Budget Resolutions
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Labour Members try so hard, but the hole in their Budget is gaping wide open. The problem is that it is not just us on the Opposition Benches who can see that hole, but our adversaries around the world, leaving ourselves open. Not properly funding our armed forces is not going to scare anyone in Moscow and it will not deter Tehran. The Defence Secretary has resigned once before, so we know he is not against resigning. Perhaps he could resign again on principle today. We on this side of the House are used to Labour breaking their promises, but to break the promises they made to our armed forces is a new low. If the Chancellor had any dignity, he would have resigned yesterday. Despite their failure to fund defence, the Government have still raised the tax burden to the highest level on record—higher than in the aftermath of world war two and higher than even the right hon. Member for Leeds West and Pudsey (Rachel Reeves) raised it. Who remembers how this Government had no plans to put up taxes? How is that working? For the third Budget in a row, the tax burden is set to rise. All told, taxes are going up by a total of £75 billion a year: higher next year, higher the following year and higher in every single year of the forecast. Even the Prime Minister’s former economic adviser, Andy Haldane, now says that Britain is “taxed out”. He also called the Chancellor “penny wise, pound foolish”. I am not even sure about the penny wise bit, to be honest. And where will that money come from? Families, small businesses, the self-employed, farmers, the people who work hard and want to get ahead. Why? To pay for those who do not—those who could work, but choose not to. The damage does not just stop with the tax bill itself. It is the disincentives in the economy that do the most harm. Two years ago, the then Chancellor stood at that Dispatch Box and raised taxes on jobs. Now, we are in a jobs crisis, with over 170,000 jobs lost since July 2024, all because Labour does not understand that if you tax something, you get less of it. Now it is raising taxes on the banks, which provide mortgages, loans to small businesses and pay interest to savers. The Chancellor might think it is just a bank tax, but we know that, like every tax, it will end up being paid by ordinary working people: higher mortgages, lower returns on savings and bank branch closures in every constituency and every high street, and fewer jobs in this country. The Budget also contains a vindictive tax rise on people who have done the right thing, those who have done what Governments have always told them to do and what this Government want them to do: save money. Yet for many, up to 49p in every pound of interest on hard-earned savings will now be taken by the Chancellor.
I call the shadow Chancellor.
This Budget must be bewildering to members of the Prime Minister’s party. He promised them a “circuit breaker”, an end to “40 years of neoliberalism” and a “new political model”. Instead, it is all gherkins and aubergines. The Defence Secretary, who is sitting on the Front Bench, is probably wondering the same as everyone else: was that it? To be honest, he is probably thinking he would have done a better job, and he might be right. It is not too late: if he resigns again, he might get his chance to be the Chancellor. All the while, Britain has a debt problem, Britain has a defence problem, Britain has a growth problem, and apparently, as we learned yesterday, there is nothing the Chancellor can do. On the big challenges, what has this Budget actually done? It does not reduce borrowing; total debt has gone up. It does not properly fund defence; the Government still have not set out how 3% will be funded. It does not cut taxes to get the economy growing; instead, they are putting up taxes again.
The hon. Gentleman says this country has a defence problem. Could he elaborate on the context of that defence problem, and perhaps reflect on the fact that it may have something to do with the under-investment that has left the Army with unprecedented levels of poor morale and left British soldiers unequipped to do their basic job of defending our country?
Order. Interventions should be short and sharp, and questions should be to the point.
If time allows, I will be very happy to go into great detail about our record on defence. When Russia invaded Ukraine, we were proud to stand with the people of Ukraine, and to reboot the funding for defence. The test that the Chancellor failed was not my test; it was his own test. It was the Chancellor who resigned because the previous Chancellor and Prime Minister would not give our armed forces the proper funding for our defence. Yesterday we needed decisive action, and all the Government delivered was a Budget of ducked decisions. The Chancellor has taken to heart the idea of, “Why do today what you can put off to next year or the year after?” Let us be clear that, as a result, Britain will be less secure, less fair and poorer for it.
The shadow Chancellor says we will be less secure. After 14 years of Tory Government, our armed forces were reduced to a size smaller than at any time since the Napoleonic wars. How secure were we during his time in power?
Madam Deputy Speaker, I should make some progress, and we have got plenty of time to talk about defence—
That is not an answer!
No, no. I have a very good answer. In 2010, the Defence Secretary’s party wanted to reduce and cut further our armed forces. We were the party that will always stand behind our armed forces.
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.
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?
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.
Will the hon. Gentleman give way?
I will give way one last time.
I thank the hon. Gentleman for giving way. There is an element of agreement, because in our Budget yesterday we agreed to get to spending 3% of GDP on defence by 2030, as did the hon. Gentleman’s mini-budget back in 2022. But does he agree that the difference between our Budget and his budget is that we will actually get to the spending review next year to be able to deliver it, and that it will last longer than 47 days?
Labour Members try so hard, but the hole in their Budget is gaping wide open. The problem is that it is not just us on the Opposition Benches who can see that hole, but our adversaries around the world, leaving ourselves open. Not properly funding our armed forces is not going to scare anyone in Moscow and it will not deter Tehran. The Defence Secretary has resigned once before, so we know he is not against resigning. Perhaps he could resign again on principle today. We on this side of the House are used to Labour breaking their promises, but to break the promises they made to our armed forces is a new low. If the Chancellor had any dignity, he would have resigned yesterday. Despite their failure to fund defence, the Government have still raised the tax burden to the highest level on record—higher than in the aftermath of world war two and higher than even the right hon. Member for Leeds West and Pudsey (Rachel Reeves) raised it. Who remembers how this Government had no plans to put up taxes? How is that working? For the third Budget in a row, the tax burden is set to rise. All told, taxes are going up by a total of £75 billion a year: higher next year, higher the following year and higher in every single year of the forecast. Even the Prime Minister’s former economic adviser, Andy Haldane, now says that Britain is “taxed out”. He also called the Chancellor “penny wise, pound foolish”. I am not even sure about the penny wise bit, to be honest. And where will that money come from? Families, small businesses, the self-employed, farmers, the people who work hard and want to get ahead. Why? To pay for those who do not—those who could work, but choose not to. The damage does not just stop with the tax bill itself. It is the disincentives in the economy that do the most harm. Two years ago, the then Chancellor stood at that Dispatch Box and raised taxes on jobs. Now, we are in a jobs crisis, with over 170,000 jobs lost since July 2024, all because Labour does not understand that if you tax something, you get less of it. Now it is raising taxes on the banks, which provide mortgages, loans to small businesses and pay interest to savers. The Chancellor might think it is just a bank tax, but we know that, like every tax, it will end up being paid by ordinary working people: higher mortgages, lower returns on savings and bank branch closures in every constituency and every high street, and fewer jobs in this country. The Budget also contains a vindictive tax rise on people who have done the right thing, those who have done what Governments have always told them to do and what this Government want them to do: save money. Yet for many, up to 49p in every pound of interest on hard-earned savings will now be taken by the Chancellor. It is the same story with landlords, who have already come under attack from this Government, and the OBR says that rents will go up as a result. Of all that the Budget was missing, the lack of welfare reform stands out the most. Or at least, so we thought—because this morning the Chancellor told the BBC that there will be welfare cuts before the election. Perhaps a Treasury Minister could come to the House and clean up the Chancellor’s mess. His Budget has not even survived 24 hours. Last week, the Prime Minister called the benefits bill a moral outrage; he was right then, but he is not doing anything about it now, because Labour Members are too afraid to say, “Enough is enough.” They do not have the courage to get a grip on welfare, because they are worried that it would cost them their jobs. Thanks to the TaxPayers’ Alliance, we know that for more than half of all Labour MPs, the number of benefit claimants in their constituencies is larger than their majority. It is true for the Chancellor, it is certainly true for the Defence Secretary, and it is true for the Economic Secretary to the Treasury. They will not get welfare under control because it would cost them their seats—they are putting their own interests before the country’s. [Interruption.] I am making progress. Don’t you worry—I am doing very well, Madam Deputy Speaker.
Order. Fascinated as we all are, there are many people hoping to contribute this afternoon, so I hope the shadow Chancellor will be concluding soon.
I read that the Budget had the most measures in it of any Budget, but also that they were the most inconsequential. I will try to crack through a few other things. [Interruption.] Labour Members are all chuntering, but I will tell you who else’s interests they are putting first: the trade unions. While the Government are raising taxes on everybody else, they are handing out more than £40 million over the next two years to a union learning fund. I cannot even begin to imagine what they will be learning: how to run rings around the Health Secretary; what to do with those extra days off from working a four-day week; how to keep public sector pay rises twice as high as the private sector—[Interruption.] The Defence Secretary says, “How to keep the Conservatives out.” That is probably about right—that is probably exactly what they are doing! It is a political bung to their political allies. It is ridiculous. While families face tough choices in a cost of living crisis, this Government use their Budget to tax people and hand money to the trade unions. It was not just the Budget we heard yesterday; we also heard the figures from the Office for Budget Responsibility, and they really do show us just how bad things are. For the first time ever, the Government are planning to spend over 45p in every £1 in the economy. Government spending goes up every year of the forecast, debt is up every year of the forecast, and it is official: living standards are down. Real household disposable incomes are set to be lower next year than when Labour took office—£1,500 lower at the end of this Parliament than they were forecast to be under the Conservatives. It is not hard to understand why: inflation is up, interest rates are soaring and unemployment is up again. The one-off £100 that the Government are putting into bank accounts will not touch the sides for most people, given the cost increases. The only thing that will put us on a path out of decline and deficits is growth. The Conservatives understand the value of growth. The Prime Minister has got his history entirely wrong. The mistake this country made was not to choose markets over socialism in 1979—it was not electing Mrs Thatcher—but giving up all that we achieved in the ’80s and ’90s. In conclusion—Madam Deputy Speaker is very firm, so I will conclude—this Budget will go down as one of history’s great missed opportunities. It was an opportunity to undo not 40 years of neoliberalism, but the damage of the first two years of this Government—the mistakes made by the right hon. Member for Leeds West and Pudsey, who is now busy job hunting and discovering for the first time what it is like to receive rejection after rejection. Yesterday was a chance to put Britain back on the right track, and the Chancellor blew it. Higher taxes, higher spending, higher borrowing; lower growth, lower living standards, fewer jobs—I hope the Chancellor kept the receipt for the Budget, because I think he is going to want to return it. The British people know that this is not the Budget we need. This is a great country whose potential is being held back. We have a Chancellor who ducks his choices, and a Prime Minister who wants to take us back to the 1970s. We cannot tax and regulate our way to growth. National security really does matter more than social security, and only by tackling the deficit can we back away from the fiscal cliff edge and do the right thing by future generations.
I am proud to open this Budget debate on behalf of the Government, proud of the leadership of the Prime Minister and of the Chancellor, who is offering this country breathing space today and fresh hope for the future. Before I turn to that, I need to talk about the threat this country faces—one that sabotages our economy, pushes out misinformation and attempts to undermine people’s trust in government. For once, I am not talking about the Russians, but the Trussian, not least the shadow Chancellor, the hon. Member for Arundel and South Downs (Andrew Griffith), who I fear is part of a Trussian sleeper cell operating in the shadows of the Conservative party. He did not say much about his plans today, but I do not think we do not need to look very far. In fact, there is a book out that tells us all about the secret plans he is no doubt saving up for the next manifesto: “Bank Job”, it is called, written by one Liz Truss. The shadow Chancellor knows her well; it is the Liz Truss for whom he helped write the mini-Budget, which crashed our economy and damaged Britain’s reputation, and which he still says contained, “lots of good things.” Maybe that is why, when I tried to obtain a copy of “Bank Job” this morning, I found that there were no copies available in bookshops for miles around. Presumably, the shadow Chancellor has gone around and bought them all up, just in case someone finds out exactly what the Trussians stand for. Because that is the danger, Madam Deputy Speaker: they walk among us, the Trussians, hiding in plain sight—deep-cover sleeper agents masquerading as responsible fiscal Conservatives. But we will not be fooled. We remember when the shadow Chancellor cheered Truss on, and we all know the consequences of their misjudgements. If we are not careful, the Trussians will be coming—they are already winding up to play their own game of roulette with our public finances once again. All joking aside, I think it is genuinely appalling that the arsonists have the audacity to complain as the firefighters are clearing up their mess—never forgive, never forget, and never let the Tories do it again. In fact, in one of the low points of an otherwise dull and inaccurate contribution to this Chamber, the shadow Chancellor had the audacity to level low blows against my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves). Let me point out that, despite the economic global shocks that this country faces, along with security threats of a kind that we have not faced in generations, earlier this month the IMF upgraded its growth forecast for Britain for 2026. It said that the UK “stands out” among G7 nations, and it credited the Government’s responsible approach to handling the public finances. That is the legacy of my right hon. Friend, and I pay tribute to her leadership, her experience and her hard-headed stewardship of our economy. [Interruption.]
