VAT on Medication: Compassionate Access Schemes

James Murray Excerpts

Monday 7th September 2026 Commons Chamber

[The Financial Secretary to the Treasury and Paymaster General (James Murray)]

It is a pleasure to respond to this debate. I thank my hon. Friend the Member for Uxbridge and South Ruislip (Danny Beales) for securing it, and for all his engagement and campaigning on this important issue. I know from my conversations with my hon. Friend that he cares deeply, as do I, about ensuring that patients can access innovative medicines, particularly when there is unmet clinical need.

Free-of-charge arrangements play an important role in giving patients early access to medicines, as my hon. Friend so powerfully illustrated when he spoke about the patients and families who have shared their stories with him. I was moved to hear the experiences of those patients, and am grateful to my hon. Friend for sharing them this evening. My thoughts, as I am sure every Member’s thoughts will be, are with those patients and families, including the family of the young woman who my hon. Friend told us had tragically passed away. I am sure that everyone in this House agrees that we must find a solution that means that those patients, and others like them, can continue to access lifesaving medicines.

Before responding to the points made, I will first set out some of the context for the existing VAT treatment of donated medicines. This evening’s debate concerns the application of long-standing VAT rules to some medicines supplied free of charge. Under UK VAT law, some transactions where no money changes hands are treated as though a supply has been made, and these are known as deemed supplies. These rules help to keep the VAT system fair where a business has reclaimed VAT on its costs. These are not new rules introduced by this Government; they are long-standing features of the VAT system dating back to the early days of VAT, before the VAT Act 1994.

His Majesty’s Revenue and Customs wrote to the sector in 2023 as part of the process of ensuring that businesses pay the correct tax. However, the Government recognise concerns raised by pharmaceutical companies and patient groups about the potential impact of this treatment on free-of-charge access and, ultimately, on patients. That is why, as my hon. Friend mentioned, on 23 June, my predecessor announced that the Government would bring forward a new approach as soon as possible. As set out in the written ministerial statement on 2 July, the Government are considering either changes to the VAT rules or a reimbursement scheme. The new approach will be effective for donations made on or after 23 June 2026.

Officials in the Treasury, HMRC and the Department of Health and Social Care have been working closely together and engaging constructively with the pharmaceutical sector to develop the detail of both options. That work must ensure that any approach supports patients while being legally robust, operationally workable and sustainable. We recognise that free-of-charge medicines are supplied through a variety of arrangements. Those include early and expanded access, post-trial access and arrangements that operate after Medicines and Healthcare products Regulatory Agency authorisation.

My hon. Friend raised the question of which medicines would be in scope of the new approach, and the Government are considering this question carefully in collaboration with the sector. The solution must capture genuine patient access arrangements without creating unintended consequences elsewhere in the VAT or supply systems. It is important that we complete that work quickly, so that patients across the UK can benefit from innovative medicines as quickly and safely as possible. It is equally important that we get this right to avoid inadvertently omitting important avenues by which medicines are donated, or opening the door to abuse. That is why we are working closely with industry to craft the scope appropriately.

My hon. Friend asked which forms of donation would be in scope, and whether the solution would apply only to donations to the NHS. He will appreciate that I am not in a position to announce any final decisions today, while work remains ongoing with the firms. However, I can reassure him that I have no desire to artificially circumscribe the scope of the new approach and unduly leave out genuine donation practices.

My hon. Friend asked about timelines. I regret that as we are talking about a potential tax change, I cannot give further detail, beyond reassuring him that I have reiterated the urgency that we both feel, and the need to reach a swift resolution, and I have imparted that urgency to my officials. On historical liabilities, the new approach will apply to donations made on or after 23 June 2026, but I am happy to hear input from firms on that point as we go through the process. On co-ordination in the case of AstraZeneca, it would not be appropriate for me to comment on the tax affairs of an individual taxpayer, but I would certainly encourage firms in the round to share the detail of any specific concerns they have with my officials. On whether HMRC could publish a business brief to fix this issue, as a matter of existing law, firms must account for VAT on donated medicines. An HMRC brief can communicate a change in policy only when the law itself has changed, or following a judicial decision requiring a change in law. A Revenue and Customs brief cannot itself make the change in law.

Finally, I share my hon. Friend’s desire to see Bayer return to the early access scheme, so that patients can regain access to innovative medicines. We have committed to applying the new approach retrospectively to donations made on or after 23 June 2026, and I hope that Bayer takes confidence from that and rejoins the early access scheme as soon as possible.

[Danny Beales]

The Minister is being very generous in giving way, as ever, and I appreciate his response about the limitations of the business brief process. If amending the VAT Act 1994 is the right route, does the Minister know roughly how long that would take to find a resolution? I fully his support his point about Bayer re-engaging. The Government have moved in good faith, and I hope Bayer will, too.

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[James Murray]

As the changes we are discussing concern a potential tax change, I am afraid I cannot give my hon. Friend further detail about any timeline, but I reiterate that I have imparted to my officials in the Treasury and HMRC the urgency that I feel about this, and that my hon. Friend and others will share. I am glad he joins me in calling on Bayer to take confidence from what we have announced and to rejoin the early access scheme as soon as possible.

I again thank my hon. Friend for securing this debate, and for the constructive way in which he has raised this issue, both this evening and in the past. In concluding, I would like to pause to reflect on the impact of continued access to medicines for patients. Individual Members have raised with me the importance that early access to medicines can have, especially for those in the most tragic of circumstances, who sadly have few other options. I have been moved in hearing those cases, and it is vital that we keep those medicines accessible. I am grateful to Members from across the House for bringing this issue the attention it deserves. I am also grateful for the constructive engagement that my officials have had with the pharmaceutical sector, and I know we have a common goal of resolving the issue swiftly. I look forward to setting out further detail once that work has concluded and when final decisions have been taken.

Question put and agreed to.

Employer National Insurance Contributions: Small Businesses in Hampshire

James Murray Excerpts

Wednesday 2nd September 2026 Westminster Hall

[The Financial Secretary to the Treasury and Paymaster General (James Murray)]

It is a pleasure to serve under your chairship, Mrs Barker. I thank the hon. Member for North East Hampshire (Alex Brewer) for raising this issue today and for bringing representatives of businesses in her constituency to Parliament to listen to this debate about such an important issue.

