Budget Resolutions Debate
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Nusrat Ghani
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Budget Resolutions
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Mrs Kemi Badenoch (North West Essex) (Con)
May I congratulate the right hon. Lady on delivering her second Budget? I hope she enjoyed it, because it really should be her last. What a total humiliation—[Interruption.]
Madam Deputy Speaker
Order. Can colleagues who are exiting the Chamber do so swiftly and quietly, so that we can focus on the Leader of the Opposition?
Mrs Badenoch
It is a total humiliation. Last year, the Chancellor put up taxes by £40 billion—the biggest tax raid in British history. She promised that she would not be back for more. She swore that it was a one-off. She told everyone that from now on, there would be stability and she would pay for everything with growth. Today, she has broken every single one of those promises. If she had any decency, she would resign. At the last Budget, she said she was proud to be the country’s first-ever female Chancellor; after this Budget, she will go down as the country’s worst-ever Chancellor.
Today—[Interruption.]
Madam Deputy Speaker
Order. The Chief Whip in particular knows that we do not allow clapping in the Chamber.
Mrs Badenoch
Today the Chancellor has announced a new tax raid of £26 billion, and Labour Members were all cheering. Household income is down. Spending policies in this Budget increase borrowing in every year. That smorgasbord of misery we just heard from her can be summed up in one sentence: Labour is hiking taxes to pay for welfare. This is a Budget for “Benefits Street”, paid for by working people.
This Budget increases benefits for 560,000 families by an average of £5,000. The Government are hiking taxes on workers, pensioners and savers to pay for handouts to keep their Back Benchers quiet. These are the same—[Interruption.] They can chunter all they like. These are the same Back Benchers who cheered last year when the Chancellor taxed jobs and left more than 100,000 people without an income. They cheered because they did not understand the consequences of what they were doing, and they still do not.
It has not been an easy time for the Chancellor. No one liked seeing her sitting on the Government Benches as it dawned on her that her own Back Benchers were going to do to her political career what she has done to our economy. She could have chosen today to bring down welfare spending and get more people into work. Instead, she has chosen to put up tax after tax after tax—taxes on workers, taxes on savers, taxes on pensioners, taxes on investors and taxes on homes, holidays, cars and even milkshakes. There are taxes on anyone doing the right thing. She and this Government have lost what little credibility they had left, and no one will ever trust her again.
What is amazing is that the Chancellor has the nerve to come to this House and claim that this is all someone else’s fault. She has a laundry list of excuses. Labour Members blame the Conservatives as if we have been sneaking into the Treasury under the cover of darkness to give pay rises to the unions. The Chancellor inherited an economy with inflation at 2% and record-high employment. She has tanked it in just over a year. She has endless excuses—she blames Brexit and Donald Trump, but she needs to blame herself.
I have some news for the Chancellor—she did not seem to understand what the OBR was saying. Inflation is up, not down, and that inflation was stoked by her tax and spend decisions. The economic and fiscal outlook says that the OBR expects inflation to stay higher for longer. Everybody else has read the OBR analysis, but she still has not. She blames higher than expected borrowing costs. Where does she think they came from? [Hon. Members: “You!”] Those borrowing costs are driven by the Chancellor’s lack of grip. Labour Members are saying those costs came from us, but she is paying more to borrow than Greece. She is paying more to borrow than at any point under the 14 years of Conservative government—perhaps if Labour MPs read a book sometimes, they would know something—which included an energy crisis sparked by a war in Ukraine and a global pandemic. What is the Chancellor’s excuse? She is taking the public for fools, but they are under no illusions about whose fault this is.
The fact is that the bad choices the Chancellor is making today—choices to break promises, choices to put up taxes, choices to spend more of other people’s money—are because of the bad choices she made at the last disastrous Budget. If you want growth, you need to start with knowing what kind of country you want to be and make a plan to get there. You need to create certainty for the people and businesses who will drive growth. There is no growth and no plan, because Labour focused on settling scores and scratching the itches it had while in opposition.
