Budget Resolutions

Siobhain McDonagh Excerpts

Thursday 29th October 2026 Commons Chamber

[Andrew Griffith]

Let me make some progress, because this debate is about the whole Budget. There will be plenty of opportunities to talk about defence, which we can come back to.

Let me give the Government some credit for some of the few positives in the Budget. The Chancellor was right to U-turn on his party’s manifesto commitment to equalise the youth rate of the minimum wage. One in six young people under this Government—shame on them—are looking for a job and cannot find one. Equalising the youth minimum wage would have made a desperately tough situation harder. He should have gone further and halved the jobs tax for young people as we would have done.

The Chancellor was also right to ignore those on his Back Benches who wanted to raise capital gains tax. In fact, it was not just the Back Benchers; the Defence Secretary was also calling for that. Thank goodness the Chancellor did not listen to him. It would have meant many more wealth creators joining the thousands who have fled our country under Labour.

The public were not asking for much from this Budget and yet even their lowest expectations have not been met. Ordinary people wanted the Government to get a grip on out of control welfare spending. They wanted a Budget that properly funded defence. They wanted the Government to tackle the deficit, with tax cuts for their families to be better off. That would have been real breathing space. Against all and any of those tests, the Budget has comprehensively failed.

It could have been a moment when a Chancellor resolved to live within our means. Instead, this Government will have added—do they know the number?—more than £300 billion-worth of borrowing over the course of this Parliament. Borrowing is up in every single year of the forecast. The national debt now stands at the equivalent of £100,000 for every household and it is set to grow by a quarter in the next five years. Britain is walking along a fiscal cliff edge and the Government have decided that this is the moment to close their eyes.

Yesterday, the OBR confirmed that the Government are spending £124 billion a year on interest alone—up £14 billion and more than the Government spend on defence, policing and prisons combined. That money goes straight out of the door to our creditors. It was so out of control that the Bank of England, in the run-up to this Budget, was forced to make an extraordinary £200 billion intervention to try to reduce the cost and still the 30-year gilt rates rose above 6%.

It is not fair, Madam Deputy Speaker. It is not fair to our children or to their children. We cannot continue to kick the can down the road for future generations of taxpayers. Instead of getting a grip, the Chancellor doubled down. He repeated his predecessor’s mistakes and cut the fiscal headroom to just £15 billion, the equivalent of just three-and-a-half days of public spending. Is that recklessness why the Defence Secretary want us all to have three days’ worth of stockpiled food? The Chancellor said in his conference speech that

“these levels of debt are an assault on our common sense, they are an affront to our values.”

That was just a month ago, so what has changed? He is now raising debt in every single year of the forecast. A month ago, it was an affront to his values; now it is front and centre in his Budget.

The Prime Minister may not care about the debt we hand on to the next generation, but he really ought to. And so should Labour’s faithful little helpers, the Liberal Democrats, who are so enraptured by Europhilia, so desperate to crawl back into the clutches of Brussels, that they have not noticed a glaring problem: the nation’s figures are so poor that we could not rejoin the EU even if we wanted to. EU rules say that a member country’s national debt should be under 60% of GDP, yet the UK is approaching 100%. The EU’s deficit limit is 3%, yet the UK’s is one-and-a-half times that.

Despite all that debt, the Chancellor still has not found the money to properly fund 3% of GDP on defence. We welcome that the Government are finally funding their own defence investment plan, but it is not good enough.

[Dame Siobhain McDonagh (Mitcham and Morden) (Lab)]

Is the hon. Member aware that while defence spending when Labour left office in 2010 was 2.5% of GDP, it fell below 2% under the Conservative Government and is now set to rise to 3.5%? Does he understand the correlation between Labour Governments and increased defence spending?

[Andrew Griffith]

The Labour Whips have clearly been doing their history lessons, but history lessons are not going to defend our country. The threat is real. The Defence Secretary is running around telling us to put food under our beds and to store water. The issue is now and that is why the Chancellor himself resigned as Defence Secretary, saying that funding below 3% was inadequate. Nobody challenges that.

--- Later in debate ---

[Dame Siobhain McDonagh (Mitcham and Morden) (Lab)]

I welcome the Chancellor’s Budget, particularly the additional £1.5 billion for social and affordable housing, taking the Government’s investment to more than £40 billion. The only lasting solution to our housing crisis is to build more homes, particularly council homes, but I want to address a crisis that cannot wait for those homes to be built: the almost 200,000 children across the country who will spend tonight homeless. In London, that figure is one in 30 children, or one in every school class. They are not sleeping on the streets—they have a roof over their heads—but they are homeless.

As chair of the all-party parliamentary group for households in temporary accommodation, I see the national picture and scale of the homelessness crisis we face, but as the MP for Mitcham and Morden, I see the faces behind those statistics week in, week out at my constituency advice surgery. I see families living in a single room, parents desperately trying to keep their children at the same school, and children without anywhere to do their homework or cooking facilities where their parents can prepare a proper meal.

Temporary accommodation is increasingly anything but temporary. Earlier this year, my APPG published research into child mortality in temporary accommodation. Between 2019 and 2025, 104 children died in cases where temporary accommodation was identified as a possible contributing factor to their vulnerability, ill health or death. Seventy-six of those children were babies under the age of one. Behind every one of those numbers is a child whose future has been taken away and a family who will never recover from that loss. We must never accept that as an inevitable consequence of homelessness.

There is also a serious financial argument for tackling this crisis. London councils are spending more than £5.5 million every single day on temporary accommodation. Much of that money is spent on securing accommodation from private providers, often at considerable expense, without creating the permanent housing assets that councils so desperately need. The cost of unsuitable temporary accommodation does not end with the council’s housing budget; it is felt in our schools, our NHS and other public services, through disrupted education, worsening health and the additional support that families so often need. That is why we must consider the full cost of homelessness to the public purse, not simply the price of providing a roof over someone’s head.

I welcome the Chancellor’s additional £432 million to tackle rough sleeping, but homelessness is not confined to our streets. The Budget recognises this and confirms that the Government’s ongoing value for money review of homelessness funding will examine temporary accommodation. That review must consider how councils can acquire more suitable accommodation locally, reducing their reliance on costly private placements.

But we cannot wait until 2027 to improve conditions for children living in temporary accommodation today. Every child deserves somewhere safe to sleep, somewhere to do their homework and somewhere their parents can prepare a proper meal. Those are not luxuries but the most basic requirements of a home. The Chancellor’s additional investment in social and affordable housing is a welcome commitment to tackling the root causes of homelessness, but building the homes we need will take time. For the children growing up homeless tonight, time is something we cannot afford to waste. We must ensure that the Government’s ambition to end rough sleeping is matched by an ambition to end child homelessness.