As the hon. Member mentioned, the Government are prioritising growth. In the first half of this year, we were the fastest growing economy in the G7. The Government’s vision is to make sure that growth is felt in every community, high street and postcode. Small and medium-sized businesses are central to that ambition, because they play such an important role in every community across the country, creating jobs, supporting local economies and helping to drive better living standards.

Sustainable economic growth depends on stable public finances. Fiscal discipline has to be the bedrock of economic stability, and that stability is necessary to support investment, confidence and long-term growth. As hon. Members will know, the Government have taken decisions on tax, welfare and spending in order to repair the public finances, protect economic stability and fund the public services on which families and businesses rely and into which the hon. Member for North East Hampshire called for greater investment.

As part of that wider fiscal consolidation, changes have been made to employer national insurance contributions. Those changes were introduced from April 2025 and were accompanied by significant protections for smaller employers, including the more than doubling of the employment allowance to £10,500. That means that around 900,000 employers—around 40%—will have no employer national insurance liability at all. In North East Hampshire alone, around 2,300 employers benefited from the employment allowance in ’25-26. Overall across the country, the employment allowance was estimated to be worth around £7.4 billion in the last tax year.

In addition, businesses can claim employer national insurance contribution reliefs, including for under-21s and under-25 apprentices, which are worth around £2.5 billion a year. That means that employers pay no employer national insurance contributions for apprentices under 25 or employees under 21 on earnings up to £50,270.

The UK’s 5.7 million small and medium-sized enterprises are central to growth across the country. The Government are backing them to succeed, supporting entrepreneurship and helping people to live well in every part of the country. Again, I thank the hon. Member for securing today’s debate.

Question put and agreed to.

Oral Answers to Questions

James Murray Excerpts

Tuesday 28th April 2026 Commons Chamber

[John Milne (Horsham) (LD)]

4. What discussions she has had with the Secretary of State for Defence on the effectiveness of the defence industrial strategy.

[The Chief Secretary to the Treasury (James Murray)]

The Chancellor and the Defence Secretary meet regularly to discuss defence, including the defence industrial strategy. As part of those discussions, they recently met leaders from the UK financial sector to discuss how private investment can also be leveraged to accelerate defence readiness, building on the commitments made in the defence industrial strategy.

[John Milne]

In my constituency of Horsham, Chess Dynamics, which is part of Cohort, is a world-leading developer of counter-drone and air defence technology—exactly the capabilities that we need. Yet Chess, like much of the defence industry, has been kept on hold since last year, awaiting clarity on the defence investment plan. Without it, it cannot commission new air defence systems, leaving the next generation of Royal Navy frigates potentially exposed. It needs to know now. Will the Minister agree to meet me and Chess Dynamics to provide certainty on the investment that everyone says we need, but which simply is not happening yet?

[James Murray]

Investment in defence under this Government is under way—just look at the contracts. Over a thousand have been signed since the general election: I point the hon. Gentleman, and anyone else in the Chamber, to the billion-pound contract for medium helicopters in Yeovil, the half-a-billion pounds invested in state-of-the-art radar systems and the £100 million boost to support submarine-hunting aircraft. This Government are raising investment in defence to the highest sustained level since the cold war and it is at the core of ensuring that we are protecting our nation’s security.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

What consideration has my right hon. Friend given to joining the Defence, Security and Resilience Bank to make sure that we are really pushing the investment that we need to see in defence in the current world situation?

[James Murray]

The UK has already signed up, with Finland and the Netherlands, to the multilateral defence budget, with this Chancellor taking a lead. I know the importance to this Government of security, which is not just something that we can achieve on our own but by working with allies to ensure that we are safer in future. I will add that we on the Government Benches are committed to remaining a core part of NATO, unlike some of the Opposition parties.

[Mr Speaker]

I call the shadow Minister.

[James Wild (North West Norfolk) (Con)]

The Chancellor said,

“National security always comes first”,

but she delayed the helicopter contract for our industrial base and we know that she is blocking the defence investment plan. Labour’s former Defence Secretary and secretary general of NATO, Lord Robertson, said,

“We cannot defend Britain with an ever-expanding welfare budget.”

He is right, so why is the Chancellor failing to grip the benefits bill and invest in our defence?

[James Murray]

Those on the Opposition Front Bench have some cheek. The hon. Gentleman is sat next to the hon. Member for Central Devon (Sir Mel Stride), who oversaw the biggest increase in welfare spending on record, with a £33 billion increase in welfare spending in the last year of the Conservative Government. This Government are serious about getting people back into work, while increasing defence investment at the same time to 2.6% of GDP by next April—something the previous Government never managed.

[Zöe Franklin (Guildford) (LD)]

5. What assessment she has made of the potential impact of the conflict in the middle east on the cost of living.

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[Catherine Fookes (Monmouthshire) (Lab)]

13. What steps she is taking to support economic growth in Wales.

[The Chief Secretary to the Treasury (James Murray)]

The Government are investing in Wales’s industrial future and unlocking economic growth, including by providing £2.5 billion for the UK’s first small modular reactor in Anglesey to support up to 3,000 jobs and power 3 million homes. We have also recently agreed a new £50 million defence growth deal for Wales. We are backing Welsh freeports and investment zones, and we are connecting people and businesses with at least £445 million-worth of rail infrastructure investment right across Wales.

[Catherine Fookes]

The people of Magor and Undy have been celebrating the fact that they are getting a new train station, thanks to two Labour Governments working together to deliver it. It is therefore unbelievable that Reform’s leader in Wales recently said that nobody wants or needs these new stations. Does the Minister agree that new railway stations are essential for economic growth, and does he think that Reform does not listen to what people in Wales want, or that it just does not care?

[James Murray]

I completely agree with my hon. Friend that the UK and Welsh Labour Governments’ generational commitment to the future of rail in Wales is fantastic for her constituents right across Monmouthshire. It is frankly outrageous to hear Reform’s leader in Wales trying to tell people what they want, and even more shocking that Reform has promised to rip up our plan. New railway stations are indeed critical for economic growth, and only Labour will build the rail network that people in Wales need and deserve.

