Budget Resolutions and Economic Situation

Max Wilkinson Excerpts

Wednesday 28th October 2026 Commons Chamber

[Dame Meg Hillier]

The hon. Gentleman raises quite a detailed point, but we know that AI can add about 0.2% to productivity in the economy overall. I do not have direct figures for the NHS, but my sister Committee—the Health and Social Care Committee, ably led by the hon. Member for Oxford West and Abingdon (Layla Moran)—will no doubt be looking at these issues. As he knows, the Committee corridor is examining the power of AI, covering both the costs and the opportunities, and I am sure the House will continue to discuss the opportunity to improve productivity in various guises and to scrutinise the Government very robustly on that.

What is interesting about the Budget is that some of its measures are for today, but it is clearly rooted in longer-term reforms, which I welcome, because we need to be thinking about the long term. One of those measures is devolution, and I am a firm believer that power should be devolved to the most appropriate level. In fact, when I was a baby councillor with the now chief of staff to the Prime Minister back in 1994, he and I were both responsible for devolving powers to areas within pram-pushing distance. I should say for younger Members that this was before the days of the internet, which perhaps dates me too much. Giving people a say over spending in their own local area can be a really powerful way of engaging people with the decisions that are made—not seeing politics as something distant and remote, but very much part of their communities.

[Max Wilkinson (Cheltenham) (LD)]

Will the hon. Lady give way?

[Dame Meg Hillier]

I have given way several times, and a lot of Members are waiting to speak.

Whitehall is often just too distant—not just physically and geographically, but in attitude—from communities and towns up and down the country. I always say that we should not make decisions about people without people. However good our civil service is—and I pay great tribute to the many civil servants I have quizzed over the years about public spending—there will still be a challenge if we do not have the right people around the table, and that may be because they just do not know what is going on in a geographical area.

Our mayors have a very important role, but if money is to be devolved to them, there needs to be very strong local accountability. Of course, the last Government abolished the Audit Commission, which I think is a great sadness, and we have seen huge challenges in local government audit. The Mayor of London has the strongest accountability, with 25 London Assembly members able to challenge him openly and regularly about his spending, and powers to delve into the detail, but mayors in other areas do not have that.

I would say to the Government and the mayors that there is very good reason to have very strong accountability. First, a mayor will want to prove to their constituents that they have spent money effectively, and to be transparent about that, so that when they come up for re-election, people know that their mayors are not frittering away their hard-earned tax pounds and that they are delivering the things they want. Secondly, if a mayor spends money well in their area, they might prove to the Government that they can get more bang for the taxpayer pound than Whitehall achieves by doing it from a distance. Dare I say it, but there may even be times when the Government of the day do not give quite enough money to deliver what was promised, and mayors need the figures to prove that they have been short-changed. In all those circumstances, we need a stronger accountability process, and I hope that we do not go so fast in the drive towards devolution that we do not have those checks and balances in place.

I am very pleased about the moves on cheaper energy and clean power. The Chancellor mentioned GB Grid, which is a start, but about 400 projects are needed to upgrade the grid, and I believe that GB Grid covers 10 or 11 of them, so there is still a huge challenge to get the grid up to speed to meet the target of net zero by 2050. I think the pledge to buy and build only when new technologies will lower bills and be connected to the grid may be an important driver in that area. We may want to quiz the Chancellor about that—as, I am sure, our sister Committee, the Energy Security and Net Zero Committee, will want to do with the relevant Ministers in due course. I welcome the energy cost reductions for businesses, because I think all Members across the Chamber have heard that businesses have been really struggling in that regard. I have also been pushing for the closure of the loophole on VAT for online marketplace sales, so I am pleased to see that.

On the face of it, this Budget looks as though it has done a good job, but the devil is of course in the detail, so I again put the Chancellor on warning that we will be looking through that detail over the next few weeks. We have the Office for Budget Responsibility before the Treasury Committee next week, alongside other economists, and we will have the Chancellor himself on 11 November, when we will have had a chance to go through all the figures in detail and can challenge him on what he has promised today and the promises for the future.

