(1 day, 23 hours ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Secretary of State for Housing, Communities and Local Government.
The Secretary of State for Housing, Communities and Local Government (Angela Rayner)
This is a Budget with immediate action today and clear direction for the future. If we want to build a Britain where all people can live a good life and live it well, where everyone has control to shape their own lives for themselves, and where no one’s future is limited by where they are from, because the only ceiling is their own ambition, what we need is good growth in every postcode. However, we also know that people need a bit of breathing space right now, which is why we have announced targeted support for households this winter, and action to bring down the cost of essentials.
We are a Government with a clear theory of growth: retake control, and devolve power to places. We are fundamentally shifting where and how decisions are made by transferring powers, resources and functions to mayors, strategic authorities and local authorities across England, and we are working with the devolved Administrations of Scotland, Wales and Northern Ireland. That shift means that local leaders with skin in the game can target spending towards the biggest issues in their communities: new housing projects, infrastructure that cuts workers’ commutes, and investment in our town centres.
The fiscal devolution road map published alongside the Budget sets out a new funding model so that local leaders can rise to this challenge: by the end of the decade, local and regional government will retain 100% of the business rates income. It sets out plans for mayoral strategic authorities to receive a share of local income tax revenues from 2028, and details how the overnight visitor levy will work, as well as our plans to explore further fiscal devolution.
Andrew George (St Ives) (LD)
The right hon. Lady has said that she wants to ensure that there is good growth in every postcode and has referred to the business rating system, but in the Budget the Chancellor extended the tax loophole available to holiday lets in postcodes in Cornwall and other tourist areas. Is the right hon. Lady aware that billions of pounds are handed out to second-home owners who flip their properties to holiday letting in order to take advantage of a tax loophole? Would it not be far better to invest that money in social housing for local people in desperate housing need?
Angela Rayner
I know the hon. Gentleman has a private Member’s Bill on this issue, but the Budget provides an extra £1.5 billion for social housing, which I welcome. That takes the overall amount up to £40 billion in the next 10 years. We should welcome that investment.
At the Budget, we also announced £285 million of good growth funding, including incubator funding for areas that are yet to have a mayor, and plans for a £1.5 billion borrowing facility for mayors from 2028. This will give them access to the capital needed to back their local priorities and deliver growth in every postcode. We have also confirmed a £150 million uplift to mayoral capacity funding in 2027-28, to give them the resources they need as their range of powers grow. To support mayors, we are publishing guidance on place-based business cases. This represents a new approach to appraisal that puts local objectives and potential at the heart of decision making.
We recognise that too much of England is not covered by strategic authorities, so we remain committed to filling the gap. This is why I was delighted that we announced at the Budget that we are in the final stages of agreeing devolution deals in Devon, Plymouth and Torbay; Hertfordshire; Lancashire; Leicester, Leicestershire and Rutland; Stoke and Staffordshire; Surrey; Thames Valley; Kent and Medway; Wessex; and Cornwall. These areas will join Cheshire and Warrington; Cumbria; Sussex and Brighton; Hampshire and the Solent; Greater Essex; and Norfolk and Suffolk at the forefront of the Government’s ambitious programme to expand devolution.
Together, these agreements will mean that over 90% of England’s population is covered by a devolution agreement, with mayoral devolution reaching every part of the north. We will continue working with all remaining areas, including Bedfordshire, Luton and Milton Keynes, where there is broad agreement but not yet local consensus.
Alison Griffiths (Bognor Regis and Littlehampton) (Con)
The one county that the Secretary of State did not mention in her very long list is West Sussex, which has been waiting through two and a half years of dither and delay. Will she take this opportunity to tell me the plan for West Sussex?
Angela Rayner
I did just say that we are working with all remaining areas. We will continue to do so where we can find local consensus, because we are the party of devolution and believe in working with local leaders.
Later this year, we will publish our full plan for rewiring the state, which will outline a vision for devolution in England. The changes that we have announced are about devolution, not delegation. Where powers and functions are transferred, they will not be duplicated at the centre. This means that, over time, central Government will become smaller but more strategic.
Shockat Adam (Leicester South) (Ind)
The Secretary of State mentioned Leicester, Leicestershire and Rutland. Can she please give a date for when this devolution will happen? We are severely missing out on the funds and pots of money that are going elsewhere.
Angela Rayner
Again, we are working with local areas to make sure that we progress as quickly as possible. We are happy to engage with local leaders as part of that programme.
As we move towards a local government finance settlement, we will continue working with local leaders to plan and invest for the long term. I am clear that local government is the foundation of the public services on which neighbourhoods and communities rely, which are essential to our wider ambition to rewire the state.
Ayoub Khan (Birmingham Perry Barr) (Ind)
I wholeheartedly support regional mayors delivering for local communities. This Labour Government always promote localisation and devolution, but how will the Secretary of State ensure that regional mayors interact and work with local councillors? After all, local councillors are elected to represent their local neighbourhoods.
Angela Rayner
Our plans are about making sure that mayors work with local authorities. In fact, in my area in Greater Manchester, we have seen the combined authority have really good pulling power, with our economy doing better than other areas, so we want to see that across the whole nation.
That is why the Cabinet statement on rewiring the state committed to the financial sustainability of local authorities, and this Budget is the next step towards that. The upcoming local government finance policy statement will set out our next steps alongside the rewiring the state delivery plan. Good growth is growth that we can see and feel. We need to draw a line under a decade of drift during which the public realm was seen as sideshow to politics—[Interruption.] The hon. Member for Hinckley and Bosworth (Dr Evans) should know about sideshows.
Our high streets are where we catch up with friends for a coffee, and those businesses provide solid jobs at the heart of our communities. Those small moments of joy give us real hope, and that is why our strategy is giving hope back to the high streets. New powers, new funding and changes to the business rates system will provide much-needed relief for thousands of cafés, pubs and high street shops. We are freezing all retail, hospitality and leisure bills in real terms to protect them from above inflation increases for the next two years, and we are lifting the small business rate relief threshold for qualifying properties.
Connor Naismith (Crewe and Nantwich) (Lab)
My constituents will strongly welcome the decision to extend small business rate relief to many more businesses in the Crewe and Nantwich constituency, but they will also welcome the decision to remove small business rate relief from adult gaming centres and vape shops. Will my right hon. Friend join me in saying that this is an important step to incentivise the kind of businesses we want to see and disincentivise those we do not?
Angela Rayner
My hon. Friend is absolutely right. We are removing business rate relief for vape shops and adult gaming centres, and giving local authorities stronger tools to tackle business rates avoidance. At the Budget, we announced an extra 20% business rate cut for pubs and all but the largest live music venues. We will also introducing a general anti-avoidance rule for business rates at the earliest opportunity, and expanding what legal costs local authorities can claim when they are unsuccessful.
Jessica Toale (Bournemouth West) (Lab)
I really welcome the change to the business rates threshold, which will take hundreds of businesses in Bournemouth town centre out of paying rates. However, has my right hon. Friend considered the knock-on impact on business improvement districts, which often step up to fill the gap when councils cannot keep the streets clean or keep shopfronts looking nice? As more areas are coming out of rates, what are the Government doing to look at the impact on BIDs?
Angela Rayner
We have been taking forward a number of measures, such as the overnight visitor levy, and working with businesses. As devolution pushes down into local communities, I hope there will be a role for the public realm as well as for businesses and innovators and for those in the community and voluntary sector who do so much as volunteers in our local community.
More broadly, we are also moving Government buildings on to high streets and improving design standards, with a whole-of-Government plan to show the public that the best days of our high streets are yet to come.
Dr Lauren Sullivan (Gravesham) (Lab)
Gravesham is one of the youngest boroughs in Kent, but it is the fourth highest in the south-east for young people not in education, employment or training. Will the Secretary of State join me in welcoming the youth hubs on our high streets in Gravesham, so that young people can find a way back into education, employment and training?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the Secretary of State responds, more than 84 Members are hoping to speak, so every minute we can give Back Benchers will go down well.
Angela Rayner
Noted, Madam Deputy Speaker. I really applaud what Gravesham is doing, especially for its young people.
The strategy is backed by £125 million to transform derelict buildings in our high streets, £65 million for community ownership funding and £10 million to deliver high street rental auctions. Alongside this, we are cracking down on illegitimate and illegal businesses, giving councils powers to limit vape shops and adult gaming centres, and reforming licensing.
The state of our town and city centres says so much about us, who we are as a country and whether we are on the right path. Getting our high streets back on track is a crucial step to giving Britain hope again. But this strategy is just one part of our plan to make people proud of their local area. Alongside it, we have confirmed plans for a new No. 10 North priority projects programme. This will unlock homes, jobs, investment and long-term economic growth, with No. 10 North working directly with new strategic authorities. The Budget will also accelerate the delivery of priority projects in West Yorkshire, the West of England and South Yorkshire. These include investment to expand the Leeds College of Building to accommodate over 2,000 new learners, crowding in around £350 million of private investment into Bristol Temple Quarter, and match-funding incubator space in the Don Valley Corridor.
We will continue to support growth in London, as one of the world’s most important cities, working with the Mayor of London to bring forward improvements to the transport network and towards a global city productivity plan. More widely, we have also confirmed that all 20 strategic authorities will be eligible for funding in the new co-operative development programme. This £10 billion programme is the biggest Government-backed boost to co-operatives for decades and shows how we are meeting our commitment to our sister party to double the size of the co-operative economy.
In the years ahead, we will continue to deliver the £5.8 billion Pride in Place programme, putting local residents in charge of change across almost 300 neighbourhoods. This month, we will see the next major milestone of the programme as we reach the deadline for phase 2 neighbourhoods to submit their 10-year plan. We will continue to work with the devolved Administrations in Scotland, Wales and Northern Ireland, confirming at the Budget the investment in the Edinburgh-Glasgow central belt, funding for the expansion of the M-SParc science park in Anglesey and of Cardiff Parkway station, and the £7.5 million of investment to grow AI and cyber industries in Belfast.
Our plans for good growth will shape the future of this country, but we also know that people need breathing space right now. Alongside radical reforms to reduce bills in the future, we have also announced a series of measures to tackle the cost of living and help make everyday life easier. We know that rising energy costs are going to be tough for a lot of households this winter. That is why we are removing VAT and standing charges from bills, freezing fuel duty and providing £100 per household for energy payments in council tax bands A to D in England. The measures are supporting up to 80% of households in England, and local authorities will get a discretionary fund of £100 million to provide further support to households most in need.
On top of that, we have taken action to make groceries cheaper by cutting import duties; increased the living wage and the minimum wage; extended parental leave; and ended the carer’s allowance cliff edge. We brought in higher tax-free mileage rates and boosted support for nurses, and we are making sure that pensioners in receipt of the full state pension will not have to pay tax.
