Budget Resolutions

Steve Barclay Excerpts

Thursday 29th October 2026 Commons Chamber

[Wes Streeting]

They can shout all they like, Madam Deputy Speaker. The fact is that the former Chancellor restored the confidence of the markets after the Conservatives trashed Britain’s reputation with their catastrophic mini-Budget. She created the platform for our Labour Government to invest in public services, protect the most vulnerable, foster innovation and navigate the headwinds of the last two years. During her time as Chancellor of the Exchequer, my right hon. Friend the Member for Leeds West and Pudsey established a record that the Conservative Front Bench could not begin to touch. Those are the facts.

None the less, against the backdrop of the enormous challenges this country faces, the Chancellor, as he set out yesterday, is taking action to tackle the cost of living and give households breathing space today: help for 20 million households to heat their homes this winter; freezing fuel duty to keep prices down at the pump; helping with the everyday cost of the weekly shop so that people have more money in their pockets; action on energy bills; and the minimum wage, the national living wage and the state pension all going up to help people out. No one is suggesting that these measures solve everything for everyone, everywhere, all at once, but people can see that we are doing everything we can, as fast as we can, to give them breathing space today and fresh hope for the future; to show that this Government and this Prime Minister have got their backs; and to show that we can still do big things as a nation, that Government can make a difference to people’s lives, and that Britain is a country we can still believe in.

That is important, as we look beyond the optimism of the first 100 days of this new Government and our new Prime Minister to the brighter future that lies ahead for our country if we make the right choices. Yes, we face great challenges, but the character of a nation is not defined by the challenges it faces, but how it chooses to respond to them. And be in no doubt: it is a choice. We choose not to be daunted by the scale of the challenge, but to be motivated by it—to face the future not with fear, but with confidence, and to choose hope. We choose it because we know what hope can do.

Look at what this Labour Government have delivered in the past two years: half a million children out of poverty; waiting lists down by a quarter of a million; the asylum backlog down 60% in a year; small boat crossings at their lowest in six years; the fastest growing economy in the G7 in the first half of this year; free breakfast clubs feeding 680,000 children; six train operators brought back into public ownership; and defence spending up by £14 billion compared with the Conservatives’ final year in office. Lots done and lots more still to do, but so many reasons to believe that our best days lie ahead.

[Steve Barclay (North East Cambridgeshire) (Con)]

As the Defence Secretary is talking about defence spending, could I just point him to paragraphs 2.5 and 2.6 on page 31 of the Red Book? I am sure that one of his Treasury colleagues will have a copy. He will see that £10.3 billion of that spending is funded by reprioritisation, alongside £4.7 billion, £3 billion of which is from capital cuts elsewhere and £1.7 billion from the reserve. He will, of course, get the £1.7 billion from the reserve, but has he been told by the Treasury where that £3 billion of capital savings is coming from? How much of it, if any, is coming from his Department? Can he assure the House that the Government are on track on the more than £10 billion of efficiencies, given that the Institute for Government and many others say that it is highly unlikely to be delivered?

[Wes Streeting]

I can absolutely confirm that thanks to the responsible choices made by the Chancellor and his predecessor, we have headroom to weather shocks, and the Chancellor is drawing on that. On capital budget reprioritisation across Government, it is absolutely true to say that across the Cabinet, Ministers have been willing to prioritise within their own capital programmes in order to fund defence. We can be absolutely clear, beyond any doubt, that this is a Chancellor, a Prime Minister and a team who choose to prioritise defence. I bet the right hon. Gentleman wishes that he made the same choices when he was Chief Secretary to the Treasury, instead of leaving our armed forces “hollowed out and underfunded”.

It was another great Healey—my predecessor, Denis Healey—who said that without strong defences,

“we have no houses, we have no hospitals, we have no schools. We have a heap of cinders.”—[Official Report, 5 March 1969; Vol. 779, c. 551.]

The first duty of any Government—to keep our country safe—is a greater and more urgent challenge now than it has been for generations. The gravest dangers of the 20th century are returning, armed with the technologies of the 21st. Britain faces growing threats from state-sponsored terrorism, sabotage and hostile acts that are designed to disrupt our lives, undermine our security and spread fear.

Yesterday, the Chancellor gave his response to those threats at this Dispatch Box, delivering more support to the frontline for freedom in Ukraine, plugging the £4.7 billion gap in the defence investment plan and confirming our unshakeable commitment to NATO to spend 3.5% of GDP on defence by 2035. But he went even further, with a new target reflecting Labour’s commitment to fund defence spending at 3% of GDP by 2030. That is the commitment the Chancellor made at this Dispatch Box yesterday. That is a record the Conservatives cannot even begin to touch—

--- Later in debate ---

[Steve Barclay (North East Cambridgeshire) (Con)]

The Defence Secretary opened today’s debate by praising the former Prime Minister and former Chancellor. That may come as a surprise to them both, given that earlier this year the Defence Secretary resigned from the Government, saying in his resignation letter that he could not serve alongside them because of the lack of direction and the drift. It is less than a year since Labour Members cheered and waved their Order Papers at the Budget from the right hon. Member for Leeds West and Pudsey (Rachel Reeves), and it is striking how much continuity there is today with measures that they cheered yesterday, despite being so unhappy with the previous Chancellor.

