Catherine West (Hornsey and Friern Barnet) (Lab)
The Parliamentary Secretary to the Treasury (Torsten Bell)
The rise in food banks across Britain is among the most visible signs that, under the last Government, ours was a country in which growth was too low and inequality was too high. This Government are committed to ending the mass dependence on emergency food parcels. We have expanded free school meals to children in all families receiving universal credit, and we have removed the two-child limit to lift around half a million children out of poverty. Britain is now on course for the biggest reduction in child poverty of any Parliament on record, and charities such as Trussell believe that will significantly reduce demand for food banks.
Catherine West
It is indeed a very exciting development to see the bold and vital steps taken to address child poverty, but runaway rental costs are driving hunger and hardship. Building council homes is obviously the right long-term approach, and Haringey council is the second biggest builder of council homes in the whole country. Will the Treasury team now help struggling families by lifting the freeze on local housing allowance so that there is a permanent link between rents and support?
Torsten Bell
My hon. Friend is absolutely right. Food bank use has fallen in recent years, but it is still far too high, including in her constituency. It is part of a wider challenge that the cost of essentials places too much pressure on household finances.
The Department for Work and Pensions spends around £37 billion a year on housing support, but in the long run, the answer to high housing costs is to build more homes. That is what we are doing through the £39 billion social and affordable homes programme, but we also need to protect tenants in the here and now, and the Renters’ Rights Act 2025 comes into force just next week. Among other things, it will allow tenants to appeal excessive, above-market rents.
Michael Wheeler (Worsley and Eccles) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
The Government are committed to improving living standards for people across the UK. Thanks to decisions I made in the Budget, the energy price cap reduced by £117 a year, on average, in April. We have extended the cut in fuel duty twice, and introduced an anti-profiteering framework to protect working people from unfair price rises during the Iran conflict.
Michael Wheeler
I strongly welcome the steps that the Government have taken to bring down my constituents’ energy bills from the start of this month. However, the effects of the war in Iran are now beginning to feed through into higher food prices. Pressures on oil and fertiliser costs are likely to intensify, and I am concerned about increases in the price of my constituents’ weekly shop at a time when their budgets are already strained. Will the Chancellor outline what steps the Government have taken to protect my constituents in Worsley and Eccles from rising food prices?
Rachel Reeves
My hon. Friend speaks powerfully on behalf of his constituents. The response of this Government during this conflict is, first, to try to de-escalate it. This is not a war that we started, and it is not a war that we joined. Unlike the Conservatives and Reform, we are working to de-escalate, not ramp up, the conflict, and that is the best way to keep prices down. As long as the conflict persists, we will do everything in our power to be both responsive and responsible in the national interest, which is why we are keeping energy bills down and why we have provided £53 million of support for people who need heating oil.
Jacob Collier (Burton and Uttoxeter) (Lab)
The Economic Secretary to the Treasury (Lucy Rigby)
This Government are backing our brilliant British businesses to trade globally, including through our new trade strategy that expands UK Export Finance’s capacity to £80 billion. This Government have secured new trade deals with India, South Korea, the EU and the US to back British businesses globally, delivering improved access to key markets and protecting British jobs.
Jacob Collier
I recently joined Cosy Direct for its second King’s Award presentation, this time for international trade. Cosy Direct is an award-winning business in early years education resources, exporting globally and continuing to grow. The Chancellor saw its success, and its goats, at first hand when she visited with me last year. Will the Minister join me in congratulating Pete, Amanda and all the team, and will she say what work she is doing to allow such businesses to expand and export globally?
Lucy Rigby
I warmly congratulate Pete, Amanda and the wider team—and the goats—on their success. In inviting me to do so, my hon. Friend shows that he is indeed a true champion for the businesses in his constituency. The support that this Government are giving to businesses will enable more of our fantastic British companies to export globally and to emulate Cosy Direct’s success.
Graham Stuart (Beverley and Holderness) (Con)
Integrated industrial clusters such as Saltend in my constituency provide fundamental chemicals and other inputs into defence and wider industries right across the country. Yet higher energy costs and global events mean that they are under unprecedented pressure. Will the Minister look at establishing an industrial support fund, so that rather than having an ad hoc approach, such as that seen when supporting Grangemouth, we have something strategic to ensure that we do not lose the industrial base upon which so much of this country depends?
Lucy Rigby
I believe the right hon. Member mentioned the British industrial competitiveness scheme. That is being expanded. He will also be aware of the British industry supercharger package, which provides additional price relief from April 2026 as well.
Mark Garnier (Wyre Forest) (Con)
The Economic Secretary to the Treasury will know that our financial services industry is a shining example of our international economic might. However, overinterpretation of rules and regulations has led to banks being nervous of taking risks, and that has slowed growth in the City and holds up international trade. For example, overinterpretation of anti-money laundering rules means that foreign inward remittances can take up to two weeks to clear into a UK bank account, while poor classification of risk-rated assets potentially starves businesses of growth debt capital. Will the Economic Secretary please assure the House that this ever-unnecessary tightening of the rules will be addressed in the financial services Bill, due to be announced in the King’s Speech?
Lucy Rigby
The hon. Gentleman will not expect me to pre-empt anything that may or may not be announced in the King’s Speech. What I will tell him, though, as he already knows, is that this Government are backing our financial services sector to the hilt to ensure that it continues to be the world-leading success that it is.
