Taxes

Wednesday 12th November 2025 Commons Chamber

[Madam Deputy Speaker (Judith Cummins)]

I inform the House that Mr Speaker has not selected either of the amendments tabled. I call the shadow Chancellor.

13:28

[Sir Mel Stride (Central Devon) (Con)]

I beg to move,

That this House calls on the Government to control public expenditure in order to keep the promise made by the Chancellor of the Exchequer at the Confederation of British Industry conference on 25 November 2024 that, after the last Budget, the Government would not raise taxes; and further calls on the Government not to break its manifesto commitment that it would not increase National Insurance, the basic, higher or additional rates of Income Tax or VAT.

Right at the centre of this motion is the single word “trust”—the trust that Labour Members lost with the British electorate. They lost it when they promised not to put taxes on farms, and did so; when they said they would not be means-testing the winter fuel payment, yet did; and when they said they would not be putting up taxes left, right and centre, but did exactly that when they came into office. Indeed, in their own manifesto there were around £7 billion of tax increases, which by the time of the first Budget translated into some £40 billion of additional taxes. Of course, much of that related to employer national insurance—a clear breach of the Labour party manifesto. Do not take my word for it. Take the word of Paul Johnson, the former head of the Institute for Fiscal Studies, who said that that particular tax increase was a “straightforward breach” of the Labour party manifesto.

The Chancellor also said that she would not take decisions that would affect working people, yet we know from the figures released just yesterday that unemployment is at a five-year high. There are 180,000 fewer jobs on payrolls on her watch. Some sectors are particularly badly impacted. Some 90,000 jobs in hospitality have been destroyed, which particularly affects the youngest people in our country, who are desperate to get on the first rung of the career ladder but are deprived of that opportunity by Ministers.

After that calamitous Budget, there were further pledges and further promises from the Chancellor. She said to the Treasury Committee:

“we are not going to be coming back with more tax increases”.

She said on Sky News that she had “wiped the slate clean”. On 25 November, at the CBI’s annual conference, she said:

“I’m not coming back with more borrowing or taxes.”

There has been little of that language of late, and I think we all know why.

At the October Budget, the Chancellor said something else that was telling and extremely important. It is worth my repeating it in full. It relates to her clear pledge not to extend the freeze in the personal allowance under the income tax regime. She said:

“I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips. I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax and national insurance thresholds”.—[Official Report, 30 October 2024; Vol. 755, c. 821.]

When the Minister comes to the Dispatch Box, will he reconfirm that solemn pledge the Chancellor made in the last Budget? [Interruption.] He could intervene now—that is true.

We know that the Chancellor has messed up the economy, yet now, only about a year into the Government, we are already into the blame game. The Chancellor made an extraordinary and rather confusing address to the nation recently in No. 10 Downing Street, in which she sought to blame everybody for this fiasco except herself. She blamed Brexit. She blamed Donald Trump. And when it came to future downgrades of productivity by the Office for Budget Responsibility, she even had the temerity to blame those of us on the Conservative Benches—blaming the past for the future. I was half expecting her to blame world war two or the great war, or the Boer war, or perhaps the battle of Hastings, which surely, with the harrying of the north, must have scarred our economy and must still be being felt 1,000 years later.

[Sir Desmond Swayne (New Forest West) (Con)]

No, it was definitely the Korean war!

[Sir Mel Stride]

It was the Korean war—my right hon. Friend is absolutely right.

It is the Chancellor’s choices that have led to this situation. She was the person who chose to put up taxes on jobs, which has led to growth being anaemic. We know that taxes such as national insurance feed through to lower investment, higher inflation, higher unemployment and lower real wages. We know that the Government talked down the economy with the absurd and fictitious £22 billion black hole. In a sweet irony, when they asked the OBR to come in and opine on that number, it said that it would not legitimise it.

[Sir Edward Leigh (Gainsborough) (Con)]

Does my right hon. Friend agree that the real downfall of the Government dates from when they did not face down their own Back Benchers and deal with the rocketing benefits bill? Frankly, the country is going broke and the Government must have the courage to deal with millions of people who are not contributing to society.

[Sir Mel Stride]

My right hon. Friend makes an extremely valid point. I shall come to those matters shortly, because there are alternatives to what the Government have decided to do.

It was this Government who went on a reckless borrowing spree. This year, we have borrowed £100 billion—the highest borrowing in our history, excluding the pandemic. Why has that happened? Because the Chancellor has fiddled the fiscal rules. She changed the debt definition from public sector net debt, as it was under us, to public sector net financial liabilities, which allows far more borrowing. In fact, under the original definition that we had—which she, incidentally, said she would not change—she would have been underwater in just about every year of the forecast on the debt target. That recklessness has led to the Labour party having plans to borrow half a trillion pounds more over the period of this Parliament than we had in our plans that it inherited.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

To put it in simple terms for those listening at home, the Chancellor raised taxes by £40 billion, she spent £30 billion and she borrowed £70 billion. Cumulatively, that will make people think, “How am I going to get the return on that investment if we are not growing the economy? How do I ensure that the interest will be paid?” That is why interest payments go up and we as a country end up paying more debt—because of the decisions the Chancellor has made.

[Sir Mel Stride]

My hon. Friend is absolutely right. If we borrow more money, we pay more for that borrowing. Of course, that has fed through to inflation. We know that inflation this year, according to the International Monetary Fund, will be the highest in the G7. The IMF also says it will be the highest in the G7 next year. The consequence of that in monetary policy is interest rates being higher for longer. Of course, if we have a mountain of debt and add to it ruinously, the cost of servicing that debt goes through the roof. It now stands at about £100 billion a year, rising to £130 billion at the end of the scorecard. That is more than twice what we spend on defence every year.

[Kit Malthouse (North West Hampshire) (Con)]

The shadow Chancellor is laying out compellingly the calamitous choices that were made at the last Budget. Does he agree that fundamentally underlying them is the most calamitous choice of all, which was the strategic decision that the public sector would be expanded and the private sector contracted? The crowding out of the private sector is resulting in this doom loop that we are trapped in. We have fewer and fewer wealth creators and businesses paying for this bloated public sector, and their ability to shoulder that burden gets weaker by the day.

[Sir Mel Stride]

My right hon. Friend makes an extremely incisive and correct point. If a Government spend huge amounts of money, there is an opportunity cost to that and it comes through in various forms, including, as he rightly says, raising the cost of capital and crowding out labour, skills and so on. It is a fine and important balance to get right and this Government, palpably, have got it wrong.

[Noah Law (St Austell and Newquay) (Lab)]

The hon. Member for Hinckley and Bosworth (Dr Evans) makes a fair point. When raising public revenue, one should at least expect a decent return on that spend, whether it be a social return or otherwise. Does the right hon. Member not consider investing in our NHS to be such a decent return?

[Sir Mel Stride]

The hon. Gentleman’s question identifies the core of the fallacy of his Government’s approach, which is to assume that getting better outputs is all about spending ever more money. It is not. It is about what you do with that money; it is about productivity. One of the Government’s many mistakes when they came to office was to splash out on pay rises for their trade union paymasters—14% for the railways drivers and 22% for the junior doctors—with not one string attached in terms of improved productivity. Therein lies the answer to the hon. Gentleman’s question.

[Noah Law]

I thank the right hon. Gentleman for giving way again. Will he acknowledge the massive dead-weight loss caused by the strikes that were going on, unbelievably, under the previous Government, and the negative returns as a result of the previous Government’s actions?

[Sir Mel Stride]

I am surprised that the hon. Gentleman would follow up what was not the strongest first question with that.

The Government are naive enough to think that by simply buying people off with no strings attached, the problem would go away. It is like feeding meat to the wolf: when the wolf is fed meat, it will come back to the door the next day, and that is precisely what has happened here. Industrial relations are not improving at the moment. We have various unions in the public sector threatening to strike, including in the NHS, where the hon. Member for St Austell and Newquay (Noah Law) started in his first question.

Where has all this led? It has led to lower growth. No matter how much those on the Front Bench may trumpet increased growth, the reality is that growth per capita—[Interruption.] The hon. Member for Bishop Auckland (Sam Rushworth) says it is the highest in the G7, but our growth per capita is the second lowest in the G7. What matters is growth per capita, because that is what drives an improvement in living standards. [Interruption.] I have more bad news for the hon. Gentleman, who continues to chunter from a sedentary position: the IMF says that growth per capita will deteriorate even further next year and be the lowest in the G7.

[Jim Shannon (Strangford) (DUP)]

I commend the shadow Chancellor and the Conservative party for bringing forward this debate. Is he aware of the stat that the average British family is as much as £15,000 poorer than they were five years ago? The biggest increases have been in energy and food, of course, and while there have been wage increases, all that has been swallowed up by the cost of living. Does the shadow Chancellor share my concern for middle and working-class families, who are worse off now than ever before, including those in my constituency, that any tax increases from the Labour party will push them towards the poverty line? It could mean that some of them will be unable to pay the bills that they are just about paying at the moment.

[Sir Mel Stride]

I agree. Of course, higher taxes are bearing down on living standards, but so is inflation. We have the highest level of inflation in the G7 and are forecast to have the highest in the G7 next year, too. Within that sits food inflation, which is running way above the headline rate of inflation. Who does that impact the most? It impacts the very people that Labour professes to stand up for the strongest: the poorest in our society. It is a direct consequence of the policies pursued by this Chancellor.

[Alex Ballinger (Halesowen) (Lab)]

Does the shadow Chancellor recognise that the previous Government were the only Government in living memory to oversee a reduction in real living standards over the course of five years? Does he accept that the difficult situation with the cost of living is in large part due to his Government’s decisions over those five years?

[Sir Mel Stride]

There were many great things that the previous Government did, not least creating employment as a job-making machine and, despite the Russia-Ukraine war, bringing inflation down at the back end of 2022 from 11% to 2%—bang on target—on the day of the general election. Where is inflation now? It is almost twice that level. We also improved education in our country beyond all measure; Labour is now undoing those reforms, and we will see the consequences of that for generations to come. We did many things of which we should be proud, not least getting us through covid and through the inflationary times. On the day of the general election, we had the highest growth in the G7, we had near record levels of employment and a near record low level of unemployment, and we had seen 13 consecutive months of improving real living standards. That is not a bad record.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

So far, Labour Members do not appear to have mentioned covid. We reduced the deficit by 80%, which enabled us to spend £373 billion to support households and businesses during those years. I have businesses in my constituency that would no longer be in business had it not been for that support. What does the shadow Chancellor think would happen if, God forbid, we had a similar event right now? The answer is, as I suspect he is about to tell me, that the Government simply would not be able to sustain households and the economy in the way that we did.

[Sir Mel Stride]

My right hon. Friend is entirely right. The conclusion that one must draw on the mess that this Government have made of our economy is that it has become brittle, fragile and vulnerable to the kind of external shocks that it was able to withstand when the Conservatives were stewards of it.

While per capita growth is almost on the floor, unemployment is at a five-year high; as we know, every Labour Government in history have left unemployment higher on leaving office than it was on entering office. Inflation is high and business confidence is at rock bottom. In a recent survey, the Institute of Directors found that business confidence among its members was the lowest in history. My right hon. Friend the Member for South West Wiltshire (Dr Murrison) refers to covid—according to the IoD, business confidence is even lower now than it was during covid, when the economy contracted by more than 10% overnight. That is how bad business sentiment is out there.

[Dr Evans]

Was my right hon. Friend as surprised as I was to hear the Prime Minister say again today at Prime Minister’s questions that his No. 1 goal is growth, when all the evidence is pointing against it?

[Sir Mel Stride]

To be fair, I think the Prime Minister was referring to facial hair growth, rather than growth in the economy. They are distinctly different things.

[Dr Evans]

He is struggling on both.

[Sir Mel Stride]

Well, he may or may not be—it remains to be seen.

What all this ends up with, of course, is lost fiscal headroom. That is the story so far. We had a Budget last October with about £10 billion against the debt target; that vanishes, with 50% on top as well. It is rebuilt in the spring, and now it has all disappeared, and we are waiting to find out how deep that black hole is. We have entered something of a doom loop, with higher taxes destroying growth, leading to a loss of fiscal headroom, requiring—in the Chancellor’s terms at least—further tax increases, leading to further destruction of growth, and around and around we go.

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

The shadow Chancellor has spent a lot of time in his speech talking about what people have said and done. I wonder if I could remind him that just a month ago he said that if he were in the Chancellor’s position, he would raise income tax. How does he square that with the speech he is currently giving?

[Sir Mel Stride]

I am pleased that the hon. Gentleman has given me an opportunity to correct the record, because I know this has been spun by the Labour party. At a fringe meeting at the Conservative party conference, there was a long, extended debate about just how bad things are, with speculations about all the “what ifs” and “maybes” of different scenarios. If the hon. Gentleman reads the full transcript of those exchanges, he will see that the point I was very clearly making was that there is an alternative to putting up taxes, which is controlling spending. That is the point I was making.

What is happening to the wealth creators in our country? About 16,000 of them have fled—they are going by the day. These are the people who generate the wealth, jobs and growth that we are all striving to achieve. Look at the cumulative tax take that has just walked out of the door with the 16,000 who have gone—it would probably require a third of a million to half a million people on average earnings to fill that gap. It is not sustainable.

There is an alternative. The Conservatives set out this alternative at our party conference: a way forward through control of Government spending. Government spending could be controlled to the tune of at least £47 billion, which were the savings we identified. Of the £47 billion, £23 billion can be found from the welfare budget by getting people off benefits and into work. It is better for the economy, but equally, for those who have mild mental health conditions such as mild anxiety, mild depression and ADHD, it is a better outcome than parking them on benefits, which the Government are doing through time. By focusing on actual need rather than simply transfer payments and on medical diagnosis rather than self-assessments and by not paying benefits to non-UK citizens, we can make real savings. In some cases they are tough choices, absolutely. However, these are decisions that the Government have made.

[Alex Ballinger]

I thank the shadow Chancellor for giving way. He will of course remember his time as the Work and Pensions Minister, when he oversaw a £33 billion increase in the welfare budget. Of course he is talking about cuts now, but not about welfare cuts, because he had the opportunity to make those cuts and failed to do so. He is talking about cuts to teachers, nurses and our armed forces. Which of those three areas is he talking about cutting right now?

[Sir Mel Stride]

I am glad the hon. Gentleman has raised my tenure at the Department for Work and Pensions, when I was the Secretary of State. I was very clear that we needed to arrest the rising welfare bill, and—

[Alex Ballinger]

Why didn’t you, then?

[Sir Mel Stride]

We did, actually. We did arrest it. We made changes to the work capability assessment, which the OBR scored at £5 billion-worth of savings. The OBR also scored the fact that there would be 450,000—almost half a million—fewer people going on to those benefits as a consequence. We had already started a consultation on personal independence payment, which I will come back to in a moment, but it was interrupted by the general election. The first thing the Labour Government did when they came into office was scrap all of that and then come forward with some ill-thought-through proposals that did not survive contact with their own Back Benchers.

There are other areas where we can make savings. The size of the civil service is one. The civil service has grown by 37% since 2016. We could cut it back by 25% and make about £8 billion—[Interruption.] The hon. Member for Halesowen (Alex Ballinger) should listen carefully to this, because he is about to sit on those benches on the 26th of this month and listen to his Chancellor come up with some pretty unpalatable things. These are good alternatives that should be taken seriously.

Raising taxes is simply a choice. The Labour Government are too weak to make the choice to control spending, so they fall back on taxes. They had to U-turn on the welfare reforms they brought through, and £5 billion was added to Labour’s black hole in an instant. We have seen the terms of reference for the Timms review of personal independence payment. They show quite clearly that there is no intention of saving any money from the PIP budget. That is grossly irresponsible. It is spiralling ever skyward.

From what we hear, it is highly likely that the two-child limit will be scrapped and abolished. Why? Probably because the Prime Minister, shackled to his Chancellor, is feeling that he is being squeezed halfway out the door of No. 10 and thinks he had better do something to settle the troops on the Back Benches. But that comes with a price tag of £3.5 billion. The only choice that this Chancellor is taking is to fail to get on top of spending and to put up taxes in order to fund ever more welfare.

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

The Chancellor often talks about taking difficult decisions and tough choices. Does my right hon. Friend agree that it is not a tough choice to raise taxes on other people; the tough choice is cutting spending?

[Sir Mel Stride]

My hon. Friend absolutely gets to the core of it. This is an extraordinary point to have arrived at, but this Government, despite their majority, do not have the plan, political will or, seemingly, even the ability now to command enough support on their own Benches to push through vital spending controls that would allow us to get the taxman off the back of businesses and people up and down our country.

[Sam Rushworth (Bishop Auckland) (Lab)]

Child poverty increased enormously on the Conservatives’ watch. [Interruption.] Yes, it did. Where was their political will to deal with it?

[Sir Mel Stride]

If the hon. Gentleman looks at absolute poverty after housing costs, he will find very significant reductions for children, pensioners and across the piece during the vast majority of our time in office.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

Will the shadow Chancellor give way?

[Jerome Mayhew]

He has only just walked in!