Britain is a kind, caring nation where people take pride in looking out for each other. In 2026, in the world’s fifth-richest economy, everyone should have a roof over their head. That is why we will make sure that by Christmas this year everyone sleeping rough will be offered a route off the streets. Earlier this year, I announced £442 million for a new rough sleeping programme to meet that milestone. Support off the streets should not just be for Christmas, though, so we are almost doubling that figure with £432 million to keep that offer going for the next two years. That means continuing to help people off the streets, while preventing people from returning and giving them the support that they need. That is why we will make sure there is wraparound support for those people as well.
The Budget makes progress towards our commitment to deliver the biggest boost in council house building since the post-war period. We have announced that we will extend the preferential borrowing rate for councils on top of the £1.5 billion that I mentioned earlier. Our message to local leaders is, “Get ambitious, and we will back you all the way.”
The Ministry of Housing, Communities and Local Government’s planned AI tool, Assist, will be available to all councils in England by the end of 2027. We also announced the Your First Home scheme to help around 70,000 first-time buyers to get on the ladder. Good growth in every postcode is not just about fairness; it is the simple point that Britain is at its best when every area of the country can play its part. I am proud of this Government’s action, I am proud of our history, and I am proud of this Budget. I commend this statement to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Growth in every postcode and breathing space—that is apparently the theme of this debate. That is what we are told the Budget will deliver. The sad fact is that it really could have been an opportunity to focus on growth and to support British businesses and people. It really was an opportunity to fix the mistakes of the past two years, to back business and unleash Britain—but the Government did not take it. All we appear to have had from the Secretary of State is the belief that more government will solve all of our problems.
The Budget was an opportunity to end the smash-and-grab tax policies on working people—that includes employers, by the way—but Labour doubled down. The Chancellor could have demonstrated that when he resigned as Defence Secretary he did so out of principle and set out a road to 3% of GDP on defence, but we did not get that either. The Government could have taken steps to cut welfare and get Britain working, but, too scared of their Back Benchers, the Government are allowing the welfare budget to continue to spiral out of control.
The Budget was a total missed opportunity. Far from growth in every postcode and breathing space, we saw a steady-as-she-goes Budget: a change of captain, a rearranging of the deckchairs, but no change of course—which would be fine if the vessel we were on were not the Titanic.
One area we did see some action in the Budget—one issue that was mentioned considerably—was on the cost of energy and our energy security, or lack thereof. There was a slight but definite acknowledgment that the energy policies enacted by the Labour Government up to this point had been having a negative impact on the people and businesses of Great Britain.
That was why I was more than a little surprised not to see energy as a theme of this Budget debate, and why I was surprised not to see the Secretary of State for Energy speaking as part of it. Or is she not too keen on this change of direction, and this moderate shift from the Government towards something resembling common sense does not sit well with her? Where is she? Absent from Parliament when they announced Jackdaw and absent from the Budget debate, she is either in hiding or being kept hidden. The words of the Chancellor last week that the Energy Secretary has “opposed” rather than approved Jackdaw was not so much a slip of the tongue as a lifting of the veil into the division at the heart of this Government when it comes to energy policy.
The truth is that we have a Government totally divided on energy policy, between a Chancellor and a Treasury desperate for growth and some good news, and an Energy Secretary and parliamentary party still wholly signed up to a Milibandism approach to energy that values net zero and clean power 2030 above all else—above jobs, cost and our security. We have an Energy Secretary briefing out that she is inclined not to approve Rosebank, presumably on the basis that growth in every postcode does not include postcodes that begin with AB, and a Chancellor briefing that it will be approved soon. We have Labour Back Benchers claiming that Rosebank is oh so different to Jackdaw because it is oil, which is exported, not like gas, which we use at home—as if, somehow, generating revenue from exports, displacing Russian oil from the European market and backing British jobs are bad things.
We also have the Office for Budget Responsibility including revenue from Rosebank and future discoveries as part of its projections for Government revenue over the next year. We have the Treasury cutting funding from carbon capture, utilisation and storage projects, Energy Ministers scrambling over themselves to insist that funding has not been cut, the Treasury announcing a cut to the warm homes fund of £1 billion, and the Energy Department insisting that the warm homes fund remains at the heart of the Government’s plans to support those on the lowest incomes insulate and decarbonise. This is utterly chaotic—no wonder the Energy Secretary is being hidden away or is in hiding.
For over two years, we have been listening to various Ministers lecture and patronise those of us on the Conservative Benches that we were wrong, that we did not need more gas from the North sea, that it was clean power that mattered over the cost of energy, and that we must have consensus on energy policies. The Conservatives have been clear from day one that the cost of energy, the security of our energy supply, and the future of our North sea are the issues that should guide and shape our energy policies. It is good to see that that consensus may be returning, and not just on the entirely reasonable and sensible step of ensuring that one has a well-stocked fridge of sauvignon blanc ready for emergencies.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
Does the hon. Member agree that, unlike Norway, which kept its crown jewels—North sea oil and gas—and is funding public services with them, it was absolutely disastrous and wrong for the Tory Government to sell off the North sea? It belonged to the people who are now paying through their nose for energy.
Andrew Bowie
It will not surprise the hon. Gentleman to learn that I do not agree with him. In fact, what we have seen are billions of pounds generated for this country since the 1960s, driven by the private sector investing in jobs, investing in this country, creating wealth and making the North sea one of the cleanest and safest basins in the world in which to invest. I am very proud of the companies, and the men and women, who have driven that oil and gas industry to be the best in the world. Unlike the hon. Gentleman, and unlike the Government, we want to see that go further—we want to see further investment in our North sea oil and gas industry.
As I was saying, consensus is welcome, because we are in an energy crisis and there is no escaping that. The people and businesses of this country face some of the highest energy bills, domestic and industrial, in the developed world, and it is getting worse. Under Labour, our energy system is becoming increasingly unreliable and intermittent, and more reliant on imported energy. The burden of expensive energy is bearing down on Britain in households, businesses and industry, and having severe consequences. While the Chancellor acknowledged that, which was as welcome as it was surprising, it was entirely underwhelming.
Some of the announcements in the Budget may have seemed impressive, but they will not even touch the sides. There may be £100 for certain households, but when people’s bills are set to increase by over £500 in January, many will ask what was the point—will people even notice it? It is clear, however, that the Chancellor had at least noticed the Conservatives’ cheap power plan. Cutting VAT and scrapping levies on energy bills—I wonder where he might have got that idea?
Jim Shannon (Strangford) (DUP)
With respect to the Labour Government, one of the things that was missing in the Budget was the working middle class, who are caught in a devastating pincer movement between frozen thresholds and rising surcharges. They have worked extra shifts, been responsible in the way they have lived and managed to put some savings aside. In the Budget, the working middle class find themselves penalised for their aspiration, forced to pay out more of their hard-earned money, while watching inflation erode their savings. Does the hon. Gentleman agree that what is missing is any consideration for the working middle class?
Andrew Bowie
The hon. Member is absolutely right, but, as usual, the Labour party gives no regard to those with aspiration or who want to succeed and get on. All it cares about is handouts and subsidies for “Benefits Street”. The Conservatives are the party that will support those who are working hard to do the right thing and move forward.
Connor Naismith
The hon. Member talked about the Opposition’s clean power plan, and how marvellous it is, but if those ideas are so good, why did the Conservatives not implement them when they had 14 years in government to do so?
Andrew Bowie
It is the cheap power plan, not the clean power plan, but I do not want to be too much of a stickler for detail. It may have escaped the hon. Gentleman’s notice that we are under new management now in the Conservative party, and I look forward to implementing our plan when we win the election.
There was also the surprise announcement of the removal of standing charges on gas bills—well, only surprising for the SNP group leader, the hon. Member for Angus and Perthshire Glens (Dave Doogan), who did not know whether he still supported the move that he called for in 2024. On the face of it the measure may appear to lower bills, but as ever, the devil is in the detail. If someone is a higher consumer—someone who uses gas for heating, cooking or hot water—then their energy bill is going to go up. Across Britain, temperatures are beginning to drop as we head into winter, and in large parts of this country—in the north of England and Scotland—it has just got more expensive to turn the heating on, thanks to Labour.
Some 80% of households in Britain rely on gas to keep them warm, which is why the delay before making a decision on Jackdaw was so maddening. When the Secretary of State for Energy Security and Net Zero approved the decision, through gritted teeth, it was rightly justified on the basis of energy security. Getting gas out of the Jackdaw field is what is best for Britain, because every bit of gas from that field will go directly into the British gas network.
However, the devil is in the detail. As I have said, we were all very surprised to see that revenue from Rosebank is still being accounted for in the OBR’s projections for revenue. Considering that the Secretary of State has suggested to the press that she is not minded to approve Rosebank, despite it being a quasi-judicial decision, does that mean that the forecasts are possibly misleading or wrong—or is the Chancellor about to get his way again, and Rosebank is about to get the go-ahead? We need to have that cleared up. We need to understand.
The theme of today’s debate is growth in every postcode and breathing space. This Budget, however, did nothing for growth and gave no breathing space, save for a couple of gasps of cold air from those who will be too scared to turn on their heating this Christmas. It could have done, though. We could have seen a bold Budget: a Budget that said, without equivocation, that we support our North sea oil and gas industry; a Budget that got Britain drilling by removing the energy profits levy today, not in three years; a Budget that reduced the cost of energy by slashing the levies, charges and taxes that still make up too much of an individual’s or business’s energy bill; and a Budget that reindustrialised our country by incentivising investment and growth, not one that doubles down on net zero and linking the emissions trading scheme with Europe. That is the Budget we needed to see. It is the Budget the Conservatives would have presented, and it is the Budget we will present when we win the next general election.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Because so many colleagues wish to contribute, Back Benchers are on a five-minute speaking limit.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Government’s commitment to children and young people is clear in the scale of the education reforms they are bringing forward, from the restoration of early years services through Best Start family hubs to the expansion of childcare, the roll-out of free breakfast clubs, curriculum reform, special educational needs and disabilities reform, technical and vocational qualifications from the age of 14, work experience, social media regulation and apprenticeships. It is the Education Committee’s role to scrutinise the detail of the Government’s policies and their delivery, but there can be no doubt as to the scale of their ambition for children and young people across our country.
I welcome the announcement in the Budget of the establishment of a new parental allowance for self-employed fathers, partners and adopters. This will enable parents who have previously been excluded from parental leave and pay to have precious bonding time together as a family with their baby or adopted child.
Earlier this year, my Committee published a report on reading for pleasure, which documented the immense benefits it brings children and young people in the development of empathy and compassion, good mental health and wellbeing, language skills and attainment at school. We also highlighted the concerning drop in the number of children and young people choosing to read for pleasure and a range of interventions that are needed to turn the situation around. I therefore welcome the additional £15 million that the Government have allocated in the Budget to increase access to books for young children.
I would add, however, that the most concerning decline in reading for pleasure is seen among teenagers, and that school libraries can play a hugely valuable role in supporting children to sustain reading at secondary school. My Committee has called on the Government to extend their important pledge to deliver a library in every primary school to secondary schools, which could be done with an investment of £15 million. I hope that the Government will continue to look at how that important pledge can be extended.