John Milne (Horsham) (LD)
The Chief Secretary to the Treasury (James Murray)
The Chancellor and the Defence Secretary meet regularly to discuss defence, including the defence industrial strategy. As part of those discussions, they recently met leaders from the UK financial sector to discuss how private investment can also be leveraged to accelerate defence readiness, building on the commitments made in the defence industrial strategy.
John Milne
In my constituency of Horsham, Chess Dynamics, which is part of Cohort, is a world-leading developer of counter-drone and air defence technology—exactly the capabilities that we need. Yet Chess, like much of the defence industry, has been kept on hold since last year, awaiting clarity on the defence investment plan. Without it, it cannot commission new air defence systems, leaving the next generation of Royal Navy frigates potentially exposed. It needs to know now. Will the Minister agree to meet me and Chess Dynamics to provide certainty on the investment that everyone says we need, but which simply is not happening yet?
James Murray
Investment in defence under this Government is under way—just look at the contracts. Over a thousand have been signed since the general election: I point the hon. Gentleman, and anyone else in the Chamber, to the billion-pound contract for medium helicopters in Yeovil, the half-a-billion pounds invested in state-of-the-art radar systems and the £100 million boost to support submarine-hunting aircraft. This Government are raising investment in defence to the highest sustained level since the cold war and it is at the core of ensuring that we are protecting our nation’s security.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
What consideration has my right hon. Friend given to joining the Defence, Security and Resilience Bank to make sure that we are really pushing the investment that we need to see in defence in the current world situation?
James Murray
The UK has already signed up, with Finland and the Netherlands, to the multilateral defence budget, with this Chancellor taking a lead. I know the importance to this Government of security, which is not just something that we can achieve on our own but by working with allies to ensure that we are safer in future. I will add that we on the Government Benches are committed to remaining a core part of NATO, unlike some of the Opposition parties.
James Wild (North West Norfolk) (Con)
The Chancellor said,
“National security always comes first”,
but she delayed the helicopter contract for our industrial base and we know that she is blocking the defence investment plan. Labour’s former Defence Secretary and secretary general of NATO, Lord Robertson, said,
“We cannot defend Britain with an ever-expanding welfare budget.”
He is right, so why is the Chancellor failing to grip the benefits bill and invest in our defence?
James Murray
Those on the Opposition Front Bench have some cheek. The hon. Gentleman is sat next to the hon. Member for Central Devon (Sir Mel Stride), who oversaw the biggest increase in welfare spending on record, with a £33 billion increase in welfare spending in the last year of the Conservative Government. This Government are serious about getting people back into work, while increasing defence investment at the same time to 2.6% of GDP by next April—something the previous Government never managed.
Zöe Franklin (Guildford) (LD)
Jess Brown-Fuller (Chichester) (LD)
The Chancellor of the Exchequer (Rachel Reeves)
We are monitoring the situation and preparing for every eventuality. The International Monetary Fund expects the UK to be the fastest growing European G7 economy cumulatively over this year and next. A rapid de-escalation of the conflict remains the best way to protect consumers from rising bills. We continue to act on the cost of living, with £117 on average off energy bills from 1 April, £53 million to help with the cost of heating oil, and freezing both rail fares and prescription charges.
Zöe Franklin
I thank the Chancellor for her answer. The tensions in the middle east are pushing up energy and food prices, adding further pressure to households who are already struggling due to the cost of living. The Chief Secretary to the Prime Minister warned this weekend that families face “eight-plus months” of difficulty ahead. With the school holidays approaching in both the May half-term and the summer, many low-income families in my constituency of Guildford are asking how they will get through the summer. When I visited Holy Trinity school in my constituency last week, the children raised concerns too, which shows how deep the anxiety about this conflict is. What concrete support will the Government provide to protect the most vulnerable households from further cost pressures in the months ahead, especially if this conflict continues into the summer holidays?
Rachel Reeves
I welcome the hon. Lady’s question. Like her, I regularly see pupils and local teachers in my constituency. As she knows, from this month we have got rid of the two-child limit in universal credit, which is lifting 450,000 children out of poverty. We are also expanding free childcare for children aged between nine months and five years, helping parents in work with the costs of balancing family life with work life. In addition, we have taken £117 off energy bills, we are freezing rail fares and prescription charges, and we are helping people—particularly those in rural areas—with the cost of heating oil.
Sadik Al-Hassan
I am grateful to my right hon. Friend the Chancellor for her efforts in what are far from ideal circumstances. Attacks on energy infrastructure and the effective closure of the strait of Hormuz are having real consequences here at home. Baker Hughes employs more than 300 people in Nailsea in my constituency of North Somerset and is an essential energy technology provider. It is at the sharp end of this crisis. Can the Chancellor confirm what support the Government are providing to exposed companies like Baker Hughes, to secure energy supplies and rebuild damaged supply chains today, and invest in the infrastructure we will need to protect British consumers tomorrow?
Rachel Reeves
I thank my hon. Friend for his question. Baker Hughes, an important employer in his constituency, is a good example of how this conflict is affecting businesses and families here at home. As he knows, we have stepped in to defend our Gulf allies who have been attacked, unprovoked, by Iran. We are working with our allies in the Gulf, whom I speak to on a very regular basis, to ensure that we are not only defending them now but helping them to rebuild their infrastructure. Here in Britain, both the supercharger and the British industrial competitiveness scheme are helping businesses with the cost of their energy.
