Budget Resolutions and Economic Situation

Nusrat Ghani Excerpts

Wednesday 28th October 2026 Commons Chamber

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—(John Healey.)

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Leader of the official Opposition.

[Mrs Kemi Badenoch (North West Essex) (Con)]

Thank you, Madam Deputy Speaker. I would have thanked the Chancellor for advance sight of his statement, but it was so redacted it was like reading it in the dark. The only numbers were the page numbers, quite frankly.

This is Labour’s third Budget in office—[Interruption.]

[Madam Deputy Speaker]

Order. I apologise for interrupting the Leader of the official Opposition, but if Members are leaving the Chamber, they should leave very quietly and very quickly.

[Mrs Badenoch]

This is Labour’s third Budget in office, this time with a new Chancellor. I welcome the right hon. Gentleman to his place. I believe there is a term in rugby called a hospital pass, which sums up the inheritance he received from his predecessor, the right hon. Member for Leeds West and Pudsey (Rachel Reeves). Last year, she gave us the Budget for “Benefits Street”; I said that it would be her last Budget, and I was right. The Chancellor may want to blame external events, but Labour’s last two Budgets weakened our economy before any wars. He has got a big job to do cleaning up her mess, and this Budget fails to do it.

The Chancellor is giving this Budget at a time of great economic danger. We are spending more on debt interest than on the Army and schools combined. The rate of interest we pay on our debts is higher than that in Greece, Latvia, Slovakia and even the Socialist Republic of Vietnam. Next year, under Labour, the tax burden will be the highest in our country’s history, and our benefits bill is going up by tens of billions of pounds because this Government have put welfare first. We are overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system, and this is the Chancellor’s answer? It is simply not enough—not good enough, not strong enough, and not bold enough.

Last week, the Government published their resilience plan. I am afraid that three days of baked beans and a wind-up radio are not going to save us. Labour’s Britain has no resilience. There is no household resilience, because families are struggling to make ends meet. There is no fiscal resilience, because we are borrowing just to pay the interest on our debt. There is no economic resilience, because businesses have been taxed so much that they are closing down and shedding jobs, and there is no national resilience, because we are not ready to meet the security threats of today—certainly not after that speech. We all know why the Chancellor has delayed until tomorrow difficult decisions that he should have taken today. It is because the Prime Minister wants to keep the option of an early general election open, putting his party’s interests before the country’s.

There are, however, some things in this Budget that I welcome. Some of the Chancellor’s colleagues—the Deputy Prime Minister, the Defence Secretary and the Energy Secretary—were calling on him to increase capital gains tax. I thank him for ignoring them—they were wrong. Tens of thousands of wealth creators have already fled Labour’s Britain, and if he had listened to his colleagues’ bonkers ideas, many more would be heading for the departure lounge. I am also glad that he has broken Labour’s manifesto pledge on the minimum wage for young people; that pledge was wrong, and breaking it is the right thing to do to help young people get jobs.

I welcome the Chancellor’s U-turn on ISAs. He is reversing his predecessor’s raid on ISAs—thank you—but his new tax on savers will penalise the prudent and all those people who have done the right thing. I am glad that he has agreed with our campaign on the previous Chancellor’s fuel duty rise. Motorists will be pleased—that rise would have inflicted real pain, especially while petrol prices are so high—but those prices will go up in July. Why? We froze fuel duty for 14 years; Labour can do better than that.

I know that Labour MPs probably did not like those bits of the Budget, but can I take a moment to say to the right hon. Gentleman that I have been appalled to see the brutal briefing about him from his own side in this week’s papers? One Labour MP called him “slow”. “A dud.”

“Visibly out of his depth”,

said another. [Interruption.] We have all read it. They are not my words—they are Labour MPs’ words. One of them said it, and another came in after, but I can assure the Chancellor that he will not be hearing that kind of language from Conservative MPs today. With friends like that, who needs enemies?

Most people in the country listening to the right hon. Gentleman’s Budget will be thinking to themselves, “Is that it? Really, is that it?” The Prime Minister came in promising to reverse “40 years of neoliberalism”; instead, we got 4p off gherkins. Unfortunately, just like every other Labour Budget, the headline story is the same: more borrowing, more tax rises and—surprise, surprise—more money on benefits. This Budget does not come close to meeting the moment.