On examining the delivery of apprenticeships, my Committee noted that children and young people are not provided with nearly enough information about apprenticeships, and that this information often does not come in time for them to properly consider apprenticeships as an alternative to university. I therefore welcome the expansion of the mayoral apprenticeship brokerage pilots, which have the potential to ensure both that employers are supported to offer more apprenticeships and that young people have access to information about these fantastic opportunities in their local area.
I further welcome the increase of £60 million a year for new PE and sport partnerships. This will increase the availability of high-quality opportunities for children and young people to participate in sport and physical activity in school and in their local area, directly contributing to better physical and mental health.
However, the Committee remains concerned about some areas of interest to us that were not covered by the Budget. Our report on higher education and funding raised concerns about the impact of the international student levy on higher education institutions and a lack of join-up between the Home Office and the Department for Education. The Government’s impact analysis for the proposed international student levy now suggests a loss of income to the higher education sector of £280 million —more than £100 million higher over three years than originally estimated. Universities consistently told us that the international student levy would prove to be relatively inelastic to increases in fees, and the impact analysis supports that.
We can be enormously proud of our universities; they are internationally renowned powerhouses of economic growth and anchor institutions in their communities that offer life-changing opportunities to thousands of young people and mature students every year. However, they are facing extreme precarity in their financial sustainability, and it is vital that Government policy seeks to bolster them, not to push them over a cliff edge. I urge the Government to look carefully again at the international student levy to ensure that it is both proportionate and fit for purpose.
My Committee has long raised concerns about the disparity in the treatment of further education colleges and schools with regard to VAT. Further education colleges have a critical role to play in the Government’s important objective of tackling the scandal of almost 1 million young people not being in education, employment or training. Colleges are places of hope, inspiration, support and inclusion where young people can find their passion and gain the skills they need to pursue it, yet unlike schools, they cannot reclaim VAT. Ministers have written to me with a technical explanation of the rules on VAT exemptions, but they are looking at this issue the wrong way round. Whatever the technical justification, the reality is that schools and colleges are not on a level playing field with regard to VAT. The response should not be, “This is what the rules say,” but, “How can we change the system to make the rules fair?”
This Budget represents the Government’s excellent commitment to children and young people, but there is further to go. My Committee will continue to press the Government and scrutinise their commitments.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Zöe Franklin (Guildford) (LD)
I welcome the Government’s recognition that economic growth cannot be driven solely from Whitehall and that local leaders and communities must have a greater say in shaping their future. The Liberal Democrats have long argued that decisions should be taken as close as possible to the people they affect. We support genuine devolution, greater fiscal autonomy for local government and the empowerment of communities to shape their own future. The real question before us today, however, is whether this Budget will actually deliver the Government’s ambition of good growth in every postcode.
Sarah Gibson (Chippenham) (LD)
I am sure that my hon. Friend will agree that rural economies rely on transport. In my constituency, colleges have had to cut their hours because the bus does not come late enough and employers have had to put on their own buses in order to get shift workers. Does my hon. Friend agree that for rural economies to thrive, we really need to look at transport?
Zöe Franklin
My hon. Friend is absolutely right. We need that support to ensure that people can get from where they live in rural constituencies to other areas for work and education.
Growth is measured not by the number of new governance structures we create, but by whether people can find an affordable home, access GP appointments, travel to work, start a business and build a secure future in the place that they call home. For the Liberal Democrats, this Budget must meet three tests: democratic consent, sustainable local government finances and tangible improvements in everyday lives.
The first test is democratic consent. Devolution should bring power closer to communities. We should be careful not to mistake devolution for decentralisation. Power removed from Whitehall but concentrated in a single regional office, such as a mayor, is not necessarily power shared with local communities.
In Surrey, the home of my Guildford constituency, that distinction is becoming increasingly apparent. The Budget confirmed that the Government are in the final stages of agreeing arrangements for a mayoral strategic authority in Surrey, despite Ministers previously assuring the House that no area would be forced into a mayoral model. What has changed? There has been no vote of the councils that will have to operate within this structure, and residents have not been given an opportunity to express a view on what model they want. In fact, the bulk of the discussions appear to have been had with Surrey county council—a council that will be defunct in just six months—rather than the new east and west unitaries. How can the Government claim to be bringing power closer to communities when those same communities have had so little say?
Of course, a mayor is democratically elected, but representing an entire county or region is very different to representing a specific town, village or ward. Local councillors understand the character, challenges and priorities of the communities they serve; they are often the first people residents turn to when problems arise. I ask the Minister what meaningful influence locally elected leaders will retain and how the voices of villages and rural communities will be protected under the new arrangements. Devolution should not be forced on communities; it should happen with them.
My second test is whether the Budget delivers sustainable local government finances. The Budget contains announcements on strategic authorities, borrowing powers, business rates retention and new fiscal freedoms. Some of those measures may prove beneficial, but we must not confuse devolution with funding reform. Local government’s central challenge is not governance but financial sustainability. While Ministers talk enthusiastically about new structures and powers, councils across England face profound financial pressure. The Local Government Association has warned of a billion-pound funding gap over the coming years. Against that backdrop, many councils are struggling simply to maintain core services.
To return to my area of Surrey, the six councils coming together to form West Surrey will inherit £4.5 billion of debt while simultaneously facing rising demand for adult social care, children’s services and support for children with special educational needs and disabilities. My concern is about how implementing measures without funding reform solves any of those problems. How does the new governance structure address historical debt? How does it ease pressure on social care budgets? How does it help councils meet rising demand for frontline services?
The Budget includes a £1.5 billion borrowing facility for the strategic authorities. While borrowing may help investment, it is no substitute for financial stability. We must learn lessons from councils such as Woking, where serious financial failures—failures caused by previous Conservative administrations—have left residents paying the price. Nowhere is the gap between structural reform and real-life outcomes clearer than in special educational needs.
Chris Vince (Harlow) (Lab/Co-op)
The hon. Lady is right to talk about local government finances. My local council of Harlow faced 70% cuts to core funding made by the Conservative Government, but does she recognise that when the Lib Dems were in coalition Government the funding was cut by nearly 30%? Does she also recognise that the Labour Government are introducing multi-year funding for local councils, which council leaders and officers in Harlow have been crying out for for a long time?
Zöe Franklin
I think we need to recognise that we are looking forward. Multi-year settlements are a positive step, but there is still ultimately no fix for local government finances, which is causing enormous problems for local councils.
Returning to the issue of SEND, families do not lie awake worrying about governance models. They worry about whether their child will receive the support they need, about delays to assessments and about whether an education, health and care plan will be delivered in time. I welcome the Government’s commitment to cover 90% of eligible historical high needs deficits accrued by March, but uncertainty remains about whether deficits accumulated in subsequent years will also be covered. This Budget also does not provide the scale of additional adult social care funding needed to address rising demand.
Finally on local government finance, I want to address business rates. I welcome the principle that more locally generated revenue should remain in local areas. Giving councils a stronger stake in local economic success is sensible. However, retaining more revenue does not necessarily mean receiving more funding. The reality is that councils only benefit from the share of business rates that they are allowed to retain. If a national policy decision reduces revenues, local government must be appropriately compensated. We must ensure that areas with fewer opportunities for growth are not left behind. Rural communities in particular should not find themselves disadvantaged by a system that increasingly relies on locally generated revenue. On my second test, the jury very much remains out.
My third test is whether the Budget will deliver tangible improvements to people’s lives. Good growth should mean growth that people can actually see and feel. It means a young family being able to afford a home and people being able to secure a GP appointment. It means reliable public transport and thriving town centres. It means ensuring that infrastructure arrives alongside development, rather than the reality we see, which is that the infrastructure arrives years afterwards.
My constituency of Guildford is home to a strong local economy, world-leading innovation and enormous potential, but beneath that prosperity, families are struggling with housing costs, children are growing up in poverty, and residents are frustrated by pressures on local services and infrastructure. That experience is not unique; it is being felt across the country.
If the Government genuinely want growth in every postcode, investment must translate into improvements. That means ensuring that the delivery of infrastructure comes with housing development, because people will support the development if they can see it. It also means growth beyond our major cities. As my hon. Friend the Member for Chippenham (Sarah Gibson) mentioned, it has to include our rural communities. Our high streets, of course, must also be central to that vision of growth.
In conclusion, the Liberal Democrats believe that genuine devolution must mean more than transferring powers from Whitehall to an equally centralised regional mayor. We want decisions to be taken closer to communities, and we want growth that reaches every community. The Government recognise those things, but there is still so far to go. We want to see tangible change for our residents.
Jonathan Hinder (Pendle and Clitheroe) (Lab)
Like many of my colleagues, I am delighted with the new Prime Minister’s clear ambition to reindustrialise Britain, which can drive economic prosperity in areas that really need it. My constituency is an example of somewhere that can drive and reap the benefits from this reindustrialisation. In Pendle and Clitheroe we do not trade financial derivatives; we make aeroplanes, furniture, chemicals and cement, and we produce food. Not only does manufacturing make up over a quarter of the jobs, but they are often the best jobs, too. However, the truth is that, as I speak, Britain is still deindustrialising. We are as vulnerable to global supply shocks as any major economy without the sovereign capability in key sectors to look after our basic needs.
I am glad to see the Chancellor deliver immediate relief for households, but in the long run we must not just treat the symptoms of this failed economic model—with fiscal transfers patching up the gaps—but overhaul it entirely. The British economy remains too reliant on the City, foreign money and importing increasingly expensive essentials. True economic security can only come from the British economy being productive enough to convert world-leading innovation and research into valuable industrial output.
I was pleased to see some of the announcements at the Budget last week reflect this challenge, with measures including: serious public investment into productive British industries via the National Wealth Fund and the British Business Bank; an acknowledgement of the need for cheaper power and protections offered to energy-intensive manufacturers; support for vocational apprenticeships, which is essential for skills development in manufacturing and aligned sectors; and a long-term partnership with Rolls-Royce, whose Barnoldswick site in my constituency provides well-paid jobs for hundreds of my constituents—a reminder that Britain could still be home to world-leading industrial champions in highly competitive sectors.
But there is a lot more to be done. We must be clear about what we mean when we talk about reindustrialisation. The clue is in the name—it is about industry. Reindustrialisation must mean increasing physical production of goods needed at home and abroad. I hope that we will see more detail on how we will achieve this in the forthcoming 10-year plan.
As a short-term measure, I would like to see an expansion of the British industrial competitiveness scheme to a much wider range of manufacturing firms in Britain. We cannot expect our productive sectors to thrive and grow with energy costs as high as they currently are. Over the long term, we must improve our energy sovereignty by making it cheaper to build nuclear power stations urgently and reducing our reliance on gas imports by using our own North sea supply.
I would also urge the Government to include in the 10-year plan an ambitious plan for rebuilding our defence industrial base, alongside a continued commitment to British procurement. Building our domestic capacity for defence and other critical sectors can be supported beyond procurement through investment in equity stakes, taking control of essential inputs, as the Government did with British Steel, and accelerating planning decisions for key sectors.