The Chancellor promised stability. She delivered chaos. Just look at the circus around this Budget: first, the leaks—then more leaks to try to undo the damage; calling panicky press conferences and U-turning on her U-turns; rolling the pitch one day only to plough through it the next. She had the cheek to talk about stability, but she has become the first Chancellor in history to release the whole Budget ahead of time. This is extraordinary, and it tells us everything we need to know about her grip on the Treasury. She is making the UK a shambolic laughing stock to international investors, and if she does not resign for breaking her promises, she should sure as hell go for this.
What have we got for all this chaos and disorder? There are 1 million more people claiming universal credit than there were at the time of the last Budget. Government spending? Up. Welfare spending? Up. Universal credit claimants? Up. Unemployment? Up. Debt interest? Up. Inflation? Up. And what about the things that we want to go up? Growth? Down. Investment? Down. Business confidence? Down. The credibility of the Chancellor? [Hon. Members: “Down!”] Not just down, but through the floor.
These figures are shocking. Does the Chancellor really think that anyone will be confused by the sleight of hand in her speech? Her speech today was an exercise in self-delusion. Today she had an opportunity to apologise and show some humility; instead, we have been fed puff pieces in The Times and the FT showing a woman wallowing in self-pity and whining about mansplaining and misogyny. Let me explain to the Chancellor—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Colleagues need most definitely to simmer down: just breathe a little and allow the Leader of the Opposition to be heard.
Mrs Badenoch
All we have had is wallowing in self-pity and whining about misogyny and mansplaining, so let me explain to the Chancellor, woman to woman, that people out there are not complaining because she is female; they are complaining because she is utterly incompetent. Real equality means being held to the same standard as everyone else. It means being judged on results. Take the Chancellor’s bright idea: the Office for Value for Money. It has been closed down because it did not save a penny. In fact, it cost the taxpayer £1.6 million. You could not make this stuff up. I have identified a way to save taxpayers huge amounts of money, by sacking just one person: the woman sitting opposite me.
The ex-chief economist of the Bank of England was not mansplaining when he said that the uncertainty around today’s Budget is
“the single biggest reason growth has flatlined”.
What did the Chancellor think would happen when she went on breakfast telly to do an emergency public service announcement: “I interrupt your Cheerios to bring you this frightening message about income tax”? Then, unbelievably, she changed her mind three days later. No wonder people are in despair. She says she wants people to respect her—[Interruption.]
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Conservative colleagues are drowning out the Leader of the Opposition’s speech, so just be mindful that nobody at home will be able to hear her.
Mrs Badenoch
The Chancellor says that she wants people to respect her, but respect is earned. She apparently told Labour MPs this week, “I’ll show the media, I’ll show the Tories—I will not let them beat me.” Show us what? Making stuff up at the Dispatch Box, incompetent chaos and the highest tax burden in history? She said to them, “I’ll be there on Wednesday, I’ll be there next year, and I’ll be back the year after that.” God help us! She is spineless, shameless and completely aimless.
Talk to any business and or anyone looking for a job—unemployment is up every single month since Labour has been in office. [Interruption.] Labour MPs do not want to hear it, but it is true. They are shouting and complaining, but they cannot create jobs. It is the worst year for graduate recruitment on record. Are they proud of that? [Interruption.]
Madam Deputy Speaker
Order. If you are on the Front Bench, I can obviously see you, Mr Kyle. There is no need for you to be chuntering this loudly. Everyone else can see and hear you as well.
Mrs Badenoch
Labour MPs do not want to hear the truth, but I am speaking for all those people out there who are sick of this Government. Companies like Merck and Ineos are slashing investment plans. The construction sector has shrunk. How is that house building target going, by the way? I will tell you, Madam Deputy Speaker: the Government are miles behind and will not even come close to what we achieved. Business confidence is at record lows. No wonder that today future growth was revised down for every year of the scorecard. The papers are reporting that one in eight business leaders is planning to leave Britain. Even one of Labour’s biggest ever donors, Lakshmi Mittal, has fled the country.
