Oral Answers to Questions
(1 day, 5 hours ago)
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Mr Peter Bedford (Mid Leicestershire) (Con)
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
The Secretary of State for Scotland (Mr Douglas Alexander)
If you will allow me, Mr Speaker, it seems fitting to begin by congratulating the Scottish men’s football team on qualifying for the world cup next year. For the first time since 1998—when I watched them in France alongside the tartan army—we will be back on the world’s largest stage. Steve Clarke and the team truly are history makers, and we are very proud of them.
Alas, today Scotland is being held back by the Scottish Government’s dogmatic opposition to nuclear power. New nuclear projects can deliver millions of pounds of investment and thousands of high-quality jobs and apprenticeships. Scotland is well-placed to benefit from the jobs, investment and energy security that nuclear can provide, but frankly we need a change at Holyrood.
Mr Bedford
What discussions has the Secretary of State had with the SNP Government in Scotland, whose luddite approach and ideological blinkers prevent Torness, Dounreay and Hunterston from being considered for future nuclear projects—and all the jobs and investment that go with them?
Mr Alexander
This at least seems to be an occasion for which there is genuine cross-party consensus. Not only have we urged a different approach from the Scottish Government—and I do so again—but my right hon. Friend the Secretary of State for Energy Security and Net Zero has already asked Great British Energy Nuclear to begin assessing Scotland’s capability for new build nuclear sites.
Sir Geoffrey Clifton-Brown
Would the Secretary of State not agree that connecting renewables to the grid requires considerable expense, and would not the former nuclear sites of Hunterston, Torness and Dounreay make very suitable sites for new nuclear power stations, from which the Scottish people have benefited hugely in the past?
Mr Alexander
I should declare an interest in that Torness is in my Lothian East constituency. It provides about 750 highly paid, unionised jobs. Of course, we would welcome the opportunity for advanced modular reactors, small modular reactors or new build nuclear at the Torness site, but the EDF management there says that the opposition from the Scottish Government is preventing equivalent investment of the kind that was recently announced for Torness’s sister plant in Hartlepool.
Alison Griffiths
A key plank of the SNP’s dogmatic argument against new nuclear is cost. Will the right hon. Gentleman find a quiet moment—perhaps when the winds fall light and the turbines stop—to point out to them to reduced costs of small modular reactors?
Mr Alexander
Of course, new technologies are emerging, as the hon. Lady recognises. We are delighted that Rolls-Royce is one company leading that new wave of nuclear technology. We do not even need to look to the future; we can look to the most recent past for occasions when the wind does not blow and the sun does not shine in Scotland. That is why Torness provides significant base load capability. We see new build nuclear as an essential part of that energy mix going forward. Alas, the Scottish Government do not understand that.
Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)
Does the Secretary of State agree that Scotland cannot meet its long-term energy security and net zero goals without new nuclear power, and that the University of Strathclyde’s internationally recognised power networks demonstration centre, whose expertise in grid integration and systems resilience is world leading, will be essential for the safe and effective deployment of next-gen nuclear technologies across Scotland?
Mr Alexander
I wholeheartedly agree with my hon. Friend: the expertise of our research centres in the United Kingdom, including the University of Strathclyde’s PNDC, is absolutely critical. The crucial research that they undertake will help to further the safe and effective deployment of new nuclear technology. We are watching a wave of nuclear technological innovation around the world. We must ensure that, as well as universities, communities across Scotland can benefit from it.
Graeme Downie (Dunfermline and Dollar) (Lab)
Last week, I spoke with trade unions in Scotland. They argue that the ideological ban on nuclear power is costing young people career opportunities for well-paid and long-term jobs. In my constituency, an SNP councillor is spreading misinformation and arguing against highly skilled nuclear jobs in the safe dismantlement of nuclear subs at Rosyth. Does the Secretary of State agree that that pervasive misinformed approach is holding our country back, and will he urge the First Minister to distance himself from the comments of that councillor and welcome those jobs in Rosyth?
Mr Alexander
Of course I condemn such misinformation. The reality is that the Government are investing £340 million in the Rosyth dockyard. I was in Fife on Monday and met with Fife College, Fife chamber of commerce, Babcock, and Navantia UK from down the coast. Huge investment is going in but, alas, the Scottish Government seem resistant to harnessing the potential of defence growth deals to secure new opportunities, not least for apprentices in Scotland.
Joani Reid (East Kilbride and Strathaven) (Lab)
Since my election I have met with many employers, both local and national, which have expressed—to put it in parliamentary terms—frustration at the SNP’s no-nuclear policy. This is stopping my constituents from getting access to high-quality jobs and it is preventing investment. Does the Secretary of State agree that this is a political choice that is actively stopping Scotland receiving good-quality jobs and investment?
Mr Alexander
I find myself in agreement with my hon. Friend. This is not just an anti-jobs measure by the Scottish Government; I would argue that it is an anti-science measure. Let us remember that nuclear power is carbon free. Given the climate change challenge we face, why would we want to resist a technology that can provide reliable, safe and cheap carbon-free energy for decades to come?
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I join the Secretary of State in congratulating Steve Clarke and Scotland football team for qualifying for their first world cup since I was 11 years old. I remember getting the afternoon off school, and when we have our first game next year I hope that Mr Speaker takes the same approach to the parliamentary day as my headteacher took to the school day.
Scotland has a long, proud history of nuclear power generation. We have the skills, the sites and the local support. But we also have, in the SNP Scottish Government, a luddite mentality, choking-off investment, preventing new jobs and going against the wishes of local communities, such as those in Dunbar, which the Secretary of State knows well, who want Torness secured for future generations. What does the Secretary of State think it will take for the SNP to join the growing list of countries around the world, and allow the global revolution in clean, safe nuclear power to reach Scotland?
Mr Alexander
I am happy to tell the hon. Gentleman what I think it will take: it will take a change of Government next May. It is time for a new direction in Scotland.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Kirsty Blackman (Aberdeen North) (SNP)
Seamus Logan (Aberdeenshire North and Moray East) (SNP)
The Secretary of State for Scotland (Mr Douglas Alexander)
Over the last year, we have increased the national living wage—a pay rise for 200,000 of the lowest-paid Scots—delivered a generational upgrade to workers’ rights, had five interest rate cuts, and expanded the warm home discount scheme, meaning one in five Scottish households are getting £150 off their bills. But we need to go further and faster, and the Chancellor has pledged targeted action to bring down inflation further.
Liz Saville Roberts
The Government do indeed need to go further. This morning, the Scottish Government laid the regulations necessary to mitigate the two-child cap, brought in by Labour and carried on by Labour. Scotland is the only part of the UK where child poverty is falling, and it is the only part of Great Britain with a non-Labour Government. Does the Secretary of State recognise the huge role played by the Scottish child payment in tackling poverty head on? Does he agree that Labour in Cardiff Bay and in Westminster should follow the Scottish Government’s lead?
Mr Alexander
I was part of a Government that saw child poverty fall significantly. I believe that this Government will be true to that commitment. I hope there may be more for the Chancellor to say in the coming minutes, but be assured that we welcome all measures that reduce child poverty after many years in which, tragically, we have seen poverty rise.
Kirsty Blackman
In the 16 months since the King’s Speech, when Labour MPs were whipped to vote against scrapping the two-child cap, how many children have been pitched into poverty as a result of the Government’s refusal to scrap the cap?
Mr Alexander
We have always been clear that we wanted to take action on the basis of sound public finances. That is why it is a Labour Government that have been willing to take difficult and challenging steps. I am old enough to remember the criticism from those on the SNP Benches after 1997, and we went on to lift a record number of kids out of poverty. That is why I welcome our Chancellor’s approach.
Seamus Logan
It is just over 500 days since this Government came to power, and the policies of the Chancellor and the Government have been a disaster for the north-east of Scotland with cost of living problems, whether that is the impact of national insurance hikes on jobs and investment, the family farm tax on the agricultural sector, the energy profits levy, which is killing jobs in the offshore sector, or the raw deal offered to our fishing industry with the coastal growth fund. Can the Secretary of State tell me and the House whether we should expect the Chancellor to fix the mess that she has made, or will the Budget be another failure for the people of the north-east—
Mr Alexander
It will not surprise the House that I am not going to prejudge announcements that the Chancellor will be making from this Dispatch Box in just a few minutes, but I certainly do not recognise the characterisation that the hon. Gentleman has offered of the first 15 or so months of this Labour Government. It was always going to take more than 18 months to undo the damage of the last 18 years. We have already seen 200,000 Scots lifted out of poverty and record rises in the national minimum wage, and that work will continue.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
This Government are embarking on delivering the biggest upgrade to workers’ rights in a generation, working to provide income security for many in my constituency. I am not surprised that Conservative peers are blocking that in the other place, but will my right hon. Friend share the shock of my constituents that the Liberal Democrats and now Green Members are also doing that?
Mr Alexander
I would like to say that I am shocked and surprised, but very little that the Liberal Democrats do can shock or surprise me. The truth is that the Employment Rights Bill is expected to benefit people in the most deprived areas of the country by up to £600 in lost income from the hidden costs of insecure work. That is exactly the work that we as a Labour Government are called to tackle.
Martin Rhodes (Glasgow North) (Lab)
What discussions has the Secretary of State had with the Chancellor of the Exchequer about the impact on Scotland of the increase to the national living wage?
Mr Alexander
Only this morning there were discussions in the Cabinet involving me and the Chancellor of the Exchequer, and I pay tribute to the work that she and others in government have done to ensure both that upgrade to workers’ rights and that pay rise for the 200,000 poorest paid Scots.
Stephen Gethins (Arbroath and Broughty Ferry) (SNP)
Will the Secretary of State tell the House by how much household energy bills have risen since Labour came to power?
Mr Alexander
I hope we will be hearing more about energy bills later this afternoon.
Stephen Gethins
The Secretary of State clearly does not know, so I will help him: energy bills have risen by £187 for the average household, with more rises due on the way. He might also want to know that today is National Energy Action’s Fuel Poverty Awareness Day. Scotland is one of the most energy-rich parts of Europe, with our renewables and hydrocarbons that the Treasury has benefited from over the years. Does he get the frustration at this Government when it comes to the cost of living on fuel poverty, food prices and child poverty, due to Tory policies that they have maintained?
Mr Alexander
This Government have taken action and will continue to take action. In his rather partial account, the hon. Member missed out around 530,000 households in Scotland that are already benefiting from £150 off their energy bills this winter, and I hope we will hear more today.
Jerome Mayhew (Broadland and Fakenham) (Con)
The Parliamentary Under-Secretary of State for Scotland (Kirsty McNeill)
Over the last year, this Government have taken action to fix the foundations of our economy, to put the public finances on a sustainable path and support growth. Despite the UK economy being forecast to be the second fastest growing G7 economy this year, and despite private companies such as Iberdrola investing £10 billion in Scotland’s energy sector alone, there is more to do. The recently published Muscatelli report shows that under the SNP, economic growth has been ignored, and the unique potential of communities across Scotland has been held back. That is why today the Chancellor will set out a Budget to boost economic growth in each and every part of the UK.
Jerome Mayhew
The latest growth figures in Scotland have been terrible—just 0.2%—and are even worse than Labour’s figures for England at 0.3%. What has been more damaging to the Scottish economy: SNP policies in Holyrood, or Labour policies here in Whitehall?
Kirsty McNeill
The SNP Government are clearly not doing what is required to drive growth in Scotland, but I say to the hon. Member that we are dealing with the legacy of 14 years of Conservative economic mismanagement, including their catastrophic policy of austerity, their mismanagement of the pandemic, and a failed Brexit deal. Members do not have to take my word for it: the current leader of the Conservative party has been clear that the Conservatives have no plan for growth.
Patricia Ferguson (Glasgow West) (Lab)
Does my hon. Friend share my regret the Scottish Government have been content to keep £1 billion of underspend rather than building 39 new health centres or 30 new primary schools, employing 23,700 nurses in our NHS, or investing money in Scottish public services and having a consequential effect on Scotland’s economy?
Kirsty McNeill
I could not agree more. Since the election, this Government have delivered an extra £5.2 billion in funding for the Scottish Government, so they should be making life easier for Scots, but that money is being completely wasted by the SNP. What do we have to show for this record-breaking settlement? We simply cannot waste another decade with this failing SNP Government. It is long past time for a new direction.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
A key driver of growth in Scotland is the agricultural sector, but Scottish farmers feel utterly ignored and totally abandoned by this Labour Government. I have received a copy of a letter that was delivered to all Scottish Labour MPs urging them to call on their own Government to reconsider the family farm tax. One farmer who wrote to Labour Members said that these tax changes would destroy the family farms that feed Scotland and that he was delivering the letter as a plea for their future. Will the Minister tell the House if those pleas have fallen on deaf ears?
Kirsty McNeill
The hon. Gentleman and I have discussed this issue many times, and he is aware that we are striking a fair balance between supporting farmers and fixing the public services on which all our rural communities rely. We have taken a fair and balanced approach that protects family farms, while also fixing the public services that we all rely on, including our own constituents.
Andrew Bowie
Pleas from farmers to the Minister and the Secretary of State are being ignored, just as other pleas from other sectors that are key to driving growth in Scotland have been ignored. Scotland has the worst of both worlds: two socialist and economically illiterate Governments, and a Scotland Office that turns a deaf ear to the pleas of the sectors that could drive growth in our country. It is no surprise that the Scottish people are about to reject Labour in May’s election yet again. After today’s Budget, who does the Secretary of State think will feel most abandoned—Scottish famers, Scottish distillers, Scottish family businesses, Scottish oil and gas workers, or poor Anas Sarwar and the Scottish Labour party?
Kirsty McNeill
The hon. Gentleman is perfectly well aware that the majority—three quarters—of those claiming agricultural property relief will be completely unaffected. However, what will affect every single person in Scotland is the Chancellor’s Budget that is set to help with living standards, to drive growth and to put the financial management at the heart of our public finances.
Pete Wishart (Perth and Kinross-shire) (SNP)
The Parliamentary Under-Secretary of State for Scotland (Kirsty McNeill)
Immigration is a reserved issue and the Home Secretary set out last week an asylum policy that will work for all parts of the United Kingdom. It contains the most sweeping asylum reforms in modern times, commensurate to the scale of the issues before us. These reforms will restore control, contribution and fairness to the system. I am proud that our country has always been fair, tolerant and compassionate, and this Government will always defend those values.
Pete Wishart
This Government’s new heinous asylum and immigration policy marks a dark moment for many who have chosen Scotland to be their home, even leaving children born in Scotland at risk of deportation. I do not know if the Minister has noticed that we are facing a population and demography crisis that the policy will only make 10 times worse, and if we do not address it, it will have a huge impact on our economy and social services. Why does Scottish Labour support an immigration policy that is contrary to the Scottish interest?
Kirsty McNeill
What Scottish Labour supports, like the rest of the Labour party, is a system that is both humane and restores control, and that is in the best interest of communities and those seeking asylum and to migrate. We are proud to support the policy, and we know that the rest of the country wants a system that has both control and fairness as its guiding principles.
Chris Murray (Edinburgh East and Musselburgh) (Lab)
In Scotland, there are approximately four times as many people fleeing oppression from Ukraine and Hong Kong as there are asylum seekers. There has been no public outcry and they have been welcomed. That shows that Scotland is a generous country, willing to play our part if the system is fair and controlled. Moreover, 14 children this year have drowned in the channel coming here. Does the Minister agree with me that there is nothing progressive about not fixing a system where public support for refugees drains and children drown?
Kirsty McNeill
I am sure that the whole House will join me in remembering those children who have drowned in the channel, and I could not agree more with my hon. Friend. There is nothing progressive or humane about a system that incentivises people to take terrible risks. I commend my hon. Friend for all the work that he has done with those seeking asylum and refuge over very many years.
Chris Kane (Stirling and Strathallan) (Lab)
The Secretary of State for Scotland (Mr Douglas Alexander)
The funding of Forth Valley college is a matter for the Scottish Government. Scottish colleges had their funding cut by 20% between 2021-22 and 2025-26. As the UK Government, we have delivered a record funding settlement to the Scottish Government. For as long as no final decision has been reached regarding the Alloa campus, I urge the Scottish Government, in the words of “Flower of Scotland”, to “think again”.
Chris Kane
Years of SNP underfunding have pushed Forth Valley college into financial crisis. Just when we needed to deliver skills for Stirling’s film studio, the Grangemouth transition, and shipbuilding and defence in the Forth and Clyde, the Alloa campus faces closure. Does the Secretary of State agree that the SNP is undermining Scotland’s future by neglecting the institutions that could drive growth? Does he also agree that Scotland needs a Labour Government, with Anas Sarwar, to rebuild our colleges and our skills base?
Mr Alexander
The facts are clear. The spending review was historic for Scotland and delivered the largest real-terms settlement for the Scottish Government in the 25 years of devolution, with an average of £50.9 billion per year between 2026-27 and 2028-29. It simply makes no sense to cut the further education college budget in Scotland by 20%, and it is definitely time for a new direction.
Susan Murray (Mid Dunbartonshire) (LD)
After 18 years of an SNP Government in Scotland, the education system is failing and qualified Scottish pupils are being turned away from Scottish universities. Meanwhile, the private sector in the west of Scotland, such as at the energy technical academy in my constituency, is upskilling workers, who are paying so that they can install electric vehicle chargers and heat pumps. Will the Secretary of State explain to the Scottish Government that educating young people and further education training are good for Scotland?
Mr Alexander
I sincerely hope the Scottish Government are listening to the very powerful points made by the hon. Lady. Some 89,600 young people in Scotland are not in work, education or training. That is equivalent to about 16.1% or one in six of our young people in Scotland. Scotland deserves better than a Scottish Government who are failing one in six of their young people.
Richard Baker (Glenrothes and Mid Fife) (Lab)
The Secretary of State for Scotland (Mr Douglas Alexander)
The UK Government are transforming our defence sector into an even more powerful engine of growth, with skills and training being a central pillar of the strategy. If the SNP-led Scottish Government will not do the right thing, we will. That is why we stepped up with £2.5 million to fund a specialist welding centre in Glasgow, and we continue to work on exactly that agenda.
Richard Baker
The recruitment of 14 new apprentices at the Methil yard in my constituency, which was saved from bankruptcy by this Labour Government protecting 200 skilled apprenticeships, is in stark contrast to the failure of the SNP on apprenticeships in the defence sector. That means that many companies struggle to recruit skilled workers locally. Will my right hon. Friend work with colleagues in the Ministry of Defence to promote Methil as a prime location for future defence contracts so that Navantia UK can create more new apprenticeships at the yard and work successfully with a Scottish Labour Government at Holyrood?
Mr Alexander
I met with Navantia management in Fife on Monday, and I met with the Minister responsible for defence procurement yesterday. There are huge opportunities thanks to my hon. Friend’s powerful advocacy of the workforce in Methil and the work that we can do together. The truth is that we have a Scottish Government who are dithering on defence, and we have a Labour Government determined to do right by the country on defence.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
I was delighted when Eastriggs in my constituency was shortlisted for a new UK munitions factory. The Secretary of State will know about its long history in munitions and the fact that the Ministry of Defence already owns the site. Will the Scotland Office continue to promote the project and join me in facing down the Scottish Government’s anti-defence-industry stance?
Mr Alexander
I can offer the right hon. Gentleman the assurance he seeks in relation to facing down a Scottish Government who are dithering on defence. I pay tribute to him for his passionate advocacy of the site he speaks of in Dumfriesshire, and I assure him that we in the Scotland Office will continue to work with our colleagues in the MOD as we ensure that we have the factories we need to keep our country safe.
Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)
The Parliamentary Under-Secretary of State for Scotland (Kirsty McNeill)
Through the Pride in Place programme, we are investing almost £500 million to revitalise communities across Scotland. As part of that, the Scotland Office has recently completed the collection of evidence from MPs, MSPs, local authorities and community groups to inform the selection of 14 new neighbourhoods that will each benefit from £20 million over 10 years.
Elaine Stewart
Will the Minister give assurances on the timeline of the Pride in Place funding? It is crucial to get projects up and running as soon as possible. While it might be too early for her to wear a Santa hat, can she tell me whether successful local authorities can expect an early Christmas present?
Kirsty McNeill
I can confirm to my hon. Friend that she will not have long to wait. It is in all our interests to get things coming down the chimney as soon as possible.
Christine Jardine (Edinburgh West) (LD)
Some 40% of children in Stenhouse in my constituency of Edinburgh West live in poverty. There are nine Pride in Place projects being considered across Edinburgh, but none include that area of deprivation. Are there plans to change the criteria so that such areas can be included, helping to attack problems such as child poverty?
Kirsty McNeill
There are no plans to change the criteria against which local authority areas will be selected, but I can confirm that we do not have long to wait before the areas will be confirmed.
Mr Speaker
Before we come to Prime Minister’s questions, I welcome His Excellency the honourable Stephen Francis Smith to the Gallery. As Stephen’s term as the Australian high commissioner to the UK comes to an end, we wish him all the best in retirement. We thank him for what he has done in the UK.
Rachel Hopkins (Luton South and South Bedfordshire) (Lab)
The Prime Minister (Keir Starmer)
May I begin by echoing your remarks, Mr Speaker, about Stephen, who is in the Gallery? He has been an incredible servant and a good friend to the United Kingdom, and we wish him well in everything he does in the future.
Today’s Budget will be a Labour Budget with Labour values to deliver for the British people’s priorities. I know what it feels like to sit around the kitchen table worried about bills that cannot be paid. That is why this Budget is for families who I know are equally worried about the cost of living today. That is why we are rolling out free breakfast clubs, free childcare and free school meals. Today, we will be going further to deliver the change that we were elected to bring about, cutting NHS waiting lists, cutting the national debt and cutting the cost of living.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Rachel Hopkins
For years and years, rail fares have gone up and up, but that is set to change next year. Can the Prime Minister confirm that commuters in my constituency will see a saving of around £400 on their annual season ticket as a result of this Government freezing rail fares? Can he confirm that it is only possible because we have a Labour Government?
The Prime Minister
I can confirm that next year we are freezing rail fares for the first time in 30 years, saving millions of commuters hundreds of pounds. That is only possible because we have a Labour Government investing in Great British Railways and putting more money in the pockets of passengers. We can contrast our approach with that of the Leader of the Opposition, who says that the minimum wage is a burden and wants to means-test the state pension.
Mrs Kemi Badenoch (North West Essex) (Con)
May I first pay tribute to the many farmers who have come to Westminster today to protest about the shameful attack on them in last year’s Budget? I want them to know that the Conservatives stand with them. [Interruption.]
This has been the most chaotic lead-up to a Budget in living memory, with resignations, hostile briefings—[Interruption.]
Mr Speaker
Order. I just say to a couple of Members, if you do not want the Budget, make your minds up now.
Mrs Badenoch
Nobody wants this Budget, Mr Speaker! We have had resignations, hostile briefings and leaks galore. Even in the past 10 minutes, there has been an unprecedented leak of the OBR analysis. These leaks have been so serious that even the former chief economist of the Bank of England has said that Labour’s “fiscal fandango” is
“the single biggest reason growth has flatlined”.
Does the Prime Minister agree with Andy Haldane, and does he have an explanation for this complete shambles?
The Prime Minister
We all know that the biggest shambles in living history was the Liz Truss Budget, and what did the Leader of the Opposition say at the time? Did she say, “I do not agree—this must be wrong”? No; she said, “I think Liz Truss is 100% right.” Not much room for flexibility there! Not one thing was wrong with it, in her view, so we will not be taking lectures from her. Matters for the OBR are for the OBR, and the Chancellor will set out the Budget in just a few minutes’ time.
Mrs Badenoch
We are talking about the leaks. The Prime Minister does not seem to appreciate the impact of these Budget leaks on the UK economy. Even the Chief Secretary to the Prime Minister has said this morning that the leaks were unacceptable, so will the Prime Minister launch an investigation into the Budget leaks and punish those responsible?
The Prime Minister
It is about 25 minutes before the Budget will be set out in full. In it we will take further decisions, and the Chancellor will set them out, but thanks to the decisions that she has already taken, we have 5 million extra NHS appointments, waiting lists are coming down, mortgages are cheaper, and we have expanded free school meals. That is 100,000 children lifted out of poverty—a moral mission for this Government. Compare that to the record of the party opposite any day of the week.
Mrs Badenoch
The Prime Minister talks about the decisions that the Chancellor has already taken. If they were that great, we would not have all the farmers protesting outside.
The Prime Minister does not want to talk about leaks, but we can see that the chaos in No. 10 is having real-world consequences. Instead of focusing on the economy, they have been fighting like rats. Several journalists reported that No. 10 sources had briefed against the Health Secretary and other senior Cabinet Ministers; the Prime Minister then told us that these briefings did not come from No. 10. Will he repeat, on the Floor of the House, the claim that none of his advisers has briefed against members of the Cabinet?
The Prime Minister
I have been really clear about this. No one in No. 10 has briefed against Cabinet Ministers, and the Health Secretary is doing a fantastic job. At the last election he stood before the electorate and said that we would deliver 2 million extra NHS appointments in the first year of a Labour Government. There he is. What did he do? He delivered not 2 million, 3 million or 4 million but 5 million extra appointments. The Opposition do not understand this language because they left everything absolutely broken.
Mrs Badenoch
The Prime Minister expects us to believe him, but no one does. We all know that he did not have a serious leak inquiry. What he did was ask Morgan McSweeney to investigate Morgan McSweeney, and then Morgan McSweeney discovered that Morgan McSweeney was innocent. All this calls into question the Prime Minister’s judgment. We read this weekend that he wants the former Deputy Prime Minister back in his Cabinet; he must have forgotten that she had to resign only a few months ago for tax evasion. When did the Prime Minister decide that lawbreakers can be lawmakers?
The Prime Minister
While the right hon. Lady has been scrolling through Twitter, we have delivered rail fares—frozen; prescription charges—frozen; and the minimum wage—boosted. We are focusing on the cost of living, the single most important thing for this country, while she is focusing on tittle-tattle.
Mrs Badenoch
It is not tittle-tattle. We all know that the Prime Minister is only talking about welcoming the Deputy Prime Minister back because he is desperate to shore up his crumbling leadership, but if he does welcome her back, will he set a condition that she must pay back the £40,000 of property taxes she avoided—the same property taxes that the Government are very happy to put on everyone else—and return her £17,000 of severance pay?
The Prime Minister
The former Deputy Prime Minister is the biggest social mobility story that this country has ever told. She started from humble beginnings, and fought her way to the very top. I am very proud of what she has achieved in politics, and very proud of everything that she has done for this Labour Government.
Mrs Badenoch
That sounds like a no. I have never heard the Prime Minister speak so highly of people avoiding their taxes.
In summary, this just looks like a Government who are a slow-motion car crash. The Prime Minister’s Cabinet Ministers are briefing against each other, his MPs are planning for life after him, and the most chaotic run-up to a Budget in recent memory is happening on his watch. Even the Chief Whip is telling MPs that he wants out. The truth is simple: his MPs do not trust him, the markets do not trust him, and the public certainly do not trust him. When will he finally accept that the chaos starts and ends with him?
The Prime Minister
The most chaotic Budget was the Liz Truss Budget. It did huge damage to our country, and we are still suffering from that damage. What did the right hon. Lady say about Liz Truss? She obviously does still think it. When asked, “Was Liz Truss right?”, she said, “100% right”. It was the most chaotic, damaging Budget there has ever been, and she sticks by it. I am very interested to see her response to this Budget, if she thinks Liz Truss got it right.
What we are doing is focusing on cutting waiting lists, cutting the national debt and cutting the cost of living. We are renewing our country—a Labour Budget with Labour values, delivering for the British people.
Cat Eccles (Stourbridge) (Lab)
The Prime Minister
I want to see our high streets thriving, and I encourage everyone to support local businesses this Christmas. Through our small business strategy, we have delivered a £3 billion boost to help small businesses expand, and we have introduced the most significant reforms in 25 years to tackle late payments. The Chancellor will have more to say about that in just a moment.
Ed Davey (Kingston and Surbiton) (LD)
We have just seen in the leaked OBR documents that taxes are going up to a historic record high. Will the Prime Minister explain why Labour is hiking people’s taxes, instead of fixing the £90 billion Brexit black hole in the public finances by growing our economy with a new, detailed, brilliant trade deal with our European partners?
The Prime Minister
The right hon. Gentleman will only have to wait a few minutes for the full details of the Budget. Every week he comes here with the same problem: he always wants more spending, and he never wants to say how he is going to raise the money for it. The two things cannot go together.
Ed Davey
We want to grow the economy, not tax the economy.
Let me take the Prime Minister on to another issue. I hope everyone in the House shares my alarm that a former leader of a political party in Wales has been found guilty of betraying our country, and has now been sentenced to over 10 years in prison for his treachery. The Prime Minister said that Reform should hold an independent investigation and he is right, but we both know that that is not going to happen. Given that Reform will not do so, he must. Will he now launch a national investigation into Russian infiltration into our politics?
The Prime Minister
The right hon. Gentleman is right to highlight this very serious case: a long sentence for pro-Russian bribery in the Reform party—at the highest level. You would think a leader of a political party would want to get to the bottom of that and ask the question, “How on earth did that happen in the Reform party, and what other links are there between Reform and Russia?” But no, the leader of Reform does not want to do it. We know he does not want to know the answer to the question, because Reform is riddled with pro-Putin propaganda.
Leigh Ingham (Stafford) (Lab)
The Prime Minister
It is staggering that an important upgrade for drivers to improve their journeys has been delayed for eight long years, and I understand that the scheme is currently being held up by the Reform-led council—quelle surprise! Reform is proving as hopeless in local government as everybody anticipated. We have invested £24 billion in our roads, and I call on Staffordshire county council to end the delay, get on with the job and get this scheme started for my hon. Friend’s constituents.
Alison Bennett (Mid Sussex) (LD)
The Prime Minister
As the hon. Member knows, we are reforming social care. I have asked Baroness Casey to lead on that, and she has had the first of her cross-party meetings to build consensus, which is obviously what we need on this. As I have set out a number of times, the first phase will report in 2026; so that we can reform as we go on, there will obviously be a phase after that. I remind the House that we have already boosted social care funding by £3.7 billion, with record increases also to the carer’s allowance and £500 million for the first ever fair pay agreement to properly recognise and reward carers.
Luke Akehurst (North Durham) (Lab)
The Prime Minister
The more we see of Reform, the more we see their true colours—in this case, making people £170 worse off. We see their true colours also in relation to the hon. Member for Clacton (Nigel Farage). His explanation in recent days, in relation to the stories about what he may have said in the past, is unconvincing to say the least. He says he never engaged with racism “with intent”. What does that mean? I have no doubt that, if a young Jewish student was hissed at to mimic the sound of a gas chamber, they would find it upsetting. He may want to forget that; they will not. He clearly remembers some of what happened. He should seek those people out, and go and apologise to them.
Josh Babarinde (Eastbourne) (LD)
The Prime Minister
Can I say to the hon. Member and to Lewis’s mum, who is with us today, that incidents like that should not be happening? I think he has met an Education Minister to discuss this matter. Every child should have tailored support, including on transport to school, and I can reassure him and Lewis’s mum that that principle will be central to our reforms.
Jenny Riddell-Carpenter (Suffolk Coastal) (Lab)
The Prime Minister
I thank Roman for his letter, which I took time to read last night. I want to read a short sentence from it now:
“This accident wouldn’t have happened if there was a safe place to cross the road... I am concerned for other children’s safety and I don’t want another accident like mine to happen again to anyone else.”
What an incredible young boy, aged just 10. I totally agree with him, and I say this to him: Roman, this is what we’re going to do—I have asked Ministers to work with all the right people to look at your school and get a safe crossing in place. The Roads Minister will be happy to meet my hon. Friend to discuss the road safety strategy.
Sarah Dyke (Glastonbury and Somerton) (LD)
The Prime Minister
We have invested a record £11.8 billion in sustainable farming this Parliament, and we set out a 25-year farming road map focused on increasing year-on-year productivity and profitability in farms, and that is vitally important.
Jen Craft (Thurrock) (Lab)
The Prime Minister
My hon. Friend is right; the report is a sombre moment. It is important to remember the scale of suffering and the scale of the loss of life, which is made clear in the testimonies of the families in the report, and to remember the incredible contribution of frontline workers and everyone who focused on protecting others. We are committed to learning the lessons we need to learn from the covid inquiry to protect and prepare us for the future. The pandemic still weighs heavily on our public finances and our NHS. That is why we have already conducted a pandemic exercise to test preparedness, and agreed a historic global pandemic agreement to improve our ability to prevent global disease threats, alongside our partners.
Adam Dance (Yeovil) (LD)
The Prime Minister
I pay tribute to those in Somerset and the hon. Gentleman’s constituency in the defence sector, which is hugely important to our country and our security. I can confirm that we are continuing with the established procurement process for the new medium helicopter programme to deliver modern equipment for our armed forces. That is part of the biggest sustained boost to our defence since the cold war. I am determined to see a defence dividend of investment in British jobs and apprentices, including in his constituency. That builds on the £8 billion Typhoon deal that we have secured, the £4 billion maritime deal with Indonesia, and the £10 billion frigate deal with Norway.
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
The Prime Minister
It is so important that men have the space and support from their peers to discuss their mental health. I thank Men Walking and Talking for the work they do, which makes such a difference. We were proud to launch our men’s health strategy last week to get more men the support they need.
Mr Speaker, I want to take a moment to thank my hon. Friend the Member for Cannock Chase (Josh Newbury) for his honesty and bravery on International Men’s Day. I say it again: men speaking so truthfully about their experiences is so powerful and inspires more to do the same. He is a credit to this House.
Mark Pritchard (The Wrekin) (Con)
The Prime Minister
I thank the right hon. Gentleman for his contributions to this important debate, including the contribution he made yesterday. It is the first duty of the Prime Minister to keep this country safe; that duty is paramount and above all else, and I take it extremely seriously and treat it as my No. 1 priority. We review our security and defence arrangements all the time, and we are, particularly, a leading member of NATO, which is the single most effective military alliance the world has ever seen.
Ben Coleman (Chelsea and Fulham) (Lab)
The Prime Minister
The deal we struck with the EU will deliver on what the British public voted for last year, which is, as my hon. Friend says, boosting economic growth and restoring positive relations. The deal we have struck, which is worth £9 billion to our economy by 2040, includes a sanitary and phytosanitary agreement to cut supermarket prices and boost export opportunities. The Tories and Reform would rip up that deal and leave us all paying more at the checkout.
Lewis Cocking (Broxbourne) (Con)
The Prime Minister
Under this Government, growth was the highest in the G7 for the first half of this year. The last Government crashed the economy.
Emily Darlington (Milton Keynes Central) (Lab)
Yesterday was the UN International Day for the Elimination of Violence Against Women, known as White Ribbon Day in Milton Keynes and many other places. I wonder whether the Prime Minister will join me in congratulating you, Mr Speaker, on your commitment to make this House the first national White Ribbon Parliament in the world. Will he join you, me and many Members across this House in making the White Ribbon promise to never use, excuse or remain silent about men’s violence against women?
The Prime Minister
I thank my hon. Friend for raising this really important issue. Mr Speaker, I am really proud of what you have done with this Parliament on the White Ribbon campaign. We must turn that from a ribbon into action. I am really proud that this Government are fully committed to tackling violence against women and girls; it is a political commitment, and a personal commitment from me. We will do everything we can to reduce violence against women and girls, which is pernicious and far more widespread than people appreciate. We absolutely have to stop talking and start doing on this.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The Prime Minister
We do need to bear down on foreign interference in our democracy, but the responsibility for investigating what happened within Reform lies with the leader of the Reform party. The hon. Member for Clacton usually has plenty to say, but now he is totally silent on one of the most important issues. He needs to speak up and answer those questions.
Point of Order
Sir Mel Stride (Central Devon) (Con)
On a point of order, Madam Deputy Speaker. This morning we have seen an unprecedented leak of the Office for Budget Responsibility’s “Economic and fiscal outlook” report before the Budget. The report contains market-sensitive information. It is utterly outrageous that this has happened, and the leak may indeed constitute a criminal act. In Prime Minister’s questions, the Leader of the Opposition asked the Prime Minister about this leak, but he refused to answer her question. Please can you advise this House on the steps at its disposal to force a leak inquiry into this matter? Would it be possible to ask the Table Office to distribute copies of the report to the House, given that everybody outside the House has already had the opportunity to read it?
Madam Deputy Speaker (Ms Nusrat Ghani)
That is not a matter for the Chair. The Chancellor is about to make her Budget statement, and I expect that Members and their constituents wish to hear from the Chancellor directly. However, before I call the Chancellor to speak, I will make a short statement.
Financial Statement and Budget Report
(1 day, 5 hours ago)
Commons ChamberRead Hansard Text Watch Debate Read Debate Ministerial Extracts
Madam Deputy Speaker (Ms Nusrat Ghani)
Before I call the Chancellor, I will make a short statement. For a number of weeks, and yet again yesterday, there have been extensive briefings to the media on the Government’s fiscal policy and public finances. This disappointing trend in relation to Budget briefings has been growing for a number of years under successive Governments, but it appears to have reached an unprecedented high.
