Taxes

Debate between Mel Stride and Alex Ballinger

Wednesday 12th November 2025 Commons Chamber

[Sir Mel Stride]

I agree. Of course, higher taxes are bearing down on living standards, but so is inflation. We have the highest level of inflation in the G7 and are forecast to have the highest in the G7 next year, too. Within that sits food inflation, which is running way above the headline rate of inflation. Who does that impact the most? It impacts the very people that Labour professes to stand up for the strongest: the poorest in our society. It is a direct consequence of the policies pursued by this Chancellor.

[Alex Ballinger (Halesowen) (Lab)]

Does the shadow Chancellor recognise that the previous Government were the only Government in living memory to oversee a reduction in real living standards over the course of five years? Does he accept that the difficult situation with the cost of living is in large part due to his Government’s decisions over those five years?

--- Later in debate ---

[Sir Mel Stride]

I am pleased that the hon. Gentleman has given me an opportunity to correct the record, because I know this has been spun by the Labour party. At a fringe meeting at the Conservative party conference, there was a long, extended debate about just how bad things are, with speculations about all the “what ifs” and “maybes” of different scenarios. If the hon. Gentleman reads the full transcript of those exchanges, he will see that the point I was very clearly making was that there is an alternative to putting up taxes, which is controlling spending. That is the point I was making.

What is happening to the wealth creators in our country? About 16,000 of them have fled—they are going by the day. These are the people who generate the wealth, jobs and growth that we are all striving to achieve. Look at the cumulative tax take that has just walked out of the door with the 16,000 who have gone—it would probably require a third of a million to half a million people on average earnings to fill that gap. It is not sustainable.

There is an alternative. The Conservatives set out this alternative at our party conference: a way forward through control of Government spending. Government spending could be controlled to the tune of at least £47 billion, which were the savings we identified. Of the £47 billion, £23 billion can be found from the welfare budget by getting people off benefits and into work. It is better for the economy, but equally, for those who have mild mental health conditions such as mild anxiety, mild depression and ADHD, it is a better outcome than parking them on benefits, which the Government are doing through time. By focusing on actual need rather than simply transfer payments and on medical diagnosis rather than self-assessments and by not paying benefits to non-UK citizens, we can make real savings. In some cases they are tough choices, absolutely. However, these are decisions that the Government have made.

[Alex Ballinger]

I thank the shadow Chancellor for giving way. He will of course remember his time as the Work and Pensions Minister, when he oversaw a £33 billion increase in the welfare budget. Of course he is talking about cuts now, but not about welfare cuts, because he had the opportunity to make those cuts and failed to do so. He is talking about cuts to teachers, nurses and our armed forces. Which of those three areas is he talking about cutting right now?

[Sir Mel Stride]

I am glad the hon. Gentleman has raised my tenure at the Department for Work and Pensions, when I was the Secretary of State. I was very clear that we needed to arrest the rising welfare bill, and—

--- Later in debate ---

[Alex Ballinger]

Why didn’t you, then?

[Sir Mel Stride]

We did, actually. We did arrest it. We made changes to the work capability assessment, which the OBR scored at £5 billion-worth of savings. The OBR also scored the fact that there would be 450,000—almost half a million—fewer people going on to those benefits as a consequence. We had already started a consultation on personal independence payment, which I will come back to in a moment, but it was interrupted by the general election. The first thing the Labour Government did when they came into office was scrap all of that and then come forward with some ill-thought-through proposals that did not survive contact with their own Back Benchers.

There are other areas where we can make savings. The size of the civil service is one. The civil service has grown by 37% since 2016. We could cut it back by 25% and make about £8 billion—[Interruption.] The hon. Member for Halesowen (Alex Ballinger) should listen carefully to this, because he is about to sit on those benches on the 26th of this month and listen to his Chancellor come up with some pretty unpalatable things. These are good alternatives that should be taken seriously.

Raising taxes is simply a choice. The Labour Government are too weak to make the choice to control spending, so they fall back on taxes. They had to U-turn on the welfare reforms they brought through, and £5 billion was added to Labour’s black hole in an instant. We have seen the terms of reference for the Timms review of personal independence payment. They show quite clearly that there is no intention of saving any money from the PIP budget. That is grossly irresponsible. It is spiralling ever skyward.

From what we hear, it is highly likely that the two-child limit will be scrapped and abolished. Why? Probably because the Prime Minister, shackled to his Chancellor, is feeling that he is being squeezed halfway out the door of No. 10 and thinks he had better do something to settle the troops on the Back Benches. But that comes with a price tag of £3.5 billion. The only choice that this Chancellor is taking is to fail to get on top of spending and to put up taxes in order to fund ever more welfare.