Property Taxes

Mel Stride Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sir Mel Stride (Central Devon) (Con)]

I beg to move,

That this House notes recent reports that the Government is considering a wide range of increases to taxes on property; notes the Prime Minister’s commitment last year not to impose Capital Gains Tax on primary residences; and calls on the Government not to introduce an annual property levy which would tax the family home, higher rates of Council Tax, or a land value tax, or to lower the thresholds or further increase liability to Inheritance Tax, for example, by changing the seven-year gift rule.

I trust you had a good recess, Mr Speaker. I am absolutely certain that the Deputy Prime Minister also had a good recess. We saw many photographs of her down at the seaside, just off the coast in a rubber dingy—rather like many of the other photographs we saw over the summer, given this Government’s reckless policies on illegal migration. She was probably celebrating the acquisition of another property for her property empire, but that celebration was perhaps slightly tinged with a nagging doubt as to whether she had indeed paid enough stamp duty. Well, we will get to the bottom of that in due course.

Those who could not avoid paying the taxes imposed by this Government are businesses right up and down our country, many of which I took the time to visit during the recess. In the leisure sector alone, some 80,000 jobs have been destroyed by the national insurance rises, and this has particularly affected those taking their first job, younger workers, part-time workers and female workers. Jobs are being destroyed.

While the Deputy Prime Minister was lounging on her boat with her wine, this Government were all at sea, like a cork bobbing on the tide, with no control over the events swirling around them. When it came to the economy, although eclipsed by the calamities around illegal migration, we saw recently the panicked reshuffle of the Treasury Front Bench. I offer my congratulations to the Exchequer Secretary to the Treasury, the hon. Member for Chipping Barnet (Dan Tomlinson) and warmly welcome him to his new role. However, I should also tell him that he is joining a sinking ship, whose captain has just had all her authority stripped from her, while all his comrades down below deck are fiercely trying to bail it out. I also offer a fond farewell to the former Chief Secretary to the Treasury, the right hon. Member for Bristol North West (Darren Jones), who no doubt thought he was very clever when he leapt off the sinking ship. He will not be feeling quite so clever when he discovers that the place to which they have sent him is even more dysfunctional than the Treasury Front Bench.

Among all this news of arrivals to our shores, we have had a cruel summer of speculation around tax. We have seen in the skies clouds of kites flown largely by the Treasury as to what taxes it is going to put up. It has all been tax, tax and tax. I am reminded of the Beatles’ song “Taxman”:

“I’ll tax the street,

If you try to sit, I’ll tax your seat,

If you get too cold, I’ll tax the heat,

If you take a walk, I’ll tax your feet.”

When it comes to tax, it is not so much “Good Day Sunshine” as “Help!”[Laughter.] Okay—it was a bit hammy, but it was worth a try. I was going to try “Penny Lane” as well, but I drew the line there.

It is worth examining how we got to this point, for a reckoning for our country is surely coming. This will be a story for all time.

[Sir Oliver Dowden (Hertsmere) (Con)]

Will my right hon. Friend give way?

[Sir Mel Stride]

I will do so momentarily.

It started with broken promises. This was a party that said during the run-up to the general election that it had no intention of raising taxes left, right and centre, and yet within a month or two, this Government did precisely that, with devastating consequences: tax rises on businesses that stifle growth. They talked down the economy by confecting a £22 billion black hole that did not exist. What an irony it was that it was they who brought in the Office for Budget Responsibility to decide whether that £22 billion black hole existed and that the OBR said it could not legitimise the claim—the Government were wrong.

What happened with spending and borrowing? It got completely out of control. The combination of passing on price rises because of the national insurance increases, and the extra borrowing and spending, has led to higher inflation. We are an outlier when it comes to inflation.

[Helena Dollimore (Hastings and Rye) (Lab/Co-op)]

Will the right hon. Member give way?

[Sir Mel Stride]

In a moment.

That in turn has seen interest rates higher for longer and the servicing costs on our national debt now running at over £100 billion a year—more than twice our defence spend. I will now give way to whoever was trying to intervene behind me.

[Sir Oliver Dowden]

Would my right hon. Friend agree that correcting this loss of market confidence demands decisive action from the Government at the Budget, and that that decisive action cannot be taken solely on the tax side? The tax side is what has driven us into this loop. We need decisive action on spending and particularly on welfare if we are to see some restoration of market confidence and get ourselves out of this rut.

[Sir Mel Stride]

My right hon. Friend, as ever, is absolutely right. The reality, as we see in the bond yields at the moment, is that the markets have no confidence in the ability of this Government to get on top of spending. We saw the farce of a Government who came into office scrapping the £5 billion of welfare savings that were already baked into the OBR’s scorecard because we had brought them in, and attempting to bring forward their own reforms only for their Back Benchers to vote them down. My right hon. Friend is so right; this Government do not have the will or the plan to deal with spending, and that is at the heart of the reason why we will all be punished and pay the price of more taxes come the Budget in November.

[Jim Shannon (Strangford) (DUP)]

I commend the shadow Chancellor for bringing forward this subject for debate. He clearly shares my deep concern that I have, and that I think everyone in this Chamber should have, that the Government are considering a further tax on property, despite the fact that the Prime Minister committed to not imposing capital gains tax on residents of this United Kingdom of Great Britain and Northern Ireland. Last year, it was the family inheritance tax; this year, those who own property—those who have scrimped and saved for their house, those who are middle class, those hard workers—have now become the latest target of Labour tax policy.

[Sir Mel Stride]

The hon. Gentleman is entirely right. Of course, if the Government have got into a situation where they are having to scrabble around and look at property taxes, as we are debating this afternoon, than really nothing is safe from the taxman under this Government.

[Helena Dollimore]

I gently remind the right hon. Member that since this Labour Government came to power, interest rates have been cut five times—a vote of confidence in our Chancellor, fixing the foundations of our economy. That saves the average family on an average tracker mortgage in my constituency over £100 a month. Will he remind me what happened to interest rates when his party was in power?

[Sir Mel Stride]

As the hon. Lady will know, interest rates are one of the key tools in monetary policy and are applied to bring down inflation. While she is right that there have been five reductions in the level of the base rate, there should have been many more. The reason is—the evidence is there—that this Government have stoked inflation. Inflation is still rising. It is at twice the level or thereabouts that it was on the day of the general election. When a Government stoke inflation, we pay the price through higher interest rates, and that is precisely what has been happening.

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

My right hon. Friend is right to highlight the massive impact of these tax rises on so many families and businesses up and down the country. Will he comment on how we can have a Deputy Prime Minister who has admitted avoiding paying the tax that she owed and who continues in office? And this, from a party that called for the resignation of people for far lower offences! Does that not expose the rank hypocrisy that seems to run right through this Government?

[Sir Mel Stride]

If the right hon. Lady wants to make the rules, she should live by them. That message will go out to businesses and families up and down the country. There is no way that they can avoid the juggernaut of taxes that are coming down the track.

[Tim Farron (Westmorland and Lonsdale) (LD)]

In return for the right hon. Member’s generosity in giving way, I will say something pleasant about the last Conservative Government. [Interruption.] I know—wait for it! It will be just one thing.

The last Government allowed councils like Westmorland and Furness, run by the Liberal Democrats, to double council tax on second homes. It is right to do that because excessive second-home ownership annihilates communities in the lakes and the dales, the west country and elsewhere. But can I encourage the Conservatives and the party in government now to do something that would do much more to limit the number of second homes than that: bring in a new planning category of use, so that national parks and councils can manage the numbers and save communities?

[Sir Mel Stride]

I thank the hon. Gentleman for his kind words about the Conservative party—I am sure that they are deeply felt and very genuine. What the Deputy Prime Minister should be doing is delivering more homes. It is quite clear that the target of 1.5 million homes, which the Government claim they will deliver at the rate of 300,000 a year, will not be met. I am quite happy to be proven wrong, but I very much suspect that I will not be, unfortunately.

We have ended up in a situation in which a huge black hole is looming. The National Institute of Economic and Social Research puts it at possibly as much as £40 billion. The economic mismanagement of the Labour party is a recurrent theme. In the October Budget—the Government’s first—there was headroom of about £10 billion against the fiscal rules. That, plus £4 billion more, was blown by the time of the spring statement—the emergency Budget. Once again, it appears that considerably more has been blown all over again.

That is no surprise. The U-turns on winter fuel payments and on welfare reform, which we have already discussed in this debate, led to unfunded commitments of around £6 billion—unfunded commitments after the Chancellor had said that the Labour party would never find itself in that position. What she said has simply not happened. What signal does it send to the markets when the Government cannot control spending? In the long-term, it will be interesting to see what the Office for Budget Responsibility has to say about its forecasts for growth. In recent times, 30-year bond yields have hit a 27-year high. We are paying more to borrow than Greece. There is a potential debt crisis looming, and this country could be on the brink—all on Labour’s watch.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

The Government inherited bond yields higher than those in many other countries. Right now bond yields are going up in Japan, Germany and the United States. Is the Chancellor responsible for all that?

