Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 27th January 2026 Commons Chamber

[Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)]

13. What steps she is taking to provide regional funding.

[The Chancellor of the Exchequer (Rachel Reeves)]

I am very sorry to see your leg in such a way, Mr Speaker.

We are committed to driving growth everywhere. The Budget ensured that Scottish public services are fairly funded, with an extra £820 million for the Scottish Government through the Barnett formula, on top of a record settlement in June this year. We are also investing in transport for city regions, and investing £5 billion in deprived neighbourhoods through the Pride in Place programme, with some of that money going to Scotland.

[Kirsteen Sullivan]

I welcome the fantastic news that Edinburgh and south-east Scotland will receive £37.8 million from the new local growth fund, supporting infrastructure, business support and skills development. However, I consistently hear from businesses that they struggle to recruit people with the skill sets needed to grow their operations and fuel economic growth. Can the Chancellor set out how this investment will reach beyond the cities to tackle the acute skills shortages in my constituency of Bathgate and Linlithgow?

[Rachel Reeves]

I thank my hon. Friend for her commitment to her constituency. It is right that the money is allocated through the regional economic partnerships in Scotland, and I have absolutely no doubt that my hon. Friend will make the case for her local area. The regional economic partnerships have already worked together to deliver the integrated regional employability and skills programme in Edinburgh and south-east Scotland, including helping people in her Bathgate and Linlithgow constituency.

[Emma Foody]

Ministers will be all too aware of my campaign to unlock improvement at Moor Farm roundabout, which is currently holding back growth across the north-east and causing misery to local people on a daily basis. The Government have rightly taken steps to ensure that my region gets its fair share of investment through changes to the Green Book and place-based business cases, but will the Chancellor meet me ahead of the road investment strategy to ensure that we finally get this long overdue investment in a critical piece of north-east infrastructure?

[Rachel Reeves]

My hon. Friend has been a tireless campaigner for the Moor Farm roundabout, which holds back both commuters and businesses, and therefore both growth and prosperity. I will continue to work with her on this. I know that the roundabout is now being properly considered for inclusion in the road investment strategy and I would be happy to meet her to discuss that further.

[Elaine Stewart]

The Ayrshire growth deal, which was allocated £103 million of UK Government funds, has the potential to make a real difference to our economic prospects. Despite its clear potential, though, delivery on the ground remains far too slow in turning around real progress. What action can the UK Government take to drive momentum, sharpen the strategic direction of the deal and ensure that Ayrshire finally sees the benefits of this investment?

[Rachel Reeves]

This Labour Government are investing more than £250 million in economic development and regeneration in Ayrshire, including but not limited to the Ayrshire growth deal. My hon. Friend is a great champion of Ayrshire, and I look forward to working with her and my good friend Anas Sarwar in the months and years ahead to deliver for the people of Ayrshire and those right across Scotland.

[Christine Jardine (Edinburgh West) (LD)]

According to a report this morning from the Jobs Foundation, the energy sector in north-east Scotland is on a cliff edge, with Robert Gordon University estimating that 400 jobs will be lost every two weeks. Given the importance of that sector not just to Aberdeen or Edinburgh West but to the Scottish and UK economies, will the Chancellor think about providing the regional development support that the Scottish Government are failing to provide?

[Rachel Reeves]

At the Budget, we published our North sea oil and gas plan and provided certainty by announcing that the energy profits levy introduced by the previous Government will end at the end of this Parliament. At the same time, we are supporting the transition to new jobs in new industries right across Scotland, including in Aberdeenshire, because the opportunities to transition to jobs in clean energy are very real, and we need to ensure that those jobs come to Scotland.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I know the Chancellor would say that the Northern Ireland budget was an exceptionally good one, but would she agree that there are extreme circumstances pertaining to three areas in particular—policing, education and health—at the moment? Will she at least get into discussions with the First and Deputy First Ministers in Northern Ireland to see what can be done to alleviate the problems that are coming towards us?

[Rachel Reeves]

My right hon. Friends the Northern Ireland Secretary and the Chief Secretary to the Treasury are in discussions with the Northern Ireland Executive on some of the additional pressures they are facing. We are working through those plans and will have more to say shortly.

