Conduct of the Chancellor of the Exchequer

Luke Murphy Excerpts

Wednesday 10th December 2025 Commons Chamber

[Graham Stuart (Beverley and Holderness) (Con)]

Britain is hurting: families are cutting back, bills are soaring, and inflation is twice the Bank’s target. Just last month, the Chancellor claimed that she had no choice but to raise taxes on working people, and in true Harry Enfield style she blamed the Tories, the Tories, the Tories—and, of course, the OBR.

On the subject of honesty—the thread that runs through today’s debate—it is worth me returning to my earlier exchange with the Chief Secretary to the Treasury, in which I said that the Labour manifesto did not specify that it was the rates of the taxes that would rise. I was quite wrong, and the Minister was correct. I would like to apologise to him and the House for getting that incorrect.

The OBR told the Chancellor in October that tax receipts were £16 billion higher than expected. She knew that but suggested otherwise. That is not spin or sophisticated political communications; it is deceit, and it does matter.

[Luke Murphy (Basingstoke) (Lab)]

Will the right hon. Member give way?

[Graham Stuart]

I have very limited time, so forgive me but I will not.

It matters because the Chancellor has a nearly £3 trillion debt to service, and because trust is everything. Because the policies that are being implemented and the promises that were made by the Chancellor are at such variance, the markets—unlike in any other western nation, I believe —have put a higher and higher cost on borrowing for this country. That has very real-world impacts. Investors from Beverley to Berlin need to believe what the Chancellor says. After all, “credit” comes from the Latin “credo”, meaning “I believe”. If that belief falters, borrowing costs rise and more of our taxes go to paying lenders instead of funding the priorities of the British people. When trust goes, growth goes. Investors hesitate, businesses hold back and families feel the pinch.

The Chancellor appears to have learnt nothing from last year’s Budget of broken promises. It was a Budget that brought higher unemployment, fewer businesses and lower growth. She did not learn from that first exercise. As the hon. Member for St Albans (Daisy Cooper) pointed out, the weakness of the jobs tax is not just that it will hurt growth; it does not even raise much money. It was peculiarly poorly thought through.

This year’s Budget repeated more of the same. The British people know that the way to tackle the cost of living is by getting people into work, not increasing the number of people on welfare; and by creating opportunity, not dependency. But Britain has a Chancellor who talks about helping working people while making it harder to work, to save and to succeed—and throwing the OBR under the bus while she is at it. That is not a vision for the future, and it is certainly not leadership; it is fantasy dressed up as policy, and the people of Beverley and Holderness can see right through it.

Labour came to power promising change. Unfortunately, change has been delivered, but it is not what we were promised. We have 280,000 more people on the unemployment register, more than 200,000 businesses have closed, and 5,000 people are signing off sick every single day, because of the decisions made by this Labour Government. People are angry about the impact of Labour policy, but my constituents tell me that they are particularly angry about feeling misled. I hope I have shown my own candour in addressing my earlier error, for which I apologise again. Can we Members of this House try to speak honestly and accurately, and not gaslight or mislead?

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[James Wild]

If the hon. Gentleman had been here for the whole debate, he would have had the opportunity of the opening 45-minute speech to put that to my right hon. Friend.

What happened as a result of all the policy kites that were flown? Pensions were drawn down, fewer mortgages were approved and investment was paused. That is not my verdict; the Bank of England warned that the economy was heading for slowdown as a result of the uncertainty, the British Chambers of Commerce said that that uncertainty affected investment and recruitment, and hundreds of thousands of people drew down their pensions. Those are the real impacts of that activity—the shenanigans—and there is genuine anger across the country at the damage such uncertainty caused. The Chancellor must take responsibility because she is responsible for that uncertainty.

People are already cynical about politics, but what could do more to undermine trust than abusing the OBR process to cook up a story to make a case for higher taxes that were not needed? It is the Chancellor who is at the centre of misleading the country. On 4 November, she staged that unprecedented press conference to roll the pitch for tax rises.

[Luke Murphy]

Will the hon. Gentleman give way?

[James Wild]

I will not. In breach of the confidentiality rules, the Chancellor warned that the OBR productivity downgrade meant lower tax receipts. Indeed it did, but the OBR report makes it clear that that downgrade was more than addressed by higher tax receipts. In other words, there was no black hole. The Chancellor had the numbers and she knew the position. Now we know what she said was simply not true. Instead, she crafted a narrative to justify decisions to increase taxes to fund higher welfare spending.

