Budget Resolutions and Economic Situation

Stuart Anderson Excerpts

Wednesday 28th October 2026 Commons Chamber

[Peter Kyle]

The right hon. Gentleman’s intervention was longer than my speech has been so far. When I find that I agree with every word that somebody is saying, I usually sit down and listen to a bit more of it rather than trying to challenge it. Perhaps the rest of my speech will answer the questions that he raises.

In that decade, because of the predictability and certainty of growth, I think that growth policy was seen like any other policy. In other words, if there was a shelf with all the different policies of Government on it, growth would be one set of policies on that shelf. I know that there are a lot of analogies going around these days, and Liz Truss has blown a hole in analogy use as well as in our economy, but it is my belief that we now need to have the mindset that growth is the shelf itself. We cannot have successful social policies delivered in the way that all of us in this Chamber would like unless we have a solid, predictably-growing economy into the long term that provides security and prosperity and from which we can share investment fairly around the country.

We must on both sides of the House be as animated about economic growth as we are about creating prosperity, spending it and challenging the social ills in our society. We must care as much about economic growth as we do about rough sleeping, social care and international development—I say that as someone who spent my early life in international development. Tackling those issues depends on economic growth itself.

Public services are incredibly important. They are enablers of growth. We cannot have growth if people are arriving late to work, are too sick to work or are stuck on a Tory waiting list for treatment. We need to have the right skills in the right places. All of those things are absolutely essential, but we should not kid ourselves that such growth is not built on by private enterprise.

Thanks to the Prime Minister deciding that I could have some time over the summer, I was able to write an essay—now that Tony Blair has brought them back into fashion. I know that many Members will have already read it, making some of my words today obsolete, but let me refresh their minds about what I focused on. I confined the essay to my experience in Government and how we can configure Government more assiduously and dependably to unlock the economic growth that our country needs so much—focusing on what Government themselves can deliver. That experience comes from leading two Departments as Secretary of State. I saw in both those Departments that civil servants can deliver boldly when they have the authority to and when incentives align.

I will use one example—the automotive sector—to illustrate to Members the challenges that the Government face to unlock growth. Delivering support for the automotive sector means aligning energy, trade, regulation and all these different areas of policy. All are held by more than one Government Department, and each of those Departments has its own priorities. As Secretary of State in the Department for Business and Trade, at times I was prioritising the automotive sector and recognising how important it can be for growth. Let us bear in mind, when Jaguar Land Rover suffered its cyber-attack, 0.2% was taken off our GDP. When it was up and running six weeks later, 0.2% was returned to our GDP. The importance of industry is still fundamental. When the Prime Minister and the Chancellor talk about reindustrialisation, hon. Members should not underestimate its ability to deliver growth for our overall economy.

We have another asset when it comes to the automotive sector in our country. When we talk about frontier technology—I am looking for the Minister for Artificial Intelligence, who was in his place a moment ago—we think about the AI labs, most of which are in California, with some in China, but we have a frontier industry here in the UK in the automotive sector, and it is Formula 1, because 11 of the 12 teams do all their research and development and all the deployment of their vehicles right here in the UK. No other country in the world has that asset, and that filters skills through our automotive sector. The ability to grow that sector is huge, but that needs Government to work in an aligned way.

I discovered how different Departments with different priorities have oversight over things like automotive, and how sometimes they can slow down those priority areas. We need the structures and incentives in Government to be much better aligned, because we cannot have all these important sectors depending on Ministers’ ability to WhatsApp each other to sort out problems. We should have a system of Government that is already on the side of making pro-growth choices.

I want to say a few brief words about defence, which has already been raised in the debate. I am grateful to the Chancellor for the statements he has made on this. We focus on the percentage of GDP allocated to defence, but the debate cannot just be about how big a share of our economy we spend on defence; it must also be about how big an economy we have. If we were to achieve five years of 3% annual growth, 3% of our national income on defence would deliver almost the same amount of money as moving to 3.5% in an economy of today’s size.

[Stuart Anderson (South Shropshire) (Con)]

Will the right hon. Gentleman give way?

[Peter Kyle]

I will continue.

That is the difference that growth can make to our national security: it does not remove the need for difficult spending decisions today, but it can give us greater strength to sustain our defence into tomorrow.

[Stuart Anderson]

I agree with the right hon. Member that it would be great to grow the economy to achieve the 3.5% spend, but the Chancellor has today set out multibillion pound in-year cuts this year—we see that in particular in the resource departmental expenditure limit budget at about 0.5% next year—so as it stands there will be far less for training and operations. That is before we even look at whether, in three-plus years’ time, the Chancellor has achieved that growth or not.

