House of Commons

Wednesday 11th November 2026 Commons Chamber

Wednesday 11 November 2026

The House met at half-past Eleven o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 11th November 2026 Commons Chamber

The Minister for Women and Equalities was asked—

[Michelle Welsh (Sherwood Forest) (Lab)]

1. What steps she is taking with Cabinet colleagues to help remove children from poverty.

[Chris Murray (Edinburgh East and Musselburgh) (Lab)]

4. What steps she is taking with Cabinet colleagues to help remove children from poverty.

[The Minister for Women and Equalities (Bridget Phillipson)]

The Government are taking decisive action to tackle child poverty, for instance by removing the two-child limit, expanding free school meals and rolling out Best Start family hubs. Measures in the child poverty strategy are expected to lift more than half a million children out of poverty in 2029-30. That is what Labour Governments do: they make the choices that lift children out of poverty.

[Michelle Welsh]

I am proud of what the previous Labour Government did in rolling out Sure Start services, and of the role that I played in Nottingham and Derby in that connection. Does the Minister agree that where people are born should not determine their future, and that connecting Sure Start to maternity services delivers hope and opportunity and pulls many children out of poverty, including those living in former coalfield communities in my constituency such as Ollerton, Blidworth, Rainworth and Clipstone?

[Bridget Phillipson]

I strongly agree with my hon. Friend. Sure Start was one of the proudest achievements of the last Labour Government. We are now bringing it to life for a new generation of children with Best Start family hubs, and I am delighted that from April next year we are expanding healthy babies funding to every local authority in England, giving every family access to trusted, practical support during those critical 1,001 days. I pay tribute to my hon. Friend, who has spoken so powerfully about what needs to change in maternity services so that all women receive care and support at that vulnerable period in their lives.

[Chris Murray]

Child poverty haunts Edinburgh. In Scotland’s capital there are more homeless children than there are in the whole of Wales, which is a shameful legacy of 20 years of Scottish National party rule. Worryingly, the Joseph Rowntree Foundation warned last month that we are set to miss our child poverty targets by a significant margin; one in five Scottish children are still in poverty. What conversations has the Minister had with Scottish Ministers about tackling child poverty, and will she press them to use some of the extra £18 billion that this Government have given the Scottish Government for Scotland’s poorest children?

[Bridget Phillipson]

Again, I strongly agree with my hon. Friend. Tackling child poverty is not just a moral imperative; it is an investment in our country’s future and our children’s future. The fact that so many children in my hon. Friend’s community grow up in poverty is a scar on their life chances and a scar on all of us, but this Labour Government are taking decisive action in lifting the two child-limit, which will benefit an estimated 94,000 children in Scotland. In England, we are also expanding Government-funded childcare for children under two, and I am sure that many Scottish families hope the SNP Government will do the same.

[Mr Speaker]

I call the shadow Minister.

[Rebecca Smith (South West Devon) (Con)]

The Secretary of State recently announced the closure of the independent Social Mobility Commission and its replacement with a Government-run class unit. The commission existed to pose independent challenges to Ministers, whereas the new unit will report to Ministers. Many will conclude that abolishing an independent commission and replacing it with an internal Government body amounts to weakening scrutiny, at precisely the moment when the Government claim to be serious about tackling inequality and child poverty. How can we have confidence in the Government’s assessment of their own performance when the independent body established to provide that assessment has been abolished?

[Bridget Phillipson]

We have been squeamish about class for too long as a country, and we need to tackle the deep inequalities that hold back too many people. I do not believe that that should be outsourced. It should be central to the work of every single Government Department, which is why I have decided to establish a new class unit in Government that will focus on everything that holds people back in our country. The difference between our party and that of the hon. Lady is that we are serious about tackling child poverty, and during this Parliament we will lift more children out of poverty than any other Parliament on record.

[Mr Jonathan Brash (Hartlepool) (Lab)]

2. What steps she is taking with Cabinet colleagues to tackle period poverty.

[The Minister for Women and Equalities (Bridget Phillipson)]

This Government are focused on giving people more breathing space. We are tackling the root causes of poverty through measures to make work pay, and are boosting the living wage so that no one has to go without the essentials. We are working with businesses to ensure that women are supported at work, and we support women’s health needs through our action plans too. We are ensuring that those with the greatest needs can access period products, with schemes that are already operating in schools and health settings.

[Mr Brash]

Will the Minister join me in paying tribute to my constituent Lyndsay Hogg for her tireless campaign to persuade businesses to provide free sanitary products in their public toilets? Lyndsay believes that we should go further and make that a legal requirement for businesses, ensuring that no woman or girl is ever prevented from participating fully in society because she has no access to essential sanitary products. Does the Minister agree that that could be a huge step forward in tackling period poverty, and will she agree to meet Lyndsay and me to explore how we can make this ambition a reality?

[Bridget Phillipson]

I pay tribute to Lyndsay, and I would be delighted to meet her and my hon. Friend to discuss what more we can do. It is good to see businesses and public services already opting to provide products, but it is right that, in parallel, we make sure that women have more money in their pockets and are lifted out of poverty. We are doing that by making work pay, cutting energy bills and scrapping the two-child limit, but I look forward to discussing this issue further with Lyndsay and my hon. Friend.

[Christine Jardine (Edinburgh West) (LD)]

Period poverty is a huge issue. The measures that the Minister has outlined are welcome, but it is a much wider issue. It has been estimated that women spend 20% more than men in their lifetimes on essential products—not cosmetics, but essential hygiene products. For a family with two or three children who are girls, that has a massive impact on their budget. Will the Government consider something that I have suggested often: looking at the pink tax—the extra money that women are charged—and doing something about it?

[Bridget Phillipson]

The hon. Lady raises a fair point and a fair challenge. No one should pay more for essential products, including health or hygiene-related products. I will pick up the issue with colleagues across Government, and I will come back to her with a full response.

[Josh Newbury (Cannock Chase) (Lab)]

3. What assessment she has made of the impact on trans people of the Equality and Human Rights Commission’s updated services code of practice.

[The Parliamentary Under-Secretary of State for Transport (Simon Lightwood)]

The code is explicit that trans people must remain protected under the Equality Act 2010, must have access to vital services and must not be subject to discrimination. This Government will always treat everyone with dignity and respect. As an independent regulator, it will be for the EHRC to monitor and review the impact of its guidance.

[Josh Newbury]

In the three months since the revised code of practice came into force, trans people have reported being forced out of all single-sex spaces, such as toilets for either gender, and they feel that the clock has been turned back to a time when their very existence was policed. That is clearly incompatible with their ongoing protections under the Equality Act, and I hope that it is not in the spirt of what the EHRC hopes to achieve. Will the Minister keep listening to the real-world experiences of trans people and, if necessary, tell the EHRC to look again at the code?

[Simon Lightwood]

The EHRC will keep the impact of its guidance under review. The code is clear that trans people should not be left without facilities to use. Where single-sex services are provided, service providers should consider alternative options, such as gender-neutral or individual self-contained facilities, to ensure that trans people are included. We expect service providers to take proportionate approaches that protect safety and privacy for everyone.

[Noah Law (St Austell and Newquay) (Lab)]

5. What steps she is taking to help disabled people with the cost of transport.

[The Minister for Social Security and Disability (Sir Stephen Timms)]

The Government are committed to travel being accessible to all. The English national concessionary travel scheme, for example, provides free off-peak bus travel throughout England for eligible older and disabled people. From 1 April, disabled passholders will be able to travel free of charge, at any time of day, across England.

[Noah Law]

I welcome the recent revision to the way the Motability changes are set to be delivered, which will ensure that people can apply for a mileage allowance if they are making journeys for healthcare, education, employment or other essential needs. There is also an automatic increase of up to 3,000 miles for rural users, which will go some way towards reducing the otherwise unfair impact of the changes on those living in rural areas. I am grateful for the representations of Labour Rural Research Group colleagues on this issue, and I am grateful to the Secretary of State for Work and Pensions for his nuanced approach, but what further steps are Ministers taking to support disabled travellers in rural areas?

[Sir Stephen Timms]

My hon. Friend makes a very important point, and I join him in welcoming the announcement by Motability, particularly to help drivers in rural areas. He will have heard what I said about the extension of the time at which the free bus pass can be used, starting from 1 April. Let me also point him to the fact that the Department for Transport is providing £10.5 million in 2026-27, including an additional £1.9 million this year, to support mobility centres around the country, which help disabled drivers, including those in rural areas, to stay mobile.

[Sir Julian Lewis (New Forest East) (Con)]

I warmly welcome the extension of the travel hours for those with disabled bus passes, but there is one further step that is still necessary for disabled people who cannot travel on a bus without a companion. At the moment, whether a council allows the disabled bus pass to cover a companion is still discretionary. That needs to be made mandatory, because there is not much point in a disabled person having a free bus pass if the person who has to be with them has to pay the full fare.

[Sir Stephen Timms]

The right hon. Gentleman raises an interesting point, which I know my hon. Friends will be aware of. The Bus Services Act 2025 includes strengthened requirements for disability training for drivers and for customer-facing staff working for bus companies, but I will certainly reflect on his point.

[Richard Quigley (Isle of Wight West) (Lab)]

6. What steps she is taking with Cabinet colleagues to help tackle violence against women and girls.

[John Milne (Horsham) (LD)]

12. What steps she is taking with Cabinet colleagues to help tackle violence against women and girls.

[The Minister for Equalities (Satvir Kaur)]

Violence against women and girls is one of the biggest challenges of our time, which is why this Government have committed to halving it in a decade. Progress towards achieving that includes rolling out dedicated specialist teams in every police force, providing specialist rape and serious sex offence courtrooms, and introducing domestic abuse protection orders. We have launched a new taskforce to tackle misogyny, we are teaching children about healthy relationships in school and we are preparing legislation to make it impossible for children to take, share and view nude images.

[Richard Quigley]

Members will have heard me speak many times about the injustice of victims of sexual assault and rape on the Isle of Wight having to travel by ferry for evidence gathering and treatment, because of the lack of a sexual assault referral centre, yet these traumatic journeys continue and many victims tell me how they feel badly let down. Will the Minister meet me to discuss a way forward so that no one has to leave the island to access that essential service?

[Satvir Kaur]

I thank my hon. Friend for the work he does in supporting victims and survivors in his constituency. Victims and survivors of sexual violence should be able to access timely, sensitive and appropriate specialist support wherever they live. He is right to raise the gaps on the Isle of Wight, and I would of course be happy to meet him to see how together we can address that.

[John Milne]

Chart Way is a major pedestrian route into central Horsham, but its street lighting is operated by the owner of an adjacent office block that was recently purchased by a venture capital company. Unfortunately, the company in question has refused to turn on the lights or respond to any inquiry from councillors or my office, despite the fear felt by women and girls—and, indeed, the danger it creates—as the nights draw in. What avenues do we have to address this problem; can the Minister offer any assistance? We just do not seem to have any powers.

[Satvir Kaur]

The hon. Member is absolutely right that women and girls need to feel safe in public spaces. We are going further on this, with a cross-Government ministerial board—both the Ministry of Housing, Communities and Local Government and the Department for Transport are part of it—and I would be happy to work with him and other Departments to ensure that we get this right.

[Mr Speaker]

I call the Chair of the Women and Equalities Committee.

[Olivia Bailey (Reading West and Mid Berkshire) (Lab)]

Time and again, powerful men are abusing women and then trying to silence them. Every woman must be protected, so will Ministers ban the misuse of non-disclosure agreements for harassment and misconduct—for everyone, not just employees?

[Satvir Kaur]

We are clear that NDAs must never be used to cover up workplace harassment or discrimination. Reports this week have shown how important that is and the horrific consequences of imbalances of power. The Employment Rights Act 2025 will stop employers using NDAs to silence workers about harassment or discrimination in the workplace, and there is a consultation on going further and analysis of which groups will be included. We are also looking at what we can do about injunctions. I am sure that my hon. Friend the Minister for the Future of Work will be happy to write to her on this issue.

[Lincoln Jopp (Spelthorne) (Con)]

Thousands of prisoners are being released early on condition that they wear a security tag. Is the Minister aware of media reports that hundreds of prisoners are currently simply refusing, once released, to wear a tag? That must be deeply disturbing to the victims of their crime. Would she work with the Ministry of Justice to sort this out?

[Satvir Kaur]

We work incredibly closely with the Ministry of Justice. The truth is that we inherited a broken system, which we are fixing. What is important is that serious sexual offences are excluded, and we are supporting victims by introducing the toughest ever range of tools, including world first restriction zones.

[Mr Speaker]

I call the shadow Minister.

[Rebecca Smith (South West Devon) (Con)]

Female genital mutilation is one of the most serious forms of violence against women and girls, yet the Government’s understanding of its prevalence is still based on figures from 2011, estimating that 137,000 women were living with FGM in this country. We cannot tackle what we do not measure, so if Ministers genuinely regard violence against women and girls as a national priority, will they stop relying on 15-year-old estimates and commission an urgent, comprehensive study to establish the true prevalence of FGM in Britain?

[Satvir Kaur]

We are going further than ever before to deal with honour-based abuse. On data, FGM is an under-reported crime and there is definitely work that we can all be doing to ensure that we are raising awareness. A campaign to raise awareness is about to be launched, so that we can get victims to come forward and support them.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Marie Goldman (Chelmsford) (LD)]

Yesterday, ITV News and The Guardian reported disturbing allegations, only possible thanks to the courage of the women who came forward, of grooming and sexual misconduct made against the celebrity David Walliams. Among the disgusting allegations of sexual advances to girls as young as 15, the years-long investigation also describes how one of the women received a threatening letter from Walliams’s lawyers demanding a written promise that she never speak about her experiences. Will the Minister meet me and my hon. Friend the Member for Chichester (Jess Brown-Fuller) to discuss, cross-party, how we work to end the manipulation of the justice system by rich and powerful men who try to silence their victims?

[Satvir Kaur]

If this week has shown us anything, it is that no one is above the law. We have heard a lot about rich, powerful men using their positions to use and hurt women and girls, but these are also stories of strong women, both the victims and those in the media who expose perpetrators in positions of power. I pay tribute to their bravery and courage in coming forward to speak about deeply personal experiences so that justice can be served. We all have a responsibility to root out abuse wherever it is found. The Government are working tirelessly to ensure that offenders are held to account and victims are supported. I will, of course, be happy to meet and to work cross-party.

[Jim Shannon (Strangford) (DUP)]

7. What steps she is taking with Cabinet colleagues to ensure that disabled people receive appropriate reasonable adjustments to allow them to access public services.

[The Minister for Equalities (Sir Stephen Timms)]

The Equality Act 2010 places an anticipatory duty on service providers to make reasonable adjustments so that disabled people are not placed at a substantial disadvantage compared to non-disabled customers.

[Jim Shannon]

I thank the Minister very much for that answer, but he will know that in Northern Ireland the disability employment gap remains, at 40.3%, the largest in the whole of the United Kingdom. Persistently low employment rates are particularly concerning following the loss of the European social fund financial support, which previously aided many employment services and disabled people in Northern Ireland. What discussions will the Minister have with the relevant Minister back home in Northern Ireland to secure sustainable replacement funding for those services, and to ensure that disabled people have the support and opportunities they need to access public services in the United Kingdom, including Northern Ireland?

[Sir Stephen Timms]

The hon. Gentleman raises an extremely important point. The disability employment gap has been stuck at the same level across the UK pretty much since 2010. We have committed an extra £3.5 billion over this Parliament to improve employment support for disabled people and others out of work who have complex barriers. We are rolling out Connect to Work across England and Wales. I very much hope that that funding and the Barnett consequentials will enable similar improvements in Northern Ireland.

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

I recently met a resident in my constituency who is blind and relies on an assistance dog to get about in his local area of Nazeing. One of the biggest challenges we face across Harlow is the problem of pavement parking and how that affects people who are partially sighted. What conversations has the Minister had with the Department for Transport to tackle pavement parking to make it easier for those who are partially sighted or blind to get around?

[Sir Stephen Timms]

I am grateful to my hon. Friend for raising that issue. There are serious concerns for people who are partially sighted or have a sight impairment. I am in conversation on that and hope we can make some progress.

[Paula Barker (Liverpool Wavertree) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Minister for Women and Equalities (Bridget Phillipson)]

Women and girls should never have to shrink our lives or ambitions because of outdated misogynistic attitudes. The appalling testimonies we have heard in recent days underline how much further we have to go. I pay tribute to all the women who have shown such bravery in coming forward and sharing their experiences. The misogyny taskforce will help to tackle misogyny in workplaces, communities and online. It is backed by £15 million, which we are working with businesses and philanthropists to grow. The Government are clear that misogyny has no place in our society and it is time to consign those attitudes to history.

[Paula Barker]

A report in July by the Women and Equalities Committee found that black people are four times more likely to experience homelessness than people who are white. In 2025-26, black people made up 2% of households in Liverpool, with 12% of those recorded homeless, or at risk of being so. Despite the Government’s welcome commitment to end rough sleeping, they are still to respond to the Committee’s report. Will the Minister chase that urgently and set out what steps the Office for Equality and Opportunity is taking to ensure that the rough sleeping programme addresses the specific challenges facing black people experiencing homelessness?

[Bridget Phillipson]

The Committee’s report provides important evidence on the experiences of black people facing homelessness, and I can assure my hon. Friend that the Government will respond shortly. Last month, I visited Liverpool with Baroness Lawrence and the race equality engagement group, and we heard about how real efforts are being made to build stronger communities and tackle racism, and how important it is that there is safe and secure housing for ethnic minority communities across our country.

[Mr Speaker]

I call the shadow Minister.

[Rebecca Smith (South West Devon) (Con)]

The Secretary of State has made class a central theme of her equalities agenda, but before she can tackle class-based disadvantage, she must surely be able to define it, so what is her definition of class and how will her Department identify who is and who is not working class?

[Bridget Phillipson]

It is important that we take action on the disadvantage that holds people back by virtue of family background and income. We intend to enact the socioeconomic duty, which will ensure that all public authorities take seriously their responsibility in how they design and deliver public services. I am grateful for the shadow Minister’s interest in this area and look forward to working with her to ensure that we finally take class seriously as a country.

[Josh Newbury (Cannock Chase) (Lab)]

T3. There is a clear distinction between discussion and disagreement, and harmful conversion practices. The Government’s draft Bill is clear in using the existing definition of abusive conduct in criminal law. Does the Minister agree with me that the protections in the Bill are urgently needed, and that before the end of this Session we should pass the comprehensive, trans-inclusive conversion practices ban that our manifesto called for?

[Bridget Phillipson]

Abusive conversion practices have no place in our country, and no one should face abuse because of who they are or who they love. We have brought forward a draft Bill for pre-legislative scrutiny because we want to get it right. I look forward to the Joint Committee’s recommendations and to working across the House to finally deliver that long-overdue ban.

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

T5. Will the Minister set out what steps she is taking to ensure compliance with the legal framework around single-sex spaces for all public bodies?

[Bridget Phillipson]

The Equality and Human Rights Commission is responsible for ensuring that public bodies honour their responsibilities and provide appropriate single-sex spaces, as well as ensuring that we have services available for everyone in our country. Government Departments have also published guidance so that we can be clear about how we will deliver on our responsibilities, but we recognise and will uphold the ruling of the Supreme Court.

[Graeme Downie (Dunfermline and Dollar) (Lab)]

T4. For nearly a decade, Dunfermline Athletic football club has made Samaritans its main charity partner. Through matchday messages, pitch-side advertising and an annual awareness day at East End Park, the Pars tell fans that it is always good to talk, reaching people who might never walk into a GP surgery. Will the Minister join me in congratulating the Pars on the work they do, and will she ensure that the Government’s own work on mental health learns from such community partnerships?

[Bridget Phillipson]

I commend Dunfermline Athletic for a powerful example of what can be achieved in that kind of partnership with Samaritans. It is important that we are all able to seek help when we are experiencing mental health challenges. Suicide is one of the biggest killers of men in our country, which is why the work that the Minister for men and boys, my hon. Friend the Member for Rother Valley (Jake Richards), is leading is incredibly important in ensuring that everyone can access timely support, so that we do not see a single person lost to suicide wherever we can prevent it.

[Munira Wilson (Twickenham) (LD)]

T6. The Prime Minister has said that it is important that rape and sexual assault victims do not feel like they are the ones being put on trial in cases, yet the mother of a rape victim who came to see me last week said that her daughter felt exactly that way when her abuser was put on trial. Does the Minister agree with the Victims’ Commissioner that juries in those cases need to be directed in the myths and misconceptions around rape?

[Bridget Phillipson]

As the Prime Minister has set out, we believe that it is important that that recognition is there. I am very sorry to hear about the experiences of the hon. Lady’s constituent, and if she would like to discuss that further with a Minister, I can certainly ensure that takes place. In recent times we have seen shameful comments that trivialise the experiences of women, and we must all be clear, right across society, that violence against women and girls is abhorrent, there can be no excuses and those who commit acts of violence and sexual violence against women should face the full force of the law.

[Carolyn Harris (Neath and Swansea East) (Lab)]

Thank you, Mr Speaker—[Interruption.] On behalf of menopausal women around the world, I thank the House for that warm welcome. According to the big Menopause Mandate 2026 survey, 90% of working women say that symptoms affect them at work, yet only 39% of their employers have a menopause policy. How will the Government ensure that the menopause action plans set to be introduced next year will be implemented and monitored to support women through that very important stage of their life?

[Bridget Phillipson]

My hon. Friend has been an incredible campaigner on this issue and has done so much to help women across our country. We are taking action as a Government, ensuring that big employers have to produce action plans to say how they will support women going through the menopause, which many already do, because they know it is an incredible waste of talent to see women leaving brilliant jobs and careers just when they are getting into their stride.

[Ben Obese-Jecty (Huntingdon) (Con)]

T7. In November last year, the former Prime Minister pledged to hold a national summit on men and boys by the end of 2026. Could the Government provide an update on exactly where we are with that, given that we are now in November this year?

[Bridget Phillipson]

We will be holding a summit, because we recognise that there is more to do to support men and boys in our country, especially around issues like mental health, as I touched on earlier. I will ensure that the relevant Minister gives the hon. Gentleman an update on the date for that.

[Mr Speaker]

Before we come to Prime Minister’s questions, I welcome to the Gallery the President of the Massachusetts State Senate and her delegation.

The Prime Minister was asked—

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

Q1. If he will list his official engagements for Wednesday 11 November.

[The Prime Minister (Andy Burnham)]

As we have just done in the past hour, we remember all those who made the ultimate sacrifice in the service of our country. We honour the courage and bravery of all our armed forces. No one who has served our country should ever sleep rough on our streets. I have today written to all English councils, as part of our drive on rough sleeping, to ask that an offer of accommodation be made to all ex-forces ahead of the winter break. I hope that Members across the House will work with their councils to ensure that happens.

Over the weekend, a British national was sadly killed and another injured in the terrible shooting in Krakow. Our thoughts are with the families, who we will support in whatever way we can. Of course, the UK stands with the people of Poland, as I have assured Prime Minister Tusk.

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.

[Claire Hanna]

Humour me for a moment and imagine that one party in this Parliament could, if it did not like the way the political winds were blowing, refuse to take part and bring Westminster to a standstill. That would be unthinkable here, but in Stormont the abnormal has become routine. We have watched parties taking turns at collapsing government for years at a time. We have watched policies blocked not by the strength of an argument, but by vetoes that were designed for inclusion. It seems like dysfunction is easier than actually doing the work, and ordinary people are paying the price. Wherever you want to go constitutionally, the path is through making a fist of things and offering people a decent life. It is worth saying that every poll shows that more people are working towards a new Ireland. Stormont is in its dying days if urgent steps are not taken to make it more productive and stable. Will the Prime Minister commit to working with us and others on a politics for the common good to end the cycle of dysfunction and despair?

[The Prime Minister]

Can I say to my hon. Friend that I know exactly where she is coming from? We all want to see Stormont up and running and delivering for the people of Northern Ireland, particularly as we approach the 30th anniversary of the Good Friday agreement. My right hon. Friend the Northern Ireland Secretary is working hard with colleagues across all parties in Northern Ireland to settle a budget for this year and to consider further ideas for reform of Stormont. We will continue to do whatever we can to bring the parties together. It is incumbent on us all to get Stormont up and running as soon as possible.

[Mr Speaker]

I call the Leader of the Opposition.

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

On this Armistice Day, we remember the courage and sacrifice of those who served our country and those who gave their lives for us. We owe them and their families an enduring debt of gratitude.

The Prime Minister entered Downing Street promising a 10-year plan to reverse 40 years of neoliberalism. Is it really true that he has so little vision for this country that he needs the Boston Consulting Group to write it for him?

[The Prime Minister]

I did walk into Downing Street promising a 10-year plan for this country, because I am determined to give this country the stability that the Conservatives failed to provide, and I am determined to give the leadership that this country needs. I can say to the right hon. Lady that we will present our plan for Britain to this House before it rises for the Christmas recess.

[Mrs Badenoch]

I am not surprised that the Prime Minister has asked management consultants to help him write his 10-year plan—he needs all the help he can get. We have heard one thing that will be in it: he is merging the DVLA with the DVSA. [Hon. Members: “Ooh!”] Exciting stuff, Mr Speaker. It is no wonder that Labour MPs are already telling The Guardian that it is a “tragic joke”. This Government are adrift. Two weeks ago we had a “do nothing” Budget. It pushed all the big decisions, like funding our defence, into the spending review, but we have no idea when that will be. He has talked about the 10-year plan. Can he assure the House that the spending review will come before next summer?

[The Prime Minister]

The right hon. Lady mentions the Budget—the most popular Budget for a number of years, I have to say—which helped people with the cost of living crisis. Can she explain why the Conservatives voted against a bank levy that will deliver a council tax cut for 20 million households in January? It was a big decision to oppose that, and she needs to explain why she took that decision.

There will be a proposal for a national care service in the 10-year plan. The covid inquiry recently said that social care was an “afterthought” for the Conservative party. We will also present the Milburn report to this House next week. We will put forward a plan to this House and the country for a safe and sustainable way to bring the welfare bill down and get young people into work.

[Mrs Badenoch]

I think it was popular compared to the former Chancellor’s Budget. I asked the Prime Minister to confirm when the spending review will be, and we did not get an answer. All the waffle he gave us there was kicking everything into the long grass. Meanwhile, the Iranians are threatening our bases today, but he cannot tell us when his Government will properly fund our defence. But he has so much time on his hands that last night he attended a speech by the head of the civil service. He is supposed to be telling her his plan, not sitting in the audience while she tells him hers.

There was one worthwhile thing in the Budget: the Rosebank oilfield. The Chancellor has already banked the tax revenue, but there is just one problem: Rosebank has not been approved. If it is not going to be approved, why was it in the Budget?

[The Prime Minister]

The right hon. Lady knows that the Rosebank decision is a quasi-legal decision and it will be taken in due course. She stood at the Dispatch Box a moment ago and said that this Government are not taking big decisions. We did approve the Jackdaw gasfield. Today £12 billion is going into renewable energy. These are big decisions. Yesterday she put forward what she considers a big decision: £36 billion of cuts. Does she accept that so many of the people affected by what she announced are working people—people whose incomes will be hit hard in a cost of living crisis? I think the right hon. Lady needs to answer why she would make the cost of living crisis harder for people through the cuts she has just announced?

[Mrs Badenoch]

I asked the Prime Minister about Rosebank. He says that it is a quasi-judicial decision. It is a political decision. Why else did it take the Labour Government two years to approve Jackdaw while the Foreign Secretary was in charge, but now he is gone it happened just like that? This is the real reason they did not do it: the Foreign Secretary instructed Government lawyers not to fight the court case. He called Rosebank “climate vandalism”—but then he also thought that cosying up to Russell Brand would make him Prime Minister, so I do not think we need to trust his judgment. [Interruption.] Labour Members are saying “Shame”—they are right, the Foreign Secretary should be ashamed. Meanwhile, the Chancellor is already banking the tax revenue from Rosebank in his calculations. Why will the Prime Minister not just approve Rosebank?

[The Prime Minister]

Correct me if I am wrong, but the Jackdaw decision that the last Government tried to take was struck down, because they made it overtly political—that was why they could not take that decision. The right hon. Lady comes to the House handing out lectures week after week, but maybe she needs to look a little closer to home as to why the last Government failed to take that decision. We will take a further decision on Rosebank in due course, as well as building a renewable energy future, which is what we are also announcing today. We are facing the big issues and we will lay that out in the 10-year plan. This country was going backwards under the Conservative party. We are leading it forward. We are bringing people back together. We are giving people hope. She is voting against the help that we just announced in the Budget. When will she directly address the cost of living crisis in this House?

[Mrs Badenoch]

I ask the questions here and I am asking about Rosebank—it was literally in the Budget. The reason why the Prime Minister will not approve it is because Government Members are all squabbling, or maybe he does not want it hanging over his head at COP. It is not just the Foreign Secretary, because 50 of his MPs do not want it either, led by the current Energy Secretary, and she is only in the job because the Culture Secretary turned it down.

Today the Government are in court defending our right to drill oil and gas off the Falklands. At the same time, they are passing legislation to ban drilling off Scotland. This is ludicrous. Why is it acceptable to drill oil and gas in the Falklands but not in the North sea?

[The Prime Minister]

The right hon. Lady has not been paying attention. We recently approved the Jackdaw gasfield in the North sea—something that she failed to do when she was in government—and through the energy wealth fund created by my right hon. Friend the Chancellor, we are using the proceeds to accelerate the delivery of renewables. Today we are announcing two offshore wind projects—off the coast of East Anglia and off the east coast of Scotland—in part funded by the National Wealth Fund.

If the right hon. Lady wants to address energy policy, perhaps we can talk about why energy bills went up and up under the Conservatives. Perhaps we can discuss how they lost public control, lost control of people’s bills and left people paying more and more. We are removing standing charges from gas bills, which will bring people’s bills down, and we are going to do the same by looking at reforming standing charges on electricity bills. We have taken VAT off electricity bills. Also, through all those efforts, we will speed up the delinking of gas and electricity prices, getting bills down over the long term. That is an energy policy, and the Conservative party could have done with one when they were in office.

[Mrs Badenoch]

There was a lot of waffle there, but I did not hear why it is all right to allow oil and gas drilling in the Falklands but not in the North sea. The Prime Minister sounds confused: he did not seem to know that he is legislating to ban oil and gas drilling. The Government are totally adrift—they need consultants to tell them what to think and civil servants to tell them what to do—so we are left with a “do nothing” Budget, a spending review delayed and a 10-year plan outsourced. Meanwhile, the whole country is in limbo. Labour MPs want to pretend that Keir Starmer simply walked off into the sunset, but in reality this man knifed him in the back and now does not know what to do. Is not the truth that they are all sat there shaking their heads, wondering whether it was all worth it?

[The Prime Minister]

I have told the right hon. Lady today what I am doing. Whether she was listening or not, people at home will have heard that I am bringing forward a national care service, when the Conservatives ignored social care for years and years. I am acting to get people’s energy bills down, when the Conservatives did not. I listen to her talking at the Dispatch Box as though they got everything right. A quarter of a million young people became NEETs—not in education, employment or training—between 2021 and 2024, when she was in the Cabinet. The welfare bill rose by £33 billion in her last year in office, when she was in the Cabinet. When will she come to this House with real proposals to address those things, rather than repeating more of the same? Next month, she will see our plan for Britain presented to this House. It will lay a new path for this country to go forward, breaking with the failed policies of the Conservative party. She is going to have to come up with better than that if she is going to take on what we are putting forward.

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

Q4. As the Prime Minister knows, Heywood is the largest town in Greater Manchester without an express bus service to Manchester city centre. I have pushed for such a service since my election, because I know that it would transform the lives of people in my constituency and transform the economy there. What will the Government do to support Transport for Greater Manchester in delivering that service, and to make sure that people in Heywood have the benefits of buses being brought back under public control?

[The Prime Minister]

The Leader of the Opposition began by talking about the biggest changes in 40 years. We all remember when the Conservative party deregulated buses across this country, and the bus fares that left people paying. This is still happening in many parts of the country, because services are still deregulated. People can pay £3 or £4 for a single journey in many Conservative Members’ constituencies. We will put a £2 cap on those bus fares next year. Because we put the buses under public control in Greater Manchester, and because we reversed 40 years of deregulation, we can introduce the service that my hon. Friend is calling for. I used to support that in my previous job; I cannot speak for the current Mayor of Greater Manchester, but I hope she does the same.

[Mr Speaker]

I call the leader of the Liberal Democrats.

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

As we mark Armistice Day, may I join the Prime Minister in honouring the incredible sacrifices made by all those who paid the ultimate price as they served our country? We will remember them. May I also welcome the announcement of new offshore wind farms, and remind the Prime Minister that they are coming in through a Liberal Democrat policy that we brought in when in government?

Our politics has been affected by poisonous ideas, such as the idea that people born and raised in England cannot be English because they are not white. Shamefully, even some in this House have argued for that racist ideology. We must reject it, as the Conservative leader, to her great credit, has done. We should start with the census; when it asks about ethnicity, the only English option is “White English”. My hon. Friend the Member for Eastbourne (Josh Babarinde), a proud Englishman, introduced a Bill yesterday to change that, and to create new options such as “Black English” and “Asian English”. Will the Prime Minister support his Bill?

[The Prime Minister]

I echo the right hon. Gentleman’s comments at the start. We all pay tribute to our armed forces today. I also echo him in praising the Leader of the Opposition, as I did from this Dispatch Box a few weeks ago. On some issues, we should rise above party politics; we should recognise when things are completely unacceptable and make common cause against them. I have not looked at the detail of the Bill, but I stand here thinking that I would want to support it, to directly take on the poisonous politics that we have seen from some in this House who are seeking to divide us. We must move on from a decade of division and drift in this country. We must bring people back together. I am interested in working with anyone in this House who shares that aim.

[Ed Davey]

I thank the Prime Minister for that reply, and I hope it means that he is inviting my hon. Friend for a meeting to discuss his Bill. Turning to welfare, we cannot leave young people without the dignity of work and the chance to get on, and we need to bring the welfare bill down, but the blame does not lie with young people. It primarily lies with the Conservatives, who tanked the economy and sent the welfare bill soaring—and Labour has made things worse with its jobs tax. Businesses cannot hire young people in the UK while they are battling unfair taxes and tied up in Brexit red tape, so will the Prime Minister do the single biggest thing to cut welfare and help young people into work: grow the economy by joining the single market?

[The Prime Minister]

No is the answer to that, today. We are honouring our manifesto pledge to have deeper ties. There is the prospect of a deal with Europe that could add up to 0.4% to GDP—[Interruption.] The Opposition laugh at growth in our economy. This is the Conservative party! Any growth on that scale is worth taking, and we will take it. We will seek that deal. On young people, I agree with what the right hon. Gentleman has said. Young people need support to get into work. To cut their benefits without that support is wrong. I mentioned a statistic a moment ago: a quarter of a million young people were NEET in the last three years of the last Conservative Government. That is because that Government rejected the report from Sir Kevan Collins that would have given young people better mental health support and other support. That is why we saw the huge rise in the number of young people not in education, employment or training. We need to grow our economy. We need to rethink the support we give to our young people. We need an education system that is both academic and technical—that is balanced between the two—and my right hon. Friend the Work and Pensions Secretary will set out those reforms as we embark on our response to the Milburn report next week.

[Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)]

Q5. The north-east has a wealth of innovative defence businesses but receives less than 1% of Ministry of Defence industry funding. That is why there is so much interest in the decision on the Skynet satellite programme, which could bring 500 jobs to my constituency and thousands to the supply chain, and help to reindustrialise the north-east. Can the Prime Minister give an update on when we can expect this important decision and, more broadly, will he meet north-east MPs to discuss how we can put north-east industry at the heart of our national defence?

[The Prime Minister]

My hon. Friend is a champion for the north-east, and particularly for reindustrialisation, which we are completely committed to in his region. The issue he raises is a live process, and I have to say to him that no final decisions have yet been made, but we are determined that our decision will drive good jobs in his region and reindustrialisation across the country, as well as building the defence and the security of the United Kingdom.

[Jeremy Corbyn (Islington North) (Your Party)]

The whole world is appalled and disgusted at what is now happening in Gaza, where people are dying for want of food and medicine and because of the lack of aid and the terrible flood there. Will the Prime Minister ensure that aid gets to Gaza? And if Israel will not deliver that aid, will he ensure that Britain and other countries deliver aid directly, given the desperation of the people of Gaza, 100,000 of whom have already died? Will he also support an inquiry on our participation in the bombardment of Gaza through the supply of weapons and security information to Israel, so that the truth can be told about the horror that the Palestinian people have faced, and continue to face?

[The Prime Minister]

The humanitarian situation in Gaza remains heartbreaking, and we are doing everything that we can to put pressure on the Israeli Government to allow the necessary aid into Gaza and to lift the restrictions on it. We have also taken further steps on sanctions, particularly in relation to the settlements on the west bank, to make sure that we preserve the viability of a two-state solution. We await the outcome of the negotiations following the Israeli general election, but the right hon. Member can be certain that we will continue to pursue the path that we have set out.

[Mary Kelly Foy (City of Durham) (Lab)]

Q8. University hospital of North Durham has been mired in a number of controversies in recent years, including the ongoing scandal in breast services. The latest disappointment for my constituents is the withdrawal of plans for A&E expansion, which the trust can no longer fund without external capital support. I commend the efforts of the new leadership team to build public confidence, but it is clear that they alone cannot cure the decline of our hospital. Does the Prime Minister agree that everyone should have access to quality healthcare, free at the point of use, in state-of-the-art facilities, and will he meet me to discuss the urgently needed improvement to our hospital provision in the City of Durham?

[The Prime Minister]

I know there are thousands of women in the north-east affected by the breast surgery scandal that my hon. Friend mentions, and I will ensure that my right hon. Friend the Health Secretary provides all the support that they need to get the help and the answers that they must have. I am also prepared to meet my hon. Friend to discuss the situation regarding hospital services in the north-east, and I will make sure that happens soon.

[Ian Sollom (St Neots and Mid Cambridgeshire) (LD)]

Q2. My constituent Maxwell has spinal muscular atrophy, has used a wheelchair since he was two, and relies on carers every single day. He has a first-class degree and a good job, and like many young people, he wants to save a deposit for a home, but under the social care capital limit, every pound he saves above £23,250 goes directly on his care. The Prime Minister has rightly made social care a priority of this Government, so will he meet Maxwell and me to discuss how we can remove the capital limit, and stop placing a limit on the aspirations of young people like Maxwell?