[Sir Mel Stride]

There is no doubt that under the previous Government there was a need to support the economy. That involved the expenditure of £400 billion, not least on the furlough scheme. I do not remember the hon. Gentleman’s party arguing at the time that we should not do that; in fact, it argued that we should go further still. The Conservative Government stepped in, supported jobs and saved us from going into mass unemployment that many feared would be worse than even in the 1980s, and I take great pride in that. But we are where we are now, and what the Government should be doing is growing the economy, stoking up business sentiment, getting taxes down and getting the economy moving, but they are doing precisely the opposite.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Is not the difference now that we are seeing stagflation—high inflation and the economy not growing as it should be? We are therefore seeing job losses and unemployment going up every month under this Labour Government. Unless they do something drastically different, it will only get worse, and that will impact on our growth prospects and therefore on the prosperity not just of our nation but of the individuals who work and try to thrive here.

[Sir Mel Stride]

My hon. Friend is absolutely right. We are seeing high inflation, anaemic growth, high gilt yields and a pound that has been plummeting in recent times. All those are signals flashing red on the dashboard.

Instead of getting a grip on spending and getting taxes down, the Government have been out there pitch-rolling yet more taxes. Over the summer, we have seen briefings to the press suggesting tax rises on property. The Labour party has an opportunity this afternoon to rule out those possibilities, and the Minister should do just that when he responds.

First, there has been a suggestion that there will be changes to the private residence relief under the capital gains tax regime. That would strike at the heart of our country as a property-owning democracy. People would be penalised simply for selling up and moving home. It would have clear implications by bunging up the property market, and clear economic implications by causing friction in the process of people moving from one part of the country to another, often in search of work. It would discourage downsizing, even though that would be beneficial in providing more homes for people to live in. Before the election, the Prime Minister said that there never was a policy of that type so it did not need to be ruled out, but let us rule it out just in case anyone pretends that there was such a policy. When he responds, will the Minister confirm that he stands by the words of the Prime Minister?

Secondly, there has been a suggestion of an annual tax on homes. What a tax on aspiration! What a tax on people who have saved hard and managed to get on the property ladder, but who will then be stuck with annual taxes. What about those who are asset-rich but income-poor and cannot afford to pay—are they expected to sell up? Will the Minister rule out that possibility and put people’s minds at rest?

If that was not enough, we hear that the Government may be considering changes to the gifting regime in inheritance tax. They are not content just to pulverise farmers and family businesses, and to see those businesses and farms broken up when they are passed on from one generation to another, because of the imposition of tax. In fact, it was a Labour Government in the 1970s who brought in the reliefs that this Government have chosen to abolish. The inheritance tax yield will double over this Parliament. The Opposition say, “Enough is enough.” We should not punish parents who wish to pass something on to their children. Socialists do not understand that we do not all stand as atomised individuals; we work together as families and communities. We care about each other, we care about the people we love, and it is right that we have the opportunity to pass something on to them.

[Harriet Cross (Gordon and Buchan) (Con)]

I thank the shadow Chancellor for introducing this debate on such an important issue. Properties and assets are vital to the country and to people. On the lifetime limit for inheritance tax, over the past year everyone will have heard the Government telling farmers and family businesses to get their affairs in order and to plan. Not having a limit on the lifetime cap was what allowed them to plan. If that is cut or the cap is not in the right place, it will negate every argument that the Government have made in the past year to justify their family farm and family business tax. Will the Minister please acknowledge that and rule out any change to the cap, which would penalise family farms and businesses?

[Sir Mel Stride]

My hon. Friend has put it brilliantly and succinctly, and she is absolutely right. In their horror—in their recoil from the inheritance tax changes—that is exactly what farmers and family business owners have been doing: thinking about alternatives. The seven-year rule has been one of those alternatives, and it would be a really heartless and extraordinarily cruel moment if the Government were to shut that down as well.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

My right hon. Friend is explaining the situation in his usual powerful way. If, as seems likely, the Government impose capital gains tax on a person’s principal private residence, will he, as mitigation, consider whether there should at least be indexation allowance to provide some relief from the horror that I fear is about to be inflicted on my constituents? He will remember that the Finance Act 2008 abolished that relief on other property. I suspect that the Government will not be sympathetic to such a suggestion given what happened in 2008, but it would at least take the edge off the imposition of taxes on the sale of a person’s principal private residence.

[Sir Mel Stride]

My right hon. Friend raises his point in his usual eloquent manner. That is a question for the Minister, and I hope that, when he rises to the Dispatch Box, he will rule out our concerns in their entirety. In the event that he cannot, perhaps he will choose to answer my right hon. Friend’s inquiry.

Is it not the case that those in the Labour party have a clear misunderstanding because they have no business experience? Those on the Government Front Bench have no business experience in setting up companies or understanding the meaning of business taxes—the experience is simply not there. Labour will talk about taxing wealth, but does it not understand that if we tax wealth, we will get less of it?

It has been estimated that about 15,000 high net worth individuals have left our country in the period in which this Government have been in power. A consequence of that tax just walking out of the door is that we will require somewhere around a third of a million to half a million people on average earnings to make up the difference. This is not a case of good riddance to wealth; the Government should—as the Conservative party would—encourage and turbocharge wealth at every turn.

[Andrew Pakes (Peterborough) (Lab)]

Will my hon. Friend give way?

[Sir Mel Stride]

If I am an hon. Friend, I will certainly give way.

[Andrew Pakes]

I am sure Hansard will correct me.

The right hon. Gentleman just made some comments about high net worth or high value individuals. In my constituency, I am particularly interested in individuals on low incomes. In Peterborough, I represent a city with one of the highest levels of those employed on zero-hours contracts and in chronically insecure work. Does he not agree that his party often wants all the spending, but none of the funding for delivery? He talked about reducing taxation for some of those with higher net worth, but will he also talk about which doctors’ surgeries in my constituency would suffer cuts under his plans, which individuals would receive no protection for their employment rights, and how the people of Peterborough would be worse off because he wants to reduce the spending that will fix the foundations of this country?

[Sir Mel Stride]

The hon. Gentleman refers to cutting spending. His party attempted to cut spending, but entirely failed to do so. My point is that if he wants money to spend on public services, he needs to cut welfare and should worry about how to do so. I do not know how he voted when that was put to the test in this House, but if he in any way voted against his own Government and against getting on top of the welfare bill, he should ask his own question of himself.

As for those on low incomes, they are precisely the people who are now being devastated by the increase in national insurance. There is not just an increase in the rate, but a substantial reduction in the threshold at which national insurance kicks in, which has meant higher unemployment, in particular among younger workers, part-time workers, women and people getting that vital first job so that they can get themselves on a career path. They are the people whom the Labour Government are punishing most.

[Dr Luke Evans]

Is that not exactly the point—that the top 1% of earners pay almost 30% of income tax? If we lose them, we damage the people who need the support and the investment from the very taxpayers we have just scared off. Should not the reverse be happening? We should attract more people into this country to spend more money, so that we have more money for such services through tax collection.

[Sir Mel Stride]

My hon. Friend is absolutely right. I have already shared with the House the classic example of the number of people who have left this country because of a punitive tax regime and the costs of that.

[Sir Oliver Dowden]

Further to the excellent point made by my hon. Friend the Member for Hinckley and Bosworth (Dr Evans), the Labour party denigrates wealthy individuals who choose to come to this country. However, it is about not just the tax that they provide, but the jobs and opportunities they create by investing in constituencies up and down the country. This country has prospered for hundreds of years by being open and welcoming to inward investment. If we lose that, we lose a key plank of the competitiveness and growth that have been associated with our economy.

[Sir Mel Stride]

That is right. We live in a highly mobile world; it is easy for people with substantial wealth or money to invest to go anywhere in the world. We have to remain competitive, and this Government are making us less competitive. My right hon. Friend refers to unemployment, but just look at the record—should we have expected any more from this Government? No, not really. Every single Labour Government in history have left unemployment higher when they left office than it was at the time they came into office. What have we seen on unemployment since this Government have been in office? It has increased every single month since they have been in power.

[Yuan Yang (Earley and Woodley) (Lab)]

The right hon. Gentleman has spent the past five minutes circling around figures gathered by a consultancy that aids the super-wealthy to migrate from this country. Where is the Conservative party getting its economic ideas from? It speaks volumes that he has spent so much time up to this point speaking for the 15,000 high net worth individuals served by that consultancy; and his previous point was about inheritance tax, which is paid by only 4% of all estates in the UK. If he has any ideas, what will the Conservative party do to grow the economy for the benefit of all people in this country?

[Sir Mel Stride]

The hon. Lady asks where we are getting our ideas from; where we are not getting them from is from academics and researchers who believe in taxing wealth and who now sit there on the Treasury Bench, or in other places where they advise No. 10. They talk on a regular basis about taxing property, wealth, shares and assets of any description that they can think of, but that is the road to ruin. She asked where we get our ideas from, and I will tell her. I set up my own business in the 1980s, from absolutely nothing. I grew it from scratch, and then I took it over to America and grew a business there. I have lived, breathed and eaten business most of my life. I also go up and down the country to speak to other such businesses. They are the people who understand what needs to be done on the tax front and who have to live with the red tape that her party is bringing in to tie them down. They are the people whom this party is listening to.

