Financial Statement and Budget Report
Debate between John Healey and Nusrat Ghani(1 week ago)
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The Chancellor of the Exchequer (John Healey)
This is a Budget for the working people of Britain, for British businesses big and small, delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home. It is a Budget built on fiscal discipline, which matches immediate action today with clear direction for the future: first, by giving Britain some breathing space on the cost of living and the cost of business; secondly, by backing the enterprise of British business to unleash innovation and growth in every postcode; and thirdly, by tackling the big challenges on energy, national security, public service procurement and transformation, and housing.
In this Budget, I will set out the new approach that this Administration is taking—led by the vision of our new Prime Minister, demonstrated in our first 100 days and carried through today’s Budget, the 10-year plan for Britain and the spending review next year, to steer us through the global economic storms today, chart a new course for Britain in the years ahead, and give people fresh hope for Britain’s future.
It is an honour to stand here as Chancellor of the Exchequer to deliver my first Budget. I had hoped that I might be the most closely watched member of the Government this week until the Prime Minister went on “Gogglebox”.
At the outset of this Budget statement, I want to pay tribute to my predecessor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves)—Britain’s first ever female Chancellor after 800 years. She brought fiscal discipline to this country. She took—[Interruption.] She took the decisions required to boost investment, cut NHS waiting lists—
Madam Deputy Speaker
Order. Colleagues who are chuntering will need a lot of stamina as we have many hours to go. Let us keep the Chamber calm.
John Healey
My right hon. Friend took the decisions required to boost investment, to cut NHS waiting lists and to lift half a million children out of poverty. I also want to thank my outstanding team of Treasury Ministers and officials, and the Office for Budget Responsibility for producing today’s forecasts.
Analysts like to speak of economic headwinds, but what we face today are global economic storms, with trade tensions acting as a drag on global growth and Putin’s illegal invasion of Ukraine approaching now the end of its fifth year. The OBR sets out that the war in the middle east is a key driver affecting its forecasts today. The Government continue to work with our allies to end the conflict and restore shipping through the strait of Hormuz.
We did not want this war, and we rejected the calls from the Leader of the Opposition to jump two-footed into it. It is a war that has driven up costs on British families and on British businesses. Inflation, which was due to fall earlier this year to the 2% target, has now risen, driven by higher oil and gas prices. Oil is up from around $70 a barrel to well over $100 and gas prices have nearly tripled since February. For families, that means higher prices at the pump, higher energy bills and higher mortgages. For businesses, it means higher running costs and more expensive business loans.
The impact is felt in the public finances, too. Driven by the conflict in the middle east, Government borrowing costs across the G7 are reaching highs not seen for decades. In today’s forecast, the OBR predicts that we will spend £14 billion more on debt interest this year. Those are the storms we face. We cannot wish them away. We must choose the course we steer through them.
Fiscal discipline is my first commitment as Chancellor. More than ever, it underwrites every promise the Government make to the British people. In the Budget today, I meet the fiscal rules: the stability rule that day-to-day spending must be covered by tax receipts; and the investment rule that Government debt, defined as public sector net financial liabilities, must be falling as percentage of GDP. This year, for the first time, I must meet those rules in the third year of the forecast, and I do. My plans continue to reduce Government borrowing so that we spend less on debt interest and more on the priorities of the British people.
First, the stability rule. In the Budget today, I have chosen to use some of the headroom established last year to absorb the impact of the Iran war to protect the economy and to protect family budgets. My choices in the Budget mean that I have kept the Labour manifesto promise not to raise tax on working people—[Interruption.] I have rejected—[Interruption.]
Madam Deputy Speaker
Order. Mr Bowie, you are sitting far too close to me to be that noisy.
John Healey
I have also rejected broad-based tax rises or slashing public services, recognising that families and businesses need breathing space. The OBR confirms today that headroom against the stability rule will be £15 billion in 2029-30 before rising to £22 billion in 2030-31. That is what a buffer is for: use it when you need it; rebuild it when you can. Despite the global challenges, the Budget puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within three years.
As a Labour Government, last year we cut borrowing to its lowest level in six years, from 5.1% to 4.4% of GDP. I continue that work today. In today’s forecast, borrowing falls to 4.2% this year, 3.4% next year, 2.9% in 2028-29, 2.1% in ’29-30 and 1.8% in ’30-31 and ’31-32. Our debt as a percentage of GDP is 83.2% this year, 83.8% next year and in ’28-29, before falling to 83.1% in ’29-30, 82.3% in ’30-31 and 81.7% in ’31-32.
It is because of our Labour decisions and it is because of our Labour plans that the International Monetary Fund has said that the UK now stands out as a country where
“action to reduce debt and deficit has been taken decisively”.
It projects our UK deficit will be the lowest in the G7 by 2029. The last time the IMF called the UK a standout was when Liz Truss crashed the economy. Her new book says she could have taken the British people to Mars. In reality, what she achieved in government, with help from the shadow Chancellor, was blowing a big black hole in the budget. That is the difference between Labour in government and a Conservative Government before us.
During this year of global economic shocks, forecasters predicted that the UK economy would slow down. Those predictions of gloom were about as accurate as the predictions of who would be the Chancellor. [Laughter.] Britain is defying expectations. In the first half of this year, our economy was the fastest growing in the G7, alongside the US. That is testament to the British people—the innovators, the business leaders and the workers on the frontline—and it is testament to the Labour decisions taken over the last two years. Government investment, up; business investment, up; productivity, up; and real wages, up. More since the election than in the first 10 years of the previous Conservative Governments.
I will never be complacent, but these are signs of resilience in the UK economy. Three months ago, the Bank of England upgraded its forecasts for UK growth this year, two weeks ago the IMF did the same, and today the OBR has upgraded its forecast to 1.2% this year, followed by 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031. Yes, there are real challenges ahead, but Britain has beaten the forecasts this year, and with the action I am taking today, I believe Britain can beat the forecasts again.
Despite our economy’s resilience, I know that people are under pressure. Too many people feel this country is not working well for them. In particular, households and businesses face challenges from rising energy costs due directly to the conflict in the middle east. In the face of that, what matters is how we respond as a Government, and my choice in the Budget today is to give families and businesses some breathing space now and to begin the radical reform of energy to reduce bills in the future.
Last week, my right hon. Friend the Energy Secretary opposed—approved—[Laughter.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. We have a long way to go. Dr Luke Evans, you will have to write yourself a prescription to calm down.
John Healey
At least they are still awake, Madam Deputy Speaker.