Overall, I think we must see cross-party support for the approach to support households in these challenging international times, when a lot of the things that buffet the Government are very difficult for them to control. We must support small businesses. Quite rightly, we all are lobbied a lot by our small businesses. People invest their energy in their businesses, and they need support. We need a long-term vision. Part of our challenge as scrutineers of the Government on the Committee corridor is to hold them to account for their 10-year plan—which we have yet to see—for reshaping the state and devolution. I again warn all Ministers sitting on the Front Bench that the Budget may feel good after the statement today, but we will be challenging them in detail about the money they are spending, whichever Committee they appear before.

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[Jim Dickson]

The situation that the right hon. Gentleman is describing sounds like what pertained for the previous 14 years. We are turning that around.

Since the 2024 election, this Government have demonstrated a clear strategy to get on and fix the foundations of our country, most obviously in public spending, that had fractured under the previous Administration, and that includes defence spending. The Budget is built on long-term investment in infrastructure and crucial new projects. Nowhere is that better illustrated than in my constituency, in north Kent, where the funding for the lower Thames crossing—public funding, supporting big private sector investment of over £10 billion—will make such a difference to Dartford residents once it is complete.

The Chancellor’s announcement that he is expanding support to businesses and infrastructure projects through the National Wealth Fund and the British Business Bank is most welcome, and it has the potential for an investment boost right across the UK. As a tangible, practical example of how investment can make a difference in our constituencies, I commend the spending review that saw the announcement of the structures fund to invest in distressed transport assets across the country that were beyond the capacity of local authorities to repair. In Dartford, we hope to hear that funding has been allocated to repair the collapsed Galley Hill Road, which links Dartford with Gravesend, in the coming weeks.

As the Chancellor made clear, and as other hon. Members have pointed out, another long-term impact of the situation in the middle east is the rise in energy bills, which is likely to affect all of us over this winter. I remain extremely worried about the impact that will have, particularly on the most vulnerable households. Only this week, EDF Energy put out a new forecast that has the average household energy bill rising by more than a quarter, to £2,192 per year in January and potentially even higher in April. Clearly the blame for these price rises should be put squarely on the architect of the conflict between the US and Iran. I welcome all the work that this Government have done since 2024 to begin to transform our energy system.

I welcome very much today’s announcement that standing charges will be removed from gas bills next year, and the additional £100 of support for all those living in homes in council tax bands A to D, which will support over 35,000 households in Dartford over the next year. It may or may not be true, but I heard that Conservative spokespeople were taking to the airwaves following the Budget to say that they opposed the £100 discount. If that is the case, I think it is wrong and disgraceful. However, I hope that Ministers will look further at what we can do to shield the most vulnerable and accelerate the work to break the link between increasingly volatile gas prices and the prices that we pay for electricity.

I have also been among those calling for more support on business rates for small businesses. I am really pleased to hear about the changes that will see many cafés, shops and pubs taken out of business rates entirely, paid for rightly by a rise in machine games duty. I think most of us in this House can support that tax.

In my previous life as a local councillor, I saw the growing levels of homelessness on our streets, as I do now, and the dire consequences for those stuck there. It is therefore right that the Government are putting in place funding for the rest of the Parliament to offer a route off the streets to anyone sleeping rough. We have needed a comprehensive strategy to tackle rough sleeping for the past 14 or 15 years, and we finally have one.

I also support the proposed changes to bring in a first-time buyer ISA to replace the lifetime ISA. I look forward to more details on the Your First Home scheme, which I believe will be a boost to new developments such as those in Ebbsfleet Garden City in my constituency.

I am really pleased to see that the Red Book published along with today’s Budget confirms the formation of either a mayoral or foundation strategic authority for Kent. That is important news for our region. If a foundation authority or a mayor was in place, for instance, they could find the investment to ensure that we bring international rail services back to Kent after they were lost six years ago.

[Max Wilkinson]

Does the hon. Member think it is right that people in Gloucestershire feel somewhat left out of the devolution agenda? We have been placed on the pause list for local government reorganisation, even though there is local consensus, and we are the only place in the whole of the west and south-west region without a devolution deal, even though there is a consensus on that as well. I say that in the knowledge that a Minister sitting on the Treasury Bench, the hon. Member for Bristol South (Karin Smyth), is from the west of England, and—as I understand it, based on what I hear from local councillors—Gloucestershire would like to have the same as her region. Does the hon. Gentleman agree that Gloucestershire could reasonably feel a bit left out and miffed by what is going on?

