Oral Answers to Questions

Wednesday 3rd December 2025 Commons Chamber

The Secretary of State was asked—

[Kirsty Blackman (Aberdeen North) (SNP)]

1. What recent discussions she has had with the Welsh Government on the potential impact of the Budget 2025 on Wales.

[The Secretary of State for Wales (Jo Stevens)]

I work closely with the Welsh Government on our shared priorities, and our two Labour Governments work together for the people of Wales. This Budget delivered for Wales by investing in public services, cutting the cost of living and shrinking the national debt. We have scrapped the Tory and Lib Dem two-child limit, benefiting 69,000 children in Wales, and slashed energy bills by £150 per household. We have also announced further increases to the minimum and living wage, building on last year’s increases, which have already helped 160,000 of the lowest-paid workers in Wales.

[Kirsty Blackman]

The autumn Budget made minor tweaks to Wales’s borrowing limits. Scotland has stronger borrowing powers, allowing us more flexibility for investment in capital projects. Can the Secretary of State tell us why the tweaks to Wales’s powers were so small? Why have those tweaks not even made up for the inflationary losses since those limits were first set?

[Jo Stevens]

The UK Government are providing the Welsh Government with nearly £6 billion in additional spending power over the spending review period as a result of changes to the fiscal framework, additional funding through the Barnett formula and the largest settlement in devolution history. We are righting the injustice of how Wales has been funded, and delivering on our manifesto commitment to update the fiscal framework. Crucially, these changes mean that the Welsh Government will be able to invest more funding in our hospitals, schools and other public services.

[Mr Speaker]

I call the Chair of the Welsh Affairs Committee.

[Ruth Jones (Newport West and Islwyn) (Lab)]

The Welsh compound semiconductor cluster in my constituency is a real Welsh success story in terms of this year’s Budget. It has attracted more than £1 billion-worth of investment over the last decade and has supported almost 3,000 jobs, and plans to create 1,000 more jobs are well on the way. What conversations is the Secretary of State having with UK and Welsh Government colleagues to ensure that the Welsh compound semiconductor cluster continues to grow, and to create more well-paid jobs across south Wales?

[Jo Stevens]

My hon. Friend rightly championed the Welsh compound semiconductor cluster from the minute she arrived in this place, and I have seen its success for myself on a number of visits. In last week’s Budget, the Chancellor announced £10 million for semiconductor activities in south Wales. That funding will focus on the technology that is central and critical to artificial intelligence and data centres, in order to support innovation, strengthen supply chains and develop the skills needed for future growth. Just two weeks ago, I was with the Secretary of State for Science, Innovation and Technology at Cardiff University—a key partner for the cluster—to announce the south Wales AI growth zone, which will create more than 5,000 new jobs for local communities, including in my hon. Friend’s constituency.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

We all know why the Chancellor went to Wales on Monday: she was seeking to avoid scrutiny over a self-inflicted controversy, but it does not end there. There has been criticism of the Chancellor’s claim that additional funding for Scotland was given

“because Anas Sarwar asked us to.”—[Official Report, 26 November 2025; Vol. 776, c. 388.]

There was no mention of the Welsh First Minister, Eluned Morgan. There is a mechanism for Barnett funding; it is not a gift. Will the Secretary of State commit to honesty about how Wales is funded, rather than insulting our intelligence?

[Jo Stevens]

I am surprised at the right hon. Lady’s tone. While this Labour Government make record investment in Wales, Plaid Cymru’s response is to be the same old stuck record, with its miserable grievance politics. It really is the Victor Meldrew of Welsh politics. It still has not explained which taxes it would raise and which public services it would cut to pay for its disastrous independence plan, which would cost every single person in Wales £7,000 a year, every single year.

[Liz Saville Roberts]

That was desperate. We all know that the Secretary of State has been using figures that we cannot extrapolate from, and cannot use to show what independence will do. I wish she would keep up, because Plaid Cymru is actually talking with Labour in Cardiff about how to improve public services and the NHS. The people of Wales want facts, not spin. A year after the announcement of inheritance tax changes, the UK Government have still failed to release data on the impact on family businesses and farms in Wales. She knows that the cross-party Welsh Affairs Committee has called for the changes to be delayed until a full Wales-specific impact assessment is published. What have the Government got to hide?

[Jo Stevens]

The Government have absolutely nothing to hide.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

2. What recent discussions she has had with Cabinet colleagues on increasing economic growth in Wales.

[Paul Waugh (Rochdale) (Lab/Co-op)]

4. What recent discussions she has had with Cabinet colleagues on increasing economic growth in Wales.

[Chris Vince (Harlow) (Lab/Co-op)]

6. What recent discussions she has had with Cabinet colleagues on increasing economic growth in Wales.

[Frank McNally (Coatbridge and Bellshill) (Lab)]

9. What recent discussions she has had with Cabinet colleagues on increasing economic growth in Wales.

[The Secretary of State for Wales (Jo Stevens)]

Growth is the No. 1 mission of this Government. We are creating tens of thousands of jobs in every corner of Wales, including through billions of pounds of investment in nuclear power in Anglesey, two AI growth zones, a defence growth deal, two freeports and two investment zones, which will deliver further economic growth to Wales.

[Gareth Snell]

Because of decisions made by the UK Labour Government, the minimum wage and the living wage will increase, boosting wages for thousands of workers across this country, including 160,000 people in Wales. Could the Secretary of State set out what impact she thinks this critical announcement will have on the economy and people of Wales?

[Jo Stevens]

From April, a full-time worker on the national living wage will see their annual pay rise by £900, on top of the £1,400 increase that we announced in the previous Budget, and 18 to 20-year-olds working full time on the national minimum wage will get an annual increase of £1,500, which, when added to last year’s increase of £2,500, means £4,000 extra a year. This Labour Government are supporting the lowest-paid workers across the country, with 2.7 million workers in Stoke-on-Trent Central, Cardiff East and every other constituency directly benefiting.

