Budget Resolutions

Debbie Abrahams Excerpts

Tuesday 2nd December 2025 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

This was a positive, progressive Budget with fairness at its heart. These fiscal decisions will benefit most people, but particularly those who have been really struggling with the cost of living crisis over recent years. Those with the broadest shoulders have been asked to do their fair share of the heavy lifting, with all but the top 10% income households seeing the proportion of their net income increase by 2028-29. Fairer policies benefit us all, not just the recipients. As the International Monetary Fund has shown, reducing income inequality stimulates growth, but we also know that fairer societies improve educational attainment, social mobility, trust between communities, health status and much more.

Collectively, these tax reforms are forecast to raise over £8 billion in 2029-30 from wealth and the wealthy. The total package of tax changes has allowed the Chancellor to make some incredibly important decisions to help with the cost of living crisis and boost living standards, including increasing the minimum wage and living wage, increasing the state pension, freezing rail fares and fuel duty, and cutting £150 from next year’s energy bills.

I particularly want to talk about the abolition of the so-called two child limit. It is now believed that this measure drive the increase in child poverty from 3.6 million in 2010 to 4.5 million in 2024, causing a multitude of poverty-related harms, including an increase in the prevalence of young people not in education, employment or training. A person is five times more likely to be NEET if they experience childhood poverty, and more than half of the current NEET population belong to this cohort. Getting rid of this harmful, damaging policy will lift 350,000 children out of poverty almost immediately, and another 150,000 will be prevented from being drawn into poverty over the life of this Parliament.

I commend the former Work and Pensions Secretary, my right hon. Friend the Member for Leicester West (Liz Kendall), and the former Employment Minister, my hon. Friend the Member for Birkenhead (Alison McGovern), for bringing forward spending on employment support. I know that the current Employment Minister is keen to continue that work and escalate it. Analysis commissioned by the Work and Pensions Committee showed that supportive employment programmes such as the new deal for young people and the new deal for disabled people introduced by the former Labour Government in the noughties led to between 5% and 11% of that group getting into sustained employment for a minimum of three years. Applying this approach to the current group of unemployed and economically inactive people would ensure that schemes such as Connect to Work, WorkWell, and Individual Placement and Support, could increase employment by at least 5%, generating savings to the Exchequer of £20 billion by the end of this Parliament.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

Will my hon. Friend join me in recognising the work of charities such as Kirkcaldy Foodbank and Kirkcaldy YMCA, which joined me in Parliament earlier this year to call on the then Secretary of State for Work and Pensions, who they met, to lift the two-child cap? They underlined the need for this cruel policy to be scrapped. Indeed, Kirkcaldy Foodbank has fed 833 children so far this year, and it has welcomed the lifting of the cap. Will my hon. Friend join me in recognising that lifting the two-child cap was the only possible step to ensure that child poverty levels go down, instead of up?

[Debbie Abrahams]

I absolutely agree. It is a shame that we need food banks at all—this is the state of what we have inherited, unfortunately.

I commend the Health Secretary for the work that has been done to increase capital investment in the NHS, which will boost NHS productivity. A recent Health Equity North report, “Health for Wealth”, showed that by reducing the inequalities between the north and the south, and by improving health in the north, we can increase productivity by £18 billion a year. On health inequalities, I hope we can focus on the weighting given to resource allocation.

My final point is about the commitment to index pre-1997 accrued pensions for inflation, capped at 2.5%, where scheme rules allow. This means that pensioners whose pension schemes became insolvent through no fault of their own, and that have failed to keep pace with inflation, will now have the situation rectified. That will benefit more than 250,000 pension protection fund and financial assurance scheme members, and I give credit to the Pensions Action Group and the Deprived Pensioners Association, and to the Pensions Minister for listening to me.

This is a very good Budget. It gives hope, particularly to my constituents and others like them, so I am very grateful.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

--- Later in debate ---

[Richard Fuller (North Bedfordshire) (Con)]

Madam Deputy Speaker, before I start my comments on the subject of this debate, let me say that I am aware, and I think a number of right hon. and hon. Members are aware, that since you presided over the opening of this debate last Wednesday, you have been subject to abuse online, with a series of presumptions on your ethnicity and your place of birth. I would like to say—I think on behalf of all of us here—that you have presided over this debate fairly, competently and in the best traditions of this House. [Hon. Members: “Hear, hear.”]

Whereas—what a colossally inept and incompetent Budget process this has been. The public believe they have been misled, seasoned journalists have been shamefaced, and the head of the OBR has resigned. This is a Budget not guided by principle or a road map for the future, but by a sleight of hand on the British people. It is a Budget that means even lower growth in real disposable incomes for households up and down the country, that increases taxes and increases borrowing rather than controlling them, and contains a total of zero measures that will have any impact on economic growth.

Yet after all the chaos, after all the briefings, and after all the kite flying, leaks and resignations, the core theme of the Budget remains what it has always been: a Budget for “Benefits Street” paid for by raising taxes on working people—a Budget delivered by a Chancellor who is out of her depth, enabled by a Prime Minister who is out of touch. Held captive by Labour Back Benchers, the Chancellor and the Prime Minister decided to put party before country, but despite all the pandering, their careers are still held captive. This Budget is the most expensive botched hostage rescue operation in British history.

This Budget process has raised important issues of accountability. Labour’s election manifesto said:

“Labour will not increase taxes on working people”.

But this Budget extends the freeze in tax thresholds for a further three years. Last year, the Chancellor said:

“we now wipe the slate clean”

and that she would not need to come back for more. But this Budget increases taxes by a further £37 billion and borrowing by a further £57 billion over the next five years. The Chancellor held an unprecedented breakfast address to the nation. But the BBC’s Chris Mason said:

“the words on the day left an impression not at one with the facts we were later to discover and which the chancellor knew at the time.”

Yesterday, the chairman of the OBR resigned. Many in the country believe the Chancellor should reflect and make the same decision.

This could have been a Budget for alarm clock Britain: for the people who work hard to create a better future for their families, their children and grandchildren—the sort of people who believe in an honest day’s pay for an honest day’s work, and who think it is unfair for the Government to increase their taxes to pay for more benefits; for the people who understand personal responsibility, especially when it comes to having children, and do not see why people on benefits should not have to make the same choices that they have to make.

[Debbie Abrahams]

When the shadow Minister talks about people in work, is he referring to the families with three or four children who, despite the fact that they are working, are living in poverty? How dare he castigate them and say those awful things, when working families are struggling because of the appalling circumstances that the previous Government left us with?

[Richard Fuller]

The hon. Lady needs to recognise that people are struggling because of decisions made by this Government.

The people do want better public services, but they do not understand why, after the Government handed out a 15% pay hike to train drivers, more trains are running late this year compared to last year. People are striving to make ends meet as prices rise, perhaps putting a little aside to create a better future for their children, and they say that this Budget will make their lives worse, not better. The verdict is in: by more than two to one, the public think that this Budget is unfair, and only 2% think it will make them better off. They are right.

This Budget attacks the strivers in our society—the engines of our economic growth. It confirms the devastating attack on family farms when we need greater food security, increases taxes on dividends when we need to encourage risk taking, discourages saving for retirement, and widens the division between pension protections for public sector and private sector employees. It deals a blow to start-up businesses that want to share their success with their employees, and raises taxes on working people, breaking the Labour party’s own manifesto promise.

This Budget makes it clear that the Labour Government do not believe in personal responsibility, do not understand the spirit of enterprise, will punish aspiration and are too weak to make the hard choices that our economy so desperately needs if it is to get back on the right track.