Order. I can tell that the Defence Secretary has had his Weetabix, because he is very loud at the Dispatch Box—but he has to be loud, because there is so much heckling. Can everybody just calm down a little bit?
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.
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?
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—
Will the Secretary of State give way?
But I look forward to the hon. Gentleman defending the indefensible.
I just wanted to bring the Defence Secretary back to his comments about the defence investment plan and its being fully funded. According to the Red Book, there is a reallocation of capital spending that is £145 million this year and £2.1 billion next year. Can the right hon. Gentleman outline where that reallocated capital spending will come from?
I have just set that out. It is there in the Budget. The Government have reallocated from capital programmes across Government to ensure that defence is fully funded. It is disappointing, Madam Deputy Speaker. This has become a running theme of the leadership of the Leader of the Opposition. When we sat on the Opposition Benches, I remember that Keir Starmer always made a virtue of standing with the Government on issues of national security and defence. We provided constructive challenge where we needed to, but we stood with the Government. This lot cannot help but try and score petty party political points at the expense of defence and national security. What is even more extraordinary is the enormous brass neck of the Opposition, considering their record. Just look at it: we had the smallest army since the Napoleonic wars; every single recruitment target was missed; morale fell to a record low of 40%; almost every equipment programme was over budget or behind schedule, and often both; and defence spending faced a real-terms cut between 2010 and 2024, falling from 2.5% of GDP to 2.3%. [Interruption.] In the words of their own Defence Secretary, the armed forces were left “hollowed out and underfunded”. [Interruption.] And now the Conservatives have the audacity to turn up and criticise a Labour Government who are investing more, investing more quickly, and cleaning up their mess.
Order. Mr Obese-Jecty, this is not good behaviour. After yesterday, Mr Cartlidge, I thought you would have had a much quieter voice. I cannot hear the Secretary of State. Can we just let him continue?
I am trying to make my voice heard from the Dispatch Box, Madam Deputy Speaker. As I have said from my first day as Defence Secretary, I trust this Chancellor to give us what we need to keep our country safe, and yesterday demonstrated why. His Budget proves why Labour can be trusted on defence—[Interruption.] It does say that here, because I wrote it. We are delivering the biggest sustained increase in defence spending since the end of the cold war. That was Labour’s record before the Budget; this Budget takes us even further, and next year’s spending review will take us further still. What a contrast with the abysmal record of failure staring us in the face from the Opposition Benches. I appealed in my first statement to this House for national unity on national security. It is important that our allies and our adversaries know that we agree far more than we disagree. We all believe that we should spend more on defence; we all believe that we should stand with Ukraine; we all believe that we should invest in homeland security. What a pity, then, that the Leader of the Opposition and her ragtag band of political vandals choose to play politics with national security. For the Opposition to do that in the current environment is bad enough; to do so with their abysmal record in government takes some brass neck.
Will the Secretary of State give way?
Perhaps the right hon. Gentleman wants to defend that record.
I am grateful to the Secretary of State for giving way, but he will be aware that there is no plan to ensure that that 2030 target is met. At a time when we have short-term cuts in operational spending, the Secretary of State must feel a certain amount of disappointment that we do not have a firm plan in place, because if the Treasury do not sign off the numbers, then nothing really happens. That is true, is it not?
I just do not know what the Opposition have to moan about. We came into government with the abysmal inheritance that we faced, and we chose straightaway to invest more in defence to clean up their mess. We have now gone even further than the NATO commitment of 3.5% by 2035 by choosing to set our own target of 3% by 2030. That is not just about the future; it is built on our record in our first two years. Defence spending has gone from 2.3%—
Will the Defence Secretary give way?
In a moment. Just so that we are clear, we have gone from spending 2.3% of our GDP on defence when we came into office to spending 2.7% next year. It is very clear that we are on the right trajectory. That is not a record that they can speak to. I do not know how they can be so shameless—
rose—
Let’s find out—I give way to the right hon. Gentleman.
If it is true that the Defence Secretary has a plan for 2030, I ask him why the Labour Chair of the Defence Committee said yesterday in reaction to the Budget: “some of the key decisions on defence spending have lamentably been delayed until next year’s spending review. There is a cost to inaction. Investment in our nation’s defence and security cannot be kicked into the long grass. Our adversaries are not bound by fiscal years and spending cycles.”
Order. Before the Secretary of State responds, may I point out that there are many people wishing to contribute? Hopefully his speech will be coming to a conclusion shortly.
I have been too generous with allowing interventions, but let me take that point head on. I think that is completely unfounded criticism—
He is the Chair of the Defence Committee!
I don’t care if he is the Chair of the Defence Committee. I would say it directly to him, and I am sure I will get the chance to say it to the entire Committee. It would be fair criticism if this Government had not already made decisions that are leading to the fastest increase in defence spending since the end of the cold war—not in future years but already, on the basis of our first two years in power. The Chair of the Defence Committee is a good friend, and I am sure that, just as I can take his criticism on the chin, he will take mine. I will gladly accept criticism where I think it is fair, but I robustly reject it where I think it is wrong. I have referred to the Conservatives’ record of 14 years in power. Let me contrast that with what I have presided over in the last 14 weeks: armed forces recruitment showing its longest run of growth for half a decade; 400 contracts signed, worth £4 billion; £400 million for spy drones for the Army; £135 million for Royal Navy torpedoes; £700 million for next-generation fighter jets; over £8 billion for our nuclear submarine fleet; and the UK’s sixth attack submarine and first ever space squadron launched. We have returned gun barrel manufacturing to the UK for the first time in decades; we are backing British industry to build the docks for our nuclear subs; we have increased monitoring of Russian vessels in the English channel; provided 50,000 apprenticeship opportunities for young people; welcomed record-breaking investment in Scotland; deployed our armed forces to help Saudi Arabia defend itself from Houthi attacks; bolstered support for Ukraine; and signed a landmark AI deal to access cutting-edge battlefield data. We have strengthened our NATO alliances, as I have visited Washington, Paris, Copenhagen, Warsaw, Reykjavík and Kyiv. We have mobilised with our allies in the Ukraine defence contact group, the E5 and the joint expeditionary force, and hosted our friends from Italy, Japan, Canada, Australia, Qatar and Oman as well as the NATO Secretary-General. And in case the Conservatives missed it, as their party leader seemed to yesterday, on top of the biggest sustained increase in defence spending since the end of the cold war, we have set out our target to spend 3% of GDP on defence by 2030. That is our record, and it is a record that the Conservatives cannot begin to touch. This is a Government who actually put our money where our mouth is—strengthening our armed forces, alliances and industrial base, and backing Britain by buying British. That is how to defend this country—not with the gimmicks and grandstanding of the Conservatives but by making this country ready with our allies to fight and win so that our adversaries think twice about launching an attack in the first place. The truth is that this is a more dangerous world, and that makes greater investment essential. Delivering what the Chancellor announced yesterday requires choices and trade-offs. We will ensure that every pound that we invest is well spent and creates jobs and opportunities—not just a Ministry of Defence but one of growth and opportunity. We will help to deliver the Prime Minister’s domestic agenda—stronger regional economies, a rebuilt industrial base, good jobs and better opportunities for the next generation. We will have a more resilient United Kingdom built by the British people to keep Britain safe. Spending on our defence is a measure of our commitment, but capability is a measure of our credibility. That is what this Labour Budget does, rooted in our values. It gives breathing space to working people. It gives us fresh hope for the future, and it strengthens the security on which we all depend. Building a Britain ready to fight and building a country worth fighting for—that is our record and plan. That is why I am proud to stand at this Dispatch Box and commend the Budget to the House.
I call the Liberal Democrat spokesperson.
After years of government chaos and failure we can only end the brutal cost of living crisis and fix our broken public services if we get the economy growing. We need a real growth plan with Europe at its heart, so Labour must fix the Conservatives’ botched Brexit deal by joining the single market, negotiating a new customs union and using the billions of pounds that that raises to cut people’s taxes and bills.
Will the hon. Gentleman give way?
Already? Okay.
We heard from the Conservative Front Bench that we do not meet the criteria to rejoin the EU. How do the Lib Dems suggest that we get around that problem?
I thank the hon. Gentleman for his intervention. He should have listened to what I said in the previous 30 seconds. What I said was that we need to join the single market and negotiate a new customs union. I did not say that we need to rejoin the European Union. First, Liberal Democrats would fix the biggest brake on our economy: the botched Brexit deal. It has put up barriers for every business that trades with our largest market. Small firms in Maidenhead tell me that they now spend more time filling in forms than filling in orders. Some have simply given up trading with Europe altogether. That is lost trade, lost jobs and lost revenue. We would rip up the Government’s red lines and build a new growth and defence partnership with Europe, including the single market and a new customs union. We would grow our economy. According to independent research, those measures would bring in £27 billion a year in extra tax revenue by the end of the Parliament. We would give those proceeds back to the people who earned it by raising the tax-free personal allowance to £15,000 and raising the higher rate threshold to £56,000, taking 2.5 million of the lowest paid out of income tax altogether and putting £650 back in people’s pockets. It was the Liberal Democrats who raised the personal allowance before. We can do it again. That is how to cut taxes responsibly—we grow our way there.
Would the hon. Gentleman wish to add his thanks to the Chancellor for the new low-income tax-free allowance for pensioners, which will ensure that they can keep their state pension and hard-earned pension?
I think the hon. Lady will find that there is an anomaly within the Chancellor’s proposals: a 54% tax rate for certain pensioners on certain incomes. I do not necessarily believe that a 54% tax rate for pensioners is the right thing to be doing. Secondly, Liberal Democrats would make fairer choices about who pays. This Budget goes back once again to savers. Tax on savings and property income go up by another two points. That is on top of the two points that were announced last year. The retired couple who have put money away all their lives and the family who are saving for their deposit will be taxed more. The Government are giving savers a little with one hand while taking with another. There is a fairer option, though. Because of the high interest rates and the way that the Bank of England’s quantitative easing programme works, the Treasury is handing billions of pounds over to the big banks every year. That is a windfall that the banks did nothing to earn. It is a windfall that they keep, and businesses in our villages and towns are paying the price. Our plan to claw back some of that money would raise £5 billion a year on average. That has never been needed more. As UKHospitality confirms, the hospitality sector pays 82p in business taxes for every £1 it makes. That is the highest amount paid by a sector in our economy and double that of the banks. In my constituency, we have felt that more than ever. Last month, the Crown at Burchetts Green, ranked among the 50 best gastropubs in the country, closed its doors, with its owner blaming staff costs, rent, business rates and VAT. They said enough was enough. If a pub like that cannot make the numbers add up, what hope is there for cafés, restaurants and pubs across the country? That is why we would use some of the bank windfall tax to cut VAT for the hospitality sector, where it needs it most. The third thing we would do is take our security seriously.
There is a slight irony in what the hon. Gentleman has just said. He wants to cut VAT on pubs, yet he wants to get closer to the European Union, which would not allow us to cut VAT in our own country. Is there not a slight contradiction there?
