Debate on the Address

Debate between Geoffrey Clifton-Brown and Jim Shannon

Wednesday 13th May 2026 Commons Chamber

[Sir Geoffrey Clifton-Brown]

I do not think I could design a tax increase that was a bigger tax on jobs than the hike in national insurance. I totally agree with the hon. Lady, and I think it is tragic in particular for our young people trying to get into the world of work today.

As Chairman of the Public Accounts Committee, my focus is on value for money for the taxpayer and ensuring that no expenditure goes to waste. Figures published by the National Audit Office in its “Audit insights” report in January 2026 point to a deeply worrying picture. The Government now spend around £1.1 trillion of taxpayers’ money across 17 Departments. A Department’s accounts are qualified—sorry, this is getting a little technical, but I hope the House will bear with me a little in this section of my speech—when it does not spend its budget as Parliament intends. The Department for Work and Pensions has had its accounts qualified for 36 years because its fraud and error rate is 3.3%, costing the taxpayer a staggering £9 billion. Overall—this is even more staggering—the Government have written off close to £7 billion this year across Departments, including the Ministry of Defence writing off £1.5 billion purely on cancelled projects. I repeat: £7 billion has been written off this year from cancelled and wasted projects. That is staggering.

The PAC has consistently recommended that each Department improves its digital and AI efficiencies. We believe that should be implemented from the top down, and that a chief digital and information officer should be appointed at a senior level in every Department and on arm’s length bodies. That would lead to efficiencies and savings. After all, every efficiency and every saving that can be made is more money to spend somewhere else. The public sector is constantly behind the private sector digitally, and we need to do much better to ensure that our public services actually deliver for taxpayers, using the latest and best technology to do so. AI is a tsunami that the Government are nowhere near prepared to deal with. I do not mean this as a criticism of the civil service—it is just how it is—but only 5% of the civil service have specific IT qualifications. Some experts say that needs to rise to 10%, which would be a massive transformation.

The Government announced a Bill to reform the welfare system. This year alone, the Department for Work and Pensions budget is expected to reach a projected £333 billion, or around 23.7% of UK spending. That almost outweighs the income tax payments of £330 billion that we receive from hard-working people. Imagine that: the total amount of income tax from hard-working people almost does not pay for the bill for the Department of Work and Pensions. The pension and benefit budgets are ballooning, and that expenditure is only due to increase as we mercifully live longer and healthier lives. Somebody else mentioned that we are at risk of intergenerational unfairness. There is a risk that our children will be unable to pay off this increasing debt, yet this Government have failed to take back control of this skyrocketing budget. Instead, their Back Benchers refuse to support such changes, which would cost just £5 billion.

Another issue that the PAC will be examining closely is the cost of Government compensation schemes, which over their lifetime are expected to exceed £102 billion, or just under what we pay in debt interest in any one year. The Government, of course, have a moral obligation to compensate citizens when the state makes serious mistakes, but we must do so in a fair, proportionate and non-litigious way.

Finally, and most importantly, I want to turn to defence. The first absolute duty of any Government is to ensure that our nation is properly defended. The King’s Speech made a commitment to NATO and to a sustained increase in defence spending, yet the defence investment plan, promised from that Dispatch Box in June 2025 and in every month since then—alongside the strategic defence review—has still not been published. Until we have that plan, we cannot see how the Government propose to procure all the military equipment that is needed.

[Jim Shannon]

I commend the hon. Gentleman for the speech that he is making. Does he agree that one of the things we need to do on defence here in the United Kingdom is adopt the drone technology that Ukraine now has? Russia is under threat: it is worried about the attacks that are reaching far into its interior. Does he agree that we may need a partnership with Ukraine to promote our drone technology in a way that can make us as effective as the Ukrainians?

[Sir Geoffrey Clifton-Brown]

If the hon. Gentleman is just a little patient, he will find that, two or three paragraphs down, I will address precisely that point.

Currently, the defence budget for 2025-26 is £62.2 billion, which is a measly 18% of the welfare budget of £333 billion. The Government have pledged to increase it by 2.6%, or £9 billion, by 2027 and by 3% in the next Parliament, which means a further increase of £14 billion. But none of that new money has yet arrived.