[Madam Deputy Speaker (Judith Cummins)]

Order. I do expect Members to be here for slightly longer before intervening.

[Sir Mel Stride]

Madam Deputy Speaker, that is a great shame. The hon. Gentleman has not been here for any of the debate, but that does not mean that he might not have given the best possible intervention from the Labour Benches so far. Perhaps he may like to come in a little later.

We have a Government who are engaged in serial breaches, who have no backbone to take the right decisions, and who will always fold to pressure, including from their own Back Benchers—and all at the expense of businesses and hard-working people up and down our country.

[Dr Evans]

The Chancellor set out in a speech only last year an absolute commitment not to raise taxes. She said, “We’ve set the spending envelope for this Parliament, we don’t need to increase taxes”. Yet here we are on the cusp of taxes going up. Is not the crux of this the fact that she cannot even stick to what she promised?

[Sir Mel Stride]

My hon. Friend is absolutely right. He will have heard the various quotations at the beginning of my contribution exactly to that effect.

The motion on the Order Paper asks a simple question. It is essentially this: even at this late stage, will the Government stand by their word, or will they dragoon those on the Benches behind them through the wrong Lobby tonight? If they vote with us, millions will heave a huge sigh of relief. If they vote against, the people will have their answer, and they will never forget.

13:55

[The Chief Secretary to the Treasury (James Murray)]

I thank the shadow Chancellor for opening today’s debate. It is two weeks until Budget day, and it is just over two weeks since the last motion tabled by the official Opposition that sought to debate the content of the Budget before it is announced. We know that Conservative shadow Ministers want the British people to forget the mess they left from their time in office, but surely shadow Ministers cannot have forgotten how the Budget process works. If indeed that is the case, I am sure shadow Treasury Ministers will recall that we would not reveal any details of the Budget two weeks before the Budget, and that any decisions on the Budget will be revealed by the Chancellor on Budget day.

[Jerome Mayhew]

I have a simple question for the Minister: does he think that manifesto promises are important?

[James Murray]

As a Treasury Minister, what I am very used to in the run-up to a Budget is members of the media and Opposition Members finding more and more convoluted ways of trying to work out what is going to happen in the Budget. My answer would be the same at every turn: they simply have to wait until 26 November to see what the Chancellor announces in her Budget. The official Opposition are entirely entitled to put forward what they say they would do differently.

[Kit Malthouse]

I hear what the Minister is saying about us waiting for the Budget. Could he reassure the House that he has not discussed anything that might be in the Budget with any journalist, and certainly that he has not authorised any members of his office or anybody within the Treasury press team to brief out some of the kites that have been flown about the Budget in the media over the past few weeks?

[James Murray]

Despite the right hon. Gentleman’s invitation, I am not going to engage in speculation ahead of the Budget. I am not going to feed the speculation that he is trying to wind up. I understand that the Budget is an important day in the parliamentary calendar, and it is an important day for the Government. Rightly, Conservative Members and Members of all parties want to know what is in the Budget, but they simply must wait until 26 November to find out.

[Kit Malthouse]

On a point of order, Madam Deputy Speaker. I seek your guidance. The Minister has said that he is unwilling to discuss what might be in the Budget with the House. He did not, however, deny that he may have done so with journalists, or that he may have authorised others to brief to the media what may or may not be in the Budget. In the absence of that denial, are we within our rights to demand that the House be privy to what those conversations contained, in the same way that the business pages of The Times may have been?

[Madam Deputy Speaker (Judith Cummins)]

That is not a point of order; it is a matter of debate. I can calm Members’ nerves by saying that it is not many more sleeps until Budget day.

[James Murray]

Thank you, Madam Deputy Speaker.

[Sir Julian Lewis (New Forest East) (Con)]

As somebody who has been around a long time and remembers when Chancellors used to have to resign for leaking things about the Budget in advance, may I ask the Minister to explain how it has been possible for the present Chancellor to make speeches about what may or may not be in her Budget in advance with no consequences forthcoming whatsoever?

[James Murray]

I am very happy to remind the right hon. Gentleman and all Members that what the Chancellor set out in her speech last Tuesday were the values and principles that will guide her in taking the right decisions going into the Budget at the end of the month. The importance of protecting the NHS, bringing down the cost of living and getting debt down—those will be the guiding principles for the Chancellor going into the Budget. That is important, because it sets out to the British people the challenges we face—some of them deep scars in the economy caused by the Conservatives—as well as the values that will guide us and the Chancellor in taking those decisions on 26 November.

The official Opposition is entirely entitled to ask questions and indeed put forward what it would do differently, but the problem with this Opposition is that when it does so, it simply exposes its total lack of any credibility. Remember last year, when we took the difficult decision, referred to earlier, to raise employer national insurance to support the NHS? The Opposition claimed to oppose that tax change but have refused to say whether they would reverse it—or, indeed, whether they would cut the NHS. As the shadow Chancellor pointed out earlier, more recently, at the Conservative party conference, they said that they thought they could find some £47 billion of cuts to public spending.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

The Minister just said at the Dispatch Box that national insurance contributions for employers were raised “to support the NHS”. Was that hypothecated or not?

[James Murray]

As I am sure the hon. Gentleman knows, the way the system works is that national insurance generally supports the NHS and pensions, but, more broadly—

[Dr Spencer]

rose—

[James Murray]

Will the hon. Gentleman let me finish? More broadly, the revenue that goes into the Treasury is not formally hypothecated. But the point is that if we are going to support public services, get the NHS back on its feet and get waiting lists down, we need to take the difficult decisions to raise the tax revenue to put into that. That was an important principle that we had to take last year in the Budget.

[Dr Ellie Chowns (North Herefordshire) (Green)]

The Minister talked about difficult decisions, but what about an obvious one? Two thirds of the British population are now backing wealth taxes. Is it not time for the Treasury to abandon its self-imposed fiscal straitjacket and commit to lifting children out of poverty, to investing in our public services and to future-proofing our communities by transforming the tax system so that it better serves ordinary people and so that those with the broadest shoulders pay their fair share?

[James Murray]

I point the hon. Lady to last year’s Budget, at which we decided to get rid of the non-dom tax status, to remove the VAT tax rate on private school fees, to increase the air passenger duty on private jets and to change the rate of capital gains tax and inheritance tax—all measures that will raise £8 billion by the end of this Parliament from taxes on assets and the wealthy. That is what a fair tax system looks like.

While our plans are a credible way to settle the public finances, get public services back on their feet and support the economic stability so vital for investment and growth, the Conservatives come up with numbers out of thin air. At least half the £47 billion of fantasy savings they mentioned come from a welfare plan that amounts to a menu with no prices: they say that the list of measures would raise £23 billion in total, but no breakdown is apparent.

We remember how, in June last year, just as the Conservatives were on their way out of Downing Street, they said that they could cut £12 billion from the welfare bill. Now they have doubled that, without any explanation whatever. Frankly, however he protests, the shadow Chancellor is not the person to be making that argument about welfare. When he was the Work and Pensions Secretary, he personally oversaw the biggest increase in benefits spending in decades.

[Jerome Mayhew]

I am grateful to the Minister for giving way again. He wonders why the ability to cut more money from the welfare bill has been identified by the Opposition. Does he not recognise that more than 5,000 people a day are joining long-term disability and incapacity benefits? That is how he can save more money from welfare. Why does he not do it?

[James Murray]

I agree with one of the sentiments in the points that the hon. Gentleman made: we need to ensure that people get into work wherever they can and that the safety net is there for people who can never work or are unable to work. My right hon. Friend the Secretary of State for Work and Pensions is leading that work to ensure that we get young people into work rather than being on a life of benefits and written off as they were by the Conservative party in office.

As I was saying, it was frankly quite some cheek for the right hon. Member for Central Devon (Sir Mel Stride) to lecture about welfare spending, given the enormous increase in welfare spending on his watch when he was Secretary of State for Work and Pensions. If the £47 billion came from cuts in public services instead of from some of these fantasy welfare cuts, what would that mean? It would mean 85,700 fewer nurses; cutting every police officer in the country twice; or cutting the entire armed forces. Funnily enough, none of that detail was mentioned in the shadow Chancellor’s speech.

When we took office, the Chancellor introduced tough new fiscal rules. Those required day-to-day spending to be paid for through tax receipts rather than borrowing, while protecting the long-term investment in our country. Now, I realise that fiscal discipline is an alien concept for some Members on the Conservative Benches.

[Dr Spencer]

The Minister has just talked about the Chancellor’s fiscal rules. Who was it who changed the fiscal rules?

[James Murray]

The hon. Gentleman said “the Chancellor’s fiscal rules”, so I suspect that it was the Chancellor who introduced those fiscal rules. He gave it away in how he phrased the question.

The point is that when the Chancellor was setting out her economic strategy at the Budget last year, it was on the basis of the fiscal rules: day-to-day spending to be paid for through tax receipts rather than borrowing and debt to be falling as a proportion of GDP, to enable investment in the long-term future of the country. I see that the hon. Member for Runnymede and Weybridge (Dr Spencer) is struggling to get his head around why that sense of fiscal reality and credibility is important, but we on the Government side believe that having those fiscal rules is crucial to that fiscal stability, to ensuring that we have that responsible attitude in government and to providing the stability for businesses to invest and grow the economy.

[Alex Ballinger]

My constituents, of course, remember Liz Truss’s devastating mini-Budget, when those rules were not followed. That had a massive impact on not just our public services but the mortgages and cost of living that my constituents are still feeling today. Does my right hon. Friend agree that going back to that irresponsible financial management would be a disaster for this country?

[James Murray]

My hon. Friend is absolutely right to point out the damage that recklessness in public office can cause families right across the country—not just for one day, but for months and years beyond that. The Conservative party is desperate for us to forget what happened when Liz Truss and Kwasi Kwarteng were in Downing Street. But the British people will not forget, and they have been feeling the impacts for many years.

The Conservative party talks about public spending but its record on public spending is abysmal. It spent years in office with money lining the pockets of dodgy PPE providers as the bill for asylum seekers’ hotels soared. As my hon. Friend the Member for Halesowen (Alex Ballinger) just said, no debate on the Conservative record on tax and spend can be complete without mentioning the mini-Budget. Conservative Members are desperate for the British people to forget what happened three years ago and what the Conservative party foisted on the country. They are desperate to forget that their reckless unfunded tax cuts crashed our economy, damaged our international reputation and added hundreds of pounds to families’ mortgage costs. While British homeowners have been living with the consequences of the Conservatives every day, Conservative Members are all too conspicuous in their efforts to sweep their record under the rug.

True leadership is about not ducking the difficult decisions but confronting them head-on with a clear focus on priorities and values. That is what the Chancellor has promised to do in this Budget. As she set out last week, we will secure this country’s future with a Budget for growth led by this Government’s values of fairness and opportunity. We will do not what is politically expedient but what is necessary to protect families from high inflation and high interest rates; to protect and strengthen our public services, rejecting the austerity that Conservative Members seem keen to impose on our country once again; and to ensure that the economy that we leave to future generations is secure, with debt under control.

Our focus on cutting debt is crucial. We inherited a national debt of about 100% of GDP and since the spring the cost of borrowing has risen for Governments around the world. Today one in every £10 of taxpayers’ money in the UK is used to pay the interest on our national debt. That money should be going to our NHS, our schools, our police and our armed forces. Instead, it is going to our creditors. That is not what people pay taxes for.

[Stuart Anderson (South Shropshire) (Con)]

The Minister talks about the building up of debt. Does he understand that when Labour was last in power, debt went up from 36% of GDP to about 76% of GDP? That massive increase built the foundation of the debt that we have today.

[James Murray]

I am very aware of the foundation of debt that we inherited at the election last year—of around 100% of GDP. That, combined with global borrowing prices, leaves us in this position. We are determined to change that because we know that the less we have to spend on debt interest, the more we can spend on the priorities of working people, the more we can invest in our infrastructure and industry, and the more resilient we can make our public finances, building the headroom to withstand global turbulence while giving businesses the confidence to invest.

[Joe Robertson (Isle of Wight East) (Con)]

The Minister seems to be telling us that we can expect debt cutting measures in the Budget. Will he also confirm from the Dispatch Box that there will not be measures to increase national insurance, taxes on hard working people, or VAT?

[James Murray]

We are back to questions about what will be in the Budget. The answer, again, is very straightforward. The Chancellor set out the values that will guide her in taking the decisions at the Budget on 26 November. She set out the challenges that we face, being straight with the British people about that. The details will all be announced by the Chancellor on Budget day in the normal way.

We know that there is much more for us to do as a Government, but we can see the tough choices we made last year showing early signs of progress. We are set to deliver the largest primary deficit reduction in both the G7 and the G20 over the next five years. Our stewardship of the economy has helped the Bank of England cut interest rates five times, meaning lower mortgage payments and cheaper borrowing for families and businesses; real wages rose more in the first 10 months since the election than in the first 10 years of the previous Government; and the average person’s disposable income is now £800 higher in real terms than just before the election, meaning living standards have begun to rise. We have increased public capital investment by £120 billion over the Parliament and supported the NHS to achieve a reduction in the total elective waiting list of more than 206,000 since July 2024.

[Dr Luke Evans]

We on the Conservative Benches have been struggling to get an answer on the question of the 50% reduction in integrated care boards, for which the expected redundancy bill is about £1 billion. Today, the Government have issued a press release that says that they have dealt with that. Yet in response to my written question on the subject, the Health Department said that it could not provide an answer because it does not know the numbers, so I have received a holding answer. How much will the redundancy payments cost, and will it come from the Health budget or the Treasury budget?

[James Murray]

It is for the Health Department to set out the details in response to any questions that the hon. Gentleman has tabled. The point about the merger between NHS England and the Department of Health and Social Care is that it is a way of cutting costs and ensuring that that money is reinvested in frontline services. Rather than having duplicative structures within our system, we want to ensure that we are merging NHS England and the Department of Health to make those savings, which we can reinvest in patient care.

As I said, there are still many challenges ahead and we are impatient to see things improve. Globally, inflation remains high and confidence is low, deterring investment and hindering growth. As geopolitical uncertainty grows, we are also faced with a critical need to invest in our defence spending. Domestically, we must continue to cut NHS waiting lists, lower the cost of living and improve our country’s productivity. We must invest in our roads, transport, housing, infrastructure, public services, towns and cities and the businesses for which the last Government failed so completely to provide.

Conservative Members will see the Budget two weeks from today. They will have plenty of opportunity to scrutinise it and participate in a serious debate about it later this month. We will, of course, oppose today’s motion, which speculates on what the Budget might contain. The effort of rebuilding a country requires the contributions of everyone in that country. Together, we can renew the UK and build an economy that is fair and thriving. That is what this Government were elected to do and that is what the Budget in two weeks’ time will play its crucial part in achieving.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

14:09

[Charlie Maynard (Witney) (LD)]

There is a real irony in the fact that the Conservative party has tabled a motion calling for the control of public expenditure and for trust to be returned just three years after a notorious mini-Budget that saw the biggest set of unfunded spending commitments in recent memory and that continues to damage the markets’ confidence in UK fiscal credibility. We still pay the so-called moron premium, driving up interest expenses on Government borrowing, which are now running at £131 billion a year. That is money out of the pockets of everyone across this country and we are still living with the real-world impact of that, because debt in the UK has gone from £0.5 trillion in 2005 to £2.9 trillion today. That is up six times in 20 years—and who has been running the country for the majority of those years?

[Stuart Anderson]

It is interesting that the hon. Member raises the moron increase. I point out that we are no longer in government. The hon. Member’s party was also in government from 2010 to 2015.

[Charlie Maynard]

I think the hon. Gentleman will find that the moron premium relates to Liz Truss. People are feeling pressures and that has a huge impact on everybody individually. Pay cheques go less far, tax bills are higher and small luxuries such as having a slice of cake or a pint, or taking the family to the pub, are increasingly out of reach for many people. That hurts, and it is all on the back of stagnant economic growth. Those facts are all the enduring legacy of the disastrous decisions that the Conservative party made. [Hon. Members: “The coalition!”] It is fun to keep saying “coalition” but, sorry, this is more recent than that. We want to back—

[Jerome Mayhew]

rose—

[Sir Julian Lewis]

rose—

[Charlie Maynard]

If hon. or right hon. Members would like to intervene, will they please do so?

[Sir Julian Lewis]

May I try to find some common ground with the hon. Gentleman? As has been pointed out, his party was in coalition with the Conservatives for five years. Can we at least agree that Nick Clegg’s decision to vote for trebling tuition fees, thus breaking a manifesto commitment, was a disaster for his party’s ratings? Can we also agree that if the Government do the same in respect of what they have pledged to do, it will be a disaster for their ratings as well?

[Charlie Maynard]

I thank the right hon. Gentleman for that. We want to back—[Interruption.] It was unquestionably a disaster for our ratings—I will happily give the right hon. Gentleman that—and I do not want the Government to break their promises. That is absolutely right and correct.

[Jerome Mayhew]

I am grateful to the hon. Gentleman for saying that he does not want the Government to break their promises. If he looks at the Liberal Democrat amendment, that is exactly what it does: it takes away the injunction to control public expenditure in order to keep the promises made by the Chancellor of the Exchequer. Does he now accept that it is right that the Government should keep their promises and not follow his amendment?

