face higher energy bills, higher rents, higher prices and, frankly, terrifying uncertainty because of this Government’s incompetence?

We introduced the energy price guarantee precisely because we care about families and also businesses that face unexpected increases in their fuel bills. I will write to the hon. Lady to tell her exactly how we are supporting small businesses in her constituency.

I welcome my right hon. Friend to his place as a great first step in restoring trust and confidence in our economy. Although I welcome the broad package of energy support measures, can I echo sentiments of other hon. Members and those of my constituents from Cowshill village hall, who I met this weekend up in rural Weardale. They are very concerned about the extra costs of being off-grid, and if my right hon. Friend could look at that over the next couple of weeks, it would be massively appreciated. Will he also keep working on the broader energy security measures so that we can ensure that we do not face this situation again in the future?

I will absolutely do that.

I note that Brexit merited not one mention in the Chancellor’s statement. The truth is that this economic crisis was baked in when his party committed to a hard Brexit; it was just a matter of when, although the Prime Minister substantially brought that forward. The then Member of Parliament for South West Surrey said that service levels and investment in public services would be massively impacted by Brexit. Does the Chancellor agree with the then Member for South West Surrey?

I am very sorry; I missed the last part of the hon. Gentleman’s question. I am not sure whether he is allowed to say it again, but on the first part of his question I would simply say that when it comes to Brexit the UK grew faster than the eurozone countries since 2016, so I do not accept his analysis.

I warmly welcome the Chancellor to his place. He, more than anybody else, will be aware of the pressures in the health and social care system as we enter a difficult winter. Will he be able to give reassurance to people working in the NHS and patients across the country that he will maintain the levels of funding necessary to cope with those winter pressures and with the future challenges that the health and social care system will face?

I am, I think, one of only two Chancellors to have been Health Secretary, so I am very aware of the pressures in the NHS. I am not making any commitments, but when it comes to the NHS the whole country wants to make sure that it can cope not just with winter crises but with the pressures we have had since covid. We will look at that very carefully, but I would also like to see reform in the way NHS funding is spent, because I think we can do better with the large sums that we spend already.

After the Government’s disastrous mini-Budget, I heard from a constituent, a single person first-time buyer who had been saving to buy a home for seven years and can no longer afford a mortgage. She described that as a kick in the teeth. What does the Chancellor of the Exchequer say to my constituent and all those ordinary people across the country battling price rises, struggling with increased mortgage costs and having their pensions hit by the effects of three weeks of instability caused by the economic incompetence of the current Prime Minister and her Government?

We have listened to her concerns and we have changed our policies as a result. Also, in fairness, the rise in interest rates is not just because of actions taken by the UK Government in the past few weeks but because of global factors, and we will do everything we can going forward to shield people like the hon. Lady’s constituent from those global factors, but we cannot do everything.

I thank my right hon. Friend for his statement today. It is absolutely right that the Government should prioritise economic stability above all else and accordingly make some necessary but difficult decisions given the challenging circumstances. Can he confirm that pursuing a high-growth economy remains central to the vision and will he continue to pursue policies of reducing the tax burden as circumstances and the economy allow?

I am happy to confirm both those points to my hon. Friend.

I would like to return to a theme that I picked up at the plan for growth statement three weeks ago: carers, particularly unpaid carers. Because of the carers allowance, they either cannot work at all or are struggling to make ends meet. Will the Chancellor confirm whether we will see inflationary increases to benefits and, if not, will he consider expanding the means-tested cost of living payments to include those on carers allowance or, at the very least, will he allow people to work more before their carers allowance is impacted?

I have said, as the hon. Lady will have heard, that I am not announcing decisions in any individual areas because of the gravity of the situation we face. On carers allowance, I will happily write to her anyway as I think these are all things we keep under review.

I very much welcome the fact that we now have an entrepreneur in 11 Downing Street. I also welcome the fact that over the weekend the Chancellor spoke once again about compassionate Conservatism, supporting those in our communities who are most in need while striving for sustainable growth. I know that my right hon. Friend is not making any spending commitments today, but does he agree with me in principle that one of the best ways we can support and create sustainable jobs in our communities is by continuing to invest in our levelling-up agenda across communities in our country?

I absolutely am very happy to confirm that I agree with that in principle.