So many of our challenges stem from a lack of quality work in productive industries. That is not talked about enough.
Ayoub Khan
I agree with the hon. Gentleman’s point about reindustrialisation. All the different jobs he talked about require students who have degrees. Does he agree that the Budget should have contained something about student loans, because students are suffering at this moment in time?
Jonathan Hinder
I definitely think that the House needs to come back to plan 2 loans. That will become a bigger and bigger issue.
So many of our challenges stem from a lack of quality work in productive industries. We do not talk about the link enough, but high streets are crippled by a lack of good jobs that provide a decent income and give people money in their pockets to spend in their area. Young people are stuck at home, unable to get a place of their own and start a family, and we see the selling-off of British assets to fund a current account deficit.
There is something even more fundamental at play when we talk about reindustrialisation. Sometimes in these economic policy debates we lose a sense of what really matters in life. Why is it that so often those jobs that appear to be the most socially useless are paid the most and those that contribute something so important to our society are often paid the least? If our economy is driving those perverse incentives that push bright young people into careers trading securities—some people call them “BS jobs”—we had better change those incentives, had we not? We need an economic framework that, instead of incentivising rent seeking, incentivises productive, meaningful work, providing people with not just a sense of satisfaction, pride and a good living but something useful to society—imagine that?
I know that this is not easy, but our economy cannot go on consuming too much and producing too little. I urge the Chancellor and his Ministers to ensure that reindustrialisation, which has struck such a chord with the British people, is turned into a fully-fledged plan for national reconstruction.
Sir Edward Leigh (Gainsborough) (Con)
I agree with the hon. Member for Pendle and Clitheroe (Jonathan Hinder) about reindustrialisation, but we will not reindustrialise Scunthorpe in my neighbouring constituency by screwing it with the highest energy costs in Europe, and nor will we reindustrialise simply by exporting our carbon by importing oil. That is why we need to get on with Rosebank.
I came to the House with a load of figures about the rising tide of debt, the tax burden rising to 38% of GDP and the £4.3 billion tax raid on landlords, but we know all those figures. What are we going to do about it? Traditionally, Governments—I have seen so many come and go—get the bad news out first. This Government still have three years to go, but I do not quite know why we have got over 100 tiny policy changes but are not actually fixing the fundamental problems now. We should get the bad news out now.
A colleague told me today that actually the Prime Minister is being very shrewd about this: we live in a TikTok generation, so he can let out a little policy announcement every week to keep people happy and delay decisions. That may be good politics, but is it good government?
We all know that society is breaking down because people feel that some are abusing the system. We had the statement this afternoon about legal and illegal migration, and we know how strongly people feel about that, but in working-class constituencies people feel strongly about so many abusing the system. They feel particularly strongly about young people who are not in work, education or training.
I agree with the Government that we cannot solve that problem with what they call crude benefit cuts, but there has to be some balance; work and training have to be worthwhile. Therefore, we cannot dodge the issue of the amount and level of benefits paid to young people.
I was reassured by the front page of The Times today, which said that the Government are looking at what is going on in the Netherlands. So, great, we will not have crude cuts, but we have got to get these young people into training, given medical help and helped into work. We need them to be not dismissed by the system in a tick-box exercise, filling in paper, but seen by a real person and helped into education or training—or, if they cannot get into that, some form of workfare.
The trouble is that half the benefit bill is taken up with the state pension. For years, I have been one of the few people who has questioned the triple lock. It is amazing how Ministers defend the triple lock, but the moment they cease to be Ministers they say it is unaffordable. The Government have listened to all the economic advice, but eventually the triple lot will have to come to an end. Again, why delay it?
The Government cannot imagine that getting rid of the triple lock will pay for the vast cost of a national care service—the NHS writ large. It would be better to say to pensioners—this is a fair deal, which I think they would accept—that their state pension should, as a proportion of the economy, stay roughly the same. We would not be bankrupting the nation, and the state pension would go up by how much the economy grows every year, which is fair.
If we want to save money, we do not want to delay these decisions till 2030. Surely what we need now is to get old and frail people out of expensive hospitals and into new cottage hospitals. They need not be in “all singing, all dancing”, hugely expensive private finance initiative hospitals. We should have more cottage hospitals where old people can be looked after, in a caring and loving way, and relieve the health service, if we are to save the national health service.
On saving one thing, the average price of a house in my constituency is just £200,000, and what really upsets people is seeing how their whole inheritance, which they want to pass to their children, will go on care costs. Let us go back to the old idea of having a cap on the total amount paid for care.
There is a way forward. I think we can work together to get young people back into work and training, and we can reassure old people that they will be looked after in their old age.
Catherine Atkinson (Derby North) (Lab)
The Budget was great news for Derby—particularly the £2.5 billion investment with Rolls-Royce to develop the next generation of aircraft engine and keep us at the forefront of this country’s reindustrialisation—but I rise to speak about justice. Whether it is growth in every postcode, high streets being brought back to life or getting everyone in and off the streets for Christmas, none can be achieved without investment in and reform of our justice system.
The Prime Minister’s first instruction on entering Downing Street was to end rough sleeping, an objective that is inspiring, ambitious and right. The near doubling of the £442 million to £874 million for those measures in the Budget showed intent, but here is where our justice system comes in: every month, 1,000 people go straight from prison to homelessness, with many rough sleeping. That figure has gone up and outpaced the increase in the number leaving prison. Being homeless doubles the risk of reoffending and makes the goal of ending rough sleeping unobtainable. That is why we need a duty for rehabilitation services to ensure that, on leaving prison, people do not go on to the streets and into worklessness.
Jim Shannon
I commend the hon. Lady for the point she is making and the Government for what they are doing on homelessness in particular. Does she agree that there should be priority for veterans in the homelessness scheme? They come out of prison, get lost in the system and nobody catches them where they are. I see that happening regularly in my constituency. Should they be given priority to address that?
Catherine Atkinson
I thank the hon. Member for his contribution. I acknowledge that there are many categories of people who we want to ensure have real priority. The Government already have the ambition to halve the number of prisoners who are released into homelessness, but, if we are to end rough sleeping and break cycles of offending, that ambition is not ambitious enough.
Just as it is morally offensive to us when we see someone sleeping rough in the doorway of a really high-end hotel, it should also offend us when we see the global elite and blue chip companies coming to Britain for our world-class justice while our own citizens are often left outside that justice system, getting rough justice. We should be rightly proud—and the Treasury mindful—of the huge contribution that international cases make to our country’s economy. In 2024 alone, the UK legal sector contributed £42.6 billion to the economy, and the UK is the largest legal services market in Europe and second only to the US globally, but we should be using some of that revenue to improve access to early legal advice and to legal aid, and to address the dire shortage in duty solicitors for our own people.
Lastly, there was positive news for our high streets, with the Budget taking many of our cafés, pubs and beauty salons completely out of business rates. The Home Secretary is putting police back on the frontline, and we have reversed the effective decriminalisation of shoplifting under the previous Government, but the justice system needs to work much faster for all of us, including on our high streets and in our town and city centres, where people need to feel safe if they are to want to be there and spend money.
But as well as fast, justice needs to be fair. It is not right for people on the minimum wage to face custodial sentences—potentially going up to two years’ custody—and not qualify for legal aid, leaving them unrepresented in court.
Catherine Atkinson
I am conscious of the number of people who want to speak in this debate, so I will continue.
It is not said often enough that this country’s dogged belief in fair rules for everyone is also a secret ingredient to business success—if your assets are protected, your contracts are enforced and your disputes are decided, that is one less risk—but there must be access to justice for our smaller businesses, as well as the larger multinationals.
There is more to do in our justice system. More is needed. I acknowledge that in the last spending review, the Budget for justice was increased by an average of 2.4%, but in the 2010s, justice spending was cut by 33% in real terms. Spending today is only on a par with what it was 24 years ago, in 2002, and it is lower per person than it was then. The Institute for Fiscal Studies has said that the Ministry of Justice would need an additional £3.6 billion just to equal its spending per person before austerity. Many of the challenges facing the justice system today have their roots in that period of austerity. I will be knocking on the Treasury Ministers’ door as hard as my children were knocking on our neighbours’ doors last week at Halloween. This is not trick or treat; it is common sense. It is essential that we act now to avoid a jump-scare later on.
Bradley Thomas (Bromsgrove) (Con)
This Budget was a missed opportunity for the residents of Bromsgrove and the villages. There was next to nothing in it for my residents, or for the hard-working business owners and businesses across the constituency. The frank reality is that businesses across the country and in my area are really struggling right now. In recent months, we have seen Labour Ministers’ true colours. Over the weekend, we heard the Chief Secretary to the Treasury stating that those who employ people are not workers themselves. I am not sure that the carpenters, plumbers, café owners and florists in my constituency would agree with that. They are frankly insulted by it. We also heard the Work and Pensions Secretary reveal earlier this year that all Labour MPs wanted to do was ask the question, “Who can we tax more to spend more money on welfare?”. Inflation is up, Government spending is up, unemployment is up, welfare is up and debt is up. How people and businesses feel is what matters, and that will be the ultimate litmus test for the Government.
Following the Budget, UKHospitality told us the reality. Despite the Government’s announcement on business rates, only one in 10 pubs will be affected. The Government need to go further. They need to endorse the Conservatives’ full exemption for hundreds of thousands of retailers, pubs and hospitality businesses. Wherever I go in my constituency, I am repeatedly told that businesses operating in these sectors are not recruiting because red tape and the cost of employment have gone up dramatically.
The voices of business are clear. Make UK has said that the Budget was a failed opportunity to reindustrialise, and the Federation of Small Business has said that the Budget contained
“nothing to make hiring someone more affordable”.
Unemployment has gone up by 276,000 in the last two years, and we are destined to see it go up even more. The Government need to get off the backs of businesses and get on their side.
I would like to briefly touch on the Government’s proposals for devolution and local government reorganisation. The Government announced something last week for Worcestershire that will not improve the quality of people’s lives. It will increase the cost and bureaucracy of delivering local government services. It is not in Worcestershire’s interests. Worcestershire does not have a Mayor and it does not want a Mayor. It is not a geography that would best suit a mayoralty. We do not need more politicians in this country; we need fewer—[Interruption.] I say that as a politician. We need fewer politicians in this country, and we need the system to work better.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
The Government’s local government reorganisation will abolish the two-tier system in the hon. Gentleman’s constituency of Bromsgrove, thereby reducing the number of local councillors and so the number of politicians. Which part of that did he miss in the announcements that have been made over the last 12 months?
Bradley Thomas
If the hon. Lady had listened to what I was saying, she would have heard me say that Worcestershire does not want a Mayor.