Weeks ago, we saw the Chancellor delivering a speech in Downing Street setting the scene for the Budget, and specific policy announcements have been briefed out to the media in advance of today’s financial statement. [Interruption.] I do not need any help from Members. It seems that just a moment ago, the Office for Budget Responsibility’s analysis appeared online. This all falls short of the standards that the House expects. The premature disclosure of the contents of the Budget has always been regarded as a supreme discourtesy to this House and to all the democratically elected Members, not to mention to Mr Speaker, and to me, the Chairman of Ways and Means.
The Government’s own “Ministerial Code” cannot be clearer. Paragraph 9.1 states:
“When Parliament is in session, the most important announcements of Government policy should be made in the first instance in Parliament.”
I have always upheld the right of this House and its Members to be treated with respect, and to be the first to hear major Government policy announcements on behalf of their constituents. As Chairman of Ways and Means, I have responsibility for overseeing the House’s consideration of the Budget statement and the ensuing resolutions; that is described in paragraph 36.33 of “Erskine May” as
“the most important business of Ways and Means.”
I want hon. Members on both sides of the House to have adequate opportunity to hold the Chancellor to account, rather than their hearing and reading about new policies daily in the media. Like many, I expected better.
Before I call the Chancellor of the Exchequer, I remind hon. Members that copies of the Budget resolutions will be available to them in the Vote Office in Members’ Lobby at the end of the statement, and online. I also remind hon. Members that interventions are not taken during the Chancellor’s statement, nor during replies from the Leader of the Opposition or the Leader of the Liberal Democrats. I call the Chancellor of the Exchequer.
The Chancellor of the Exchequer (Rachel Reeves)
It is my understanding that the Office for Budget Responsibility’s “Economic and fiscal outlook” was released on its website before this statement. This is deeply disappointing and a serious error on its part. It has already made a statement taking full responsibility for its breach.
We are rebuilding our economy. Over the last 16 months, we have overhauled our planning system to get Britain building; forged new trade deals with the United States, India and the European Union; reformed our visa system to bring the brightest and the best to Britain; changed the fiscal rules that we inherited from the Conservatives; and raised public investment to its highest level in four decades. In last year’s Budget, I raised taxes on business and the wealthiest to close the £22 billion black hole in the public finances left by the Conservative party. We used that money to fund the biggest ever settlement for our national health service.
Those were the fair and necessary choices. We faced opposition to them—from opponents to planning reform who will always demand that the future is built somewhere else, not in their backyard; opponents to trade who want to take us down the path of isolation and division; opponents to investment who believe that the only good thing a Government can do is get out of the way; opponents who insist that the only way to balance the books is to cut public spending; and opponents who say that we do not need to balance the books at all. But we made these choices for a reason: because after 14 years of Conservative Government, working people demanded—and deserved—change, with investment, not cuts, to our public services; stability for our public finances, which is the single most important factor in getting the cost of living down; and economic growth, which is the best means of improving wages, creating jobs and supporting public services. That is what our plan, this Government and our Prime Minister are all about.
Today’s Budget builds on the choices that we have made since July last year to cut NHS waiting lists, to cut the cost of living, and to cut debt and borrowing. No doubt, we will face opposition again, but I have yet to see a credible or a fairer alternative plan for working people. [Interruption.] These are my choices: the right choices for a fairer, a stronger and a more secure Britain.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. There is far too much noise. I expected so much better from you, Dr Luke Evans; you are meant to be a leader in your community. Simmer down.
Rachel Reeves
I am happy for them to shout as much as they like, Madam Deputy Speaker, as long as they do it from the Opposition Benches, where they cannot cause any more damage.
I said that there would be no return to austerity, and I meant it. This Budget will maintain investment in our economy and in our national health service. I said that I would cut the cost of living, and I meant it. This Budget will bring down inflation and provide immediate relief for families. I said that I would cut debt and borrowing, and I meant it. Because of this Budget, borrowing will fall as a share of GDP in every year of this forecast. Our net financial debt will be lower at the end of the forecast than it is today, and I will more than double the headroom against our stability rule to £21.7 billion, meeting our stability rule, and meeting it a year early. These are my choices—not austerity, not borrowing, not turning a blind eye to unfairness. My choices are a Budget for fair taxes, strong public services and a stable economy. That is the Labour choice.
Growth is the engine that carries every one of our ambitions forward, through stability, investment and reform. It is the platform from which British ambition can finally get moving again. Growth does not just appear out of thin air; it is built, patiently and stubbornly, by people who take risks; by founders who bet their savings on an idea; by firms breaking into new markets, developing new technologies and creating new jobs and new opportunities; and by the men and the women who work hard every day, in all parts of our country. Our job is not to watch from the sidelines, but to partner with them, backing them every step of the way, and to match private enterprise with public ambition.
I thank my team of officials at the Treasury for their hard work in preparing this Budget. In the spring, the Office for Budget Responsibility forecast that our economy would grow by 1% this year. I said then that Britain would defy the forecasts, and defy them we have. The OBR has upgraded Britain’s growth for this year from 1% to 1.5%, reaching the same conclusions as the International Monetary Fund, the OECD and the Bank of England, which have already upgraded their forecasts.
Today, the OBR has published the result of its review of the supply side of the economy. It is clear that this is not about the last 14 months; it is about the previous 14 years, the legacy of Brexit and the pandemic, and the damaging decisions by the Conservative party, which cut public spending, leaving communities and entire regions behind, starved our economy of investment, and weakened our public services.
As a result of its review, the OBR is reducing its expectations for productivity growth by 0.3 percentage points to 1% by the end of the forecast. It says today:
“Real GDP is forecast to grow by 1.5% on average over the forecast period…due to lower underlying productivity growth.”
There is an impact on our public finances too. The OBR says that its productivity forecast will mean £16 billion less in tax receipts by 2030. Those forecasts are the Tories’ legacy, not Britain’s destiny. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. It is very hard to hear the Chancellor over all the shouting. Mr Holmes, you promised me yesterday that you would be on your top behaviour in the first few minutes. I call the Chancellor.
Rachel Reeves
We beat the forecasts this year, and we will beat them again by boosting trade, not blocking it; by increasing investment, not cutting it; by championing innovation, not stifling it; and by backing working people, not making them poorer. Brick by brick, we have been building our economy—building roads, building homes, and getting spades in the ground and cranes in the sky.
Growth begins with a spark from an entrepreneur. Half of new jobs in Britain are created by scale-up businesses, and we want those jobs created here, not somewhere else. Our job is to make Britain the best place in the world to start up, to scale up and to stay. We are widening eligibility for our enterprise incentives, so that scale-ups can attract the talent and capital that they need; expanding the enterprise management incentive, so that more companies can offer tax-relieved share options; re-engineering our enterprise investment and venture capital trust schemes, so that they do not just back early-stage ideas, but stay with companies as they grow; and introducing UK listings relief, with a three-year exemption from stamp duty reserve tax for companies that choose to list here in Britain. To continue this work, I am launching a call for evidence on how our tax system can better back entrepreneurs, and a targeted review with founders and investors at its heart, to make the UK an even more attractive place to grow a business. We are sending a simple message to the world: “If you build here, Britain will back you.”
Our retail investment system should do the same. The UK has some of the lowest levels of retail investment in the G7, and that is not only bad for businesses, which need that investment to grow; it is bad for savers, too. Someone who had invested £1,000 a year in an average stocks and shares individual savings account every year since 1999 would be £50,000 better off today than if they had put the same money into a cash ISA. So from April 2027, I will reform our ISA system, keeping the full £20,000 allowance while designating £8,000 of it exclusively for investment, with over-65s retaining the full cash allowance. Thanks to our changes to financial advice and guidance, banks will be able to guide savers to better choices for their hard-earned money. Over 50% of the ISA market, including Hargreaves Lansdown, HSBC, Lloyds, Vanguard and Barclays, have signed up to launch new online hubs to help people invest here in Britain.
At this Budget, consistent with the commitments in our corporate tax road map, I will retain our competitive corporation tax rate, the lowest in the G7, and retain our generous full expensing offer for business investment. I will also introduce a new 40% first year allowance, so that businesses can write off more of the cost of their investment up front, while reducing main rate writing-down allowances in line with fiscal constraints.
Private investment is the lifeblood of economic growth, but growth needs public investment too. When faced with challenges, previous Chancellors have chosen to decrease, delay or cancel capital spending, but low investment is the cause of our productivity problems, not the solution. So my choice is not cuts, not stagnation, but to maintain the additional £120 billion of investment that I provided at the spending review: in transport to link our towns and cities; in energy infrastructure to power our businesses; and in housing, so that people can live near good jobs and growing businesses that pay decent wages. That is the Labour choice.
I am grateful to the Financial Secretary to the Treasury for his work in driving our growth agenda forward. As we allocate investment for the infrastructure that is the backbone of economic growth across our country, today I will commit investment for the lower Thames crossing, and we are continuing to drive investment in city region transport, in the midlands rail hub and the trans-Pennine route upgrade, along with our commitment to the northern growth corridor, including Northern Powerhouse Rail.
It this Labour Government that have overhauled our planning system, and I will today provide further funding to increase planning capacity through a new skills offer, as has been called for by the British Chambers of Commerce and the Confederation of British Industry. It is this Labour Government that have invested in nuclear power: in Sizewell C and in Culham. We are taking forward our commitment to slash electricity prices for thousands of manufacturing businesses, as Make UK and many others have called for. Today, I am pleased to welcome John Fingleton’s report—an ambitious plan to cut the red tape that has tied our nuclear industry in knots for decades—and within three months we will set out our plan for delivering his recommendations.
We are proud of our industrial heritage and we are determined to build the industry of the future so that we buy, make and sell more here in Britain. That is why, as we increase defence spending, we are investing in Portsmouth, in Barrow and in Plymouth, and I am pleased to be supporting Team Derby, an initiative to drive growth in one of our defence industry hubs. It is why we stepped in to save British Steel in Scunthorpe and invested in Sheffield Forgemasters. It is why we have changed Government procurement so we can buy British when it is crucial to our national security. For steel, for shipbuilding and today for AI, we are driving innovation and building that great industry here in Britain.
But it is not just what we invest in that matters; it is how we invest—putting money and power back in the hands of local and regional leaders. Today, we are devolving £13 billion of flexible funding for seven mayors to invest in skills, business support and infrastructure. I am extending the business rates retention pilots in the west of England, Liverpool city region and Cornwall until 2029, and providing £30 million for the Kernow industrial growth fund for sectors like critical minerals and marine innovation. I am establishing the Leeds city fund, a long-term agreement to retain business rates to fund local regeneration projects like the development of Leeds south bank, and I am allocating £20 million for the new Peterborough sports quarter and £16 million for a science centre in Darlington from the growth mission fund.
The benefits of investment and growth must be built and felt in every part of our United Kingdom, so we are providing an additional £370 million for the Northern Ireland Executive, £505 million for the Welsh Government and £820 million for the Scottish Government over the spending review period through the Barnett formula. Sorry, I didn’t quite catch that from the SNP. Did they not show up? Perhaps they didn’t hear us: £820 million for the Scottish Government over the spending review period because Anas Sarwar asked us to. I am making targeted investments in our industrial strategy sectors across the UK.
In Northern Ireland, I am providing £17 million to support businesses and strengthen the UK internal market, and backing advanced manufacturing through the Northern Ireland enhanced investment zone. Wales will be the host for two AI growth zones, creating more than 8,000 jobs supported by a £10 million investment in the semiconductors critical for that industry. We are building the UK’s first small modular nuclear reactors with Rolls-Royce at Wylfa in Anglesey—two Labour Governments working together in Wales to deliver for the people of Wales.
In Scotland, I am committing over £14 million for low-carbon technologies in Grangemouth, £20 million to renew infrastructure at Inchgreen in Inverclyde and £20 million to redevelop Kirkcaldy town centre and seafront with construction starting next year. That is on top of the UK’s biggest ever warship export deal with the Norwegian Government to build frigates in Glasgow, supporting 4,000 jobs. Investment opposed by the SNP, jobs opposed by the SNP, defence opposed by the SNP, but secured by this Labour Government.
A growing economy needs strong foundations of economic stability, with borrowing and inflation down and investment up. That is good for business, and it is good for working people so they have more money in their pockets. Economic stability, safeguarded by iron-clad fiscal rules, is our best defence against rising prices and the best way to improve living standards.
We have all seen the alternative. Three years ago, in their clamour to cut taxes for the richest, the Tories under Liz Truss crashed the economy, sent mortgage rates spiralling and brought pensions to the brink. [Interruption.] They are being so loud, and yet I can’t even hear them now. I know that the leader of the Green party is a keen hypnotherapist, and believes that he can achieve remarkable things using only the power of his mind. Unfortunately, the only things getting bigger under his approach would be the deficit and the rate of inflation.
For all the damage that the Conservative cuts did to our schools and hospitals, they also doubled the national debt. Our net financial debt this year will be £2.6 trillion, 83% of GDP, meaning that today £1 in every £10 the Government spend is on debt interest—not on paying down that debt, but just on paying the interest on the debt we inherited from the Conservatives.
My fiscal rules will get borrowing down while supporting investment: the stability rule—that day-to-day expenditure must be met through tax receipts—and the investment rule, which allows me to increase investment while getting debt on a downward path. Those fiscal rules are non-negotiable. I met them at the Budget last year, I met them in the spring and I have met them today.
While the current Budget balance is in deficit by £28.8 billion in ’26-27 and £4.6 billion in ’27-28, it moves into a surplus of £3.9 billion in ’28-29, £21.7 billion in ’29-30 and £24.6 billion in ’30-31—more than doubling our headroom against the stability rule and meeting that rule a year early, too. Our net financial debt is 83.3% in ’26-27, 83.6% in ’27-28, 83.7% in ’28-29, falling to 83.0% in ’29-30 and 82.2% in ’30-31. I said we would cut the debt and we are, with debt down by the end of the forecast. Going forward, to support our commitment to a single fiscal event and to further strengthen our economic stability, I will follow the recommendations of the International Monetary Fund by assessing the fiscal rules just once a year at the Budget.
Despite the challenges we face on productivity, the path of our deficit reduction remains broadly the same as in the spring. Public sector net borrowing is due to be £112.1 billion or 3.5% of GDP in ’26-27, 3.0% in ’27-28, 2.6% in ’28-29, 1.9% in ’29-30 and 1.9% in ’30-31, ending at £67.2 billion, translating into an increase in the net cash requirement next year of £4.2 billion, taking the total to £133.3 billion. According to the IMF, we are due to reduce borrowing more over the rest of this Parliament than any other G7 economy.
The Conservatives crashed the economy; we are protecting it. The Conservatives lost control of debt; we are getting debt down. The Conservatives let inflation and interest rates go through the roof, but since Labour took office the Bank of England has cut interest rates five times. I have made my choices: not reckless borrowing, not dangerous cuts, but stability for our economy, security for our public finances and security for family finances, too. Those are the Labour choices.
Tory austerity left classrooms crumbling and waiting lists sky high, weakened our productivity and choked our economic growth, and now the Conservatives propose a further £47 billion of cuts to our public services. That is the equivalent of cutting every police officer in our country twice over. Then there is Reform, which promises more than £100 billion of cuts with no detail on where those cuts will come from or who will pay for them—a recipe for devastating damage to our public services. People voted for Labour because they want roads that are not full of potholes, police on our streets, and an NHS that is there when they need it. We are delivering that. Waiting lists are down by 230,000, and we have already delivered not just the 2 million additional appointments that we promised, but an additional 5.2 million appointments since the general election.
I joined the Labour party almost 30 years ago because I could see that the Conservative Government I grew up under did not care much about schools like mine. Textbooks were rationed—[Interruption.] I know that many of you were not at schools like mine. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. There is far too much noise, far too much excitement. People need to calm down a little.
Rachel Reeves
The Tories do not want to hear what they did to schools like mine, but I will tell them. Textbooks were rationed, libraries closed and kids herded into portacabins in the playground. I came into politics to change that. The money that I allocated at the spending review will fix the crumbling classrooms that the Conservatives left behind, and build the schools they promised but never delivered.
Today, thanks to representations from my hon. Friends the Members for Wolverhampton North East (Mrs Brackenridge) and for Leeds South West and Morley (Mark Sewards), I will provide £5 million for libraries in secondary schools, building on the £10 million commitment to ensure that every primary school has a school library within this Parliament. Thanks to representations from my hon. Friends the Members for Bournemouth East (Tom Hayes) and for Luton North (Sarah Owen), I am providing £18 million to improve and upgrade playgrounds across England. Let there be no doubt that this Government are on the side of our kids and will back their potential.
I will not allow the legacies of Conservative neglect to stain our society. Last year, I made changes to the Mineworkers’ Pension Scheme to ensure that its members receive the fair pensions that they are owed. This year, with thanks to the Minister for Pensions for all his work on this subject, I can go further. I have heard representations from Labour coalfield MPs, including my hon. Friends the Members for Bassetlaw (Jo White), for Blyth and Ashington (Ian Lavery), for Barnsley South (Stephanie Peacock), for Mansfield (Steve Yemm) and for Llanelli (Dame Nia Griffith), and I can today announce that I will transfer the investment reserve fund of the British Coal staff superannuation scheme to its members, so that the men and women who worked in our coal industry get a fair deal in their retirement, too. And there is more. Having heard representations from my hon. Friends the Members for Banbury (Sean Woodcock) and for Edinburgh South West (Dr Arthur), I will index for inflation on pensions accrued before 1997 in the pension protection fund and the financial assurance scheme, so that people whose pension schemes became insolvent—no fault of their own—no longer lose out as a result of inflation.
Last year, I also provided funding to compensate the victims of the infected blood scandal, after the previous Government failed to budget for the costs of compensation. This year, I have listened to representations from my hon. Friends the Members for Eltham and Chislehurst (Clive Efford) and for Edinburgh South West. I thank the Minister for Employment for her representations over many years on this subject. As a result, I will exempt all payments from the infected blood scheme from inheritance tax, regardless of the circumstances in which those payments are passed down. That is how we should be spending taxpayers’ money: on dealing with injustices and building strong public services, not on waste and inefficiency.
At the spending review, I set out an ambitious target for £14 billion of efficiencies per year by 2029. I am grateful to the Chief Secretary to the Treasury for driving that work forward, realising savings through artificial intelligence and automation, and by scrapping NHS England and reducing back-office staff by 18,000. At this Budget, I will find a further £4.9 billion of efficiencies by 2031, by getting rid of police and crime commissioners, cutting the cost of politics and local government, and selling Government assets that we no longer have any use for.
These savings will be required across Government, but for our national health service, I will invest all those savings back into the care that people rely on—more nurses, more GPs and more appointments, restoring the services that faltered under years of Conservative decline and investing in the future of our national health service. Today, I am announcing £300 million of investment in technology to improve patient service, and 250 new neighbourhood health centres, expanding more services into communities so that people can receive treatment outside hospitals and get better, faster care where they live. More than 100 of those centres will be delivered by 2030, including in Birmingham, Truro and Southall. The Labour party founded our national health service, and we will renew our national health service.
I will take the same approach for defence spending that I take for NHS spending, reinvesting savings back into our national security. In our age of insecurity, Britain will continue to stand with our allies, working in collaboration to secure a sustainable ceasefire for Ukraine, and maintaining our commitment to NATO, with the UK set to spend 2.6% of GDP on defence by April 2027.
The public rightly expects that we stamp out fraud, error and waste, and put that money to good use in our schools, hospitals and other frontline services. My right hon. Friend the Home Secretary has already announced that she will claw back excess profits from the use of hotels to house asylum seekers, as we phase out the use of those hotels entirely. And we will consult on reforms to indefinite leave to remain and access to taxpayer-funded benefits.
The introduction of digital ID will break the link between illegal migration and illegal working, and His Majesty’s Revenue and Customs and the fair work agency will crack down on the illicit businesses that blight our high streets and undercut legitimate firms, enforcing the minimum wage, investigating dodgy businesses and increasing scrutiny of the gig economy, as well as tracking down fraudulent business owners who vanish without paying their taxes. I thank my hon. Friends the Members for Great Grimsby and Cleethorpes (Melanie Onn), for Leigh and Atherton (Jo Platt) and for Kensington and Bayswater (Joe Powell) for their representations on this subject. I will take further steps to prevent and track down unpaid tax. Together, these reforms will raise nearly £10 billion a year by 2030, including through new powers for HMRC to pursue the promoters of tax avoidance schemes.
I am building on our successful use of targeted checks on welfare claims to root out fraud and error and to prevent public money from being paid to people who are not entitled to it. I thank Tom Hayhoe, the covid corruption commissioner, for his work in helping to chase down nearly £400 million from dodgy pandemic spending and contracts. Tory contracts handed out by Tory Ministers to Tory peers and Tory friends—[Interruption.] That money belongs in our schools, in our hospitals—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. It is so noisy in here we can barely hear the Chancellor. Everybody needs to calm down.
Rachel Reeves
I would not want any hon. Member to miss this. We are chasing down that money and have almost £400 million back from dodgy pandemic spending and contracts. Tory contracts handed out by Tory Ministers to Tory peers and Tory donors. That money belongs in our schools and in our hospitals, and we are getting it back.
Finally, we are ramping up sanctions on Russia and freezing known Russian assets. Let me be clear, I do not mean the hon. Member for Clacton (Nigel Farage). Under the Conservatives —[Interruption.]
Madam Deputy Speaker
Order. We do not need commentary from the Back Benches. Mr Dewhirst, you are so loud; it is remarkable how far your voice carries.
Rachel Reeves
Under the Conservatives, the cost of our welfare system increased by nearly 1 percentage point of GDP—equivalent to £88 billion in just five years. The broken welfare system that we inherited wrote off millions of people as too sick to work. We will reform that system, so that it is a system that does not count the cost of failure, but rather one that protects people who cannot work and empowers those who can.
We have brought back face-to-face assessments for disability benefits—those are the face-to-face assessments that the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), got rid of when he was Work and Pensions Secretary. Our changes to universal credit will get 15,000 people back into work—a figure confirmed today.
The former Heath Secretary, Alan Milburn, will review the causes of rising youth inactivity, and we are already taking action. I am grateful to the Federation of Small Businesses and Small Business Britain for their representations on apprenticeships, and today I am announcing funding to make the training for under-25 apprenticeships completely free for small and medium-sized enterprises. I am funding our new youth guarantee, providing £820 million over the next three years to give the young people who were let down by the Conservatives the support and opportunity they deserve, guaranteeing every young person a place in college, an apprenticeship or personalised job support. After 18 months, 18 to 21-year-olds will be offered paid work, not benefits.
The Motability scheme was set up to protect the most vulnerable, not to subsidise the lease on a Mercedes-Benz, and so I am making reforms that will reduce generous taxpayer subsidies. Motability have confirmed that it will remove luxury vehicles from the scheme, getting the scheme back to its original purpose of offering cost-effective leases to disabled people.
Taxpayers’ money should not be spent on pensions for people abroad who only lived here for a couple of years and may never have paid a penny of tax. The Conservatives allowed thousands of people living abroad to buy their way into the state pension for as little as £3.50 a week, debasing the purpose of our pension system. I will abolish access to class 2 voluntary national insurance contributions for people living abroad, increasing the time that someone has to live or work in Britain to 10 years, and increasing the contributions they must pay. These reforms improve our welfare system: they support our young people; protect those who need it most; and put an end to Conservative waste and unfairness.
To break the cycle of austerity we need a fair and sustainable tax system, one that generates revenues to fund the public services we all use, and supports investment to grow our economy. That does mean that today I am asking everyone to make a contribution. The previous Conservative Government froze personal tax thresholds from 2021 until 2028. Today, I will maintain all income tax and equivalent national insurance thresholds at their current level for three further years from 2028—[Interruption.]
Rachel Reeves
The Leader of the Opposition supported these freezes when her party made them; she might want to forget about that, but the British people never will.
At the same time, we are ensuring that people only in receipt of the basic or new state pension do not have to pay small amounts of tax through simple assessment from April 2027. I will also keep the plan 2 student loan repayments threshold at its 2026-27 level for three years.
I know that maintaining the thresholds is a decision that will affect working people. I said that last year and I will not pretend otherwise now. I am asking everyone to make a contribution, but I can keep that contribution as low as possible because I will make further reforms to our tax system today to make it fairer, and to ensure the wealthiest contribute the most.
The Conservatives knew that our tax system did not work. Time and time again, they ducked the necessary reforms, leaving a system unfit for a changing economy, with unfairness that they refused to address. Currently, a landlord with an income of £25,000 will pay nearly £1,200 less in tax than their tenant with the same salary, because no national insurance is charged on property, dividend or savings income. It is not fair that the tax system treats different types of income so differently, and so I will increase the basic and higher rate of tax on property, savings and dividend income by 2 percentage points, and the additional rate of tax on property and savings income by 2 percentage points. Even after these reforms, 90% of taxpayers will still pay no tax at all on their savings.
I also believe that, as well as narrowing the gap between the tax on income from assets and income from work, a fair society is one where the wealthiest pay their fair share. The reforms I made last year will raise an additional £8 billion a year by 2030 from wealth. I increased taxes last year on private equity, private schools and private jets, and I abolished the non-dom tax regime. This year I will make two changes to cap trust charges and prevent avoidance. I reformed inheritance tax on agricultural and business assets and this year—[Interruption.] This year I am aligning those reforms with wider inheritance tax rules by allowing the transfer of the 100% relief allowance between spouses, balancing the taxation of these valuable assets with the realities of family life.
In this Budget, I will take further steps to deal with a long-standing source of wealth inequality in our country. A band D home in Darlington or Blackpool pays just under £2,400 in council tax, nearly £300 more than a £10 million mansion in Mayfair, and so from 2028, I am introducing the high value council tax surcharge in England, an annual £2,500 charge for properties worth more than £2 million, rising to £7,500 for properties worth more than £5 million. This will be collected alongside council tax, levied on owners, and we will consult on options for support or deferral. This new surcharge will raise over £400 million by 2031 and will be charged on less than the top 1% of properties.
Reliefs in our tax system cost the taxpayer billions of pounds a year, but many of them no longer serve their original purpose. The Government rightly provides generous tax relief for people paying into a pension, relieving income tax on all contributions and on the investment itself, as well as national insurance relief on employer contributions, at a cost of over £70 billion a year to the Exchequer. This Budget makes no changes to those reliefs or to the tax-free lump sum.
However, salary sacrifice for pensions, which was intended to be a small part of our pensions system, is forecast almost to treble in cost to other taxpayers, from £2.8 billion in 2017 to £8 billion by 2030, with the greatest benefit going to the highest earners, or to those in the financial services sector putting their bonuses into pensions tax-free, while those on the minimum wage or whose employers do not offer salary sacrifice do not benefit at all. That is not sustainable for our public finances, putting pressure on the tax that everyone else pays.
I am therefore introducing a £2,000 cap on salary sacrifice into a pension, with contributions above that taxed in the same way as other employee pension contributions. It is a pragmatic step so that people, especially on low and middle incomes, can continue to use salary sacrifice for their pension without paying any more tax than they do now. To give individuals and employers time to adjust to these new arrangements, these changes will come into effect in 2029.
The coalition Government introduced 100% relief from capital gains tax on business sales made to employee ownership trusts, creating a route for gains to go completely untaxed when businesses are sold. I will reduce that relief to 50%, retaining a strong incentive for employee-owned companies. As we work towards doubling the size of the co-operative economy, the Department for Business and Trade will launch a call for evidence on how we can better support co-ops to grow. As a result of the changes that I have made to capital gains tax this year and last year, receipts are forecast to increase from £14 billion this year to £30 billion by 2030.
To support our high streets, I am announcing a package of regulatory changes, as called for by UKHospitality and the British Retail Consortium. I will support the great British pub through our new national licensing framework, encouraging councils to back our pubs and to back late-night venues with greater freedoms. For business rates, I will introduce permanently lower tax rates for over 750,000 retail, hospitality and leisure properties—the lowest rates since 1991, paid for through higher rates on properties worth more than £500,000, such as the warehouses used by online giants. Alongside this, I will introduce a package of support worth over £4.3 billion over the next three years for a property of any size seeing a large increase in their bill. To support a level playing field in retail, I will stop online firms from undercutting our high street businesses, by ensuring that customs duty applies on parcels of any value.
I will reform our motoring taxes, exempting search and rescue vehicles from vehicle excise duty, as called for by my hon. Friends the Members for Na h-Eileanan an Iar (Torcuil Crichton) and for Whitehaven and Workington (Josh MacAlister). All cars contribute to wear and tear on our roads, so I will ensure that drivers are taxed according to how much they drive, not just by the type of car they own, by introducing the electric vehicle excise duty on electric cars. That will be payable each year alongside vehicle excise duty at 3p per mile for electric cars, and 1.5p for plug-in hybrids, helping us to double road maintenance funding in England over the course of this Parliament.
Alongside that, I am providing support to boost our British car industry: increasing the threshold for the expensive car supplement on electric vehicles to £50,000, saving over a million motorists £440 a year; providing £1.3 billion additional funding for the electric car grant, extending it to 2030, taking total funding to £2 billion; and delaying changes to the employee car ownership scheme. In addition, we are investing a further £200 million to accelerate the roll-out of EV charging, as well as 100% business rates relief for EV charge points for the next decade, with thanks to my hon. Friend the Member for Camborne and Redruth (Perran Moon) for his representations on that policy.
I will improve competition in our taxi industry by ending ride-hailing companies’ use of a discount scheme intended for coach tours, as called for by Steve McNamara, general secretary of the Licensed Taxi Drivers Association: legislating to restrict access so that everyone pays fairly, and protecting £700 million of tax revenue each year.
I am responding to our consultation on landfill tax, and listening to representations particularly from our house building industry. I will not converge towards a single rate, but I will prevent the gap between the two rates from widening, to balance the need to address tax avoidance in the current structure. I will today publish Ray McCann’s report into the loan charge, along with the Government’s response, setting out a new settlement opportunity that will finally allow people to finalise their position and draw a line under this long-standing issue. I thank my hon. Friend the Member for Milton Keynes Central (Emily Darlington) for her representations on this subject.
I will continue with the planned uprating for tobacco duties that I set out last year, and uprate alcohol duties by inflation, alongside our plans to introduce a vaping products duty in 2026, and the changes to the soft drinks industry levy announced by my right hon. Friend the Health Secretary yesterday. I thank the Exchequer Secretary to the Treasury for his work on all the tax measures in this Budget.
I will also reform gambling taxes in response to the rise in online gambling. Remote gaming is associated with the highest levels of harm, and so I am increasing remote gaming duty from 21% to 40%, with duty on online betting increasing from 15% to 25%. I am making no change to the taxes on in-person gambling or on horseracing, and I am abolishing bingo duty entirely from April next year. Taken together, my reforms to gambling tax will raise over £1 billion per year by 2031.
As a result of the tax reforms I have made today, I can confirm that I will not be increasing national insurance, the basic, higher or additional rates of income tax, or VAT. I have kept everyone’s contribution as low as possible, through reforms to make our tax system stronger, closing loopholes, ensuring that the wealthiest pay their share, and building a tax system that is fairer for the future as our economy changes.
On the day I became Chancellor, I said that I would judge my time in office a success if I knew that ordinary children from working-class backgrounds were living more fulfilling lives—their horizons expanded; their potential realised. I joined the Labour party, I came into politics, because I believe that every child has equal worth and deserves an equal chance to achieve their promise. The biggest barrier to equal opportunity is child poverty, because for every child that grows up in poverty, our society pays a triple cost.
The first and heaviest is to the child: going to school hungry; waking up in a cold home, or in another B&B. While other children enjoy the advantages of parents with time to help with homework, or a quiet space at home to work in, too many go without. There is also the cost of supporting a family in poverty, which ends up in the lap of overstretched councils that can do no more than shunt them into temporary accommodation, at huge cost to local taxpayers. Then there is the future cost to our economy and our society, of wasted talent, and a welfare system that bears the cost of failure for decades to come: young people with so much to contribute, but whose potential is suffocated early by limited life chances and missed opportunities, struggling to make their way in a society that did not look out for them.
I do not intend to preside over a status quo that punishes children for the circumstances of their birth and demands that we all pay three times over for it. Since last July, we have rolled out free breakfast clubs in schools, and we are expanding free school meals to half a million more kids, lifting 100,000 children out of poverty as we do it. We have passed the Renters’ Rights Act 2025, and we have extended the childcare offer.
I am proud of all that, but it is not enough, because there is one policy that pushes kids into poverty more than any other. It was introduced by the Conservatives. They said it would save money, and that it would bring about “behavioural change”, disincentivising poorer families from having more children. Even on its own terms the policy failed: the welfare bill has continued to rise, and there has been no difference in the size of families. What it has done since it was introduced is push hundreds of thousands of children into poverty. They said they were punishing parents’ choices, but it is the kids who have paid the price. They have paid the price for the policies of a party that opted for cynical gimmicks over real savings in our welfare system.
I understand that many families are finding times hard, and that many have had to make difficult choices when it comes to having kids. There are many reasons why people choose to have children and then find themselves in difficult times: the death of a partner, separation, ill health, a lost job. I do not believe that children should have to bear the brunt of that.
And neither can I in good conscience leave in place the vile policy known as the rape clause, which requires women to prove their child has been conceived non-consensually, to receive support. I am proud to be Britain’s first female Chancellor of the Exchequer and I take the responsibilities that come with that seriously. I will not tolerate the grotesque indignity to women of the rape clause any longer. It is dehumanising, it is cruel and I will remove it from the statute book.
So because I am tackling fraud and error in our welfare system, cracking down on tax avoidance and reforming gambling taxation, I can announce today, fully costed and fully funded, the removal of the two-child limit in full from April. [Interruption.] It is amazing what people get so angry about. We have seen the Conservatives’ true colours today—the thing they get angry about is lifting children out of poverty—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Our constituents want to hear the Chancellor.
Rachel Reeves
I think our constituents have heard all they need to from Conservative Members today. We on the Labour Benches do not believe that the solution to a broken welfare system is to punish the most vulnerable. We are lifting 450,000 children out of poverty with the end of the two-child limit. Combined with other actions that we are taking, this Labour Government are achieving the biggest reduction in child poverty over a Parliament since records began. That is the difference that this Labour Government are making.
I know how worried families are about the cost of everything. They are worried that their money will not stretch to the end of the month—
Rachel Reeves
I think if you have a house that is worth £5 million, then you can probably afford it, but Conservative Members get more exercised about reducing child poverty than they do about the richest paying more.
Under this Government, wages have risen by more since we were elected than in 10 years under the last Government, with lower interest rates already saving families £1,200 a year off a typical new mortgage. Compare that to when Liz Truss was Prime Minister. But I know that people still face pressure on their budgets, day to day and week to week, and where there is more we can do to provide relief, we are doing it: extending the bus fare cap, cracking down on rip-off price hikes, freezing prescription charges and freezing rail fares for the first time in 30 years.
I am increasing the basic and new state pension by 4.8%, an increase of £440 per year for the basic state pension and an increase of £575 per year for the new state pension, in line with our commitment to the triple lock. At the election, we promised a genuine living wage and we are delivering it. At the Budget last year, I increased the national minimum wage and the national living wage, and I am doing the same this year too. I am accepting the recommendations of the Low Pay Commission in full and increasing the minimum wage for 18 to 20-year-olds from £10 to £10.85 per hour, and increasing the living wage from £12.21 to £12.71 per hour.
Under current plans, the temporary 5p cut to fuel duty that was introduced during the pandemic will come to an end in April and fuel duty will be uprated in line with inflation. But I know that the cost of travelling to and from work is still too expensive, so I am extending the 5p cut until September 2026. Because I know that changes in wholesale prices are not always passed on to motorists, I am bringing in new rules to mandate petrol forecourts to share real-time prices through a new fuel finder, empowering drivers to find the cheapest fuel, calling out rip-offs and strengthening competition, saving the average household £40 a year.
One of the greatest drivers of the rising cost of living is energy prices. The cause of high energy bills must be tackled at source, and so we are investing in energy security—in nuclear and renewable energy—and in insulation through the warm homes plan, but that is not enough when people are struggling with energy bills today. The Conservatives’ energy company obligation scheme was presented as a plan to tackle fuel poverty. It costs households £1.7 billion a year on their bills, and for 97% of families in fuel poverty, the scheme—get this—has cost them more than it has saved. It is a failed scheme, and so I am scrapping it, along with taking other legacy costs off bills.
As a result, I can tell the House today that for every family we are keeping our promise to get energy bills and the cost of living down, with £150 cut from the average household bill from April next year—money off bills and in the pockets of working people. That is my choice, not to neglect Britain’s energy security, like the Tories did, and not to leave working families to bear the brunt of high prices, like the Tories did, but to get energy costs down now and in the future. That is the Labour choice.
And, Madam Deputy Speaker, one more thing: because of our action on bills and on prices, as a direct result of this Budget, the Office for Budget Responsibility confirmed today that inflation is coming down faster and will be a full 0.4 percentage points lower next year. That is the benefit of a Labour Government cutting the cost of living.
