Budget Resolutions and Economic Situation

Chris Coghlan Excerpts

Wednesday 28th October 2026 Commons Chamber

[Dame Meg Hillier]

I look to the reputation of my predecessor in this role, who took her job very seriously but would still make a point. It would be very difficult for me to stand up and, from the Government Back Benches, not react to those in the Conservative party who crashed the economy in 2022 and left a lot of the mess that we are now dealing with. I am passionate about these issues because I spend a long time looking at public spending and at the waste of the previous Government, as does the Public Accounts Committee, quite rightly. It should challenge this Government on any waste of taxpayer pounds, because taxpayers work hard for their money and they need to be sure that someone is watching the Government to make sure that they are spending it as well as they can. We know that that is not always a simple task.

I look to welfare reform. Yesterday, I was with the Secretary of State for Work and Pensions in my constituency of Hackney South and Shoreditch. We met with Scope, which is doing amazing work with disabled people. Some 72% of the recent cohort supported into work were still in work 26 weeks later—people who had been written off by the system. If we make sure that it is done properly through some of the devolution measures that the Government propose, we can make sure that the “names not numbers” approach is replicated across the country, where there are already good examples.

I welcome the Chancellor’s decision to fund the defence investment plan—again, I looked at this issue for many years as Chair of the Public Accounts Committee. It is right that we stand with Ukraine—a cross-party position—and it is right that we spend the right money on defence. Unfortunately, the last Government reduced the money spent on defence to a ridiculously low level under austerity, leaving us exposed to the challenges we face in the world. I hope that we will have cross-party consensus that we need to increase defence spending and back the Chancellor in that mission.

[Chris Coghlan (Dorking and Horley) (LD)]

I was very pleased to see the Chancellor announce £5 billion more in the Budget for defence research and development, which—[Interruption.]

[Madam Deputy Speaker]

Order. Whose phone is going off? Please fix your phone.

[Chris Coghlan]

Does the hon. Member agree that the announcement of £5 billion more in the Budget for defence R&D through the British Business Bank could have profoundly positive implications for our national security and growth, as I have urged, if the Government scale it further from here?

[Dame Meg Hillier]

I count the hon. Gentleman as a friend, because he serves on the Treasury Committee and is indefatigable in his attempts to ensure that the Government are listening about research and development in defence and across wider sectors. It sounds as though, between us, the Government have heard that message.

Before I move on to the main thrust of the Budget, I want to address the Leader of the Opposition’s comment about plan 2 student loans. The Treasury Committee looked at this issue, which is having a very big impact on that generation of young graduates—the engine room of Britain, and the people who will be funding and growing our economy in the years to come, and making sure that the ageing population is supported. We need to do everything we can, and intergenerational fairness is a big strand of the Treasury Committee’s concerns, but let us be clear: who set up plan 2 student loans? It was the previous Government.

I talk a lot about slow politics. Governments should make decisions that will stand the test of time in 10 or 20 years, as well as dealing with the challenges of today and the catastrophes that might occur, either globally or locally, next week. Plan 2 student loans were designed by the Conservative Government and left as a ticking time bomb for this generation to pick up. Although I am saddened that we have not seen a change to the threshold at which repayments are made, I hope that the Chancellor will consider that as part of his longer-term plans, to make sure that this generation has one fewer burden. I hope that we will see some talk about that in the weeks to come.

Before the Chancellor rose to his feet it seems that some bank shares increased in value. I am concerned about that and, with the permission of the Treasury Committee, I will write to the Financial Conduct Authority to see if there is any evidence of leaked market-sensitive information that may have led to that movement, because that would be a very serious issue. On that point, I congratulate my right hon. Friend the Chancellor on his very strong clampdown on speculation and leaks ahead of this Budget. He knows, as we all do, that stability is so important. He cannot completely halt wild speculation, but clamping down on leaks from the Treasury and the wider system is very important.

Despite the headwinds, the debt forecast has only slightly worsened. We have seen a Budget that pushes stability, and I welcome some changes in particular. The Treasury Committee looked at cash ISAs and the changes that were proposed in last year’s Budget, and as we said then, it was not the right approach. Building societies use cash ISAs to lend to home purchasers, and they were going to be particularly badly hit. Most people have much less than £20,000 in a cash ISA, and many never get anywhere near £12,000. The average is between £3,000 and £7,000, depending on how we cut the figures, so it is right that the Chancellor has made changes. I look forward to seeing the starter ISA for investors, and the Committee will examine the changes in detail, but the previous proposal had overcomplicated the system. The ISA is a trusted brand, and the Chancellor has taken a good step.

On the subject of building societies and mutuals, in a hidden corner of the Red Book is the announcement that my hon. Friend the Member for Peterborough (Andrew Pakes) has been appointed as the Government’s co-ops and mutuals champion. I commend him for achieving that position following his many years of hard work in this area. As the chair of the Co-operative group of MPs in Parliament, I am delighted that the Government are further leaning into the progress they have already made in supporting co-ops and mutuals. That is important for getting growth and the involvement of people in every community up and down the country, because this is a way of people owning and having a say in the shaping of their services and their outcomes, whether it is a credit union, a food co-op or a childcare co-op—the list goes on. There are many opportunities.

I welcome the reform of lifetime ISAs—again, something that the Treasury Committee produced a report on. The removal of the penalty payment seems like the only just approach to that. We have a challenge when products such as ISAs are created but do not work as well as they could, so I welcome the Chancellor looking at that.

I am delighted to see some changes in housing. In my constituency, house prices are rocketing through the roof, rents are high and thousands of people are living in temporary accommodation, and those in housing are often severely overcrowded. Every weekend I visit people who are living with three children in a one-bedroom flat—a very typical picture—with no freedom or agency to move, because the cost of housing is too high, the cost of rent is too high, and we do not have enough social housing. Indeed, it is cheaper to buy back from a leaseholder who is selling their property than it is to build new houses, so the VAT reduction for housing associations is a welcome first step.