The Government’s proposals for devolution are nothing more than a cop-out to absolve Westminster of its failure to tackle the big issues facing this country, and that is the theme that runs through this Budget. Politicians do not create jobs. I read in The Times this morning that the Government believe that mayors and local leaders can be empowered to create jobs. That is absolute rubbish. It is businesses that create jobs. Every single penny and pound of taxation received by the Government is generated, ultimately, through the endeavours of private enterprise. We have to get to the point, once again, where risk taking and entrepreneurialism are not frowned on. They should be embraced and encouraged. If the Government want to tax something, they have to create wealth and prosperity first. They need to get off the backs of businesses and get on their side.
Sagal Abdi-Wali (Holborn and St Pancras) (Lab)
Thank you, Mr Speaker, for giving me the opportunity to make my maiden speech during a Budget debate—a Labour Budget that speaks directly to some of the challenges that first brought me into politics and public service. It is a profound honour to rise for the first time in this House as the Member of Parliament for Holborn and St Pancras, the place that has been home for most of my life.
I came to Camden with my family as a child refugee. It is where I grew up and where I went to school, made friends and discovered the opportunities that would shape my life. This Budget speaks to the issues that matter deeply to the people I represent, from the security of a home to the opportunities available to the next generation. Like so many young people growing up in Camden, I spent my time making friends through the universal language of football. On the football pitch, you quickly learn that it does not matter where someone comes from, what language they speak or what their family does for a living. What matters is whether they turn up for their team mates. Those friendships taught me something important about community, long before I entered politics: that we are stronger when we look beyond our differences and recognise what we have in common.
As I came of age, Camden continued to give me opportunities and a sense of belonging, and it gave me the responsibility to give something back. For more than 20 years, I have tried to honour that responsibility through community work and public service, campaigning for change and serving in local government, ultimately as leader of Camden council. That experience has taught me that beyond every policy, every budget line and every statistic is a person whose life can be changed by the decisions made in this House.
Holborn and St Pancras is a place of extraordinary character. What makes our constituency so special is not just the landmarks, but the extraordinary variety of places and people. From the leafy streets and village feel of Primrose Hill, the independent spirit and community life of Kentish Town and the neighbourhoods and estates of Haverstock to the historic streets, theatres and cultural institutions of Covent Garden, every part has its own story to tell. We are home to thriving local businesses, historic markets, places of faith and community centres. We have students and academics, artists and entrepreneurs, families who have lived here for generations, and people who have made this place their home from every corner of the world. That diversity is our strength. It is one of our greatest strengths. It is reflected in our languages, our food, our festivals and our music, and in the everyday way that we all come together to look out for one another. It is what makes Holborn and St Pancras not simply a collection of neighbourhoods but a community.
The Roundhouse in Chalk Farm began life as a railway engine shed before becoming one of the country’s most well-known cultural venues that also provides creative access to young people. Legends from Led Zeppelin to David Bowie have played there. It is a reminder that places, just like people, can be given new opportunities and go on to achieve remarkable things. In King’s Cross stands the historic German gymnasium, where sporting events were held at the national Olympian games in 1866, long before the modern Olympic games came into being.
My constituency has a sporting legacy stretching back over a century, and I am pleased to make a little history of my own, as Holborn and St Pancras’s first Tottenham Hotspur supporter MP, bringing an end to a rather lengthy period of Arsenal and West Ham dominance in our representation in this House. If supporting Spurs had a dictionary definition, it would read something like this: “To remain eternally hopeful despite overwhelming evidence, and to return, every season, convinced that this will finally be your year.” I hope that combination of optimism and sheer refusal to give up will serve me well in this House.
Of course, the West Ham and Arsenal dominance that I mentioned came from the distinguished Labour MPs who represented the constituency before me. I am immensely proud to follow in the footsteps of two men who have given so much to Holborn and St Pancras, and whose contributions to our community and my party deserve to be celebrated. The late, great Frank Dobson represented Holborn and St Pancras for more than 33 years. He was a tireless champion for local people, a proud defender of our NHS and public services, and a politician who never lost sight of the people who were behind the policies. I have a childhood memory of meeting Frank at a community event. I had no idea at the time how much of an important political figure he was; to me, he was simply a nice bearded man who took the time to speak to a child. Looking back, that small encounter captured something important about his connection with the community. He was a familiar face to generations of residents—someone who understood the challenges facing working people and was never afraid to stand up for them.
Sir Keir Starmer continued that tradition, representing our constituency for more than a decade, leading the Labour party from opposition back into government, introducing generational reforms to renters’ and workers’ rights, and lifting half a million children out of poverty. I have had the privilege of working alongside Keir through our local Labour movement, and have seen another side of his public service: watching him quietly console bereaved families who have lost young loved ones, and hearing his determination to end youth violence. I pay tribute to both men, with enormous gratitude and respect. I will do my utmost to honour the trust that generations have placed in them, and that the residents have now placed in me.
It is also an extraordinary honour to become the first woman, black person and Muslim to represent Holborn and St Pancras in Parliament, and the first British Somali woman to sit in this House. I take great pride in those milestones, and in being elected during Black History Month in a constituency whose town hall proudly commemorates Claudia Jones, the pioneering black woman who founded and hosted Britain’s first Caribbean carnival there. I take pride in those milestones because of what they might mean to a young woman or a young girl growing up in our constituency today. I want her to see that her background does not define the limits of her ambition, that there is no ceiling to what she can achieve, and that public life belongs to her, too.
One of the issues that first drove me into politics 10 years ago was the rise in homelessness. Alongside people sleeping rough on our streets, families and young people are facing a housing crisis that leaves too many struggling to find a secure, affordable place to call home. That is why I strongly welcome my right hon. Friend the Prime Minister’s determination to end rough sleeping. This Budget turns that determination into action, with nearly £900 million to tackle rough sleeping and an additional £1.5 billion to support the delivery of social and affordable homes. For constituencies such as mine, this investment is essential.
There is another issue that matters deeply to me: the strength of our communities and the bonds that hold us together. Growing up in Camden, I saw different people from different backgrounds, cultures and faiths build support networks and look out for one another. I saw how diversity enriches our lives and how cohesion is built through everyday acts of kindness, friendship and solidarity. But that cohesion is hard won, and we cannot take it for granted. During the election campaign, I experienced attempts to question people’s belonging, sow division, and turn differences into reasons for suspicion and hostility. We must stand firmly against the hateful and divisive forces that seek to pull our communities apart. Hope is not naive; it is what gives us the courage to change lives for the better.
My parents taught me to work hard and always give something back to the community that has given me so much. I want every young person in our constituency to have the opportunities that I had. I want families to have secure homes, young people to have access to good jobs and apprenticeships, and our public services to always be there for people when they need them most. To represent this community in Parliament is an extraordinary privilege. Camden gave me hope and opportunity. Now, as the MP for Holborn and St Pancras, I will pass that hope and opportunity to others, and give them the same chance.
Sir Alec Shelbrooke (Wetherby and Easingwold) (Con)
May I say that it is a genuine pleasure to follow the excellent maiden speech of the hon. Member for Holborn and St Pancras (Sagal Abdi-Wali)? As a West Ham fan, I understand that it is the optimism that kills you; she is a Spurs fan, so after last season, I think I will leave that there. I congratulate her: it is not easy to follow in the footsteps of a Prime Minister and to fight against the leader of another national party. As she pointed out, the racial attacks on her in the lead-up to that election were absolutely disgraceful. I am sure that the vast majority of people in this House stand in solidarity with her. I wish her a successful career in this House; I am sure that she will be a great asset to it.
Today’s debate is about growth in every postcode, but I will focus on the genuine threat of war to this country. The Budget does not deal with the defence issues that must be addressed. We could carry on saying that we have a plan to have a plan, and kicking things down the road, but that would be to hide from the reality of what is going on in the world. Just today we saw a cyber-attack that destroyed hundreds of millions of pounds-worth of frozen and refrigerated stock across at least six European countries. We know that such cyber-attacks are taking place every day, yet we are still delaying the real investment that needs to take place.
I was recently in Australia with the NATO Parliamentary Assembly. In Australia, inflation is 4%, cost of living is the No. 1 priority and 55% say immigration is too high, yet the Australians have decided to invest in defence. In the 1980s, they felt that their geography gave them the security, and now they have recognised that it does not. They are in the process of doubling their navy, with three air defence destroyers, six frigate submarine hunters, 11 general purpose frigates, six large missile barges and eight launching vessels to protect army capability. Of course, with AUKUS, they also have a built-in 50% contingency.
Germany is going to have 15 extra frigates by 2035, Finland is going to have four new corvettes by 2035, and Norway is going to have five new frigates, six new submarines and 28 standard vessels by 2035, yet we say that we are aiming to get to 3.5% by 2035. I have said this before, and I will say it again: targeting a percentage of GDP is false and wrong. The target was only brought in to satisfy the Americans in 2014. Plenty of us have a lot of complaints about President Trump, but at least he got European countries spending. As far back as Eisenhower, the Americans were saying that Europe needed to spend more on defence. George Bush made such a speech in 2007, and Barack Obama made one in 2014 when the target came in.
What really matters is article 3. Everybody talks about article 5 and defence. If article 5 is triggered, nations have a choice as to what they contribute to collective defence. Everybody thinks that America will pile in with its troops, tanks, planes and warships, but it could simply say, “We will provide the intelligence,” and that would satisfy article 5. Article 3 states that a country must be able to defend its borders for three weeks. NATO is a reinforcement. We simply cannot carry on saying, “We are going to do a defence investment review in a year’s time”—not actually investing in a year’s time, but doing a review! I welcome today’s news that double shifts might be done at the dockyards to produce more frigates, but that should be happening now.
In the time I have remaining, let me say this. I said before in this House that when we cut spending from 5% of GDP—that level was just a consequence of what we needed to spend—the 3% went into health and welfare, and that it would be a brave politician who stood up and said that we should cut those things, especially welfare, to invest in defence. Well, that is exactly what the Leader of the Opposition is now saying. The time has more than passed. The threat of war in this country is on the horizon. We do not want it to happen, so we bury our heads in the sand and say that we can delay the spending. That cannot carry on. The threat is imminent.
Lorraine Beavers (Blackpool North and Fleetwood) (Lab)
When I ask people in my constituency how they feel about the economy, they tell me that their bills are too high and their rent or mortgage take too much of their pay. I am glad that the Budget takes some first steps to address those issues.
Four years ago, the Conservatives, led by Liz, crashed the economy and sent mortgages and bills soaring. Before that, they spent more than a decade cutting our armed forces and public services—they left us poorly defended in every sense. The Chancellor’s Budget makes a good start in addressing those problems. The immediate help for 20 million households towards their energy bills this winter is a welcome relief. The changes to business rates will have a huge impact on businesses in my constituency.
On devolution, I can only hope that Lancashire will have a mayor by 2028 to share in the proposals that were announced. I urge Reform-led Lancashire county council to grab this amazing opportunity for Lancashire. We have been left behind for too long. The council needs to stop infighting and start fighting for Lancashire instead.
