Budget Resolutions

Peter Swallow Excerpts

Monday 1st December 2025 Commons Chamber

[Claire Coutinho]

My right hon. Friend is right, and here is the problem: this Budget might have made the Back Benchers happy, but it is not the Budget that they promised at the election. Let me help them. To start with inflation, we left Labour with inflation back under control at 2%. That took difficult decisions, which needless to say Labour opposed, but it was important to do that because inflation hurts: it picks the pockets of families who find themselves working just as hard but able to afford less and less. However, under Labour, inflation has doubled thanks to the choices it made at the last Budget.

We have now broken away from our international peers—Labour Members can check the graphs—and we have significantly higher inflation than Europe and the United States. In fact, we have the highest inflation of any major economy, and the OBR has said that, compared with March, it now expects inflation to be higher for longer. Why? It is because Labour has chosen to make the cost of energy and the cost of food more expensive, and to pursue policies that will push up rent. People’s weekly shop is up because of Labour’s choices: taxes upon taxes—a jobs tax, a packaging tax, a family farm tax. These are Labour’s choices, and they mean that the average family will pay almost £300 more for their groceries this year. With Labour’s war on farmers, is it any surprise that a pack of mince, a family staple, is up 40% this year alone?

Let us take housing: rent is going up by £700 this year for the average renter. Labour does not understand that a lower supply of homes to rent means higher rents, yet it is written in black and white in the OBR document that its new housing taxes risk

“a steady long-term rise in rents”.

Labour’s choices mean that the cost of going away on a family holiday will set people back up to £400 extra because of its flight tax. Those choices mean that food will cost £300 more, rent will cost £700 more and holidays will cost £400 more—that is £1,400 more and I have not even got to energy bills or taxes yet. On energy, where do we even start?

[Peter Swallow (Bracknell) (Lab)]

The right hon. Lady has repeatedly suggested that energy bills are going up—[Interruption.] If she does not believe me, perhaps she will believe Martin Lewis, the money-saving expert, who tweeted earlier today:

“I’ve just got the new predictions for the April Price Cap, which is a cut in cost of 4.2%. Without the Budget changes, it would be predicted to be rising 3.5%.”

Will she correct the record and explain why she does not support the work that we are doing to cut energy bills?

--- Later in debate ---

[Charlie Maynard (Witney) (LD)]

This is a Budget driven far more by political calculation than by the economic realities that the country faces. The Chancellor has an enormous majority—on paper, at least—and the country desperately needs change, but we now have a second Budget in which the Government have failed to demonstrate that they have any big ideas to get the economy moving. However, before I go into that, I want to focus on some positives.

I welcome some of the announcements that the Chancellor made last week, which will help households that have been struggling with the cost of living. Lifting the two-child benefit cap will be worth up to £5,000 a year to each of the more than 500 families in my constituency who have been impacted by the cap. Too many children and families have been trapped in poverty because of the decision to impose it and the Government’s previous stubborn decision to keep it. I just wish that this had been done a year ago, and I give my commiserations to the brave Labour Members who lost the Whip after standing up for a policy that their party now finally accepts.

I also welcome the Government’s action to cut energy bills by removing the renewables levy, which is something that we Liberal Democrats had been calling on the Chancellor to do. It will make a difference to families struggling with sky-high fuel bills. However, I wish that the Government had gone further, rather than removing just 75% of the levy and only for three years. We were proposing to fund the renewables obligation instead from a windfall tax on the excess profits in the banking sector that have resulted from quantitative tightening—something that would have happened now, unlike the deferred taxation that the Chancellor is proposing, which may or may not happen. Both those changes will make struggling families’ lives a little easier, and are very much welcomed.

Similarly, doubling remote gaming duty—something we have also been calling for—is clearly a sensible move. It is one way to raise much-needed revenue without increasing the burden on hard-working families, but it is comparatively small, raising only £1 billion a year. The sad truth is that these are all small wins in the context of the huge challenges we face.