What we have in front of us is a Budget littered with broken promises. The Chancellor stood on a manifesto that promised better returns for UK savers. Today she is putting up taxes on savings and on salary sacrifice even. She promised to give pensioners the security in retirement that they deserve. Today she slapped higher taxes on people saving for their pension. She promised to make Britain the best place in the world to invest and do business. Today she has raised the dividend tax rates. She and the Prime Minister had already broken their promise to freeze council tax, but today she has decided to go even further, introducing a new property tax clobbering family homes that will only raise small amounts. This is Labour’s Britain: people who work hard and save hard to buy their homes get taxed more, while those who do not work—those who, in some cases, refuse to work—get their accommodation paid for by taxpayers.
To top it all off—because taxing your home, your car, your savings and your pension was not enough—the Chancellor has, by her own admission, broken her manifesto promise on income tax. In the last Budget, she said:
“I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax…thresholds”.
She also said that
“extending the threshold freeze would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.]
But today she has done exactly that. Why should anyone believe anything she has promised in this Budget?
Where is the money going? There are small changes to rail fares and prescriptions. Those are distractions while the Chancellor steals your wallet. The real story is that Labour has lost control of welfare spending. Not only will working people have their tax thresholds frozen while benefits go up in line with inflation, and not only has Labour abandoned reforms that would have saved the taxpayer £5 billion after pressure from its own Back Benchers, but today Labour has added another £3 billion to the bill by scrapping the two-child benefit cap. We introduced that cap, because it means that people on benefits have to make the same decisions about having children as everyone else. Even Labour voters know that it strikes the right balance between supporting people who are struggling and protecting taxpayers who are struggling themselves.
Just this summer, the Chancellor admitted that lifting the two-child benefit cap was not affordable, but that was before the Prime Minister accidentally fired the starting gun on the race to replace him. Now he and the Chancellor are buying the votes of their own MPs with taxpayers’ money. If she wants to reduce child poverty, she should stop taxing their parents and stop destroying their jobs. She congratulated herself on a new tax on landlords. Let me tell her this: hiking tax on landlords will only push up rents. It will push landlords out of the market, and the people who will suffer are the tenants. Then she talks about taxes on electric vehicles. Those changes will hit rural drivers the hardest, but we know that Labour does not care about rural people.
All this Budget delivers is higher taxes and out-of-control spending. Nobody voted for this. The Chancellor must take responsibility. She chose to impose the jobs tax, driving unemployment higher month after month. She chose to abandon welfare reform, meaning that the benefits bill is spiralling. She chose to spend more and more money she did not have, leaving taxpayers to foot the bill. She is out of money, out of ideas, out of her depth, and she has run out of road.
The country simply cannot afford a Chancellor who cannot keep her own promises. Her position is untenable, and she knows it. [Interruption.] She is talking to the Prime Minister. Is he mansplaining to you, by the way? Is he mansplaining? Would you like some help? The Prime Minister should grow a backbone and sack her, but he will not, because he knows that if she goes down, he goes down with her, so we are stuck with them both, Laurel and Foolhardy.
Does the Chancellor have any sympathy for the people facing Christmas without a salary because of her jobs tax, or for the retailers suffering sleepless nights because of their plummeting Christmas sales? People out there are crying. Last year, we had the horrors of the Halloween Budget. This year, it is the nightmare before Christmas. As for her, she is the unwelcome Christmas guest. Ten minutes through the door and she has eaten all the Quality Street.
Let me tell the Chancellor something she has forgotten. Behind every line in today’s Red Book is a family, a home, and a lifetime of work and sacrifice. People are frightened, and they have every reason to be—the Chancellor has spent the last year terrifying them. Every decision that she and the Prime Minister make puts more pressure on the people who keep this country going. If Labour is the party of working people, why is it that every day under this Government, thousands more people are signing off work and on to benefits? It is the Conservatives who are the party of work. The Labour party should be renamed the Welfare party.