[Peter Kyle]

I agree. I realise that in seeking to make an intervention we stop listening to what is being said, but I did say before I gave way to the hon. Member that that would not be instead. I am not proposing that we look to start investing five years down the line after five years of 3% growth—of course, we must move towards those NATO targets, just as the Prime Minister and the Chancellor have promised—but if the debate is about getting cash into defence, this illustrates how there is more than one way of doing that. Immediately, yes, it is about increasing the percentage, but in the long term, on the back of economic growth of 3% and above, we could do so sustainably, and that would unleash enormous amounts of resource in addition to the reprioritisation that might need to happen.

Of course, the difference is that when the spending comes from growth, other Government Departments’ budgets can grow as well, and working people right across the country will be feeling it in their pockets. That is why growth is one of the driving social justice issues of our time.

It is my belief that government needs to become organised around growth, and that growth needs to become the organising principle of government. In the essay that I published, I give some practical suggestions based on my time in government for what I would do if I had the opportunity.

First, the Government need to adopt a taskforce mentality when it comes to growth. The Prime Minister should back a 90-day plan to unblock investment. Of course, we need Cabinet accountability, but we have these great boards in government—experts on the Board of Trade and non-executives on Departments’ boards—and all sorts of different specialist groups and outside experts coming in and sitting on boards across Government. We should pick from those boards those people who are best placed because of their understanding of Government from the work they are already doing, and jump to a taskforce-based approach to looking at different Government Departments and the opportunities we have to act fast in Departments. They should identify areas that need legislative change, and for that we can introduce a growth Bill, if that were appropriate. I believe that it is.

--- Later in debate ---

[Jim Dickson]

I welcome the Budget, and it is a pleasure to follow distinguished members of the Treasury Committee from across the Chamber. As others have noted, when the IMF published its most recent forecast, it highlighted how despite the consequences of US military action in Iran, our economy is proving more resilient than expected, with 1.3% growth for this year and similar for next. That is largely underscored by the OBR forecast. I back our Government to exceed those forecasts, as they have done this year, and we wish them well in doing so. We should not underplay the damage done by the conflict, with price rises in important commodities such as oil and fertilisers pushing up inflation, but it is positive that the IMF has upgraded our growth prospects. That, I believe, is a testament to the work of the current and previous Chancellors, and it is welcome that we remain towards the top end of the G7 for growth, even though—as always—Members of the House would want growth to be higher, and we hope very much that it is.

In my view, it remains essential to reassure the markets that we will stick to the fiscal rules, and I welcome the Chancellor’s pledge today to keep doing so. We must ensure that we continue to keep sufficient headroom against those rules, and again the Chancellor has done that.That was recognised by the IMF, which singled out the UK among the G7 for the way that we are managing our debts. As shown in chart 3.4 in the Red Book, which sets out the distributional impact of the Budget, we are doing that while ensuring that those at the bottom end of the income scale do better proportionally than those higher up the income scale. I believe that means this is a proper Budget for working people.

This careful and fair economic management will allow us to ramp up defence spending to meet the spending target of 3% by 2030, after our armed forces, frankly, languished under the previous Government.

[Stuart Anderson]

I welcome the approach to move forward on defence, but since I have been elected I have even called my own Government out for not providing enough defence funding. Does the hon. Gentleman realise that today’s announcement on defence means that we are making in-year cuts for the next two years on defence because we cannot afford what we currently have in place?

[Jim Dickson]

I thank the hon. Member for his intervention, but I am very confident that the plans laid out today will take us to 3% by the end of this Parliament, and to 3.5% by the middle of the next decade. That is what we have committed to do and that is what I believe we will do.

--- Later in debate ---

[Stuart Anderson (South Shropshire) (Con)]

It is interesting to follow the hon. Member for Lancaster and Wyre (Cat Smith), who started by talking about not having a mayor, and then how getting a mayor will open routes to funding. In South Shropshire, we do not have a mayor, and we are not looking to get one; most of what was said today excludes areas like mine that do not have local mayors. That is a big issue. I would categorise this Budget as one that fails rural communities and does not protect our nation, and I will back that up by outlining why.

I will start with the gambling tax. Ludlow racecourse is in my constituency, which Members will obviously all agree is the best in the country; along with the point-to-points, like Bitterley and Eyton races, Ludlow is really going to suffer from the gambling tax. It will have a massive impact, and there is a whole ecosystem around racecourses.