Jess Brown-Fuller
In my constituency, the owner of a haulage business—a vital industry that keeps our economy moving—has reported a 40% increase in the cost of diesel. It is at risk of going bust, while companies like BP are reporting record profits. Given that the impact of the conflict will be felt up to eight months after its conclusion, will the Chancellor please commit to cutting fuel duty, to keep my businesses and my residents on the road?
Rachel Reeves
Fuel duty was never lower at any point under the previous Conservative Government or, indeed, the Conservative-Liberal Democrat Government. We are keeping under review what happens from September, but it is important to note that in the first three months of this year, revenues from fuel duty were no higher than they were just a year ago.
With regard to the profits of energy companies, that is exactly why we extended the energy profits levy: to ensure that windfall profits could be taxed appropriately. BP and other oil and gas companies play a really important part in our energy mix, and our important British companies are representing our country in the US this week, but it is important that windfall profits are properly taxed, whether that is through the electricity generator levy or the energy profits levy.
Laura Kyrke-Smith (Aylesbury) (Lab)
I am grateful to the Chancellor for the work she is doing to protect us from the economic impacts of this war. One of my local farmers has been in touch about the impact on red diesel prices, which are up by around 70%, and fertiliser prices, and shared his nervousness about the affordability of going ahead and planting next year’s crops. Can the Chancellor outline what more she can do to protect our farmers, our food security and our food prices in light of these global challenges?
Rachel Reeves
When we froze fuel duty and extended that freeze, that also impacted red diesel. As we keep under review what happens to fuel duty, we will do the same for red diesel. I think there are two crucial issues. The first is protecting supply, which is why de-escalating this conflict—not ramping it up, as the Tories and Reform would do—is so important, so that we can reopen the strait of Hormuz. The second is prices and costs. That is why we have introduced the British industrial competitiveness scheme to help businesses with energy costs and the supercharger. BICS comes in from this year, and the supercharger is extended from this year, to help businesses impacted by this conflict.
Sir Jeremy Hunt (Godalming and Ash) (Con)
Given that national debt is around 95% of GDP and debt interest costs are nearly 4% of GDP, does the Chancellor agree that it would be irresponsible to fund any cost of living support by increasing borrowing? That would further drive up borrowing costs, choke off growth and saddle future generations with totally unfair debt.
Rachel Reeves
I congratulate the right hon. Gentleman on running his fourth London marathon this week for a cancer charity. I know that cause is dear to his heart. He makes an important point. I understand why people are calling for immediate support, but the previous Government’s untargeted support—I understand why the former Chancellor did what he did—cost more than £100 billion in total, I think, and it meant that interest rates, inflation and taxes have ended up being higher than they needed to be. We managed to reduce Government borrowing by £20 billion last year. The budget deficit is below 5% for the first time since 2019. Sticking to fiscal responsibility is not just good for the public purse; it is also good for ordinary families and businesses. I am determined that we do not go back to the high inflation, high interest rates and high taxes that would be the inevitable result if we had an untargeted response to this conflict.
Mr Paul Foster (South Ribble) (Lab)
Cost of living, cost of living, cost of living—those are the three words that my constituents in South Ribble and the small area of Chorley that I represent contact me about every single week. They do not contact me about the Westminster bubble and process. Will the Chancellor please assure me that she will stay laser-focused on delivering on the cost of living for the constituents of South Ribble and will not allow the noise and disruption from the Opposition to put her off?
Rachel Reeves
I thank my hon. Friend for standing up for the people of South Ribble and the issues that matter to them. Since the general election, there have been six cuts in interest rates, which is the best way to help people with the cost of living, especially if they have a mortgage. Before this conflict began, unemployment was falling, the economy was growing, the deficit was coming down and interest rates had gone down six times. I will continue to focus on the cost of living, because that is the thing that matters most to all our constituents.
Daisy Cooper (St Albans) (LD)
Australia, Italy, India and more have all slashed fuel duty in response to Trump’s idiotic war in Iran. We Liberal Democrats are calling for fuel duty to be cut by 12p per litre here. Last week, the Chancellor claimed that anyone calling for a cut in fuel duty was “economically illiterate”, because it would push up inflation. According to the Office for Budget Responsibility, the current 5p fuel duty cut has led to a 0.2% reduction in the rate of inflation. Does the Chancellor think that the OBR and all these other countries that are helping their citizens are economically illiterate, or does she accept that her Government might be in the wrong and that it is time to act?
Rachel Reeves
Last time she stood up in the Chamber, the hon. Lady said that she wanted a 10p cut in fuel duty; now it is a 12p cut. What she has failed to explain is how on earth she is going to pay for any of those policies. As a former Chancellor, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), has just explained, untargeted support will result in higher inflation, higher interest rates and higher taxes, which would hurt people in St Albans and around the country rather than helping them with the cost of living.
I support what the Liberal Democrats say about opposing the war in Iran—that is our policy—but they appear to be the only people on the planet who think that a war in the middle east is somehow good for the Treasury coffers. I would not be surprised if in their next manifesto they said they would commit themselves to closing the strait of Hormuz for good. It is not good economic policy, and I am afraid that that says a lot about the Liberal Democrats’ policies.
Dave Doogan (Angus and Perthshire Glens) (SNP)
Wendy Morton (Aldridge-Brownhills) (Con)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
The Government have already taken action on fuel affordability at the pump. In last year’s Budget they extended the 5p per litre cap for a further five months, and they have also cancelled the increase that would have otherwise taken place in line with inflation at the start of this financial year.