[The Prime Minister]

It is a very powerful case that the hon. Member makes, and it is unfair—there is no other way of putting it. We are not waiting to make improvements; we are increasing the minimum income guarantee for 150,000 disabled adults. I realise that does not answer the question that he has raised on behalf of Maxwell today, but I am sure he is also speaking for many people across the country. Baroness Casey is conducting her review, and I urge him to put that point to the review. We will have cross-party talks on adult social care before the end of the year.

[Martin Rhodes (Glasgow North) (Lab)]

Q11. My constituents in Glasgow North regularly raise with me the increase in illegally modified e-bikes travelling at dangerous speeds on our roads and pavements. Online marketplaces are selling unsafe e-bikes and conversion kits that take pedal cycles beyond the legal limits, leaving pedestrians, families and vulnerable people worried for their safety when going about their daily life. Will the Prime Minister set out what action the Government are taking to hold online sellers and marketplaces to account for selling these products?

[The Prime Minister]

We are considering tougher regulations for the sale of non-compliant e-bikes and conversion kits across the UK. We will, of course, work with the Scottish Government to ensure that they apply in Scotland, whatever we decide. I agree with my hon. Friend: the safety risks posed by e-bikes that are going at excess speeds need to be stopped.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

Q3. The Prime Minister visited Watford general hospital last week, so he must understand the issues caused by the recent closure of the urgent care centre at Mount Vernon, and that his Government’s decision to delay the rebuild of Watford general hospital is an issue. I want to make sure that my constituents can access high-quality healthcare when they need it, so can the Prime Minister confirm that his Government will get on with the rebuild of Watford general hospital without further delay?

[The Prime Minister]

The Health Secretary and I did visit Watford general. We were very impressed with what is happening at the hospital to address corridor care, and with the improvements that it has made. I know Watford has been waiting a long time for its new hospital. I think we need to look both at Watford general and the Mount Vernon site together in considering what change is made, but I do believe Watford has waited long enough, and I will be working with the Health Secretary to make sure we move quickly on a new hospital for Watford as quickly as possible.

[Kirith Entwistle (Bolton North East) (Lab)]

Q12. When my right hon. Friend was the Mayor of Greater Manchester, he and I had many discussions about the state of public transport in Bolton. Now that he is the Prime Minister and spreading the message of hope, what hope and assurance can he give my constituents that we will finally get the tram in Bolton North East?

[The Prime Minister]

This is one for the Mayor of Greater Manchester rather than for me, but I am aware that a proposal was developed that would bring a tram-train service through Bolton North East. As I said before, I did favour that option in my previous job; I favour it in this job. We will see if we can make a business case to bring it forward.

[Dame Caroline Dinenage (Gosport) (Con)]

Q6. Recent small boat crossings in the direction of the Solent have been spectacularly mishandled. The Government’s failure to communicate with Gosport residents bred misinformation and led to violent protests. It also sent a clear message to the gangs that this is a viable new route. What message does the Prime Minister have for Gosport businesses and properties that were damaged, for residents trapped in their homes in fear, for Hampshire police and for taxpayers left with a bill for over £800,000? Recent events have shown that Gosport is not a suitable place to disembark these boats. Can he reassure my constituents that it will not be used again?

[The Prime Minister]

The hon. Lady asks me what message I have for her constituents. The message is that we will work with their Member of Parliament to hold to account those who caused the damage to those properties and businesses, but also to provide the support they need in the situation they are in. I understand she is meeting the Border Security Minister later today to discuss those issues further. Because the Government have been successful in stopping small boat crossings, the gangs are changing their tactics, but we will continue to chase them down. As we do, we will ensure that we learn from what happened and improve the arrangements going forward.

[Andrew Cooper (Mid Cheshire) (Lab)]

Q13. Four years after the Down Syndrome Act 2022 was passed, we are still awaiting publication of the statutory guidance that will bring the Act to life. This guidance is essential to improve life chances for people with Down’s syndrome and to guarantee they will receive the support they need and deserve so that they can thrive. Can the Prime Minister confirm when the guidance will be published, and will he agree to meet me so that we can deliver on a long overdue promise made to the Down’s syndrome community?

[The Prime Minister]

I understand that there is a legal challenge to the guidance, but notwithstanding that, we will ensure that it is finalised as soon as possible. I will arrange for the relevant Minister to meet my hon. Friend to give him a full update.

[Bob Blackman (Harrow East) (Con)]

Q7. On Armistice Day, I joined the Prime Minister and the Leader of the Opposition in paying tribute to all those who laid down their lives in the service of this country. We all wear our poppies with pride, but what is often forgotten is those millions of men and women who came from across the Commonwealth to serve this country, so I wear the marigold to commemorate the 3.2 million Indians who were the largest volunteer army in both the great war and the second world war and who risked their lives in the service of this country. On Sunday, the Association of Jewish Ex-Servicemen and Women will parade at the Cenotaph. I will have the honour of laying a wreath together with a renowned Holocaust survivor, Susan Pollack, remembering those who were murdered by the Nazis. Will the Prime Minister join me in commemorating and praising all those who give their service to this country?

[The Prime Minister]

The hon. Gentleman is absolutely right to say what he has just said, and we honour the service of everybody who fought alongside British service personnel fighting Nazism in the second world war. It was uplifting to see the representation of all those communities at the Cenotaph on Sunday. I was there with the right hon. Lady the Leader of the Opposition, and it is always the most moving of moments. But we must never forget the contribution, as he rightly says, of people across the Commonwealth supporting and standing alongside Britain and the people in those countries who made the ultimate sacrifice, too.

[Feryal Clark (Enfield North) (Lab)]

Q14. The Prime Minister has rightly made it a priority to ensure that children with special educational needs and disabilities can learn alongside their friends and siblings in mainstream schools, so he will be pleased to hear that Suffolks primary, a pioneering school in my constituency, is already delivering the inclusive education model, championing the Government’s White Paper. Will he join me in congratulating Suffolks on its outstanding work? I know the Prime Minister has one or two things in his diary, but will he consider visiting the school to see for himself this excellent example of inclusive education?

[The Prime Minister]

I would love to do so, when my diary allows. SEND reform is coming through. It is part of what we need to do in response to the Milburn report, to rethink how we support young people growing up, and how we have the right experts on site in our schools to give children the speech and language therapy, and other support that they need, so that they do not fall behind and they do not miss out. I would love to come to see the school at some point, as a beacon of best practice in supporting young people with additional needs.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Q9. The price of heating oil has doubled in the last year, and more than 9,000 households in the Scottish borders rely on it to heat their homes. Many are vulnerable people; many are pensioners, like Kate from Cockburnspath who told me that she will be sitting at home freezing this winter because she cannot afford to heat her home. She says that support from the Government does not go far enough to help her, so what more will the Prime Minister do to help people who are struggling to pay their heating bills because they are relying on heating oil this winter?

[The Prime Minister]

We have provided extra funding to local authorities to help with precisely the situation that the hon. Gentleman’s constituent is in. We have also provided funding through the Barnett consequentials in relation to VAT on electricity—[Interruption.] If I could just finish the point. We have given extra support to the devolved Administrations—sorry, not in relation to VAT, but in relation to the support we have provided in the Budget. There is extra help that the Scottish Government can use alongside what we have already done, and we will ensure everybody is supported this winter.

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

There has been a lot of talk recently about immigrants and the need to frame legislation to ensure they make a contribution. My parents were immigrants, and my mother was a nurse. She was one of the wave that helped to build the NHS after the war. To this day, immigrants make a very important contribution to the NHS and the care system. Does the Prime Minister agree that we should never forget to honour the contribution of generations of immigrants to this society?

[The Prime Minister]

My right hon. Friend speaks very powerfully on this issue from personal experience. I can also share mine as I saw people from around the world caring for my dad. She is absolutely right that we must celebrate their contribution, as I did in my speech at the party conference. We must take on a politics that seeks to say to those people that they have no place here, because they do.

[Sir Julian Lewis (New Forest East) (Con)]

Q10. Whether the level of military threat from Russia faced by the UK is currently as great as that during the cold war years.

[The Prime Minister]

The right hon. Gentleman asks about the Russian threat that we face today compared with the cold war. With rapid changes in technology, including AI, cyber-warfare and autonomous systems, we face new complex threats, which is why we are fully funding the defence investment plan and investing in the modern capabilities needed for the future.

[Sir Julian Lewis]

I think that answer suggests that the Prime Minister accepts that the threat we face today is comparable in dangerous intensity to that we faced during the cold war years. If that is the case, may I urge him to try to persuade his fellow Ministers to stop using the standard line that the Government have made the greatest increase in defence spending “since the end of the cold war”? At the end of the cold war, the threat largely declined, but we have to look at the level of spending during the cold war, which was regularly at 4.5% to 5% or more during the 1980s. As someone who has criticised successive Governments for cuts I am not trying to make a partisan point, but please stop making a comparison between the post-cold war years and now. The threat we face now is similar to that of the cold war years, and our defence investment has to match that level.

[The Prime Minister]

I assure the right hon. Gentleman that there is no complacency here. I understand the seriousness of the points that he is making, but, in the two years that this Government have been in office, we have seen the biggest sustained increase in defence spending since the cold war period. That is important, and that will continue. The Chancellor set out a path to increased defence spending as we go through the next decade to honour our NATO commitments, but we have to recognise that the threat is different; it is multifaceted, and we will address it on every level.

[Andy MacNae (Rossendale and Darwen) (Lab)]

The Prime Minister has rightly championed reindustrialisation. That is a powerful vision that resonates in Rossendale and Darwen and across the country; through it, people see the opportunity for good jobs in the places that need them the most. The Budget lay out the framework for reindustrialisation as an engine for growth and national resilience. Does he agree that the next step is to embed a truly ambitious reindustrialisation strategy in his 10-year plan? Will he meet me and members of the 90-strong Reindustrialisation Research Group to discuss how we can achieve that together?

[The Prime Minister]

I will meet the group, and I agree with my hon. Friend. The 10-year plan must lay out a compelling vision for the reindustrialisation of Britain.

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

Q15. The Chancellor has acknowledged that Scotland could have had a £1 trillion wealth fund from oil and gas, but instead we have seen no fund and 1,000 jobs lost every month. Before the Prime Minister jets off to COP31, will he commit to a Scottish wealth fund to ringfence revenues from Scotland’s waters for Scotland’s renewables future, or is he content to continue Labour’s deindustrialisation of Scotland, just like Thatcher in the ’80s?

[The Prime Minister]

That is a very unfair comment, if I may say so, on the very day that the National Wealth Fund has committed £1 billion of funding to support offshore wind off the east coast of Scotland. I would have thought that the hon. Gentleman would stand up and welcome that announcement.

Bill Presented

Wednesday 11th November 2026 Commons Chamber

Online Platforms (Regulation) Bill

Presentation and First Reading (Standing Order No. 57)

Manuela Perteghella, supported by Caroline Voaden and Sorcha Eastwood, presented a Bill to impose duties on providers of online platforms in relation to the prevention of harm arising from user-generated content and interactions; to make provision about transparency in content moderation, algorithms and advertising practices; to establish a regulator of online platforms; to make provision about the powers and duties of that regulator, including provision relating to complaints, investigations, penalties and redress; to make consequential provision relating to the powers and duties of other regulators; and for connected purposes.

Bill read the First time; to be read a Second time on Friday 19 March 2027 and to be printed (Bill 180).

Compulsory Purchase (Fees)

Wednesday 11th November 2026 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

12:43

[Leigh Ingham (Stafford) (Lab)]

I beg to move,

That leave be given to bring in a Bill to make provision about excluding legal and professional fees from compensation payable by local authorities to persons whose properties are, in certain circumstances, subject to a compulsory purchase order; and for connected purposes.

That is a mouthful, so let me explain what I mean. Across our country, in towns, villages and city centres, there are buildings that tell a story. Some tell a story of success—an old department store brought back into use as housing, a former bank transformed into a community hub or an empty shop becoming a thriving new local business—but too many tell a different story. There are buildings with boarded-up windows, leaking roofs and even trees growing out of them, in a famous case in Stafford town centre. There are buildings left to deteriorate year after year while local people look on in frustration. They are right to be frustrated, because those buildings are not simply an eyesore; they drag down neighbouring businesses and homes, discourage investment, create safety concerns and undermine confidence in the future of our high streets and town centres. In too many cases, those buildings are not victims of circumstance, but of neglect—neglect by owners who have allowed their properties to fall into serious disrepair while communities bear the consequences.

In my own constituency, the former jobcentre in Greyfriars has become a notorious example of what happens when responsibility is abandoned. Left to rot by its owners, it has been vandalised, it has become overgrown, and it is now a magnet for antisocial behaviour. It is also a danger, with fires that have put other local buildings at risk. However, this Bill was originally inspired by a much-loved country pub in the village of Sutton in my constituency. It was bought six years ago by someone who wished to develop the site, but planning permission was refused. In the six years it has lain empty, it has deteriorated beyond recognition. It has been stripped of its period features by criminals, and not only is it now a blight on the village, but it is dangerous, attracting antisocial behaviour.

My hon. Friend the Member for Darlington (Lola McEvoy) has shared with me the ongoing saga of Northgate House in her constituency—despite years of effort, that eyesore still dominates the Darlington landscape. In the constituency of my hon. Friend the Member for Weston-super-Mare (Dan Aldridge), one rogue landlord is blighting entire town centre streets such as Boulevard and Waterloo Street. He is refusing to bring his properties back into use and is allowing them to rot, bringing the local area down with them. People cannot understand why communities are expected to live with the consequences of landlord neglect while local authorities are left carrying the burden of putting things right.

Councils do have the power to act—where necessary, they can use compulsory purchase orders to acquire neglected properties and bring them back into productive use. Those powers are an important tool, but there is a problem. Under the current system, when a council has exhausted all other avenues and is forced to pursue a compulsory purchase order, it is generally expected not only to pay the owner for the property, but to cover that owner’s legal and professional fees. In other words, a council can find itself paying the bills of the very person whose neglect has created the problem in the first place. That is not fairness, it is not accountability, and it is certainly not conducive to the regeneration of our towns.

The principle behind my Bill is simple: there should be no reward for neglect. That is why I launched my “no reward for neglect” campaign; it is why people up and down the country have signed petitions, written to me and shared examples of neglected buildings at the heart of their communities; and it is why I am bringing this Bill before the House today. The Bill would remove the automatic entitlement to recover legal and professional fees where an owner has deliberately allowed a building to fall into disrepair and that neglect has contributed to the need for compulsory purchase.

To be clear, this is not a blanket removal of rights, nor is it aimed at the vast majority of property owners and landowners who work hard, meet their obligations and contribute positively to their communities. It is directed at a specific problem: those who allow properties to deteriorate year after year, ignore opportunities to improve or sell them, and then profit from their inaction while the public purse bears the cost. In those circumstances, the public purse should not fund those owners’ legal and professional costs as well. Indeed, a similar principle already exists in our heritage system. For listed buildings, we recognise that owners should not benefit from creating the circumstances that require public intervention. This Bill applies the same common-sense principle to compulsory purchase.

If we are serious about revitalising our towns and high streets and delivering growth in every postcode that people can feel and see, we have to be honest about the barriers that councils face. Many local authorities are reluctant to pursue compulsory purchase, even when the public interest is clear. Partly that is because of complexity, and partly it is because of capacity—our councils have been starved of resources—but very often, it is because of cost and risk. Council leaders know that every pound they spend on enforcement is a pound that is not being spent on frontline services. They know that legal costs can escalate and that they are likely to end up paying not just their own advisers, but those acting for the neglectful owner. That creates hesitation, and hesitation allows the decline to continue.

If we want councils to use the powers that Parliament has given them, those powers need to be practical, not just theoretical. This reform would remove one important barrier, and at a crucial moment. The Government have rightly renewed their focus on high streets, regeneration and tackling dereliction, but successful regeneration is about more than just bricks and mortar. What matters is not simply taking neglected buildings out of the hands of absentee landlords, but what we choose to do with them next. Organisations such as Power to Change have highlighted the enormous potential of vacant high street space, and we know that the high street of the future will include homes, public services, cultural spaces, workspaces and community hubs alongside traditional businesses.

Councils hold powers that community organisations, local charities and residents just do not have. Where appropriate, councils should use them to unlock opportunities for community businesses, social enterprises and local organisations with the commitment and knowledge to keep those buildings productive for the long term. Indeed, I would love to see compulsory purchase used more often as a route into community ownership, because when local people have a stake in a building’s future, they have a stake in its success, and the rewards of regeneration are felt by the people who live there, rather than extracted elsewhere.

This Bill will not solve every challenge facing our high streets. It will not bring every neglected building back into use overnight, but it does address a clear unfairness and strengthen accountability. It sends a message about where responsibility should lie. Those who own buildings have responsibilities as well as rights. Communities should not have to live with the consequences of landlord neglect, and councils should certainly not have to pay for it. The people of Stafford know exactly what that looks like when they walk past our former jobcentre. Communities across Britain know exactly what it looks like, too. This Bill is ultimately about fairness, accountability and a simple principle: those who neglect buildings should not be rewarded, while those committed to the future of their communities should be empowered. There should be no reward for neglect. I commend this Bill to the House.

Question put and agreed to.

Ordered,

That Leigh Ingham, Dan Aldridge, Chris Bloore, Dr Beccy Cooper, Maya Ellis, Tom Hayes, Adam Jogee, Lola McEvoy, Melanie Onn, Sarah Smith, Gareth Snell and Alan Strickland present the Bill.

Leigh Ingham accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 5 February 2027, and to be printed (Bill 179).

Point of Order

Wednesday 11th November 2026 Commons Chamber

12:53

[Sir Roger Gale (Herne Bay and Sandwich) (Con)]

On a point of order, Mr Speaker. I wish to utilise a rare device, which is a point of order that I believe is genuinely a matter for the Chair. Some weeks ago, the Secretary of State for Energy Security and Net Zero issued a determination on a development consent order based upon what I believe to be false figures supplied by the National Grid to the Planning Inspectorate. I raised that as a named day question, to be answered on the fourth of this month. That answer was finally provided on Monday of this week, many days late. There usually is a very good reason that Members table named day questions, as in this case, and it is that they want an answer on that named day. Mr Speaker, can you use your good offices to ensure that when Members table named day questions, they receive the courtesy of a proper and timely response?

[Mr Speaker]

I know how important this matter is to the right hon. Member, his constituents and other constituencies around his, so I am very disappointed. I hope the Treasury Bench have heard the comments, and I will be taking this up with the Leader of the House. It is not acceptable. MPs are elected to serve their constituents. When they put in or ask a question, it should be answered in good time. With a named day question, it should be answered, as in its title, by that named day.

[Sir Julian Lewis (New Forest East) (Con)]

rose—

[Mr Speaker]

We are not going to continue the argument. That is not the best thing to do at this stage.

[Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)]

Further to that point of order, Mr Speaker—

[Mr Speaker]

No, I don’t think so. Take the first hint; don’t require a second.

Opposition Day

Wednesday 11th November 2026 Commons Chamber

5th Allotted Day

Welfare

Wednesday 11th November 2026 Commons Chamber

[Mr Speaker]

I inform the House that I have selected the amendment in the name of the Prime Minister. I call the shadow Secretary of State.

12:49

[Helen Whately (Faversham and Mid Kent) (Con)]

I beg to move,

That this House calls on the Government to commit to bringing working-age welfare spending down in this Parliament.

The day after the Budget, we heard the Chancellor on the radio telling the country some good news: the welfare bill would come down in this Parliament. But hold your horses, Treasury spinners hit the phones just minutes later to say that they could not commit to that. Even No. 10 intervened to say that it has never set an arbitrary target or timetable. By 5 pm, the Chancellor had done a remarkably rapid reverse ferret. He popped up on Channel 4 to tell us that the Government will not bring down welfare this Parliament after all. What a mess. It was, “Oh yes, we will,” then, “Oh no, we won’t.” It is a bit early for pantomime season. Seriously, what is going on over on the Government Benches?

The bill for working-age welfare is £183 billion a year, and it is set to rise to more than £200 billion. Taxes are up, borrowing is up, the cost of borrowing is up, and the Government cannot tell us how they will fund 3% of GDP on defence, on today of all days. They said that they would not put up taxes on working people, but paying for all that welfare will cost working households £50,000 in taxes over this Parliament. The country cannot afford this Labour Government, but it is what we have come to expect from them—no plan, no conviction and no backbone, just ducking tough choices and leaving working families to pay the price.

[Mark Pritchard (The Wrekin) (Con)]

My hon. Friend mentions that the Government have no plan, and that includes not having a plan to fund defence. Does she agree that there is no social security without national security, and that threats to the UK are real, present, multiple and serious? Putting off increasing defence spending until later on in the autumn or perhaps even later is a dereliction of duty. The first duty of any Government is to protect our constituents and this nation, and putting off defence spending increases is putting our nation at risk.

[Helen Whately]

My right hon. Friend is absolutely right. The first duty of Government is national security. We will not even have social security if we do not have national security. We have to find a way to fund defence. There is no time to waste. As I will set out in my speech, there are plenty of opportunities to make substantial welfare savings, to cut taxes, to bring down the deficit and to fund defence.

To be fair, some Government Members understand the situation that the country is in. Some of them know that their constituents understand it, too. That is why they sometimes go through the motions, as with their amendment today, albeit they hid it at the very end, with some wording that they want to “bring down the benefits bill”. I wonder whether Labour Whips were hoping that their leftie Back Benchers would not read that far. Though Labour talks about bringing down the bill, there is no date. It is the same thing when the Prime Minister says that he wants to bring welfare spending down

“as soon as we possibly can.”

It is nonsense. Without a date or plan, it is just empty words. No one trusts this Government on welfare. Apparently there will not even be any savings in the Prime Minister’s 10-year plan.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

The hon. Member says that we do not have a plan to bring down welfare spending. We are putting £3.5 billion into getting young people back into work. Can the hon. Member tell me how the Opposition arrived at their £36 billion figure—the Institute for Fiscal Studies does not know—and, indeed, how much they will put into getting young people back into work?

[Helen Whately]

I will set out how we will achieve our £36 billion in savings, if the hon. Gentleman will just sit back and listen. All we have heard from him and his party are plans to spend more money, and he simply reiterated that just now. We do not bring the benefits bill down by spending more money.

This is not just about the welfare bill. Let us talk about what is happening to our country. A total of 6.7 million people of working age are not working and are on out-of-work benefits, and 700,000 of them are under the age of 25. This is a disaster. All those young people are sitting at home whiling away the day instead of going out to work and getting on with their lives. One in four adults now identify as disabled. Claims for personal independence payment have doubled since 2019, but the country is not twice as sick. Hundreds of thousands of households claimed more than £32,000 in benefits last year, and some of them claimed more than £60,000. That is almost twice the average take-home pay of a British worker. People who are working are asking, “Why do I bother?” We cannot expect taxpayers to keep funding a welfare system that is clearly so broken and so unfair.

[Mark Pritchard]

I am grateful to my hon. Friend for her generosity in giving way. I am sure she would like to see the details at some point, but is she aware that some people are actually getting mortgages to buy houses on the basis of the benefits they receive, and that those on benefits who can save a little are actually using benefits to save for a deposit? I am in favour of cutting benefits as long as we protect the most vulnerable, but it is fundamentally unfair that people in my constituency who are working in factories, on farms and in offices and are struggling to save for their first property or pay their mortgage should be outdone by those who are being paid by the taxpayer to sit at home. They can have benefits, but they should not take advantage.

[Helen Whately]

That is an important point. Most people want to see a welfare system that supports those who really need help. They want to see a welfare system that is a safety net, not a lifestyle choice.

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

Following the scenario that we have just heard, my understanding is that the Conservatives believe that someone can pay their mortgage for 20 years, be retired on grounds of ill health or disability and then not pay the remainder of the mortgage, because it should not be possible for those who do not work to conclude their mortgages. Is that the position of the Conservative party?

[Helen Whately]

It sounds to me as if the hon. Member has wilfully misunderstood and misrepresented what my right hon. Friend the Member for The Wrekin (Mark Pritchard) said a moment ago.

[Madam Deputy Speaker (Caroline Nokes)]

Order. Can we please be a little bit careful about the use of words such as “misrepresented”?

[Helen Whately]

My apologies, Madam Deputy Speaker. I am sure that that was not the intention of the hon. Member for Bexleyheath and Crayford (Daniel Francis).

Reforming welfare is not cruel to people on benefits—quite the opposite. What is cruel is failing to reform welfare, parking young people on benefits while taxing and regulating jobs out of existence, and telling people that a handout is the answer to their problems rather than going out to work. Truly what is cruel is what the Government are doing to hard-working families: squeezing them with tax rises, higher inflation and higher bills so that there is less to go round at the end of the month, all to fund the lifestyle of “Benefits Street”.

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I agree with the shadow Secretary of State that failing to reform welfare is a very serious failure indeed. Her party was in government for 14 years. Will she tell us in which years spending on welfare fell?

[Helen Whately]

The right hon. Gentleman’s intervention is extremely timely, as that is literally the next bit of my speech. I thank him for taking me on.

The Government like to say that all this happened on our watch. Let me remind them what actually happened. Last time Labour left power—no surprises—we inherited high unemployment, a rising welfare bill and more than a million young people not in education, employment or training. During the 2010s we brought down unemployment, brought down the number of NEETs and brought down the welfare bill. In the 2020s, as we all know, covid and lockdowns accelerated the rise in claims for mild mental health conditions and neurodiversity, and the number of NEETs did go up, although it did not reach the level it is at today under Labour. When this Government showed up, they had no plan, and in fact they have only made things worse.

[Sir Stephen Timms]

rose—

[Daniel Francis]

rose—

[Helen Whately]

I will not give way again. They will have their opportunity to speak in due course.

Let me remind the House of the things that the Labour Government have done—of which, no doubt, they are proud—to make benefits easier to claim and more generous. As soon as they entered office they cancelled our sicknote reforms, our PIP reforms, and our plans to update the work capability assessment to reflect the option to work from home. Then, one year in, they cobbled together some poorly thought through changes to save just £5 billion from the benefits bill. Even that was too much for Labour Back Benchers. In a moment of utter shambles—we have never seen anything like it—on the Floor of the House, in the middle of a debate, amid a flurry of concessions, they ripped up their own legislation. In true Labour fashion, the Bill ended up costing money instead of saving any.

One of those concessions was the Timms review of personal independence payment. I have a great deal of respect for the Disability Minister, but what hope is there for his review, given that it started out as a bargaining chip to buy off angry Back Benchers? No wonder it has ruled out making any savings. In fact, its recommendations so far will actually increase the benefits bill. It says that PIP is not generous enough and too hard to claim, although we know that one in six people on PIP admit that they face no extra cost for their condition, and “sickfluencers” sell scripts and model answers so that people can game the system.

Desperate to make his MPs like him again after his savings fiasco, Keir Starmer scrapped the two-child benefit cap despite promising that he would keep it. [Hon. Members: “Hear, hear!”] Labour Members are cheering again. I remember that they cheered at the time, but they got rid of him anyway. Let me remind them that nearly half a million households received an extra £5,000 in benefits, and about 75,000 received between £10,000 and £21,000 more. That is more than the income of someone working full time, just in extra money. People can see that this is a benefits bonanza.

[Natasha Irons (Croydon East) (Lab)]

More than half the households to have benefited from the lifting of the two-child limit have somebody who is in work. I wonder what the hon. Lady would say to those people, given that she is talking as if they do not work or contribute. The lifting of the limit will have helped their household, kept them in work and helped their children to not be in poverty.

[Helen Whately]

What would the hon. Lady say to people who are not on benefits, who ask, “Can we afford to have another child?”, and decide that they cannot? The fact is that someone who is in work and decides to have another child will not be given a pay rise.

None of what I am saying should come as a surprise, given that 204 Labour Members have more PIP claimants in their constituencies than the size of their majorities. No wonder the Welfare Secretary has said that all his MPs ask him is, who can they tax more in order to pay more benefits? Most Labour Members see no problem with the size of the welfare bill. The Disability Minister himself said that

“the current level of spending is not a great concern”,

but some of them know that the anger is building out there. People who work are getting tired of being taxed to the hilt to pay for people who do not. Some Labour MPs will desperately want to reassure their constituents. They will be hoping that the Timms and Milburn reviews will give them some succour, but they will not face the facts, and neither will they bring down the benefits bill. Labour spin doctors may try to say otherwise, but nobody is buying it.

The Conservatives are the only ones with a plan that backs welfare savings—no ifs, no buts. Our reforms will save £36 billion.

[Josh Fenton-Glynn]

How?

[Helen Whately]

The hon. Member asks “How?” from a sedentary position. I have our plan with me here and, if he will just listen, I will set it out.

As I said, our reforms will save £36 billion. When the Prime Minister was asked about them, he said that they were just a number. He could not be more wrong. Savings are important, but reforming the welfare system is a good thing to do in its own right. We have not just plucked a big round number out of thin air; it takes hard graft to work out who should get support and what help they should get. It also involves saying who will not get benefits any more, which is not something that welfare party Members will ever have the courage to do.

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

The hon. Lady knows that I always try to find cross-party consensus where possible. [Interruption.] I know—sometimes it is difficult, right? She referred to the Timms review. I am very pleased that my right hon. Friend the Minister is leading that review, because he is absolutely the right man for the job. Does she recognise that one of the things that the Timms review is looking at is the importance of bringing back in-person assessments for PIP? Those were scrapped by the previous Government. I am sure that she will come up with reasons for why that happened, but does she not recognise that it is good to bring them back? In-person assessments mean that we can get PIP to the people who need it, and fraudulent claims will go down. I did not mention Harlow—sorry!

[Helen Whately]

The hon. Member—for Harlow—has indeed found an opportunity for consensus across the House. We do want to see face-to-face assessments brought back. In fact, we want to see the Government get on with it—the sooner, the better.

If the Government are asking people to fund our welfare system, that system needs to do what the public want it to do. Our plan is grounded in five clear and widely held principles: fairness; contribution; responsibility; welfare as a safety net, not a lifestyle choice; and living within our means. Unlike the Timms review, we will not shy away from reforming sickness and disability benefits. We should not be telling millions of people that they need handouts from the state for milder conditions, neurodiversity and anxiety. The state is telling people that what matters is what they cannot do or what they find difficult, not what they can do. We will stop giving PIP for mild mental health conditions and routine back and joint pain, and shift from cash handouts to support, backed by an extra £1 billion of funding. This will save £13.7 billion a year.

The same tragedy is unfolding in children’s benefits. The number of child disability living allowance claims for behavioural conditions, learning difficulties and ADHD has doubled since 2020, as Policy Exchange’s recent excellent paper has highlighted. Even the Government’s own adviser, Professor Fonagy, has said that the actual prevalence is not going up at the same rate, yet half a million more children will be signed on under this Government. That is half a million children being told that they have something wrong with them, that they cannot succeed and that they need handouts, which can be up to £20,000 a year. I have heard stories of children saying that they do not want these labels foisted on them, but they are not being given a choice. Child disability living allowance is a conveyor belt on to PIP and then a clear path to becoming another of the 1 million NEETs, so we will reform DLA. Yes, cash should go to the families of seriously disabled children, and we will provide £1 billion of extra support for those with milder conditions. After that, we will save £2.8 billion from these reforms.

[Jim Shannon (Strangford) (DUP)]

It is not often that I disagree with the hon. Lady, but I have to put this on the record. In my constituency, a large number of children are assessed by specialists, be it privately or through the NHS, and the number is rising greatly. They are assessed by professionals, who agree that they have ADHD, dyslexia or another challenging disability. The figures in my constituency tell me that things are getting worse, and the medical evidence proves it. Does the hon. Lady not agree?

[Helen Whately]

I did refer to the Government’s own review and the work of Professor Fonagy, because that review says that the prevalence is not rising at the same rate as the claims. Clearly, something must be done to make sure that assessments are being done properly. That is very serious and it requires further work.

[Dr Kieran Mullan (Bexhill and Battle) (Con)]

The broader question is not so much whether the rates are going up, but whether having any of these diagnoses should preclude people from working.

[Helen Whately]

My hon. Friend makes a really important point, and—

[Marsha De Cordova (Battersea) (Lab)]

Will the hon. Lady give way?

[Helen Whately]

I am responding to an intervention, if the hon. Lady will give me a moment.

There is a really important point to be made. Following this debate, I will no doubt receive a lot of criticism about some of the things I say from people who are neurodiverse. However, many people who have an ADHD diagnosis who are in work will respond by talking about the strengths that they believe their ADHD gives them. In fact, if he does not mind my mentioning it, my hon. Friend the Member for Isle of Wight East (Joe Robertson), who is sitting beside me, has recently received an ADHD diagnosis and has had the courage to talk about what that means for him. We should talk about what people can do, not what they cannot.

[Marsha De Cordova]

rose—

[Mark Pritchard]

rose—

[Helen Whately]

I will make a little progress.

Britain cannot be a cash machine for the world. Migrants come here believing that we will give them money, free healthcare and a house. This has to change. We will stop giving benefits and social housing to foreign nationals with indefinite or limited leave to remain, because being British has to count for something. That will save £9.5 billion and free up 230,000 social homes for British families who are stuck waiting. Labour Members should think about how much that will help British families facing homelessness.

We will save £1 billion by fixing loopholes in the household benefit cap and stopping households on benefits claiming endless cash, and a further £1 billion by rooting out fraud and error. Working families do not get a pay rise when they have another child, and families on welfare should not do so either, so we will bring back the two-child cap and save £3 billion. We will save an extra £4.5 billion by reforming housing benefit, which will include reforms that both Onward and the IFS have argued for. There will be no more asking taxpayers to pay for people on benefits to live in places where working people cannot afford to live, and we will save another half a billion pounds by tackling long-term unemployment. People who could be working but choose not to do so will have their benefits cut by a third after six months and be put on to a card, instead of receiving cash. Some people call this a nanny state measure, but it is not. It is not their money; it is taxpayers’ money.

Labour Members could show today that they understand the anger out there. They could show that they have found their moral compass—or are they going to keep on backing “Benefits Street”? We know where we stand. The Conservatives are on the side of people who get up, go to work and pay their taxes. They are the ones who fund our welfare system to support the seriously sick and disabled, and people who fall on hard times. Most people think our approach is the right thing to do. What they will not accept is being taken for a ride. We do not take their hard graft for granted, and it is time for Labour Members to decide where they stand.

13:19

[The Minister for Social Security and Disability (Sir Stephen Timms)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“notes that the previous Government left over one million young people not in education, employment or training, while overseeing a £33 billion rise in the welfare bill in its final year alone; recognises that since the General Election one million more people are in work and 397,000 more people are economically active; welcomes the imminent publication of the Milburn and Timms reviews; and supports the Government’s commitment to deliver welfare reforms that break down barriers to employment, support more people into good, secure work and bring down the benefits bill.”

The welfare system that the hon. Member for Faversham and Mid Kent (Helen Whately) has just been criticising is the one that her party designed and built, and then failed to reform when the Conservatives were in office. They failed abjectly on its financial cost and on its human cost. Over 14 years, they utterly failed to reform the system. She said at one stage that they had cut the welfare bill. I asked her in how many of those 14 years the bill fell, and she did not answer the question—not surprisingly—because the answer is none: it never fell in that 14-year period.

On the Conservatives’ watch, 2.8 million people were out of work due to long-term sickness. Progress on the disability employment gap stalled. It fell steadily under the last Labour Government, but it barely shifted during their 14 years in office. The number of young people not in education, employment or training went up by a quarter of a million just in their last few years in power. The number of children in poverty went up by hundreds of thousands, setting back their life chances and making them much more likely to be not in education, employment or training as young adults. Welfare spending rose by £33 billion in their final year in government alone.

[Dr Mullan]

The Minister is berating us on the question of spending during our time in government, arguing that we did not bring it down, but can he name a single one of those years in which the Labour Opposition asked us to bring it down?

[Sir Stephen Timms]

The hon. Member for Faversham and Mid Kent claimed that spending had been reduced; it never was. That never happened, and it would not happen under the proposals she talked about, as I will come to in a moment.

These latest ill thought through proposals show that the Conservatives have learned nothing from their time in government. They are making exactly the same mistakes all over again in opposition: crude cuts to put more people into poverty; more people pushed on to disability benefits; 1 million young people not in education, employment or training; and an explosion in the welfare bill. Those are crude cuts, with no thought for the human costs, which means that savings will never materialise. How much would their proposals increase child poverty? How much would they increase homelessness? How much would they add to their costs of failure?

[Priti Patel (Witham) (Con)]

I have a great deal of time for the Minister, and we have worked together on many welfare and other issues in the past, but does he not recognise that in the five-year period between 2010 and 2015, the number of workless households fell by 600,000? Can he please explain to the House, including his hon. Friends, why his party when in opposition—after the financial crisis and the former Labour Government had let unemployment go up—voted against every single welfare reform measure put forward by that Conservative Government?

[Sir Stephen Timms]

Let me tell the right hon. Lady about one of the welfare reform measures in that period. As she will well remember, disability living allowance was replaced by the personal independence payment in 2013. We were told by the Conservatives that that would save £2 billion a year. That saving never, ever materialised: it was never delivered. In 2017, they said they would save hundreds of millions a year by scrapping the higher benefit, on top of the universal credit standard allowance, payable to people in the intermediate category with limited capability to work. What happened was that large numbers moved instead on to the highest rate—up to the limited capability for work-related activity category. In that case, it was not simply that the saving did not materialise, which it certainly did not, but that they ended up spending a lot more. Even worse, once people had LCWRA status, the system no longer offered them help to find work. Those people were completely abandoned, which was a big part of the reason why this Government inherited 2.8 million people who were economically inactive on health grounds.

[Mark Pritchard]

The Minister has been in this place a very long time, and the whole House knows his experience on pensions and welfare reform. Can I just encourage him not to overextend his response today ahead of the Milburn report? There may be some contradictions between what he says today and what Lord Milburn says in his report about the importance of getting people into work and how that is compassionate. The most compassionate thing is getting people off benefits and into work, not topping up their benefits endlessly. He may find that the Milburn report takes a different view from some of the—forgive me—ideological points he has been making.