On 13 November, the Financial Times reported that the Chancellor had decided against the much-briefed income tax increases. The next day, after the gilt market had responded badly, journalists were briefed that the tax rises would not happen thanks to an improved fiscal forecast. Yet that is not what the OBR pre-financial measures said. Little wonder the OBR took that extraordinary step of publishing the forecasts, exposing the truth that there was no giant deficit, as briefed to the press.

The OBR said it took that action to address misconceptions about the forecasts. Where might such misconceptions come from? We do not need to be Sherlock Holmes to identify the Treasury as the culprit.

[Luke Murphy]

The OBR told the Treasury Committee, on which I sit, that the narrative that the Chancellor set out on 4 November was consistent with the forecast at that time. When the OBR made that point, was it right or wrong? Are you questioning what the OBR said?

[James Wild]

I am sure that Madam Deputy Speaker is not questioning anyone. I am pointing out that the Chancellor said that there was a big £16 billion downgrade from the productivity—that was all offset—but she did not mention that—[Interruption.] If the Minister wants to intervene to say that she did mention that on 4 November, I will give way. She did not. She did not at all.

Yesterday, when the Chancellor was asked in the House if she had authorised or allowed confidential details of the Budget or forecasts to be briefed to the press, she gave a categorical no. If the Chancellor did not license briefings, can the Minister give a cast-iron commitment that no other Ministers, special advisers or officials in the Treasury or No. 10 briefed or authorised briefings about potential measures or the forecasts? Frankly, if you believe that all of those were unauthorised briefings, the Treasury is utterly out of control and I have a bridge to sell you. There is a leak inquiry, but the permanent secretary said today that it centres on 13 November, not on the tsunami of tall tales on potential Budget measures. Why might that be, I wonder. Nothing less than a full inquiry, with the findings made public, will do.

That brings us to the broken promises referred to in the motion. A year ago, the Chancellor delivered the biggest tax-raising Budget in modern history, hitting the British people with £40 billion of tax rises. Then in this Budget, taxes were increased yet again, by £26 billion, despite the Chancellor promising not to come back for more. Life comes at you fast. A year ago, the Chancellor also said that extending the freeze on income tax thresholds

“would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.]

Do Labour Members remember her saying that? I certainly do. She said that she would not freeze the thresholds. Then what did she do? Oh, she froze the thresholds. She imposed a three-year extension, with £23 billion coming out of the pockets of 1.7 million people who will pay higher taxes for her failures. As the motion says, the Chancellor should apologise for breaking her promise not to raise taxes again.

What Chancellors say matters. The public and the markets need to believe them, and to trust that they are not being misled. That is not the case around the events of this Budget. That is why this motion calls on the Chancellor to apologise for the misleading picture she presented of the public finances, for the Treasury briefings that did so much damage to businesses and to people, and for breaking her promise not to increase taxes. Frankly, in the face of such a charge sheet, an apology is the very least that the British public deserve. I commend this motion to the House.

Office for Budget Responsibility Forecasts

Luke Murphy Excerpts

Monday 1st December 2025 Commons Chamber

[James Murray]

I refer the hon. Lady to the comments I made in my statement about how we are going to take forward the recommendations in the report. As I made very clear, this is an incredibly serious incident, and we take it incredibly seriously. We are going to move urgently to take forward the recommendations in the report.

The hon. Lady asks about other arm’s length bodies and Government organisations. We take security, information security and cyber-security incredibly seriously right across Government, and the spending review focused on ensuring that all Departments and all Government bodies are adequately resourced so that they have the right information technology, cyber-security and information security for the future.

The hon. Lady referred to the Chancellor’s speech on 4 November, where the Chancellor set out the challenges we are facing and the principles that would guide her going into the Budget: cutting NHS waiting lists, cutting the cost of living and cutting Government borrowing. That is exactly what she delivered in her Budget last week. On business rates—I suspect this is a debate for another day, rather than for this statement—I point anyone concerned about increases in their valuations towards the generous transitional relief, which will cap the increase in bills at 15% or less for most small businesses next year.

[Luke Murphy (Basingstoke) (Lab)]

Having spent the past 18 months arguing that this Government have mismanaged the public finances, the Conservatives have now come to the House to argue that the public finances are fine after all. Their position is patently absurd. Due to the OBR’s productivity downgrade, which was a direct result of the Conservative Government’s decisions, the headroom available to the Government had been cut by 57%. Does the Minister agree that the Conservatives are right to be angry about the state of the public finances, but that they are on the Opposition Benches because they are responsible for it? The Chancellor is on our Benches, making decisions in the national interest.

[Mr Speaker]

Mr Murphy, I brought you in to ask a short question, not to give a full-blown statement. Please do not test the Chair too often.