The Government are making a mistake. The British public do not want higher welfare spending; they want people in work, providing for themselves. They want to live in a country where hard work pays—where what you put in reflects what you get out, and we agree with them. There is an alternative, and we Conservatives have set it out. This Budget could have saved £47 billion, including £23 billion from welfare. The Chancellor could have applied our golden economic rule, allocating half those savings to cutting the deficit and using the rest to cut taxes. [Interruption.] Oh, they are all pretending that they are not listening. It is the shame of the mess that they have made—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Mr Vince! And Mr Thompson, you are so enthusiastic that I was worried a moment ago that you would knock Mr Waugh off his seat. We need to calm down and breathe, and we need to ensure that we can hear the Leader of the Opposition.
Mrs Badenoch
Even the dog is laughing at the Chancellor, Madam Deputy Speaker.
The Chancellor could have abolished stamp duty on homes to get the housing market moving, and she could have abolished business rates on shops to breathe life into our high streets. She could have introduced our cheap power plan, which would save a lot more money than what she announced, and would bring down energy costs for homes and businesses. That is what she should have done.
The Chancellor should be on the side of people who get up and go to work, people who take a risk to start a company, and people working all hours to keep their business afloat. She should be on the side of the farmer trying to hand something over to the next generation, and the investor deciding whether to spend their money in the UK or elsewhere. She should be on the side of the young person looking for their first job, the saver doing the right thing and putting money away for a rainy day, and the pensioner trying to enjoy a decent retirement. This country works when we make the country work for those people. Only the Conservatives are on their side, and our plan for them is simple: bring down energy costs, cut spending, cut tax, back business, and get Britain working again.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Members who are leaving the Chamber should do so quietly and quickly before we come to our first Back-Bench contribution. Other Members who are trying to catch my eye should resume their seat; I have noticed them bobbing. I call the Chair of the Treasury Committee.
Dame Meg Hillier
It is interesting that the Opposition are doubling down on the policy, which is humiliating people.
Let us be clear: the birth rate in this country has fallen year on year for the last three years. It is well below where it needs to be. I think that only Luton is at 2.1, which is about where the rate needs to be. Actually, that is a bit lower than where it needs to be. This is a real crisis for the country in the long term, so it is absolutely right that my right hon. Friend the Chancellor is investing in the future of Britain. Young people in my constituency may be poor, but there is no poverty of ambition. Children I met when I was elected 20 years ago are now doctors, barristers and enterprising businesspeople, in spite of the challenges they faced. Just think about the ones who did not get there because they could not overcome the challenges of deep-seated poverty. We should invest in our young people, and that is what this Government are doing, including through apprenticeships, the youth guarantee and the nine youth hubs in London, one of which is in my constituency.
I really welcome the fact that my right hon. Friend listened to the Treasury Committee on the gambling taxation regime. We are a cross-party Committee, but our report was unanimous that there was a real issue with the lower tax on online gambling because of the relative harm that it caused, compared with going to the races or popping along to a local betting shop. I very much welcome my right hon. Friend’s decision to change the gambling taxation regime; that will contribute to taking children out of poverty.
On the ISA changes, I caution my right hon. Friend. I hope that the Treasury is watching very closely the impact on mortgages and lending by building societies, because that was a concern in the evidence we heard. If we want to get people into their own homes through the building that will be going on, we need to make sure that mortgages are available to them, so I hope that the Treasury is in ongoing dialogue on that issue, despite the change having been made.
We need to recognise some of the challenges with green taxes. I have not had a chance to go through the Red Book in the time since the Chancellor sat down, but I very much welcome her bold and necessary decision to take on the challenge of the reduction in fuel duty as people move to electric vehicles. This has been a point of debate for at least the last decade or so. In my time on the Public Accounts Committee, we kept challenging the Treasury on how it would fill the gap, and my right hon. Friend has been bold and right to address the challenge. It is a difficult one to grapple with, but it is great that she has done so. We look forward to hearing more about that. On supporting people with the cost of living, the freeze on rail fares, keeping the bus fare cap and the ongoing freeze on fuel duty will help people get to work.