Two very important conferences are taking place in the UK this week that support the Government’s aim for a UK cryptocurrency hub: the digital assets summit and the bitcoin collective summit. The crypto and digital assets all-party parliamentary group, which I chair, is keen to meet the Treasury to hear about the Chancellor’s commitments to regulation and consumer protection and to take forward the area’s vast potential in job creation, innovation and growth.

I know that the hon. Lady has been in discussions with the Financial Secretary to the Treasury, and I know that he would be delighted to communicate with her further, because she obviously has a lot of expertise in this area.

For three and a half weeks, the Government have gambled with people’s pensions, with their mortgages and with their futures. I notice that the Chancellor, in the list of people he has met, did not mention the Pensions Regulator, yet pensions have taken a significant hit over this period. Can he say that pension schemes will not be deemed unviable over this period, that they will get the support they need from Government, and that he will ensure they are stable for the future as both defined contribution and defined benefit schemes?

Well, I have had many discussions on pensions issues with the Governor of the Bank of England who, as the hon. Lady knows, has taken extensive action to protect the viability of pension funds. She will be as pleased as I was that he announced today that he thinks that he has basically succeeded in resolving that issue in nearly every case.

Will the Chancellor commit to the House that, as part of his decision making, he will also take cognisance of the social consequences and the consequences for social stability? Food aid charities handed a petition to Downing Street today saying that they are struggling to meet the demands of our fellow citizens. Will he meet those charities so that they can impress on him the urgent need to uprate benefits in line with inflation?

I am meeting many different people to discuss that very issue, but I am afraid that I can only point the hon. Gentleman to my earlier answer that I am not announcing any decisions on it today.

The Chancellor is taking plaudits for having calmed the markets, but he has not resolved the problem—he has just stopped it getting worse. Gilts will still cost more so borrowing will still cost more for the Government in perpetuity, which will have an impact on people’s mortgage rates. Does he expect repossessions to go up in future? If so, what action will he take to assist people who find themselves in that situation because of the Prime Minister’s reckless Budget?

It is because I do not want that to happen that I have taken the very difficult decisions today.

I am sure that the Chancellor would agree that certainty is key to stability for businesses. As has already been mentioned by one or two of my hon. Friends, the Scotch whisky industry, and the spirits industry generally, is now facing uncertainty because of his U-turn on freezing the duty, and it has no certainty about whether or when the duty will go up, or when it will even know. Can he commit to letting the industry know at an early date—as soon as possible—what will actually happen to it, as it is vital to many of our constituencies?

We will conclude the decisions on what we will do in terms of excise duty reform generally as quickly as we can, but for now, I am afraid that the difficult decision that I announced today stands and we will not be able to proceed with the freeze from next February.

I genuinely welcome many of the announcements that the Chancellor has made today and the stability that they will produce, and I wish him well for all our sakes in his new role. I want to focus his attention back on the young couple seeking to purchase their first home. They fear that the housing shortage means that the cut in stamp duty will not benefit them, but will simply raise the price of property and benefit existing homeowners—or have he and his party managed to abolish the law of supply and demand in the last 24 hours?

No, I have not. We recognise the need for more housing and the problems in the planning system. They will be at the top of our mind as we announce reforms to restore economic growth.

Last month, I pressed the Government to commit to extending the short-term energy price support announced for business and said that it could not afford to wait for the three-month review, because it needs certainty. Today, we have heard that the same uncertainty is to be imposed on every single household across my Edinburgh South West constituency, and indeed across the United Kingdom, because the Chancellor has reversed the Prime Minister’s promise to give them energy support for two years. My constituents live in one of the most energy rich countries in the world, yet they face crippling bills. Does the Chancellor think that that is a good example of the dividend that he says Scotland gets from being in the Union?

Well, I think that not just Scotland but England, Wales and Northern Ireland get a fantastic dividend from being in the Union. I say to the hon. and learned Lady that we have not reneged on our commitment to help people on low incomes with energy bills next year. We have said that we will review it and that we need a more targeted scheme, but we absolutely want to give help to her constituents and everyone’s constituents.

Does the Chancellor recognise that there was a very heavy blow to the lowest-income households in the country in April when social security benefits were uprated by 3.1% and inflation was nearly 10%? It was justified at the time on the basis that that was what the regular uprating formula had delivered, and that the same formula would be used next April. That assurance was given by both the then Chancellor and the then Prime Minister. Will the Chancellor recognise, when he reflects on his announcements in a couple of weeks’ time, that that is a matter of compassion, yes, but also of fairness?