This Labour Government are changing our country. In the face of challenges on our productivity, I will grow our economy through stability, investment and reform. I have met my fiscal rules and built our economic resilience for the future. I have asked everyone to contribute—yes—for the security of our country and the brightness of its future, but I have kept that contribution as low as possible by reforming our tax system, making it fairer and stronger for the future.
I have protected our NHS, maintaining public investment and driving efficiency in government spending. I have taken action on our broken welfare system, rooting out waste and lifting children out of poverty. And I have cut the cost of living, with money off bills and prices frozen, all while keeping every single one of our manifesto commitments—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Rankin and Ms Morton, your voices carry right across the Chamber—try to take a breath every so often.
Rachel Reeves
Those are my choices, not austerity and not reckless borrowing, but cutting the debt, cutting waiting lists and cutting the cost of living. Those are Labour choices, promised and delivered by this Budget—promised and delivered by this Labour Government. I commend this statement to the House.
Provisional collection of taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Stamp duty reserve tax (UK listing relief) (motion no. 60);
(b) Rates of tobacco products duty (motion no. 65).—(Rachel Reeves.)
Question agreed to.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on the succeeding days. The questions on this motion and on the remaining motions will be put at the end of the Budget debate on Tuesday 2 December. I call the Chancellor of the Exchequer to move the motion formally.
Budget Resolutions
(1 day, 5 hours ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Leader of the Opposition.
Mrs Kemi Badenoch (North West Essex) (Con)
May I congratulate the right hon. Lady on delivering her second Budget? I hope she enjoyed it, because it really should be her last. What a total humiliation—[Interruption.]
Madam Deputy Speaker
Order. Can colleagues who are exiting the Chamber do so swiftly and quietly, so that we can focus on the Leader of the Opposition?
Mrs Badenoch
It is a total humiliation. Last year, the Chancellor put up taxes by £40 billion—the biggest tax raid in British history. She promised that she would not be back for more. She swore that it was a one-off. She told everyone that from now on, there would be stability and she would pay for everything with growth. Today, she has broken every single one of those promises. If she had any decency, she would resign. At the last Budget, she said she was proud to be the country’s first-ever female Chancellor; after this Budget, she will go down as the country’s worst-ever Chancellor.
Today—[Interruption.]
Madam Deputy Speaker
Order. The Chief Whip in particular knows that we do not allow clapping in the Chamber.
Mrs Badenoch
Today the Chancellor has announced a new tax raid of £26 billion, and Labour Members were all cheering. Household income is down. Spending policies in this Budget increase borrowing in every year. That smorgasbord of misery we just heard from her can be summed up in one sentence: Labour is hiking taxes to pay for welfare. This is a Budget for “Benefits Street”, paid for by working people.
This Budget increases benefits for 560,000 families by an average of £5,000. The Government are hiking taxes on workers, pensioners and savers to pay for handouts to keep their Back Benchers quiet. These are the same—[Interruption.] They can chunter all they like. These are the same Back Benchers who cheered last year when the Chancellor taxed jobs and left more than 100,000 people without an income. They cheered because they did not understand the consequences of what they were doing, and they still do not.
It has not been an easy time for the Chancellor. No one liked seeing her sitting on the Government Benches as it dawned on her that her own Back Benchers were going to do to her political career what she has done to our economy. She could have chosen today to bring down welfare spending and get more people into work. Instead, she has chosen to put up tax after tax after tax—taxes on workers, taxes on savers, taxes on pensioners, taxes on investors and taxes on homes, holidays, cars and even milkshakes. There are taxes on anyone doing the right thing. She and this Government have lost what little credibility they had left, and no one will ever trust her again.
What is amazing is that the Chancellor has the nerve to come to this House and claim that this is all someone else’s fault. She has a laundry list of excuses. Labour Members blame the Conservatives as if we have been sneaking into the Treasury under the cover of darkness to give pay rises to the unions. The Chancellor inherited an economy with inflation at 2% and record-high employment. She has tanked it in just over a year. She has endless excuses—she blames Brexit and Donald Trump, but she needs to blame herself.
I have some news for the Chancellor—she did not seem to understand what the OBR was saying. Inflation is up, not down, and that inflation was stoked by her tax and spend decisions. The economic and fiscal outlook says that the OBR expects inflation to stay higher for longer. Everybody else has read the OBR analysis, but she still has not. She blames higher than expected borrowing costs. Where does she think they came from? [Hon. Members: “You!”] Those borrowing costs are driven by the Chancellor’s lack of grip. Labour Members are saying those costs came from us, but she is paying more to borrow than Greece. She is paying more to borrow than at any point under the 14 years of Conservative government—perhaps if Labour MPs read a book sometimes, they would know something—which included an energy crisis sparked by a war in Ukraine and a global pandemic. What is the Chancellor’s excuse? She is taking the public for fools, but they are under no illusions about whose fault this is.
The fact is that the bad choices the Chancellor is making today—choices to break promises, choices to put up taxes, choices to spend more of other people’s money—are because of the bad choices she made at the last disastrous Budget. If you want growth, you need to start with knowing what kind of country you want to be and make a plan to get there. You need to create certainty for the people and businesses who will drive growth. There is no growth and no plan, because Labour focused on settling scores and scratching the itches it had while in opposition.
The Chancellor promised stability. She delivered chaos. Just look at the circus around this Budget: first, the leaks—then more leaks to try to undo the damage; calling panicky press conferences and U-turning on her U-turns; rolling the pitch one day only to plough through it the next. She had the cheek to talk about stability, but she has become the first Chancellor in history to release the whole Budget ahead of time. This is extraordinary, and it tells us everything we need to know about her grip on the Treasury. She is making the UK a shambolic laughing stock to international investors, and if she does not resign for breaking her promises, she should sure as hell go for this.
What have we got for all this chaos and disorder? There are 1 million more people claiming universal credit than there were at the time of the last Budget. Government spending? Up. Welfare spending? Up. Universal credit claimants? Up. Unemployment? Up. Debt interest? Up. Inflation? Up. And what about the things that we want to go up? Growth? Down. Investment? Down. Business confidence? Down. The credibility of the Chancellor? [Hon. Members: “Down!”] Not just down, but through the floor.
These figures are shocking. Does the Chancellor really think that anyone will be confused by the sleight of hand in her speech? Her speech today was an exercise in self-delusion. Today she had an opportunity to apologise and show some humility; instead, we have been fed puff pieces in The Times and the FT showing a woman wallowing in self-pity and whining about mansplaining and misogyny. Let me explain to the Chancellor—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Colleagues need most definitely to simmer down: just breathe a little and allow the Leader of the Opposition to be heard.
Mrs Badenoch
All we have had is wallowing in self-pity and whining about misogyny and mansplaining, so let me explain to the Chancellor, woman to woman, that people out there are not complaining because she is female; they are complaining because she is utterly incompetent. Real equality means being held to the same standard as everyone else. It means being judged on results. Take the Chancellor’s bright idea: the Office for Value for Money. It has been closed down because it did not save a penny. In fact, it cost the taxpayer £1.6 million. You could not make this stuff up. I have identified a way to save taxpayers huge amounts of money, by sacking just one person: the woman sitting opposite me.
The ex-chief economist of the Bank of England was not mansplaining when he said that the uncertainty around today’s Budget is
“the single biggest reason growth has flatlined”.
What did the Chancellor think would happen when she went on breakfast telly to do an emergency public service announcement: “I interrupt your Cheerios to bring you this frightening message about income tax”? Then, unbelievably, she changed her mind three days later. No wonder people are in despair. She says she wants people to respect her—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Conservative colleagues are drowning out the Leader of the Opposition’s speech, so just be mindful that nobody at home will be able to hear her.
Mrs Badenoch
The Chancellor says that she wants people to respect her, but respect is earned. She apparently told Labour MPs this week, “I’ll show the media, I’ll show the Tories—I will not let them beat me.” Show us what? Making stuff up at the Dispatch Box, incompetent chaos and the highest tax burden in history? She said to them, “I’ll be there on Wednesday, I’ll be there next year, and I’ll be back the year after that.” God help us! She is spineless, shameless and completely aimless.
Talk to any business and or anyone looking for a job—unemployment is up every single month since Labour has been in office. [Interruption.] Labour MPs do not want to hear it, but it is true. They are shouting and complaining, but they cannot create jobs. It is the worst year for graduate recruitment on record. Are they proud of that? [Interruption.]
Madam Deputy Speaker
Order. If you are on the Front Bench, I can obviously see you, Mr Kyle. There is no need for you to be chuntering this loudly. Everyone else can see and hear you as well.
Mrs Badenoch
Labour MPs do not want to hear the truth, but I am speaking for all those people out there who are sick of this Government. Companies like Merck and Ineos are slashing investment plans. The construction sector has shrunk. How is that house building target going, by the way? I will tell you, Madam Deputy Speaker: the Government are miles behind and will not even come close to what we achieved. Business confidence is at record lows. No wonder that today future growth was revised down for every year of the scorecard. The papers are reporting that one in eight business leaders is planning to leave Britain. Even one of Labour’s biggest ever donors, Lakshmi Mittal, has fled the country.
What we have in front of us is a Budget littered with broken promises. The Chancellor stood on a manifesto that promised better returns for UK savers. Today she is putting up taxes on savings and on salary sacrifice even. She promised to give pensioners the security in retirement that they deserve. Today she slapped higher taxes on people saving for their pension. She promised to make Britain the best place in the world to invest and do business. Today she has raised the dividend tax rates. She and the Prime Minister had already broken their promise to freeze council tax, but today she has decided to go even further, introducing a new property tax clobbering family homes that will only raise small amounts. This is Labour’s Britain: people who work hard and save hard to buy their homes get taxed more, while those who do not work—those who, in some cases, refuse to work—get their accommodation paid for by taxpayers.
To top it all off—because taxing your home, your car, your savings and your pension was not enough—the Chancellor has, by her own admission, broken her manifesto promise on income tax. In the last Budget, she said:
“I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax…thresholds”.
She also said that
“extending the threshold freeze would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.]
But today she has done exactly that. Why should anyone believe anything she has promised in this Budget?
Where is the money going? There are small changes to rail fares and prescriptions. Those are distractions while the Chancellor steals your wallet. The real story is that Labour has lost control of welfare spending. Not only will working people have their tax thresholds frozen while benefits go up in line with inflation, and not only has Labour abandoned reforms that would have saved the taxpayer £5 billion after pressure from its own Back Benchers, but today Labour has added another £3 billion to the bill by scrapping the two-child benefit cap. We introduced that cap, because it means that people on benefits have to make the same decisions about having children as everyone else. Even Labour voters know that it strikes the right balance between supporting people who are struggling and protecting taxpayers who are struggling themselves.
Just this summer, the Chancellor admitted that lifting the two-child benefit cap was not affordable, but that was before the Prime Minister accidentally fired the starting gun on the race to replace him. Now he and the Chancellor are buying the votes of their own MPs with taxpayers’ money. If she wants to reduce child poverty, she should stop taxing their parents and stop destroying their jobs. She congratulated herself on a new tax on landlords. Let me tell her this: hiking tax on landlords will only push up rents. It will push landlords out of the market, and the people who will suffer are the tenants. Then she talks about taxes on electric vehicles. Those changes will hit rural drivers the hardest, but we know that Labour does not care about rural people.
All this Budget delivers is higher taxes and out-of-control spending. Nobody voted for this. The Chancellor must take responsibility. She chose to impose the jobs tax, driving unemployment higher month after month. She chose to abandon welfare reform, meaning that the benefits bill is spiralling. She chose to spend more and more money she did not have, leaving taxpayers to foot the bill. She is out of money, out of ideas, out of her depth, and she has run out of road.
The country simply cannot afford a Chancellor who cannot keep her own promises. Her position is untenable, and she knows it. [Interruption.] She is talking to the Prime Minister. Is he mansplaining to you, by the way? Is he mansplaining? Would you like some help? The Prime Minister should grow a backbone and sack her, but he will not, because he knows that if she goes down, he goes down with her, so we are stuck with them both, Laurel and Foolhardy.
Does the Chancellor have any sympathy for the people facing Christmas without a salary because of her jobs tax, or for the retailers suffering sleepless nights because of their plummeting Christmas sales? People out there are crying. Last year, we had the horrors of the Halloween Budget. This year, it is the nightmare before Christmas. As for her, she is the unwelcome Christmas guest. Ten minutes through the door and she has eaten all the Quality Street.
Let me tell the Chancellor something she has forgotten. Behind every line in today’s Red Book is a family, a home, and a lifetime of work and sacrifice. People are frightened, and they have every reason to be—the Chancellor has spent the last year terrifying them. Every decision that she and the Prime Minister make puts more pressure on the people who keep this country going. If Labour is the party of working people, why is it that every day under this Government, thousands more people are signing off work and on to benefits? It is the Conservatives who are the party of work. The Labour party should be renamed the Welfare party.
The Government are making a mistake. The British public do not want higher welfare spending; they want people in work, providing for themselves. They want to live in a country where hard work pays—where what you put in reflects what you get out, and we agree with them. There is an alternative, and we Conservatives have set it out. This Budget could have saved £47 billion, including £23 billion from welfare. The Chancellor could have applied our golden economic rule, allocating half those savings to cutting the deficit and using the rest to cut taxes. [Interruption.] Oh, they are all pretending that they are not listening. It is the shame of the mess that they have made—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Vince! And Mr Thompson, you are so enthusiastic that I was worried a moment ago that you would knock Mr Waugh off his seat. We need to calm down and breathe, and we need to ensure that we can hear the Leader of the Opposition.
Mrs Badenoch
Even the dog is laughing at the Chancellor, Madam Deputy Speaker.
The Chancellor could have abolished stamp duty on homes to get the housing market moving, and she could have abolished business rates on shops to breathe life into our high streets. She could have introduced our cheap power plan, which would save a lot more money than what she announced, and would bring down energy costs for homes and businesses. That is what she should have done.
The Chancellor should be on the side of people who get up and go to work, people who take a risk to start a company, and people working all hours to keep their business afloat. She should be on the side of the farmer trying to hand something over to the next generation, and the investor deciding whether to spend their money in the UK or elsewhere. She should be on the side of the young person looking for their first job, the saver doing the right thing and putting money away for a rainy day, and the pensioner trying to enjoy a decent retirement. This country works when we make the country work for those people. Only the Conservatives are on their side, and our plan for them is simple: bring down energy costs, cut spending, cut tax, back business, and get Britain working again.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Members who are leaving the Chamber should do so quietly and quickly before we come to our first Back-Bench contribution. Other Members who are trying to catch my eye should resume their seat; I have noticed them bobbing. I call the Chair of the Treasury Committee.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It seems, in some ways, a very long time since 2022. Do Members remember 2022? It was when we had a Prime Minister and a Chancellor who put the country in hock to the bond markets, made mortgages rise, and put the British public through a living hell. What a contrast that is with what my right hon. Friend the Chancellor has done today. She has put money into the NHS, she is backing investment in our country, she is supporting start-ups, and she is supporting the British public in a difficult cost of living crisis caused by the Conservative party.
I want to go into what the Chancellor has said today, but I cannot do that without first making some comments about the Leader of the Opposition. Who was “shambolic”, Madam Deputy Speaker? The last Government. Under them, mortgages went up, and children entered poverty in greater numbers. Which party created child poverty? It was them, not us. Which party has consistently talked down the country since the election, been negative at every stage and downgraded people’s confidence in our country? Which is the party of zero hours contracts? The Conservative party. Which party failed consistently to invest in our schools, the NHS, our prisons and our justice system? The Conservative party.
Under the last Government, the country spiralled. Under the last Government, I spent a decade looking at public spending in the privileged role of Chair of the Public Accounts Committee. I saw those mistakes close up. I saw the big nasties that would be left, whichever Government was elected in July last year, and I commend my right hon. Friend the Chancellor for tackling those challenges. Productivity, on which we have seen challenges as a result of the decisions of the Office for Budget Responsibility, has been low since 2010, and who was in government from 2010 onwards? The Conservative party. The last Government left the legacy—they left the big nasties—and now it is this Government’s job to clear it up.
Amid all the noise, however, we must remember that the markets are listening and that we all need to be responsible: Government, Opposition, and every Member of this House. Of course, speculation always swirls around a Budget; that is inevitable because we are all lobbying, quite rightly, on behalf of our constituents, our local businesses and every other group that we represent. We are all seeking to persuade our Government to do the things that we want done, and we are all impatient to see those things happen yesterday, which is why we were elected to make change. However, the leaks about the Budget were very unfortunate, and I hope that my right hon. Friend the Chancellor will grapple with that and ensure that it does not happen again. The most recent leak of the OBR data, moments before her Budget, is undermining for us all, so we will raise the matter with the representatives of the OBR when they appear before the Treasury Committee next week.
The Committee has looked at a number of the issues on which there was speculation, including child poverty, gambling tax and cash individual savings accounts, and I am grateful to my right hon. Friend for tackling some of those. Let me deal first with cash ISAs. In a report, our Committee recommended that the Chancellor should not reduce the limit on cash ISAs from £20,000. She has reduced it not to the £10,000 that was being mooted, but to £12,000. For short-term savers, there could be a real issue. With targeted support coming next year, along with work on the advice guidance boundary review, there is an opportunity to bring the British public into a more investing environment, and to encourage them to invest, or invest more. However, for many years, we have all been warned that our capital is at risk—it has been rather like the warning on the cigarette packets that we might die if we smoke—and it takes a long time to turn that culture around.
I pay tribute to the financial literacy and inclusion campaign backed by the Financial Times, which is running a three-year programme at City of London Academy, Shoreditch Park, in my constituency with young people in years 7, 8 and 9 to teach them about financial literacy. They are the investors of the future, but it will take some time for them to reach the point when they can invest. I am pleased that the Chancellor exempted over-65s from the limit, because that short-term saving is important, particularly for an age group who are planning for retirement or, indeed, already in retirement.
I welcome my right hon. Friend’s support for start-ups, which are a huge issue in my constituency, and her widening of enterprise support, which will doubtless be considered by our sister Committee, the Business and Trade Committee. Encouraging companies to list in London is absolutely right, and the three-year stamp duty relief will hopefully be enough to encourage that. We have seen too many companies listing elsewhere, and we need them here in the UK to grow our economy and create jobs. There are many technical issues involving reviews of business tax that I am sure we will examine. We are putting our slide rule across all the measures in the Budget today.
My right hon. Friend referred to £4.9 billion of efficiency savings to be made by Government Departments by 2031. That is a potential challenge, and the Public Accounts Committee—another sister Committee—will probably consider that, alongside our Committee. However, I am pleased that my right hon. Friend will give His Majesty’s Revenue and Customs more powers to pursue promoters of tax avoidance schemes; we know what the problems have been in that regard. The Treasury Committee has the privilege and the responsibility of challenging HMRC regularly, and when its representatives appear before us in January, we will be able to ask them more about the matter.
I have been thinking about why we need a Labour Government, and one of the central planks for me, as a constituency MP, was the issue of child poverty. We need a Labour Government because of what the Conservative party did to children living in poverty. There are now 4.5 million such children, and the figure has risen by nearly 1 million since 2012. Two million of them are in deep poverty. One in three live below the poverty line, in 2025, in the United Kingdom. Children are sharing beds with their siblings or parents, and turning up to school tired. Every weekend, I visit people in my constituency and see this challenge. Just last weekend, a woman showed me the bedroom that she shares with her now disabled husband, who had a stroke three years ago. There was a curtain between their double bed and a narrow space so that her daughter could share their room. Luckily, they have a second bedroom, where her two sons sleep in a bunk bed. That is the reality for so many children, and the poverty has an impact on their learning and their ability to perform in the world. It is a shameful stain on this country that when the present Government came to power, the UK ranked 37th out of 39 advanced economies in respect of child poverty.
Tim Farron (Westmorland and Lonsdale) (LD)
I agree with everything that the hon. Lady has said about child poverty, and I welcome the lifting of the cap, but is there a little bit of a blind spot in this Government when it comes to rural poverty? Their own figures show that by the end of next year, the average hill farmer will earn barely above half the national minimum wage. Is the hon. Lady as disappointed as I am that the Government have not tackled that in the Budget and, indeed, have not got rid of the family farm tax, which will tax many of those farmers out of existence altogether?
Dame Meg Hillier
The hon. Gentleman is a veritable champion of his constituency and of rural issues. There are very important changes to the minimum wage and the living wage, which will have an impact, and there is a lot that can be welcomed for rural areas, but I recognise that his constituency and mine sometimes have very different challenges, and I welcome the fact that he champions that here. Obviously, I have not had a chance to look through the Red Book and the Blue Book, but we on the Treasury Committee will bear that in mind.
Seventy per cent of children in poverty are in working families, so the chutzpah of the Leader of the Opposition talking about people making a lifestyle choice really makes my blood boil. In 60% of households hit by the two-child limit, the parents are in work, and 15% of affected families include mothers whose babies are too young for them to work.
My right hon. Friend the Chancellor said it better than any of us could: the Victorian rape clause means that women face humiliation. Notionally, it affects 3,600 women, but we on the Treasury Committee heard evidence that women will not put themselves or their children through the humiliation of using that policy. Any policy that required a workaround like that is outdated and long needed to be gone, and I commend my right hon. Friend for tackling the issue.
Dr Scott Arthur (Edinburgh South West) (Lab)
I thank my hon. Friend for her forensic analysis of our Budget. Will she take an intervention from the Leader of the Opposition, so that she can apologise for that awful policy and its impact?
Dame Meg Hillier
It is interesting that the Opposition are doubling down on the policy, which is humiliating people.
Let us be clear: the birth rate in this country has fallen year on year for the last three years. It is well below where it needs to be. I think that only Luton is at 2.1, which is about where the rate needs to be. Actually, that is a bit lower than where it needs to be. This is a real crisis for the country in the long term, so it is absolutely right that my right hon. Friend the Chancellor is investing in the future of Britain. Young people in my constituency may be poor, but there is no poverty of ambition. Children I met when I was elected 20 years ago are now doctors, barristers and enterprising businesspeople, in spite of the challenges they faced. Just think about the ones who did not get there because they could not overcome the challenges of deep-seated poverty. We should invest in our young people, and that is what this Government are doing, including through apprenticeships, the youth guarantee and the nine youth hubs in London, one of which is in my constituency.
I really welcome the fact that my right hon. Friend listened to the Treasury Committee on the gambling taxation regime. We are a cross-party Committee, but our report was unanimous that there was a real issue with the lower tax on online gambling because of the relative harm that it caused, compared with going to the races or popping along to a local betting shop. I very much welcome my right hon. Friend’s decision to change the gambling taxation regime; that will contribute to taking children out of poverty.
On the ISA changes, I caution my right hon. Friend. I hope that the Treasury is watching very closely the impact on mortgages and lending by building societies, because that was a concern in the evidence we heard. If we want to get people into their own homes through the building that will be going on, we need to make sure that mortgages are available to them, so I hope that the Treasury is in ongoing dialogue on that issue, despite the change having been made.
We need to recognise some of the challenges with green taxes. I have not had a chance to go through the Red Book in the time since the Chancellor sat down, but I very much welcome her bold and necessary decision to take on the challenge of the reduction in fuel duty as people move to electric vehicles. This has been a point of debate for at least the last decade or so. In my time on the Public Accounts Committee, we kept challenging the Treasury on how it would fill the gap, and my right hon. Friend has been bold and right to address the challenge. It is a difficult one to grapple with, but it is great that she has done so. We look forward to hearing more about that. On supporting people with the cost of living, the freeze on rail fares, keeping the bus fare cap and the ongoing freeze on fuel duty will help people get to work.
The increase in the minimum wage and the living wage are vital. In my constituency, some people work four jobs over seven days, just to make ends meet. Even if they are lucky enough to have a council tenancy, it is hard to make ends meet on those salaries. Going into private sector housing is completely unaffordable for those on that kind of income. Contrast that with people who work four days a week because they can afford to do so. I am not criticising them for that life choice, but that is the challenge that we face.
There has been a lot of discussion about a high-value property tax. In my constituency, around 1% of properties are worth over £2 million, and that is in central London. The Opposition might scream foul on this, but in London’s zones 1 and 2—my constituency is right on the edge of the City and 10 minutes from Liverpool Street—around 1% of people will face the surcharge. That is a small price to pay when families next door are living in the deepest poverty, as I have described. It is also great to see some movement on energy bills, which is having a really big impact.
There is a lot more detail in the Budget, which the Treasury Committee will look at over the next couple of weeks. We look forward to welcoming the Chancellor to the Committee on 10 December, when we will ask her to explain, but also challenge her on, the detail of her Budget, as is our proper constitutional responsibility.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the leader of the Liberal Democrats.
Ed Davey (Kingston and Surbiton) (LD)
We look forward to the Treasury Committee challenging the Government on the details of the Budget. This Government were elected on a promise to tackle the cost of living and grow the economy, and this is the second Budget in which they have failed to do either. For millions of people struggling with higher bills, all this Budget really offers is higher taxes.
The OBR sets it out in black and white: disposable income and living standards are down thanks to this Budget. Surely the Chancellor should have learned from her first failed Budget that we cannot tax our way to growth. Under the Conservatives, the UK’s tax burden reached its highest level since 1948 and it hit the economy, yet under this Budget the tax burden will hit an all-time high.
There is an alternative to all these Conservative and Labour taxes, and the shocking reality is that the Government know it: a new trade deal with Europe—a major new deal to cut the cost of living and grow our economy. The truth is that Boris Johnson’s Brexit deal has cost the Treasury £90 billion a year in lower tax revenue. Imagine if the Chancellor had adopted our plan to reverse those Brexit costs. Imagine how much more we could be helping families and pensioners across our country with the cost of living. Imagine how we could be ending the cost of living crisis today.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Will the right hon. Gentleman give way?
Madam Deputy Speaker
Order. You are a senior Member of the House, and I made it very clear earlier that no interventions should be made on party leaders.
Ed Davey
I am happy to talk to the hon. Gentleman in the Tea Room afterwards.
The Government know the damage that the Conservative-Reform Brexit deal has done to every family and business across our country, yet they choose to reject the single biggest policy for ending the cost of living crisis, turbocharging economic growth and boosting tax revenues without raising tax: a new trade deal with Europe. We need to properly fix our broken relationship with Europe, with a new customs union. We can grow our economy by freeing British businesses from the costs, barriers and red tape favoured by the Conservatives and Reform. Rather than trying to tax our way out of debt, as Labour is choosing to do, the Liberal Democrats would grow our way out of debt.
To be fair to the Chancellor, she has recently spoken about the terrible damage that the Conservatives’ Brexit deal has done to our economy—a deal that promised to save us £350 million a week, but which ended up costing the taxpayer £1.7 billion every week. But where is the Chancellor’s urgency and ambition to fix the problem that she rightly identifies? Today she did not even mention the huge hit to the Treasury from Brexit. She is like a doctor who has diagnosed the disease but refuses to administer the cure. She is refusing to take up our plan for a brand-new deal with the EU—a much better deal for Britain than anything the Government have pursued so far, with a new customs union at its heart.
Everyone but the most extreme Brexiteers now realises what a costly economic disaster the Brexit deal has been. Whether they are a young family struggling with ever higher food prices or a high street business just trying to survive the Chancellor’s latest new cost or tax, people are understandably looking for a credible economic policy to change their futures for the better, and it is crystal clear that only the Liberal Democrats are providing the leadership on our economy that people are crying out for.
There are some measures the Chancellor announced today that we do welcome. At last, she has decided to tax the big online gambling firms by raising remote gaming duty, as the Liberal Democrats have been calling for. Problem gambling is related to hundreds of suicides every year, so of course online casinos and the like should pay more tax on their huge profits. Her decision to scrap the rape clause is an excellent one. I may not have heard the Leader of the Opposition, but I was not sure if she welcomed that. I hope the Conservative party will welcome it. The Chancellor’s decision to scrap the two-child limit is excellent. It was in our general election manifesto, and I am glad that she is now enacting Liberal Democrat policy. It is clearly the most effective way of lifting children out of poverty, and it will save taxpayers money in the long term.
The biggest relief today for millions of families and pensioners is the action the Chancellor is taking to reduce energy bills, and we welcome it, but even after the Chancellor’s changes, the Budget will leave the typical household paying hundreds of pounds a year more on their energy bills than five years ago. More action will be needed, but we need action on energy bills that works.
Reform and the Conservative party pretend that the answer to rising energy bills is to scrap our climate commitments and stop investing in renewables. They could not be more wrong. The Conservative-Reform energy policy would put up bills and make the UK even more reliant on imported fossil fuels, with their volatile and high prices. That would be a disaster for our economy, a disaster for our environment, a disaster for jobs and a disaster for people struggling with energy bills. A major winner from Reform’s energy policies would be Vladimir Putin, which might explain why the hon. Member for Clacton (Nigel Farage) is so keen on them. I urge the Government not to listen to the Conservatives or Reform, but to be more ambitious in cutting people’s energy bills and to take up our plan to cut energy bills even more right now and cut them in half within a decade, finally giving families and pensioners the relief they need from this cost of living crisis.
While there are some things to welcome, as I have just done, there are quite a lot of measures in the Budget that will cause a lot of pain and unfairness, all of which could have been avoided if the Chancellor had gone for growth with Europe instead. Her plans to tax salary sacrifice will be hugely damaging to savings and pensions, and it looks like it is another NI hit on workers. Why, oh why, when the electricity vehicle market still needs a boost to get going, is she taxing electric vehicles? If she was not spending £1.8 billion on digital ID, many of these tax rises would not have been needed in the first place. Her failure to U-turn on the family farm tax is a huge error. If the Chancellor was really looking to tax those with the broadest shoulders, why not put a windfall tax on the big banks that are making billions at the taxpayer’s expense due to the side effects of quantitative easing?
The worst tax hike of this Budget by far—the biggest tax rise in this Budget—is the Chancellor’s decision to repeat the Conservative policy of freezing income tax thresholds. Freezing these thresholds reduces the amount that people can earn tax-free and hits the lowest-paid the hardest. I have to say that hearing the Conservative leader criticising it now rings incredibly hollow—and I think the “Member for Bark-shire” was objecting to her comments. The Leader of the Opposition cheered Conservative Budget after Conservative Budget that did exactly the same thing as the Chancellor has done—raising taxes on the low-paid. The Conservatives dragged an extra 4 million people on very low incomes into paying income tax, and an extra 3.5 million people into paying the 40p rate. The OBR says that this Government are now planning to drag a further three quarters of a million low-paid workers into tax and nearly 1 million people into the 40p rate. Someone on the average salary is paying an extra £582 this year because of the Conservatives’ policy, and under the Chancellor’s plans they will pay an extra £300 a year by 2031.
Contrast that with our record on income tax. We raised the personal allowance by £4,000. We cut income tax by £825 for millions of people, and took 3.4 million of the lowest-paid out of paying income tax altogether. It is clear that the Liberal Democrats are the only party that believes in cutting income tax for ordinary people; Labour and the Conservatives make them pay more.
As well as adding income tax pain to families struggling with the cost of living crisis, the Budget will add to the cost of doing business crisis facing Britain’s hospitality sector, on which the Chancellor went nowhere near far enough. Our high streets are suffering. Pubs, restaurants, cafés, caravan parks, zoos and even our beloved theme parks are struggling against higher business rates and the Government’s misguided jobs tax. The Liberal Democrats called on the Chancellor to help them with an emergency 5% VAT cut for hospitality for the next 18 months. That would have been a lifeline for some of our most beloved local businesses and for people’s jobs, boosting local economies across Britain, and it is very disappointing that the Chancellor has not listened to our calls.
Finally, can I say how disappointed I am at how little there was for carers in this Budget? As a carer myself for much of my life, I am determined to speak up for the millions of carers less fortunate than I am—the millions of family carers and care workers who make enormous sacrifices looking after loved ones, the carers who keep our NHS going and the carers who keep our society going. They deserve far more support from the Government, and I will keep pressing their case.
I do welcome the carer’s allowance review, but it confirms our argument that the carer’s allowance system is out of date and in need of urgent change, and we are yet to hear commitments to such changes. I welcome the decision to reassess cases where overpayment has caused huge hardship, but with those changes not coming into force for another year, the Government must instruct the Department for Work and Pensions to immediately suspend repayments during that delay and swiftly deliver compensation. More needs to be done to help family carers juggle their jobs with their caring responsibilities, and we urgently need the social care commission to actually start fixing the system on a cross-party basis and make sure that our loved ones get the care they need. The Chancellor cannot claim to be supporting our NHS properly, however much money she puts in, while she and Treasury officials keep blocking the social care reforms that alone can transform the health service across the country and boost our economy.
A caring society, a growing economy and a plan to drive down household bills, boost high streets and go for growth with Europe—that is the vision the Chancellor should have set out today. Instead we got a low-growth, high-tax Budget from a Government who I fear are just not listening.
Catherine West (Hornsey and Friern Barnet) (Lab)
It is an honour to follow the leader of the Liberal Democrats, the right hon. Member for Kingston and Surbiton (Ed Davey), in this debate. Put very simply, this is a family-friendly Budget, and every family up and down the UK will be welcoming it. Gone is the vile rape clause, and an increase in family income is very welcome.
We have been through many traumatic times together in this House. We have been through the global financial crisis and its long tail. We have been through Brexit, and the right hon. Member was quite right to emphasise the vast difference between our economy while we were in the European Union and our economy now that we are not. I welcome the work being done at Cabinet level, and I ask the Cabinet to redouble its efforts to work on good trade arrangements under the EU-UK security pact to improve and enlarge our economy. And, of course, we have had covid. We heard about covid this week, with the publication of the UK covid-19 inquiry report. We all remember not just the impact on the economy, but the terrible impact on younger people in particular and the impact that that long tail is having on so many of our young people, who are still feeling too unwell to work or whose work opportunities have been severely reduced through anxiety, depression and all the other things that not just covid but that context of fiscal austerity brought down on them.
I represent a multi-faith, multi-ethnic constituency that works really hard on community cohesion. When all is said and done, we rub along well together in Hornsey and Friern Barnet. From recent rhetoric, it could be assumed that there is deep unhappiness and division. In fact, it is the opposite. I would like to put on record the contribution to our local economy from all parts of my constituency, regardless of skin colour, faith or school qualifications.
Of course, my community also faces challenges. We have unacceptably high numbers of children living in households where incomes do not cover the basics of heating, eating and rent. I really welcome today’s statement on heating, with help for households; on eating, with school meals, more breakfast clubs and help in particular for secondary school children with their nutrition; and on rent, quite rightly introducing a little more tax on some of the landlords who, in a wealthy place such as London, will be making quite a lot and can afford to pay a little more.
It is my first Budget as a member of the Treasury Committee. This Budget has rewarded those who fought to restore hope, stop the chaos of the 14 years of Conservative Governments and deliver change. Remember the election? We promised change. Today, we saw change. That change is an end to poverty-line family budgets. The hope is that we finally see food banks close for good.
Chris Coghlan (Dorking and Horley) (LD)
I thank the hon. Member for giving way. She is a colleague with me on the Treasury Committee. In terms of the Government delivering hope, a key part of the Government’s economic forecasting comes, of course, from the Office for Budget Responsibility. A lot of what has driven the Budget today is the £16 billion productivity downgrade by the OBR. We heard in the Treasury Committee that there was very little basis behind that productivity forecast in the first place and that it was based purely on UK productivity pre-2008 and not much real depth beyond that. Does she agree with me that the OBR has serious work to do to look at the robustness of its forecasts?
Catherine West
I thank my Treasury Committee colleague. There was quite a lot in today’s Budget on skills and nutrition for children so they can get their educational qualifications, and quite a lot that will help us to solve the productivity puzzle. I look forward to questioning, with him, the OBR on its data and how it got to that position, and how we can be helpful in pushing the Government towards even more investment in skills and apprenticeships, and in deepening our investment in young people so that our productivity can improve over time.
I know that so many of us in the House are in politics because we want every child and every family to have the chance to thrive in school, work and life. Let us look back at past Labour Governments. In 1945, despair and hunger stalked many communities. London was flattened in the blitz and rationing would continue for nine more years. Keynes famously said:
“Anything we can actually do, we can afford…we are immeasurably richer than our predecessors.”
What did Labour then do? Labour went on to build the NHS, build the country and build the welfare state. We can do this, we will make the UK fairer, and today is a really good start on that journey.
Very briefly, because I know so many Members wish to speak today, as a former borough leader, I introduced free schools meals for all primary schoolchildren. It was a great equaliser and social leveller, children were more focused and made better progress, families who were just about managing saved money, and there was no stigma—everyone sat together and talked with each other. Free school meals for all primary schoolchildren were subsequently rolled out across London, and we know that more secondary school children will benefit under the Government’s proposals today. We need to continue to restore hope and deliver change.
The two-child cap on universal credit is another pro-family measure, the most cost-effective quick measure to bring up to half a million children out of poverty ,and paid for by an increase in the tax on the most addictive forms of gambling. My personal view is that we could have gone even further, because remote gambling—people in their bedroom on their phone —is deeply damaging to society. I hope that it raises between £1 billion and £3 billion,.