[Sir Stephen Timms]

I have not been ideological at all; I am just telling the House what the previous Government did. Like the right hon. Gentleman, I am looking forward to the publication of the Milburn report, which, as the Prime Minister has just told us, will take place next week.

[Daniel Francis]

I have been a member of the Labour party for 32 years, and I believe that being a member of the Labour party means supporting people in work. However, I have heard Conservative Members and the shadow Secretary of State repeat the claim today that everything was the fault of covid. Yet the statistics, both the absolute numbers and in percentage terms, from my borough—the London borough of Bexley—rose more from spring 2022 to spring 2024 than they did from spring 2020 to spring 2022, so the fault was not covid. The fault was that the Conservatives lost control of the system. Why, therefore, do they have any credibility in arguing this case?

[Sir Stephen Timms]

My hon. Friend is absolutely right, and the increase in the number of NEETs at the end of the Conservatives’ term in office was particularly staggering.

Just setting out a list that adds up to a big number does not solve the problem. The Conservatives should have realised that by now. Theirs was a catastrophic record—waste, lost potential, moral failure—and we are not going to leave that unchanged. Too often, their system was writing people off instead of giving people the help and support they need. We are absolutely determined to fix the system we inherited, in the interests both of those who depend on benefits and of taxpayers who pay for them.

We have already narrowed the gap between what people get on the health element and the standard allowance in universal credit. That feature of the system, which the Conservatives left behind, was forcing people to aspire to be classed as too sick to work. The social security system simply should not force people to do that. The system should be encouraging people to look for work and providing the support to make work feasible. That is what we are reforming the system to do.

We are restoring face-to-face assessments for health benefits, and I am glad the shadow Secretary of State supports that. The number collapsed under the Tories, as they were never reinstated after the pandemic. We have also started to change the equation under which the last Government spent £25 on benefits for every £1 spent on opportunity, because the best way to bring benefits spending down is to put opportunity at the heart of the system and get people into work.

[Jim Shannon]

I thank the Minister for setting out a very distinct way forward. None of us in this House on either side of this Chamber is against sensible savings in benefits, which are welcome, but that can never, ever be at the cost of the genuinely disabled or the terminally ill. I always try to be helpful to the Minister in these debates. Gordon Lyons, the Minister for Communities in the Northern Ireland Assembly, has taken a zero-tolerance approach to benefit fraud. By ramping up investigations, and tackling and catching benefit fraudsters, he has saved £60 million in the last year. Does the Minister agree that tackling fraud and getting those who can work into jobs has to be the way forward?

[Sir Stephen Timms]

The hon. Gentleman is absolutely right about the importance of tackling fraud—my hon. Friend the Minister for Employment took the Public Authorities (Fraud, Error and Recovery Bill) through this House—and about ensuring there is always support for those who have no alternative but to depend on the social security system, and we will always do so.

Since the general election, 1 million more people are in work and the rate of increase in welfare spending as a share of GDP over the new Office for Budget Responsibility forecast is expected to be half what it was in the previous Parliament. That is very positive progress, but there is a great deal more to do, and turning that inactivity-opportunity equation around is key for young people, because the longer they are left on benefits or out of work at the start of what should be their working lives, the harder it is to come off those benefits, and the worse and longer lasting are the consequences. That is why we are making a £2.5 billion additional investment in the youth guarantee to get more young people earning or learning.

[Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)]

The Minister is outlining the progress he wants to make in getting people back into work, and I know he has put a lot of hard work into that, but the reality, as we know from talking to businesses, is that they do not want to employ younger people now, because of the decisions taken by the previous Chancellor of the Exchequer: lowering the threshold for national insurance and increasing employer national insurance; increasing the minimum wage at a higher rate than for older people; and passing the Employment Rights Act 2025. Businesses perceive it to be too great a risk to be worth hiring somebody who does not have the experience others may have. I say openly to the Minister that those issues must be addressed if he is to open up the market and get young people back into work.

[Sir Stephen Timms]

We are taking initiatives to do exactly that. Contrary to what the right hon. Gentleman has said, I would say that employers want very much to give opportunities to young people, because they know that their future depends on that.

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

Will the Minister give way?

[Sir Stephen Timms]

I will make a little more headway and then will gladly give way to the hon. Lady.

We are increasing, for example, the number of youth apprenticeships to reverse the 40% decline in starts in a decade that kicked away a vital first step in the career ladder for many. I can remember, as I think will others, Tory Ministers year after year announcing apprenticeship targets that never got anywhere near being achieved. On more work experience places, the right hon. Gentleman may have heard the recent announcement from the British Retail Consortium. Employers want to give young people a chance to break the “no experience, no job” cycle. There is a £3,000 hiring incentive to help employers who take a chance on young people, on top of the existing employer national insurance contributions relief.

I will give way to the hon. Lady and then I will need to make some headway.

[Alison Griffiths]

I thank the Minister for giving way. He will know that employers across all our constituencies, and particularly those in hospitality, who are typically among the most prolific employers of youngsters, are telling all of us on both sides of the House that the Government’s jobs tax, the Employment Rights Act 2025 and the increase in the national minimum wage for youngsters is pricing them out of the market. Will he reconsider?

[Sir Stephen Timms]

I have told the hon. Lady about the announcement that the British Retail Consortium has made. Hospitality employers also want young people to have opportunities in their businesses, and I think we will be hearing more about that before too long.

We have youth hubs being set up in every community to offer wraparound health, housing and employment support. I visited mine in Newham last week, hosted by West Ham United Community Foundation at the Foundry in Beckton. It was full of activity and optimism for the young people who were there. For long-term unemployed young people, there is a guaranteed job fully subsidised by the Government for six months, which from next April we will fast-track for young disabled people after just three months.

[Simon Hoare (North Dorset) (Con)]

I am very grateful to the right hon. Gentleman for giving way. Can I just say to him very politely—he knows the House respects the work he has done on this issue and his understanding of the broad picture—that none of those interventions would be required were it not as a direct result of Treasury policy? Change Treasury policy and employers will employ people of all abilities and all ages across the country. He is destroying job creation and then expecting plaudits for providing additional taxpayer money to subsidise people to create jobs that his Government are destroying.

[Sir Stephen Timms]

I am grateful to the hon. Gentleman for his politeness, but the NEETs figure rocketed in the last three years of the Tory Government and that was not caused by a national insurance change. We are increasing the employment rate, making progress and tackling the terrible problems left behind by the previous Government. I will give way one final time and then I really must make progress.

[Chris Vince]

I thank the Minister for giving way, and I will make sure I mention Harlow in this intervention. One of the things that I think the previous Government got wrong—I say this as a former teacher—is that they narrowed the curriculum. That meant young people who would have benefited from more vocational, practical courses were missing out on the opportunity to train. That is something Harlow College has done very well. I invite the Minister to see the courses it provides to get the long-term unemployed into training and employment. Will he confirm that he is working with the Department for Education to ensure that we have a broader curriculum to cater for everybody’s needs?

[Sir Stephen Timms]

Yes, I will. My hon. Friend will know that we have a joint Minister between the Department for Education and the Department for Work and Pensions to help us to make progress in exactly the way he describes.

It was disappointing to hear the shadow Secretary of State and other Opposition Members dismiss the support that we are providing. She would hear quite different views if she spoke to the young people hired under our jobs guarantee. Getting their first experience of a real paid job is a life-changing boost for a young person. It means an enormous amount to them and it is the crucial first break that they need, which we are determined they should have. They were not getting that under the previous Government. The truth is that people do want to work. Conservatives sometimes talk about strivers versus shirkers, and people making a mockery of the system—there was something of that in the hon. Lady’s remarks earlier. Deriding the efforts of people who may well be up against tough odds but who want to make a go of things is not the right way forward. This Government will stand alongside those people.

[Alison Griffiths]

Will the Minister give way?

[Sir Stephen Timms]

No, I am going to make some progress.

Anyone can find themselves in need of support at different times in their life. It will not be divisive rhetoric or public shaming that helps them to get on to the right track to make their contribution; it will be giving them a chance. That is what we are determined to do.

We have made a very important start not just with the changes to universal credit, the Right to Try scheme and the youth guarantee, but with more investment in employment support for long-term unemployed disabled people through Pathways to Work. We have 1,000 Pathways to Work advisers reaching out to people who the Tories just gave up on. They wrote them off as too sick to work and did nothing at all to help them. We know that many of those people want to work and they know they can if they have the right support. That is what we are providing for them.

We are encouraged by the early results coming out of our Connect to Work programme, providing tailored support for disabled people and others faced with complex barriers to work. The commissioning of that programme has been devolved to local government across England and Wales, because we know that councils are best placed to know in their local area who can provide the support that is needed, bringing together employment support, education, colleges, skills providers and the NHS to deliver the help that people need. We are publishing the results for each area every quarter, so that everybody can see how things are going and extra help can be provided in places where it is needed.

Sir Charlie Mayfield’s “Keep Britain Working” review has been looking at what more employers can do to make workplaces more welcoming to jobseekers with health impairments, and more accommodating to people who experience a health problem in the course of their employment. There is a great deal of employer enthusiasm for this, because employers recognise the benefits they can get from retaining their employees, with their skills and experience, and ensuring that they are supported to thrive in work.

[Alison Griffiths]

I thank the Minister for being so generous with his time. I would like to share the feedback I received from a business group in my constituency just before the Budget. What they tell me is that they would love to be enthusiastic about hiring and bringing on more young people, but they are feeling absolutely shackled by the taxes and regulations that are being imposed on them, layer upon layer.

[Sir Stephen Timms]

The British Retail Consortium recently announced a programme of 100,000 work experience opportunities and jobs for young people. There is a lot of employer enthusiasm here. Sir Charlie Mayfield, who I was talking about, started working up his ideas with 60 vanguard employers, after publishing his report a year ago. The vanguard group is now up to 230. With regional leadership across the UK, Keep Britain Working is working with another 400 employers, mostly small and medium-sized enterprises, to test and develop better approaches to managing health and disability in the workplace. We are looking at the reform of Disability Confident and we are recruiting an extra 480 staff to turn around Access to Work applications more quickly.

[Alison Griffiths]

rose—

[Sir Stephen Timms]

No, I am not giving way again.

Like the right hon. Member for The Wrekin (Mark Pritchard), I am looking forward to Alan Milburn’s report. His interim report on young people and work was a powerful rallying cry for change and a powerful indictment of the system left behind by the previous Tory Government. The steering group working on PIP, which I co-chair, will also be coming forward with our recommendations later this month. The final reports of both reviews will be published in the next couple of months. The Government will then consider the recommendations and bring forward a White Paper in the new year.

The social security system should always provide security for those who cannot work, but for those who can work the system needs to be a bridge to provide a way into greater participation. That means going beyond the approach we inherited that provides an assessment, writes a cheque and after that says goodbye, with no offer of skills or training and no opportunity to get a job. We do not just owe young people an income; we owe them a future. Young people were starting to doubt whether they had a future. We need to show them that a way is being opened up, as it is. It means ending the Tories’ “signed off, written off” culture, changing the question the system asks from, “What benefit are you entitled to?” to “How do we help you to live the fullest life, to fulfil your aspirations?”

[Helen Whately]

rose—

[Sir Stephen Timms]

I will give way one final time.

[Helen Whately]

I object to the way the Minister is describing our approach to welfare, which I do not agree with. I have talked about how the Conservatives brought down the working-age welfare bill during our time in government. The Minister appears to disagree with that statement. Can he tell me whether he is disagreeing because he includes rises in the state pension during that time—so he is considering the full bill including the state pension—or is it because he is looking at figures in nominal terms?

[Sir Stephen Timms]

The hon. Lady has perhaps taken some advice and is conceding that the bill never fell under their 14 years in government.

We need to learn the lessons from the success of what has happened in other countries, such as Denmark, which the Secretary of State visited last week to see how a focus on asking what people can do, not just what they cannot do, has given it one of the highest disability employment rates in Europe.

The Tory party signed people off, wrote them off and then blamed them. Our approach is very different: we want to invest in people’s success and give them the chance of education, training, a decent job and a full life—not a life constrained by the limitations of benefit income. That is the way to bring hope for the future and bring the benefits bill down. In the next few weeks, the House will see the two major reports that we are bringing forward. The Government’s response to them will set out the details of how we will set about that task, and I am looking forward immensely to the debates ahead.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

13:41

[Steve Darling (Torbay) (LD)]

I am sure that all of us in this House agree that we need to manage the benefits system, but that we need to manage it appropriately. The Liberal Democrats fear that the official Opposition are playing the man rather than the ball. It is systems that are broken and need amending, and that is where the focus should be, rather than on demonising individuals.

As a Liberal Democrat, I am extremely proud that the architect of our welfare state was Beveridge, who issued his report in 1942, which was then taken on by the Labour Government of 1945 and has built the bedrock of our society since. It is something that we need to ensure evolves appropriately, rather than the slashing and burning that we have seen.

From my two years on the Work and Pensions Committee, I reflect on how extending the pension age has significantly impacted a lot of manual workers, who are unable to continue in those roles for year upon year until their retirement age, and thus have to fall back on the benefits system. That is a pressure that has not been there historically. Closer to home, I am aware of the individuals who 50 years ago would have died very early as premature babies, but who now often live through to adulthood because of the marvels of health services around the world. There is therefore an added pressure on our benefits system.

I also reflect—I am sure that other Members will agree— that I will not take lectures from His Majesty’s Opposition, given that they saw a £33 billion increase in the benefits bill during their last year in power. Another element that I am alive to about those years of Conservative Government is the lack of investment in our national health service. Capital money was used on revenue spending, which has left a gaping hole that will be a challenge for years to come—that money could have been used ensuring that we were getting people back into work.

On the Conservative proposals before us today, it is not so much about seeing that there is a mask, but that the mask has been completely removed. The Child Poverty Action Group suggests that the proposals would see the biggest plunge of children into child poverty that we have ever had as a nation. It is often suggested that it is all about people who work and people who do not, but one third of people who are on universal credit are in work.

A few weeks ago, I met in the Lobby a lady who had come up from Torbay hospital, where she worked. She puts a fair amount of time into the hospital, supporting some of the most vulnerable in our society, yet she is still in receipt of universal credit. That is a significant challenge that we need to be alive to: one third of people on universal credit are in work. Similarly, there is the suggestion that people on personal independence payments are out of work, but an awful lot of people use PIP to get themselves into work.

There is a significant pressure relating to local housing allowance. In London, only 2.3% of rents are affordable using that measure. In my constituency, the average rent for a studio flat is £577, yet the amount paid by local housing allowance is £503. There is a massive gap between rents and what the state supports people with; they will have to subsidise their rent with other benefits that they may receive.

The Liberal Democrats strongly believe that the best way to get people out of the benefits system is to grow our economy. The botched Brexit deal has seen a 32% reduction in job vacancies in the United Kingdom, and that pressure continues to build. Sadly, it has been exacerbated by the Labour Government’s NIC hike, which has seen 100,000 jobs lost in the hospitality industry—jobs that are often a first step on the employment ladder.

We need to be alive to how to fix the system. Only last week, the Work and Pensions Committee heard that the system that supports people on carer’s allowance is older than the data officer at the Department for Work and Pensions. Significant systems need renewing in the DWP if it is to be fit for purpose. Cliff edges in the benefits system for NEETs need to be tackled, so that people are encouraged to go into work. Access to Work needs to be ungummed up; it too has an old system that has problems getting people into employment. The Minister spoke about Disability Confident employers, but the scheme feels to me like a tick-box exercise. We need to ensure that disabled people and employers work together, so that the scheme becomes a lot more meaningful as a driver of people into employment.

I will say it again: we need to play the ball and not the man. The Conservatives are behaving like the Argentinian football team at the last world cup; they played the man, rather than the ball. We need a fair deal for those most in need.

13:48

[Michael Payne (Gedling) (Lab)]

I welcome the opportunity to contribute to this debate, not least because it gives this House an opportunity to remind the Conservative party of a rather inconvenient truth. The welfare crisis facing our country did not begin on 4 July 2024; it was inherited on that day from a Conservative party that had 14 years to fix our welfare system, tackle economic inactivity, improve employment opportunities for disabled people and build a health service capable of getting people back into work. What did the Conservatives leave behind? They left millions of people economically inactive because of long-term sickness; a welfare system that too often wrote people off, rather than helping them back into employment; NHS waiting lists at record levels; and a generation of young people facing barriers to opportunity.

The welfare bill rose by £33 billion in the final year in which the Leader of the Opposition was in the Cabinet, and there was an increase of a quarter of a million young people not in education, employment or training in the final three years of the Conservative Government. That is not a record to boast about, but a record to apologise for, yet here we are, listening to Conservative Members—the very few who are present for this Opposition day debate—lecturing this Labour Government about the very problems that they created. They have apparently now discovered the answer to those problems: £36 billion of welfare cuts, and all during a cost of living crisis.

The ink is barely dry on the Conservatives’ proposals, and already the highly respected Institute for Fiscal Studies has raised serious questions about the credibility of their numbers—serious questions, by the way, that the shadow Secretary of State did nothing to address in her opening remarks. The Conservatives claim that they can save £14 billion by restricting health-related benefits for people with certain mental health conditions and with back and joint problems, but the Institute for Fiscal Studies points out that disability benefits are assessed according to the impact of a person’s condition, not simply the name of their diagnosis. The IFS also highlights that two thirds of personal independence payment recipients with a mental health diagnosis also have a physical health diagnosis.

I ask Conservative Members a very simple question: how exactly will they distinguish between somebody who is genuinely unable to work and somebody whose illness they have decided is not serious enough? Will it be a Conservative politician making that judgment, a Treasury spreadsheet, perhaps, or an arbitrary list of conditions drawn up to make their sums add up? Illness does not become less debilitating simply because a politician decides it is too expensive, nor does disability disappear because the Treasury wants to save money.

Then there is the Conservatives’ proposal to save £9.5 billion by restricting benefits for foreign nationals. Again, the IFS questions the certainty of these savings, pointing to the possibility that eligible individuals will seek to obtain British citizenship. There is a further problem with their figures, because the Department does not routinely publish a breakdown of benefit expenditure by nationality.

The Opposition need to explain precisely how they have calculated that £9.5 billion figure, what assumptions they have made about eligibility and future behaviour, and how much of that money they genuinely expect to save. Identifying a group of people and attaching a multibillion-pound saving to them is not the same as demonstrating that the saving can actually be delivered. A credible fiscal proposal needs to account for the people who acquire citizenship, those whose immigration status changes, and those who would remain eligible for support under existing rules. The IFS has already raised questions about the assumptions underpinning the Conservatives’ figures, so before Conservative Members start banking £9.5 billion in savings, perhaps they could explain how they intend to achieve them. A headline figure is not a costed policy, and a projected saving is not a saving until they can demonstrate where it will actually come from.

Perhaps the most extraordinary criticism of this approach comes from within the Conservative party. We have been here before: in 2016, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith)—I notified him that I would mention him in this debate—resigned from David Cameron’s Cabinet over its approach to welfare cuts. He warned that the reductions in welfare for working people had “gone too far”, and criticised an approach to balancing the books that placed an unfair burden on the poor and vulnerable. These are the words not of a Labour politician, but of the man who designed the Conservative welfare programme and championed universal credit. I seriously think that Conservative Members should reflect on that. If even the architect of their own welfare reforms when they were last in government recognised that there was a point at which welfare cuts went too far, what exactly makes them think that another £36 billion of ill-thought-through cuts is the answer now?

I have to say that the use of the phrase “foreign nationals” intrigues me. Let me be clear: foreign nationals, in the main, are not entitled to benefits. They have no recourse to public funds. A look under the bonnet exposes the groups of people the Conservatives propose taking support from: 50,000 people who came here on humanitarian visas—half of whom, by the way, are in work. And who is entitled to a humanitarian visa? Ukrainian refugees, people who came here because they worked alongside our troops in Afghanistan, and British national overseas visa holders, particularly those from Hong Kong who are living in our constituencies.

There used to be consensus in this place that supporting the people I have just listed was virtuous, and that our commitment to our allies was unshakeable. Do the Opposition really think that the British public support cutting support for Ukrainian refugees, former soldiers and translators who worked with us in Afghanistan, and those fleeing oppression in Hong Kong? That is why they rely on such broad and politically convenient labels as “foreign nationals.” Examine the actual groups of people who would be affected, and the Conservatives’ proposals become much harder for them to defend. That is precisely why we should look beyond the headline figures and examine who would pay the price of these cuts. The next category the Conservatives talk about is refugees—people who came to this country fleeing war, persecution and famine; people who were vetted extensively and awarded refugee status by our country. The Opposition propose cutting off their access to benefits entirely. That is who they are referring to.

[Helen Whately]

What the hon. Member is saying about our policies is not correct.

[Michael Payne]

It would be really interesting to hear why it is not correct, because I have read the proposals referred to in the speech in detail. It is absolutely clear that that is who the Opposition are referring to when they use the phrase “foreign nationals”. If they want to bank made-up savings on the backs of refugees, they should come out and say so.

The next category is people with indefinite or limited leave to remain; the shadow Secretary of State mentioned them in her speech. As mentioned earlier, many of these people will simply seek British citizenship, meaning the Opposition’s claimed savings are illusory at best. It is also worth pointing out that 110,000 of these people are in work, so their benefits will likely be lower than the Opposition’s figures imply. That fact also completely blows a hole in their argument that contribution should be the basis of our welfare system. Those people contribute. They are our care workers, our nurses, and our NHS staff.

This is where the Conservatives’ argument becomes particularly difficult to understand. They tell us that welfare should reward contribution, and that people who work hard, pay taxes and contribute to our country should be recognised, yet they propose restrictions that could penalise people who are already doing precisely that. They cannot stand at the Dispatch Box championing contribution on Monday, and then propose taking away support from the people who contribute on Tuesday. Surely the test of a welfare system is not simply where somebody was born, but whether the rules are fair, whether a person is contributing where they can, and whether they receive the support to which they are entitled.

Finally, the remaining categories are “other” and “no immigration status recorded”. According to the Department’s spreadsheets, to which the Opposition have linked in their report, the “other” category includes “individuals no longer receiving UC payments”, so any savings attributed to that category are highly questionable. As for the “no immigration status recorded” category, there is as much chance that these are British nationals as not.

So what does that all mean for the £9.5 billion identified in savings? After accounting for the fact that the figure is likely to be inaccurate, accounting for those who seek British citizenship and accounting for the fact that the final two categories either contain no one claiming benefits or may not even contain foreign nationals, any remaining savings come from cuts to support for refugees, Ukrainians we have found homes for, Afghan interpreters we have an obligation to, and care workers, nurses and NHS staff we rely on.

Let us be clear about what we have established: the Conservatives have announced £9.5 billion in savings, but their own assumptions need rigorous scrutiny. Some of the people affected are refugees, some have supported our armed forces, and some are already working in our public services. Some may not even fall within the category that the Conservatives claim to be targeting. This is a very long way from the Conservative party of old, which used to be credible when delivering savings.

Let me turn to their proposal to move disabled people from the personal independence payment on to attendance allowance when they hit pension age. My word—a disabled person who worked their entire life, having assiduously saved, will finally reach the age at which they can retire, only to find that the Conservative party has ripped their personal independence payment away. I wonder how many Conservative Members have explained that proposal to the older disabled people in their constituencies. This is the problem with the Conservative welfare policy. The savings are announced in billions, but, as the Minister said earlier, the consequences are felt in individuals and families. The nasty party is truly back.

Let me be clear and unequivocal. I believe in welfare reform. I believe that those who can work should be supported and expected to work. I believe that taxpayers deserve a system that is fair, sustainable and protects public money, and I believe that fraud and abuse should be tackled robustly. Ministers should be commended for the work that they are already doing in that regard.

I also believe something equally important—that people who are genuinely sick, disabled or unable to work deserve dignity, security and compassion. Those principles are not contradictory; they are the foundations of a decent welfare state built by William Beveridge and people whose shoulders we in this House sit on. They are precisely why I support the approach of this Labour Government under the leadership of this Prime Minister. Rather than simply announcing make-believe cuts and hoping for the best, this Government are reforming the incentives within universal credit and investing £3.5 billion in employment support by the end of the decade.

We are providing personalised help to people who have too often been abandoned by the system. We are increasing the standard universal credit allowance above inflation while protecting existing recipients of the health element and those with the most severe lifelong conditions. We are supporting people into employment, not simply pushing them into poverty, and we are recognising that welfare reform cannot be separated from fixing the NHS, improving mental health services, investing in skills and creating decent jobs.

In Gedling, I meet constituents who want nothing more than the opportunity to work, contribute and build better lives for themselves and their families. They include people living with disabilities who face enormous barriers to employment, people with long-term health conditions who desperately want treatment so that they can return to the jobs that they love, and parents who work hard, pay their taxes and still struggle to make ends meet. They do not need another round of political finger-pointing or simplistic slogans like those we heard today from the shadow Secretary of State. They need a Government prepared to do the difficult work of reform. That is what this Labour Government are doing.

The Conservatives had 14 years to build a welfare system that works. Instead, they left behind a system that too often trapped people in inactivity, failed to provide the support that they needed and left taxpayers facing an increasingly unsustainable bill, as the Minister set out earlier. Now, from the comfort of opposition, out of office, they have produced a plan built around £36 billion of cuts, with serious unanswered questions about whether their figures add up.

Perhaps the most revealing part is that even their own former Work and Pensions Secretary warned nearly a decade ago that welfare cuts had gone too far. The lesson seems to be one that the Conservatives have chosen to forget. Welfare reform is not simply about how much money can be taken out of the system or somebody else’s pockets. It is about whether we can help people into work, protect those who cannot work and build a system that is sustainable for the long term.

They failed to fix the system when they had the power to do so. Now they want the country to believe that they have all the answers. Well, the British public have seen the Conservatives’ record, and this Labour Government will take absolutely no lectures from the architects of the very crisis that Ministers are now clearing up.

We will vote for welfare reform. We will protect those who need protecting. We will support those who can work into good, secure employment, and we will build a welfare state that is fair to taxpayers, compassionate to those in need and worthy of the country that we all aspire to be. That is the Labour difference, and it is one I am proud to defend.

[Several hon. Members rose—]

[Madam Deputy Speaker (Caroline Nokes)]

Order. After the next speaker, there will be a five-minute limit. Dame Priti Patel.

[Priti Patel (Witham) (Con)]

It is a pleasure to contribute to the debate and to have heard speeches from both Front Benches. It is also good to be debating again with the Minister for Social Security and Disability, the right hon. Member for East Ham (Sir Stephen Timms), with whom I have had similar debates on welfare reform, from the opposite side of the House, a few times in the past.

I am intrigued by what I have heard so far, although Back-Bench contributions have been limited. I think everyone in the House will agree that we have a moral duty and responsibility to ensure the welfare system in this country is functional and does what it says on the tin. It should be a safety net for those who are in need of support, and we should all work together to find ways to get more people back into work. There is no dispute on that whatever.

The hon. Member for Gedling (Michael Payne) just quoted my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) when he was Secretary of State for Work and Pensions. I was his Minister of State, and at that time we were undertaking regression analysis to ensure there were the right taper levels so that work paid and there were the right incentives for people on universal credit. There is a lot of technicality behind this, and with regard to those circumstances, I am afraid that the hon. Member’s quotation of my right hon. Friend was not totally accurate. I was proud to serve with my right hon. Friend in that Government and of the work we undertook.

[Josh Fenton-Glynn]

The right hon. Lady talks about incentivising people to get back into work. In the £36 billion of savings, can she point to where the investment in getting people back into work is?

[Priti Patel]

There is plenty of investment, starting with the work that needs to take place at the Treasury to stop putting burdens on businesses. We can have the same conversation in the other debate later this afternoon.

Back in 2010, we inherited a fiscal position in which £1 in every £4 spent was borrowed. When up against a weak fiscal position, the Government of the day have a duty to ensure they incentivise work, get more people off welfare and back into work—particularly at a time when unemployment had been rising. [Interruption.] If the hon. Member listens and goes back and looks at how the last Conservative Government did, he will know that is the case.

We saw around 1 million young people who were not in education, employment or training. Within five years, as I said in my intervention on the Minister, the number of workless households had fallen by 600,000. Over 370,000 fewer children were growing up in households where no one had a job. That is really important, because employment levels for single parents and those with disabilities and barriers to employment had also increased. Of course, it was the combination of the Work programme—all colleagues in the House should give some time to look at this—universal credit and welfare reforms that encouraged more people into work and gave them something we should all care about: the security and dignity that comes with having a job.

None of this is easy. This afternoon, we will hear lots of point scoring, but I stood at the Government Dispatch Box along with my hon. Friends to do the heavy lifting on welfare reform. In fact, it was prior to 2010, during the Government in which the Minister served—I think he was in the Treasury; he may correct me if I am wrong—that the Work programme first came into the public domain. We all heard about how the Work programme was all about working with employers and giving them incentives to do much more to get people into work. That also led to young people getting into work and more apprenticeships.

Apprenticeship starts are not straightforward; we have to incentivise them. People with disabilities had been written off—that was why we had Disability Confident, and I am pleased to hear that more work is being done to look at that scheme to get more people into work. All those people had been written off under previous Governments.

In the past, it was easier to sign people off than to create pathways to meaningful employment. We all have a duty to work with businesses in our constituencies to help people get into work. Madam Deputy Speaker, I am sure you saw in your constituency that employment rates increased for those signed off and on benefits. We also saw a halving of youth unemployment. Those are the things that had been achieved under previous Governments. Then, of course, we had the pandemic—we have heard about that—which absolutely changed the situation.

Under previous Conservative Governments, in every debate, every question time and every Budget—this is why I made the point I did to the Minister—our welfare reforms were not supported universally in the House, including by Labour Members. As the Minister does now, I fielded endless questions, urgent questions and Westminster Hall debates from Labour Members who simply could not accept that supporting people into employment and reducing welfare dependency was the right thing to do for those who had become trapped on welfare.

Nothing is worse than seeing families trapped on welfare, with the intergenerational welfare dependency that creates. All credit to colleagues, including former Secretaries of State, who worked hard to tackle that. We have a duty to find ways to reduce the costs for taxpayers and to do more to create pathways to work.

[Alex McIntyre (Gloucester) (Lab)]

The right hon. Lady says that there is nothing worse than seeing a family on benefits, but there was something worse between 2010 and 2015. In 2010, the Trussell Trust had 35 food banks in this country, but by 2015, it had 1,375 handing out 1.1 million food parcels a year. Does she agree that seeing a family not able to feed themselves and their kids, despite being in work and perhaps receiving some welfare, might be worse than having a welfare state supporting them?

[Priti Patel]

I remember what that time was like, and I remember the arguments about food banks—there were endless debates in the House about that. Is the hon. Member telling me that food bank usage has declined? It simply has not, and that is a stain on our society. [Hon. Members: “It has!”] I am afraid that is not correct. Why are we having this debate? It is because the welfare state is growing, and it is unsustainable. There are more people out of work now.

Labour Members cannot say hand on heart that their employment policies are helping the employment market. They should come to the Witham constituency, or go to any constituency, where they will see employers—family-run businesses—struggling to recruit and employ people because of Labour’s regressive taxation policies. Higher levels of employment tax mean more unemployment, which means more people going on to welfare. These are the basic policies—[Interruption.] There is no point in trying to point score; these are basic policies that the House has to get right.

There has to be recognition right now that the current policies are not helping people get into work. It is too easy to write off people on welfare, but all credit to Opposition Front-Bench Members who are saying things that people do not want to hear. Too many labels are being attributed to people out there in society that write them off. That is a stain on society. We should be helping them and working with employers to incentivise them back into work, not just have them trapped in welfare and benefit dependency.

[Dr Mullan]

On employers, there are various, complex ways in which the Government are trying to unpick the damage they did with their tax rises. Big businesses will engage with such projects—they can look at them for use across their entire workforce—but smaller businesses cannot as they do not have the mental thinking space or the time to go through them. We have seen the biggest drop in employment among those smaller businesses—the people who speak to me and tell me how bad things are—but the Government seem to be completely ignoring that.

[Priti Patel]

My hon. Friend is right. The Minister mentioned the British Retail Consortium in relation to young people. Yes, the BRC is a nationwide organisation, but across parts of the country—the east of England, and I am sure Sussex as well—family-run businesses do not have the ability to work at that level. It is the same in the hospitality trade. We are seeing this again and again.

We see it with first jobs. For many of us, our first ever jobs were behind tills, washing up or in the service sector. As everybody knows, in my family I grew up under the till, because my family ran small shops, but while employability skills are so valuable, those experiences have gone and it is harder to get a job. That is what we are lacking right now.

I commend my hon. Friends on the Opposition Front Bench for doing the hard yards in looking at how we can be better and proposing solutions and alternatives. They might not fit everybody—it is right that we debate and discuss them—but the House must recognise that the current situation is totally unsustainable. We need to do better by those trapped in welfare and give young people in particular opportunities and hope and create pathways for good future employment.

14:16

[Alex McIntyre (Gloucester) (Lab)]

Yesterday, the Conservative party told young people in my constituency that they are not showing up. I want to talk about the young people in Gloucester, who are ready to show up, and about what it will take to ensure that, when they do, somebody opens the door for them.

Let us start with the Conservatives’ record. The welfare bill did not appear from nowhere; it grew on their watch in a system they designed. In the last five years of the previous Government, the number of young people not in employment, education or training rose by more than 250,000, and welfare went up by £33 billion in that Government’s last year alone. Their plan to chase after Reform, to talk down to people on benefits, to pit neighbour against neighbour and simply to shout at people that they need to go back to work is not new, either. It is the exact same playbook we saw under 14 years of Conservative Government. What happened? More young people were left behind, there were queues round the corner for food banks, and almost one in three children—many of whom had parents in work—were growing up in poverty. We also had a special educational needs and disabilities system that failed to deliver for young people in my constituency, setting so many of them off on the wrong path and writing off their life chances at the earliest stage.

Now, the Conservatives want £36 billion more in cuts, and the shadow Work and Pensions secretary has confirmed that there will be no extra money for employment support. Same plan, no new support and expecting different results is not actually a plan—it is the definition of insanity.

Of course, we all want a lower welfare bill, but the question is how we get there. Alan Milburn’s interim report is clear about the scale of the challenge: nearly 1 million young people aged 16 to 24—one in eight young people—are not in education, employment or training. The review estimates the annual cost of that to our country at £125 billion, which is more than we spend on education each year, yet only about one in five NEET young people in England is getting meaningful employment support, and less than half of the £8.1 billion spent on key benefits for young people has any participation support attached to it. That is the real scandal of the system the Government inherited: it spent billions of pounds on benefits for young people but far too little on helping them into work.

In Gloucester, more than 2,500 young people are not in employment, education or training. When I speak to them, I hear the same thing time and again: they have applied for job after job, only to be ghosted. They are not lazy. They want to work. I am pleased that this Government are acting. The £3,000 youth jobs grant supports any employer that takes on a young person who has been claiming universal credit for six months, in a genuine job of at least 25 hours per week. The Budget delivered a jobs guarantee for eligible 18 to 24-year-olds on universal credit and £100 million for local apprenticeship services. Because the Government are getting people into work rather than writing them off, like the Conservative party, we will bring the welfare bill down for good—not by slamming doors in people’s faces but by opening them.

National action must be matched by local leadership. That is why on the 30 November, I will host the Gloucestershire Futures summit at Kingsholm stadium with Gloucestershire county council. We will bring together schools and colleges, employers, health services, local government and the voluntary sector in one room, with one shared goal that no young person in Gloucestershire is left behind. I am delighted that the Skills Minister will join us. The summit builds on our Gloucester Futures programme from this summer, from which 20 young people graduated after a week with local employers and partners from Fasthosts and the University of Gloucestershire to The Music Works and the Gloucester Rugby Foundation.

In Gloucestershire, we have to make sure that support sits in the communities that need it most, that growth and opportunity are our ambition for Gloucester and not just for Cheltenham, and that national initiatives are run by trusted community partners with a stake in our city. I have two asks of the Minister. First, will he meet me after our summit on 30 November, so that the solutions that Gloucestershire’s employers and partners come up with can feed into the Government’s response to the Milburn review? Secondly, will the Minister ensure that support reaches young people where they are and not where local government sit?

The Conservatives want to talk down Gloucester’s young people but, in fact, they are already showing up. Our job and this Government’s job is to make sure that when they do, the door is open, the support is there and we get them back into work.

14:19

[Bradley Thomas (Bromsgrove) (Con)]

Welfare can be, and is, a lifeline for so many. Yet among those who want to work—I am pleased that the Minister mentioned that there are lots of young people who do want to work—many cannot get on to the employment ladder, and there is a real danger that welfare then becomes a trap that can burden them for the rest of their life.

When I have travelled across my constituency over the last two years, since I was elected, I have heard a pretty universal message from young people and employers. I will start with the young people. I routinely have constituents email me expressing their despair at the fact that they cannot get a job. Often they are not even offered an interview after applying for hundreds of jobs. I have met a few of those young people, and it is really tough to listen to them because I see the despair and the despondency. They wonder what they can do to cut through. Is it them? Is it the fact that they have gone and got a degree that they feel might be worthless?

Conversely, when I speak with employers in my constituency, the theme is pretty universal, particularly among businesses in the hospitality sector—I mention hospitality because it is often the first rung on the employment ladder for so many young people. I have heard the same thing from so many of them: that ever since the Government increased the cost of employment, particularly the increase in national insurance contributions for young people, they have ceased recruiting. That is damning, because it does not mean that young people cannot get their foot on the ladder; it means that the first rung on the ladder has been cut out completely. The focus from Government has to be on how that step on the ladder can be re-established. That only comes from creating a thriving, fertile environment in which employers—those who create the jobs—are incentivised to provide those opportunities for young people.

There are young people out there who take risks, but they are few and far between because the cost of establishing a business is profound. I will mention two of those young people in my constituency, Sophie and Matt, who run a business called Toploaf, which I went to on Sunday after attending remembrance services. They are in their mid-20s and have established a thriving hospitality business in Bromsgrove. However, I know that they are worried about the increasing cost of doing business and terrified about the increasing cost of energy bills, and I was told that what the Government claimed was support in the Budget will not even provide any relief for them. Indeed, UK Hospitality cited a statistic when the Budget was released that only one in 10 businesses will benefit from the relief that the Government said they are providing.