[Dr Ellie Chowns (North Herefordshire) (Green)]

Regional funding must not come at the expense of local authority funding and all devolved funding must recognise the realities in the places where funding is needed, yet under the so-called fair funding review, in just three years Herefordshire council will see a reduction in UK Government fundings to 78% of current levels. The Government have also removed the remoteness adjustment for anything except social care, but rurality does of course matter for bin collections, school transport and many other aspects. Will the Chancellor look again at the fair funding review, which is unfair for so many places, like Herefordshire, and ensure that remoteness is properly adjusted for in the calculation?

[Rachel Reeves]

My understanding is that the Ministry of Housing, Communities and Local Government is still consulting on this matter, so the hon. Lady and other colleagues will have a chance to feed into that process. In the spending review, we put an extra £600 million into supporting local authorities after the years of austerity under the Conservative Government. While the previous Conservative Prime Minister said he would take money away from poorer areas and give it to Tunbridge Wells, we are investing more fairly in the areas that need it most.

[Richard Foord (Honiton and Sidmouth) (LD)]

3. What assessment she has made of the potential impact of changes to business rates on the hospitality sector.

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[Lillian Jones (Kilmarnock and Loudoun) (Lab)]

12. What assessment she has made of the potential implications for her Department’s policies of the final report of the Covid Counter-fraud Commissioner, published on 9 December 2025.

[The Chancellor of the Exchequer (Rachel Reeves)]

This Government are determined to get back all the money that was lost through covid fraud and corruption. That is why I appointed the covid corruption commissioner when I became Chancellor, and we have already brought in £400 million that the previous Government gave up on.

[Lillian Jones]

This Government have recouped £400 million in covid fraud and error, with HMRC recovering a massive £1.3 billion, as well as aggressively pursuing the firm linked to Baroness Mone, PPE Medpro. Does my right hon. Friend agree that this Government’s relentless recovery action demonstrates that it is only under Labour that this money is recovered from fraudsters to do what it should do, which is to fund our public services?

[Rachel Reeves]

Sadly, I cannot comment on any individual cases, but I am absolutely determined to get that money back, because that money belongs in our schools, hospitals and public services, not in the pockets of Tory friends and donors.

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[Lincoln Jopp (Spelthorne) (Con)]

18. What assessment she has made of the potential impact of her policies on inflation.

[The Chancellor of the Exchequer (Rachel Reeves)]

While the Bank of England has overall responsibility for returning inflation to target, this Government are taking the action that we can: £150 off energy bills from April this year, freezing prescription charges for the second year in a row, and freezing rail fares for the first time in 30 years. As a result, the Office for Budget Responsibility forecast that inflation will be 0.4 percentage points lower in 2026-27 than it otherwise would have been.

[Lincoln Jopp]

On Friday, I visited Primark in Staines, in my Spelthorne constituency, where the team, led by Luke, is doing a fantastic job in creating a vibrant retail experience. However, the British Retail Consortium has said that the Chancellor’s jobs tax is pushing up prices and raising the cost of living, and that the Employment Rights Bill will also be inflationary. When did the Chancellor stop listening to business?

[Rachel Reeves]

I was at Primark just ahead of the Budget, where we announced that we were going to take action on low-value imports. That was welcomed by Primark and many other retailers who are undercut by foreign importers that do not pay customs duty on what they bring into the country. Far from working against business, we are working in conjunction with business to grow our economy. Our economy exceeded expectations for growth last year, and I am confident that it will do the same this year too.

[Tom Hayes (Bournemouth East) (Lab)]

The Conservatives may want to talk down Britain, but Bournemouth is building again, with a £350 million expansion at J. P. Morgan Chase following the Chancellor’s visit, a £100 million expansion planned by AFC Bournemouth, a £50 million airport upgrade, £26 million invested in Bournemouth and Poole College, £500 million provided for the Royal Bournemouth hospital development, and new land at Wessex Fields to build key worker housing and medical research facilities. Will the Chancellor continue to prioritise stability, bringing down costs, and the free trade that we need in our world, so that we can continue to protect and expand these investments into Bournemouth?