The Trussell Trust’s September “Hunger in the UK 2025” report makes for sobering reading. In 2024, 16% of UK households were food-insecure. We know that that is not a food problem, but an income problem. We must continue to interrogate the issue, and I am very pleased to have secured a Backbench business debate on food inflation and poverty.
In conclusion, together with school meals, more breakfast club provision and a higher living wage since the general election, slowly the living standards of families will turn around. It is particularly positive to see the first woman Chancellor recognise the impact that the difficult financial climate has had on families. I hope that by this time next year, once these measures are really embedded, we will begin to see the closure of food banks. I have heard a lot about what we want to see by the end of this Parliament. Let us aim for the closure of food banks in this country by 2029. We hope that every child and every family will have the chance the thrive.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Colleagues are now permitted to make interventions, which a Back Bencher may accept or decline them.
Sir Jeremy Hunt (Godalming and Ash) (Con)
Budgets are not easy for Chancellors, because there are so many things beyond their control, but being forced to make trade-offs reveals priorities. I am afraid today’s priority was not economic growth, but political survival. That is because there was one central call the Chancellor had to make today: do we reform welfare, or do we raise tax?
Getting our welfare bill down to pre-pandemic levels would save about £47 billion a year within five years. It would not have been easy, but it would have meant no tax rises and plenty of headroom in public finances. Instead, welfare spend is going up, and jobs and growth are going down. In every single day of the Government’s first year, around 2,200 people have been signed off not just work, but from even having to look for work. That is 1 million more people on universal credit just in the last year. Most of those claimants cite mental ill health, but every doctor I spoke to as Health Secretary said that people with anxiety and depression need social contact. That means being at work, not being at home.
Layla Moran (Oxford West and Abingdon) (LD)
On mental ill health, the right hon. Gentleman is absolutely right to point out that it is one of the drivers of people going on universal credit and that does need to be tackled. Does he share my alarm that today in the Health Service Journal it has been reported that the Government are planning to water down the mental health investment standard, which will start to reverse the trend we saw over many years of achieving parity of esteem between physical and mental health?
Sir Jeremy Hunt
I absolutely share the hon. Lady’s concern. That standard was introduced when I was Health Secretary. This could have been the Budget in which the Chancellor announced we would speed up treatment for people with mental illness and not park them on welfare. This could have been the Budget that said that we will eliminate fraud by stopping completely benefit applications by phone. It could have been the Budget that said that instead of relying on migration to help firms expand, we will make sure that people at home are fit to join the workforce. Instead, the welfare bill is going up by around £14 billion, not least because of the totally unfair abolition of the two-child cap, which I fear will see more children, not fewer, living in the structural poverty caused when there are no adults in the household at work.
Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
Given his background, the right hon. Gentleman must surely recognise that there is a direct link between social policy and economic policy—that this country needs a working-age population to fund future pensions and welfare bills for generations in the future. How on earth can you do that if you are not encouraging children to be brought up and raised in a household that can afford to feed them?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. How on earth can “you” do that? We cannot start off these four days of Budget debate with the words “you” and “your”. Come to your conclusion quickly and using the right language.
Sir Jeremy Hunt
I recognise that the hon. Gentleman’s concern about child poverty is sincere; I just have a totally different view as to how to reduce child poverty in this country. I think financing people to have ever larger families will mean more children growing up in poverty, not fewer. The evidence for that is that under the previous Conservative Government, we had a million fewer children growing up in workless households, and child poverty in absolute terms fell. The hon. Gentleman needs to look at that evidence.
The price we are paying for this mushrooming welfare bill is rising taxes which are already starting to destroy growth: 180,000 fewer payroll jobs in the last year; unemployment up, inflation up and interest rates higher than they would have been. The tragedy is that absolute poverty—which, as I said, fell under the previous Conservative Government—is now likely to rise under Labour as jobs vanish and welfare rolls soar.
Tom Hayes (Bournemouth East) (Lab)
I grew up in poverty. One in four children in Bournemouth, the town that I represent, is growing up in poverty. I can tell the right hon. Gentleman that growing up in poverty is not a good thing. It is an awful thing for the life chances of the child, an awful thing for the family who care for them and an awful thing for the community that wrap their arms around the child. Does he acknowledge that he is ignoring the future costs of child poverty? I used to run mental health and domestic abuse services, and I can certainly tell him that when children grow up in poverty and then, later in life, cannot find the education, training and support that they need because of their trauma as a child, they cause extra costs for public services that we then have to meet. Does he not agree that we should be preventing those future costs?
Sir Jeremy Hunt
I absolutely agree with the hon. Gentleman, but I profoundly disagree on the way the Government are choosing to do that. By expanding the welfare bill and expanding the number of large families living in poverty, they are making the root causes of poverty worse and not better.
The Chancellor says that there is a growth plan, but it was very difficult to discern it at all in today’s Budget. We know, for example, that raising public sector productivity to private sector levels would add 0.4% to annual GDP growth. We know that proper planning reforms would add 0.4%, that proper welfare reform would add 0.3% and that getting energy bills down properly would add 0.3%. We know that AI could dwarf all that, according to Microsoft and Accenture, potentially adding 1% a year.
We got none of that today. Instead, we had a Government arriving in office saying that they wanted “Growth, growth, growth” without knowing how they were going to get there. Growth needs a plan, not a soundbite, and it is that lack of a plan—or even a guiding philosophy—that has resulted today in a Budget that damages growth, damages investment, damages jobs and, most tragically of all, damages opportunities for young people, of whom there will shortly be a million not in employment, education or training.
Andrew Lewin (Welwyn Hatfield) (Lab)
The right hon. Gentleman is a respected Member of the House, but I think it is really important that we reflect on the facts. Both the Chancellor and the OBR announced today that growth is up from 1% to 1.5% this year. The right hon. Gentleman talks about having a plan on planning reform—a subject I am very interested in. Why then did his party abstain and not back our planning reforms?
Sir Jeremy Hunt
The hon. Gentleman is absolutely right that we should look at the facts, which are very clear: the OBR upgraded growth for this year, and then downgraded it for every single year of the forecast thereafter. The overall size of the economy is shrinking as a result of the measures taken by the Chancellor in the previous Budget—and, I am afraid, made much worse in this Budget.
I agree with the hon. Gentleman that we need to go further on planning reform, but I do not think we have had any plan from the Government for the really substantive changes that would align incentives between local communities and national Government when it gets to things like planning approval for big infrastructure projects. I would cheer from the rafters if we heard that from the Chancellor, because it is urgently needed.
Can the Government please not tell us that everything is going to be fine just because they are not the evil Tories? That is what I think is most disappointing of all, because those terrible Tories got inflation down from 11% to 2% and saw 4 million new jobs in the economy, as opposed to nearly 200,000 fewer. They grew the economy faster than France, Germany, Italy or Japan, and they attracted more greenfield foreign direct investment than anywhere in the world apart from China and the United States.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
Could the right hon. Gentleman remind us which Government led to that 11% inflation and which Government crashed the economy? Could he also speak to the estimated 1,970 children in Morecambe and Lunesdale who will benefit from the lifting of the two-child benefit cap and tell them why they should continue to live in poverty?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I will remind colleagues that interventions must be short and to the point, and must be an actual question, not a statement.
Sir Jeremy Hunt
I would be happy to tell the hon. Lady which Government were responsible for 11% inflation: the Russian Government were responsible for 11% inflation. I will happily look in the eye the 200,000 fewer children in absolute poverty after a succession of Conservative Governments because of the 4 million jobs created on our watch.
Let me say this. Those dreadful Tories also increased the number of doctors and nurses in the NHS by a third, and those posh Tories increased standards in state schools to have the highest reading standards in the western world. That, Madam Deputy Speaker, is because progressive instincts do not pay the bill for good public services—a strong economy does.
Jerome Mayhew (Broadland and Fakenham) (Con)
Could my right hon. Friend remind the House what happened during that period to the deficit, which was inherited at over 10%? Maybe we will just deal with that.
Sir Jeremy Hunt
My hon. Friend is absolutely right. The Chancellor makes a great play of fiscal responsibility—incidentally, I hope she will correct the record, because she said that she was reducing debt, when the OBR’s economic and financial outlook says that it is going up from 95% of GDP to 96% of GDP. On my hon. Friend’s point, yes: when the previous Conservative Government came into office, the Government were borrowing nearly £1 in every £4 that we were spending on public services, and we reduced that deficit from 10% to 2%, and Labour opposed us every single step of the way.
Several hon. Members rose—
Sir Oliver Dowden (Hertsmere) (Con)
I thank my right hon. Friend for giving way. As we are going down memory lane, I cannot resist reminding him that when we came to power in 2010, we had a youth unemployment crisis. Youth unemployment plunged when we were in office; now, with Labour back in office, the Government have imposed a national insurance contribution tax and youth unemployment is soaring again. Is that not a damning indictment of Labour?
Sir Jeremy Hunt
Labour Members might find that hard to hear from a former Conservative Deputy Prime Minister, but they might want to listen to the Resolution Foundation, which has been saying exactly the same thing on the airwaves today. No one disputes the progressive credentials of the Resolution Foundation. It has been warning against this rise in the minimum wage and all the extra workers’ rights, which it says could lead to a crisis in youth unemployment.
Sir Jeremy Hunt
I do not want to leave the hon. Lady out, but I promise that this will be my last intervention.
Yuan Yang
I thank the right hon. Gentleman for giving way. Does he find it fiscally responsible that with his two Budgets, he left us with the lowest amount of fiscal headroom since the OBR was created at £8.9 billion in 2024? Is he proud of that? That left the current Chancellor and this Labour Government a mountain to climb to get us back to £22 billion of solid headroom.
Sir Jeremy Hunt
I am proud that I dealt with a real black hole of £72 billion, not a fake one of £22 billion, in my fiscal events, and I met the fiscal rules every time. If the hon. Lady is really concerned about that low headroom, why did the shadow Chancellor at the time—now the current Chancellor—not object once to the fact that headroom was reduced to that level? I will tell the House why she did not object: because if I had left headroom any higher, I would have had to cut spending more or increase taxes more, and that would have made the recession we were heading into deeper and worse, with more unemployment, fewer jobs and more poverty. That is why I am proud that I took the right decision.
Even now, it may not be too late, because a Government who try to do the right thing with the time they have left are more likely to earn the trust of the British people than a Government who have given up. Please do not treat government as an exercise in survival. That would be a betrayal of the Government’s mandate.
People with the broadest shoulders, as the Chancellor described them, will be rightly angry today. But it is the people who depend on public services, who are looking for a job and who are on the poverty line, who need a strong economy more than anyone else, and they will finish today feeling more scared than ever about their prospects.
Ms Abena Oppong-Asare (Erith and Thamesmead) (Lab)
I welcome the Chancellor’s Budget and its message of strong foundations and a secure future. It delivers on the priorities that matter most to my constituency: economic growth, lower cost of living, investment in families, and a stronger NHS.
I also fully welcome the Chancellor’s commitment to the docklands light railway extension to Thamesmead, set out on page 65 of the Budget document. It is a game-changing moment for residents who have waited decades for proper transport links.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I thank my constituency neighbour for giving way. Page 104 of the Budget document confirms capital investment to fix potholes and capital investment for the lower Thames crossing to the east of my constituency and the DLR extension to Thamesmead to the west of my constituency. Will she join me in thanking the Chancellor for that capital investment for our constituencies?
Ms Oppong-Asare
Our constituencies are both served by Bexley council, so we know how important it is to get those potholes fixed. I thank my hon. Friend for supporting the DLR extension to Thamesmead.
The DLR extension will unlock 25,000 to 30,000 homes and around 10,000 new jobs. It will mean an economic impact of about £11.6 billion, as estimated by Transport for London, as well as crowding in nearly £18 billion of private investment over 30 years. It will mean the transformation of one of London’s most underserved communities, and it will cut commutes by nearly half, benefiting over half a million people who live in the area and wider London.
It is not just a transport upgrade; it is key to unlocking opportunity and prosperity for generations. Behind this extension has been a community-led campaign that has had cross-community effort, and I am proud of the role that my residents have played in getting us here. It has also been a personal priority since I was first elected in December 2019, and I referenced it in my maiden speech from the Opposition Benches. It was also part of my 2019 general election pledge.
A constituent of mine, Peter, told me last week that he has lived in Thamesmead for over 45 years and has heard promise after promise of a transport link to London’s only postcode without a tube and train station. He and I know that many thousands more will be thrilled that this Labour Government are putting investment into their community so that they can thrive.
I pay tribute to the key supporters of this campaign, whose work has been vital: Greenwich council leader Anthony Okereke, the Mayor of London Sadiq Khan, my hon. Friend the Member for West Ham and Beckton (James Asser), my Thamesmead councillors, TfL, councils, assembly members and Members in this place, the developers Peabody and Lendlease, and, of course, my senior parliamentary researcher Patrick Brown. Most of all, I pay tribute to the local people and their brilliant campaigning. They never lost faith in the project. This is a collective achievement, and my constituency should be proud of the role it has played in this Budget.
I welcome the Labour Government’s announcement in September that Thamesmead is one of the 12 areas that has been selected by the new towns taskforce; it is further proof of the area’s potential and importance. Once the DLR extension is secured, schools, NHS services, jobs, communities and facilities must grow alongside new homes. This is a start of a new chapter in Thamesmead. I am proud to have played a part in it, and I am proud of my community, which has championed this project from the start.
I strongly support the Chancellor’s mission to reduce child poverty, which includes the nationwide roll-out of free school breakfast clubs. I have seen at first hand the benefits for Willow Bank and Jubilee primary schools in my constituency. The clubs mean a better start for pupils and real financial relief for families and schools. I was delighted to see on page 31 of the Budget document that from September 2026 around 12,000 more primary schools will offer free breakfast clubs, helping 200,000 more children. I believe that will save working families around £450 a year and ensure that over half a million more children do not start their school day hungry.
I welcome the confirmation of further investment to cut NHS waiting times, which is a vital issue for my constituents. I also welcome the announcement of the 250 new neighbourhood health centres—the “one-stop shops”—which will bring together GPs, nurses, dentists and pharmacists under one roof, starting in areas that need it the most.
Gideon Amos (Taunton and Wellington) (LD)
On health facilities, does the hon. Lady share my concern that the only thing with more leaks than the Budget run-up period is the roof of Musgrove Park hospital in my constituency? Does she agree that hospitals across the country in the second and third waves of the new hospital rebuild programme need interim funding to keep them going in the meantime?
Ms Oppong-Asare
I remind the hon. Member that this Government are delivering more than previous Governments delivered, and he may remember that his party was in a coalition Government that caused a lot of damage to this country.
To conclude, this Budget delivers for the country and my constituency of Erith and Thamesmead. After decades of waiting, residents will finally have the transport links that they deserve and the opportunities that will come with them. A new chapter begins today. I will continue to fight for investment, services and opportunity for people in my community, because they deserve it.
Sir Edward Leigh (Gainsborough) (Con)
The benefit bill is now unsustainable in this country. Really, the main reason I will say what I want to say today is that I hope we can create some consensus in the House to try to deal with this problem, which is imposing a massive level of debt on families.
I am absolutely sure that the Government accept that this burden is unsustainable, and I am absolutely certain that if they came to the House with sensible proposals to try to get people off benefit, Her Majesty’s loyal Opposition would support them in that endeavour. The Government ducked the challenge earlier in the year to cut benefits and thereby encourage more people into work. We said at the time that we were prepared to support the Government to try to deliver those cuts, and I am sure that those on the Conservative Front Bench would repeat that promise.
Ms Polly Billington (East Thanet) (Lab)
May I confirm that the right hon. Gentleman is then perfectly happy for children to continue to live in poverty while we try to reform the welfare benefit system?
Sir Edward Leigh
I was not actually making that point. What we were discussing earlier in the year was people seeking work, and trying to encourage people to get back into work. I can understand the political imperative of what the Chancellor has done today—to sustain her position with her Back Benchers—but the problem is that the Government will create a perverse incentive for people on benefit with larger families to stay out of work. I am not sure that is good for their morale or the economy. It is not good for anybody. It seems a very easy hit for the Chancellor today, but I think it will have perverse results.
As a Member representing a rural constituency, I want to say a word about the family farm tax. The Budget’s extension of inheritance tax for business assets over £1 million has, as we know, imposed a major new burden on long-established family farms in my constituency and elsewhere. Although I could understand the Government targeting larger estates and people who were acquiring estates to avoid inheritance tax, the new family farm tax affects not just large landed estates but ordinary farms worked by generations of the same families. I recently visited a tenant farmer in my constituency. He is affected because his tenancy—he does not own the and—is a capital asset, and he will be taxed perhaps as much as £300,000 on it, which affects the family’s ability to stay in farming.
As we know, many family farmers lack liquid assets, which forces them to hold cash back, restructure, borrow or consider selling part of their business. Because the dividends used to pay inheritance tax are themselves taxed, these family farms face an effective tax rate of about 33%. The measure affects a significant share of medium-sized, long-standing firms even though it raises less than £500 million annually. It achieves maximum social and economic destruction for minimal financial reward. The policy also discourages business growth, because expanding a family firm increases future tax liabilities on heirs.
Some advisers are recommending that owners sell businesses outright to avoid future tax complications. A climate of unpredictable tax changes creates fear among owners and undermines long-term planning. The uncertainty over succession planning is freezing investment and expansion across affected businesses. The arguments can be repeated, but I appeal to the Government to listen to the National Farmers Union, which has come up with sensible compromises that would keep family farms in business and achieve the Government’s objective.
Let me say a bit about the benefits bill. Four million universal credit claimants are now excused from even looking for a job. This is a disaster in terms of self-reliance, the economy and much else. We know that the numbers have grown sharply since the pandemic. A surge in reported illnesses—particularly mental health conditions—is the main driver. Two thirds of recent work capability assessments cite mental or behavioural disorders. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) has blamed the collapse in the assessment process for the rise in successful claims, with remote and paper-based assessments introduced during covid having weakened checks on eligibility. That, again, is something on which we could co-operate across the House. It is a question not just of cutting benefits but of summoning people in, helping them and giving them confidence to try to get back into the workplace. Unless we do that and tackle the perverse incentives in the whole benefits system that discourage people from working, we will fail as a nation.
Rachael Maskell (York Central) (Lab/Co-op)
I like drilling into the data and getting to the facts. You can see a correlation between the rise in people claiming social security and the rise in waiting lists in the NHS—they map identically through all Parliaments, whether Tory or Labour. Will the right hon. Member look at the data before making assumptions? Getting waiting lists down has got to be our objective.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The hon. Member used the term “you”. Perhaps focusing, and looking at the Chair, will stop colleagues from doing so.
Sir Edward Leigh
I am careful, actually, to look at the data and constantly refer to facts that are accepted by the OBR and the Government. These facts are not challenged. We have 300,000 people currently waiting to undergo a work capability assessment. We need emergency measures to clear the backlog. I am surprised that anybody could disagree with what I am saying.
The lack of in-person assessments has created a feedback loop where dependency grows and work expectations diminish. The longer that is allowed to continue, the harder it becomes for people to reintegrate into society. This is a system that writes people off rather than helping them back into employment. I would have thought we could all agree on that. We must not abandon these people; this is about human dignity.
Getting people off long-term benefits and into employment brings significant mental health benefits. It also helps our straitened finances. The cost of sickness and disability benefits is projected to reach £100 billion annually by the end of the decade. Some households receive more than £30,000 a year in universal credit alone, with disability benefit payments pushing support well above that. The current system financially incentivises individuals to demonstrate incapacity rather than engage with work. I agree that the Government have redeployed work coaches to re-engage long-term inactive claimants, but systematic incentives remain unchanged. Failure to tackle long-term benefit dependency impoverishes the nation by increasing fiscal burdens and reducing labour force participation.
The Office for Budget Responsibility reported that the working-age incapacity benefit caseload reached 7% in 2023-24 and is forecast to hit 7.9% by 2028-29. We must stop paying full benefits to young people who are neither working nor studying. Those young people should be working or studying.
Sir Edward Leigh
I will make some progress, if I may. The Centre for Social Justice estimates that by 2026 there will be a gap of over £2,500 between earnings and combined benefit income for under-25s. I could go on making those arguments, but I will proceed to the next part of my speech, on immigration.
I accept that the greatest failure of our last Government was immigration. I admit, and I apologise on behalf of my Government, that the 2021 to 2024 Boriswave allowed—[Interruption.] Why should I not apologise? Why should I not be honest? It allowed over 4 million non-UK migrants into the country. Many of them will soon qualify for indefinite leave to remain. ILR’s granting of access to benefits and public services on the same basis as citizens is destroying financial incentives. The scale of it is financially significant.
I agree that the Home Secretary has announced some sensible moves. I supported her when, for example, she came to the House to extend the standard qualifying period for ILR from five years to 10. As Karl Williams of the Centre for Policy Studies has noted, policymakers cannot say with confidence how many migrants currently hold ILR or what their economic circumstances are. Experimental DWP data shows that about 211,000 ILR holders receive universal credit—that is completely unsustainable. If Migration Observatory estimates are correct, between 27% and 37% of ILR holders receive universal credit. This is a worrying problem that needs resolution.
I turn next to increasing tax. I have long argued for a much simpler tax system where we close loopholes but keep taxes low, especially for married families. Corporate tax complexity creates an inherent bias towards huge multinationals who can hire departments of accountants to reduce their liabilities. A free market relies on everyone paying their fair share. We need creative ways of ensuring that companies like Amazon and Starbucks can operate freely—we all use them—while paying a fair contribution. Then we can help lighten the burden on family farms, working people and small firms. Increasing taxes on working people risks undermining growth by reducing take home-pay and incentives.
Figures from the Office for National Statistics show that direct taxes reduced income inequality by only 4.4 percentage points: limited redistribution for a heavy burden. Higher taxes on the wealthy simply encourage them to leave. Data from the Henley & Partners 2025 migration report suggests that the UK may lose 16,500 millionaires this year. What is the point of it? Why are we driving these wealth creators out of the country? [Interruption.] There is so much to say, Madam Deputy Speaker, but I know that I will weary the House if I go on too long.
May I end on one point? It is quite controversial and difficult to say. I know I am going to get into trouble for saying it, but I have got to say the truth as I believe it. We all know that the triple lock is unsustainable. We cannot have a situation where people of my generation are consuming an ever greater proportion of national wealth through the state pension. Frankly, our Government never dared tackle it, having brought it in, because they knew that the Labour party would crucify them at the ballot box. Now, the Labour party is caught in the same bind. The fact is that it is completely unfair on younger people if the burden of older people, through the triple lock, increases year by year.
We laugh at the French because of their failure to achieve sensible pension reform, but we ourselves have got to have the courage, frankly, to end the triple lock—and I think this will only be done with consensus between the two parties. I am absolutely sure that the Government could come to the Leader of the Opposition and say, “This is unsustainable. Will you share this burden with us?” That may seem very unpopular, but actually many older people—people of my generation—all have children and we all have grandchildren, and we all see our children struggling to get into the housing market. If the Government and the Opposition were prepared to have the courage to deal with the triple lock, I am not sure that it would be as unpopular with older people as is sometimes maintained. After all, we could always relieve the burden on those on pension credit and find ways of helping people who really could not afford to live. But the triple lock must go. That is not a popular policy, but in our hearts, I think we know that it is the right one.
Madam Deputy Speaker (Ms Nusrat Ghani)
Just shy of 60 Members wish to contribute, so there is a speaking limit of 10 minutes to begin with.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to follow the Father of the House and his wide-ranging contribution. I think he is slightly more optimistic about the ability to achieve consensus across the Front Benches than, sadly, I might be, but his point about intergenerational unfairness is absolutely right.
Let me start by recognising the hard work that the Treasury team have put into this Budget against a challenging international backdrop, particularly around trade issues. I particularly welcome the long overdue measures around council tax on more valuable properties. No one wants to pay more tax, of course, but some of us appreciate that the public services and the public realm need to be properly funded. Frankly, what is extraordinary to me is the number of years that those invaluable properties have escaped proper taxation.
I am old enough to remember how that all came about, with the council tax being introduced as a quick fix after the debacle of the Tory poll tax. I am afraid that some people on the Conservative Benches never change: they are always hankering to find a way to escape paying their dues. They hanker after things like flat taxes or whatever, but after 30 years of certain properties not making their contribution, I am delighted that it is this Government who are finally cracking down on that unfairness.
There are many other aspects to this Budget that I strongly welcome. Many of my Cambridge constituents commute into London, and the freeze on regulated rail fares, including season tickets, will be widely welcomed.
I also wish to say a few things about what the money raised in the Budget is spent on. In my experience, both as an MP and a former Minister, it was not just the council tax system that the Tories broke in the 1990s; it went much wider. The fragmentation and privatisation of so much of our public realm have not only cost us financially but contributed to the gloom that has descended on what is still a rich and successful country. Private affluence alongside public decay does not make for a happy society. In the limited time I have, I will cite a few examples that I have come across over the previous few weeks.
The chaos in our prison and justice systems goes back in no small part to the disastrous policies pursued by Chris Grayling in his misguided attempts to privatise the Probation Service, from which it has never fully recovered. The fragmentation of services was made particularly clear recently, when residents in a modern development near Cambridge railway station complained to me about the problems they faced with both criminal behaviour and poor building standards. The housing associations turned out in force to meet me—it is amazing what a visit from an MP will do—and they told me about the labyrinth of organisations involved in those issues: at least two councils, the police, those responsible for developing the building, those responsible for maintaining the building, and those responsible for fire safety. In those circumstances, how could anyone come to a sensible solution? I came away very clear about one thing: no one seemed to take responsibility overall, and as a consequence, the residents have a very poor deal.
Another example is the rightful national outcry about the abuses that have resulted from too many neighbourhood shops selling vapes and smuggled cigarettes, exposed so well by BBC investigative reporters. I could not be the only one who wondered why it seemed so hard to enforce the law when it is being flouted in plain sight, so I asked the House of Commons Library for statistics on what has happened to trading standards officers over the years. Guess what? In 2010, local authorities spent just under £172 million per annum on them. By 2020, that had fallen to just over £103 million. That figure recovered only a little, to £117 million, by 2024. I understand that trading standards are not the only agencies involved, but it is no wonder that they struggle to respond. That is certainly not a criticism of trading standards officers; they do a remarkable job, given that they have been starved of resources.
My conclusion is that this Budget is a really good start in difficult circumstances, yet we have a huge way to go in rebuilding the public realm so that we have a country that feels safe and secure for everyone. Putting back together what has been broken apart is neither easy nor quick; it is much easier to break things than to put them back together again. We have had decades of disruption from the Conservative party, and things would only be made worse by the party that goes by the name of Reform. It, too, ought to go to trading standards, because that is a false prospectus. The party is not about reforming the country, but about breaking it. I am confident that people will increasingly recognise that, so I urge my Treasury colleagues to stand firm and rebuild not just our economy but the communities in which we all live, whatever our circumstances.
Sir Oliver Dowden (Hertsmere) (Con)
I refer Members to my entry in the Register of Members’ Financial Interests, including my position as chair of the United Arab Emirates all-party parliamentary group.
It did not have to be this way. The roots of this Budget and its failure are in the last one. It began with the unnecessary delay and scaremongering before that Budget, which frightened consumers and scared off businesses from investment. Then, when the Budget was announced, the Chancellor made three key errors. She chose to do probably the worst thing for jobs and growth: she put up national insurance contributions. She chose to drive human and financial capital away from the United Kingdom through the abolition of the non-dom tax status, and she chose a totally unrealistically low level of fiscal headroom. By the time the Chancellor sat down, markets were already preparing for the next round of tax rises, and the sense that there would be tax rises only grew with the U-turn on welfare reforms. The problem is that the Government are making exactly the same mistake all over again—and there was a litany of leaks, culminating, extraordinarily, in the OBR publishing the entire content of the Chancellor’s Budget before she even stood up, which rendered the entire speech meaningless.
This Budget makes a simple and clear choice: there will be higher welfare spending, paid for by higher taxes. For my constituents, that means higher income taxes, higher taxes on their savings, and higher taxes on their dividends. Further, in constituencies like mine, house prices have soared over the past 30-odd years to astronomical levels, and there is a real risk that older people in family homes that they bought for a very low price will have to scrimp and scrape to find several thousand pounds every year, just to stay in their family home, which they so love. That is a real problem that will emerge from this Budget, and I urge the Chancellor to look, at the very least, at ameliorating measures to stop older people having to sell their home to pay their council tax bills.
Behind this decision lies a strategic choice, and we all know exactly what has happened. The Labour leadership has watched in fear as its vote haemorrhages to the left, and this Budget is all about shoring up Labour’s tax base. The taxes of the residents of Bushey, Radlett, Potters Bar and Borehamwood are being hiked to pay for higher welfare costs, in order to appease Labour’s Back Benchers.
Luke Akehurst (North Durham) (Lab)
The right hon. Gentleman mentions taxpayers in his Hertsmere communities, which I have visited and know. Does he accept that among his constituents, there will be families who receive benefits and have more than two children, and who will be positively impacted by today’s Budget? Could he at least nod in the direction of those of his constituents who will benefit from the measures that the Chancellor has set out?
Sir Oliver Dowden
The problem with that analysis is that many people on the same street will think to themselves, “I chose not to have another child because I could not afford to have another, but my neighbour is now able to have more children, paid for by the taxman through welfare.” That is the fundamental unfairness at the heart of this Budget announcement.
Worse than that, this failure to grasp welfare reform risks neglecting a whole generation. Already, young workers’ prospects are under threat from artificial intelligence, and employment prospects are being hit by Labour’s jobs tax and labour market regulation, which is discouraging hiring. Now the message seems to emerge from the Government: “Don’t worry: abandon ambition. There is ever-higher welfare spending under Labour. That is the reason why you should vote for us.”
Simon Hoare (North Dorset) (Con)
My right hon. Friend is making a characteristically excellent speech. Would he agree that we are at a tipping point at which the welfare state is ceasing to be what we have always wanted it to be—a safety net below which nobody can fall—and is instead becoming a cocoon that will trap a whole generation in dependency, and kill off aspiration and social mobility?
Sir Oliver Dowden
As ever, my hon. Friend is totally correct. Of course the welfare state should be there for those people in temporary difficulty, but it cannot be a lifestyle, which is what ends up happening.
Sir Oliver Dowden
I will give way to the Chairman of the Treasury Committee, then I must make some progress.
Dame Meg Hillier
The Committee has heard evidence on this. It is an absolute fallacy, which we need to nail, that people choose to have more children to get more benefits. That is not the case. People fall on hard times, and that safety net is there. The ambition of my young families in Hackney is immense, but they are held back. There are a lot more systemic issues about poverty, but this measure will tackle poverty for this generation, and we need to welcome it.
Sir Oliver Dowden
Of course there will be the occasional person who falls on hard times, but the hon. Lady should try saying what she did to the many of my constituents who are unable to have more children. They took the choice not to have them, but that option is now there. There is an imbalance between the situation that my constituents faced and the approach taken on welfare.
At a time when the United Kingdom is embracing higher taxes and an ever-greater role for the state, lower-tax dynamism abounds beyond Europe. We can see the US surging, with freer markets and a tech and energy bonanza. We need only look to the Gulf, where states like the United Arab Emirates and Saudi Arabia embracing tech, finance and alternative energy. A generation ago, this would have mattered less, but labour and capital are now highly mobile, and more and more people are voting with their feet. They are leaving the United Kingdom in their tens of thousands. This tide is washing the very brightest and best away from our shores, and I fear that once those people leave, it will be very hard to get them to come back.
The sadness of all this is that the United Kingdom remains a wonderful country. It is a beacon of stability, and we have the rule of law, the English language, our time zone, great research universities and a highly talented workforce. Indeed, having criticised the Government a lot, I pay tribute to them for successfully concluding a number of free trade agreements, including with India and the United States, and I hope that others will follow, including with the Gulf Co-operation Council. At a time when other countries present challenges—whether we are talking about the security situation in China, the unpredictability of the United States or stagnation in Europe—the United Kingdom has a golden opportunity to be a magnet for investment from businesses and entrepreneurs around the world. However, we risk consigning ourselves to what a Scottish entrepreneur described to me a couple of days ago as a “why bother” economy. What he meant was that of course people are not going to disinvest, but they will not actively choose to invest in the United Kingdom, because we are not creating an environment that rewards risk-taking and entrepreneurship.
There are a few simple steps that we could take to seize this moment, and I urge the Chancellor to take them and light the fire of competitiveness. First, instead of trying to drive away the wealthiest and biggest global investors, as we have done with the abolition of the non-dom status, we should welcome them and gain more revenue at the same time. One need only look at the Italian model; they have imposed a relatively high fee, but have in return exempted wealthy mobile people from paying further taxation. As a result, investment in Italy is surging, as is the number of wealthy people choosing to locate there, with all the opportunities that brings for growth and investment.
Secondly, instead of obsessing about policing social media, we should be aggressively policing the sort of low-level crime that drives people away from locating in this country, whether it is phone snatching, shoplifting or the general sense that the streets of this country have become less safe than they were a few years ago. Thirdly, instead of clobbering entrepreneurs, wealth creators and hard-working Brits with ever-higher marginal rates, we should have confidence that lower marginal rates generate higher revenues in the long run and benefit absolutely everyone. Fourthly, and most importantly of all in relation to this Budget, instead of consigning a generation to welfare, we should aggressively reform the welfare state to create opportunities for all. It really is not too late for the Government to seize this opportunity, but sadly, I fear that only a change of Government, and a Conservative Government, will be able to deliver those things.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
I do not know what Budget the right hon. Member for Hertsmere (Sir Oliver Dowden) was reading, but it was not the Budget that was put on the table this afternoon. I think the Chancellor got the judgment exactly right today. She had a difficult inheritance, a difficult hand and difficult decisions to take, but she got the calls absolutely right. Under the Budget, growth this year and business investment over the course of this Parliament are forecast to rise, and inflation is coming down. Forecast interest rates are coming down, energy bills for our constituents are coming down, and child poverty is set to collapse. That means that 8,900 people in my constituency will be better off because of this Budget—a Labour Budget delivered by a Labour Chancellor this afternoon.
I have been in this House for 21 years. I have sat on both Front Benches and on both sets of Back Benches, and over the years I have seen the selective amnesia that bedevils debate in this place, and the problem of unreliable narrators, but I have to say that I have never seen amnesia on as epic a scale as I did from the Leader of the Opposition today. It is quite well established that back in 2010, I thought the numbers were a little bit tight. I thought difficult decisions were going to be needed, which is why we left a judiciously balanced Budget—two thirds spending cuts, one third taxes rises—that would have halved the deficit in four years and brought debt borrowing down by 2016. That, of course, was not the strategy pursued by the last Government, and what difference did that make? The Conservatives saddled this country with an extraordinary £1 trillion of debt more than the situation we left. That is why we are paying £1 in every £10 in interest rates today—it is because they more than doubled the national debt.
Liam Byrne
Before we hear any nonsense about covid, let us remember that 80% to 90% of the increase in debt that the Conservatives saddled us with came before the covid lockdowns began.
Simon Hoare
Oh, it is nothing as contemporary as covid—don’t worry about that. I just wondered how much money the right hon. Member left in the coffers when he was Chief Secretary in 2010.
Liam Byrne
I can tell the hon. Member. I do not know what his facility with maths is like, or if he realises that a trillion has 12 noughts, but we left the national debt £1 trillion lower than it is today—£2.7 trillion. That is how much this country is now borrowing.
The great tragedy is that if the previous Government had borrowed money at low interest costs and invested it in something that enhanced productivity, we would be in a better position today and the Chancellor would not have had to deliver the Budget she had to deliver today. Don’t take my word for it; the International Monetary Fund was clear in its report on 25 July that our productivity growth under the Conservatives collapsed by a third compared with the good old new Labour years. Our productivity divergence with the United States is so serious. Our productivity growth has been half that of the United States, and the OBR is clear today that the downgrade on growth that it has baked into its numbers is entirely due to the productivity collapse because the Conservatives wasted the money during their 14 years in office.
I should just say, by the bye, that because the Conservatives are the Conservatives, they managed to put £1 trillion on the debt and to collapse the productivity numbers, and still to put inequality through the roof. That is why we have all had food bank queues in our constituencies that we will never forget. I will never forget for as long as I live the phenomenon of collecting food in inner-city Birmingham because our food banks had run out of food. I will never forget the children at Adderley school who were literally helping restock our food banks by taking Penguin bars out of their lunch boxes to put them in food collection crates so their classmates did not go hungry at lunch time. That is the reality of the child poverty legacy the Conservatives left us with, and that is the legacy that the Chancellor got to grips with today.
The Business and Trade Committee looks forward to scrutinising the proposals that have been laid out today. We have been travelling the country over the last couple of weeks talking to businesses about what they wanted out of this Budget, and three things were clear. These are isles of wonder. We now stand on the threshold of an extraordinary new era of innovation. This is an extraordinary and inventive country; we have been since the industrial revolution started in Birmingham back in 1761, but that will be nothing compared to what is about to unfold in this country. We are at the front of the grid in the race for the 21st century, but we need to mobilise capital on a completely new scale. That is why certainty, certainty, certainty for business was so important. I welcome the fact that the headroom has been put up to £22 billion today.
