Budget Resolutions

Jeremy Hunt Excerpts

Wednesday 26th November 2025 Commons Chamber

[Sir Jeremy Hunt (Godalming and Ash) (Con)]

Budgets are not easy for Chancellors, because there are so many things beyond their control, but being forced to make trade-offs reveals priorities. I am afraid today’s priority was not economic growth, but political survival. That is because there was one central call the Chancellor had to make today: do we reform welfare, or do we raise tax?

Getting our welfare bill down to pre-pandemic levels would save about £47 billion a year within five years. It would not have been easy, but it would have meant no tax rises and plenty of headroom in public finances. Instead, welfare spend is going up, and jobs and growth are going down. In every single day of the Government’s first year, around 2,200 people have been signed off not just work, but from even having to look for work. That is 1 million more people on universal credit just in the last year. Most of those claimants cite mental ill health, but every doctor I spoke to as Health Secretary said that people with anxiety and depression need social contact. That means being at work, not being at home.

[Layla Moran (Oxford West and Abingdon) (LD)]

On mental ill health, the right hon. Gentleman is absolutely right to point out that it is one of the drivers of people going on universal credit and that does need to be tackled. Does he share my alarm that today in the Health Service Journal it has been reported that the Government are planning to water down the mental health investment standard, which will start to reverse the trend we saw over many years of achieving parity of esteem between physical and mental health?

[Sir Jeremy Hunt]

I absolutely share the hon. Lady’s concern. That standard was introduced when I was Health Secretary. This could have been the Budget in which the Chancellor announced we would speed up treatment for people with mental illness and not park them on welfare. This could have been the Budget that said that we will eliminate fraud by stopping completely benefit applications by phone. It could have been the Budget that said that instead of relying on migration to help firms expand, we will make sure that people at home are fit to join the workforce. Instead, the welfare bill is going up by around £14 billion, not least because of the totally unfair abolition of the two-child cap, which I fear will see more children, not fewer, living in the structural poverty caused when there are no adults in the household at work.

[Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)]

Given his background, the right hon. Gentleman must surely recognise that there is a direct link between social policy and economic policy—that this country needs a working-age population to fund future pensions and welfare bills for generations in the future. How on earth can you do that if you are not encouraging children to be brought up and raised in a household that can afford to feed them?

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[Jim McMahon]

I think she brought me to order at just the right time!

[Sir Jeremy Hunt]

I recognise that the hon. Gentleman’s concern about child poverty is sincere; I just have a totally different view as to how to reduce child poverty in this country. I think financing people to have ever larger families will mean more children growing up in poverty, not fewer. The evidence for that is that under the previous Conservative Government, we had a million fewer children growing up in workless households, and child poverty in absolute terms fell. The hon. Gentleman needs to look at that evidence.

The price we are paying for this mushrooming welfare bill is rising taxes which are already starting to destroy growth: 180,000 fewer payroll jobs in the last year; unemployment up, inflation up and interest rates higher than they would have been. The tragedy is that absolute poverty—which, as I said, fell under the previous Conservative Government—is now likely to rise under Labour as jobs vanish and welfare rolls soar.

[Tom Hayes (Bournemouth East) (Lab)]

I grew up in poverty. One in four children in Bournemouth, the town that I represent, is growing up in poverty. I can tell the right hon. Gentleman that growing up in poverty is not a good thing. It is an awful thing for the life chances of the child, an awful thing for the family who care for them and an awful thing for the community that wrap their arms around the child. Does he acknowledge that he is ignoring the future costs of child poverty? I used to run mental health and domestic abuse services, and I can certainly tell him that when children grow up in poverty and then, later in life, cannot find the education, training and support that they need because of their trauma as a child, they cause extra costs for public services that we then have to meet. Does he not agree that we should be preventing those future costs?

[Sir Jeremy Hunt]

I absolutely agree with the hon. Gentleman, but I profoundly disagree on the way the Government are choosing to do that. By expanding the welfare bill and expanding the number of large families living in poverty, they are making the root causes of poverty worse and not better.

The Chancellor says that there is a growth plan, but it was very difficult to discern it at all in today’s Budget. We know, for example, that raising public sector productivity to private sector levels would add 0.4% to annual GDP growth. We know that proper planning reforms would add 0.4%, that proper welfare reform would add 0.3% and that getting energy bills down properly would add 0.3%. We know that AI could dwarf all that, according to Microsoft and Accenture, potentially adding 1% a year.

We got none of that today. Instead, we had a Government arriving in office saying that they wanted “Growth, growth, growth” without knowing how they were going to get there. Growth needs a plan, not a soundbite, and it is that lack of a plan—or even a guiding philosophy—that has resulted today in a Budget that damages growth, damages investment, damages jobs and, most tragically of all, damages opportunities for young people, of whom there will shortly be a million not in employment, education or training.

[Andrew Lewin (Welwyn Hatfield) (Lab)]

The right hon. Gentleman is a respected Member of the House, but I think it is really important that we reflect on the facts. Both the Chancellor and the OBR announced today that growth is up from 1% to 1.5% this year. The right hon. Gentleman talks about having a plan on planning reform—a subject I am very interested in. Why then did his party abstain and not back our planning reforms?