Last week, Labour MPs were asking for a Budget that did no harm. That shows how little ambition they have for this country. Let me tell them: the harm has already been done. Not facing up to the tough decisions we need to take is itself an act of immense harm. Many Labour MPs do not understand that our national debt is now more than £100,000 for every household in this country. They do not understand why it is a problem that a quarter of all working-age adults are now claiming some form of benefits. They do not understand that if Russia launches an attack on NATO in the next three years, as the Government’s own intelligence suggests, we will be at war without the means to properly defend ourselves. [Interruption.]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Ms Dawn Butler, Adam Jogee, and Mr Vince—what would baby Patrick say? Behave better than your child.

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[Mrs Badenoch]

The Defence Secretary is chuntering; he could not even commit to 3% on TV the other day. He is still not doing his job. The fact is that there are huge problems coming down the road, and this Budget is simply trying to get through today. It is a Budget for getting by, not for getting on.

I was cautiously optimistic when the right hon. Gentleman was appointed Chancellor. This is a man who once seemed to grasp the danger that Britain is now in. I thought that he was putting country before party when he quit as Defence Secretary—he will remember that I said he was a man of principle. Let me remind him what he wrote in that resignation letter in June. He said:

“I am certain that a…date for 3% of GDP on defence in 2030 is what Britain must set.”

[Interruption.] I have not finished—Labour MPs will have to wait for the punchline. They are so slow. He went on to say that if that did not happen, he would be

“forced to make decisions that would…increase the risk to personnel on operations, and could make the country less safe.”

Today is the day he should have set that date. He is the man who has failed to set a plan for 3%. [Interruption.] Today is the day that we should have got the plan.

[Madam Deputy Speaker]

Order. I am not sure which side is the most noisy. The Defence Secretary will have to have a lie down in a dark room if he carries on like that.

[Mrs Badenoch]

The Chancellor should have set out a plan for 3% today. Now he is the man who is increasing risk to personnel on operations. He is the man who is making our country less safe. He has failed his own test. This is on him, and no one will ever forget. If he had any decency, he would resign again today. Yes, the Chancellor has funded the defence investment plan, and that is welcome, and yes, there is more support for Ukraine, and that is welcome, but he said himself in June that that was not enough. He has given himself a bit of breathing space until next year. Instead what we have is a plan to have a plan. I bet Putin is really scared now.

We know that finding the money is difficult, but it can be done. On the Opposition Benches, we have found the savings to get to 3%, because we know Britain is facing very serious threats. The defence funding that the Government have announced today relies on more borrowing. Let me explain why that will only make us weaker. The OBR confirmed today that Britain’s national debt is forecast to increase again. We are borrowing just to pay the interest on that debt. The credit card has been maxed out and the Chancellor is taking out new credit cards just to pay the interest on the old ones. The three Labour Budgets will have added more than £260 billion to the national debt. Our great grandchildren will be paying for Labour’s total lack of self-restraint.

Meanwhile, the Prime Minister is fantasising about rejoining the EU. There is just one problem: under Labour, Britain is now borrowing so much that we would not even qualify for EU entry. The Chancellor clings to the IMF’s praise of the Government’s deficit reduction plans, but the truth is that the IMF has to take at face value the idea that Labour will cut public spending massively just before the next election. Really? Are these MPs signed up to the cuts in those plans? These are the same MPs who voted down the most modest welfare reforms in the history of this House. They are never going to cut spending. That is why this month, the IFS described the Government’s plans as “a work of fiction”.

I can tell the House who else is not fooled by Labour’s fantasy figures: the bond markets. Britain is now paying more to borrow than at any point in the past 30 years. Those borrowing costs are hurting people today. Businesses are struggling to afford loans because of rising interest rates. Five-year mortgage rates are now above 6%. Rates are far higher now than they ever were under us. We have the utter cheek of the Chancellor and Labour MPs raising the mini-Budget when Government borrowing rates are far higher now. They are higher than under any Conservative Prime Minister. These are their interest rates; these are their borrowing costs; and this is their mess—they need to own it. The Chancellor knows that next week interest rates are expected to rise again. Only the Labour party would think that the answer is to spend more money. [Interruption.] I know the Education Secretary cannot count, so she thinks this is all fantastic. Come on, have you got something more to add? Can you add?

[Madam Deputy Speaker]

Order. We have to showcase the best of ourselves. Our constituents are watching. [Interruption.] I really do not need any help. Ms Emily Darlington, you are normally so polite and so well behaved, but today is not a great day.