I welcome the fact that the Chancellor is ending the biannual circus of fiscal speculation by having one forecast a year. I have to say to the House that I seriously think that Mr Hughes needs to consider his position. The fact that we had a leak of the OBR forecast before this House got to debate the Budget is appalling, and this uncertainty has bedevilled us. Alongside that, we have to step up the mobilisation of capital on a completely different scale.
Liam Byrne
I will in a moment.
That is why I absolutely welcome the package that the Chancellor has set out today to mobilise investment capital in a radical new way: the expanding of enterprise management incentives, the boosting of the venture capital trusts, and UK listing relief. That is almost £3 billion of extra incentives for entrepreneurs in this country. That is a game changer not just for start-ups, but for scale-ups, so we can end the craziness of brilliant inventors in this country starting new businesses, growing them nicely and then them having snapped up and shifted out to the United States. We have to ensure that we are growing and fostering more big, global dominating companies here in this country, so I welcome the way the Chancellor leant in behind those firms today.
The third thing we have to do is to improve the return on investments made in this country. That means a couple of things. It means bringing down energy costs radically. We did not have a business energy cost scheme scored in the Budget today, but that is because I know the Government are out to consultation on it. Every single member of the Committee would implore the Government to do whatever it takes to ensure that business energy costs in this country are internationally competitive. It is wrong that firms like Nissan say to us that their energy costs up in Sunderland are the most expensive of any Nissan plant in the world. We must bring business energy costs down.
Alongside that, the message that we hear from small businesses in particular is that we must bring down business rates. From looking at the policy decisions in the scorecard, it looks like there is a £4.2 billion subsidy to help bring business rates down. That should mean that we have the lowest business rates this country has seen, which is a good thing, but I urge the Chancellor to go further by cutting the cost of red tape in a bold and radical way.
As the Committee travelled around the country, business after business told us that they want not just less red tape but better regulation. Crucially, they want Departments and regulators to co-ordinate with each other, so that we do not have one Department over here making one decision and another over there making a different one. Ensuring that the Whitehall machine moves at the speed of business in this new age of AI will be more and more important as a competitive advantage. This is one of the best places in the world to be an inventor or build a start-up business. We now need to ensure that we are one of the best places in the world to scale up a business. That will be the nature of the questions that the Committee will put to Ministers over the weeks to come.
One thing above all shone through in the Chancellor’s statement: ambition for, and confidence in, the future of this country. That is why one of the most important numbers we will read in the OBR forecast is that business investment is not flat or falling but is set to soar by £6 billion over the forecast period. That ambition for this country stands in stark contrast to the amnesia of the Conservative party. That is because we on the Labour Benches know how futures are really built.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The speaking limit is now eight minutes.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I thank the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) for a fascinating lecture on amnesia—it was dripping with irony given his last role in government.
I wish to congratulate the Chancellor on delivering what is almost certainly her final Budget. There is no conceivable way—not politically and certainly not economically—she can remain in post for a further year. Businesses, workers, bill payers, farmers, hospices, industry and the public sector cannot endure another cycle of this Chancellor. It has been just over a year since she stood at the Dispatch Box, delivered her first Budget and boasted that she had made the “right choices”—if anyone outside the real economy believed that, we would not be in this situation right now. She promised to
“restore stability to our public finances”
and to
“drive growth right across our country.”—[Official Report, 30 October 2024; Vol. 755, c. 828.]
She told us that growth would be her central Budget mission.
However, last month the IMF forecast that the UK will have the lowest per-capita growth in the G7 next year at just 0.5%, compared with the 1.4% average for advanced economies. Labour promised to turn the page on high food prices, but households see food inflation running out of control—it hit 4.9% last month. The Chancellor promised more jobs to tackle poverty, but unemployment hit 5% this month—its highest level since the pandemic—while poverty is at record levels. Government borrowing stands at a five-year high—£17.4 billion for October alone—and Labour is spending double the defence budget every year just to service the UK’s chronic national debt. The OECD has downgraded the UK’s economic prospects, singling out the Chancellor’s policies as exposing the economy to “significant downside risk”.
That gloomy prognosis is not borne out only in the SNP’s analysis; just listen to the Chancellor. She has spent the past 18 months insisting that the economy is in a terrible state, while blaming everyone and everything except herself, and misunderstanding what negativity her musings signal to investor confidence. It is as if she forgets that she is the Chancellor, as yet another stream of consciousness resonates—invariably negatively—around the economy. She has blamed the black hole—yes, the one that the SNP told Labour about before the election, and which she pretended only to discover after getting into No. 11. She has blamed the markets for their focus on her fiscal rules—you could not make it up—and she has blamed Brexit, despite having herself voted to trigger article 50.
However, this is not just about the fundamental economic incompetence of the Chancellor, nor just about Labour’s inheritance, which, while bad, was not the cause of this malaise. This crisis remains a product the Chancellor’s catastrophic decisions, and she will own them, just as she will own Labour’s compound fiscal bonfire. She is the in the frame for one of the most chaotic preludes to any Budget in living memory. Andy Haldane, former chief economist of the Bank of England, called it a “circus” of speculation around the Budget. The endless leaks, U-turns and media trails created panic in the economy, which, according to Mr Haldane,
“without any shadow of a doubt”
contributed to weaker than expected economic growth in the UK.
There is nothing meaningful in the Budget on energy. The measures on energy bills are a start, but they do not fulfil Labour’s election promise to reduce bills by £300. Bills are set to rise in January and again in April; £150 off energy bills will still leave the Labour party in a debit of £87 a year on its commitment at the election.
Dave Doogan
I will give way in a second. The SNP did Labour’s job for it, with a Budget proposal that involved a surcharge on banks that would have created the £300 discount for bill payers, just like Labour promised. I am very happy to give way to the hon. Member, if he can tell me when Labour will come good on that promise.
Dr Arthur
Of course, if the hon. Gentleman takes the time to read our manifesto, which we were elected on in Scotland, he will see that that promise was to be met at the end of this Parliament, so we are actually ahead of schedule. I am sure he welcomes that, just like he welcomes the extra £500 million in cash and £300 million in capital going to Scotland, and the commitment to above-inflation budget rises up to 2029. It is fantastic, Madam Deputy Speaker, is it not?
Dave Doogan
I am sure the public will be delighted to hear Labour’s never-never promise on energy bills. Unlike the hon. Member, I do not exist on my knees, waiting to get patted on the head by Labour Ministers on the Front Bench. I am off my knees. The consequentials we get in Scotland are a consequence not of largesse by the Labour party but of the taxes that Scottish enterprise creates within this so-called United Kingdom.
There is nothing in the Budget on the energy profits levy, which is putting North sea oil and gas into an early grave. As things stand, 42% of the forecast revenue of firms in the North sea oil and gas sector for 2026 is expected to come from outside the UK continental shelf. Analysis earlier this month from the Fraser of Allander Institute showed that the industry is undergoing an accelerated decline. In my view, that is a direct result of this Labour Government, who do not understand energy or the economy. This is Scotland’s reality within the so-called Union: our future and our natural endowments decided on by Westminster Ministers rather than the people of Scotland.
It must really stick in the craw, especially for Scottish Labour MPs who have to come down here to toe the party line, to see the difference that Scotland has had under the SNP since 2007. Under the SNP, GDP in Scotland has grown by 10.2% per person compared with 6.8% in the UK. Productivity has grown in Scotland at a rate of 0.9% per year, compared to 0.3% per year in the UK, and Scotland attracted 135 foreign direct investment projects in 2024, maintaining our position as the top performing part of the UK in that regard. Labour MPs are not so keen on the facts. Scottish Labour MPs jump up and down about the new minimum wage, despite the fact that their constituents and mine are already on more than that as a result of the Scottish living wage being £13.45.
There was little today to suggest that Labour grasps the severity of the cost of living crisis, which for many people feels endless. Inflation has almost doubled under Labour, and food prices are up a staggering 37% over the last five years. People are rightly asking, “What is going to sort this?” I can assure them that it is not Labour. I am pleased to see that the two-child cap is gone, and with it the appalling rape clause. It is just a shame that all the Labour MPs who were cheering the Chancellor when she announced that today did not vote with the SNP in September 2024 when we had a motion to try to remove the cap. It is rank hypocrisy.
In the last year, businesses have been trying to survive this Labour Government, rather than trying to thrive and invest. Businesses know that this Chancellor does not understand business. Family-owned businesses feel that most acutely, and farm businesses know that the Labour party is out to get them. Today’s announcements will not repair the damage. The reality is that it is already too late for some.
Whisky duty is going up again. The Scotch Whisky Association said that hiking duty today, for the third time in two years, limits Scotch whisky’s ability to generate growth, and will have a direct consequence for investment and jobs. This Chancellor has run out of road with businesses across these isles. Last year, after £40 billion of tax rises, most of that on jobs, she said:
“I’m not coming back with more borrowing or more taxes.”
She said the Government had “taken the hard decisions”, and as a result:
“We won’t have to do a Budget like this again.”
Twelve months later, here we are again with another round of tax rises. Let me make a prediction: 12 months from now, we will be back here once more, albeit with a different Chancellor.
Today’s Budget supports the view that taxes are up, borrowing is up, the cost of living is up, the cost of energy is up, spending is up, but growth—the central aim of the Chancellor, I remind the House—is down. Scotland deserves better than this Westminster version of groundhog day, and fortunately, the people of Scotland will be in a position to choose that in May’s elections.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
I would normally extend the courtesy of saying that it is an honour to follow the hon. Member for Angus and Perthshire Glens (Dave Doogan), but that speech was all a bit dreich.
I have reflected hard on this Budget, as it is the first since I left my role in the Government as Minister for School Standards. As the first Labour Minister for 14 years, I focused relentlessly on more teachers in classrooms, more support for struggling schools, pay rises that teachers deserve, an inclusive school system, and curriculum reform to transform the life chances of every child. Believe me, I would have given anything to have found a few million, or indeed a few billion, behind the Government sofa, had there been that chance when making some of those decisions, and I suspect the Chancellor has known exactly how that feels over the past few weeks.
To scrutinise public spending and to draw on those experiences of making tough decisions in government about how we spend the public’s money were among the reasons I joined the Public Accounts Committee. I have enjoyed our deep dives, examining how public services are delivered, where schemes fail, making sure that lessons are learned, and ensuring that we spend every pound in the best way possible. Just last week, we looked at clinical negligence—an area with a staggering £60 billion of accumulated liabilities. We have a golden opportunity to cut those costs and deliver better care at the same time, so I encourage the Chancellor to read our report when it lands, because it might come in handy for next year’s Budget.
Peter Prinsley (Bury St Edmunds and Stowmarket) (Lab)
Does my hon. Friend acknowledge that the cost of clinical negligence claims in maternity services is now greater than the cost of maternity services?
Catherine McKinnell
I share those concerns, as I know does the right hon. Member for Godalming and Ash (Sir Jeremy Hunt). We have cross-party interest in making better use of those resources. I thank the Chancellor for her comments about the infected blood contamination scheme, which is proudly delivered from my constituency in Newcastle upon Tyne North. The team there are incredibly proud of the work they are doing, and they will be proud of the announcement that the Chancellor made today.
Working people in Newcastle are feeling worn down by the cost of living. We know that everybody is feeling the squeeze—it is relentless and it is grinding, and I know the Chancellor knows that too, and has sought in the Budget to deliver on that promise of a better life for a hard day’s work. Many measures in the Budget will deliver that, such as the freeze in rail fares, extending the bus fare cap, measures on fuel duty, frozen prescription charges, and the cut in household energy bills.
I also know that the Chancellor cares deeply about children trapped in poverty, too often in families that are working hard and doing their best. I saw those stories at first hand on the Government’s child poverty taskforce. The driving force behind the crisis is the two-child limit. In the north-east alone, tens of thousands of children living in poverty will be lifted out of that by today’s announcement. The limit is both economically foolish and morally wrong, which is why charities and businesses in the north-east have been calling for it to be scrapped. Poverty comes at a price—a price in NHS bills, educational failure, and wasted potential. I strongly welcome the Chancellor’s decision to scrap that limit today.
Catherine McKinnell
I am afraid that I cannot give way because the time will keep running down. Scrapping the limit is just the start and it has to happen in the context of wider welfare reforms that ensure that every child grows up in a home where work pays and where families can thrive.
The mention of home brings me to council tax. There are deep-rooted inequalities in Newcastle. Just yesterday, I looked up two properties that are for sale: there was a lovely 1,600 square feet, five-bedroom house in Newcastle Great Park for £420,000, and a grade II listed former church in Knightsbridge in London of over 12,000 square feet, with seven bedrooms and a swimming pool, selling for £35 million. If I asked my constituents, “Who should pay more council tax?”, it is pretty obvious what the answer would be, yet incredibly my constituents will pay £75 more in council tax than that household in Knightsbridge. While I welcome the Chancellor’s announcements about council tax, I urge the Exchequer Secretary to go further and to review council tax bands, especially how new properties in all the new estates that are growing around the country are assessed.
Turning briefly to the new powers for mayors on overnight stay levies, of course people flock to the north-east for good reason—our history, culture, stunning coastlines and the friendliest people they will ever meet. It is only fair that tourists help to fund the infrastructure that they use and enjoy when they stay, so I understand why mayors welcome this power and want to decide about it at a local level, so the amount is not just set in London but in every region, according to what works. However, that levy has to be proportionate and not have an unfair knock-on hit on small businesses, because if those businesses go under, we will lose jobs, vibrancy and what makes the north-east special.
Our hospitality sector is under incredible pressure. I know that it is busting a gut to turn a profit and that every cost could be the one that breaks them, so while I welcome the higher wages in this Budget, we have to listen to some of the concerns raised by the Resolution Foundation. We do not want to discourage businesses from hiring, and especially not young people who want to take their first step on the job ladder.
Finally, on electric vehicles, I appreciate the changes announced on pay per mile, but the affordability of electric vehicles remains a barrier to some who want to buy one and to do the right thing. Many workers have access to salary sacrifice schemes to help make the switch, but teachers in academy schools are still unable to access a scheme, because it was put on pause by the Treasury. I want to take the opportunity to make a plea that the Treasury sort out this impasse once and for all. It would be a win-win for teachers and the electric car scheme.
To conclude, the goal is clear: a country where hard work pays, the cost of living is brought back under control, public services thrive and child poverty is history. Every pound of public money matters, because we know that it has the potential to transform lives. That is what people rightly expect of this Government, and I know that is the future that the Chancellor is working to deliver and why she has announced this Budget.
Sir Desmond Swayne (New Forest West) (Con)
I congratulate the hon. Member for Newcastle upon Tyne North (Catherine McKinnell). She caught my eye earlier when she was cheering the Chancellor with great enthusiasm, even more so than her colleagues who were making a pretty good fist of it. I recall cheering a Chancellor during a Budget speech—
Sir Desmond Swayne
Notwithstanding the misgivings that I had, I cheered with gusto. Somewhat later, I found myself on a train to Oxford to defend the Government in the annual Oxford Union debate of no confidence. While on the train, I received the news that the Chancellor who I had been cheering had been sacked—not a particularly good wicket to go out to bat on.
I am confident that those hon. Members who cheered today will fare no better, because the economy is still reeling from the last Budget that the Chancellor delivered, with her wholesale assault on enterprise, family undertakings, initiative and every employer in the land. In fact, business confidence had collapsed significantly before that Budget. It had collapsed in the summer, when the Government warned everyone that things were so bad that they were going to have to get very, very much worse. As a consequence, when the Budget was delivered, we discovered that things were even worse than we had imagined. The Government then announced after that Budget that they had stabilised the economy. It was over; they were not coming back for any more. They trumpeted throughout the past year the fact that we had the highest growth rate in the G7. That is what they inherited, but as their monstrous regiment has proceeded, that growth rate has become more and more anaemic. There is no getting away from the fact that last month the economy shrank.
This summer, the Government repeated the mistake. All we got throughout the summer was horror story after horror story and kites being flown about ghastly taxes that might be imposed on us. That was most unwelcome for businesses planning investment and for anyone planning to take on workers; these interventions move some markets and make others absolutely sclerotic. It is a disaster. When I challenged the Chief Secretary to the Treasury last week with the example of Hugh Dalton, who properly resigned over a Budget leak, I was astounded that he admitted at the Dispatch Box that he had no idea what I was talking about. That is extraordinary. Against that background, there is always the chilling presence of the huge increase in trade union power that is part of the Employment Rights Bill currently before Parliament.
However, the Government’s anti-growth agenda is only half the story. The other half of the problem was expounded excellently by the Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh). The Government’s bloated expenditure plans have overshot by 4%, and we have this enormous, growing benefits bill. The disaster was that the Government withdrew from their attempts to provide some mild or modest restraint to the growth of that bill, and as my right hon. Friend said, we now face a bill that is running annually at £300 billion—£212 billion of which is for the economic inactivity of 4.3 million people who are under no obligation to work. That number of people is growing at a rate of 130,000 per month. That is completely unsustainable, and it is to be paid for by increasing taxes that disproportionately attack those people who are already contributing the most—the entrepreneurs, the investors and the very people who can take their investment, vision, skills and employment to where the business environment is rather more friendly. They are doing that in droves and to such an extent that even the Business Secretary has remarked on and spotted it. We increasingly face a situation in which fewer and fewer people will be able to pay for the bills of the increasing burden of people who are economically inactive.
As we approach—
Sir Desmond Swayne
I do wish the hon. Gentleman would be quiet. He is insufferable.
As we approach Government activity accounting for 45% of the economy—
Several hon. Members rose—
Sir Desmond Swayne
I will not give way; I have reached my peroration. I have always thought that the result of that would be the totalitarian hand clenched in anger. I have read “The Road to Serfdom”, and things have actually turned out very differently. It is not the totalitarian hand clenched in anger; it is the Minister’s hand, open, dishing out largesse. It has turned out to be not so much the road to serfdom as the road to penury.
Cat Smith (Lancaster and Wyre) (Lab)
Follow that, I suppose! I cannot promise the same level of entertaining enthusiasm as the right hon. Member for New Forest West (Sir Desmond Swayne) as I rise to speak on today’s Budget.
I want to start by talking about the cost of living, which is my constituents’ major concern. When I have been speaking to them ahead of this Budget, it is the thing they have most wanted me to raise. I therefore welcome the really good measures that cut the cost of living, including the £150 off energy bills, the freezing of NHS prescription charges, and, for the first time in 30 years, the freeze on rail fares alongside the cap on bus fares, which will make a huge difference to people’s commutes.
I welcome the fact that the national minimum wage and the national living wage will rise, giving full-time workers a gross annual earnings increase of £900. One of my biggest asks of this Budget was the alleviation of the two-child limit. Basically, I became involved in politics because I want to eradicate child poverty, so the measures in the Budget to lift these children out of poverty are hugely welcome. The decisions by the last Government, which pushed more than half a million children into poverty, were a disgrace. I am pleased that this Labour Government are reversing that damage.
Lizzi Collinge
I know that my hon. Friend is aware of the report from North Lancashire Citizens Advice about child poverty in our area. Its top recommendation to combat child poverty was to scrap the two-child limit. Will she join me in thanking North Lancashire Citizens Advice for its fantastic work to help local people? Will she continue to work with me, as she often so generously does, to tackle child poverty in our area?
Cat Smith
My hon. Friend gives me the opportunity to put on record my thanks to North Lancashire Citizens Advice. We frequently end up referring constituents to Citizens Advice, and I thank its volunteers for all their work to support my constituents and those of my hon. Friend.
I do not buy into the idea that those who are in need of state support are in any way irresponsible or on the take. The real scandal in our country is the number of parents who are in work and in poverty. I do not believe it is ever morally right to punish a child for the decisions and choices of their parents, because that was the reality of the two-child benefit cap and its subsequent rape clause, which was abhorrent.
I am pleased that in my constituency of Lancaster and Wyre, the ending of the cap is expected to benefit around 1,550 children, who will be lifted out of poverty because of the measures in this Budget. That, alongside the expansion of breakfast clubs, such as the one at Grosvenor Park primary school, will go a long way towards transforming the life chances of children in my constituency.
One very small part of the Budget that is close to my heart is playgrounds. So far in this debate no one has mentioned the £18 million for playgrounds, but that money is incredibly important. The public space that we give to our children shows them how much we value them. If we value our youngest citizens, we should invest in playgrounds. I very much hope that Lancaster city council will receive some of this money. If it does, I will certainly be putting in a good pitch for the Ridge estate’s playground, which is in desperate need of refurbishment.
I have also been contacted ahead of the Budget by pensioners in my constituency who are understandably, like everybody, concerned about rising bills. I hope that they welcome today’s announcement of the 4.8% increase in the state pension.
Chris Vince (Harlow) (Lab/Co-op)
Members across the House will be disappointed that my mother has not yet been mentioned in the Budget debate. She has just been on the phone to champion the 4.8% increase in the state pension, which she claims will mean that she will have an extra £39 a month. Does my hon. Friend agree that this is good news for our pensioners?
Cat Smith
I am absolutely delighted for my hon. Friend’s mother. Will he please pass on my best regards?
It is not just the state pension increase, but the decision to restore the winter fuel allowance, that ensures that pensioners get the support they need. Will our Treasury Front-Bench team look at other measures to support low-income pensioners in particular, such as a national social tariff for water or enhancing the warm home discount scheme?
I represent many farmers, and I was listening carefully to the announcements today. I really do welcome the agricultural property relief now allowing 100% of that rate relief to be transferable between spouses. I am keen to continue working with Treasury Ministers to ensure that we can protect local family farms, because I feel that the thresholds are not quite in the right place yet. While I welcome today’s announcements, I am sure that many other rural MPs will also continue the dialogue with Ministers on this issue. I ask the Government to commit themselves to looking into the CenTax proposals, which would return the burden to those with the broadest shoulders—the large passive investors and the non-farming landowners, rather than our small family farms in Lancaster and Wyre. That is very much in line with our Labour values.
I was very pleased to hear the announcements about infected blood, but as an MP who has been very active in respect of another medical scandal—as I know you have, Madam Deputy Speaker—I urge the Government not to forget those who have been harmed by sodium valproate. It is nearly two years since the Patient Safety Commissioner presented her report on redress, and the families are continuing to wait. It would be remiss of me not to mention them today, and I hope that in the next Budget we can hear some welcome news for those who have campaigned for justice for many decades, while supporting their disabled children. This scandal dates to the 1970s, and I hope it will be this Government who can put things right.
I must now declare my interest as someone who is quite partial to a milkshake—although I do acknowledge that they are packed full of sugar, so I am fine with the extension of the sugar tax to my much-loved milkshakes. However, I want to ask a question about a drink that kills tens of thousands of people every year. In 2023 there were 22,644 alcohol-related deaths in England alone; the rates are going up year on year, and have been spiking since covid. The Government could, of course, tax the industry in a way that would enable the money to be put back into supporting those with addiction and reducing alcohol harms—not just the health harms, but the societal impacts as well.
According to research findings published in the last few months by the Alcohol Health Alliance, the Government could generate £3.4 billion over five years by introducing an alcohol duty escalator—a mechanism that would automatically raise the price of non-draught alcohol by 2% above inflation every year. That would also help to narrow the price gap between pubs and other hospitality venues and the supermarkets, where more alcohol is now being bought. Given the widespread evidence that supermarket-bought alcohol is the primary cause of alcohol harms, narrowing the price gap could also reduce those.
I realise that the Government have had to put our public finances on a more sustainable footing owing to the global uncertainty and the irresponsible decisions made by the last Government, but I have had had many emails from and conversations with my constituents about the issue of wealth taxes. The measures that they have been advocating include a wealth tax of 2% on assets amounting to more than £10 million, reforms of existing taxes such as capital gains tax, and closing the tax gap by properly funding and resourcing HMRC to enable it to tackle tax abuse.
I want to allow time for other speakers, so I will just say this in conclusion. I became active in politics because I wanted to fight poverty in my community and in my country. I am really pleased to be able to support this Budget, because lifting the two-child cap and the subsequent rape clause will make a huge difference to my constituents, and to all our constituents. This is a Budget that is anti-poverty and pro-children, and that is surely something we can all get behind.
Richard Tice (Boston and Skegness) (Reform)
This Budget has been a car crash—the third car crash over which this Chancellor has presided. The first was last year’s Budget, which was so damaging to business confidence, to jobs, and to the farmers who provide the food for this great nation. The second was the run-up to this Budget, with so many leaks. It was the hokey-cokey Budget—in, out, shake it all about—which, again, was damaging to business confidence. The third car crash has, I fear, written off the engine of the British economy, because once again all the data, all the incentives, are bad.
Let us just look at the simple data, shall we? Growth is down. It has been flatlining over the last quarter, and the OBR numbers show that the growth forecasts for the next four years have all been reduced. Jobs are down by nearly 200,000 people since the last Budget. Earlier this week I spoke to recruitment agents from up and down the country who told me that, essentially, businesses had stopped hiring particularly, and most damagingly, young workers. I fear this Budget will make that even worse.
Let us now look at the other data. Taxes will go up, over the next few years, to the highest level since the second world war. This Chancellor has achieved the extraordinary, unbelievable feat, after just two Budgets, of being the second highest tax raising Chancellor ever, raising taxes by some £70 billion.
Lewis Atkinson (Sunderland Central) (Lab)
On putting up taxes, a household living in a band A property in Sunderland that is worth £50,000 currently pays more council tax than one living in a £50 million property in Westminster. Do the hon. Gentleman and his Reform UK colleagues agree that reforming the system to increase council tax for those in higher bands is a good tax change to make in order to reduce people’s energy bills and to take 2,000 kids in Sunderland Central out of poverty?
Richard Tice
The good news is that when Reform wins more and more elections next May, we will be able to get better value for council tax across the whole country.
I will keep going. Over the next five years, welfare spending will increase by £70 billion per annum. That shows that this is not a Budget for workers; it is a Budget for those on welfare. It reduces the incentive to work, and it reduces the incentive to be an entrepreneur or a small business owner.
Tom Tugendhat
I am interested to hear the hon. Gentleman using the figure of £70 billion, and I agree with him. He knows that £30 billion of that results from the rise in the triple lock, so does he agree that the triple lock is simply not affordable?
Richard Tice
The truth is that if we carry on going this way, nothing will be affordable, because this Chancellor is heading us towards bankruptcy as a nation. The reality is that nothing becomes affordable if we go bust under the Minister’s and the Chancellor’s mismanagement of this economy, so we need to change course, because all the data is bad.
I cannot believe the borrowing numbers, Madam Deputy Speaker! The OBR is forecasting that borrowing in this year alone will be some £21 billion higher—
Richard Tice
The Minister clearly does not know the facts of the Budget that he is presiding over. The numbers in the Blue Book show that borrowing will be £21 billion more than the OBR forecast back in March. Over the next four years, borrowing will increase by over £60 billion. To help the Minister: mathematically, that is up.
All the data and the numbers are going in the wrong direction, but it did not need to be this way. The Government could have followed Reform’s fine recommendations. The Chancellor could have said to the Governor of the Bank of England, “Stop paying voluntary interest on the quantitative easing reserves.” She could have also said that we should stop quantitative tightening, which is why we have the highest QE programme in the western world. She could have said that we should reduce the foreign aid budget. She could have said that we should stop paying welfare to overseas nationals in order to protect British citizens. She failed to make those choices, and that is why we have had to increase taxes to the highest levels ever.
Richard Tice
I have been very generous with my time, but many others wish to speak.
It is time for change, because this Budget disincentives work and it disincentivises risk-taking, and some of the finest and brightest of our nation are seriously considering leaving the country.
There is, however, some good news: this is the last Budget that this Chancellor has given. Why? Because she has proven herself to be a learner driver with her multiple car crashes. Based on the parliamentary Labour party’s antics, it is probably also the last Budget that the Prime Minister will preside over. The final good news is that after the next general election, Reform will redesign and re-engineer the economy to make work pay, to make risk-taking pay and to get our economy growing again.
Bill Esterson (Sefton Central) (Lab)
Context is everything, and the context for this Budget can be summed up in three letters: ABT. It stands for “anyone but the Tories”, or “austerity, Brexit and Truss”. Both explain the composition of the House of Commons; it is a result of the damage done by those things. Their combined impact is that households in this country are £11,000 worse off every year than they would have been had we continued on the trajectory we were on in 2010, when Labour last left office. Policy mistakes by Liz Truss led to a £1,200 hike in interest payments. Interestingly, the market reaction to what the Chancellor said today was very positive; the only downward spike was when the Leader of the Opposition stood up. That speaks volumes about what the markets have made of the Budget today.
The contrast between ABT and now is quite stark. The situation is completely different from what the deputy leader of Reform, the hon. Member for Boston and Skegness (Richard Tice), has just tried to tell us it is. He of course supports all three of those Tory measures, although they had the disastrous results that I have outlined. By contrast, business investment is up over this Parliament. Public and private investment have jointly increased, under the partnership in the industrial strategy. That includes £14 billion of public money to secure the success of Sizewell C. We have had five successive interest rates cuts. We have had wage rises and the highest G7 growth forecast—upgraded by the OBR—and, of course, borrowing is down, which is not what the hon. Member claimed.
My constituency stands to benefit enormously. I will put in a bid to be one of the pioneers who gains a neighbourhood health centre. I am pleased that Southport was mentioned, but I want one in my constituency. In fact, I want more than one, but I will start with one: the Maghull health centre. We already have £1.3 million pledged from developer contributions, but Maghull stands ready to be a pioneer of the NHS neighbourhood health scheme. Could the Chancellor please get the integrated care board to play ball? High Pastures, my GP surgery, has already taken advantage of the modernisation fund, which is very welcome.
In the Liverpool city region, £1.6 billion has been announced for a new fleet of buses for the newly franchised network. Members will be familiar with the Manchester Bee Network, but the Liverpool A network will of course come along shortly—well, that is what Steve Rotheram says, anyway. It will link to John Lennon airport, and to Everton and Liverpool football clubs.
On energy, my Energy Security and Net Zero Committee asked the Government, in one of our recommendations, to consider moving the surplus in the investment reserve fund of the British Coal staff superannuation scheme to its members, and I am very pleased that the Chancellor has listened. A friend of mine—he and his wife are both pensioners—messaged me today to pass on their thanks to the Chancellor and the Treasury team. I know those thanks will be replicated by other Government Members—and, I hope, some Opposition Members—speaking on behalf of their constituents.
There is the very welcome decision to cut energy bills by £150, recognising the energy company obligation failure of the last Government, under which 97% of scheme participants were worse off as a result of the scheme. The price cap should fall significantly in April as a result of what the Government have announced today on energy bills. We also have an extra £1.5 billion for the warm homes plan, taking the total to £14.7 billion. I strongly recommend that the Treasury and the Department for Energy Security and Net Zero make the most of the money, and ensure that it is used as widely as possible, so that we have proper insulation and reduced energy usage.
Chris Vince
My hon. Friend makes a valid point about the importance of insulating homes. As he will be aware, my constituency of Harlow is a new town, so many householders face the same challenges at the same time. The people who are in the most poverty are least able to insulate their home. This issue is really important to them, and this measure is another example of this Government supporting the most vulnerable.
Bill Esterson
My hon. Friend is right. The warm homes plan will help those who are in fuel poverty the most. We are talking about up to £500 for a combination of insulation and solar and battery installation. Closing the gap between electricity and gas prices, which is what the money off bills will partly do, will make it more attractive for people to switch to electric heating, be it heat pumps or other forms of electric heating. That will all help with our climate commitments and bring down bills at the same time.
The Budget books contain a section on energy security. There is recognition in the Budget that secure, clean and cheaper energy is central to sustainable economic growth, but it is also essential for our energy security. The threat from Putin is becoming increasingly clear; it will become greater than it is in Ukraine. Submarine drones will target tankers delivering oil and liquified natural gas. That is a very significant threat. We have already seen the threat to pipelines. Tankers come from all over the world, and they are very vulnerable. We see in the strait of Hormuz what the Houthis are able to do. Just imagine how much bigger the threat is from Russia. The answer to that must be to diversify as far as possible. That is why Ukraine is moving away from oil and gas as much as it can, and towards low-carbon alternatives.
Lizzi Collinge
On energy security and ensuring a diverse range of clean energy sources, does my hon. Friend welcome, as I do, the Government’s commitment to responding to the nuclear regulatory review within three months, so that we can change the way that nuclear is regulated and ensure that it is kept safe and up to date, and can get building new nuclear?
Bill Esterson
My hon. Friend is right. The Energy Security and Net Zero Committee looks forward to hearing what John Fingleton has to say, and to the Government’s response to him. Regulatory reform is key. We have to speed up planning and grid connections, which are referred to in the Budget, in order to address the very serious shortfall in grid capacity, and the delays in grid connection. We could probably say the same about generating capacity, too.
This country has faced 60 years of lack of investment in our grid networks. The problem was exacerbated when the grid was privatised in 1989, despite the warnings of the then shadow Energy Secretary, Tony Blair, who predicted, entirely accurately, that although the grid was of strategic national importance, it was a natural monopoly and really would not attract the private investment that the Conservative Government claimed it would. We are left trying to catch up. That is one of the reasons—along with delays in renewing our gas fleet, let alone moving to new nuclear and renewables—why we have spent so much money on our energy system, and why bill payers are under so much pressure. It is important to say that we would have these cost pressures regardless of whether we looked to invest in fossil fuels or renewables.
I very much welcome the recommitment to the £14.2 billion from the public sector for Sizewell C. That will ensure its success. The Committee wants a fleet approach to large-scale nuclear. There has been very welcome news on a small modular reactor at Wylfa, which will deliver 3,000 jobs. Sizewell C ultimately means that 6 million homes will be powered by cheap, clean electricity.
The ongoing investment in the North sea, referred to in the Budget, has been confirmed by the North sea future plan, published this afternoon by the Department for Energy Security and Net Zero. There is strong recognition that we must support North sea oil and gas production, and a strong commitment to doing so. That will be crucial to our energy supply for decades to come, but also crucial to the energy transition, because the same companies who drill for and produce oil and gas provide the engineering expertise in the North sea for offshore wind. I was pleased to see the call for evidence on the fuel sector and refineries, too.
This Budget is no return to ABT. Instead, we have trade deals with the EU, India and the US. We have rejected the Truss approach, so fondly supported by Reform and the Conservatives, and instead we want to support reductions in the cost of living, investment in infrastructure, skills and business, and rebuilding the public sector. As the Chancellor said, we want strong foundations and a secure future. She did really well today.
Tom Tugendhat (Tonbridge) (Con)
It is somewhat depressing to speak after this Budget, which has basically picked the pocket of anybody who is trying to earn any money in this country. It has sent a very clear message to everybody in our country—a message that many people are hearing—which is, “This Government are not on your side. This Government will do everything they can to keep you where you are. They will encourage you to leave the country, rather than invest in it.” We can see that in the numbers. There is £26 billion in extra taxes, and 800,000 people are paying more. This is a welfare Budget, not a work Budget.
Sadly, though, the issue is not just those bald figures; it is what they will do to so many citizens in our country. Among the most tragic bits of this Budget is the £7.5 billion extra tax on the young people who have got themselves a university degree—that is hidden nicely and quietly in the OBR report—but there are also the 1 million young people who will not end up in work. Let us just think about that. It is 1 million young people who will not end up in work for another year, or another year after that. Those 1 million young people, in a few years’ time, will not have a choice, because businesses will not hire them, and the world will not be one that they are adapted to. Worse than that, they will have become, quite literally, slaves of the state, waiting for the man or woman in Whitehall to decide what they get each month and year. They will have become totally dependent. It is a crime to leave our fellow citizens dependent on the state.
Several hon. Members rose—
Tom Tugendhat
Forgive me; I am going to make a little progress.
That is not all of it. This Budget looked hard at fixing the very real political problems faced by the Chancellor and the Prime Minister today, admittedly, but it also looked hard at how they can simply inflate the balloon today; there was nothing about tomorrow. We can see that in the way that farmers are being taxed; it is deliberately punishing investment. We can see it in the investment figures; despite the hon. Member for Sefton Central (Bill Esterson) claiming that there has been investment in this country, the investment figures in the UK per capita show a 4% increase. Okay, that is an increase, but the figure is 22% in Canada and 79% in the United States. This is not real growth or serious investment. Sadly, we see the knock-on effects. The right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), the Chair of the Business and Trade Committee, said that there was investment in start-ups. Well, I wish there was, but all the decisions made by this Government have convinced anybody with any entrepreneurial spirit to go either to Abu Dhabi, where they are filming some new version of “Auf Wiedersehen, Pet” with British workers who have fled this country, or to the United States, which at least has the capital to invest in start-ups.
All we see is a continuation of the Blair-Brown model of increasing nationalisation of savings—that creeping control that we see spreading over pensions and the insurance market. It has left 60% of our savings in bonds, and only about 40% in equities, which contrasts remarkably with Australia, Canada and the United States, which have 20% in bonds and 80% in equities.