[Charlie Maynard]

I have already said that the Government should keep their promises, so there we are. May I continue, please?

We want to back hard-pressed households and small businesses and push for practical steps that will help ease the burden on families and get our high streets thriving again. We have called on the Government to respond to the crisis in our hospitality sector through an emergency VAT cut. That would boost footfall on our high streets, thus protecting jobs in a sector that employs people from all walks of life: young, old, those returning to work, those vulnerable part-time workers and everyone in between.

We also propose bringing down household energy costs as winter is coming by removing the biggest levy baked into people’s electricity bills and, in effect, putting more than £90 a year into the pockets of the average family. Indeed, that will be closer to £250 for some of the least well-off, who rely more on electricity for their heating. This is about supporting local businesses at the heart of our communities, which we all represent, and making a real difference to people’s lives by making it cheaper for them to heat their homes. For too long, our high streets and the small business owners on them have been crippled by the policies of successive Governments.

All that needs to be paid for and needs to be done in a way that is pro-growth and pro-business and which shields households from even greater bills each month. That is not an easy circle to square—I will not pretend that it is. We, as Liberal Democrats, seek to bring deliverable and progressive ideas to the table. If the Chancellor chose such ideas, she could deliver them in her Budget, which is just days away, and the impact would be felt by households across the country with almost immediate effect.

First, we call for a time-limited tax on big commercial banks levied on the massive windfall profits that they receive due to unintended consequences of our financial system. Because of high interest rates and the way the quantitative tightening programme works, the Treasury hands over billions of pounds to the big banks every year via the Bank of England, effectively subsidising banking profits at the expense of the taxpayer. Figures from the OBR confirm that, as things stand, we are on course to hand the big banks £50 billion over the course of this Parliament. Banks never expected to receive that windfall, they never relied on it and never took any risk to reap it. They have only received the payments because inflation and interest rates shot up. That needs to be corrected. It is fair and reasonable to return a portion of that unexpected windfall to the taxpayer and it will do nothing to undermine the health of our financial sector to claim it back.

[Sarah Olney (Richmond Park) (LD)]

Does my hon. Friend agree that interest rates shot up in the way he has just described as a direct result of that mini-Budget three years ago, and that that is precisely why the taxpayer is now paying such large interest rate payments to the banks? Is it not therefore right that the Conservative party should get behind our plan to tax the banks, to reclaim some of that money for the taxpayer?

[Charlie Maynard]

I wholeheartedly agree with my hon. Friend—[Interruption.] People might be joking about it, but our reputation as a country matters. That is why people invest in our country, and that is why traditionally our debt prices have been low. When we self-sabotage, we pay for it not just for a few weeks or months but for years, and we are paying for it now.

[Joe Robertson]

When we are just two weeks away from a Budget where the Chancellor is preparing all sorts of unpleasantness for families and businesses, is the hon. Member not just a little concerned that the hon. Member for Richmond Park (Sarah Olney) is quizzing him about a Budget from three years ago? Does he not think the British people are more interested in what is about to happen in two weeks’ time?

[Charlie Maynard]

They are interested in what costs them money, and their mortgages are more expensive because of the decisions the Conservatives took three years ago—[Interruption.] Well, read the Financial Times.

Moving on, I suggest that the digital services tax is another way we should be looking at to raise revenues. We would increase it from 2% to 10%, which would raise roughly £4 billion a year and get some of the biggest and wealthiest corporations in the world to finally contribute their fair share of tax here in the UK. We would also increase gambling taxes, because gambling really beggars some of the most vulnerable in society. Of course, the biggest one of all is that we should rejoin the customs union with the EU. Nobody voted to leave the customs union, but we are now in a market that is more than seven times smaller than the one we used to be in. As somebody who founded and ran a business for 24 years, I know that that hurts. It has done huge damage to small, medium-sized and big businesses and we are living with that loss. The quickest thing we could do is to negotiate a new, bespoke customs union with the EU. This would unleash the potential of British business.

With every month and year that goes by, it becomes clearer just how economically damaging the previous Government’s Brexit deal has been. The OBR has forecast that it will harm economic growth, reducing long-term GDP by 4%. However, according to Frontier Economics, a much closer trading relationship with Europe—not even a customs union—could boost UK GDP by 2.2%. These are enormous numbers, so when we are looking around for solutions, there is one right in front of us. It stands to reason that a new customs union would probably raise more than £25 billion a year for the Exchequer. There it is. Grab it, please. With the autumn Budget just two weeks away, the Liberal Democrats’ message to the Chancellor is clear. Instead of asking hard-working households and struggling small businesses to pay even more tax, she must take growth seriously and repair our broken trading relationship with Europe.

[Dr Luke Evans]

The hon. Gentleman talks about the trading union, but if we were to go back into the EU, one of the things we would have to take is freedom of movement. How does that tally with the Lib Dems’ position on dealing with immigration?

[Charlie Maynard]

I think we should have all the economic benefits of Europe while controlling our borders and controlling movement—[Interruption.] Well, look at Norway, Switzerland and Turkey. There are lots of options out there. Let’s go and negotiate something that makes sense for us.

My final point is that we need an office for value for money—an effective regulator with proper scrutiny and proper teeth that really looks into our Budget. I ask the Government to take inspiration from the Swedish model of tax scrutiny. I understand that after introducing these changes 30 years ago, and aided by strong economic growth, Sweden has reduced its national debt from nearly 80% of debt to GDP to 32%. Meanwhile, our public debt is around 95%, which means that billions that we could be spending on our public services are instead going towards servicing our debt.

A key component is significantly strengthening the scrutiny powers of this Chamber when it comes to the Government’s financial management. The Chancellor’s practice of keeping the Budget secret until the day, at which point everyone else has to scramble to assess the detail and has no time to provide a proper, meaningful critique, is far from the best way to scrutinise the Government’s economic policy. This is not how many of our international peers go about their economic policy. Proper, detailed scrutiny of the Budget, as opposed to the wave-through regime we currently have, with no proper transparency before approval, needs to be addressed—

[Mark Garnier (Wyre Forest) (Con)]

The OBR?

[Charlie Maynard]

Okay, can I just respond to my colleague chuntering in the background? He keeps saying “the OBR”. We are Parliament. We have a responsibility to scrutinise the Budget, and I believe that we, as a Parliament, should be doing that properly, line by line and taking out what is wasted—[Interruption.] I would do it tomorrow if we had the chance, yes. I will finish in a moment, then I will be off—

[Mark Garnier]

Even the Lib Dems agreed with the OBR. Danny Alexander agreed with the OBR. I will stop chuntering now.

[Charlie Maynard]

Just because we have always done things a certain way does not mean that there is not room for fresh thinking, a more collaborative approach and greater ambition. Realistically, if we are going to repair the economic damage of the last few years, we need fresh thinking and new ideas.

14:25

[Sam Rushworth (Bishop Auckland) (Lab)]

I would also like to thank the Opposition for giving us this opportunity to set out two competing visions for Britain: growth, modernisation, new infrastructure and stronger public services under Labour; or a return to austerity, Government waste and decline under the Tories—of both their shades of blue. The Tories’ 14 years of power is a tale of two halves. First came—[Interruption.] They do not like to hear it. First came austerity, which broke our public services, leading to the social problems that have increased cost pressures on Government today, but in their final years they did away with austerity, and we saw astonishing levels of profligate waste, dodgy covid contracts, vanity projects and promises that were made to our constituents but never funded.

The hon. Member for Clacton (Nigel Farage) described Liz Truss’s Kwamikaze Budget as

“the best Conservative budget since 1986”,

but I think most people in this place would agree that we have to live within our means. The Chancellor has inherited a difficult challenge because, on the one hand, she inherited an economy with a debt to GDP ratio of over 99%—the highest debt since the 1960s. On the other hand, she inherited a broken state.

[Bradley Thomas (Bromsgrove) (Con)]

Can the hon. Gentleman clarify the bundle of contradictions that we have heard over the last year from Labour Members? I recall that, in July 2024, we heard from the former Leader of the House, the right hon. Member for Manchester Central (Lucy Powell), that Labour had to abolish winter fuel payments for older people because there would be a run on the pound, and then they were reinstated because the economy had allegedly stabilised. We are hearing from the Chancellor and from Ministers that the economy is in a state that requires additional taxation and additional spending. We are hearing all these noises from the Labour party around the need to—

[Madam Deputy Speaker (Caroline Nokes)]

Order. I am sure that the hon. Gentleman will be making a speech in due course. That was a very long intervention.

[Sam Rushworth]

I am not sure that I fully understood the hon. Gentleman’s question or what contradiction he sees, but I will go on to talk about why I feel that we need to see major investment in our public services and our infrastructure.

[Lincoln Jopp (Spelthorne) (Con)]

The hon. Member says that he does not really understand the contradictions. Would he like to state how much growth there has been in the UK economy since the last Budget?

[Sam Rushworth]

Obviously, we are in a global economy. We have the fastest growth in the G7; I think that is well known—[Interruption.] I am going to make some progress, because it is important to set out why we need to be making investment in our public services and infrastructure.

We have only to look at what austerity did to the NHS. The Conservatives inherited an NHS with the highest satisfaction levels and the lowest waiting times ever, and they reversed both of those two things. Look at the state of our town centres. In fact, look at the state of my own constituency of Bishop Auckland compared with 15 years ago. Look at the state of dentistry. In the year before the general election we lost two NHS dental surgeries but, worse than that, children in the existing practices were sent letters telling them they could no longer be provided with an NHS dentistry service. Look at the rising crime in many of our communities, which exactly mirrors the cuts to frontline police. Look at what the Conservatives did to our defence capabilities, which left us the smallest Army since the Napoleonic era.

[Jerome Mayhew]

I quite understand the hon. Member’s philosophical approach: he wants to spend more money on public services. He knew of all those issues before the last general election, yet when he stood for election, he said to his constituents, “Vote for me because we will not raise income tax, national insurance and VAT.” Will he stick by his own promise?

[Sam Rushworth]

I have confidence in the Chancellor to produce a Budget that will do the things that my constituents need it to. What my constituents are asking for, and what they voted for at the general election, is change.

Look what the Conservatives did to our justice system: prisons are 99.9% full, and we have a court backlog that makes victims wait years for justice. We all know that our surgeries are crammed with these cases. Look at what they did to the asylum system, which has an enormous backlog. Whoever negotiated the contract on asylum hotels must have been the person who did the dodgy covid contracts, given the amount that they wasted. Millions a day were spent on hotels.

Look at what the Conservatives did to childhood. Contrary to what was said earlier, child poverty in our country has increased. The Institute for Fiscal Studies said that both relative and absolute poverty have increased. The pattern between 1997-98 and 2022-23 can be described as a U-curve; poverty fell under the 13 years of the last Labour Government, and then relative and absolute child poverty increased. Look at what that means for the communities I represent: 16 Sure Start centres closed; primary school budgets are below their 2010 levels; transport for college students is expensive, and their education maintenance allowance was cut; youth services, boxing gyms and swimming pools have closed; and social infrastructure has disappeared from our communities over the last 15 years.

These are real challenges, but the problem is not just with our public services. Because the Conservatives robbed the capital budget to pay for day-to-day spending, they left Britain in the slow lane. Cancelling Labour’s Building Schools for the Future project left our schools and public buildings infested with reinforced autoclaved aerated concrete. Cancelling nuclear projects left us reliant on expensive fossil fuels, which led to 11% inflation at one point under the Conservatives. Cancelling High Speed 2 to secure a media headline on the eve of a conference has left us without the critical transport infrastructure we need.

All these problems come with a higher social cost. When His Majesty’s Revenue and Customs staff are sacked, we get more tax avoidance and fraud. When people have to wait two years for a routine operation, businesses have a bigger sick bill. When prisons are not built and the police are cut, there is more crime. When civil servants were cut, the previous Government had to spend £3 billion on agency staff.

[Dr Luke Evans]

The hon. Gentleman has missed something from his list: the Government’s own assessment shows that when winter fuel payments are cut, it puts 50,000 people into absolute poverty and 100,000 people into relative poverty. A 2017 report by the hon. Member for Chipping Barnet (Dan Tomlinson), now the Exchequer Secretary to the Treasury, said that cuts to the payment would kill 4,000 people. Was that factored into the hon. Gentleman’s assessment when he went through the Lobby to vote on the measure?

[Sam Rushworth]

The only vote we ever had on the issue was a vote for or against an Opposition day motion. I was always clear that the original threshold that the Government set was far too low. I do not think that millionaires and asset-rich, wealthy pensioners should receive the payment. The policy, as it now stands, and as it will be for pensioners in my community this winter, is as it should be.

[Stuart Anderson]

You voted for it when voting for the Budget.

[Sam Rushworth]

I voted against a motion saying that the payment should be a universal benefit, because I do not think that it should be universal, and I argued for where I thought it should be.

The Conservatives are right about one thing: we do need to control spending. We should not listen to those on the left who think that there is a magic money tree. There is not. Many of my colleagues on the Government Benches and I know how flippin’ difficult it is to get money out of the Chancellor, because she has this difficult job of having to control public spending. Let us talk about that for a minute. The Conservatives failed to invest in our public services, infrastructure and growth when they were in government, but let us also look at what they did on profligate waste. They spent £73,000 in 2019 topping up the Government’s wine cellar; £1.7 million painting Boris Johnson’s prime ministerial planes, including £800,000 on a Union Jack; £500,000 in a single year on chauffeuring ministerial red boxes around Whitehall; £11 million changing the colour of our passports; and £120 million on their festival of Brexit.

[Joe Robertson]

Why is the hon. Member going on about spending decisions of previous Governments, when his Chancellor said last year that her Budget had wiped the slate clean? She said, “It’s on us now”. If she accepts responsibility for where she is today, why does he not?

[Sam Rushworth]

The point I am making is that spending for spending’s sake is not what any responsible Government should do. We should spend every tax pound well. These examples of waste are not things that we should continue.

There was the £100,000 spent on a fake bell that only bonged 10 times during Big Ben’s maintenance. Truss spent £1.8 million on executive travel as Foreign Secretary, not to mention the £500,000 for her private jet for a single trip to Australia in 2022. Then again, she spent £3,000 on a lectern.

[Lincoln Jopp]

The hon. Member is nickel-and-diming the debate. One big question faces the Chancellor: what to do about the two-child benefit cap, which costs £3.5 billion, so let us not worry about the odd £50,000 here or there. I would like to hear a clear statement from him: is he for lifting the two-child benefit cap, or for keeping it?

[Sam Rushworth]

That is a fair question, and I will answer it. It is important that we do not return to the days when the Conservatives were in office and vanity projects wasted so much public money, because child poverty is the scourge of our time. We need a national mission to eradicate child poverty. Some of what we need to do will come through, for example, our looking at the two-child cap, but not all of it. I have argued in this place for us to extend free school meals, and I am pleased that the Government have listened to that and are extending them to more children. I have argued in this place for free breakfast clubs, and I am pleased that the Chancellor is listening and funding them. Unlike the Conservatives, she is funding free childcare, because these things matter, too. This is not just about benefits; it is about ensuring that we give children what they need to have a meaningful childhood.

[Bradley Thomas]

I am not sure that I heard an answer to the question from my hon. Friend the Member for Spelthorne (Lincoln Jopp). Does the hon. Member support a two-child cap, or would he like it removed?

[Sam Rushworth]

I have never supported the two-child cap. The Conservatives introduced a two-tier benefit system that penalised younger families in a way that it does not penalise older families. My genuine view is that this needs to be looked at creatively. I do not know what the Chancellor will do, but my view is that we need to do something about the problem; possibly we need a tapered system. I have a big family, and I know that my fifth child did not cost what my first child did. I have confidence that this Government, like the last Labour Government, will eradicate child poverty.

I make the point again that child poverty is not just about benefits; it is about what we do to improve childhood. It is about giving children more access to the creative arts, as the Education Secretary this week announced we would. It is about getting youth hubs back; we are working on that. It is about free breakfast clubs, and the warm home discount being extended to more people.

[Dame Caroline Dinenage (Gosport) (Con)]

I apologise—I may be a little hard of hearing. Could I ask the hon. Member once more for a quick yes-or-no answer? Would he vote to get rid of the two-child benefit cap?

[Sam Rushworth]

That is not a vote before the House right now, but I have been pretty clear in my answer. I never agreed with the cap when the Conservatives introduced it. They did terrible things that put too many children in my community into poverty. The Government are addressing child poverty in multiple ways, including through the welfare system. However, children are not poor just because we do not have good enough benefits. In Bishop Auckland, people do not want better benefits; they want better jobs, a stronger local economy, better infrastructure, better education and a better health service. All that will require public spending. If I may say so—[Interruption.] Do you want to make an intervention?

[Madam Deputy Speaker (Caroline Nokes)]

Order. I do not want to make an intervention. Perhaps the hon. Member for Wyre Forest (Mark Garnier) does, but I certainly do not.