Once again, the hon. Gentleman is confusing rejoining the single market and customs union with rejoining the European Union. I am glad that the Defence Secretary is in his place, because just days ago, he said that we need to be ready for war by 2030, within 1,000 days. I take that warning seriously, and I hope that his colleagues do, too. Yesterday, the Chancellor set the target for spending 3% of GDP on defence by 2030, and the plan to pay for that will come in next year’s spending review. The money needed for the issues and compromises that the Defence Secretary describes will not come until next year. No Government can meet a 1,000-day deadline on a funding plan that does not exist. That is why we Liberal Democrats have proposed defence bonds. Our plan would raise £20 billion over two years, ringfenced to rebuild our armed forces. That would start now, inside the Defence Secretary’s 1,000 days, and not after them. Meanwhile, the Government are funding their defence investment plan by cutting budgets across Whitehall. Earlier this year, Departments were told to cut 1% from their capital budgets to pay for the first £10.3 billion of the DIP. For the remaining £5 billion, they must now find another 1% on top of that. As has already been mentioned, we do not know where the cuts will come from. Families right across the country want to know which capital projects are to be cut. Will it be the rebuilding of our crumbling schools or our leaking hospitals? Where will that money come from? We are asked to choose between security and growth, but we need both. The Government urgently need to make the case for defence bonds, so that we have the money to rebuild our defences as soon as possible. If we built that capacity alongside our European partners, every pound would go further, and support skilled jobs and British businesses in the supply chain. We have also set out how to keep that investment going for the long term: through the digital services tax. We would raise the tax from 2% to 10%, bringing in billions of pounds a year from the tech and social media giants by 2030. They are some of the most profitable companies in the world, and they should pay their fair share. Our plan shows how, and it is fully costed. Defence bonds will provide the money up front, and the higher digital services tax would sustain that amount year after year. Together, they would pay for us to expand British shipbuilding and build more frigates to protect our waters. Our European neighbours are investing billions in their defence industries, and Britain must be at the heart of that, not watching from the sidelines. We need our new growth and defence partnership with Europe—buying together, building together and defending our continent together—to ensure that British shipyards, engineers and factories win jobs and investments from European contracts. If we are shut out, those jobs go elsewhere. This Budget is a holding pattern Budget; it is not the growth Budget that we all needed. There is a better way: growth with Europe; fairer taxes that ask the big banks, rather than hard-pressed savers, to pay their share; lower bills for every household; and a serious plan for our security. That is what fiscal responsibility looks like. We need to grow our economy, cut people’s bills and cut people’s taxes.
This Budget gives my constituents and people up and down the country much-needed breathing space and fresh hope for our long-term future. It tackles the big issues facing our country, from the cost of living pressures facing all our constituents to the need to bring growth back to our economy. The Chancellor was honest about the impact that the war in Iran has had on our economy, energy prices and supply chains. I remind the House that we Labour Members opposed that war, but the Conservatives supported it. I will address the impacts of the Budget, first on my constituency, and then from my perspective as Transport Committee Chair. I am pleased that the Budget delivers for house building, and will mean more council and social housing, as too many families in Hounslow, Brentford and Isleworth live in temporary housing. There is also the new Your First Home scheme, which will support many who are earning, but do not have a deposit to get on the housing ladder. The Treasury listened, and raised the sale price cap for the scheme in London. I am grateful. Over the past year, I have met businesses across my constituency, from restaurants such as Sam’s Waterside and coffee shops such as Ballucci in Isleworth and Hounslow to small specialist manufacturers Ormiston Wire and Newmont Engineering. Their common message has been that costs, particularly energy and business rates, are too high. I am therefore pleased that the Chancellor has committed to taking more businesses out of paying business rates—900 each in the Hounslow and Richmond boroughs—and frozen business rates for many more. I know that to support businesses, we need to get more money into people’s pockets. Increasing the national living wage and the minimum wage, addressing energy bills, keeping commitments on tax and introducing the new pension tax allowance, among many other measures in the Budget, are all much welcomed by my constituents. I also welcome London now having the fiscal devolution that our city has long deserved, bringing it more into line with other world cities. It allows the mayor to kick-start projects across the capital, one of which is the West London Orbital, a much-needed rail line linking Hounslow to Hendon via Old Oak Common, opening up development and employment opportunities across a swathe of west to north London. As Chair of the Transport Committee, I will mention several transport-related elements in the Budget that I welcome: the Government’s work to bring international rail services to Stratford, which will increase rail connectivity and choice; the work to address the costs for electric vehicle drivers using public charging points; and the decisions on fuel duty, which not only benefit car drivers but save a light goods vehicle driver £472 on average, and the average heavy goods vehicle driver nearly £4,000 per year. Given the impact that fuel prices are having on the critical logistics sector, we all end up benefiting from those changes. Rail infrastructure costs far more to build per kilometre in the UK than in any equivalent economy; I refer to my Committee’s February ’26 report, “Rail investment pipelines: ending boom and bust”. I welcome the announcement of the review of rail infrastructure costs, and the publication of the more extensive infrastructure pipeline. The review’s terms of reference responded to many of the issues discussed in our inquiry, including investment certainty, with clarity about at what point costs are fully understood and when funding will be committed. That drives efficiency, safeguards workforces and enables skills planning. Investment certainty is certainly needed if we are to allay the concerns of the rail supply chain and its investors. Although the Government review is restricted to rail, its scope is otherwise very similar to the scope of the Competition and Markets Authority’s review of road and rail procurement, so I want to know from the Government how the two will relate to each other. Strangely, in their response to our report, the Government denied that there was such a thing as boom and bust in investment; I hope that the review will be more open-minded on that front. I am glad that the Chancellor has heard the pleas of the owners of airports and private rail infrastructure, such as St Pancras and High Speed 1, who are concerned about the exceptional and unpredictable rateable value increases. I hope that a rational and predictable system can replace the current mess, which is holding back long-term investment in our rail and aviation infrastructure. I welcome the work that the Treasury is doing to enable the Prime Minister’s drive for devolution and partnership with local leaders. Northern Powerhouse Rail and a whole host of local transport projects will deliver local growth across Britain. Finally, the Chancellor is also backing British bus manufacturers, with a new look at bus procurement, which is very welcome indeed. I conclude by thanking the Chancellor for tackling the big issues that face our economy, and for a Budget that delivers both for constituents and for the whole economy.
Thank you, Madam Deputy Speaker, for allowing me to catch your eye in this important Budget debate. I listened to the Defence Secretary, and thought he absolutely embedded his comedic skills. Some of what he was saying would have been better said on “Have I Got News for You” than in this Chamber. This Budget was a tragic lost opportunity to fix the fundamentals of the economy. Our debt is at a record level. The tragedy is that we are paying a higher interest rate than Greece on that debt—5.31%. That will add additional interest of £14 billion, just on that debt. If the amount that we are paying to service that debt were a Department, it would be the third largest. The budget for the Department for Work and Pensions is around £344 billion. That does not even cover the amount of income tax we raise in this country in total, which is £330 billion. In other words, income tax does not pay all our DWP bills. The second highest-spending Department has a budget of £226 billion. I welcome the Chancellor saying that he will meet his fiscal rules by the end of this Parliament, but that involves the national debt falling by the end of the Parliament. If I were a betting man, I would doubt very much that he will meet that rule. One of the saddest things about our economy is that inflation is going up. Before Labour Members start to scoff at that, it is one of the most important measures of the lot, because it affects everything; it affects all our cost of living. Everything from our fuel costs to our energy and mortgage costs are affected by inflation, so the one thing we ought to be doing is trying to get the rate of inflation down. One of the saddest things about inflation is that my constituents, many of whom live off the gas grid, have to pay for heating oil, which has gone up by 75% in the last year. Imagine that for someone on benefits. In this Budget, they are getting very little help with meeting those costs.
£35 per person, if they are eligible.
My hon. Friend has made his point well. Let us hope that is read into the record. Currently, 13% of 16 to 24-year-olds are not in employment, education or training. We should be focusing relentlessly on creating opportunities for young people and supporting businesses that employ them. Sadly, this Budget does not do that. When sickness benefits pay more than the minimum wage, what is the incentive to work? Sectors such as tourism and hospitality that provide opportunities in every part of the country and in every constituency, but especially in rural areas, face significant economic pressure, and nationally, at least one pub is closing a week. The rates relief offered by the Chancellor in this Budget may help by a minuscule amount, but that is unfortunately offset by the increase in the minimum wage, and the VAT costs that those businesses face. I want to turn to the kernel of what the Defence Secretary was saying, and to defence. It was solemnly promised by this Prime Minister and the previous Prime Minister that we would not only quickly get to spending 2.7% of GDP on defence, but would have a path to 3%. There is no path to 3%. The only path I can see is that departmental budgets will be cut, and it has not yet been tied down what services will be cut to pay for that 2.3% real cut in Departments. There was no clarity on this in the Budget yesterday. Surely if the Labour party and the Government keep boasting that they will go to 3%, the least they owe the British people is a path to get there—and it is not only the 3%, but the 3.5% in the following Parliament, which is a great deal of money. Importantly, as General Sir Richard Barrons said recently, we do not own the clock. In other words, we do not know when our adversaries are likely to launch some form of attack on us, and we know that the Ministry of Defence is not able to place the orders it needs. To take the bigger equipment, when will the F-35s come? The Defence Secretary shakes his head. They are still in the queue; they cannot be manufactured for us because we have not given a solid commitment on when we want them. Those delays in procurement particularly affect some of our smaller defence companies, because they do not have the cash flow. I mentioned artificial intelligence in an intervention yesterday. One of the most important things the Chancellor could have done for this country yesterday was provide a proper path to how every single Department will operate digital and AI more effectively, so that he could increase productivity. The machinery of government changes that the Government have undertaken in the last year do not give the Public Accounts Committee, which I chair, any confidence that the Government have a real policy on digital and AI, and how they will produce mechanisms for using this technology properly. A year ago, digital policy was in the Cabinet Office. It was then transferred to the Department for Science, Innovation and Technology, but DSIT was abolished. Now it is in the Department for Digital, Culture, Media and Sport—the Department which historically has been used to dealing with sport and culture, not the important matter of AI. Without this priority, it is difficult to see how the Government will make this digital policy work. When my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt), as I said in an intervention yesterday, gave in his Budget a significant sum of £3 billion to the Department of Health and Social Care—the Defence Secretary’s former Department—to transform their digital equipment, that was the start of what we should have been doing for every single Department. I do not know how the Government will meet their efficiency targets unless they start to introduce proper AI and get rid of some of our legacy equipment, which, as the Defence Secretary knows only too well, is more vulnerable to cyber-attacks. I turn to local government reform. I was pleased by the announcement this morning that Gloucestershire will be one unitary authority—that is good news—but our local authority will only get any increase in finances if we can come up with devolution. There was no link to how Gloucestershire will move from local government reorganisation into a strategy authority, and we need to have that. Otherwise, we will not be able to take advantage of some of those financial benefits. On the civil service pension scheme, there is a good news story for which I praise the Government. We have had five hearings on the Public Accounts Committee into the dreadful mess that Capita has left that scheme in—five hearings where every single deadline has been missed. That is not good enough for the poor 1.7 million members of that scheme. The Government have done a good thing. Last week, I wrote to the Pensions Minister about a problem: if Capita did not pay out a lump sum within two years, scheme members would be taxed on that sum at the highest rate. The Minister met me fairly quickly, I raised it on the Floor of the House on Monday and—bingo!—I got a letter yesterday saying that the law was going to be changed in the Budget. I pay tribute to the Government and the Pensions Minister for that quick action. That was the just thing to do. Those pension scheme members will not have to keep worrying about whether they will get their full lump sum. In conclusion, this is sadly a wasted opportunity, and we look forward to future Budgets actually giving us a path to a better economic future. One of the economic forecasts we had in the Budget yesterday was growth of 1.2%, which all the Government and the Chancellor are crowing about, but historically 1.2% is not enough to keep spending at the rate the Government are. We need more measures to help business and a proper taxation policy, and then this country will start to grow.
Order. With an immediate five-minute time limit, I call Chris Webb.