[Mr Jonathan Brash (Hartlepool) (Lab)]

The right hon. Gentleman has talked at great length about taxing the wealthy, but he has omitted one of the suggestions that came forth over the summer, which was to get rid of the punitive council tax system, which taxes poverty and deprivation in this country. The former Conservative leader of Hartlepool borough council famously cheered when he put up council tax on deprived people in Hartlepool. Why are the Conservative party and now Reform—that former Conservative leader has now defected to Reform—so attached to that regressive system?

[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.

[Emily Darlington (Milton Keynes Central) (Lab)]

rose—

[Emily Darlington]

What the right hon. Gentleman has said is not a fact. The reality in my region is that Milton Keynes, the Labour-run local authority, has lower taxes than all the surrounding Tory authorities, including in Northamptonshire, which has failed over and over again. Two Conservative and now Reform councils have failed, as has Buckinghamshire, while Milton Keynes has been labelled by the Local Government Association as one of the best-run councils. It still delivers lower council tax than all those Tory-run authorities.

[Sir Mel Stride]

It is a simple matter of logic that even if the hon. Lady’s assertion is true—I do not know whether it is or not—it does not contradict the point that I made.

[Dr Luke Evans]

Was it not the current Prime Minister who said

“not a penny more on your council tax”?

Is the shadow Chancellor aware of how that worked out?

[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.

--- Later in debate ---

[Sir Mel Stride]

My point is very clear—I need to make some progress as I have been fairly generous in taking interventions—that when it comes to council tax, it is a fact that Conservative-controlled councils charge less, because their whole approach to running the council is the same as our approach to running the economy: to ensure it is done efficiently and not to impose undue burdens on people by way of tax.

We were told by the Chancellor that the tax hikes in the Government’s first Budget, last autumn, were a “once in a Parliament” event. It is now a question not of whether there will be further tax increases, but which taxes will be increased. The uncertainty that has flowed from the disastrous situation over the summer has meant that, because of Labour’s choices, a hold has been put on businesses investing, on property transactions and choices, and fundamentally on some of the freedoms that we, as citizens, often take for granted.

Labour Members will desperately dismiss all of this as press speculation—I expect to hear that from the Minister in a moment—but is it not the truth that this sorry tale is entirely of their own making? It is the inevitable result of their choices and the failure that has followed, with much of this speculation seemingly fuelled by briefings from within the Government. This House and the public deserve answers.

The Chancellor cannot borrow more and has shown no ability to control spending. That can only leave tax, but which taxes will it be? Are family homes safe or are they simply fair game? If Labour Members fail to vote for the simple motion before us today, then the answer will be clear: under this Labour Government, nothing is safe—not people’s homes, pensions, savings, businesses or farms, and not that which they simply wish to pass on to their own children. The message to hard-working people up and down our country could not be clearer: Labour will always duck the hard choices and tax the living daylights out of your family’s future, to pay for its failure.

[Perran Moon (Camborne and Redruth) (Lab)]

The hypocrisy!

Taxes

Mel Stride Excerpts

Tuesday 15th July 2025 Commons Chamber

[Sir Mel Stride (Central Devon) (Con)]

I beg to move,

That this House notes that the Government was elected on the basis of a manifesto commitment not to increase taxes on working people and not to increase National Insurance or the basic, higher, or additional rates of Income Tax, or VAT; accordingly regrets the decision to raise employers’ National Insurance contributions in the Autumn Budget 2024; further regrets the proposed changes to Agricultural Property Relief and the burden on taxpayers from increases in Council Tax, which is forecast to increase at its highest rate in 20 years; calls on the Government to reaffirm the statement made by the Chancellor of the Exchequer in the Autumn Budget 2024 that, from 2028–29, personal tax thresholds will be uprated in line with inflation once again; regrets that the Government plans to bring those whose only income is the State Pension into paying Income Tax this Parliament; and urges the Government not to introduce new taxes on the value of assets owned such as savings, homes and pensions, which would drive wealth creators away from the UK.

This is the Government of broken promises. The Labour party said during the general election campaign that it would do nothing on taxation, and yet it came straight into government and placed £25 billion-worth of taxation on businesses up and down our country. We know the consequences of that: it killed growth nearly stone dead, and it has cost around £3,500 pounds by way of lower wages alone to the average working family. It is a clear breach of the Labour party’s manifesto. Members need not take my word for it—they can take Paul Johnson’s, when he was the head of the Institute for Fiscal Studies. He has also been on the airwaves recently describing the move as not just a breach of the Labour party manifesto, but a “blatant” breach.

We had the Secretary of State for Environment, Food and Rural Affairs—then the shadow Secretary of State—out reassuring farmers, looking Tom Bradshaw, the president of the National Farmers Union, in the eye and telling him that at least when it came to inheritance tax, farmers had nothing to fear from a future Labour Government. How wrong they were!

Then there was the winter fuel payment debacle. Labour reassured pensioners up and down the country that it would not be means-testing the winter fuel payment. Before somebody jumps up and says, “Well, it only excluded millionaires,” it did not—some 80% of pensioners living below the poverty line were denied those payments and had to go through a long and cruel winter. The U-turn, when it finally came, will come as little comfort to pensioners who are now about to be dragged into income tax for the first time as a result of the Labour party’s policies.

In opposition, the Labour party said it would freeze council tax, and yet we have seen in the latest spending review a £7 billion increase in council tax levied across this Parliament. According to the IFS, it is the largest increase in council tax in a generation—and that from the party that said it would not be putting up taxes on working people. Does it not think that working people pay council tax?

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

I am grateful to the shadow Chancellor for making that point. Does he believe that a humble toolmaker who happens to own a small business is a working person?

[Sir Mel Stride]

Indeed, my hon. Friend is absolutely right. We need to stand up for everybody—even our toolmakers.

Let us be frank: we have had to table this motion today, which seeks to do nothing other than reaffirm the commitments that the Labour party has already made, because of the litany of broken promises that I have just shared with the House.

[Sir Jeremy Hunt (Godalming and Ash) (Con)]

Does the shadow Chancellor agree that, following the welfare U-turns, public finances today are in a far worse state than they were a year ago when the Government came into office? There is a crucial difference: a year ago, the Conservative Government were taking difficult decisions to bring taxes down in order to grow the economy; because this Labour Government are failing to take those decisions, there is only one way taxes can go, and that is up.

[Sir Mel Stride]

My right hon. Friend is absolutely right, and under his stewardship, things were so much better. As he points out, the Government have resiled from any attempt to control the welfare bill—an unfunded tax commitment of £5 billion. That, plus the U-turn on the winter fuel payment, is more than £6 billion of unfunded commitments that the Government are responsible for—unfunded commitments that they said they would never see themselves making. He is absolutely right: the legacy that he left when he was Chancellor in the previous Government was the highest growth in the G7 for our economy. We had near record levels of employment, and near record low levels of unemployment. We had had 13 consecutive months of real wage growth, and inflation had been brought down from over 11% due to the Ukraine war, to bang on 2% on the day of the general election. Where is inflation now? It is almost double what the Government inherited.

[Ben Coleman (Chelsea and Fulham) (Lab)]

Given all the extraordinary and wonderful things that the right hon. Gentleman is setting out, is it not equally extraordinary that the British people thought you were a shower and needed to get rid of you—and they did? That is why you are on the Opposition Benches and we are over here.

[Madam Deputy Speaker (Caroline Nokes)]

Order. I am not sure that the British people were seeking to get rid of me.

[Sir Mel Stride]

I think what the hon. Gentleman said was a gross impertinence, Madam Deputy Speaker. He also referred to you as an absolute “shower”, which is totally unreasonable. I have always been a great admirer of yours, as you know, and always will be. [Hon. Members: “ Name him!”] Name the hon. Gentleman—quite.

We have a Government who are grossly incompetent. As soon as they came into office, what did they do? They talked down the economy. It is no surprise that the British Chambers of Commerce is now saying that the No.1 concern of its members is high taxes, or that the latest survey by the Institute of Chartered Accountants in England and Wales once again shows that business confidence is down—and that is for the fourth survey in a row.

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

Amid the shadow Chancellor’s quite correct exposition on the subject of where the Government have gone wrong, does he not have a little pity for the Ministers on the Government Front Bench? After last week, it is quite clear that they are no longer responsible for the running of the Government, as that has been handed to the hard left who have no interest whatsoever in balancing the books, and do not care about rising debt, rising gilt costs and the other irresponsible outcomes of this Government, who are now absolutely out of control.

[Sir Mel Stride]

My right hon. Friend is absolutely right. When it comes to criticising this Government, it is always confusing whether to address those on the Front Bench or on the Back Benches, because they are never quite in the same place.