I want to come back to how much further we need to go to rebuild Britain. The Prime Minister rightly identified the deindustrialisation of Britain as one of the reasons places such as Blackpool North and Fleetwood have not shared in the proceeds of growth as much as they should have done. He is right that a change of policy is required, but right now Britain is deindustrialising faster than any of our neighbours. Domestic manufacturing capacity is an essential source of our national security. British manufacturers face the highest electricity prices in Europe. I know many Labour colleagues have asked the Chancellor to look at the merits of extending the British industrial competitiveness scheme to all manufacturing firms. I hope the Front-Bench team look carefully again at the proposals and sit down with the TUC and others to discuss how that could be implemented.
This Budget offers practical help with people’s bills this winter. The 10-year plan and the spending review must do the same for their jobs.
Pippa Heylings (South Cambridgeshire) (LD)
As we head into winter with bills rising again in January, households and businesses across the country are worried. This Budget needed to match the scale of the energy and climate challenges, but we as Liberal Democrats are concerned that it does not. While the standing charge removal and the proposed energy bill cost control framework are welcome, struggling households cannot wait until the next spending review in 2027 for policy costs to be taken off bills—one of the quickest ways to reduce bills while supporting electrification.
The Government could have introduced the Liberal Democrat essential energy guarantee to protect basic household energy needs. If we are truly to break free from the volatile fossil fuel prices driven by despots and Trump’s stupid wars, we must accelerate renewables, grid connections and electrification. That is why I am disturbed by the seeming inconsistencies in the approach taken in the Budget.
First, the Treasury says that it is setting an entirely new path on energy, while Ministers tell us that their clean energy ambitions remain unchanged. With the allocation round 8 auction budget due within weeks, Ministers must urgently clarify what that means for investment certainty in floating offshore wind and port regeneration, which is critical for supply costs and supply chains.
Secondly, cheaper energy does not automatically lead to electrification on its own. As winter approaches, why is the Treasury cutting the flagship warm homes plan—the surest way to electrify heating in our homes and reduce wasted wind energy? The Budget slashes £1 billion of capital funding from the programme and reintroduces VAT on clean technologies from 2027, effectively creating a solar panel and heat pump tax. I ask the Minister to confirm or deny reports that a further £1.5 billion could be removed from the warm homes plan’s financial transactions funding. That is the very zero-interest loan schemes that have just been launched and lauded.
With 90% of domestic bill increases since 2020 linked to wholesale gas price spikes, despite and contrary to all the protestations from the Conservatives and Reform, the answer is clear: a national electrification strategy, making it easier, not harder, for households to move away from fossil fuels. This Budget should have advanced that mission; instead, it risks setting Britain back.
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
It is a pleasure to speak in this debate, and let me add my congratulations to my hon. Friend the Member for Holborn and St Pancras (Sagal Abdi-Wali) on her excellent maiden speech.
This is a Budget to create growth in every postcode, and nowhere is better placed than Newcastle to manufacture, innovate and grow if given the tools and opportunities to do so. My right hon. Friend the Chancellor of the Exchequer has clearly recognised this, allocating funding for investment and giving welcome attention to our region’s economic potential with the announcement of the international investment summit in Gateshead next spring.
We have always been a city that builds, that innovates, that delivers, whether it is in advanced manufacturing, engineering, digital technology, energy or professional services. It was growing up in Newcastle surrounded by the legacy of great Geordie engineers and inventors, in a culture that championed making and building things, that inspired me to become an engineer.
The north-east hosts world-leading companies and research institutions, but after 14 years of Conservative austerity, my constituents still find significant barriers to social mobility and opportunity. Newcastle Central and West ranked bottom of 543 constituencies for attainment and outcomes in the “Crossing Paths” 2026 report. Having grown up on a council estate myself, I am heartbroken that the life chances of disadvantaged young people are so curtailed. One fifth of those aged 16 to 24 are characterised as NEET in the north-east, and I echo the Chancellor in saying that I refuse to write them off, unlike the last Conservative Government. I look forward to the upcoming publication of Alan Milburn’s report. He was recently in Newcastle, and I know that he seeks to make a real difference for the intelligent and ambitious young people I meet regularly across Newcastle Central and West.
It is a difficult time for so many families across my constituency, squeezed by increasing bills in energy, housing and so on, so it is great to see the Budget directly address that. Some 60,000 properties in the constituency will receive £100 towards their energy bills this winter, and I welcome the £1.5 billion in additional funding to deliver social and affordable housing and, of course, the £20 million in Pride in Place funding for Elswick in my constituency. After years of fighting for the investment we deserve, our region will no longer have to pick up the crumbs from the Whitehall table, with the new north-east good growth fund helping our fantastic mayor, Kim McGuinness, to improve our public transport and deliver major regional projects directly. I hope that giving £20 billion to the National Wealth Fund and the British Business Bank will support start-ups, spin-outs and research facilities in the north-east, not simply in the golden triangle.
I wish the Chancellor had provided more support in two further areas. The attainment gap in education between the north-east and London is the highest since records began. To challenge that, I would like to see further investment in the incredible young people of Newcastle Central and West, on the scale of the London Challenge from 2003. Secondly, there was significant support for businesses, particularly small businesses, in the Budget, but I would like to have seen even more. Growing businesses will provide jobs for our young people, and small businesses have been heavily hit by higher taxes and less disposable income from many constituents.
Finally, I hope that the Chancellor’s £15 billion defence investment plan will be used to support regional growth and investment, as he has promised, and in particular to address the unacceptable truth that the north-east sends the highest proportion of young people into the armed forces, yet receives the lowest proportion of defence investment spending. That is something I will be thinking about this Remembrance week.
Young people and, indeed, everyone in the north-east deserves growth in every postcode, and I am grateful to the Chancellor of the Exchequer for providing the first steps to achieving that.
Aphra Brandreth (Chester South and Eddisbury) (Con)
The Budget was a missed opportunity for our rural economy, which yet again this Government have failed to back. My message to the Prime Minister and the Chancellor is simple: stop saying that every postcode matters, and start showing it. In Chester South and Eddisbury, around our farms sit the contractors, vets, farm shops, pubs and family businesses that keep our villages alive.
Jim Shannon
I commend the hon. Lady for bringing agriculture and the farming life to this debate. That is important, and I congratulate her on being the first person today to mention it. The family farm inheritance tax will have a destructive impact on farming in Northern Ireland. The Ulster Farmers’ Union—I declare an interest as a member—says that people will be forced into a tax bracket not because a family is wealthy, but because the value of the land and buildings has risen on paper. Hard-working families are asset rich but cash poor, and the family farms that I live among and represent in Northern Ireland will be those that feel the pain caused by this Government.
Aphra Brandreth
The hon. Gentleman is a champion for farmers in his community, and he is right—the Chancellor had the chance to repeal the vindictive family farms tax and family business tax, but he chose not to.
Nearly nine in 10 rural businesses have paused investment, and when investment stops, the consequences ripple through the whole rural economy. Conservatives would scrap those damaging taxes. The Government also had the chance to give small businesses some much-needed breathing space. They did not. Our rural businesses, particularly in hospitality and tourism, are being squeezed by rising costs, higher taxes and more regulation.
When businesses are struggling they stop investing, they stop expanding and, crucially, they stop taking on staff. These are the businesses that give so many young people their first step into work, and we should be making that easier, not harder. That is the difference between this Government and the Conservatives: we would halve the jobs tax for under-25s and create 100,000 new apprenticeships, because the best way to get young people into work is to back the businesses willing to employ them. This Budget did neither.
Then there is the cost of fuel. The fuel duty freeze is welcome, but the Conservatives kept it frozen for 14 years because we understand how much rural communities rely on their cars. This is not just about fuel for transport. On Saturday, I was out chatting to residents in Audlem, and so many of the people I spoke to are living off-grid. The price of heating oil has nearly doubled this year, and families are wondering whether they can afford to fill their tanks before winter.
Rural communities are being left out in the cold, quite literally, and the Budget offered them nothing. That is the real cost of this Budget in the countryside: investment on pause, young people not taken on, homes going cold, and family farms wondering whether they will survive. The contrast could not be clearer. The Conservatives would back our family farms, cut taxes on jobs, bring down energy bills through our cheap power plan, and get our rural economy growing again.
The president of the National Farmers’ Union described this Budget as
“tinkering while Rome is burning”,
and he was right. Our farmers, rural businesses and families do not need more promises, more consultations or more plans for the future. Rural Britain needs action now, and this Budget has failed to deliver it.
Patricia Ferguson (Glasgow West) (Lab)
If I may, I will speak on behalf of the Scottish Affairs Committee, but I wish to make one point from the perspective of my constituency. Glasgow West, which I am proud to represent, has a relatively high level of youth unemployment, a lower than average level of educational qualifications, and a fairly high number of unemployment-related benefit claimants. We also do not have access to a youth hub. There are three in the city of Glasgow, but none anywhere near my constituency. My plea to the Government is this: can we please have a youth hub?
Today’s debate is about good growth in every postcode, and I want to consider an issue that the Scottish Affairs Committee spent some time on, namely Scotland’s space launch sector. Last year we visited the SaxaVord spaceport on the island of Unst in Shetland, and saw for ourselves the potential of the UK’s first fully licensed vertical spaceport. What we heard reinforced our view that Scotland is uniquely placed to further the UK’s space ambitions, while delivering economic growth. Unst’s northerly location allows for launch routes over the north Atlantic ocean, making it particularly well suited to putting satellites into polar orbits. That is combined with our expertise in satellite manufacturing—hon. Members might be surprised to hear that the city of Glasgow produces more satellites than anywhere else in Europe, and Edinburgh’s expertise in data in space makes us uniquely placed to benefit from that. SaxaVord also provides a strong foundation for end-to-end space services.
For Shetland, the economic opportunity is hugely significant. The Budget talks about the importance of creating jobs across every nation and region of the UK. SaxaVord could help to sustain an island community by creating skilled jobs and giving young people more opportunities to establish careers locally. In a remote community where unreliable connectivity makes economic development, and life in general, more difficult, that new industry could deliver growth in Shetland’s postcodes. However, the economic growth potential of a space launch capability in Shetland would extend beyond Scotland. A successful spaceport could attract international investment and create opportunities for suppliers across the whole UK.
There is also a national security interest here. Developing a sovereign launch capability would reduce our reliance on overseas providers. However, we cannot afford to be complacent, and SaxaVord has yet to achieve a successful orbital launch. In September this year, Norway’s spaceport at Andøya successfully launched satellites into orbit. We should welcome that because it is progress for the European sector, but it raises important questions about whether Scotland has lost its first-mover advantage, and what more the Government can do to support innovative businesses such as SaxaVord to realise their economic potential.
During our inquiry, we heard that there is sufficient demand to sustain more than one European spaceport. A successful launch from Scotland will be important, but the real test will be whether it can be scaled up into a commercial launch service. That is why I welcome the Government’s space strategy and their £30 million investment in SaxaVord. It is a significant public investment, but it must be spent wisely.
The Committee also looked at fixed links. Despite the island having such great ambitions, there are two ferry journeys before anyone gets to SaxaVord. Given that those ferries are not always reliable and the weather is often against us, the islands in Shetland have been looking at whether fixed links would work for them. Working in conjunction with the Scottish Government and the Shetland Islands council, we think that that is absolutely the kind of thing the Government should be looking at to meet their ambition.