[Mrs Badenoch]

They love to dish it out, Madam Deputy Speaker, but they cannot take it. [Interruption.] What was that from the Education Secretary? I am sorry, but I cannot hear her, because the rest of the class are making too much noise.

Inflation is eating away at our standard of living. Labour’s friends in the Joseph Rowntree Foundation have said that this could be the worst Parliament on record for living standards, but Labour has looked after its people. There have been plenty of pay rises for the unions. Benefits will go up. [Interruption.] It is true, there have been plenty of pay rises for Labour’s friends in the unions. Benefits will go up by inflation in April, but private sector wages this year are below inflation. People in the private sector are getting poorer. They can all feel it. Those on benefits are getting an increase, while those going out to work will not. That is not fair.

The problem is that Labour is addicted to spending other people’s money and addicted to welfare. The welfare Secretary said it himself. Talking about Labour MPs, he said:

“Every meeting I have is: ‘Who can we tax in order to pay benefits to others?’”

Since the last Budget just 11 months ago, the equivalent of the entire city of York has signed on to disability benefits. And why would they not, when sickness benefits pay more than the minimum wage? Jobs have been destroyed by Labour, and this Government have made it easier than ever to claim. It is honestly like their policies are designed to get people off work and on welfare. Just because it is called universal credit does not mean that everyone in the universe should be on benefits.

The issue is not just about cutting the benefits bill. This welfare burden is deeply unfair to those who are working hard and making ends meet—those people making tough decisions about whether they can move home or afford to have children. How do Members think they feel when they hear that working-age welfare is now costing every taxpayer £4,000 a year?

Cutting welfare is not just about saving money. A million young people in this country wake up with nothing to do and nowhere to go. Unemployment among 20 to 24-year-olds is now higher in London than in Bulgaria, the second-poorest country in the EU. Labour is creating a lost generation, isolated and powerless over their futures.

Britain is about to collapse under the weight of welfare. We have to start showing people some tough love. Deep down, the Chancellor knows that spending more money is not the answer. He talks about giving people breathing space, but the Government are the ones choking the economy. We have seen £70 billion of new taxes in just two years, and they have put them up again today. He said he would not be putting taxes on working people. That is what the last Chancellor said, too, but he has, because the Government are taxing everything that they can get their hands on. They have taxed jobs, pensions and cars. They have taxed the rental market today. They have taxed savings, investments and homes. He asked me whether I support the action that they are taking today. No, I do not support the action that they are taking today.

The Chancellor also said that this is a Budget for business that will unleash enterprise. That must be why the entrepreneurship adviser quit this week. There is nothing for business here. He wants to charge them more for the union learning fund, was it? Business does not want these random new schemes. Let me tell him: business confidence is negative not just this quarter, and not just the last quarter, but for seven quarters in a row. That has never happened before. In case Labour MPs do not understand what that means, the last time business confidence was positive was when we were in charge.

The Chancellor says that he is helping with the cost of doing business. Businesses need cheaper energy, flexible labour markets and lower taxes. They are getting none of those. Nearly half of businesses say that they have cut employment because of Labour’s jobs tax. There are now fewer vacancies in the economy than at any point in the last 12 years, outside the pandemic. Graduate vacancies are down by almost 50% this year. They were the worst on record last year, and under Labour they are again even worse—the worst on record this year. I was hoping that the Chancellor would do something on plan 2 student loans today, but he has not even done that. When was the last time any of them spoke to a graduate looking for a job? Parents are watching their children receive rejection after rejection. Companies report 140 applicants chasing every job. Unemployment has risen by a quarter of a million people since Labour came in: a quarter of a million people, under this lot.

So let me tell them some home truths. They have made wages expensive with their jobs tax. They have made energy expensive with their net zero policies. They have made capital expensive by increasing the cost of borrowing. What happens when wages, energy and capital are expensive? Nothing gets built. That is why the economy is grinding to a halt. Labour said that it was going to build 1.5 million new homes. I remember when the Housing Secretary first started, and I told her that she had been stitched up. Do you know what she is saying now, Madam Deputy Speaker? She says that now there is a “slim chance” that Labour will build 1.5 million new homes. They are not going to build them. They are not even going to build as many as we did, despite their lofty ambitions. They promised to secure the future of Britain’s steel industry. Now taxpayers are spending £1.3 million a day propping up British Steel alone. They promised to create 650,000 clean energy jobs. Where are they? Nothing has been created except unemployment.

