Middle East: Economic Update

Debate between Andy McDonald and Rachel Reeves

Tuesday 21st April 2026 Commons Chamber

[Rachel Reeves]

As I set out in my statement and as the hon. Lady said, we are delinking gas and electricity prices. That is the right policy, and we will achieve it through the increase in the electricity generator levy. By increasing it from 45% to 55%, we are providing a very strong incentive for companies that still get market prices to move on to contracts for difference to avoid the electricity generator levy. If they do not go on to a contract for difference, they will continue to pay the electricity generator levy, which I have extended today, and we can use that money to help people with their prices.

The hon. Lady’s commitment to lower prices and more secure supply would be a bit more credible if the Green party did not oppose new nuclear and the Planning and Infrastructure Act 2025, which will make it easier to build the infrastructure investment in renewables and clean energy that we desperately need to lower bills and get ourselves off fossil fuels.

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

I thank the Chancellor for her statement and for the work that she and the Energy Secretary have done in this regard. The focus on renewables and the decoupling of gas and electricity is most welcome, but may I point something out? One of the problems that we inherited from the Conservatives, who have the gall to complain about the high cost to businesses and households, is that we are heading towards curtailment fees in 2030 of around £6 billion per annum. Would the Chancellor be kind enough to meet me and my hon. Friend the Member for Camborne and Redruth (Perran Moon) to discuss some of the technological options available to us to mitigate those soaring costs?

[Rachel Reeves]

I thank my hon. Friend for the interest that he has in this really important area. We are doing a number of things on this front. The Planning and Infrastructure Act, which passed through Parliament at the end of last year despite the opposition of the Conservatives and the Greens and the indifference of the Liberal Democrats, will enable us to build the infrastructure to get energy from offshore wind to people’s homes and businesses, as well as investment in battery technology so that we can store energy. My hon. Friend will also have heard the announcement last week that we will enable differential pricing at different times—for example, to be able to get free electricity in some cases at weekends, when the demand for energy is lower. Those are some of the things we are doing to better balance demand and supply on the grid, and I would be very happy to meet him to discuss the matter further.

Spring Statement

Debate between Andy McDonald and Rachel Reeves

Wednesday 26th March 2025 Commons Chamber

[Rachel Reeves]

The right hon. Gentleman has long been an advocate of spending properly on defence. We have set out a fully funded and costed plan to get to 2.5% of GDP in the next two years and to 3% in the next Parliament. The world has changed. We can see that all around us. This Government will always put our national security and defence first, and as the situation evolves, of course so will we.

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

I thank the Chancellor for her statement. She is absolutely right to highlight the stimulus that the Employment Rights Bill will bring to our economy, but I respectfully say that the impact of the cuts to welfare payments will be reduced incomes for some of my poorest constituents. That contrasts with the easy ride that the very wealthy get from lower margins of tax on their assets and gains than my constituents face through income tax. The world indeed has changed since the Chancellor set her fiscal rules, so will she consider putting capital gains tax on an equal footing with income tax or implementing a wealth tax of 2% on assets worth over £10 million in order to improve the country’s finances?

[Rachel Reeves]

At the Budget last autumn, we increased taxes by £40 billion without asking working people to pay more. We did that by abolishing the non-dom tax status, increasing the rates of capital gains tax, tightening the rules around inheritance tax and, yes, by asking businesses to pay more as well. We have already raised taxes to put more money into our health service, reduce NHS waiting lists and provide free breakfast clubs at primary schools. Today’s spring statement shows that we can grow the size of our economy through planning reforms and therefore ensure more money for our public services. The Government’s No. 1 priority is growth, so I am so pleased that the OBR has said that by the end of this Parliament the economy will be bigger than that we inherited it from the Conservatives.