Yesterday the Chancellor affirmed this Government’s commitment to good growth in every postcode. As the MP for a town that has been neglected by previous Governments, I welcome this investment in communities like mine because it is desperately needed. Through years of austerity and economic decline, places like Blackpool were asked to do more with less, again and again, until there was nothing left to cut. I believe that with the right investment and with local people in the driving seat, no community needs to feel left behind again. Many of my constituents have already welcomed the cost of living measures this Budget set out. A £100 household energy payment for eligible households in council tax bands A to D means 97% of households in my constituency will feel that benefit. Freezing fuel duty rates and extending the 5p cut to July 2027, along with more generous mileage rates for people who use their own vehicles for work, will make a real difference to the Blackpool’s tradesmen and care workers alike. Taken together with a welcome increase in the minimum wage, these tangible changes will have an impact on my constituents’ pockets. However, improving people’s lives also means improving their environment. People want to walk out their front doors and be proud of where they live, not be met by boarded-up buildings. High streets are the beating heart of our communities, and hard-working businesses should be able to thrive on them. The derelict buildings fund, announced alongside the Budget, lets us bring prominent long-term vacant buildings back into productive community or commercial use. After campaigning hard in this place for funding to tackle the blight of derelict buildings in Blackpool, I am delighted that we have been allocated £1.35 million from that fund. This is the type of investment we have to make count, and I will be leading on this work locally. I want local residents to tell me the buildings that matter most to them, or the projects to back that have the potential to transform the area. This fund is exactly what we mean when we talk about putting power back into every postcode, and it is another step towards building a better Blackpool. It is right that this Labour Government have now committed more than £40 billion to the biggest house building programme in a generation, with an extra £1.5 billion committed in the Budget. At the end of last year, 11,844 people in Blackpool were waiting for social housing. I therefore urge Ministers not to overlook us, like their predecessors did, and ensure that we get a share of the additional homes to meet the scale of our need. I welcome the Chancellor’s additional £432 million to ensure that people sleeping rough have a route off the streets. Figures from Blackpool council show that applications from people seeking help with homelessness in 2024-25 were running at nearly three times the national average. We must make sure that safe accommodation sits alongside the practical health, addiction and housing support that people need to rebuild their lives and stay off the streets for good. We have fantastic homelessness and outreach organisations across Blackpool, such as Streetlife, whose youth advisory group I welcomed to Parliament last week. They told me that they need wraparound support and for us to see the whole person. Unfortunately, the odds have been stacked against our young people. We face serious concentrations of deprivation and poor health, and high demand on services for children and families. Blackpool currently supports nearly three times the national average of children in care. Despite the immense pressure, Blackpool council has significantly improved its children’s services. We were recently graded outstanding by Ofsted, thanks to the tireless work of frontline staff and dedicated leadership from Councillors Jim Hobson and Kath Benson. The leader of Blackpool council, Councillor Lynn Williams, joined me in urging the Government to commit to a dedicated children and families transformation investment package for Blackpool, so that we can build on the work that has already been done to bring down the numbers of children in care. We stand ready to work with the Government to make our town a national example of prevention-led children’s services reform. I have told this House on numerous occasions that I truly believe that when Blackpool succeeds, Britain succeeds. If we can fix the problems of a town at the sharp end of many statistics, we can fix them anywhere. We are now a town on the cusp of change. We have a wealth of creativity and culture and the ambition to be the city of culture in 2029. That could be the connecting tissue between all the areas of good work being done. In conclusion, breathing room is needed, and this Budget provides some of that, but we must scale up the ambition and the speed of the projects. Blackpool’s motto is “Progress”. The town has pioneered so much and has kept moving even through deep spending cuts. We are on the right path; what we need now are a Government who walk with us.
I begin by asking the House a question. When I heard the Chancellor’s speech yesterday, I thought, “Is that it? Is this the Government’s best shot?” If the Prime Minister is planning to go to the country on the back of this Budget, I say, “Bring it on.” Yesterday the Chancellor delivered the gravest betrayal of the just transition in my constituency and in Scotland. Grangemouth, Mossmorran and now St Fergus—this looks like Thatcherism on steroids. Is anyone seeing a pattern here? The Chancellor did not even have the courage to spell it out in yesterday’s Budget, with the loss of Government support for Acorn hidden in the weeds of the Red Book. While the Labour Government’s so-called “mature” carbon capture, usage, and storage projects in England and Wales get the go-ahead, their paltry offer to Scotland amounts to merely seeing how loans or equity investments can support the continued development of future CCUS, with specific mention of the Acorn site. In other words, the project will no longer be considered for direct Government money as part of the Government-funded track process.
No, I am not taking interventions. A lot of people want to speak. The Labour Government are prioritising £9.4 billion in England and Wales, but are not even managing £200 million for the Acorn project and the Scottish cluster. The rhetoric once again fails to match reality and instead reveals treachery in cold blood. I was promised a final investment decision by the previous Chancellor at the Dispatch Box. Where has that promise gone? Trust in this UK Government from Scotland lies in tatters, as they renege on their commitment to the green transition and re-industrialisation in the north-east of Scotland. We have taskforces, reports, road maps and decisions to be made in the future. It is jam tomorrow. As one newspaper put it this morning, the sound we heard yesterday was the can being kicked down the road. The Chancellor calls it capital reprioritisation, but his fancy phraseology hides the truth. Existing capital remains prioritised in Teesside and Merseyside. Why not Acorn in Scotland and the Scottish cluster? The UK’s net zero future, and thousands of jobs in Scotland, rely on the ability to cut industrial emissions. Acorn provides the country’s only viable CO2 transport and storage solution. Without it, key industries including energy, chemicals and manufacturing will face mounting costs, a loss of competitiveness and a major risk of job losses. Meanwhile, as the cost of living and the cost of food, fuel and energy spiral upwards, Scotland remains trapped in an economic doom loop under Westminster control. We estimate £650 million will be removed from our budget next year. Where is the breathing space for households? When energy bills will soon be more than £1,000 higher than promised, the Labour party’s gas price hike will disproportionately increase costs for people in Scotland. What about the many people who rely on home heating oil in my constituency and across Scotland? They will not benefit from the changes on standing charges. Where is the help for those households facing enormous hikes in heating costs? [Interruption.] I know that Government Members do not like to hear it, but I am still going to say it. [Interruption.] Where are the transformative measures on child poverty?
Order. I am struggling to hear the hon. Gentleman. Please let us hear the words being said.
Where are the transformative measures on child poverty? The UK Government only have to look to Scotland for inspiration and innovative policies to combat child poverty, such as the Scottish child payment.
No. Where is Labour’s equivalent? Where is the full windfall tax on the banks? Just 3% for 15 months will not cut it, when £46 billion of profit was made in 2024.
Will the hon. Gentleman give way?
I have already said no interventions, thank you. Where is the help for the Scottish whisky industry? Why is there nothing on fiscal drag and tax thresholds? Why is there nothing on VAT reduction for small hospitality businesses? Of course, the extent of the Barnett consequentials remains to be seen. Devolution is fine for mayors, but what we need in Scotland is a fresh start with independence. That is why we in the SNP choose Scotland, not this tepid version of a Chancellor’s Budget. It is a wasted opportunity, a betrayal of our energy workers and a hopeless stab in the back for struggling families. The Government are robbing Peter to pay Paul. I will conclude by channelling the words of T.S. Eliot—words written more than a hundred years ago. This Budget was not so much a bang, but a whimper.
Order. Before I call the next speaker, I remind the Members who are heckling from the Back Benches while also trying to catch my eye that they may want to be mindful.
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.
Fiscal responsibility means living within our means. Every household across East Yorkshire and up and down the country knows that we cannot spend more on the family credit card than we earn, racking up debt with little more than the hope of a future pay rise, yet that is exactly what this Government are doing with our country’s credit card—a credit card taken out in my constituents’ names. After Labour crashed the economy in 2008, it left a deficit of 10%. It was spending 10%—£160 billion—more on the country’s credit card each year than our country earned. Only the Conservatives’ fiscal responsibility was able to fix Labour’s mess and steadily wrestle that deficit down. Even after the exceptional need to support jobs and businesses through the global pandemic and the Ukraine war, that deficit rose to 4.4%—less than half of the legacy left by Labour in 2010. Here we are again, with Labour’s fiscal irresponsibility and no plan to deal with the deficit. Labour is borrowing £308 billion more than the plan it inherited in 2024. Under this Government, the national debt has surged through the £3 trillion mark for the first time ever. This spending cannot go on. This Government need to get borrowing down, they need to get public spending down, they need to get welfare spending down, and they need to get people’s taxes down. Next year the tax burden will reach a historic high of 37.9% of GDP under this Government, and it is set to surge from there. Where is this money going? I would like to address briefly some of the issues around the mismanagement of public money in the civil service. This Government, to their credit, pledged to reduce the size of the civil service, but I have bad news: the headcount has risen by 11,000 people since they took office. Cutting the civil service headcount is not this Government’s only broken promise. Last year, they put out a press release promising that they would instruct civil servants to stop what Labour themselves called “wasteful spending”—namely, banning Government-branded merchandise and away days in externally hired venues, rather than using freely available Government buildings. However, the Department for Environment, Food and Rural Affairs spent £20,000 on an away day at the Cumberland hotel in March. In the same month, the DCMS spent £2,000 on an away day at the British Museum. The following month, in April 2026, the Cabinet Office spent over £33,000 hiring the Hartwell House luxury hotel and spa, and its swanky restaurant with a 20-page wine list, for another retreat for its top tier of civil servants. I am slightly confused that the Parliamentary Secretary, Cabinet Office, the hon. Member for Gateshead Central and Whickham (Mark Ferguson), admitted that in a written answer to my hon. Friend the Member for Kingswinford and South Staffordshire (Mike Wood), because when I asked the question, I got the response: “In the calendar year 2026, the Cabinet Office has not held any departmental Senior Civil Service away days.” The Crown Prosecution Service spent £37,000 on an away day at the four-star Manchester Marriott hotel. The Department for Transport managed to spend £9,000 on an away day at the Foreign Office and £14,000 on one at the HS2 offices. The Northern Ireland Office spent £4,000 meeting in a castle. The Department for Education held an away day for £27,000 at a grade II listed building in Sheffield, while the Ministry of Justice spent another £34,000 on an away day at a theatre. The Treasury—which we might hope would be holding the purse strings a little tighter—held two away days, with one at the British Museum, and spent £25,000 “excluding VAT”. The Department for Energy Security and Net Zero held three offsite away days, two at four-star hotels, costing a total of over £50,000. The Department for Business, Innovation, Science and Trade also spent £50,000 on three, including one at the Emirates stadium because no “alternative venues were available.” The MOD and the Foreign, Commonwealth and Development Office could not tell me whether they had had any away days, as it would cost them too much to answer the question, so I dread to think how many away days they have had! Unfortunately, the Minister for Women and Equalities has not even bothered to reply to me, so I assume her staff have got lost on an away day to a nice spa hotel. The list goes on and on, but let me turn to merchandise. The Cabinet Office—which banned all of this—alone spent £4,500 on T-shirts, stickers and commemorative coins. I could move on to No. 10 North, but as we know, it is nothing more than a vanity project. In conclusion, it is time to bring back common sense and fiscal responsibility. Taxes are at a record high, growth is down, borrowing is higher, debt is up and living standards are down. We cannot keep spending more on the country’s credit card than we earn. Wealth must be created before it can be distributed, by our businesses, our entrepreneurs and those who go to work every day. There is no such thing as Government money; it is taxpayers’ money, and Labour is addicted to spending other people’s money, not creating it. We Conservatives want to see Britain richer, more prosperous and thriving. To paraphrase the excellent point made by the Leader of the Opposition yesterday, our country is overspent, overborrowed, overtaxed and drowning in an out-of-control welfare system—what a pickle we are in.
I am very happy to contribute to this debate, and it is a pleasure in particular to follow my hon. Friends the Members for Brentford and Isleworth (Ruth Cadbury), for Blackpool South (Chris Webb) and for Mitcham and Morden (Dame Siobhain McDonagh). I welcome this Budget for three reasons. First, it maintains the fiscal discipline that is a strategic imperative, and I think the fact that sterling, the FTSE indexes, and 10 and 30-year gilt yields have remained stable over the last 24 hours is a signifier of that. Given the risks that the UK economy faces—be it barriers to trade, the imposition of tariffs, volatile and rising energy costs, or higher Government borrowing costs everywhere—it is really important that this Budget remains within the fiscal rules. Secondly, it provides families, households and businesses in the towns, villages and cities that make up the Buckingham and Bletchley constituency with genuine breathing space as they manage ongoing cost of living pressures. Thirty-four thousand households in council tax bands A to D will receive a £100 household energy payment and even more will feel the extension of the electricity VAT cut. Businesses on Queensway in Bletchley and on the high streets of Buckingham and Winslow will gain from the higher small business rate relief threshold rise. Agricultural businesses in north Buckinghamshire will benefit from the extended red diesel duty cut. However, while fiscal responsibility is an absolute imperative, it should never be an end of itself. The third reason I welcome the Budget is that it does what my right hon. Friend the Chancellor sought to do, which is to back those “bloody-minded entrepreneurs”. It is not just me saying that; business groups such as Startup Coalition and UK Private Capital are, too. Fiscal responsibility enables Governments to help the people building Britain’s next generation of national champions and globally consequential companies. Be those in artificial intelligence, defence, clean energy, life sciences or advanced manufacturing, they are driving economic growth, job and wealth creation, and are ultimately underpinning the sovereign capabilities of the UK. Growth in every postcode is absolutely the right objective, and that means we need entrepreneurs in every postcode. Today is undoubtedly a better day and a better Britain in which to build a company than yesterday was. When it comes to helping people start a business, raising the trading allowance from £1,000 to £3,000 is a strong signal that people—young people in particular—can realise their dreams here in the United Kingdom. We have known for a long time that scaling businesses is where Britain could do much more and needs to go further quickly. Expanding the capacity of the British Business Bank and the National Wealth Fund, including by deploying £5 billion over the next four years in defence, recognises the role that public capital has to play in acting as a cornerstone investor alongside our deep pools of private capital—all £3 trillion of that. With all the blood, sweat and tears that go into building a business, we need to give founders a genuine, compelling reason beyond patriotism alone to remain anchored here and to stay here. That is why the founders’ relief is so welcome. I know that many business groups have been arguing and advocating for it across Government and Westminster for some time. We are giving entrepreneurs greater confidence that they can build and scale here and that they will be rewarded. Just as importantly, the relief will strengthen their ability to reinvest their wealth and reuse their expertise and experience in more ventures into the future. Growth and wealth creation, and fiscal responsibility, are intrinsically linked. Growth is the ultimate stabiliser of the public finances through stronger receipts that will help to reduce the budget deficit and reduce our borrowing costs in the long run. That will give us flexibility to let people keep more of what they earn and invest in the things that are particularly important to us, be they our national security, our schools or our police. The Budget is a very welcome step in the right direction. There is much more to do, and I look forward to the 10-year plan and the spending review in the long run. I welcome this Budget.