Dave Doogan
If you were a gardener with a Renault Trafic or a builder with a Ford Ranger in Scotland, Mr Speaker, you would be paying over £150 just to fill up at the pump in order to get to work. When Spain and Poland and Germany and France and Italy and Ireland and Australia are all intervening to help their industry and economy, our Chancellor here stands idly by and congratulates herself on the quality of her inaction. We do not want to hear from Anas Sarwar in Scotland, because he promised £300 off our energy bills and they are now £700 higher than the level that he promised in 2024. We want to hear from the Chancellor. What is she going to do about diesel specifically, and when is she going to do it, to keep the grafters of Scotland turning up for work?
Dan Tomlinson
The Scottish National party has had ample opportunity in Scotland to invest in energy, to invest in energy infrastructure and to invest in the changes that we need in our economy to bring down energy bills, and when it comes to fuel duty—[Interruption.]
Dan Tomlinson
When it comes to fuel duty, it is of course worth noting that it is lower today, in cash terms, than it has been in any year since 2009.
Mr Mohindra
If the increase in fuel prices rather than the Chancellor’s two disastrous Budgets is to blame for the stagnating economy, why does the Chancellor believe that raising fuel duty further in September will help to reduce the cost of living when in fact it will harm the economy more, and will deliver another direct hit to the pockets of my constituents?
Dan Tomlinson
Before the conflict in Iran started we saw inflation falling, we saw unemployment falling and we saw growth increasing by 0.5% in one month at the start of the year. That showed that our economic plan was the right plan for this country, and it is important that we stick to it rather than returning to the bad old days of the high borrowing and high interest rates that the Conservatives brought us when they had a chance to run the economy.
Wendy Morton
Labour is at war with motorists, and Reform’s idea of protesting about fuel prices was revealed at their non-event yesterday—and, indeed, its members are not even here today. Only we on the Conservative Benches are standing up for our motorists and our constituents. Will the Chancellor take this opportunity to help our constituents, our businesses and our motorists, and adopt our plan to extend fuel duty relief—yes or no?
Dan Tomlinson
I agree with the right hon. Member that Reform’s rabble yesterday was deeply underwhelming. As for fuel duty, the rate is currently lower than it was at any point under the last Government, or, at least, it was never lower under the last Government than it is now. In real terms, it is lower than it has been at any point since 1993.
Bill Esterson (Sefton Central) (Lab)
The fuel duty freeze is of course very welcome for drivers of petrol and diesel vehicles, but this is the second time in just over four years that petrol and diesel prices have gone through the roof as a result of international oil and gas uncertainty. Is it not time that we gave as much support as possible to those who want to make the transition to electric vehicles? According to Autotrader, the average price of electric vehicles is already lower than that of petrol and diesel vehicles. Will the Government confirm that they are bringing forward plans for greater ability to charge at home and bringing down the cost of electricity as far and as fast as possible, so that more drivers can benefit from long-term lower driving costs?
Dan Tomlinson
My hon. Friend is right to say that we are seeing a continued uptake of electric vehicles—we saw that in March this year. More electric vehicles were purchased in March than in any month in British history, and we can see that take-up is continuing to increase. This Government are increasing and expanding the grants for those who want to buy an electric vehicle, and we are making progress on permitted development rights, so that those who do not have easy access to charging in their driveways can have easy and cheap access to on-street charging.
Gerald Jones (Merthyr Tydfil and Aberdare) (Lab)
Even before the current conflict in the middle east, fuel suppliers in the Merthyr Tydfil part of my constituency were charging an average of 10p per litre more than those in other parts of my constituency and neighbouring towns. Even London fuel prices were cheaper than they were in Merthyr Tydfil, and the situation has not improved since. I have written to suppliers and met some, with limited success, and I have asked the Competition and Markets Authority to look at the matter, which it has so far not done. May I ask the Chancellor to offer whatever assistance she can and to urge fuel providers in Merthyr Tydfil to act fairly? Will she urge the CMA to consider what it can do to ensure fair play for my constituents?
Dan Tomlinson
I thank my hon. Friend for his representations, and for the work that he is undertaking on behalf of his constituents in a rural part of our country. We are making sure that all garages are on the new fuel finder website that the Chancellor has introduced. That should drive up competition and make it easier for the people he represents to compare the cost at the pumps in different garages nearby. It is good to hear that he has been in touch with the CMA; the Chancellor, too, has been in discussion with it about making sure that we have competition in this industry. If I can help him to get a meeting with the CMA, I will happily assist.
James Wild (North West Norfolk) (Con)
Whereas the Conservatives froze fuel duty for 14 years, Labour is planning to increase it by 5p, costing families £150 a year and hauliers £2,000. When the Chancellor was asked to reverse her hike, she said she was
“loath to spend Government money”
to do so. There is no such thing as Government money; there is only taxpayers’ money. Rather than increase taxes again, will she actually help households and businesses facing higher prices and scrap this fuel hike?
Dan Tomlinson
We on the Labour Benches are fiscally responsible. We will make sure that we continue to get borrowing down in a sustainable way, as we did over the last financial year, when borrowing fell by £20 billion. Whenever the Conservatives have had the chance, they have borrowed more, which pushes up interest rates for families and means that we have to have higher taxes in the long run. That is not the approach that we will take. The plans that the Conservatives set out in their final Budget before they left office would have seen fuel duty increase every single year. Instead, we have frozen it since we took over.
