Budget Resolutions

Tulip Siddiq Excerpts

Wednesday 6th November 2024 Commons Chamber

[The Economic Secretary to the Treasury (Tulip Siddiq)]

It is an absolute honour to make the closing speech on this historic Budget. It is historic for two reasons. First, it is the first ever Budget to be delivered by a woman—the first female Chancellor of the Exchequer after 800 years. She has smashed the glass ceiling, and I hope all the women and young girls watching know that they can be in the driving seat of a Labour Government. Secondly, it is historic because we are finally wiping the slate clean and turning the page on 14 years of Tory incompetence, chaos and outright instability. This Budget will make meaningful change by focusing on the fundamentals.

[Ms Julie Minns (Carlisle) (Lab)]

Does the Minister agree that one of the best ways of celebrating this Budget is with a pint of locally brewed beer? Does she agree that the consultation on the pubs code announced by the Government in the Budget statement will be joyful to the ears of local, independent breweries in all our constituencies?

[Tulip Siddiq]

I thank my hon. Friend for her intervention. I know that she is a doughty champion of the pubs in Carlisle. The pubs in my constituency are celebrating the penny off pints.

Let me get back to the previous Government, who were wrong when they claimed that they would fix the roof while the sun was shining. While chasing a budget surplus— for which, 14 years later, all they had to show was catastrophic public finances—they merely painted over the ever-growing cracks in the bedrock of our society and our country. That is why this Government are right to focus on fixing the foundations of our economy, because that is the only way that we can change the country, deliver for working people and rebuild Britain. Of course, buying a home is harder if the seller has misled us about its true condition by underestimating the size and cost of any required repairs. In that sense, rebuilding our economy is no different, because the previous Government’s public spending plans existed only on paper; there was no real allocation of money to back up any of the spending plans. They behaved no better than some huckster trying desperately to sell a flat that they know will never be built.

That is why the OBR has said that, had it been made aware of the scale of the spending pressures during the spring 2024 Budget, its assessment of the previous Government’s spending plans would have been “materially different”. That is why it was right that we took our time to conduct a full survey of the economic inheritance that they left us.

[Graham Stuart]

Will the Minister give way?

[Hon. Members]

No!

[Tulip Siddiq]

The right hon. Gentleman has intervened 18 times. I shall not give him another chance.

Let me continue. That is the only way that we can really fix the foundations. Of course, that involves taking tough decisions, particularly on spending and taxation, but I will take no lectures from those who were content to levy a £22 billion pound tax on this country’s future, and, through their unfunded spending commitments, attempt to undemocratically bind the hands of a future Government. Well, guess what? This Government will do things differently. While the previous Government allowed investment in our country to fall to its lowest level on record, this Government will put investment at the heart of everything that we do.

That is why we held the international investment summit in October—to show firms at home and abroad that Britain is open for business once more. That is why we have introduced a new fiscal rule—the investment rule—which, alongside appropriate guardrails provided by the OBR and our new stability rule, means that this Government can meaningfully invest in our country’s future.

Of course, investment means taking a long-term view. As anyone who has bought a property, built a business or raised a family will know, the early days are always the hardest. But if they take the hard calls now, in time they will get back far more than they put in. I pick those examples deliberately, but with regret. The sad truth is that, for working people—particularly young people—up and down the country, home ownership, entrepreneurship and starting a family have never been more distant. This Budget will start to change that.

Our manifesto made a clear commitment to get Britain building again. This Budget puts the first shovels in the ground, with a commitment to spend an average of 2.6% of GDP on public sector net investment over the course of this Parliament. This will include an additional £500 million in new funding for social and affordable homes, which brings total investment in housing supply to more than £5 billion and supports the delivery of tens of thousands of new homes.

We will build more than just homes; we need to build communities. Infrastructure is key to tying those communities together while ensuring that they plug into the wider economy. [Interruption.] The shadow Foreign Secretary asks how. If she listens, she will learn, so she should pay attention. Getting our country moving again will be key to growing the economy. [Interruption.] She should not chunter from the Front Bench. She needs to listen, because our commitment to infrastructure investment will help us to do so—by, for instance, increasing local roads investment by £500 million in 2024-25. These are the things that the previous Government failed to do, but we will deliver for our country. For working families, that means less time wasted dodging potholes and more time for the things that actually matter. Of course, infrastructure helps not just families but firms. In an increasingly volatile world, Government should play an important role in securing our energy supply so that firms can price that into their business plan.

We heard powerful and authentic maiden speeches today from my hon. Friends the Members for North Ayrshire and Arran (Irene Campbell), for Stoke-on-Trent North (David Williams) and for Sherwood Forest (Michelle Welsh). We will see them as huge assets to Parliament. Some of them mentioned that their families did not think that they would get here; I am really pleased that their families were wrong.