[Paul Waugh]

I was pleased to see Conwy recently selected for this UK Government’s Pride in Place programme. That is alongside the existing funds for Rhyl and Wrexham. Given the north-west’s strong economic and family ties to north Wales, I was proud to secure £20 million for Rochdale through the Pride in Place programme. Can the Secretary of State update the House on the difference that these growth funds and other funds will make to economic development in the region?

[Jo Stevens]

The introduction of the Pride in Place programme has meant good news for Rochdale, as well as for Wales. A total of 14 communities across Wales are each benefiting from £20 million of long-term investment to enable the changes that they want to see in their neighbourhoods. This hyper-local programme will benefit areas that are doubly disadvantaged, having both the highest deprivation levels and the weakest social infrastructure. It is about investing for the long term, and creating safer, stronger and more resilient communities with the facilities and infrastructure that they need to thrive.

[Chris Vince]

It has been a momentous two weeks for my Welsh colleagues, with announcements of new AI growth zones in both north and south Wales, a fleet of small modular reactors, billions of pounds of investment and 11,000 new jobs. Does the Secretary of State agree that this shows that this Labour Government are determined to ensure that there will be growth across the UK, including in Wales?

[Jo Stevens]

My hon. Friend is absolutely right. This Labour Government have backed Welsh business and economic growth since day one, and the results speak for themselves; new nuclear at Wylfa and the two new AI growth zones will mean well over 11,500 new jobs. Add to that the best inward investment results for years, a 30% increase in jobs created, a 23% increase in projects landed, more jobs, wages rising faster than inflation, and more money in the pockets of people across Wales.

[Frank McNally]

The UK and Welsh Governments are rightly prioritising the next generation through apprenticeships and engineering opportunities linked to the Wylfa SMR project. Does my right hon. Friend agree that young people in Scotland deserve access to the same world-class training pathways as those in Wales, and will she work with colleagues to ensure that Scottish businesses can participate fully in the UK-wide nuclear skills pipeline, despite the ideological opposition of the SNP, which prevents similar investments from being realised in Scotland?

[Jo Stevens]

My hon. Friend is absolutely right to raise the ideology of the nationalists. Nationalists in Scotland turn their back on nuclear jobs for Scots, while nationalists in Wales are desperately trying to hide the cavernous split in their party on whether they support new nuclear. This Labour Government are absolutely clear that we want economic opportunities for all parts of the UK, and we want jobs and skills opportunities—including nuclear skills—for people across the UK. Those parties that are hellbent on breaking our country apart are simply exposing the fact that they are willing to put their ideology before jobs, opportunities and economic benefits for the people and communities of these isles.

[Ann Davies (Caerfyrddin) (PC)]

In order to secure rural economic growth in Wales, we need to ensure that our agricultural sector is supported. Every pound spent on agriculture generates £9 by supporting farm workers, vets, feed merchants, machinery sales and repairs, and local shops—I could go on and on. What is the Wales Office doing to support all those who live and work in rural Wales?

[Jo Stevens]

The hon. Lady will know that the Welsh Government have put extra money into farming this year through their Budget. Her party in the Senedd voted against that Budget. We are renegotiating the sanitary and phytosanitary standards deal with the EU, following our deal in May, and we are protecting farmers and food manufacturers across Wales.

[Jim Shannon (Strangford) (DUP)]

If we are to improve economic growth in Wales, we can do that collectively. We can do it with tidal energy—Wales and Northern Ireland share the Irish sea—with wind turbines, and with floating wind turbines in the Irish sea. These are opportunities. We can make it happen with the engineering of those in Northern Ireland and Wales. Does the Secretary of State agree that it is time for us to work together for this great United Kingdom of Great Britain and Northern Ireland? We are always better together.

[Jo Stevens]

The hon. Gentleman eloquently sets out the case for the Union. The nationalists sat in front of him would break this country apart, ruining economic growth in this country. We are definitely all better together.

[Mr Speaker]

I call the shadow Secretary of State.

[Mims Davies (East Grinstead and Uckfield) (Con)]

On Monday, it was delightful to observe the Chancellor and First Minister enjoying themselves in one of Wales’s premier hospitality venues, but we had an invisible Secretary of State for Wales once again. That venue is the type of business that must thrive if this Government are to have any chance of achieving anything other than anaemic growth and growing unemployment lines. If she had been there, what would people in the hospitality sector have told her about the minimum wage rise pressures, huge business rates and energy costs, the tourism tax, national insurance hikes and how those are strangling the economy in Wales, along with the bloated red tape and wanton spending from the Labour-run Senedd?

[Jo Stevens]

Britain outperformed growth forecasts this year. Growth was upgraded from 1% to 1.5%, and we are on course to achieve the second-fastest growth rate among G7 countries. The Bank of England has cut interest rates five times since the election. The positive impact that our UK and Welsh Labour Governments are having is clear from how the Welsh economy is changing. In the last year in Wales, wages have increased faster than inflation, employment has risen, inactivity is down and inward investment is up.

[Mims Davies]

Clearly something more important than economic growth in Wales came up for Labour’s Wales Office. Can Ministers explain? The biggest rise in unemployment in the UK was in Wales, at 1.4%. Frankly, that is no surprise, given the Governments’ joint refusal to build the M4 relief road or the north Wales main line. That does not exactly match the Chancellor’s boasts about world-class infrastructure at the summit. Among the hobnobbing and backslapping, did any Ministers spare any thought for the desolate owners and workers of businesses in tatters in Monmouth and more widely? Did Ministers work on the ask for extra help to save those people’s livelihoods?

[Jo Stevens]

There was a smörgåsbord of questions there. I just say to the shadow Secretary of State that her party wrecked the economy, starved our public services and exacerbated the cost of living crisis. Our Labour Budget is reducing the cost of living, investing in public services and shrinking the national debt—the Conservatives increased it—while at the same time lifting thousands of children out of the poverty that the Tories created.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

I start by raising a point of order, Mr Speaker. The Secretary of State said that the Liberal Democrats were responsible for imposing the two-child benefit cap. That is simply not true. It was imposed by the Conservatives, and we have campaigned tirelessly against it ever since. Will she correct the record?