Last week, my right hon. Friend the Energy Secretary approved the Jackdaw gas field, boosting our energy security. This will protect hundreds of jobs and add an estimated £2.9 billion to the UK economy—a pragmatic, common-sense decision. Alongside that, I launched a new energy wealth fund for the UK. Today, I am setting a new course on energy to get UK energy costs down in line with Europe. From this point, our Labour Government priority is, first and foremost, cheaper energy, with clean power key to achieving it. This is possible because of the progress we have made towards clean power over the last two years, and this Government remain unshakeably committed to net zero by 2050. This will demand deep reform of our energy system, starting at the Budget today and carried through the 10-year plan into the months and years ahead.
For many years under Conservative Governments, policy costs were simply loaded on to household bills through levies. Today, I am putting an end to that. We will introduce a new cost control framework to drive down all aspects of energy bills, and I will scrap the upcoming gas shipper obligation—a levy to fund hydrogen projects—and instead back those projects directly from Government.
I am making further big changes to bring bills down in the long term. First, on clean power generation, this Government will only buy and build new projects when they lower bills and when they can connect to the grid. Secondly, we will further break the grip of international gas prices on our bills by moving more of our old renewables on to fixed-price contracts. Thirdly, we will build cheaper, faster grid connections through GB Grid, and reform the complex web of institutions that govern the system. This is how we deliver the radical change that Britain needs on energy. It will not happen overnight, so I am taking immediate action to give families and businesses breathing space in the here and now.
In the first week of this new Government, we took VAT off electricity for 29 million households. Today, I am extending that VAT cut through the winter and spring to July, taking £50 off the annual price cap. For business, our new British industrial competitiveness scheme will take 25% off electricity bills for 10,000 firms at the heart of British industry. It will go live in April, and I confirm that we will make backdated payments for energy costs this year too. Next year, working with my right hon. Friend the Energy Secretary, we will go further to make bills fairer. Gas standing charges cost people over £100 a year, regardless of how much gas they use, so from next year, through Ofgem, we will remove standing charges from household gas bills. We will set out similar reforms to follow for electricity bills.
Let me say this to families at home. I know that, with the conflict in the middle east, rising energy bills are a real worry. I know that people look to the Government at times like this, not to solve all their problems but to give them a bit of breathing space—so today, I am taking one further step. This winter, for 20 million households in council tax bands A to D, I am announcing a £100 energy payment for households. It will be paid directly into people’s bank accounts to deal with rising energy bills. That is a £2.6 billion scheme to take the pressure off in the coldest months and see people through to the spring. The Scottish, Welsh and Northern Ireland Governments will receive their share of this funding, and I call on them to do the same and give people in all nations of the UK breathing space on their energy bills this winter.
Madam Deputy Speaker, £50 off VAT, £100 off council tax. For this winter, two tax cuts; for next year, fairer bills; and for the long term, radical reform of the energy market to produce cheaper power. Breathing space now and hope for the future, delivered to the British people by this Labour Government.
For millions of people, the cost of living and the cost of doing business are the same—the home is the office, the van is the family car. Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years. With the war in the middle east still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers and farmers. For anyone who relies on their car for work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and I am making permanent the increase to the standard mileage rate introduced earlier this year.
In this Budget, I am acting on other costs, too. To help with the weekly shop, I am suspending tariffs on over 100 supermarket products to keep prices down. For pensioners, I am delivering the new pension tax allowance, so that pensioners with income of up to the value of the full new state pension will not pay income tax in this Parliament. For ex-mineworkers, I am guaranteeing that every penny of the pension fund surplus now goes to miners. I know the job is not done, and I will go on to ensure the full transfer of the guarantor’s fund. For carers, I am getting rid of the cliff edge on earnings, so that people do not lose their entire carer’s allowance when they earn a penny over the threshold. For 2.3 million of our lowest-paid workers, I am increasing both the national minimum wage and the national living wage by 3.9%.
I know that, for families, the worst thing is feeling that their kids are missing out—even on little things—because money is tight. So today I am announcing £15 million for organisations like Dolly Parton’s Imagination Library and BookTrust, which give books to children. I have heard calls for pay transparency on job adverts to close the gender pay gap, and we will act soon to make sure that women are paid and promoted fairly. This Labour Government are determined to make the economy work better for all families, so I have listened to representations from colleagues across the House about paternity leave, and I am making a down payment on change today. As a mark of respect for their role, I will make self-employed fathers and partners eligible for paid parental leave for the first time.
Since day one, I have said that I will be a Chancellor who champions the small British firms that give character to our communities: the bakeries, the cafés, the hair salons—they make the places we live and work the places we love. I want these businesses to invest, to recruit and to expand, so today I am taking action to support our high streets. In the first week of this Government, we cut 20% off business rates for pubs, clubs and music venues from April next year. I have heard calls from Members across this House and a call from one Member in particular—my right hon. Friend the Member for Makerfield (Andy Burnham)—so I am increasing the threshold for small business rate relief for retail, hospitality and leisure businesses from £12,000 to £18,000. That means for 70,000 more businesses, I am not just cutting their rates; I am taking them out of paying business rates altogether. That means half of our shops, restaurants and gyms will pay no business rates at all. For all other businesses in these sectors, I will freeze their rates in real terms so that none faces an above-inflation rise for the next two years.
To pay for this support for our high streets, I am raising taxes on gambling by increasing machine games duty from 20% to 25% for higher-stakes machines, while protecting pubs and seaside arcades. I will carve out adult gaming centres and vape shops from business rate reliefs and extend the business rates transitional relief supplement for another two years. I will also strengthen the requirements for online marketplaces so that sellers cannot avoid paying VAT when they sell online.
For those who feel like celebrating tax cuts for our high streets, I am providing a £10 million alcohol duty relief for around 2,000 small British brewers and British cider makers. Breathing space now, fresh hope for the future—delivered to the British people by this Labour Government.
I have made my commitment to fiscal control clear, and every policy in this Budget is fully funded. I have begun by making sure that people pay the tax they owe when they owe it and by closing loopholes in our tax system. First, I am giving His Majesty’s Revenue and Customs funding to improve compliance and stronger powers to collect overdue tax from those who can clearly afford to pay but ignore repeated contact. I am reforming the administration of self-assessed income tax from 2029, bringing more of these taxpayers in line with the majority, so that they make smaller, more regular payments instead of facing large bills that are often harder to pay.
Secondly, I am changing outdated rules so that people taking profits out of their companies are taxed consistently, and I will protect the treatment of genuine commercial transactions and families passing their businesses down to the next generation.
Thirdly, I am modernising the tax treatment of investment by foreign sovereigns. This will bring UK rules more in line with other investment and other nations, while remaining still one of the most generous regimes in the world.