If the Government want to provide people with the very best opportunities that do not restrict them to a lifetime on welfare, they have to support the wealth creators. Those wealth creators are not just the big corporates—every large business starts as a small business. All our constituencies contain hundreds and, in some cases, thousands of small businesses where people get up each day and do the right thing to create prosperity for themselves, the community and the young people they want to recruit.

The statistics are clear. We have 10.8 million working-age people not in work and 60,000 additional NEETs since 2024. According to the official statistics, between 2024, when the Government was elected, and 2032, the welfare bill is projected to grow by a staggering £57.7 billion. What does that do? If the welfare bill is growing but opportunities for economic prosperity are not, things go only in one direction, as the burden bears down even more heavily and increasingly on those who try to create the jobs for young people. In turn, that compounds the problem and further curtails the opportunities, and we see welfare dependency grow further and further.

The Government need to reverse the increase in employers national insurance and stop leaning into councils and local government as the sole arbiters of local economic prosperity. It is not that councils do not have a role to play, but the Government must, in the first instance, get off the backs of the businesses that create the jobs that allow our young people to get on in life.

14:19

[Matthew Patrick (Wirral West) (Lab)]

I am a progressive. I believe in a social safety net to help people in their moment of need. That might be to manage a health condition or to deal with a moment of crisis, or it could be to support people through the natural ebbs and flows of employment, which I think we will see more of with the advent of AI. There is a challenge, however, in getting that support to work for people. It requires a safety net, which needs to be the right size. It needs to be wide enough to catch people when they fall, but not so wide that people cannot escape it. The modern safety net should not simply break someone’s fall; it should support them to get back into work.

The benefits of work are many, and those benefits can bring so much to an individual: self-esteem, money, mental health, physical health, resilience, routine, friendship, socialising and demonstrating to yourself and others that you can make a difference. I believe that the benefits are endless, which is why it is so heartbreaking when we see just how many young people do not have them.

One million young people are not benefiting from a job or not expanding their opportunities through education or training. Why? The Conservatives created the broken system that led to the outcomes we see today. They do not like to hear it, but it is true. Their system pushed people further away from the job market. They scrapped the Work and Health Programme, shut down Work Choice and left Access to Work in chaos. They made support so difficult that people were pushed towards the health component of universal credit to simply deal with the cost of living crisis.

What was the consequence of that? There was no requirement for those people to look for work, apply for jobs or do any work-related activity. The Conservatives’ system both cost more and pushed people further away from work. Their system told people that they cannot. We need a system that helps people see that they can. Members will forgive me if I do not look to the Tory party for a route to achieving that.

[Simon Hoare]

Does the hon. Member not kick himself that, in the 14 years that Labour sat quietly on the Opposition Benches, with think-tanks and everything else, it did zero planning for welfare reform? We are two-and-a-bit years into this Government. We await the Timms review; we await the Milburn review. Labour should have had a plan ready to go from day one, should it not? That is a missed opportunity, is it not?

[Matthew Patrick]

I regret the results of the Conservatives’ failure; I sincerely do. I will come on to talk about how some of the benefits of the system we are introducing now will bear fruit.

The Conservatives say they have a plan, and as Members can imagine, it is pretty thin on detail. There is something that they are clear on, however, and there is something that they have a plan for: they can save money in the here and now. I do not think it is a long-term plan, but it saves some money now and that requires us to accept putting half a million children into poverty. That is not what I got into politics for. Let us say that a Member sits on the Conservative Benches and they can stomach that. Let me ask them: what is the long-term cost to society of plunging half a million children into poverty? That, for me, is not the route to reducing welfare.

There is a better way—a sustainable way—and we have already started. It starts with sorting out the very foundations that people rely on: mental health support in our schools, waiting lists falling in our NHS and quality homes that give people security. We are building on that by creating a new jobs and careers service that brings employment skills and career support together. There is a jobs guarantee that will help support over 90,000 young people into work over the next three years. We are personalising job support for disabled people to tackle the unacceptable disability employment gap of 28%. We are taking action with £3.5 billion of support for people who are too sick or disabled to work, but who want to work. We are rewarding employers who take a chance on a young person. If they hire a young person who has been out of the jobs market for too long, they will be backed with £3,000.

I do not pretend that this will solve everything overnight, but I think it makes a big difference. It helps now, and it is a down payment on the future of our young people. When the Milburn review comes out, we will have a plan to go further still. That is how we will do this for the long term. It is about finding solutions, not scoring points. A country that is hopeful and optimistic cannot go back to the failure that leaves young people on the scrapheap. The country has seen the Tory way, and it hears what the Tories are saying now. I do not think the country likes their politics of, “Do as I say, not as I do.” It wants a new approach grounded in problem solving. That is the Labour way that we are charting, whereby we will bring down the bill by helping people get back into work. It is the long-term solution: believing in the potential of our young people, and knowing that a good job gives them so much more than simply money at the end of the month. Our constituents deserve that, our country deserves that, and I am proud to support that.

14:31

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

The hon. Member for Gedling (Michael Payne) made a passing reference to William Beveridge in his speech. He is not often mentioned in the Chamber these days, but it was Beveridge’s decision to nationalise and bring into the political domain what was already the most evolved and most comprehensive welfare system of any country in the world, inherited from the Conservative Government that came before, that arguably put our welfare state on to the path of unsustainability that we see today.

A statistic that should chill us all is that today, 46.7% of our people live in households that are net contributors to the United Kingdom, while 53.3%—more than half—of our population live in households that receive more from the state than they contribute. That is not just about welfare—it is also about education, healthcare and other things—but it shows is a trajectory by which a greater and greater share of national resources is consumed by things broadly badged as welfare. Those people who come here, work hard, start businesses and contribute, about whom many have spoken warmly, and those born in the United Kingdom and whose families have lived here for generations see that they are able to gain less and less through their own efforts, because more and more of the available resources are consumed by those who are not currently contributing.

[Chris Curtis (Milton Keynes North) (Lab)]

The hon. Gentleman makes the point that roughly half of the people in this country give more to the state and roughly half give less than they take. If, on average, a large majority of people are giving more to the state than they are taking out, where would that money be going?

[David Simmonds]

Clearly, the benefit for people of keeping more of the money that they make is that they spend that money on the quality of life of their families from the wealth that they have personally created by their own efforts. What we are seeing is that a greater and greater share of the wealth that they are creating and more and more of the money they are earning through their jobs, or of the profits being generated by the businesses they run, is going into a central pot for the benefit of other people and, in many cases, delivering less and less benefit to those other people.

In the recent Budget, the announcement of £100 to help with heating bills was more than offset by the cost impact of the Government’s policies on household energy bills. The Government say that housing is really important, despite the fact that their own policies in the Renters’ Rights Act 2025 have massively driven up the cost of renting a home. They have made it harder for landlords to place a home on the market, and made it harder for developers to build, resulting in accelerating insolvencies in a sector that is crucial to our national economy. In many areas, the cost of state interventions has become grossly disproportionate to the benefit that accrues to the individual, and we as a party need to accept that we have had some responsibility in some of those areas.

This is a debate about working-age welfare. We have always accepted that we protect pensioners, because once people have retired it becomes much more difficult for them to increase their income by finding another job, but we need to find a better way of ensuring that work pays and enterprise pays if we are to address the long-term conundrum of growth in this country. So many of concerns that we all share—rough sleeping is often cited by Labour Members—have surged since this Government took office. More and more people are living on the streets of this country every day because of this Government’s policies. It is welcome that they talk about introducing policies to address that, but they are trying to fix with a sticking plaster a wound that they have created by their own actions.

The same is true of housing policy. It is also true of VAT on school fees, which has left our state schools net worse off than they were before. It is particularly true of national insurance, which has driven up the cost of employing people in this country, and the so-called Employment Rights Act 2025, which has, as we have all heard, made businesses more and more wary of hiring people and giving them the opportunity to get on the ladder to a job and prosperity.

Let us not forget that this is not just about money. This is not an arid debate that is solely about balancing the books. Having a job is good for mental health, for physical health and for family wellbeing. It is the one solution that we know makes the biggest difference to people’s opportunities in life. As my right hon. Friend the Member for Witham (Priti Patel) described, one of the things that we should be proud to have done in office was to massively increase the share of working-age households earning their own living by their own efforts, rather than increasing the number who are dependent on welfare and benefits from the state.

This is a time of missed opportunity. The proposal that our Front Benchers have set out is about a subset of that issue. It is about how we deal with welfare, but it is also about how we get this country back on to a path where prosperity is something that all our people have a realistic prospect of enjoying. It is worth remembering that when the previous Chancellor set out this Government’s first Budget, it provided flat cash for every single Government Department except the NHS, and that was entirely dependent on welfare reform, which Labour Back Benchers immediately overturned. I say gently to Labour Members: please make sure that welfare reform is something you are willing to drive through, so that we can make the difference we need for this country.

14:37

[Deirdre Costigan (Ealing Southall) (Lab)]

The Conservatives are sat here today criticising welfare spending when we all know it was their Government that created the very system they are now complaining about. Universal credit was dreamed up by the Conservatives, and it created a system where people were better off on welfare than in a job. For under-25s, the choice was a poverty-level standard rate of £317 a month or a far higher disability rate of £747 a month—more than double. This of course created a massive incentive for young people to go on the higher rate, and because they got zero support, they were effectively consigned to never getting a job.

Since being elected, Labour has already changed this. We have cut the disability rate from £747 to £556 for those young people who may be able to work with the right support. We have made the higher rate only for those with a severe health condition or disability that is unlikely to change. This is the Labour way to reform welfare: looking after those who will never work and helping them, while encouraging those who can work to get into a good job by removing the perverse incentives that were created by the Conservatives.

The Conservatives also came up with the personal independence payment, although from the way they talk about it in this place, anyone would think it had nothing to do with them. It is a benefit that helps with the additional cost of being disabled, so it is supposed to be paid to those in work as well as to those who are not. In fact, over 80% of recipients are not working. A Unison report found that assessors routinely used the fact that a claimant was employed as justification to reduce or entirely withdraw their PIP award. As a result, disabled people left jobs or went part time to keep their PIP. This was yet another perverse incentive created by the Conservative benefits system, which made people better off not working.

Those perverse incentives are why, in the Tories’ final year in government, the welfare bill rose by £33 billion and almost 3 million people were not working because of long-term sickness. For over a decade, the Conservatives presided over a system that meant people were better off on benefits, and it is only now that they have been kicked out that they have decided it needs to change, but their answer is to slash benefits crudely in a way that would only see massive increases in child poverty and homelessness. It is a false economy, as the money will only have to be spent again on other public services.

[Dr Mullan]

Is the hon. Member’s position that, prior to 2010, under the Labour Government, someone was never better off on welfare than working?

[Deirdre Costigan]

Under the last Labour Government, work was the cornerstone of everything that we did, and we will continue with that under this Labour Government.

As I said, the Opposition’s approach to welfare is a false economy, and we will end up spending the money again on public services. It would just move the cost from the welfare bill to the NHS and local authorities. Their plan to bring back the two-child limit would see 3,660 children in Ealing Southall fall into poverty. That is not just a statistic; it is 3,660 children in Ealing Southall going hungry and cold, and it is the taxpayer who would still end up picking up the tab. The Conservatives’ claim to be able to cut £13 billion from disabled people’s benefits seems like a random number they plucked from the sky with no real plan.

The Leader of the Opposition says she can cut this £13 billion because

“Double amputees run marathons… People with autism”

have set up “tech companies”. She may be right about a very small number of people, but she should tell that to the parents in my constituency with non-verbal and developmentally disabled autistic children—parents who spend every single day of their lives fearing what will happen to their grown-up child when they die. I can only imagine how utterly crass and insensitive the Leader of the Opposition’s comments must sound to those parents.

Instead of scaring those parents, Labour is taking a measured approach to changing the system. We have commissioned the Timms report to look at making PIP fit for the modern world, where we know so much more about the impact of mental health and fluctuating conditions than we did a decade ago, and we have commissioned the Milburn review, which will radically change how we support young people to get into work.

Already Labour is spending £3.5 billion on employment support for sick and disabled people with personalised support through Connect to Work. We have invested in new apprenticeships and introduced a jobs guarantee, with paid work for six months, backed by mentoring and tailored support. Those reforms are part of our work to address the broken welfare system inherited from the previous Government and to ensure that the system supports those who can work while protecting those who cannot.

The Conservatives’ approach to welfare spending is to let it run out of control when they are in government and then come up with crude and financially illiterate cuts when they are out of government and will not have to deliver them. Instead of making families and their children sick, homeless and dependent on food banks, Labour’s choice is to bring down welfare spending in a safe and sustainable way by doing one simple thing: making people better off in work. That is the Labour way and that is the way that we will deliver.

14:43

[Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)]

I am going to take a slightly different tack in this debate because as the shadow Secretary of State, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately), said, one of the reasons why welfare reform is needed is to cut the bill because we have to invest more in defence. That is being pushed down the road—the Government say that we may get to 3% of GDP by the end of the decade and 3.5% by 2035, but we know that what was asked for in the strategic defence review would not even get close to funding that.

I am going to say something that makes it feel like it is the 1930s: war is coming. How are we going to fund that? It is vital that we reduce welfare spending, because as my hon. Friend the Member for Faversham and Mid Kent said, we cannot have welfare security without security. That lies at the heart of this question. As the Leader of the Opposition said, it is not just that we have to fund defence; we have to be able to fund defence, and we are not able to do that now.

[Mike Martin (Tunbridge Wells) (LD)]

Here is some crude maths: if we want to get to 3.5% on defence, it will cost about £30 billion extra a year, so where will that money come from? Furthermore, why are the Conservatives not supporting the Government on restricting the triple lock, because that would help with funding the future defence budget?

[Sir Alec Shelbrooke]

The first thing I will say to the comment about the triple lock is that the Prime Minister has done what the Prime Minister usually does: he said he is going to reform the triple lock but then said nothing else. It is very difficult to comment, given that we do not have a clue what he might be talking about. My second point is that it is not about how much the defence review would cost; it is about the fact that it has to be done. We have threats coming towards us—

[Madam Deputy Speaker (Caroline Nokes)]

Order. The right hon. Gentleman, as an experienced Member of the House, will know that the debate is about welfare, not defence. I can see where he is going, but he needs to tie it more closely to the motion.

[Sir Alec Shelbrooke]

Well, the reality is that the motion is about welfare reform, which is about saving money. Members on the Opposition Front Bench have outlined the savings that we could make, and there has been much comment from the Government Benches, not least the accusation that people with mental health conditions are being stigmatised. There have also been accusations concerning people’s inability to work if they have an ADHD diagnosis. I would counter those accusations by arguing that when someone is told that, because they have a certain condition, they should not have to go into the workplace, that becomes a self-fulfilling prophecy.

Many statistics have been thrown about in this debate on the increase in welfare from 2022, but in reality that period covers a time when a group of people left the school system and went straight on to welfare. It is all very well dismissing what happened during the pandemic, but it is crass, quite frankly, to say, “Well, it had no impact later on; that was all down to you.” The Leader of the Opposition has made it clear that, yes, welfare was not properly reformed, and the adjustments that needed to be made to universal credit did not happen during our time in power. That is a fact. It changed because people felt they needed more support and said, “Well, if you were going to give it on those grounds, you can give it to me on these grounds.” Of course, the other side of it is that an adjustment has not been made for the fact that there are now plenty of social media instructions on how to cheat the system. We have to address those issues, and we have to be able to understand what is being said.

To the Liberal Democrat spokesman, the hon. Member for Torbay (Steve Darling), who said that welfare was running out of control, I say that it was his leader who said back in March 2022, at the start of the war in Ukraine, when people’s mortgage rates started to rise, that the Government should be paying for those increases. That is a ridiculous policy, and it speaks to this whole idea that the Government should step in for every aspect of life that people find a bit hard. Life is hard. When we talk about people having anxiety, it is called being an adult, in a lot of ways. We all have anxiety. Most people in this building could lose their job tomorrow and would find that hard. That is anxiety. [Interruption.] There is a bit of chuntering from Members on the Government Benches; I know they are probably all nervous because they do not know whether the Prime Minister is going to go to the country. There has been plenty of speculation about that—bring it on, I say.

The reality of the situation is that if we carry on telling people that they do not have to go into the workplace because they have been diagnosed with something, and if we put more and more labels on them, it will become impossible to get them back into work, because they keep being told that they have a reason not to want to work, and to a certain extent they have been led down that path over quite a long period of time.

Welfare reform is necessary, but the things being said in this debate are all about future ideas. Nothing solid is coming across. There is a lot of theory coming across, but without savings we will not be able to invest in the defence and security we need to ensure that people have a secure nation and welfare security.

11:30

[Daniel Francis (Bexleyheath and Crayford) (Lab)]

I start by declaring my interests. I chair the all-party parliamentary groups for wheelchair users and for access to disability equipment. I am also the parent of 13-year-old twins, one of whom I hope will work every day of her working life, and one of whom is on disability living allowance and, I know, will never work a single day of her life. I will refer to that lived experience later in my speech.

That is the lived reality for many people in this debate, and we need to listen to that. We need to listen to people like the hon. Member for Torbay (Steve Darling) and his lived experience. Some 75% of blind and partially sighted people in this country are not in work—a legacy of the last Government and something that this Government must get right. Again, while the Conservatives lecture us, that is the inheritance they left us. He is not currently in his place, but I thank the Minister for Social Security and Disability, my right hon. Friend the Member for East Ham (Sir Stephen Timms), who visited my constituency last year to meet my disability charities, to hear their lived experience and to hear their good ideas for how things could work better.

This is not just a DWP issue. We will not get this right unless we look at what is going on in other Departments, such as the Department of Health and Social Care and the Department for Education. This morning I was with the Public Service Ombudsman as it launched its report into complaints about wheelchair contracts in the NHS. The report was clear that if we do not get those contracts right, wheelchair users will not return to work. On education, my goodness, we have inherited a hell of a mess in the SEND system, and a system that looked at excellence but not necessarily inclusion. Why are we therefore surprised that we have this crisis of people not being in education, employment or training? It is because we did not think about or plan for the long-term opportunities for those people.

We have left lots of young people on education, health and care plans post-16 in courses that are totally unsuitable for them, just as a way of extending the EHCP, and then we wonder why they do not have the skills needed for work. Sometimes they drop out of the system and become NEETs. The SEND reforms that this Government will bring forward will start to plan those matters so we work with those young people at that transition to understand their long-term prospects.

When I worked in retail it was not just a student job; I spent 11 years with Marks and Spencer—some of that time as a recruitment and HR manager, but most of it on the shop floor. A lot of my time was spent on these kinds of programmes with disabled people. A lot of that has gone by the way over the years, but this Government are bringing some of those schemes back. I go into the Bexleyheath store in my constituency and there are two people with learning disabilities who I worked with over 30 years ago who are still there in those jobs—jobs they are proud to have for their whole working lives. It is those schemes, which this Government are reinstating, that will bring that back.

As I said earlier, the real crisis with costs was not covid; it was 2022 to 2024, and the stats show that. My wife and I both had to give up full-time work in 2016, the year my child had 100 medical appointments, because it was unsustainable. I know from my lived experience of the impact on a family when they are drawn into that cycle of disability and carers and the problems that brings. It was a Conservative council that sent a social worker to my house and told us we would be better going on universal credit than trying to carry on part-time jobs and support our family in the best way we could. That kind of information, at the back end of the last Conservative Government, was given to families like mine, who were put on the scrapheap. This Labour Government will turn that around in the announcements we will make in the coming weeks, in the Milburn and Timms reviews, to finally reinstate that working support for disabled people in this country.

I will take no lectures on savings from the Conservatives. One of the first things I did with the previous Secretary of State, when I became an MP in 2024, was bring her the four-page letter my daughter had received every Christmas for eight years, telling her that she was going to get a £10 Christmas bonus—the money they were wasting sending people four-page letters every year, for eight years in my case, to tell them they were going to get a £10 bonus. They had no idea what was going on in their Department. The previous Secretary of State in our Government scrapped that letter at my request. The Conservatives have no room at all to start talking to us about waste in the Department.

Yes, there are reforms we need to make. Yes, there is more we will need to do to get disabled people back to work. I will support the savings, and there will be difficult conversations about the disabilities that people have, but I will never take lectures from the people who left us this mess.

[Several hon. Members rose—]

[Madam Deputy Speaker (Caroline Nokes)]

Order. I will reduce the time limit to four minutes after the next speaker.

11:30

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

It is a pleasure to follow the hon. Member for Bexleyheath and Crayford (Daniel Francis), who speaks with real personal experience in this area. Although we may not agree on the treatment for the diagnosis, I have huge respect for the insights he brings to the Chamber on this issue.

I do not think this particular motion should be controversial. I think it should be welcomed across the House that there is a desire to bring down the welfare bill among working-age people, because that is a compassionate position to take, and I will set out why I think that is compassionate. The opposite position lacks the compassion we should be showing those people who want to be establishing their working lives, who want to be contributing, and who want to have that independence and that ownership, because this all comes as part of the social contract that forms part of our society.

General taxation is there for the benefit of the whole of society, whether that is funding our police forces, our defence and the NHS, or supporting those who are vulnerable through the welfare state, but it is essential that the process is fair. The welfare system should be seen as a form of societal insurance and not a form of charity. It does not benefit anyone if we make them dependent upon a system opposed to enabling them to participate as fully as they can in our wider society. The fact that the Office for Budget Responsibility predicts that the total expenditure for working-age benefits will breach £220 billion by 2030-31 should be a matter of great concern to us all, as is the fact that the number of people not in education, employment or training has broken the 1 million barrier and has increased by some 60,000 since the start of this Parliament.

The Fonagy report, which has been referred to, provided some interesting statistics, particularly the fact that the population prevalence of conditions such as ADHD and other neurodiverse conditions has not increased in the last few years. What has happened, however, is there has been a much greater administrative prevalence of those conditions, and we have to ask questions about why that is the case.

There is also a legitimate conversation to be had about medicalising or over-medicalising neurodiversity. There are, of course, those individuals who suffer neurodiverse disorders to such an extent that they are unable to work and will be unable to work throughout their lives, but neurodiversity is actually a variance of human nature. We are not all built the same; we vary in our skillsets and our personalities. Neurodiversity is part of that picture, and we should be harnessing it to enable those young people to get into the workplace.

There is also an argument of fairness, because those who pay into the system want to know that it is being spent in a fair and equitable way—it is taxpayers’ money after all. Nobody begrudges those who genuinely need support from having it, but what they do begrudge is a situation—I have encountered this when speaking to young people in my constituency—in which young people have gone out and worked, and they have friends who were on the same university course, for example, who have then gone on to benefits and are financially in a better position than them.

That is not the way we should be supporting our young people. It does not allow them to grow or establish the full lives that we all want them to have. It also deeply damages that social contract with the wider public, because if an increasing number of people feel that the system no longer adequately distributes wealth and does not represent the importance of paying in and supporting those who belong in it, we will find that there will be a growing resentment—not against those who are unable to work, but against those who can work but choose not to do so. That fundamentally damages the reciprocity of the social contract of this country.

14:59

[Natasha Irons (Croydon East) (Lab)]

May life grant me the confidence, conviction, and lack of shame of a Conservative MP who is enraged by problems that they either helped to create or did nothing about when they had the chance. I do not think there has been a Conservative Government in my lifetime who have not said that they would cut welfare spending, and then attempted to blame their failure to do so on the sick, the poor and the young, and what we hear from the Opposition today is the same old approach, which would lead to the same old failures from the same old Tories.

I am old enough to remember when George Osborne promised us a high-wage, low-tax, low-welfare country. Instead, we saw child poverty skyrocket, food banks open in every community, young people written off, and a welfare bill that went up by a record £33 billion in the Conservatives’ last year in power alone. Opposition Members cannot be trusted to fix the welfare system, because they are unwilling to be honest about how the money would be spent, or to simply address the question of why people need support. They know full well that most of the welfare bill is spent on pensions, and that in the future, to protect pensions, decisions will have to be taken, such as on whether to adjust the triple lock. Instead, what we get from the Opposition is a bogus petition designed to stoke fear and division, proposals to push children back into poverty, and an open attack on the working poor. The Opposition’s proposals fail to acknowledge that 3.1 million people receiving universal credit this year are in work, that one in five working-age people receiving personal independence payments are in employment, and that 58% of households helped by the removal of the two-child benefit cap have at least one parent in work.

If we are genuinely to reduce dependency on welfare, we must tackle the things that make people need that support in the first place: low pay, poor health, the cost of housing and, perhaps most importantly, child poverty. As research from the Joseph Rowntree Foundation shows, young people who experience persistent childhood poverty are 3.4 times more likely to be out of education and employment by the time they turn 23. That should concern every Member of this House, because poverty does not simply disappear when a child turns 18; it can shape their education, health and opportunities for the rest of their life. If we fail to address those barriers today, we risk creating greater costs for our welfare system tomorrow.

The sad thing is that everyone in this House agrees that the system can and should be fixed, because a system that spends £1 on support for every £25 on benefits is not right. Is it time to do this differently, and to work across the House to design a system that is about lifting people up, instead of writing them off? I am proud that this Labour Government have removed the two-child benefit cap and lifted half a million children out of poverty. I welcome the £3.5 billion investment in employment support for the sick and disabled. Reducing welfare dependency cannot simply mean reducing the support that people need; it should mean reducing the need for that support in the first place, and that cannot be achieved by the same old approach that leads to the same old failures from the same old Tories.

15:03

[Lara Bird (Arbroath and Broughty Ferry) (SNP)]

It is heartbreaking that we still have a such a large proportion of working poor in our society, and that so many people across my constituency, and the constituencies of others Members, are working hard, making sacrifices and doing their best, yet are still being punished by increasingly oppressive policies that take one look at the reality of hardship faced by folk, and decide to look the other way. One thing that is clear, and has always been clear, is that we cannot cut our way to prosperity—the Tories’ own record shows that to be true. The way to get the welfare bill down is not to arbitrarily pick targets and experiment with people’s lives to score political points, and it is genuinely insulting that Conservative Members can come here today and try to offer half-baked solutions to problems that they created.

This is largely a problem of the Conservative party’s own making. Conservative Members are trying to blame those in our society who rely on support because they cannot accept responsibility for their own actions. We must make it clear how misguided at best, or intentionally reckless at worst, the Conservative party is when it comes to welfare, because its austerity-fuelled cuts were linked directly to rising levels of poverty, and they have exacerbated the overall cost, long term. Anyone minded to listen to the Conservative party on their arbitrary welfare targets might need to seriously check themselves.

Of course we do not want people to rely on welfare long term, but there is a trend over past years—largely instigated by Conservative Members, but it is increasingly found wider afield—to blame those who rely on additional support for Government mismanagement, instead of recognising that many who receive such support are already valuable, contributing members of our society. This trend completely fails to address why so many working-age, motivated and skilled individuals still have no choice but to rely on additional support. Indeed, many people are able to contribute to our society and economy only because they receive additional support. Rather than blame those people, there must be more intense scrutiny of why so many people have to rely on that support, why so many are dependent on universal credit despite being in full-time employment, and why so many young people are relying on jobseeker’s allowance. It is not because they do not want to work and are not looking for work; it is because the Labour Government have priced them out of employment by creating such a hostile hiring environment. So many parents and families rely on the Scottish child payment because life is just so unaffordable.

I am especially concerned about young people who are coming of age today. A young person in my constituency who graduated from a university in England or Wales might have over £60,000 of debt, which they will likely be paying off for their entire life, and that amount will rise year on year because of interest. They have started paying that debt back earlier because Labour refused to amend the threshold freeze. A young person might not be able to find a job because the employer national insurance contribution hike is pricing young people out of work, or because of the refusal to cut VAT on hospitality, or because of the total mismanagement of minimum wage reforms. A young person could be paying more than £1,000 in energy bills; they are due to rise again in January, because of Labour’s choices. A young person who cannot afford to save knows that they will likely never buy a house, might never receive a state pension, and faces unaffordable monthly living costs.

As one of the youngest Members in this House, it is so frustrating to come here and hear others speaking about the reality for young people without actually understanding what they are facing, and to see the discrepancy between apparent support from the Government and the reality for young people in my constituency. Yes, I want the welfare bill to come down, but the way to reduce it is to introduce effective employment support. The SNP will not support the Opposition motion this afternoon, and it is laughable to think that anyone would take their lead when it comes to addressing the welfare budget.

15:07

[Sean Woodcock (Banbury) (Lab)]

I start by disappointing Conservative Members: I agree with some of what they are saying. The welfare bill is too high, and too many young people are not in education, employment or training; it is morally indefensible. The problem is that Conservative Members seem to have forgotten who was in charge when those trends first took hold. In their final year in office, the welfare bill rose by a record £33 billion. Listening to some of the speeches this afternoon, one might think that Conservative Members had spent 14 years campaigning against Conservative Governments. They are right to highlight the growing number of young people who are not in education, employment or training, but it is not a new problem. It did not begin last year, or in July 2024; it grew on their watch, and yes, it has continued since. Frankly, that should prompt some humility, not self-righteousness from Conservative Members.

I also agree with Conservative Members when they say that we need to spend much more on defence. What puzzles me, however, is the argument that all we need to do is cut welfare, and the defence budget will somehow take care of itself. If it is that easy, why did they not do it? They had 14 years in government, and over those 14 years, welfare spending rose while, in the words of a former Defence Secretary, our armed forces were “hollowed out”. What exactly are Conservative Members asking us to learn from their example—that it is entirely possible to end up with a growing welfare bill and shrinking military capability at the same time? Anyone on the Opposition Benches can demand cuts, but it is the responsibility of the Government to ensure that reform actually works.

Earlier this year, I brought together a group of young people from my constituency who were not in education, employment or training. Not one of them told me that welfare was the reason that they were out of work. They talked about poor or non-existent careers advice; artificial intelligence and the rapidly changing labour market; and struggling to get employers to give them a chance, because they lacked confidence or soft skills, in some cases. In other words, they talked about barriers. We can ignore those barriers and make speeches about random, crude cuts to welfare, or we can try to deal with them. I would much rather do the latter. Real welfare reform is not measured by how much money leaves the Treasury; it is measured by how many people can enter and remain in work.

The Opposition are right to demand welfare reform and stronger defence, but they have no right to pretend that they bear no responsibility for the position in which this country finds itself on either score. After their 14 years in government, the welfare bill had risen and our military was hollowed out. The country needs welfare reform and stronger defence, but demanding change is not the same as delivering it. The real test is whether more people find work, whether barriers are removed, and whether our armed forces are genuinely stronger. None of those challenges will be solved by that lot on the Opposition Benches pretending that the previous 14 years did not happen.

15:09

[Dr Kieran Mullan (Bexhill and Battle) (Con)]

I have a solemn duty to talk about an incredibly difficult and challenging statistic in relation to the prosperity of this country: the size and scale of worklessness in our country right now. Some 6.7 million working-age people are claiming benefits and are not in work. That is one in six of our working-age population. I do not know how anyone can hear that statistic and not be horrified by what it represents for the prosperity of a country that seeks to do well. Historically, that figure has been around one in 10. It causes me particular concern, for a number of reasons, that today’s figure is related to an increase in claims for mental health challenges and disabilities.

We have talked about the challenges of ensuring that people do not feel stigmatised or labelled in a way that will not be conducive to their finding work. When it comes to mental health conditions such as depression, we have to recognise that getting in work and getting a job is advantageous to someone’s mental health, and that not working is a disadvantage to their mental health. I am afraid that there is also the challenge of fraud in the benefits system. We all have to accept that the benign view of human nature that we have heard expressed by Government Members, in which no one is ever induced or encouraged to make a claim that might not reflect their reality, is naive in the extreme.

[Daniel Francis]

Will the hon. Gentleman give way?

[Dr Mullan]

Let me finish my point.

The fact is that mental health conditions are almost entirely self-reported. People are asked questions that relate to how they feel, what their mood is and what they can or cannot do, and we must accept that that inevitably has a risk of inducing or encouraging people to exaggerate their claims. The hon. Member for Ealing Southall (Deirdre Costigan) is not in her place any more, but she inadvertently accepted that point when she talked about the disability living allowance, and how the changes that were made encouraged people to put in higher claims. That in itself is admitting that people say or do different things depending on the available incentives.

We must not forget that a welfare system does not exist in isolation; it is part of a wider society. All of us face a complex mixture of incentives and disincentives to do the right thing. There will be people at either end of the spectrum, but a lot of people are at a point in between. That is why I support our policies, which make it very clear that when it comes to access to cash, being on benefits is not the same thing as being in work, and it should not be the same thing. I support our plans to make the welfare state more about helping and supporting people with the things that they need, rather than just giving them money. That is also why I support our plans on the two-child benefit cap. We should never create a situation in which people who are working have to make tough decisions that those on benefits are excluded from having to make.

Government Members like to say that benefits are claimed by people in work, which is true, but the claimant numbers do not reflect how the money is spent. More than 80% of the money spent is spent on people who are not in work. A much smaller proportion of expenditure is on people who are in work. That is why I support the idea that the system should have two tracks: a track for people who have put into the system, who can then fairly ask more of it when they are in need, versus a track for people who have never put into the system. These are the incentives and disincentives that we all interact with in society. When I meet and speak to people on the frontline who work with people who are in poverty and claiming the support of charities and other sectors, they are very clear about that. They will freely talk about the people who come to see them—the people who they think are legitimate and really in need, and the people who they think are not. That is why I find it so extraordinary that Government Members never seem to want to acknowledge what we all know is a real pressure in society.

[Daniel Francis]

We heard from the hon. Member for Torbay (Steve Darling) that 20 or 30 years ago, a person born with a brain injury would be unlikely to survive. Today, such people survive and live with a disability for the rest of their life—people like my daughter. Is the hon. Member for Bexhill and Battle (Dr Mullan) really saying that because those people have never paid in or contributed, they are not entitled to any help from the state?

[Dr Mullan]

That is not the system that we propose. We are talking about people who have had an opportunity to contribute and have not done so; the system should take that into account. That is a fair and reasonable point to make.

[Natasha Irons]

The hon. Member is talking about contributions and people who have contributed. Does that include foreign nationals?

[Dr Mullan]

I do not think that foreign nationals should be entitled to benefits, because of the basis on which they are allowed into our country. The only reason they are allowed into our country is that they are net contributors. Why would we undermine that by allowing them to be net recipients of benefits? They are only here because they have signed up to the idea that they will come and be net contributors, so I do not think that that entitles them.

[Natasha Irons]

Just so that I am clear, if somebody is born in another country, comes here and gets citizenship or indefinite leave to remain, and has contributed to the system because they have been working, should they be able to claim from the system? That was my question. They may well have been a high earner, but they may have fallen on hard times and fallen back on the system that we all rely on, and they may have contributed to that system.

[Dr Mullan]

They are citizens, are they not? They have signed a deeper contract with the country that they are in, and they are here under a different set of circumstances. The hon. Member needs to be clearer when she asks her questions in relation to two different groups of people, because we treat them very differently in our proposals. There is a distinction.

Let me make a final point that is often not talked about enough. We are all incredibly focused on what the Government should do to help people and how taxpayers should help people. We know that for very many people in poverty, a big factor in that is having absent parents who give them absolutely no money or pitiful amounts of money for very many years. We also know that a large proportion of families with children who are in absolute poverty would not be in poverty if an absent parent who is not paying was paying.

I wish that there was as much focus on the dereliction of duty that parents too often show to their children and the complete failure for decades to tackle that issue, across all parties, as there is on what taxpayers and the state should deliver. That is a significant moral failing that we are too shy to talk about in this country, and it does not get the attention that it needs. If all parents, whether they have split up or are together, contributed to the upkeep of their children, we would see a lot less child poverty; I wish that MPs on all sides of the House were as invested in that issue as they are in deciding how much the state should pay in their place.

[Madam Deputy Speaker (Caroline Nokes)]

With an immediate three-minute limit, I call Chris Curtis.

15:09

[Chris Curtis (Milton Keynes North) (Lab)]

Let me start on that last point. I am the proud son of a single mother, and I am probably standing here today only because of the support that she got from the last Labour Government.

There are three things that we as Members can agree on. First, the welfare bill is too high, and the trajectory is unsustainable. Spending on disability benefits alone has risen from £45 billion last year and is forecast to reach almost £70 billion by 2031-32. If we want to protect the welfare state, we must make it more sustainable. Secondly, we have a duty to protect those who cannot work and provide a safety net for those who work but have fallen on hard times. That is what the welfare state is for.

Thirdly, helping more people into work is good not only for the Treasury, but, as many people have said, for those individuals. Good work brings dignity, purpose, independence and often better health. That matters, because this debate is presented as a contrast between those who are willing to reform the welfare system and those who want the status quo, but I reject that. I believe in reforming the welfare state because I am a Labour politician, not despite it. The disagreement is on how we do that and the determination with which we push through changes.

We have seen that just announcing spending cuts does not achieve them. The Conservatives announced £11 billion of welfare cuts in 2010. In 2015, they promised another £12 billion. When they introduced PIP, they expected it to reduce spending by 20% compared with the system that it replaced; instead, the OBR said that it increased spending. Even before the pandemic, working-age disability benefits spending was rising by more than 5% a year in real terms. Announcing savings does not always lead to delivering them.

There are two reasons for that, both of which are relevant to the Opposition’s proposals. First, cutting one benefit can simply move the cost elsewhere. Take local housing allowance; the Opposition have announced that they are going to add extra limits to that, as well as reinstate the two-child benefit limit. Imagine a family with three young children who are already struggling to pay the rent. They could lose support for their third child while their housing allowance is pegged to a level that covers only the cheapest tenth of local properties. What happens is that they can now no longer afford their home. Quite rightly, I think there is consensus across the Chamber that we do not leave children sleeping on the pavement, and I do not believe the Opposition are arguing against that.

[David Simmonds]

The hon. Gentleman is talking about local housing allowance. The Prime Minister said that he felt a freeze in local housing allowance was simply a cost-shunt on to local authorities, but the Chancellor went ahead and did it anyway. Does the hon. Gentleman think the Chancellor was right, or was the Prime Minister right to criticise him?

[Chris Curtis]

I sit on the Housing, Communities and Local Government Committee, and we have discussed raising LHA a lot. However, the Conservatives’ proposal goes even further, and would ultimately have a real effect on the temporary housing bill. Last year, councils in England spent £2.9 billion on temporary accommodation. In London, the number of homeless children in such accommodation is equivalent to at least one in every classroom—if you cut in one place, it whacks the cost up somewhere else. That is before we get on to the wider costs, including disrupting schooling, parents being forced out of work, and pressure on the NHS.