[Sam Rushworth]

I was distracted by the chuntering of the hon. Member for Wyre Forest (Mark Garnier) and thought that he may have wanted to make an intervention.

I will finish as I started. For me, the choice is really this: do we return to the dark days of austerity, which created the challenges that scourge the community that I represent, or do we lift people out of poverty, give them hope and the public services that they need, and invest in the critical infrastructure that brings our economy and our country into the 21st century? I know where I stand on that. Do the Conservatives know where they stand?

14:40

[Stuart Anderson (South Shropshire) (Con)]

It is interesting to follow the hon. Member for Bishop Auckland (Sam Rushworth), who clearly has an ideology that he believes.

As a Conservative, I believe in lower taxes, and that people have a better understanding than Governments of how to spend their own money. I want to see more South Shropshire constituents keep more of what they earn. Last year’s Halloween Budget hoicked taxes by £40 billion a year. It included a hugely damaging rise in employer national insurance contributions, which has added almost £1,000 to the cost of employing someone. We are stunting the wealth creators, and that is not acceptable. The Chancellor did that with one hand, and withdrew support from our suffering high streets with the other. Pubs will have to pay an extra £3,000 on average because of the changes to business rates, and they are feeling it.

The latest statistics have confirmed that economic growth has flatlined, despite the Chancellor’s promise to

“lead the most pro-growth, pro-business Treasury our country has ever seen, with a laser focus on delivering for the working people”.

How is that going? Since last year’s Budget, a huge number of people—the figure is approaching 180,000—are out of work. Jobs have been lost, and unemployment is up to 5%.

A year ago, the Chancellor told the country that she would not come back with any more tax hikes. The slate had been wiped clean. She clearly said on TV: “This is what I will be doing, and I will not have to come back.” No matter what reason they come up with, if the Government break that manifesto promise, I believe it will hurt them beyond what they believe possible. They have run out of road in their continual blaming of the previous Government. However, it seems almost certain that that is what will happen, so pensions, savings, cars and houses are all sadly in the frame for Labour’s Budget.

South Shropshire is a big rural constituency, so let us consider rural prosperity. The Chancellor’s policies have killed growth, fuelled inflation and reduced opportunities for South Shropshire residents. On average, productivity, earnings and ease of access to further education are all lower in rural than in urban areas. Closing those gaps could add billions to England’s economy. A stronger economy is needed to enhance public services. I agree with the hon. Member for Bishop Auckland that we need strong public services, but we cannot stifle private industry and businesses to get them.

The shadow Chancellor, my right hon. Friend the Member for Central Devon (Sir Mel Stride), has shown how huge savings can be made at the same time as cutting taxes for working people. If the shadow Chancellor and shadow Treasury team set out clear objectives, we should put party politics behind us and adopt some of them for the good of the country.

The family farms tax is crippling farmers in South Shropshire. I have a huge rural constituency—25% of my constituents work in the agriculture industry—and the tax is really hurting it. The Budget must reverse the cruel family farm tax, which needs to change. Farmer confidence has dropped to its lowest-ever level on record. More than 6,000 farms have already closed under this Government. That is concerning, and it is a threat to food security.

The Budget must also reverse some measures to release the stranglehold on the high street. Every Member would struggle to find a business in their constituency that says, “I am enjoying the measures that have been put in.” More than a thousand pubs and restaurants on our high streets have already gone—that is the equivalent to two every single day. That is an issue. I welcome the fact that a future Conservative Government would abolish business rates for thousands of retail, hospitality and leisure businesses. That would stimulate growth, and we could then invest in the areas where we need to.

[Dr Luke Evans]

This toxic concoction creates a cumulative cycle. The pubs that do survive have to reduce staffing and hours. In rural areas, that might increase loneliness and reduce opportunities for young people to get jobs. That cyclical nature means a spiral into decline. I am concerned about that in my area. Does my hon. Friend share that concern for his area?

[Stuart Anderson]

I certainly do. You raise a huge point—

[Madam Deputy Speaker (Caroline Nokes)]

He raises.

[Stuart Anderson]

He raises a huge point. In my constituency of 700 square miles, the local pub and village hall are community hubs. After Remembrance Sunday, I took my family to the Queens in Ludlow. I have met many publicans across South Shropshire. Experienced publicans are still just able to keep trading on reserves, but they are not really making a profit. The ones who are just setting out to build up that reserve are going broke. It is just not a viable situation for them at the moment.

Council tax bills doubled in the time that Labour was last in power, representing an extra £751 on an average band D home. The Conservatives put in veto powers to ensure that council tax did not increase over a certain amount. We allowed local areas to receive the funding that they wanted by raising council tax within 5%, but without excessive rises. At the moment, less funding is going into rural areas but council tax is going up by a dramatic amount, so people are paying more and getting less.

The County Councils Network has named Shropshire council as one of 16 local authority areas that will see significant cuts in direct Government funding. It suggests that there will be about £9 million of cuts to Government funding over the next three years. That will affect many different services, including Shropshire Fire and Rescue Service, which has said so on record.

I have written to many constituents as part of my “shop local” survey, and I have heard from almost 10% of them—thousands of people have responded. People say that they love going to the local high street and want to do so. However, the footfall numbers are dropping. Businesses say that they do not have confidence, and that it is getting harder and harder to trade. That is causing major issues on the high street. We must release the stranglehold on the high street and encourage growth. The biggest factor, businesses tell me, is the tax hikes, which are crippling. I make a plea to the Government to change their approach to taxing small businesses, or they will destroy the country.

[Lincoln Jopp]

Will my hon. and gallant Friend take an intervention from any Labour Member who is prepared to say that they have spoken to a business in their constituency that welcomes the NI tax increase?

[Stuart Anderson]

I will gladly take an intervention from any Labour Member whose local businesses say that the tax on local business is good. Anyone?

[Sam Rushworth]

I spoke to a business in my constituency that said it understands why the Chancellor made that decision. One of its biggest concerns is the number of days that it loses to sickness, and it understands the importance of improving public services and of having a better educated and healthier workforce.

[Stuart Anderson]

I am happy that you intervened, and if you support tax hikes for your—

[Madam Deputy Speaker]

Order.

[Stuart Anderson]

I will start that again, Madam Deputy Speaker. I am happy that the hon. Gentleman intervened. If he speaks to businesses across his constituency, they might say that they understand the tax hike, but I am asking if any of them support it. I am happy if he wants to intervene to say that they do.

Despite the huge pressures, I will continue to campaign for funding and support that enables businesses to thrive. The biggest area is tax cuts, and it remains a vital part of my focus to unleash rural prosperity for South Shropshire. I urge colleagues across the House to vote down any future tax rises.

14:50

[Chris Vince (Harlow) (Lab/Co-op)]

It is a pleasure to speak in this debate, and I thank the right hon. Member for Central Devon (Sir Mel Stride) and the Chief Secretary to the Treasury for opening it. As Members will know, I take any opportunity to speak or to intervene, but a couple of weeks ago I missed an opportunity when the right hon. Member for Braintree (Sir James Cleverly) asked whether any Labour Members wanted to lower taxes. I have two excuses for not intervening on that occasion. The first was that I had only just walked into the Chamber, and as my hon. Friend the Member for Calder Valley (Josh Fenton-Glynn) has found, someone cannot intervene if they have only just walked in. The second reason I did not intervene on the right hon. Gentleman was that I have to declare an interest when it comes to tax: I am the son of not one but two of His Majesty’s Revenue and Customs tax inspectors—[Interruption.] I know; I am turning into the Prime Minister and talking about what my parents did for a living. I am also the grandson of an HMRC tax inspector, so I have to declare an interest as I would not be standing here if it were not for tax.

[Dr Ben Spencer]

Tax collection and working for HMRC are important jobs. Obviously the tax collector gets a bad rap in popular culture, but I wish to thank the hon. Gentleman’s parents and family for what they do.

[Chris Vince]

I thank the hon. Gentleman for his kind intervention. I like the fact that, even in a debate about tax in which we have opposing views, we have been able to come to some sort of consensus—my speech has already done its job, one might argue.

The answer that I thought of giving the right hon. Member for Braintree about tax was that I would love residents in Harlow, particularly those in low-income families—23% of under-16s in Harlow live in low-income families—to pay less tax. However, we have seen underfunding in our local services, with the hospital and schools falling apart, and roads that frankly look like the surface of the moon. If we were to live in a low-tax haven—I do not suggest that all Opposition Members say we should—it would lead to those local services suffering, and it is those lower-income families who cannot afford private healthcare, private schools, or to get their car fixed every time they go over a pothole, who would suffer.

[Jerome Mayhew]

Will the hon. Member give way?

[Chris Vince]

I will, as long as the hon. Gentleman does not ask me about renationalisation.

[Jerome Mayhew]

I know that the hon. Member cannot pronounce that word. I quite understand the points that he makes—he is heartfelt in making them, and he thinks there should be Government spending on those issues. However, he was aware of every single one of those issues before the 2024 general election, when he stood on a manifesto commitment not to raise income tax, not to raise national insurance, and not to raise VAT. Does he accept that if his Government resile from those promises, it will be a huge breach of trust with the British people?

[Chris Vince]

I thank the hon. Gentleman for again mentioning that I cannot say “renationalisation”—well, apparently I can; I just cannot say it when we are on “BBC Look East” together.

I stood on a manifesto to ensure that I got investment into my town, and I am delighted that this Government have promised, for the first time, a realistic and fully funded timetable for a new hospital for Harlow, with a guarantee that Harlow will be the home of the UK Health Security Agency—I appreciate that I am now turning into a party political broadcast. My priority is to ensure that every young person in Harlow has the best possible opportunities, and I know that that is what this Government will do. I know that difficult choices need to be made by the Chancellor, and I will not pre-empt the Budget—Opposition Members will not be surprised to know that, as a humble Back Bencher, I do not know what the Budget says.

I mentioned that my mother was an HMRC compliance officer, and I thank the hon. Member for Runnymede and Weybridge (Dr Spencer) for paying tribute to her. I asked my mother to talk to me a little about what she did at the Inland Revenue, and later at HMRC. She said, “I will write a couple of bits down for you.” Hon. Members will be pleased to know that I am not going to read out the four pages that she wrote, but I will give a few selected highlights. I will miss out the bit where she says, “Hello Darling, thanks for asking”, but she wrote that she joined the Inland Revenue as an inspector of taxes in 1975—I thought that was very honest of my mum. That was pre-computers, and she was

“manually calculating assessments, processing returns and issuing code numbers, i.e. PAYE.”

Apparently it took 18 months of training to do that, and she successfully passed the exam, as hon. Members will have gathered.

If we fast forward, she took a career break—if hon. Members are wondering why she took a career break, I am standing right here. She initially worked at the national insurance organisation, until that merged with HMRC. Her role was to help people with gaps in their national insurance records—basic investigation work and contacting employers. In 2003, she

“returned to HMRC ‘proper’—to employer compliance investigation team.”

He job was to visit employers and check their records. Very positively she found that

“most companies were compliant, but they made mistakes.”

There was a scheme—this is something I would suggest to the Minister if he was in his place—that ran courses to ensure that businesses got it right. That could be really important. When we talk about tax evasion, there are people who do that on purpose, but there are also some who just need that help and support.

At compliance reviews, my mother also checked that foreign employees had the right to work in the UK. She was subsequently promoted to regional manager—well done mum—where she managed 100 staff and eight managers who were below her. Her team met taxpayers face-to-face in their offices, or in their homes if they were vulnerable, and they

“helped people complete tax returns, claim allowances, and ensure they paid the correct tax.”

They also administered what were then child tax credits. She was also

“able to authorise hardship payments in this context.”

Sadly, in 2014, 20,000 staff in HMRC customer services were made redundant, and as Members across the House will know, that included my mother—[Hon. Members: “Ahh!”] Thank you. HMRC decided that customers—that is taxpayers—should telephone for assistance, but telephone staff were not given 18 months of training, and if people could not get through on the phone they were told to go online. Across Essex, there were a number of cuts to local offices, including in Chelmsford, Witham, Colchester, Harlow, Bishop’s Stortford—that’s not in Essex—and Hertford.

[Joe Robertson]

I confess that I am struggling to understand the relevance of this. If it is so important to Budget setting, has the hon. Member given his mother’s note to the Chancellor for her to read?

[Chris Vince]

I thank the hon. Gentleman—I had not thought to do that, but I will do so. I am sure my mother will appreciate that I am having that conversation. I briefly spoke to the Chancellor before this speech, to let her know about my mum’s circumstances. I just put that on the record, and I thank the hon. Member for his intervention—

[Madam Deputy Speaker (Caroline Nokes)]

Order. I think there will be another intervention, but I want to bring us loosely back to the subject of taxes. While I can see that the career of the hon. Member’s mother at HMRC is related to taxes, it would be unfortunate, would it not, if I had to put a tight time limit on other Members?

[Chris Vince]

Thank you, Madam Deputy Speaker. So I cannot talk about my father’s and grandfather’s experiences—[Interruption.] No, okay.

[Laurence Turner (Birmingham Northfield) (Lab)]

I am grateful to my hon. Friend for becoming the human face of tax collection in this debate. A number of my constituents also work for HMRC, and they have told me that the period of cuts has impeded the agency’s ability to collect corporate taxation and get into the public purse revenues that are rightly due. Is that not a relevant factor when talking about the Opposition’s plan to cut 132,000 civil servants?

[Chris Vince]

The ultimate point here is that an estimated £5.5 billion was lost to the Treasury in 2022-23 as a result of tax evasion, and an estimated £6.6 billion was lost in 2023-24. What impact does the Minister think the previous cuts to HMRC will have on the amount of revenue collected, based on the current taxation rules, which were also agreed to by the Conservative party? How different would the amount in the coffers be if those cuts to HMRC had not been made? Will he consider that fact in the Budget and look at how we can support HMRC to ensure that we collect the correct taxes? Let us talk about the tax that should be collected but is not being collected because of the starving of funding for HMRC. From personal experience, I know that my mum and her colleagues made money for the Government. I appreciate that I went a little bit off topic, Madam Deputy Speaker, but I hope you understand the point I was trying to make.

To reiterate what my right hon. Friend the Chief Secretary to the Treasury said in his opening remarks, the Budget will be set on 26 November, which is why we will vote down this motion.

[Gregory Stafford (Farnham and Bordon) (Con)]

On that point, will the hon. Gentleman give way?

[Chris Vince]

No, I have finished my remarks.

[Madam Deputy Speaker (Caroline Nokes)]

After the next speaker, I will impose a seven-minute time limit.

15:00

[Dame Caroline Dinenage (Gosport) (Con)]

It is a pleasure to follow the hon. Member for Harlow (Chris Vince). I thank him for cantering us through his mother’s career at HMRC—on behalf of the whole House, I thank her for her service, and I ask him to pass on our very best wishes.

Madam Deputy Speaker, as a near neighbour to my constituency, I am sure that you will know that the history of Gosport has always been umbilically linked to the fortunes of our armed forces. The town was effectively nationalised by the Royal Navy two or three centuries ago. As the size and structure of our defence base changed, with that, over many decades, went many of the jobs and livelihoods that depended on it. Job density on the Gosport peninsula is almost 50% lower than in the wider south-east region, which is an issue that I have spent 15 years as an MP trying to help drive solutions for. There is nothing more important to an area like mine than maintaining the conditions that give businesses the confidence to invest, employ and grow, but the overwhelming foundation stone for growth, and for the innovation and investment that will solve the productivity puzzle that the UK is facing, is that businesses need to be able to make long-term decisions and plan for the future.

Employers in my constituency, both large ones like StandardAero, QinetiQ and STS Defence and the numerous small and growing businesses, need to be able to rely on stable borrowing costs and to know that the cost of materials will not rise unsustainably in order to have the confidence to take on new staff and start apprenticeship programmes. Investors like those who took the plunge and moved to the Solent enterprise zone at Daedalus airfield, creating hundreds of local jobs in the process, need to know that if they put their capital at risk by investing, the Government will not reach in on a whim to take a large slice of any reward. The fact is that employer tax rises put all of that at risk. That is what we have seen since last year’s Budget and why local people are nervous about this year’s Budget too.

Tax fulfils two purposes: one, which the Chancellor knows well, is to raise revenue for the Government, but I am not convinced that she has given much thought to the other, which is influencing changes in behaviour. The pessimism and growth downgrades in our economy over the past year have provided hard and fast evidence that changes to the tax regime are at least as powerful at achieving the second goal as the first. Some £40 billion of tax rises very effectively mowed down those green shoots of post-pandemic recovery, but worse than that, they incentivised businesses in my Gosport constituency to make decisions that run in direct contrast to what our area needs. There are fewer employment opportunities and fewer chances for young people to build good-quality careers.

I have heard worrying stories about the impact that the employer national insurance rises announced in last year’s Budget of unintended consequences have had in my constituency. The common thread is that the national insurance change hit the businesses for which labour is the highest cost hardest, putting services that my constituents rely on every day at risk. A fifth of everyone who works in Gosport works in caring, leisure and other service occupations. Those are by far the biggest employment sectors, and account for almost three times the average for England, so my constituents felt the Chancellor’s national insurance rises the hardest.