The big mistake that the Government made was to talk down the economy by going on about this confected black hole of £22 billion—something that the Office for Budget Responsibility has already debunked. The Government should stop using that number. They are the ones who created a black hole of some £6 billion, as I have just set out, and they should focus not on the black hole that they have invented, but on the one they have created. It is that black hole that is creating speculation across the summer about what will happen in autumn, damaging confidence and damaging businesses up and down the country.

[Noah Law (St Austell and Newquay) (Lab)]

Does the right hon. Gentleman accept that regardless of the actual size of the black hole left by the previous Government, it is a significantly larger number than the one he is talking about with respect to the welfare bill?

[Sir Mel Stride]

I am not sure that I fully understood the point, but the hon. Gentleman seems at least to accept that there is a real black hole when it comes to this Government, of at least £6 billion.

[Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)]

Does my right hon. Friend find it extraordinary that when the Government came into office they made a big play of putting the OBR on a pedestal, but because they did not like the news, they now want to dismiss it and water it down?

[Sir Mel Stride]

Well yes, exactly. The Government will look to any floating branch or whatever to cling on to, to try to look a little better than they truly are.

We have seen a Government who have indulged in spending like it was the 1970s. The result of that has been to push up inflation, which has led to interest rates being higher for longer than they otherwise would have been. It is all very well for Labour Members to trumpet the fact that there have been four interest rate cuts since they came into office. The reality is that if they had not lost control of inflation, there would have been more and they would have come more quickly. The headroom that the Chancellor has against her fiscal targets is wafer-thin. This is the usual Labour way: spending and spending and spending until it runs out of other people’s money.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

The shadow Chancellor talks about interest rate rises. Will he enlighten us as to why he thinks we should take lectures on economic competence from his party, which has a shadow Cabinet with 16 members who served in the Government of Liz Truss and Kwasi Kwarteng?

[Sir Mel Stride]

It would be sensible for the hon. Lady to look at those on her own Front Bench and ask why they take these appalling anti-business decisions. The answer is that hardly any of them have any experience of private business or of setting up a company—in fact, not one senior Front Bencher from her party has that. That is unlike the Conservatives—whether that is myself; the shadow Home Secretary, my right hon. Friend the Member for Croydon South (Chris Philp); the shadow Business Secretary, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith); or others—who actually understand the real world of business.

[Dr Evans]

The shadow Chancellor makes a very good point. Is he surprised by the Federation of Small Businesses, which has come out and said that for the first time ever in its index—since records began in 2008—more small businesses will contract than will grow? Is he as worried as I am about what signal that sends to those small business owners who are trying to grow for our economy?

[Sir Mel Stride]

My hon. Friend is absolutely right. The reality is that if we tax something, we tend to get less of it. This Government have taxed business, so it is not surprising that the economy has been damaged as a consequence.

An often fair question asked of the Conservatives is: what would we do? Let me answer that question directly. First, we would have taken very different choices. We would not have loaded up taxation on businesses and stifled growth in the way that Labour has: we would have focused on productivity. We would not have come into office and given the train drivers 14% and the junior doctors 22% with no strings attached whatsoever. We were told by the now Health Secretary during the run-up to the general election that all we needed to do was get around the table with the unions and settle and the problem would go away—well, the junior doctors are back for more.

[Darren Paffey (Southampton Itchen) (Lab)]

Will the right hon. Gentleman give way?

[Sir Mel Stride]

I will momentarily.

We would of course have tackled the welfare bill, as we did when we were in office. We made £5 billion-worth of savings, as scored by the Office for Budget Responsibility, and we had 450,000 fewer people going on to long-term sickness benefits as a direct consequence of our policies. We had a clear plan to go into government and save £12 billion a year in addition.

[Darren Paffey]

While the shadow Chancellor is engaging in such fascinating whataboutery at the Dispatch Box, will he take the opportunity to say which of the 25 tax increases in the last Parliament he regrets or would undo?

--- Later in debate ---

[Sir Mel Stride]

I think this debate is actually about the tax policy of this Government. As I have clearly set out—[Interruption.] To be fair, there was the small matter of covid, which came along and shrank the UK economy by 10% overnight. People at the time speculated that we would see mass unemployment, the like of which our country had never, ever seen, yet through our intervention we ensured that that did not happen.

Likewise, when the Ukraine-Russia war brought inflation to our shores through energy price spikes, peaking at 11.1% at the back end of 2022, we took the tough decisions, along with the Bank of England, to bring that inflation down. In the meantime, we protected millions of low-income families up and down the country from the consequences of that inflation. That came with a £400 billion price tag, so it is not surprising that some taxes had to rise in order to pay for that.

[Mr Richard Holden (Basildon and Billericay) (Con)]

The shadow Chancellor is making an excellent speech. Does he agree that the danger is that if Governments do not have a prudent financial position, they end up in the situation that we are now seeing, with the interest on Government debt going up and up? We are now paying around £10 billion a year more than we were at the time of the general election.

[Sir Mel Stride]

My right hon. Friend is absolutely right. With the increasing Government debt to which this Government are constantly adding, and the higher interest rates for longer for which they are responsible because of their extravagant spending, we are spending about £100 billion a year on simply servicing that debt, which is twice what we spend on defence. That is not sustainable, and things will get worse under this Government.

[Joe Powell (Kensington and Bayswater) (Lab)]

Might the Chancellor elaborate on the national debt that the previous Government inherited in 2010, compared with what we inherited last year?

[Sir Mel Stride]

I would be delighted to talk the hon. Gentleman through that. The preceding Labour Government left this country with a deficit of 10.1%, or £160 billion a year, so clearly we had to get on top of that deficit. It is a simple fact of economic life that if a country is running a large deficit, its debt increases, but by the time of covid, we had largely settled that deficit. For the reasons that I gave a moment ago, of course we added to the debt and the deficit at that point, because we had to intervene to stabilise the economy. However, the inheritance that we received in 2010 was the start of that debt climbing. The hon. Gentleman should acquaint himself with the economic history.

What approach can this Government take in the autumn? They are not going to be saved by growth—that is for the birds. The OBR, the Bank of England and the International Monetary Fund have all downgraded growth, and the Office for National Statistics recently announced that for the second month in a row, we have had an economic contraction.

How else might the Chancellor make the numbers add up? Well, despite Ministers insisting that their commitment to the fiscal rules remains non-negotiable, there are reports of potential changes to the broader fiscal framework, including the early use of the flexibility of a 0.5% of GDP range for the current budget target, which would allow £12 billion to £13 billion of extra borrowing. However, that would be a breach of faith. There are similar reports that Ministers might move to just one OBR forecast a year, to avoid an embarrassing emergency Budget like the one we saw in March. However, that would completely abandon the commitment not to sideline the OBR, so when the Minister comes to the Dispatch Box will he reconfirm that the Government’s commitment to the fiscal rules also applies to the fiscal framework, and that we will continue to have two OBR forecasts per year?

The Government should be looking not for yet more borrowing, but to rein in spending. However, the welfare debacle shows that they are utterly incapable of doing that, so that leaves just taxes. The motion before us today simply asks the Minister to confirm the Chancellor’s commitment not to extend the freeze on tax thresholds. She specifically said in her Budget speech that such a move

“would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2025; Vol. 755, c. 821.]

When the Minister comes to the Dispatch Box, will he confirm that he, too, holds that position? Will he also rule out wealth taxes? We have already seen tens of thousands of people—high net worth individuals—leaving our country. I know that socialists may say, “Good riddance to them—they are wealthy”, but the Adam Smith Institute calculates that the tax forgone as a consequence of their departure is equal to the tax paid by around half a million people on average earnings. The Labour party has no plan to stem that exodus of talent and wealth creation.

Whatever decisions are taken in the autumn, they will be bad ones, and as nervous markets look on, they may prove disastrous. It may even be that this Government take us to a dark place; it is hoped not, but if history is any guide to the future, the lights are surely flashing red. Surely, too, the British people, those hard-working men and women up and down our country—the businesses, the entrepreneurs, the farmers who toil all hours, our charities, our hospices, our veterans, our elderly, and all those who embody the very best of all that our country can be—deserve answers about the promises made to them, and about whether their pay packets, their pensions and their savings are safe. Surely, they deserve better than this wretched, rotten and defunct Labour Government.

Government Performance against Fiscal Rules

Mel Stride Excerpts

Monday 7th July 2025 Commons Chamber

[Sir Mel Stride (Central Devon) (Con)]

(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the Government’s performance against the fiscal rules.

[The Chief Secretary to the Treasury (Darren Jones)]

As the shadow Chancellor knows, it is a long-standing convention of this and previous Governments not to provide a running commentary on a fiscal forecast, and it is for the independent Office for Budget Responsibility to assess performance against the Government’s fiscal rules in its official economic and fiscal forecast. In the most recent forecast, published in March alongside the spring statement, the OBR confirmed that the Government were on track to meet their fiscal rules two years ahead of target. It also confirmed that the Government were on track to meet their fiscal rules early in the Budget last autumn.