Fourthly, I will resolve the question of VAT for larger taxi companies, ensuring they play by the same rules no matter where they are located, while still protecting smaller local firms.
Providing support for British families and businesses has meant raising some tax to meet my commitment to fiscal discipline. I have done this in a balanced way, protecting the incentives for business investment and the incentives and income from work. I am maintaining full expensing in corporation tax for eligible assets. For other assets, I will provide greater up-front relief for new investment, increasing the main rate first-year allowance from 40% to 50%, while reducing the main writing down allowance rate from 14% to 12%.
I am reducing the threshold for business asset disposal relief in capital gains tax from £1 million to £500,000, meaning no change for three in four claimants. I am increasing the rates of tax on income from property and savings by a further two percentage points from April 2027, with no change to tax on income from dividends and no change to tax on income from employment. Eighty-eight per cent of people will pay no more tax on their savings, and I am taking a new approach today to encourage people on ordinary incomes to save and to invest. I will not go ahead with the cut to the tax-free amount that people can put into a cash ISA. The limit will stay at £20,000 per year tax-free for people of all ages. To make investment more accessible, I will work with the sector to create a new “starter ISA” to reward first-time investors.
Finally, let me turn to banks. Our world-leading banks make a huge contribution to this country—in the tax they pay and in the jobs, industry and investment they support. As Chancellor, I want to say directly to our banks: I celebrate, and am grateful for, the role that you play. Amid the global economic storms, I am looking to our banks to help fund breathing space for British families, so banks will pay an extra 3% on the bank surcharge. This will be time limited to pay for immediate support on energy bills, starting in January and ending 15 months later.
I have made my choice at this Budget: asking a bit more of our banks to support ordinary people and raising taxes on gambling to support good growth on every high street. I challenge the Leader of the Opposition. Does she support today our support for British families and British firms, and does she back the action we are taking to pay for it?
The only way we keep Britain’s families and Britain’s finances secure for the long term is with an economy that is growing strongly. Our country is one of the most innovative in the world. We have top-ranking universities, vibrant start-ups and deep capital markets. Just today I can announce over £1 billion of new life sciences investment from Kindeva, Vertex and Convatec, backed by almost £70 million of Government funding, and supporting over 1,000 jobs. I can announce that Rolls-Royce will develop its next generation of turbine engine technology here in the UK, in partnership with this Government—a £2.5 billion investment supporting thousands of jobs across the midlands, Bristol and the UK. I want to build on our strengths to unleash the innovation power of Britain to drive competition and raise profits in British business—drawing a line on the costs holding business back with stronger public control, as I have done today on energy; proudly backing Britain’s entrepreneurs to succeed; and unlocking the potential of every part of this country with a new wave of devolution.
The biggest barrier to fast-growth firms here in Britain is investment here in Britain. In today’s Budget, I am boosting investment through our public financial institutions, with a further £20.4 billion for the National Wealth Fund and the British Business Bank over the coming years, supporting 140,000 jobs. I will work with pension providers, asset managers and the wider industry to accelerate more private investment into Britain’s innovative, fast-growth firms. We will prevent regulation from holding back investment by removing regulation and tariffs worth £800 million to business. We will legislate for a regulatory carve-out so that innovative products such as drones and medicines can be safely tested and rapidly scaled. I am re-establishing the Better Regulation Executive to cut outdated regulations and admin burdens on businesses and workers—scrapped by the Tories; re-established by this Labour Government.
I am determined that we use public procurement to back British businesses, buy British goods and promote British exports, so I am expanding challenge-led procurement, just as I did in Defence, so that the Government can be the first customer for innovative firms. I am developing a new definition of UK supplier, to identify companies that are creating genuine wealth, genuine investment and jobs here in Britain. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Cartlidge, I think you have spoken more words than the Chancellor during this statement—[Hon. Members: “More!”] Ms Atkins, do not lead that with a “More”. I call the Chancellor.
John Healey
Thank you, Madam Deputy Speaker.
Nowhere is the necessary role for the state clearer than in artificial intelligence, and we must forge a British way to seize opportunities and guard against risks that is based on security. We are already world leaders in AI safety and security, which today’s Budget backs with an extra half a billion pounds. It is based on sovereignty, with our first-of-its-kind sovereign AI unit protecting UK interests by channelling Government investment into strategic British AI firms, backed today with another £140 million.
To ensure that our most sensitive data stays under British control, I am setting out a new deal for data centres in the UK. When the NHS uses AI to treat patients, we want that data here. When our armed forces use AI to keep us safe, we want that data here. So here’s the deal: I am today launching a new British data centre covenant with strict tests that data centres must meet to invest in local communities, create local jobs and protect local water supplies. In return, critical data centres will get the grid connections they need, and where necessary be allowed to build onsite generation while they wait. Built on sovereignty and security, I want to ensure that the British people can benefit from the huge potential upsides of AI, with a new AI challenge prize to find innovative uses for AI in public services, and the union learning fund to back workers. That is how Britain leads on AI: secure, safe and working for the British people.
Let me turn to enterprise. Britain does not lack great entrepreneurs, but too often we invent the technologies that the world wants here in the UK, then see the jobs and profits go somewhere else. High-growth firms make up less than 1% of small and medium-sized businesses, and they generate more than half the output. From the start-ups of today to the scale-ups of tomorrow and the billion-pound companies of the 2030s, I want to see them succeed and stay in Britain. So for those just starting out, I am tripling the trading allowance—the amount someone can earn from a new venture tax-free—from £1,000 to £3,000. I am launching a new young entrepreneurs allowance, which will cover a year of living costs for young founders while they turn their ideas into businesses. As recommended by the women in tech taskforce, I am also announcing a new scale-up programme to support female founders, and the British Business Bank will double its commitments to women-led businesses and funds to £200 million.
We need to get the best talent into our fast-growth firms, so I am reforming skilled worker visas and non-compete clauses in contracts, so that people who help build one successful company can move easily on to the next. Building on our world-leading enterprise management incentives scheme, today I am launching EMI2, doubling the generosity of the company share option plan so that more companies can hire and retain top talent as they grow.
Let me say this to the men and women building their businesses in Britain: I know that starting a company means taking a risk, often leaving a secure job to build something when there is no guarantee that it will work. I believe that when business founders take that risk, build an exceptional company and create wealth for Britain, we should recognise that success and keep those people here to invest again. That is why today I am announcing founders’ relief, a brand new relief in capital gains tax, with a 10% rate on lifetime gains up to £10 million for the founders of our most successful firms. That is how we make Britain the place where the companies of the future are built: entrepreneurs backed by this Budget, investment backed by this Budget, talent backed by this Budget, innovation backed by this Budget, growth backed by this Budget, and delivered to the British people by this Labour Government.