[Dr Luke Evans]

My hon. Friend is making an excellent speech about what happened a year ago. Another problem is that all the kite flying in the Treasury at the moment means that people are now making decisions to withdraw their pensions schemes, not employ people and not invest. Is my hon. Friend seeing that in her constituency, as I am in mine? All that kite flying has real-world consequences, even before we get to the Budget in three weeks’ time.

[Dame Caroline Dinenage]

My hon. Friend is 100% right to point out that people are making knee-jerk decisions because of fear about what the Chancellor will do, and they are delaying business decisions that they might otherwise have made that would have brought growth to my constituency.

My constituency lies on the south coast. The stunning Solent coastline may mean that Lee-on-the-Solent, Stubbington and the wider Gosport area is a wonderful place to retire. As I often repeat, we have the largest proportion by percentage of veterans of any place in the United Kingdom, but that requires adequate health and care provision. However, care providers, whose main cost is personnel, are struggling.

The Nuffield Trust has calculated that the national insurance rise costs England’s 18,000 independent adult social care providers £940 million, which has severe consequences for the elderly and vulnerable people who need the service. One local provider, who operates a 44-bed care home offering residential care for the frail elderly and those living with dementia, suggested that they had no choice but to pass those national insurance rises directly on to their customers. As a result, one constituent told me that he was seeing an increase of nearly 8% in his brother’s care home fees.

At the other end of the spectrum, Hopscotch nursery, which looks after 1,900 children across our local region and provides fantastic care and support, told me that the jobs tax added £1 million to its overheads—that is a 10% increase, which means a 10% fee increase is being passed on to many of my constituents. Working parents need childcare, so working parents have to pay. What is the impact? Reduced household spending and a slower economy or, even worse, a parent dropping out of work to look after the children. Perhaps that is why we have seen growth flatline, borrowing costs rise and, this week, unemployment reach its highest level since lockdown.

On 26 November, will the Chancellor demonstrate that she has learned the lesson that tax rises that hit employers’ bottom lines have serious implications for our businesses, communities and economy? I would be shocked if she has not, but we are still hearing reports that hiring costs are going to increase yet again. None of the hospitality and retail businesses in my constituency will welcome that. After all, the sector has already seen 80,000 job losses.

I am particularly concerned for young people. A recent Telegraph article said that young people were giving up on Gosport because of the lack of employment opportunities. For many, a job in hospitality or retail is the first step on the route into work. Businesses in the sectors that take on so many young people across my constituency, from adult social care and childcare to hair and beauty, are telling me that they are not taking on more staff as a result of the Chancellor’s changes to national insurance contributions. In fact, the National Hair and Beauty Federation told me that, at the current rate of decline, there would be no new apprenticeships in that sector at all within the next few years. It is not a coincidence that this year my constituency saw the number of young people between 18 and 24 years old claiming unemployment-related benefits rise by 31%. So when the Government conduct their new independent review into why this is happening, they might want to start by looking in their own backyard.

When the Chancellor is considering the vast array of tax measures at her disposal to fill the £30 billion black hole, will she consider the impact on the employment of young people of any proposals to further penalise retail and hospitality businesses? She might even consider taking a Conservative growth policy, and announce that business rates will be scrapped for high street businesses such as pubs.

It is not only businesses that support growth. Across Gosport, Lee-on-the-Solent, Stubbington and Hill Head, many people dedicate their own time to volunteering, towards supporting sports clubs, charities, health forums and community organisations. Those groups are the backbones of our communities, but like any organisation they cost money to run. The Culture, Media, and Sport Committee, which I chair, has heard how increasing costs have impacted the ability of charities and voluntary organisations to deliver the services that local people rely on and love.

We often forget that charities face employment costs too. Despite 83% of charities recording an increase in demand for their services over the past 12 months, last year’s tax hike added a combined £1.4 billion to the wage bills of more than 44,000 charities. A huge amount of pessimism is growing in the sector. A third of charities are reducing their workforce as a result of the tax rises, and a similar number think that the sector is in an unhealthy space.

The increase might be easier to shoulder were it not for the parallel drop-off in funding streams. Tax rises mean less money for charitable giving, especially if the Chancellor is going to go after pensioners with her increase in income tax. I cannot stress enough how much tax rises have hurt and will continue to hurt the charitable sector, and the unintended consequences are huge. We have less charitable giving and fewer hours volunteered, as people work longer and salary sacrifice schemes are raided, while increased costs threaten jobs at national charities such as Oxfam, Scope and the National Trust, which face the loss of £50 million through restrictions on their ability to claim gift aid.

Sports clubs do a fantastic job of alleviating pressure on charities and the NHS, but they can also reduce the burden on the Chancellor to pay out-of-work benefits. On current estimates, spending on working-age disability and incapacity benefits is expected to increase by £25 billion to more than £70 billion by the end of this Parliament, and an estimated 148.9 million working days were lost due to sickness or injury in 2024. Physical activity can play such a vital role in the prevention of so many conditions, and so many of our sports clubs lean in, but the tax rises in last year’s Budget mean that the sector is in a precarious position and unable to meet its potential. The facilities that teams use to practise, play and socialise need staff as well as revenue streams. Tax undermines the work being done by our sports clubs to increase the take-up of physical exercise, reduce the burden on the NHS and keep our communities together.

We do not yet know what the Chancellor plans to announce at the Budget in a couple of weeks’ time. Last year we saw £40 billion-worth of tax rises. It was the highest tax-raising Budget in a generation, and I know that many people in my constituency were shocked. That was not what the Government promised when they were in opposition or at the general election. We now fear that the Chancellor will go big on tax rises, despite categorically saying last year that she had wiped the slate clean and would not be coming back for more. My concern for my constituents is that they have seen no tangible benefit from last year’s Budget, just pain, and they will undoubtedly shoulder the burden whenever new measures are announced.

15:10

[John Slinger (Rugby) (Lab)]

I commend the hon. Member for South Shropshire (Stuart Anderson) on his constituency, which I drove through. I enjoyed a drink or two in one of the pubs in his town of Ludlow, and it was really good to be there. Fortunately, I sat next to some Labour supporters in the pub, so I am grateful for that too.

There has been quite a lot of bluster from the Conservatives today. However, sadly for them, a party that repeatedly broke its manifesto promises, crashed the economy and brought public services to their knees has no credibility. It is all brass neck and no contrition. This Labour Government are still cleaning up the mess that the Conservatives left—a mess that has deep consequences for our economy, with the impact of austerity, their bodged Boris Brexit deal, and Liz Truss’s mini-Budget, which homeowners and many others have been paying the price for.

Changes to fiscal policy are made at the Budget, which will be set out on 26 November, not today. That is just one of the many reasons why we will vote against this motion. What I can say is that my colleagues in the Treasury will ensure that the Budget is underpinned by Labour’s values of fairness and opportunity and focused on the priorities of the British people: protecting our NHS, reducing the national debt and improving the cost of living.

[Lincoln Jopp]

It would make things so much simpler for the House if the hon. Gentleman would put a date on when those on the Government Benches will take responsibility for running the country. I do not mind if it is in six months’ time or a year’s time, but we can then all go home—I have lots of things to do in Spelthorne until then. When the Government finally come to terms with the fact that they are in charge and are responsible, we will all be grateful.

[John Slinger]

Frankly, it took 14 years for the Conservatives not to apologise for any of the decisions they took, so I do not think we need any lectures from the hon. Member or from other Conservatives.

Contrast our values with the values of the Conservatives: austerity, financial recklessness under Liz Truss, and a dodgy Brexit deal. We cannot return to austerity and economic chaos.

[Stuart Anderson]

I thank the hon. Gentleman for talking highly of my constituency—Ludlow is lovely. Does he realise that austerity started under the Labour Government when they were last in power? They started measures to make cuts in 2008-09.

[John Slinger]

I absolutely accept that the previous Labour Government took difficult decisions towards the end of their tenure in office following the global financial crisis. What happened from 2010 onwards was unnecessary and reckless, and we are all still paying the price to this day.

[Bradley Thomas]

Will the hon. Gentleman give way?

[John Slinger]

I will not; I may give way in a little bit, but let me make some progress.

We will ensure that we avoid another decade of under-investment in public services and infrastructure. I am sure we all agree that we owe it to future generations to ensure that the economy we hand down is secure, with debt under control. I would like to hear more from Conservative Members—perhaps they would like to intervene on me. Their motion makes no mention of the public services that would be cut. How many doctors, teachers, soldiers and police officers would they want to cut? I am happy to take an intervention.

[Jerome Mayhew]

If the hon. Gentleman is looking for ideas about how to cut spending, he could do worse than to look at the proposals set out at the Conservative party conference, in which we identified £47 billion of public sector cuts that would not require any of the cuts that he suggests.

[John Slinger]

That £47 billion seems rather like a number plucked out of thin air. Frankly, I do not think that that number holds any credibility.

The previous Government cut national insurance in 2024, which was deliberate sabotage. They cut public services from 2010 onwards, which was deliberate ideological recklessness and is still damaging the services that our constituents rely on.

[Bradley Thomas]

Will the hon. Gentleman give way?

[John Slinger]

No, I will not.

The consequence? Chaos. Under the Conservatives, prisons were full. We had a lack of prison places and a crisis so bad that it led the right hon. Member for Richmond and Northallerton (Rishi Sunak), it is said, to go to the country early. Local government was underfunded. Schools were literally at risk of collapse. Waiting lists were at a record high. Every time I knock on a door, people tell me of the lengthy waits they are undergoing. They often say that there is no difference between the parties and that all politicians are the same. Well, the Conservatives increased waiting lists, and we are getting them down faster than we promised; they are at the lowest level for two years.

On promises, the Conservatives are in no position to lecture us. In 2019, they pledged to build 40 new hospitals. Where are they? I am waiting. In 2019, the former Prime Minister, Mr Johnson, said:

“We will fix the crisis in social care once and for all with a clear plan we have prepared.”

Where is it? How did that go?

In 2010, 2015 and 2017, the Conservatives promised to bring net migration down to the “tens of thousands”. When was it that net migration peaked? It was in June 2023, when it peaked at 906,000.

[Dr Spencer]

The hon. Gentleman is making an interesting argument. As I understand what he is saying, does he stick to the manifesto promises on which he was elected?

[John Slinger]

I absolutely believe we should implement the manifesto that we stood on, and I am proud to do that.

[Hon. Members]

Tax rises!

[John Slinger]

Since hon. Members mention taxes from a sedentary position, let me say that the Conservatives broke their tax pledge by increasing national insurance in 2021.

[Bradley Thomas]

rose—

[Jerome Mayhew]

rose—

[John Slinger]

I will not give way.

The Conservatives broke their triple lock promise in 2022 and 2023.

[Bradley Thomas]

Will the hon. Gentleman give way?

[John Slinger]

I will not give way; I will make a little progress.

The Conservatives paint themselves as economically competent and as the party of low taxes. Well, Liz Truss blew the first claim out of the water. On the second claim, the tax burden under the Conservatives reached a record high of 36.3% in ’22-23.

[Bradley Thomas]

On a very brief point of clarification, is the hon. Gentleman saying to this House that he would like this Labour Government to not increase taxes and therefore stick by their manifesto?

[John Slinger]

I am saying to this House that my right hon. Friends in the Government have to take very difficult decisions to deal with the problems this country faces, many of which were caused by decisions taken by the Conservatives. They left mines in our national finances, our public services, our system of taxation, and more besides. This Government are not just manoeuvring around those mines, leaving them for future generations; we are defusing them. We are getting on with the job of renewal and, unlike Opposition parties, we will not take risks with the next generation through undue debt. We will invest in the national interest, and we will reform things, as we are showing with NHS England. We will take the tough long-term decisions that are necessary to rebuild Britain. We are doing this with our Labour values at the forefront: fairness; opportunity for all; protecting the vulnerable; empowering people, businesses and organisations; challenging vested interests; long-term investment; an industrial strategy; skills for the future.

[Lincoln Jopp]

On the topic of tough decisions, I have a really simple question for the hon. Gentleman, which will probably do him some good in the coup that is currently going on. Is he for lifting the two-child benefit cap, or for keeping it in place?

[John Slinger]

I am for doing absolutely everything we can to reduce child poverty. One way in which we can achieve that is by ending the two-child cap—there are other measures. However, that is a matter for my right hon. Friend the Chancellor; it is not for me to decide right now in the Chamber.

Our approach is paying off. We were the fastest-growing economy in the G7 in the first half of the year, and the average person’s disposable income is £800 higher now in real terms than just before the election, but there is not time for me to go through the long list of our achievements. My right hon. Friend the Chancellor will set out more in the Budget. In my view, ours is a can-do approach, not a kicking-the-can-down-the-road approach.

[Madam Deputy Speaker (Caroline Nokes)]

Order. I call Joe Robertson.

15:21

[Joe Robertson (Isle of Wight East) (Con)]

Too many of my constituents know 26 November 2025 already. Usually, Budgets come and go without making a huge impact on the public consciousness of people living their daily lives, but this year is different. It is different because businesses and families are terrified about what the Chancellor is cooking up for them.

What the Chancellor and the Prime Minister could have done a couple of weeks ago—indeed, a couple of months ago—is to put their fears at rest, confirm the Labour manifesto and confirm the promise not to increase tax on income, national insurance or VAT. The Prime Minister was prepared to do so in the summer; he did not revert to this absolute nonsense that he is not going to write the Budget. No one is asking him to write the Budget, and no one is asking the Minister to write the Budget from the Dispatch Box today. What we are asking for is confirmation of a manifesto promise that he and others got elected on less than 18 months ago. The Prime Minister committed to that promise in July, but failed to do so two weeks ago. Either he and his Government are indifferent to the worries of my constituents and the British people, or they are cooking up plans to tear up their manifesto and increase taxes they said they would not. I suspect that it can only be the latter.

[Sir Julian Lewis]

There is, of course, a third possibility, which some people with twisted minds have been suggesting: that the Government plan to do some pretty terrible things in the Budget but are setting up a strawman that they are going to break their manifesto promises. Then, when they do not do so, everybody will swallow those other terrible things. Is that too Machiavellian?

[Joe Robertson]

My right hon. Friend, whose constituency is just across the water from mine, is far more experienced in this place than I am. I admit to a certain naivety in not imagining that Machiavellian intention within the Government to set up such a strawman, but the point remains the same. If they are doing so, they are indifferent to the economic worries of my constituents and others, particularly hard-working families and businesses.

The question that we as the Opposition have raised today is what the Chancellor is going to do with the situation that she has created. Having sat through this debate, it is surprising to have heard so much deflection from Government Members—so much determination, in November 2025, to talk about previous Budgets under previous Governments. It is an obvious deflection technique, but in so doing, they speak against their own Chancellor. In November last year, she was very proud of herself in saying that her previous Budget had dealt with the black hole—a mystery black hole that she had identified, but let us take her at her word—and she wanted credit for having closed it off and wiped the slate clean. Her actual words to Sky News were “It’s now on us”, meaning that from that date, any problems in the economy and in future Budgets would be hers to deal with, and would have been caused by her decisions.

Last year, the Chancellor blamed the Conservatives for a £22 billion black hole. On a political level, one can understand that—why would she not? She had just come into government; she felt she could get away with it. This year’s black hole is bigger. It is £30 billion, and it is on her. That is why she is faced with the choice of raising money from hard-working families. What she could do is seek savings from the ballooning disability welfare bill, which, according to the OBR’s figures, is set to reach £100 billion by the end of the decade. She tried to do that earlier this summer, but her Back Benchers were not having any of it, so she and the Prime Minister had to shelve those plans.

We learn today that not only have the Prime Minister and the Chancellor lost the confidence of many of their Back Benchers, they have also lost their grip on No. 10, with its staffers briefing out against the Health Secretary. Today, the Prime Minister has had to admit to this place that he did not authorise any of that. In so doing, he has demonstrated that he has lost control of No. 10, his own operation. He is now having to suck up to the Health Secretary, the man who wants his job, in order to try to hold his operation together. The Prime Minister and the Chancellor could try to make savings—the shadow Chancellor has very kindly identified £47 billion of savings for them.

[David Pinto-Duschinsky (Hendon) (Lab)]

You have mentioned the £47 billion of savings, but you have neglected to identify the number of teachers—

[Madam Deputy Speaker (Caroline Nokes)]

Order. If the hon. Gentleman had been here for more of the debate, he would have heard that I am being particularly pernickety about the use of the word “you”. I have not identified anything this afternoon, and I do not intend to do so. Perhaps the hon. Gentleman will make his intervention short, given his short tenure in the Chamber this afternoon.

[David Pinto-Duschinsky]

Thank you, Madam Deputy Speaker, and I apologise. The hon. Member has not mentioned how many teachers, how many doctors and how many police would be involved.