[Dr Beccy Cooper (Worthing West) (Lab)]

15. What fiscal steps she is taking with Cabinet colleagues to help reduce costs for commuters.

[The Chief Secretary to the Treasury (James Murray)]

The Government are acting to ease the cost of living for commuters, including by extending the £3 national bus fare cap to March 2027. We have also frozen regulated rail fares for the first time in 30 years, which will save the average commuter travelling from Worthing to London using an annual season ticket £360 a year.

[Dr Cooper]

I thank my right hon. Friend for freezing rail fares, which will indeed help to ease the cost of living for many commuters, such as my constituents in Worthing West, many of whom have jobs here in London or in Brighton. Southern has been rated the worst value for money rail operator in a national passenger survey. As we move to nationalisation of our service and finally see the back of Southern rail next month, will the Minister ensure that investment is available for key issues such as reducing overcrowding and improving the reliability and punctuality of our vital south coast services?

[James Murray]

My hon. Friend is right to make it clear that improving services for passengers is our absolute priority as rail operations come into public ownership. When Southern rail is brought into public ownership, it will be expected to focus relentlessly on improving passenger experience, reliability and punctuality, and it will be held to account for doing so.

[Alicia Kearns (Rutland and Stamford) (Con)]

In rural areas like Rutland and Stamford, we are reliant on our cars, so fuel costs are hitting us hard. I have a simple ask that the Chancellor could deliver on now: will she expand the 5p per litre rural fuel duty relief to more areas as soon as possible, particularly Leicestershire, Rutland and Lincolnshire, where it is desperately needed?

[James Murray]

As my hon. Friend the Exchequer Secretary has already set out many times today on fuel duty, we inherited plans from the previous Government that would have seen fuel costs go up for people across the country. We have extended the 5p cut on fuel duty and extended the freeze, which is an important way of helping people with the cost of living right now.

[Bradley Thomas (Bromsgrove) (Con)]

16. What assessment she has made of the potential impact of changes to business rates announced in the autumn Budget 2025 on the retail, hospitality and leisure sector.

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

T6. It has been widely reported in the press that the Chancellor is rightly considering issuing defence bonds. I know that the Chancellor agrees with me on the value of defence research and development. Does she or the Minister agree that defence bonds could be a powerful way to increase R&D and raise economic growth?

[The Chief Secretary to the Treasury (James Murray)]

Whatever the purpose, spending funded from bonds issued by the Government adds to the national debt and so must be considered within the fiscal rules. But the hon. Gentleman is right to point to the importance of research and development within the defence industry to support economic growth. I am proud that last year we allocated £400 million for UK defence innovation to foster a world-leading UK defence tech sector.

[Michael Wheeler (Worsley and Eccles) (Lab)]

T9. This Labour Government have ensured that, as of this month, workers in Worsley and Eccles and across the country get sick pay from day one, including low-paid workers. As chair of the USDAW parliamentary group, and having campaigned for this, I welcome this so much. Does the Chancellor agree that it is only Labour, with its trade union link, that is on the side of working people?

European Union Finances: Annual Statement

James Murray Excerpts

Thursday 26th March 2026 Written Statements

[The Chief Secretary to the Treasury (James Murray)]

I am today laying before Parliament, “European Union Finances Statement 2025: Statement on the implementation of the Withdrawal Agreement” (CP 1538). This is an annual publication; this year’s edition covers the period from 1 January 2025 to 31 December 2025. This publication is available on the gov.uk website.

The publication sets out the Government’s updated estimate of the financial settlement on withdrawal from the EU. HM Treasury estimates that the total net value of the financial settlement is £30.9 billion since the UK ceased to be an EU member state in February 2020. Of this, £25.7 billion has been paid up to the end of December 2025, and the forecast of future outstanding net liabilities is £5.3 billion.

[HCWS1478]

Devolved Governments: 2025-26 Funding

James Murray Excerpts

Tuesday 24th March 2026 Written Statements

[The Chief Secretary to the Treasury (James Murray)]

In addition to changes in devolved Government funding at supplementary estimates 2025-26, and in line with the statement of funding policy, the Welsh Government have chosen to draw down £285.901 million in resource DEL (excluding depreciation), £53.395 million in capital DEL (general) and £10.704 million in capital DEL (financial transactions) from the Wales reserve in 2025-26. This is in line with the funding arrangements set out in the Welsh Government’s fiscal framework.

There have been further changes to devolved Government funding due to the application of the Barnett formula that were processed after the finalisation of supplementary estimates 2025-26. In 2025-26 these have resulted in changes of:

-£0.208 million resource DEL (excluding depreciation) and £2.890 million capital DEL (general) for the Welsh Government

-£0.344 million resource DEL (excluding depreciation) and £0.188 million capital DEL (general) for the Scottish Government

-£0.468 million capital DEL (general) and -£0.921 million capital DEL (financial transactions) for the Northern Ireland Executive in 2025-26.

The Northern Ireland Executive will also carry forward an increase of £0.078 million capital DEL (general) and defer a -£0.145 million resource DEL (excluding depreciation) reduction to 2026-27.

The Welsh Government will also return £11.790 million resource DEL (excluding depreciation).

Revised 2025-26 devolved Government funding is as follows:

Northern Growth Strategy: Next Steps

James Murray Excerpts

Thursday 19th March 2026 Written Statements

[The Chief Secretary to the Treasury (James Murray)]

My noble friend the Financial Secretary to the Treasury (Lord Livermore) has today made the following written ministerial statement.

On Tuesday 17 March, the Chancellor updated Parliament on the Government’s economic plan to increase living standards, build resilience and bolster the security of the UK economy. I am today setting out more detail on a core part of that plan—how the Government will drive growth in the north of England, working alongside local leaders, as part of our wider regional growth strategy.