Most horrifically of all, in the six years since 2019, 104 children died with temporary accommodation recorded as contributing to their vulnerability, ill health or death. Seventy-six of those children were under the age of one. We all accept that policies involve trade-offs, but that is probably one that we should all find pretty difficult to stomach. For the Conservatives to put forward such a policy without even having modelled its impact on temporary accommodation and wider impact on the welfare bill, shows that those proposals have not been well thought through.

Yes, we need to come up with sustainable ways to address the welfare bill. We will see more from the reviews that are coming forward, and I will be proud to support them.

15:22

[Simon Hoare (North Dorset) (Con)]

From 2010 to 2024, every reform was opposed and every initiative was rebuffed by people who sat on the Opposition Benches. Labour Members remind me of St Augustine, because they try to tell us that they are now serious about welfare reform. Their prayer is “Make me a welfare reformer, but not yet”, because when they had the opportunity to introduce some reform, they rebelled. Keir Starmer blinked, the rebels got their way, and the reform agenda was kiboshed. The Prime Minister lost his authority, and the rest, as they say, is history. Do not take my word for it; the current Secretary of State for Work and Pensions told the whole world. He said that “Every meeting I have” with Labour MPs—not some, not the majority, but every meeting—

“is ‘Who can we tax in order to pay benefits to others?’”.

[Sir Alec Shelbrooke]

Going back to the speech made by my right hon. Friend the Member for Witham (Priti Patel), when she was the Minister of State for Employment, I was her Parliamentary Private Secretary. We would sit through many a Westminster Hall debate secured by the Opposition, who are now the Government, complaining that we just were not spending enough. They said about every reform we brought forward, “Not good enough. You need to spend more.” There was never any attempt to reduce the welfare bill.

[Simon Hoare]

My right hon. Friend is right. As I said in an intervention on the hon. Member for Wirral West (Matthew Patrick), the Government had 14 years to plan for this great reform and modernisation of welfare, and they did nothing with it. They arrive in government, and precious little happens.

[Sean Woodcock]

Will the hon. Gentleman give way?

[Simon Hoare]

It gives me another minute, so why not?

[Sean Woodcock]

Is the hon. Gentleman’s position seriously that it is Labour’s fault that the welfare bill went up under the Conservatives?

[Simon Hoare]

No, that would be an asinine interpretation of what I have just said. The point I am making is that every time the Conservative party came up with a reform or a modernisation when in government, the gut reaction of the Labour party was to oppose it.

I happen to think that the welfare state is one of our crowning glories. It was brought in to address a number of deeply systemic societal problems, and it has been a tremendous force for good and transformation in our country. However, it is always intended to be a safety net, a permanent safety net for those who—as a result of disability, for example—find themselves unable to enter the workplace. It removes pressure and anxiety, and it gives people the dignity to live that they quite legitimately deserve, but it should never have been allowed under successive Administrations to become a cocoon. It has ceased to be a safety net; it has become a trap with perverse, Kafkaesque incentives, where the cumulative benefits an individual can receive are greater than anything they could hope to aspire to when getting into a job for the first time. I hope the House can agree that there is nothing kind or caring about trapping people in that sort of environment.

We all know—as various right hon. and hon. Members have mentioned in their speech—the fundamental importance and transformative nature of work for individuals, their families and their communities. It promotes a sense of self-respect, self-reliance, and being able to do things for yourself.

[Dr Mullan]

Will my hon. Friend give way?

[Simon Hoare]

I will not. The benefits of work are clear and unquestionable, yet we are trapping people through perverse incentives; if they earn an extra pound here or there, they suddenly lose a great slew of benefits. Surely—I say this to Members on the Treasury Bench—we will have to be far more imaginative and far more bespoke in how we approach welfare. We should be using digital and the raft of opportunities it offers to provide a far more bespoke, personally tailored network of support to get people back into work, rather than trapping them.

I want to say one thing about disability, as I had the honour of chairing the all-party parliamentary group for multiple sclerosis in the last Parliament. We will get more disabled people back into work because they want to stay in work—for all the reasons I have set out—if they have the confidence that they can ask their employer for reasonable adjustments, and if their employer has the confidence to ask what the employee might need in order to stay in work. Let us not have a slanging match across the two Dispatch Boxes; let us try to work cross-party. It will be good for the economy and good for our people up and down the land, and it will generate greater tax receipts to pay for the social services, defence and other areas that we want to see expenditure in. However, the status quo cannot be defended.

15:27

[Richard Baker (Glenrothes and Mid Fife) (Lab)]

What we should be talking about in this debate is root-and-branch reform of our welfare system, providing more opportunities for work for those who can work while protecting those who cannot. We should be talking about innovation and investment in employability to tackle the scourge of youth unemployment in our communities. What we should not have is the weaponisation of this debate and point scoring by a party whose record on this issue does not stand up to the slightest scrutiny.

On the Conservatives’ watch, spending on incapacity and disability benefits for working-age adults rose by £20 billion between 2019 and 2024, while progress on closing the disability employment gap stalled. When they left office, nearly 900,000 young people were not in education, employment or training and the disability employment gap stood at nearly 30%. The legacy in my constituency is that Fife has the fourth-lowest rate of 16 to 19-year-olds in education, training or work of Scotland’s 32 council areas. In Buckhaven and Methil in my constituency, one in eight of those aged 16 to 19 is a NEET, putting the area among the five worst wards in the whole of Scotland.

It is not rocket science to work out how that happened. We had a Conservative Government at Westminster failing to take the action required to provide more opportunities for our young people and to close the disability employment gap. Regrettably, we had an SNP Scottish Government cutting budgets for skills and training. I hope that Scottish Ministers will respond positively to the Prime Minister’s invitation to work with the UK Government to devolve powers and resources on employment to Scotland’s regions, as we are doing in England and Wales.

Importantly, this Government are not waiting for the final conclusions of the Milburn review, but are instead heeding the important call for change made in his interim report. We have the youth guarantee, backed by £1.5 billion of funding. We are introducing the youth jobs grant to incentivise employers to hire young people who have been on universal credit for six months. The Secretary of State recently had the opportunity to visit the youth hub in the constituency of my hon. Friend the Member for West Dunbartonshire (Douglas McAllister). Young people who had never worked before are already finding jobs as a result of the support they are receiving from the youth hub.

There is plenty of evidence of what works with employability support. The community trade hub in Buckhaven in my constituency is reaching young people who were non-attenders at school, but are now getting the skills they need for the work of the future. The brilliant Enable Works scheme, where I used to work, is bringing third sector organisations together with expertise in employability. Could the work of the third sector make an even greater contribution with this vital change for disabled people, for young people and for our country?

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Minister.

15:30

[Joe Robertson (Isle of Wight East) (Con)]

No welfare system stands the test of time in perpetuity. Loopholes appear in all well-intentioned systems. People test the system, and the world does not stand still. That is why the last Conservative Government came into office with a plan to tackle the welfare bill that had ballooned under Labour, and they did tackle welfare.

The right hon. Member for East Ham (Sir Stephen Timms) asked earlier in this debate, “In which years under the last Conservative Government did the welfare bill come down?” I am happy to be able to assist him. Under the last Conservative Government, the working welfare bill came down in 2012. It came down in 2013. It came down in 2014. It came down in 2015. It came down in 2016. It came down in 2017. It came down in 2018. It came down in 2019. Between 2010 and 2019, the working welfare bill came down by a fifth. That is the legacy of the last Conservative Government’s reforms.

I live in the real world, and I accept that covid changed everything. It changed the relationship between the individual and the state. From that time, the welfare bill started to climb. Those were the conditions that Labour knew it would have to deal with as it came into government, and it failed to deliver. Labour did not even have a plan to tackle the welfare bill, which it knew had been climbing year on year since covid.

At least the last Prime Minister, Keir Starmer, cobbled together some form of plan. It was a pretty rubbish plan, but a year and a half ago he tried to get some crude cuts through the House of only £5 billion-worth of savings. He failed, though, because the same MPs sitting opposite me now on the Government Benches stopped him. The current Prime Minister came into office a few months ago and flirted with the idea of bringing down the welfare bill, but he has given up entirely and he is proud of it. He is so proud that he will not bring the welfare bill down that he has ruled it out for the remainder of this Parliament.

The right hon. Member for East Ham has been tasked with finding savings, and he is about to publish his review into PIP. We know what will be in that review when it comes to savings: absolutely nothing, because the Prime Minister has already ruled it out. The Labour party is the welfare party. Its Members are proud of welfare spending going up and up. Just a few hours ago, at the Dispatch Box, the Prime Minister criticised our party’s plan to save £36 billion because it will hit incomes during a cost of living crisis. The system of benefits and personal independence payments is not intended to be an income top-up. It is not even means-tested. It is there to help people with a genuine need to meet the daily cost of a disability. I am afraid that the Prime Minister’s mask has slipped if he thinks it is there to serve as an income top-up during a cost of living crisis of his own making.

Let me now deal with some of the contributions from Labour Members. The hon. Member for Wirral West (Matthew Patrick) brought up the subject of child poverty. The best way to help hard-working families tackle child poverty is to make sure that they have well-paid jobs—to get off the backs of wealth creators, get off the backs of business and reverse the harmful job tax, as my hon. Friend the Member for Bromsgrove (Bradley Thomas) has asked.

[Daniel Francis]

The hon. Member has accepted from the Dispatch Box that the Conservatives did completely lose control of the budget, but will he also accept that, contrary to what they keep saying on the airwaves and in the House, the numbers increased more between spring 2022 and spring 2024 than they did between spring 2020 and spring 2022? Moreover, covid was not the cause; the cause was the fact that, at the back end of their Government, they lost control of the economy, they lost control of our borders, they lost control of the SEND system, and they lost control of DWP budgets.

[Joe Robertson]

I fundamentally disagree with the hon. Member’s claim that covid and its legacy had no effect. I think he should go back and think again about what life was like during covid and in the aftermath.

I turn now to our plan. We will not make the mistake that the Labour party made in opposition. We will not sit by and let a system become more and more unfair without doing the hard graft. As my hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst) pointed out, it is not fair to leave the system as it is. Our plan includes £36.1 billion of welfare savings to help get Britain working. Ensuring support for people with genuine need is at the heart of it, and we will provide £1 billion for people with lower-level mental health conditions. That is new money to help them and ensure that we can make savings of £16.5 billion by removing them from the cash handout system, giving them the therapeutic support that they need instead.

[Several hon. Members rose—]

[Joe Robertson]

My time is short, so let me finish by addressing the critics head-on: those who say that we do not understand—that we do not understand mental health, and that I do not understand what it is like to live with a neurodevelopmental disorder. Well, I do know what it is like. I have an ADHD diagnosis, but I have never been told that I cannot do something, and I have never been told that I need more help to do it. My condition was undiagnosed for 30 years. People with ADHD do not need a disabled persons railcard, they do not need a Motability car, and most of them do not need a cash payment every month to meet the cost of a disability for ADHD alone.

The Government need to stop thinking of new ways to give more people more things. Instead, we need to ensure that people have access to therapeutic community support to help them to live, learn, train, work, and get on in life. That is good for the economy, it is good for society and, most of all, it is good for the individuals involved. That is not the Labour way; it is the Conservative way.

15:37

[The Minister for Employment (Andrew Western)]

Given that time is short, I hope that my hon. Friends will forgive me for not being able to respond at length and reflect on the excellent contributions that we have heard. However, I want to thank my hon. Friend the Member for Gloucester (Alex McIntyre)—whom, of course, I will meet, as he requested—and my hon. Friends the Members for Wirral West (Matthew Patrick), for Ealing Southall (Deirdre Costigan), for Bexleyheath and Crayford (Daniel Francis), for Croydon East (Natasha Irons), for Banbury (Sean Woodcock), for Milton Keynes North (Chris Curtis) and for Glenrothes and Mid Fife (Richard Baker) for their passionate speeches. In particular, I want to highlight the contribution of my hon. Friend the Member for Gedling (Michael Payne), whose demolition job on the Opposition’s proposals was truly something to behold.

In her opening speech, the shadow Secretary of State suggested that it was a little early for the panto season. However, people could be forgiven for their confusion, given that the Tories have rushed out their Christmas wish list of cuts somewhat early this year. Before turning to those particular proposals, however, I want to comment on some of the other points made by the shadow Secretary of State.

We agree that the number of unemployed young people is unacceptable. The number of young people not in education, employment or training was, of course, up by 250,000 in their final three years in office. We commissioned the Milburn review, the youth guarantee and the youth jobs grant because we are determined to right their wrong.

The hon. Lady said that reforming welfare is not cruel. Again, I agree with her, but the Conservatives’ plans are not welfare reform; they are cruel cuts. She said that we cancelled their reforms, but it is worth remembering that their 2023 consultation on reforming the work capability assessment was ruled unlawful.

Let us turn to some of the specific proposals in the plans that the hon. Lady spoke to, which would push hundreds of thousands of children into poverty. Half a million young people would be impacted by the Conservatives’ proposal to reinstate the two-child limit, with well over half the children affected in families that are in work. The Child Poverty Action Group has said that the Tories’ measures, including the reinstatement of the two-child limit, would cause

“the biggest overnight increase in child poverty since records began.”

It is absolutely shameful.

The Conservatives’ changes to housing benefit would exacerbate homelessness and add costs. They have proposed to reduce local housing allowance to the 10th percentile of local rent, instead of the current 30th percentile. Expert organisations have said that this would dramatically increase homelessness, as well as displacing costs to local authorities, the NHS and other public services. The director of the Chartered Institute of Housing says:

“At a time when record numbers of households are already struggling with housing costs, this would almost certainly increase financial hardship and homelessness. Any short-term savings to the welfare bill could quickly be outweighed by higher costs to councils, the NHS and other public services”.

[Lincoln Jopp (Spelthorne) (Con)]

I am grateful to the Minister for giving way on welfare bill savings. Can he confirm that the Labour party’s 10-year plan will contain detailed plans for reducing the bill?

[Andrew Western]

As the hon. Gentleman is aware, we have been clear that we will set out our proposals for welfare reform next year. They will be scored by the OBR in the usual way.

Turning back to the Conservatives’ proposed changes to local housing allowance, I have already quoted the Chartered Institute of Housing. I rather prefer the slightly snappier comments of the chief executive of Shelter, who said:

“Making more families homeless does not save the government money.”

It is not rocket science, but it needs explaining to some Members of this House.

The Conservatives have not said what would happen to British people, including children in households that contain foreign nationals. They have not set out how a household with a foreign national and a British citizen partner would be treated. Universal credit is, of course, a household benefit. Would that household be treated as a single person claim, instead of a couple claim? Would the household lose all eligibility? What about households containing foreign national adults living with British citizen children? Would the Tories’ policy on foreign nationals hit the income and living standards of British people? From the information available to us at present, it certainly seems that that would be the case.

Let us turn to the laughably ambitious £13.7 billion that the Conservatives claim they can save by reforming disability and sickness benefit. They say that this would be achieved by introducing more detailed and holistic assessments with tighter eligibility criteria, but the current contracts, which they signed us up to, run until 2029. They say that they can deliver all this by 2030, yet those contracts include a target for face-to-face assessments of just 20%. It is undeliverable.

Of course, that is before one considers that the Conservatives’ costings are predicated on claimants’ primary condition only. The shadow Secretary of State quoted the IFS, which has been very clear that most people in the cohorts that the Conservative party hopes to take benefits away from actually have multiple conditions, and often three or four. The Tories have no idea what those people’s conditions are, so the numbers are just total fantasy. Overall, they refuse to say how many households or individuals would lose out.

The hon. Member for Ruislip, Northwood and Pinner (David Simmonds) said that the Conservatives were protecting pensioners. That is not the case, because the transition from PIP to attendance allowance that they will force on people reaching pension age could cost somebody up to £4,160 a year. That would be someone on the higher rate of PIP for both daily living and mobility moving on to the higher rate of attendance allowance, so it could in some cases be more. I suspect that the Conservatives do not know how many people would be affected, I suspect they do not have a precise figure for how much it will save, and I fully expect—now I have pointed out that they are not, in fact, protecting pensioners—that that proposal will disappear, because many of these things do not stand up to scrutiny.

The challenge with the proposals the Conservatives have put forward is that they are not worth the paper they are written on. A serious Opposition would have done their homework properly, but what do we have instead? They claim to have a plan for welfare that works, but who exactly does it work for? Not for the children plunged into poverty, not for the taxpayers who have to foot the cost, not for the pensioners who face a £4,000 cliff edge and not for the households facing homelessness. We know how punitive policies turn out: more hardship, less opportunity and more pressure on the welfare state. This Government will not repeat the Conservatives’ mistakes. We are fixing the broken welfare system they left in their wake, and ensuring that everyone gets the support they need so that they can fulfil their potential and truly have a better future.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

15:45

Division 119

Question accordingly negatived.

Ayes: 92

Noes: 279

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

15:59

Division 120

Question accordingly agreed to.

Ayes: 268

Noes: 93

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House notes that the previous Government left over one million young people not in education, employment or training, while overseeing a £33 billion rise in the welfare bill in its final year alone; recognises that since the General Election one million more people are in work and 397,000 more people are economically active; welcomes the imminent publication of the Milburn and Timms reviews; and supports the Government’s commitment to deliver welfare reforms that break down barriers to employment, support more people into good, secure work and bring down the benefits bill.

Employers

Wednesday 11th November 2026 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I inform the House that Mr Speaker has not selected the amendment.

I call the shadow Secretary of State.

16:10

[Julia Lopez (Hornchurch and Upminster) (Con)]

I beg to move,

That this House believes that employers are working people and therefore condemns the Government for breaking the Labour Party manifesto commitment not to increase National Insurance by increasing employers’ National Insurance contributions; and calls on the Government to halve employers’ National Insurance contributions for under-25s.

Today, we debate a simple proposition: that employers are working people. One might have assumed it a blindingly obvious proposition, but it is one that Labour contorts itself to deny. But, then, Labour is not very good at answering obvious questions, like, “What is a woman?” or “Should someone identifying as a llama be taken seriously?”—remember that one?

Yes, the “working people” definition has really been flummoxing Labour Members. For two years, they have been bending themselves into funny shapes. The right hon. Member for Bristol North West (Darren Jones) said that a working person is

“anyone that gets a payslip, basically”.

The Secretary of State for Transport said that working people were “people on modest incomes”. The Chief Secretary to the Treasury confirmed that employers are not working people. Last week, the First Secretary cleared it all up by saying that working people

“do not have savings…and…rely on good public services.”—[Official Report, 4 November 2026; Vol. 792, c. 910.]

That might explain why the Budget hiked taxes on savers. It is a Cirque du Soleil of mental gymnastics—but why? Because in 2024 Labour decided, albeit briefly, that it would rather get elected to govern the country than continue its audition to lead the student union of Islington ring road university, so it made everyone a promise in its manifesto: no tax increases for working people. It got specific: there was to be no VAT hike and no extra rates of income tax, and Labour would not increase national insurance—no way. Just months later, up shoots national insurance to the tune of £25 billion a year. Suddenly, working people across the country are asking, “What the hell happened?”.

Labour told working people, “No, no, it’s all perfectly legit—it’s an increase in national insurance for employers, not employees.” I think that is what Labour MPs might normally call gaslighting, but since it is being done to people who contribute, work themselves silly and generally want the country to succeed, their feelings are of no concern to the Government.

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

I am afraid that I must disagree with my hon. Friend. I do not think the Labour Government were gaslighting the nation. So little is their understanding of business and their ability to read an Office for Budget Responsibility analysis that they did not realise that the nearly £27 billion hit on the nation’s economy would lead to a nearly £20 billion reduction in the money that ordinary people get in their pay packets, and that the net receipt to the Treasury would be about half that—about £10 billion. They cannot add up. Perhaps my hon. Friend needs to acknowledge that they have that disability.

[Julia Lopez]

I ask for my right hon. Friend’s forgiveness. I buy into his theory more than mine; I have overestimated the Government’s capabilities.

The Conservatives’ motion says that the House believes that employers are working people, and that increasing national insurance broke Labour’s manifesto. If this was just a debate about semantics, maybe we could all move on, but the 2024 Budget has cast a shadow over every employer in every postcode, driving up unemployment and pushing up costs for everyone. It is time to start unravelling that damage, and in particular the damage that this tax increase has done to young people.

[Jonathan Davies (Mid Derbyshire) (Lab)]

For what it is worth, I accept that employers are working people and they are an important part of our labour market and our economy. However, though I lament the increase to national insurance, it was necessary to get money back into the NHS, which was on its knees following the end of the last Government, and that was breaking the economy too.

[Julia Lopez]

The hon. Gentleman has no doubt been to his constituency and been denied access to pubs, salons and all the rest of it, and that has suddenly changed his mind about what constitutes “a working person”. I should ask: are his constituents seeing those better public services? Certainly, mine are not, and they wonder where all that money has gone because it has not gone on more stable public finances or better public services.

Let us start by acknowledging what it takes to be an employer. It takes someone who saved money to start a business of their own and who took a risk to expand it gradually to take on that first member of staff, then over time building a team. It takes long hours, personal sacrifice, financial peril, time away from their family.

[Sir John Hayes (South Holland and The Deepings) (Con)]

My hon. Friend characterises a picture that might be seen in every constituency among small and medium-sized enterprises. Sometimes, people imagine business as consisting wholly of globalist corporate plutocrats, but the backbone of our economy is made up of those small and medium-sized firms of exactly the kind that she describes. On the issue of public services, why does the Labour party not focus on productivity? It is not wholly about what we spend; it is what we get for what we spend.

[Julia Lopez]

I agree with what my right hon. Friend says. That characterisation of employers is why Labour gets itself into such problems in the first place. He talks about the issues relating to national insurance and public services. The NHS also has to pay a higher national insurance bill because of the changes that the Labour Government have made, and that has caused all kinds of challenges across the public sector.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

My hon. Friend is exactly right. One of the biggest problems when national insurance went up was that places such as hospices, pharmacies and care homes were not excluded. It is one thing to say that we are putting more money in, but all that money and more was taken elsewhere to pay for the staffing. Is that not part of the problem?

[Julia Lopez]

It is absolutely part of the problem. Labour did not think that through, and I have an example of that same phenomenon with the hospice in my constituency, as well as with a number of public sector organisations and charities.

[Robbie Moore (Keighley and Ilkley) (Con)]

To build on that point, the same applies to the education setting. I met some of my headteachers just last week. Despite employer national insurance going up, central Government grant covers only about 70% of the cost, so the additional 30% must come out of the existing school budget. That has led to teaching assistants being let go and made redundant in my constituency. Does my hon. Friend not agree that that detrimental increase in tax has hit everybody across every constituency?

[Julia Lopez]

I completely agree with my hon. Friend. It has been seen in my constituency and across Whitehall. It is an absolute dog’s dinner of a policy that has created problems for not just the private sector but the public sector.

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

The shadow Minister makes a point about the increases to national insurance—absolutely fine; that is a political point that she is entitled to make. Will she tell me, using the exact same logic that she has applied to the criticism of this levy, why in 2021 she voted for the hypothecated health and social care levy, which was a 1.25% increase on national insurance for both employees and employers? Why was that an acceptable increase, but this was not?

[Julia Lopez]

That was a policy that was put forward. My right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak) decided to change it because the economy was in a challenging state after the pandemic and we needed to think again about whether it was the right thing to put that pressure on employers, so we went back on that policy.

To return to what employers have been going through, they have the ongoing stress and responsibility of employing people and wanting so desperately to continue to provide opportunity for them. They have to think about the other families who are relying on them as small business founders who are pushing to provide a community with a great service and a happy experience. They are pub landlords, builders, restaurateurs, service firms, salon owners, café owners, shop owners. Work, work, work, work, work.

Employers are not just working people; they are uber-taxpayers. They made it through covid, they made it through an energy crisis, but many are now saying that they cannot make it through Labour. When Labour broke its manifesto commitment in its first Budget by increasing national insurance, it did so in a highly destructive way. Not only did it increase the rate, but it lowered the point at which employers start paying NI on an employee’s salary. Lowering that threshold hit part-time, entry-level and lower-wage jobs the hardest, making employees so much more expensive to retain. I do not know about you, Madam Deputy Speaker, but suddenly, countless businesses in my constituency started sounding the alarm, especially those employing people who need flexible, part-time hours because of caring responsibilities.

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

I thank the shadow Minister for highlighting the impact on part-time workers. My constituency is a very seasonal area on the coast, but we also have students and OAPs, all of whom want part-time work, yet under this Government they are finding that so much harder to achieve.

[Julia Lopez]

My hon. Friend is absolutely right to highlight that challenge in seasonal working, which creates an extra burden for employers, many of whom have to work to fill the shifts they would otherwise have used temporary staff for, creating enormous pressure.

People are writing to me in despair because their adult child simply cannot get a first break in the workplace, and it is not for want of trying. Businesses warned the Government that this would happen. The hospitality, retail and care sectors all raised the alarm about the impact of higher employer national insurance. What was Labour’s response? The unemployment Act, which makes it riskier to employ people as well as more expensive. The national insurance increase came into effect in April 2025. By April this year, there were 210,000 fewer payrolled employees than a year earlier. There are now 1 million young people not in education, employment or training, and the Government are in denial about the reasons why.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The shadow Minister talks about businesses having warned the Labour Government about the impact that Labour’s jobs tax was going to have. Does she, like me, think it is inconceivable that Treasury officials would not similarly have advised the Government that this would be a consequence of the jobs tax? Is it not particularly pernicious of Labour to have put the biggest barricade in front of younger workers, possibly accessing their first job in hospitality, which will have a lifelong damaging effect on their careers?

[Julia Lopez]

The hon. Gentleman is absolutely right to point that out. It is inconceivable that the Government would not have been told about the impact that this policy was likely to have.

Labour likes to point out that employers do not pay national insurance on workers under 21, but that misses the point. Employers are making decisions about their entire workforce, and when the cost of employing people rises and the risks associated with taking on a new starter increase, the first opportunity to disappear is the one that will no longer be created. Rather than take on an extra employee at junior level, employers are squeezing the staffing resource they have, but they are shedding younger workers, too. By 2027, employing a full-time minimum wage worker over the age of 21 will cost a business 20% more than it did when Labour entered office. For an 18 to 20-year-old, it is 31%.

Labour knows that there is a problem, but rather than tackle it at source, it offers up the youth guarantee, a bung to employers to take on a young person for six months. How about making it cheaper and easier to employ that young person in the first place? Soon we will get details of an unlimited youth mobility scheme with the EU to add to this mix, which will see young Britons competing for available work with peers from 27 other nations.

The cost of all this must be absorbed somewhere. Higher national insurance, soaring energy bills and a growing burden of regulation all feed through into the price of doing business and, ultimately, the price we all pay. The weekly shop costs more, a meal out costs more, getting your hair done costs more, activities with the kids cost more, as does going away for a few days. This is just one of the reasons that household finances are going backwards. Whether Labour is talking about employer national insurance or employee national insurance, everybody pays at the end of the day.

We Conservatives want more working people, because work is dignity, contribution, resilience and confidence, and we want that opportunity for as many young people as possible. We want to end the waste of a generation unable to showcase its talents, and we want to reduce the cost on a generation of workers that can bear no more tax on its shoulders. That means returning to some of the policies that are driving this destruction. Not only would we repeal the job-destroying provisions of the unemployment Act; we Conservatives would halve employer national insurance for under-25s. Our policy would permanently reduce the cost of employing young people and give businesses a real incentive to take them on. For an employer, it would be a saving of around £1,500.

This is part of a wider plan to tackle Labour’s youth jobs emergency. Our “Get to Work” scheme would stop young people leaving education and drifting straight on to welfare. It would create 100,000 new apprenticeships, cut red tape to save the Saturday job and reduce high street business rates to support the businesses that give young people their first step on the jobs ladder—a policy that would benefit not 70,000 high street businesses, as Labour’s policy would, but 250,000.

Aside from old prejudices about employers as the oppressors of workers, the reason that Labour contorts itself on the definition of working people is that it knows it has taxed them silly. In doing so, it has not just broken its manifesto commitment but completely undermined what Keir Starmer and his sparkling new Chancellor used to say was Labour’s No. 1 priority: growth. The consequences are there for all to see in the unemployment figures and the living despair of young people unable to secure a good job.

[Sir John Hayes]

My hon. Friend is making a fundamental point about the structural effects of this policy: of course, it affects profitability year by year, but it also undermines the capacity of businesses to reinvest and ensure structurally that they are fit for the future. A butcher in my constituency, Andrew Parsons of Bennetts Butchers, is closing the shop in a couple of weeks after more than 100 years of trading, because, as a result of the costs lumped on him by successive Governments but particularly by this one, he does not have the money to reinvest.

[Julia Lopez]

My right hon. Friend tells us a terrible story that is unfortunately being played out in constituencies across this country. People are having their buffer eroded and then they are simply not able to invest in their businesses in the way that they would have hoped. It was all so predictable.

Let me close by reading out what I said to my constituents immediately after the 2024 Budget:

“Labour said in the election they did not need to hike taxes to pay for their plans, beyond those they had already announced. We now know this was not true—they have gone on a borrowing and spending spree that makes a mockery of the idea that they are concerned about the state of public finances they inherited. 

Many of the taxes on ordinary working people have been disguised by heaping pain on business. Labour may think it’s clever politics. But the result will be job losses, higher prices and closures…this approach is all wrong, warping the incentive structure in our economy. It won’t work and as they come back for more taxes, the number of people willing to take the risk of starting a business or save for their families will simply get smaller and smaller.”

We are now living that future. Have these tax rises given us robust public finances? Have they delivered better public services? Do people feel better off? On all counts, the answer is no, yet this new Prime Minister believes that the solution to the resulting welfare crisis is to give Labour more taxes to spend. It does not work. Employers are the funders of services, the drivers of growth and the engines of opportunity. Many are not just working people themselves but working people on steroids, and they are fed up of being the cash machine for Labour’s faux benevolence. Their requests are simple: give us the chance to grow our businesses and build a future pipeline of young people to whom one day we might well pass our life’s work. It is time for this Government to start undoing the damage they have wreaked and halve the jobs tax on the young people whose aspirations Labour is burying right now.

16:27

[The Financial Secretary to the Treasury and Paymaster General (James Murray)]

The Budget of two weeks ago was a Budget to steer Britain through the economic storms we are facing. It provided breathing space now on the cost of living and the cost of business with fresh hope for the future, and it was built on fiscal discipline, which underwrites every promise this Government make. When the Chancellor stood at this Dispatch Box two weeks ago, he faced a choice: he could have followed the route of the Conservatives—sacrifice stability, borrow irresponsibly and make unfunded promises straight out of Liz Truss’s playbook—but instead he chose a responsible route to keep the public finances under control, protect working people, back businesses and invest in Britain’s future.

[Dr Evans]

I have asked this question a number of times over the past couple of years: could the right hon. Gentleman define “working people” for the House?

[James Murray]

Working people are those millions of people across the country who put so much in every day but have not been getting back what they deserve. Those are the people this Government are backing, and that is why, at this Budget, the Chancellor chose to prioritise breathing space for families and businesses, including on the cost of energy. He set out how we will tackle the long-term challenges facing our country. For families, that will mean a £100 household energy payment to support 20 million households—80% of households in England—along with an extension of the VAT cut for electricity bills and a further extension to the fuel duty freeze.

[Dr Neil Hudson (Epping Forest) (Con)]

I am grateful for the Minister giving way—I have a huge amount of respect for him. He is always the brave Minister who has to pad up and go out to bat to defend the indefensible, such as the jobs tax, the family farm tax or the family business tax. I wonder if the Minister could enlighten me: if there is a pub landlord hiring local people and serving beer to customers—who may or may not own black Labradors—are they a working person?

[James Murray]

Of course they are. If the hon. Member wants to talk about defending the indefensible, I wonder how he ever stands up in this place to talk about the previous Conservative Government because that must be an insurmountable challenge. I hope that he would welcome what the Chancellor announced at the Budget to give breathing space to businesses because it will mean that more than 70,000 small retail, hospitality and leisure properties are taken out of paying business rates altogether, that pubs will have a 20% cut in their business rates from next April and that business rates for retail, hospitality and leisure premises of all sizes will either fall or be frozen in real terms. In addition to business rates, many firms will benefit from our freeze on red diesel duty and from the reduction in energy bills by up to 25% for more than 10,000 eligible businesses from next April through the British industrial competitiveness scheme. That is what breathing space for businesses looks like, alongside the breathing space for families.

As I said earlier, the bedrock of our approach—our lodestar—to the public finances is fiscal discipline. That is why the Budget set out how we will fully fund all new policy and breathing space measures for families and businesses. In deciding his approach, the Chancellor rejected broad-based tax rises, instead taking decisions about tax changes that are fair, proportionate and targeted. That included having banks help pay for the energy help for households this winter through a temporary increase to the bank surcharge and an increase in machine games duty for higher-stakes machines to help fund cuts for business rates.

[Graham Stuart]

Could the Minister confirm that, under the current regulatory regime, the £1.5 billion that will be taken over 15 months in this doubled bank tax could be lent out to a maximum of £25 billion? There is a risk that having withdrawn £1.5 billion from the banks’ equity, £25 billion—it is the maximum—in lending to the UK businesses we are talking about could be lost?

[James Murray]

I am sure the right hon. Gentleman will have been interested in our measures in the Budget for the British Business Bank, for instance, to increase access to finance, particularly for many of those businesses that are trying to scale up and increase. But I come back to this central point—I know what his position will be because he is a loyal member of the Opposition Benches and will follow what the Leader of the Opposition said on Budget day itself—which is that the Conservative party does not support our decision to require banks to pay a little more for a temporary period of time to fund household support across the country. We know that banks are coming from a strong position. It is a temporary increase. It is one that we believe is fair, targeted and proportionate. We are asking banks—requiring banks—to pay that extra amount, and they are therefore contributing towards the important support for households. What I think is sad about this debate is that the Opposition do not support that breathing space for households. I thought the right hon. Gentleman was loyal to his party leader, but if he would like to break ranks and intervene on me again to confirm that he supports our £100 household energy payment, that would be helpful.

[Graham Stuart]

The slavish loyalty of the Minister has already been remarked upon, along with the courage that goes with defending the indefensible quite as often as he has done—always with wit and good humour. Could he address this particular point? The truth is that banks are a popular target to hit with the public and with Labour Members, but if there is actually less money to go to the pubs, restaurants and small businesses in my constituency and elsewhere, can he not accept that that multiple should give people pause for thought before they go for the easy, popular target and take it out of the big, fat, rich banks, if it turns out the small business in trouble will actually lose the credit it desperately needs?

[James Murray]

I was listening carefully to the right hon. Gentleman, as I always do whenever he speaks in this Chamber, and I did not hear a response to the question I asked of him, which is whether he supports the household energy payment, which the Leader of the Opposition so clearly opposes. I invited him to intervene to clarify his position given there seems to be some confusion on the Opposition Benches around the household energy payment and whether they support it or not. I would have thought that given the Leader of the Opposition was so clear in not supporting the household energy payment, the hon. Gentleman—

[Graham Stuart]

Right hon. Gentleman.

[James Murray]

I would have thought that the right hon. Gentleman—excuse me—would have no difficulty in rowing in behind her, but he seems to be struggling with that somewhat, so I will make some progress.

I was speaking about the fiscal discipline that underwrites everything we are doing as a Government. Through the approach that we took in the Budget, we have maintained our fiscal rules while making no changes to rates of income tax or national insurance on income from employment or self-employment, or to the rate of national insurance that employers pay on wages or salaries for their staff.

[Nigel Huddleston (Droitwich and Evesham) (Con)]

The Minister is giving us lots of opportunity to intervene on him, and we are grateful for that. We keep hearing about the “difficult decisions” that Ministers are making to increase taxes. I do not think that is a difficult decision; it is a very easy decision to make—the laziest decision for a Government. I noticed that his list did not include the new tax on tourism. Will he please explain how Labour believes that we can help an industry by taxing it more?

[James Murray]

As the hon. Gentleman may know, the overnight visitor levy is a power that we are giving to strategic authorities across the country. It will be a decision for mayors or foundational strategic authorities to take about whether to introduce that levy, and if they do so, at what percentage to introduce it. Any proceeds will be reinvested in the local visitor economy and other infrastructure in the local area, and will support that area to get more visitors in future, thereby supporting economic growth—I hope that is something the hon. Gentleman would support.

Let me turn directly to the role of employers in our country, given the title of the motion. As I said in response to an earlier intervention, employers are working people and they are the backbone of our economy. As I also said, that is why the Budget gives businesses breathing space, with 70,000 retail, hospitality and leisure properties taken out of business rates altogether, and bills for others cut or frozen in real terms.

[Rebecca Smith (South West Devon) (Con)]

I thank the right hon. Member for giving way yet again. He is helpfully listing things from the Budget that are supposed to help businesses, but I wonder whether he has come across anyone in his constituency, or in his work at the Treasury who, like businesses I am aware of, have seen the standing charge for their business electricity double. We are talking four figures in the first place, so that is a significant increase. In one case a business invested in solar panels, which the Government would no doubt welcome, but ultimately the investment that it made will be completely wiped out by increased standing charges. Will the Minister address that specific point?

[James Murray]

I thank the hon. Lady for mentioning energy bills, because as MPs and Ministers we all recognise that energy costs are one of the primary concerns for households and businesses across the country. In the Budget two weeks ago, we offered breathing space for families and businesses, including with energy bills. Crucially, we also set out the work we will be doing in the years ahead to get those energy bills down for good, and ensure that we can invest in home-grown, renewable cleaner sources of energy, break the link between electricity and gas prices, and remove standing charges from gas bills and then electricity bills. All that is about reforming the way the energy market works, because while breathing space is what households and businesses need now, we know that longer-term reform is needed over time.

I was explaining the breathing space for businesses, and I mentioned the cuts to business rates announced in the Budget. I remind hon. Members that we are backing people who want to start and grow businesses by cutting red tape and unlocking billions of pounds of investment. We also introduced our new founders’ relief for founders of high-growth companies, and a new young entrepreneurs allowance to cover a year of living costs for young founders while they bring ideas alive. Employers and businesses drive growth, offer job opportunities and create wealth across our country.

