Budget Resolutions

Oliver Dowden Excerpts

Wednesday 26th November 2025 Commons Chamber

[Sir Jeremy Hunt]

I will give way one last time to my right hon. Friend.

[Sir Oliver Dowden (Hertsmere) (Con)]

I thank my right hon. Friend for giving way. As we are going down memory lane, I cannot resist reminding him that when we came to power in 2010, we had a youth unemployment crisis. Youth unemployment plunged when we were in office; now, with Labour back in office, the Government have imposed a national insurance contribution tax and youth unemployment is soaring again. Is that not a damning indictment of Labour?

[Sir Jeremy Hunt]

Labour Members might find that hard to hear from a former Conservative Deputy Prime Minister, but they might want to listen to the Resolution Foundation, which has been saying exactly the same thing on the airwaves today. No one disputes the progressive credentials of the Resolution Foundation. It has been warning against this rise in the minimum wage and all the extra workers’ rights, which it says could lead to a crisis in youth unemployment.

--- Later in debate ---

[Sir Oliver Dowden (Hertsmere) (Con)]

I refer Members to my entry in the Register of Members’ Financial Interests, including my position as chair of the United Arab Emirates all-party parliamentary group.

It did not have to be this way. The roots of this Budget and its failure are in the last one. It began with the unnecessary delay and scaremongering before that Budget, which frightened consumers and scared off businesses from investment. Then, when the Budget was announced, the Chancellor made three key errors. She chose to do probably the worst thing for jobs and growth: she put up national insurance contributions. She chose to drive human and financial capital away from the United Kingdom through the abolition of the non-dom tax status, and she chose a totally unrealistically low level of fiscal headroom. By the time the Chancellor sat down, markets were already preparing for the next round of tax rises, and the sense that there would be tax rises only grew with the U-turn on welfare reforms. The problem is that the Government are making exactly the same mistake all over again—and there was a litany of leaks, culminating, extraordinarily, in the OBR publishing the entire content of the Chancellor’s Budget before she even stood up, which rendered the entire speech meaningless.

This Budget makes a simple and clear choice: there will be higher welfare spending, paid for by higher taxes. For my constituents, that means higher income taxes, higher taxes on their savings, and higher taxes on their dividends. Further, in constituencies like mine, house prices have soared over the past 30-odd years to astronomical levels, and there is a real risk that older people in family homes that they bought for a very low price will have to scrimp and scrape to find several thousand pounds every year, just to stay in their family home, which they so love. That is a real problem that will emerge from this Budget, and I urge the Chancellor to look, at the very least, at ameliorating measures to stop older people having to sell their home to pay their council tax bills.

Behind this decision lies a strategic choice, and we all know exactly what has happened. The Labour leadership has watched in fear as its vote haemorrhages to the left, and this Budget is all about shoring up Labour’s tax base. The taxes of the residents of Bushey, Radlett, Potters Bar and Borehamwood are being hiked to pay for higher welfare costs, in order to appease Labour’s Back Benchers.

[Luke Akehurst (North Durham) (Lab)]

The right hon. Gentleman mentions taxpayers in his Hertsmere communities, which I have visited and know. Does he accept that among his constituents, there will be families who receive benefits and have more than two children, and who will be positively impacted by today’s Budget? Could he at least nod in the direction of those of his constituents who will benefit from the measures that the Chancellor has set out?

[Sir Oliver Dowden]

The problem with that analysis is that many people on the same street will think to themselves, “I chose not to have another child because I could not afford to have another, but my neighbour is now able to have more children, paid for by the taxman through welfare.” That is the fundamental unfairness at the heart of this Budget announcement.

Worse than that, this failure to grasp welfare reform risks neglecting a whole generation. Already, young workers’ prospects are under threat from artificial intelligence, and employment prospects are being hit by Labour’s jobs tax and labour market regulation, which is discouraging hiring. Now the message seems to emerge from the Government: “Don’t worry: abandon ambition. There is ever-higher welfare spending under Labour. That is the reason why you should vote for us.”