When I talk about unleashing Britain’s innovation power, I mean in every part of Britain. That is why we reformed the Treasury’s investment manual, the Green Book, so that we can invest in the potential of every town and city. That is what I do today in the west midlands with £10 million for a new market hall in Stafford; in the south-west with £10 million for Bristol’s Temple quarter and £3 million to help Plymouth’s young people get jobs in defence; in the east of England with new access to Government borrowing for the Greater Cambridge Development Corporation; and in the north with £15 million to upgrade the Leeds College of Building, £10 million for Bury’s indoor market, £20 million to restore Liverpool’s Littlewoods building and £3 million for a tech company incubator in the Don valley. I can announce that we will hold the next international investment summit in Gateshead in the spring.
The devolved Governments will receive equivalent funding for the measures in this Budget, and today I am also investing directly in high-growth industries in Scotland, Wales and Northern Ireland. In Wales, there is £2.5 million for a science park in north Wales, £11 million for the Aberavon bridge and £30 million for Cardiff Parkway station; in Scotland, there is £18 million for advanced chip design led by Edinburgh University and £6 million for Glasgow’s Scottish event campus; and in Northern Ireland, there is £7.5 million for AI and cyber in Belfast. [Interruption.]
Madam Deputy Speaker
Order. I am sorry to interrupt the Chancellor again, but Mr Holmes, just like last year, your voice is carrying far too heavily across the Chamber, and the hon. Member for Bridlington and The Wolds (Charlie Dewhirst) promised me and his young daughter this morning, on the way to work, that he would behave—he has let himself down and his daughter down. [Interruption.] Order. I call the Chancellor.
John Healey
All power to your elbow, Madam Deputy Speaker.
London is the UK’s economic powerhouse, but if our other great cities matched their counterparts in France and Germany, growth in this country would be transformed. Local leaders should not have to come cap in hand to Whitehall to build a new tram or a new concert hall, and when those projects lead to growing local companies and rising local incomes, it should be those same areas that keep the proceeds.
This radical rewiring of the state is a dual mission, led by the Treasury and No. 10 North. In today’s Budget, I am announcing new good growth funds for mayors and incubator capital for areas without mayors. I am announcing flexible funding to invest in local economies, boosted by a further £1.5 billion of devolved loans for mayoral authorities—funds that will back projects such as the new Black Country metro extension, led by the Mayor of the West Midlands; the urban regeneration in Gateshead Quayside, led by the Mayor of the North East; and, in my home region, the reopening of Doncaster airport, led by the Mayor of South Yorkshire.
This is unfinished business for me. As a Treasury Minister in the last Labour Government, I was proud to help create the regional development agencies. They delivered economic growth and local regeneration, before they were axed in 2010 by the Tory-Lib Dem coalition Government. But there is a further step that we never took—the most radical act of devolution in a generation: the devolution of tax revenues. That is the step I take today, alongside this Budget—a road map for fiscal devolution.
For the first time, I am making the commitment that 100% of business rates will be retained locally by the end of the decade, so if local leaders help businesses to start and grow, more of the rates they pay will stay in that area. From next year, 20% of business rates revenues will go to mayors, and from 2028, a share of income tax receipts will go to mayors as well.
Also from 2028, mayors and other strategic authorities will have new powers to introduce an overnight visitor levy. Taken together, these are long-term funding streams that they can use to back investment into big local infrastructure, so that more of the money that is raised locally can be invested and spent locally, on projects like the Trent sports district, led by the Mayor of the East Midlands, and the Bakerloo line extension, led by the Mayor of London. These are new powers for the people who know their areas best—not sentimentality, but supply side economics. It is the biggest wave of devolution in a generation, driving good growth in every postcode, delivered to the British people by this Labour Government.
I decided on an early Budget to give the country a bit of breathing space, and to provide stability and direction in the face of speculation. We will continue to map out that direction for Britain through the Prime Minister’s 10-year plan and the spending review.
The Labour party is the party of public services. Since 2024, we have rejected austerity, we have been rebuilding our public services with over £40 billion a year of extra day-to-day spending, and we are making our streets and borders safer, fixing crumbling classrooms, extending childcare and restoring our NHS, spending £37 billion more on health this year than in the last year of the last Conservative Government. Today I am accelerating our work to halve violence against women and girls, and setting up a new misogyny prevention fund, partnering with the private sector.
I want to pay tribute to my Cabinet colleagues and thank them for everything they are doing, prioritising within their Department budgets in the face of tough fiscal constraints. In today’s Budget, I am fully funding the defence investment plan, including through capital reprioritisation across Whitehall. This honours the commitment made both by me and by the Prime Minister.
As we look ahead to the spending review, we start from a position of strength, with spending at that higher base. There will be choices we have to make about priorities, as we have shown we can, and efficiencies we must deliver, as we have shown we can. Last year, Departments hit double their productivity and efficiency target, generating £16 billion of savings. Asylum costs, which tripled under the last Conservative Government, have been cut by £1 billion under this Labour Government.
Strong public services and strong fiscal discipline are two pillars of our Labour approach, but delivering the next spending review will also require a fundamental rewiring of the state. First, a digital overhaul of Government. In the Budget today, I am investing in AI for the civil service transformation, to support saving a further £600 million from back-office costs. Alongside my right hon. Friend the Health Secretary, I am launching a review of NHS productivity and AI, so staff can spend their time with patients and not on admin.
Secondly, streamlining the state through devolution, reducing the double running between central and local Government. Today’s Budget provides £100 million for a local apprenticeship service to match young people with local firms, funded from savings in welfare fraud and error.
Thirdly, a new focus on prevention. Just as we ringfence capital spending to invest in future success, so at the next spending review I will ringfence prevention spending that brings down costs in the future, with new preventative departmental expenditure limits.
When it comes to welfare, the last Conservative Government left a broken system—a broken system that we are changing. Bringing back face-to-face assessments, rebalancing universal credit so it does not force people to label themselves as too sick to work, reforming Motability and clamping down on those living abroad from accessing a UK state pension on the cheap, but there is more to do. I refuse to write off a million young people, like the last Conservative Government. I refuse to see disabled people suffer the indignities of a system that has been found “not fit for purpose”, and I refuse to allow the burden of paying for this failing system to fall on taxpayers for decades to come. As the Prime Minister and I have both said, we will bring down the welfare bill, and we will do it in a Labour way.