Oral Answers to Questions

Luke Murphy Excerpts

Tuesday 9th September 2025 Commons Chamber

[Dan Tomlinson]

My hon. Friend is right to highlight the fact that we have had five interest rate cuts since the election. That has reduced the cost of mortgages for families up and down the country, and reduced the cost of borrowing for businesses that are thinking about investing. It is good to see that there is more investment coming both domestically and internationally, particularly as a result of our investment summit that I was pleased to attend last year.

[Luke Murphy (Basingstoke) (Lab)]

When I was elected for the first time last year, my constituents told me that they wanted this Labour Government to rebuild our public services, which is what our tax changes are delivering. Does the Minister agree that Opposition parties, of whatever colour, want the benefits of our investment in public services but are not willing to take the tough decisions to deliver them?

[Dan Tomlinson]

Yes, I agree strongly with my hon. Friend that Opposition Members continue to will the ends—they want the spending on public services—but are not willing to come forward with a plan for the means and the money to invest in our public services so that we can change things for people up and down this country.

Property Taxes

Luke Murphy Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sir Mel Stride]

I think that council tax, different variants of it, revaluations and so on are things that Government should look at, because we do not want them to be entirely static; there can always be reform and change. I will observe, however, that the average council tax paid in Labour areas is demonstrably higher than the equivalent taxes in Conservative areas. That comes down to the approach that a Conservative council takes to spending and to ensuring that councils are efficiently run, rather than the profligate approach of the Labour party.

[Luke Murphy (Basingstoke) (Lab)]

One of the suggestions made to the Government earlier this year was from Conservative-run Hampshire county council, to increase the council tax on my constituents by 15%. That was blocked by this Government, by the Secretary of State. Will the right hon. Gentleman join me in condemning Conservative-run Hampshire county council’s proposal to increase council tax by 15%?

[Sir Mel Stride]

I am not going to get into specific things going on in the hon. Gentleman’s area. How can I be expected to opine with authority on something of that nature relating to his constituency? [Interruption.] Hold on. My general point stands: the simple fact is that Labour-controlled local authorities charge more in council tax than Conservative-run councils do.

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[Sir Mel Stride]

In a word, badly.

[Luke Murphy]

A moment ago, the shadow Chancellor suggested that he would not get into speculation, but this whole debate is premised on media speculation. I asked him to comment on an actual proposal that was made to the Government by a Conservative-run county council to increase local council tax for my constituents by 15%, so he is asking us to vote on a motion about media speculation but he will not comment on an actual proposal.

Property Taxes

Luke Murphy Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Luke Murphy (Basingstoke) (Lab)]

As my hon. Friend the Member for Gateshead Central and Whickham (Mark Ferguson) pointed out, the motion we are debating is based purely on media speculation. It also conveniently overlooks the Conservatives’ own disastrous record. Let us not forget that it was the Conservatives who presided over 14 years of failure, during which the very foundations of our economy rotted away. It was on their watch that taxes were increased 25 times in the last Parliament and the costs of mortgages soared, crippling family finances across the country.

We have heard Conservative Members talk about covid, and Russia and Ukraine—and some even seem to acknowledge the travesty that was Liz Truss. However, a 2021 report from the cross-party Treasury Committee highlighted that the OBR had been warning since 2011 about an “unsustainable” fiscal trajectory in the public finances, although the Government failed to engage with that fact. Who was the Chair of the Treasury Committee making that shrewd analysis? It was of course the current shadow Chancellor. Before we got to Russia, covid and the disaster of Liz Truss, the Conservatives had already been mismanaging our economy.

Now the Conservatives come to this House to complain about a Budget that has not even been written, offering no credible economic plan of their own and continuing to make unfunded promises. This Labour Government took immediate emergency action to stabilise our economy, and made difficult but absolutely necessary decisions. We are already seeing the early signs of promise: wages are now rising faster than prices; we have had five interest rate cuts, bringing down the cost of mortgages; and we have secured three major trade deals.

[Jerome Mayhew]

The hon. Member and a number of his colleagues have referred to the reduction in interest rates as the sign of a growing economy. If he even googled it, he would realise that the first explanation for the Bank of England reducing interest rates is that it is worried about a weakening economy. Does he not realise that?

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[Luke Murphy]

The foundation for being able to cut interest rates is a stable economy, and that is exactly what the Bank of England has done.