[Mr Speaker]

Just ask your question.

[David Chadwick]

This Government keep claiming that offshore wind will bring down bills for people in Wales and drive economic growth, but research from Greenpeace shows that the opposite is happening. The Crown Estate is pushing up bills by running uncapped auctions that force energy companies to pay huge fees just to use the seabed. Those extra costs are added straight on to the energy bills of families and businesses across Wales, meaning that Welsh households pay more. The profits are taken out of Wales, while the Crown Estate’s chief executive officer pockets £1.9 million a year. Why are the Government allowing the Crown Estate to drive up energy bills, and why will not they force the Crown Estate to manage Welsh natural resources in the public interest, rather than its own?

[Jo Stevens]

At every session of Wales questions, the hon. Gentleman talks about how he does not want infrastructure to be built in Wales. His party was one of the architects of austerity and the crushing poverty faced by so many people across the United Kingdom. This Labour Government have turned the page on that austerity legacy, bringing down energy bills, increasing the minimum and living wages for about 160,000 Welsh workers, and scrapping the two-child cap.

[Sarah Bool (South Northamptonshire) (Con)]

3. What steps she is taking with the Home Secretary to help tackle grooming gangs in Wales.

[The Parliamentary Under-Secretary of State for Wales (Anna McMorrin)]

I thank the hon. Member for raising this important matter. The Home Office is working closely with the Welsh Government to share information and co-ordinate work to prevent and respond to child sexual abuse and exploitation, including that perpetrated by grooming gangs. This includes taking forward the recommendations of Baroness Casey’s audit, and I strongly welcome the continued support of the Welsh Government as we do so.

[Sarah Bool]

Welsh Labour voted against a grooming gangs inquiry in the Senedd. Now Scottish MPs are bemoaning the lack of action from the Scottish National party and the Scottish Government. Given that Welsh Labour is also dragging its heels over this inquiry, will the Secretary of State step up and ensure that it holds a Wales-wide inquiry into this horrific scandal?

[Anna McMorrin]

I am disappointed in the hon. Member. She must have forgotten that the last inquiry was not implemented in any way, shape or form. We have accepted Baroness Casey’s recommendations in full, and we are working together—the Welsh Government and the Home Office, alongside Baroness Casey—to appoint a chair, as a matter of urgency. Victims’ voices should be at the heart of this inquiry, and it is imperative that any chair appointed earns the trust of the victims, who have been let down far too often. For those victims, we must get this right; we can absolutely do no less.

[Nick Smith (Blaenau Gwent and Rhymney) (Lab)]

Can the Minister say more about how the Government are reflecting the experiences of victims when tackling grooming gangs in Wales?

[Anna McMorrin]

Absolutely, and I thank my hon. Friend for raising this critical matter. We are putting victims’ voices at the heart of the inquiry, because their voices must be heard, and we are accepting Baroness Casey’s recommendations in full, including the introduction of mandatory reporting, the creation of a new child protection authority and the ending of the three-year statute of limitations for personal injury claims. I will say this once again: we are ensuring that victims’ voices are at the heart of the inquiry, because they have been forgotten for far too long.

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

5. What steps she is taking with Cabinet colleagues to help create new jobs in Wales.

[The Secretary of State for Wales (Jo Stevens)]

Announcements made over the past month demonstrate that our industrial strategy is working. In November alone, the Government announced investments to create more than 11,000 jobs in Wales, and just this week, the Wales investment summit showcased investments totalling £16 billion, which are expected to bring tens of thousands of jobs to Wales.

[Steve Witherden]

Montgomeryshire and Glyndŵr is home to the largest one-day livestock market in Europe, just off the Buttington roundabout in Welshpool. Will my right hon. Friend join me in welcoming the 55 jobs that have been created on the roundabout in the last month alone, and would she consider joining me for a milkshake in one of the numerous places in Buttington where we could now obtain one together?

[Jo Stevens]

I am very pleased to hear about the new jobs created at Buttington Cross, and I should be delighted to join my hon. Friend for a milkshake—strawberry, please. Our landmark May deal with the European Union included a commitment to a comprehensive sanitary and phytosanitary agreement, which we are now actively negotiating, and which will reduce paperwork, delay and costs for Welsh farmers exporting their animals and produce to the EU. This Government are backing our farmers and food manufacturers.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

We have heard about the benefits that small modular reactors can bring to Wales and, indeed, to England. Does the Secretary of State agree that it would be a very good idea if she and I invited Mr John Swinney to come to Dounreay to hear from the workforce how badly they want one up there?

[Jo Stevens]

I absolutely do not understand why the SNP Government are not willing to see the creation of jobs and opportunities for people in Scotland because of their ideology around new nuclear.

[Mr Speaker]

I call the shadow Secretary of State.

[Mims Davies (East Grinstead and Uckfield) (Con)]

The Office for National Statistics has revealed that a scandalous 1,000 jobs are being lost every single day across the country, meaning that Aston Martin is not immune to this Government’s economic recklessness and could soon be forced to make over 100 job losses because of the poor trade deal that Labour struck with the US. The deal includes absolutely no guarantee that small-volume car makers, like Aston Martin, will get fair access to the 10% tariff rate from 2026, meaning that they could face the imposition of an eye-watering tariff of 27.5% if they are squeezed out of the 100,000 car quota to the US. What will the Secretary of State do? Will she turn up to ensure that iconic Welsh car makers get fair access to US trade?

[Jo Stevens]

I have been in discussions with Aston Martin, as have Cabinet colleagues. We are doing everything we can to protect the car industry in this country. One of the biggest problems in the car industry arises from the Conservatives’ botched Brexit deal, for which the hon. Lady and her Government were responsible.

[John Cooper (Dumfries and Galloway) (Con)]

7. Whether she has had discussions with the Welsh Government on the potential impact of the proposed visitor levy on the Welsh economy.