[Simon Hoare (North Dorset) (Con)]

My right hon. Friend is making a characteristically excellent speech. Would he agree that we are at a tipping point at which the welfare state is ceasing to be what we have always wanted it to be—a safety net below which nobody can fall—and is instead becoming a cocoon that will trap a whole generation in dependency, and kill off aspiration and social mobility?

[Sir Oliver Dowden]

As ever, my hon. Friend is totally correct. Of course the welfare state should be there for those people in temporary difficulty, but it cannot be a lifestyle, which is what ends up happening.

[Dame Meg Hillier]

rose—

[Sir Oliver Dowden]

I will give way to the Chairman of the Treasury Committee, then I must make some progress.

[Dame Meg Hillier]

The Committee has heard evidence on this. It is an absolute fallacy, which we need to nail, that people choose to have more children to get more benefits. That is not the case. People fall on hard times, and that safety net is there. The ambition of my young families in Hackney is immense, but they are held back. There are a lot more systemic issues about poverty, but this measure will tackle poverty for this generation, and we need to welcome it.

--- Later in debate ---

[Sir Oliver Dowden]

Of course there will be the occasional person who falls on hard times, but the hon. Lady should try saying what she did to the many of my constituents who are unable to have more children. They took the choice not to have them, but that option is now there. There is an imbalance between the situation that my constituents faced and the approach taken on welfare.

At a time when the United Kingdom is embracing higher taxes and an ever-greater role for the state, lower-tax dynamism abounds beyond Europe. We can see the US surging, with freer markets and a tech and energy bonanza. We need only look to the Gulf, where states like the United Arab Emirates and Saudi Arabia embracing tech, finance and alternative energy. A generation ago, this would have mattered less, but labour and capital are now highly mobile, and more and more people are voting with their feet. They are leaving the United Kingdom in their tens of thousands. This tide is washing the very brightest and best away from our shores, and I fear that once those people leave, it will be very hard to get them to come back.

The sadness of all this is that the United Kingdom remains a wonderful country. It is a beacon of stability, and we have the rule of law, the English language, our time zone, great research universities and a highly talented workforce. Indeed, having criticised the Government a lot, I pay tribute to them for successfully concluding a number of free trade agreements, including with India and the United States, and I hope that others will follow, including with the Gulf Co-operation Council. At a time when other countries present challenges—whether we are talking about the security situation in China, the unpredictability of the United States or stagnation in Europe—the United Kingdom has a golden opportunity to be a magnet for investment from businesses and entrepreneurs around the world. However, we risk consigning ourselves to what a Scottish entrepreneur described to me a couple of days ago as a “why bother” economy. What he meant was that of course people are not going to disinvest, but they will not actively choose to invest in the United Kingdom, because we are not creating an environment that rewards risk-taking and entrepreneurship.

There are a few simple steps that we could take to seize this moment, and I urge the Chancellor to take them and light the fire of competitiveness. First, instead of trying to drive away the wealthiest and biggest global investors, as we have done with the abolition of the non-dom status, we should welcome them and gain more revenue at the same time. One need only look at the Italian model; they have imposed a relatively high fee, but have in return exempted wealthy mobile people from paying further taxation. As a result, investment in Italy is surging, as is the number of wealthy people choosing to locate there, with all the opportunities that brings for growth and investment.

Secondly, instead of obsessing about policing social media, we should be aggressively policing the sort of low-level crime that drives people away from locating in this country, whether it is phone snatching, shoplifting or the general sense that the streets of this country have become less safe than they were a few years ago. Thirdly, instead of clobbering entrepreneurs, wealth creators and hard-working Brits with ever-higher marginal rates, we should have confidence that lower marginal rates generate higher revenues in the long run and benefit absolutely everyone. Fourthly, and most importantly of all in relation to this Budget, instead of consigning a generation to welfare, we should aggressively reform the welfare state to create opportunities for all. It really is not too late for the Government to seize this opportunity, but sadly, I fear that only a change of Government, and a Conservative Government, will be able to deliver those things.