[Helen Maguire (Epsom and Ewell) (LD)]

I am sure the Minister will agree that the Conservatives left the high street on life support, but unfortunately I feel that Labour has failed to resuscitate it. Epsom and Ewell has a coffee shop called Brew Forty Two. The staff work really hard, but rising costs mean it is difficult to employ young people, and the Saturday job is pretty much now extinct. Does the Minister agree that we need to reinstate lower national insurance contributions?

[James Murray]

I will come to that later in my remarks. Employers do not pay national insurance contributions for under-21s, because of the relief that already exists, or for apprentices under the age of 25. That goes some way towards supporting the objective that the hon. Lady mentions, which is to ensure that employers are supporting young people into work. I agree with her comments about the state in which the Conservatives left high streets across the country, having not done what was necessary to support them over 14 years.

Businesses across the country are the ones who drive economic growth, and every employer across the country knows the importance of fiscal discipline. It is crucial in enabling them to succeed, just as it is the crucial bedrock of economic stability for the country and the foundation that we need to support confidence and long-term growth.

[Sir John Hayes]

Will the Minister give way?

[James Murray]

I will give way one more time, then I will make a bit of progress.

[Sir John Hayes]

The Minister is being immensely generous in taking interventions. Employers in my constituency include many farmers and growers and related food firms and hauliers, yet much of the land in my constituency is threatened with immense solar developments, which will take that land out of production. That threatens the country’s food security, and we risk making energy security the enemy of food security. That is bound to undermine our economy in the long term, as we import more and more of what we need to feed the nation. Will he take a look at that, discuss it with colleagues across Government and see how we can reverse that trend? It puts our national economic resilience at risk.

[James Murray]

While I agree with the right hon. Gentleman drawing attention to the importance of food security as part of our national security, he and I take a different approach to energy security. The reforms that we are implementing as a Government, including through investment in home-grown, independent sources of energy to increase our energy security and make us more independent from fossil fuel prices around the world, are crucial to bringing bills down over time and ensuring greater energy independence and energy security. That is what the Government are doing, and that is how we see ourselves responding to one of the greatest pressures that many households and businesses face: the immediate and long-term costs of energy.

I was talking about employers recognising the importance of fiscal discipline in their own businesses, just as the Government recognise the importance of fiscal discipline for the country. We know that this Government inherited a crisis in our public services, our public finances and the cost of living. NHS waiting lists were at record levels, children worked in portacabins as school roofs crumbled, and rivers were filled with polluted waste. Billions of pounds of spending commitments had not been funded or even properly disclosed to the Office for Budget Responsibility. Faced with that reality, any responsible Government would have to act. We kept our manifesto commitment to working people not to increase their income tax, their national insurance or VAT, and we went further by freezing fuel duty and raising the national minimum wage.

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

Will the Minister give way?

[James Murray]

I will make some progress, as I have taken a few interventions. Maybe I will address the hon. Gentleman’s point in a moment.

After taking office, we had to take decisions on tax, welfare and spending to fix the public finances and repair our broken public services. It was to restore stability in the public finances and to get our NHS and other essential services back on their feet that we increased national insurance contributions from employers. In making that change, we also more than doubled the employment allowance from £5,000 to £10,500 so that around 900,000 employers—around 40% of employers—have no employer national insurance liability at all.

As I mentioned earlier in response to the hon. Member for Epsom and Ewell (Helen Maguire), we maintained reliefs for those employing younger workers, with businesses able to claim employer national insurance contribution reliefs, including for those aged under 21 and apprentices under the age of 25. That means that employers pay no employer national insurance contributions for employees under the age of 21 or apprentices under the age of 25 on earnings up to £50,270, which saves up to £6,750 a year for each eligible employee.

We know that the decision to increase employer national insurance contributions had an impact on businesses, but we recognise that because of that choice and others, we have been able to put the NHS back on its feet, with waiting lists down by more than 250,000 since the Government came into power. As well as getting the NHS back on its feet, our fiscal rules and the discipline of meeting them mean that we are boosting investment in Britain’s future—the investment that families and businesses want and need. Across this Parliament, we will invest an additional £120 billion in Britain’s roads, rail, energy and other infrastructure, which is so important for driving growth, and last year we delivered the highest number of affordable homes in a decade.

[John Slinger (Rugby) (Lab)]

Does my right hon. Friend agree that this Government’s investment in our infrastructure and our NHS, which is significantly higher than the risible amount of investment delivered under the previous Government, is pro-business and pro-economic growth, and that that is why the Budget measures will help our country and help businesses across this land?

[James Murray]

My hon. Friend is absolutely right that businesses want to make sure that the population—their employees or future employees—are healthy, are able to get to work and are able to access the support they need to get a job. That is as important for businesses as it is for the people themselves, and of course businesses want to see the investment in infrastructure that our adherence to our fiscal rules enables. That investment in rail, road and energy is so important to businesses, as it is to families across the country.

In their motion, the Conservatives propose halving employer national insurance contributions for under-25s. Apart from a brief mention in the shadow Secretary of State’s speech, they appear to have forgotten that employers already pay no employer national insurance on any earnings up to £50,270 for every employee under 21, and for all apprentices under 25. However, the bigger problem—one that goes to the very heart of why the Conservatives failed in government and why it is clear that they have learned nothing—is that they are very good at announcing tax cuts, yet always entirely fail to credibly say how they would pay for them. If they want a reduction in employer national insurance, what is the cost? Where does the money come from? Is it from higher borrowing, higher taxes on someone else or cuts to the NHS and other public services that working people rely on?

Just look at the Conservatives’ announcements on tax more widely. They have promised billions of pounds-worth of unfunded and poorly targeted tax cuts for the very wealthiest—exactly the same irresponsibility that led to the disastrous Liz Truss mini-Budget that crashed the economy and sent mortgages skyrocketing. That is the difference between us as a responsible Government and them as a discredited Opposition.

[Dave Doogan]

There is a constant tension in that those who criticise Government fiscal policy must say where they would get the money from. On that basis, could the Minister advise the House what progress the Government have made over the past two years on closing the tax gap, and say what size it currently is?

[James Murray]

If the hon. Gentleman wants to have a conversation about the tax gap, I am very happy to pick that up. When we came into office in 2024, one of our first priorities was to close the tax gap before asking for any further tax contributions from any other sources. That was an essential part of our wider plan to restore public services and the public finances and to create the conditions for economic growth. That work continues, and I am very pleased to be playing a role in the Treasury, continuing that work to close the tax gap and modernise the service His Majesty’s Revenue and Customs provides, so that more people pay the right tax first time and can pay it automatically without mistakes or errors creeping into the system.

Because of the decisions we have taken as a Government—including closing the tax gap, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) mentioned— we are providing certainty and stability. Meanwhile, the Conservative party cannot resist playing games with the public finances, irrespective of the fact that whenever it has done so in the past, it is working people who have suffered the most. Britain is a country of entrepreneurs, shopkeepers, manufacturers, publicans, start-ups, family firms and growing businesses, and I am proud of the people across our country who take on risk and put in every hour they can to start and grow businesses. Above all, they need—and they have—a Government who are prepared to do the hard work of building a stable economy in which businesses can prosper. Employers need stability in order to plan for the future, create good jobs, invest and innovate, and providing that foundation is our responsibility as a Government. That is why, in the face of global storms, fiscal discipline will always underwrite every promise this Government make. The opposite is true of the Conservative party.

Government is about making choices, not pretending that choices do not exist. We in this Government are choosing to back working people. We are choosing to back the employers who create jobs. We are choosing to back young people into work, and we will always choose, with fiscal discipline as our lodestar, to maintain the economic stability on which our success as a country depends. For all those reasons, I urge Members to reject the motion.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

16:49

[Daisy Cooper (St Albans) (LD)]

It has been a tough decade for businesses. It all started with Brexit, which unleashed uncertainty, red tape and form-filling, pushing up prices for all of us. Following that was the covid pandemic. Notwithstanding the furlough scheme, it unleashed on business a boom and bust cycle of lockdowns and opening back up, all because the then Conservative Government did not buy an off-the-shelf app that might have prevented that boom and bust cycle by tracking the impact.

[Stuart Andrew (Daventry) (Con)]

I recall that when I was sat on the Government Benches, the Liberal Democrats were calling for more stringent measures.

[Daisy Cooper]

The right hon. Gentleman will perhaps remember more correctly that during that time we called for a lockdown initially, but the public had already decided to go into lockdown. He will also remember that the then Prime Minister announced that pubs, high streets and a whole load of businesses should be closing down, without covering their insurance. The right hon. Gentleman will remember that.

Following covid, we had the mini-Budget, which I am sure the Conservatives will deny, too. The mini-Budget was incredibly painful and unleashed huge panic in the financial markets. It drove up the cost of living and the cost of commercial loans. On top of all that, we then had two anti-growth Budgets from the Labour Government that have pushed up costs on businesses. For many, it is too much to bear. Small businesses, the backbone of our high streets and our communities, have borne the brunt. It is the cumulative impact that small businesses have expressed concern about. They tell me that if it had been just one tax, they might just have been able to manage it, but they have had the national insurance contributions rise, the business rates changes and the Employment Rights Act 2025, which got the balance wrong between protections for workers and the burden on business. Businesses that have put in blood, sweat and tears and financial investment are now struggling and do not know whether they can survive.

[Dave Doogan]

The hon. Lady has given a comprehensive list of the impediments that this Government have put the way of business in just 24 months, but I hope she will not forget that we have the highest commercial energy prices anywhere in the developed world under this Labour Government. Those are similarly threatening to put businesses under.

[Daisy Cooper]

The hon. Gentleman is right to raise the fact that we have some of the highest energy costs for business. We have called on the Government to extend their scheme for energy-intensive businesses. We have made it clear that we want to see further action on decoupling the link between gas and electricity. I have had meetings with Ofgem about making sure that there is better regulation for small businesses, particularly when they are looking to brokers for their energy deals. There needs to be far more action, not just for energy-intensive businesses, but for the small businesses on our high streets.

As I was saying, the impact on businesses of all these higher taxes has exacerbated the youth unemployment problem. That is why we now see vacancies at a five-year low. It is wrong to blame young people for not applying for or getting jobs when there simply are not jobs for them to apply for. That is why we Liberal Democrats have talked about growing our economy and pulling the biggest single growth lever that we can by joining the single market, which would reduce costs for businesses.

[Dr Luke Evans]

Have the Liberal Democrats done any modelling of what the impact would be on those young people who are not employed if we rejoined the European Union and had free movement or if we had a youth mobility approach and there was an influx of young people into this country?

[Daisy Cooper]

If there are no jobs in the UK, there will not be people coming to the UK to take jobs that do not exist. If we could join the single market, it would reduce red tape, reduce form-filling, and make it cheaper for businesses in the UK to grow. They would create more jobs, and there would be more jobs for young people. I simply cannot believe that the Conservative party, despite all the evidence and all the studies, will still not accept that having a stronger relationship with Europe is the single biggest way in which we can grow our economy—and it is only if we grow our economy that we can cut taxes and cut bills. For as long as the Conservatives refuse to acknowledge the damage of their Brexit deal, they will remain an out-of-touch, anti-growth, anti-business party.

[Gareth Snell]

The hon. Lady has made the argument here eloquently, many times, about joining the single market and the customs union. However, on 1 April 2019, the House came within three votes of a Brexit deal that would have allowed the retention of membership of the customs union. I voted for it, and others who were Labour Members at the time voted for it. Six Liberal Democrats, including the current leader of the hon. Lady’s party, voted against it. They walked into the Lobby with the Conservatives—with those of the right—to veto a Brexit deal that included membership of the customs union. Why did they do that?

[Daisy Cooper]

I will not apologise for the fact that we fought tooth and nail—we were the only large party that fought tooth and nail—to stop the damage of the Brexit deal in any shape or form.

[Dave Doogan]

In the last Parliament, the SNP was a substantially bigger party than the Liberal Democrats, and we fought tooth and nail to maintain membership of the EU as well. I am sure the hon. Lady will acknowledge that.

[Daisy Cooper]

I do indeed acknowledge that. It was a slip of the tongue. Many parties were fighting tooth and nail to stop the damage of the Conservatives’ botched Brexit deal. I hope very much that at the EU summit, the Labour Government will move a great deal further than the timid approach they appear to be taking now.

[Paul Holmes (Hamble Valley) (Con)]

Will the hon. Lady give way?

[Daisy Cooper]

I will happily give way, all day long.

[Paul Holmes]

Will the hon. Lady acknowledge that economic growth in Europe is lower than the economic growth in this country? Perhaps she could also tell the House how much her party, under its policy proposal, would be willing to pay to join the single market. Would that not take money out of the economy that we could be using to increase growth domestically?

[Daisy Cooper]

The hon. Gentleman will, I hope, accept that growth in one country is not equivalent to growth in another country. When we tear down barriers between countries, we increase growth. Plenty of modelling has been done by the national economic social research unit in America, and by other bodies in this country. I am not sure, but I believe it is PwC that has talked about the amount of growth we would gain from the single market. We believe that joining the single market and the customs union would bring in about £29 billion and that the cost would probably be about £2 billion, so the growth that we would gain would massively exceed the cost of joining.

[Graham Stuart]

Does the hon. Lady agree that the Liberal Democrats are a singularly special party in this place, because they can believe passionately in something and then not vote for it?

[Daisy Cooper]

I am sure that if I had more time to speak in this debate, I could point to a number of examples of the Conservative party saying one thing and doing another. It is, of course, a party that is trying to claim, after the mini-Budget, that it is reclaiming the brand of fiscal responsibility, but even in the Conservatives’ recent spending plans there is, according to my calculation, a £33 billion hole between their funding pledges—or the things they want to fund—and the tax cuts that they want to make. It looks like Trussonomics 2.0.

[Danny Kruger (East Wiltshire) (Reform)]

May I bring the hon. Lady back to the point about the opportunity presented by opening up greater access to the European single market? She has cited various reports suggesting that that would be good. Is she aware of the winners of the Nobel prize for economics last year, who demonstrated that what has driven growth across the world, but particularly in the United Kingdom, has not been access to wider markets, but innovation and technology? That is about the growth that we receive from supporting businesses to develop new products and services. It is not access to global markets that does that; it is our own industry and services economy here in the UK. Will the hon. Lady please return to the original liberal principles that helped to develop the prosperity of this country in the 19th and 20th centuries, which are about low tax and low regulation?

[Daisy Cooper]

I have made it very clear in my speech that the single biggest lever for growth is a much better deal with Europe. I have never said that it is the only lever for growth. I absolutely believe that we need to invest in innovation, and I wish that the Government would go further in fixing the entire pipeline, from ideas and start-ups to scale-ups and commercialisation. We should be the best place in the world for a business to start up, to scale up and to stay, and I hope that the hon. Gentleman shares that vision.

I return to the motion. I was saying that the rise in national insurance contributions has exacerbated youth unemployment. We want growth with Europe; we want NICs cut; we want 100 hours of guaranteed work experience for young people before they reach the age of 18; and we want the cliff edges in universal credit tackled as well. We are pleased that the Labour Government have finally looked at putting a tax on the banks, but they will be aware that we have pointed out other ways in which they could have raised taxes on the banks—for example, through a windfall tax on unearned income, which would not deter any further investment. When it comes to our economy and supporting employers, the only long-term solution is to get growth back into our country and get Britain growing again. That is the only way that we can cut taxes and bills.

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. To ensure that everybody can contribute, there will be a speaking limit of seven minutes for Back Benchers.

17:00

[Dr Jeevun Sandher (Loughborough) (Lab)]

I want to start a bit differently today, if I may. My parents were employers; they were business people. They employed me in what was probably my first job. As the son of immigrants, I did not get a choice as to whether I took up that employment. I am not quite sure if I was paid the minimum wage, but working taught me something. It taught me what it meant to earn money; it taught me the pride in work; and it taught me what I got at the end of it. I will never forget working for a week, and then buying a turquoise iPod Mini. I loved that iPod, partly because I was really hip and cool, of course—

[Paul Holmes]

You still are!

[Dr Sandher]

Stop it! The hon. Member is too kind.

I had a sense of pride, because I knew that I had earned that iPod; it was the fruits of my labour. When I was growing up in the ’90s and ’00s, I saw business people doing well, partly because we were growing under a Labour Government, but also because the conditions of business worked. My parents knew that their workers had skills and were healthy, and they also knew that workers and families across the country were living good lives at that point in time. They could afford a decent life, and to spend money down the shops and on the goods that my parents were producing and selling. I saw them do well, and I saw business do well. Part of the reason why I became a member of the Labour party is that I want to see every single person do well and thrive. I saw businesses thrive, and I saw my parents’ business thrive.

I also joined the Labour party because we are the party of work—the clue is in the name. I want every single person in this country to have a good job, but we are quite far away from that, and we have been for quite a while. About 40% of people in full-time work cannot afford to raise a family, because there are not enough good jobs in this country. Post-industrial areas are still post-industrial, and they are the most deprived parts of this nation. They have not been doing well for an incredibly long time. We have to do more to create good jobs across our country.

[Patrick Spencer]

I could not agree more. We should do everything to create jobs. Surely the hon. Member is about to suggest that we cut taxes on businesses. That will create jobs.

[Dr Sandher]

I want to start there. I disagree with the Conservatives’ motion. It effectively says that if we cut national insurance contributions, good jobs will follow. The first thing to note is that, yes, we did raise national insurance contributions in our first Budget, and there are a million more people in work today. The second thing to note is that the Conservatives’ mistaken moral aims would lead to poorer material ends. They are googling; they are finding out the difference between the pay-as-you-earn measure of employment and the Office for National Statistics measure of employment.

There is something else on which I disagree with the Conservatives. I read the document entitled “The Right Way”, which they produced before their conference. It effectively said that if the Government just step away and create the right conditions, businesses will create the prosperity and good jobs that we need. We have seen that this has not worked. Post-industrial areas are still post-industrial. We saw the Government step away in the 1980s, and we saw those areas remain poor over time. In places like Middlesbrough, the employment rate is 20 percentage points lower than the national average. For non-graduate men, the employment rate is down by about 20 percentage points, too.

[Douglas Lumsden (Aberdeen South) (Con)]

The hon. Member is talking about deindustrialisation; it is happening right now in my constituency, because we are turning our back on the oil and gas industry. We are not approving Rosebank, when we should. It is an absolute disgrace that the Labour Government are killing off jobs right across north-east Scotland.

[Dr Sandher]

I think about 90% of jobs in the oil and gas industry have disappeared over the past 20 or 30 years, including 150,000 in Aberdeen. That is basically because the North sea is a declining basin; we cannot change geological facts. As the hon. Member will know, the Rosebank decision is a quasi-judicial one that will be made by the Secretary of State for Energy Security and Net Zero.

I come back to the fact that in the 1980s, the Conservatives said, “If you just cut taxes, good times will follow,” but they did not follow for huge numbers of people and huge areas of this country. We also see the legacy of the Conservative Governments from 2010 to 2024: in the past few years, there have been 250,000 more young people not in education, employment or training; areas have not recovered; and there has been the longest wage stagnation since Napoleon’s time.

We have seen the outcomes of the Conservatives’ philosophy. They had 14 years in government, and it was not a success. We did not see good jobs across this nation, because there was not the means or materials for them, or a foundation of prosperity. There were not the skills; the number of apprenticeship starts for young people was down by a third. The population was not healthy; we had the longest waiting lists on record. There was not enough transport infrastructure—ours was the worst in western Europe—and energy costs were the highest in the G7. That was the legacy of your Government, because the only thing Conservative Members have ever believed—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I am not participating in this debate, but presiding over it, so “you” and “your” are not needed.

[Dr Sandher]

I apologise, Madam Deputy Speaker.

[Graham Stuart]

rose—

[Dr Sandher]

I will give way, because the right hon. Member has been very patient.

[Graham Stuart]

. The hon. Member is being most generous in giving way. He is a fair-minded man, so, on outcomes, I am slightly surprised that he picks this figure of 1 million more people in work; the numbers from His Majesty’s Revenue and Customs show that the payroll has reduced by 165,000 people since July 2024, and that the number of unemployed people has gone up by 225,000. In fairness, would he make sure that he does not just pick the one statistic that he thinks helps his argument?

[Dr Sandher]

I choose to use the labour force survey statistic because it includes both the self-employed and those who are low-paid and do not appear in the PAYE figures. I pick that figure because it is more comprehensive, and I believe it is more correct, as it includes everybody in work.

I want to briefly pick up the point about unemployment. The right hon. Member is right to say that both employment and unemployment have increased, but that in part is good news; it is because those who were economically inactive are now seeking work, so they are now in the category of “unemployed”, rather than “inactive”. We have more people in work, and more people looking for work.

Our argument is that, for businesses to create prosperity, they need not just lower taxes—I take the Opposition’s point on that—but the sales and the foundations to create prosperity. They need a healthy workforce. That is why we are investing in the NHS and waiting lists are falling. They need good skills, which is why the number of apprenticeship starts in this country is such a focus for this Government. They also need lower energy costs, which means providing home-grown, cheaper, cleaner energy. Those things help employers produce more in this country, and help businesses hire more people.

[Dr Luke Evans]

I am very grateful to my Leicestershire colleague for giving way. Could he point to where in the Budget Loughborough cafés or restaurants will get specific support with their energy? The British industrial competitiveness scheme is only for manufacturing, and all the tax levies that are coming off bills—the carbon taxes, the green levies—will not do so until 2028. I am not aware of any support specifically for cafés in Loughborough or restaurants on his high street. Am I wrong?

[Dr Sandher]

As the hon. Member will know, we are also freezing rates, but on a personal note, I do everything I can to support every pub in my constituency, because that is the service we Labour Members believe in.

We know that our approach, our philosophy and our moral aim leads to material prosperity because we have seen it before. We saw Attlee create collective prosperity after collective sacrifice, and Blair and Brown renew a nation after 18 years of Conservative Government. We see how our aims lead to better outcomes. Labour Members believe that our country thrives when everybody thrives. Businesses do well when everybody does well—when the young person who leaves school knows that they can get a good job in a local business; when that business can hire them, because it knows that they have the skills that it needs; and, more importantly, when the business knows that consumers can buy its goods, because we are making life affordable for all. That is how we Labour Members are creating jobs and helping business people like my mum and dad.

17:10

[Priti Patel (Witham) (Con)]

It is a pleasure to speak in this debate, and to listen to a range of views, but I genuinely think that Government Members should begin with an apology to employers, for a number of reasons. First of all, the Chief Secretary to the Treasury insulted them all a few weekends ago, basically saying that employers are not working people. It was a flat insult to the millions upon millions of people in family-run businesses, probably just like the parents of the hon. Member for Loughborough (Dr Sandher), who just gave a lecture on his views about employment and employability.

Fundamentally, small and medium-sized enterprises—hard-working family-run businesses—have always been the backbone of Britain and the British economy. I have a lot of time for the Minister. He is a great survivor, and he deserves some kind of accolade for his long-standing defence of his Government’s tax-grabbing, job-destroying policies, and even for his references to fiscal discipline—we can talk about that—but the Government need to wake up to the adverse impact of their economic policies for employment. We see devastating impacts on small businesses across the country and their ability to function. They are working hard and putting in long hours just to keep the lights on and manage their cash flow. The Government need to demonstrate some humility and acknowledge that right now.

[Patrick Spencer]

I thank my right hon. Friend for her assessment of the performance of the Government Front Benchers—I tried to intervene on the Minister. I have serious concerns; the Minister said, at the Dispatch Box, “We kept our manifesto commitment not to tax working people.” He then said that they introduced a NICs increase for employers, but in the same breath, he said, “Employers are working people.” Do you not agree with me that the Minister clearly does not understand what a business is, and that, in increasing NICs, he has increased taxes on working people and broken a manifesto promise?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Once again, “you” and “your” are not to be used when referencing colleagues.

[Priti Patel]

My hon. Friend is absolutely right. I do not want to insult anybody, but it is important for Members to speak on these issues if they have credible experience of them—if they have set up a business and come from a business background. I am afraid that government has become a blunt instrument now. Things are far too binary. The Government are not even thinking through the overall impact of their decisions on local businesses, and then they come to the Dispatch Box defending broken pledges. This House should spend much more time talking about our pride in the nation’s businesses. They are the wealth creators and employers who give people a hand up in life. They give people economic security.

I will speak for my great county of Essex, because I do not think it gets enough airtime in this Chamber. We are a county of entrepreneurs. Despite the damage that this job-destroying, business-bashing, tax-grabbing Labour Government are doing to our economy, we are fighting hard to survive. We have a range of amazing businesses, and I will list them, because I think the House might have experienced some of the fine produce from Essex. Wilkin and Sons in Tiptree makes the jam that is in the Tea Room. Linden Lady chocolates, made in Copford, are sold in the House of Commons shop. There is a range of Essex farmers and food manufacturers, whom we all depend on. A colleague spoke about food security; that matters. Maldon Salt, a very famous brand, comes from my constituency as well.

On the Opposition Front Bench, my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) touched on pubs, salons and all those other employers that provide the gateway to jobs for young people. Those are the types of business that we must support—we absolutely need to give them a hand up right now. We need reductions in national insurance, and we must recognise that in a significant way. Businesses think that Labour Ministers have no idea about the fact that they are working 70 or 80 hours a week just to keep their businesses afloat. That work is to generate tax revenues that this wasteful and bloated socialist Government are, quite frankly, destroying in an unjustifiable way.

There must be a recognition, because businesses in my constituency feel let down by Labour and seriously want to fight back against the increase in national insurance, the red tape from the infamous Employment Rights Act 2026 and the taxes on family farms. Businesses are constantly facing a rising tax burden. Even the reliefs in the recent Budget, which Ministers want to gloat about, will not compensate for the overall pain that businesses are facing.

The Minister spoke about fiscal discipline, but fiscal discipline alongside high levels of borrowing and debt will not give the financial and economic stability that local businesses need in our country. Debt is not going down, and borrowing is going up. We know who pays for all that: businesses pay for it all. Ministers come and go—we all know that—and they can make whatever defence they wish, but the reality is that it is hard-pressed taxpayers who are constantly filling Government coffers right now for higher debt and borrowing. Businesses need some latitude and leeway—they really do. I implore and urge this Government to reconsider many of the policies that they are putting in place.

There is a silver lining; it is called the Finance Bill. When that sees the light of day on the Floor of this House, it will give Members the opportunity to challenge the Government to give headroom and breathing space to businesses by lowering taxes, being more responsible on national insurance contributions and freeing up businesses to employ more people. Importantly, it will give Members the opportunity to challenge the Government to give the British people the freedom to succeed and live their lives, completely unshackled from the burdensome taxes that this Government are constantly putting on them.

17:17

[Alice Macdonald (Norwich North) (Lab/Co-op)]

Like the right hon. Member for Witham (Priti Patel), I start by recognising the many amazing employers and businesses across my constituency, from large household names such as Aviva, to local SMEs, including MSI Defence Systems, and local retail and hospitality businesses that are the backbones of our high streets, such as Café 193. I recognise the pressures on employers and businesses, including in the face of external shocks. I will focus on relaying some of the messages that I have heard from businesses and employers in my constituency.

I welcome the targeted measures in last month’s Budget, as the Minister set out, including the business rates relief. That will mean that more than half of all retail, hospitality and leisure businesses in the east of England will pay no rates at all, and another 900 businesses in Norwich and 400 in Broadland will benefit from frozen rates.

I recently attended a roundtable hosted by the New Anglia Advanced Manufacturing and Engineering partnership. Many of those innovative businesses are creating products and jobs in Britain—including for my constituents in Norfolk—but they face challenges. One of the biggest challenges they raised, which will not surprise the Minister, was rising high industrial energy costs, which are affecting trade and regional growth. I welcome the action that the Government are taking with BICS, but I urge the Minister to set out what more we can do to support manufacturing businesses such as those at the roundtable.

Today, we have had good news in the press that £12 billion of investment has been secured to build the Vanguard East and West wind farms off the coast of Norfolk. Those schemes alone will create more than 2,400 jobs, and I want as many of them as possible to be for people from Norfolk. We have to ensure that employers can also benefit from the supply chains. Norfolk has many strengths; renewable energy is just one of them. We have a £20 billion economy and strengths in energy, agrifood, advanced manufacturing, financial services and world-class research, such as at the Norwich research park. When the new Prime Minister came into office, the Norfolk and Suffolk business boards wrote to him together to set out how Norfolk and Suffolk can help to power, feed, connect and innovate the UK’s future. That is the ambition that I have heard from businesses.

I have also heard businesses’ requests that the Government work with them in three key ways that will benefit employers in Norfolk and Suffolk. First, as we have touched on already in this debate, is the importance of backing nationally significant infrastructure projects such as the Bacton energy hub and the desperately needed upgrade at Ely and Haughley junctions. Despite our differences across the House, I know that MPs across East Anglia really support those investments because of the impact they will have on businesses in the area. Secondly, through innovation we could be the leading testbed for new technologies, building on world-class assets such as the Norwich research park. Thirdly, by aligning skills, innovation and industrial policy, we will help businesses to invest, create jobs and develop the workforces they need.

Another clear message I have heard—we have touched on the need for stability—is about devolution and the opportunity it presents for employers and businesses. I welcome Norfolk and Suffolk being on track for devolution. This week, the Reform-led Norfolk and Suffolk county councils have finally reached an agreement on the terms of a devolution deal, which the Government are backing with about £37 million of investment each year. That cannot come soon enough; we need that deal and the associated funding in place as quickly as possible so that we can invest in infrastructure, skills and economic growth. It is really important that employers and businesses’ voices are heard and that they are instrumental in seeing how that investment is spent.

I will not pretend that I have not heard messages from businesses about some of the costs around labour. The Minister has set out why those decisions have been made, and I will continue to listen to the concerns that businesses raise with me and relay them back to Ministers.

Finally, I want to focus on young people, who have so much to offer employers. Far too many young people are not in education, employment or training—something we will be focusing on even more in the next few weeks. I welcome the action the Government have taken, including the jobs guarantee and the jobs grant to back employers who give a chance to young people who have been out of work for six months. I am working with the local DWP office, employers and other local organisations on an initiative called Opportunity Norwich to support young people into work.

No one is pretending that this is an easy situation and that there have not been difficult choices to make. The Budget and the measures the Government have set out are a welcome step forward. As a Norwich MP, I am proud of our city and our county of Norfolk. We are a place of innovation, hard work and creativity, and I am proud of our employers who have consistently shown themselves to be genuine community partners and to bring so much benefit to our local area. I will continue to advocate for the support they need to invest in our region, grow our economy and deliver opportunities to my constituents. I am sure that the Minister will respond in detail to many of the points raised, but I want to urge him to work with us in Norfolk and Suffolk to ensure that as we move forward on our journey with devolution, our employers and, indeed, employees thrive.

17:23

[Stuart Andrew (Daventry) (Con)]

It is a pleasure to contribute to this debate and to follow the hon. Member for Norwich North (Alice Macdonald). I heard a collective thud when the Minister was speaking earlier, which must have been the jaws of businesses in my constituency hitting the floor, because there was a real lack of understanding of the real pressures that businesses are facing.

One thing I love about being a Member of Parliament is spending time going around the constituency, and I always make a point of visiting businesses—be they small, medium or large—to hear directly from them their concerns, and there are many of them. I also hold a regular business club, and it is becoming increasingly difficult in those meetings to give businesses any meaningful answers of reassurance because of the real problems they are facing. I am always struck by just how hard these people are working to keep their businesses going. They are part of not just our local economy, but our community. They create the vibrancy of our villages and our towns and are places where people can meet and congregate. These things are really important. We heard a moment ago about tech and innovation; even in the smallest barn on a farm, some really amazing tech companies are being created, and that is something we should be celebrating.

Employers want their businesses to be successful, and having a great team of employees is a keen part of that. Employers invest not only financially but emotionally in their business. I hear time and again that the costs of running a business are making that increasingly difficult. The spokesperson for the Liberal Democrats, the hon. Member for St Albans (Daisy Cooper), was right to say that a multitude of tax rises are creating that difficulty—not least the Government’s increase in employer national insurance contributions.

The Government will point to the increase in employer allowance, and I appreciate that it helps some businesses, but it does not change the fundamental fact that many employers are facing higher costs just to employ the same people and local businesses are having to make really difficult decisions. Time and again I hear it. I was depressed to hear at one event about a business whose owner had started it three years ago on his own and that was about to employ three people, but the national insurance contribution rise meant that that simply was not affordable any more.

It is not just businesses that are affected. Time and again, when I was a shadow Digital, Culture, Media and Sport Minister, I tried to raise the impact on the charities sector, where I spent 16 years working before entering Parliament. I know the pressures that they face. I particularly worked in hospices, which can only provide care if they can afford to employ the people to look after their residents—children, in the case of the hospice I worked in. The Government will cite their £100 million of capital funding for hospices, but they cannot fund nurses with bricks and mortar. The reality is that these workers should not be facing these tax rises, because they are picking up a massive part of public sector work in caring for some of the most vulnerable people in our constituencies.

We have many wonderful charities in my constituency that provide important services to people who need them. They are employers too, and they still have staff to pay. When I speak to the people who use these charity services, it is not the charity that they talk about but the staff. That is why we must think about those charities as well.

[Mr Lee Dillon (Newbury) (LD)]

In my constituency of Newbury, a volunteer centre survey found that charities needed to raise an additional £300,000 a year just to stand still. Does the right hon. Member agree that charities’ time should be focused on serving our constituents rather than worrying about fundraising off the back of Labour’s tax rises?

[Stuart Andrew]

The hon. Gentleman is right. I was the head of fundraising at the hospice, so I know that it takes some time to plan a fundraising strategy. If a charity suddenly finds overnight that it has to find all that extra money, it will be almost impossible, and often they will end up having to eat into reserves, which is not a good thing.

[Gareth Snell]

I want to go back to the point that I raised to the shadow Secretary of State. The right hon. Gentleman was here when the health and social care levy came around. At no point did the Conservatives attempt to exempt charities and hospices from that tax rise. Why was it appropriate to keep them in scope when he was proposing it but completely inappropriate now?

[Stuart Andrew]

I point the hon. Gentleman to his party’s own manifesto. Labour promised that it would not do it. That is the reality of it, and that is the challenge that we are putting to this Government.

I really am worried about the opportunities for so many young people. We all remember how important getting our first job was. Mine was being a waiter at a hotel in Anglesey. It taught me about independence, it built my confidence, and it gave me real experience of working, sometimes with very challenging customers. It was really important to build that confidence. But it is becoming increasingly difficult for young people.

I know that employers in my constituency want to give young people those opportunities, but there is a cost involved in taking on and training someone. I spoke to one of the pub owners in my constituency who said that he always used to employ 14-year-olds to wash dishes, and when they got a bit older they would work as a waiter or waitress in the restaurant, and when they were a bit older still they would work behind the bar. As a result, he had trained staff, when they came back from university at Christmas or summer. He simply cannot afford to do that any more because of all the additional costs. Instead, he is employing older people. That is a real problem that we have got to address.

Many people who have just finished university or further education will be trying to get their first job, often without much experience. We should be doing all we can to encourage employers to give them that chance. That is why I support the Opposition’s proposal to halve employer national insurance contributions for under-25s, which would help businesses to plan ahead when taking on younger employers, making it more affordable to employ those who are just starting out. If we do not address this problem, there is a real danger that young people will find themselves permanently stuck in unemployment.

I will make another point to conclude. Some Members talk about employers as though they are somehow separate from working people, but when I visit businesses across my Daventry constituency, I meet people who are working extremely long hours and have often had to put their savings into getting the business up and running in the first place and to keep it afloat. They are serving customers, they are dealing with suppliers and they are doing the accounts. Sometimes they are worrying about whether they will have enough money left to pay themselves, let alone their workforce. They say to me that they wake up in the middle of the night worrying about where the money will come from. I do not think anyone could seriously suggest that those people are not working hard. They are making great personal sacrifices. We should be proud of everything they do and give them encouragement whenever we can. We should welcome the fact that they are providing employment for other people.

I want to see businesses in my constituency and across the country doing well, our local charities continuing their important work, and young people having the opportunity to get into employment, but we must recognise that increasing the cost of employing people has consequences, particularly for smaller businesses. Halving employers’ national insurance for under-25s would be a practical way of helping businesses give more young people a chance in life and the start that I enjoyed. For those reasons, I will happily vote for the motion.

17:32

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

I want to speak in the debate because Cornwall probably has more self-employed and small businesses than many other places. Small businesspeople hold businesses together and employ people. They take on the responsibility, risk and privilege of creating jobs for other people. I considered myself as much of a working person when I was an equity partner in a law firm that employed 50 people as I did when I was a teaching assistant.

Small businesses do an incredibly important job. I want to talk about a few of them in my constituency. Richard Wakeham at Treveague campsite in Gorran employs six people. We also have Mariners and Harbour Lights, our brilliant fish and chip shops; Bread & Butter in Truro; Fudge & More in St Mawes; and Windjammer, with Oliver running a number of establishments brilliantly. Of course, we have our farmers—I went to see one in Restronguet at the weekend—and then we have publicans like Mark Holden, who runs a number of pubs and has built his hospitality business over 16 years. For many years, Mark has worked hard with young people, setting up apprenticeships and giving training to dozens of Cornish young people. He is working closely with the Government and the Minister for Skills to set up skills training in hospitality down in Cornwall.

The motion concentrates on under-25s, so that is what I will focus on. Our young people have struggled, with rising numbers of NEETs, but that has been over a long time, not just the last two years, as the Milburn review made clear. Alan Milburn said that this has been a growing issue, and among the reasons for that are: how SEND provision in schools dropped off under the previous Government; covid, which was a really big issue for young people and hit their confidence; and mental health support, with child and adolescent mental health services having been decimated in the last 15 years.

As has been pointed out a number of times, employers pay no national insurance contributions on earnings of up to £50,270 for under-21s, nor for apprentices under 25. That makes a saving of up to £6,790 per employee per year, which was worth £2.5 billion in the last year.

Some of the Opposition Members have talked about the minimum wage rises. When the Labour Government first brought in the minimum wage, the figure was similar for everybody over 18, and businesses did not shut down and the economy did not stop, as the Opposition said would happen. When they got into power, they split the minimum wage into three or four different age brackets. That caused an awful lot of problems and inequity, because a 20-year-old’s rent is not cheaper than a 26-year-old’s. In trying to converge those wage differences, we are trying to reintroduce that fairness and the idea of the minimum wage in the first place.