[The Parliamentary Under-Secretary of State for Wales (Anna McMorrin)]

The Welsh tourism sector is thriving. Last year, British residents alone took over 7 million overnight trips to Wales. If all councils in Wales were to introduce the Welsh Government’s visitor levy, it could raise as much as £33 million a year across Wales to invest in communities and tourism. This is an excellent example of the Welsh Government leading the way. As announced last week, a similar overnight levy will be introduced in England, allowing mayors to invest across their communities.

[John Cooper]

Hospitality in Wales and across the United Kingdom is dying on its feet. It needs a shot in the arm; instead, last week’s bin-fire Budget gave it a shot in the head. This is more money coming out of businesses, is it not?

[Anna McMorrin]

Quite the contrary: the visitor levy would boost the economy by up to £33 million if all councils were to accept it across Wales. I do not think that will—[Interruption.]

[Mr Speaker]

Order. The hon. Member for Montgomeryshire and Glyndŵr (Steve Witherden) should wait for two questions after his own before leaving the Chamber.

[Anna McMorrin]

Wales is leading the way on the visitor levy and I am proud to be from Cardiff—a city that is introducing the levy. People come in droves to Cardiff and I know that they will continue to do so. Perhaps the hon. Member for Dumfries and Galloway (John Cooper) should look to his own ranks first, because the Conservative-run Great Yarmouth borough council has supported this form of tourist levy for years.

[Mr Alex Barros-Curtis (Cardiff West) (Lab)]

In last week’s Budget, the UK Government gave mayoral strategic authorities in England the power to propose a local overnight visitor levy—something that has already been introduced in Wales. Does the Minister agree that this is another example of the UK Labour Government and the Welsh Labour Government working together to share best practice to better our country?

May I also take this opportunity to ask her to join me in celebrating Cardiff Rugby’s 149th birthday this week?

[Anna McMorrin]

I would also like to wish Cardiff Rugby penblwydd hapus on their 149th birthday. I absolutely agree with my hon. Friend that the Welsh Government are leading the way, and it is fantastic to see that a similar overnight levy will be introduced in England. This is the power of partnership: two Labour Governments working together.

[Mr Speaker]

Before we come to Prime Minister’s questions, may I extend a warm welcome to the President of the Parliament of Montenegro and his delegation, who are in the Gallery today?

The Prime Minister was asked—

[Ian Lavery (Blyth and Ashington) (Lab)]

Q1. If he will list his official engagements for Wednesday 3 December.

[The Prime Minister (Keir Starmer)]

Our Budget took important measures to tackle the cost of living. That is why we have frozen rail fares and prescription charges, and cut energy bills for every family by £150. Today, we are going further. For too long, parents have been pushed into spending more on infant formula than needed, told they are paying for better quality and left hundreds of pounds out of pocket. I can announce today that we are changing that. We will take action to give parents and carers the confidence to access infant formula at more affordable prices, with clearer guidance for retailers and help for new parents to use loyalty points and vouchers. Together, that will save them up to £500 before their child’s first birthday. That builds on our action to lift half a million children out of poverty and our action on breakfast clubs, and our child poverty strategy will be published later this week.

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.

[Ian Lavery]

The north-east is still picking up the pieces of the destruction and decimation of 14 years of Tory government. Men in the north-east of England still expect to live 10 years less than people in other parts of the country. Women in the north-east of England are making, on average, over £11,000 less in wages than people in other parts of the country. In my patch of Blyth and Ashington, 33% of kids are living in poverty, the unemployment rates are above the national average, and wages are below the national average. The people in the north-east are a proud breed, and we deserve much more than this, mind. Can the Prime Minister assure me and the people in my constituency and in the north-east whether there is much to look forward to on the horizon, and will he meet me to discuss how we can shape it? [Interruption.]

[The Prime Minister]

My hon. Friend talks about poverty in his constituency, and the Opposition heckle him. They should be ashamed. It is our moral mission to tackle poverty. We have abolished the two-child cap. That will be over 3,000 children, I think, in his constituency lifted out of poverty. I am very proud to be able to do that. We have boosted the national minimum wage by £1,500, and we are adding the £150 that we are taking off everyone’s energy bills. We are driving economic growth right across the country, devolving power and investing across all of the country.

[Mr Speaker]

We come to the Leader of the Opposition.

[Mrs Kemi Badenoch (North West Essex) (Con)]

Let me first pay tribute to Sir John Stanley, who passed away yesterday. Sir John was a dedicated MP for 41 years, and we send our deepest condolences to his family.

Does the Prime Minister believe that when an organisation descends into total shambles, the person at the top should resign?

[The Prime Minister]

Can I first join the Leader of the Opposition in her comments about Sir John? I am sure I speak for the whole House in that respect.

I was very proud to lead this party at the Budget last week, where the Chancellor set out that we would protect the NHS, which we have done in the Budget; create the conditions for economic stability, not repeating the mistake of austerity; and bear down on the cost of living by taking £150 off energy bills. We are fixing the mess that the Conservatives left, and I am very proud to be doing so.

[Mrs Badenoch]

The Prime Minister does not want to answer a question about taking responsibility, because he likes to blame everyone except himself, and so does the Chancellor. We now know that the head of the Office for Budget Responsibility was forced out for telling the truth: that the Chancellor did not need to raise taxes on working people. We also know that the Chancellor was briefing the media and twisting the facts—all so she could break her promises and raise taxes. If she were a CEO, she would have been fired, and she might even have been prosecuted for market abuse. That is why we have written to the Financial Conduct Authority, so will the Prime Minister ensure the Chancellor fully co-operates with any investigation?

[The Prime Minister]

The right hon. Lady is completely losing the plot. May I pay tribute to Richard Hughes for his leadership of the OBR? He made very clear why he stepped down and I have made very clear my support of the OBR. She says, “Take responsibility”. Under this Chancellor: growth is up this year, defeating and beating the forecast; wages are up more since the general election than in 10 years of the Tories; we have had, I think, five interest rate cuts; NHS waiting lists are down; and we have had record investment into this country. We are turning the page on Tory austerity and reckless experiments on borrowing. I will compare our record to theirs any day of the week.

