Rebecca Smith (South West Devon) (Con)
The Exchequer Secretary to the Treasury (James Murray)
As we set out in the autumn statement, the Government have set aside funding to support the public sector with the additional cost of employer national insurance contributions. The amounts are £4.7 billion in 2025-26, £4.7 billion in 2026-27, £4.8 billion in 2027-28, £4.9 billion in 2028-29 and £5.1 billion in 2029-30. The Government plan to update Parliament on allocations by Department as soon as possible.
Chris Law
Labour’s national insurance increase will cost Dundee city council a minimum of £7.3 million, while across Scotland an additional £500 million will be incurred, rising to £750 million when indirect employers such as GP practices are included. Labour promised to reset the relationship with the devolved Administrations, so, ahead of Scotland’s Budget this week, will the Minister confirm that the full cost of the national insurance contributions increase to the delivery of public services in Scotland will be reimbursed?
James Murray
The funding for the impact on public sector organisations includes funding for the devolved Governments, which is allocated through the Barnett formula in the usual way. It is the responsibility of the devolved Governments to manage devolved workforces. Might I say that if the bill is somewhat higher in Scotland, that may be due to the Scottish Government’s decisions about the size of the public sector?
Rebecca Smith
A major housing association serving not only Plympton, Plymstock and Ivybridge in my constituency but the rest of Plymouth and other parts of Devon and Cornwall will have to shoulder three quarters of a million pounds in increased national insurance contributions. That is money that could have been spent on new homes for some of the most vulnerable in my constituency. How will the Minister reassure my constituents patiently waiting for much-needed social housing when they realise that they will have to wait longer because of the Chancellor’s decisions?
James Murray
We recognise that the decision on national insurance contributions is a tough one, but we also recognise that it was necessary for the Chancellor to set out a Budget that included a record set of promises on home building. We are set to build 1.5 million homes over the course of this Parliament, investing in social and affordable housing. That is what will benefit the hon. Member’s constituents who need a decent home.
Bill Esterson (Sefton Central) (Lab)
The shadow Chancellor was touring the TV studios this morning to say that the Conservative party did nothing wrong in government. Will my hon. Friend confirm that the reason for the changes to national insurance is precisely to plug the £22 billion gap that the Conservatives caused and to ensure that our constituents can get a hospital or GP appointment?
James Murray
My hon. Friend is absolutely right. The problem with Conservative Members is that they are all happy to say that they want more funding for the NHS; they are just not prepared to pay for it. What they need to realise is that, in government, we have to take tough decisions to ensure that we can fund public services and fix the public finances.
Neil Duncan-Jordan (Poole) (Lab)
What reassurance can the Minister give to hospices such as Julia’s House, which serves my constituents, which are concerned by the planned increase in national insurance contributions and the impact that will have on the services they provide?
James Murray
As my hon. Friend will know, many hospices are independent charities and therefore will be able to access the employment allowance, which we have doubled to £10,500 a year, as well as the other wider tax reliefs in the tax system for charities, such as business rates relief and gift aid. Of course, hospices often have statutory obligations with the NHS as well, so I suggest that hospices discuss their contracts with their integrated care boards.
Gareth Davies (Grantham and Bourne) (Con)
Later today, the House will vote on the Government’s £25 billion national insurance tax hike. To avoid any uncertainty when we vote, will the Minister confirm exactly which public sector organisations will be compensated?
James Murray
If the shadow Minister would like to know which public sector organisations will be compensated, he could look at what his Government did with the health and social care levy, because the definition of public sector organisations—it is a regularly cited definition—is set out through the Office for National Statistics. We will reimburse Departments and other public sector organisations.
Gareth Davies
There was so little information in that response—the civil service will be very proud of the Minister. He will not say who will be spared by the Chancellor’s tax raid, but we know that working people will be made to pay—the Office for Budget Responsibility has said so; the Institute for Fiscal Studies has said so; even the Resolution Foundation has said so; and working people know so. Why is it that Labour always leaves office with unemployment higher than when it entered office?
James Murray
I do not think the shadow Minister listened to my response to the previous question, in which I set out very clearly the definition of the public sector for the purposes of national insurance contributions. Look at what the OBR has said: yes, it recognises that we are asking businesses to contribute more and that this will have an impact, but it also says that the employment level will rise from 33.1 million to 34.3 million by 2029, meaning an increase in the employment level over this Parliament.
Daisy Cooper (St Albans) (LD)
Citizens Advice in St Albans supports some of the most vulnerable people to access public services. It says that the changes to national insurance contributions will
“hit hard because we employ mostly part-time staff and the change to the threshold means we go from paying nothing to the full amount for each staff member. The increased rebate is intended to offset the NIC for small organisations but does not for us because so many of our staff are part-time.”
Will the Chancellor look again at the impact of the national insurance contribution changes on part-time workers?
James Murray
We recognise that we have taken a tough decision to increase the rate and broaden the base through changes to the secondary threshold. I welcome the work done by the organisation mentioned by the hon. Lady in her constituency, but perhaps the need for advice would be less if public services were stronger. One of the reasons we are taking these difficult decisions on taxation, welfare and spending is precisely to ensure that these public services can provide the service that people need.
Daisy Cooper
We all want to see stronger public services. According to Hightown Housing Association, the estimated extra total cost of the national insurance contribution changes will be £860,000 per year—money that would allow the association to pay the interest on a loan of around £17 million, which would pay for around 60 social homes. Will the Chancellor say whether she will conduct an impact assessment of these national insurance contribution changes on the number of social homes?