I will finish by echoing something that the shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), said. It is not often that I agree with him, but he said that we had choices. The truth is that we did have choices, and guess what? We chose to act. In 10 years’ time, the country will look back on this Budget as the moment when we got Britain’s future back. In the future, the economy will have grown because at this moment we chose to prioritise a healthy workforce; we will have record levels of investment because we prioritised fiscal and economic responsibility; and people will have more money in their pockets because we prioritised protecting hard-working people’s payslips. The merry-go-round of austerity and economic irresponsibility is over. We made a choice—a choice to rebuild Britain.

Question put and agreed to.

Resolved,

That income tax is charged for the tax year 2025-26.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Let me explain what will happen next. I am now required under Standing Order No. 51(3) to put successively, without further debate, the Question on each of the Ways and Means motions numbered 2 to 62, and the money motion on which the Finance Bill is to be brought in. These motions are set out in a separate paper distributed with today’s Order Paper.

The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).

2. Income tax (main rates)

Resolved,

That for the tax year 2025-26 the main rates of income tax are as follows—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(c) the additional rate is 45%.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

3. Income tax (default and savings rates)

Resolved,

That—

(1) For the tax year 2025-26 the default rates of income tax are as follows—

(a) the default basic rate is 20%,

(b) the default higher rate is 40%, and

(c) the default additional rate is 45%.

(2) For the tax year 2025-26 the savings rates of income tax are as follows—

(a) the savings basic rate is 20%,

(b) the savings higher rate is 40%, and

(c) the savings additional rate is 45%.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

4. Income tax (starting rate limit for savings)

Resolved,

That—

(1) For the tax year 2025-26 the amount specified in section 12(3) of the Income Tax Act 2007 (the starting rate limit for savings) is “£5,000”.

(2) Accordingly, section 21 of that Act (indexation) does not apply in relation to the starting rate limit for savings for that tax year.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

5. Income tax (appropriate percentage for cars)

Resolved,

That (notwithstanding anything to the contrary in the practice of the House relating to the matters that may be included in Finance Bills) provision may be made taking effect in a future year increasing the appropriate percentages mentioned in sections 139 to 142 of the Income Tax (Earnings and Pensions) Act 2003.

6. Capital gains tax (the main rates)

Question put,

That—

(1) In section 1H of the Taxation of Chargeable Gains Act 1992 (the main rates of CGT)—

(a) omit subsection (1A) (which sets out the rates for residential property gains accruing to individuals),

(b) in subsection (3) (which sets out the rates for gains accruing to individuals that are not residential property gains or carried interest gains)—

(i) for “10%” substitute “18%”, and

(ii) for “20%” substitute “24%”,

(c) omit subsection (4A) (which sets out the rates for residential property gains accruing to personal representatives),

(d) in subsection (6) (which sets out the rates for gains accruing to personal representatives that are not residential property gains or carried interest gains), for “20%” substitute “24%”,

(e) omit subsection (7) (which sets out the rates for residential property gains accruing to trustees), and

(f) in subsection (8) (which sets out the rates for gains accruing to trustees that are not residential property gains or carried interest gains)—

(i) omit “Other”, and

(ii) for “20%” substitute “24%”.

(2) The amendments made by this Resolution have effect in relation to disposals made on or after 30 October 2024.

(3) If an asset is transferred on or after 30 October 2024 under an unconditional contract made before that date, the disposal is, despite section 28(1) of the Taxation of Chargeable Gains Act 1992, to be treated for the purposes of the amendments made by this Resolution as taking place at the time the asset is transferred (rather than at the time the contract is made) unless the contract is an excluded contract.

(4) A contract is an excluded contract if—

(a) obtaining an advantage by reason of the application of section 28(1) of the Taxation of Chargeable Gains Act 1992 was no purpose of entering into the contract, and

(b) where the parties to the contract are connected persons, the contract was entered into wholly for commercial reasons.

(5) A contract is not to be regarded as an excluded contract unless the person making the transfer makes a claim which includes a statement that the contract meets the conditions to be an excluded contract.

(6) But no claim is required if the total amount of—

(a) the chargeable gain accruing on the disposal, and

(b) the chargeable gains accruing on all other disposals made under excluded contracts, does not exceed £100,000.

(7) For this purpose the amount of any gain accruing on a qualifying business disposal is to be taken to be the amount of the gain under section 169N(2) of the Taxation of Chargeable Gains Act 1992.

(8) If the person making the transfer makes—

(a) a claim under section 169M of the Taxation of Chargeable Gains Act 1992 in relation to a qualifying business disposal (business asset disposal relief), or

(b) a claim under section 169VM of that Act (investors’ relief) in relation to a disposal, section 169M(2) and (3) of that Act, or (as the case may be) section 169VM(1) and (2) of that Act, apply to a claim under paragraph (5) in relation to the disposal as they apply to a claim under the section concerned.

(9) In this Resolution “qualifying business disposal” has the meaning given by Chapter 3 of Part 5 of the Taxation of Chargeable Gains Act 1992.

(10) In this Resolution any reference to the transfer of an asset includes its conveyance.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.