The increase in the minimum wage and the living wage are vital. In my constituency, some people work four jobs over seven days, just to make ends meet. Even if they are lucky enough to have a council tenancy, it is hard to make ends meet on those salaries. Going into private sector housing is completely unaffordable for those on that kind of income. Contrast that with people who work four days a week because they can afford to do so. I am not criticising them for that life choice, but that is the challenge that we face.
There has been a lot of discussion about a high-value property tax. In my constituency, around 1% of properties are worth over £2 million, and that is in central London. The Opposition might scream foul on this, but in London’s zones 1 and 2—my constituency is right on the edge of the City and 10 minutes from Liverpool Street—around 1% of people will face the surcharge. That is a small price to pay when families next door are living in the deepest poverty, as I have described. It is also great to see some movement on energy bills, which is having a really big impact.
There is a lot more detail in the Budget, which the Treasury Committee will look at over the next couple of weeks. We look forward to welcoming the Chancellor to the Committee on 10 December, when we will ask her to explain, but also challenge her on, the detail of her Budget, as is our proper constitutional responsibility.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Will the right hon. Gentleman give way?
Madam Deputy Speaker
Order. You are a senior Member of the House, and I made it very clear earlier that no interventions should be made on party leaders.
Ed Davey
I am happy to talk to the hon. Gentleman in the Tea Room afterwards.
The Government know the damage that the Conservative-Reform Brexit deal has done to every family and business across our country, yet they choose to reject the single biggest policy for ending the cost of living crisis, turbocharging economic growth and boosting tax revenues without raising tax: a new trade deal with Europe. We need to properly fix our broken relationship with Europe, with a new customs union. We can grow our economy by freeing British businesses from the costs, barriers and red tape favoured by the Conservatives and Reform. Rather than trying to tax our way out of debt, as Labour is choosing to do, the Liberal Democrats would grow our way out of debt.
To be fair to the Chancellor, she has recently spoken about the terrible damage that the Conservatives’ Brexit deal has done to our economy—a deal that promised to save us £350 million a week, but which ended up costing the taxpayer £1.7 billion every week. But where is the Chancellor’s urgency and ambition to fix the problem that she rightly identifies? Today she did not even mention the huge hit to the Treasury from Brexit. She is like a doctor who has diagnosed the disease but refuses to administer the cure. She is refusing to take up our plan for a brand-new deal with the EU—a much better deal for Britain than anything the Government have pursued so far, with a new customs union at its heart.
Everyone but the most extreme Brexiteers now realises what a costly economic disaster the Brexit deal has been. Whether they are a young family struggling with ever higher food prices or a high street business just trying to survive the Chancellor’s latest new cost or tax, people are understandably looking for a credible economic policy to change their futures for the better, and it is crystal clear that only the Liberal Democrats are providing the leadership on our economy that people are crying out for.
There are some measures the Chancellor announced today that we do welcome. At last, she has decided to tax the big online gambling firms by raising remote gaming duty, as the Liberal Democrats have been calling for. Problem gambling is related to hundreds of suicides every year, so of course online casinos and the like should pay more tax on their huge profits. Her decision to scrap the rape clause is an excellent one. I may not have heard the Leader of the Opposition, but I was not sure if she welcomed that. I hope the Conservative party will welcome it. The Chancellor’s decision to scrap the two-child limit is excellent. It was in our general election manifesto, and I am glad that she is now enacting Liberal Democrat policy. It is clearly the most effective way of lifting children out of poverty, and it will save taxpayers money in the long term.
The biggest relief today for millions of families and pensioners is the action the Chancellor is taking to reduce energy bills, and we welcome it, but even after the Chancellor’s changes, the Budget will leave the typical household paying hundreds of pounds a year more on their energy bills than five years ago. More action will be needed, but we need action on energy bills that works.