Today the Government have laid the “Northern Growth Strategy: Next Steps” (CP 1549). As set out in the “Northern Growth Strategy: Case for Change” (CP 1485) published in January, there is significant national benefit to boosting growth in the north. Just growing the north’s five most populous mayoral strategic authority areas’ productivity to the national average could add around £40 billion per year in gross value added, alongside around £15 billion per year in fiscal revenues. That is why the Government have put the north of England at the centre of their regional growth plans including through unlocking the northern growth corridor, stretching from York to Liverpool across the Pennines; and making the most of unique strengths in the north-east, and wider north.

The publication laid today sets out how investment in Northern Powerhouse Rail will serve as the backbone for economic transformation across the region, alongside action to grow and densify northern cities, to back industrial strategy clusters where they excel, and to decentralise our political system and put real power in the hands of local leaders. This publication begins a new phase of deeper engagement with a wide range of local partners, to further develop the northern growth strategy, with a further update intended for the autumn.

The document sets out the next steps the Government are taking now, to support their strategy, including through:

City Investment Funds

The city investment funds, announced earlier this week by the Chancellor, provide £2.3 billion of new grant, loan and patient capital funding, with up to £1.7 billion going directly to mayors of the largest city regions in the north, to unlock large-scale city centre development, in particular where there are issues around viability.

The fund will bring together different types of finance, deployed flexibly to accelerate projects, expand city-centre housing and office markets, and support major regeneration schemes across the north, including:

The Victoria North development in Manchester, one of the largest city-centre regeneration schemes in the UK

Transformation of Liverpool central gateway and sites at the Knowledge Quarter

Regeneration and densification around Leeds City station, Leeds South Bank, and the new Bradford Northern Powerhouse Rail station

Developing projects in the Don Valley corridor, Sheffield city centre innovation spine, and Rotherham town centre

Accelerating development across the proposed mayoral development zone spanning Newcastle and Gateshead, with Gateshead Quays and Forth Yards as flagship anchors.

By combining early catalytic funding with a long term focus on reinvestment, city investment funds will support sustainable growth, crowd in private capital, and help cities realise their full economic potential.

Industrial Strategy Cluster Partnerships

The Government are backing five areas in the north, supported by £150 million clusters investment from the British Business Bank, supercharging growth driving sectors where they already excel. New place based partnerships will be established with local leaders, businesses and universities to strengthen and accelerate growth in the north’s globally competitive industrial strategy clusters. For example:

Transforming Greater Manchester into a “global growth cluster” in life sciences, advanced manufacturing and digital and technologies, including through investing hundreds of millions into the development of Manchester digital campus. The campus will bring together 8,800 civil servants and Ministers in the heart of the city, solidifying Manchester’s status as a digital and AI hub, bringing more high-skilled jobs to the area, and saving the taxpayer billions through consolidating existing estate.

Strengthening Liverpool city region’s role as a leading centre for life sciences and digital technologies, including through investment in a new national cryogenics facility that will help establish the north-west as a hub for ultra-low temperature research, expected to attract investment from sectors such as quantum, healthcare and fusion; creating high-quality jobs and boosting our national security.

Supporting West Yorkshire’s financial services and professional and business services “Northern Square Mile” in Leeds, promoting it as a destination for global financial services businesses supported by the Office for Investment: Financial Services concierge service.

Working with partners to further develop the clean-energy “supercluster” across the north-east, Tees Valley, York and North Yorkshire, and the Humber. The Government will work in partnership with local leaders and businesses to attract and develop clean energy industries investment and infrastructure into the region.

Building on South Yorkshire’s strengths in advanced manufacturing and defence through its £50 million defence growth deal to strengthen sovereign manufacturing capability. This will boost the region’s strengths in the research, development and engineering of materials critical to the next generation of defence capabilities.

Fiscal Devolution

Looking ahead to the Budget, the Chancellor confirmed that she has asked Treasury officials to work with mayors and businesses to develop a road map for future fiscal devolution. This will set out plans to give regional leaders a share of the revenue from some national taxes and will consider income tax alongside other taxes. The Chancellor’s objective is to provide mayors with the long-term financial certainty that they need to invest in a way that is practical and responsible. Therefore this work will be guided by four key principles: empowerment, accountability, sustainability and fairness.

The Government will continue to develop the northern growth strategy in partnership with local stakeholders. To support this, an invitation for views is being launched alongside the document laid today. This sets out a series of questions around connectivity, regeneration and densification of cities, business investment, skills, and culture. The invitation for views will close on 31 July 2026. The Government will review responses over the summer to strengthen the approach, ahead of a further update in the autumn.

Across the north, places are demonstrating what sustained investment, strong local leadership and clear long-term direction can achieve. The challenge now is to build on that momentum and scale it up at pace. We look forward to working together with mayors and local partners on this collective endeavour over the coming months.

The report is published on gov.uk: https://www.gov.uk/government/publications/northern-growth-strategy-case-for-change/northern-growth-strategy-case-for-change

[HCWS1423]

Oral Answers to Questions

James Murray Excerpts

Tuesday 10th March 2026 Commons Chamber

[Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)]

3. What fiscal steps she is taking to support the community ownership of assets.

[The Chief Secretary to the Treasury (James Murray)]

Through the English Devolution and Community Empowerment Bill, the Government are introducing a strong, new community right to buy. That will empower communities to take ownership of and protect local assets. Alongside those new powers, the Pride in Place programme will provide up to £5.8 billion over 10 years to support 284 neighbourhoods, enabling local people to choose to fund a range of activities, including developing or restoring important community assets.

[Preet Kaur Gill]

After 14 years of Conservative austerity, many communities like mine have seen the assets that matter most to them hollowed out. I welcome the Government’s community right to buy, because putting local people in control of local assets is simply common sense. In my constituency, Woodgate and Bartley Green will receive £20 million through Pride in Place funding over the next decade thanks to this Government. Does the Minister agree that tackling barriers such as access to finance will help communities to take ownership of local assets and rebuild neighbourhoods?

[James Murray]

My hon. Friend is absolutely right. Pride in Place funding can be used for communities to take ownership of and support local assets, from youth centres to libraries and cultural venues. I am very glad to hear that the funding will make such a positive difference to her constituents in Woodgate and Bartley Green, and I am proud that this Government are putting people in control of what happens in their local area.