I do accept that, and I think compassion and fairness are two sides of the same coin. I have told the right hon. Gentleman that while I cannot give the answers to any of these decisions, it will be through those prisms that we make those very difficult choices.

How will the concerns and experiences of the nations and regions of the United Kingdom be represented on the Chancellor’s new advisory panel? What, if any, are the Barnett consequentials of today’s announcement for the devolved Administrations’ budgets?

On the latter point, I will write to the hon. Gentleman. On the former point, I am confident that the advisers I have will be able to speak for the whole United Kingdom.

May I press the Chancellor? The defined benefit pensions market has been in turmoil. Schemes have nearly folded, and the Bank of England has spent £20 billion to steady the market. How will he grip that better so that pensioners can have confidence in their schemes?

I believe that the Bank of England has taken important action and I refer the hon. Gentleman to what the Governor of the Bank of England said today and his confidence that those issues have been largely resolved.

Earlier this afternoon, the Chancellor announced the formation of a new economic advisory council. Can he confirm that its members will be independent and that they are not major donors to the Conservative party seeking to gain influence on Government policy?

I can confirm that the council’s members will be independent; I can confirm that there will be no improper influence exerted; and I can confirm, as the hon. Gentleman will be pleased to hear, that all donations to the Conservative party are vetted and legal.

I have listened carefully to what the Chancellor has said. Our public services are on their knees after 12 years of Tory misrule; they really cannot cope with any further cuts. In contrast, the very richest have seen their wealth soar threefold over the past decade. Surely, rather than further cuts to our public services, would it not be fairer to impose a wealth tax on the very richest in our society?

The trouble with those kinds of taxes is that they end up inhibiting the wealth-creating capacity of the economy to fund the very public services that the hon. Gentleman supports. I support wealthier people paying more tax, but only when it creates more resources to put into the public services that we all need.

We have a Government who Scotland did not vote for, and a Chancellor who is leading the way despite Scotland not voting for him and who is, of course, about to impose swingeing public sector cuts on Scotland that, again, we did not vote for. With that prospectus, is it any surprise that the people of Scotland are going to choose a different path?

I am very happy that the hon. Gentleman is concerned about what the people of Scotland voted for, which was to remain in the United Kingdom.

In the past year, I have found myself regularly agreeing with the right hon. Gentleman when he warned that workforce burnout across the NHS and social care had reached emergency levels and

“is an extraordinarily dangerous risk to the…functioning of both services.”

Does he stand by that assessment today and will he now support an independent workforce plan?

It is very difficult to un-invent or un-say things that one has said on the Floor of this House. I am not going to make any commitments today, but let me say that, in my time as Chair of the Health and Social Care Committee, I learned a great deal about how the NHS functions, as indeed I did when I was Health Secretary, and I hope that will be useful to me in my role.

The doglike devotion that Tory branch office members in Scotland have for their London bosses was hopelessly exposed when they urged the Scottish Government to follow the disastrous tax plans of the soon-to-be former Prime Minister. Hours later, the same branch office members applauded October’s Chancellor’s abandonment of those plans in a desperate effort to stay on script. Does the current Chancellor agree that those in the Tory branch office in Scotland should apologise to the people of Scotland for seeking to railroad the Scottish Government down a path that would have caused even more pain for struggling households?

The Tory Government the hon. Member so hates have shown ourselves in the last few days to be willing to take tough and difficult decisions if they are right for the country, so here is a tough and difficult decision for her. Independence will make Scotland poorer in every single way, so why does she not abandon it?

The Chancellor has reversed most of his Prime Minister’s Budget, yet he is still talking about spending cuts to pay for the fine mess his Government have got this country into. Tory austerity broke our precious NHS, which he had a hand in. Now he is in charge of the purse strings, will he put his money where his mouth is, invest in the NHS and implement the workforce plan he knows is desperately needed?

Before I was Chancellor, with great respect to the hon. Gentleman, I think I did put my money where my mouth was. When I became Health Secretary we were funding the NHS at the OECD average and now it is the fifth highest in the OECD, so I have started to fix years of disastrous Labour underfunding.

I call Jim Shannon. [Interruption.]

Sorry, Madam Deputy Speaker, you threw me off there. I was looking round to see who it was. Thank you very much for calling me. Can I say how very pleased I am to see the Chancellor in his place? I wish him well, and I think this House wishes him well in the job he has to do.