[Mrs Badenoch]

The Prime Minister talks about losing the plot. Let me read to him what his own Cabinet Members are saying—that the handling of the Budget has been

“a disaster from start to finish.”

Who said that? Was it him? Was it her? It was probably her, actually—it was probably the Chancellor! [Laughter.] One of the Prime Minister’s Ministers said that the Chancellor and the Prime Minister look “weak and incompetent”. The country agrees.

We know that there were endless Treasury briefings to justify raising taxes on hard-working people to pay for benefits and those briefings had real-world consequences. Hundreds of thousands of people drew down their pension, an irreversible act. The Prime Minister pays tribute to the head of the OBR. If the head of the OBR had to resign over market-sensitive leaks, why is the Chancellor still in her job?

[The Prime Minister]

Last year, the Conservatives left us with a £22 billion black hole. This year, at the beginning of the process, the OBR did a productivity review on their record in office, and that cost an additional £16 billion that we had to find in the Budget. But notwithstanding that, we have protected the NHS—waiting times are coming down; notwithstanding that, we have cuts in borrowing at the fastest rate in the G7; notwithstanding that, we have got £150 off energy bills, in addition to rail fare and prescriptions freezes. [Interruption.]

[Mr Speaker]

Order. Mr Holden, your voice carries more than mine. The difference is that yours will be carrying outside, not in the Chamber.

[The Prime Minister]

What the right hon. Lady does not understand is that picking up a £16 billion tab for the Conservatives’ failure is not a good starting point for any Budget. The OBR said yesterday that the Chancellor’s speech was not misleading, so if the Leader of the Opposition had any decency, she would get up now and apologise. [Interruption.]

[Mr Speaker]

Order. Other Members might be enjoying a cup of tea with Mr Holden if they carry on.

[Mrs Badenoch]

No one believes a word the Prime Minister says. We now know the black hole was fake, the Chancellor’s book was fake, her CV was fake—even her chess claims are made up. She does not belong in the Treasury; she belongs in la-la land.

The Government raised taxes on working people—that is £16 billion—to increase benefits to protect them from their Back Benchers. The Prime Minister now boasts about removing the two-child benefit cap, but he used to say that it was unaffordable. He even removed the Whip from seven Labour Members for wanting the same thing. He is very happy to throw them under a bus when it pleases him. I ask the Prime Minister, how did it suddenly become affordable at the very time he needed to save his own skin?

[The Prime Minister]

The vast majority of the families we helped in the Budget are in work. Three quarters of children in poverty are in working families. The Conservatives’ policy of nearly 10 years on the two-child benefit cap had one result and one result only: it dragged hundreds of thousands of children into poverty. They should be utterly ashamed of that. I am very proud that we are lifting half a million children out of poverty, because I believe—I profoundly believe—that every child should have a chance in life; every child should be able to go as far as their talent will take them. That is why we are lifting half a million out of poverty, but they are the same old Tories: the party of child poverty.

[Mrs Badenoch]

If all of this is true, why did the Prime Minister take the Whip away from the people asking for it? Let us remind the Chancellor that exactly a year ago today, on 3 December 2024, she said:

“We will never have to repeat a Budget like this one”.—[Official Report, 3 December 2024; Vol. 758, c. 149.]

If only!

The Prime Minister may have taken the Whip away then, but the rebels have had the last laugh—he has lost. He cannot run his own party, let alone the country. Let me quote the hard-left former shadow Chancellor, the right hon. Member for Hayes and Harlington (John McDonnell). He said: “We’ve won.” He is right, isn’t he?

[The Prime Minister]

I have said repeatedly that bringing down child poverty is a moral mission, a political mission and a personal mission. The Conservatives drove hundreds of thousands of children into poverty—children who will pay the price for the rest of their lives for the previous Government’s failure. We are taking half a million children out of poverty, and we are very proud to do so. That is good for children, it is good for the economy and it is good for the NHS, which will have less of a burden on it. The Opposition should be ashamed of what they did on child poverty, and the right hon. Lady should stand up and apologise.

[Mrs Badenoch]

Let me tell the Prime Minister: making the whole country poorer and destroying jobs is not how to keep children out of poverty. In the past week we have seen broken promises, broken leadership and a broken Budget for “Benefits Street”—[Interruption.] The Education Secretary is chuntering. I ask her, where is the money for the children with special educational needs? Where is it? It is coming out of her budget.

[The Secretary of State for Education (Bridget Phillipson)]

indicated dissent.

[Mrs Badenoch]

She is shaking her head; she does not know where that money is coming from.

Let us be clear: unemployment is up. There are more children now growing up in workless households because people are losing their jobs. It is not just the head of the OBR who is losing his job; millions of people have been hung out to dry by the Government’s Budget. Is it not the truth that behind it all is a Prime Minister who only cares about one person’s job—his own?

[The Prime Minister]

The right hon. Lady wants to put half a million children back into poverty. She thinks the Chancellor should resign because the economy is improving. We are turning the page on her party’s failure. We are bringing waiting lists down. We are bringing stability that cuts inflation and interest rates, and we are bringing down bills. We are building a brighter future.

[Claire Hanna (Belfast South and Mid Down) (SDLP)]

Conversations about a new Ireland are deepening, with people from all sorts of backgrounds having serious, hopeful discussions about building something new. Yesterday in Westminster, along with the hon. Member for South Antrim (Robin Swann), who has a different view to me, we hosted two of the island’s most respected journalists, making the case both for and against Irish unity. While both positions were argued, clear voice was that the time for careful preparation is now. Does the Prime Minister agree that, although there is much work to do before any referendum, in order to avoid a mess like Brexit, it is prudent and completely compatible with the Good Friday agreement for the Irish and British Governments to jointly prepare for constitutional change?

[The Prime Minister]

One of the greatest achievements of the last Labour Government was the Belfast/Good Friday agreement. We fully support that agreement, which brought peace and stability for Northern Ireland. As the hon. Member well knows, it sets out a process for future decisions, which under the agreement I support. We are focused on working constructively with the Executive and others on all issues, including the record settlement for Northern Ireland under the Budget.