Alan Milburn and the Timms panel will publish their final reports next month. This Government will then set out our response before the end of the year, with a White Paper and legislation to follow next year. The Prime Minister has already announced that from 2030 we will adjust the triple lock, so that the state pension rises every year and keeps pace with earnings and inflation. This will save £15 billion a year by the end of the 2030s—£50 billion by 2050. A new settlement for older generations: a rising state pension and a national care service that is there when older people need it, taking the burden off families and taking the burden off our NHS. Taken together, these reforms reject crude cuts that intensify cost of living pressures and drive up costs elsewhere in the system. Taken together, these reforms will rebuild our welfare system so that it supports people from youth into old age. This is our Labour approach—tackling long-term challenges, improving public services and restoring hope for the future.
Let me now come to two more long-term challenges, First, defence. The week in Kyiv started with Russia launching another brutal ballistic missile attack on the city. This morning, the Prime Minister and I called President Zelensky to tell him about our commitments in the Budget. He told us, “You have made my day.” There will be £10 billion of additional economic and military support, based on loans, export finance guarantees and half a billion in urgent military funding for this winter. The whole House—the whole country—is united for Ukraine. Today, we send a clear message to Moscow: Britain will stand with Ukraine for as long as it takes.
In this new era of threat, the demands on our UK defence are rising. Keeping the people safe by equipping our armed forces is the first duty of any Government. I say this as Chancellor; as a former Defence Secretary; and as a dad whose son is an Army reservist—a reservist who came back four years ago from early training to say that they had no kit and no bullets to fire. That is the truth. For 14 years, Conservative Governments hollowed out and underfunded our armed forces. I am proud to be part of a Labour Government who have made the biggest increase in defence spending since the end of the cold war.
This year, our defence budget is £14 billion higher than it was in the Conservatives’ last year of government. At the spending review next year, I confirm that I will set out the details of how we will meet our NATO commitment to spend 3.5% of GDP on defence by 2035, with a target date for 3% in 2030. Today, I am getting work under way to get there in a fiscally sustainable way. That will include looking hard at public spending, as I have done today to fund the defence investment plan, but I am also determined to use more innovative financing, alongside the private sector and our international allies.
First, I am launching today the new innovative defence finance taskforce to lead this work ahead of the spending review. Secondly, I am now confirming that we will commence treaty negotiations on the multilateral defence mechanism—or bank—with Finland, Poland, and the Netherlands to boost defence investment and joint procurement across NATO allies. Thirdly, we will expand our defence industrial base by getting the maximum amount of private investment into defence, including through public-private partnerships. Fourthly, as an immediate step, I can tell the House that the national wealth fund and the British Business Bank will launch a new focus on defence, dual-use technology and sovereign capability, deploying up to £5 billion of investment and lending over the next four years.
I will ensure this record defence investment works twice: once for our national security, and once for British jobs and British business. Places across all four nations—Barrow, Rosyth, Aldershot, Plymouth, Glascoed and Belfast—reindustrialised and transformed. Security for our nation, jobs for our people, fresh hope for the future—delivered for Britain by this Labour Government.
Let me now turn to housing. On Monday, the Prime Minister and I met Les at the Connection project at St Martin-in-the-Fields, just a stone’s throw from this Chamber. He had spent three months sleeping on the streets; now, he has a room, medical help and a bit of hope for the future. Les told me:
“Now I have the chance, I want to make something of my life.”
Anne, the nurse at the project, put it this way. She said that they
“put the team around the person”.
That is what we will do as a nation.
The Conservatives did promise to end rough sleeping, yet when they left office it had doubled. Ten years ago, as shadow Housing Secretary, I argued that rough sleeping was a shame on the nation. I said it could be solved, but only with national will. Government can fix this, if they choose, and this Government have chosen. We have already promised everyone sleeping rough a route off the streets this winter, and today, I confirm a further £430 million to keep that offer open for the rest of this Parliament—not just this winter, but every winter. This is a moral mission for me, a moral mission for the Prime Minister and a moral mission for the Labour party.
Home is the heart of all our lives. It is the foundation on which we raise our families and build our hopes. Rough sleeping is the sharp end—a symptom of a system that feels broken to too many people. Since the 1980s, Britain has lost over 2 million council homes. Tonight, more than 170,000 children will sleep in temporary accommodation. Two in five young people are trapped, paying more than a third of their income in rent while they watch their hopes of buying their own home slip away. I am taking action today to deal with immediate pressures and taking decisions to start to deal with the long-term challenges.
To get more homes built, I am drawing the line on constant changes to building regulations. There will be no major changes to building regulations in this Parliament, except where critical for safety, and I am removing biodiversity requirements for more brownfield sites. To get more council homes built, I am extending cheaper borrowing for councils and making all land sold to social housing providers VAT-free. Today, I am providing an additional £1.5 billion for the social and affordable housing programme, taking our total Government commitment backing council housing to £40 billion. The Conservatives sold off our council houses; Labour is now building them back.
Finally, for every young person who is working hard, saving what they can and dreaming of their first home, I am taking action. I am announcing that a first-time buyer ISA will replace the lifetime ISA. From today, I am dealing with the LISA penalty, so that if the home you want costs more than the limit, you will get back at least what you put in. And I am going further. From next spring, we have a new scheme for first-time buyers who do not have the bank of mum and dad behind them: Your First Home—an equity loan scheme, which I am funding today with £4.7 billion of Government-backed lending. Hope starts with a home. A route off the streets, a secure home to raise your kids, the keys to your own front door—delivered to the British people by this Labour Government.
This is a Labour Budget for the worker, the sole trader, the parent at the school gate, and the young person desperate to start their first job or start their first business. These are my choices: raising revenue from those who can afford to pay; no tax rises on wages or dividends; and cutting taxes for millions of families and businesses. Just as the British people helped to support our banks 20 years ago, it is our banks that will help to give families breathing space today. For our high streets, it is gaming machines and vape shops that will help to provide the funding for our pubs, shops and cafés to thrive—breathing space now, while taking the long-term action to get costs down for good.
The decisions I have taken today will help to steer Britain through. When the storms pass, what matters is where Britain is heading—a Britain reindustrialised; a Britain with power returned to communities, threats deterred and global opportunities seized. In our first 100 days, this Labour Government have set a course for fresh hope, good growth and support for those who need it. We know who we are, and we know where we are going. [Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Bhatti, there is no need for that.
John Healey
We know who we are, and we know where we are going. We can see the Britain we want to be. It is a vision burned into every line of this Budget statement—breathing space now, fresh hope for the future, delivered to the British people by this Labour Government. I commend this statement to the House.
Provisional Collection of Taxes
Motion made, and Question put forthwith (Standing Order No. 51(2)),
That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—
(a) Stamp duty land tax (local government pension scheme pools) (motion no. 49);
(b) Stamp duty land tax (withdrawal of group relief) (motion no. 51);
(c) Value added tax (electric vehicle charging) (motion no. 55).—(John Healey.)