Northern Ireland is a global leader in areas such as cyber-security and advanced manufacturing, and it is also the top location in the UK outside London for foreign direct investment. However, the rate of economic inactivity in Northern Ireland is higher than anywhere in Great Britain, which costs the economy some £16 billion annually. Can I ask the Chancellor if he can give any indication as to whether Northern Ireland will receive a fair proportion of the levelling-up funding under round 2, rather than in the first phase, when the 3% share target was missed?

As the hon. Member knows, I am not announcing any decisions today, but it would always be my intention to give a fair deal to Northern Ireland, which is an incredibly precious part of our Union.

The new Chancellor—October’s Chancellor—said, with no small measure of smug superiority and constitutional illiteracy, that in his opinion the four members he identified of his economic advisory board, who by my count are three members of large accountancy firms and one former insider from the Treasury, were well equipped to usher in the best possible economic plan for the devolved nations. That is clearly patent nonsense, but has it occurred to the Chancellor to invite the Finance Ministers from the devolved nations to form part of his economic advisory board, or is that beneath him?

I have regular contact and will continue to have regular contact—[Interruption.] Excuse me, would you let me answer? Sorry, Madam Deputy Speaker, but I was hoping the hon. Gentleman would let me answer.

I have regular contact with my Finance Minister counterparts in the devolved nations—and, indeed, the Chief Secretary to the Treasury had such discussions today—but this economic council is something different. This is about trying to make sure that we deal effectively with the instability we have seen in the markets, which is mainly London-based, and we want to make sure that it does not happen again, so I think I have four fantastic people for that role.

My constituents in Birmingham, Perry Barr and the people of the west midlands, who work tirelessly to be able to secure homes for their families, now look on in disbelief as they are having to focus on soaring energy bills in addition to crippling mortgage interest rates. Can the Chancellor explain how he will ensure that my constituents will not lose all they have worked for and will not need to make a choice between heating, eating or keeping their homes?

We are taking difficult decisions, and we will do whatever it takes to restore economic stability. That is the biggest single thing we can do.

Could the Chancellor explain to me whether the announcements today on tax will have implications for the primary legislation the Government are looking to introduce to enable the offer on tax and simplified regulations on investment zones? The in principle policy was published on 24 September, with expressions of interest asked for on 2 October and a rushed announcement that they had to be in by 14 October. There is very little detail for people to make really informed decisions. I will write again to the BEIS Secretary of State, if he remains the same—I have written to two—about one really good scheme, which is going to be massive. My constituency has two of the most deprived boroughs—Knowsley, the second most deprived in the country, which has had nothing yet, and St Helens, which is high up there. The schemes are just wonderful. What is the impact?

Because we are getting towards the end of our questions, I will reply to the hon. Member’s letter. I do not believe there are any implications from what I have said today but, if I am wrong, I will let her know.

If the Chancellor is serious about growth, he has to be serious about education, yet school governors in my constituency recently described the funding situation they face as “soul destroying”, and one said that

“we have trimmed everything we can possibly trim”.

They are considering laying off teaching assistants, delaying building repairs and axing school trips. Could the Chancellor of the Exchequer tell parents and teachers in my constituency what else he wants schools to cut to pay for the Prime Minister’s economic incompetence?

I want to do everything I can to protect our precious public services. I totally agree with the hon. Member about the link between education and economic growth, but I also think it is about social justice. I want to have fantastic schools for all our children, whatever their background. That is why I have taken the difficult decisions I have announced today.

I know the Chancellor has already performed quite a lot of U-turns today, but can I invite him to make another U-turn specifically on fracking? Given that renewable energy is nine times cheaper, would it not make good economic sense to invest in renewables rather than fracking?

We are not going to do fracking unless it has local consent, but I also say, as someone who believes passionately that we have to do more on climate change, that it is not helping climate change to import hydrocarbons from other countries and say that as a result we are being very virtuous in reducing our own emissions. We need to do what it takes to reduce overall emissions.

Can I thank the Chancellor in advance for what he has promised to publish over the next two weeks because it will be the starkest ever confirmation of the awful price of Better Together?

