Thank you, Mr. Speaker. And can I congratulate the prime minister on his stamina — three hours yesterday. Yesterday he faced 125 questions from MPs across the House. Of course, Labour and the Lib Dems just wanted more government spending as taxpayers' money. But can he name a single spending request to which he answered no?
Prime Minister. Well, what I can say to the right honorable lady is I was quite clear in my statement about the need to get the welfare bill down. I do not want to be a prime minister that sees a situation where we have so many people in their 20s not in education, employment or training. I can't defend that. And I want to change that by giving more support to young people so that we start investing in their success, Mr. Speaker, rather than paying for failure as we have done for many years under successive governments. Now, this seems to me, Mr. Speaker, to be one area where we can both engage in problem solving rather than point scoring. And I hope the right honorable lady will take up my offer on that point.
Mr. Speaker, he avoided the question. He did not say no to a single spending request. And personally, I think it's delightful that he wants to make everyone happy, but a prime minister needs to be a leader, not a people pleaser. He's talking about working together on welfare. I already made that offer, but that does mean cuts. He wants to bring the welfare bill down by spending more money. Yesterday, the prime minister told the House that his summer of promises would be paid for by reprioritizing within government. So, what exactly has he cut?
Well, in terms of what has he cut? Tax is the simple answer to that question. Mr. Speaker, within days of taking office, I indicated that we would remove VAT off electricity bills. And that, Mr. Speaker, will help people with the cost of living. And then days later, with the support of my right honorable friend, the chancellor, we said that there would be a cut in business rates for pubs, social clubs, live music venues. So, this government lowering the cost of living, lowering the cost of business, and that is what we will continue to do. And can I say to the right honorable lady, it has to be fully funded and those commitments are fully funded. And we made a decision early to be clear about our priorities. Digital ID is not a priority for me or for this government. We reallocated the funding and we made those commitments as a result.
Mr. Speaker, I asked what he cut. He says tax cuts. He hasn't said where the money is coming from. He talks about digital ID. Yeah, I know. He said digital ID, but the chief secretary to the former prime minister said that there was no money allocated for digital ID. You can't cut something that never existed in the first place. Mr. Speaker, Lord O'Neal, a close friend of the prime minister, said yesterday's statement in the Commons was the last thing investors wanted to hear. Lord O'Neal is a serious economist. He knows what he's talking about. And sure enough, yesterday the cost of government borrowing rose to its highest in 18 years. How does he plan to tackle the government's rising debt costs?
Well, can I say to the right honorable lady, I've worked with Jim O'Neal for 10 years. Jim O'Neal always gives me candid advice. We don't always agree, but he and I work together to turn Greater Manchester from a former industrial heartland to the fastest growing city region in the country. They complain, Mr. Speaker, but where are their ideas about growth? When they were in government, we saw 14 years of stagnant growth. We saw 14 years of debt rising as a percentage of GDP. I would say to her that the turbulence on global markets is because of that exposure that they left behind. We are turning that corner. Mr. Speaker, in the first half of this year, we've had the fastest growth in the G7. Borrowing fell to its lowest level in six years. We're cutting the deficit faster than any other G7 country. I say to the party opposite, particularly to the right honorable lady, that is problem solving rather than point scoring.
Mr. Speaker, I don't know what any of that has to do with tackling the cost of increasing debt. Mr. Speaker, collaborating with Jim O'Neal is not how we're going to get the debt cost down. And he said yesterday that the markets would be worried. The markets are clearly worried. So, will he be honest and tell us? Is he preparing to raise taxes again? Yes or no?
Can I say to the right honorable lady, I've already indicated my first moves were to cut tax. But he and I took a deliberate decision to set an early date for the budget so that we reduced the period for prolonged speculation of the kind that she is wanting us to indulge in today. But can I also say to her and indeed to the whole of her new shadow cabinet, the majority of whom were part of a government that lasted for 49 days. A government, a short-lived government that crashed confidence in the economy, hammered people's mortgages. She took a decision at the weekend. She removed a shadow chancellor who said that the Truss mini budget was a mistake and she replaced that shadow chancellor with one that helped to write the Truss mini budget. He says he wants new politics. He says he wants honesty. So why is he pretending that a junior minister wrote that budget? The fact is, guilt yields now cost of borrowing. The cost of borrowing now. Mr. Speaker, the cost of borrowing now is far more than it ever was under Liz Truss. Mr. Speaker, the reason why that budget failed is because spending was announced before the money to pay for it, which is exactly what he is doing right now. He says it's the new politics. It's the same old Labour politics, tax and spend. He did not rule out tax rises and what markets see is a government that cannot control its spending. So the markets will charge us more to borrow. That means higher mortgage rates for families. It makes life more difficult. Borrowing costs are the biggest threat to family finances. So will he rule out any more borrowing that will make people poorer?
Yeah, but can I say to something I said earlier? Debt was rising as a percentage of GDP under the previous government. Some PPS to the defence secretary, with all respect to my right honorable friend. He was in the Treasury, Mr. Speaker, as a senior minister on the day of the Truss budget. She mentions mortgage rates. Well, that was the day that they spiked and that was the day the British public were hammered by the previous government. We are taking the action needed to get debt down. This will be a government grounded in fiscal responsibility. It will stick to the fiscal rules but at the same time we will help reduce cost of living pressure on our constituents and that's the approach that we will take and that's the one I would suggest the party opposite they should follow too.
Mr. Speaker, he is the prime minister now. He needs to answer the questions instead of spending time attacking someone who has more private sector experience than his entire cabinet. I asked him whether he would rule out more borrowing. He did not do so. We spend more servicing our debt than we do on defence. Almost double. There is war in Europe. Mr. Speaker, yesterday Germany confirmed that Russia was behind the attack. We need the plan to hit 3% on defence now, but the armed forces won't know what they'll be getting until next July's spending review. There is a simple answer to this. Cut welfare spending and invest that money in our defence. Now, Mr. Speaker, the honeymoon is over. Isn't it time for the prime minister to ditch the vibes and get serious about defending our nation?
German government yesterday in relation to the attack in Leipzig. And I think that should unite the House in sending complete condemnation of that attack by Russia and complete solidarity in this House to support both Germany and to support Ukraine. And that position will not change. And it takes me to defence. The very reason I appointed this chancellor to his position is because of his strong commitment to the defence of our country and to defence spending. We will fully fund the defence investment plan and at the spending review we will set out a plan to meet our NATO commitments by 2035. There is no problem with our commitment to defence, Mr. Speaker. But more broadly, the honorable lady has made a lot of accusations there about what went wrong. But I go back to what was the position that she left. The country was not heading in the right direction. Now we have a clear, coherent, credible plan for growth based on 10 years of delivering it myself. This is grounded in reality. I want to take it to all parts of the country and it's all about bringing back a sense of positivity, Mr. Speaker. A sense of possibility, growth in every postcode. Let this country believe in itself again. Let people have some hope. And that is what this government will do.