[Rachel Reeves]

I thank my hon. Friend for that question. He did not mention the beautiful Bournemouth pier, which we visited together in August and where we enjoyed a very nice ice cream, but he did mention J.P. Morgan, which has announced record investment in its Bournemouth campus. It is employing a shedload of apprentices on that campus, helping it to grow its business, and after this year’s Budget, J. P. Morgan has announced a new building in Canary Wharf. [Interruption.] Maybe Opposition Front Benchers do not like apprentices, but this Government do, which is why we are backing them.

[Paula Barker (Liverpool Wavertree) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Chancellor of the Exchequer (Rachel Reeves)]

This Government have a plan to grow the economy and reduce the cost of living, and it is the right plan for Britain. We are cutting the cost of living and the national debt and creating the conditions for growth in all parts of our country. We have had six cuts in interest rates since the general election, reducing typical mortgage costs by £1,200 a year, and have secured record levels of inward investment and trade deals with countries around the world. The FTSE has hit record highs, and while other countries are increasing barriers to trade, I was in Davos talking to allies about how to reduce them. Our economic plan is the right one to build a stronger and more secure Britain, and I am focused on delivering it.

[Paula Barker]

While I am looking forward to the statement a little later from the Exchequer Secretary to the Treasury, I would like to push him, if I may. I recently visited one of my local pubs, the Masonic Arms on Lark Lane—which is a fantastic venue—and met Guy and Amelia. Currently, the overall sector picks up 2.8% of UK business rates nationally, but has only 0.5% of the turnover of UK businesses. This is clearly not a fair tax for pubs; it is the result of a uniquely skewed business rates system that actively penalises many pubs. What long-term steps can the Minister take to help pubs like the Masonic Arms and the wider hospitality sector?

[Rachel Reeves]

As my hon. Friend knows, we have permanently reduced the multiplier for business rates for retail, hospitality and leisure, but my hon. Friend the Exchequer Secretary will set out the support for pubs in more detail later today. We are determined not only to support pubs, which are the lifeblood of so many communities, but also to support the whole of our retail, hospitality and leisure sector. We are putting more money in people’s pockets by cutting energy bills and train fares and getting people back to work, so that they have more money to spend on the things they love, not just on the essentials.

[Mr Speaker]

I call the shadow Chancellor.

[Sir Mel Stride (Central Devon) (Con)]

Mr Speaker, I begin by associating Conservative Members with the Chancellor’s comments about your leg—we wish it well.

We are waiting with interest to hear the details of the latest U-turn on business rates this afternoon, but if the briefing is to be believed, it will be far too little, too late. The Chancellor simply does not understand the desperate situation so many of our pubs are in. Many pubs are asking why the Chancellor chose to spend billions more on the benefits bill instead of providing proper, permanent business rates support.

[Rachel Reeves]

Under the previous Government—when the right hon. Gentleman was in government—7,000 pubs closed. We have permanently lowered the tax rate that retail, hospitality and leisure businesses pay. When I became Chancellor of the Exchequer, we faced a situation in which all of the covid support was going to disappear overnight. We have put £4.3 billion of taxpayers’ money into supporting our retail and hospitality sector, including pubs, but we recognise the distinct problems that pubs face. That is why, unlike the previous Conservative Government, we are setting out more support.

[Sir Mel Stride]

They just do not get it. Of course, it is not just pubs; the whole high street—shops, restaurants and hotels—is seeing massive increases in business rates, some well over 100%. Where is the help for those businesses?

[Rachel Reeves]

Some of the numbers that are bandied around by the right hon. Gentleman do not reflect the reality, because they do not reflect the £4.3 billion of transitional support that we have put in to taper those increases in business rates. I do not think anyone in this House seriously believes that temporary support during the pandemic should continue infinitely. That would not be the right thing, and it would not be affordable for other taxpayers. That is why we are gradually tapering the support, with a £4.3 billion support package in the Budget and some more targeted support for pubs later today. I remind the right hon. Gentleman that he could have taken action when he was in government. Instead, there was a cliff edge, with no support for pubs or any other sector of the economy.

[Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

T2. The three-year local government funding settlement is a welcome return to long-term planning. Newcastle city council faces a 34% rise in adult social care costs, compared with only a 15% rise in core spending power. That is taking more and more money away from the many services that my constituents depend upon. Will the Chancellor work across Government to consider changes to the adult social care funding formula and/or an increase to the recovery grant so that Newcastle city council can meet the costs of adult social care?

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

T5. While the Chancellor was enjoying her trip to Davos last week, inflation went up, as did unemployment, reversing the progress of the previous Conservative Government. Did the Chancellor or her Cabinet colleagues pick up any ideas in Davos that could reverse those trends, support our businesses and high streets and end the hiring recession that her Budget has caused?

[Rachel Reeves]

I am not sure whether the hon. Gentleman thinks that the Chancellor of the Exchequer should not be in Davos, but I think it is important that the Chancellor is there banging the drum for Britain and bringing investment here. While I was in Davos, we secured new investment and worked with our allies on securing new trade deals for Britain. While the Opposition like to talk our country down, we are getting on and delivering a lower cost of living and higher economic growth.

[Alan Strickland (Newton Aycliffe and Spennymoor) (Lab)]

T3.   A recent Sunday Times investigation found worrying evidence that multiple businesses run by the Reform leader of Durham county council had failed, owing hundreds of thousands of pounds in tax and national insurance and an unpaid covid loan. Does the Chancellor agree that it is just more evidence that, just like the Conservatives, Reform cannot be trusted with other people’s money?

[Rachel Reeves]

I thank my hon. Friend for bringing this matter to the House’s attention. I cannot comment on individual cases of covid fraud and tax, but that person would not be the first member of Reform who took a fraudulent covid loan—[Interruption.] The hon. Member for Boston and Skegness (Richard Tice) is here just in time. I am not sure whether he is still the shadow, shadow, shadow Chancellor or not.

[Munira Wilson (Twickenham) (LD)]

T6. Given that the Chancellor has just confirmed that today’s U-turn will support only our hard-pressed local pubs, what message does she have for independent restaurants and coffee shops, such as Bones in Twickenham, that are struggling to survive, let alone grow?

[Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)]

T4. My constituents are fed up with seeing more and more dodgy Bob Shops on Hagley Road, Harborne and neighbouring Bearwood High Street. Can the Chancellor say what the Government are doing to tackle money laundering and other financial crimes involving the dodgy shops blighting our high streets?

[Rachel Reeves]

I could not agree more with my hon. Friend, and that is why I announced—on the basis of many representations from colleagues, including her—a comprehensive set of measures at the Budget to crack down on illegal high street activity. We want our high streets to thrive, but we must crack down on these illegal businesses selling counterfeit goods and often harbouring more dangerous criminal activity. That is why we put money into that area in the Budget.

[Edward Morello (West Dorset) (LD)]

T8. Vast swathes of Bridport, Beaminster, Maiden Newton, Yetminster and Thornford—whole parts of West Dorset—are under water. Dorset and Wiltshire Fire Service is doing an amazing job of rescuing residents who are trapped either at home or in cars, but unfortunately it will suffer a £1.2 million shortfall in the long-term funding settlement because the Treasury’s underlying assumptions are incorrect. Will the Chancellor meet me, so that we can show her why this is a problem for the service?

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[Kevin Bonavia (Stevenage) (Lab)]

I wish you a speedy recovery, Mr Speaker.

I welcome the economic steps that the Chancellor has taken against Russia’s illegal invasion of Ukraine, and I encourage her to go further, but does she agree that the British public can have confidence in our sanctions regime only if those in political leadership across all parties, including the shadow Attorney General, do not have ongoing involvement in advising Russian oligarchs?