Reform and the Conservative party pretend that the answer to rising energy bills is to scrap our climate commitments and stop investing in renewables. They could not be more wrong. The Conservative-Reform energy policy would put up bills and make the UK even more reliant on imported fossil fuels, with their volatile and high prices. That would be a disaster for our economy, a disaster for our environment, a disaster for jobs and a disaster for people struggling with energy bills. A major winner from Reform’s energy policies would be Vladimir Putin, which might explain why the hon. Member for Clacton (Nigel Farage) is so keen on them. I urge the Government not to listen to the Conservatives or Reform, but to be more ambitious in cutting people’s energy bills and to take up our plan to cut energy bills even more right now and cut them in half within a decade, finally giving families and pensioners the relief they need from this cost of living crisis.
While there are some things to welcome, as I have just done, there are quite a lot of measures in the Budget that will cause a lot of pain and unfairness, all of which could have been avoided if the Chancellor had gone for growth with Europe instead. Her plans to tax salary sacrifice will be hugely damaging to savings and pensions, and it looks like it is another NI hit on workers. Why, oh why, when the electricity vehicle market still needs a boost to get going, is she taxing electric vehicles? If she was not spending £1.8 billion on digital ID, many of these tax rises would not have been needed in the first place. Her failure to U-turn on the family farm tax is a huge error. If the Chancellor was really looking to tax those with the broadest shoulders, why not put a windfall tax on the big banks that are making billions at the taxpayer’s expense due to the side effects of quantitative easing?
The worst tax hike of this Budget by far—the biggest tax rise in this Budget—is the Chancellor’s decision to repeat the Conservative policy of freezing income tax thresholds. Freezing these thresholds reduces the amount that people can earn tax-free and hits the lowest-paid the hardest. I have to say that hearing the Conservative leader criticising it now rings incredibly hollow—and I think the “Member for Bark-shire” was objecting to her comments. The Leader of the Opposition cheered Conservative Budget after Conservative Budget that did exactly the same thing as the Chancellor has done—raising taxes on the low-paid. The Conservatives dragged an extra 4 million people on very low incomes into paying income tax, and an extra 3.5 million people into paying the 40p rate. The OBR says that this Government are now planning to drag a further three quarters of a million low-paid workers into tax and nearly 1 million people into the 40p rate. Someone on the average salary is paying an extra £582 this year because of the Conservatives’ policy, and under the Chancellor’s plans they will pay an extra £300 a year by 2031.
Contrast that with our record on income tax. We raised the personal allowance by £4,000. We cut income tax by £825 for millions of people, and took 3.4 million of the lowest-paid out of paying income tax altogether. It is clear that the Liberal Democrats are the only party that believes in cutting income tax for ordinary people; Labour and the Conservatives make them pay more.
As well as adding income tax pain to families struggling with the cost of living crisis, the Budget will add to the cost of doing business crisis facing Britain’s hospitality sector, on which the Chancellor went nowhere near far enough. Our high streets are suffering. Pubs, restaurants, cafés, caravan parks, zoos and even our beloved theme parks are struggling against higher business rates and the Government’s misguided jobs tax. The Liberal Democrats called on the Chancellor to help them with an emergency 5% VAT cut for hospitality for the next 18 months. That would have been a lifeline for some of our most beloved local businesses and for people’s jobs, boosting local economies across Britain, and it is very disappointing that the Chancellor has not listened to our calls.
Finally, can I say how disappointed I am at how little there was for carers in this Budget? As a carer myself for much of my life, I am determined to speak up for the millions of carers less fortunate than I am—the millions of family carers and care workers who make enormous sacrifices looking after loved ones, the carers who keep our NHS going and the carers who keep our society going. They deserve far more support from the Government, and I will keep pressing their case.