James Murray
The Liberal Democrat spokesperson began her question by saying that we all want public services; the problem is that not all of us in this Chamber are prepared to pay for them. That is exactly why we have to take difficult decisions to ensure that we can fund our ambitious plans for the NHS, education and indeed housing. The impact of the impact assessment is published in the tax information and impact note, which is published alongside the legislation, which I am sure the hon. Lady will have seen. It comes down to the basic point that we have to make tough decisions on taxation if we want to fund those public services.
David Williams (Stoke-on-Trent North) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
At the Budget, the Government announced major steps towards delivering a once-in-a-generation increase in social housing, including a £500 million boost to the affordable homes programme, increasing annual spend to £3.1 billion. The Government will set out future grant investment beyond the current affordable homes programme at phase 2 of the spending review.
David Williams
In Stoke-on-Trent and Kidsgrove there are many historic buildings that are lying dormant, and they have done so for a very long time. What steps will the Chancellor take to help to bring these beautiful buildings back into use as affordable homes for local people?
Rachel Reeves
Stoke-on-Trent has a proud industrial history and some beautiful buildings. My hon. Friend makes an important point—I will raise it with colleagues at the Ministry of Housing, Communities and Local Government. The £500 million boost to the affordable homes programme also allows up to 10% of that delivery to come from acquiring existing homes. Social landlords, including some local authorities, can bid for funding to bring empty homes back into use for social housing.
Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)
Many of my constituents have benefited over many years from the right to buy their council homes and social housing, which has given them an important step on to the ladder to home ownership. The discounts in Staffordshire are going to be cut to £16,000. I do not doubt that the Chancellor, like me, wants to help as many people as possible on to the path to home ownership. Will she pledge to review that decision with regard to the impact it will have on so many people, and look at restoring that discount in future?
Rachel Reeves
As the right hon. Gentleman will know, home ownership fell under the previous Government. We are determined to turn that around and ensure that more people, particularly families, get on to the housing ladder. As he has confirmed, the right to buy discounts will continue, but in future every penny of that money will go back into building new social housing, so that more people can have a home of their own and a roof over their head.
Bob Blackman (Harrow East) (Con)
The Economic Secretary to the Treasury (Tulip Siddiq)
I read that report with great interest and have a lot of sympathy for those who suffered. However, a lot of the incidents described happened a very long time ago. The FCA has made substantial changes in response to those experiences. That does not mean the end of our engagement with the FCA, but we are continuing to hold it to account and it has made changes since the report came to light.
Bob Blackman
The FCA has been completely defensive in response to the report. Since the historical elements quoted by the FCA, 13 major scandals have erupted. I will not intrude on your time, Mr Speaker, because I am sure that you would not want me to list them all, but Woodford Equity, car finance and others have come to light since the details came out. Clearly, there is a need to fundamentally reform the FCA so that victims of scandals are properly compensated and the industry is properly regulated in the way that we would all like to see.
Tulip Siddiq
I understand that lots of people have suffered, as the report explains, which I said I have read. However, I do have confidence in the FCA; I have sent it remit letters outlining what we expect it to do to deliver on its objectives. The FCA is looking at certain things such as its rulebook, which we think is too extensive, to look at rules that no longer need to be applied but, overall, we are working with the FCA closely and we believe that it is trying its best. It is not possible to have a system where nothing ever goes wrong, but we are trying to minimise that and ensure that there is consumer protection. The FCA knows that we are working together to deliver on its objectives.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
The Parliamentary Secretary, His Majesty’s Treasury (Emma Reynolds)
The Money and Pensions Service plays a vital role in supporting individuals to manage their money effectively. Its funding levels are regularly reviewed to reflect demand, inflation and evolving needs.
Ms Creasy
New research from the Centre for Responsible Credit shows that 7.5 million people in this country are going without the debt advice that they need. We are in a cost of living crisis, so services are severely stretched. The Money and Pensions Service underestimates need by excluding people who are behind with their bills. That means that the financial levy that it proposes is not what it needs to be. Since a third of those who need financial help borrow from buy now, pay later lenders, and given the delay in regulating those companies, will the Minister meet me to look at the funding model of the financial levy and what more we can do to ensure that those profiting from exploiting our constituents pay to repair the damage?
Emma Reynolds
My hon. Friend has been a tireless campaigner on this issue. We are reforming buy now, pay later, as the Economic Secretary recently stated in answer to my hon. Friend in the House. The Government recognise the gap between those who need debt and those accessing it, which is why the Money and Pensions Service is exploring ways to improve accessibility, including through outreach initiatives. We continue to keep a close eye on its funding levels to ensure that they reflect demand.
Tim Farron (Westmorland and Lonsdale) (LD)
The Money and Pensions Service does tremendous work to support people in my constituency who come to surgeries in desperate need—particularly those facing crippling debt—as do organisations such as Christians Against Poverty. Would the Government consider putting more money behind the Money and Pensions Service, not just for staffing but for visibility and presence in local communities? Would they consider the proposal that others have made to make our post offices a shop window for Government services in our communities, including such advice?
Emma Reynolds
As the hon. Gentleman knows, the Money and Pensions Service commissions other charities, particularly to work with hard-to-reach vulnerable people. We continue to review its funding and we keep a close eye on the evolving demand and need for its services.
Lloyd Hatton (South Dorset) (Lab)
The Exchequer Secretary to the Treasury (James Murray)
Ensuring that online multinationals pay their fair share of tax is crucial, so the Government are finalising the implementation of internationally agreed rules for a minimum 15% effective rate globally. As set out in the corporate tax road map, we are seeking an international solution for a fair tax allocation of multinational profits. Meanwhile, the digital services tax ensures that search engines, social media platforms and online marketplaces pay UK tax reflecting a UK-derived value.
