08 Apr
Question
Economic Growth

The UK Parliament's Economic Growth question session on April 13, 2023, in the House of Commons focused on strategies to stimulate economic growth, especially through fiscal policies in the upcoming spending review. Chancellor Rachel Reeves highlighted the government's commitment to infrastructure investment, cross-departmental collaboration, and maintaining fiscal stability amidst international uncertainties like US tariffs.

Key Details:

  • Investment: Rachel Reeves announced an additional £113 billion for capital spending, emphasizing infrastructure, skills development, and sector support for automotive and life sciences.
  • Cross-department Collaboration: Efforts were highlighted to foster collaboration across government departments for issues such as educational reforms and homelessness.
  • Business Concerns: A query about delayed responses highlighted a focus on small business concerns surrounding national insurance impacts.
  • International Trade: Responding to global tariff challenges, maintaining fiscal prudence to avoid past fiscal indiscretions, preserving market stability through rules on fiscal management.
  • Economic Initiatives: Support for infrastructure projects like the A66 upgrade and broader economic growth strategies through substantial public investments in roads, rail, and housing.
£113 billion

Additional capital spending announced for infrastructure investments over previous government plans.

Outcome: The session underlined the government's stance on maintaining fiscal discipline while prioritizing growth through strategic investments in infrastructure and skills development. The Chancellor reiterated non-negotiable fiscal rules despite international pressures, outlining a path focused on long-term economic stability and growth.

60,000

Extra places in construction skills courses to drive infrastructure projects forward.

Statistics Context:

  • £113 billion unlocked: reflects government's increased commitment versus previous government plans.
  • 60,000 additional places: for construction skills to boost infrastructure capabilities.
  • 1 million small businesses: will pay less or no national insurance under revised policies.
1 million

Small businesses expected to see reduced or unchanged national insurance rates.

Outcome

The question session reinforced continuity in the government's economic strategy with a strong emphasis on capital investment and inter-departmental cohesion to tackle economic growth and social issues. Despite international economic pressures, a commitment to fiscal stability and strategic investments remains clear.

Key Contributions

Deirdre Costigan
Labour

Inquired about spending review plans to bolster economic growth.

Rachel Reeves

Outlined government's priority on economic growth through substantial capital investment.

Paul Holmes
Conservative

Expressed frustration over lack of response from the Chancellor regarding national insurance rise impact on small businesses.

Dame Meg HillierChair of the Treasury Committee
Labour

Queried government response to US tariff impacts on UK's economic strategy.

Tim Farron
Liberal Democrats

Called for approval of A66 upgrade to bolster regional economy and improve safety.

Richard FullerShadow Minister
Conservative

Criticized rushed spring statement changes affecting fiscal targets.

Original Transcript
Deirdre Costigan
Ealing Southall
Lab
Question
UIN: 903657

2. What steps she is taking through the spending review to help increase levels of economic growth.

The Chancellor of the Exchequer
Rachel Reeves

Growth is the No.1 priority of this Government. That is why in the autumn Budget and the spring statement we unlocked an additional £113 billion for capital spending, compared with the plans that we inherited from the previous Government.

Yesterday we announced significant support for the automotive sector and life sciences, and ahead of the spending review in June we have announced the roll-out of an additional 60,000 places in construction skills so that we can build the homes and infrastructure that our country desperately needs.

Deirdre Costigan
11:47

To drive progress on our growth mission and get the most out of taxpayers’ money, it is vital that Departments work collaboratively and not at odds with each other. Will the Chancellor outline how she is promoting cross-departmental working and planning as part of the spending review?

Rachel Reeves
11:48

The Chief Secretary to the Treasury is working closely in a constructive way to bring together clusters of colleagues to discuss some of the pressing issues that span Departments and that no one Department can address on its own, whether that is reform of special educational needs and disabilities provision for early years, or tackling issues around homelessness and the cost of temporary accommodation.

We are working cross-Government to address some of those cross-cutting issues.

Paul Holmes
Hamble Valley
Con

The Chancellor is right to focus on increasing economic growth, so will she please explain why my office is still waiting for a response on behalf of a small business to a letter that I sent on 12 December, asking her to look into the impacts of her national insurance rise on small businesses?

We asked for an update on 11 February, I raised a point of order on 10 March, and I still have not had a response. Will she please get a response to me as soon as possible?

Rachel Reeves

I will follow up on that issue. The smallest businesses—those that employ the equivalent of four people on the national living wage—will be paying no national insurance at all from this April.

Up to 1 million of the smallest businesses will be paying less or the same national insurance as they were paying previously.

Mr Speaker
11:48

I call the Chair of the Treasury Committee.

Dame Meg Hillier
Hackney South and Shoreditch
Lab/Co-op

Since the spring statement the world has been rocked by the announcements by President Trump on tariffs last week. It is an event as significant as the financial crisis of 2008, or perhaps as covid, and in those instances the state unleashed everything it could to try to resolve those issues.

Is the Chancellor considering changing any of her rules to ensure that everything that the state can throw at this problem is being done?

Tim Farron
Westmorland and Lonsdale
LD
11:50

Is now not the right time to start trying to make our own luck? In that light, would it not also be the right time for the Chancellor to give the green light to the upgrade of the A66 between Penrith and Scotch Corner?

Some 25% of traffic on that A road is freight, which is twice the average for A roads across the country, and it is outrageous that so much of the road is single carriageway. Would it not be great for the economy, as well as save lives, if the Chancellor gave the upgrade the green light today?

Rachel Reeves

Impressive. We will be considering all such schemes as part of the spending review, but I agree with the hon. Gentleman that we need to go further and faster to grow our economy.

That is why we are spending £113 billion more on capital investment in this Parliament, compared to the plans that we inherited, which means that we can upgrade more roads, rail lines and energy infrastructure, and build the 1.5 million homes our country needs too.

Mr Speaker
11:51

I call the shadow Minister.

Richard Fuller
North Bedfordshire
Con
11:51

Two weeks ago, the spring statement rushed through changes to disability benefits, or “pocket money” to the Chief Secretary to the Treasury, to help plug the £14 billion gap in public finances created by the first Labour Budget.

Now we are already in the Office for Budget Responsibility’s scenario 2 on tariffs, and the Chancellor is once again forecast to be out of room on her fiscal targets.

What does she plan to ask the Chief Secretary to the Treasury to do to update departmental budgets in his multi-year spending review in order to avoid punishing businesses and people once again with further taxes?

Rachel Reeves

The hon. Gentleman is jumping the gun somewhat. We delivered the spring statement just two weeks ago, in which we were able to restore the fiscal headroom after the change in global bond yields.

We will set out the Budget in the autumn, moving to one fiscal event a year, which is very different from the multiple Budgets we had from the previous Government. We have set the spending totals for the spending review and we will be setting out the departmental allocations on 11 June.

All content derived from official parliamentary records