Taxes

Ashley Fox Excerpts

Wednesday 12th November 2025 Commons Chamber

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

This will be a very simple speech, because it has only a single fundamental point, which is that honesty in politics matters. That should not be a controversial statement. In debates in this place, we are advocates for a political philosophy, and for certain political tactics, and yes, we should put forward our case as attractively as possible, perhaps using statistics that make our case more effectively than others, but if we downright mislead the public, a line is crossed. That is wrong, because it is taking the public for fools.

In the election of 2024, the Labour party had a manifesto on which every single one of its Members was elected. There was an identified £7 billion that they intended to raise through tax rises, but a core promise at the very heart of the manifesto was that apart from that, there would be no tax rises—in particular, no increases to national insurance contributions, income tax or VAT. That is the very basis of their electoral mandate, and even then, they only managed to secure 34% of the vote. The first breach of those promises came in October last year: the tax rises were for not £7 billion, but £40 billion. That was justified by a wholly fictitious £22 billion black hole, a figure that the Office for Budget Responsibility refused to support, and that the Institute for Fiscal Studies and the Financial Times, among others, could not identify.

The Government raised taxes on employers; it was a tax on jobs of fully £25 billion. The IFS said that was a “straightforward breach” of their manifesto. We were told that this was a one-off, and that the Government had “wiped the slate clean”. The Chancellor of the Exchequer’s words were that they were

“not coming back with…more taxes”;

they had fixed

“the foundations of our economy”,

and she said, “It’s now on us.” Those are not my words, but the words of the Chancellor of the Exchequer.

The second Budget is in just two weeks’ time, and no global event has blown this Government’s plans off course. There has been no pandemic, and there has been no European invasion sending electricity and energy prices through the roof. If things have changed, it has been as a direct consequence of the political and economic decisions of the Government.

[Sir Ashley Fox (Bridgwater) (Con)]

Would my hon. Friend agree that what has actually changed is the inability of the Prime Minister and the Chancellor to control their Back Benchers, who now feel free to demand whatever public expenditure they think is convenient?

[Jerome Mayhew]

My hon. Friend is entirely correct. The Prime Minister tried—half-heartedly, admittedly—to save £4.5 billion from the welfare budget. He put his Secretary of State for Work and Pensions in the ridiculous position of starting a debate arguing for £4.5 billion of savings from long-term disability and health benefits, only for her to end the very same debate advocating for a £300 million increase in those same benefits. The Prime Minister has lost control of his Back Benchers, and he has lost control of his Government’s spending.

We have had no global event, but we do have Government policies that have been economically disastrous. Labour is truly the tax-and-spend party. It has raised the tax burden to the highest in history—certainly since the second world war. As for spend, it raised £40 billion in tax, borrowed a further £30 billion, and increased spending by £70 billion. According to the Government’s own plans, they intend to borrow half a trillion pounds extra during the course of this Parliament. And for what? Has there been reform of public services? No. Public sector productivity has declined. We are getting less for our money—even more so in healthcare, where the decline in productivity is fully 8.3%. What they have done is increase wage inflation. For public sector pay, it is more than 6%, whereas in the private sector, it is a third less.

The Government are coming back for more. They intend, we are told through multiple briefings to newspapers, to breach their core election manifesto pledge and raise taxes, because they cannot reduce spending.

--- Later in debate ---

[Sir Ashley Fox (Bridgwater) (Con)]

During the general election, the Labour party said that it would not increase income tax, national insurance or VAT. It repeated that it would not increase taxes on working people. In its manifesto, it said it would increase spending by only £9.5 billion and that that was to be paid for by £7.3 billion in extra taxes and £3.5 billion in extra borrowing. That was a modest plan with a prudent margin. It was a plan put forward to the electorate to show that the party could be trusted with the public finances. My constituents might be surprised to learn, however, that if they now look on the Labour party website, that manifesto is rather more difficult to find than it was a couple of months ago.

It is fair to say that we Conservatives did not believe them, so we were not entirely surprised when, within weeks of moving into Downing Street, the Chancellor told the country that she would have to raise taxes after all. She had apparently found a magical £22 billion black hole. I say “magical” because nobody other than the Government seemed able to locate it—certainly, the Office for Budget Responsibility could not find it. It was, of course, a fiction to give the Chancellor cover for what she always intended to do, which was a massive increase in taxes, borrowing and spending, because that is what Labour does. Dogs bark, cats miaow and Labour increases taxes, borrowing and debt.