[Calum Miller (Bicester and Woodstock) (LD)]

Across my constituency, there are three things that small villages tend to have: a pub, a church and a village hall. The community asset policy will support community ownership of the pubs, but I am hearing from those who run large faith buildings that they are deeply concerned about the changes to VAT relief on listed buildings. Will the Minister agree to meet me and others who are literally trying to repair the church roof to discuss that uncertainty?

[James Murray]

As the hon. Gentleman will be aware, this scheme is operated by the Department for Culture, Media and Sport, so I am happy to ask colleagues in that Department to come back to him.

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[John Glen (Salisbury) (Con)]

5. Whether she has made an assessment of the potential impact of the Office for Budget Responsibility's growth projections for 2026 on future departmental spending levels.

[The Chief Secretary to the Treasury (James Murray)]

At the spring forecast last week, my right hon. Friend the Chancellor showed that we have the right economic plan. Our plan has lowered inflation, borrowing, debt and debt interest payments. Our approach means that investment is up, helping to create the conditions for growth across the UK. Our firm approach to public spending is helping to keep public finances on a sustainable path.

[John Glen]

Given that the Chancellor has pencilled in 0.3% real-terms growth in public spending in 2029-30, and assuming that health spending is at its historical average, the special educational needs and disabilities spend is as per the proposals, and defence is at 3%, that will leave a 2.5% real-terms cut in unprotected Departments. What plans do the Chancellor and Chief Secretary to the Treasury have to fill that £13 billion gap in the 2029-30 envelope?

[James Murray]

If the right hon. Gentleman looks at the plans that we set out through our spending review, he will be clear that we are increasing spending by £50 billion a year by 2028-29 compared with the previous Government’s plans. At the same time, we are ensuring that taxpayers get value for money. We are making £3.9 billion of efficiency savings by 2029-30, rising to £5 billion by 2030-31.

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

The Government’s spending plans look very, very iffy. The Minister has a chance of fitting in with the Chancellor’s fiscal rules—if there is no further downgrade on economic growth, which seems unlikely; if the Government have the backbone to rein in public spending and to increase taxes in the last years of the Parliament, which seems very unlikely; if the Government do not have to step in with any significant energy support because no money has been set aside; and if the Government can get £4.8 billion in salary sacrifice in 2029-30 revenues, which the industry says is a pipe dream. So here is another “if”. If the Minister’s spending plans start to fall apart, will he prioritise cuts in public spending over tax increases?

[James Murray]

I will give the hon. Gentleman an “if”. If he were honest and remembered his time in Liz Truss’s Government, he might not have the gall to make comments like that across the Dispatch Box—

[Mr Speaker]

Order. All Members are honest. Please think about what you are saying. You cannot individually attack a Member for not being honest. We are all honourable Members, as you well know. I call the honourable Minister.

[James Murray]

Thank you very much, Mr Speaker. I apologise unreservedly for the implication about the hon. Gentleman: I know that he is a very decent and honourable man, and I withdraw that comment. He may have unintentionally misled the House by failing to declare his part in the Liz Truss Government and the impact that that had on public spending. As he will know, we have stuck to the fiscal rules that this Chancellor introduced at the beginning of this Government in every fiscal event that we have had. Those fiscal rules are ironclad. We have sustainable plans for public spending, and we are ensuring that we are managing the economy in a way that the hon. Gentleman’s party could only dream of.

[Catherine West (Hornsey and Friern Barnet) (Lab)]

7. What fiscal steps she is taking with Cabinet colleagues to help reduce the level of use of food banks by families.

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[Liz Jarvis (Eastleigh) (LD)]

T3. David, who owns the Steam Town Brew Co. in my constituency, tells me that his biggest concerns right now are inflation and the ability to plan ahead. What reassurance can the Minister give him that businesses in my constituency will be supported with the stability and certainty that they need?

[The Chief Secretary to the Treasury (James Murray)]

Businesses in the hon. Lady’s constituency, and indeed across the country, can know that, whatever instability we face in the world in the months and weeks ahead, the Government have done the right thing for the economy by bringing down inflation, interest rates, borrowing, debt and debt costs. All that puts us in the strongest possible position to be resilient going into the future.

[Sam Carling (North West Cambridgeshire) (Lab)]

T9. Young people in North West Cambridgeshire and across the country are struggling to access mortgages and get on to the housing ladder due to thin credit files. Will the Minister explore requiring lettings agents and large landlords, with the consent of tenants, to report rental payment data to credit reference agencies so that a record of paying rent on time can contribute to tenants’ credit histories and help them access mortgages?

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[Jessica Toale (Bournemouth West) (Lab)]

The junction of Surrey Road and Prince of Wales Road; Wimborne Road, between Kinson library and Bear Cross; and Hankinson Road, around Winton rec—these are some of the more than 35 roads in Bournemouth West where residents have told me potholes are out of control. Lib Dem-led Bournemouth, Christchurch and Poole council has been given £7.5 million to maintain our roads and fix potholes. I will be writing to BCP council later today, but in the meantime, will the Minister join me in urging it to get its act together and finally fix our roads?

[James Murray]

As my hon. Friend makes clear, we need to ensure that our extra funding for local roads maintenance is spent effectively, and that local residents can hold councils like Bournemouth, Christchurch and Poole to account. The Liberal Democrats have typically not been shy about mentioning potholes in their leaflets; now is their time to deliver.

[Sir Desmond Swayne (New Forest West) (Con)]

T8. The Chancellor said that she will meet representatives of the North sea oil industry to see how it can help. The proper question is how she can help it, is it not?

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[Chris Webb (Blackpool South) (Lab)]

Two weeks ago, I held an emergency cost of living summit in Blackpool, after record numbers of families, particularly single mums, contacted us in food crisis. They could not access the council’s discretionary fund. Will the Minister outline how the new crisis and resilience fund will ensure that families in my constituency can get the support that they need, especially over the weekend?

[James Murray]

My hon. Friend is right to point to the crisis and resilience fund as an important lifeline for families across this country. We work with local authorities to make sure that the funding gets to the frontline, because local councils best understand where the most acute pressures are in their areas. I am, however, happy to discuss this with him later.