I welcome many elements of the Chancellor’s Budget, including his commitment to fiscal devolution, his promise to end rough sleeping and the additional assistance for people to pay their energy bills, but there were many significant omissions and missed opportunities. Instead of freezing fuel duty, he should have listened to Liberal Democrat calls to cut it. Instead of promising reform to carer’s allowance in four years’ time, he should have delivered it now. Instead of flirting with the EU, he should have committed to beginning negotiations to rejoin the single market and a new UK-EU customs union. For our young people, the Chancellor has moved away from Labour’s manifesto commitment to equalise the minimum wage and living wage while failing to address the student loan bubble, which is at bursting point, or to scrap his predecessor’s damaging national insurance contributions rise that is keeping young people out of work. For working people, he failed to address wage compression by following Liberal Democrat calls to increase the personal allowance and to raise the higher rate income tax threshold. That reform is vital for the 110,000 Londoners being dragged into the higher tax bracket. While there are measures in the Budget that can be welcomed, there are many missed opportunities. The Liberal Democrats will push the Government to be more ambitious and to deliver on their promise of providing people with the help they need during the cost of living crisis and with the unaffordably high cost of doing business. Not enough is being done to support small businesses that are struggling, particularly with the cost of employment. In retail alone, employment costs have jumped by £6.5 billion since the 2024 Budget. Unemployment levels are alarmingly high, with 25% of young Londoners not in employment, education or training. The Government must start making it easier for businesses to provide opportunities, particularly to young people as they begin their working life. The move to decouple gas and electricity prices is a welcome step, and we welcome the short-term relief that many households will receive to ease energy costs this winter, but the Government have failed to address the issue facing many businesses: the cost of energy for our industrial sector. Our dependence on other countries for fuel makes us all vulnerable to international turmoil. Household energy bills remain a third higher than before the war in Ukraine and the average UK resident and small business is being hit by those rises. The ongoing war in Iran reminds us yet again of the importance of secure and reliable energy sources. The best way to cut energy bills is to invest in home-grown renewable power. Make UK sets out the “ruinous effect” that industrial electricity costs have on investment. It has highlighted the continuing lack of action to address those costs and the risks now associated with taking on workers. The manufacturing sector accounts for 2.6 million jobs and 42% of UK exports; the Government must listen to its calls to reduce energy bills much more urgently than the 10-year schedule set out in the Chancellor’s speech. The British Chambers of Commerce and the chief executive of the Food and Drink Federation have echoed those calls, highlighting that the energy support available to certain manufacturing sectors does not apply to food and drink businesses. It is time for the UK to lead within Europe again on security, working closely with our democratic European allies so that we can support Ukraine and our European partners during peace and war. Our trade relations must also be adjusted to reflect the geopolitical realities we face. The Government must remove their self-defeating red lines and be bolder by introducing a new EU-UK customs union. Ministers must take advantage of the upcoming UK-EU summit to maximise opportunities for closer trading with the European Union and mitigate the risks and damage caused by schemes such as “Made in Europe”. The Liberal Democrats have always championed fiscal devolution, so I welcome that the Budget will legislate for the Mayor of London to set up a successor to the Elizabeth line business rates supplement. Anyone who has used London’s train network recently will acknowledge that it is in need of upgrades. Whether it be persistent cancellations on the District line or the discomfort of using the Central line, commuters in London deserve better. That said, the business rates supplement remains quite a limited way of raising funds and the Government have seemingly constrained it to apply only to the west London orbital and the Bakerloo line extension. So while I welcome the business rates supplement as a step in the right direction, I will continue to champion further fiscal devolution for the capital. I am concerned that the Home Office and the Department for Transport are set to face funding cuts. While taking into account the caveat that figures are adjusted due to lower employer pension contributions, the Home Office faces £1.2 billion in cuts next year and another £1.2 billion cut the following year while the DFT will lose out on £100 million over two years. Two of the most common issues I see in my inbox are concerns about policing and transport, so that is of huge concern to my constituents. Lastly, on an issue that the Prime Minister has declared is “a matter for London and Londoners”, I come to the question of Heathrow expansion, which is still yet to be answered. The Budget Red Book states that, on Heathrow, “The Transport Secretary will provide an update as soon as possible”. If the Prime Minister is true to his word, why does the decision on a third runway still seem to lie in the hands of the Government? It is a white elephant project that does not have the support of the majority of Londoners and must be scrapped.
Yesterday in the Budget the Chancellor’s priorities, and those of this Government, were clear: delivering breathing space for families and businesses in Gloucester this winter in the middle of global headwinds from wars in Ukraine and the middle east, and starting to tackle the big issues facing our country such as defence, social care, and energy bills, to build fresh hope and optimism for the future—a future that delivers real change for Gloucester residents. The cost of living crisis remains the No.1 concern for families and businesses in my city, so I welcome the down payment made by the Prime Minister this summer, reintroducing the £2 bus fare cap, scrapping VAT on electricity bills, and cutting business rates for our pubs. Yesterday I was pleased that the Chancellor went further. The £100 household energy payment will be paid to 50,000 households in Gloucester this January, providing much needed help in the coldest months. Freezing fuel duty and increasing the minimum wage above inflation will help. The Chancellor acknowledged that those measures alone will not solve the cost of living crisis, but they are a vital first step, with the Prime Minister’s 10-year plan coming later this year, and the spending review next spring. I ask the Government throughout all of that to keep hard-working Gloucester families at the front of their minds when going through those processes. Breathing space is not just for families; it is also needed for the small businesses that are the beating heart of our city. For too long, our local high streets have been punished by an outdated business rates system. By freezing rates in real terms for retail, hospitality and leisure properties, and providing that 20% cut for our pubs and live music venues, we are taking decisive action. By increasing small business rates relief, almost 60% of businesses on our high streets will be taken out of business rates altogether. I also welcome the Government’s new Hope on the High Street strategy, which aligns with the great work done by Andrew Hearne at Gloucester city council on our city masterplan. It is an ambitious plan for our city, and we must be ambitious. I must draw the House’s attention to the immediate roadblock that we face at home in Gloucester, because Gloucester city council is, to all intents and purposes, entirely broke. Years of mismanagement have forced it to rely on an emergency bail-out from the Government just to keep the lights on. To make matters worse, following a recent vote of no confidence in the leader of the council, the entire Lib Dem cabinet of the council has walked away, and it is now operating without any political leadership whatsoever. My constituents cannot afford for Gloucester’s regeneration to be held hostage by local political chaos and bankruptcy. The city centre desperately needs investment, officers need political certainty, and the businesses of Gloucester need a reliable, functioning partner to unlock the growth that this Budget makes possible. So I ask the Government today: what support can they provide to my constituents to get Gloucester back on track? How can we, at a national level, bypass this local vacuum of leadership to ensure that our city centre gets the investment it so desperately needs, and so that our national growth strategy is not blocked by local government failure? On growth, I want to ensure that Gloucester businesses truly benefit from our national economic strategy. Small businesses need a reliable place in the national supply chain. When we invest, we must buy local, build local, and grow local, and nowhere is that supply chain more crucial than in our national security. Gloucestershire has a proud, deep-rooted footprint in the defence, cyber-security, and aerospace sectors. I am proud that this Government are fully funding the defence investment plan, and putting ourselves on a firm path to spend 3% of GDP on defence by 2030. I urge the Government to ensure that that historic investment flows directly to innovative SMEs in Gloucester such as Poeton Industries, Avon Metals, Cherry & White and Permali—the very businesses engineering the technologies that keep our country safe. This Budget fundamentally recognises that the people closest to problems should have the power to solve them. It promises greater control over local economic futures, and it is clear that devolution is the key to unlocking Gloucester’s immense potential. Sadly, due to a lack of consensus from local leaders, Gloucestershire is being left behind. Only one option makes long-term sense for Gloucester, and that is for us to join the west of England combined authority. I am in complete cross-party agreement with Lisa Spivey, the Liberal Democrat leader of Gloucestershire county council, on that. In the meantime we need a Gloucestershire foundation strategic authority to unlock investment in my city, and I ask the Government to meet me to deliver that. Every decision in the Budget shows that we have shut the door on the reckless, unfunded promises of shadow Chancellors past, and that we reject the dangerous rhetoric of Reform—its Members are again not here—whose pledge to slash public spending in 100 days without any detail would decimate our hospitals, schools, and police. We are choosing a different path. Gloucester has an incredible future ahead of it, provided that we get the devolution and investment we deserve. We can build new council homes, we can rebuild our high streets, and we can finally deliver the fresh hope that our great city deserves.
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.
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”?
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.
When I was first elected to this place as the proud Member for Glasgow South West, many of my constituents lived in great financial uncertainty: the more than 6,000 kids in my constituency who live in relative poverty; the many constituents who have not had a decent wage rise for over 10 years; and the proud shipyards of Govan that are unable to fill their order books. I am proud that I was part of a Government, and a friend of a Chancellor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), who helped to eliminate some of that uncertainty by ensuring the fastest wage growth in a year—it was much greater than any wage growth that happened in the previous 10 years—and by lifting the two-child benefit cap. That took thousands of kids in my constituency out of poverty, and probably benefited the local economy to the tune of £4 million. We also secured the Type 26 frigate contract, which will give certainty to Govan shipyard workers for generations to come. It is not only in the large policy areas that this Labour movement does its work. It is at its best when, at the ground level, it feels the pain of ordinary people who are trying to get by and are not able to live the life that they were promised by their forefathers. In that regard, I am very proud of the Budget, and the direction that my right hon. Friend the Chancellor has taken, particularly in relation to energy bills. Through this Budget, we are committed to immediately ensuring that 90% of my constituents will feel the benefit of £100 off their energy bills; and 100% of my constituents will be absolved from the need to pay standing charges on their energy bills. All my constituents will also have VAT eliminated from their electricity bills. No country or Government can insulate their citizens from the pressures of global markets and global conflict, but we can do as much as we can. I believe that we are doing as much as we can on energy bills, and creating the space for people to live more comfortably.
The hon. Gentleman is talking about doing everything that we can. One way to bring in some funding is through gas and oil tax receipts. Page 94 of the Office for Budget Responsibility report explicitly says that Rosebank is baked in as being granted. Does he support Rosebank?
