Middle East: Economic Update

David Burton-Sampson Excerpts

Tuesday 21st April 2026 Commons Chamber

[Rachel Reeves]

I welcome the fact that the hon. Lady and her party opposed the war and did not want the UK to become involved, unlike the Conservatives and Reform. However, I find what she has just set out fundamentally economically illiterate. The idea that a great fiscal policy is to close the strait of Hormuz! Why did we not think of that when we came to office? If we close the strait of Hormuz, all our problems will be over because we can get in all this money—that is what the hon. Lady is suggesting; that we will get some great windfall from a tax. The truth is that the IMF and every other forecaster are clear that tax revenues will be lower, not higher, because of the conflict in the middle east. The money that the hon. Lady wants us to spend simply does not exist. I am afraid she is falling into the failed economic policies of the Conservatives, who delivered untargeted, unfunded support that resulted in higher interest rates, higher inflation and higher taxes. She is suggesting an untargeted approach, but that is what got us into the mess we are in today.

I welcome the fact that the hon. Lady supports us on decoupling, which is the right thing to do with our gas and electricity prices. I regret that she and her party did not support the Planning and Infrastructure Act 2025, which enables us to build the homes and energy infrastructure that we need. On working with banks, the Department for Energy Security and Net Zero is working with every high street lender and energy company to help people who are struggling with their bills.

[David Burton-Sampson (Southend West and Leigh) (Lab)]

As my right hon. Friend mentioned, in 2022 Liz Truss launched a household energy support package that provided blanket support to every household, including the most well off. It was estimated to cost between £57 billion and £60 billion, just over the first six months; that was predominantly funded by borrowing. Does my right hon. Friend agree that the right and fiscally responsible thing to do during this crisis is to provide targeted support to those who need it most?

[Rachel Reeves]

More than one third of that support for energy bills went to the top third of households. That makes no sense at all, especially when those households then end up being burdened with higher interest rates on their mortgages, higher inflation in the shops, and higher taxes for years to come. The right approach is a targeted one, to keep costs and interest rates down for everybody. Of course, the best economic policy would be a de-escalation of this conflict, not ramping it up, as the Conservatives and Reform want to do.