Lloyd Hatton
Amazon currently makes hundreds of millions of pounds in profits in the UK each year, and often gets away with paying little to no corporation tax. Meanwhile, high street businesses in Weymouth, Portland and Swanage in my constituency pay their fair share. To level the playing field, will the Chancellor consider further measures to ensure that online giants always pay their fair share of tax? I fear that, without action, our high streets will always be at an unfair disadvantage.
James Murray
My hon. Friend is absolutely right, and supporting the high street is at the heart of our ambitions when it comes to business rates reform. On Second Reading of the Finance Bill last week, in which I spoke, we set out our plans to issue permanently lower tax rates for high street retail, hospitality and leisure properties. That will be paid for through an increase in the tax rate on properties with a rateable value above £500,000, a category that includes the warehouses used by many of the online giants to whom my hon. Friend has referred.
Dr Luke Evans (Hinckley and Bosworth) (Con)
The Parliamentary Secretary, His Majesty’s Treasury (Emma Reynolds)
Thanks to our steadfast commitment to the triple lock, more than 12 million pensioners will benefit from a 4.1% increase in their state pensions next year, and over the course of this Parliament they will be better off by £1,900. Pensioners also benefit from free bus passes, eye tests and prescriptions.
Dr Evans
In September the Government released statistics showing that one in five pension credit claims were not being processed within 50 days, and I raised that in a written parliamentary question, No. 5385. Part of the answer stated:
“The department has secured funding for additional staffing to improve processing times.”
Two months later, data has been released showing that the processing of one in four pension credit claims is now taking longer than 50 days. How much funding was given, will more be provided to try to move this forward, and what conversations is the Minister having with the Department for Work and Pensions to ensure that the funding is spent properly, given that it is taxpayers’ money?
Emma Reynolds
I am a Minister in both the Treasury and the DWP, so I have conversations with officials about this all the time. We are absolutely determined that those who are eligible for pension credit should be aware that they can apply for it, given our big campaign to raise awareness—only last week we launched a TV campaign on the issue. We have also deployed an additional 500 staff to process those pension credit claims. Thanks to our campaign there has been a 145% increase in the number of claims, which is why the processing is taking a little longer, but we are absolutely focused on speeding it up and ensuring that those who are eligible receive the help they need.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Helen Morgan (North Shropshire) (LD)
The Exchequer Secretary to the Treasury (James Murray)
A prosperous rural economy will be underpinned by improvements in rural connectivity and productivity, the availability of affordable energy, access to public services and a thriving farming sector. To that end, the Government are investing £5 billion in broadband connectivity, which will support growth in rural areas across the UK. In addition, we are spending £5 billion for the farming budget in England over the next two years, including the largest amount to be directed at sustainable food production and nature’s recovery in our country’s history.
Jamie Stone
For generations the grim spectre of highland depopulation haunted the area I come from. I can remember my own father saying, before North sea oil came along, that I would have to go south; to go away. Today we have the Inverness and Cromarty Firth green freeport, and we have the prospect of a space launch in Sutherland. May I ask the Government to consider fiscal means whereby these projects can be assisted? I warmly invite a Treasury Minister to come north to my constituency to see what we are doing and what we have on offer.
James Murray
The Chief Secretary to the Treasury will set out any fiscal measures in due course. I am not sure whether I will get away with committing him to a visit to the hon. Gentleman’s constituency, but I am sure that many of us would like to visit it. In fact, I shall be in Scotland in the next few days, but as it is for a Labour party fundraiser, the hon. Gentleman may not want to join me.
Helen Morgan
Rural North Shropshire is home to some great independent businesses that we are looking forward to celebrating on Small Business Saturday this week, but they are held back by the business rates system, which benefits big online retailers and holds back investment not only on the high street but in the countryside. Will the Minister consider a much more radical reform of business rates which takes account of land values, encourages businesses to invest and puts high street retailers on a level playing field with online giants?
James Murray
Until the hon. Lady’s last sentence, I thought she was declaring support for our business rates plans, because we are setting out to level the playing field for high street businesses and the online giants. We are doing that by way of a permanent tax cut for retail, hospitality and leisure businesses on the high street, which is paid for by the higher multiplier for those with a rateable value of £500,000 or more—a category that includes the warehouses used by online companies. I look forward to the hon. Lady perhaps contributing towards our “Transforming Business Rates” paper, which sets out our wider ambitions for reform.
Jo White (Bassetlaw) (Lab)
The last Government failed to stand up for British farmers in trade agreements and left them vulnerable to flooding, rollercoaster energy costs and poor infrastructure. Can the Minister confirm that this Government will protect British farmers where the last Government failed?
James Murray
My hon. Friend is absolutely right to point out the failures of the previous Government, and to point out that this Government remain steadfast in our commitment to farmers across the country. That is exactly why we have committed £5 billion to the farming budget over the next two years, including the largest ever budget for sustainable food production in our history.
Natalie Fleet (Bolsover) (Lab)
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
The Chief Secretary to the Treasury (Darren Jones)
We plan to raise living standards by boosting economic growth to put more money in people’s pockets, and by developing a comprehensive strategy on child poverty to give every child the best start in life. Already, the independent Office for Budget Responsibility estimates that living standards will increase during this Parliament, at more than double the pace observed in the previous Parliament.
Natalie Fleet
Fourteen years of Conservative rule meant that we all saw child poverty levels rise. One in five children across the country now grows up in scarring poverty. A quarter of all children in Bolsover live in poverty. Can the Minister please set out the measures that this Labour Government will take to end this travesty?