The hon. Gentleman will know that there is a quasi-judicial process, and it would be remiss of me to make undertakings on an issue for which my right hon. Friend the Secretary of State for Energy Security and Net Zero is responsible. I gently remind the hon. Gentleman that those calculations have been baked in for many years. This is not some new reference to the assumptions in this year’s OBR report, and he knows that very well; I think he is being a little mischievous in his questioning. Let me return to my principal point about giving breathing space. It is not only families and individuals who need breathing space; it is businesses, including small businesses on the high street. I am really proud that before and in this Budget, we have been lifting many more businesses on the high street out of the need to pay business rates. As hon. Members may be aware, in Scotland, that will not be automatic; it is at the discretion of the Scottish Government. I plead with them to ensure that the Barnett consequentials of that decision translate into savings on business rates for ordinary high-street businesses, including pubs. My right hon. Friend the Prime Minister made an undertaking during the summer to reduce business rates for music clubs and pubs. As far as I know, that has not yet translated into a similar policy statement in Scotland. I know that pubs in my constituency, which are around many of the underground stations in Glasgow—students and others like to do a Clockwork Orange pub crawl—crave and would benefit from those savings. I urge the Scottish Government to pass them on with immediate effect. Those interventions all make life a little more bearable and easier. I know that some Members think that there is a binary choice to be made between social and personal economic security on the one hand, and our national security on the other, but there is not; one is very much reliant on the other. That is why we are committed to ensuring that our defence spending hits the 2030 and 2035 targets that our NATO allies expect it to. I am proud that my constituency is contributing to the defence of our nation, whether it is through the shipyards and building the Type 26 frigates that will patrol our seas, or through more novel technologies, and drones being designed in my constituency. Labour Members are proud of investing in defence. Investing in defence is not taboo, contrary to the view that the Scottish Green party and the Scottish National party have sometimes espoused; we in Scotland should be proud that we are at the forefront of defending our nation, and we will always invest in that. I am grateful to the SNP for finally relenting and matching our funding for two defence technical excellence colleges in Scotland, enabling us to defend our nation. In closing, I will just say that when I speak to this Prime Minister and this Chancellor, I find that they understand Scotland, and they feel the needs of Glasgow South West. The Budget that they have delivered will give us breathing space for today, but also—more importantly—hope for tomorrow.
It is a pleasure to follow the hon. Member for Glasgow South West (Dr Ahmed). The Chancellor has said that his Budget carries through the Prime Minister’s vision, but that there is still much to come, in his 10-year plan and in next year’s spending review, so there is still an opportunity to change fiscal policy in a way that could help the Government to achieve their housing targets, and help councils, developers and communities to revive town centres and bring derelict and long-term empty buildings back into use. I start by congratulating the Friends of Campsie High Kirk, the first group in Britain to take ownership of an A-listed heritage building through the ownerless property transfer scheme run by the King’s and Lord Treasurer’s Remembrancer. The work of that group has led me to raise this issue today, and I am incredibly proud to have it in Mid Dunbartonshire. It has taken ownership of a derelict A-listed church, with plans to renovate it for community use, but nearly every piece of work that it carries out on the site will be subject to VAT at 20%. Until recently, Scotland’s historical churches could claim back VAT on repairs through the listed places of worship grant scheme, but that scheme has closed, and the fund that has replaced it covers England only. The UK Government say that Scotland’s share of the money has gone to the Scottish Government, yet no fund has been set up to spend it, so even the buildings that could once claim that 20% back are now caught. Will the Minister take this issue up with the Scottish Government, and press for a fund to be created? It is not just community groups that face this hurdle to restoring our historical sites. Should a developer wish to restore a similar historical building and make it into housing, they would pay VAT at 5% if the conversion qualified, or at the full 20% if it did not. Meanwhile, if it were to demolish the building and start anew, it would pay no VAT on the new homes. The Government’s explanation is that the zero rate on new homes is there to “stimulate the construction of new homes”, but it should not matter whether or not a home is new; if any building is lying long-term vacant or derelict, bringing it back into a habitable, eco-friendly condition gives us the same benefit as building a new house. On top of that, restoring a building preserves the character and heritage of an area, saves carbon by reusing existing materials rather than making and transporting new ones, and often meets less local opposition. We all know how difficult it can be to get permission to build a new home, and we all know the impact a derelict property can have on a street. His Majesty’s Revenue and Customs has told my office that it does not hold figures on how much VAT it raises from building repair and restoration. Before ruling anything out, the Treasury should be able to tell this House how much that tax brings in. With that in mind, I have three asks of the Treasury. First, I urge the Minister to investigate and publish how much VAT is raised each year from the renovation and repair of historical buildings. Secondly, will the Treasury assess the case for treating renovation, repair and conversion in the same way as new build? Thirdly, will it confirm that Scotland will benefit from its fair share of the derelict buildings fund? Our historical buildings help us make our communities what they are. The tax system should help people to save those buildings and bring them back into use, not charge people more to repair than to build new.
I hold the hon. Member for Aberdeenshire North and Moray East (Seamus Logan)—he is no longer in his place—in high regard, but I thought it was very telling that he would not take any interventions. The Scottish National party is desperate to paint the gloomiest possible picture of this Budget, but its argument does not hold. The reality is that the Budget is full of measures that will be very widely welcomed, in Scotland and by my constituents. Measures such as scrapping the standing charges for gas and extending the freeze on fuel duty will be extremely welcome to my constituents in Glenrothes and Mid Fife. I am delighted that the Budget also means that pensioners will see their state pension rise by nearly £500 a year, and that the Government have acted to ensure that pensioners receiving only that income will not have to pay income tax on it. I make the case again to Ministers for the nearly 850 retired miners in my constituency who are members of the mineworkers’ pension scheme. I hope that Ministers will act swiftly to ensure that all the funds in the scheme go to retired miners. However, we must also remember the context for every pensioner in my constituency—the action taken to increase their pension, and the action on rising energy prices, which, as we approach another cold Scottish winter, have been a subject of deep concern to my constituents. The £100 energy payment being introduced for households in council tax bands A to D is particularly welcome. Thank goodness the SNP has actually seen sense on one thing, and is ensuring that this policy from the Government will be implemented in Scotland. In my constituency, nine out of 10 households will benefit. That is vital relief from the rising energy prices that we face because of global economic challenges. That is the real, practical support for families that the Prime Minister promised, and that this Budget delivers. The Budget not only provides breathing space in tough times; it also sets out investment that brings huge opportunities for the future of our communities in Glenrothes and Mid Fife, with the prospect of skilled work and good jobs for our young people. Along with the Defence Secretary, who gave an excellent speech at the start of this debate, the Chancellor has committed the funding for the defence investment plan. His contract decision that the new dry docks for Faslane will be built not in a foreign shipyard but here in the UK is a wonderful opportunity for the Methil yard in my constituency, which was saved from closure by this Government. If the new dry docks are built by the skilled workforce at Methil, that will secure the long-term future of the yard and drive its recruitment even higher. Methil is a community with a proud industrial history but high levels of social deprivation; this is a wonderful opportunity for reindustrialisation in our part of Scotland. It is not only in defence that there is such potential to grow our local economy. We have thriving renewable energy businesses, and the decision to proceed with the Jackdaw project has been widely welcomed in the Scottish energy sector, because it will provide employment in an industry whose workforce will be vital if we are to succeed in making the transition to renewables, and to sustain skills and employment in our energy sector. The £18 million pledged to the University of Edinburgh to boost our national capacity to design and test our own semiconductor chips is a decision that will be warmly welcomed across the Forth in Fife, where industry-leading companies such as Clas-SiC Wafer Fab and Semefab are based. Their highly expert staff export their products right across the globe. That is another example of how we are taking advantage of the revolution in artificial intelligence to ensure security, and to realise economic benefits for many of our high-tech, high-skilled industries in Scotland. This is a Budget for breathing space, a Budget to protect our economic stability and a Budget for investment in the future of our communities. I commend the Chancellor for recognising not only the challenges that we face as a country, and offering families respite from them, but the many opportunities that we have to strengthen growth in our economy in the future.
Before I turn to the Budget, I would like to take this opportunity to pay tribute to Sue Holt, whose death Mr Speaker announced to the House this morning. I am a member and former leader of the OSCE Parliamentary Assembly delegation, and I worked with Sue over quite a long period. She was always immensely cheerful and efficient, and her death came as a real shock to us all. I send my condolences. At least there is one part of the Budget that I welcome: the continuing support being given by this Government to Ukraine. That was initiated under the last Government—indeed, over 10 years ago, long before the full-scale invasion by Russia—and we have continued to maintain it. It is a cross-party matter, so that support is very welcome. One of the reasons it is so important that we support Ukraine is that Ukraine is our frontline, and the threat to Ukraine is not just a threat to that country; it is a threat to all of us. That is why it is essential that we increase our defence expenditure now. The Chancellor has recommitted to spending 3% of GDP on defence by 2030, but that is still some way off, and we have heard from the Secretary of State for Defence about the immediacy of the threat. It is a matter of some concern that while we are still debating how we will get to 3%, allies such as Denmark, Estonia, Lativa, Lithuania, Norway and Poland are already exceeding that level and planning to spend more. Perhaps one of the reasons we have not yet been able to explain how we will meet the target is that the essential measures to fund it—in other words, addressing the welfare budget—have again been ducked by this Government. We await the outcome of the reviews by the Minister and Alan Milburn, but we have reached a position in which 6.7 million people are now claiming out-of-work benefits. That is creating a situation that is not just unaffordable; it is actually immoral that so many people of working age are out of work and living on benefits. The situation in this country is that all the economic signals for the long term are heading in the wrong direction. Borrowing is going up. Our national debt already stands at £3 trillion and is scheduled to increase further. Tax levels are the highest in our history. The Chancellor claims that he wants to cut regulation, but we have heard today from the OBR that the Employment Rights Act 2025 will result in unemployment standing at over 5% next year. That situation destroys incentives to work, drives away investment and causes entrepreneurs to leave the country. It is an unsustainable situation, yet nothing in this Budget does anything to give confidence that those things will be reversed. I will quickly refer to a couple of measures. In the Prime Minister’s first statement to the House, I raised the situation on our high streets, where so many businesses have been hit by not just the increase in business rates, but the increases in national insurance contributions, energy costs and the minimum wage. Although the measure to increase the threshold for business relief is of some small help, it is nothing like sufficient to help those businesses that are struggling to survive. I regret that there was no mention of VAT, a cut to which UKHospitality has identified as a critical measure that could help, because such businesses have to compete with those in countries such as France, Spain and Italy, which levy rates that are half of those here. I will quickly mention hair salons, which the Chancellor talked about. They often face unfair competition from identical-looking salons next door, where the chairs are rented out and the staff class themselves as self-employed. That is depriving the Treasury of proper revenue while also creating unfair competition. I hope that is something that the Treasury will listen to. I am sorry that the gambling sector is yet again being used as a cash cow, and I refer the House to my entry in the Register of Members’ Financial Interests. By increasing the tax on gambling yet again, the effect will hit our high streets even harder, because a lot of betting shops are going to be driven out of business.
My right hon. Friend has been a staunch defender of Ukraine for many years in this House. Would he agree with what President Zelensky said yesterday, as reported in The Sun, when he advised this Government to prioritise UK defence spending and to do so without further delay? Does Zelensky know something the Government do not?
I am extremely grateful to my constituency neighbour for making an excellent point—and for giving me another minute. He is absolutely right that President Zelensky once again has spoken words for the Government to listen to, if only they would. It is absolutely right that we should increase our support for and expenditure on defence. Finally, my right hon. Friend and I both represent relatively rural constituencies, and I regret that the Budget made no mention of the harm being done to the agriculture sector through the family farming tax, nor did it provide any help to those constituents—I have many, and I know he does as well—who are off the grid and rely on heating oil. They will not benefit from the abolition of the standing charges, yet they have faced huge increases. Perhaps the only thing to celebrate in this Budget is the fact that the Chancellor did not listen to his Back Benchers who wanted him to go even further, with a wealth tax, a mansion tax and an increase in capital gains tax; long may it continue that he listens to us, not to them.
I welcome the opportunity to speak in today’s debate on the Budget, and to talk about some of the things that will affect my constituents. This Budget does indeed provide the breathing space needed by families, workers and small businesses across the country, built on the bedrock of fiscal discipline and helping families to deal with high living costs. Most notably, looking at energy costs, over 92% of households across the Blaydon and Consett constituency will benefit from the household energy payment, directly delivering £100 to help households with bills this winter, alongside the extension of 0% VAT on electricity. Many of these houses are of course of poor quality and poorly insulated, so it is particularly welcome. For local motorists, tradespeople and commuters, extending the 5p fuel duty cut keeps daily costs down, and many constituents have written to me about that. When talking to the North East chamber of commerce recently, I heard that our local businesses were concerned about operating with the current system of taxes. For our high street businesses, the £1 billion business rates package ensures that over 52% of retail, hospitality and leisure properties across the north-east will pay no business rates at all next year, giving independent traders room to plan and to invest. Alongside the 35% business rates relief for pubs, the new guest beer legislation will give local landlords the right to serve locally brewed beers on tap, supporting independent north-east brewers such as the Firebrick Brewery in Blaydon and the Thirsty Moose in Ryton, which have spoken to me about these issues.