[Joe Robertson]

The reason I have not identified any doctors, teachers or police is the fact that there are none to identify. The savings of £47 billion have been listed by the shadow Chancellor. They include cuts to the civil service in Whitehall—I suspect that the hon. Gentleman’s Government may be dragged kicking and screaming to cut it, in some way at some point, by us—and they also include £23 billion of cuts in the welfare bill. It is the right thing to do to incentivise work and lift people from welfare into work, something in which the hon. Gentleman’s party used to believe. One way of doing that is making employers want to employ people, but the Chancellor, in her last Budget, disincentivised work, because she taxed work by raising national insurance contributions. As we stand today, there are 180,000 fewer people on the payroll than there were when this Government came in, and it is no surprise that the economy is grinding to a halt.

In fact, the Government are doing worse through the Department for Business and Trade, by introducing an Employment Rights Bill that will further disincentivise work. It has disincentivised people, young people in my constituency, from finding a seasonal summer job, because it has lowered the hourly threshold at which national insurance contributions come in, so it is less beneficial to employ people for fewer hours and, indeed, younger people, who used to be cheaper to employ while they were between education and full-time work.

As was explained so eloquently earlier by my hon. Friend the Member for Gosport (Dame Caroline Dinenage), it is the unintended consequences that have really damaged the economy and made it harder to employ people—although she was, I think, generous in describing them as unintended consequences, given that the Chancellor, the Treasury and the Government should know the consequences of their policy decisions. It makes me wonder whether they were in fact reckless, and were quite happy for businesses to soak up the additional cost and come back to the taxpayer for more money.

I urge those on the Government Benches—very few of whom are present today—to maximise all possible pressure on their Chancellor to do the right thing by their constituents and the British people.

15:31

[Laurence Turner (Birmingham Northfield) (Lab)]

Opposition motions are usually detailed—as, indeed, is the next motion on the Order Paper, relating to energy—so the brevity of this motion deserves comment. The most important line is, I think, the first:

“That this House calls on the Government to control public expenditure”.

In the hands of this Opposition, that short and seemingly innocuous phrase is a euphemism for cuts to essential services, and a return to the austerity agenda that the public rejected so decisively a year ago. All that follows in the motion hangs on that intent. After all, the Opposition accept that were the positions reversed, they themselves would probably be putting up taxes.

Earlier in the debate the shadow Chancellor, who is not in the Chamber at the moment, said that he had been quoted out of context. According to the longer transcript, as reported by City AM, he said:

“If I was in exactly her position”

—the Chancellor’s, that is—

“and I had to deal with tax, and I was down the end of the spectrum where the black hole was really big, I would probably go for income tax…I wouldn’t want to be in that position but that’s the cleanest thing to do.”

[Jerome Mayhew]

As we are looking for clarity, what the shadow Chancellor was saying was that if he was in the Chancellor’s position, that is, if he could not cut spending and had to raise tax, perhaps that is what he would do, but that is not what his intention is. His intention, very properly, is to control spending, as any responsible Government would. Why will the hon. Gentleman’s Government not do the same?

[Laurence Turner]

I thank the hon. Gentleman for his intervention, because it brings me to my next point. The Opposition have come to the House today stating that all these difficult matters have been resolved and there is no need for tax increases at all. They say that they have a plan for cutting £47 billion of public expenditure. I have a copy of that plan with me, but it is not much of a boast, because it is a very sparse document. The right hon. Member for Basildon and Billericay (Mr Holden) said, “Further detail will follow,” but a month has passed and we are still waiting. Perhaps the shadow Minister who winds up the debate can let us know whether the Opposition will be publishing a more detailed document.

[Gregory Stafford]

To bring the hon. Member back to the controlling of spending, may I ask him a question that other Members on his side have failed to answer? Would he be in favour of keeping or scrapping the two-child benefit cap?

[Laurence Turner]

I have said it a number of times on the record and in this House before, so it is no evasion to say that I am no fan of the cap at all. As an incrementalist, I would like to see at least some solid progress on lifting that cap, and I hope that we will be in a position to remove it completely.

[Lincoln Jopp]

Will the hon. Member give way?

[Laurence Turner]

No. I have already taken two interventions and I want to make a bit of progress with my speech, but I might come back to the hon. Member.

I hope that the Opposition do publish more detail, because, if they do not, it will be widely suspected in the country and the House that they know that their claims do not withstand the lightest of scrutiny. It will also be concluded that the real function of that document is to act as an exercise in wishful thinking, and that it is designed to avoid the taking of difficult and unpopular decisions.

Some parts of the Opposition’s claims can be dispensed with briefly. They tell us that they would save £3.5 billion by closing asylum hotels; I think my constituents would choke on their cornflakes on that one, because they know that the Conservative party was the originator of hotel use, just as small boat crossings were not an issue before 2019. I am glad that, under Labour, hotel placements in Birmingham are down by 50% compared with their peak, and I look forward to their use being eliminated completely.

The greater part of the Opposition’s claimed savings is £23 billion of supposed cuts to the welfare bill, but, again, we have had only the scarcest of details. Let us be clear about the scale of what is being discussed: £23 billion is the equivalent of a quarter of the universal credit bill, more than half the disability social security bill, and two thirds of housing costs.

To give her credit, the shadow Work and Pensions Secretary, the hon. Member for Faversham and Mid Kent (Helen Whately), said last week that she would be happy to share a further breakdown of those savings. Again, that has not been brought forward. If the Opposition are to ask the House to have any confidence in their proposals, they must provide that information—not examples of proposed cuts, but the cuts in their totality.

[Dr Ben Spencer]

One of the striking features of this debate is how much time the Government Benchers have spent discussing our record in Government and our future plans. It is almost as if they are lingering, cheering on, and desperately in need of a change of Prime Minister. Will they facilitate that?

[Laurence Turner]

When Opposition Members talk about defenestration, I do listen—because of their greater expertise in these matters. And, of course, “What’s past is prologue”—the hon. Gentleman tempts me to get on to the Zinoviev letter, but that might be one for another day. However, I have actually made only one brief reference to the last Government’s record. We are scrutinising their motion and their proposals; this is an Opposition day debate, and that is a proper function of Parliament.

The other part of the Opposition’s document that I want to comment on is their intention to axe 132,000 civil servants. Some of those people are my constituents—as has already been noted. Not only is this pledge a rehash of a “here today, gone tomorrow” promise once announced by Boris Johnson and never seen again, but it is unclear where exactly the Opposition see those job cuts falling. Is it the additional trade and customs officials hired since 2016? Is it the additional Department for Education staff hired as a result of academisation—effectively a transfer of functions from local government to central Government? Is it the Ministry of Housing, Communities and Local Government staff hired as a result of the growth in statutory burdens on our local authorities? I think all our constituents who work in those roles deserve at least clarity on what the Opposition’s intentions are.

[David Pinto-Duschinsky]

Does my hon. Friend agree that it is interesting that the Conservatives have put forward lots of fantasy proposals about various cuts they cannot make, yet strangely failed to mention any of the covid money that went missing on their watch, or its recovery?

[Laurence Turner]

My hon. Friend is right, and we could all point to examples of waste and inefficient spending under the previous Government. That is, of course, part of the context of where we find ourselves today, as are the £9.5 billion of undisclosed spending pressures that were withheld by the Treasury on their watch from the Office for Budget Responsibility.

I will just say this before concluding, because it has been part of the debate: we are today in a pre-Budget debate, and no Back Bencher knows the contents of what will be announced. But when we do look back on the past in that reflective way, I think the right hon. Member for New Forest East (Sir Julian Lewis) had—

[Bradley Thomas]

Will the hon. Gentleman give way?

[Laurence Turner]

I will give way to my constituency neighbour.

[Bradley Thomas]

I wonder if the hon. Gentleman could tell the House whether he would be content if income tax, national insurance or VAT were to rise in the Budget in two weeks’ time.

[Laurence Turner]

I will happily say to the hon. Gentleman that I do not think any of us come to this place wanting to raise taxes. I will just draw attention to one thing in the Labour party manifesto: an important statement that a growing economy needs strong public services. I welcome the record investment in our NHS—the biggest in 20 years—which has seen waiting lists in Birmingham fall by 20%. That is a philosophical difference between my side and his, but it was also a very important part of the manifesto that I stood on.

Earlier, the right hon. Member for New Forest East suggested that he remembered when Hugh Dalton resigned in 1947. I am not sure that the numbers can be right on that one, but I will just say this. Every Conservative Government and leadership from 2010 onwards claimed mitigating circumstances—some were great, such as the pandemic, and some less so—when they deviated from manifesto commitments. There is no doubt that the weakening of international trade, the imposition of tariffs and the forthcoming OBR revision on productivity estimates are new and relevant factors. That is why difficult conversations are currently happening in Governments and Parliaments across Europe. When the Conservatives demand consistency from others, they would do well to reflect on their own confounding record.

15:41

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

This debate is much broader than mere numbers on a spreadsheet buried in the Treasury; it is about trust, stewardship and the future of our country. That matters because, at the last general election, the now Government and all those elected on their manifesto said they would not raise taxes on “working people”, yet at last year’s Budget, they did precisely that. They introduced £40 billion-worth of tax rises—under the guise of national insurance in the majority of cases—which have a trickle-down effect on working people up and down the country.

To compound matters, on 25 November last year the Chancellor addressed the Confederation of British Industry and made a cast-iron promise: no more borrowing, and no more taxes. That was a pledge to every family, every community and every business in this country, yet we are now on the precipice of the Government breaking their promise. To do so would irreversibly damage the public’s confidence in the Government’s ability to manage our economy. Simply put, every tax rise hits families, pensioners and small businesses. There is a simple maxim: borrowing today is merely debt for tomorrow. Every pound borrowed has to be repaid, and it has to be repaid with interest.

I know that those on the Government Benches do not necessarily regularly take the words of Margaret Thatcher to heart, but she said:

“Pennies don’t fall from heaven. They have to be earned”.

That is what people up and down this country are doing every day: they are grafting to provide for their families and their future. She was absolutely right. History teaches us that unchecked spending commitments undermine growth, reduce confidence and erode the state’s ability to serve those who are most vulnerable. By contrast, having control over public expenditure is not an ideology or something to be feared; it is simply common sense. It is about cutting waste, and it is about making hard choices today so that future generations are not saddled with crushing debt. That is responsible government.

It was Churchill who said that

“the price of greatness is responsibility”.

When the Government came into power with great fanfare, there was a sense that they wanted to be a great reforming Government. Well, is there any greater responsibility than to families, who budget carefully; to citizens, who trust the Government to keep their word; and to the public, who expect manifesto promises to be kept? People live within their means.

[Sam Rushworth]

Was the hon. Member a Conservative in 2010, when George Osborne promised not to put up VAT, or in 2019, when Boris Johnson promised not to put up any taxes—both of them made promises that they went on to break because, they said, the circumstances of the country required it—or is he a recent convert to his position?

[Dr Shastri-Hurst]

The hon. Member may have forgotten the covid pandemic that swept this country, which of course turned the tables, and difficult decisions had to be made.

[David Pinto-Duschinsky]

Will the hon. Gentleman give way?

[Dr Shastri-Hurst]

No, I want to make this point. The difference is that the Chancellor told the media last year that the buck stops with her. She has to own these decisions.

As I say, people in this country are asked to live within their means, and they make sacrifices and plan for contingencies. They expect the Government to do the same, so when the Chancellor promises not to borrow more and not to tax more, the country should be able to take her at her word. Such promises are bonds of trust between the Government and the people.

I have a certain degree of sympathy for Labour Members, who have been put in an invidious position. They have been asked to break a promise that they made to their constituents and their country. I ask them to look into their hearts, and to think about whether this is really what they want to be remembered for. Will they show the leadership, the independence of thought and the resolve to vote for this motion?

15:45

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

This will be a very simple speech, because it has only a single fundamental point, which is that honesty in politics matters. That should not be a controversial statement. In debates in this place, we are advocates for a political philosophy, and for certain political tactics, and yes, we should put forward our case as attractively as possible, perhaps using statistics that make our case more effectively than others, but if we downright mislead the public, a line is crossed. That is wrong, because it is taking the public for fools.

In the election of 2024, the Labour party had a manifesto on which every single one of its Members was elected. There was an identified £7 billion that they intended to raise through tax rises, but a core promise at the very heart of the manifesto was that apart from that, there would be no tax rises—in particular, no increases to national insurance contributions, income tax or VAT. That is the very basis of their electoral mandate, and even then, they only managed to secure 34% of the vote. The first breach of those promises came in October last year: the tax rises were for not £7 billion, but £40 billion. That was justified by a wholly fictitious £22 billion black hole, a figure that the Office for Budget Responsibility refused to support, and that the Institute for Fiscal Studies and the Financial Times, among others, could not identify.

The Government raised taxes on employers; it was a tax on jobs of fully £25 billion. The IFS said that was a “straightforward breach” of their manifesto. We were told that this was a one-off, and that the Government had “wiped the slate clean”. The Chancellor of the Exchequer’s words were that they were

“not coming back with…more taxes”;

they had fixed

“the foundations of our economy”,

and she said, “It’s now on us.” Those are not my words, but the words of the Chancellor of the Exchequer.

The second Budget is in just two weeks’ time, and no global event has blown this Government’s plans off course. There has been no pandemic, and there has been no European invasion sending electricity and energy prices through the roof. If things have changed, it has been as a direct consequence of the political and economic decisions of the Government.

[Sir Ashley Fox (Bridgwater) (Con)]

Would my hon. Friend agree that what has actually changed is the inability of the Prime Minister and the Chancellor to control their Back Benchers, who now feel free to demand whatever public expenditure they think is convenient?

[Jerome Mayhew]

My hon. Friend is entirely correct. The Prime Minister tried—half-heartedly, admittedly—to save £4.5 billion from the welfare budget. He put his Secretary of State for Work and Pensions in the ridiculous position of starting a debate arguing for £4.5 billion of savings from long-term disability and health benefits, only for her to end the very same debate advocating for a £300 million increase in those same benefits. The Prime Minister has lost control of his Back Benchers, and he has lost control of his Government’s spending.

We have had no global event, but we do have Government policies that have been economically disastrous. Labour is truly the tax-and-spend party. It has raised the tax burden to the highest in history—certainly since the second world war. As for spend, it raised £40 billion in tax, borrowed a further £30 billion, and increased spending by £70 billion. According to the Government’s own plans, they intend to borrow half a trillion pounds extra during the course of this Parliament. And for what? Has there been reform of public services? No. Public sector productivity has declined. We are getting less for our money—even more so in healthcare, where the decline in productivity is fully 8.3%. What they have done is increase wage inflation. For public sector pay, it is more than 6%, whereas in the private sector, it is a third less.

The Government are coming back for more. They intend, we are told through multiple briefings to newspapers, to breach their core election manifesto pledge and raise taxes, because they cannot reduce spending.

[Sam Rushworth]

What the hon. Gentleman says about healthcare is not quite credible. I appreciate that his researchers will have tried to find a statistic that works for his speech, but it is undeniable that we have delivered significantly more NHS appointments. Waiting times are coming down, and satisfaction levels are going back up again for the first time since the Conservatives broke the NHS.

[Jerome Mayhew]

One quick clarification: waiting times have actually increased in each of the past three months, so they are not going down at the moment. If we hose enough money at a system, we can get increased results, but what we get per pound spent has declined by over 8%. That is a very serious point.

[Gareth Bacon (Orpington) (Con)]

Further to the intervention by the hon. Member for Bishop Auckland (Sam Rushworth), is my hon. Friend aware of the Office for National Statistics report from last week, which showed that NHS productivity has declined since the Labour party took office? Would he like to invite the hon. Member to retract what he just said?

[Jerome Mayhew]

I could not have put it better myself. These are not statistics made up by my researchers; they are from the Office for National Statistics.

The decisions that we are told the Chancellor is about to make in two weeks are not inevitable. There is another choice. She can grow a backbone—so can the Prime Minister—and impose some control over public spending. We have set out a plan to reduce spending by £47 billion. I have heard the criticisms and challenges from Labour Members. They have a budget of £1.3 trillion to work with; are they seriously saying that they cannot find £20 billion of necessary savings from a £1.3 trillion budget? If they cannot, then they do not deserve to be in government.

The motion is not a sleight of hand. It is a simple, short motion, which merely asks Government Members, when they choose which Lobby to go through tonight, to decide whether they will stick with their promises—their manifesto commitments. Will they treat their constituents as fools, or will they vote with the Opposition and defend their, albeit shaky, democratic mandate?

15:53

[Gregory Stafford (Farnham and Bordon) (Con)]

Under Labour, Britain is living in a doom loop of high spend, historically high debt, and higher taxes. That is killing growth, fuelling inflation, reducing opportunities and absolutely weakening our economy.

I have spoken to numerous businesses across Farnham, Bordon, Haslemere, Liphook and our surrounding villages, and they are all anxiously awaiting the undoubtedly business-crushing Budget in two weeks’ time. The Government’s lack of understanding of business should surprise no one; Government Front Benchers have more experience of the trade union movement than of business. Indeed, when the former Deputy Prime Minister, the right hon. Member for Ashton-under-Lyne (Angela Rayner), was asked which companies supported her damaging Employment Rights Bill, which will cost businesses £8.3 billion and cause around 326,000 job losses, she could not name a single one.