Leigh Ingham (Stafford) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
We are reforming Government procurement rules so that we can buy more that is made in this country, and we have already changed the rules on steel, shipbuilding, energy infrastructure and artificial intelligence. But I do not just want big companies to be able to get contracts; I want to help smaller businesses and charities to access Government procurement. The Government are the biggest buyer of goods and services in the economy, and I want more of that money to be spent here in Britain.
Leigh Ingham
I thank the Chancellor for her answer. In Stafford, world-class manufacturers such as GE Vernova are producing the technology that powers our national grid, yet for far too long these British employers have not had money given to them through British Government contracts. I therefore warmly welcome the Government’s commitment to reform public sector procurement to grow British industry, British skills and British jobs. Can the Chancellor tell us how this new approach will ensure that Government spending reaches manufacturers and businesses in constituencies like Stafford and towns across our country, so that when the taxpayer spends, Britain builds?
Rachel Reeves
I am slightly disappointed that my hon. Friend did not mention that today is Staffordshire Day; Staffordshire oatcakes are available for Members from both sides of the House in the Tea Room. On the wider issue, we do need to buy, make and sell more in Britain, with more contracts going to firms in Staffordshire—not just for their brilliant oatcakes, but for their ceramics.
Rachel Reeves
Conservative Members cheer, but they did not use any of those freedoms. It is this Government who are doing everything we can to buy, make and sell more in Britain. One of the best ways in which we can grow our economy is to work more closely with our friends, trading partners and neighbours in the European Union—whether through rejoining Erasmus, through playing our full part in Horizon or through a deal for our food and farming sector so that we can export the great stuff that we make here in Britain into the EU as well as to so many other areas. That is why we are determined to rebuild that relationship with the European Union.
Peter Fortune (Bromley and Biggin Hill) (Con)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
The reforms to business property relief maintain significant relief for owners of business assets. That is beyond what is available to others and is more generous than at any time under Margaret Thatcher, for example, when the rate of relief was a maximum of 50% on all business assets, including the first £2.5 million. I do not think that Conservative Members would argue that we did not see growth in the private sector while Thatcher was in power.
Peter Fortune
I agree with the Minister, of course, that Margaret Thatcher really was the sunny uplands of this country.
Small and medium-sized enterprises provide the backbone for our economy in Bromley and Biggin Hill. Many of those businesses are still family owned, suffering from the slew of taxation from this Labour Government. Family Business UK’s analysis, published just last month, said that 57% of businesses are still suffering from the business property relief that, despite the slight U-turn that the Minister alluded to, is still impacting their business. Does the Minister agree that the best way to growth is to support small businesses and not to tax them out of existence?
Dan Tomlinson
I am glad that the hon. Gentleman acknowledges that while Margaret Thatcher was in power she was taxing such businesses through business property relief more than this Labour Government. We have a fair and balanced approach when it comes to making sure that we can raise revenues from the very largest businesses, including agricultural businesses, so that we can sustainably support the reduction in borrowing that this Government are bringing about.
Perran Moon (Camborne and Redruth) (Lab)
Hundreds of small family businesses across Cornwall will soon be subject to a significant increase in their property costs as a result of the Valuation Office Agency’s decision to reclassify serviced offices, business centres and co-working spaces. Will the Chancellor arrange for me to meet Treasury officials and the VOA to discuss how the impacts of that reclassification may be mitigated?
Dan Tomlinson
I thank my hon. Friend for his question. I am aware of the issue that he raises; I have met representatives of the sector in recent weeks to discuss it. It follows changes to case law over recent years, but it is of course an important issue that affects many businesses. I would be happy to meet my hon. Friend to discuss it.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
The Chancellor of the Exchequer (Rachel Reeves)
The Government are taking action to tackle child poverty, by removing the two-child limit and by expanding free school meals and breakfast clubs, including the seven breakfast clubs already rolled out in the Dewsbury and Batley constituency. As a result, 550,000 children will be lifted out of poverty in this Parliament: the biggest reduction in child poverty in any Parliament ever.
Iqbal Mohamed
In my constituency, 44.4% of children are living in poverty, according to the latest Government figures. Yet Oxfam reports that just 56 billionaires in the UK now hold more wealth than 27 million people combined in our country, and their wealth rose on average by more than £230 million each last year. Does the Chancellor accept that child poverty is not inevitable but the result of political choices about who this Government want to protect? Can she explain how the child poverty taskforce can succeed without the Treasury being willing to pursue far more fair and equitable wealth distribution, through closing tax loopholes, taxing wealth and not just income, and preventing—
Rachel Reeves
Child poverty is absolutely not inevitable, which why we are lifting 550,000 children out of poverty. It is always Labour Governments who lift children out of poverty and Tory Governments who put children back into poverty. The numbers the hon. Gentleman refers to are appalling: 44% of children should not be growing up in poverty in Dewsbury and Batley. We have made the changes we have made to lift those children out of poverty and to give all of them a decent start in life.
Andrew Pakes (Peterborough) (Lab/Co-op)
One of the worst legacies of the previous Government is that 43% of children growing up in Peterborough are living in poverty. Nearly 10,000 children will be affected by the lifting of the child cap in Peterborough alone. Will the Chancellor assure me that, while we have made huge progress, we will keep a razor-like focus on child poverty as we deal with the cost of living crisis and the fallout from the war in Iran?
Rachel Reeves
The fact that some 10,000 children in one constituency have been lifted out of poverty, by just one of the policy changes we have made to reduce child poverty, shows the difference that this Labour Government are making. Combined with the breakfast clubs, the free school meals, the extension of childcare, the Renters’ Rights Act 2025 and the building of new homes, the Government are set to deliver the biggest ever reduction in child poverty in one Parliament.