Darren Jones
I thank my hon. Friend for her question. She will know that this Government, like every Labour Government, are committed to improving living standards right across the country. From 1 April 2025, the national living wage will increase by 6.7% to £12.21 per hour for eligible workers aged 21 and over. That represents an increase of £1,400 to the gross annual earnings of a full-time worker on the national living wage, and is expected to benefit around 3 million low-paid workers. My hon. Friend knows that the Government have set up a ministerial taskforce on child poverty, which will report in 2025.
Pamela Nash
In the Chancellor’s first ever Budget, she delivered over £1.5 billion for Scotland this year and £3.4 billion next year—the largest ever block grant settlement in the history of the Scottish Parliament. Unlike the Tories and the SNP, it is clear that this Labour Government are choosing investment over simply managing decline. Can the Minister share with the House a bit more detail about how the Budget will directly impact and improve the lives of people in my constituency of Motherwell, Wishaw and Carluke, and throughout Scotland?
Darren Jones
I thank my hon. Friend for her question. As she said, the Scottish Government’s spending review settlement for 2025-26 is the largest, in real terms, of any settlement since devolution began. The Scottish Government are receiving at least 20% more per person than equivalent UK Government spending in the rest of the United Kingdom. That translates to over £8.5 billion more in 2025-26 alone. This Labour Government are delivering for the people of Scotland by giving the Scottish Government the power and money to get on with the job, and it is for the SNP to be accountable for what it delivers for the Scottish people.
Graham Stuart (Beverley and Holderness) (Con)
Can the Minister confirm that of the £26.4 billion tax rise through the increase in employer NICs, £19 billion will come directly out of people’s pay packets? Secondly, can he confirm that the net amount that the Treasury will actually get from that £26.4 billion after behavioural change and public sector compensation is just £11 billion?
Darren Jones
The right hon. Gentleman seems to have forgotten the cost that working people paid as a consequence of his party’s actions in government, with inflation on house prices racing to 11%, the cost of living crisis, higher energy bills and a loss of grip on public spending. People suffered a direct cost in their disposable income because of the actions of the Conservative party. This Labour Government have wiped the slate clean, and we are getting a grip on public spending, fixing the foundations and delivering for working people.
Bradley Thomas (Bromsgrove) (Con)
Will the Chancellor admit, as she has already done in the media, that wages will be lower because of her jobs tax?
Darren Jones
This Government’s commitment to economic growth will improve living standards for people right across the country. I refer the hon. Member to my previous answer and suggest that his party might want to apologise before trying to lecture this Government on the change that we are delivering.
Darren Paffey (Southampton Itchen) (Lab)
Mr Mark Sewards (Leeds South West and Morley) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
We have brought stability back to the economy, which is the foundation for attracting investment and is vital to our growth mission. We have already launched the national wealth fund, which will mobilise over £70 billion of private investment with an expanded remit for the Office for Investment overseen by the Minister for investment. In October, we welcomed global investors from around the world to London for the international investment summit, where we were able to announce a record-breaking £63 billion of private sector investment into our economy.
Darren Paffey
I have been meeting a number of maritime companies in and around the port of Southampton, and they tell me that the single biggest key to unlocking further investment would be the expansion of the national grid to our city. What steps is the Chancellor taking to secure that vital investment, and will she meet me and local industry leaders to discuss how this would boost our local and national economy?
Rachel Reeves
It was a pleasure to go to my hon. Friend’s constituency in June to see the port and the wealth creation and jobs that it is bringing to Southampton. As I set out in the autumn Budget, as well as focusing on the national wealth fund’s capital investment in ports, we are committed to accelerating grid connections and ensuring that new network infrastructure is built at pace to unlock investment and growth opportunities. We are particularly focused on driving network build, including by completing the strategic planning of the energy system needed for 2030, to ensure that projects such as those my hon. Friend has mentioned in Southampton make the progress that they need to.
Alan Gemmell
New green businesses such as XLCC in Ayrshire, a sub-sea cable manufacturer, are seeking long-term investment to create jobs. Recently, my hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) and I visited its training academy in Irvine. What more will my right hon. Friend the Chancellor do to help Scottish businesses such as XLCC to secure long-term investment, and might she visit Ayrshire to see it in action?
Rachel Reeves
I thank my hon. Friend for his question and for the invitation. In October, the Government launched the national wealth fund to mobilise billions of pounds of investment into world-leading clean energy and growth industries. I am pleased that the national wealth fund already announced a £20 million investment in XLCC to support it in moving towards a construction phase. This will support 900 jobs, as well as making a contribution to the UK being a clean energy superpower by strengthening the home-grown energy suppliers that are fundamental to achieving our energy independence.
Mr Sewards
As the chair of the all-party parliamentary group for Yorkshire and Northern Lincolnshire, I am always on the lookout for opportunities to encourage investment and growth in our region. That is why I am backing the campaign to put the national infrastructure and service transformation authority in Leeds, and I was delighted that the national wealth fund was put in Leeds. Given these facts, will my right hon. Friend the Chancellor meet me to discuss the opportunities we have to maximise the benefits from the national wealth fund?
Rachel Reeves
I welcome the work that my hon. Friend does on the all-party parliamentary group for Yorkshire and Northern Lincolnshire. As I announced in October, the UK Infrastructure Bank has now become the national wealth fund and it will expand its team and be headquartered in the brilliant city of Leeds, to realise our ambition on the national wealth fund. The national wealth fund will also have a strong regional focus, working with the mayors, including Tracy Brabin in West Yorkshire, so that we can realise the potential of all our regions, including Yorkshire. Further details on the national infrastructure and service transformation authority’s governance and location will be confirmed in due course.