This Government have introduced other measures to help small and medium-sized employers take on young people: £2,000 for SMEs that hire apprentices between 16 and 21; free training for under-25 apprentices; the youth jobs grant, with £3,000 for every young person hired; and the jobs guarantee, which is coming in, for fully subsidised jobs for six months, with the Government covering 100% of the employment costs. There are a thousand people in that first pilot.

There is a lot of work to be done. Under-25s have struggled for many reasons over a number of years, not just because of the job market. What we have to do, and what the Milburn review will make very clear in the next few weeks that we should do, is support those young people to overcome their barriers and help employers to employ them again.

16:19

[Patrick Spencer (Central Suffolk and North Ipswich) (Con)]

I rise in support of the Opposition motion. I rise to criticise this Government’s attitude towards employers, their disregard for the reality of life running a business, their nonsensical approach to tackling poverty and social mobility, and their maddening approach to the economy.

The reality is that a job is the foundational unit in an economy. It is the immortal gene that is fundamental to economic evolution, growth and prosperity. I say that because a job is, first and foremost, an income. An income keeps a roof over someone’s head, food on the table and the lights on. An income is spent and then passes through the economic supply chain, creating more value and, yes, more jobs. A job is not just an income, however; it is a source of pride, purpose and identity. It offers structure, routine and the opportunity for a sense of self-achievement. It is a source of social inclusion, friendship and support. It is also a stepping stone. The job someone has today connects them to the job opportunity that might come up tomorrow, next week or next month. Without a job today, the probability of being in work in future diminishes greatly.

As a result of those three realities, work is indeed the best route out of poverty and into prosperity, not just for the individual but for the population as a whole. Look what happens when work is degraded. All the evidence shows that long-term unemployment is synonymous with depression, anxiety, social isolation and a shortened life expectancy. The Health Foundation found that people out of work and on benefits are five times more likely to report poor health than those in work. And yet, Members on the Labour Benches are obsessed with talking down the importance of a job. They talk of bad jobs and unfulfilling work. The reality is that the phenomenal growth in employment we experienced between 2010 and the onset of covid coincided with a massive improvement in living standards and a fall in material deprivation.

If Members do not believe me, they should read the report from the Institute for Fiscal Studies. The share of children living in material deprivation fell by a quarter in the six years leading up to the pandemic. By 2017-18, severe material deprivation among working-age families was roughly one fifth lower than it was in 2010. Pensioner material deprivation fell continuously from 2010 onward. Why? Because rising employment and earned income, offset the cuts to welfare. That is what we delivered in government: a high-employment, low-welfare economy, which is in stark contrast to the high-unemployment and high-welfare economy that this Government aspire to.

The Government talk about hope. The Conservatives in government gave people hope of a life off welfare and in work. Four million new jobs were created between 2010 and 2024—4 million people who otherwise would have been left languishing on benefits, 4 million people who could go home on a Friday proud of their contribution to the economy, their family and themselves. The Labour Government cannot help themselves but steam in and ruin the jobs market for so many.

Nowhere is that more the case than in their deluded decision to increase national insurance contributions for employers. Can you imagine the contorted logic of saying, “I am from the Labour party, the party of work, and we want jobs for all, so we have decided to tax the people who create the jobs in the hope that taking money out of their pockets will inevitably mean they will have more money to put into yours.” It does not make any sense.

This Government do not make any sense. They are for Europe, then they are against it, then they are for it again. They want to invest in defence, then they do not, then they do and now they do not. They embarked on the famous prawn sandwich offensive in advance of the last election, only to turn around and backtrack on all that pro-business sentiment. They promised they would not tax working people, then they did.

In the process, we saw a Treasury Minister go on TV and refuse to recognise entrepreneurs, business owners and decent people who have taken a risk to start a business as working people. Well, say that to Jason and Kate of Trulock & Harris in my constituency. Tell Roger, the postmaster in Framingham, who had to put up with Storm Babet but kept on going, that he is not a working person. How about Will, who runs the Greyhound in Pettistree, one of my favourite pubs? People travel from across the country to go and visit him. Tell him he is not a working person.

Tell that to Debbie, the landlady at the Kesgrave Bell, who has served that community for a generation and is loved by her customers. Is she not a working woman? Tell my friend Charlotte, who works day and night on her business selling paper and card products and has done for six years, that she is not a working woman. How about Darren from DK9 in Blakenham? Our children are in the same class at school. He invested in rescue teams that helped find little Noah Woods in Brantham earlier this year. Is he not a working man as well? Or perhaps the team at Realise Futures in North Ipswich who have set up a community interest company supporting disadvantaged people into work—are they not working people either?

These are the people we on this side of the House stand up for: the workers, grafters, innovators and disruptors who work themselves to the bone because they want to make payroll for their staff and do not want to let their customers down. This Government could help them. It is not too late. Cut their taxes, reverse the NICs increase introduced by the right hon. Member for Leeds West and Pudsey (Rachel Reeves) and help people get a job.

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I call Danny Kruger, after whose speech the time limit will drop to six minutes.

17:42

[Danny Kruger (East Wiltshire) (Reform)]

I want to acknowledge the contributions made by Labour Members, because I think they have clearly articulated their philosophy of growth. In a sense, it is coherent and respectable, because what they believe is that the economic growth is driven by state action. It is true, and they often make this point, that we need the rule of law, infrastructure and proper investment in people, in places and in the sectors that need help. Those are legitimate arguments, but the fact is that our economy is built on businesses. It is built by businesses—particularly small businesses—being free to operate themselves. The prosperity of this country historically was created by free men and women trading with each other with minimal Government regulation. Yes, this took place in a safe and rule-bound world, but with rules that were light and predictable and without excessive taxation.

I think of Marlborough, in the heart of my constituency. This wonderful ancient town was given its charter 800 years ago, and it was a successful trading community on the road between London and Bristol. It was built on the textile trade, with amazing wool manufacture and processing. That is what made it rich. I was honoured to join the procession of the town council to the war memorial on Sunday—we love a procession in Marlborough—and to walk behind the robed councillors and mace bearers proclaiming the ancient wealth of the town.

The economy of Marlborough now largely involves retail, hospitality and tourism. As the procession walked into St Mary’s church, we passed Franklyn’s Bistro, a restaurant I know well—I was in only a month or two ago—and I saw that, to my great regret, it has now closed altogether. This happens in hospitality. Restaurants open and close, but there is something happening in Marlborough and across my constituency and across the country, which is that hospitality is absolutely on its knees.

Worst of all, Marlborough received the terrible news this week that the Polly Tea Rooms had closed down. It was an institution in the town, open for 114 years and surviving two world wars and all the economic ups and downs of the last century and more. This large shop front on the high street had been selling tea and cakes and lunch and dinner for all those decades.

I was very proud to be able to support the Polly during covid, and I was very proud that the owner said, “You have saved the Polly,” because I helped him with managing his application for a covid loan, but I am afraid to say that it is all over.

I want to quote the notice that the owner, David Clarke, put out:

“I have decided to close the Polly Tearooms with immediate effect.

I was hoping that the budget…would offer some help to businesses like ours, but the result was the same as every budget this Government has brought in, quite the opposite…Fuel costs and business rates have also been increasing all of the time, but with the cost of living crisis as it is, we simply can’t increase our prices to our customers and expect them to still come in as often as they did in the past.

The Chancellor John Healey spoke in his budget…of ‘hope’ for the future. He said the word so many times, I lost count. He sounded like Mr Micawber from David Copperfield, hoping something will turn up.

But that is all this government has—hope. No plan for growth, no idea what to do, just hoping something will turn up, rather than creating the environment and conditions to make the economy grow. They are spending far too much money on the wrong things, and then taxing the very people who would be able to create growth to the level that they have nothing left to achieve any of it. The measure for the government investing in anything should be how will this improve our economy. They should apply this test to every penny they spend—literally every penny. But this of course is not what…Labour…do.

So, along with literally hundreds of other businesses, I have no option but to give up trying to make it work.”

I could not put it better myself. I am the son of a restaurateur, so I know how people pour their hearts into these businesses. I am so sorry for the Polly, Franklyn’s Bistro and the other hospitality businesses in my constituency that are closing.

What should the Government do about it? My right hon. Friend the Member for Newark (Robert Jenrick) has set out a series of measures on behalf of my party: we would raise the VAT threshold from £90,000 to £150,000 to support those small businesses to grow, take on more work and take on more staff; we would end tax on overtime; and we would reverse the employer national insurance rise back to 13.8%. On hospitality, we would cut VAT to 10%, we would cut beer duty by 10%, we would progressively over time abolish business rates for pubs, and of course we would repeal the job-destroying Employment Rights Act 2025.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I am really sad to hear about the Polly Tea Rooms in the hon. Gentleman’s constituency, but has he spoken to the IFS about cutting VAT? The IFS has said that cutting VAT would not generate the income that people promise, and I think the Treasury says the same. For businesses like the Polly Tea Rooms, I do understand the issue of the national insurance rise in the Budget of two years ago, but the other issue is the cost of living crisis, which is driven by something we have not spoken about in this debate at all: Trump’s war on Iran. Does he recognise those wider impacts on the economy as well?

[Danny Kruger]

I do not accept for a second that cutting VAT on hospitality would not be of great benefit to those businesses. I am astonished to hear that the IFS might have said such a thing. VAT is one of the major costs that businesses have to carry, so clearly a cut in what is essentially a sales tax for retail businesses would be helpful.

I will speak briefly about the challenge of the cost of living and energy costs in particular, because the issue for retail businesses like the Polly is not just about the costs that they have to carry; it is about the demand for their business being reduced because of the cost of living that customers are carrying, as Mr Clarke said in the statement I read out. What the Government should do is not simply give people more money to spend, but ensure a stable economy and a stable society, and then leave people with more of their own money that they can spend on our high streets.

That is why my party proposes raising the personal allowance for individual taxpayers to £15,000. That would be a tax cut of £500 per person for over 40 million people in this country. On the point made by the hon. Member for Edinburgh South West (Dr Arthur), I say that we would take £250 off household energy bills, which is the right response to the accelerating energy costs that have been caused not just by global instability but by Labour’s obsession with net zero.

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. There is now a five-minute speaking limit for Back Benchers.

17:49

[Paul Holmes (Hamble Valley) (Con)]

British businessmen and women are integral to the growth and sustainability of our nation’s finances. A nation’s economic strength is measured not simply by the size of its Government, the amount it spends or the number of regulations it imposes, but by the confidence, enterprise and ingenuity of its people. It is built by those who take risks, start businesses, employ others, run shops, run pubs, manufacture goods and provide services. It is built from the ground up.

Yet at precisely the moment when we should be strengthening the foundations of our economy, this Government are placing an ever greater pressure on the very businesses that sustain it. I fear that this Government simply do not understand the reality of running a business in Britain today. Indeed, we have seen that in the last couple of weeks. Take the comments by the Chief Secretary to the Treasury that employers are not working people. I do not think a political soundbite has resonated with so many across the country for a long time. I cannot overstate the hurt and insult that that comment caused to the men and women of this country who have had an idea, who get up early, who have gone out and built something, and who have given their employees a start in life, such as a young apprentice they have taken on, even if it means that they have to reduce their own pay to keep open or keep operating. They are the first ones out to work in the morning and the last ones home in the evening. Those comments hurt people, and although the Minister has apologised, I believe that she perfectly summed up the dire situation that this Government have caused for businesses up and down the country.

At the autumn Budget in 2024, the then Chancellor announced an increase in employer national insurance contributions of 1.2 percentage points alongside a reduction in the threshold at which employers begin to pay national insurance from £9,100 to £5,000. That happened despite Labour having promised that it would not do it. Ultimately, businesses have three options: absorb the additional cost, pass it on to their customers through higher prices or reduce their costs elsewhere. Both the Centre for Policy Studies and the Office for Budget Responsibility warned that those measures would lead to higher consumer prices and lower nominal wages. They have affected 1.2 million employers, and 940,000 people have lost out financially. They leave the average employer facing a net increase that will see their liabilities rise by approximately £26,000. Those are not abstract figures; they represent real businesses, real jobs and real decisions about whether to invest, expand or even remain open.

I want briefly to bring the debate closer to home by highlighting the experience of some local businesses in my constituency. Cherrywood Kitchen in Netley, run by Jason Hardcastle, is a small hospitality café that provides local employment and contributes to the community. He has seen a clear impact on the operating costs of his café since 2024, with national insurance contributions rising by over £2,000, VAT liabilities increasing by £4,000 and a weekly wage cost now exceeding £12,500. His cafe is busy. He has seen turnover increase every year that he has operated, but the actions of this Government have meant that he now takes on fewer people and does not take any profit home at the end of the week.

Another local business owner, Matthew Boyle, operates a number of excellent hospitality venues in my constituency, employing local young people—people who the Government claim they want to support. He spent 23 years building his hospitality business, which now employs 175 people, but this Budget and this Government’s actions will add £230,000 of additional annual costs to his business.

[Stuart Andrew]

My hon. Friend makes an important point. Is he struck, as I am when I meet these business people, by how physically broken they sometimes look because they simply do not know how they are going to survive? Their life’s work and their dreams have been torn to shreds by this Government.

[Paul Holmes]

My right hon. Friend makes an excellent point, and I go through the same thing as him. One of the most frustrating things on a Friday, when I go to see businesses in my area, is that I have no hope to give them because this Government have given them no hope. The Government need to listen to business people like Matthew who create the jobs and the wealth in the country that they love spending so much.

Ministers must recognise that businesses are not simply a source of revenue for the Treasury; they are the wealth creators of our economy. That is why I am delighted that the Leader of the Opposition has set out our party’s policies on how we would help to meet the challenge that the Government have caused including, as my right hon. Friend the Member for Daventry (Stuart Andrew) said, by halving national insurance contributions for people aged 21 to 24, saving £1,500 for employers, and abolishing business rates for hospitality. I also believe that we need to consider a VAT cut for hospitality businesses.

If we want thriving high streets, more jobs, better wages and a stronger economy, we must start by making Britain a better place to do business. Employers are working people because they create prosperity—not the Government, and certainly not this Government who are actively making the situation worse. It is not the Government who create prosperity; it is the people and businesses of this country, and they deserve better than what they are getting under this dire Labour Government.

17:55

[Mr Peter Bedford (Mid Leicestershire) (Con)]

Before I came to this House, I spent 17 years in the private sector as a chartered accountant, working with businesses in the food and drink, construction and utility sectors. I sat with owners as they went through their accounts, line by line, working out whether they could afford to take on one more person. When this House talks about business owners, I think of people who put their savings and even their own homes on the line so that others can earn a wage. There are a great many of them. At the start of 2025, there were 5.7 million private sector businesses in the country. Small and medium-sized firms provide almost 17 million jobs—almost three in five private sector jobs—and family firms sit at the heart of that, employing almost 14 million people in the country.

The value of a successful business goes far beyond numbers. In my constituency of Mid Leicestershire, there is David North in Rothley, a family deli that has served the village for more than 50 years; Barrie Stephen in Anstey, a salon that started in one village and has trained stylists who went on to open businesses of their own; and S. J. Langton in The Square in Glenfield. Businesses like those give a teenager their first job and offer the apprenticeship that lets a young person build a career without leaving home. They are the shops that keep our villages alive, but how have this Government treated them?

In the Government’s first Budget they raised employer national insurance contributions to 15% and cut the threshold to just £5,000. The accountancy firm UHY Hacker Young found that national insurance bills for employers rose by almost £28 billion in a single year. That is more than the Government’s own forecast. When we tax something more, we get less of it. Today, small firms planning to cut jobs outnumber those that are planning to hire by more than three to one. Then came the Employment Rights Act 2025, with new costs and new risks for every firm and every new hire. Then there were the business rates, and the results were entirely predictable. The Federation of Small Businesses confidence index fell to minus 71 at the end of last year. The business confidence monitor of the Institute of Chartered Accountants in England and Wales has now been negative for seven consecutive quarters.

The headwinds are getting stronger. Inflation rose to 3.5% in September, with motor fuel up by almost 30% on the year. The OBR has cut growth forecasts for next year to just 1%, and last week the Bank of England raised interest rates for the first time in over three years. Small firms looked to last month’s Budget to help, but the verdict of the Federation of Small Businesses was blunt. Those firms got

“nothing to ease sky-high energy bills, and nothing to make hiring someone more affordable.”

Employer national insurance remains at 15%—the jobs tax remains.

The Conservatives take a different view: Governments do not create growth, businesses do. Our job is to back businesses and then get out of their way. That is why we will scrap the family business tax and the family farm tax. We will introduce a permanent 100% business rates relief for retail, hospitality and leisure, cutting bills for a quarter of a million pubs, shops and high-street businesses. We will halve employer national insurance on jobs for those aged between 20 and 24, because the cost of giving a young person their first break has soared under this Government.

[Ben Maguire (North Cornwall) (LD)]

Will the hon. Member give way?

[Mr Bedford]

I will not. We would repeal Labour’s Employment Rights Act 2025, replace IR35, review Making Tax Digital, scrap the packaging tax and simplify tax for small businesses and the self-employed.

I started working in my early teens, because if I wanted something, I had to earn it. This is the bargain that every business owner makes: they take the risk and do the work, and all they ask is that the Government do not stand in their way. Back them, and they will build this country. Tax them into retreat, and they will stop. The Government must decide which side they are on.

17:59

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

“Yes”—it is a small word, but it is absolutely crucial to creating a successful economy. Yes to that first investment; yes to opening that business; yes to giving that young person a job; yes to taking that risk; yes to expanding; yes to investing—all those things are so crucial to getting a successful company and a successful economy. However, the Government cannot build an economy by making it harder for businesses to say yes. The economy responds not to a Prime Minister saying, “We must have growth,” and his intentions, but to the incentives that Ministers put in place—or, in this case, the disincentives.

We have heard it mentioned before—in relation to the jobs guarantee, for example—that the Government are trying to incentivise people into work, while at the same time disincentivising businesses from taking on people. That is like pressing the accelerator while putting on the handbrake. The Government have given so many businesses a reason to say no. The NICs increase, the business rates increase, the minimum wage increase and the red tape in the Employment Rights Act are a toxic concoction for our businesses, and are having a devastating effect.

Let me take the examples of the café in Burbage, the restaurant in Barwell and Earl Shilton or even the gym in Hinckley. They have had the jobs tax. They have had the minimum wage go up. They have had employment red tape added. They have had business support changed and taken away. They have had business rates go up. They have had their energy bills go up—there was no support in the Budget for that. Is it any wonder that the ONS has said that from October 2026, some 16% fewer hospitality businesses have been created? Across the entire economy, business creation is down by 3.5%.

Let us turn to the wider argument about the environment. As my constituency neighbour, my hon. Friend the Member for Mid Leicestershire (Mr Bedford), has said, business confidence has been down for seven consecutive negative quarters. Businesses are losing the confidence to say yes. Why? Because of the employment costs. In a report by the Institute of Chartered Accountants in England and Wales, 53% of businesses cite labour costs and 41% cite taxation. That figure is double what it used to be.

Young people have been mentioned a lot. There are 981,000 people aged between 16 and 24 who are not in education, work or training. That is 30,000 more than last year. It is almost 1 million people, for the first time since 2013. That compares unfavourably with the likes of EU countries; for the first time ever, we are above the EU average.

Why does all this matter? The contribution from my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) from the Opposition Front Bench got me thinking. We can count the trees that have fallen, but we cannot see the forest that has never been planted. What do I mean by that? We can see the 12,000 job losses in Poundland. We know that Morrisons has had to lay off 5,000 people. Jaguar Land Rover has had to lay off 4,000 people. Claire’s on the high street has had to lay off 2,500 people. Whitbread, which runs Premier Inn, has had to lay off 3,800 people. We can also count the young people who are going abroad. We know that 250,000 people went, of whom two thirds were under the age of 35. But what about the businesses that never opened? What about the investment that was never made, the job that was never offered, or the apprenticeship that was never started?

The cost of this Labour Government’s “no” economy is so great. This is about the opportunity that has never been taken, and the future that we could have had. That is not recorded in any figures. No matter how hard this Government tell businesses to hire, they cannot force people to be hired, or force young people to stay. We cannot build a “yes” economy by giving businesses thousands of reasons to say no. That is why I support the motion.

18:04

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

It is a pleasure to take part in this debate, Madam Deputy Speaker.

I started my business at the end of my first year at university. By my third year, it was paying me more than I thought any employer sensibly would—that is, if anyone would be foolish enough to take me on in the first place—so I carried on building that business, with no business experience and no knowledge of how to do anything. I had to learn everything from scratch. Lloyds became my business bankers, and although they were supportive, the sight of the black horse on an envelope was enough to make my palms sweat from sheer stress. All it takes is for the bank to withdraw its support, and your whole business—all your hours, hopes and dreams—are gone.

The Minister is unusual in having some feeling for and understanding of private business. One of the problems is that Government Front Benchers in particular, and the parliamentary Labour party overall, do not. If you do not understand the dynamics of a business—the pressure and the reality of trying to build a business—you will not understand why people were outraged by the Chief Secretary to the Treasury’s remark about employers not being working people. That outrage is not fake; it is real and visceral. Their sense of disappointment in their Government is so strong. Many of them will have voted for this Government, based on their promise that growth would be the No. 1 thing, and that tax would not be put up. It sounded great in the manifesto. Those people feel betrayed by the lack of understanding and empathy for the fact that they are risking everything, including the home that they share with a spouse, who has to sign up as well. They have put all that on the line to create a business. That is the only way to create wealth. The state facilitates—through the rule of law, decent health services, education and the rest of it—but it does not deliver wealth. That can only come from the private sector, and that failure of understanding and personal experience has led to this desperate situation.

The previous Chancellor, the right hon. Member for Leeds West and Pudsey (Rachel Reeves), made a manifesto pledge that must have been made because some public relations person told Labour, the weekend before the election, that if it did not make that pledge, it might not win, and not to be complacent: “Let’s promise not to put tax up on working people.” The Government then broke that pledge by coming up with the clever wheeze of putting tax up on employers, with no understanding of what that would do.

The arithmetic is really depressing. The £26 billion hit to the economy meant that there was not £26 billion to spend on the NHS. It turned out that the increase did not even raise the £16 billion that, according to the OBR, it should have, once the cut in corporation profits and so on was accounted for. The Government then had to compensate the public sector, which brought the figure down to £11 billion or £10 billion. Then they said, “Oh, no, hospices and GPs are not technically part of this,” so they had to find more money. Single-digit billions is all that the Government got for putting a £26 billion or £27 billion brake on the economy. It is utterly insane.

It is noticeable that smaller and smaller numbers of Labour MPs want to come to the Chamber to defend that decision. I congratulate those who have, on their party loyalty if nothing else, but when I talk to Labour colleagues outside this Chamber—if I have a chat with them in the bar, for example—I struggle to find any Labour MP who says, “That was a really good idea. That was the best way of raising money.” They will defend the need to raise money to stick into the health service, repair the “dreadful 14 years” and so on. They buy into that still, but they do not think that putting tax up on employers was a clever way of raising money, because it did not raise very much, it was an enormous brake on the economy, and it has been devastating. It has been most devastating for young people.

[Alistair Strathern (Hitchin) (Lab)]

indicated dissent.

[Graham Stuart]

If the hon. Gentleman wants to intervene on me, I would be delighted to let him come in.

Yesterday, the deputy governor of the Bank of England said that one of the reasons why youth unemployment has gone up faster than unemployment generally—remember, because of that gigantic brake on the economy, overall unemployment has gone up by 250,000 under this Government—was the cost of employing young people, including because of the minimum wage, the jobs tax and so on.

[Dr Luke Evans]

Would my right hon. Friend care to comment on the state of the graduate market, too?

[Graham Stuart]

The situation is affecting all young people, is it not? I have used this quote in the Chamber before, but it is worth repeating, even for the tiny number of Labour MPs who were prepared to come here, to vaguely try to support the Government. Ronald Reagan said about the left:

“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.”

Labour taxed it with a jobs tax; then it regulated it with the Employment Rights Act 2025 until it stopped moving. Then young people were not getting employed anymore. Labour said, “Yippee!” Labour MPs were literally going around the TV studios saying, “Look at us—there is a jobs guarantee.” They have taxed it; they have regulated it until no one is getting employed; and now they will say, “We will subsidise it.” They have absolutely no conception of how private enterprise works, or how the economy works. They are letting the country down, and they increasingly know it, albeit that they do not say so in the Chamber quite yet.

18:10

[Nigel Huddleston (Droitwich and Evesham) (Con)]

Two weeks ago, when I spoke in the Budget debate, I criticised the Government for deliberately increasing the cost of running a business and of hiring people, in the full knowledge that it would cause more unemployment. I said that it is constituents, including mine, who are paying the price for Labour’s economic failure with their jobs. What I did not realise at the time was quite how prescient those comments were. On Monday, one of the largest employers in my constituency, Kanes Foods, went into administration, with the loss of 662 jobs. That is 662 people who last week were paying national insurance and income tax, but who this week are on benefits. My thoughts are with every one of those employees and their families.

Many people may not know or have heard of Kanes Foods, but most of us will have consumed its packaged salads or stir fries, which were on sale in major supermarkets and especially in Asda. Let me be clear that the business had some difficulties, and the administrators have particularly highlighted challenges with a recent waste water treatment issue. Let us be in no doubt, however, that Government policies did not help. When margins are as tight as they are in food production and distribution, even a tiny increase in labour costs can turn a profitable business into a loss-making one.

When the Government whacked up the national living wage by way more than inflation, they added to businesses’ costs. When the Government increased employer national insurance, it added somewhere in the region of £700 or £800 to the cost of employing each and every worker. When a business has hundreds of employees, as Kanes did, that is hundreds of thousands of pounds of additional costs. When the Minister comes to the Dispatch Box in a few minutes’ time, I would like to see him at least acknowledge that the Government have played a part in large numbers of my constituents now being unemployed, and perhaps bring himself to say sorry.

I hold the Government at least in part responsible for the situation, but on a more positive note, I thank the local community for supporting those impacted by the closure of Kanes Foods. In particular, I thank Primafruit, which has already gone out of its way to offer jobs to some of those who lost their jobs, and other businesses are coming forward. I also thank Jobcentre Plus in Evesham, which I spoke to yesterday, which is providing support for impacted constituents and information on how they can claim for pay, holiday pay and redundancy pay. The administrators are also working on that.

I am also concerned about the knock-on impact on the supply chain—on suppliers to Kanes, and on those who are owed money by Kanes. I appeal to them to talk to the administrators. I am hopeful, as are the administrators, that somebody will come forward and buy some of Kanes’ business, or its site. We may be able to get something back and resurrect the business—once a vibrant local family business, right in the heart of the vale of Evesham—in some way, shape or form.

A broader issue, and a key theme in today’s debate, is that this Government simply do not respect people who run their own businesses. They do not consider them to be workers, and the Government overall do not seem to have respect for the private sector. They do not seem to get business. They do not understand basic things like cash flow. They do not have a grasp of even the most basic economic principles, but that is not a surprise; they are socialists. As the saying goes, if a socialist understood economics, they would not be a socialist.

Before entering Parliament, I spent 23 years in the private sector, and that amounts to more private sector experience than the Prime Minister, the Chancellor, the Business Secretary, the Home Secretary, the Foreign Secretary and the Housing Secretary have combined. In fact, it amounts to more private sector experience than is in 90% of the Cabinet, which is startling, but it probably goes some way to explaining why this Government are well on track to continue Labour’s unenviable record: every single Labour Government since the second world war has left office with unemployment higher than when they started. Let us contrast that with the Conservatives’ record in government, between 2010 and 2024, of helping to produce an environment in which 4 million jobs—800 jobs a day, on average—were created.

There is an alternative. There is a pro-business, Conservative alternative, articulated by the shadow Business Minister in her opening speech, and that is why I will wholeheartedly support the motion.

18:14

[Esther McVey (Tatton) (Con)]

Nothing highlights the fiscal failure of this Government more starkly than the plight of Poundland. The chain’s 600 stores and 12,000 workers sit on the verge of collapse, not because customers have walked away—they have not; sales grew by 6.7% in September—but because of the Government’s unaffordable tax rises, which make it impossible to run a business that works on slim profit margins. Those that work on slim profit margins keep prices down for customers. How ironic it is that a Government who preach about helping the least well-off and helping with the cost of living are forcing those firms out of business.

Business owners in my constituency are mystified by the damage that the Government have inflicted on businesses up and down the country. What I am asked by them most often is, “Do this Government not understand the harm that they are doing, or is it that they just do not care?” They have concluded that it is both. The Chief Secretary to the Treasury, the right hon. Member for Wycombe (Emma Reynolds), made sure of that when she said that employers were not working people—which, by the way, was a kick in the teeth for every employer in the country who is often at work before everyone else, and leaves work after everyone else. When the former Chancellor, the right hon. Member for Leeds West and Pudsey (Rachel Reeves), announced that she would raise business and employer-related taxes by over £50 billion by the end of the decade, she wanted money for Labour’s pet projects—benefits and net zero—and she did not care that they squeezed the life out of businesses. Labour did not care where that money came from. I asked the right hon. Lady on several occasions whether she expected the number of jobs to go up or down when she taxed them. She did not say. She did not know. She was shocked.

Labour does not seem to understand that you cannot tax your way to growth and you cannot spend your way out of debt. The consequences have been job losses and, combined with day one workers’ rights, fewer opportunities. The tax rate policy hit on family businesses was hard as well.

[Ben Maguire]

I have sat here for nearly an hour and a half, and I have not heard anything from Conservative Members about how they will address the elephant in the room: how to generate economic growth and rebuild trade relationships with our closest partners in the EU and elsewhere. Instead, we just hear criticism of the national insurance jobs tax. I completely agree with the right hon. Lady about that, but we are not hearing anything—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. This is a debate about employers, not about our relationship with the EU.

[Esther McVey]

When it comes to getting costs down for employers, I would start with energy. I welcome the Government’s—eventually—approving the drilling in Jackdaw, and they need to admit to doing the same in Rosebank and going further. They should look at what our neighbours in Norway have managed to do by drilling in their country.

Let me return to the subject of family businesses. The Government showed a complete lack of knowledge of family businesses and how they are run when they capped what would have been 100% tax relief for business properties and taxed the assets as they did so. They did not understand that the life of a business can be a couple of years—it may not last—or it can go on for generations. It does not end when the founder of the business dies; it goes on. The Government did not seem to have a clue about that; they showed complete disregard.

The other thing my constituents talk about is why the Government hate wealth creators. Why do they hate the wealthy? It must be—has to be—the politics of envy and jealousy. Frankie Dyer of Barbakan Delicatessen—one company in my constituency, but it could have be any of the 365 hospitality businesses there—sent an open letter to the Prime Minister before the Budget. She wanted help, particularly with national insurance contributions, which have had the worst impacts on her business, now costing her an extra £1,000 per employee. If someone has 50 or more employees, they will have no profit left at all, and they certainly cannot invest to grow their business.

Frankie said that her business is second-generation, and it is 62 years old. It is now facing severe financial pressures. Despite the business having an annual turnover exceeding £2.3 million and winning more than 10 awards for its products, soaring operational costs—energy bills, tax obligations and national insurance—mean that the business is now struggling to stay afloat and to pay its bills each week. She is calling on the Government to reduce national insurance contributions. She wants to employ more young people, as does the whole of the hospitality sector. People in the industry want VAT, which those on the Labour Benches led them to believe would be reduced, to be reduced to 13%, and they want the charge on employment—the tax on jobs—to be reduced. The Government should reduce national insurance contributions.

18:21

[Rebecca Smith (South West Devon) (Con)]

The Government are quick to lecture Conservative Members about how to care for the most vulnerable, but at the very moment that Ministers say they want more people getting into work—as we have heard time and again this afternoon—they have increased the cost of employment. We all know that work is the best form of welfare, and Labour’s job tax is shooting the Government in the foot.

Time and again, local businesses tell me that they can no longer afford to take on apprenticeships. The double whammy of higher employer national insurance contributions and the increase to the minimum wage has simply become too much to bear.

[Gareth Snell]

The Conservatives have made the argument that they would like to see a reduction in national insurance. Will the hon. Lady spell out, in pounds and pence, by how much the Tory party would like to see the minimum wage cut to achieve the outcomes that she is suggesting?

[Rebecca Smith]

I thank the hon. Member for his question, but many questions of that nature have not been answered this afternoon. That is not what I am here to talk about. I am here to talk about the fact that businesses are currently dealing with this situation. What happens in the future is irrelevant; we are talking about what is happening while this Government are in power.

We know that by next year the annual cost of employing a full-time worker on the minimum wage will have increased by more than £4,000 since 2024—a whopping 31% increase in just three years.

[Gareth Snell]

rose—

[Jayne Kirkham]

rose—

[Rebecca Smith]

I will continue.

It is little wonder that job opportunities have shrivelled up under Labour, as has been pointed out by Members on the Government Benches. Vacancies fell by 21,000 between July and September this year, and as we have heard, small firms are being hit the hardest. To get our economy moving again, the Conservatives would halve employer national insurance contributions for under-25s. We would help young people get a foot on the ladder by backing the businesses that are prepared to give them that first opportunity.

Madam Deputy Speaker, you might be pleased to hear that there are more than 3,700 small and medium-sized enterprises in South West Devon, much like in Cornwall, which has been mentioned already. The south-west is home to many SMEs. Each one represents somebody who took a risk, invested their savings, employed local people and worked many long hours to build something of their own. In fact, that was my own experience. My dad regularly went out to work before I had even had breakfast, then came home and fell asleep—I never got a story or anything like that. He was out working six days a week, running his small business. When he was asleep, he was worrying about how the business was going to survive.

For many sole traders and small business owners, there is no guaranteed safety net if their business fails. If they have no public sector pension waiting for them at retirement, they are in an even more precarious position. I was therefore genuinely astounded when a Labour Minister had the audacity to claim that employers are not working people. The employers I know work incredibly hard. They are, as we have heard many times today, the ones opening up before dawn and locking up long after everyone else has gone home. They are the ones managing staff, cash flow and contracts. They bear the ultimate responsibility when things go wrong. When a business goes under, the employees may be able to move on to another job—although given the examples this afternoon, that is perhaps less of a possibility—but for many business owners, it is not that simple. They are losing something they have devoted years of hard work to building.

The Labour Government seem to forget that 99% of businesses in the UK are small and medium-sized enterprises, meaning that they have fewer than 250 employees. Saddled with ever higher costs, these businesses are now faced with difficult choices to raise prices, cut trading hours or make redundancies. Indeed, one local café owner told me that they have been forced to cut back deliberately on younger staff to protect the jobs of their employees who have mortgages and rent to pay. Added to that, they breed poultry, and they have had to increase the mid-year price of chickens, which will go on and lay eggs for people, for the first time in 18 years, which is driven by rising prices of animal feed, gas and fuel.

One local electrician from Plympton has told me how he regularly sees about 10 other businesses at the wholesaler each morning. There was a time when the majority of them had an apprentice, but now it is just him, and he has one only because it is his son, so it is in his interest to keep the business going. Ministers seem to have forgotten that employers pay the apprentice when they are at college as well as when they are at work, and the costs are just too high.

I have 670 construction businesses in my constituency, and one of them used to participate in an innovative scheme to support recovering addicts back into work. It partnered with well-loved Shekinah, a Plymouth homelessness charity, which provides employment support for people undergoing treatment for drug or alcohol misuse. These people would work for the company on a flexible basis, starting at a few days per week and building up gradually. After a few months, the workers would go on to gain full-time employment with other businesses. However, the company’s founders, Aaron and Sarah, say that it is impossible to continue offering this scheme due to the increased labour costs. As Aaron has said:

“We are so sad about this, as it is something that we feel is vital. Everyone needs a second chance and the chance for work and purpose in life.”

I believe that that is a sad indictment of Labour’s damaging policies.

The couple have also made the difficult decision to stop taking on apprentices. The business simply cannot afford it, despite being regularly approached by local colleges. Aaron told me that the total employment cost per day for a 21-year-old with no experience is now over £100, but for twice the cost he could recruit and employ an experienced tradesperson, who would be three or four times more productive from day one and require no supervision.

Despite the changes at the top table, this is the same old Labour, with more taxes and higher costs. If the Government are serious about helping people off welfare, they should stop making it harder to hire them. Labour’s answer is to punish employers. Ours is to create more opportunities and more apprenticeships, and get more people into work.

18:27

[Robbie Moore (Keighley and Ilkley) (Con)]

When Labour campaigners knocked on doors at the last general election, they made a promise—a promise that they would not raise taxes on working people and that they would not increase national insurance—and people put their trust in them. Today, however, the shutters are coming down on our high streets, young people cannot get a foot on the ladder and the business owners, who were told that they had nothing to fear from this Labour Government, are now paying the price for that broken promise. Let no one pretend that this is a debate about abstract tax rates; it is about jobs, the future of our high streets and whether the commitments that this Labour Government made to the electorate carry any weight at all.

Labour let the mask slip when the Chief Secretary to the Treasury said that employers are not working people. What an absolute load of rubbish. Of course, employers are working people—the café owner who starts work before dawn, the farmer who employs staff from the local community, or the pub landlord who has gone without their own salary to keep their staff in work. Each of them are working people, and each of them have been asked to pay more by this Labour Government, who promised that they would not.

On broken promises and the rising cost of employment, Labour’s manifesto stated that it would not increase national insurance, yet in its first Budget the Government increased employer national insurance from 13.8% to 15% and cut the threshold at which it is paid from £9,100 to £5,000. The thresholds actively hurt part-time and lower-paid roles, which are precisely the jobs on which many young people depend. Ministers claim that this is not a tax on businesses, but it absolutely is a tax on businesses and working people. That has been seen throughout this debate. Then there is the increase to the minimum wage, which again stifled business growth. And that is before we look at the challenge of the Employment Rights Act 2025. Under this Labour Government we have seen higher taxes, higher costs and more red tape. Far from being the party of business, Labour is showing itself to be actively discouraging growth and killing the businesses up and down the country that are the very backbone of our economy.

Let me turn to my own constituency. We have held many roundtables with many local businesses, and I thank Sarah Brookfield-Almond and Ryan Troy from the Ilkley and Keighley business improvement districts for helping me to organise them. The businesses who came along were retailers, hospitality businesses and independent traders. Employers of every size were present—people who have spent years building up their businesses and who give work to local people across my constituency. Their message was consistent and stark: they described the relentless pressure of the increase in employer national insurance contributions, the minimum wage increase with no support to meet their needs, the business rates that bear down on them and the uncertainty of the Employment Rights Act hitting their businesses hard. These businesses are not asking for special treatment; they are asking for a Government who understand and want to support them.