[Claire Young (Thornbury and Yate) (LD)]

Heat batteries are the only clean heat technology certified by the microgeneration certification scheme that is excluded from VAT relief under the energy-saving materials framework. This penalises smaller homes and lower-income households that cannot accommodate a heat pump. Will the Chancellor commit to removing that anomaly, and meet me and representatives of the UK heat battery industry to discuss it?

--- Later in debate ---

[Adam Jogee (Newcastle-under-Lyme) (Lab)]

My constituents in Newcastle-under-Lyme are sick and tired of poor-quality, dangerous roads. The county council has resources from this Government, and must stop being missing in action. What message does the Minister have for Staffordshire county council?

[James Murray]

My hon. Friend is right that we need councils across the country to use the extra funding that the Government have made available for local road maintenance to fill those potholes. Councils will have to publish their data online, so that local people can monitor, through a traffic light system available on gov.uk, how their council is performing.

Public Service Pension Scheme: Indexation and Revaluation 2026

James Murray Excerpts

Thursday 26th February 2026 Written Statements

[The Chief Secretary to the Treasury (James Murray)]

Public service pensions are a cornerstone of the remuneration package for hard-working people across our public services. Ensuring that they maintain their value over time is essential to delivering dignity in retirement for current and former public service workers.

Legislation governing public service pensions in payment requires them to be increased annually by the same percentage as additional pensions (state earnings-related pension and state second pension). Public service pensions will therefore be increased from 6 April 2026 by 3.8%, in line with the annual increase in the consumer prices index up to September 2025, except for those public service pensions that have been in payment for less than a year, which will receive a pro-rata increase. This will ensure that public service pensions take account of increases in the cost of living and their purchasing power is maintained.

Separately, in the career average revalued earnings public service pension schemes introduced in 2014 and 2015, pensions in accrual are revalued annually in relation to either prices or earnings depending on the terms specified in their scheme regulations. The Public Service Pensions Act 2013 requires His Majesty’s Treasury to specify a measure of prices and of earnings to be used for revaluation by these schemes.

The prices measure is the consumer prices index up to September 2025. Public service schemes that rely on a measure of prices, therefore, will use the figure of 3.8% for the prices element of revaluation.

The earnings measure is the whole economy year-on-year change in average weekly earnings (non-seasonally adjusted and including bonuses and arrears) up to September 2025. Public service schemes that rely on a measure of earnings, therefore, will use the figure of 4.8% for the earnings element of revaluation.

The effective date of revaluation listed in the order is 1 April 2026, but some schemes have chosen to move their effective revaluation date to 6 April 2026 in order to manage interactions with the annual tax allowance.

Revaluation is one part of the amount of pension that members earn in a year and needs to be considered in conjunction with the amount of in-year accrual. Typically, schemes with lower revaluation will have faster accrual and therefore members will earn more pension per year. The following list shows how the main public service schemes will be affected by revaluation:

Oral Answers to Questions

James Murray Excerpts

Tuesday 27th January 2026 Commons Chamber

[Alice Macdonald (Norwich North) (Lab/Co-op)]

22. What steps she is taking to providing funding for rail infrastructure.

[The Chief Secretary to the Treasury (James Murray)]

Investment in our railways is a crucial part of our plan to unlock economic growth in every nation and region of the UK. Earlier this month, my right hon. Friend the Chancellor announced our plans for Northern Powerhouse Rail. That transformational programme is backed by up to £45 billion of investment in the long term, which will be key in unlocking economic potential across the north.

[Dave Robertson]

People across Lichfield, Burntwood and the villages are delighted that this Government have funded the midlands rail hub project, meaning a doubling of the number of trains from Lichfield to Birmingham every hour. Ministers could go even further, though, by investigating the reopening of the Derby-Burton-Lichfield line, including a stop in Alrewas for the National Memorial Arboretum. Despite warm words from my predecessor, no business case exists for that. Can the Minister confirm that this Labour Government are not done with investing in transport in the midlands, and will he look again at the Derby-Burton-Lichfield line?

[James Murray]

I thank my hon. Friend for highlighting the value of the midlands rail hub, which we invested in at the spending review. We are determined to invest more in transport in the midlands. Indeed, at the spending review the Government committed to investing £4.4 billion there through transport for city regions funding. My hon. Friend is a great advocate for services that will benefit his constituents, and I will ask the Rail Minister to respond about the specifics of the line that he raises.

[Alice Macdonald]

I welcome the investment the Government have made in rail, including East West Rail, but there are still several projects that would hugely benefit passengers and the local economy in the east. Those include upgrading the Trowse swing bridge near Norwich and, of course, Ely and Haughley junctions. Will the Chief Secretary to the Treasury meet me and other colleagues from the east of England to discuss how we can advance those key infrastructure projects for the region?

[James Murray]

East West Rail is a transformational project that will unlock economic growth and housing. Just yesterday, I was glad to host a representative from East West Rail at an infrastructure roundtable at the Treasury with my right hon. Friend the Secretary of State for Housing, Communities and Local Government. My hon. Friend is another powerful advocate for her local area, and I will happily discuss this matter with the Rail Minister and get back to her.

[John Glen (Salisbury) (Con)]

Last week I met Lawrence Bowman, the chief executive of South Western Railway. I am keen to make sure that all the Government’s changes take positive effect in Salisbury and south Wiltshire, so that tracks, signal and stock can be improved. Will the Minister make sure that there is a suitable reference board along the commuting line into Waterloo, so that when Lawrence Bowman’s business plan is delivered, there will not be any delays when he has to interact with local authorities—a concern that he raised with me last week?

[James Murray]

I thank the right hon. Gentleman for raising the concerns of the services used by his constituents. I can assure him that I will look into those and get back to him.

[Ian Roome (North Devon) (LD)]

The Tarka line in North Devon has seen a massive increase in footfall. However, the line is often closed because of the lack of infrastructure upkeep. Will the Minister meet me to discuss various funding opportunities? It is a rural line that is vital for students to get into Exeter and for people’s job opportunities—I know that the Government are all about job growth.