Dave Doogan (Angus and Perthshire Glens) (SNP)
One of the economic investments that we do not want to see in Angus and Perthshire Glens, or anywhere else in Scotland, is foreign multinationals buying up farms because farmers have given up under the weight of the taxes introduced by this Government. This would destroy local supply chains and make larger farms that are less responsive to consumer demand. What has the Chancellor seen in her impact assessment of the agricultural property relief changes to allay those fears?
Rachel Reeves
One of the current challenges, as the hon. Gentleman will know, is that agricultural property relief is often used for tax avoidance. People are buying farmland not because they are family farmers but because they do not want to pay any inheritance tax. That is why we are reforming the system to bring in much-needed money to fund our public services, and to have a fair system with a 50% discount to inheritance tax paid on agricultural property and a 10-year period to pay that inheritance tax, interest free.
Pippa Heylings (South Cambridgeshire) (LD)
Last week, I joined a biotech boot camp in South Cambridgeshire. Although the investors and entrepreneurs recognise and welcome the research and development budget announced in the Budget, they said it is a reduction from 2021. Does the Chancellor recognise that we need to increase investment in R&D to encourage long-term investment in our leading services?
Rachel Reeves
We were really pleased to announce an R&D budget of more than £20 billion at the autumn Budget. This is important to funding and accelerating R&D not just in the hon. Lady’s constituency but across the country. Combined with the corporate tax road map, as well as the commitment to continuing funding for Horizon, our universities and great innovators can look to the future with confidence.
Josh Babarinde (Eastbourne) (LD)
Local leisure and sports facilities, such as the Sovereign centre where I learned to swim, deserve more long-term investment. I want Eastbourne to be able to invest its £20 million from the towns fund in such facilities, but it will not be unlocked by the Treasury until 2026. Will the Chancellor commit to accelerating the unlocking of that funding, so that we can invest in facilities for local families and people in Eastbourne much sooner?
Rachel Reeves
I agree it is important that all children learn to swim, especially in our coastal communities. We had to make difficult decisions at the Budget, but I am happy to try to arrange a meeting between the hon. Gentleman and the relevant Minister to make sure the investment can go ahead at pace.
Jonathan Hinder (Pendle and Clitheroe) (Lab)
Jade Botterill (Ossett and Denby Dale) (Lab)
The Exchequer Secretary to the Treasury (James Murray)
To deliver our manifesto pledge, we intend to introduce permanently lower tax rates for high street retail, hospitality and leisure properties from 2026-27. This tax cut must be sustainably funded, so we intend to introduce a higher rate on the most valuable properties—those with a rateable value of £500,000 or above—from 2026-27. The Non-Domestic Rating (Multipliers and Private Schools) Bill, introduced last month, will enable the Government to deliver these changes, and it will come into effect in April 2026.
Jonathan Hinder
High streets in my Pendle and Clitheroe constituency were hollowed out under the last Conservative Government, with many shops left empty. Small, independent businesses are the backbone of our local economy, employing local people, keeping our towns vibrant and giving them their character and charm. Can the Minister assure me that multinational giants will pay their fair share under Labour, levelling the playing field and enabling our high streets to thrive?
James Murray
My hon. Friend is absolutely right about the importance of small, independent businesses in his constituency, and I am sure his sentiment is shared by Members across the House. Through our reforms, we are setting out to make sure that those properties with a rateable value of £500,000 or more pay so we can have a permanent tax cut for high street business. This category includes the large distribution warehouses used by online businesses, which will make sure that those online businesses make a fair contribution to ensuring that our high streets are the success we all want to see.
Connor Naismith
Ahead of Small Business Saturday, I congratulate St Martha Greek taverna in Nantwich on being the first winner of my Crewe and Nantwich small business of the month competition. Small businesses on our high streets, such as St Martha, regularly highlight business rates as a significant challenge, so what steps is the Minister taking to ensure that they can continue to thrive?
James Murray
May I extend my congratulations to St Martha Greek taverna in Nantwich? Given the time, I am feeling a bit hungry now that we are talking about food. I reassure my hon. Friend that our plans to reform the business rates system would see a permanent tax cut for retail, hospitality and leisure businesses. While I do not know exactly the details or the rateable value of the property in question, I am sure properties like that would be eligible for the cut. It is crucial that we support those much-loved local businesses. I am glad he is doing all he can to champion them, and I look forward to my invite.
Jade Botterill
Many people in my community rely on in-person banking and access to cash. I was pleased to recently open the banking hub in Ossett town centre. Ossett was previously one of the 55 bankless towns in the UK. How are the Government looking to further support those who rely on those services, particularly in towns and rural villages?
James Murray
My hon. Friend is right to highlight the importance to communities of having access to cash and banking services, which is why we have committed to rolling out more banking hubs across the country—100 by the end of this year and a total of 350 through our commitment. We want to work with local communities across the country to deliver that, so that all areas, like Ossett, can benefit from a local banking hub.
Sammy Wilson (East Antrim) (DUP)
The heavy burden of business rates and the national insurance contributions that the Government are going to impose on small businesses is taxing businesses to death. Does the Minister recognise that in doing so, he is going to cause unemployment, higher inflation and lower growth, and that we are heading for higher taxes in future because of the downward economic spiral?
James Murray
As the right hon. Gentleman will see in the National Insurance Contributions (Secondary Class 1 Contributions) Bill that we will be debating this afternoon, we have doubled the employment allowance to help small businesses to employ up to four people earning the national living wage without paying a penny in national insurance. That is dedicated support to help those small businesses, in the context of what, I admit, is a tough decision. If the right hon. Gentleman has a chance to contribute to the debate, he might say whether he supports the extra public services funding that comes from those difficult decisions.