Madam Deputy Speaker (Judith Cummins)
With an immediate three-minute time limit, I call James MacCleary.
James MacCleary (Lewes) (LD)
The Chancellor has promised growth in every postcode, but those of us in the south-east could be forgiven for thinking that the Government have forgotten us altogether. Take London out of the equation, and the south-east, and Sussex in particular, does not seem to be part of the Government’s infrastructure strategy at all. While London has the highest per capita public transport investment in the country, by contrast the south-east has the lowest of any English region, at 11% below the national average.
Where I live in Newhaven, nothing stands out more than the A259—the main coastal road that runs the length of East Sussex, passing through Seaford and Newhaven, as well as serving the hugely popular Seven Sisters country park, which attracts visitors from around the world. The road is vital to the local economy. Department for Transport figures show that more than 19,000 vehicles squeeze along South Way in Newhaven every day, which has a massive impact on neighbourhoods and businesses. The traffic system, designed in the 1970s, is now fundamentally failing our coastal communities.
Newhaven is a strategic port and Seaford is a town of over 25,000 residents that attracts tens of thousands of visitors to its beautiful beach and serves as a major access point to the famous Seven Sisters cliffs. The road is a critical artery for our area and, like all coast roads, it is hard to expand it in its current location. In 2023, a multi-year major road network study recommended a package of upgrades, including safety improvements to junctions like Bishopstone Road. The county council submitted its business case to the Government to fund the upgrade package, but that is where it stopped. Will the Minister say whether the Government will commit the money necessary to get the A259 finally moving, and press the Reform-Conservative administration at East Sussex county council to get on with funding immediate improvements, like the Bishopstone Road junction, to boost roads in our area?
The Chancellor has said that he wants more houses to be built as a result of this Budget, but building more houses without the necessary infrastructure is a road to nowhere. I am very clear about this: it is not reasonable or fair to ask residents in my community to just accept more and more housing, while they watch their roads clog up and their public services deteriorate and while they cannot get access to a GP.
Take Ringmer, a beautiful village in my constituency, where over 1,600 new homes have been proposed as part of the district council’s local plan process. It is worth noting that the village currently has only 2,000 households. I have heard Ministers refer to people in villages like Ringmer, who are concerned about how their communities can possibly cope with so much new housing, as nimbys. That is grossly unfair and frankly insulting. If we want house building and growth, the Government need to offer communities a fair deal, not call them names.
Housing plans must be led by need. Too much house building is just waved through and sometimes it is not even built at all. If the Chancellor wants to build Britain, he needs to invest in roads, schools, health facilities and public transport to make the new houses and the communities in which they are built truly sustainable, otherwise we are just building problems for the future. This Budget contains many warm words. However, the residents of Lewes, Seaford, Newhaven, Polegate and our local villages will judge it based on what actually changes for them.
Gurinder Singh Josan (Smethwick) (Lab)
I am pleased that this Budget sets a clear priority to address the cost of living. More than 44,000 households in my Smethwick constituency will receive the £100 payment to help with their energy bills, and the business rates freeze will benefit 52% of retail, hospitality and leisure properties in the west midlands, including 1,198 properties in my constituency.
It is clear that decisions taken by this Labour Government, the current Chancellor and the previous Chancellor have been instrumental in keeping UK growth at the top end of growth in all G7 countries. Furthermore, in the past two years the Government have set out an ambitious programme of investment in key industries, including in nuclear energy, green energy and defence industries to name a few. Alongside that public investment, those industries will need crucial private investment to grow to their full potential. For that reason, I would have liked to see the restoration of the 30% up-front income tax relief for venture capital trusts, which was reduced to 20% at the last Budget, as that relief is vital in supporting British small and medium-sized enterprises in their early stages of development.
Venture capital trusts already support over 1,100 British companies, predominantly in tech sectors, employing over 100,000 people and generating £21.8 billion in revenue in the last year alone. Those businesses often have high up-front costs, long development cycles and uncertain terms that can make conventional finance difficult to secure. In 2006, when the relief was reduced from 40% to 30%, fundraising reduced by around 65%, and it took 16 years for it to recover. At last year’s Budget, the relief was reduced further from 30% to 20%, and as a result, industry estimates suggest a decline in fundraising of anywhere between 30% and 60%, which is equivalent to between £1.25 billion and £2.5 billion less growth equity for UK scale-ups over the next five years.
Restoring the 30% relief would incentivise investment in SMEs across the country to support Government investment. It would allow investment into firms that are crucial to the supply chains that will help to secure our place as a global leader, build our national resilience and deliver growth in every postcode. Every pound invested by VCTs unlocks an additional £2.33 in funding from additional sources. The Treasury has already shown a willingness to support small businesses. Indeed, last year the then Chancellor listened to the industry and implemented changes that it had been requesting for many years. I hope that the Treasury will consider restoring the relief to 30% as part of a wider industry strategy that supports our ambition for growth in every postcode.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
Scottish voters were promised change, but instead this Budget delivers a real-terms cut of £650 million to Scotland’s block budget. It treats Scotland as an afterthought, syphons off our energy wealth and fails to protect hard-working families facing a bitter cost of living crisis this winter. Rather than delivering economic growth or protecting the vulnerable, this is a Budget of broken promises.
Turning first to the cost of living crisis, during the election campaign Labour explicitly promised to cut household energy bills by £300, yet under its watch, energy bills are forecast to surge by 27% this coming January, taking average annual bills to £2,192, before climbing further to £2,389 by April. Scottish families will face energy bills a whopping £1,275 higher than Labour promised.
Even worse, the Chancellor’s decision to replace standing charges with higher gas unit prices creates a deeply unfair geographical penalty. Recent YouGov polling shows that 84% of people in Scotland already had to turn their heating on this year, compared to 59% in London, and independent analysis from the Scottish Parliament confirms that over 800,000 Scottish households face higher gas bills under these changes. Scots are effectively being forced to pay higher bills to subsidise warmer homes in the south of England. This Budget ignores the 142,000 Scottish households who rely on heating oil, leaving them exposed to soaring fuel costs with negligible support.
At the pumps, drivers face a similar squeeze. Since July, diesel has rocketed by 34p per litre to over £2 a litre in many locations, leaving diesel drivers £130 worse off each year. Regrettably, the Prime Minister and Chancellor are frankly asleep at the wheel.
Nowhere is Westminster’s contempt for Scotland’s economic future clearer than in the decision to axe grant funding for the Acorn carbon capture project in Peterhead. Despite explicit promises that capital was secured, the Government have removed Acorn grant funding. Out of the £200 million promised by Ministers, a mere £12 million in grant funding was delivered, with the rest now being converted to a loan or—possibly, maybe—equity proposals. This continues a 20-year history of Westminster betrayals, from Gordon Brown to the Tories, and Acorn being snubbed, with carbon capture projects being left on the scrap heap all over the place.
The decision deals a direct blow to a just transition. In its Budget documents, the Treasury has banked £5.1 billion in revenue from Scottish oil and gasfields. Over decades, more than £400 billion in oil and gas revenue flowed from Scotland’s waters into Westminster’s hands, with the Chancellor admitting that a Scottish sovereign wealth fund would today be worth £1 trillion, had that wealth been properly invested, as Norway chose to do. Every single penny generated from Scotland’s natural resources should be reinvested in Scotland to secure a genuinely just transition to a renewables future.
Deirdre Costigan (Ealing Southall) (Lab)
It is fair to say that my constituents in Ealing Southall will not all have been glued to the telly last Wednesday to watch the Chancellor’s speech. Instead, due to wars abroad, many of them will have been trying their best to feed hungry kids, who were off for half term, or stressing about whether to turn the heating on or not. After years of austerity, my constituents have spent more than a decade too worried about their daily lives to be able to pay much attention to Budget day, and all the talk of GDP, OBR and CPI does not seem to have any impact on their lives.
This Budget changes that. By cutting energy bills and giving 34,300 households in my constituency a £100 council tax rebate, this Budget recognises the families in Ealing Southall worried about getting through this winter and the next. By reducing tariffs on everyday items, this Budget recognises the hard choices that mums in Ealing Southall have to make every day. By permanently raising the tax-free mileage rate to 55p, this Budget recognises the many nurses, plumbers and care workers in Ealing Southall who use their car for work. By allowing carers to work more hours without losing their entire benefits, this Budget recognises the situation of many carers in Ealing Southall. The Leader of the Opposition dismisses those changes, but in doing so she simply shows how out of touch she is with the reality of working people’s lives. Small changes such as those matter.
As well as giving people breathing space, this Budget takes the big decisions needed to finally undo the damage of 14 years of the Conservatives. Investing in skills and apprenticeships so that my constituents can get better-paid jobs is the best way to protect them from the uncertainties of foreign wars and global crises. This Budget’s £15 million investment to restore the union learning fund is one example of that.
The Leader of the Opposition dismissed the union learning fund as a “random new scheme employers don’t want”, but in fact it is a brilliant old scheme that 78% of employers said they were hugely supportive of until the Tories got rid of it. Yet again, the Leader of the Opposition shows how out of touch she is. The new union learning fund will address the challenges of today and help to reskill the workforce to take on jobs in AI and advanced manufacturing. It will help the Somali Uber drivers in my constituency to get help from their union, the GMB, when they fear losing their jobs to driverless cars.
This Budget also invests in apprentices such as Jack and Aidan, who I met when I visited West London College earlier this year. They can see buildings being built outside their window, and the new apprenticeship brokering scheme will help them to work on those sites.
Although they might not have been glued to the telly last week, when the kids had all been fed, the elderly parents had been looked after and the working day was done, people in Ealing Southall switched on their telly and their heating, and they saw a Government who are giving them not just the breathing space they need to make their lives a little easier right now, but the tools they need to face the future with confidence.
Blake Stephenson (Mid Bedfordshire) (Con)
“What incentive is there for hard-working families and young entrepreneurs to remain in Britain after this Budget?” That is the question that a constituent put to me at a community meeting I held in Wixams in Mid Bedfordshire last week.
Let me start with what I think is the main test that really matters for any Budget: will it make my constituents richer in five years’ time than they are today? Having listened to the Chancellor and the reaction over the weekend, I am afraid that the answer is no. There is simply no confidence whatsoever that this Budget will deliver growth in their postcodes, and it certainly does not give hope in their hearts.
Given that the Prime Minister is extremely comfortable looking to the past, whether it is to the 1970s or 2016, but not to the future, I did a little reflecting myself over the weekend. It is fitting that we debate this Budget 40 years on from the big bang in 1986, when regulations that were strangling our economy were swept away, making London into the powerhouse of global finance that it remains today, opening the City of London to the world and delivering prosperity here at home. The courage of that decision in 1986 benefited every corner of Britain, delivering more jobs, investment and tax revenues that paid for schools, hospitals and public services.