This is a choice—a responsible choice. When we contrast it with the actions of Conservative Members, who lost control of the public finances, we see working people across the country still paying the price. In line with the usual process, the Chancellor will ask the OBR to produce a new fiscal forecast in the autumn for the annual Budget. That forecast will include an updated assessment of the Government’s performance against their fiscal rules. As the Prime Minister confirmed last week, the Government are committed to their fiscal rules, which remain non-negotiable.

We have seen what happens when fiscal rules are put to one side—[Interruption.] Conservatives Members may be chuntering from their sedentary positions, but families across the country are still paying the price of the consequences of Liz Truss’s experiment through higher mortgage payments, and we are not going to put the nation’s finances at risk as the Conservatives have done. In contrast, this Government are meeting their fiscal rules and, as a consequence of the Chancellor’s decisions, we are investing billions of pounds in the renewal of Britain: in schools, hospitals, affordable homes and public transport and in keeping the nation safe. Any future fiscal plans will be set out at the Budget in the normal way.

[Sir Mel Stride]

The Chancellor said that she would not make any commitments that were not

“fully funded and fully costed”,

but the Chief Secretary to the Treasury has just said that he now expects us to wait until the autumn to hear how the Government intend to cover the £6 billion of unfunded commitments that their U-turns have run up in the last month alone. A Government divided. A Government racking up unfunded spending. A Government wrecking the public finances. Why is the Chief Secretary not prepared to explain how they will fund these U-turns? There are surely only two possible answers: either the Treasury has made them without a clue as to how they will be funded, or it knows but is refusing to tell us. Either is completely unacceptable. Can the Chief Secretary set aside the usual blather that we have just heard and tell us whether he knows how these unfunded commitments will be paid for, or are his Government simply refusing to say?

The House will also have noted the inherent contradiction in the Chief Secretary sticking to the line that decisions will be made at a fiscal event in the normal way, when that is precisely what the Government have not done. By losing control of the finances and of their own parliamentary party, the Government have made significant fiscal decisions outside of a fiscal event. The Chancellor said at the Budget that she would not be coming back with more tax rises. Is this still the position? Will the Chief Secretary rule out a wealth tax, along with reconfirming there will be no rise in income tax, national insurance or VAT? The Chancellor said that she would not extend the freeze on tax thresholds because it would hurt working people. Is this still the position? Can the Chief Secretary confirm that the Chancellor will not be adding to her fiscal black hole by scrapping the two-child benefit cap? Can I also ask whether consideration—

[Madam Deputy Speaker (Caroline Nokes)]

Order. The shadow Chancellor will know the time limit. I am sure that this will be his last sentence.

[Sir Mel Stride]

It certainly is now, Madam Deputy Speaker. If Ministers are to begin putting their house back in order, that must start right now with full transparency and proper answers.

[Darren Jones]

I think the House knows what losing control of the public finances looked like, because under the previous Conservative Government interest rates went through the roof, families were paying higher mortgage rates and the Chair of the Treasury Committee was calling out the irresponsible behaviour of Liz Truss and her Ministers in the Treasury. That is what losing control of the public finances looked like and that is why the Conservative party lost control of Government and is in opposition today. The right hon. Gentleman asked me to comment on forecasts of annually managed expenditure and on future tax decisions. He knows how this works. All of that will happen with a forecast and a Budget, which will happen in the autumn.

--- Later in debate ---

[Andrew Lewin (Welwyn Hatfield) (Lab)]

I always listen attentively to the shadow Chancellor, in this place and in his many media rounds. Sadly, what is missing is a costed economic policy of his own. Does my right hon. Friend agree that the shadow Chancellor might be wise to spend some quality time in his beautiful Dorset constituency—

[Sir Mel Stride]

Devon.

[Andrew Lewin]

Apologies—in his Devon constituency over the summer to develop some credible policies of his own? If he does not, he is not credible from the Dispatch Box.

Oral Answers to Questions

Mel Stride Excerpts

Tuesday 1st July 2025 Commons Chamber

[Mr Speaker]

I call the shadow Chancellor.

[Sir Mel Stride (Central Devon) (Con)]

The winter fuel payment U-turn will cost £1.25 billion, and the welfare reform U-turn will cost £2.5 billion, all adding to Labour’s unfunded black hole. This is from a Chancellor who said that she would never make a spending commitment without explaining where the money was coming from—yet another U-turn. The Chancellor has also said that her fiscal rules are iron-clad and non-negotiable. Can she reconfirm that commitment now, or are we heading for yet another U-turn?

[Rachel Reeves]

I would take that a bit more seriously if the Conservatives were not voting against the welfare reforms this evening, and if they had not committed to fully reversing the winter fuel changes, which would cost a further £400 million that they cannot explain. I am always grateful to the right hon. Gentleman for his questions, because he always offers a useful lesson in what not to do. Even George Osborne now says that the shadow Chancellor has “no credible economic plan”. I will give the shadow Chancellor this: he knows a thing or two about welfare spending, because under his watch, the UK became the only country in the G7 with an unemployment rate stuck below pre-pandemic levels. Under his watch, the cost of working-age inactivity rose by £15.7 billion a year.

[Sir Mel Stride]

The House will note that the right hon. Lady did not categorically rule out the possibility of changing the fiscal rules in the autumn. Given that, will she at least confirm that she stands by her commitment not to raise the rates of income tax, national insurance or VAT in the autumn? Is it a yes, or is it another potential U-turn?

[Rachel Reeves]

We made a commitment in our manifesto not to increase the key taxes that working people pay, and we stick by those commitments because, unlike the Conservative party, we stick by our manifesto.

Spending Review 2025

Mel Stride Excerpts

Wednesday 11th June 2025 Commons Chamber

[Sir Mel Stride (Central Devon) (Con)]

This spending review is not worth the paper it is written on, because the Chancellor has completely lost control. This is the “spend now, tax later” review, because the right hon. Lady knows that she will need to come back here in the autumn with yet more taxes, and a cruel summer of speculation awaits.

How can we possibly take this Chancellor seriously after the chaos of the last 12 months? We were assured at the election that Labour’s plans involved barely any additional spending or borrowing. Now the Chancellor parades her largesse, with hundreds of billions in additional spending over this Parliament. The initial profile for that spending was, of course, significantly front-loaded, but the Chancellor now expects us to believe that she will let spending rise by only 1.2% a year. There is no chance whatsoever of that happening, for the lesson of the last year has been that when the going gets tough, the right hon. Lady blinks.

She presented herself as the iron Chancellor, but what we have seen is the tinfoil Chancellor: flimsy and ready to fold in the face of the slightest pressure. She said she would not fiddle her fiscal rules; then she did. She said that she would not make any unfunded commitments; with the humiliation of the winter fuel U-turn, she just has. She looked business leaders in the eye and said no more taxes, but we all know what happened next, and we all know what is coming in the autumn. Her own Back Benchers, her Cabinet colleagues, Labour’s trade union paymasters and even the Prime Minister himself have all seen that she is weak, weak, weak. They can smell the blood. They will be back for more, and they will get it.

These spending plans are a fantasy, and is it not the truth that the Chancellor has to maintain this fiction because she has left herself no room for manoeuvre? She is constantly teetering on the edge of blowing her fiscal rules, which she has already changed to allow even more borrowing. The only way she can claim to be meeting her rules is by pretending that she can control spending over the coming years, but let us look at the record so far. Borrowing in the last financial year came out £11 billion above even the Office for Budget Responsibility’s March forecasts, and 70% higher than the plans she inherited from the Conservatives.

For someone so keen on borrowing, the Chancellor seems strangely reticent even to use the word. Indeed, Ministers bizarrely tell us that it is Labour’s fiscal rules themselves that have “generated investment”. The reality is a little more straightforward: they have loosened the fiscal rules so they can borrow more. They borrow and borrow and borrow, allowing the national debt to continue to rise higher every single year while Ministers pretend that it is not. There will be an eye-watering £200 billion of additional borrowing in this Parliament compared with the plans set out in the last Conservative Budget, with £80 billion more to be spent on debt interest alone. In fact, if the Chancellor had retained our fiscal rules—[Laughter.] Labour Members may laugh, but if she had retained our fiscal rules, as she said she would before the election, the OBR has confirmed that she would be breaking them right now.

Our country is now vulnerable to even the smallest changes in the bond markets. Should we face a sudden external shock, we have no fiscal firepower left with which to respond, all thanks to the right hon. Lady’s choices. So can I ask the Chancellor: will she be open about what she has done? Will she admit that she has made a conscious choice to borrow more and to accept higher debts? Does she accept that this means interest rates and mortgages will be higher than they would otherwise have been, as the OBR itself has said? Given that she continues to claim that she has brought stability to the public finances, can I ask her what on earth her definition of “stability” is?

The Chancellor must be delighted that she does not have to face a new OBR forecast today, because if she did, she would have to set out how she would fund her humiliating U-turn on winter fuel payments, having already blown the savings on buying off her trade union paymasters last year. She said this week that there was still

“work to do to ensure the sums always add up”.