Gideon Amos (Taunton and Wellington) (LD)
Businesses like Mr Miles in Taunton High Street are being hit hard by the changes in taxes for hospitality businesses, including the increase in the wage bill and national insurance contributions, and the massive increase in business rates. That business is now considering reducing its opening hours, which would make our high street less vibrant than it should be. One challenge is the £50,000 rateable value limit for the discount, as many high street premises have a rateable value of more than £50,000. Will the Chancellor consider reviewing the limit placed on the business rates discount for small businesses?
James Murray
As the hon. Gentleman will know, we set out our plans for reforming business rates to ensure that retail, hospitality and leisure properties on the high street with rateable values below £500,000 will benefit from a permanent tax cut from this Government. The importance of that tax cut being permanent is that it gives businesses the stability they need to invest and grow. I look forward to his support for our reforms when we vote on them in due course.
Jen Craft (Thurrock) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
Sound management of the public finances means spending wisely and not sending money to fraudsters. Today, I have appointed the health expert Tom Hayhoe as our new covid counter-fraud commissioner. As chair of an NHS trust during the pandemic, he saw the urgency of getting personal protective equipment to NHS staff when they needed it. Now he is at his desk in my Department starting the work to investigate the billions of pounds lost to fraud and underperforming contracts, and instead ensuring that that money is where it belongs—in our public services.
Jen Craft
My constituents expect the Government to treat taxpayer money with the utmost respect. However, during the pandemic the Conservatives handed out contracts to their friends and donors and failed to prevent fraud, using the crisis as a cover for their greed. Does the Chancellor agree with me that that money belongs to the taxpayer?
Rachel Reeves
My hon. Friend’s constituents in Thurrock are right to be angry about the waste and corruption that happened under the previous Government. That money belongs to the British people and in our public services, not in the pockets of fraudsters taking advantage of a national emergency. Tom Hayhoe will leave no stone unturned in investigating the carnival of fraud that the previous Government presided over, including in PPE contracts, where they recommended any attempts to reclaim that money be abandoned. Letting huge sums of taxpayers’ money be wasted would be egregious and I will not tolerate that.
Harriet Cross (Gordon and Buchan) (Con)
The Treasury consistently insists that only 500 farms a year will be impacted by the family farm tax. However, the Central Association for Agricultural Valuers calculates that the real number will be five times higher and will include many farms in my Gordon and Buchan constituency. Who is right: the Treasury or the experts?
Rachel Reeves
We have published the detail of how that money is raised, but the numbers from His Majesty’s Revenue and Customs are very clear: only a quarter of estates will pay any additional tax. At the moment, the vast majority of agricultural property relief is enjoyed by a very small number of very large and very expensive estates. That is not affordable, and it will not continue.
Brian Leishman (Alloa and Grangemouth) (Lab)
I declare an interest: I am a member of Unite the Union. The Grangemouth refinery costs £100 million a year to run, and its economic contribution to Scotland exceeds £400 million per annum. Unite has a credible plan to save the refinery and prevent thousands of job losses. Will the Treasury consider the plan, and meet me, Unite and the refinery owners to discuss its viability and Government intervention for the public good?
Rachel Reeves
I am happy to arrange a meeting between my hon. Friend and the relevant Minister.
Nick Timothy (West Suffolk) (Con)
Last week, the Chancellor told the CBI conference that she would not come back
“with more borrowing or more taxes”.
Last Wednesday, the Prime Minister hung her out to dry and refused to repeat those words. Will she repeat them today and rule out any more borrowing or any more taxes—yes or no?
Rachel Reeves
At the Budget in October, we had to fill a £22 billion black hole left by the previous Government. We will never have to repeat a Budget like this one, because we will not have to clear up the mess of the previous Government ever again.
Rachel Reeves
The hon. Gentleman talks about uncertainty, but he was a Minister in the Treasury under Liz Truss, when huge damage was done to families’ and businesses’ finances. Frankly, I will take no lessons from Conservative Members on how to run the economy. We have already done phase 1 of the spending review; phase 2 will begin shortly and be concluded next year, when we will make multi-year settlements on resource departmental expenditure limits and capital budgets for the next few years.
Richard Fuller
The Chancellor may find that in her job, she needs to listen and learn lessons. One of the many criticisms of the last Budget was that the Government fiddled the figures to borrow more money, and still left little headroom for if their forecast went wrong. Since the Budget, business confidence has collapsed, putting further pressure on that headroom. Does the Chancellor have a problem with balancing her books, and will she, like Oliver Twist, be coming back for more?
Rachel Reeves
The hon. Gentleman will know that there is more headroom in our Budget in October than was left by the previous Government. The lesson I have learned is that I will never play fast and loose with the public finances, as the Conservative party did, because when it did, interest rates went through the roof and inflation topped 11%, and families and businesses in our country are still paying the price for its disastrous economic management.
Clive Efford (Eltham and Chislehurst) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
At the Budget, I wiped the slate clean after 14 years of chaos and mismanagement of our public finances, and I have brought stability back to our economy, so that we can get on with fulfilling our promise of delivering change. That means investing to fix the NHS and rebuild Britain, while ensuring that working people do not face higher taxes in their payslips.
Only through economic growth can we deliver on the promise of change. That is why we have wasted no time in delivering on the Government’s No. 1 mission. We have established the national wealth fund, have kick-started planning reforms to boost long-term growth, are developing an industrial strategy, and are announcing reforms for our world-leading financial services sector, including in pensions. I am under no illusion about the size and scale of the challenge that we face, and the struggles of working people. That is why we choose stability and investment. The Conservatives, however, choose chaos, austerity and decline.