Bill Esterson
I am grateful to the right hon. Member for quoting me, but when backing Liz Truss to be leader of the Tory party he said:
“I have no doubt that we will move with determination to make this country safer and more secure.”
Does that not rather undermine any claim of credibility he makes?
Tom Tugendhat
I will tell the hon. Member the honest truth: Liz Truss was wrong, and I made a mistake. That is the reality; that is what happened. But here is the difference: it is true that what she did put pressure on the economy, but this Chancellor has increased debt to the highest-ever levels and the cost of borrowing to the highest in the G7.
Tom Tugendhat
There is no debate about that, so I will not give way on that point.
The reality is that we are looking at the politics of today and forgetting about tomorrow. We are seeing people left on welfare and not helped into work. We see a pretence at kindness that is actually long-term cruelty. We are failing to recognise that it is not the state, the Government or the civil servants, and certainly not the Minister, who employs people or creates any work, but free individuals freely associating and freely structuring their lives in order to create opportunity for themselves, their family and their community. But guess what? This Government do not believe in that. That is why we now see taxes at their highest-ever level at 38%—the highest since the second world war. This is a remarkable theft of liberty from the British people. Forget about digital ID, which is insane in its own right; this is a genuine theft of the liberty of free citizens to choose what to do with their resources. It is an appalling decision.
We need to look very hard at what the choices are. We can already see where the cost is going. Despite the Home Office estimates a few years ago that asylum seekers would cost £4.5 billion, this OBR report tells us that it will be £15.3 billion. That is a multiple of more than three. We are seeing any number of different areas where the costs are rising. All this would be bad enough in a normal situation where, with a bit of adjustment, we could get back to normal, but the truth is that this is not a normal situation. This is a situation that demands frank honesty.
Let me be honest and lay it on the line. The demographics of this country are going against us. We do not have enough young people for an ageing population. That means, I am afraid, that we do need to look at the triple lock. I know that those on my party’s Front Bench do not agree with me, but I have been clear that we simply cannot afford the level of welfare payments we are making. We need to be clear that health and pensions are now costing too much. We need to be clear that the security situation has changed.
I have heard that we are now raising more for defence—gosh, have I heard that?—but the reality is that it is all on the never-never. The Army is even now talking about cutting the number of soldiers, the Navy is talking about cutting the number of ships, and the Air Force is talking about cutting its numbers too. I have heard that from friends who are serving today, so I look forward to seeing what comes out of the Budget round for them. The reality is that while our enemies are arming, we are talking. It is simply not serious.
For all that I have said, there is one thing that is going so far against us that we are not even on the same field, and that is technology. Looking at the rise of AI across the world, there are only two countries that are serious players: the United States and China. The Unites States is heading for the exquisite, while China is heading for the quotidian. We are seeing a radical change in the way the economy is working, but here we are defending old jobs, punishing ideas and keeping back growth. We have a Government who simply do not understand that we have only a few years in which we can get back into the game. If we miss this chance, we will be like the old Chinese empire: we will have missed the boat, we will have burned our ships, and we will be replaced, as happened after European expansion to the Americas.
Gurinder Singh Josan (Smethwick) (Lab)
I thank the Chancellor of the Exchequer for her excellent Budget statement. I would take the right hon. Member for Tonbridge (Tom Tugendhat) and his colleagues more seriously on defence spending if the Conservatives had not wasted 14 years and cut back our defences to the bare minimum.
Gurinder Singh Josan
I will make my points.
I will focus on the benefits of the Budget and the choices made by the Chancellor for people in my constituency. It is worth first reminding ourselves of the disgraceful situation in which the Conservative party left the economy in July last year and the scale of the mess the Labour Government are having to deal with. The economy was broken, with high interest rates, high unemployment, borrowing and debt beyond our means, growth stagnating, and strikes across our public services in various sectors. The NHS was on its knees, with record waiting lists and a crisis in midwife services and mental health services—I could go on—and we had a debilitating cost of living crisis, with no plan to make things better for ordinary families in my constituency.
The Labour Government have already done so much to fix the mess, and the change is beginning to be felt in my constituency; I will go through some of those things. My constituents benefited from £20 million of plan for neighbourhoods funding in Smethwick. We have seen wage increases and growth upgraded to 1.5%. Rail fares and prescription charges have been frozen, the fuel duty freeze has been extended and pensions are increasing. We are seeing breakfast clubs and free school meals, along with more GPs and nurses. There is the 10-year NHS plan, and railways are coming back into public ownership—people said that could never be done, but it is happening. We are seeing local control over bus services, new protections for renters, and homes for heroes. We have launched the Border Security Command.
There is over £100 million in Government funding for five new research hubs, including one in Birmingham. We scrapped the ban on onshore wind and unblocked solar schemes—we have new solar schemes for schools in Smethwick. We are having lower business rates, along with the National Wealth Fund and the warm homes plan to deliver lower energy bills, with £150 off bills announced today. The child poverty taskforce was established, and 5,350 children in Smethwick will benefit from the lifting of the two-child limit. Change is happening, and my constituents are benefiting from it, but all that is in the face of a world that is changing around us.
Over the last year, global challenges have impacted the UK in an unprecedented way. We have seen the impact of President Trump’s tariffs, the Ukraine war, Russia and China, and the mess that the Tories made of Brexit. Many Labour Members have understood that the old way of doing things—leaving everything to free markets and global trade—is not working for families and workers in the UK. Essentially, we all want to buy things cheap, so they end up being made abroad, where labour costs and conditions are much lower. That in turn has meant that whole industries in the UK have shut down, with the loss of good quality jobs. Therefore, as well as the choices being made by the Chancellor and this Labour Government to cut NHS waiting lists, cut the debt and cut the cost of living, they are working to ensure that the UK becomes less reliant on other countries and more self-sufficient in defence, energy security and many other areas.
The recall of Parliament in April to save the Scunthorpe steelworks was a defining moment, with the realisation that we cannot be reliant on the US or China for steel and that we need to maintain our own capacity. I see the change delivered in last year’s Budget and this year’s Budget as being about a necessary reindustrialisation of our country to ensure that we are more self-sufficient. If we do that and get it right, we will bring good quality jobs back to our communities that allow people to buy a house and a car and to support their kids through university—the decent standard of living that people aspire to. If we get it right, we will also remove the opportunity for dog-whistle scaremongering by the nakedly populist opportunists in Reform and others who want to take advantage of economic uncertainty to peddle division.
A choice has been made by the Chancellor and this Labour Government to commit to increased defence spending, with an understanding that we will not just buy everything from America; we will make it here. There is also the investment in green energy, nuclear energy, the industrial strategy, semiconductors and AI. All those things will support and deliver growth in our economy.
It is interesting that Conservative Members have talked a lot about growth and business confidence. The Venture Capital Trust Association organised an open letter signed by 250 signatories, which included me and other Members of this and the other House, but the majority of signatories were from various start-ups and businesses, including the founders of Quantexa and Matillion, which are both billion-dollar-valued tech firms. They asked for changes to the VCT and EIS schemes, which have not been updated in more than 10 years. I would take the Opposition more seriously if they had not been asleep on their watch when in power.
The British Private Equity and Venture Capital Association has just said:
“We are delighted to see the Government signalling that the important EIS and VCT incentives will be reformed to support businesses as they scale, as well as early stage investments”.
Business confidence is there. People want to see the change that we are making, which will support growth in our economy. If we get that right, that future will deliver for my constituents and for the UK, and I am proud to stand with the Government on that.
Sammy Wilson (East Antrim) (DUP)
May I, on behalf of the whole nation, thank the Chancellor for advance sight of her statement over the last few weeks? I do not know what she hoped to gain by that—she may have hoped to make it more palatable—but I am afraid that the leaks have not made it any more attractive today than when they came out of the Treasury and, in fact, we are seeing a repeat of last year.
In last year’s Budget, we were told that there was a black hole, that it was all down to the Tories and that we would have to have all the tax increases that we have had over the last year to fill it. Well, like some kind of fiscal JCB, the Chancellor seems to have dug another one and now she is back again, looking for more tax increases. Labour Members might say, “Yes, there is pain to be taken, but at least we are now getting the target right and going after the wealthy.” I have heard that so many times today, but let us look at the facts: the real tax increase here is the freezing of the thresholds.
What does the OBR say? As a result of the freezing of the thresholds, we will not drag dead rich people into the tax brackets. Instead, we will drag into the tax bands three quarters of a million people who are currently not paying tax because their income is so low, along with people on modest incomes who will be dragged into the top tax bands. Let us not fool ourselves that this will be financed by rich people, because the only evidence we have been given about rich people is the council tax on big mansions, which will generate only £400 million of the extra tax that is required and will not do so until 2031. This Budget still hits those who are working.
Luke Akehurst
If the right hon. Gentleman were to look at the Budget book, he would see that the graph that shows the progressiveness of this Budget shows that, in every decile, it is redistributive. He might be correct about the impact of the specific measures he has spoken about, but the overall impact of the Budget is that the poorer people are, the better off it makes them, and the richer they are, the less well-off it makes them.
Sammy Wilson
Some of that redistributive impact is the result of taxes being taken off people who are on modest incomes for welfare increases. This is a figure that the Chancellor has quoted in the House time and again: one in seven under-25s is now fully reliant on benefits and is not in work. Where is that money coming from? It is coming from people who are working on a daily basis and, in many cases, for not a great deal of money, but who will be dragged into the tax system.
This is an unfair Budget, because it still relies on taking money from working people who are not mega-rich to pay for some of the Government’s grandiose schemes. Some people may argue that if it works, it is worth doing, but let us look at the record of the previous year. The OBR tells us that the outcome of the Chancellor trying the same tactic last year has been that investment is now predicted to fall as a percentage of GDP. Output growth is going to fall by a sixth, productivity is going to fall from 0.4% to -0.4%. Consumer expenditure is down by 0.5%. People are receiving less and profits for companies are going to fall from 12.5% to 10.75%, all of which will affect investment and economic growth, and undermine the very objective that the Chancellor says she is seeking to achieve.
Of course, many people will argue that that is fine, but we have levels of expenditure that we have to finance, so how do we pay for it? Let us look at some of the decisions that the Government have made over the last year. Welfare payments are going to go up quite substantially to £58 billion over the period of this Parliament. On net zero, environmental taxes are going up by 60%, affecting the profitability of companies, and the renewables obligation next year is going to cost us £3 billion. So net zero, the impact of which we are all experiencing on jobs, is going to lead to further costs. I think many people would question whether those are the kinds of things we should be spending money on at a time when we have an abundance of fossil energy in this country.
Tax avoidance has not been dealt with. I have heard tax avoidance being mentioned every time we have a Budget, including under the previous Government, but it is never dealt with. The Googles and Amazons of this world still sell goods here but do not pay taxes in this country. The budget for welfare in relation to immigration is now predicted to go up to £15 billion. Also, we have had debates in this House time and again about the bases in the Indian ocean that we had possession of. We gave them back to Mauritius and we are paying Mauritius for that. What is Mauritius going to do with the billions that we give them from taxpayers here? It is going to cut its own taxes. We are putting up our taxes in order to allow taxes to be reduced in another country when we did not even need to do it. So there are ways in which the money could have been achieved.
I welcome the announcement about the loan charge. As a vice-chairman of the loan charge and taxpayer fairness all-party parliamentary group, I trust that we will now see the Government treating the ordinary people who are affected by the loan charge in the way in which they treated big business. Businesses were given a concessionary payment of 15%, while some of the ordinary people who were affected were being charged nearly 100%. I hope that the McCann review leads to that being sorted out.
As far as Northern Ireland is concerned, I welcome the Barnett consequentials and I hope that the Northern Ireland Assembly and the Sinn Féin Finance Minister in the Northern Ireland Assembly will spend the £370 million wisely—
Sammy Wilson
It may well be very unlikely, but I am expressing a wish that he does that.
Some £17 million has been set aside for the cost of the protocol. The protocol and the Windsor framework are costing the Northern Ireland economy dearly, and the money that has been allocated today does not replace the cuts in the trader support system and the movement assistance scheme. Without that support, Northern Ireland suppliers are increasingly finding themselves cut off from their main market of supplies here in Great Britain, and that is something that the Government need to address. I do not think that the £17 million is going to address it. It is a token, and an acceptance that there is a problem, but the problem has to be properly dealt with. Only when we have the same lawmaking arrangements as the rest of the United Kingdom, to which we belong, is that going to be dealt with.
The other issue—I noted the wording—is that while welfare changes will be funded by the Government in Westminster, because the annually managed expenditure is funded from here, when it comes to the concessions about reducing electricity bills, it simply says that the Government will work with the Executive. The Chancellor needs to give clarification. Will the Northern Ireland Executive be expected to fund the reductions in electricity bills while they are funded through Great British Energy in the rest of the United Kingdom?
Lastly, we have no vested interest in seeing the Government fail, because we will not be an alternative Government, but I do not believe that this Budget will deal with the issues that need to be dealt with. I believe we will find the Chancellor back with the same problems next year.
Matt Western (Warwick and Leamington) (Lab)
Here we are three years on from the Tory Truss kamikaze Budget. It is worth recalling just how bad that was—absolute carnage, with interest rates rocketing and mortgage market mayhem, and people and businesses left to pay for the Conservative chaos. That 49-day con trick was an ideological experiment that will scar this country for many years to come. It is worth remembering that their catastrophic failure was hailed by the hon. Member for Clacton (Nigel Farage) as
“the best Conservative budget since”
the 1980s. So much for economic illiteracy! There is clearly much to be done in our schools.
It remains for this Labour Government to clean up the mess of the last Conservative Government. It was not just the Truss Budget; successive Conservative Budgets failed the public, whether it was with the lowest investment levels in the G7 despite having historically low interest rates, or with stagnant wages and flatlining productivity.
Jim Dickson (Dartford) (Lab)
One of the things the Chancellor was clear about in her speech was the way we need to continue to build capital investment to improve the long-term growth rate of the economy. Does my hon. Friend agree that projects such as the lower Thames crossing, which will hugely reduce congestion and poor air quality in my constituency and create thousands of jobs and new opportunities for business, are great for our economy?
Matt Western
I absolutely agree with my hon. Friend. That was one of the great failings of the last 14 or 15 years; when interest rates were at record lows, that was the time as a nation to invest in our infrastructure. Any business would have done that. Unfortunately, that did not happen.
Returning to productivity, if we had continued at the same rate as when the Labour Government left office, the average worker would be making £5,000 extra per year. That is the loss in productivity we face. This past 15 years we have seen national debt rocket—from 2010 to 2024, it increased by a third—leaving us paying more on debt interest than on defence. That is the reality.
I recognise what the Chancellor is doing, and I congratulate her on her determination in delivering for the British people. As she said, it is a Budget that addresses the most important and pressing issues for people up and down our country, so I am encouraged by the proposed changes in business rates, whether that is for the hospitality sector—our pubs, cafés and so on—or small retail, and also by the taxation on dividends. It cannot be right that unearned income pays considerably lower tax than earned income.
The Budget today has made some difficult choices, but we can tackle these problems and address the concerns of our constituents and the problems facing businesses. We need to recognise the deep structural problems that undermine our economy, and without a doubt the biggest worry for my constituents is the cost of living. Despite inflation having fallen, the price of goods is 28% higher now than in 2020. The weekly food shop, for example, is now 37% higher than just five years ago. Given that, I am pleased to see the announcements on the cost of living set out today: the £150 saving on energy bills, the train fares freeze, the freezing of fuel taxation, support for childcare and the increases in the living wage. It builds on the progress we have already made, with wages having risen more in 10 months under this Labour Government than in 10 years of the Conservatives.
Let me turn to the automotive sector, which is really important for my constituency of Warwick and Leamington, where thousands are employed either by companies such as Jaguar Land Rover and Aston Martin or in the supply chain. I am proud of the support that the Government have already set out. We have delivered £2.5 billion under DRIVE35—a bold industrial strategy that provides clarity and long-term direction for industry —as well as a £1.5 billion loan to protect the Jaguar Land Rover supply chain. In addition, the US trade deal is huge for this country, as is the India trade deal. The additional £1.3 billion for the electric car grant is very welcome, as is the additional £200 million for EV infrastructure.
As chair of the all-party parliamentary motor group, I have heard concerns from the industry about the 3p mileage tax on EVs. I hope that the additional support for vehicle purchase, along with the infrastructure grants, will help to offset that, but we must not allow a repeat of what happened in New Zealand, which saw a significant reduction in take-up and demand.
I welcome the fact that the Government’s plans to change the employee car ownership schemes have been put on hold. They would have cost the industry £1.5 billion and risked 5,000 jobs. I thank the Treasury team for listening to Members, given the important role that those programmes play in vehicle manufacture and in meeting manufacturers’ zero emission vehicle mandate targets over the coming years.
I will focus—perhaps unusually in this place—on the productivity problems facing the UK. Since 2009, productivity has flatlined. The previous Government failed people and businesses. How can UK productivity have fallen so far that it is now 20% lower than that of the United States and Germany, and 12% lower than that of France? I have never believed that productivity is a puzzle; for me it is about fair employment rights, addressing the casualisation of the workforce, incentivising investment and improving on skills delivery. I welcome the measures aimed at young people, including the free apprenticeship training for SMEs and the youth guarantee scheme.
If we are to improve productivity, we need people to be fit to work. That is why sorting the NHS workforce, ending the strikes and getting people back into work has been so important. The initiative providing 30 hours of free childcare has released young parents back into the workplace—again, improving productivity. All that, along with restored stability and international credibility, means that investment is flowing back into the British economy.
Since July of this year, the Government have secured over £250 billion of investment in high-growth sectors, supporting 45,000 high-quality jobs. That is in additional to the increased capital spending of £107 billion laid out by the Chancellor at the previous Budget, and a National Wealth Fund equipped with £28 billion to catalyse investment. That is all incredibly significant.
On exports, as a trade envoy, I am very aware of our opportunities abroad and of the confidence that other countries have in this country—they want to invest here. In fact, we know that Britain was the fastest-growing G7 economy in the first half of this year, and that it recorded the second highest growth year on year. That is now allowing us to rebuild our public services. The NHS has already delivered 5 million additional appointments, including an extra 23,000 in my local NHS trust.
The Chancellor talked about money for defence. I would like more clarity not just on defence but on security. As chair of the Joint Committee on the National Security Strategy, I say that it is incumbent on us now to place more focus and resource in areas of resilience and wider security—and not just of our shores. We have seen cyber-attacks on Jaguar Land Rover and Marks and Spencer, for example. JLR took a £1.7 billion hit. That is what we are facing, and we must wake up to that reality and put more resource into it. That is a plea to those from the Treasury who are listening.
I have listened closely to Opposition Members, and I fear that there is a degree of naysaying. We have got growth back into the economy, and there is so much in the Budget to be positive about. We are making good progress, but we must be patient. It takes time to clear up the mess when rebuilding, but that is what we will do.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
It gives me a certain pleasure to share some agreement about the need for more resource in defence and resilience with the hon. Member for Warwick and Leamington (Matt Western). For all the Government’s talk of increasing spending on defence, the vast bulk of the promise they have made is after this spending period, and the small increase that has been allowed for in these spending plans is not even sufficient to make up for the problems that the Ministry of Defence has managing its own programmes. There is now a huge row going on there about what it is going to have to cut in order to stay within the spending envelop set by the Treasury. It is not a new problem, but it is a significant one, and it is one that underlines the need for the Ministry of Defence to adapt to a very different climate—a much more warlike and adaptive system for acquiring military kit.
The great theme of this Budget and the last, to which the hon. Member for Warwick and Leamington referred, is growth. I think we need to be realistic that the growth rate was flattened by the global financial crisis of 2008-09, and our productivity rate never recovered from that period. It is a puzzle. It is partly because our economy is more and more service orientated, which is labour intensive, but I think it is also because we have expanded the public sector so dramatically in recent years.
Public sector productivity is way below what it was before covid—it has not recovered. The productivity of the national health service is lamentable. These are issues of leadership, organisation and efficiency. The Government need to look at getting much better value for money for what we are spending, given that this country now has the highest ever peacetime levels of public expenditure.
Max Wilkinson (Cheltenham) (LD)
Will the hon. Member accept that some of the blossoming of the public sector in this country is as a result of Brexit, for which he advocated over very many years?
Sir Bernard Jenkin
I am tempted not to be drawn into the rather silly Brexit debate that seems to go on. It was notable that the Government spoofed towards the idea that they would make Brexit the scapegoat for the economy, but actually very little has come out from them on that. The Liberal Democrats may think, “Oh, if only we had a customs union to deal with the European Union, we would be £90 billion better off,” but that is fantasy economics. Why does the hon. Gentleman think that the Treasury is not saying that? Because it is not true—it is complete rubbish.
The idea that we have lost 4% of GDP as a result of Brexit is based on a very flimsy piece of evidence: a report put together from 13 forecasts made in 2016 and 2017, all before the Brexit deal was completed and we had a free trade agreement. It has never come to pass. In fact, a respected commentator, Wolfgang Münchau, said that we were approximating along growth rates in line with France and Germany before we left the European Union, and that our leaving the European Union was the “economic non-event” of the century. We have been approximating along at about the same growth rates. The very dire forecasts were based on the idea that there was going to be a 25% decline in our trade—that has not happened. There has been a marginal decline in our trade with the EU—[Interruption.]
Madam Deputy Speaker (Caroline Nokes)
Order. Ministers on the Treasury Bench might be more interested in having their private conversations, but it is making it very difficult to hear the hon. Member.
Sir Bernard Jenkin
I am very sorry that those on the Front Bench do not like hearing this, but there is no “get out of jail free” card through realigning with the European Union. It looks as though the European Union wants to charge us money for the Brexit reset. In fact, the expenditure line—what we make in net contributions to the EU since we left—has absolutely crashed. We are now contributing very little, and that money is available to the Exchequer. If we rejoined the European Union, we would have to find another £20 billion for contributions to the European budget—no thank you very much.
The real point about a Budget is that it is when the country hears from the Government about their judgment. It is not about lots of little schemes—the £400 million extra being raised from council tax does not even cover the margin for error on annual public spending each year. It is almost irrelevant; it is a window dressing about punishing the rich. Incidentally, if we go on every Budget making sure that the top deciles contribute far more than the bottom deciles, we will finish up with a more and more punitive tax and benefit system that will be more and more damaging for economic growth.
The question is: did the Government get the judgment right last time? The answer was obviously no; they said that those tax increases would be a one-off but they have had to come back for much more, because the effect of their measures has damaged economic growth. What we are missing from this conversation is a real discussion about the long-term growth of public expenditure and what we can afford. The “Fiscal risks and sustainability” report, produced by the OBR in the summer, was a sort of two-day wonder in the public debate. We then went back to discussing the very narrow question of how much headroom we should have in just one year—as though aiming for that little hole is the answer for the long-term economic viability of this country. What a ludicrous way to run a country! It is about as un-strategic as you can get.
As a consequence, we are living in a fool’s paradise. The Government have repeated their errors. They are punishing wealth creators and padding out the welfare system, which is decreasing incentives for work. The tragedy of the nearly 1 million young people who are not in education, employment or training is getting bigger. The national minimum wage will reduce opportunities for young people, because it will no longer be worth pubs and hotels recruiting young people, given that there is no cost advantage to recruiting students as opposed to full-timers. Perhaps that is what the Government want, but it will not be good for employment for young people, nor good for growth and enterprise.
The Parliamentary Under-Secretary of State for the Home Department (Jess Phillips)
As the mother of somebody in that age bracket who works in a pub, I just wanted to stand up on his behalf and say thank you to the Chancellor.
Sir Bernard Jenkin
I will not be thanking the Chancellor and her Government on behalf of all the young people who thought they would be able to get jobs in the hospitality sector, but now will not get them. Students will not get those part-time jobs to help to pay off their student loans. These issues have to be balanced—[Interruption.] I am not going to give way again.
The point is that this Budget will prove, once again, that higher spending, higher borrowing—the debt is still going up, by the way—and higher taxes are not a route to growth, prosperity, employment, happiness and security. This is a Government proving, once again, that socialism does not work. We are heading for a terrible reckoning on the basis of the long-term fiscal forecasts produced by the OBR. There is going to be a crunch.
Last year the Government sent the gilt rates rising. This year the gilt rates are way above the level that was provoked by the Liz Truss Budget. These two Budgets are much worse than the Liz Truss episode, and they have raised—[Interruption.] The Liz Truss episode was short-lived; this is permanent. It is Government policy to inflict higher borrowing costs, higher debt, higher taxation and lower growth on our country—[Interruption.] I would be grateful if those on the Front Bench could contain themselves. This Government have made permanent a fiscal and growth crisis, and we will rue the day that we elected them, because once again they will prove that Labour Governments always trash the economy permanently.
Fleur Anderson (Putney) (Lab)
I thank the Chancellor for her Budget, and the whole Treasury team for the conversations I have had with them about aid, our high streets and child poverty. It is a pleasure to follow the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), although we absolutely do not agree on the significance of Brexit. Neither do we agree that the Truss fiasco was a short-lived little incident; its effects have been very long term on my constituents and on the country, and it has made this Budget a far harder one for the Chancellor to agree, but she has risen to the challenge. As a member of the Foreign Affairs Committee, I look forward to looking at the changes in the aid and defence budgets, and I welcome the commitment in the Budget to return official development assistance to 0.7% of GNI in the future.
This Budget is good news for my constituents in Putney, Southfields, Roehampton and Wandsworth town. It has fair taxes that will mean investment in families, strong public services and a growing economy. There is an increase in the minimum wage and the state pension. Businesses will be supported with innovation. Small and medium-sized enterprises will be supported to provide free apprenticeships for under-25s. I have been looking into the impact of the transformation of the business rates system on my high street, and on high streets up and down the country. High streets will be protected through the introduction of permanently lower tax rates for retail, hospitality and leisure properties. That will benefit 3,790 properties in Wandsworth, which is very good news.
I welcome that we will be getting back £400 million from the dodgy covid contracts, and a cut to the cost of living with £150 off energy bills. I also welcome that £18 million will be spent on playgrounds, which are vital because they are places where so many children spend so much time. The increase in plastic packaging tax is good for the environment and for reducing our reliance on plastic, which is made from and uses fossil fuels. I also welcome that £29 million in fines taken from water companies will be spent on cleaning up rivers, lakes and seas—this is all really good news.
I note that the lower Thames crossing is being paid for, but my constituents will ask, “When will the reopening of Hammersmith bridge be paid for?” The bridge is a major London crossing that has been closed for six years. Across my constituency, we look forward to having more conversations about that with the Secretary of State for Transport and the Chancellor.
I will focus my remarks on welcoming the change to the two-child benefit cap. The change will lift 450,000 children out of severe hardship across the UK and will directly benefit 2,310 children in my own constituency. As the Chancellor said, the cost of leaving the cap in place is to the child, but it is also to the public services that they use and to our wider community, and there is a future cost to the economy. It has been eight long years since this cruel and unnecessary policy was brought in, and it has punished families and increased poverty ever since.
I have been on the child poverty taskforce for over a year, championing the work done by the Government to really drill down into what can make the most difference—and it is scrapping the two-child benefit cap. Children must be able to thrive no matter where they are born in the UK, and scrapping the cap will allow them to do so. The policy drove families into severe hardship, as I saw for myself in my constituency. Its removal is not only a moral imperative but an economic necessity. It makes sense in every way.
The Trussell Trust’s latest figures have exposed the scale of the crisis. In Putney alone, 5,991 emergency food parcels were distributed between April last year and March this year. That is a 7% rise on the previous year, so there is real need to scrap the two-child cap. It will make a huge difference and will result in the largest expected reduction in child poverty over a Parliament since comparable records began in 1997. That kind of dramatic change in our country is the reason I became a politician—this is what I want to see.
The change will be welcomed not only by the families who are directly affected, but across our whole community. It will mean that more children have a better start in life and that wealth will be more fairly distributed in communities. So many measures in the Budget mean that wealth distribution is going in the right direction, which is what our country needs after 14 long years of austerity. We are now seeing an end to that, and families will see the change and the benefit.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The hon. Lady is speaking about the measures that she supports in the Budget. I wonder about her views on the council tax surcharge. I had a quick look at the websites of estate agents in her constituency, and I can see that dozens—if not hundreds—of properties will be affected by the council tax surcharge. Does she support the measure and what is her message to her constituents who will have to pay that extra tax?
Fleur Anderson
It is estimated that about 4% of homes will be affected in my constituency. I have really looked into this matter, and the surcharge being added to their bills is a fair way of redistributing our tax. This surcharge applies to a very small number of people who are able to afford it. What do we get in return? A fairer society, better public services and the NHS, which people will be using. We get all those benefits in return for a minimal surcharge that will be fairly distributed. Doing this through council tax, instead of in the other ways that were talked about, is fairest.
Across the many changes in the Budget, we are looking for good things for our families, for businesses and for hard-working people. We are looking to make their lives better, bring down their bills and increase income. The increase in skills is such a necessary part of this Budget. This is a welcome Budget for Putney, for London, and for the country.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I am letting Members know that I will drop the time limit to seven minutes after the next speaker.
Llinos Medi (Ynys Môn) (PC)
Today should have been an opportunity to offer some hope, and to deliver for Wales. Unfortunately, the Chancellor has failed to do that, and our communities will still feel vulnerable.
We have been promised action on the cost of living, but nothing has been said about the unfair standing charges that see communities like mine on Ynys Môn pay £58 a year more than the UK average. On the cost of energy, one way to offer families immediate relief is to cut VAT on energy bills and review unfair standing charges.
The Budget has not addressed a travesty: Wales is a net exporter of energy, yet 25% of all Welsh households are in fuel poverty. To change that, Wales should have powers over the Crown Estate, equivalent to those in Scotland, so that the millions generated in profit from our natural resources can be returned to our communities, rather than going to Whitehall. Money for the NHS in the Budget is always welcome, but this money must be put into context. The lowest day-to-day spending increases from recent Westminster Governments for Wales’s public services have come from Labour.
Today was another missed opportunity for this Government to deliver for Wales. Classifying High Speed 2 and Oxford-Cambridge rail as “England and Wales projects” is denying Wales £4 billion. Rail spending per capita in Wales stands at £307, while in England the figure is £432. That is a clear injustice that the Government have failed to address today.
The leaking and briefing in the run-up to the Budget, and today’s unprecedented early publication of the OBR’s “Economic and fiscal outlook”, has made a mockery of the process. The speculation has caused unhelpful volatility for businesses and the markets. Uncertainty about borrowing costs for business and Government, and delays to interest rate cuts, are undermining the growth that our public services need, and provide no stability for businesses to flourish. That comes at a time when businesses in Wales are already suffering from the incoming hit of inheritance tax, which, it is estimated, will cost more than 9,000 jobs in Wales, yet the Treasury still refuses to conduct an impact assessment specifically for Wales. Today’s announcement does not take away any of the financial burden that our family farms feel. Today, I have received a message saying that Welsh farmers facing the terrible consequences of the inheritance tax are actually considering taking their own lives. That is the reality of this Government’s attack on our family farms.
Measures on the cost of living are welcome. However, despite the Budget’s policies, living standards and real household disposable income are negatively impacted by this Budget, as shown by the OBR. A rise in the minimum wage is welcome for the workers who keep our public services and local economies running, but without action on national insurance, small businesses will struggle to afford the increase. That issue is especially relevant for us in Wales, as the latest job figures show that Wales has the steepest increase in unemployment of the UK nations. To avoid further losses, we needed the Budget to support both workers and our small businesses.
Ms Billington
I am interested to know whether the hon. Lady welcomes the fact that the youth guarantee will benefit hundreds of young people in the Ynys Môn constituency. It will give free support for apprenticeships for the under-25s. That will help small and medium-sized businesses that want to recruit and train young people in Ynys Môn.
Llinos Medi
I am grateful for the opportunity to answer that question. Small businesses are the majority of our economy in Wales. While it is extremely important that they can offer apprenticeships, they need to be able to afford to employ people, and we need a skilled workforce if we are to give apprentices training opportunities. If that skilled workforce is not in place, apprentices will not have the same training opportunities. We need the whole package. National insurance changes have had a detrimental impact on small businesses in Wales, and we need a more strategic vision if we are to support small businesses.
The Chancellor’s Budget statement will have only compounded the confusion in Welsh households and businesses about what the Government’s plan means for them. The truth is that Labour today has not offered any hope for the people of Wales.
Uma Kumaran (Stratford and Bow) (Lab)
I commend the Chancellor on her statement, which sets out that this Labour Government are committed to building a stronger, more secure economy, to protecting and investing in our NHS, to reducing the national debt, and to taking measures to drive down the cost of living. My constituents in Stratford and Bow will welcome so many of the measures that the Chancellor has announced today—not least the measures on investment in our energy security, which will bring bills down, and on free apprentice training for small businesses. Some 6,500 small and medium-sized enterprises in Stratford and Bow can take that up. We also have an increase in the minimum wage for 18 to 20-year-olds, an increase in the living wage, a renewed commitment to Ukraine, and the wealthiest paying their fair share.
I will speak in particular on the important decision to abolish the Tories’ two-child benefit cap. That delivers on our defining moral mission, which is to cut child poverty. The Chancellor today set that mission out in her statement with clarity and conviction, and with reference to Labour values. Appalling rates of child poverty in communities across our country are a moral stain that should shame every Member of this House. The British public want us to bring down child poverty, but they also want the return of a social contract, in which each of us asks what we can do for our country or state, not what our state can do for us.
Child poverty continues to blight our communities in Stratford and Bow. Whether we are talking about Labour’s breakfast clubs, the free school meals provided by the Labour Mayor of London, Sadiq Khan, or the Chancellor’s extensive package today, it is Labour politicians who are leading the way, governing according to our values, and unpicking years of devastating Tory austerity.
In east London, our landscape has changed dramatically over the past two decades. The Olympic legacy has made east London the best part of the UK for social mobility and opportunities for young people. For the next generation of children growing up in Stratford and Bow, their background will not hinder their opportunity to succeed or excel. As a proud east Londoner by birth, I have seen that at first hand, and I know what the promise of London means to families like mine. There are more opportunities, but that does not negate the fact that we have some of the highest levels of children growing up in poverty.
Tragically, almost half of the children in Stratford and Bow are growing up in poverty. All the evidence shows that that experience produces poorer educational outcomes, physical and mental health challenges, shorter life expectancy, higher rates of infant mortality and childhood illness—the list goes on. Shamefully, that problem grew under the last Tory Government. The previous Parliament was the first on record during which living standards fell, and the Tories should be ashamed that that was their legacy. We will never forget that it was the working people in Britain who suffered the most from the Conservatives’ fiscal sabotage; they put their friends and profits before the British people. My constituents are still paying the price in their bills, their mortgages and their rents, all of which soared, while they worked harder than ever to battle the cost of living.
Let me put a human face to this damning failure. I received an email from a constituent, who said:
“I want to do right by my son and provide him the stability, care, and life he deserves. But right now I feel like I’m drowning, despite trying my hardest.”
I have read countless emails like that, and I have heard many more stories to that effect during my constituency surgeries. It bears repeating: the last Parliament was the first on record in which living standards fell. This is the legacy that we inherited. Families trying their very hardest are still floundering, still drowning.
Every child deserves safety and stability, which is why I am proud to see this Government act so decisively in abolishing the two-child benefit cap. It is a step that will make a huge difference to some of the most vulnerable families in my constituency. It will deliver security and stability to our very youngest citizens, regardless of the shape of their families, giving them the best start in life, and ensuring that they grow up in a Britain that cares for them, and to which, in time, they will contribute their talents.
When it comes to tackling insecurity, there is so much that this Government are already doing. There is so much that we have achieved in our first year in office—on employment rights, on renters’ rights, and in our schools—which is already transforming the lives of working people in Stratford and Bow. Now we are going further, following the evidence and introducing the single most cost-effective intervention for the benefit of our country’s most vulnerable children. No child should grow up in poverty. That is the resolve of this Labour Government, who are showing serious leadership. This is a decisive departure from the austerity and doom of Budgets past, and a rebuke to the seductive sophistry of populists on the right and the left—those who believe that we can balance the books on blame, and those who ignore the financial market, economists and experts at their peril. The populists’ false promises of hope are based on the Willy Wonka school of imagination, not rooted in financial reality or financial literacy. We have seen this before, in the disastrous Truss Budget. If it was left to Farage or the Greens, we would be right back there, and no amount of hypnosis can make the British public forget that.
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Lady should refer to colleagues not by name, but by constituency. She will, perhaps, think carefully when referring to the hon. Member for Clacton (Nigel Farage).
Uma Kumaran
I apologise, Madam Deputy Speaker.
Once more, the challenge of delivering for Britain falls to the party of working people, the Labour party. This Budget is a Labour Budget. It will cut waiting lists, tackle the national debt, prioritise cost of living pressures, and put working people first. On behalf of the 4,470 children and their families in my constituency who will be helped by the lifting of the two-child benefit cap, I thank the Chancellor for the measures she has announced today, and I am very proud to support this Budget.
