Budget Resolutions and Economic Situation

Luke Murphy Excerpts

Wednesday 28th October 2026 Commons Chamber

[John Glen]

Yes, a small measure like that will make some impact, but we need to look at the context—at what we have seen previously. As the hon. Gentleman will know, the manifesto he stood on two years ago implied a modest increase in taxes of about £7 billion, and we actually had increases of £66 billion. The scale of the burden placed on those businesses means they are disinclined to continue to invest.

I want to say a few words about defence. It is a massive part of the world in Wiltshire, including in south Wiltshire. Again, the context is changing, and it is doing so rapidly. The commitment given so far to raise defence expenditure is, of course, welcome, but in June the departing Defence Secretary was pretty explicit in insisting that a date be given by which 3% of GDP would be secured. A date has not been given today. I accept that there is a pathway to 3.5% and that a taskforce to get to 3% has been announced, but that is very different.

I think that we, in this country, are rather complacent about the nature of the risks we face. Just over two years ago, I visited the Nordics in one of my last months as a Minister. In Sweden and Norway, I was struck by the sense of anxiety and readiness over what Russia was capable of doing and how imminent the threat was. Of course I acknowledge the progress made, but the urgency and reality of the situation in which we now find ourselves necessitates a step change in the urgency of the Government’s response.

[Luke Murphy (Basingstoke) (Lab)]

I respect the right hon. Gentleman’s experience, and the tone in which he is delivering his speech. However, on the point of credibility, I would gently ask him this question. In April 2024, the Conservative Government committed to a target for defence spending in 2030—that target was, of course, 2.5%. A month earlier, they cut national insurance, and they committed to a further cut in national insurance in the manifesto. Will he reflect a little harder on the credibility of the Conservatives on this issue, given their failure to commit to 3% mere months before their party said that defence spending should be 3%, and with no real means to pay for it?

[John Glen]

Of course I recognise the mistakes and choices made in previous Governments, but as I was trying to indicate, the world has materially changed since the general election—I think that is pretty obvious to most people, given what is happening in geopolitics—and that necessitates a suitable response from the Government. Indeed the Chancellor insisted on that when he left his position as Defence Secretary.

In conclusion, if a party comes into government and secures the massive majority that this Government secured, it is pretty painful for the country to see the lack of ambition in the choices made in the three Budgets so far. The downgrade from 1.6% to 1% growth next year is massive, and it still implies a 2.6% per year spending cut in unprotected Departments from 2028-29 to 2031-32. I do not see that as politically realistic for the Labour party, and that is why I anticipate that the next step after the summit next month will be the call for a general election.