Budget Resolutions

Rebecca Smith Excerpts

Wednesday 26th November 2025 Commons Chamber

[Rebecca Smith (South West Devon) (Con)]

It is important that we take account of the hard-working families who will be affected by Labour’s economic mismanagement, and that their voices are not drowned out by the political drama surrounding the Budget. To ensure that I heard directly from those I represent in South West Devon, I launched a survey ahead of the Budget to gather at first hand the views of as many constituents as possible. Almost 90% of those who responded told me that they were worried about Labour’s Budget, and it turns out that they had good reason. The 3,000-plus small businesses in South West Devon are suffering under the strain of Labour’s job-killing policies. The Resolution Foundation has warned that Labour’s hikes to national insurance contributions and the minimum wage will drive up the cost of employing a part-time, low-paid worker by 14%—the biggest jump on record. Increasing taxes without real spending cuts will undermine growth. I have heard in recent weeks that many people’s experience is that increased wages and national insurance, on top of higher costs, are choking SMEs in my constituency. That is why 75% of those I surveyed supported the Conservative policy of scrapping business rates for retail, hospitality and leisure. What a shame that policy did not feature in the Budget today. Indeed, 63.8% of my constituents want lower taxes, even if it means less Government spending—again, we did not see that today.

It is almost a year to the day since the Chancellor promised that she would not come back to the House with announcements of more borrowing or taxes, yet my constituents repeatedly expressed concerns that Labour would do exactly that. They did not believe the Chancellor’s hollow words, because they knew that Labour has never met a tax that it did not want to raise. Today, their concerns have been realised.

Let me be clear: the Chancellor’s fiscal mess is not a result of Brexit, covid, the Ukraine war, the fall of the Berlin wall or any other historical event; it stems from the Prime Minister and Chancellor’s inability to stand up to their Back Benchers. Spending on health and disability benefits alone is on track to hit £100 billion by 2030. My constituents know that the country cannot afford that. The Government have abandoned any meaningful reforms after a humiliating climbdown on their flagship welfare Bill.

The Chancellor’s decision to lift the two-child benefit cap is not a result of some newfound passion to tackle child poverty; plainly, it serves to throw some happy sweeteners to the Back Benchers who tore apart that flagship welfare Bill just a few short months ago. It has been clear from this debate—I have sat through almost the entire thing—that the policy is pretty much the only thing that Labour Members are excited about. My constituents do not want to lift the cap, nor does the country at large, but yet again it is party before country for Labour, and it is hard-working families who will pay. The Resolution Foundation has estimated that removing the cap in full will cost up to £3.5 billion in this Parliament. The country is in a fiscal black hole, and Labour keeps on digging, expecting hard-working families to fill that hole.

I will briefly comment on statistics on the two-child benefit cap. We have heard about its negatives, but there are a lot of statistics that those on the Government Benches have not mentioned. For example, the Institute for Fiscal Studies found that 70% of the poorest households subject to the two-child limit would see the gains from its reversal partially or fully wiped out by the household benefit cap. We have heard nothing about that. This flagship policy is not necessarily going to help the families who the Government seem to think it will.

The introduction of the two-child limit has had no significant effect on the proportion of third and subsequent children in England achieving a good level of development at age five, which is the cornerstone metric of the Government’s opportunity mission. Instead, the alternative side of that argument has been presented today. The IFS has also said that lifting the two-child limit is not a magic bullet, and other measures, such as supporting parents into quality jobs, are vital for reducing poverty in the long run. For half of those affected, the two-child limit significantly improves work incentives, so just removing the cap, as has been done today, does not actually help those whom we are seeking to support.

I represent a constituency in which defence is a really important part of the ecosystem. It is the future of our area, given what we are trying to do with Team Plymouth. However, we have still not seen the defence investment plan; it was due in the autumn, but we are rapidly approaching the winter. Big figures were announced, but I am waiting to see how amounts will be distributed. Plymouth was mentioned in the Chancellor’s speech today, but if one does a ctrl+f on the Budget document, it is not in there—except on something to do with place-based development.

On ISAs, I understand why the Government seek to push people towards stocks and shares, and there are compelling reasons to do with how much more money can be saved in that way. However, it is clear that this policy will result in a need for increased financial education. When the Opposition tried to get the Government to take financial education seriously during consideration of the Pension Schemes Bill, so that we can help people understand fully how to invest for their future, they were not interested in accepting our amendments.

I hope that the Government will not assume that it is down to banks to educate everybody on the difference between a stocks and shares ISA and a cash ISA. I like to think of myself as fairly financially literate, but even I struggled to put the effort into finding that out; as much as anything else, I struggled to find the time. I would love to make more money on my savings, but an advert on a bank website is not going to be good enough. I am interested to see what the Government will do to ensure that more people can benefit.

[Chris Vince]

I do not disagree with the hon. Member about the importance of financial education; I had a long rant about whether it should be in the maths curriculum. However, we have recently had a curriculum review that recognised the importance of financial education. This does not have to be a political point. Does she agree that financial education in schools is really important, and that it is one way that we could ensure financial literacy?

--- Later in debate ---

[Rebecca Smith]

Absolutely. Of course financial education in schools is important, as is a whole lot of education about life, budgeting and other things, but I am talking specifically about financial education for people in their professional years—in their 20s, 30s and 40s—who will be affected by changes to the ISA rules. They will potentially need help to make sure that they can still save effectively.

The last point I will talk about is the electric vehicle pay-per-mile policy, which will have a huge impact on rural communities, as has been said. It will also be a huge disincentive for any non-inner-city community. I represent an urban area on the outskirts of a city and the rural area around it, and a lot of my constituents—aside from the ones who have a drive and perhaps a detached house—are not able to have an electric vehicle. Pay-per-mile will disincentivise people to even aspire to have an electric vehicle in an area where it is a long drive to the supermarket, or to take their child to the swimming pool. I feel that pay-per-mile contradicts the Government’s obsession with electric vehicles. Perhaps they will speed up development of alternative fuels instead. I do not understand how they can dislike fossil fuels but at the same time disincentivise EV transition.

This Budget is completely out of step with the public. They wanted lower personal taxes and welfare spending cut. They wanted to see work pay. They wanted to see stamp duty scrapped, business rates abolished for retail, leisure and hospitality, and a £5,000 first job bonus—policies that would have meant tax cuts, and rewarded hard-working men and women—not the increase in welfare spending and the tax increases we have seen today to prop up some nice little pet projects of the Labour Government.