[Rachel Reeves]

Like many, I was staggered by reports that senior counsel appointed by Mr Abramovich in relation to proceedings in Jersey include the shadow Attorney General. I cannot speak for the Opposition—I had many years of doing that—but our focus remains ensuring that there is no further delay in proceeds from the sale of Chelsea football club reaching humanitarian causes in Ukraine. If Mr Abramovich fails to act quickly, this Government are fully prepared to pursue legal action to release the funds. We know whose side we are on: we are on the side of the Ukrainian people, and of Britain’s national interests.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

More than 80% of households in Bromley and Biggin Hill have at least one car or van—a figure significantly higher than the average in Greater London—so the decision to remove the 5p fuel duty reduction hits them particularly hard. This is the latest in a slew of measures against motorists, including increased congestion charges and the ultra low emission zone charge, which is really hitting them in the pocket. Why does the Labour party continue to use motorists as a cash cow?

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[Antonia Bance (Tipton and Wednesbury) (Lab)]

There are many small and medium-sized enterprises in advanced manufacturing supply chains in my bit of the Black Country. Does the Chancellor agree that successfully implementing our industrial strategy is vital to securing the growth, through small businesses, that we need to get British industry back on track?

[Rachel Reeves]

I thank my hon. Friend for the work that she does to champion small businesses, and all businesses in the Black Country, but particularly those in her constituency. Advanced manufacturing is one of our industrial strategy sectors in which we have huge strengths as a country. We are determined to support such businesses in growing and fulfilling their potential.

[Edward Argar (Melton and Syston) (Con)]

What does the Minister say to childminders in Melton and Syston who are concerned about potentially increased administrative burdens and cash-flow pressures, as a result of changes under Making Tax Digital for businesses with a turnover of at least £50,000? It is scrapping the blanket 10% wear and tear allowance, and replacing it with a requirement for line-by-line item accounting, with childminders having to pay up front and claim back later.

[Sarah Coombes (West Bromwich) (Lab)]

Thanks to the policies of the Labour Treasury team, Sandwell will receive £1.5 million to smarten up our towns. Does the Chancellor agree that local people should have a say in how that funding is spent, and will she encourage people in Rowley, West Bromwich and Oldbury to fill in my survey about how we spend this Government cash?

[Rachel Reeves]

I very much encourage people in my hon. Friend’s constituency to fill in her survey. The Pride in Place money, which we are allocating across some of the most deprived parts of the country, will make a huge difference in regenerating areas left behind by the previous Government. I encourage everyone in all our communities to get involved, and to shape those plans, because those plans can only be improved by direct contact with the people who stand to benefit from them most.

[Caroline Voaden (South Devon) (LD)]

Link has doubled down on its decision not to grant Totnes a banking hub, despite the Prime Minister telling Members at Prime Minister’s questions that every community that wants one should have one. Will the Chancellor agree to review the criteria for banking hubs, so that people have access to face-to-face banking services, not just access to cash, when the last bank turns its back on its customers and leaves town?

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[Chris Webb (Blackpool South) (Lab)]

Southshore in my constituency has the highest concentration of deprived communities and the most deprived ward in the country. We have developed a local people’s plan for work to regenerate the area. Will my right hon. Friend the Chancellor meet me to discuss this plan, so that we can regenerate the most deprived area in this country?

[Rachel Reeves]

We were pleased to be able to allocate Pride in Place funding to my hon. Friend’s constituency, in recognition of its levels of deprivation. That comes alongside policies such as getting rid of the cruel two-child benefit cap, which the previous Government introduced, and investing record amounts in social housing. This Government are delivering for the people of Blackpool. I am very happy to meet my hon. Friend.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

Constituents of mine have restored the Alyth hotel. It has gone from near dereliction to being an outstanding venue for dining and drinking, and a hotel. However, they are smothered by the compound burden of VAT rates, wage costs, duty increases, employer national insurance contributions, energy costs and the squeeze on spending. That is why there were 8,000 fewer jobs in hospitality in December than in November, and 20,000 fewer than in September. Will the Chancellor consider reducing VAT on hospitality to the 7% it is in Germany, the 9% it is in Ireland, or the 10% it is in Spain and Italy?

[Rachel Reeves]

I suggest that the people of Scotland ask who was in charge in Scotland for the last two decades, kick them out at the next election, and give Labour a chance.