Warinder Juss (Wolverhampton West) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
First of all, I offer my deepest condolences following the tragic death of two young children in my hon. Friend’s constituency. This will be an incredibly distressing time for the whole community and the thoughts of the whole House are with them.
We recognise that everyday living costs remain too high, which is why we are supporting households with their energy bills, and why we have frozen prescription charges for a second year in a row and rail fares for the first time in 30 years. It is also why we have lifted the national living wage and the national minimum wage, so people on low pay can see their money go further.
Warinder Juss
I thank the Chancellor for her condolences. I was at the site of the tragedy on Sunday laying flowers. It is very upsetting for everyone in my constituency.
One of my favourite places for lunch is the Pomegranate Café, together with the Central Community Shop, in my constituency. It is a community-based social enterprise partnership founded by the Good Shepherd charity, the Wolves Foundation and the Labour-controlled city of Wolverhampton council. It provides affordable food, and all the profits from the café are donated to the Good Shepherd’s free-to-access services—supporting its work to end homelessness, assist recovery, provide access to services around training and employability, and provide meaningful pathways out of poverty in Wolverhampton. Will the Chancellor please join me in congratulating everyone involved with the Pomegranate Café—
Rachel Reeves
I thank my hon. Friend for raising the excellent work city of Wolverhampton council is doing to help people with the cost of living, in particular the most vulnerable people in our society. The measures we are taking to reduce child poverty, and to increase the basic state pension and the new state pension, combined with what we are doing with Pride in Place, including in Whitmore Reans and Dunstall Hill in his constituency, will improve outcomes for people in Wolverhampton West and around the country.
Catherine Fookes (Monmouthshire) (Lab)
The Chief Secretary to the Treasury (James Murray)
The Government are investing in Wales’s industrial future and unlocking economic growth, including by providing £2.5 billion for the UK’s first small modular reactor in Anglesey to support up to 3,000 jobs and power 3 million homes. We have also recently agreed a new £50 million defence growth deal for Wales. We are backing Welsh freeports and investment zones, and we are connecting people and businesses with at least £445 million-worth of rail infrastructure investment right across Wales.
Catherine Fookes
The people of Magor and Undy have been celebrating the fact that they are getting a new train station, thanks to two Labour Governments working together to deliver it. It is therefore unbelievable that Reform’s leader in Wales recently said that nobody wants or needs these new stations. Does the Minister agree that new railway stations are essential for economic growth, and does he think that Reform does not listen to what people in Wales want, or that it just does not care?
James Murray
I completely agree with my hon. Friend that the UK and Welsh Labour Governments’ generational commitment to the future of rail in Wales is fantastic for her constituents right across Monmouthshire. It is frankly outrageous to hear Reform’s leader in Wales trying to tell people what they want, and even more shocking that Reform has promised to rip up our plan. New railway stations are indeed critical for economic growth, and only Labour will build the rail network that people in Wales need and deserve.
Dr Beccy Cooper (Worthing West) (Lab)
The Chief Secretary to the Treasury (James Murray)
The Government are acting to ease the cost of living for commuters, including by extending the £3 national bus fare cap to March 2027. We have also frozen regulated rail fares for the first time in 30 years, which will save the average commuter travelling from Worthing to London using an annual season ticket £360 a year.
Dr Cooper
I thank my right hon. Friend for freezing rail fares, which will indeed help to ease the cost of living for many commuters, such as my constituents in Worthing West, many of whom have jobs here in London or in Brighton. Southern has been rated the worst value for money rail operator in a national passenger survey. As we move to nationalisation of our service and finally see the back of Southern rail next month, will the Minister ensure that investment is available for key issues such as reducing overcrowding and improving the reliability and punctuality of our vital south coast services?
James Murray
My hon. Friend is right to make it clear that improving services for passengers is our absolute priority as rail operations come into public ownership. When Southern rail is brought into public ownership, it will be expected to focus relentlessly on improving passenger experience, reliability and punctuality, and it will be held to account for doing so.
Alicia Kearns (Rutland and Stamford) (Con)
In rural areas like Rutland and Stamford, we are reliant on our cars, so fuel costs are hitting us hard. I have a simple ask that the Chancellor could deliver on now: will she expand the 5p per litre rural fuel duty relief to more areas as soon as possible, particularly Leicestershire, Rutland and Lincolnshire, where it is desperately needed?
James Murray
As my hon. Friend the Exchequer Secretary has already set out many times today on fuel duty, we inherited plans from the previous Government that would have seen fuel costs go up for people across the country. We have extended the 5p cut on fuel duty and extended the freeze, which is an important way of helping people with the cost of living right now.
Bradley Thomas (Bromsgrove) (Con)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
The Government have introduced a support package worth £4.3 billion to protect rate payers across the country against the impact of the independently set new property values, whereby properties have been valued for the first time since the pandemic. We have also introduced permanently lower multipliers for eligible retail, hospitality and leisure properties worth nearly £1 billion a year, and this will benefit more than 750,000 high street businesses.
Bradley Thomas
I recently met Chris, the owner of Chapters Hair in Bromsgrove, who told me that current conditions are the most difficult he has faced in 25 years of trading, which he attributes directly to the decisions taken by the Chancellor. Why is it that the Chancellor of the Exchequer and the Government across the board are riding roughshod over what business owners think—the people who know best how to run their businesses—and when will the Government get off their backs and get on their side?