Let me tell you, Madam Deputy Speaker, what has actually happened since last year’s Budget for “Benefits Street”. Inflation—[Hon. Members: “Up!”] Government spending—[Hon. Members: “Up!”] They can join in now on the Labour side, because they know the words—we heard them. Debt interest—[Hon. Members: “Up!”] Mortgage rates—[Hon. Members: “Up!”] Benefits claims—[Hon. Members: “Up!”] Unemployment—[Hon. Members: “Up!”] Welfare spending—[Hon. Members: “Up!”]

The report card is not looking good. They are making the same mistake with banking that they made with oil and gas: tax one of Britain’s flagship industries until it packs up and leaves. The result? The country gets less money in tax. [Interruption.]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Mr Gemmell, yowling for so long will be very bad for your throat, so simmer down.

[Mrs Badenoch]

I see that the Minister for Pensions is leaving. I guess he could not handle the truth.

Everything in our economy is being made more expensive by Labour’s taxes. Next year, under Labour, Britain will have the highest tax burden in our country’s history—higher than in the 1970s, higher than in the second world war, higher than in the Napoleonic wars. [Interruption.] She asks, “Whose fault is that?” It is your fault. She is asleep at the back of the class. The Education Secretary might want to take a look at that student.

What have we learned from the Office for Budget Responsibility today? Growth next year: downgraded. Inflation: up every year until 2030. Real household disposable income: lower every year. We have learned that the Chancellor’s debt interest bill will be £14 billion higher than expected, and the debt will be higher in every single year compared to the previous plan. How is this giving us breathing space?

There is a better way that would actually deliver for the people of this country. There is a logical order to creating growth in an economy. You have to create value, prosperity and wealth first, before you distribute it. That is how it works. Labour is only interested in the distribution; it has no plan to create any value at all. We on the Conservative side of the House want to see Britain richer, more prosperous and thriving—not just a little bit of breathing space. That is why Conservatives are proposing tough love. We will cut spending by £70 billion, including £36 billion from welfare—cuts that are fair to taxpayers, and fair to those who really need support. We would use half of that money to cut the deficit, so that Britain does not go bankrupt and borrowing rates start to come down. That is how we get cheaper mortgages. And we will fund our defence properly, because keeping our country safe should be the first priority of any Government.

Getting the public finances under control and living within our means will allow us to cut taxes, because that is what really gives people breathing space. Scrapping the carbon tax to bring down energy bills, scrapping stamp duty, abolishing inheritance tax on family homes—that is what people want. So let us cut spending, cut the deficit, fund defence, and cut people’s taxes. That is the Budget that the Chancellor should have delivered today. That is the Budget that Conservatives would have delivered. And that is going to be the choice at the next election.

[Madam Deputy Speaker]

I call the Chair of the Treasury Committee.

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[Chris Coghlan (Dorking and Horley) (LD)]

I was very pleased to see the Chancellor announce £5 billion more in the Budget for defence research and development, which—[Interruption.]

[Madam Deputy Speaker]

Order. Whose phone is going off? Please fix your phone.

[Chris Coghlan]

Does the hon. Member agree that the announcement of £5 billion more in the Budget for defence R&D through the British Business Bank could have profoundly positive implications for our national security and growth, as I have urged, if the Government scale it further from here?

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[Chris Vince (Harlow) (Lab/Co-op)]

The House will be determined to know how this Budget is going to benefit Harlow. Does my hon. Friend agree that the £100 direct payment into the bank accounts of Harlow residents will make a huge difference this winter? By the way, it will help over 39,000 households in council tax bands A to D.

[Madam Deputy Speaker]

I am surprised that the hon. Member failed to get the Chancellor to use the word “Harlow” multiple times during the Budget statement.

[Dame Meg Hillier]

I thank my hon. Friend the Member for Harlow (Chris Vince)—I say that just to up his constituency’s mention count. Around 48,000 households in my constituency households will benefit from the council tax rebate for those in bands A to D. I am assuming the Government took this approach because it is a simple way of getting the money into people’s pockets, but how that works will need a lot of unpicking. It is an instructive figure, in fact, because people think that London’s streets are paved with gold, but one in two children in my constituency are living in poverty, it is among the top three for the pensioners deprivation index, and it has a very high level of deprivation overall, while there are also challenges with the cost of living.

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[Dame Meg Hillier]

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

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

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

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

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

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

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

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the leader of the Liberal Democrats.