Kit Malthouse (North West Hampshire) (Con)
Let me begin by drawing attention to my entry in the Register of Members’ Financial Interests, not because I believe there is a conflict, but because it illustrates the fact that I am one of those sadly rare individuals in the House who have spent the last 30 years owning and building a business. Hopefully, it also illustrates that I know whereof I speak.
I sincerely wish, on behalf of my employees and my constituents, that I could welcome today’s Budget. Before I am a Conservative, I am a British citizen, and I want the country to win. All of us should hope that any Budget, delivered by any Chancellor of any party, will put the country on a sound footing for a prosperous future. Sadly, today’s Budget was, to me, most redolent of the omnishambles Budget of 2012. We have to admit, as a party, to mistakes that we have made in the past. That Budget attempted to be politically smart to satisfy the Government’s Back Benchers, but in the hours and days that followed, it quickly unravelled, and I must tell Labour Members that I think exactly the same will happen with this Budget, because it is full of contradictions and incoherences in seemingly small areas. Take electric vehicles. I declare an interest, as the driver of an electric vehicle. The Government are pumping money into subsidising the roll-out of charging—indeed, there are grants for take-up—but the pence per mile being charged will discriminate against particular groups who need their cars, such as the disabled and the elderly, and against those in rural constituencies, who will be seriously disincentivised. It will also have a psychologically damaging impact on people who are thinking about buying an electric vehicle.
Another of those areas is the housing market. We seem to think that an attack on landlords and the higher end of the market will not have an impact on the rest of the market. I am afraid that Labour Members will hear their constituents squealing, given the inflated prices in the capital, and I think that measures on housing, too, will unravel pretty quickly.
The Chancellor said that she wants to encourage co-operatives and employee ownership, yet she has dealt a hammer blow to employee ownership by reducing by 50% the tax incentives for owners to transfer businesses to their employees, so we will see less of it.
Much was made of the apprenticeship changes and the roll-out of nurseries. That is great, but hidden in the Blue Book is a £7.5 billion hit to students and an overall reduction in per pupil funding in education. All of these things will be revealed in the days to come.
Lincoln Jopp (Spelthorne) (Con)
I completely agree with my right hon. Friend about the inherent contradictions. Would it be fair to characterise this Budget as the left hand not knowing what the further left hand is doing?
Kit Malthouse
That is a very good way of putting it. The other way of putting it is to say that there is a huge attempt to gaslight the country and, I am afraid, Labour Members about what is actually being proposed.
Let me give another example. We are told that the Government are trying to encourage business investment, yet the Blue Book contains a £1.5 billion reduction in incentives for business investment. The contradictions are clear, and I urge Members to read the Blue Book, because the Chancellor is relying on us not reading the leaked book. Sometimes it is quite impenetrable, and sometimes it is quite difficult to understand, but there are some key things that I want to point people to, if I may.
First, I ask Members to turn to paragraph 1.3 of the executive summary, which tells us that, contrary to what the Chancellor said, debt will rise over the next few years. Debt moves from being
“95 per cent of GDP this year and ends the decade at 96 per cent of GDP, which is 2 percentage points higher than projected in March”.
That was the first thing she said that was incorrect.
Sir Bernard Jenkin
Obviously, the Labour briefing says how much the previous Conservative Government borrowed over their period in office, but given that we inherited a situation where £1 in every £4 of public spending was being borrowed, it took a considerable period of austerity to get annual borrowing down. During that borrowing, we accumulated a lot of extra debt.
Kit Malthouse
My hon. Friend is exactly right. It is worth remembering that if we had not gone through a period of austerity post the financial crash and the mess that we inherited, we would not have been able to rescue the economy during covid. We would not have had the headroom that allowed us to re-leverage the country in emergency circumstances. I wish that we now had the same foresight.
Paragraph 3.13 of the Blue Book points out that, in the OBR’s view, there is nothing in this Budget that will do anything for growth. The OBR has declined to revise its previous output predictions because the Budget does nothing for growth.
Finally, the fourth bullet point in paragraph 1.28 points out that the tax-to-GDP ratio will become the highest it has ever been in this country and will constrain business incentives for the future. I urge colleagues to read the Blue Book—the truth lies therein.
We find ourselves in a position where we have a Budget that is trumpeting itself as a triumph, but which is nevertheless producing the highest tax rate of all time, completely flat and anaemic growth, and inflation and interest rates—they are in the Blue Book—that will be higher for longer than they otherwise would have been. The outlook has worsened since March, to the extent that the OBR makes a point of it.
Yuan Yang
I, too, very much enjoy reading the Blue Book. While we are talking about our favourite passages, I wonder what the right hon. Gentleman makes of page 29, which says that
“persistent weakness in productivity growth relative to the pre-financial crisis period is more likely to reflect underlying structural trends.”
What was going on in the 2010s that meant that the structure of the UK economy was so bad?
Kit Malthouse
The hon. Lady raises a very good point, which I will come on to shortly.
All of this points to the fact that, let us be honest, this is not actually a Budget about growth. I only left the Chamber for half an hour to have a cup of tea, and all the speeches that I have heard from those on the other side of the House—the “far left” side, or whatever it might be—have been about redistribution. They have all been about how pleased Labour Members are at the redistribution that is going on. That is fine, but I wish their Front Benchers would be honest about what they are trying to do, because they are sacrificing the prospect of future growth for the economy in order to tick the box on Labour Members’ political demands about redistribution. That is fine, and we have been here before. As hon. Members have said, we have been through most of these scenarios before. I am only just old enough to remember, but it happened in the 1970s. That was when we last had an openly redistributive Government—forget Tony Blair, because he was not about that—and we saw what happened to growth as a result.
To me, four things were broadly missing from this Budget. First, there very obviously is no governing philosophy of the political economy that any of us can discern. There is no plan or strategy. There is maths, there are inputs and outputs, and there is political box-ticking, but there is no sense of what kind of economy we are trying to build. There was a nod towards it in the desire to review the enterprise investment scheme and venture capital trusts, but that is really about trying to keep the lobby groups in the City happy. There is no plan to build an energetic economy.
Secondly, as has been said by a number of Opposition Members, there is no comprehension of how this Government—and I have to say, sadly, previous Governments—have damaged the return on risk. A number of Members have said that capitalism relies on risk. People go out there to invest, to risk their own money and to buy businesses, and they do that calculating the return they are going to get. If we continue to tax that return, to regulate that return and to make that return less attractive, fewer and fewer people will take that risk. If we want a scale-up economy that takes advantage of the scientific and technological inventions that we are so good at producing, we have to reduce the impositions we put on risk and make it worth while.
Thirdly, we did not have any talk about frictional taxes. The Chancellor was trumpeting growth this year, but the only reason we had a bump in growth this year was the closing of the stamp duty window, when people rushed—
Kit Malthouse
I will not give way, because I am running out of time. People rushed to fill the void, and we saw a bump in growth in the first half of the year, but since then it has been tailing off. We have to focus on the fact that frictional taxes do enormous damage.
Finally, we are at the bottom of an ellipse in human achievement, particularly in this country. If we do not get capitalism right in the UK to take advantage of that, as we did during the Victorian era, we will not build wealth for the centuries of the future, and we or our children will not live off the profits of this period.
Chris Evans (Caerphilly) (Lab/Co-op)
The two groups in society most affected by poverty are the young and the old. I think that that speaks to Labour party values. Harold Wilson once said that our party and our movement is
“a moral crusade or it is nothing.”
That is what separates us from the Opposition parties. The simple fact is that I do not buy the Liberal Democrats’ reinvention as the cuddly leaders of social mobility, especially when their leader sat in the coalition Government that oversaw austerity. Equally, I do not believe that the Tories yet understand what they did to the economy, and in particular to the people they plunged into poverty. That is the real legacy of the Tory Government.
I think the important thing is that we are supporting young people. It is amazing today that we are allowed to say that 450,000 children will be lifted out of poverty. That is an achievement in itself, but we are also with them on their journey. We are ensuring a youth placement for the long-term unemployed aged between 18 and 21, and ensuring that small businesses can give them apprenticeships. Those are important achievements. Furthermore, it is amazing that we have been able to raise the state pension limit for so many pensioners, who for so long froze under the Tory Government and had to make a choice between heating and eating. We are not talking about these things in the abstract; they are actually happening in constituencies such as mine.
However, I think this is our proudest achievement, and the one thing the Chancellor should be remembered for. Last September, I chaired a meeting in Caerphilly of all the pensioners affected by the British Coal staff superannuation scheme, and I wrote to the Chancellor to ask for the £2.3 billion in its investment fund to be transferred to them immediately. I am proud to be standing here today while a Labour Government are bringing about that legacy—for these people worked underground and kept the country moving; they knew intolerable suffering from the industrial diseases they had after they finished work. These are the people who made Britain great, and we should honour them.
We have heard all sorts of blame today for the problems we have, but it comes down to one thing: for 40 years, we have been in the grip of a failed economic theory, and we see it still today. We hear all the time that we can cut taxes and keep public services at the same level or improve them, and that there are no consequences of that, but there is only one outcome: more borrowing. That went on under previous Governments over and over again, but eventually we have to pay the piper. [Interruption.] I hear Opposition Members chuntering from a sedentary position, so I give way.
Lincoln Jopp
I am grateful to the hon. Member for giving way. What is his message to the people who have been made unemployed since the Labour party came to power?
Chris Evans
If the hon. Gentleman asks me a specific question, I will answer it. What does he mean? This is what I am talking about—this is the reason we are where we are. We are sitting on a debt mountain and we have to pay the piper. [Interruption.] He says that unemployment is rising. In what specific sector? Give me a sector. No; so we are just talking in the abstract.
Mike Wood (Kingswinford and South Staffordshire) (Con)
The number of jobs lost in hospitality since last year’s Budget, just over a year ago, exceeds 110,000 as a result of the Chancellor’s choices.
Chris Evans
To be honest, it is a bit rich for the Conservatives to talk about job losses. In the 1970s—[Interruption.] Let me give the hon. Gentleman a history lesson. In the 1970s, they said that unemployment would never reach 1 million. Under the Tories, in the golden years of Thatcher and Major, unemployment reached 3 million—3 million people unemployed. Let us not forget that they also moved most of those unemployed people on to incapacity benefit. If we are talking about the benefit bill, it actually rests at the door of the party opposite—that is the truth. More people claimed incapacity benefit under the Tory Government. They failed to bring about an economic plan. Those people lost their jobs because of heavy industry leaving. They did not plan for that or bring anything about; they just put people on the scrapheap. That is why we have the problems we have today.
The fact is—[Interruption.] Sorry, I did not catch what the hon. Member for Spelthorne (Lincoln Jopp) said. Does want to make an intervention? I do not mind. It is the third one I have taken.
Lincoln Jopp
I am grateful to the hon. Member for giving way a second time. The Chancellor said on Sky News, “It’s on me now.” I would be grateful if he could set a date for when this Government are going to take responsibility for the country. I have plenty of things I could be doing in Spelthorne, so I will go away and come back when he is prepared to be accountable and take responsibility for the state of the nation under this Government.
Chris Evans
When I was elected in 2010, all I ever had whenever I spoke was people saying, “Apologise.” Why do the Tories not apologise for the mess we find ourselves in now? Let us be fair and start from there. We have had 14 months; the party opposite had 14 years.
Chris Evans
Yes, we are in charge and we are taking the action we need to take. I do not understand what the hon. Gentleman wants us to do. Does he expect us to stand there and do nothing, or to walk away? Is that what he wants? At the end of the day, this is going nowhere. What we need to talk about are the fundamental problems.
We have heard a lot of analysis from the Opposition Benches about what is wrong, but what are we to do? We have to grasp the nettle. The fact is that net zero is here. We hear a lot of Members on the Opposition Benches saying, “Net zero is causing us problems.” The simple fact is that it is here and there are countries that are way ahead of us. We have an opportunity to be a green superpower. We can invest in nuclear energy. We can invest in tidal power. We can invest in renewables and carbon capture technology. These are the waves of the future, along with AI. This is where the jobs will come from. This is where the growth will come from. We have to pick winners, but we have to have the political will as well.
I have visited a number of companies in my constituency and the issue they have is energy bills. Captiva is a very successful spa and Team Rees Gym is also very successful. Both have talked to me about energy bills. I welcome the reduction in energy bills of £150 on average and £300 for the most impoverished, but I would like to see some sort of deal on energy for businesses to ensure that their costs come down and they can carry on competing. I welcome the increase in the minimum wage, but I also ask the Chancellor for some help for small and medium-sized businesses, so that they can carry on employing people and producing apprenticeships.
Matt Rodda (Reading Central) (Lab)
My hon. Friend is making an excellent speech, and I wholeheartedly agree about the appalling damage done by the Conservatives to our economy over 14 years. I wonder whether he would also mention the significant benefit to both employers and employees of the freezing of rail fares, which will make an enormous difference in my community. We have a net input of people commuting into Reading, but like Caerphilly we also have many people who commute to London and other destinations on the railway line. Many residents will benefit, and many employers will also benefit through the increased labour mobility.
Chris Evans
I absolutely agree, and I wish the Conservatives would apologise. It is quite simple: freezing rail fares mean that people can get work easier and can commute from places like Reading; it will bring money to the shops, restaurants and everywhere else. It is a really important move for social mobility, and will allow more people to travel from Reading to London, too.
I would say one thing in caution. I still do not understand why we have a Budget in November. I ask that the Treasury move the Budget to April, at the end of the financial year, so that businesses can plan from there and we do not have the speculation we have seen over the past couple of months.
In conclusion, I support the Budget and I support what we are doing. I am sure that in years to come, we will look back on this Budget as one of the more significant.
Helen Maguire (Epsom and Ewell) (LD)
I have listened carefully to the Chancellor, and while the Budget contains many claims, it offers little reassurance to my constituents, who will continue to feel the impact of decisions announced today.
Epsom and Ewell is home to fantastic hospitality businesses, from independent cafés such as Charlie & Ginger to charming local pubs such as the Penny Black in Leatherhead. Only last week, I had the pleasure of pulling pints at the Jolly Coopers, a fantastic community venue in Epsom. Hospitality businesses are still reeling from the increase in employer national insurance contributions announced in the previous Budget—a rise that has placed real strain on already tight margins.
The Liberal Democrats want to see an emergency VAT cut of 5% for hospitality, accommodation and attraction businesses until April 2027, funded by a new windfall tax on big banks that would raise £30 billion. A transformative measure like that would have driven footfall, eased pressure on prices and given our high streets the breathing space they desperately need. Instead, bankers are celebrating today, as there was not a single new tax on bank profits despite those profits having doubled in the past five years.
Middle-income earners in my constituency are being squeezed from every direction, with mounting household costs, spiralling food prices and eye-watering rail fares just to get to work, and now this Government are piling on yet another burden with the freeze on income tax thresholds. Let us call it what it is: a stealth tax that drags more people into paying more when their wages are only just catching up.
If that was not enough, the Government’s cut to the pension salary sacrifice scheme shows no regard for the longer-term consequences on people’s future pensions. It is fundamentally wrong to disincentivise pension saving, especially when so many have already been forced to cut back during the cost of living crisis. How do this Government expect working people to save responsibly for retirement when they are effectively being taxed for planning ahead? It is hard to see how this measure will not affect ordinary people.
Then there is the question of household energy bills, which the Government can and should be doing more to bring down. The UK continues to pay some of the highest electricity and gas prices in Europe. It is welcome that this Government have partly implemented the Liberal Democrat proposal of removing the renewables obligation levy from bills, but we would like to see the Government go further and break for good the link between gas and electricity prices.
All this comes as the Chancellor herself has acknowledged the economic impact of Brexit on our public finances. Instead of squeezing families and savers even further, could the Government not finally commit to growing the economy by repairing the damage of the previous Conservative Government’s botched Brexit deal, starting with negotiating a new UK-EU customs union? That is the responsible way forward, not continuing to squeeze those who are already struggling to make ends meet.
St Helier hospital is literally crumbling. Large windows are held together by masking tape and corridor floors are sinking into the ground. This is simply unacceptable, and has been going on for years. NHS staff are left to treat patients in abysmal conditions. Today, the Government did not say anything about the delayed new hospitals programme promised to patients or pledge new investment so that we can go further and faster on tackling the patient backlog. What does that say to staff and patients who are already crying out for help?
Frontline NHS services urgently need support, and taking certain appointments and treatments out of hospitals could help to reduce waiting times and staff pressures. That is why a national eye health strategy is a necessity; not only would it take the heat off one of the busiest out-patient departments in NHS hospitals by identifying opportunities for eyecare in the community, but it would deliver a true partnership between qualified optometrists and ophthalmologists while setting out a clear, long-term plan for eyecare.
Community health services are always welcome, and so I look forward to the roll-out of the 250 new neighbourhood health centres announced today, but we cannot ignore the fact that GP wait times are through the roof. For those health centres to work, we urgently need proper investment to ensure that everyone can see a GP within seven days and that staff feel supported. The Government cannot pick and choose which parts of healthcare they invest in when the people the Chancellor wants to get back into work need to be fit and healthy to do so.
I am disappointed in the lack of support for hospitality businesses and that the Chancellor is punishing working people trying to save for retirement, and I am disappointed that our hospitals have been left in disarray.
Janet Daby (Lewisham East) (Lab)
I thank the Chancellor and her team for a very welcome Budget. This is our Government’s second successive Budget, and it is focused on addressing the cost of living. It will ensure that everyone pays their fair share towards public services, and it invests in communities up and down the country. I will focus mainly on the cost of living, defence and overseas development aid.
As Members will be aware, many people across our country are facing great challenges to meet the cost of essentials. Food banks should be a thing of the past. Through this Budget, the Government are working towards making them a thing of the past by focusing on getting children out of poverty and getting young people into work through apprenticeships, and by bringing down energy costs. I strongly believe that prevention is far better than cure. The Government know that that is so, which is why they are investing in and focusing on early family help and early intervention, and lifting the two-child benefit cap, which is a significant measure.
I would hope the whole House would agree that no child should go hungry or without basic necessities, but from what I have heard from Conservative Members, I am not so sure that is the case. To those Members I say: child poverty damages the UK economy in the long term and makes those children less likely to perform as well as their peers in education and employment. Lifting the two-child benefit cap is, therefore, better for the economy. It will break the cycle of disadvantage and deprivation, and improve the life chances of children nationwide, wherever they are experiencing child poverty.
Jim Shannon (Strangford) (DUP)
I want to confirm my party’s support for the Government’s change to the two-child benefit cap. Child poverty levels in Northern Ireland are some of the highest in all of the United Kingdom; between 30% and 35% of children are in poverty. This change will bring them out of poverty and mean a better life for people. My party agreed with the amendment on the two-child benefit limit put forward by the SNP to the King’s Speech, so today is good news for us and for those children in poverty in Northern Ireland.
Janet Daby
I thank the hon. Member for his support for the Chancellor’s Budget and the lifting of the two-child benefit limit. I agree with what he said.
I remind Members what my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) said: 70% of children in poverty have parents who are in work. Children are not in poverty because their parents are not working. This Government are doing everything they can to lift children out of poverty. I also remind Members about the Children Act 1989, which states that the welfare of the child is paramount. If memory serves me correctly, Maslow’s hierarchy of needs refers to food. Getting children out of poverty means ensuring that no child goes hungry and that children have their basic needs met. This Government are very much committed to that, which is why I am delighted that the measure is in the Chancellor’s Budget.
Matt Rodda
My hon. Friend is making an excellent point. Is she ready to move on to the importance of breakfast clubs? Last week, I had the pleasure of welcoming the Prime Minister and the Education Secretary to Reading, where they visited a breakfast club providing excellent support to many children. The programme to expand them is really valuable, as it will invest in our young people and make huge differences to families. It will also help employers by helping mums and dads to get to work earlier.
Janet Daby
I thank my hon. Friend for his comments. I will indeed come to breakfast clubs—how could I miss them out?
The Resolution Foundation has estimated that scrapping the two-child limit would bring 330,000 children out of poverty and prevent a further 150,000 children from falling into poverty over the course of this Parliament. Children in my constituency will therefore have an improved standard of living, which is exactly what I want for them, just as Labour Members—and others, I am sure—want for their children. In fact, it is estimated that in Lewisham East, 3,530 children’s experience of relative child poverty will be reduced.
That builds on the vital work already begun by this Government, including on expanding access to free school meals, opening free breakfast clubs in every primary school and investing in historic amounts of affordable and social housing. Alongside that, we have the recently announced freeze of rail fares and prescription prices.
Every child deserves to be free from poverty and the effects of poverty. For far too long, successive Conservative Governments allowed child poverty to skyrocket; this Government will not. As a result of that failure, almost a fifth of children in my constituency grow up in poverty, but with the policies announced today, it is evident that the Labour Government are tackling child poverty as the moral imperative that it is.
Lincoln Jopp
Does the hon. Member acknowledge that whether parents get their money from income or from benefits, the Government, having inherited 2% inflation, have taken it up to 3.6%, which reduces the value of that pound in parents’ pockets?
Janet Daby
Parents want to provide for their children. Parents make choices, and the Government are making choices to support parents. We are doing that by lifting the two-child limit; Opposition Members should support that. We must not forget that these announcements have been made possible by making tough choices. Following the previous Government’s mismanagement, the nation was faced with an appalling fiscal situation.
I turn to defence. The Government are investing in capital investment over the course of the Parliament to kick-start the rebuilding of our armed forces, which is absolutely necessary when we consider how unrest in Europe is coming closer to our shores every day.
Since 2010, economic growth in my constituency of Lewisham East has lagged 30% behind the national average—that trend has been repeated in many other regions. The investment that will support councils and communities across the UK is therefore desperately needed.
Finally, as a member of the International Development Committee, I turn to international development. The UK has been at the forefront of global efforts in particular to prevent violence against women and girls, to promote peace and co-operation between different ethnic and religious groups, and to support the economic development of communities across the world. I am therefore pleased to see that paragraph 4.61 of the Red Book says:
“The government remains committed to restoring ODA spending to 0.7% of Gross National Income”
as their fiscal forecasts continue to improve. I am pleased that we are still focused on that, so that we can promote overseas the values and rights that we enjoy here in the UK.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Expectation management is normally deployed because something is not so great. The scene is set that things are going to be really bad, so that when the day arrives, people think, “Actually, that thing we thought wouldn’t be so good is actually quite good.” However, the expectation management around this Budget has been six months of doom, gloom and terror. My constituents and everyone I know has been dreading what would come out on 26 November. Worse than that, we have seen crashing business confidence and the floating of taxes of all different shapes and forms. I am surprised that we have not seen a tax on taxes themselves being floated by the Chancellor or her Department in recent months. We saw a U-turn on the Budget before it was announced, and then an announcement on the Budget half an hour before the Budget was even delivered.
Luke Akehurst
Does the hon. Gentleman not agree that it was not a U-turn, but that there were better economic statistics that meant that the hole the Chancellor was trying to fill was smaller? People on both sides of the House should welcome the numbers being better. I find it quite bizarre that anyone would attack the Chancellor for finding herself in a better situation. It would be worse for our economy and all of us, including our constituents, would be worse off if we had had to look down the barrel of any change to the headline rates of income tax, quite aside from our manifesto pledges.
Dr Spencer
I suggest the hon. Member looks at the OBR report, which, as I mentioned, was released half an hour before the Chancellor stood up and which goes into detail about why that statement is entirely false.
Surrey is one of the biggest contributors to taxation revenue. It is my constituents who will be particularly hit, if not targeted, by the Budget measures. I hear their frustrations all the time about the amount of money we contribute and the lack of reciprocity when it comes to investment in Surrey so we can continue to be an economic powerhouse. My constituents worry about the future, particularly about what the Budget means for opportunities for their kids and about the debt that we are laying on them because of decisions made today. Sadly, this Budget and the one before it show that Labour is totally unable to rein in spending. We have yet another Budget of higher welfare paid by tax.
There has been a lot of focus in this debate on poverty and childhood poverty. That is absolutely right; it is a really important subject to tackle. It is important that we help all families, and everyone, out of poverty in the best way, but we fix and work towards resolving child poverty by ensuring that people have jobs and by focusing on the tax—
Lola McEvoy (Darlington) (Lab)
Does the hon. Member therefore agree on the point in this Budget around investing £16 million in a cutting-edge science, technology, engineering and maths centre in my constituency to enable us to repair the post-Conservative scarring that we felt as a community, as we saw the hollowing out of our manufacturing sector?
Dr Spencer
If the hon. Lady will forgive me, I do not know the specific details regarding her constituency, but what I can say on the broader, macroeconomic details is that the reduction in employment as a consequence of national insurance contributions changes means that there are more children with parents who do not have jobs.
Antonia Bance (Tipton and Wednesbury) (Lab)
Will the hon. Member address this point that in the case of the six in 10 children who are in families affected by the two-child benefit limit, those families have jobs? Will he address the situation of my constituent who lost her husband? She was working, he was working and they had three kids together. They were working and still they were affected by the two-child benefit limit. It is facile in the extreme to talk about just getting a job as the route out of poverty—it is not.
Dr Spencer
I am so pleased that the hon. Member raised the point about people who are in work but still poor. I will come on to that in relation to tackling child poverty, so if she waits a second, I will respond to her questions in full.
For the moment, I want to concentrate on the more macro costs point. Food inflation has gone up to 4.9%. Food costs are a big chunk of daily spending, especially for people who are poorer. That is a direct result of decisions to raise employer national insurance contributions. It turns out that taxes on businesses get passed on to working people.
Dr Spencer
Who knew, indeed.
Energy costs are a big chunk of everybody’s outgoings, and we are still waiting for them to come down. Property costs also are a big chunk of people’s outgoings, and this is reducing and putting more pressure on the private rented sector, particularly landlords. The measures in the Budget today around the increased taxation on property revenue will be passed on to the consumer—that is, people who are renting—adding yet another cost pressure. I wish Labour Members would think through what happens not just in step one of a Budget intervention but in steps two, three and four in relation to the impact on their constituents.
One way to deal with child poverty is to look at the cliff edges of the taxation system, including the wrapping down of universal credit when someone works for 28 hours. When the Work and Pensions Committee looked at in-work poverty costs—the right hon. Member for East Ham (Sir Stephen Timms), who is in his place, was the Chair at the time—one of the things that really came out, through and through, was that lots of the families in difficulty were single-parent families and they struggled with the 28 hours’ provision because of childcare costs and the marginal benefit. We also need to look at cliff edges in relation to housing allowance and council tax. We need to get rid of the cliff edges to ensure that work always truly pays.
Also really important in helping child poverty is making sure that the child maintenance system works. There are plenty of families with a parent who should be supporting their child but is not doing so. That is absolutely scandalous and it needs to be fixed.
Lola McEvoy
I wholeheartedly agree with the hon. Member that the child maintenance system needs reforming. Does he agree that, in 2010, it was wrong of the Conservative and Lib Dem coalition to introduce a £50 access fee for people who were trying to get the money that the absent parent of their child was refusing to pay? Was that a bad decision by his Government at the time?
Dr Spencer
I invite the hon. Member to look at the report that Parliament released on the reform of child maintenance, particularly on the barriers that were set up in the system, both in terms of direct and indirect payments. I think all of us across the House would agree that the child maintenance system needs reform.
The issue with the two-child benefit cap is that most, if not all, parents love their children and would like to have more children, should money, time and other things—[Interruption.] Okay, I stand corrected, but people make decisions when planning their families based on the resources they have, whether those are personal resources, time or money. It is fundamentally unfair to say to one group of people who are making difficult budgetary decisions in relation to having more children, “You’re going to be taxed more so that you can pay for other people who are not subject to those difficult budgetary decisions because they are not employed at the moment.” That is fundamentally not fair.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
Will the hon. Member give way?
Dr Spencer
No, I am sorry. Other colleagues want to get in.
This Budget is unfair. Fairness is about honouring promises made and delivering on the Government’s responsibility to govern for all. Fairness is about making sure that opportunities are available to everyone, not just those who work hard, and that those who work hard to grasp them are not penalised for their efforts. Taxes should be used to improve security, services, growth and prosperity, not to garner political support. Fairness is not mortgaging away our children’s future on an ever-spiralling amount of debt.
Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
Today we have heard from across the House where the divide in this debate really is. There is a train of thought on the Conservative Benches that if we continue to do what the Conservatives have done over the last 14 years, things will surely get better. Well, given the experience of the 14 years of the previous Government, that is madness. Things did not get better, and for working people in this country things got materially worse, so a different course is needed.
Given the range of difficult and competing interests that the Chancellor has had to face, which have been well rehearsed, I believe that this Budget provides balance and respite for working people. When taken in the round, the two-child benefit cap will help 6,000 children in my constituency. For all the talk of, “Well, if people just worked a bit harder, things would be better,” the fact is that 60% of those households have at least one person in work. These are people who are rolling up their sleeves and doing everything that has been asked of them, but they still cannot get on in life because of the wage levels in the jobs they occupy—many of which, by the way, are important and foundational for our economy.
The rail fare freeze, the bus fare cap and measures on energy bills, on prescription charges and on the minimum wage and national living wage will give people respite and ease things a bit.
What I want to talk about, though, is the thing that really made my heart sing as a co-operator in this House: the Chancellor of the Exchequer talking about co-operation and co-operative businesses at the Dispatch Box in the main Budget. Why is that important? It is important because for so long, even when the economy has grown, many working people have not been the beneficiaries of that growth. Many communities have been hollowed out and become more and more removed from the economies that they work to serve. We believe that co-operatives and mutuals provide that bridge. They are more sustainable and productive, and they treat their workers better. They have better pay differentials, and they invest in apprenticeships at a higher rate and so on. All the arguments are there, but we have been waiting for quite a long time for a Government who understand co-operatives, see the value of them and are willing to put something behind them.
The work being done to establish a co-operative development agency so that every region of the country can benefit is music to our ears. The work being done through the mutuals and co-operative business council—where those voices and interests around the country are being brought together with the support of the Department for Business and Trade and the Treasury—is essential for doubling the size of the co-operative economy in a way that can make a huge difference.
Of course, community ownership of local assets through the English Devolution and Community Empowerment Bill will end those years of communities constantly fighting to at least keep what they have, and will mean that they can begin to look to the future and what they can build together. Co-operatives and mutuals, like every other business, rely on a thriving economy and a local community that has disposable income to spend in that local economy, so the business rates relief for retail, hospitality and leisure will be a big boon to our high streets, town centres and pubs and to many other parts of the economy.
It is no surprise that today the Co-operative Group has announced £1 billion of investment in the UK because it believes in the direction of the Government and the country—more importantly, it believes in the people of this country and wants to get behind them. I pay tribute to Shirine Khoury-Haq, the CEO of the Co-operative Group, for the work she does in driving that agenda. If anyone wanted to meet a business leader in this country who runs a tight ship financially from a business point of view, but also leads with her heart when it comes to social investment, they could do worse than looking at Shirine and her team at the headquarters in Manchester.
But we do need to go further. Our building society network and our credit unions have so much potential, but we can do much more with them. I say to every Member of this House that there are more members of building societies and credit unions than people who voted in the last general election, so they are quite an important constituency to look after and support. I know that the Minister is working hard on this issue. One very small change he could make would be to review the common bond, so that credit unions can grow, expand and offer a wider range of financial services to local communities.
There is a lot in the Budget on councils and support for them. I perceive this Budget almost as one that gives communities the right to survive, to get through what has been a difficult period and to have respite. The next challenge will be: how do these communities begin to thrive? How do working families stop worrying about every single paycheque because they are just about making ends meet and begin to think about a better future where they can thrive, really enjoy life and get the most from it? For many people, local neighbourhood services are the foundation of public services in their local area but, let’s be honest, for most parts of England, they have been eroded by pressures in adult social care, children’s services and temporary accommodation.
Whatever we think about our missions and ambitions as a Government—they are all important, of course—we also need to accept that if people open their front door and walk out on to the street and it does not feel and look better, we just will not get a hearing when we get to the ballot box the next time round. For many parts of our movement, the elections are coming pretty soon down the line, so I urge the Government to focus on that.
Let us celebrate the move to further devolution. Mayors will finally get the power to impose a visitor levy, which they have been asking for. We see even more capital investment going into our regions, further empowering mayors—that should be celebrated.
There is a lot in the Budget about investment in Britain plc, which is to be welcomed, but we need to be better at co-ordinating across Government. I have asked questions of a number of Departments, be it the Home Office about police vehicles purchased by local forces, the DWP about vehicles commissioned through the Motability scheme, or the Cabinet Office about the procurement of Government vehicles. There are no checks and balances to ensure that British vehicles are procured. Surely that is the simplest thing a Government can do—use the lever of procurement to ensure that we are supporting British jobs in our regions. On top of the good work that has been done, I urge the Chancellor to commission an urgent cross-Government review to ensure that we support British businesses across all procurement lines.
Lincoln Jopp
No one can doubt the hon. Member’s commitment to the people of Oldham. He is being very loyal to the Chancellor and her Budget. I have a simple question: if unemployment goes up in his constituency from today, before the local elections next year, will he resign?
Jim McMahon
Well, I think that would just make the unemployment situation worse, wouldn’t it? I am looking at the practical measures taken in the Budget. I am here to be helpful to the Government, not make matters worse.
I became an apprentice when I left school. I did not go to university; I went straight to work and earned a technical qualification. My two sons have followed the same route. That is a route for many working-class kids in the country. However, only 16% of apprenticeships are advertised in July and August, when kids are leaving school and looking for opportunities. The system is not geared towards helping young people to succeed. When we have a review of those not in employment, education or training and ask why so many people are out of work and not contributing to society, we will find that it is because the whole system is not geared towards supporting them in that endeavour. Today’s announcement of free apprenticeships up to the age of 25 could, if it includes a review of apprenticeships, be absolutely life-changing for tens of thousands of young people.
My final plea, in the seconds I have left, relates to HMRC mileage rates, which have not been reviewed for working people for 15 years. A social care worker who does home visits is on the minimum wage, but they are, in truth, subsidising HMRC for travelling between appointments. That is not right. The Department of Health and Social Care has already considered this, but will the Treasury take it on board, too?
Rebecca Smith (South West Devon) (Con)
It is important that we take account of the hard-working families who will be affected by Labour’s economic mismanagement, and that their voices are not drowned out by the political drama surrounding the Budget. To ensure that I heard directly from those I represent in South West Devon, I launched a survey ahead of the Budget to gather at first hand the views of as many constituents as possible. Almost 90% of those who responded told me that they were worried about Labour’s Budget, and it turns out that they had good reason. The 3,000-plus small businesses in South West Devon are suffering under the strain of Labour’s job-killing policies. The Resolution Foundation has warned that Labour’s hikes to national insurance contributions and the minimum wage will drive up the cost of employing a part-time, low-paid worker by 14%—the biggest jump on record. Increasing taxes without real spending cuts will undermine growth. I have heard in recent weeks that many people’s experience is that increased wages and national insurance, on top of higher costs, are choking SMEs in my constituency. That is why 75% of those I surveyed supported the Conservative policy of scrapping business rates for retail, hospitality and leisure. What a shame that policy did not feature in the Budget today. Indeed, 63.8% of my constituents want lower taxes, even if it means less Government spending—again, we did not see that today.
It is almost a year to the day since the Chancellor promised that she would not come back to the House with announcements of more borrowing or taxes, yet my constituents repeatedly expressed concerns that Labour would do exactly that. They did not believe the Chancellor’s hollow words, because they knew that Labour has never met a tax that it did not want to raise. Today, their concerns have been realised.
Let me be clear: the Chancellor’s fiscal mess is not a result of Brexit, covid, the Ukraine war, the fall of the Berlin wall or any other historical event; it stems from the Prime Minister and Chancellor’s inability to stand up to their Back Benchers. Spending on health and disability benefits alone is on track to hit £100 billion by 2030. My constituents know that the country cannot afford that. The Government have abandoned any meaningful reforms after a humiliating climbdown on their flagship welfare Bill.
The Chancellor’s decision to lift the two-child benefit cap is not a result of some newfound passion to tackle child poverty; plainly, it serves to throw some happy sweeteners to the Back Benchers who tore apart that flagship welfare Bill just a few short months ago. It has been clear from this debate—I have sat through almost the entire thing—that the policy is pretty much the only thing that Labour Members are excited about. My constituents do not want to lift the cap, nor does the country at large, but yet again it is party before country for Labour, and it is hard-working families who will pay. The Resolution Foundation has estimated that removing the cap in full will cost up to £3.5 billion in this Parliament. The country is in a fiscal black hole, and Labour keeps on digging, expecting hard-working families to fill that hole.
I will briefly comment on statistics on the two-child benefit cap. We have heard about its negatives, but there are a lot of statistics that those on the Government Benches have not mentioned. For example, the Institute for Fiscal Studies found that 70% of the poorest households subject to the two-child limit would see the gains from its reversal partially or fully wiped out by the household benefit cap. We have heard nothing about that. This flagship policy is not necessarily going to help the families who the Government seem to think it will.