I do welcome the carer’s allowance review, but it confirms our argument that the carer’s allowance system is out of date and in need of urgent change, and we are yet to hear commitments to such changes. I welcome the decision to reassess cases where overpayment has caused huge hardship, but with those changes not coming into force for another year, the Government must instruct the Department for Work and Pensions to immediately suspend repayments during that delay and swiftly deliver compensation. More needs to be done to help family carers juggle their jobs with their caring responsibilities, and we urgently need the social care commission to actually start fixing the system on a cross-party basis and make sure that our loved ones get the care they need. The Chancellor cannot claim to be supporting our NHS properly, however much money she puts in, while she and Treasury officials keep blocking the social care reforms that alone can transform the health service across the country and boost our economy.
A caring society, a growing economy and a plan to drive down household bills, boost high streets and go for growth with Europe—that is the vision the Chancellor should have set out today. Instead we got a low-growth, high-tax Budget from a Government who I fear are just not listening.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Colleagues are now permitted to make interventions, which a Back Bencher may accept or decline them.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. How on earth can “you” do that? We cannot start off these four days of Budget debate with the words “you” and “your”. Come to your conclusion quickly and using the right language.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
Could the right hon. Gentleman remind us which Government led to that 11% inflation and which Government crashed the economy? Could he also speak to the estimated 1,970 children in Morecambe and Lunesdale who will benefit from the lifting of the two-child benefit cap and tell them why they should continue to live in poverty?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. I will remind colleagues that interventions must be short and to the point, and must be an actual question, not a statement.
Sir Jeremy Hunt
I would be happy to tell the hon. Lady which Government were responsible for 11% inflation: the Russian Government were responsible for 11% inflation. I will happily look in the eye the 200,000 fewer children in absolute poverty after a succession of Conservative Governments because of the 4 million jobs created on our watch.
Let me say this. Those dreadful Tories also increased the number of doctors and nurses in the NHS by a third, and those posh Tories increased standards in state schools to have the highest reading standards in the western world. That, Madam Deputy Speaker, is because progressive instincts do not pay the bill for good public services—a strong economy does.
Ms Oppong-Asare
I remind the hon. Member that this Government are delivering more than previous Governments delivered, and he may remember that his party was in a coalition Government that caused a lot of damage to this country.
To conclude, this Budget delivers for the country and my constituency of Erith and Thamesmead. After decades of waiting, residents will finally have the transport links that they deserve and the opportunities that will come with them. A new chapter begins today. I will continue to fight for investment, services and opportunity for people in my community, because they deserve it.
Rachael Maskell (York Central) (Lab/Co-op)
I like drilling into the data and getting to the facts. You can see a correlation between the rise in people claiming social security and the rise in waiting lists in the NHS—they map identically through all Parliaments, whether Tory or Labour. Will the right hon. Member look at the data before making assumptions? Getting waiting lists down has got to be our objective.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The hon. Member used the term “you”. Perhaps focusing, and looking at the Chair, will stop colleagues from doing so.
Sir Edward Leigh
I am careful, actually, to look at the data and constantly refer to facts that are accepted by the OBR and the Government. These facts are not challenged. We have 300,000 people currently waiting to undergo a work capability assessment. We need emergency measures to clear the backlog. I am surprised that anybody could disagree with what I am saying.
The lack of in-person assessments has created a feedback loop where dependency grows and work expectations diminish. The longer that is allowed to continue, the harder it becomes for people to reintegrate into society. This is a system that writes people off rather than helping them back into employment. I would have thought we could all agree on that. We must not abandon these people; this is about human dignity.
Getting people off long-term benefits and into employment brings significant mental health benefits. It also helps our straitened finances. The cost of sickness and disability benefits is projected to reach £100 billion annually by the end of the decade. Some households receive more than £30,000 a year in universal credit alone, with disability benefit payments pushing support well above that. The current system financially incentivises individuals to demonstrate incapacity rather than engage with work. I agree that the Government have redeployed work coaches to re-engage long-term inactive claimants, but systematic incentives remain unchanged. Failure to tackle long-term benefit dependency impoverishes the nation by increasing fiscal burdens and reducing labour force participation.