Like my hon. Friend, I have small breweries in my own constituency, including the Saltaire Brewery, the Goose Eye Brewery and SALT. Does she agree with me that, with rising energy costs, the £10 million annual alcohol duty relief for small brewers is very welcome from the Chancellor?
There are indeed welcome moves in this Budget, and I know that the guest beer one was particularly wished for. On regional growth, I warmly welcome the new £1.5 billion borrowing facility for mayoral strategic authorities that was announced yesterday. In Gateshead, these devolved borrowing powers will allow us to move forward with the transformation of the Gateshead Quays development. Backed by £24 million in enabling funding from North East Mayor Kim McGuinness, essential site preparation and infrastructure work can now begin. Once these loans allow us to start investing in full, Gateshead will gain a world-class venue featuring a 12,500-seat arena and an international conference centre. The North East combined authority estimates that this ambitious development will attract over 1 million visitors every year, generate a £70 million annual boost to our local economy and create 2,000 good local jobs. I want to set the record straight on the international investment summit. The Budget Red Book announces that “The next International Investment Summit will take place in spring 2027 in Newcastle.” I must gently correct the record for the Treasury. As the Chancellor announced in his speech yesterday, that major summit will actually be hosted on the south side of the Tyne, right in Gateshead. I look forward to seeing Tyneside on the global stage. As we prepare to welcome global investors, my firm hope is that the investment announced at the summit stays directly in Gateshead and the surrounding area, helping to further fund our local regeneration and economic growth, and benefiting my constituents on the Blaydon side and beyond to provide employment opportunities, so that it will affect the whole of Gateshead, not just the quayside. There is a little-noticed measure in the Budget on the preventive departmental expenditure limit. I particularly welcome the creation of ringfenced preventive expenditure, which establishes a spending category for early intervention in the spending review. We do not have much detail on that, but I am going to get my bid in quite early. I want investment in preventive measures that affect all Departments in relation to suicide prevention and mental health. This is a really important issue and one that I come back to regularly. I warn those on the Treasury Bench that I will be referring to it many times in future, so that they do not lose the message—if they could take a note now, that would be helpful. Extensive research conducted by Samaritans and Mind demonstrates that every single suicide prevented saves our economy roughly £1.46 million. We cannot reduce lives to figures on a spreadsheet, but that shows that investment in preventive work on mental health and work on suicide prevention is well worth the money. Across County Durham, 878 local properties will benefit from the real-terms business rates freeze, alongside 377 in Gateshead. To help our young people gain high-quality skills and secure good careers, new apprenticeship brokerage funding and expanded mayoral apprenticeship services will support businesses, including small and medium-sized enterprises, to hire and train the next generation. The derelict buildings fund will help both sides of my constituency, making a difference to our high streets.
It is an honour to follow the hon. Member for Blaydon and Consett (Liz Twist). I join my right hon. Friend the Member for Maldon (Sir John Whittingdale) in paying tribute to Sue Holt. I was in Strasbourg with her only a few weeks ago when she was taken ill. It was a great shock to all of us to learn what had happened to her. I want to cover measures in the Budget that relate to my constituents, the Home Affairs Committee and my constituency, but I realise I have limited time so I will race ahead. It is pretty quick on the Home Affairs Committee side of things, because there was not very much in the Budget about such matters. In fact, there was only one mention in the speech: £15 million over three years for a misogyny prevention fund. We are yet to see what that actually involves, but I worry that priority is being given to perpetrators. Where is the money for victims? A victim-centred approach to violence against women and girls is essential. The Government have already said that £1 billion needs to be spent on tackling violence against women and girls during the life of the strategy, but the Red Book states: “the government is prioritising £55 million of funding over two years to accelerate delivery of the Violence Against Women and Girls strategy.” Again, £55 million out of £1 billion does not sound too much. On issues that were not mentioned but relate to home affairs, the Committee is conducting two inquiries at the moment. I am interested in the work that the Government are doing on apprenticeships and so on, but I urge them to look at the work the Committee did with Demos—a piece of deliberative democracy—looking at the public’s attitude to work-based immigration. They will find really interesting insights on the need to prioritise upskilling UK workers to take job vacancies, not just looking overseas to fill those roles. The Committee is also doing to a piece of work on the impact of serious and organised crime on local neighbourhoods. My right hon. Friend the Member for Maldon made some really interesting comments about the high street. It is the case that we have seen the hollowing out of the high street, and the measures that the Government have taken on national insurance, business rates and so on have left a vacuum that is being filled by organised criminality. That is filling our high streets in a way that is inappropriate and that we do not want, so I urge the Government to deal with that issue. Moving on to issues that affect my constituency, I welcome the £100 for A to D council tax payers. We have a disproportionately high number of properties in bands A to D in Staffordshire Moorlands, so more people will be affected by that than in some other constituencies. However, there was nothing in the Budget for those who rely on heating oil, and they will not benefit from the abolition of gas standing charges. Those people really do need help; the price of heating oil is hideous and, as we come into winter, the numbers that have been quoted to fill a tank of heating oil are astonishing. Again, I join my right hon. Friend the Member for Maldon in commenting that there was nothing about hospitality and tourism. As the Member of Parliament for Alton Towers and other great local attractions, including the Peak Wildlife Park, I know how much they welcomed the reduction in VAT over the summer and how much they want to see that made permanent. There was also nothing for farmers in the Budget. It would have been very heartening if the Chancellor had mentioned something about the family farm tax, to give farmers the respite that they need. The Government tell us we need to have local government reorganisation in order to benefit from many of the measures in the Budget. As I said following the Minister for Local Government’s statement earlier, if we are going to have a mayor, we do not need to reorganise the structure of our local government as well. Let officials and councillors spend their time and effort on delivering services and let the mayors have the strategic overview. That would be a much better approach. The Peak Cluster project proposes to enable the cement industry to continue in the Peak district through carbon capture, with plans to transport the carbon to Morecambe bay. This is of great concern. How much carbon is going to be emitted in building the pipelines that will go underneath the Peak district, Cheshire and other areas to get out to Morecambe bay, where the carbon can be put into an empty gas field? Surely, it would just be better to allow the cement industry to continue producing cement in as clean a way as possible in the United Kingdom, without the need to build the pipeline, with all the environmental damage that will cause. I welcome the comments around new battery storage, and solar farms needing to be connected to the grid to start with. That is a measure that many of my constituents will welcome.
High energy costs are one of the biggest issues facing both my constituents and the small businesses that our economy needs to thrive, so I am delighted that the Chancellor announced that gas standing charges—which we all know are not fair—will be removed. That comes on top of cost-of-living policies already announced by the Prime Minister, such as removing VAT from electricity—a measure that the Chancellor has now extended—on top of a direct £100 household energy payment eligible for band A to D households. On top of the £150 taken off energy bills at the last Budget, these things add up. Focusing on energy costs is the progressive thing to do. The poorest 10% of households pay the greatest share of their money on energy, at over 12%. The measures provide support for those most in need: the families, and particularly the children, in poverty in North West Cambridgeshire and across the country. Indeed, the whole Budget reflects progressive principles: 80% of households—all bar the top 20%—will have more money in their pockets from this Budget; the ninth decile breaks about even; and it is only the top 10% that are being asked to pay that little bit more—and it really is only a little more, at 0.1% of their income. That is very much the Labour way. All the support that we are providing must of course be paid for, and a key part of that will come from delivering growth. And we are delivering growth. Our economy was the joint fastest growing in the G7 in the first half of this year. That comes alongside the news that the IMF forecasts that we are set to deliver a bigger reduction in borrowing over the next few years than any other G20 country. We are one of only two G7 countries to cut our deficit this year, despite all the global headwinds that we face. In many ways, I feel sorry for the Conservatives, because they have the very difficult job of reading a Red Book full of good news and trying to make it sound bad—[Interruption.] I welcome the discussion in the Budget about lowering business costs, both through business rates relief and freezes. We have heard a lot of criticism that there is nothing in the Budget for hospitality, but about 50% of retail, hospitality and leisure businesses in the east of England will not be paying any business rates at all. The reforms to regulations will be saving businesses up to £5.6 billion a year if we hit our target. I encourage the Government to ensure that that also applies to our life sciences sector. I have spoken previously in this Chamber about options for reforming clinical trial regulation such that we save business and the NHS time and money and attract more investment—not necessarily by cutting regulation, but by streamlining it and reducing duplicated effort. An awful lot of different regulators look after clinical trials at the moment, and I think there is a lot of potential to streamline some of that down, save a lot of money and bring more investment into that area. I will turn briefly to another area I would have liked to see more work on, and something I hope the Government might consider taking forward in the spending review, which is gift aid and the tax exemptions given to charities. There is very little scrutiny over that expenditure, which is sizeable, with more than £5 billion of reliefs for charities in the tax year to April 2026. Of course, the vast majority of charities spend that money well and on good causes, and that is to be commended. However, due to fundamental problems in the law, it is far too easy for organisations that provide very little or no benefit to the public—in some cases, they may even cause active harm—to obtain charity status and, in so doing, claim public money through gift aid and tax exemptions. That fact damages the whole sector and those within it who do such good work. In July 2025, The Guardian reported that the Kasner Charitable Trust transferred £5.7 million to support an illegal settlement in the occupied west bank. In theory, therefore, the UK taxpayer could have funded an illegal settlement by over £1 million in gift aid through that transaction alone. The fact that that was permissible under our current system clearly shows that major reform is needed, including to Treasury rules, and that significant amounts of taxpayer money could be saved, because that is not an isolated example. There are many similar organisations—taxpayer-funded charities—that are preaching horrendous misogyny, homophobia and other forms of hatred. This is a monumental waste of our constituents’ money, which we could be redirecting both towards our public services and to tackle violence against women and girls at the same time. I know that that is a priority for this Government; they are showing it in the measures in this Budget, such as the £15 million announced to create a misogyny prevention fund, which will have a real impact. However, such measures are hugely undermined when the taxpayer is also subsidising major organisations like this. Earlier this week, there was a report of a mosque in which preachers were advising husbands that they could hit their wives. Just yesterday, I became aware of a church with awful posts on its website that deny the existence of marital rape, alongside all sorts of other horrendous misogyny. That church had an income of £5 million, £1 million of which could be taxpayer funding. That has to stop, and I implore Treasury Ministers to consider what options they have to ensure that it does.
Torbay has one very sad accolade: it is the most deprived constituency with a Liberal Democrat MP. The cost of living crisis is therefore close to my heart. The fact that the Government have reduced fuel bills for some people is welcome, but it is a small step. As the Liberal Democrats highlighted, there were other opportunities on the table that could have helped people with the fuel crisis, which is set to bite really deep come the new year, when those bills go up. I am only too aware of the challenges that people have getting out and about in a rural county such as Devon. Further support measures that the Liberal Democrats identified were, sadly, left on the table. As our spokesperson, my hon. Friend the Member for Maidenhead (Mr Reynolds), said earlier, it is about growing the economy and unshackling ourselves by using what opportunities there are for us; not choosing to keep to those red lines is extremely important. On the upside, I want to use this opportunity to celebrate the fact that the oldest pub in Torquay, the Hole in the Wall, is set to reopen tonight. I am delighted that my uncle Drew Millin will be performing there on a Thursday and Sunday night—I wish I was going to be home in time to join them. On a more negative note, like many others in this Chamber, I am disappointed that the temporary cut to VAT that we campaigned for to help our hospitality and tourism industry was sadly not included in the Budget. That opportunity still sits there, and it would give us a boost in a number of different ways. As colleagues have already highlighted, the national insurance hike has also hit that industry. Even raising the level at which it kicks in would be helpful, particularly for those not in education, employment or training and young people by providing those opportunities for their first job in the hospitality industry. Hospitality is also in fear of the overnight levy. There is an irony in that the VAT rate in Italy, Spain and France is 10%, whereas here it is 20%. Applying an overnight levy is quite perverse unless there is a cut to VAT to put us on more of a level playing field. I have even had Scouts associations that run a campsite in Torbay concerned that Scouts groups and similar youth facilities could be hit by such a levy. My No. 1 priority as the MP for Torbay is the rebuild of Torbay hospital. It is somewhat disturbing that there is only £190 million in the Budget to support our NHS. That would not even cover the rebuild of Torbay hospital, which is desperately needed. I hope that the Chancellor will continue to push hard on supporting our NHS. In conclusion, I welcome the changes that have been made, including the taper that is set to be applied to carer’s allowance. That is a significant step in the right direction. However, it is a bit of an indictment on the DWP that there is to be a four-year delay in its implementation. I welcome the approach where the allowance will taper away for every £1 earned over the amount, but surely there is an opportunity to be more generous in the long term as the change comes forward.