Question agreed to.
Madam Deputy Speaker (Ms Nusrat Ghani)
We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on succeeding days. The questions on this motion and on the remaining motions will be put at the end of the Budget debate on Tuesday 3 November. I call the Chancellor to move the motion formally.
Middle East
Debate between John Healey and Nusrat Ghani(7 months, 1 week ago)
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John Healey
There is no use—there has been no use—of Prestwick airport for US bombing strikes.
John Healey
The hon. Gentleman is almost last, but not least. I reject almost every assertion he makes in his tripartite question. The decisions we have taken and the permissions we have given have a sound legal basis. They are for defensive purposes, and are directed at Iranian sites that are attacking our interests and our allies, and that hold a threat, including to British ships and red-ensign-flagged vessels in the strait of Hormuz.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Jim Shannon to ask the final question.
Jim Shannon (Strangford) (DUP)
While we welcome the progress of talks in the middle east, the fact that our Government have to learn updates from the news cycle is beyond disappointing. The deterioration of the relationship between the President of the United States and the Prime Minister is particularly worrying. Will the Secretary of State begin to rebuild that relationship with our American allies, and show willingness to work in the best interests of this nation? The attacks on Diego Garcia prove that this nation is under attack, and that deserves decisive action. How will the Minister secure the right action to put us back in step with our American friends, regardless of any personality clashes?
Ukraine and Wider Operational Update
Debate between John Healey and Nusrat Ghani(9 months, 4 weeks ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
Order. We do not need chuntering from the Back Benches, and I can determine whether the House has or has not been misled.
John Healey
I welcome my hon. Friend’s observations. I think this is a test for the leader of Reform: are the interests that he declares closer to those of President Putin or closer to those of the British people?
John Healey
I do indeed, and my hon. Friend is right. This new era of threat also demands hard power, strong alliances and sure diplomacy, but all that is based on a domestic political unity of values and unity of intent. I am proud of the way that the UK sets the standard for that.
Ukraine
Debate between John Healey and Nusrat Ghani(1 year, 2 months ago)
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The Secretary of State for Defence (John Healey)
With permission, Madam Deputy Speaker, I shall make a statement about Ukraine.
Before I begin, I inform the House that yesterday we secured a £10 billion contract to supply Norway with at least five Type 26 frigates. This is the biggest British warship deal in our history. It strengthens NATO and our northern flank, and supports 4,000 British jobs and 400 British businesses for years to come. It shows that this Government are making defence an engine for growth across the regions and nations of the United Kingdom.
Turning to Ukraine, a few days ago Ukrainians around the world came together to mark a special day: 34 years of their country’s independence—34 years as a proud and sovereign nation. Ukrainians, civilians and those from the military alike, continue to fight for that freedom with huge courage, three-and-a-half years on from the start of Putin’s brutal, full-scale invasion. A secure Europe needs a strong Ukraine: its freedom is our freedom and its values our are values. That is why the UK stands with Ukraine, and why this House stands united for Ukraine. When Ukraine marks its next independence day, we all hope to see Ukrainians celebrate in a time of peace, not in a time of war.
Over the summer, the UK, with our allies, has been working hard to make that hope a reality. The Prime Minister hosted President Zelensky in London, chaired various coalition of the willing meetings with President Macron and joined European leaders with President Zelensky to meet President Trump in Washington DC. I have spoken with Defence Ministers across the coalition about stepping up military support and securing a peace after any deal. Our military leaders have met multiple times to strengthen international contributions to the coalition, also known now as the “multinational force Ukraine.”
We welcome President Trump’s dedication to bringing this terrible war to an end, and we strongly welcome his commitment to make security guarantees “very secure,” as he says, with the Europeans. At every stage, President Zelensky continues his support for a full, unconditional ceasefire and for talks on a lasting peace, yet Putin’s response has been to launch some of the largest attacks on Ukraine since the start of the war. During last week’s onslaught on Kyiv, at least 23 people were killed, four of whom were children, including a two-year-old. An attack on the British Council was an outrage: a Russian missile, fired into a civilian area, as part of an illegal war, damaged a British Government building, injuring a civilian worker.
It now appears that Putin is refusing a meeting with President Trump and President Zelensky, so while Ukraine wants peace, Putin wages war. President Trump is right: we must continue pushing for peace, as well as increasing pressure on Putin to come to the table. So we support measures to disrupt Russian oil revenues, and we welcome President Trump’s comments that he is weighing very serious economic sanctions on Russia. The Foreign Secretary will have more to say on similar UK action very soon.
On the battlefield, intense fighting continues along the frontline. While Russian military activity has reduced in the Kharkiv and Sumy oblasts, as Russian ground forces relocate elements of those forces, over the past two weeks, they have advanced in the northern Donetsk region. Pokrovsk remains Russia’s focus and its forces are using a variety of methods to infiltrate Ukrainian positions, but Putin continues to make only minor territorial gains, at a huge cost.
The most recent assessment by UK defence intelligence estimates that at the current pace since January, it would take Russia another 4.4 years to seize the Donbas, at a cost of almost 2 million more Russian casualties. Despite that, the increasing escalation of Russia’s devastating drone strikes is a serious concern. In July, Russia launched approximately 6,200 one-way attack drones into Ukraine, another monthly record. In one night alone, over this weekend, Russia launched nearly 540 drones and 45 missiles.
The UK Government are stepping up our efforts for Ukraine. Our priorities are simple: support the fight today, secure the peace tomorrow. To support the fight today, we are providing £4.5 billion in military aid for Ukraine this year—the highest ever level. At the last Ukraine Defence Contact Group meeting, with over 50 nations and partners, in July, I launched a “50-day drive” to accelerate the assistance that we are giving. Fifty days on, the UK has delivered to Ukraine nearly 5 million rounds of munitions, around 60,000 artillery shells, rockets and missiles, 2,500 uncrewed platforms, 30 vehicles and engineering equipment, and 200 electronic warfare and air defence systems.
We will not jeopardise the peace by forgetting about the war. Next week, I will co-chair the 30th UDCG meeting with Germany’s Minister Pistorius, alongside NATO Secretary General Mark Rutte and 50 other allies and partners. I will host an E5 Defence Ministers summit in London next week, where we will be joined by the Ukrainian Defence Minister, and where together we will step up still further our support for Ukraine.