We are putting more money directly into people’s pockets, lifting the minimum wage for 3 million workers and delivering free breakfast clubs for all primary school pupils. We are getting Britain building again by reforming the planning system to cut through red tape, bringing in hundreds of new planning officers and making a record investment of £39 billion in affordable housing. We are committed to building 1.5 million new homes, so people are not locked out of the dream of home ownership. We are correcting the mistake of successive Conservative Governments with the crucial £113 billion in extra capital investment right across the country to boost our infrastructure and catalyse high-growth sectors.

Crucially, we have had to make difficult but fair decisions on taxation—decisions that ensure that the richest and larger businesses pay more—because we urgently need to invest in the public services that the Conservatives ran into the ground. That means vital investment in our NHS, schools and other essential services that all my constituents tell me we need. It is only because of the revenue measures applied by this Government, which the Conservative party repeatedly opposed, that we are able to make that investment.

As many others have said, the Opposition parties want all the benefits of our difficult choices, but refuse to say how they would pay for them. They talk about growth, but they consistently attempt to block measures to get our country building and they have been holding our economy back for far too long. As the Prime Minister and the Chancellor have said, the next phase of this Government is singularly focused on making working people better off, improving living standards across the entire country, boosting British jobs and delivering the renewal that our country desperately needs. We will not be swayed by Opposition motions based on their fantasies, or by those who offer no credible solutions themselves.

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[Luke Murphy]

rose—

[Sir James Cleverly]

No, I will not give way. The hon. Member had his chance.

This is the point: the Government love putting up taxes. We in the Conservative party put up taxes when we had to; this Government put up taxes at every chance they get. And the reason they put up taxes whenever they get the chance to do so is that they think taxes are not a necessary evil, but a good in and of itself. That is at the heart of the problem. The fact that gilt markets, bond markets, businesses and individuals know in their heart of hearts that taxes will go up under this Government has produced the stagnation and the stifling that Labour Members are criticising.

I was about to say that we have had a number of good contributions from both sides of the House, but that is being generous. The simple fact of the matter is that a key indicator of confidence in a Government is the cost of borrowing, and, currently, that is at a multi-decade high. As we have said, it has not been higher this century; it is trending in the wrong direction. The Bank of England, when setting interest rates, made it clear that it is concerned about the trajectory—specifically the trajectory on property taxes. Those on the Treasury Bench say that they do not want to speculate on what might be in the Budget later this year. They did not want this House to investigate what they claim to be speculation. They probably should not have spent so much time briefing the media over the summer. They cannot have it both ways. We are asking legitimate questions of the Government, because the markets and the country are worried about what is happening and we want to allay their fears.

Government Performance against Fiscal Rules

Luke Murphy Excerpts

Monday 7th July 2025 Commons Chamber

[Darren Jones]

I was not at the event, so I cannot comment on those discussions, but I point the hon. Member to record levels of investment in this country. We have £120 billion of investment from the private sector in the first year of this Labour Government—including, as the Prime Minister said last Wednesday at Prime Minister’s questions, £40 billion from Amazon. We can look at water infrastructure, housing or digital infrastructure. The United Kingdom is a country that people now want to invest in. It is a stable country with a long-term strategy and with lots of great potential and assets, and we look forward to working with those business partners and investors to get the best deal for Britain.

[Luke Murphy (Basingstoke) (Lab)]

The Institute for Government’s review of the Government’s performance against fiscal rules found that the previous Conservative Government changed their rules in 2014, 2015, 2016, 2019, 2021, 2022 and 2024. In fact, all of the sets of rules that existed under the Conservatives were abandoned because at least one rule could not be met. Does the Chief Secretary to the Treasury agree that the Conservatives have not met a fiscal rule they did not change, break or, in the case of Liz Truss, blow up?

[Darren Jones]

I thank my hon. Friend for his pertinent question. It rather begs the question of whether the last Conservative Government had any fiscal rules at all. Based on the experience of all of us paying our mortgages and rent, and looking at the cost of inflation at the back end of the last Parliament, the answer is no.

UK Infrastructure: 10-year Strategy

Luke Murphy Excerpts

Thursday 19th June 2025 Commons Chamber

[Darren Jones]

I am usually confident in my abilities, to be frank. We will be consulting on some of the design details. We will be using private capital for social infrastructure only in particular potential use cases. We mention in the strategy today certain types of primary neighbourhood healthcare centres. We will be transparently consulting on that detail, and we will only allow such capital to be used in a way that is value for money. We will not be returning to the PFI contracts of the past.