Dan Tomlinson
Under the previous Government, the business rates multiplier—the tax rate—paid by medium-sized businesses and the very largest businesses was exactly the same. We have implemented significant reforms to the way businesses rates work so that the system supports the high street, and the tax rate paid by small high street businesses will now be 33% lower than the rate paid by the largest properties, such as online giants. Of course, the revaluation since the pandemic has had an effect, and that is why we have stepped in to provide support.
Richard Fuller (North Bedfordshire) (Con)
This month, a comprehensive survey by UKHospitality showed that one in seven of our hotels, pubs and restaurants will close as a direct result of the Chancellor’s policies. Many of those businesses represent the hopes and dreams, hard work and savings of the people who set them up. Therefore, as I am permitted, rather than having the Minister come to the Dispatch Box, may I ask the Chancellor to come to the Dispatch Box to answer this? If it was not me standing here but one of those people who had founded a business and is now going through the gut-wrenching process of closing it because of her policies, what would she say to them?
Dan Tomlinson
Of course, the Government want to do all we can to support businesses up and down the country—small, medium and large. That is why we are working hard to put the economic stagnation we had over the last 14 years behind us. We are seeing economic growth rising—growing by 0.5% in February; we saw unemployment falling; and we were seeing Government borrowing falling as well. Those are the long-term changes we need to lay the foundations so that businesses can grow, invest and hire more people. It is disappointing that the Conservatives seem to have forgotten what we need to provide stability in our economy.
Cat Smith (Lancaster and Wyre) (Lab)
The Chancellor of the Exchequer (Rachel Reeves)
We are on the right path with the right economic plan. Unemployment is down, the economy is growing, interest rates have been cut six times, and last year Government borrowing was lower than it was the year before and is set to fall by more than in any other G7 economy.
At the same time, the Government are acting responsibly on the world stage. This is a war that we did not start, we did not enter, and we are working with our international allies to de-escalate. Our focus is on protecting family finances, supporting businesses and taking care with the public purse to improve Britain’s economic resilience. That is the right plan for our country.
Cat Smith
I thank the Chancellor for her work to lift the two-child benefit cap, which was cruelly brought in by the Conservative Government. Does she agree that that is not only morally the right thing to do, but economically good news for the 1,690 families in Lancaster and Wyre who will have more money in their pockets to spend in our local economy in Lancashire—unlike the super-rich, who would have just taken it to offshore tax havens?
Rachel Reeves
Just a couple of weeks ago, I hosted an event in Downing Street where I met people who are benefiting from the change in the two-child limit and people who had campaigned for that change. Mums told me that they were going to use the money to pay for their kids to go to after-school clubs with their friends, swimming lessons that they could not afford before, or a new school coat rather than a second-hand one. That is the difference that this money is making to families up and down the country. I am proud to be the Chancellor who has scrapped the two-child limit.
Sir Mel Stride (Central Devon) (Con)
In response to the question from my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) on borrowing, the right hon. Lady suggested that she was following a strict deficit reduction plan. I think she made reference to a reduction in the deficit of £20 billion year on year—but, of course, it is easy to reduce something if you pump it up recklessly in the first place. Could she tell the House how much more borrowing this Government will undertake across this Parliament compared with the plans that she inherited from the last Government?
Rachel Reeves
To start with, let us remember that the plans we inherited from the last Government would have seen fuel duty go up straightaway; the plans that we inherited from the last Government would not have seen £29 billion of investment a year in our NHS; and the plans that we inherited from the last Government would have seen business rates for our high street businesses—our retail, hospitality and leisure businesses—go up straightaway. We did make the decision to change that inheritance because we thought it was the right thing to do, and we still do. The International Monetary Fund confirmed that we have the fastest rate of fiscal consolidation of any country in the G7, and our borrowing as a share of GDP fell to 4.3% in the last financial year and is due to fall in every single year of this Parliament. This is the first time that our deficit has been lower than 5% since 2019.
Sir Mel Stride
The right hon. Lady does not seem to know how much additional borrowing this Government are undertaking compared with the plans of the last Government, so I will tell her: it is one quarter of a trillion pounds of additional borrowing across this Parliament. The truth is that this Chancellor is addicted to borrowing, which means, compared with what otherwise would be the case—she said exactly this, in terms, in the answer to my right hon. Friend the Member for Godalming and Ash—higher borrowing costs, higher inflation, higher interest rates and more sluggish growth, doesn’t it?
Rachel Reeves
What the right hon. Gentleman is basically admitting is that he would have gone ahead with the increases in fuel duty and business rates, and that he would take that money out of our national health service. We made those changes on the mandate that we got at the election, and at the same time we are reducing the budget deficit so that, for the first time in six years, it is now below 5% of GDP. As a result, the Bank of England has cut interest rates six times, helping all our constituents with their mortgages. This is very different from the hikes in mortgages that we saw under the previous Tory Government.
Yuan Yang (Earley and Woodley) (Lab)
Rachel Reeves
As my hon. Friend knows from sitting on the Treasury Committee, this Government have already taken action to reduce the cost of living and to bear down on inflation with the changes around energy prices, fuel duty, prescription charges and rail fares. I will do everything in my power and use every lever we have to bear down on the cost of living, including for people in the private rented sector. That is why we have already introduced the Renters’ Rights Act 2025. People who have mortgages have seen cuts in their mortgage rates since we came into office, and we will also do everything we can to help people in the private rented sector too, because we must ensure that this conflict in the middle east does not result in our constituents being poorer.