[Mr Speaker]

I call the leader of the Liberal Democrats.

[Ed Davey (Kingston and Surbiton) (LD)]

I join the Leader of the Opposition in paying tribute to Sir John Stanley, and send our condolences to his family. I had the huge pleasure of working with him over a number of years on developing the relationship between our country and Korea, and he was always a true gentleman.

Yesterday, I was in Royal Tunbridge Wells, where tens of thousands of people have had no water for five days. This is now a public health emergency and, shockingly, it is the second time in just three years that South East Water has badly let down the people of Tunbridge Wells. Parents are queuing up for bottled water for their kids; pensioners are relying on neighbours to fetch water for them; businesses have closed down; and schools and GPs have been forced to shut. South East Water said that it would be sorted on Monday, and then again yesterday, but today it has still not been sorted. Will the Prime Minister convene Cobra? Does he agree that it is time for him to get a grip of this crisis so that it is sorted?

[The Prime Minister]

I thank the right hon. Gentleman for raising this really important issue. It is shocking, for all the reasons that he set out. I too have heard South East Water say—Sunday into Monday, Monday into Tuesday, and Tuesday into Wednesday—that it was sorting the situation, and still it has not been sorted. There are really serious consequences. We are bearing down on it, as he would expect, because this is such a serious issue.

[Ed Davey]

I am grateful for the Prime Minister’s reply and for the actions of the Water Minister, the hon. Member for Kingston upon Hull West and Haltemprice (Emma Hardy), but I do think the Government will need to do more, because South East Water has failed so badly.

Turning now to the Budget, the Prime Minister’s chief economic adviser has recommended a customs union with the EU as one of the most effective ways of generating growth, and we Liberal Democrats agree. Instead of hitting people with higher taxes in the middle of a cost of living crisis, will the Prime Minister change course in economic policy and listen to the wise economic advice from his own economic adviser?

[The Prime Minister]

We are getting closer relationships with the EU on a number of fronts, including trade and the economy, because that is good for businesses across our country, and it has been welcomed by them. We will continue down that path, but we have clear red lines on the single market and the customs union; within those constraints, we will move closer.

[Dr Beccy Cooper (Worthing West) (Lab)]

Q2. Gambling addiction is a serious public health harm, causing ill health and misery for millions of people in this country. The industry now spends £2 billion a year on advertising, often targeting vulnerable people and exposing our children to harm. Like many Members across the House, I very much welcome the Chancellor’s announcement last week to tax harmful online gambling products. Does the Prime Minister agree that to continue this essential work, we must now act to tackle harmful gambling advertising to protect the health of our children?

[The Prime Minister]

My hon. Friend is right that harm from online gambling has surged—NHS referrals are up 91% in the past year. The decisions we made in the Budget mean investment in public services and lifting more than half a million children out of poverty, but we are working with industry to ensure that adverts do not exacerbate harm and, through our £26 million investment, helping the Gambling Commission to crack down on black market sites and illegal adverts to keep players safe.

[Paul Holmes (Hamble Valley) (Con)]

Q7. In 2020, the Justice Secretary said:“Criminal trials without juries are a bad idea”,and the Prime Minister himself has said that there should be “a right of trial by jury in all criminal cases”,but now they want to scrap trials by jury. With a Chancellor who cannot count and a Justice Secretary who has lost count of the number of people he has let out of prison, is it any wonder that the people of this country cannot ever again trust a single word this Prime Minister or Government say?

[The Prime Minister]

The Conservatives left a broken criminal justice system in which victims of rape and serious sexual violence wait three or four years for trial. Only this week I have heard further examples of 14-year-old and 16-year-old girls having to give evidence four years after the allegation. That is not justice for them, and I am determined that we will deal with that. As the hon. Gentleman well knows, of all criminal cases going to court, 90% have always been in the magistrates court and 10% go to the Crown court. Of that 10%, 7% of defendants plead guilty, which means that 3% of all criminal cases go forward for a jury trial—not all our cases. We are making sensible changes to ensure that victims get justice, which was denied to them under the failure left by the Conservatives.

[Rachel Taylor (North Warwickshire and Bedworth) (Lab)]

Q3. I am really pleased to hear many constituents tell me how much local NHS services have improved since this Labour Government entered office, but some, such as David Wootton from Atherstone, have faced long delays. He was told that he would have to wait five months for X-ray results from George Eliot hospital—and he is not the only one. My constituents deserve better. Will the Prime Minister set out how he will go further and faster to get our NHS fighting fit again?

[The Prime Minister]

First, I am sorry to hear that her constituent David is waiting. We took decisions at the Budget to invest in the NHS and tackle waiting lists, which was to help people such as David. We delivered £29 billion extra investment into the NHS and scrapped NHS England to invest in the frontline. We are opening 250 neighbourhood health centres to treat patients closer to home, and we have more than 5 million extra appointments being delivered. Waiting lists are down 230,000—[Interruption.] Conservative Members are chuntering, but they absolutely destroyed our health service—we are picking it up. They should be ashamed of themselves.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

Q9. My constituent Claire runs Claire Howard Jewellery in Fakenham, and she is one of many small business owners who contacted me after the Budget last week. She was absolutely incensed by the style of the Chancellor, who seemed to give the impression that she was reducing taxes on small businesses when the exact opposite is the case. The tax on Claire’s shop is going up, not coming down. Could the Prime Minister do Claire and many other shop owners the common courtesy of just admitting that their taxes are going up and not down?

[The Prime Minister]

The hon. Gentleman raises an important point; let me address it. At the heart of this issue is that temporary business rate relief was put in by the last Government during the pandemic. That was the right thing to do, and we supported it, but it was temporary relief. That is now coming to an end, and obviously there is a revaluation that goes with it. What we are doing is permanently lowering the rates for leisure, retail and hospitality, but because of the changes, we are putting in £4 billion of transitional relief. That means there will be a cap on increases for small businesses, and we are finding that by adjusting the burden between them and the online giants. It is the temporary business rates coming to an end that we have to adjust through this policy.