In her first Budget last year, the Chancellor did not raise taxes by the £7.3 billion promised in the manifesto. She increased taxes by £40 billion. She increased borrowing not by the promised £3.5 billion, but by £32 billion. And believe it or not, she did not increase spending by the promised £9.5 billion. She increased it by £72 billion. The Chancellor imposed £40 billion of extra taxes on our economy. She increased employer national insurance, stamp duty and capital gains tax and she imposed extra taxes on family businesses and family farms, then she pretended that none of those were taxes on working people.

[Charlie Maynard]

Will the hon. Member acknowledge that debt has risen from £0.5 trillion to £2.9 trillion from 2005 to 2026, forecast to March? That is nearly six times as much, and the great majority of that happened under the Conservatives’ watch. Yes, we can talk about covid, but covid is a very small portion of that—about £0.7 trillion—so what about the rest of it? Is anyone going to take any responsibility for that?

[Sir Ashley Fox]

The hon. Gentleman will know that the Liberal Democrats joined a coalition Government in 2010 with the Conservatives. We inherited a deficit of £156 billion in 2010—11% of GDP—and it took 10 years, to 2020, to reduce that steadily to 2% of GDP. For all the moaning and whining from the Labour Benches about austerity, what we were trying to do—as a coalition Government for five years and as a Conservative Government for the remainder—was to live within our means, and that is tough. That is really difficult. It is about improving public services, but without necessarily hosing money at them. We see that most successfully in the field of education. In England we have seen a dramatic increase in reading standards and the standards of examination of English pupils caused by genuine reforms. That compares very favourably with what has happened in Scotland and Wales, where those reforms did not take place. The skill of government is in improving public services without always spending more money. The Liberal Democrats used to have a few Members who were called “Orange Book” Members. It is a shame there are so few of them left.

Who does the Chancellor think she is kidding when she says she has not increased taxes on working people? Try telling the farmers in my constituency that they are not working people, or the young family where both parents work and are saving to pay the stamp duty on their first home. As Labour Members will recall, that first Budget was not well received, so to draw a line under her broken promises, the Chancellor said:

“We’ve now wiped the slate clean. It’s now on us. We’ve put everything out into the open, we’ve set the spending envelope for the course of this Parliament. We don’t need to come back for more.”

Except we know that that is not true. She is coming back for more. She is now set to break that promise again by putting up taxes again.

[Jerome Mayhew]

Does my hon. Friend have any idea why the Chancellor has changed her mind or what it is that has affected her decision? Just a year ago, she said that she did not need to come back for more, but now she says she does. Has there been any great global shock, or does he think the problem lies closer to home?

[Sir Ashley Fox]

I would suggest two reasons. First, our economy has slowed down as a result of the very tax increases that the Chancellor has imposed. Secondly, the feral Labour Back Benchers have made them lose their nerve. The Prime Minister and the Chancellor therefore cannot control public expenditure in any way at all. The British people are already paying the highest tax burden in 70 years and Labour wants to increase it further. It is sad to say that this Government have no clue as to how the economy works. I genuinely believe that their Front Benchers want to reduce unemployment, but have they ever considered that if they increase employer national insurance charges and the cost of employing labour, businesses might use less of it? If they pass an Employment Rights Bill that increases the cost of labour, might businesses use less labour? Might that be why unemployment has increased every month since they took office? Is that why unemployment increases under every Labour Government?

Labour is just as ignorant on the effects of taxes and spending. If the Government tax entrepreneurs, there will be less enterprise. If they increase benefits, they should not be surprised if it becomes more attractive to claim them. Unfortunately, Labour’s answer to every question is more spending because, of course, it is what they do best: spending other people’s money. We never hear about its plans to improve efficiency or get better value for the taxpayer because there are no such plans.

Labour’s higher taxes and borrowing are leading to higher unemployment and lower growth. We are in a doom loop created by the Chancellor, and if we are to revitalise our economy, the first step is for the Government to control public expenditure. That is why we have outlined our plans to reduce expenditure by £47 billion. We will reduce welfare spending by £23 billion. Unlike the Liberal Democrats, Reform UK and other high-spending left-wing parties, we would keep the two-child benefit cap. We would reduce the size of the civil service to where it was in 2016, saving £8 billion, and reduce overseas aid by a further £7 billion. We would use those savings to cut both borrowing and taxes to bring about a new spirit of enterprise and confidence in our country.

It is ironic that it is the Conservatives calling today for the Government to stick to their manifesto promise not to increase taxes. The British people will notice if they break that promise for a second time.

[Madam Deputy Speaker (Caroline Nokes)]

That brings us to the Front-Bench contributions. I call the shadow Minister.

[Gareth Davies (Grantham and Bourne) (Con)]

I am grateful to be able to respond to the debate on behalf of His Majesty’s official Opposition.