From the person in charge of the nation’s finances, that is hardly reassuring. You do not need to have worked at the Bank of England for a decade to know that that pitiful utterance is unlikely to soothe the markets.

So can the Chancellor confirm categorically that there will be no additional borrowing to pay for this chaotic reversal? And if that is the case, can she explain how on earth it can be paid for without raising taxes? Can she explain why, last summer, apparently to avoid a run on the pound, this measure was so urgent that pensioners had to be left in the cold over the last winter? What exactly has changed? Because it certainly has not been made possible by an improvement in the economy or the public finances, which the Institute for Fiscal Studies said this week are both in a worse state now than when Labour came into office.

If we had an OBR forecast, we might also get some answers on how the Government intend to find £3.5 billion to abolish the two-child benefit cap, which we are led to believe is imminent—another addition to the ballooning welfare bill; another expensive surrender to the Labour left. And we would certainly get the OBR’s assessment of the economic outlook following the tariffs—changes that the right hon. Lady knew full well were coming. Meanwhile, her deluge of taxes and regulations has left business confidence at record lows, costing people their livelihoods. Only yesterday we saw the latest evidence of that. Figures for last month show that the number of people on payrolls fell by more than 100,000, after already falling by 55,000 in April. Unemployment is up by more than 10% since Labour came to office.

The right hon. Lady may trumpet extra spending today, but is it not the simple truth that she has trashed the economy and left no contingency in the face of a highly volatile global outlook? Is it not the reality that the Chancellor knows she will have to come back in the autumn with more tax rises to fund these plans? Or can she assure us right now that this is not the case—yes or no? We know that the Deputy Prime Minister has helpfully provided her with an entire brochure of tax rises that she will no doubt be perusing over the summer—the Corbynist catalogue. Can the Chancellor confirm that, as promised, the income tax thresholds will not be frozen at the Budget, a move she herself said would hurt working people?

What about the uncertainties in the departmental spending plan that the Chancellor has set out today? Can she assure us that these plans will not be topped up and that no backroom deals have been cut with disgruntled Cabinet Ministers? Can she assure us that the capital allocations announced today will actually be spent on capital and will not be diverted in-year, as she has done in the past, to day-to-day budgets to play more games with her fiscal rules?

The Chancellor has had to impose a settlement on the Home Secretary because this spending review will not deliver for our hard-working police officers across the country. Instead, the Home Office budget gets squandered on asylum costs because this Government simply do not have a plan on illegal migration. As the Defence Secretary has admitted, the Government have “lost control” of our borders. Small boat crossings are up by 42% on the same point last year.

On energy, at a time when businesses up and down the country are struggling with high energy costs, the Chancellor has chosen today to fund the Energy Secretary’s vanity projects such as GB Energy. And although we welcome the announcements on expanding nuclear capacity, the scale of ambition is a downgrade on the commitments made previously by the Conservatives.

Labour barely mentioned farming in its manifesto, and now we know why. It is not enough to have hit the farmers of our country with a family farm tax; today, what we see in black and white is a choice to make further cuts to the vital grants on which many farmers rely. This is a huge betrayal of our farming communities, and something that many Labour MPs in rural areas will have to go back to their constituencies later this week to explain.

On defence, we will always welcome any additional investment in our armed forces and capabilities, though I note nothing was said about when 3% will be achieved. All we heard was that intelligence services spending was to be included in defence spending to flatter the numbers. We left Labour a fully funded plan that they dithered over for a year, but now what we get is the Chancellor’s own black hole on defence spending and the lack of a timeline on when we will achieve 3%. Instead, we get a £30 billion bill for the Chagos surrender—money that should have gone to our brave armed forces rather than, as is being reported, funding lower taxation in Mauritius. The first tax cuts for which this Chancellor has been responsible are in Mauritius.

We would have made different choices. We would not have killed growth with huge tax rises and new regulations. We would not have talked down our economy and the great businesses up and down our country. We would be focusing on efficiency and productivity in the public sector, not handing out pay rises with no strings attached. We would be getting a grip on welfare. Labour cancelled our plans for fundamental reform to health and disability benefits that would have seen 450,000 fewer people on long-term sickness benefits—that is a disgrace. Instead of proper reforms to PIP, the Government’s own plans are a rushed cost-cutting exercise—so rushed they even had to change them after they were announced. Their own Back Benches are in full revolt. Yet again, the Government talk tough, but there is no substance.

The right hon. Lady has no grip. She has no clue. The markets and the public see a Chancellor completely out of her depth. Having blown her headroom and more from her Budget in the autumn, she was forced into an emergency Budget in March to scrabble around to try to repair the damage. Today she comes before us again with yet another fantastical tale that she knows will have completely fallen apart come the autumn. We are not left with stronger foundations, as she would have us believe, but rather another dose of that hallmark for which her actions have made her so renowned: uncertainty and failure.

So there the right hon. Lady sits, powerless to resist her disillusioned MPs and her panicking Prime Minister, like a cork on the tide, the drumbeat for U-turns pounding in her ears. Yet her tone today suggests that all is well; the sunlit uplands await. What a hopeless conceit—a masterclass in delusion. Inflation is up, unemployment is up, growth is marked down, business and households are hurting, investors are fleeing in their droves, the bond market vigilantes circle—and here we have the Chancellor who refuses to listen, not only tinfoil, but tin-eared, too.

Let me be clear: it is working people and businesses who will pay the price come the autumn, with yet more taxes to pay for her weakness and her failures. We cannot afford this spending review, and for many, the growing conclusion is that we cannot afford this Chancellor.

[Rachel Reeves]

I will address the shadow Chancellor’s specific points in a moment, but I want to start by acknowledging the progress he has made. After all, it has been quite a week for him. Last Thursday, he gave a speech saying that it will “take time” for his party to win back trust on the economy. Today he showed us how far he and his party have to go to achieve that. I want to give him some credit for last week’s analysis. He said that

“the Conservative Party was seen to have failed”,

and he is right. He said that the last Conservative Government

“put at risk the very stability which Conservatives had always said must be carefully protected”,

and I agree with him. [Interruption.]

Oral Answers to Questions

Mel Stride Excerpts

Tuesday 20th May 2025 Commons Chamber

[Mr Speaker]

I call the shadow Chancellor of the Exchequer.

[Sir Mel Stride (Central Devon) (Con)]

Only last week the right hon. Lady was trumpeting that the economy had turned a corner, but, as she has just said, it is barely a month since her disastrous jobs tax started to bite. May I ask her precisely which business confidence survey—just one—she can point to which supports her assertion that everything is coming up roses?

[Rachel Reeves]

According to PwC’s global CEO survey—that is just one of the surveys—Britain is the second-best place in the world in which to invest, and that is what this Government are doing. The shadow Chancellor simply is not serious, and his party is becoming completely irrelevant. He talks about jobs; 200,000 jobs have been created since the general election. He talks about economic growth; the UK is now the fastest-growing economy in the G7. He talks about business; we have secured three trade agreements which are backed by British businesses and British trade unions, and the Conservative party opposes every single one of them. No wonder even George Osborne has said that the shadow Chancellor has “no credible economic plan”. While the Conservative party plummets into irrelevance, this Labour Government will deliver in the national interest.

--- Later in debate ---

[Sir Mel Stride (Central Devon) (Con)]

Will the Chancellor explain what the Economic Secretary to the Treasury meant last week when she said that there will be no tax rises on individuals at the autumn Budget? Will the Chancellor similarly confirm that there will be no tax increases on businesses?

[Rachel Reeves]

In our manifesto, we set out that we would not increase taxes on working people—that is, the income tax, national insurance or VAT that they pay. That is why we also reversed the previous Government’s decision to increase fuel duty, which would have had a disastrous effect on working people in our country. We will set out all other tax policy at the Budget.

[Sir Mel Stride]

What many up and down the country are asking is why that manifesto pledge not to impose taxes on working people was broken. Last week the Pensions Minister confirmed to the House that the Government would never interfere with the fiduciary duty of pension trustees to get the best return for their members, but when the Chancellor was questioned on that topic by Bloomberg the very same day, she said:

“I am never going to say never”.

This is chaos. The Government cannot even speak with one voice. It is clear that the right hon. Lady and the Pensions Minister cannot both be right, so will she now put the record straight?

[Rachel Reeves]

We have secured an agreement with the biggest pension companies to invest on a voluntary basis in UK unlisted equities and infrastructure, which is something the Conservatives never achieved. We are getting investment into British infrastructure and British businesses because that is the way to grow the economy and support working people.

Oral Answers to Questions

Mel Stride Excerpts

Tuesday 8th April 2025 Commons Chamber

[Mr Speaker]

I call the shadow Chancellor.

[Mel Stride (Central Devon) (Con)]

It was obvious to many before the emergency Budget that the President of the United States was going to be slapping tariffs on our exports. May I therefore ask the Chancellor why it was that she came forward at the emergency Budget with a recklessly slender slither of headroom—the same headroom that she had at the time of the autumn Budget, which proved then to be entirely inadequate. She blew that headroom and more due to her disastrous economic choices.