[Oliver Ryan (Burnley) (Lab/Co-op)]

Q4. I declare an interest as the chair of the all-party parliamentary group on multiple sclerosis and as the proud son of a lifelong multiple sclerosis patient—she joins us in the Gallery today. Neurological conditions such as MS and Parkinson’s affect one in six, but wait times for first and follow-up neurology appointments have increased by a huge 65% since 2020, risking delayed treatment and diagnosis at a critical time. I am proud that this Government are bringing down NHS waiting lists, cutting admissions and investing in care and equipment. Will my right hon. and learned Friend formalise these efforts, support an NHS modern service framework for neurology and get these wait times down?

[The Prime Minister]

I thank my hon. Friend for his question and for sharing his personal interest. We are focused on bringing down waiting lists and making sure every patient receives the best possible care. As he knows, the 10-year health plan announced a new modern service framework to help rapidly improve care, and I reassure him that we will consider whatever else we can do. In the meantime, we are acting to improve neurology care, and we have cut neurology waiting lists by over 15,000.

[Layla Moran (Oxford West and Abingdon) (LD)]

Q11. Allison in Oxford is threatened with new service charges by her housing association, Green Square Accord, for shrubbery she happily cut herself for 22 years and for cleaning a communal area that simply does not exist. Meanwhile, Rebecca’s charges have more than doubled over the last four years, with no explanation. Green Square Accord is not the only provider doing this. It is a wild west out there. Will this Government consider Liberal Democrat plans for a new regulator and a cap on these outrageous rip-off service charges?

[The Prime Minister]

I thank the hon. Lady for raising that. We are implementing the Leasehold and Freehold Reform Act 2024, which is long overdue, providing homeowners with greater rights, powers and protections. Through that, we will strengthen regulation to protect leaseholders from abuse and poor service, which she has highlighted; bring the injustice of fleecehold to an end to protect up to 1.75 million households; and make sure that leaseholders receive standardised service charge documentation, making it easier for them to challenge unreasonable bills. The hon. Lady makes good points, and that Act will help to change things.

[Graham Stringer (Blackley and Middleton South) (Lab)]

Q5. This country can be proud of its history of religious tolerance and religious freedom. The quid pro quo for that is the right to criticise religion. Can the Prime Minister assure the House that there will be no introduction or reintroduction of a blasphemy law, either by statute, judicial overreach or a non-statutory definition of Islamophobia?

[The Prime Minister]

Yes, I can give my hon. Friend that assurance, and it is important that I do so.

[Lewis Cocking (Broxbourne) (Con)]

Q12. The best form of welfare in this country should be a well-paid job, but with unemployment up and this Labour Government choosing to raise taxes to spend even more on a bloated welfare and benefits system, is the Prime Minister happy with the message that sends to my hard-working constituents in Broxbourne and constituents right across the United Kingdom?

[The Prime Minister]

We have a broken welfare system. Guess who broke it? The Conservatives. We are bringing in reforms to change it and mend it. What did they do? They voted against them. Under their watch, they drove up welfare spending by £33 billion, so we need no lectures from them on welfare.

[Paul Waugh (Rochdale) (Lab/Co-op)]

Q6. As a lifelong Dale fan, I am delighted that Rochdale football club is top of the national league right now. But after 14 years of Tory cuts, sadly my town is also near the top of a league table that people do not want to be in: the child poverty league table. Does the Prime Minister agree that lifting 5,000 kids in Rochdale out of poverty, plus cutting every household’s energy bills by £150 and, crucially, expanding the warm home discount will mean that this Budget is a family Budget that reduces the cost of living for everyone in the country?

[The Prime Minister]

Let me start by congratulating Rochdale football club on being top of the league for the time being. [Laughter.] Well, I say that because I know who is top of the premier league, but it will be in March and April that we find out who actually wins.

My hon. Friend is right. Thanks to the actions in the Budget, every household will see £150 off their energy bills, and because we have now extended the warm home discount to 6 million of the poorest households, they will save an additional £150. In the north-west, that benefits about 280,000 households. That is huge cost of living support for families alongside freezing prescription charges and rail fares and boosting the minimum wage.

[Liz Jarvis (Eastleigh) (LD)]

Q14. My constituent Tracey owns O’Briens, a lovely café in the heart of Eastleigh. She works tirelessly to make it a success, but spiralling costs including business rates, VAT and the hike to employer national insurance contributions mean that she has not been able to take a salary for four months. David, the owner of Steam Town Brew Co and Jayne, the manager of the Holiday Inn in my constituency, say that their businesses will be impacted by the Government’s stealth tax on our high streets. They feel let down. Will the Prime Minister look again at the Liberal Democrats’ call for an emergency cut in VAT for hospitality?

[The Prime Minister]

We put in place a strategy for small businesses, which was broadly welcomed by small businesses, because they contributed to it. That involves some of the key asks they made of us, including on late payments and greater flexibility when it comes to licensing for hospitality. We will always look at other measures that can help small businesses. We set out quite a lot of them in our small business strategy.

[Andrew Pakes (Peterborough) (Lab)]

Q8. At the weekend, I had the great privilege to join volunteers from Peterborough food bank at the Tesco in Werrington on their autumn food drive. I put on record my thanks to my constituents and those of other hon. Members who have supported that Trussell Trust initiative over the last week. One of the most significant challenges my food bank has consistently talked to me about is child poverty. Even though the Conservative party opposes our plans, nearly 9,000 children will be lifted out of poverty across Peterborough because of decisions that our Chancellor took in the Budget last week. Does the Prime Minister agree that that is not just the right thing to do for those children but an investment in our future and in growth?

[The Prime Minister]

I thank my hon. Friend for raising that. I was in his constituency just the other week, and we could see the impact that this measure would have on children in Peterborough where, as he said, 9,000 children are living in poverty. In his constituency, 5,500 children are living in poverty. We are lifting them out of poverty, and that is the right thing to do.

[Graham Stuart (Beverley and Holderness) (Con)]

It wasn’t last year.