The introduction of the two-child limit has had no significant effect on the proportion of third and subsequent children in England achieving a good level of development at age five, which is the cornerstone metric of the Government’s opportunity mission. Instead, the alternative side of that argument has been presented today. The IFS has also said that lifting the two-child limit is not a magic bullet, and other measures, such as supporting parents into quality jobs, are vital for reducing poverty in the long run. For half of those affected, the two-child limit significantly improves work incentives, so just removing the cap, as has been done today, does not actually help those whom we are seeking to support.
I represent a constituency in which defence is a really important part of the ecosystem. It is the future of our area, given what we are trying to do with Team Plymouth. However, we have still not seen the defence investment plan; it was due in the autumn, but we are rapidly approaching the winter. Big figures were announced, but I am waiting to see how amounts will be distributed. Plymouth was mentioned in the Chancellor’s speech today, but if one does a ctrl+f on the Budget document, it is not in there—except on something to do with place-based development.
On ISAs, I understand why the Government seek to push people towards stocks and shares, and there are compelling reasons to do with how much more money can be saved in that way. However, it is clear that this policy will result in a need for increased financial education. When the Opposition tried to get the Government to take financial education seriously during consideration of the Pension Schemes Bill, so that we can help people understand fully how to invest for their future, they were not interested in accepting our amendments.
I hope that the Government will not assume that it is down to banks to educate everybody on the difference between a stocks and shares ISA and a cash ISA. I like to think of myself as fairly financially literate, but even I struggled to put the effort into finding that out; as much as anything else, I struggled to find the time. I would love to make more money on my savings, but an advert on a bank website is not going to be good enough. I am interested to see what the Government will do to ensure that more people can benefit.
Chris Vince
I do not disagree with the hon. Member about the importance of financial education; I had a long rant about whether it should be in the maths curriculum. However, we have recently had a curriculum review that recognised the importance of financial education. This does not have to be a political point. Does she agree that financial education in schools is really important, and that it is one way that we could ensure financial literacy?
Rebecca Smith
Absolutely. Of course financial education in schools is important, as is a whole lot of education about life, budgeting and other things, but I am talking specifically about financial education for people in their professional years—in their 20s, 30s and 40s—who will be affected by changes to the ISA rules. They will potentially need help to make sure that they can still save effectively.
The last point I will talk about is the electric vehicle pay-per-mile policy, which will have a huge impact on rural communities, as has been said. It will also be a huge disincentive for any non-inner-city community. I represent an urban area on the outskirts of a city and the rural area around it, and a lot of my constituents—aside from the ones who have a drive and perhaps a detached house—are not able to have an electric vehicle. Pay-per-mile will disincentivise people to even aspire to have an electric vehicle in an area where it is a long drive to the supermarket, or to take their child to the swimming pool. I feel that pay-per-mile contradicts the Government’s obsession with electric vehicles. Perhaps they will speed up development of alternative fuels instead. I do not understand how they can dislike fossil fuels but at the same time disincentivise EV transition.
This Budget is completely out of step with the public. They wanted lower personal taxes and welfare spending cut. They wanted to see work pay. They wanted to see stamp duty scrapped, business rates abolished for retail, leisure and hospitality, and a £5,000 first job bonus—policies that would have meant tax cuts, and rewarded hard-working men and women—not the increase in welfare spending and the tax increases we have seen today to prop up some nice little pet projects of the Labour Government.
John Slinger (Rugby) (Lab)
This Labour Budget safeguards the priorities of the British people: protecting our NHS, reducing national debt, and easing the cost of living. There is no better lens through which to view them than the eyes of the younger generations, who will feel the greatest impact of the decisions that we make today. Of course people are concerned about their material lives, but they are also emotionally and philosophically worried about the long-term future of the country. In particular, there was the feeling, after 14 years of the Conservatives, that things were not getting better, and the worry that their children would not be as well off as them, and would not have the same, let alone more, opportunities. That is a primordial fear, as any parent will know, and we all agree that we should be taking action right here, right now, to build back up, so that this becomes a land fit for future generations. The Budget does that. It rebuilds this country in many ways, but I want to focus specifically on young people. I am delighted that my right hon. Friend the Chancellor said that this Labour Government is on the side of kids and will back their potential.
Today I participated in an online assembly at Oakfield primary academy, just after the Chancellor’s speech. I am sure the children will be inspired to see this country’s first female Chancellor delivering such a brilliant Budget. As she said, she got involved in politics because the Conservatives under-invested in schools like hers, and she is, I am sure, someone with the long-term interests of young people at the forefront of her mind. It is excellent that the Chancellor is prioritising the youth guarantee, and the measures announced today are beginning to turn the tide against entrenched inter-generational unfairness.
This Government are unleashing the talent of all our young people, with £800 million over the next three years for the youth guarantee, guaranteeing every young person a place in college, an apprenticeship, or personalised job support; funding to make training for under-25 apprenticeships free for SMEs; increasing the minimum and national living wages; £5 million for libraries in secondary schools, on top of £10 million to ensure that every primary school in England has a library; and £18 million to upgrade playgrounds across the country. We are ending the two-child benefit cap, lifting 450,000 children out of poverty.
Lincoln Jopp
For the record, why did the hon. Member vote against lifting the two-child benefit cap when the SNP proposed it earlier?
John Slinger
I am a Labour MP and I vote with the Government—it is as simple as that.
Lifting 450,000 children out of poverty is the biggest reduction in child poverty over a Parliament since records began. That will positively affect 2,020 children in my constituency of Rugby. This investment is not just anti-poverty, but pro the prosperity and life chances of all our children. More broadly, the Budget has at its core investment in housing, infrastructure and skills. The Chancellor’s decisions ensure £120 billion in additional capital spending over this Parliament, with a 10-year infrastructure strategy, an NHS back on its feet after 14 years of the Conservatives in government, a benefits system that provides support for those who need it, and help into work for people who can work, as I saw on a recent visit to Rugby jobcentre. The Budget ensures a stable economy, with support for entrepreneurship, growth forecast to rise, and inflation and borrowing forecast to fall. We are transforming the business rates system to protect the high street, with permanently lower tax rates for eligible retail hospitality and leisure properties. That will affect around 1,090 properties in my constituency of Rugby alone. The Chancellor rightly asked everyone to contribute. We all share a responsibility—in this House, in boardrooms, in businesses of all sizes and in organisations —to invest in our young people, and I am glad that this Government are sending that clear message today.
Only on Monday, when one young person at Ashlawn school in my constituency asked about my views on the pension triple lock, I pointed out that while we must of course help pensioners—and we are doing so—when thinking about how to allocate resources most fairly, our young people have a very good claim for more support. So, if you will indulge me, Madam Deputy Speaker, I am calling for a youth triple lock: three measures beyond the youth guarantee that will focus attention on the needs and voices of young people. My suggestions would be free bus travel, inflation-beating maintenance loans for students and additional help for young people with housing, but that is for another day. We are going in the right direction, as this excellent Budget shows.
I am also pleased that the Budget stays true to what Government Members hold dear: our Labour values—values that put the priorities of the British people first.
Lincoln Jopp
The hon. Gentleman is being very generous with his time. I am a bit confused by his answer to my last intervention. Why was it a bad idea to lift the two-child benefit cap when the SNP suggested it, but a good idea now that his Chancellor suggests it?
John Slinger
The hon. Gentleman is a decent man and I like him a lot, but he seems a little fixated on this point. My right hon. Friend the Chancellor has taken difficult economic and fiscal decisions so that she can lift the two-child cap, as well as doing many other things. We are getting child poverty down—I am proud of that and I will always support it.
We are protecting our NHS, reducing the national debt and borrowing, and improving the cost of living. To unleash the potential of our country, we must place the needs of young people ever higher up the political agenda, which I intend to do in this place. While some talk this great nation down, we get on with the job of building it back up and laying the foundations on which to grow in the long term, and, most importantly, enabling our citizens, especially our young people and future generations, to thrive and play their part in building a fairer and far more prosperous country for all.
Mike Wood (Kingswinford and South Staffordshire) (Con)
This Budget underlines the cost of a Labour Government who are making bad choices that are hurting working people. Once again, the Government talk about growth, but it is clear that the biggest growth that will come from the Budget is in people’s tax bills. This is a Budget that takes £12 billion from people who work or who have spent most of their adult lives working hard and doing the right thing, and gives it to people on benefits. It doubles down on the mistakes that the Chancellor made in last year’s Budget that have killed jobs, damaged our high streets and made our country poorer.
The proof is there for all to see in the OBR forecasts, which were helpfully published early. Unlike last year, when the Chancellor told the House that the OBR was going to back up her claims of a £22 billion black hole, but when we read the document it said nothing of the sort, today we could see the gaping chasm between the Chancellor’s claims and the reality contained in the report as she was delivering the Budget. The OBR is clear that it is downgrading growth forecasts not since Brexit or anything that happened under the last Government, but since March. These are downgrades under this Labour Chancellor, caused by this Labour Chancellor.
The Chancellor boasted that this year’s projections increase expected growth to 1.5%, which is still less than was being predicted at the time of last year’s Budget when she told us that 2025 would see 2% growth, but she was silent about the growth forecasts being slashed for every subsequent year of the forecasting period.
The OBR says that inflation will stay higher for longer. At a time when the cost of living is falling and inflation is at low levels in other countries, we are the outlier. That is the result of the Chancellor’s choices. It is clear that, despite the claims of the hon. Member for Rugby (John Slinger) a few moments ago, debt will rise as a proportion of GDP, not fall. That is a direct result of the Chancellor’s extra borrowing.
It is also clear that the OBR expects the cost of that borrowing to be higher—to cost the public purse more money each year. While long-term borrowing rates have fallen for most major economies since July last year, the rate that we must pay on UK Government bonds has risen.
Mike Wood
I think the hon. Lady is extremely brave to come to that point so early, given the levels that bonds are still trading at.
The OBR report is clear that the extra cost of borrowing, which is not replicated in other major economies, amounts to an extra £3 billion a year by 2030—more than the OBR expected just in March. In short, we are paying what I understand the markets call a “moron premium” because of the Chancellor’s choices.
Mark Garnier (Wyre Forest) (Con)
While we are talking about bonds, does my hon. Friend agree that, given the fact that we have an unusually large amount of index-linked gilts in the market and inflation is running at a higher rate than it was when Labour came to power, the cost of paying off the debt is going up at a disproportionately fast rate, thanks to Labour’s policies?
Mike Wood
My hon. Friend hits the nail on the head. I would go slightly further and say that it is not about paying off the debt; it is purely about servicing additional borrowing. That has real consequences for working families.
Perhaps the most concerning part of the OBR’s report is in paragraph 1.9, which says:
“Growth in real household disposable income per person is projected to fall from 3 per cent”
last year. It is falling not to 2%, or even to 1%, but to one quarter of one per cent on average for the next five years.
Mike Wood
I will make a little progress; I can see the time.
The difference between 3% per year and 0.25% per year in growth in disposable income adds up to £2,700 less per family in disposable income because of the Chancellor’s choices.
We needed a Budget for jobs, but instead this was a Budget about saving the Prime Minister’s job by giving his mutinous Back Benchers the welfare rises that he forced them to vote against just last year. If the Government really wanted to support jobs, they would have undone some of the damage that the Chancellor did last year, particularly on hospitality.
A number of Members have raised the issue of hospitality and business rate reform. Before the election, the Chancellor was clear that business rates would be reformed, which meant that pubs, restaurants and cafés would have lower bills. Instead, the owners of cafés, pub landlords and restaurant owners saw their business rate bills more than double in April. We have heard today from the Chancellor that—because of the effects of revaluation and the fact that she has decided to go with a reduction of only 10p on the multiplier, instead of the 20p signalled when the Government introduced the legislation last year—when the new regime comes in, we will again see the bills for those pubs and cafés increasing, even though business rate bills have only just doubled.
This is a bad deal for hospitality. It will have a devastating impact on our high streets, and it is made only worse by the decision of the Chancellor to increase alcohol duties. That will hit pubs again, and make it more difficult for our pubs, our bars and our responsibly licensed venues to compete with supermarkets piling them high and selling them cheap.
Lincoln Jopp
Does my hon. Friend share my concern that we have lost, I believe, 90,000 jobs from the hospitality industry just since the last Budget? While I do my bit to try to save the British pub industry on my own, does he worry, as I do, that today’s Budget will just make it harder and harder for hospitality?
Mike Wood
I do not think such declarations are in my current entry in the Register of Members’ Financial Interests, but Members may wish to look at my historical declarations. I disclose that I have received some hospitality below the threshold from UKHospitality, the British Beer and Pub Association, the Campaign for Real Ale and the British Institute of Innkeeping. My hon. Friend is clearly right, although I think his figures are slightly out of date, because it is not 90,000 jobs that have been lost in hospitality; the latest figures from UKHospitality suggest that 111,000 jobs in hospitality have been lost since the Budget.
As the Safeguarding Minister, the hon. Member for Birmingham Yardley (Jess Phillips), indicated earlier, these jobs ought to be an opportunity for social mobility. Instead, the Chancellor’s choices have been destroying those opportunities. The Budget, the measures that have been announced today and the taxes she has been piling on businesses and working people across the country will continue to destroy other opportunities, making our communities weaker, our economy poorer, and our families less well off.
Rachael Maskell (York Central) (Lab/Co-op)
Indifference to poverty, as we have just heard, marks out the political divisions of our time. The task of restructuring our economy to ensure that those who serve and work hard are not exploited by profiteers and the powerful is our mission. Today, it is clear which side Labour is on. Leveraging resources from accumulated wealth, not simply income, must be the economic pivot that this Parliament determines to make. We should hold wealth accountable, not just the fruits of hard labour. That is why I welcome measures such as the surcharge on council tax.
As John Maynard Keynes said:
“The difficulty lies, not in the new ideas, but in escaping from the old ones”,
such as the notion that the success of growth will trickle down to provide economic security. Generations have failed to receive that. Unlike the economic engineering we have seen today, economic neoliberalism has been a failed experiment that holds people back and holds people down in poverty. Some 14.5 million people now sit below the poverty line, and 4.5 million children sit in poverty. Tonight, 180,000 children will not sleep in their own bed, and 1 million children are in destitution and dependency, not given dignity or decency. We inherited that shameful legacy from those on the right.
Today is monumental: 450,000 children lifted out of poverty, 1,650 of them in my constituency. Scrapping the two-child limit is the right thing to do—it is the Labour thing to do—but we must go further. Another 80,000 are held back by the Tory benefit cap, and I trust that the child poverty strategy will ditch the cap and the ideology behind it. When a baby comes to York hospital with hypothermia, and when a mother begs me for formula because she has no milk, we must recognise the impact of pregnancy and baby poverty. It causes low birth weight, malnutrition and impeded development. From cold and damp homes, we get poor lung health. I therefore urge the Government to look specifically at women during pregnancy and at their babies, and to say that we will prioritise lifting them out of poverty, because it will make a difference to their life course.
As we seek to abolish child poverty here at home, I plead with the Government to recommit to 0.7% of GNI for overseas development aid. Every child’s life must be of equal worth, no matter where that child is born. Cutting aid will be catastrophic for infants, and we must not contemplate it. Instead, we must restore our commitment to 0.7%.
The moral injustice of the social determinants of poverty must be addressed. After a decade in this place, I have concluded that holding power and wealth in Westminster and Whitehall fails to realise the opportunities across the towns and cities of our country. A pound spent by a Government has a limited reach, but when infused with partnerships and people in localities, it stretches further and deeper into the solutions that can transform lives. The Government must trust our communities and invest to return better health, better education, better employment and opportunities for all. Today I challenge them to embark on a radical devolution of the nation’s resources to our communities, making finances work harder and reach further, restructuring services with transformational local partnerships and relationships.
I urge the Government to review the broad rental market area. Housing injustice is a major cause of poverty in York. The local housing allowance has fallen far below rental costs, to nearly 50%, and a review is essential, while more social housing is a priority. We must examine this issue. Enabling local revenue-raising is also critical, and after years of lobbying hard for it I welcome the tourism levy, which, at just the price of a cup of coffee, will raise £7 million for York.
I urge the Chancellor to look at cities such as York, because we are struggling. Our city may have an affluent core, but much is extracted, leaving it with a very high cost of living and a low-wage economy. Eight communities in York sit in the lowest quintile nationally, and the Government funding formulas are failing us across the board. We receive the lowest funding of any unitary authority but we are far from the most affluent, with one of the lowest settlements for health, schools, special educational needs and disability, police and fire. The cumulative impact has caused significant impediment. School heads who come to York cannot believe the inequity. We have far less than other areas for health and care, we need more police on our streets, and our brilliant Labour local authority is on its knees. Combined with decades of fiscal oversight, the cumulative impoverishment has driven a cultural change in York, and, sadly, the new fair funding formula is just not fair for our city. We are experiencing disadvantage, and I want the Government to look into this inequity in order to understand why the matrices are not working economically for our city and others like it and how the Treasury can rebalance them. I trust we can have a meeting to discuss that.
I believe that Labour can build a safe and secure economy, nationally and in my city, working for all. Addressing poverty, its causes and effects, must always be our driving force: keeping the elderly warm, giving disabled people dignity, and ensuring that child poverty is consigned to history. Today resets the moral purpose of politics, powerfully showing Labour on the side of families and communities, using our socialist roots to collectivise revenue to work for the common good. Poverty, in all its forms, destroys the hope that we long for and the opportunities that we need. Labour must always recognise that ending the injustice of poverty and inequality is our moral purpose, and the route to a strong economy.
Robbie Moore (Keighley and Ilkley) (Con)
This Budget was dead on arrival. We were promised that the last autumn Budget was a once-in-a-generation event, but I suggest that the Chancellor may want to correct her record on that claim. Despite setting out to find growth, she has flatlined the economy and tanked employment. Indeed, we now know that Labour will raise taxes by more than any Parliament has raised them since the 1970s. All sectors are being impacted, not only those in hospitality but manufacturing and engineering—the sectors, and the organisations, that grow growth. Our hospitality sector and high streets are the backbone of my constituency, but the cost of doing business is spiralling out of control, not helped by the previous Budget, which hiked employer national insurance contributions and significantly reduced business rate relief, and by an energy policy that is crippling everyone from manufacturers to those in hospitality. Rather than helping businesses—for example, by axing business rates on our high streets, as those of us on the Conservative Benches are committed to doing—the Chancellor has offered them absolutely no ladder at all to get out of the hole that she has created for our small businesses.
A month or so ago, I held a roundtable at New Brook Street Deli in Ilkley in my constituency, when Ilkley Brewery, The Little Teahouse and many other businesses came along specifically to raise the challenges around increases in overheads, which they simply cannot pass on to their customers. This Budget does nothing at all to help them. Indeed, it almost seems like this Government look at those businesses as if they were separate from the families who work for them, but when we make it more expensive to employ someone, it is the workers who end up paying through lower wages, fewer hours or potentially having no job at all. Given that those in my area are subjected to council tax increasing by 10%, and that Labour-run Bradford council will increase it by a further 5% next year, there is less disposable income for people to spend.
This Budget has ignored the pleas of businesses to let them get on with the job that they want to do and achieve the growth that they aspire to achieve. The Chancellor has slashed investment allowances and pushed up fuel duty for every hard-working Brit in this country, and that is not the way forward for growth. Of course, the increase in fuel duty will negatively impact rural areas much more than others, because there are further distances to travel.
Then there is the challenge with inheritance tax, which has not really been addressed at all by the Chancellor today. Small family businesses, including family farms, got just one mention by the Chancellor today, despite the Government unleashing the most devastating tax changes in a generation on these businesses last year. The changes to agricultural property relief and business property relief are set to wreak havoc not only on big multinationals, but on small family businesses. Many farming businesses are going to be negatively impacted.
John Lamont
My hon. Friend is making a powerful speech about the flaws in this Labour Government’s Budget. Does he share my concerns about the many farmers who were outside Parliament today to express how strongly they are opposed to the impact of inheritance tax changes on their business? It is very telling. I know he was there as well, but I did not spot any Labour Members listening to the concerns that farmers expressed today. Does he also share my concerns about the ban that the Met police imposed on the rally, which had been planned for weeks? Last night they decided to cancel it.
Robbie Moore
I absolutely agree. The fact that the Met police cancelled today’s pre-organised Budget day protest and rally at the last minute is an absolute disgrace. I was proud to be out on Whitehall today with many of our farming community and my Conservative colleagues. We share their anxiety and concern that the changes to inheritance tax that this Labour Government are imposing will have a negative impact not only on our farming businesses, but on the wider supply chain. It is absolutely catastrophic.
However, it is not only our farming businesses that are being impacted but many family businesses, such as Fibreline in Keighley, which employs about 200 people. It has already worked out that its BPR liability will be in the hundreds of thousands of pounds. The options that many of these businesses have are to sell plants or machinery, or to lose control of the business for which they have worked for generations by selling shares. That is not progressive, and it does not give any hope to our family businesses. That is why it is absolutely devastating to see that the Chancellor could not even be bothered to engage with family businesses in the run-up to this Budget over the last year, so that they could get their viewpoints across. Yes, I agree with my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) that it was a disgrace that not one Labour MP was out in Whitehall today to stand side by side with the farming businesses that Labour Members claim to be representing. Many of them represent rural constituencies.
Today’s Budget is heartless. After a year of anxiety, uncertainty and desperate pleas, the Prime Minister and the Chancellor have shown pure ignorance today, and this while the Government are yet set to spend £1.8 billion on a digital ID policy that nobody I have ever spoken to wants. When it comes to aspiration, why on earth would any young entrepreneur looking at this Budget want to stay in this country, and create the growth that the Chancellor is after and the local economic activity that we desperately need across areas such as Keighley and Ilkley?
The message we have heard loud and clear from this Labour Government today is, “Don’t save for your future or for your pension, because Labour will tax it; don’t bother working hard to get that pay rise, because Labour will tax it; don’t take the leap of setting up your own independent business, because Labour will tax it; and don’t you dare die holding assets, because Labour will tax them.” In fact, just about the only thing this Budget does positively is not incentivise anyone to work, but how does that deliver for the economy?
Given the crippling, tax-raising Budget that has been put before us, how on earth is the Chancellor aiming to create growth? She still has not addressed the key issues that many of our constituents have been raising with this Labour Government. Last year’s Budget, delivered by this Labour Chancellor, walked the country up the fiscal plank, which was cheered on by many Labour MPs on the Government Benches. I fear that today’s Budget, again cheered on by many Labour MPs, will leave the whole country sinking into the sea.
Matt Turmaine (Watford) (Lab)
It is a pleasure to follow the hon. Member for Keighley and Ilkley (Robbie Moore). I thank and congratulate my right hon. Friend the Chancellor, on behalf of my fellow residents in Watford and Bushey North. The Chancellor has made the tough decisions needed to get Britain’s future back, just as we promised we would during the general election campaign last year. The scale of the task of dealing with the toxic legacy left to us by the Conservatives is truly enormous: from the black hole at the heart of the nation’s finances, running on fumes, to a decade and a half of failed productivity and pitiful investment in public services. Last year, my right hon. Friend put the country on a firmer footing by fixing the foundations and reversing our seemingly terminal decline.
In Watford, private enterprise and public sector employers are both significant for our local economy. People commute to Watford as well as to London and the surrounding areas. We all know that our efforts are paying off: a succession of interest rate cuts, the highest growth in the G7 earlier this year and wages up more in 10 months under her stewardship than in 10 years of the Tories, as well as massive investment in capital projects and huge investments in the NHS. This has directly benefited my constituency, and therefore my fellow residents and I are grateful for that. Watford’s population skews young compared with similar towns in the UK, so the Chancellor’s announcement that young people on the national minimum wage will receive an 8.1% pay rise is welcome indeed. It will make a big difference to people in Watford, especially on the back of the previous increase.
All of this has been achieved against a backdrop that has been phenomenally challenging, but let us not forget that modern economic history did not begin with the Conservative Government in 2015. Oh, no, no—it was in 2010, under the Conservative coalition Government with the Liberal Democrats that the rot truly set in with austerity, the bedroom tax, the slicing and dicing of the public services we all rely on, and the severing and casting aside of opportunity for almost everyone.
I welcome the Budget’s commitments to stand by the Government’s investment in the NHS and capital infrastructure, as it was under the Conservative-Liberal Democrat coalition that Labour’s previous plans to rebuild Watford hospital were ripped up under the austerity programme. My home town has been waiting for that hospital ever since. Now we will finally get the change we were promised. I cannot tell you, Madam Deputy Speaker, how ecstatic we are to have a proper commitment backed up by actual funding from a Labour Government to rebuild our hospital finally.
I thank my right hon. Friend the Chancellor—the first female Chancellor in our nation’s history—who has once again taken the tough decisions that will right our economy and put us on the path to prosperity once more.
Ordered, That the debate be now adjourned.—(Imogen Walker.)
Debate to be resumed tomorrow.
Grove Park Railway Station
(1 day, 5 hours ago)
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Janet Daby (Lewisham East) (Lab)
I am grateful for this Adjournment debate on the merits of upgrading Grove Park train station, a historical station that has served the local community for 150 years. Originally opened in 1871 to serve rural communities and local farmers, the station helped to kickstart the development of the thriving neighbourhood that we know today. At the turn of the century, the area gained fame through its connection to Edith Nesbit’s beloved novel “The Railway Children”, which drew inspiration from the surrounding landscape. I remember watching the film adaptation as a child, as a teenager and as an adult. I am delighted that the film has this amazing link to my constituency.
Grove Park station has grown to meet the community’s changing needs. From its origins as a small rural station, it has become a vital transport hub with five platforms, connecting local residents to central London and the wider south-east. However, the station has been left to deteriorate and requires significant investment if it is to continue serving the community that has grown and developed around it. I am sorry to say that the station feels grubby and dirty. There is what appears to be a makeshift roof along most of the inside walkway. Weeds have been known to grow inside the walkway. There is no style, no pattern and no one colour to the walls of the station. Frankly, it is unpleasant, and I know that Southeastern can do much better.
My residents and local businesses deserve better. I have spoken to many of them, including a local hairdressers, the local nail salon, the café next door, the Harris chemist and the other café, the Filling Station Café. These are the people who, along with me, have been driving this campaign. I thank the over 100 constituents who signed the petition that I submitted to Parliament, calling for an upgrade to the station.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady for bringing this issue forward. She is right to highlight the condition of the station. It was great when it was first built because it suited the times, but today’s times are different. I spoke to her beforehand about this issue. My concern is that many stations across the nation require passengers to climb stairs, or place unavoidable barriers in the way of disabled people, anyone with a mobility difficulty and parents with prams. I welcome the Government’s commitment to improving accessibility, but does she agree that the Minister and the Department for Transport must commit more time to reviewing this particular case, and all cases across the nation in which there are accessibility issues, and people cannot even get into a station?
Janet Daby
The hon. Gentleman is correct. I am just about to go into the additional accessibility options for Grove Park and many other stations. This is an issue that we need to keep raising, because we need improvements for our constituents.
Grove Park station needs additional accessibility options. It has three steep ramps to each set of platforms, which makes access difficult for people with a mobility impairment, such as those in a mobility chair or using an aid to walk with. It is also challenging for parents who have pushchairs and small children to navigate the ramps. There is a separate bridge connecting the platforms, but it is not served by lifts, and there is also only one set of toilets. Imagine a parent who has a child who needs to go to the toilet, and who happens to be on the wrong platform. They have to go up and down a ramp to get to the toilet, and then make the long journey back. I think we can all agree—Members and constituents—that further options need to be considered in a wider consultation.
Daniel Francis (Bexleyheath and Crayford) (Lab)
I thank my hon. Friend for securing this debate. Like Hither Green, Grove Park is a station that my constituents in Crayford need to change at to reach Bromley North, so they would welcome improvements. Will she join me in calling for a national rail accessibility app that people could use when planning their journey? It would show which stations were accessible, where lifts were working, and where there were accessible toilets.
Janet Daby
My hon. Friend makes a strong campaign argument for ensuring that stations are accessible to all.
Much of Grove Park is made of corrugated metal, which leaks and is cold. When it rains, the waiting room is often flooded because of the leaky roof; things are even more difficult for my constituents when the door is locked. As I have said, I know that change can happen. We have campaigned for years and years for improvements at Grove Park station, and I know that campaigning works, because earlier this year, work began on upgrading Hither Green station, which is also in my constituency. It is exciting to watch the upgrade, which includes a new footbridge connecting all six platforms, new lifts, new closed circuit television and public address systems and a host of other improvements. This is a great scheme that construction workers and railway station staff are rightly proud of. More importantly, my constituents—and me, as I use both Hither Green and Grove Park stations—will benefit from this work. I am looking forward to benefiting from the improvements that will hopefully come about at Grove Park.
Lee Pitcher (Doncaster East and the Isle of Axholme) (Lab)
In Doncaster East and the Isle of Axholme, rail passengers tell me that it would make a massive difference, and help them to feel safe at stations like Hatfield, if there was improved lighting and security, and better shelters. Does my hon. Friend agree that when we make upgrades, we should think about things that make women and children feel safe?
Janet Daby
My hon. Friend is absolutely correct about better lighting. People need to feel safe using transport, especially women and girls, and anybody who feels vulnerable in those situations. We all need better lighting and accessibility, and other improvements, in our stations, so that we can all use them, and so that we have equal rights and choices when it comes to using stations and getting to where we need to go.
I need to hear about plans and timescales for improvements at Grove Park station, so I am looking forward to the Minister’s response. Grove Park station is the centre of the community, and I want to ensure that it gets the upgrade that my residents and local businesses so rightly deserve. I ask the Government to get behind me on this, and to work with Southeastern on these much-needed upgrades to a station that is frequently used by my constituents. These renovations will lift the local area.
The Parliamentary Under-Secretary of State for Transport (Keir Mather)
I start by congratulating my hon. Friend the Member for Lewisham East (Janet Daby) on securing this important debate. She has made a powerful case for accessibility improvements at Grove Park railway station. Before I turn to those improvements in detail, I will briefly pick up on two things she mentioned that I think are worthy of due consideration.
First, my hon. Friend made a point about the station not being aesthetically what her constituents deserve. This is not something we often get the opportunity to speak about in the House, but building beauty into our railways is incredibly important to me. It should factor to a greater extent in our thinking about how the travelling public can engage with our railways and enjoy the process.
I also congratulate my hon. Friend on her campaign. It was exciting to hear about the array of small businesses and community organisations that made her petition possible. It speaks to the fact that our railway stations sit at the heart of the local communities they serve—a point that was reflected powerfully in her speech. I know how deeply my hon. Friend cares about her local community and how tirelessly she campaigns for improved public transport that is safer and more accessible for everyone in it.
This debate, and indeed the petition that my hon. Friend presented to Parliament on 20 October, underline the very real concerns of passengers who rely on Grove Park station every day. For many residents, Grove Park is not simply a station; it is a gateway to work, education, healthcare and family life. As my hon. Friend clearly set out, though, for too many users, especially those with mobility challenges, parents with buggies, older passengers or anyone travelling with heavy luggage, this gateway does not offer the accessibility and, most importantly, the dignity that they expect. She is right to say that the public’s travelling experience must be safe, comfortable and inclusive. That is central to this Government’s commitment to a more accessible and passenger-focused rail network for all.
Across Britain, many stations were constructed long before modern accessibility standards existed. Although around 56% of stations are now step-free and around two thirds of journeys take place between such stations, we recognise that this is not enough. Everyone must have dignity as they travel across the United Kingdom. Accessibility is not an optional extra; it is a basic expectation of modern public transport. That is why we remain committed to delivering improvements through programmes such as Access for All, through our recently published rail accessibility road map and through our long-term reforms to create Great British Railways.
The rail accessibility road map sets out clear actions that will improve disabled passengers’ experience, from better-maintained lifts and clearer information to the quality of assistance provided at stations for every journey. These are an essential element to providing dignity and inclusion to all rail passengers. I regret that Grove Park station does not offer full step-free access to all platforms. For wheelchair users, people with mobility needs, parents with pushchairs and travellers with luggage, this is a real challenge and a hugely regrettable reality in 2025—a reality that I know my hon. Friend is working tirelessly to correct for the better on behalf of her constituents.
Lee Pitcher
I have Althorpe station in my constituency. We are trying to get more trains, which will mean more passengers using those trains. This is massively important to reduce carbon, and to get people to work and hospital appointments and so on. Access is really important, and there is no step-free access there. Does the Minister agree that improving access will increase the number of passengers who use our trains, and that it will benefit the environment too?
Keir Mather
My hon. Friend is a tireless champion for improved rail services for all in Doncaster East and the Isle of Axholme. He makes an incredibly important point: if more people can access our railways and thereby the opportunities that access provides them—social lives, employment and the ability to give back to their local communities—good will create good. Improving accessibility for all is a virtuous circle.
In 2022, the previous Government sought nominations for stations across Britain to benefit from upgrades as part of the Access for All programme. A total of 310 nominations were received from train operators, strategic transport bodies and Transport for London stations. This did not include a nomination for Grove Park station. I recognise my hon. Friend’s frustration with the process that we inherited from the previous Government. The current limitations of the station and the benefits that step-free access would bring, which she set out clearly today, are exactly the sort of factors that I would expect to inform bids for future rounds of funding. When assessing potential projects, we look closely at station footfall, weighted by incidence of disability in the area, industry priorities, and the availability of third-party funding. Local factors—for example, proximity to hospitals or especially high numbers of interchange passengers—are also taken into consideration. I know that these factors are very important to my hon. Friend’s case as to why Grove Park station needs extra support.
I would like to highlight the significant investment we are putting in to make rail more accessible within my hon. Friend’s constituency to show where we are making progress. As she knows, significant upgrades to the nearby Hither Green station, which she has also campaigned on in her work to improve rail in her local area, are well into delivery and are progressing well. Those upgrades are due to come into passenger use in 2027, at which point Hither Green will provide a fully accessible rail hub for her constituents and the wider south-east London community.
I turn to other issues that my hon. Friend has highlighted in relation to Grove Park station. I reassure her that my Department takes the safety and security of passengers and rail staff incredibly seriously. British Transport police, which is responsible for policing the railway, works closely with train operating companies including Southeastern to create a safer network. I am pleased to say that Grove Park will benefit from an LED lighting update to the overbridge and platforms. The upgrade will improve lighting levels, security perception and CCTV-recorded images.
We have recently announced £17 million of funding to improve British Transport police’s access to railway CCTV. The Department expects that train operating companies will implement crime prevention methods where required, including by improving lighting and CCTV where necessary. The BTP’s designing out crime unit provides advice on crime prevention, including the type of CCTV technology to use and suitable placement at stations. I therefore reassure my hon. Friend that the safety and security of those who use our railways is a core priority for the Government.
Shelters and seating at train stations play a vital role in ensuring the comfort and wellbeing of passengers. The Department for Transport expects train operating companies to manage station amenities to ensure that they are safe, clean and fit for purpose. We monitor those standards through the service quality regime, which includes regular inspections of the condition and availability of assets such as seating and shelters to ensure compliance and to identify areas for improvement.
Southeastern is driving forward a multimillion pound station improvement programme, which has delivered benefits to over 100 stations since March 2024. This ambitious initiative includes deep cleaning, repairs, and enhancements that will refresh and modernise station amenities across the network. I am pleased to say that Southeastern has recently completed a deep clean at Grove Park, helping to improve the overall customer experience, but I am aware from my hon. Friend’s comments that there is much further to go.
Daniel Francis
Southeastern serves the stations in my constituency, like those in the constituency of my hon. Friend the Member for Lewisham East, and those enhancements include a number of Changing Places toilets for people with disabilities who require them. I therefore reaffirm the point I made to my hon. Friend. The Changing Places consortium has a map that shows its toilets around the country, and Transport for London has an accessibility app that shows where lifts are working and which stations are accessible. Can the Minister look at how we can bring those two together in the Railways Bill so that stations can be truly accessible, with real-time information for passengers?
Keir Mather
My hon. Friend makes a powerful point on behalf of his constituents about improving accessibility for all in his constituency. Through the Railways Bill, and the creation of Great British Railways and the passenger watchdog, rail provision will need to have due regard to improving accessibility. Through the accessibility road map, the Government are also setting out the actions we are taking in the round to deliver a more accessible railway in the run-up to GBR becoming a reality. They will include a range of actions that I hope my hon. Friend will find productive, which will improve the experience of disabled passengers on existing lines, including the assistance they receive, their access to journey information, and improvements to how we maintain lifts, escalators and—as he so importantly mentioned—facilities such as toilets.
Let me close by again thanking my hon. Friend the Member for Lewisham East and congratulating her on securing this important debate and on her tireless representation of her constituents’ needs. Upgrading Grove Park station is not just about infrastructure; it is about fairness, dignity and ensuring that every individual in Lewisham East can travel safely, independently and confidently. The concerns raised tonight of accessibility, safety, lighting, toilets, CCTV, seating and platform shelters are all fundamental to a modern and inclusive railway. This Government remain committed to improving accessibility across the network, supported by major investments in crime prevention, infrastructure upgrades and industry reform through the creation of Great British Railways. I encourage my hon. Friend to continue working with Southeastern, Network Rail, Transport for London and the British Transport police to ensure that Grove Park station is equipped to serve its community now and for many years to come.
Question put and agreed to.