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[Sir Bernard Jenkin]

If the hon. Gentleman is saying, “If only we were not doing this later retirement thing, there would be more jobs for young people,” I have to say that managing the economy in that way is not very successful. It does not work.

On the forecast, the Government set great store by what the IMF says about the UK’s deficit reduction programme. The Red Book states:

“The IMF forecasts that the UK’s deficit reduction this year will be bigger than any other G20 country.”

I am afraid that there are a lot of lemmings rushing over cliffs in that G20 bloc. It is not a good benchmark for success. In any case, the forecast is based on the forecast that the Government have given to the IMF, and the reduction has not been delivered yet. The Government have not started to deliver the debt reduction programme. The OBR says that debt rises from 95.5% of GDP this year to 97.3% in 2028-29. The headroom is just £15 billion in 2029-30, which is £7 billion less than at the last Budget. The OBR says there is only a 56% chance of meeting the rule. As the bond markets digest this Budget, I am not sure they will be quite as sanguine as they have been.

I will end by responding to a point that we heard from the hon. Member for Hornsey and Friern Barnet (Catherine West). She talked about us getting back into the European Union and said that 60% of the economy is dependent upon trade with Europe. That is rubbish. What proportion of GDP do we export to the EU in goods? The single market is about goods. Incidentally, our record on services exports outside the EU is that there has been a dramatic, massive increase.

[Max Wilkinson]

Will the hon. Member give way?

[Sir Bernard Jenkin]

No, I will not give away. Only 5.9% of the UK economy is goods exports to the EU. A much larger proportion goes outside the EU. Incidentally, during our period of membership, the proportion of GDP that we exported to the EU was in steady decline from 1992 to 2021. Other factors have led to the decline in our exports with the EU.

Overall—this is the astonishing thing, and I will end on this point—our economy has outgrown France and Germany since 1992. Leaving the EU has not reversed that trend. I wonder whether Government Members do not understand the irony when they say, “We are the fastest-growing economy in the G7.” That has often been the case, because the EU is not a very efficient market and does not add much value to our economy. In fact, we have grown our exports to the rest of the world.

[Max Wilkinson]

Will the hon. Member give way?

[Sir Bernard Jenkin]

No, I am not giving way; I have given way twice. [Interruption.] Members may shout me down, but they do not want to hear the facts. The fact is that our economy is now growing faster outside the EU than it would have done, because of two sectors: financial services, and tech and AI. They are not regulated by the EU. Employment in the City of London has doubled since 2016. All the doom-mongers who told us that the City was finished were wrong.

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[Andrew Lewin]

I think the right hon. Member is talking about the issue of the Chagos Islands, which has absolutely no bearing on the speech that I am making today, but if the Conservative party wants to hold to its position that the current deal with the EU is a good one, I will take that debate any day of the week.

[Max Wilkinson]

Will the hon. Gentleman give way?

[Andrew Lewin]

I will not give way now, but I may do so later. [Interruption.] I am keen to make some progress.

Closer to home, in Welwyn Hatfield, 35,000 households will benefit from the £100 direct payment to help with energy bills this winter. The ending of standing charges on gas bills will particularly help those in smaller homes and flats, and it is unquestionably the right thing to do. I was also pleased, earlier in the week, to see the announcement about the warm homes plan, with low and zero interest rate loans for people who are able to make energy improvements to their properties, and cheaper public charging for electric vehicles. That is an all-round energy package that I believe we can support.

Let me now say a little about the national health service, which has not featured in the debate as much as it might have. Waiting lists have fallen sharply since the election of this Government, and ambulance response times in my region in the east of England have improved markedly in the last year. There is a great deal more work to do—there is no question about that—but this improvement has only been possible because of the investment made in this and previous Budgets. It is striking that £37 billion more is being spent on the NHS under this Government than was spent by the Conservatives.