[Peter Swallow]

Before the hon. Gentleman gets to the part of his speech that I do not think I will like as much as what he has said already, does he welcome the freezing of rail fares for the first time in 30 years, which means almost 300 quid off a season ticket into London for commuters in Bracknell?

[Charlie Maynard]

Yes, I welcome it.

The OBR has marked down economic growth for each of the next four years, which is bad news. We have a ballooning debt, which now sits at £2.9 trillion. Our debt costs have tripled in the last five years—yes, that is the Conservatives’ fault—and our Government debt is now more expensive than Italy’s. Yes, this all happened on the Conservatives’ watch, but we now have a situation in which 11% of Government spending goes on covering the interest payments, not on paying down the debt itself, and the Chancellor has given no indication that she is serious about addressing that.

Across the five years of the forecast, the Chancellor proposes to deliver a reduction in our net borrowing of just 0.04% of GDP, and I question her tactics. What is the sense in taxing salary sacrifice schemes when we know the strain that the state pension and social care systems are under and when we need people to save more, not less? Does common sense not tell us that discouraging people from saving for retirement now will only lead to a greater burden on the public purse in the long run?

Then there is the desperate state of our special educational needs and disabilities provision. The SEND national deficit overspend is forecast to reach £17.8 billion by March 2028. The Government have said they will cover costs directly from that point on, but they have given no answer as to how this huge bill will be settled up. In Oxfordshire alone, the SEND annual overspend is expected to reach £153 million by March 2026. Why are we waiting two and a half years to do something about that?

As per policy decision 37, the Government determine that they will go further on efficiencies and savings in public services, but not just yet. There are zero governmental cost savings in each of the next three years and then, miraculously, we expect £4 billion in savings in 2029-30—the other side of a general election. How can the country take the Government seriously when they take this approach?

That last instance highlights the problem with the fiscal framework the Government have set themselves. The rule that the current Budget must be in surplus in 2029-30, and the aim of ensuring that debt is falling as a share of the economy by ’29-30, are all well and good, but entirely excluding the intermediate years from the calculation serves our country extremely badly. This Government are gaming the system, in the same way the Conservatives did before them, by adjusting everything in year five to perfectly line up, with more spending early on and tax rises deferred, possibly into the never-never.

Let us look at international examples of how national Budgets are set to understand why the UK is so ineffective at controlling its debt. The Government could take inspiration from the Swedish model of tax scrutiny. Thirty years since introducing changes, and aided by strong economic growth, Sweden has reduced its national debt from nearly 80% to 32%—and yes, Sweden had covid too. Meanwhile, our national debt stands at around 95%. A key component of the solution is that we need to substantially strengthen the scrutiny powers of this Chamber when it comes to the Government’s financial management. This four-day debate clearly does not provide an effective scrutiny function, and there is no meaningful ability for Parliament to amend the Budget once it is announced. Our country is the poorer for this approach.

Secondly, of course, we need to seek a deal with Europe that captures the economic benefits of the European market, which is five times bigger than our own, while maintaining control of our borders. This should start with negotiating a new customs union with the EU. Last month, the US’s National Bureau of Economic Research published a paper that found that Brexit had cut UK GDP by between 6% and 8%, with the economy now £170 billion smaller than it would otherwise have been. The House of Commons Library found that we are losing £90 billion in tax revenues every year as a result of Brexit—an enormous number. That is equivalent to two thirds of the UK’s entire annual Budget deficit of £138 billion; to nearly 80% of our entire annual debt expense of £114 billion; or to our defence, security, prisons and courts budgets combined. The Government now finally acknowledge that Brexit has left our country poorer, weaker and more divided, but they are still unwilling to do almost anything material about it.

I was elected by my Witney constituents in 2024 to do all that I can to make their lives better and our country better. This Budget is a key lever through which to do so, and I am deeply dismayed at the lost opportunity that it represents.