One fantastic local business which has grown and expanded is Three Little Birds Bakery, owned and run by Bec Severs. She has a shop in Keighley, and recently opened one in Ilkley. Bec has been very clear about her views on the Labour Government’s most recent Budget. Taking to Facebook, she said:

“This budget does nothing to help”.

On the latest minimum wage rises, she says there is “absolutely no support” for how she will now have to pay that money to her employees. That has been heard loud and clear by the Turkey Inn, which has now reduced its working hours from seven days a week to four days a week on the back of this Government. Then we look at that hospice sector, which is being hit very hard, such as Sue Ryder Manorlands hospice in my constituency, by the rise in employer national insurance.

Those people are not think-tanks. They are not economic advisers to this Government. They are hard-working people in my constituency who are being impacted heavily by the choices of this Labour Government. This Labour Government are not on the side of hard-working people and my constituents are feeling the brunt of it.

18:32

[Sarah Bool (South Northamptonshire) (Con)]

Fewer sentences have caused such shock and reaction than when the Chief Secretary to the Treasury said that employers were not working people. I feel so saddened for all those small business owners across my constituency who have worked so unbelievably hard and sacrificed so much to give so many other people the opportunity of work. I think about Magda, who runs the Omorfi Nails and Beauty salon in Towcester. She does not only employ staff; while also bringing up her family, she is studying medical practice so that she can help people with diabetes—a matter close to my heart—through podiatry. It is an insult to say that she is not hard working and a working person. No matter how many examples we give, the Government simply will not listen. I wish they would engage. The voices from all the stories told here today are those of actual people from our constituencies who are living and breathing this. I implore the Government to take this issue seriously.

At the very beginning of the debate, the Minister talked of breathing space. I think the only “Breathing Space” people recognise is the song by the Pet Shop Boys, but I think their version might be slightly more popular than the Chancellor’s. We ask businesses every single day to take risks. The contract must be that if we ask them to take a risk, we give them the confidence to be able to operate their businesses, not the shifting sands constantly coming from this Government and their Budgets. Actions ultimately speak far louder than words, because hope does not pay the bills, hope does not put food on the table and hope does not heat our homes.

As we have identified, the people suffering most are our young people. We have heard many examples of people who are struggling to get opportunities and jobs. One of the pubs in my constituency—I have just run a pub of the year competition—said that it put up an advert for just a couple of hours of work at the weekend for those under 18. It received 200 applications for just one job. There are so many young people who are absolutely desperate to get into the working environment, but they cannot because those businesses cannot give them the opportunity. That is a travesty that has happened on this Government’s watch.

Nearly 1 million young people are NEETs, with 60% of those being economically inactive—not just not in work but not even looking for it. There is a much deeper issue of youth detachment from the market, which hurts young people’s confidence, health and ability to earn an income, and it hurts the taxpayer, because it is incredibly hard for us to give young people opportunities if those jobs do not exist. That is why I welcome the Conservative proposal to halve national insurance contributions for the under-25s to get them into work.

I will flag—as I did in justice questions this week—that the Employment Rights Act has introduced many powers that the Government laud, but with them we are going to start to see an increasing amount of red tape. With that red tape comes an issue with employment tribunals. When people are going through a dispute with an employer, one of the most difficult times of their lives, they are going to discover that there is a huge backlog for tribunals. There are already over 70,000 open single cases. In reducing the time from two years down to six months to bring a tribunal claim, the Act is going to increase the workload and the backlog in the courts by a third. That is madness.

We are slowing down the economy with everything we do. The Employment Rights Act is exactly as the Conservatives describe: it is an unemployment rights Act. It is burdening our businesses and slowing down opportunities, but the Government and the Labour Benches just sit and stare. That is the problem: they are sitting and staring while hard-working people out there are trying to make a living. The Government need to start listening.

My poor farmers were looking to the Budget for a little bit of help and assistance—88% of my constituency is agricultural land—but they are not getting any. Another big issue that we have to focus on are the massive issues in the pig industry. I will save that discussion for another day, but the industry is desperate for some support from the Government. I implore the Government one more time: please, do listen to the Opposition Benches. The Government may not want to on political grounds, but we are literally just voicing the concerns of our constituents. Please listen.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

18:36

[Peter Fortune (Bromley and Biggin Hill) (Con)]

It is a pleasure to close this debate, and I thank every Member who has spoken across the House. That includes the hon. Members for Loughborough (Dr Sandher), for Truro and Falmouth (Jayne Kirkham), for East Wiltshire (Danny Kruger), and for Norwich North (Alice Macdonald)—Norwich is a fine city.

On the Opposition Benches, I thank my right hon. Friend the Member for Witham (Priti Patel), who took us on an excellent canter through the businesses in her constituency. I thank my right hon. Friend the Member for Daventry (Stuart Andrew), and my hon. Friends the Members for Central Suffolk and North Ipswich (Patrick Spencer) and for Mid Leicestershire (Mr Bedford). My hon. Friend the Member for Hinckley and Bosworth (Dr Evans) talked about the importance of the word “yes”, and I will hold him to that in future. I thank my hon. Friends the Members for Hamble Valley (Paul Holmes), for South West Devon (Rebecca Smith), for Keighley and Ilkley (Robbie Moore), and for South Northamptonshire (Sarah Bool), and my right hon. Friend the Member for Tatton (Esther McVey).

My right hon. Friend the Member for Beverley and Holderness (Graham Stuart) gave an excellent speech about his business sense; he also talked about his sweaty palms, which explains some of his bowling when we are playing cricket. The most important contribution was from my hon. Friend the Member for Droitwich and Evesham (Nigel Huddleston), who talked about the reality of businesses failing, and the 662 jobs that have been lost due to the squeezed margins at Kanes Foods—we wish them all well.

If this debate comes down to anything, it is two simple truths: if we tax growth, we get less growth; if we tax jobs, we get fewer jobs. That is not ideology; it is the exact logic that Government will use when they tax things such as tobacco. The difference is that the Conservatives would very much like to see more jobs.

Let me be clear what I am talking about: employers are the café owner who opens at 6 am; the scaffolder out in the rain; the builder, the hairdresser, the gym owner and the hotelier; and the pub landlord, who on any given night is also the cleaner, the accountant and, when needed, the bouncer. They take the risk, they put their own house on the line, and then they do something remarkable: they give other people a job. They are the backbone of our high streets and our economy and we value them.

In Bromley and Biggin Hill, I see them every week, in places such as The Oak pub in Bickley, Tip Top key cutters in Hayes, or the Spitfire Café in Biggin Hill. They are not asking for special favours; they are asking not to be charged more for doing the very thing that the Government say they want them to do, which is to give someone a job.

That brings me to the remarks of the Chief Secretary to the Treasury on the first of this month, when she told GB news:

“I don’t think employers are working people. They are companies.”

I do not say this to be unkind. Every one of us has said something careless over the weekend that we have then spent Monday morning trying to explain—I certainly have. By the next day, it had fallen to the Science Minister to tell LBC that employers are working people. I have always believed in following the science, and I hope the Treasury will, too.

I have met a great many companies in Bromley and Biggin Hill since then, and some were greatly distressed and hurt by that statement. These are hard-working people who felt undervalued, disregarded or that their work was being disrespected; some were angry; and most of them have a first name. They open early, close when the last customer leaves, and do the VAT return at the kitchen table on a Sunday night. If that is not working, I would love to know what is.

This matters because of a promise. Before the election, Labour said in its manifesto that it would not increase taxes on working people, and that is why it would not increase national insurance. Businesses up and down the country were told again and again that Labour was on their side. Then came the first Budget, when the rate of employer national insurance went up from 13.8% to 15% and the threshold at which employers started paying fell from £9,100 to £5,000, bringing in around £25 billion a year with a tax on every job in the country, paid before a single new person is taken on. The only way for Labour to square its promise with that tax was to decide after the election that the people paying it no longer count as working people. With respect, that is not a definition; it is an escape hatch.

We warned that this would happen, as did the OBR, which said at the time that the rise would mean higher prices and lower wages, that around 940,000 employers would lose out, and that the average employer losing out would face a bill around £26,000 higher. The number of people on payrolls has fallen for most of the past two years. Youth unemployment is at its highest in more than a decade. Earlier this year, the number of young people neither earning nor learning passed 1 million for the first time in more than 12 years. That should trouble every one of us. When a Government put up the cost of hiring, the first person not hired is the one without experience. That is no judgment on them; it is just the arithmetic.

Here is the part I find hardest to square: this tax was sold as a tax on businesses, not on working people. However, the OBR’s own assumption is that over time, around three quarters of the cost—76%—is passed on to employees through lower real wages. This means that the tax that was not on working people turns out to be paid mostly by working people—it is just done behind a curtain of accountancy and in a way that never appears clearly on the front of the payslip. Instead, it appears in the pay rise that did not happen, the extra shift that was not offered and the job that was never advertised. Those are the hardest losses to see and the easiest for Government to overlook.

It is not only the high street. Think about who else is an employer: the GP practice, which is a private partnership and pays employer national insurance like anyone else; the care home; the nursery; the community pharmacy; and the local hospice, which is a charity, raising money one fun run at a time. I recently visited Demelza hospice, a remarkable charity that helps life-limited children and their families. The compassion staff bring to their roles was matched only by the frustration of rising employment costs, putting specialist staff at risk.

When this tax was announced, many hospices were surprised to find that they were caught by it. They had heard that the NHS would be protected, and assumed that that meant them. It did not. Every pound a hospice spends on national insurance is a pound raised at a cake sale that never reaches a patient.

Then there are the businesses I speak for in my own brief as shadow Minister: our fantastic hard-working manufacturers—firms that compete with the whole world on thin margins and that often have to train skilled people from scratch. Raising the cost of employing someone means raising the cost of training them, too. That is the last thing a country that wants to make things again should be doing.

Bill Perera, who employs more than 700 people in Bromley through his McDonald’s franchises, said that

“while individual measures may be manageable in isolation, their combined effect is placing a strain on investment, recruitment and long-term growth.”

National insurance, the wage bill, energy costs and new employment rules—each one on its own looks manageable, but together they decide whether a business takes on one more person.

The new Prime Minister and new Chancellor promised breathing space. It is a lovely phrase—I will give them that. But for the employer staring at a higher national insurance bill, a higher wage bill and a higher energy bill, it feels less like breathing space and more like they are holding their breath. A new Prime Minister was a chance for a new start; instead, we have simply put a new cover on an old book.

I want to be fair to the Government, because I know what Labour Members will say, and it deserves an answer. They will say that they inherited difficult public finances. Every new Government say that. I will not pretend that the choices were easy, but choosing how to fix things is the whole job of Government. They chose to put a tax on jobs after promising not to. At the very moment that the economy needed more people in work, that was the Labour party’s choice. They will say that they protected payslips—that employee national insurance, income tax and VAT were left alone. But as I have said, the OBR experts say that the workers carry the cost anyway. The Government can protect the front of the payslip and still shrink what is written on it.

Labour Members will say that we raised national insurance ourselves in 2022. We did. We listened and reversed that within months, because it was the wrong call at the wrong time. There is no shame in changing your mind when the evidence changes. I say gently to the Government that it is one of the few things in politics that it is never too late to do.

[Paul Holmes]

Does the shadow Minister agree that the key difference between our increase and the Government’s increase is that in their manifesto to win the general election in 2024, they said that they categorically would not raise national insurance?

[Peter Fortune]

I thank my hon. Friend for his intervention. Saying one thing and doing another is something that we are getting very used to from this Government.

What would we do? We would halve employer national insurance for workers aged 21 to 24, taking the main rate down to 7.5%. We are not inventing a new idea here. Under-21s and apprentices under 25 already pay no national insurance on most earnings. That was a Conservative reform and this Government have kept it, so I take it that they agree that it works. All we are asking is why that help should stop on someone’s 21st birthday, just as so many are leaving university or college and looking for a proper start. Nor is it only a Conservative idea. The cross-party Work and Pensions Committee recommended in July that the Government extend the relief to all under-25s. When a Committee with both Labour and Conservative Members agrees on something, it is usually worth a second look.

Most of us in this House remember our first job and the person who took a chance on us. Mine was at the South London Press in Streatham—though, to be fair, I think they regarded that as a mistake pretty sharpish. For a lot of young people, that first chance comes as a job in a café, shop, pub or hotel. Those are exactly the businesses that this tax hits hardest and that our plans would help most. On business rates, we would give retail, hospitality and leisure businesses full relief—up to £110,000 each—so that our high streets have genuine room to grow and hire. We look at the whole bill that businesses face—not one line of it—because that is how the person running a business has to look at it too.

Napoleon supposedly called us a nation of shopkeepers. I am sure he meant it as an insult, but as we know things did not go terribly well for poor old Boney after that, and I consider it a compliment—a strength, part of our industrious culture and something we can be proud of. The motion asks the House to agree with something that most of our constituents would think goes without saying: that the person who opens the shop, runs the pub or builds the extension and who pays the wages of the people working alongside them is a working person. If Members agree with that, they can say so tonight in the Lobby.

18:48

[The Parliamentary Under-Secretary of State for Business, Innovation, Science and Trade (Blair McDougall)]

It is a pleasure to respond to the debate with you in the Chair, Madam Deputy Speaker. I join other Members in paying tribute to the work that entrepreneurs do in our country—to the sacrifice, long hours and sleepless nights that have been referenced.

The right hon. Member for Beverley and Holderness (Graham Stuart) singled me out as being someone who has empathy with and an understanding of business. I do not know if that will result in him having to surrender his party card, or perhaps in me doing so, but I will take it in the spirit that it was intended. We absolutely understand the feeling of jeopardy that he talks about.

My hon. Friend the Member for Loughborough (Dr Sandher) spoke powerfully about the feeling of responsibility that employers have, including his parents, towards their workers. For all the disagreement that there will be in this debate about how we do it, our job is to make that just a little bit easier, because it can be an all-encompassing and, at times, lonely enterprise running a business.

I will endeavour to respond to as many points raised by right hon. and hon. Members around the Chamber as possible. Several made me hungry and reminded me that I skipped lunch earlier on today. The right hon. Member for Witham (Priti Patel) and my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) referred to fantastic food businesses in their constituencies, and even the reference to the prawn sandwich offensive from the hon. Member for Central Suffolk and North Ipswich (Patrick Spencer) brought on that feeling.

I do, however, want to echo the remarks made by my right hon. Friend the Financial Secretary to the Treasury in his opening speech. The big macroeconomic picture for the UK is this: we were the joint fastest growing economy in the G7 in the first half of this year, the IMF has upgraded our growth for this year, and the IMF’s chief economist has called the UK the “stand out” economy for deficit reduction, with the lowest forecast deficit in the G7 by 2029.

[Esther McVey]

Will the Minister inform us how many businesses have gone to the wall since Labour came into government?

[Blair McDougall]

It has been a dreadful decade for businesses, and for small businesses in particular. As I said at the beginning, our job is to make it easier to invest and to ensure that we are cutting red tape and increasing access to finance. I will talk about that in a moment.

In the Budget, we took action to give the businesses that the right hon. Member for Tatton (Esther McVey) is concerned about and employers some breathing space. We continue to work on the long-term changes that are necessary to create good jobs and growth in every part of our country. As a result of that work, employment is up this year—it is higher than previously forecast in March—and, in fact, the UK has the third highest employment rate in the G7. Meanwhile, business investment—so often embarrassing under the previous Government—relative to the size of the economy remains at its highest level for a decade.

Of course, as Members have said, there are global headwinds from the conflict in the middle east. [Hon. Members: “Ah!”] Conservative Members say “Ah”, and they do not like to be reminded of that, because they were calling for us to take part in that conflict. People and employers are seeing the impact of that conflict in their bills. We know that there is more to do, but this is a country that is turning a corner.

With that, I turn to the points raised throughout the debate, starting with national insurance, which was raised by several hon. Members. The facts are these. Employer national insurance contributions are forecast to raise about £150 billion in 2026-27. That is a significant contribution to the funding of our public services. Why is that needed? Because we cannot have a strong NHS or strong public services without investing in them, investing in our country and rebuilding the crumbling infrastructure we inherited after 14 years of austerity.

[Stuart Andrew]

The national insurance rises are really affecting hospices: in some cases, 40% of their beds are closing. Where will those people go? They will go to the national health service. How does that help our public services?

[Blair McDougall]

We recognise that and, as was mentioned, we are providing additional resources throughout the NHS and hospices to help with that.

On relief for employers, hon. Members will know that the employment allowance was estimated to be worth £7.4 billion in 2025-26. That provides eligible employers with up to £10,500 a year towards their national insurance contribution bills.

That is obviously not the only help that we gave to businesses in the Budget. As my hon. Friend the Member for Norwich North (Alice Macdonald) noted, we have lifted tens of thousands of businesses out of business rates. Several hon. Members raised concerns about youth unemployment.

[Graham Stuart]

Will the Minister acknowledge, because he not only has the ear of business but is a very honest Member of this House, that, notwithstanding the talk about support for business and the 70,000 businesses that have been mentioned, overall the Budget raised the tax on business by another £2.2 billion, on top of the £66 billion that came in the two previous ones?

[Blair McDougall]

We asked business, and banks in particular, to pay a little more so that we could give people help with their energy bills. We have heard in the debate, once again, that the Conservative party opposes that and so opposes that additional support that people are getting with their energy bills this winter.

As has been said, no employer is paying national insurance contributions on under-21s up to a salary of £50,000 and similarly for apprentices who are under 25, which is a saving of around £6,700 at most for employers. We have doubled the employment allowance and ensured that 40% of companies do not pay national insurance contributions.

[Lincoln Jopp (Spelthorne) (Con)]

Has unemployment gone up or down on this Government’s watch, and what has caused it?

[Blair McDougall]

Unemployment is still lower than in comparable economies—[Interruption.] The hon. Gentleman asked the question, so I will answer. Employment is up and inactivity is down in this country. It is precisely because we are concerned about youth unemployment that we are introducing measures such as the £2,000 hiring payment for smaller employers to take on young people and the £3,000 jobs grant for those at risk of sliding into youth unemployment. As several hon. Members have noted, that is in stark contrast with the increase of a quarter of a million in youth unemployment and inactivity in the last few years of the Conservative Government.

[Dr Luke Evans]

rose—

[Paul Holmes]

rose—

[Blair McDougall]

I will give way to the hon. Member for Hamble Valley (Paul Holmes) for one last intervention and then I will make some progress.

[Paul Holmes]

The Minister has outlined the £2,000 payment to businesses. Does he think that it is best for a Government to administer that payment or to reduce taxation on businesses so that they can choose to employ younger people without that Minister getting in the way?

[Blair McDougall]

It is precisely because we recognise, as many right hon. and hon. Members have mentioned, that retail and hospitality give so many young people their first job that we are lifting so many of those businesses out of business rates and lowering the tax burden on those individuals.

I will follow the Prime Minister’s lead and note that we agree on a lot despite the debate across the House. We agree, as many hon. Members have said, that small businesses in particular are the backbone of our economy, we agree that more must be done to support business to employ people, and we agree that young people should be supported.

[Dr Evans]

rose—

[Blair McDougall]

I will make some progress.

We agree that young people should be supported into work. However, we disagree fundamentally on how to go about that. The hon. Member for South West Devon (Rebecca Smith) spoke about the minimum wage, but told the House that she did not want to talk about what might happen in the future. I think I know why that is. It is because in a report from the Prosperity Institute, the shadow Business Minister in the other place committed to freezing the minimum wage for five years. That is a real-terms cut of 12% for the poorest workers that will not just take £8,900 out of the pockets of the poorest workers in the country, but take that money out of the tills of businesses in their communities.

The way to fix the issue we have with youth unemployment is to increase the number of apprenticeships, increase the flexibility of those apprenticeships, invest in the growth sectors that will create the well-paid jobs of the future, ensure that those young unemployed people are more attractive to potential employers and take all the other measures that we are taking to invest in business.

The Tory plan for those young people who have been rejected over and over again and who are close to being broken by the experience of being let down by the system is to punish them for that. We will not do that. The Conservatives offer only insecure hours, cuts to incomes and poverty pay. That did not work for 14 years, it did not work for employers and it will not work now.

Question put.

18:59

Division 121

Question accordingly negatived.

Ayes: 105

Noes: 293

Independent Expert Panel

Wednesday 11th November 2026 Commons Chamber

[Relevant document: House of Commons Commission, Independent Expert Panel: nomination of new members, HC 663.]

Ordered,

That, in accordance with Standing Order No. 150C (Appointment of Independent Expert Panel Chair and members) and for a period of six years from 25 November 2026, Alison Abu, Tom Crowther, Justine Davidge and Elizabeth Dux be appointed as members of the Independent Expert Panel.—(Sir Alan Campbell.)

Business without Debate

Wednesday 11th November 2026 Commons Chamber

National Security Strategy (Joint Committee)

Wednesday 11th November 2026 Commons Chamber

Ordered,

That Derek Twigg be discharged from the Joint Committee on the National Security Strategy and Dame Chi Onwurah be added.—(Jessica Morden, on behalf of the Committee of Selection.)

Northern Ireland Affairs

Wednesday 11th November 2026 Commons Chamber

Ordered,

That Chris Bloore be discharged from the Northern Ireland Affairs Committee and Sean Woodcock be added.—(Jessica Morden, on behalf of the Committee of Selection.)

Procedure

Wednesday 11th November 2026 Commons Chamber

Ordered,

That Michael Wheeler be discharged from the Procedure Committee and Jeff Smith be added.—(Jessica Morden, on behalf of the Committee of Selection.)

Public Accounts

Wednesday 11th November 2026 Commons Chamber

Ordered,

That Catherine McKinnell be discharged from the Committee of Public Accounts and Al Carns be added.—(Jessica Morden, on behalf of the Committee of Selection.)

Science and Technology

Wednesday 11th November 2026 Commons Chamber

Ordered,

That Dr Allison Gardner be discharged from the Science and Technology Committee and Steve Yemm be added.—(Jessica Morden, on behalf of the Committee of Selection.)

Work and Pensions

Wednesday 11th November 2026 Commons Chamber

Ordered,

That Lee Barron be discharged from the Work and Pensions Committee and Neil Duncan-Jordan be added.—(Jessica Morden, on behalf of the Committee of Selection.)

Charity Commission

Wednesday 11th November 2026 Commons Chamber

[Relevant document: Third Report of the Public Administration and Constitutional Affairs Committee, The Parliamentary and Health Service Ombudsman’s investigations into the Charity Commission, HC 111.]

Motion made, and Question proposed, That this House do now adjourn.—(Liam Conlon.)

19:14

[Ashley Dalton (West Lancashire) (Lab)]

I am grateful to have secured this debate and to raise an issue that is important not only to my constituents but to everyone who relies on the vital work of charities. It concerns whether the Charity Commission currently has the necessary powers and resources to respond effectively when charities are not properly governed.

A charity’s ability to operate successfully and serve our communities depends on public trust. Well-governed charities can make an enormous difference to people’s lives, and trusteeship carries series legal responsibilities. Trustees are custodians of charitable assets, and they must comply with the governing documents and manage the charity’s resources responsibly to ensure that activities further charitable purposes. When charities are not appropriately governed, the consequences are significant, and it undermines public confidence and deprives the local communities they are supposed to serve. When trustees fail to meet their responsibilities, there must be an effective regulator with the powers and resources to intervene swifty and restore public trust in the charity sector, the vast majority of which does an excellent job. That is the role of the Charity Commission.

I acknowledge the important work of the Charity Commission. It regulates more than 170,000 charities in England and Wales, overseeing a sector that is responsible for tens of billions of pounds in annual income and expenditure. It has a range of statutory powers, including the ability to investigate misconduct and mismanagement, to require information and documents, to issue official warnings, to suspend or remove trustees, and in appropriate circumstances to appoint interim managers.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Lady for her assiduousness in bringing forward this issue. Although the Charity Commission should have teeth, does she agree that it is the job of enforcement agents such as HMRC, or indeed the local council, to take a bite out of those who are in breach? The delineation of powers must be clear, and that is one thing that charities perhaps needs some help with.

[Ashley Dalton]

A wide range of powers are held by a number of organisations, and it is crucial that each one of those takes responsibility and has power to work within its own remit, as I am sure the hon. Gentleman would agree. There are serious questions as to whether the Charity Commission’s current framework is sufficient. A regulator’s ability to investigate concerns does not necessarily mean that it has the capacity to intervene swiftly or effectively enough, and there is a pertinent concern in my West Lancashire constituency, where I have been engaging with the Charity Commission over long-standing concerns about the management and governance of Scarisbrick village hall.

In 1972, local people secured a piece of land and went about fundraising and building a village hall, a village green and a children’s playground. They then fundraised and erected a war memorial to the Scarisbrick residents lost in the world wars who had not previously been recognised. Many years went by, with the village hall being a valued community asset, including the village green and the children’s playpark. In recent years, however, concerns began to surface over the running of the hall and facilities.

First went the children’s playpark, with trustees claiming that funds could not be found to maintain it. The trustees then changed the name of the village hall to The Venue Scarisbrick, marketing it as a function suite. Local organisations such as the Scouts were allegedly deprioritised, and regular slots that they had been using were changed, making it difficult for them to continue, forcing them to go elsewhere. The trustees then fenced off the village green, denying access to local residents, and renting the green space to a private sector petting zoo. The final straw came in July 2025 when the trustees proposed the permanent removal of the war memorial. I launched a petition to save the memorial, and wrote to trustees in August 2025 setting out my concerns and requesting a meeting. I received no response. I chased it in August and later in October, but I still received no response.

Meanwhile, local residents became increasingly concerned about not only the trustees’ decisions, but their behaviour towards residents. It transpired that the trustees were using the hall as a base for their own private sector businesses and charging other businesses to use the address. When challenged, the trustees refused to meet local residents, refused to meet or correspond with me, and called the police when local residents protested at the proposed removal of the war memorial. On inspection, it transpired that the trustees have set up a limited company in the name of The Venue Scarisbrick, of which some of the trustees are directors. There is no indication of how that company relates to the charity that owns the building. They have also failed to register accounts for the charity for several years running.

Residents demanded an annual general meeting, as one had not been held for some time and was long overdue. In February 2026, six months later than the governing document required, the trustees, despite receiving advice from the Charity Commission that they must hold the AGM in person, held an online broadcast, claiming that it was an AGM. There was no way to ascertain who was there, how many people were present or whether they were eligible to be there. There was no way to contribute unless explicitly invited to do so.

When it came to so-called elections, the trustees were appointed by ballot by email. It was not secret, and there was no adequate scrutiny or transparency. Unsurprisingly, all the existing trustees were re-elected. Not only was the so-called AGM appallingly run, but the chair of the trustees took the opportunity to launch a 15-minute verbal attack on local people who challenged him. Local parish councillors have been threatened with legal action and intimidatory language on social media. While the war memorial was saved—at least for now—the village green remains inaccessible and the trustees remain in charge.

[Sir John Hayes (South Holland and The Deepings) (Con)]

The hon. Lady is making a bold and brave case. As she knows, she has recently become a bit of a heroine of mine following a recent and well-publicised speech. Is not the problem here the Charity Commission? I do not know if it has the resources, the means or the legal powers required, but, in a variety of cases that I have drawn to its attention on woke causes—about which we might not agree—it seemed to be highly ineffective. She is talking about a very local case, but she is highlighting a bigger point in doing so.

[Ashley Dalton]

I thank the right hon. Member for his contribution. That is the point that I am making: whether the Charity Commission has the powers, resources and ability to act. I fear that the story I am laying out today is far from unique across the country.

[Grahame Morris (Easington) (Lab)]

I congratulate my good and hon. Friend on securing this debate. There is a really key point about trust and accountability. Does she share the concerns of myself and other members of the coalfields group of MPs about the activities of the Coal Industry Social Welfare Organisation? It is a charitable body established by Parliament in 1952 to provide support to mining communities. Many former mining communities, including some in my own constituency, say that they are missing out on millions of pounds of investment from the sale of former miners’ welfare halls and outdoor welfare schemes. Does my hon. Friend agree that the public must have confidence that charitable trusts are held accountable for their actions? Will she support our efforts to ensure that the Charity Commission takes all appropriate action in the cases that we have identified?

[Ashley Dalton]

I absolutely agree with what my hon. Friend has outlined. The Charity Commission should support all charities, because it is fundamental that public trust remains. That is why residents and I have engaged with the Charity Commission and raised concerns regarding the transparency and governance of Scarisbrick village hall and the decisions being made.

The Charity Commission has begun an investigation. Following the February AGM, the commission confirmed that concerns about the failure to comply with advice and the conduct of the meeting itself had been escalated to its regulatory compliance team. Further concerns, including concerns around social media activity and questions about the transparency and integrity of the AGM ballot, have been added to its case records. However, by June, the commission confirmed that the case remained ongoing and was progressing.

Last month, the commission advised that it had received a significant volume of further correspondence, including new concerns about the conduct of a trustee on social media. It also confirmed that it was continuing its investigation and planned to undertake a books and records inspection in the coming weeks. I appreciate that thorough investigations take time, particularly where there are complex governance issues to consider. However, this case illustrates the challenges of addressing concerns in a timely way, particularly where further issues and inappropriate conduct continue to emerge while an investigation is ongoing. Residents of Scarisbrick are concerned that the village hall will potentially be lost and its resources frittered away.

Those concerns have been compounded by further developments. Two companies associated with the management of the village hall, The Venue Scarisbrick Ltd and Community Inclusion Projects Ltd, have appeared on Companies House as having active proposals to strike off. That raises even more questions about corporate governance and the protection of charitable assets and community facilities. Given that this case has been ongoing since last summer and I have been raising concerns with the commission for a year, I ask the Minister to consider what more the Government can do to ensure the commission can investigate cases of this nature promptly.

[Vikki Slade (Mid Dorset and North Poole) (LD)]

I am staggered by the story of Scarisbrick village hall—what the hon. Lady is describing is terrifying. It seems to me that the Charity Commission does not have the resources it needs to do any of its work. I have a constituent who is starting a charity, HeritageTies, and he has been told that it is going to take 23 weeks to register his charity. During that time, he cannot get a bank account, fundraise, or start the job he is trying to do. I am told that 3,000 new church charities have been added, so does the hon. Lady agree that we need a root-and-branch investigation of whether the Charity Commission has the resources it needs to do its job?

[Ashley Dalton]

I thank the hon. Member for her contribution. This is an ongoing issue, and she will be aware that the Public Administration and Constitutional Affairs Committee’s report on the Parliamentary and Health Service Ombudsman’s investigations of the Charity Commission more widely has raised similar concerns. It also questions whether the commission shows sufficient boldness in exercising its existing powers, and whether it has the powers it needs to regulate the charitable sector effectively.

[Sam Carling (North West Cambridgeshire) (Lab)]

I thank my hon. Friend for referencing my Select Committee’s recent report. Will she join our Committee in calling on the Government or the Digital, Culture, Media and Sport Select Committee to hold a thorough consultation on the commission’s powers, both to identify whether it needs further powers and whether it is making the best use of the powers it already has, and particularly whether the legal advice it is getting is too risk averse?

[Ashley Dalton]

I thank my hon. Friend for his intervention, and join him in that call.

I would welcome an update from the Minister on the Committee’s report and on the Government’s plans to take forward its recommendations, particularly its proposal for a wider consultation on the powers of the Charity Commission. Is the Minister satisfied that the commission’s existing powers and resources are adequate to enable it to intervene at an earlier stage where there are persistent governance concerns and potential risks to charitable assets? Are there opportunities to strengthen the regulatory framework so that the commission can take effective action without unnecessary delay? Ultimately, this is about ensuring that the Charity Commission has the resources, powers and support it needs to fulfil its responsibilities, protect charitable assets and maintain public confidence in the charitable sector.

19:28

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Vicky Foxcroft)]

I am pleased to respond to this debate, and I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on securing it. She is an incredibly powerful woman—such a powerful woman that she has been able to get the Secretary of State to attend the debate. She also shares powerful woman characteristics with my mother. I have to mention my mother today, because it is her birthday and, sadly, I am not able to be with her.

Village halls and other such spaces are often the lifeblood of our communities, and I pay tribute to the army of workers and volunteers who selflessly provide vital services in them, to communities up and down the country. In the vast majority of cases, these spaces are well-run and treasured by their communities, but on rare occasions, problems can arise.

My hon. Friend has raised concerns about Scarisbrick village hall in her constituency. Such cases highlight the important role that local Members of Parliament can play in resolving issues in their communities. I congratulate her on securing a positive outcome that protects and preserves the war memorial. On the ongoing concerns about the management of the village hall, I note that the Charity Commission opened a regulatory compliance case into the charity in February 2026. The opening of a case is not a finding of wrongdoing, but a step the commission can take to consider concerns in greater detail. The case is ongoing, and the commission is therefore limited in what it can say at this stage. However, I understand that the commission intends to meet the parties involved at the charity’s premises in the coming weeks.

The Charity Commission for England and Wales plays a vital role in helping community charities, such as village halls, to thrive, and in supporting public trust and confidence in charities across the sector.

[Grahame Morris]

Trust is important, and I support the points made by my hon. Friend the Member for West Lancashire (Ashley Dalton), but further to the issues that I raised in my intervention, I point out to the Minister that we are expecting a judgment from the Charities Commission on the evidence provided to it by Members of Parliament representing coalfield constituencies. We gathered that evidence from local authorities, the National Union of Mineworkers, the Industrial Communities Alliance and around 20 locations across the UK coalfields. This is not an isolated issue, so does the Minister believe that the Charity Commission has sufficient powers to effect the change required to hold charities to account for their actions? If I may be so bold, will she agree to meet a delegation from the coalfields group to look at some of the evidence that we have gathered, which should raise concerns for the Charity Commission investigators?

[Vicky Foxcroft]

I will come to the points that my hon. Friend raises later, but I will say that the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend the Member for Barnsley South (Stephanie Peacock), met the Charity Commission when she was the Minister responsible for civil society to discuss CISWO’s support for coalmining communities. My hon. Friend the Member for Easington (Grahame Morris) cares deeply about supporting coalfield communities, and the Government and I share that sentiment. I would be happy to meet a delegation.

We rightly rely on the Charity Commission not only to promote best practice and deliver knowledge for trustees, but to step in and act when issues arise. As a civil regulator, its core responsibility is to ensure that trustees comply with their duties under charity law, that charities pursue their charitable purposes for the public benefit, and that any misconduct or mismanagement is addressed. The Charity Commission has a range of statutory, investigatory and enforcement powers at its disposal to effectively regulate charities and address wrongdoing. The Government fully support the Charity Commission in taking proportionate action in such cases, but it is important to note that the Charity Commission can only take action where there is misconduct or mismanagement. Where a charity pursues its charitable purposes within the law and the terms of its governing document, the commission cannot intervene.

[Peter Lamb (Crawley) (Lab)]

I am a member of the Public Administration and Constitutional Affairs Committee, and we have had the Charity Commission in to review matters, in the wake of its attempt to violate privilege in several cases that had been dealt with badly. Would it surprise the Minister to learn that the Charity Commission has expressed concern about the limits of its powers? One example was an incident in which a member of a charity board dealing with children had been asking for intimate photography of children. They resigned from that role, which meant that they could not be disbarred from holding an office in another charity in future, because the powers of the commission apparently did not extend that far.

[Vicky Foxcroft]

I am interested in having a further discussion with my hon. Friend, because what he has described sounds extremely worrying.

It is undoubtedly important to resolve disputes such as the one raised by my hon. Friend the Member for West Lancashire, for the benefit of local communities. Indeed, many of the points that she raised seem deeply concerning. However, with more than 170,000 registered charities to regulate, the Charity Commission takes a risk-based approach to regulation to ensure that no issue or complaint is overlooked, while also ensuring that it acts in a proportionate manner and uses its resources to prioritise the highest risks. That means that in some cases the commission cannot take action, or cannot take action as swiftly as those involved would like it to, and final outcomes of casework can depend on the complexity of each individual case. The commission experienced a 50% increase in the number of concerns raised about charities between August 2025 and 2026, which has left its resources severely stretched. It is important that we have a regulator that can act effectively to tackle abuse and mismanagement of charities.

[Sir John Hayes]

There is a fundamental difference between others raising concerns and a Member of the House doing so. We do this all the time, do we not, in respect of public bodies, Government Departments and so on? That should be given an appropriate degree of weight by the Charity Commission, because we speak for our constituents.

[Vicky Foxcroft]

I agree. The Secretary of State and I discussed the possibility of presenting this as a test case to establish why it is taking so long to be resolved, and we will explore that further.

In the 2025 spending review, in recognition of all of the challenges faced by the Charity Commission, we gave it a 25% uplift in funding, which is backing a three-year transformation programme to manage rising demands on its services. I know that it has been criticised recently by both the Committee of Privileges and the Public Administration and Constitutional Affairs Committee for its approach to reports by the Public Service Ombudsman, which made findings of maladministration in two cases. The commission has apologised unreservedly to Parliament in response to the Committee of Privileges report, and has accepted the report in full. I have confidence in the commission’s leadership, and I know that the board is taking action to address the concerns raised by the reports and to learn lessons for its handling of similar cases.

The Government keep the Charity Commission’s powers under regular review, and are committed to strengthening them where needed. On 14 October, the Government published a consultation proposing expanded charity trustee disqualification powers, which will help to protect charities from extremist abuse.

[Sam Carling (North West Cambridgeshire) (Lab)]

The Government are rightly consulting on those additional powers for the commission—which I welcome—to disqualify people from being trustees or senior managers if they engage in conduct that promotes hatred of people on grounds of race, religion or belief, but does the Minister agree that we should not limit the powers to those three grounds? We often see discrimination in the form of misogyny or homophobia, and discrimination against disabled people. Would the Minister consider extending her proposals to cover those as well?

[Vicky Foxcroft]

We will indeed be happy to engage with my hon. Friend and look into his proposals. We will also consider carefully PACAC’s call for a broad review of the Charity Commission’s powers to ensure robust regulatory oversight, and will continue to engage closely with the commission on that.

Let me again thank my hon. Friend the Member for West Lancashire for securing the debate, and genuinely thank all the Members who have contributed to it. I think that it has been enhanced by all those contributions.

Question put and agreed to.

19:39

House adjourned.