Clive Efford
According to the Local Government Association, local government spending on public services is down 42% on what it would have been had it kept pace with demand and costs since 2010. My local authority, Greenwich, faces a £3 million to £5 million gap in commissioned social care costs, and after 14 years of Tory austerity, there is very little headroom to bridge that gap. Does my right hon. Friend agree that local authorities need more assistance to bridge such gaps in the December local government finance statement?
Rachel Reeves
As my hon. Friend will know, in the autumn Budget and phase 1 of the spending review, more than £1 billion was made available to local government, including £600 million for social care. The allocation of that money will be set out in the normal way over the next few weeks, so that local government is funded properly and can deliver the services that it needs to deliver.
Mel Stride (Central Devon) (Con)
What a pleasure it is to appear opposite the right hon. Lady for the first time. I was tempted to ask her how things were going, but I did not want to start out by being unkind. I will instead ask this: when she recently pledged to the CBI that she would not raise taxes again, did she mean it?
Rachel Reeves
I welcome the right hon. Member to his place, and look forward to many exchanges with him across the Dispatch Box. At the Budget in October, as he knows, we had to fix a £22 billion black hole in the public finances. Some of that black hole comes from the fact that we are the only G7 economy in which employment is lower than it was before the pandemic, when he was Secretary of State for Work and Pensions, so we had to raise taxes to fund our public services; but never again will we have to repeat a Budget like that one, because we have now wiped the slate clean and drawn a line under the mess created by the previous Government.
Mel Stride
I did not actually discern any answer to my question, so may I put it this way? No. 10 has stated that it is not prepared to stand by the Chancellor’s commitment on tax. Is that because No. 10 changed its mind, or because the right hon. Lady spoke without thinking?
Rachel Reeves
No Chancellor of the Exchequer would write five years’ worth of Budget in their first five months in post, but I can say that we will never have to deliver a Budget like that again. We took decisions in this Budget in order to wipe the slate clean after the mismanagement, decline and chaos of the previous Government. That required us to make difficult decisions, but we were right to make them, so that we can get going with our plans to achieve growth and reform public services, and deliver the NHS and schools that our country desperately needs.
Jacob Collier (Burton and Uttoxeter) (Lab)
The Chief Secretary to the Treasury (Darren Jones)
My hon. Friend has campaigned extensively on this issue in his constituency. I understand that National Highways continues to develop proposals to improve the A50/A500 corridor through Uttoxeter. That is part of the pipeline of projects for future road investment strategies. He will know that in the Budget, we invested £1.6 billion to maintain and renew the nation’s local roads. That includes a £500 million increase in 2025-26 alone.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Rachel Reeves
The tax rises in the Budget were used to provide a £22.6 billion uplift in the Department of Health and Social Care budget to ensure that our NHS is properly funded. The NHS will ensure that important services are properly funded, and those allocations will be set out in the normal way.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
Rachel Reeves
I will head to the Great Northern conference in Hull later this afternoon to speak about the impact of this Government’s policies on Yorkshire and the wider north of England. We are supporting local leaders and communities through integrated settlements, are investing in the trans-Pennine route upgrade, East West Rail and High Speed 2, and are reshaping public services.
Helen Maguire (Epsom and Ewell) (LD)
The Exchequer Secretary to the Treasury (James Murray)
Primary care providers have yearly negotiations with the Department on what services they provide and what money they are entitled to. More broadly, the reason why we are, in the Budget, taking difficult decisions about national insurance and other matters is precisely to fund the NHS, so that we have the health service that our country needs and deserves.
Peter Lamb (Crawley) (Lab)
Rachel Reeves
In the past four weeks since the Leader of the Opposition was elected, the Conservatives have made £7 billion of commitments to cut taxes, but with no idea of how they would cut public services to afford them. I do not know how they will vote on national insurance, but we can see pretty quickly how they ended up leaving us a £22 billion black hole.
Damian Hinds (East Hampshire) (Con)
The single most important factor in raising living standards, driving income equality and improving children’s life chances is having a job. Why is the Chancellor disregarding that fundamental truth, with tax policies that will actively harm employment, particularly youth employment?
James Murray
If we look at the OBR forecasts for this Parliament, employment will increase from 33.1 million to 34.3 million. The right hon. Gentleman talks about youth employment. I suggest that he read our “Get Britain Working” White Paper, which sets out in detail what we will do to help get young people, and people suffering from ill health, back into work.
Tristan Osborne (Chatham and Aylesford) (Lab)
James Murray
As my hon. Friend set out, the Government confirmed the introduction of a vaping products duty to ensure that young people and non-smokers do not take up vaping. Registration for the duty will open on the digital platform from 1 April 2026, and the duty will take effect from 1 October that year.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
On economic black holes, the Labour Mayor of London thinks that Brexit punched a £40 billion black hole in the public finances. A very simple question for the Chancellor: has leaving the EU been a net positive or a net negative for the public finances?
Darren Jones
The Government have no overall estimate of the impact of the UK’s exit from the EU, but the OBR has projected a 4% drop in productivity in the long term. That is why we are starting negotiations with the EU to improve trade in our mutual interest.
Graeme Downie (Dunfermline and Dollar) (Lab)
Darren Jones
The Government recognise that ports are an important route to growth, which is why the national wealth fund will deploy at least £5.8 billion into five priority manifesto sectors, including ports. I would be happy to meet my hon. Friend to discuss that specific constituency issue in due course.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
WealthTek was placed into administration by the Financial Conduct Authority after losing £80 million of its clients’ money. FCA-appointed administrators are now deducting fees from victims’ compensation. My constituents Dominic Knights and his wife have between them lost thousands of pounds. What is the Treasury doing to safeguard the £85,000 compensation limit?