[Luke Murphy (Basingstoke) (Lab)]

I welcome the Chief Secretary’s statement. As someone whose parents and grandparents grew up in and lived in council housing and benefited from that opportunity, I particularly welcome the record investment in social and affordable housing. Under the previous Government, the UK was 28th out of 31 OECD countries for business investment, and it was regularly at the bottom of the G7 for the combination of public and private investment. Will the Chief Secretary confirm that this strategy today will begin to turn that terrible legacy around?

[Darren Jones]

I agree with my hon. Friend on our extremely ambitious plans for council houses—or social and affordable houses, as we call them now. He will know that I, too, grew up in a council flat. I now represent the constituency of Bristol North West, and over 20,000 people in the city of Bristol are waiting for secure housing. I am very confident that our £39 billion commitment on building affordable and social housing will make a huge difference to the lives of people across the whole country.

My hon. Friend asks about unlocking private capital. The good news is that plenty of investors want to invest private capital in the UK, but they have told us through the British infrastructure taskforce and other vehicles that they did not invest for many years because they thought that we had lost the plot in this country, whereas we now have a clear strategy. We have stability both politically and economically, and we will now work with those investors to provide opportunities across the country to bring money to communities that have missed out for too long.

Oral Answers to Questions

Luke Murphy Excerpts

Tuesday 4th March 2025 Commons Chamber

[James Murray]

As we have debated several times in this Chamber and Westminster Hall, the changes to agricultural property relief and business property relief retain a generous relief for people accessing those benefits within the taxation system. That means that people will get £1 million before inheritance tax is due, in addition to the existing nil rate band for spousal transfers. Over that, it is up to an effective rate of 20%, and any money due can be paid over 10 years, interest free.

[Luke Murphy (Basingstoke) (Lab)]

The Government’s recent £100 million investment in hospices, including St Michael’s hospice in Basingstoke, will help to modernise facilities, enhance digital services and provide more comfortable spaces for patients and their families. Given the vital role that hospices play in all our communities, will the Treasury continue to work with the Department of Health and Social Care to ensure the sector’s long-term financial stability?

[James Murray]

As my hon. Friend rightly points out, £100 million is being made available for hospices—£25 million in 2024-25 and £75 million from April 2025. That capital funding is intended to help charitable hospices in his constituency and elsewhere across the country to improve and modernise their facilities and physical estate.

UK-China Economic and Financial Dialogue

Luke Murphy Excerpts

Tuesday 14th January 2025 Commons Chamber

[Rachel Reeves]

The national wealth fund created by this Government will get investment into industries such as carbon capture and storage, green hydrogen, ports and, indeed, steel. We were really pleased at the end of last year to be able to announce investment in carbon capture and storage in Merseyside and Teesside, securing billions of pounds of investment into those economies and securing many thousands of jobs.

[Luke Murphy (Basingstoke) (Lab)]

I thank the Chancellor for her statement. I think it is worth reminding the House that under the previous Government business investment fell to 28th out of 31 OECD countries, which was lower than Latvia, Slovenia and Hungary. Could the Chancellor set out how our industrial strategy will overcome that terrible legacy on business investment left by the Conservatives?

[Rachel Reeves]

One of the reasons for such poor investment—the lowest of all the G7 economies—is that our planning system makes it so hard to get anything done in this country. That is why the planning and infrastructure Bill, which is being brought forward by my right hon. Friend the Deputy Prime Minister, will turn that around, making it easier to invest in transport, in digital, in housing and in so much more. That is the way to get our economy growing after 14 years of failure.

Public Finances: Borrowing Costs

Luke Murphy Excerpts

Thursday 9th January 2025 Commons Chamber

[Darren Jones]

You will correctly tell me, Mr Speaker, that it would not be right for me to comment on legal proceedings, but I am happy to say that one of the huge lessons for the country, for the British voting public and perhaps, one day, for the Conservative party is that the actions that the Conservative party took were not just reckless and negligent, but had a direct impact on public finances in every single constituency. There was a direct connection: it was Conservative Ministers’ hubris, ego and lack of focus on working people that ruined the lives of people across the country. I say that today and I will say it every day, because the British people must never forget the recklessness of the Conservative party.

[Luke Murphy (Basingstoke) (Lab)]

I thank the Chief Secretary for his statement—

[Mr Speaker]

Order. It is an urgent question, not a statement.

[Luke Murphy]

I am sorry, Mr Speaker. During these exchanges on the urgent question alone, we have heard chuntering from Opposition Members about the cut in the winter fuel payment. We have heard them oppose the tax increases that have been introduced to pay for public spending, and we have heard them urge the Government to call off talks with economic partners including China. Is it any wonder that the GDP-to- debt ratio rose by a full 30 percentage points under the Conservative Government?