[Darren Jones]

I am sorry to disappoint the shadow Chancellor, but I am afraid that, because of the ordering of questions, he is stuck with me. To answer his question, he will have seen at the Budget that we increased the fiscal headroom back to our agreement of £9.9 billion, which was more than the headroom that we inherited from the Conservative party. The key difference is that this is a Government who take economic and political stability seriously, because when a Government lose control of the economy, they lose control of family finances and, ultimately, end up in opposition.

[Mr Speaker]

Just to correct the record, the Order Paper has not changed at all in topicals.

[Mel Stride]

You are quite right about that, Mr Speaker, as you are about everything. Indeed, the right hon. Gentleman is completely wrong when he says that he inherited less headroom than was the case at the autumn Budget. He inherited, on the current Budget, £23 billion, and he took it down to £9.9 billion to be precise. He also loosened the fiscal targets, which is why he is not underwater already on the targets that we had when we were in government.

May I ask him this: the fiscal targets are looking like they will be under a great deal of pressure come the autumn. There is a great deal of speculation and uncertainty among businesses as to whether this will lead to tax increases. Can he take away that uncertainty now, particularly given the tariffs and all the uncertainty that is vested in that, to make it clear at that Dispatch Box that there will be no further increases in taxation on businesses this Parliament?

[Darren Jones]

My apologies, Mr Speaker. It was our ordering that caused the problem, not the ordering of questions in the House.

The right hon. Gentleman knows that tight decisions were taken at the Budget, but we have been very clear that we are working hand in glove with businesses to be able to bring growth back to the economy and to ensure that investment—private sector and public sector—is coming forward. As he will know, from his time of swimming underwater, this Government are taking a different approach to fiscal discipline, and he should welcome that.

Speaker’s Statement

Mel Stride Excerpts

Tuesday 8th April 2025 Commons Chamber

[Mr Speaker]

I call the shadow Chancellor.

[Mel Stride (Central Devon) (Con)]

I thank the right hon. Lady for advance notice of her comments.

This is a time of great concern for millions of people up and down our country, for businesses, and, as an open-trading nation, for our economy at large. Free trade has been the bedrock of prosperity for our country, and for many countries around the world, for decades. It has raised billions of people out of poverty. Tariffs are the enemy of free trade, and we on the Conservative Benches will do whatever we can to assist the Government in getting those tariffs down.

Having said that, of course we will never cease to be an effective Opposition who vigorously hold the Government to account—not least on the disastrous decisions that they have already taken in respect of our economy. We will be responsible when it comes to these matters, particularly where market sensitivities are engaged.

I want to ask the right hon. Lady the following questions. First, could she provide further details of the US negotiations and specifically whether further meetings with Scott Bessent and others have been arranged that involve her? Secondly, which areas beyond tariffs are being discussed in those negotiations? Thirdly, which sectors beyond cars and life sciences are being considered for potential Government support? Finally, could she update the House on what options there are for protecting sectors of the economy that might be affected by the dumping of goods as a consequence of trade diversion?

[Rachel Reeves]

I thank the right hon. Gentleman for that response and for his offer to work constructively. I know from my time as shadow Chancellor that those moments when we can work constructively together in the national interest, whether in response to covid or in supporting Ukraine against the aggression of Russia, are when this House is at its best.

The shadow Chancellor asked for further details in a number of areas. Discussions are ongoing across a range of Government Departments, including the Treasury, with the United States, and I will be meeting US Treasury Secretary Scott Bessent shortly. Beyond tariffs, we are discussing a range of different areas, but the focus is on reducing tariff and non-tariff barriers to trade, with a particular focus on those sectors that are subject to the higher tariffs.

Although the 10% tariffs are lower than those for many other countries around the world, and we welcome that, the additional tariffs on cars, on steel and potentially on life sciences pose a real challenge to our country, because those are some of our biggest export markets. That is why we made the announcements yesterday, and in those sectors—automotives, life sciences and steel—we will continue to take the action that is necessary, working in partnership with business and trade unions, to make sure we are addressing those issues. We are also using institutions such as the British Business Bank, the National Wealth Fund and UK Export Finance to help businesses through these times.

The shadow Chancellor also mentioned concerns around dumping. We are working with colleagues around the world to understand those implications, but our first priority is not to create more trade barriers but to reduce the ones that exist today.

Spring Statement

Mel Stride Excerpts

Wednesday 26th March 2025 Commons Chamber

[Mel Stride (Central Devon) (Con)]

At the last Budget, the right hon. Lady said that she would bring stability to the public finances, but this statement, more appropriately referred to as an emergency Budget, has brought her to a cold—[Interruption.]

[Mr Speaker]

Order. Rightly, I wanted to hear the Chancellor, and I now want to hear the shadow Chancellor. [Interruption.] I do not need any help.

--- Later in debate ---

[Mel Stride]

This emergency Budget has brought the right hon. Lady to a cold hard reckoning. She has become fond recently of talking about the world having changed, and indeed it has. This country was growing at the fastest rate in the G7 only about a year ago. Just as the OECD, the Bank of England and other forecasters—including, we learn today, the OBR—have stated, growth has been halved for this year. It has been cut in two as a consequence of the decisions and the choices that the right hon. Lady has made on her watch. Inflation was down to 2%—bang on target—under a Conservative Government on the very day of the last general election. We are now told that this year we will be running at twice the level as was forecast under us in 2024. That will mean prices bearing down on households and on businesses right across the country, because of her choices.

The OBR also says that unemployment will be rising this year, next year and the year after. In fact, across the forecast period it will not decline at all. So much for the right hon. Lady’s back to work plans. We have already seen what it means when it comes to controlling borrowing under this Chancellor. She has come forward now with a plan to squeeze spending later on in the forecast period, and she has of course told the OBR that these are the elements of spending restraint to which she will stick, but what do the markets think? Given her track record, and the fact that she has failed to control spending and borrowing to date, what does the right hon. Lady think the markets will make of her latest promises?

Of course, the right hon. Lady says that none of this is her fault. It is the war in Ukraine, it is President Trump; it is tariffs; it is President Putin; it is the Conservatives; it is her legacy; it is anyone but her. What the British people know, however, is that this is a consequence of her choices. She is the architect of her own misfortune. It was the right hon. Lady who talked down the economy so that business surveys and confidence crashed through the floor. It was the right hon. Lady who confected the £22 billion black hole, a smokescreen that was only ever there to cover up for the fact that she and the Prime Minister reneged on their promises to the British people during the last general election, and a black hole that the Office for Budget Responsibility itself—ironically, at the Government’s behest—has said it will not legitimise. She chose to be reckless with a sliver of headroom against her fiddled targets. She borrowed and spent and taxed as if it were the 1970s. Little wonder that the Chancellor has tanked the economy, little wonder that we have an emergency Budget, all because of her choices.

The Chancellor likes to tour the television studios and tell everyone that they should be thankful that she will not be ramping up taxes in this emergency Budget as she did before, but that will be cold comfort to the millions up and down the country who are waiting in fear and trepidation for the start of the new tax year, buckling under the burden of tax that will rise to the highest tax burden—on her watch—in the history of our country. May I ask the right hon. Lady whether, when she replies, she will give that much-needed reassurance, particularly to businesses, that she will not be ramping up taxes still further in the autumn? Even a basic economist knows that if you tax something, you get less of it. You do not need to have worked at the Bank of England for 10 years to know that.

So what did the Chancellor tax? She taxed jobs and wealth creation. She has destroyed livelihoods. Businesses have been clobbered, big and small—small companies, the backbone of our economy—and enterprise has been crushed on the altar of her ineptitude. The Chartered Institute of Personnel and Development has told us that a third of the businesses affected will shed labour, with Morrisons losing 200 jobs, Tesco 400, and Sainsbury’s 3,000. No wonder the Federation of Small Businesses has said that outside the pandemic, business confidence has been left at its lowest level on record. However, it is not just businesses. It is charities, it is GPs, it is pharmacies, it is those who transport children with special educational needs, and it is hospices caring for the sick and the dying. In this House, the Labour party had the opportunity, yesterday and last week, to stop that, but they voted our amendments down, and we will never let their constituents forget it.

If you ramp up taxes, Mr Speaker, and if you ramp up borrowing and spending without any commensurate improvement in productivity, it leads to growing inflation, and inflation has been increasing on this Government’s watch. It means that interest rates stay higher for longer. The Chancellor has just trumpeted the fact that there have been three interest rate cuts since the Labour party came to office. She knows full well that there would have been more than that had she managed—[Interruption.] She knows full well that interest rates are higher for longer because of the choices that she made. This has led to servicing costs for our national debt running at twice the defence budget, and today we have learnt from the OBR that debt interest is to increase still further—and none of this money will be spent on public services. It will be going down the drain.