[James Murray]

The hon. Gentleman is absolutely right: we are all about job growth. I fear I will be quite busy after this set of questions with taking up projects in different constituencies, but that is absolutely right, because we all want to make sure that we have better investment—particularly in transport and infrastructure—for our constituents. I assure him that I will look into the matter and get back in touch with him.

--- Later in debate ---

[Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

T2. The three-year local government funding settlement is a welcome return to long-term planning. Newcastle city council faces a 34% rise in adult social care costs, compared with only a 15% rise in core spending power. That is taking more and more money away from the many services that my constituents depend upon. Will the Chancellor work across Government to consider changes to the adult social care funding formula and/or an increase to the recovery grant so that Newcastle city council can meet the costs of adult social care?

[The Chief Secretary to the Treasury (James Murray)]

As my hon. Friend sets out, there are significant challenges in adult social care, and we have already made available an extra £4.6 billion, including funding to start to implement the fair pay agreement. As she will probably be aware, Baroness Louise Casey is leading an independent commission to build consensus on reform. Its first phase will report this year, with a focus on how to make the most of existing resources.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

T5. While the Chancellor was enjoying her trip to Davos last week, inflation went up, as did unemployment, reversing the progress of the previous Conservative Government. Did the Chancellor or her Cabinet colleagues pick up any ideas in Davos that could reverse those trends, support our businesses and high streets and end the hiring recession that her Budget has caused?

--- Later in debate ---

[Edward Morello (West Dorset) (LD)]

T8. Vast swathes of Bridport, Beaminster, Maiden Newton, Yetminster and Thornford—whole parts of West Dorset—are under water. Dorset and Wiltshire Fire Service is doing an amazing job of rescuing residents who are trapped either at home or in cars, but unfortunately it will suffer a £1.2 million shortfall in the long-term funding settlement because the Treasury’s underlying assumptions are incorrect. Will the Chancellor meet me, so that we can show her why this is a problem for the service?

[James Murray]

Let me start by thanking the emergency services in the hon. Gentleman’s constituency for all their work to ensure that people are kept safe, and to respond to the challenges that people face as a result of flooding. We are determined to support public services across the board, and the decisions taken by my right hon. Friend the Chancellor in past Budgets and in the spending review mean that we have sustainable funding for our public services in all parts of the country.

[Dame Nia Griffith (Llanelli) (Lab)]

T7. I thank my right hon. Friend the Chancellor for bringing us record investment, financial stability and repeated interest rate cuts, but does she share my astonishment that Reform is not only welcoming treacherous Tories who did so much to wreck our economy and public services, but actually entrusting them with economic policy?

[James Murray]

My hon. Friend is absolutely right. The hon. Member for Clacton (Nigel Farage) is warmly welcoming people who spent 14 years undermining public services, who wrecked the economy, who botched Brexit, and who were booted out by the British people in 2024—and Reform’s latest recruit was so bad that she managed to get sacked by Liz Truss.

[Wendy Chamberlain (North East Fife) (LD)]

T9. I heard the Minister’s words to the hon. Member for Shipley (Anna Dixon) about the energy company obligation 4 scheme, but the vague promise in the warm homes plan to put right poor-quality work under ECO4 seems like empty words to my constituents who are affected. Will the Treasury consider the only viable alternative to this disastrous scheme, which is redress?

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

T10. Ben Houchen’s Teesworks saga has seen more than half a billion pounds of taxpayers’ money funnelled into enriching a few business people, while the opportunity for a sovereign wealth fund investment programme has been squandered. What steps are being taken to ensure that there is meaningful investment for economic growth and development in Teesside?

[James Murray]

This Government are backing investment in Teesside to create the good jobs that my hon. Friend’s constituents deserve. I know that Teesside is very well placed to lead for our country across a range of sectors. For example, £4 billion is going into the UK’s first carbon capture, usage and storage cluster in Teesside, including the world’s first at-scale gas power station with CCUS.

[Bobby Dean (Carshalton and Wallington) (LD)]

Ten years ago, this place introduced legislation preventing banks from applying tax deductions after paying compensation for wrongdoing. Now lenders are set to pay out billions of pounds in connection with the motor finance scandal, but they will be able to reduce their tax bills because most of those companies have channelled their money via subsidiaries. Does the Minister agree that that is not in keeping with the spirit of the law, and will the Government do something about it?

--- Later in debate ---

[Rebecca Smith (South West Devon) (Con)]

At the weekend, Storm Ingrid caused the sea wall at Dawlish to collapse in two new places, and we wait to see the damage caused by Storm Chandra today. Both storms are once again exposing the vulnerability of the main rail line to Devon and Cornwall, which is vital for the local economy. Given the reported lack of a Treasury emergency reserve, can the Chancellor guarantee contingency funding for any urgent and unplanned resilience work required and not covered by a fiscal event?

[James Murray]

I thank the hon. Lady for raising the situation in her constituency. All Departments across Government have had their budgets set, and they include a contingency for covering known pressures. One of the ways that we have managed spending settlements differently from the previous Government is that all Departments must recognise that unexpected pressures will come along. They need to prepare for that, and should have robust plans for responding when such things occur.

[Chris Webb (Blackpool South) (Lab)]

Southshore in my constituency has the highest concentration of deprived communities and the most deprived ward in the country. We have developed a local people’s plan for work to regenerate the area. Will my right hon. Friend the Chancellor meet me to discuss this plan, so that we can regenerate the most deprived area in this country?

Covid-19: Financial Support

James Murray Excerpts

Thursday 15th January 2026 Commons Chamber

[The Chief Secretary to the Treasury (James Murray)]

I, too, congratulate the hon. Member for Stratford-on-Avon (Manuela Perteghella) on securing this debate. I thank hon. Members from both sides of the House for their powerful contributions. Although much of the debate has rightly focused on the detail of the financial support made available by the then Government during the pandemic, we have also heard many deeply personal stories about businesses and individuals who were directly affected.

In two months’ time, the country will come together to mark the sixth anniversary of the start of the pandemic. That will be an opportunity for us all to remember and reflect, and to pay tribute to all those who died, whose loss is still so keenly felt in all our constituencies. The pandemic cost over 227,000 lives in our country, and I know that loss and grief are still felt by families whose loved ones were lost during that difficult period.