[Sir Jeremy Hunt]

The hon. Gentleman is absolutely right that we should look at the facts, which are very clear: the OBR upgraded growth for this year, and then downgraded it for every single year of the forecast thereafter. The overall size of the economy is shrinking as a result of the measures taken by the Chancellor in the previous Budget—and, I am afraid, made much worse in this Budget.

I agree with the hon. Gentleman that we need to go further on planning reform, but I do not think we have had any plan from the Government for the really substantive changes that would align incentives between local communities and national Government when it gets to things like planning approval for big infrastructure projects. I would cheer from the rafters if we heard that from the Chancellor, because it is urgently needed.

Can the Government please not tell us that everything is going to be fine just because they are not the evil Tories? That is what I think is most disappointing of all, because those terrible Tories got inflation down from 11% to 2% and saw 4 million new jobs in the economy, as opposed to nearly 200,000 fewer. They grew the economy faster than France, Germany, Italy or Japan, and they attracted more greenfield foreign direct investment than anywhere in the world apart from China and the United States.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

Could the right hon. Gentleman remind us which Government led to that 11% inflation and which Government crashed the economy? Could he also speak to the estimated 1,970 children in Morecambe and Lunesdale who will benefit from the lifting of the two-child benefit cap and tell them why they should continue to live in poverty?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I will remind colleagues that interventions must be short and to the point, and must be an actual question, not a statement.

[Sir Jeremy Hunt]

I would be happy to tell the hon. Lady which Government were responsible for 11% inflation: the Russian Government were responsible for 11% inflation. I will happily look in the eye the 200,000 fewer children in absolute poverty after a succession of Conservative Governments because of the 4 million jobs created on our watch.

Let me say this. Those dreadful Tories also increased the number of doctors and nurses in the NHS by a third, and those posh Tories increased standards in state schools to have the highest reading standards in the western world. That, Madam Deputy Speaker, is because progressive instincts do not pay the bill for good public services—a strong economy does.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

Could my right hon. Friend remind the House what happened during that period to the deficit, which was inherited at over 10%? Maybe we will just deal with that.

[Sir Jeremy Hunt]

My hon. Friend is absolutely right. The Chancellor makes a great play of fiscal responsibility—incidentally, I hope she will correct the record, because she said that she was reducing debt, when the OBR’s economic and financial outlook says that it is going up from 95% of GDP to 96% of GDP. On my hon. Friend’s point, yes: when the previous Conservative Government came into office, the Government were borrowing nearly £1 in every £4 that we were spending on public services, and we reduced that deficit from 10% to 2%, and Labour opposed us every single step of the way.

[Several hon. Members rose—]

[Sir Jeremy Hunt]

I will give way one last time to my right hon. Friend.

[Sir Oliver Dowden (Hertsmere) (Con)]

I thank my right hon. Friend for giving way. As we are going down memory lane, I cannot resist reminding him that when we came to power in 2010, we had a youth unemployment crisis. Youth unemployment plunged when we were in office; now, with Labour back in office, the Government have imposed a national insurance contribution tax and youth unemployment is soaring again. Is that not a damning indictment of Labour?

[Sir Jeremy Hunt]

Labour Members might find that hard to hear from a former Conservative Deputy Prime Minister, but they might want to listen to the Resolution Foundation, which has been saying exactly the same thing on the airwaves today. No one disputes the progressive credentials of the Resolution Foundation. It has been warning against this rise in the minimum wage and all the extra workers’ rights, which it says could lead to a crisis in youth unemployment.

[Yuan Yang (Earley and Woodley) (Lab)]

rose—

[Sir Jeremy Hunt]

I do not want to leave the hon. Lady out, but I promise that this will be my last intervention.

[Yuan Yang]

I thank the right hon. Gentleman for giving way. Does he find it fiscally responsible that with his two Budgets, he left us with the lowest amount of fiscal headroom since the OBR was created at £8.9 billion in 2024? Is he proud of that? That left the current Chancellor and this Labour Government a mountain to climb to get us back to £22 billion of solid headroom.

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[Sir Jeremy Hunt]

I am proud that I dealt with a real black hole of £72 billion, not a fake one of £22 billion, in my fiscal events, and I met the fiscal rules every time. If the hon. Lady is really concerned about that low headroom, why did the shadow Chancellor at the time—now the current Chancellor—not object once to the fact that headroom was reduced to that level? I will tell the House why she did not object: because if I had left headroom any higher, I would have had to cut spending more or increase taxes more, and that would have made the recession we were heading into deeper and worse, with more unemployment, fewer jobs and more poverty. That is why I am proud that I took the right decision.

Even now, it may not be too late, because a Government who try to do the right thing with the time they have left are more likely to earn the trust of the British people than a Government who have given up. Please do not treat government as an exercise in survival. That would be a betrayal of the Government’s mandate.

People with the broadest shoulders, as the Chancellor described them, will be rightly angry today. But it is the people who depend on public services, who are looking for a job and who are on the poverty line, who need a strong economy more than anyone else, and they will finish today feeling more scared than ever about their prospects.