Unless you are a banker on a bumper bonus, which not many of my constituents are, you are looking at higher food prices, higher fuel prices, higher mortgages, reducing wages in real terms, falling benefits in real terms and savage real-terms cuts in public services. Alternatively, my constituents could be building towards a Scotland that is creating 385,000 jobs in renewable energy, producing between three and four times as much energy as we need, and—who knows?—maybe even selling it on at mates’ rates to our friends and neighbours, as long as they treat us well. I respect the Chancellor’s right to dismiss that future. I think he is doing himself an injustice by basing his dismissal on blind, evidence-light dogma, rather than looking at the facts, but does he accept that it is not for him, anyone on the Government Benches or, indeed, anyone on the Opposition Benches to deny my constituents the right to choose between those two futures?

I can accept that the hon. Member and I are different in that I am totally emotionally committed to the Union and it is part of my identity, and he feels differently about that, but what I cannot accept is that it would be anything other than madness for every household in Scotland to want to leave the United Kingdom, which would make them much worse off.

The Chancellor spoke of cuts, albeit shrouded in compassionate conservativism—a paradox if ever there was one—but surely he must realise how serious things are in public services at the moment. In Salford alone, the council is sitting on a £16 million shortfall due to soaring energy costs. That is on top of slashing its previous budget in half and slashing its staff rotas by over half. How can he possibly put forward compassionate cuts to services that are barely able to function at the moment?

It is because I want to be able to invest in public services like the ones the hon. Member talks about that I think it is so important to take tough economic decisions at times like this. All I would say is that, while she and I have a different viewpoint on many issues, her party has supported the decisions I have taken today, and I think that was the right thing.

After the Chancellor’s televised statement earlier, gilt prices rose and the yield on them fell, thereby reducing their effective interest rate. Does he recognise that the markets have effectively factored in the removal from office of the Prime Minister and what does he think will happen if that does not happen?

One of the first lessons I was told as Chancellor is never to speculate on why markets do what they do and I am not going to break that today.

The Chancellor has repeatedly refused to answer questions about uprating of benefits, but with the Resolution Foundation briefing last week that it expects 2 million more people to be pushed into absolute poverty, can he guarantee to the House that any attempt to balance the books, to steady the ship, or whatever other expression we are going to use, is not going to be made at the expense of those already struggling?

As I have said—I am happy to repeat it—all these decisions will be taken through the prism of the impact on the most vulnerable people in society.

Many constituents in Ilford South will be very glad that the last Labour Prime Minister had the foresight to make the Bank of England independent, given the mini-Budget a few weeks ago almost tanked six pension funds in the UK. What I would like to know from our new Chancellor today is what he is going to do—at least one more is still at risk—to reassure pensioners in Ilford South, and the millions of people across the country who are not only angry but frightened, that he will do something concrete to shore up pension funds not just over the next few weeks but over the next few years.

We have had very decisive action from the Bank of England to do exactly that, and I hope the hon. Gentleman is encouraged by what the Governor of the Bank of England said today about his belief that he has largely solved those issues.

Finally, the prize for patience and perseverance goes to Daisy Cooper.

Thank you, Madam Deputy Speaker; I now know what it feels like to have the knees of the hon. Member for Strangford (Jim Shannon). [Interruption.] It is a fleeting thought, but it has gone.

Pubs and hospitality businesses in my seat of St Albans are really up against it. Suckerpunch is a bar that closed its doors just a couple of days ago because it can no longer continue. Others are clinging on until Christmas and we know that around the country hospitality businesses are saying that they are going to go into complete hibernation until the spring, and that means redundancies. Will the Chancellor confirm that he understands that hospitality is one of the sectors that is most affected and will therefore attract support, and will he look again at the broken business rates system, which is killing our pubs and high streets while letting multinationals off the hook?

Another of the promises I now vainly wish I had not made in the summer as to policies we should do is a fundamental review of business rates, so I have a great deal of sympathy for the hon. Member on that front and I will happily look at those issues. I do not want to promise we are going to make any progress in the next two weeks because there are so many other things we have to consider, but what she has said has been well heard—and I, too, congratulate her on her patience.

That concludes the statement. I thank the Chancellor for taking questions for a whole two hours—perfect timing.

Bill presented

Benefit Cap (Report on Abolition) Bill

Presentation and First Reading (Standing Order No. 57)

David Linden presented a Bill to require the Secretary of State to report to Parliament on the likely effects of the abolition of the benefit cap, including on levels of absolute and relative poverty, poor mental health, food bank use, borrowing of money from friends and family, evictions from homes and problem debt, and on different groups including women, lone parents and people from Black and minority ethnic backgrounds; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 21 October, and to be printed (Bill 161)