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[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

Will the right hon. Gentleman give way?

[Madam Deputy Speaker]

Order. As I said earlier in my introductory remarks, Sir Bernard, we do not intervene on Front-Bench speeches. The odd thing is that we went through this scenario this time last year. [Interruption.] We did, we did—yet here we are again.

[Ed Davey]

Thank you, Madam Deputy Speaker. I am always happy to talk to the hon. Gentleman in the Tea Room.

As I was saying, our economy is being held back by Brexit, so the biggest single thing the Government could do to fix our economy is to fix our trading relationship with Europe and take us back into the single market and a customs union, giving us the growth and the money to cut people’s taxes. [Interruption.]

[Madam Deputy Speaker]

Order. Mr Gareth Snell, moving three rows back does not mean I cannot see you or hear you. Let us try to simmer down.

[Ed Davey]

Thank you, Madam Deputy Speaker.

Unless and until a Government have the courage to do just what I have outlined, I am afraid that any Budget will only be tinkering around the edges, because it will not provide the growth our country so desperately needs.

The Prime Minister, to be fair, has rightly talked about the economic damage caused by Brexit, but in answer to my questions he still refuses to drop Labour’s red lines set down by Keir Starmer more than five years ago. The world has changed so much since then and it is long past time that Labour policy changed with the world. I welcome the Prime Minister talking more openly this week about the need to move forward on Europe, but can I say to the Chancellor and the Prime Minister that it is just too urgent to wait until the next Parliament? Today’s Budget shows why.

I remember when 2% growth was nothing special. When we were in government that was the average, but since we left the EU, it has been less than half that—less than 1% growth a year. Today’s forecasts show things starting slowly to move in the right direction, but they still show growth well below 2% every year for the next five years. What used to be average growth now feels like a pipe dream, so we need a real growth plan with Europe at its heart: a plan that only our party has set out—an economic plan to make Britain richer, safer and stronger.

Our plan would also tackle one of the great hidden tax injustices not just of this Budget, but of every Conservative and Labour Budget since 2021: frozen income tax thresholds. They are a stealth tax rise that has dragged millions of the lowest paid into paying income tax and millions of ordinary people—nurses, teachers, police officers—into the higher 40p tax band. Millions are paying higher taxes for the cost of Government economic failure. I have to say to the Chancellor that this Budget, which freezes the income tax allowance of people in work while raising the personal allowance for some pensioners, is not the answer. Income tax thresholds should rise for everyone—the fairest tax cut possible—letting people keep more of what they earn, rewarding hard work and giving individuals more power in our economy. That is a profoundly Liberal thing to do. If we grow the economy by trading more with Europe, we can afford to do that—a real plan to turn the economy around and cut taxes fairly.

Our plan would also tackle one of the biggest headaches the Chancellor is facing in this Budget: the cost of Government borrowing. We clearly cannot go on spending £1 in every £12 just on interest payments on the national debt. That is money that should be going on schools, on hospitals, or back into people’s pockets. We just cannot go on with the Government borrowing money at interest rates of over 5%. Some of the cost is down to global factors, as the Chancellor talked about, and a lot of it is down to Donald Trump’s war with Iran, but there is no doubt that the bond markets would look more favourably on the UK if our growth prospects were better. Just as for growing the economy, the single biggest thing the Government could do to cut their own borrowing costs, and the interest rates faced by homeowners and businesses, would be to take up our growth plan, and join the single market and customs union.

Just look at the alternative put forward by the terrible twins of British politics, the Conservatives and Reform. They are in a bidding war of unfunded fantasy promises. We have seen where that sort of fiscal irresponsibility ends; Liz Truss’s mini-Budget sent mortgage rates rising. Yet now we face the threat of a Tory-Reform Government doing it all over again. The British people simply cannot afford that.

That brings me back to the cost of living. Why are so many bills going up again? Because Donald Trump chose to start his idiotic war with Iran, which has pushed up our energy bills and hiked diesel and petrol prices to painful levels. When that war began, the Conservatives and Reform were lining up to say that Britain should be backing President Trump. Just imagine if they had been in charge. We would have been dragged into fighting a war that no one wants and paying for it with even higher bills and higher taxes. Britain needs a Government who stand up for British interests, not one who make us ever more dependent on an unreliable, out-of-control American President.