[The Prime Minister]

The Conservative party shamefully dragged hundreds of thousands of children into poverty, and they will pay that price for the rest of their lives. Conservative Members should be ashamed of themselves.

[George Freeman (Mid Norfolk) (Con)]

I was recently the target of an AI deepfake video announcing my defection to Reform. As colleagues across the House will know, that is about as likely as Reform moving from pub populism to a coherent programme for government. I am delighted to reassure my Chief Whip and the House that I am and always have been a faithful—[Laughter]—a faithful Conservative. Does the Prime Minister agree that while satire has always been an important part of our politics, the rise of AI deepfake disruption is a serious threat to our democracy? Will he work with me and cross-party MPs to frame some appropriate reforms, as proposed by the recent Speaker’s Conference, to protect our democratic integrity?

[The Prime Minister]

I thank the hon. Gentleman for raising this important issue. We need to work cross party where we can on deepfake, on AI and on other issues that need to be addressed. I am afraid I missed his alleged defection to Reform. I would not have believed it if I had seen it, but I have to say that there are a lot of Conservatives going—I think three ex-MPs have gone this week. They talk about leaks. That is where their leaks are going: to Reform.

Talking of leaks, according to the front page of the Financial Times this morning, the leader of Reform apparently says he wants to merge with the Conservative party and sit down in here with them—an absolutely unholy alliance of austerity and failure.

[Mrs Elsie Blundell (Heywood and Middleton North) (Lab)]

Q10. This week, I have been speaking to warehouse workers at Tetrosyl in my constituency, who have been given an appalling ultimatum in the run-up to Christmas: they must either sign a new contract with reduced pay and breaks or lose their jobs. Can the Prime Minister advise me on what action can be taken against rogue employers such as Tetrosyl who take action against workers and seek to exploit them and undermine their rights?

[The Prime Minister]

I thank my hon. Friend for fighting hard for her constituents who are facing awful uncertainty, which is bad enough at any time of the year but really bad at this time of the year. Our thoughts are with the workers and their families who are facing the uncertainty that she has flagged. Our landmark Employment Rights Bill will strengthen workers’ rights and put them in a better position, including by ending unscrupulous fire and rehire practices. I thank her for fighting for her constituents.

[Shockat Adam (Leicester South) (Ind)]

No religion, theology or philosophy is beyond critique or scrutiny, and we must protect freedom of speech at all costs. But Islamophobia is real, at least for Zainab Hussain in my city, who was run over not just once but twice, simply for being a Muslim. She survived. Not so lucky was Makram Ali, who was killed outside Finsbury Park mosque simply for being a Muslim, or Mohammed Saleem, who was stabbed to death simply for being a Muslim. When the Prime Minister was in opposition, a definition of Islamophobia was adopted, but in government it has been dropped. What has changed?

[The Prime Minister]

I thank the hon. Gentleman for raising those examples of hatred in his constituency. He is right to raise them and we should all condemn them. Hatred in all its forms should be condemned by all of us in this House, and that includes anti-Muslim hatred as well. We intend to act on it.

[Anna Dixon (Shipley) (Lab)]

Q13. This week I met my constituents, Mike and Sue. Their autistic son Jimmy was imprisoned as a young man. The judge recommended a sentence of two and a half years. Jimmy is now in his 40s. He has been in prison for nearly 20 years on an indeterminate sentence for public protection. His doctors say that he is safe and well for discharge, and a supported living flat is waiting for him in Shipley. Will the Prime Minister please help by ending the injustice of these IPP sentences and help to get Jimmy home?

[The Prime Minister]

My hon. Friend raised this case with me in the Lobby last night. It is a really shocking case of two years leading to someone being in prison for over 20 years and not yet released, and with delays in the release process. The Justice Secretary will look into this case and meet her to discuss her concerns to see what more can be done. It is right that IPP sentences have been abolished, and we are committed to supporting the progression of all those who are serving such sentences.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

I have a charming elderly constituent who, after a series of major medical interventions, has been left in excruciating, uncontrolled pain after her opioids were withdrawn, pushing her to suicidal ideations. Can the Prime Minister shed light on what plans His Majesty’s Government have to help people manage pain in order to live a happier and more comfortable life? Please can I have a meeting with the appropriate Minister?

[The Prime Minister]

I thank the hon. Lady for raising this awful case. We are putting in further protection and support, but I will take this up. It is important for her to discuss this with the relevant Minister, because the case that she has referred to sounds appalling.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Q15. Under this Labour Government, NHS waiting lists are coming down. I welcome the commitment to refurbish Truro Health Park in my constituency, one of the first new neighbourhood health centres in the country. Cornwall is already leading the way with new neighbourhood health teams, and upgrading Truro Health Park will help to deliver care for patients in their own communities. Will the Prime Minister confirm that this investment reflects decisions taken by this Government to prioritise community health care, and that services will not be removed before effective community replacements come online?

[The Prime Minister]

I thank my hon. Friend for raising this, and I am delighted that her constituency will benefit from one of the 250 new centres. Neighbourhood health centres will provide simpler, more convenient access to a full range of health and care services on people’s doorsteps, and GP services will be protected before they come online. This is about early intervention, continuing to drive down NHS waiting lists and creating a more modern NHS that is fit for the future.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

Could the Prime Minister give his assessment of the latest news that President Putin has again turned down terms for peace in Ukraine? In an extraordinary outburst designed to destabilise our understanding of the truth, he did say that Russia is ready for war with NATO. How ready are we?

[The Prime Minister]

I thank the hon. Gentleman for raising this; I updated the House last week on the attempts to get a lasting peace. We all know that Putin is the aggressor here. We all know that Putin is dragging his feet, not wanting to come to the table, not wanting to reach an agreement. We have to continue to put pressure on in every conceivable way—that is, in supporting Ukraine with capability and resource, but also ensuring that our sanctions, acting with allies, do as much damage to the economy in Russia as we can, and pressure that we can put on. We will continue to do so but the hon. Gentleman is absolutely right to raise this, and I thank him for doing so.