Let me turn to heating oil. As 53% of my constituents are not on mains gas, over half over my constituents will not benefit from those announcements in the Budget.

[Alex Ballinger]

A few people have mentioned heating oil in the debate. For those who have not looked at the detail of the Budget, there is a 4% reduction in heating oil tariffs among the announcements, and anyone who uses heating oil this winter will be getting £100. There is substantial support for people using heating oil; it is not just about gas.

[Stuart Anderson]

The price of heating oil is more than double what it was six months ago. I understand that that is because of international headwinds, and I believe that prices will probably go up significantly again because of what will happen over the next few weeks. However, 53% of my constituents do not feel that the support they are getting is comparable to what residents on gas are getting.

Let us look at pubs. The 166 pubs and four great breweries in South Shropshire tell me that the various rate rises they have seen over the past few years are having a massive impact on them. The minimum wage makes it very hard for them to employ young people, whether to give them their first step on the jobs ladder or because they want to earn extra money while at university. It is getting very hard.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

My hon. Friend is making a very good point. I wonder whether he is aware that since the last election, the minimum wage for 18 to 20-year-olds has risen by 30.1%, which is coincident with youth unemployment rising by 54,000. Does he think there is a link?

[Stuart Anderson]

My hon. Friend raises a valid point. There is definitely a link; it is getting harder to employ people because businesses are not making a profit.

In my high street survey, to which 4,500 residents contributed, businesses said that it is harder to make a profit on the high street. We have seen the rise of the internet alongside increases in taxes and the cost of employing people. Businesses are not investing—they are not taking the risk. Look at how hard the Government have made it for high streets. The Lib Dem council in South Shropshire decided to bring in what look to be catastrophic parking charges for Ludlow and Bridgnorth, and across the whole area. I stand firmly against those charges, because they are just another tax on my constituents.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Given that he raised the issue, could the hon. Gentleman set out by how much he thinks the minimum wage should be cut?

[Stuart Anderson]

I do not think the minimum wage should have gone up by 3.9% or 3.4%—whatever was announced today. I believe it should have been frozen for many years, or for several years. I definitely think we should have left it; I do not believe it should rise, because businesses cannot take it at the moment. We have to make firm decisions. Fewer young people will have work because of these rate rises.

I will turn to farming. The Chancellor spoke for an hour and a half, and there was not one thing about agriculture. Some 25% of my constituents work in agriculture, and the failed SFI26 window was a serious issue. Rural communities really do feel left behind. We have seen an attack on our rural communities, from the shotgun consultation to trail hunting—all those issues are vital to my constituency. This is huge. I think my constituency has the second highest number of shotgun licences in the country. It is a serious sport that is undertaken widely. There is just a continual drip, drip, drip of these policies.

I will finish on defence. The Chancellor resigned when he believed that defence was not funded well enough. In this year, there is a £3.5 billion cut, with a £1 billion cut in each of the next two years—that is in the RDEL figures on page 145 of the Red Book. That means that defence is now getting less funding than when the Chancellor resigned. The target to get to 3% by 2030—[Interruption.] It is! It is on page 145. Look at the in-year cuts. Look at the defence industry’s response to the Budget.

[Alex Ballinger]

Will the hon. Gentleman give way?

[Stuart Anderson]

I will not take any more interventions— I have already taken two.

Look at what the industry, from ADS across, is saying about these cuts.

Last week, the House found out that two or three Boxer projects were cut. We found out that DragonFire might not be on the Type 45s next year, as planned. We found out that there are training cuts that happen to have an impact on operational capability. We found out that there is a cut to single living accommodation. Does anybody seriously think that we are funding defence? We are nowhere near doing so.

When we were in government, I had many conversations saying, “This does not work,” and I publicly put it on record with the rest of the Defence Committee. We were facing serious issues, and we were not funding defence enough. I am very happy to say that. The strategic defence review set out almost 18 months ago that we face the most serious times since the cold war—though I believe it is since the second world war. Out of the NATO countries, only Iceland is rearming more slowly than us and it does not have a military.

I travel a lot within NATO countries, and I have been called out to speak on behalf of the UK by other countries’ Defence Ministers. I fed that back to the now Chancellor and he said, “I know; it is embarrassing.” On the international stage, we are nowhere near where we should be. Our approach to defence is seriously failing. This Budget fails rural communities and it fails defence.