The avoidance of engagement runs goes right to the top of this Government. We have seen that in this debate. We have had what I would call a utopian socialist vision from the hon. Member for Bishop Auckland (Sam Rushworth), who mentioned that Labour came into power at the last general election to change. Given how much Labour has resiled from its manifesto, “change” is about the only word left that it is still sticking to. Speak to people and businesses in my constituency—and, I am sure, in the hon. Gentleman’s constituency—and they will say that things have not changed for the better.

I have to say that the Liberal Democrats’ lack of interest continues. Not a single Liberal Democrat Back Bencher has chosen to speak in this debate on the fundamentals of how we will grow and run our economy. Not a single one thought it important to talk in it. That is shameful. I hope that the Liberal Democrat spokesperson, the hon. Member for Witney (Charlie Maynard), for whom I have a lot of respect, speaks to his colleagues about this.

Our motion asks the Government to stick to their promises; I am concerned to see that that wording would be removed by the Liberal Democrat amendment, which thankfully was not selected by Mr Speaker. It is an extraordinary situation.

[Sam Rushworth]

I will refer to the hon. Gentleman’s comments about my contribution. Perhaps because our constituencies are different, his constituents do not face the same challenges as mine. The sorts of changes I am talking about are things like getting NHS dentists back, reopening Sure Start centres, fixing the problems on our high street, improving our schools and getting the waiting lists for child and adolescent mental health services down. These are the serious things that my constituents are looking to me to deliver. The hon. Gentleman and I know as much as each other does about what will be in the Budget, but I will be looking for a Budget that invests in the public services that we need, and in infrastructure, which has sadly been neglected for far too long.

[Gregory Stafford]

The hon. Gentleman has aptly described the social utopia that I accused him of describing. The fundamental point is that if we do not have businesses contributing to the economy, we cannot fund public services. If 90,000 people in the hospitality sector are made unemployed, they are not paying income tax, and we cannot support public services. The idea that the Government can just raise money out of nowhere forever, inevitably, without consequence, is not sustainable, and we are seeing that in our economy.

[Charlie Maynard]

I have already said this, and will say it again: I absolutely—and I speak on behalf of my colleagues—expect the Chancellor to stand by her promises.

[Gregory Stafford]

I thank the hon. Gentleman for that clarification. Hopefully, that means that the Liberal Democrats will vote for our motion later.

[Charlie Maynard]

indicated dissent.

[Gregory Stafford]

The hon. Gentleman shakes his head—our motion probably does not fit the narrative that he is looking for.

The hon. Member for Bishop Auckland just said that neither he nor I know what is in the Budget. While that is technically correct, the Government have been flying many kites about what will be in this Budget, pretty much since the summer—more kites than Mary Poppins—and I think that gives us some indication of what will be in the Budget. As has been said, that has caused great uncertainty and worry. Businesses are either deciding not to invest because they are so worried about what will happen, or delaying investment decisions because of the Budget.

[Tom Hayes (Bournemouth East) (Lab)]

I would like to quote the chief executive of the CBI, who says:

“Scrapping the Climate Change Act would be a backwards step in achieving our shared objectives of reaching economic growth, boosting energy security, protecting our environment and making life healthier for future generations.”

The chief executive of Energy UK says:

“Treating the Climate Change Act as a political football is a surefire way to scare off investors.”

Does the hon. Gentleman support his party leader’s objective of scrapping the Climate Change Act 2008, given that these two respected authorities say that doing so would damage investment in our economy?

[Gregory Stafford]

I do not think I have mentioned the Climate Change Act, but I am grateful to the hon. Gentleman for raising it. I think what my constituents want—[Interruption.] I am trying to answer the hon. Gentleman’s point, and he is barracking me before I have even had a chance to answer. My constituents tell me that they want green policies and sensible moves to reduce carbon and pollution, but they do not want them to hobble our economy and hit them in their pockets at a very difficult time when they are being taxed to death by the Government. The owners of Rutland London in my constituency spoke to me about the Government’s much-vaunted policy paper “Backing your business: our plan for small and medium-sized businesses”, which came out recently. They said that the plan “while promised to cut red tape, lacks delivery details, relies on third-party co-operation, and depends on enforcement rather than details, plans or even an outline, none of which have been set out to us.” Once again, we have another supposedly amazing thing that this Government have done, but businesses do not want it.

During the general election, Labour told the public that it would not raise taxes—it said that 41 times. Then, as we have heard, the Government raised taxes to raise £40 billion. At that point we could have had a sensible discussion about how we were going to reduce the size of the state, reduce inefficiencies and increase productivity, but we had none of those discussions. Essentially, we had a tiny change to welfare, which this Government, because of their Back Benchers, could not get through.

While I disagree with the Labour Back Benchers on that, I am asking them now to find the backbone that made them stand up to their Front Bench last time and to do so again. If the Chancellor comes to this House and raises taxes on working people, I ask them to find that backbone and vote against the tax rise. Their constituents will thank them, and the country will thank them.

In the minute or two I have left, I want to focus on local leadership. I think it is incumbent on us as local leaders to meet and listen to constituents and businesses. That is why I am running a business roundtable next week, and I am very grateful that the shadow Business Secretary, the hon. Member for Arundel and South Downs (Andrew Griffith), is coming to speak at it. I recommend speaking to businesses not just because we are local leaders, but because Members on the Labour Benches would learn something. They would learn that their constituents are not in favour of this.

The hon. Member for Bishop Auckland made some reference to our constituencies not being the same, but I can tell him that in my constituency, as I am sure is the case in his, there are business owners suffering, families struggling, farmers worried about what they will do with their taxes and small businesses that will be broken up because of this Government’s tax. There are also thousands upon thousands of people who have either lost their job or will not get into employment because of what this Government have done.

It is time for this Government to act—stop tinkering, stop the gimmicks, and stop punishing hard-working families and small businesses. This country deserves more than promises. It deserves action, certainty, and a Government who are on the side of those who work, innovate and contribute every day. What we need from the Chancellor in two weeks’ time is a Budget that actually invests in growth, supports jobs, protects household incomes and cuts the red tape on businesses that I described earlier.

I urge the Minister to take this opportunity seriously and ensure that the Chancellor and the Government listen to their constituents and my constituents and produce a Budget that restores confidence, ambition and hope in this nation.

16:02

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

One thing that this Government are really good at is creating a feeling of fear and worry, particularly among my constituents. They are looking at what has happened to them as a consequence of decisions that were taken in the last Budget. I am talking about people from all walks of life, across the board—people who employ people, people who are employed, people who work in hospitality and people who work in the charities sector, who have had to make very difficult decisions as a consequence of the impact of the last Budget.

[Jerome Mayhew]

We have talked about the fear that our constituents have, but there is another fear held by businesses. My hon. Friend will know that business confidence has plummeted to the worst level on record, and investment decisions taken by businesses have been delayed because businesses are worried about the impact of this terrible Budget that we are facing. Does my hon. Friend agree that the speculation fuelled by the anonymous briefings from No. 11 are already damaging our economy?

[Dr Spencer]

I thank my hon. Friend for his intervention. That was pretty much what I was going on to say. We are seeing this constant kite-flying about various different potential taxes or cooked up schemes that could affect different walks of life, as the Government are trying to keep meeting their burgeoning and ever-growing spending commitments. That is making people lose confidence, and it has a real impact on the decisions they are making here and now, even without the policies having been enacted. Like it or not, the Budget on the 26th is already here and operating. It is operating through the media, and people are making decisions now that are having a real impact, particularly in my patch.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

This is a serious point. People who are worried about the financial situation in the country will save rather than spend, whether they are private individuals or business. But is not the very aim of this debate to fuel that speculation and make people feel more anxious?

[Dr Spencer]

We were hoping that this debate would clarify the inability of the Prime Minister to answer the question asked by the Leader of the Opposition only two weeks ago: about whether he would repeat the manifesto commitment not to raise the big three taxes. We are in a period of uncertainty that we are trying to resolve, and it has been created by this ongoing kite flying.

[Lincoln Jopp]

Would my hon. Friend agree that the corollary of taxes is expenditure? We have tried to elicit some clarity from Government Members about whether they would like to raise the two-child benefit cap, which would cost £3.5 billion, or leave it where it is. Given the Chancellor’s kite-flying exercise in the media recently, would my hon. Friend be prepared to take an intervention from the hon. Member for Edinburgh South West (Dr Arthur), who suggested that we were the ones spreading uncertainty?

[Dr Spencer]

I thank my constituency neighbour, and of course I am always happy to take interventions.

[Dr Arthur]

I thank the hon. Gentleman for giving way. My home town is Kirkcaldy, and a former MP for Kirkcaldy is Gordon Brown, of course. In the Blair-Brown Government, he did a lot of work to cut child poverty, which is something I am really proud of, and he cut pensioner poverty as well. Conservative Members should be absolutely ashamed of what they did to child poverty in the UK. I and my colleagues on these Benches, I am sure, will do everything we can to reduce child poverty—including, I hope, removing the two-child cap.

[Dr Spencer]

I thank the hon. Gentleman for his clarity. Labour Members have been keen to talk about the past, so I am glad that he brought up Gordon Brown, who sold the gold at record levels, which led to a mess that we had to clean up.

Homeowners are concerned, particularly in my constituency, where many people are asset rich but cash poor. Many pensioners are worried about pension tax. People who do the right thing—make responsible decisions that we encourage, whether investing in pensions or saving for the future—are seen as targets, or potential targets, by this Government when it comes to paying for the profligate spending being offered. Those people are desperately worried. The truth is that we have to stop spending money that is not ours to spend.

[Sam Rushworth]

I think that the hon. Gentleman was in the Chamber when I read out a list of the billions of pounds of profligate spending by the Conservative party in government. I am pleased that this Government have stopped that and that he is a convert to our cause.

[Dr Spencer]

I have to say that I am getting a bit exhausted by this “14 years” narrative and this recurrent chewing over the past. I want to talk about the future and decisions now. I want to talk about bringing hope for the future again. If the hon. Gentleman wants to talk about the past, we can talk about the past—the dodgy private finance initiative deals under the previous Labour Government, or Gordon Brown selling the gold. We can talk about the International Monetary Fund bailout. I might go back to the future, but if the hon. Gentleman wants me to continue in the past, I can do so. I am happy to take an intervention.

[Joe Robertson]

My hon. Friend was seeking an intervention—from the Opposition Benches, I think, but I thank him for taking one from me. Is not the tragedy that we are stuck for the rest of this decade with this Government? They are clearly not going to hold a general election while they are bombing in the polls. The country is in their hands for the rest of the decade, but all they want to do is talk about previous decades. What must our constituents and their constituents be thinking when they hear this sort of stuff?

[Dr Spencer]

My hon. Friend is absolutely spot on. Our constituents are hurting. They are in a difficult situation and very worried about what is going to happen in two weeks’ time. They look at this place and see Government Members just wanting to talk about the past over and over again.

[Charlie Maynard]

Let us talk about trade—

[Madam Deputy Speaker (Caroline Nokes)]

Order. When the hon. Gentleman makes an intervention, he should do that via me, facing the Chair and not the Back Benches.

[Charlie Maynard]

Let us talk about trade, Madam Deputy Speaker. I find it extraordinary if we look at the future. I think it was Stephen Bush in the Financial Times who talked about the permanent lobotomy that the Tory party needs to have when talking about Brexit. If we are talking about getting money into the Exchequer, let us get our economy moving again and get growth back into the economy. Let us open up a customs union with Europe and get our economy growing. Let us look to the future.

[Dr Spencer]

I have to apologise to the hon. Member. I came into the House in 2019, and it strikes me that this debate is probably better suited to 2018, before I was elected.

On the situation that we find ourselves in, many Labour Members have spoken about the Chancellor or the Government bringing in free this and free that. The Government do not have money and the Chancellor does not have money. It is not even just taxpayers’ money that they are pledging to spend; it is our children’s money. That goes to the core of the problem that we face.

The decisions that the Government are taking to keep on and not cut spending and to keep on borrowing and borrowing are not on my head. They are not on the heads of anyone in this room. Those decisions are on the heads of our children. Families know how to budget, and this is the equivalent of a parent saying, “We fancy going on holiday to—I do not know—Lanzarote this year and we are going to borrow money to do it. I am not going to borrow it on me, though; I am going to borrow it on my kids. They will take out the loan and they can pay it back in future.”

It is fundamentally and morally unacceptable that we are in this position and that the Government do not have an approach to try and drive down the deficit and pay back the debt. That is why I am so pleased that the Leader of the Opposition announced the golden rule for making sure that policies going forward recognise that we cannot keep on spending money that we do not have.

In the last Government, from 2010 onwards, we worked really hard on driving down debt, and we had almost got there, in terms of reducing the deficit, when covid kicked off. Can people imagine the situation we would have been in if covid had kicked off without the work we had done to balance the books and without the fiscal firepower that we had to get through it? I remember the debates that we had around covid, and I remember well the first year—I am sure everyone in this Chamber does, whether they were a Member or not. I remember early on being desperately worried that the shadow of covid would loom long and loom hard, and that, over the next decade, we would see the impact of turning off the economy for two years.

[Madam Deputy Speaker]

Order. I call Sir Ashley Fox.

16:12

[Sir Ashley Fox (Bridgwater) (Con)]

During the general election, the Labour party said that it would not increase income tax, national insurance or VAT. It repeated that it would not increase taxes on working people. In its manifesto, it said it would increase spending by only £9.5 billion and that that was to be paid for by £7.3 billion in extra taxes and £3.5 billion in extra borrowing. That was a modest plan with a prudent margin. It was a plan put forward to the electorate to show that the party could be trusted with the public finances. My constituents might be surprised to learn, however, that if they now look on the Labour party website, that manifesto is rather more difficult to find than it was a couple of months ago.

It is fair to say that we Conservatives did not believe them, so we were not entirely surprised when, within weeks of moving into Downing Street, the Chancellor told the country that she would have to raise taxes after all. She had apparently found a magical £22 billion black hole. I say “magical” because nobody other than the Government seemed able to locate it—certainly, the Office for Budget Responsibility could not find it. It was, of course, a fiction to give the Chancellor cover for what she always intended to do, which was a massive increase in taxes, borrowing and spending, because that is what Labour does. Dogs bark, cats miaow and Labour increases taxes, borrowing and debt.

In her first Budget last year, the Chancellor did not raise taxes by the £7.3 billion promised in the manifesto. She increased taxes by £40 billion. She increased borrowing not by the promised £3.5 billion, but by £32 billion. And believe it or not, she did not increase spending by the promised £9.5 billion. She increased it by £72 billion. The Chancellor imposed £40 billion of extra taxes on our economy. She increased employer national insurance, stamp duty and capital gains tax and she imposed extra taxes on family businesses and family farms, then she pretended that none of those were taxes on working people.

[Charlie Maynard]

Will the hon. Member acknowledge that debt has risen from £0.5 trillion to £2.9 trillion from 2005 to 2026, forecast to March? That is nearly six times as much, and the great majority of that happened under the Conservatives’ watch. Yes, we can talk about covid, but covid is a very small portion of that—about £0.7 trillion—so what about the rest of it? Is anyone going to take any responsibility for that?

[Sir Ashley Fox]

The hon. Gentleman will know that the Liberal Democrats joined a coalition Government in 2010 with the Conservatives. We inherited a deficit of £156 billion in 2010—11% of GDP—and it took 10 years, to 2020, to reduce that steadily to 2% of GDP. For all the moaning and whining from the Labour Benches about austerity, what we were trying to do—as a coalition Government for five years and as a Conservative Government for the remainder—was to live within our means, and that is tough. That is really difficult. It is about improving public services, but without necessarily hosing money at them. We see that most successfully in the field of education. In England we have seen a dramatic increase in reading standards and the standards of examination of English pupils caused by genuine reforms. That compares very favourably with what has happened in Scotland and Wales, where those reforms did not take place. The skill of government is in improving public services without always spending more money. The Liberal Democrats used to have a few Members who were called “Orange Book” Members. It is a shame there are so few of them left.

Who does the Chancellor think she is kidding when she says she has not increased taxes on working people? Try telling the farmers in my constituency that they are not working people, or the young family where both parents work and are saving to pay the stamp duty on their first home. As Labour Members will recall, that first Budget was not well received, so to draw a line under her broken promises, the Chancellor said:

“We’ve now wiped the slate clean. It’s now on us. We’ve put everything out into the open, we’ve set the spending envelope for the course of this Parliament. We don’t need to come back for more.”

Except we know that that is not true. She is coming back for more. She is now set to break that promise again by putting up taxes again.

[Jerome Mayhew]

Does my hon. Friend have any idea why the Chancellor has changed her mind or what it is that has affected her decision? Just a year ago, she said that she did not need to come back for more, but now she says she does. Has there been any great global shock, or does he think the problem lies closer to home?

[Sir Ashley Fox]

I would suggest two reasons. First, our economy has slowed down as a result of the very tax increases that the Chancellor has imposed. Secondly, the feral Labour Back Benchers have made them lose their nerve. The Prime Minister and the Chancellor therefore cannot control public expenditure in any way at all. The British people are already paying the highest tax burden in 70 years and Labour wants to increase it further. It is sad to say that this Government have no clue as to how the economy works. I genuinely believe that their Front Benchers want to reduce unemployment, but have they ever considered that if they increase employer national insurance charges and the cost of employing labour, businesses might use less of it? If they pass an Employment Rights Bill that increases the cost of labour, might businesses use less labour? Might that be why unemployment has increased every month since they took office? Is that why unemployment increases under every Labour Government?