Daisy Cooper (St Albans) (LD)
Business rates bills have been landing on doormats over the last few weeks, and some small businesses in St Albans and beyond tell me that the future looks bleak, with some taking the crushing decision to close their doors. Will the Chancellor please look again at the eye-watering revaluations and release the full 20p discount for small businesses, which the Government legislated to do, to save our high streets?
The Exchequer Secretary to the Treasury (Dan Tomlinson)
On business rates, the hon. Member will know that this Government inherited the plans that were set in train for an independent revaluation of properties to take place for the first time since the pandemic. It would not have been the right thing to do to delay that independent revaluation for those businesses who have seen their rates fall since the pandemic, so we went ahead with it, and we then put in £4.3 billion of support to limit the increases in bills that businesses would pay. Of course we keep all taxes under review, but we have for the first time put in a differential within the business rates system so that high street businesses face a lower tax rate—a lower multiplier—than the largest online giants.
Antonia Bance (Tipton and Wednesbury) (Lab)
Rachel Reeves
I thank my hon. Friend for that question. While other parties—specifically Reform and the Conservatives—wanted us to enter this war, we stayed out of it, and are working to de-escalate the conflict and reopen the strait of Hormuz. The economy was growing, interest rates were coming down and inflation was falling. As a result, every month since I have become Chancellor, wages have risen by more than inflation, easing the cost of living pressures that the previous Government oversaw.
Olly Glover (Didcot and Wantage) (LD)
Mr Speaker
Order. This is topical questions, and I want to get other colleagues in, please.
Dan Tomlinson
I am always happy to take questions on business rates, even months after the decision set out at the Budget, and I thank the hon. Member for reading out the Labour manifesto. We have made significant changes to business rates by introducing the new lower multiplier for high street businesses so that they can pay a lower tax rate than the largest online giants.
Chris Bloore (Redditch) (Lab)
Rachel Reeves
My hon. Friend is absolutely right that although Reform-led Worcestershire council said that it would cut taxes, it has instead put them up. That is why I urge people in Redditch and across the country to vote Labour on 7 May.
Sarah Olney (Richmond Park) (LD)
The Economic Secretary to the Treasury (Lucy Rigby)
The Government are committed to making the aspiration of home ownership a reality for as many people as possible, and we recognise that the LISA is not working for everyone. That is exactly why we have launched a short consultation on the implementation of a new ISA product that will support more first-time buyers. That new product will include the Government bonus being paid at the point the individual makes a withdrawal for a home purchase, therefore removing the need for a withdrawal charge.
Tom Rutland (East Worthing and Shoreham) (Lab)
Rachel Reeves
The oil and gas sector will play an important part in our energy mix for many years to come, and we need to support it, as we are doing through tiebacks, for example. But it is important that the energy profits levy remains in place for now, because during this conflict we will be able to capture the profits made in the UK through the windfall tax. The Conservatives and Reform oppose this tax, which would just mean even higher profits for oil and gas companies. As my hon. Friend knows, we are also delinking gas and electricity prices by increasing the electricity generator levy, so that no energy company can make excess profits because of the conflict.
Chris Coghlan (Dorking and Horley) (LD)
The Chief Secretary to the Treasury (James Murray)
Whatever the purpose, spending funded from bonds issued by the Government adds to the national debt and so must be considered within the fiscal rules. But the hon. Gentleman is right to point to the importance of research and development within the defence industry to support economic growth. I am proud that last year we allocated £400 million for UK defence innovation to foster a world-leading UK defence tech sector.
Michael Wheeler (Worsley and Eccles) (Lab)
Rachel Reeves
I thank my hon. Friend for all his campaigning in this area. I also pay tribute to the trade union USDAW, its former general secretary Paddy Lillis, and its current general secretary Joanne Thomas, for all their work in this area. Strengthening statutory sick pay is part of our commitment to implement our plan to make work pay, ensuring that the safety net of sick pay is available to those who need it from day one.
Shockat Adam (Leicester South) (Ind)
Leicester South has a home ownership rate of just over 40%—nearly 23 points below the national average—in a city where the average house costs 8.5 times average local earnings. My young constituents work very hard and save responsibly to get on to the housing ladder, yet the tax system offers them absolutely nothing, while incorporated landlords deduct full mortgage interest through a company structure. Canada and Nordic countries are offering targeted tax relief for first-time buyers. Has the Chancellor considered introducing a similar relief here to ensure that young people are supported by the tax system, not left behind?
Lucy Rigby
This Labour Government are committed to enabling more people to realise the dream of home ownership. Mortgages have become more affordable under this Government, thanks to increased economic stability and six interest rate cuts.
Bills Presented
Newhaven West Beach (Public Access)
Presentation and First Reading (Standing Order No. 57)
James MacCleary presented a Bill to provide for a right of public access on foot to Newhaven West Beach; to impose duties on the harbour authority in respect of that right, including requirements to open and maintain specified access routes; to provide for exemptions from those duties for reasons of safety or in connection with harbour operations; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 8 May, and to be printed (Bill 436).
Defence Bonds (Proposals)
Presentation and First Reading (Standing Order No. 57)
James MacCleary presented a Bill to require the Secretary of State to publish proposals for the issuing of defence bonds, including for purchase by members of the public; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 8 May, and to be printed (Bill 437).