Let me start by thanking everybody from both sides of the House for their contributions, but in particular those on my side of the House. My hon. and gallant Friend the Member for South Shropshire (Stuart Anderson) pointed out the impact of the family farm tax on his farms in Shropshire and that 6,000 farms across the country have closed. The hon. Member for Harlow (Chris Vince), who is sadly not in his place—probably on the phone to his mother—spoke well about Harlow and his mum. I particularly enjoyed the bromance emerging between him and the hon. Member for Runnymede and Weybridge (Dr Spencer).

My hon. Friend the Member for Gosport (Dame Caroline Dinenage) spoke well about the impact of the rise in national insurance contributions on the Gosport employment market. My hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst) said a good quote by Margaret Thatcher. As the MP for Grantham, I particularly appreciated it, but it still rings true today about spending other people’s money wisely.

My hon. Friend the Member for Farnham and Bordon (Gregory Stafford) rightly highlighted that not a single Liberal Democrat Back-Bench MP has turned up, which I agree is completely shameful. We did hear from the hon. Member for Witney (Charlie Maynard), who had the temerity to talk about our country’s reputation when it is his leader who is prancing about in a wetsuit falling off paddleboards—slightly ironic. Finally, my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew), who made a number of important interventions, pointed out that every Labour Member should ask themselves the same question every morning when they wake up, “Who voted for this?” None of them have a mandate for further tax rises, just as they did not have a mandate for last year’s jobs tax increase. They must know this. The proof is right in front of them. Labour has over 400 Members of Parliament and fewer than 10 have shown up. I was going to say that they have come to defend the indefensible, but they have not even done that. None tried to defend the indefensible; we just heard more and more speeches about the past, while their constituents are living in the present.

I think that Labour Members know that the upcoming Budget is surely the beginning of the end. The Government have lost control. Just when the Prime Minister should be focused on fixing their mistakes, he is instead having to oversee co-ordinated briefings against the apparent plots to depose him by his own Health Secretary. It is troubling, to say the least, that the Prime Minister seems more worried about the damage coming from inside his own Cabinet than about the damage already done outside it. The truth is that the Labour party will not be forgiven. Socialism has failed everywhere and every time it has ever been tried.

We should not forget that Labour won the last election because it promised not to be a socialist Labour Government. It said that it would not fiddle with the fiscal rules to borrow more money. It said that it would not increase national insurance, income tax or VAT. It said that it would not pursue ideologically driven policies that would push up energy bills—in fact, it said that it would cut those bills by £300. Unfortunately for the country, this has very much turned out to be a socialist Labour Government after all: higher taxes, fewer jobs, lower confidence, and an economy put into reverse—back to the 1970s. That is felt in every boardroom, every workshop, every pub and every place of work across this country. The best thing that the Government can do right now is take responsibility for their actions and show leadership. After just 16 months of Labour, inflation has doubled, taxes are heading for record highs, borrowing has risen rapidly and unemployment has surged to the highest level since the pandemic. And none of that takes into account what may yet be to come.

We know that the Chancellor deliberately picked the latest time possible for her upcoming Budget, in a last-ditch hope that someone, somewhere might come up with something that makes it all better. The date of 26 November is a highly unusual one for an autumn Budget. The last time we had a Budget this late, phones still had aerials, Mark Morrison was “returning the mack”, and we had to rewind VHS tapes before taking them back to Blockbuster. If only we could rewind the past 16 months; sadly, we cannot.

[Sir Ashley Fox]

Does my hon. Friend agree that this very long lead-in period for the Budget has caused enormous uncertainty for businesses, which have faced a string of briefings in the media about every possible tax rise, and that the very date that the Chancellor has chosen for her Budget is itself causing more uncertainty and delaying investment decisions?

[Gareth Davies]

I could not agree more. In fact, markets and investors have now endured week after week of reckless and irresponsible speculation, not about whether Labour will put up their taxes, but about which taxes will go up. The endless uncertainty that my hon. Friend mentions has caused relentless Treasury kite-flying that has damaged confidence. There are so many kites in the air but none of them is tied to an actual plan.

My hon. Friend the Member for Isle of Wight East (Joe Robertson) said it well: everyone seems to be looking over their shoulder to see who the Chancellor will come for next. That cannot be what Labour MPs want in the run-up to Christmas. They have a chance tonight to reaffirm the promises that they made to all their constituents. It should be their easiest vote this year. Their core manifesto commitment, which won them the election, is printed in black and white in the motion. To fail to support the motion is to confirm to each and every one of their constituents that Labour is content to betray their trust. Be in no doubt, the country is watching.