I am going to give a slightly different speech today, because I think that what the Government are doing with this Budget shows both a material and moral difference between our two sides. For us on the Labour Benches, it has always been clear—indeed, it is in our founding values—that every single person in this country should be able to live a decent life and that out of that we build prosperity for all. Those on the Opposition Benches believe that only some should be able to afford a decent life—a vision that has made us not just materially poorer but morally poorer. I have written Budgets in the Treasury and in Somaliland. I have seen really difficult Budgets and, make no mistake, this was a difficult Budget at an incredibly difficult time. We face existential challenges, including an affordability crisis, a burning planet, war in Europe—and all of it coming at the same time. Underneath it all is a question that underlines our politics: will we stand strong together to meet this moment, or will we fall apart divided, weaker and poorer? We made our choice in this Budget: we will see every single person, family and place do even better than before. Families, workers, business and Government will work in partnership to create prosperity. In this Budget we reduced energy bills so that families can afford the basics, but also because when families have more in their pockets, they spend more down the shops, and that helps their local businesses. We are helping businesses with the things that they require—roads, skills and investment in energy—and we are cutting rates to give them a bit of breathing space as we go into what we all know will be an incredibly difficult winter. For the Government, it is being able to raise the funds that we need in the fairest way possible and in a way that does not damage prosperity. That is why we have a windfall tax on the banks, who have made huge profits in the past few years, and on oil and gas giants. They are making tens of billions of pounds from Iran and Ukraine, so we are making a choice to use some of that money to help cut bills for people in our constituencies across our country. We know that this works not just because we have the fastest growing economy in the G7 but because it is what our past tells us. We know that it was Bevin’s alliance of labour and capital that helped win the second world war. We know that Attlee built common prosperity based on common sacrifice, all of it from common endeavour, and Blair and Brown renewed a nation. All that built upon the fundamental ideal that we hold, included on our founding membership card and, indeed, today, that we achieve more by standing together through our common endeavour. There are those who believe differently from us. They believe that we should allow oil and gas giants and banks to make huge, record windfall profits, leave that there and not try and help every single person in this country. We have also seen that Reform, which supports racist thugs and masked people on our streets, will use those kinds of tactics to distract from the fact that it wants to give its crypto-billionaire mates tax cuts. That is who we stand against and that is the ideal that we stand against on the Labour Benches. We choose a different path. The British people are better than that—better than the anger and the division, but also better than the penury that leads to. We know, on these Benches, what we have always known and seen throughout our history: that we build prosperity for all; that we stand together when each of us can stand as tall; that a nation is only as strong as each of the people who has a stake in it; and that they have a stake in that nation if life is affordable for all. That is the choice that we have made in our history—in our greatest moments—that was the choice that helped us win a war and rebuild our nation afterwards and it was the same choice that saw us build prosperity in our past and, indeed, prosperity in our present. That is what this Budget represents, that is the choice that we make and every single one of us is so proud of it.
On a point of order, Madam Deputy Speaker. It has just come to my attention that the right hon. Member for Rayleigh and Wickford (Mr Francois) made a particularly nasty age-related comment during my speech. I wanted to see, first, if that was in order and secondly, if he might like to say that so that his young constituents can hear what he thinks of them.
I thank the hon. Member for his point of order. I did not hear any comments in the Chamber and it is not a matter for the Chair—I did not hear it.
Further to that point of order, Madam Deputy Speaker. If I caused any offence, I am sorry, but I was reacting to the fact that the hon. Gentleman effectively said that the people on the Conservative Benches could not read, which I humbly suggest is not very polite.
I thank the right hon. Member for his point of order. That is clearly not a matter for the Chair, but a matter of debate. I ask Members yet again to treat each other with the courtesy and respect that we expect in this Chamber.
It is a pleasure to follow the hon. Member for Loughborough (Dr Sandher). The overriding question after the Chancellor sat down yesterday was, “Is that it?” Most Budgets manage to survive 24 hours before they fall apart; his Budget lasted about 24 minutes before it fell apart, as the Leader of the Opposition eviscerated it, quite rightly. The verdict this morning suggests that living standards will fall over the duration of this Government and that although over the 2010-2020 period household income increased by 12%, in this decade it is likely to increase only by 2%. That demonstrates that this Government and this Chancellor are making Britain poorer, and we have to remember as well that there are baked-in tax increases from the previous Chancellor that are kicking in now. I will look at four areas of the Budget where there are missed opportunities. First, as my hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown) pointed out, there is nothing in the Budget for young people. There are a million young people not in education, training or work. There could have been an opportunity to reduce national insurance contributions for recent graduates under 25, but there was no action. As a result, graduate unemployment is dramatically up. There could have been action on reducing the amount of interest that ex-students pay on their student loans. That was promised but not delivered. On energy costs, a lot of young people in London share houses in bands E to F, so they will get no relief from the £100 drop-in-the-ocean energy payment that is dished out. There are clearly taxes on savers, taxes on banks and taxes on landlords. That means that rents will go up, which means that young people will end up paying the price. For most landlords, the problem is they cannot sell their properties because of the inflated stamp duty that applies, and therefore the amount of supply will reduce. I note that smoking or smoking cessation were not mentioned once in the Budget. Unbelievably, smoking cessation in the national health service is being cut when there are still 4.9 million smokers out there who desperately want to quit. They will not get the support under this Government that they desperately need. That costs the economy £53.2 billion every year through lost productivity, healthcare and social care costs, and smoking-related fires. It is a big issue hitting young and old people. I welcome the extra money to enable every rough sleeper to have a roof over their head. The commitment was, of course, that they would be taken off the streets before Christmas. It has now been watered down—they will be given an offer of somewhere to sleep. At the same time, the number of people who are homeless or rough sleeping is increasing. Far from dealing with the problem, the Government are not addressing it properly. It is good news that the Vagrancy Act 1824 has been scrapped, and we celebrated that two days ago. There is much more we can do to help people in this extremely vulnerable position. As I mentioned earlier this week, we still await the implementation of the Supported Housing (Regulatory Oversight) Act 2023 that I introduced three years ago, which would help prevent vulnerable people from being exploited. There are concerns straight away on the Government’s moves to bring empty buildings back into use. The key there is who will pay the cost. Where is the money coming from when councils already have overstretched budgets? Dealing with local authorities, the £100 council tax rebate does not fix the core spending issues. For those who follow these things, the average increase in council tax last year at band D was £111, so the £100 that some people will get back will disappear when the council tax increases come in this year. The problem now at local authority level is that the demand-led services, which of course are not in the control of local authorities, continue to spiral. I welcome the fact that the Government have given a three-year settlement, but it will still not be sufficient, and in many cases it will lead to huge council tax increases and cuts in services. All in all, this Budget is a series of missed opportunities that could have been easily solved.
Order. I call Adam Jogee, after which I will reduce the time limit to three minutes.
I am grateful to you, Madam Deputy Speaker. I have already edited out lots of my speech, but I will try to read through my scribbles. In this Budget, His Majesty’s Government are taking the necessary steps to make everyday life that little bit easier for people back home in Newcastle-under-Lyme, and thank goodness. Those steps and that determination stand in stark contrast with the chaos, instability and nonsense that we see at Staffordshire county council. This week we received news that Staffordshire county council is on to its fourth leader at County Hall since the county council elections in May 2025. It is an uninspiring and unfunny game of musical chairs, and my constituents in Newcastle-under-Lyme deserve much better. Our community is a great place and is home to good, hard-working, decent people. They deserve every little bit of help announced yesterday to make life that little bit more manageable, and there is much to welcome. I am pleased that more than 40,000 homes in my community will receive the £100 payment, as we have heard from colleagues across the House, to help with their energy bills, and that we have extended the 0% rate of VAT on electricity bills until July 2027. We are finally acting on gas standing charges, and there was more good news on fuel duty, too. We are taking more businesses out of paying business rates by increasing the small business rates relief threshold—important, too, for retail, hospitality and leisure businesses in my community. In fact, these changes will mean that around 52% of all retail, hospitality and leisure properties in the west midlands will now no longer pay business rates at all. That will go some way to helping the much-loved and much-used pubs and restaurants in our town centre and communities, as well as boosting our local economy and keeping local people in work. We saw action on paternity leave, which will make the system fairer—that is excellent. I welcome the £55 million of funding that will be made available to accelerate the delivery of the violence against women and girls strategy—that is important stuff. I look forward to working with the Chancellor and colleagues from coalfield communities to finally deliver the justice that our coal miners deserve. While I will never shy away from my concerns about local government reform and the impact that would have on my community, I am delighted that the Government have announced that a new mayoral strategic authority for Stoke-on-Trent and Staffordshire is on its way. It will bring power, investment and decision making closer to those of us who live, learn and work in Newcastle-under-Lyme, and that is to be welcomed. I have a bit more time left. [Interruption.] It would do a disservice to my constituents not to use the time. Since I was elected, I have seen up close how our local authorities have passed the buck at every stage, and my constituents have suffered because of it. The change to a mayoral strategic authority will give us the opportunity to fix a broken transport system, to invest in our young people and to boost the resilience of our region, all with our local communities at the heart of the process. This Budget is one part of helping communities like mine recover from years of delay, dither and de-industrialisation. We owe it to the hard-working, skilled people who built our town and the young people who will move it forward to keep pushing for better. We have a proud history, a strong identity and huge potential, and with this Budget, we have begun the journey of reinvesting power and control into communities like mine. I will continue to do everything I can, as Newcastle-under-Lyme’s representative, to make sure that my constituents’ voices are heard loud and proud. There is a minute and 23 seconds back to you, Madam Deputy Speaker.
On a three-minute time limit, I call Dr Luke Evans.
I had to check that the Chancellor had said what I thought he had, and it was referred to again today by the Defence Secretary. They said that this is the first 100 days of a Government, with a new 10-year plan. By my calculation, the Government have been in for 847 days, with their third Budget being delivered yesterday, and we are over a quarter of the way through the last 10-year plan. Rather than this being a baby Budget and a fledgling Government, they are more an adolescent Government, and this really is a bum-fluff Budget. It has got wispy bits and patchy bits, but no one really knows what they are, where they are going or even if they should be there. We can see that by the fact that we have 98 announcements within the Budget, which is a record, but the value per project is one of the lowest on record. When I saw the Budget, I was pleased that there were some bits that I have been working on that have finally come to fruition. First, pensioners are being taken out of paying tax on their state pension. There is also the freeze on fuel duty. Those are in response to things that were warned about, but put in by a Labour Government. The hole was dug by a Labour Government, and they have now had to half-fill it. That is exactly what we see with the NEETs situation. We have record unemployment of young people, certainly when compared with the EU average, with more than a million people not able to get through into jobs, so what do the Government do? They put on that toxic concoction of tax increases and red tape, and now they turn around and say, “We will give you £3,000 to take someone on.” The Government should get out the way. It would be far simpler to let businesses take on people and grow as they need. The same applies to the hospitality industry and the leisure industry. It is welcome that the Government have made some changes to their rates, but we should remember that the Government took away the support in the first place, put up the rates and added the toxic concoction on top. It is a hole that has been half-filled, and we see that time and again. We often hear about the money that went into the NHS, but we should remember it was taken away with the jobs tax that hit hospices, care homes, GPs and pharmacies, which are all feeling it. With energy, £100 has been given, but we know that Ofgem says the cap will see a more than £400 increase. We should remember that Labour promised £300 lower bills when it came into office. I hope that we see this beard grow into a full bushy shape. Whether it is Keir Starmer’s continuation or Andy Burnham’s new direction—
Order. The hon. Gentleman knows better than to refer to the Prime Minister by name.
Forgive me. I mean the right hon. Member for Makerfield (Andy Burnham) and his new direction, with a lovely new moustache.
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