The shadow business secretary Andrew Griffith has claimed “the Budget emperor has no clothes” as MPs began the final day of debate on Labour’s first Budget in 14 years.
On Wednesday, MPs will vote on the Budget outlined to Parliament by Chancellor Rachel Reeves last week, which she promised will “rebuild Britain”.
Mr Griffith has criticised the Government’s plans for economic growth, and said it has “already failed” in that goal.
He told MPs: “The Government may be right to say that there is much to rebuild in Britain today, but what this Budget does, combined with the Government’s nationalisation of railways, employment rights bills and GB Energy, is take us further away from that goal.
“Higher taxes, more regulation, bigger government and a smaller wealth-producing part of the economy – it’s a Budget for prejudice rather than progress.
“Whilst the Labour benches will praise the Budget for the veneer of its measures and the socialist purity of its design, their constituents can see that when it comes to growth, the Budget emperor has no clothes.
“The OBR strips it back to its stark, naked flesh, when they say Budget policies temporarily boost output in the near term, but leave GDP largely unchanged in five years.
“If growth is its central mission, the Government has already failed.”
Business Secretary Jonathan Reynolds said that “growth is our only path to prosperity” and “you cannot have growth without investment”.
“Growth demands investment in our infrastructure, into our public services, into the cities and regions that have gone overlooked and under-invested in by past administrations, and that is what this Budget chooses,” he said.
He added: “May I remind the opposition, we tried it their way and all it did was stagnate wages, stifle growth and put the public finances into a £22 billion black hole with nothing to show for it.
“You can’t cut your way out of a hole, you need the investment to lift the economy up. And having endured the last government lurching from crisis to crisis, the British people in July voted overwhelmingly for change.
“They voted for a Government that would set budgets to serve their long-term interests, not serve the news cycle or the election cycle.
“They voted for stability. They voted for growth. They voted to fix the foundations. This is exactly what this Budget delivers.”
One of the most highly criticised Budget measures by opposition MPs is the change to agricultural property relief.
Under plans announced in the Budget, inheritance tax will be charged at 20% on agricultural assets above £1 million, although Ms Reeves has said that in some cases the threshold could in practice be about £3 million.
Fixing the NHS, rebuilding Britain and protecting working people from higher taxes in their payslips.
— Rachel Reeves (@RachelReevesMP) November 2, 2024
We promised change - we are delivering change. pic.twitter.com/J8nXi1PQED
Mr Reynolds claimed that only 500 farms will be impacted by the change.
He told MPs: “I do think on a lot of the analysis – certainly on the Conservative Party’s analysis – what they forgot to do is aggregate the impact of the changes to those allowances on agricultural property relief, alongside the existing nil rate band and the ability to transfer those allowances between spouses in all cases.
“So, actually, if you look at the number, the total number across the UK of farms that would have been affected by this change, it’s only 500, yes, it’s 500 for the 2026/27 financial year. And I think that has been missed.”
He added that the criticism of the measure amounted to “a little bit of scaremongering” as he urged colleagues “to be clear with people about what actually the case is”.
The Business Secretary further defended the Budget from lacklustre growth predictions by the Office for Budget Responsibility (OBR), which he said cannot model for “some of the wider parts of the Government’s agenda”.
Day one.
— Andrew Griffith MP (@griffitha) November 5, 2024
As Shadow Secretary of State for Business and Trade, I am committed to giving businesses - from high street enterprises to global British brands - the voice they deserve.
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Conservative MP for North West Hampshire Kit Malthouse said: “The OBR report actually says that growth in real GDP starts to slow over the next three years, and in year four and five of the Parliament goes negative.
“So, what it’s telling us is that the Government’s Budget is actually going to result in a smaller private sector, not a larger one.”
Mr Reynolds said: “The analysis by the OBR shows that a long-term improvement in GDP growth is absolutely vital. But what it cannot do, that it cannot model, is some of the wider parts of the Government’s agenda.
“It can’t model those changes in the planning system that are so important to the Government, it cannot model the changes to having a long-term industrial strategy. They cannot model our changes to trade policy.
“I would also say, actually, one thing that hasn’t had sufficient recognition is that many of the real benefits of greater public investment don’t accrue in this Parliament. They accrue beyond it. And it’s about time we had some long-term focus again in this country.”