With Donald Trump pushing up petrol and diesel prices, the Chancellor’s freeze on fuel duty is welcome, but it is not enough. I urge him to look again at our emergency transport package, which would cut prices at the pumps by 12p a litre and bring down the cost of travel by bus, train and electric vehicle, too—a real breathing space for families and businesses. With energy bills forecast to rise by more than 25% in January, the Chancellor’s promise to break the link between gas prices and electricity bills cannot come soon enough, but he is right to reject the siren song from those on the Conservative and Reform Benches who want Britain to be even more dependent on dirty fossil fuels and their volatile prices. Once again, they are copying Donald Trump, and their energy plan would be a disaster for our environment, our economy and for everyone struggling with the cost of living. The right answer is to invest instead in clean home-grown renewable power, energy efficiency and battery storage, so that the prices we pay do not depend on Trump’s latest Truth Social post, but instead come down quickly as technology continues to slash the cost of renewable energy and of batteries.

In a world where Trump is deserting Ukraine, praising Putin and selling out on European security, we must move far more quickly on defence. When the Defence Secretary says we must be ready for war within 1,000 days, our armed forces cannot wait years for the investment they desperately need now. The Chancellor’s announcement of some extra funding is welcome as far as it goes, but why has he not taken up our plan for defence bonds to invest £20 billion in Britain’s defence over the next two years? And since he has ruled out joining Canada’s defence bank, will he now take up our plan and push for a European rearmament bank that goes so much further than what he announced today? Instead of signing up to one country’s version, surely the right answer is to bring our allies together behind a shared vision of defence investment to protect our continent from Putin.

The defence of our country needs serious answers like these, not fantasy pledges like the Conservatives’ “iron dome”, which they say is not an iron dome—except when it is. What a shambles! No wonder they left Britain’s armed forces in such a mess, something for which they have not yet apologised.

It will not surprise the House to hear that we on the Liberal Democrat Benches are delighted to hear talk of fiscal devolution. Taking money and power out of a few hands in Whitehall and giving it to communities to make their own decisions is something that we, as Liberals, have always championed. There is a right way to do devolution and a wrong way, so we will have three tests for the Government’s plan as it develops. First, does it give councils enough money to fulfil the responsibilities they are being given? Secondly, does it reach beyond mayors to councils and communities everywhere? Thirdly, is it fair, so that those areas that are already struggling do not find themselves with even less? Done properly, this could be the start of something really big; done badly, it is simply passing the buck.

The same goes for welfare reform. Of course it needs to be done, but it needs to be done right: cutting the bill by helping people into work and giving people the care and support they need so that they can work, like fixing carer’s allowance to help people juggle care with work. I am glad that the Chancellor has listened to carers on the need to scrap the unfair cliff edge of carer’s allowance. As I said to the Prime Minister earlier, this cannot wait another four years, and we cannot see a 100% tax rate on working carers. I urge the Chancellor and the Prime Minister to look at our alternative plan instead, which we put forward to Liz Sayce when she did her review. I hope to bring it to the meeting that the Prime Minister has promised.

Whether on carer’s allowance or other benefits, let us reform welfare right, so that the system helps people into work and then rewards them for working. The country needs this new Chancellor and Prime Minister to succeed, because the livelihoods of everyone in our country are at stake. The Liberal Democrats will work constructively with the Government wherever we can. We will oppose them when they get things wrong, of course, but we will also support them when they get things right and push them to go further when they are too timid.

In that spirit, I say to the Chancellor that this Budget is far too timid. The Government have recognised the scale of the challenge, but like Keir Starmer before them, they still have not risen to it. They have not fixed the terrible damage that they did with their tax rises, from the family farm tax to the jobs tax. I urge them to be bolder—be bolder on energy and defence; be bolder on devolution, and get it right; be bolder on cutting income tax; and be bolder on Europe and growth—because after so many years of pain, so many years of being held back, the British people need real change, and fast.

--- Later in debate ---

[Sir Mel Stride]

I am just concluding now.

When Members hear the Chancellor talking about being steady as we go, they should read into that complacency. When we hear him say that we need time to get things right, we should read into that kicking the can down the road. We face huge challenges as a country, and this Budget has been grossly complacent. It is a lost opportunity. It has failed our economy, and it has failed the British people.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Peter Kyle.

--- Later in debate ---

[Madam Deputy Speaker]

I call the Chair of the Business, Innovation, Science and Trade Committee, after which there will be a speaking limit of eight minutes.