To illustrate that, I will highlight certain phrases and words we hear from Labour Members on a regular basis, starting with perhaps the most frequent, which is the need to have no austerity. An “end to austerity” is a constant refrain—[Interruption.] I see those on the Front Bench nodding. They might be surprised to see that the OBR report states on pages 21 and 115 that there is an £11 billion shortfall from the year after next for all Departments, other than protected Departments such as Health. The Government have already said that they want to commit to Defence. I do not think the party that stands saying “24 hours to save the NHS” will cut funding to the health service going into an election, but perhaps that is its policy. If not, according to the OBR, Labour will be cutting funding for unprotected Departments by 2.6% in those final three years. There is a paradox about that: only last week, the Defence Secretary came to the House to say that there is urgency in national resilience, yet Departments like the Ministry of Housing, Communities and Local Government, which would deliver that national resilience, will be the same unprotected ones facing cuts, so Labour Members are cheering a Budget in which there is austerity baked in—[Interruption.] They shake their heads.

Labour Members may have been told by the Labour Whips, “Do not worry—the spending review will fix that”, but having run a spending review, I know that a spending review allocates the funds but does not decide on the quantum. They may have been told, “Do not worry, there will be a election”—maybe there will—but yesterday the Prime Minister was saying the opposite. Either they believe a Budget that has austerity baked in, they think the spending review will fix it, or they do not believe the Prime Minister and think an election will avoid the issue entirely. But it is an odd position for Members who come to the Chamber talking about an end to austerity to then be cheering a Budget where that austerity is in the Red Book numbers.

The second paradox is that Labour Members talk about breathing space. There are policy areas that show continuity with last year’s Budget: the 2p on property income tax is a repeat of last year’s 2p increase—4p in all—with both measures starting at the same time, in April next year. The OBR makes it clear that that will lead to fewer people entering the rental market, fewer landlords and prices going up. The Budget includes a bank tax, again repeating a trick of the former Chancellor, who thought, “If I tax employers with national insurance, it will not go through into a jobs’ tax”, so we have a bank tax on the basis that that will be more palatable. But do not take my word for it: The Times leader on 16 October said it will be a tax on growth, and one of Labour’s favourite advisers, Lord O’Neill, said it will “hobble” growth.

[Sam Carling (North West Cambridgeshire) (Lab)]

I thank my constituency neighbour for giving way. In the context of the criticism of tax changes for banks, how does he respond to the chief executive of Barclays describing changes along the lines of ones that we have made as “bearable”?

[Steve Barclay]

Of course it will be bearable for the chief executive because he will not take it from his bonus—he will take it by adding it to the mortgage rates and the loan rates that he charges the hon. Member’s constituents. Does the hon. Member honestly believe that the bankers will take that tax from their own bonuses, or does he think they will pass it on to constituents and consumers? That is exactly what The Times, Lord O'Neill and many others have commented: it is a displaced cost that adds to the constraints on businesses. This Government talk about wanting growth in every postcode, but making it harder for businesses to access capital will make it harder for them to expand. As with the measures imposed on landlords, this approach continues that taken by the previous Government.

There is a lack of consistency in the proposals, even measured against those announced in the Labour conference last month. As the Minister pointed out, at the conference the Chancellor talked about how he was aghast at the idea of debt. Well, the OBR document makes it clear that the Budget measures are adding £8 billion of debt this year alone, on top of the £11 billion of additional debt that flows from interest rates and inflation. [Interruption.] Again, a Government who say that they want to reduce debt have a Budget that is adding to debt in a way that will further constrain the growth in every postcode.

Unfortunately I have run out of time, but I suspect that in a few months’ time, as with the last Budget that Labour Members cheered, once the detail becomes more known and they see how it goes against many of the equities that they say that they stand for, we will find this Budget disowned in exactly the same way as the last one.

--- Later in debate ---

[Lucy Rigby]

We are reforming welfare, and the Prime Minister has made it clear today—[Interruption.] The welfare Budget ballooned under the Conservative party. The Prime Minister has been very clear today that the welfare bill will come down.

As I have said, the contrast between our approach and the Conservatives’ could not be clearer. The IMF forecast earlier this month that our deficit would be the lowest in the G7 by 2029. Fiscal strength matters because our economic security and our national security are inseparable. That is why this Budget strengthens Britain’s capacity to withstand global volatility. It funds the defence investment plan by reprioritising capital budgets, so that Britain can respond to a more dangerous world. It also strengthens our defence industrial base and supports skilled jobs across the country. As has been pointed out by the right hon. Member for Maldon (Sir John Whittingdale) and the hon. Member for Edinburgh West (Christine Jardine), it also—

[Steve Barclay]

On a point of order, Madam Deputy Speaker. The Economic Secretary has just said at the Dispatch Box that the welfare bill will come down. The BBC has been reporting, following the Chancellor saying the same thing this morning, that No. 10 and the Treasury have informed the media that that is not the case, and the welfare bill will not be coming down. How do we ensure that the House gets the true position, because it is rather hard to keep up when the message keeps changing?

[Madam Deputy Speaker (Caroline Nokes)]

I thank the right hon. Member for his point of order. He will know full well that it is not a matter for the Chair, but I am sure those on the Treasury Bench have heard his point.