Oral Answers to Questions

Kemi Badenoch Excerpts

Wednesday 16th July 2025 Commons Chamber

[Mr Speaker]

I call the Leader of the Opposition.

[Mrs Kemi Badenoch (North West Essex) (Con)]

Yesterday, the head of the Office for Budget Responsibility warned the Government that higher and higher levels of taxes are bad for growth. Does the Prime Minister agree?

[The Prime Minister]

Mr Speaker, I will tell you what is bad for growth: 14 years of a Tory Government. That meant stagnant growth for 14 years, leaving a £22 billion black hole. In the first quarter of this year we have achieved: the highest growth in the G7, which we promised before the election; investment of £120 billion in this country, which is a record in the first year of any Government; and three trade deals, all of which will boost growth.

[Mrs Badenoch]

The Prime Minister is talking about what he has achieved, but we have just heard that inflation is up again—the worst in the G7. We left him with 2% inflation. We have borrowing up, unemployment up and taxes up under his Government. The fact is that the Prime Minister does not get it, so let me tell him. His Budget last year had high taxes. That is why the economy is contracting. The Government have said that they will not put up taxes for people on modest incomes, but they also seem incapable of explaining who is in that category, so can the Prime Minister clear up the confusion and tell us what he thinks a modest income is?

[The Prime Minister]

I think of the working people across this country who put in every day and do not get back what they deserve. That is who we are working for, and that is who we are fixing the country for. They are the sort of people that work hard but have not necessarily got the savings to buy themselves out of problems. That is who we are working for, and that is why we put the national living wage up, with an extra £1,400. The national minimum wage is up, with an extra £2,500 a year. The triple lock means pensions went up by £470. And of course, we are extending childcare, opening free breakfast clubs and extending free school meals. We know exactly who we are working for. The right hon. Lady comes here every week and just talks the country down.

[Mrs Badenoch]

I am not talking of the country down; I am talking the Prime Minister down. I asked him what a modest income was. He answered with what a working person is. He does not know what a modest income is, and they cannot even define who working people are. The Chief Secretary to the Treasury said that working people are people who get a payslip, but millions of self-employed people do not get a payslip, so are the self-employed next in line for a Labour tax raise?

[The Prime Minister]

The self-employed were the very people who suffered repeatedly under the Conservatives’ watch, particularly during covid, as I remember, when they did not get the support that they needed. The right hon. Lady talks the country down and she cherry-picks. Since we have been in government, we have created 380,000 jobs, the employment rate is up and inactivity is down—the complete opposite of what we inherited.

[Mrs Badenoch]

I do not know where these 3,000 jobs are coming from. Unemployment has gone up every month under his Government. Perhaps the Prime Minister should speak to farmers and small business people and find out what those working people think about his Government. But that is not all, because we know that the Chancellor is launching a review into pension contributions. It is as clear as day why this is. It is because the Government are considering taxing them. Does the Prime Minister agree with me that a tax on pension contributions is a tax on working people?

[The Prime Minister]

We made absolutely clear manifesto commitments, which the right hon. Lady asked me about last week, and we are keeping to them. I am not going to write the Budget months out from the Budget. I am proud of the decisions that we took to invest in our NHS and to invest in our public services—all decisions that the Conservatives opposed. It is no wonder that after the first year of a Labour Government, business confidence is at a nine-year high. That is longer than she has been in government—[Hon. Members: “Withdraw!”] I am not withdrawing that; I am going to repeat it. Business confidence is at a nine-year high.

[Mrs Badenoch]

The Prime Minister says that he is not going to write the Budget, but his Chancellor is on the front of the Daily Mirror talking about what she is going to do on taxes, so why can he not do the same in the Chamber? I asked him about pension contributions. The truth is that he does not want to talk about pension contributions. It is all right for the Prime Minister, because he has his own special law to stop his personal pension from being taxed. But let us be honest: this is really about choices. My party knows that there is an alternative to tax rises: cutting spending—something that the Government are too scared, or perhaps too weak, to do. We offered to work with him to reform welfare and make meaningful savings, but his refusal sent a signal and now the cost of borrowing is rising. The Budget is in November, which is months away and the markets may not wait. What will the Prime Minister be doing over the summer to get a grip on the cost of borrowing?

[The Prime Minister]

The Conservatives left the most incredible mess in the economy, and now they think that they can lecture others. Just last week their chairman said that they had done the necessary apologising for the 14 years of failure. I did not hear an apology for the lowest living standards in living history. I did not hear an apology for the £22 billion black hole. I did not hear an apology for the Liz Truss mini-Budget. Maybe the right hon. Lady would like to stand up and make that apology now.

[Mrs Badenoch]

The Prime Minister is not planning to do anything this summer to fix the economy. The shadow of the last Budget is hanging over the entire country. Just yesterday, only the Conservatives supported the two-child benefit cap, because only the Conservatives believe in living within our means—not Labour, not the Liberal Democrats, not Reform.

But it is the end of term, so why don’t we go through the Prime Minister’s end-of-term scorecard? The economy is contracting, inflation is the highest in the G7, unemployment is up every month under this Government, spending is out of control, borrowing costs are more expensive than in Greece—and this is just the first year. The Labour party should be ashamed of what it is doing to the country. [Interruption.] Labour Members can shake their heads as much as they like, but the fact is that this summer they will have to go to their constituents and explain why the Government have been making such a mess over the past 12 months. And is it not the case, given that this is just their first year, that the worse is yet to come?

[The Prime Minister]

We are happily going to go to our constituents. We will tell them that we promised 2 million extra NHS appointments and have delivered 4 million extra appointments. I have to upgrade that—it is now 4.5 million extra appointments, so we will tell our constituents that. Then we will tell them about the free school meals we are rolling out, the free breakfast clubs, the free childcare, and school uniform costs. We will tell them about that. When we have done that, we will move on to affordable houses and tell them about the £39 billion we are investing. When we are finished with that, we will tell them about the rail and road upgrades across the country, the £120 billion investment and, of course, the three trade deals—and we are only just getting started.