The real black hole is not the one that the Chancellor invented; it is the one that the Chancellor created. Is not the central problem that this Chancellor is a gambler? Even with her fiddled fiscal targets, she left way too little headroom. Is not the truth that while the right hon. Lady said of the last Budget that it was a

“once-in-a-parliament reset”,

she rolled the dice on a wafer-thin margin, and she lost? Reckless, with her fingers crossed, she fiddled the targets and she missed them. [Interruption.]

[Mr Speaker]

Order. I am not sure about the language being used. I think there are better and more constructive words that the shadow Chancellor would prefer to use in future.

[Mel Stride]

May I just point out that all the Chancellor’s fiscal headroom disappeared, not just some of it? In fact, she went underwater to the tune of £4.1 billion. Reeling from one fiscal event to the next is not a way to run the public finances, and breaking your fiscal rules to the extent that the right hon. Lady has in just six months is a public humiliation.

May I now focus briefly on defence spending? We on this side of the House welcome the fact that the Government will reach 2.5% of GDP by 2027, as we pressed them to do, and we note the stepping stone along the way that the right hon. Lady has just announced, but we should go further than that. The 3% target should be brought forward to this Parliament. So may I ask the right hon. Lady: given the geopolitical tensions that she has raised, what provision she has made in her headroom, in her fiscal plans, for increasing defence spending more quickly in this Parliament, if that proves necessary? May I also ask her this: would she scrap the absurd Chagos deal, and put that money behind our armed forces?

The economy is in a perilous state, but there was a different way. There were different choices on taxing and spending and borrowing, and on productivity, and on welfare. Let me just say a few words about welfare. It was the privilege of my life to serve as the Secretary of State for Work and Pensions, and when it came to welfare reform, with that privilege came a deep responsibility: the responsibility for welfare reform to be properly thought through, with a very clear plan—[Interruption]—I know that Labour Members do not like it, because it is an alien idea to their party—so that we could be fair to the taxpayer, but equally fair to the many people up and down the country, some of whom are highly vulnerable. That was an approach, on our watch, that led to £5 million of savings across the forecast period, and 450,000 fewer people going on to long-term sickness and disability benefits as a direct consequence.

We would have gone further—much further—and we set out a clear plan in our manifesto to do exactly that, but those in the party opposite rushed their changes. They had no plan. There was not a single mention of the personal independence payment in the Labour party manifesto, and when they got into office, the Labour Government pussyfooted around and dithered. Why? Because it is deeply divisive within their rank and file. Then suddenly, when the Chancellor decided that she had run out of money, out went the word to find some savings in welfare, to scrabble around, to yank every lever possible.

Then there was the spectacle, frankly, of what the OBR has said about the simply shambolic changes that were announced only last week by the Secretary of State for Work and Pensions. We have gone from incompetence to chaos. There have been more changes to this policy than there were at the last minute to the right hon. Lady’s LinkedIn profile. The result is the worst of all worlds: a wholly inadequate level of savings on welfare, with welfare costs spiralling ever higher, and changes that are likely to harm many vulnerable people. May I ask the right hon. Lady: when the Secretary of State for Work and Pensions came to the House last week with these changes, she did not provide an impact assessment, but was this because the OBR had not signed off the numbers, was it because the Department did not have enough time to produce one, or was it only provided today, as many of us suspect, because this was thought to be a good time to bury bad news?

The forecast for growth is down, the forecasts for borrowing costs and inflation are up, and business confidence has been smashed into a million pieces. This Chancellor is constantly trying to blame forces beyond her control. The right response is not to duck responsibility, but to build a resilient economy. The right hon. Lady would have us believe that that is what she is doing, but how can we believe this Chancellor? How can we trust this Chancellor? She is the Chancellor who said she would not increase borrowing, but she did. She said she would not change her fiscal rules, but she did. She said she would not put up national insurance, but she did. She said she would not cut the winter fuel payment, but she did. She said she would not tax farmers, but she did, and she said she would not move to more than one fiscal event a year, and she just has. Now we are all paying the price of her broken promises. Today’s numbers confirm it. We are poorer and we are weaker. To govern is to choose, and this Chancellor has made all the wrong choices.

[Rachel Reeves]

I know that the shadow Chancellor has not been in his role for very long, but at least he is not misquoting Shakespeare today. If this was a Budget, it would be the Leader of the Opposition responding. I am glad that she is still in her place, but I know she will want to get back to her office for a lunchtime steak soon.

The right hon. Gentleman talks about Budgets. Let me remind the Conservative party that the only emergency Budget we have seen in recent years was in response to their party’s disastrous mini-Budget—a mini-Budget that crashed the economy, sent mortgage bills spiralling and left a £22 billion black hole in our nation’s finances. Conservative Members may have forgotten about the damage that they did to our country, but the British people never will.

As always, the shadow Chancellor talked a lot, but he did not offer a single alternative. He says he opposes our tax rises, but he cannot tell us whether he would cut the NHS to reverse them. He says he wants economic growth, but Conservative Members abstained on the very planning reforms that the OBR has said will kick-start growth. Mr Speaker, you do not change the country by abstaining or by sitting on the fence; you change the country by leading and by taking action, and that is what this Government are doing. The shadow Chancellor says he wants businesses to trade, but he does not want us to talk to the second largest economy in the world or, indeed, our biggest trading partners in the European Union. He simply is not serious. Four months into the job, and he has got no clue.

The right hon. Gentleman wants to talk about growth, but he does not say anything about the fact that the OBR has upgraded growth next year and every single year after. He talks about pensioners, but he forgets that it is his party’s policy to scrap the triple lock, which we are protecting and which will mean the state pension rising next month by over £400. He talks about wages, but he forgets the fact that we are boosting wages by boosting the national living wage from next month. The shadow Chancellor says nothing about living standards or this morning’s fall in inflation, because the last Parliament was the worst on record, and the OBR has today revised up its forecast for family finances. Working people are always better off with Labour.

The right hon. Gentleman is learning something, because at least this time he has asked a couple of questions, so let me respond to them. He asked what the markets should make of this. What the markets should see is that, when I have been tested with a deterioration in the headroom, we have restored that headroom in full. That is one of the choices that I made. He says that it is a sliver of a headroom. Well, it is 50% more headroom than I inherited from the Conservative party. When I was left with a sliver of headroom, I rebuilt it after the last Government eroded it. That is the difference that we have made. While they left the public finances and the public services in a mess, we wiped the slate clean, which means that we have the flexibility now to increase defence spending, as the leader of the Labour party has done. The Conservatives had 14 years to increase defence spending, and now they lately come to the party.

The shadow Chancellor mentions welfare reform and his time at the Department for Work and Pensions. What a legacy: one in eight young people not in education, employment or training, and 1,000 people a day going on to personal independence payments. The OBR says today that welfare spending as a share of GDP will now start falling—a far cry from what we had under the Conservative party. The shadow Chancellor speaks about employment. The OBR says that employment will increase, that wages will increase and that living standards will increase. What a change, after 14 years of the Conservative party.

The world is changing, and no one can be in any doubt about it, but the Conservative party is stuck in the past—divided, out of touch and carping from the sidelines. Conservative Members have no plan: no plan to kick-start growth, no plan to fix our public services and no plan to keep our country safe. The only plan for change they are working on is a plan to change their party leader, and we cannot blame them for that.

If the Opposition have no plan, let me remind them about ours. The minimum wage up, real wages up, house building up, NHS investment up, investment in our schools up, investment in our roads up, defence spending up—and every single one of those policies is opposed by the party opposite. They are opposed by the Conservatives, opposed by Reform, opposed by the SNP, opposed by the Liberal Democrats and opposed by the Greens. It is the anti-growth coalition in action. They are the blockers. We are the builders—securing Britain’s future, protecting working people and delivering change.

Oral Answers to Questions

Mel Stride Excerpts

Tuesday 4th March 2025 Commons Chamber

[Mr Speaker]

I call the shadow Chancellor of the Exchequer.

[Mel Stride (Central Devon) (Con)]

How many jobs will the right hon. Lady destroy as a result of her jobs tax?

[Rachel Reeves]

I know that the right hon. Gentleman will have looked at the OBR forecast from the Budget last year, which forecasted that employment will rise in this Parliament, unemployment will fall and real household disposable income will increase. That is a far cry from the last Parliament, which was the worst on record for living standards.

[Mel Stride]

I am surprised that the right hon. Lady did not reference the fact that the OBR also said that there would be 50,000 fewer jobs as a result of the NICs increase; indeed, Bloomberg put that figure at 130,000 jobs. It does not need to be that way. On 26 March, the right hon. Lady should come to this House with a spring statement containing a clear plan around welfare savings, which we had when we were in Government. Will she now confirm that she is prepared to do that with our support and put an end to the pernicious tax increase?

[Rachel Reeves]

The right hon. Gentleman and his party had 14 years to reform the welfare system. They failed to do so, but this Government will. We are turning the British economy round after the disaster left to us by the previous Government: three cuts in interest rates since the general election, real wages rising at their fastest rate for three years, fuel duty frozen, the payslips of working people protected, and millions getting a pay rise through an increase in the national living wage. That is the change that this Government are delivering; that is the change that the Opposition are blocking.