To secure the peace tomorrow, the UK continues, with the French, to lead the coalition of the willing. Some 200 military planners from more than 30 nations have helped design plans in the event of a ceasefire: plans to secure the skies and seas, and to train Ukrainian forces to defend their nation. This week, I will host Defence Ministers from across the coalition, with French Minister Lecornu, to further cement contributions to that coalition. For the armed forces, I am reviewing readiness levels and accelerating funding to prepare for any possible deployment. Peace is possible, and we will be ready. The Prime Minister and I will ensure that the House is fully informed of developments in the proper way.
May I take this opportunity to pay tribute to one of the driving figures of the coalition of the willing, Admiral Sir Tony Radakin? Today is his last day as the UK Chief of the Defence Staff. Tony has had a distinguished 35-year military career in the armed forces, serving in operations right across the globe. He is widely respected and a true friend of the Ukrainian people, as President Zelensky himself said last week. I am sure that everyone in the House will join me in thanking Tony for his outstanding service and wish every success to his successor as CDS, Air Chief Marshal Rich Knighton.
Let me end by saying that while President Putin likes to project strength, he is now weaker than ever. Since Putin launched his illegal invasion, he has not achieved any of his strategic aims. He has lost more than 10,000 tanks and armoured vehicles, and his Black sea fleet has been humiliated. He is forced to rely on states such as Iran for drones, North Korea for frontline troops and China for technology and components. He is using 40% of his total Government spending on the war, with interest rates now running at 18% and inflation at 9%. Moreover, Putin now faces a bigger NATO—32 nations strong, with an agreement to raise national spending on security to 5% by 2035—and a Ukraine that is more determined than ever to control its own future. A secure Europe needs a strong, sovereign Ukraine, and we in the UK will stand with Ukraine for as long as it takes.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
James Cartlidge (South Suffolk) (Con)
I am grateful to the Secretary of State for advance sight of his statement. I join him in paying tribute to the outgoing Chief of the Defence Staff, Admiral Sir Tony Radakin, who, as he says, has given such impactful leadership and support for Ukraine. I also send my best wishes to his successor as CDS, Air Chief Marshal Sir Richard Knighton. It was a privilege to work with both of them at the MOD.
Let me turn to Ukraine. It is being widely reported that in his speech to the Shanghai Co-operation Organisation summit today, Vladimir Putin said that the understandings reached at his meeting with President Trump in Alaska were opening the way to peace in Ukraine. How utterly cynical. What followed the summit in Alaska was not peace, but the brutal bombing of innocent civilians across Ukraine. In particular, just days ago, Putin unleashed the second-largest aerial attack of the whole war, killing at least 23 people, including four children, as the Secretary of State just confirmed.
Bomb damage included the British Council in Kyiv. We join the Government in utterly condemning the attack on the British Council and pay tribute to all its staff, who are playing their part in our national endeavour to support Ukraine. We pass on our best wishes to the member of staff who was injured in the attack. We note that the chief executive of the British Council, Scott McDonald, promised to continue operations wherever possible. Can the Secretary of State outline to what degree that has been achieved and what support the Government have provided to assist?
If Putin really wants to open the way to peace in Ukraine, as he said, he should recognise that the blame for this war lies squarely with his territorial ambitions, and that all the civilian and military bloodshed that continues is wholly the result of his unprovoked and illegal invasion. The reality is that Putin does not accept that basic fact. In his speech today at the Shanghai Co-operation Organisation summit, Putin is widely quoted as blaming others for the war, in particular his long-standing refrain that the war was caused by
“the West’s constant attempts to draw Ukraine into NATO.”
Without ambiguity, we and all our allies must see that the war in Ukraine is a question of a free and sovereign democracy invaded without provocation by a bullying dictator. That is why, when we were in office, it was right to provide such strong support to Ukraine from the outset of the invasion—indeed, even before it commenced —and why in opposition we stand shoulder to shoulder with the Government in continuing that policy. That is why we need to keep tightening the screws on Putin’s war machine. Moscow should be denied safe harbours for its tankers and profits, and Europe should ban Russian oil and gas sooner than its current 2027 deadline.
The Euro-Atlantic alliance must lead a new pincer movement to further constraint Russia’s energy revenues and stop Putin from getting his hands on military equipment, so I am glad that the Foreign Secretary will have more to say on sanctions very soon, as the Secretary of State for Defence said. Can he confirm whether the timeline is directly linked to US action? Would the UK go ahead with those plans for tougher sanctions if the US for some reason did not?
On any potential end to the fighting, we all desperately want to see peace in Ukraine, but we are clear that it must be a lasting, sustainable peace. That is why security guarantees are so important. The Secretary of State referred to President Trump’s commitment to make security guarantees “very secure” with the Europeans. What further detail is he able to share on the likely shape of any such US security guarantees?
The Secretary of State states that the coalition of the willing would
“secure the skies and seas”.
That seems to miss out the land force element. Does that mean that the Army would be sent to Ukraine only in a training role? He also said that he is
“reviewing readiness levels and accelerating funding to prepare for any possible deployment”.
Does he expect that funding to come from the Treasury reserve or the existing MOD budget? On reviewing readiness, what is the timescale of the review? Is it yet at the stage where urgent operational requirements are being considered?
Finally, I strongly welcome the news that Norway has selected the Type 26, which is made in Scotland, for its future fleet. That is a huge deal that will support thousands of jobs, but it has been many years in the making, with significant input and progress under the previous Government. In December 2023, I had the pleasure of visiting the Norwegian MOD in Oslo, and I assure the House that the Type 26 was very much at the top of the agenda. To remind hon. Members, that was in the same week we announced that Britain and Norway would lead the maritime coalition supporting Ukraine’s navy, underlining the strength of our naval alliance and our joint commitment to Ukraine.
It is clear that a key reason for Norway’s decision is that it faces the same Russian threat that we do from Russian submarines and wants the best possible capability to respond, maximising interoperability with the Royal Navy. However, that Russian threat arises entirely from Putin’s pursuit of aggression, rather than peace. Until that situation changes in reality rather than in rhetoric, we must continue to be robust in doing everything possible to support Ukraine.
Strategic Defence Review
Debate between John Healey and Nusrat Ghani(1 year, 5 months ago)
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Ellie Chowns (North Herefordshire) (Green)
This Government seem to have confused security with spending more on weapons, but warheads do not buy a safer world—they make it more dangerous. Instead of wasting £15 billion on nuclear warheads—weapons that must never be used and that should be as unacceptable as biological and chemical weapons—at a taxpayer subsidy of more than £1 million per job created, why not instead spend that money on real security that must involve defence and diplomacy and development? Real security means decent housing and public services, tackling the challenges of the climate crisis and pandemic-preparedness because—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I call the Secretary of State.