As the hon. Member for Richmond Park (Sarah Olney) said, reflecting on the pandemic is also a moment to express our gratitude, once again, to all those who worked throughout the pandemic to provide vital and, in many cases, lifesaving services to all of us across the country. It is also a moment to recommit to learning the lessons of what happened during that time, so that we are better prepared for future crises. The Government are committed to learning those lessons and doing all we can to protect businesses and individuals across Britain in future.

As well as having a huge impact on the lives of people and their families across the country, as we have heard today, the pandemic was a huge economic shock. GDP fell by a record 19.4% and thousands of businesses faced closure, so it was necessary to support businesses and individuals affected. We supported putting in place the measures mentioned by the shadow Minister, the hon. Member for North West Norfolk (James Wild), including the coronavirus job retention scheme, the self-employment income support scheme, and various business grants and Government-backed loan guarantees. It is right, however, that we as a country now reflect on how those schemes were implemented by the Government of the day.

As we have heard from many hon. Members, a number of people experienced genuine hardship and distress because they were excluded from the available schemes. Many of those experiences have been described powerfully in today’s debate, including by the hon. Member for Stratford-on-Avon in her opening speech and by my hon. Friend the Member for Montgomeryshire and Glyndŵr (Steve Witherden). We also heard a number of other stories about individuals and businesses across the country from my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham), the hon. Member for Ely and East Cambridgeshire (Charlotte Cane), and my hon. Friend the Member for Mid Cheshire (Andrew Cooper), who also spoke about the significance of economic resilience and preparedness for the future—an important topic that I will return to in a moment.

We also heard from the hon. Members for Wimbledon (Mr Kohler) and for Dewsbury and Batley (Iqbal Mohamed), and my hon. Friend the Member for Falkirk (Euan Stainbank), who spoke about the impact of the pandemic on young people, which has had a lasting effect, as we are all keenly aware. The hon. Members for Didcot and Wantage (Olly Glover) and for Mid Dunbartonshire (Susan Murray) also spoke about their affected businesses and constituents. One of the themes of those contributions was about what we as a country are doing to prepare for the future, to ensure that if a similar crisis happened again, we would be better prepared. As a Government, we are considering how we might better target and reach excluded groups in future, including through better real-time data collection.

As hon. Members know, the official covid-19 public inquiry is considering how future emergency schemes could be better tailored to the modern labour market. The inquiry recently held public hearings focused on economic support for people and businesses during the pandemic, and it will publish its final report in due course. The Government, including the Treasury, fully participated in those hearings and provided a substantial amount of evidence. We will carefully study and consider any recommendations, mindful of our responsibility to vulnerable groups and our commitment to value for money.

As hon. Members have also made clear, no assessment of the previous Government’s record during the pandemic can ignore the fact that billions of pounds of taxpayers’ money was lost to fraud. That was a failure of monumental proportions, and we are all continuing to pay the price. That is why, on taking office, we took action to recoup the money owed, including by appointing Tom Hayhoe as the covid counter-fraud commissioner. In December he published his report, and the findings are shocking.

According to the commissioner, covid fraud cost the taxpayer a staggering £10.9 billion—that is enough to fund daily free school meals for the UK’s 2.7 million eligible children for eight years. Of course, we recognise that our predecessors in government were responding to a crisis, the nature of which demanded acting at speed, but the cynical exploitation of pandemic support was foreseeable.

Last year, an arrest was made following an HMRC investigation into a company, Luxe Lifestyle, which was awarded a £25 million PPE contract, having been referred to the procurement VIP lane by a Conservative Minister and a party chairman. The company won that contract despite having no employees, no assets, no turnover and £9,000 of debt. While Luxe Lifestyle did end up supplying some items, they were all inadequate and unusable. That is just one example. It does not begin to scratch the surface of covid fraud, but we have heard no apology today from the Conservatives for their actions—no apology to this House, and no apology to the British people who have been left to pick up the bill.

We cannot allow this ever to happen again. That is why the Government introduced tougher sanction powers in the Public Authorities (Fraud, Error and Recovery) Act 2025 to help recover stolen funds, and why we have rolled out specialist fraud recovery teams to track down suspected fraudsters and recover taxpayer cash. Since coming to office, the Government have recouped almost £400 million paid in error or that was obtained illegally through covid fraud. As the Chancellor has made clear, this fraud is a fraud against the British people, and we will leave no stone unturned, leave no question unasked, and leave no fraudster unchallenged until we have cleared up the mess we inherited.

While we work to fix those problems, we are also turning towards the future, making sure our country is well prepared to face future crises. Much has been learned already from the covid-19 pandemic, but the scale of the economic emergency facing the country nearly six years ago underlines the need to continue embedding these learnings into the Government’s systems and processes. As I have already set out, we have taken tough action to track down the fraudsters who profited on the previous Government’s watch. We are improving and enhancing the Government’s analytical and modelling capabilities, to ensure that we can better target support schemes in future. We have launched the National Situation Centre, enabling us to identify and plan for a range of risks and improve our crisis response.

We have conducted, through Exercise Pegasus, the largest cross-Government pandemic simulation in British history, helping to make sure we are better prepared than before, that our plans are battle-tested, and that we are ready to adapt. As the official covid-19 inquiry draws to a close, we stand ready to study any recommendations and to take action where needed.

The economic implications of the covid-19 pandemic for this country were profound. In response to this unprecedented crisis, it was of course necessary to act quickly for our economy and for our communities. But we know that mistakes were made, and the British people were defrauded to the tune of over £10 billion. That is money that should have been spent on schools and hospitals but which has instead gone into the pockets of fraudsters and criminals. There will also undoubtably be wider lessons to draw from the design of support schemes and the impact those schemes had on various groups across the economy.

As a Government, we will continue to enhance our resilience to future shocks. We have set to work on that since the election, and our efforts will intensify after the official covid-19 inquiry publishes its final report. We will do whatever is necessary to build a safer and more secure country for the future. I will end by again thanking all hon. Members for sharing the experiences of their local businesses and individual constituents in the debate.