Labour is just as ignorant on the effects of taxes and spending. If the Government tax entrepreneurs, there will be less enterprise. If they increase benefits, they should not be surprised if it becomes more attractive to claim them. Unfortunately, Labour’s answer to every question is more spending because, of course, it is what they do best: spending other people’s money. We never hear about its plans to improve efficiency or get better value for the taxpayer because there are no such plans.

Labour’s higher taxes and borrowing are leading to higher unemployment and lower growth. We are in a doom loop created by the Chancellor, and if we are to revitalise our economy, the first step is for the Government to control public expenditure. That is why we have outlined our plans to reduce expenditure by £47 billion. We will reduce welfare spending by £23 billion. Unlike the Liberal Democrats, Reform UK and other high-spending left-wing parties, we would keep the two-child benefit cap. We would reduce the size of the civil service to where it was in 2016, saving £8 billion, and reduce overseas aid by a further £7 billion. We would use those savings to cut both borrowing and taxes to bring about a new spirit of enterprise and confidence in our country.

It is ironic that it is the Conservatives calling today for the Government to stick to their manifesto promise not to increase taxes. The British people will notice if they break that promise for a second time.

[Madam Deputy Speaker (Caroline Nokes)]

That brings us to the Front-Bench contributions. I call the shadow Minister.

16:21

[Gareth Davies (Grantham and Bourne) (Con)]

I am grateful to be able to respond to the debate on behalf of His Majesty’s official Opposition.

Let me start by thanking everybody from both sides of the House for their contributions, but in particular those on my side of the House. My hon. and gallant Friend the Member for South Shropshire (Stuart Anderson) pointed out the impact of the family farm tax on his farms in Shropshire and that 6,000 farms across the country have closed. The hon. Member for Harlow (Chris Vince), who is sadly not in his place—probably on the phone to his mother—spoke well about Harlow and his mum. I particularly enjoyed the bromance emerging between him and the hon. Member for Runnymede and Weybridge (Dr Spencer).

My hon. Friend the Member for Gosport (Dame Caroline Dinenage) spoke well about the impact of the rise in national insurance contributions on the Gosport employment market. My hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst) said a good quote by Margaret Thatcher. As the MP for Grantham, I particularly appreciated it, but it still rings true today about spending other people’s money wisely.

My hon. Friend the Member for Farnham and Bordon (Gregory Stafford) rightly highlighted that not a single Liberal Democrat Back-Bench MP has turned up, which I agree is completely shameful. We did hear from the hon. Member for Witney (Charlie Maynard), who had the temerity to talk about our country’s reputation when it is his leader who is prancing about in a wetsuit falling off paddleboards—slightly ironic. Finally, my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew), who made a number of important interventions, pointed out that every Labour Member should ask themselves the same question every morning when they wake up, “Who voted for this?” None of them have a mandate for further tax rises, just as they did not have a mandate for last year’s jobs tax increase. They must know this. The proof is right in front of them. Labour has over 400 Members of Parliament and fewer than 10 have shown up. I was going to say that they have come to defend the indefensible, but they have not even done that. None tried to defend the indefensible; we just heard more and more speeches about the past, while their constituents are living in the present.

I think that Labour Members know that the upcoming Budget is surely the beginning of the end. The Government have lost control. Just when the Prime Minister should be focused on fixing their mistakes, he is instead having to oversee co-ordinated briefings against the apparent plots to depose him by his own Health Secretary. It is troubling, to say the least, that the Prime Minister seems more worried about the damage coming from inside his own Cabinet than about the damage already done outside it. The truth is that the Labour party will not be forgiven. Socialism has failed everywhere and every time it has ever been tried.

We should not forget that Labour won the last election because it promised not to be a socialist Labour Government. It said that it would not fiddle with the fiscal rules to borrow more money. It said that it would not increase national insurance, income tax or VAT. It said that it would not pursue ideologically driven policies that would push up energy bills—in fact, it said that it would cut those bills by £300. Unfortunately for the country, this has very much turned out to be a socialist Labour Government after all: higher taxes, fewer jobs, lower confidence, and an economy put into reverse—back to the 1970s. That is felt in every boardroom, every workshop, every pub and every place of work across this country. The best thing that the Government can do right now is take responsibility for their actions and show leadership. After just 16 months of Labour, inflation has doubled, taxes are heading for record highs, borrowing has risen rapidly and unemployment has surged to the highest level since the pandemic. And none of that takes into account what may yet be to come.

We know that the Chancellor deliberately picked the latest time possible for her upcoming Budget, in a last-ditch hope that someone, somewhere might come up with something that makes it all better. The date of 26 November is a highly unusual one for an autumn Budget. The last time we had a Budget this late, phones still had aerials, Mark Morrison was “returning the mack”, and we had to rewind VHS tapes before taking them back to Blockbuster. If only we could rewind the past 16 months; sadly, we cannot.

[Sir Ashley Fox]

Does my hon. Friend agree that this very long lead-in period for the Budget has caused enormous uncertainty for businesses, which have faced a string of briefings in the media about every possible tax rise, and that the very date that the Chancellor has chosen for her Budget is itself causing more uncertainty and delaying investment decisions?

[Gareth Davies]

I could not agree more. In fact, markets and investors have now endured week after week of reckless and irresponsible speculation, not about whether Labour will put up their taxes, but about which taxes will go up. The endless uncertainty that my hon. Friend mentions has caused relentless Treasury kite-flying that has damaged confidence. There are so many kites in the air but none of them is tied to an actual plan.

My hon. Friend the Member for Isle of Wight East (Joe Robertson) said it well: everyone seems to be looking over their shoulder to see who the Chancellor will come for next. That cannot be what Labour MPs want in the run-up to Christmas. They have a chance tonight to reaffirm the promises that they made to all their constituents. It should be their easiest vote this year. Their core manifesto commitment, which won them the election, is printed in black and white in the motion. To fail to support the motion is to confirm to each and every one of their constituents that Labour is content to betray their trust. Be in no doubt, the country is watching.

16:29

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I thank all right hon. and hon. Members for their contributions today, as well as my right hon. Friend the Chief Secretary to the Treasury for his opening remarks, and the hon. Member for Grantham and Bourne (Gareth Davies) for summing up for the Opposition. He was Exchequer Secretary to the Treasury for a time under the last Government, and he will know just how busy the period two weeks before a Budget can be for a junior Minister in His Majesty’s Treasury. I imagine that when he was in my position, 14 days out from a Budget or autumn statement, with officials rushing in and out of his office with advice on various measures, and a day full of meetings trying to get the details right, there was nothing more he would have wanted in the world than be called to the House for an Opposition day debate. I thank him and the shadow Chancellor for calling this debate at such a crucial time in the Budget-setting process.

I expect some interventions during my remarks over the next 10 to 15 minutes, and I encourage Members across the House to play what I will call Treasury Minister bingo. If I am asked questions about the upcoming Budget, I intend to respond with, “The Chancellor will make all decisions on tax and spend at the Budget, and I will not comment on speculation.” We can see how many interventions we get, and how many times we get to play Treasury Minister bingo. That is just to forewarn those who, like me, perhaps enjoy a game of bingo—

[Joe Robertson]

rose—

[Dan Tomlinson]

We already have an intervention, so here we go.

[Joe Robertson]

I appreciate that this is the end of a debate and the Minister is trying to be funny, but a lot of constituents I speak to do not find this period particularly funny, and would like the Minister to confirm that his Government will stick to their manifesto pledge. Please can the Minister not respond with the word “bingo”? This is a really serious matter.

[Dan Tomlinson]

I thank the hon. Member for his intervention. The Chancellor will make all decisions on tax and spend at the Budget, and I will not be commenting on speculation. I have said that is what I will say if people continue to intervene. We are two weeks out from a Budget, and I will not be commenting on speculation from the Dispatch Box today.

[Jerome Mayhew]

I have heard what the Minister says and I do not ask him to comment on the Budget, but can he confirm whether he thinks that manifesto pledges are important?

[Dan Tomlinson]

If the hon. Gentleman wants to ask questions about the manifesto, I am glad that he is interested in the change that this Government are bringing through their manifesto. We have invested in our NHS and introduced new taxes on non-doms. We have introduced free breakfast clubs, and invested in HMRC to reduce tax avoidance—we will come on to talk about that, after the contribution from my hon. Friend the Member for Harlow (Chris Vince). We have set up Great British Energy, and we are implementing the National Wealth Fund.

[Several hon. Members rose—]

[Dan Tomlinson]

Let me make a bit of progress if I may—I will happily take a further intervention in good time. It is a sorry fact, but it is true that Conservative Members squandered their time in power, just as they squandered much taxpayer money. After 14 years of failure they left people paying more for less, and enforced a policy of austerity for too long, which my hon. Friend the Member for Birmingham Northfield (Laurence Turner) spoke about in his contribution. That policy brought public services to their knees—something we needed to fix—and saddled us with so much debt that we now pay £1 in every £10 of public money in debt interest payments alone. I agree with the contribution from a Conservative Member who said that that is not a morally acceptable situation, but that is the situation we inherited, and one that we intend to change. Over the course of this Parliament the international comparisons bear out, and we are on track to reduce the deficit that we inherited faster than any other G7 economy. That is the stability that the Chancellor is returning to the public finances.

[Laurence Turner]

The Minister has just spoken about public services and touched on productivity. At the start of the debate, the shadow Chancellor talked about the importance of timely public sector pay settlements to productivity increases. Having been a union official in the aftermath of the strikes by ambulance workers, I have some insight into this issue. Ministers in the previous Government said that they wanted productivity increases, but negotiators for the Government had nothing to suggest on productivity links and they were asking the trade union for ideas.

[Dan Tomlinson]

I thank my hon. Friend for his comments and for his years of work and experience supporting public sector workers and our proud trade unionists.

Conservative Members have mentioned the statistics that have been published of late. There is much that we need to do to ensure that the investment that we make in the NHS comes with improvements in productivity and output. The Health Secretary was talking about that today in reference to our reforms to NHS England, and about ensuring that we are not duplicating spending in both the Department for Health and Social Care and NHS England. I thought that Conservative Members were against quangos, but it turns out that they are against that reform.

[Jerome Mayhew]

I am encouraged to hear that the Minister wants to link increased funding with productivity increases. In that spirit, why was the resident doctors’ pay rise not linked to any productivity increases?

[Dan Tomlinson]

In the end, in order to sort out the strikes we needed to give public sector workers a fair deal. The situation that they were left in was not fair, with their wages going up significantly less than prices over the 14 years that the Conservatives were in power. The Health Secretary has been clear about not wanting to go as far the pay settlement demanded, but the situation that we reached last year is right and proportionate, and we hope that we can continue to invest in reform of our NHS.

[Several hon. Members rose—]

[Dan Tomlinson]

Let me make a bit more progress—I am only on page 2 of a six page speech—[Interruption.] I am taking many interventions, but I will take fewer.

The previous Government saddled us with much debt, as we have talked about, with £1 in every £10 of public money going towards debt interest payments, perpetuating a stop-start cycle of public investments that left us with roads full of potholes, train lines that cannot even make it between London and the north of England, and an unpredictable business environment, with business taxation going up and down all the time. All that gave us an incredibly narrow base for regional growth, with few parts of the country forging ahead, while too many in the rest of the country fell behind.

Levelling up was a Conservative slogan, not a solution. Instead, this Labour Government are growing the economy and lifting living standards in all parts of the country, investing in infrastructure to get Britain building again, and working with local leaders and Members of Parliament to build pride in place and revitalise communities. That is the change that we are bringing. The Conservatives had the opportunity to invest in our public services, to upgrade rail, roads and connectivity, and to protect our NHS, but instead they threw money around with little regard for its value.

A key factor in our stalled productivity is that, time and again, the Conservatives had the option to choose economic responsibility, but they chose political convenience instead. The austerity that they pursued after the financial crisis, when interest rates were at record lows, was a sledgehammer to our economy, gutting public services and cutting the essential flows of investment that would have aided a faster recovery. As the hon. Member for Witney (Charlie Maynard) said, and as Liberal Democrat Members are wont to mention, they then went ahead and implemented a rushed and ill-conceived Brexit deal that brought extra costs to businesses and extra disruption to trade. When the pandemic arrived, our country was not ready. Our public services and our economy have been severely weakened.

[Gregory Stafford]

As I told the hon. Member yesterday, he has the second worst job in Government, which I think he is feeling today. Even if what he has just said is true—I do not agree with him—after the Budget last year, the Chancellor said that the slate was wiped clean and that no more tax rises or borrowing would be needed. What has changed between then and now?

[Dan Tomlinson]

I was glad to attend the hon. Member’s Westminster Hall debate last night on wine producers across the UK. I am impressed by his close reading of all the words of members of the Cabinet; I hope one day to be as diligent as him in following the utterances of the Chancellor, the Prime Minister and all Ministers.

When it comes to the inheritance that this Government and the British people are dealing with, let me say that if wage growth since the financial crisis continued at the pace that it had before, it is not that families in my constituency, in the constituency of the hon. Member for Farnham and Bordon (Gregory Stafford) and across the country would be £1,000 or £2,000 a year better off; they would be £12,000 a year better off. Imagine the difference that that would make to the businesses and communities across our country if we had not had that productivity stagnation.

In the end, we will see at the Budget that the OBR is implementing its review of productivity. I will not pre-empt that review, but it is right and proper that we ensure our fiscal forecasts are based on accurate understandings of what has happened in the past to our productivity, because the past is a guide to the future. I hope that this Government will continue to beat the outcomes that happened under the previous Government, when productivity almost flatlined, and that is exactly what this Budget will be about.

[Jerome Mayhew]

Will the Minister give way?

[Dan Tomlinson]

I will happily give way—it might be the final time I do so.

[Jerome Mayhew]

My hon. Friend the Member for Farnham and Bordon (Gregory Stafford) asked the Minister a specific question. In October last year, the Chancellor said, “We are not coming back for more. We have wiped the slate clean. From now on, it is on us.” What has happened between then and now? What has changed?

[Dan Tomlinson]

One of the things that has changed is that Conservative Members seem to have found £47 billion down the back of the sofa and are coming forward with plans that are not deliverable, just like they did when they were in government. They have done the job of a losing Opposition—we have been there in the past—whereby numbers used in opposition are not serious or credible. We all know where that ends up.

The Conservatives said recently that they would slash taxes and pay for it with £47 billion of fairyland spending cuts. For context, that is the equivalent of firing every police officer in the country. Of course, I am not saying that they will do that or that they have joined the “defund the police” brigade, but what would they do? We do not really know, because all we have is a menu without a price list.

[Josh Fenton-Glynn]

One unexplored area we could look at to raise some of the money we need is selling the brass neck of the Conservatives on the commodities market. Having cheered when Liz Truss delivered her mini-Budget, they now have the gall to lecture us about fiscal responsibility.

[Dan Tomlinson]

And the Conservatives have the gall to lecture us about managing the public finances well. They say that they want to cut civil service numbers. Between 2016 and when the Conservatives left office, there were 130,000 more civil servants. The former Member for Uxbridge and South Ruislip and former Prime Minister said that he would cut civil service numbers by 91,000; they then went up. In October ’23—when the Opposition spokesperson, the hon. Member for Grantham and Bourne (Gareth Davies), was in my role—the right hon. Member for Godalming and Ash (Sir Jeremy Hunt) unveiled an immediate cap on civil service numbers and pledged to cut them by 66,000; they then went up. Between May 2022 and July 2024, the numbers went up in every single quarter. I am not sure that the public would leave the Conservatives’ restaurant at all satisfied if they bought the items on their menu, because everything they have promised does not seem to turn into reality.

I will conclude, Madam Deputy Speaker.

[Mark Garnier]

More!

[Dan Tomlinson]

Hon. Members want more! Okay.

If this debate has taught us anything, it is simply this: not only do the Conservatives need to stay in opposition for longer, but I am sure that they will do so. So far, they have learned nothing from their time on the Government Benches. There is no humility for their mini-Budget, no plan for giving Britain a brighter future, and no grasp of the realities that the country and the world face. They also have no will to face up to reality, to show leadership or to make choices that will support our public services, businesses and citizens.

Meanwhile, this Government have given the country the fastest growth in the G7 in the first half of the year. We have raised wages and living standards, and the Bank of England has cut interest rates five times because of the economic stability we have brought, which has reduced mortgage payments and lowered the cost of borrowing. This Government have increased public investment in capital spending by over £120 billion over the course of this Parliament, building for the future—something that the Conservative party failed to do. That is the difference that a Government with British values at their heart can make. At this month’s Budget, we will put those values into practice again, with fairness and opportunity for all so that we can secure our economy, strengthen our public services and lift living standards for the British people.

Question put.

16:45

Division 345

Ayes: 101

Noes: 316