John Healey
We are strengthening our armed forces to secure the peace, not to fight the war. We deter the attacks that we fear by being strong enough to defeat our enemy. I say to the hon. Lady that our deterrent has helped to keep stability and peace in Europe for over 75 years, it has been the ultimate guarantee of our national security and it is what Putin fears most. We are the only European nation in NATO that commits its deterrent in full to the protection of other NATO allies. We play a unique role and we make a unique contribution. I would like the hon. Lady to recognise that, even if she cannot support it.
Russian Maritime Activity and UK Response
Debate between John Healey and Nusrat Ghani(1 year, 9 months ago)
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John Healey
I thank the Chair and the members of the Defence Committee not just for the work that they are doing, but for the work that they are willing to do outside this House. I thank them for the visit that they paid to Lossiemouth to see for themselves some of the essential work that our forces personnel and civilians are doing in defending this country. He asks about the Finnish investigation into the EstLink 2 cable damage. That is for the Finns to complete and to confirm the findings of their investigation. It will be at that point that we can draw out and discuss any lessons that there might be for the UK.
We defend more fiercely than perhaps any other nation in the world the freedom of navigation in our seas. Ships of all states may navigate through our territorial waters. They are subject to the right of innocent passage, and so some of the steps that the Chair of the Defence Committee might urge the Government to take are simply not available to us under the United Nations law of the open seas. It is for that reason that we take the steps and actions that I have reported to the House—to make sure that we monitor, we watch and we track, so that those who might enter our waters with malign intent, or try to undertake any malign activity, know that we see them and know that they will face the strongest possible response.
Madam Deputy Speaker (Ms Nusrat Ghani)
It is also important for Front Benchers to arrive on time to hear the opening statement—I believe that the Liberal Democrat spokesperson was four minutes late—and it is important for them to know that they may not be called in the future, but, on this occasion, I do invite the hon. Lady to speak.
Helen Maguire (Epsom and Ewell) (LD)
Thank you, Madam Deputy Speaker, and apologies for my lateness.
I thank the Minister for advance sight of the statement. It goes without saying that we stand shoulder to shoulder with the Government in our support for their actions against the Russian threat. We also thank all the service personnel involved in dealing with this threat.
The Liberal Democrats believe that our defence policy and conventional forces should be focused on defending British territory and playing a leading role in our immediate European neighbourhood. As such, we welcome the Government’s announcement that the Royal Airforce will provide P-8 Poseidon and Rivet Joint maritime patrol and surveillance aircraft to join Baltic Sentry under NATO command.
Action to defend the realm is particularly pressing in light of recent escalations of hybrid threats from Russia. The suspected sabotage of undersea cables, including the damage to Estlink-2 on Christmas day, underscores the urgency of this moment. Such cables are the life blood of international connectivity and commerce and any attack on them is an attack on the collective stability of Europe.
The events involving the tanker Eagle S and its links to sanctioned entities supporting Putin’s war machine are deeply alarming. This is not an isolated incident, but part of a broader pattern of aggression that demands robust and co-ordinated action. This Government must rebuild trust with our European neighbours. The UK’s national interest and security have always been inextricably tied to that of Europe. From the second world war through to the cold war and the current war in Ukraine, our shared defence has been vital.
To that end, we urge the Government to work hand in glove with NATO countries to support Ukraine during the war and the rebuilding afterwards, including finding lawful ways to use the $300 billion of frozen Russian state assets as reparations; sign a comprehensive security treaty with the European Union to strengthen collaborative defence; and collaborate on developing cutting-edge defence technologies and ensure inter-operability with NATO allies to respond effectively in times of crisis.
We also face serious national vulnerabilities. The UK lacks land-based anti-ballistic missile systems to protect critical national infrastructure. Questions remain about the ability to secure the Greenland-UK gap.
We welcome the Government’s commitment to spending 2.5% of GDP on defence, but when will they outline a clear timeline for achieving that? This is not the time for complacency. The threats are clear, and the response must be decisive.
John Healey
Madam Deputy Speaker, I have some sympathy with the hon. Member for Epsom and Ewell (Helen Maguire). Perhaps she, like I, thought that there would be more interest in this House in the operation of the Competition and Markets Authority than the length of the urgent question proved was the case. It may just be that I can run a little faster than her.
Madam Deputy Speaker (Ms Nusrat Ghani)
It gives a whole new meaning to “running to the defence”.
John Healey
But Madam Deputy Speaker, I thank the Liberal Democrat spokesperson for her support for the UK contribution to the Baltic Sentry NATO operation. We play a leading role in NATO and we will play a leading role in this operation in the Baltic. It reinforces our allies, and by doing that we reinforce our own defences and strengthen collectively the deterrence that we can, as NATO nations, offer to any future aggression and aggressive intent from President Putin.
The hon. Lady urges us to work hand in glove with allies over the support for Ukraine, which is what we are committed to do. It is why the Prime Minister was in Kyiv last week, when he confirmed the record level of funding for this year to support military aid to Ukraine and when he signed a 100-year partnership with Ukraine. Finally, he made the commitment that I think the hon. Lady is looking for, when he said that, whatever happens next, our job is to put Ukraine in the strongest possible position both on the battlefield and at any negotiating table. That is what I, as Defence Secretary, am determined to do for this country.
Points of Order
Debate between John Healey and Nusrat Ghani(1 year, 11 months ago)
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Madam Deputy Speaker (Ms Nusrat Ghani)
I thank the hon. Member for giving me notice of his point of order. As he will, I believe, be aware, I have been given no indication that the Secretary of State will be making such a statement, but the Secretary of State is obviously here and taking note of what is being said, and if he wishes to comment either now or later, he has the opportunity to do so.
The Secretary of State for Defence (John Healey)
Further to that point of order, Madam Deputy Speaker. We have seen, over recent weeks, a significant change in the action and in the rhetoric on Ukraine, and Ukraine’s action on the battlefield speaks for itself. We, as a nation and as a Government, are doubling down on our support for Ukraine, and are determined to do more. When I discussed this with Minister Umerov in a call yesterday, he talked about Ukraine’s robust response to recent Russian escalations—the escalation in the attacks on Ukrainian cities and children, the escalation in the attacks on the energy system, and the escalation that involves deploying 10,000 North Korean troops in combat positions on the frontline. We also discussed our plans, as the UK, to support the Ukrainians throughout 2025.
I remain committed to keeping Parliament as fully informed as possible. The hon. Member for South Suffolk (James Cartlidge) and the House will, I think, understand the reasons why, at this point, I am not able to go into any further operational details.
Madam Deputy Speaker
I trust that that response has satisfied the hon. Member for South Suffolk.