The Economic Secretary to the Treasury (Tulip Siddiq)
The FCA is held to account by the Government and Parliament, but Treasury Ministers cannot comment on individual cases, and the Treasury has no stake in the operational issues of the FCA. I am very happy to meet with the right hon. Lady and the FCA to discuss that matter, but let me be clear: the FCA is an independent regulator.
Steve Yemm (Mansfield) (Lab)
Rachel Reeves
I happily join my hon. Friend in welcoming Mansfield’s success. We have launched a revamped fair payment code, under which signatories commit to paying their suppliers on time, and the disability finance code for entrepreneurship. That comes on top of reforms announced at the Budget to protect small businesses, such as doubling the employment allowance to £10,500, and our commitment to maintaining the small profits rate and marginal relief at their current rates and thresholds, as well as to freezing the small business multiplier for 2025-26—
Rachel Reeves
And like my hon. Friend, I look forward to small business Saturday this week—
Mr Speaker
Order. [Interruption.] No, we are going to have a little talk now, because this is not fair; I have to get all these other Members in. I understand that these are set questions, but questions and answers should be short—it works both ways—otherwise I cannot get Members in and it makes my job impossible. Please work with me.
Greg Smith (Mid Buckinghamshire) (Con)
The owners of a 380-acre farm in my constituency have worked out that they would have to spend 40 years paying back the money that they would have to borrow because of the changes to agricultural property relief. When will the Chancellor start listening to farmers rather than hiding behind Treasury figures?
James Murray
We are taking an approach that balances significant tax relief for family farms with the need to fix the public finances in as fair a way as possible. The hon. Gentleman will have seen the data that the Treasury has put out, based on claims data from His Majesty’s Revenue and Customs. It shows how few farms will in fact be affected. The measures are a fair and balanced way to fix the public finances, which we desperately needed to do given our inheritance from the Conservative Government.
Ben Goldsborough (South Norfolk) (Lab)
It is vital that we give value for taxpayers’ money, yet Conservative-run Norfolk county council’s doomed Norwich western link road is costing taxpayers £27,000 per day—that is nearly £50 million so far for not an inch of tarmac. Does my hon. Friend agree that the Norfolk Tories give us Liz Truss not just in Whitehall, but in county hall?
Darren Jones
The Government will always support local authorities to deliver good value for money road enhancements to support economic growth and improved connectivity. The Norwich western link road is currently the subject of a live planning application, so I am afraid that I cannot comment further on the specifics.
Rupert Lowe (Great Yarmouth) (Reform)
I cannot help but think that this morning has made for rather depressing listening. We hear this repetition about a £22 billion black hole, but we are dealing with very serious matters such as people’s employment. Ultimately I hear the Chancellor talking about a central planning agenda, but it is public services that are the problem; they are wasting money, and we must seriously consider that. Will the Chancellor accept, if the economy turns down next year, which it surely will, that she has made a mess of it?
Rachel Reeves
We mention the £22 billion because that is the inheritance that the Government now have to address. We have published a line-by-line account of the £22 billion black hole that the previous Government left. We are now growing the economy through our national wealth fund, our planning reform and our pensions reform, and we are reforming our public services, so that we can deliver for the people we came here to represent.
Clive Lewis (Norwich South) (Lab)
As the Treasury team may be aware, there is a growing body of evidence that the growth of the financial sector beyond a certain size has an impact on the economy, particularly the productive economy. Over a 10-year period, it has cost the rest of the economy £4.5 trillion, so how will the Chancellor ensure that a growing financial sector will not harm the Government’s wider missions and the productive economy?
Tulip Siddiq
My hon. Friend will know that there is a long-standing debate about the relationship between financial and real economy growth, on which there is no consensus. The Government are clear that we see the financial services sector as a key part of our future economic success. The growth of the UK economy and our wider missions will not be achieved if we do not champion one of our biggest assets—the growth of the UK’s financial services sector—and mobilise it towards achieving those goals.
Munira Wilson (Twickenham) (LD)
Achieving for Children is the arm’s length body of Richmond council that delivers its vital children’s services, yet because of the rise in employer’s national insurance, it now faces a staggering bill of £588,000 because the employees are not directly employed by Richmond council. When the Chancellor looks at her local government settlement, will she build in reimbursement for councils such as Richmond, or indeed exempt arm’s length bodies?
James Murray
As the hon. Member will know, we announced in the Budget an increase in local government funding of 3.2% next year, and the Chancellor announced extra funding for early years providers to deliver Government-funded childcare places, meaning that total funding will be over £8 billion in 2025-26. I look forward to the hon. Member’s support for all that extra funding.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Today is International Day of Persons with Disabilities. With a disability employment gap of nearly 30% and a disability pay gap of nearly 14%, how is the Chancellor helping to address those inequalities?
Rachel Reeves
Just today, the Government launched the disability finance code for entrepreneurship—something championed by my right hon. Friend the Secretary of State for Business and Trade—to ensure that people from all types of backgrounds, including those with disabilities, can start and grow their own businesses.
Jim Allister (North Antrim) (TUV)
When the Windsor framework was introduced, it was accompanied by the boast that access to the EU single market would result in a huge increase in investment in Northern Ireland. Is the Chancellor aware that Invest NI has reported that there has been no upturn, and is that not because of the barrier presented by the Irish sea border to the bringing of raw materials into Northern Ireland from Great Britain?
Darren Jones
The Government are committed to increasing the flow of investment to every nation and region of the United Kingdom, and we will continue to work with the Northern Ireland Executive to deliver that for the people of Northern Ireland.