The Office for Budget Responsibility reported that the working-age incapacity benefit caseload reached 7% in 2023-24 and is forecast to hit 7.9% by 2028-29. We must stop paying full benefits to young people who are neither working nor studying. Those young people should be working or studying.
Sir Edward Leigh
I will make some progress, if I may. The Centre for Social Justice estimates that by 2026 there will be a gap of over £2,500 between earnings and combined benefit income for under-25s. I could go on making those arguments, but I will proceed to the next part of my speech, on immigration.
I accept that the greatest failure of our last Government was immigration. I admit, and I apologise on behalf of my Government, that the 2021 to 2024 Boriswave allowed—[Interruption.] Why should I not apologise? Why should I not be honest? It allowed over 4 million non-UK migrants into the country. Many of them will soon qualify for indefinite leave to remain. ILR’s granting of access to benefits and public services on the same basis as citizens is destroying financial incentives. The scale of it is financially significant.
I agree that the Home Secretary has announced some sensible moves. I supported her when, for example, she came to the House to extend the standard qualifying period for ILR from five years to 10. As Karl Williams of the Centre for Policy Studies has noted, policymakers cannot say with confidence how many migrants currently hold ILR or what their economic circumstances are. Experimental DWP data shows that about 211,000 ILR holders receive universal credit—that is completely unsustainable. If Migration Observatory estimates are correct, between 27% and 37% of ILR holders receive universal credit. This is a worrying problem that needs resolution.
I turn next to increasing tax. I have long argued for a much simpler tax system where we close loopholes but keep taxes low, especially for married families. Corporate tax complexity creates an inherent bias towards huge multinationals who can hire departments of accountants to reduce their liabilities. A free market relies on everyone paying their fair share. We need creative ways of ensuring that companies like Amazon and Starbucks can operate freely—we all use them—while paying a fair contribution. Then we can help lighten the burden on family farms, working people and small firms. Increasing taxes on working people risks undermining growth by reducing take home-pay and incentives.
Figures from the Office for National Statistics show that direct taxes reduced income inequality by only 4.4 percentage points: limited redistribution for a heavy burden. Higher taxes on the wealthy simply encourage them to leave. Data from the Henley & Partners 2025 migration report suggests that the UK may lose 16,500 millionaires this year. What is the point of it? Why are we driving these wealth creators out of the country? [Interruption.] There is so much to say, Madam Deputy Speaker, but I know that I will weary the House if I go on too long.
May I end on one point? It is quite controversial and difficult to say. I know I am going to get into trouble for saying it, but I have got to say the truth as I believe it. We all know that the triple lock is unsustainable. We cannot have a situation where people of my generation are consuming an ever greater proportion of national wealth through the state pension. Frankly, our Government never dared tackle it, having brought it in, because they knew that the Labour party would crucify them at the ballot box. Now, the Labour party is caught in the same bind. The fact is that it is completely unfair on younger people if the burden of older people, through the triple lock, increases year by year.
We laugh at the French because of their failure to achieve sensible pension reform, but we ourselves have got to have the courage, frankly, to end the triple lock—and I think this will only be done with consensus between the two parties. I am absolutely sure that the Government could come to the Leader of the Opposition and say, “This is unsustainable. Will you share this burden with us?” That may seem very unpopular, but actually many older people—people of my generation—all have children and we all have grandchildren, and we all see our children struggling to get into the housing market. If the Government and the Opposition were prepared to have the courage to deal with the triple lock, I am not sure that it would be as unpopular with older people as is sometimes maintained. After all, we could always relieve the burden on those on pension credit and find ways of helping people who really could not afford to live. But the triple lock must go. That is not a popular policy, but in our hearts, I think we know that it is the right one.
Madam Deputy Speaker (Ms Nusrat Ghani)
Just shy of 60 Members wish to contribute, so there is a speaking limit of 10 minutes to begin with.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. The speaking limit is now eight minutes.