During my 15 years in the City before coming to this place, I saw at first hand how EU regulations after the credit crunch steadily ratcheted up costs and de-risked our entire economy. The courage and ambition of 1986 have slowly given way to the caution and complexity of 2026. That is why my right hon. Friend the Leader of the Opposition is right to say that Britain needs a new economic revolution even bigger than the big bang.
Where are we today? The OBR says that the tax burden will reach a record 38.6% of GDP. The Budget raises tax on savings and rental income—again. It doubles the bank surcharge and leaves Labour’s damaging jobs tax untouched. After Labour’s first Budget, I told the House that it was “a job-cutting Budget”. Some 1.7 million people older than 16 are now unemployed—up by 276,000 under this Government—and vacancies are at their lowest level since 2014. Last year, about 136,000 more British nationals left the country than came home, with two thirds of them under the age of 35.
The Prime Minister and the Chancellor may have changed, but this Budget makes it clear that Labour has not. It is still picking the pockets of working people to pay for welfare. That was plain to hear this weekend, as the Chief Secretary to the Treasury redefined working people to exclude employees. It may be a new team at the Dispatch Box, but their contempt for British business and British business owners in this Budget is as strong as ever.
Peter Dowd (Bootle) (Lab)
The motto of my constituency —the old Bootle county borough—was “Respice, Aspice, Prospice”. In English, that means reflecting on the past, considering the present and looking to the future.
I want to look a little to the past. In 2010 David Cameron said, “I’ll cut the deficit, not the NHS.” Well, that did not age well, did it? In 2010 the national debt was 64.7% of GDP; by 2024 it was 96.5% of GDP. What about the NHS? Waiting lists in 2010 stood at 2.4 million; in 2024 they stood at 7.6 million. Satisfaction ratings were down. Rough sleeping was up. Wage growth was down and did not recover for many years under the Tories. On food bank use, there were 100,000 food parcels in 2010, and more than 3 million by 2024. Some 3.6 million children were in poverty in 2010, and 4.3 million by 2024. There were 168,000 zero-hours contracts in 2010; by 2024 there were more than 1 million of them.
Let us look to the present. We have more than 4,500 more secondary, further education and special school teachers. More than 1,300 schools have joined the free breakfast club programme. That impacts on my constituency in a very practical and positive way. Waiting lists are down. The Renters’ Rights Act 2025 protects 11 million renters. We have created Great British Energy—cutting bills for schools and hospitals, and planning clean power for 10 million homes. We have raised the national minimum wage to £13.21, which is a 3.9% increase. We have a £100 discount on energy bills for homes in council tax bands A to D, which impacts 20 million households, and 99.8% of homes in my constituency will be affected by that. Standing charges on household gas have been scrapped. The list goes on.
What about the future? We are decreasing annual borrowing, with borrowing forecast to drop from £134 billion to £67 billion by 2031. On the share of GDP, annual net borrowing is expected to decline from 4.2%. We are on track with the fiscal rules. We have real wage growth—and so on, and so on. Child poverty is down. That is what we get from a Labour Budget. That is in addition to the impact of devolution in all our communities, which will be of great benefit to my constituency.
Siân Berry (Brighton Pavilion) (Green)
I cannot begin without congratulating the hon. Member for Holborn and St Pancras (Sagal Abdi-Wali) on her speech. I know her constituency well, and she is a distinguished former colleague of mine on Camden council.
I am here today to speak about council housing. The Government’s priorities are still not right on this issue, despite the Chancellor explicitly naming in his Budget speech the loss of more than 2 million council homes since the 1980s and the Prime Minister’s focus on rough sleeping. We have millions of people waiting in overcrowded homes, rented homes that they cannot afford and temporary accommodation that councils cannot afford. That goes well beyond a crisis.
What have the Government given us in this Budget? We have new money, with £1.5 billion added to the pot for councils to bid on for affordable home building. In paragraph 5.4 of the Budget, the Chancellor says that that will help to build potentially 10,000 more real council homes over the next four years. That is not terrible, but in paragraph 5.5 in the same document we get £4.7 billion for the Government’s new version of the Help to Buy scheme. The Chancellor explains that that will support private, profit-making developers to sell an extra 20,000 new builds. I presume that is without expecting developers to cut their prices or profits—it is possible that they will increase them.
I note that the Government plan to collect some small fees from the house builders, but I assume that they have been agreed with them. I also note that one impact of the previous Government’s Help to Buy scheme was to keep house prices rising out of many people’s reach and to boost profits and profit margins for developers, as the recent Government evaluation of the scheme concludes. Can Ministers tell us whether £4.7 billion for loans that they do not expect to be paid back for many years to support 20,000 extra private sales by developers really represents better short-term or long-term value for the public purse than £1.5 billion to enable 10,000 new build council homes? That is three times more funding out of the door for just twice as many new homes. Even under the Government’s broad house building target, is that really the best use of public money? It may not be that simple, so I ask the Government to give us their workings on these choices, especially if I am wrong in my assumptions. Can they commit to publishing, for comparison, the Green Book assumptions and appraisals for each of these investment decisions, and the time it takes for money to move out of their loan scheme and back into it? We need much more investment in real council housing. We need “buy the supply”—the funding of acquisitions. I cannot see why the Government are not putting together an equity loan scheme for councils to help them buy the supply, instead of going with another help to buy scheme, just as the last Conservative Government did.
Adam Thompson (Erewash) (Lab)
I start by thanking the Chancellor for presenting us with the Budget, and the Secretary of State for Housing, Communities and Local Government for introducing today’s debate on growth in every postcode. When the Prime Minister began his tour of the country in August, he started in Ilkeston. There, he, the Secretary of State and I listened to people talk about the loss that they feel, having watched our town centre decline over decades. Whether I am in Ilkeston or Long Eaton, people in my constituency share that sense of loss. They remember how our town centres used to be. They had vibrant high streets and markets and great pubs. They were bustling centres of commerce and the beating heart of our community, all at the same time.
The Chancellor is absolutely right to help level the playing field by recognising the fundamental shifts in our economy, and helping out struggling small local businesses while asking thriving online giants to finally pay their fair share. Following the Chancellor’s announcement, almost 400 Erewash businesses will no longer need to pay a penny in business rates. That is money that they can now spend on creating jobs, pass back to their customers, reinvest, or keep hold of to reacquire some breathing space. More than 80 additional shops in my constituency no longer pay any business rates at all, and I know that the Chancellor will be very glad to hear that 10 great pubs have been given full business rates relief, including the fantastic Dewdrop in Ilkeston, and the Mill and Brook in Long Eaton.
Adam Thompson
I will not, because so many people want to speak tonight. If the Chancellor is looking for somewhere to celebrate his first Budget, I invite him to Erewash to try out the newly done-up function room at the Mill and Brook, or perhaps enjoy one of the Dewdrop’s famous cheese and onion cobs.
I turn to the measures that my right hon. Friend the Chancellor has introduced for families. I was heartened to hear him present such an extensive raft of measures to help pull back the cost of living for so many people across Erewash and the country. Alongside the removal of VAT from electricity costs and scrapping standing charges on gas, there is the direct £100 payment this winter. It is an enormous step that pulls down energy bills for more than 40,000 families, from Sawley to Sandiacre and Shipley View.
I also thank the Chancellor for his continued investment in Rolls-Royce. Royce’s is a huge employer in my constituency, and it is a great point of pride for us in Derbyshire that the most groundbreaking innovation in the world happens on our doorstep. The Chancellor has recognised how much Rolls-Royce and my constituents have to offer our country. That is what a Labour Budget is all about—rooting our economy in society and making them both fairer, and supporting working families, pensioners, carers and small businesses. It is great to have a Chancellor and a Government who listen to people, who will allow our communities to hope again, and who will put our communities back at the heart of our economy.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
It is worth reflecting on three things. As we have very little time, I make just one comment about welfare. It is necessary for the Government to reduce welfare spending, because we can see what the Government’s own forecast says will happen if they do not do so: debt and borrowing will be higher in every single year. That is hugely down to the fact that the growth in welfare spending is running out of control. I was astonished that the point was avoided during the Budget, and then we had confusion when the Chancellor went on the radio the following morning and said that welfare would be reduced during the course of this Government. He was overridden by the Treasury, which said, “No, it won’t, and he didn’t say that,” but he did. That is the confusion. I do not doubt that the Chancellor wants to reduce welfare spending, but it appears that he will not be able to.
The main thing I want to say is that this Budget has not been good for working families, middle-income earners, and those who bother to save. It is really hard on them. Tax is at the highest level on record; the tax burden will hit a historic high next year of 37% of GDP, nearly 38%, and will surge to over 38.6% by 2031. Growth next year has been cut from 1.6% to 1%, and as a result of this Budget, real household disposable income per person is forecast to fall by 0.8% this year. Those are stark figures, figures that economists have produced in their forecasts.
The effect of that is to give Government fewer choices. I want to talk about defence, which is important because the threat we face now—from China and North Korea, from Iran and Russia, all linked together along an axis of totalitarian states—is astonishing. That means that our defence spending needs to rise. Every other Government in Europe is raising defence spending. We used to be the leader on this; they would all look to us, but not any more, because we have avoided raising our defence spending. Even the defence review will not take place until well into next year, and who knows what will happen next. This is a failure of the Government—an opportunity that has been missed. To quote Helen Miller, the economist at the Institute for Fiscal Studies, the Budget
“feels like lots of fiddling, short-term things, new complications—a ‘new entrepreneurs allowance’, ‘starter ISA’…etc. I don’t hear a clear, coherent vision or a simplification of tax system”,
which is necessary. The reality is that this Budget was an opportunity missed, and future generations will look back at this moment and say, “Where were you? Why didn’t you take the decisions that were necessary?”.
Baggy Shanker (Derby South) (Lab/Co-op)
I refer the House to my entry in the Register of Members’ Financial Interests, specifically as it relates to Rolls-Royce.
This is a Budget that backs grafters, not just in Derby but in towns and cities across the whole country. It backs hard-working families who are struggling to make ends meet with £100 of breathing space on their energy bills. It backs the landlords behind the pubs we know and love through changes to business rates that will help them balance their books, and it backs good growth—not just in DE1 and DE2, not just in our great city of Derby, but in postcodes all over the country. At the heart of that is good growth and reindustrialisation, driving the jobs, investment and opportunities our communities need.
In Derby, we know a thing or two about making things. For generations, we have built, engineered and supplied the technologies that keep our country powered. We are proud of that heritage, but we know that our industrial future cannot be built on nostalgia; we need investments that match the scale of our ambition for British workers and British industry, such as the whopping £2.5 billion joint investment delivered in the Budget to keep the next generation of narrow-body aircraft engines right here on our home soil. Last week, I was proud to welcome the Prime Minister, the Chancellor, and our brilliant Business Secretary to Derby to meet the people making that possible—people such as Rolls-Royce apprentices Will, Elliot and Lucy, young people putting in the hard yards, learning their trade and building the skills that will secure not just their own futures, but the future of British manufacturing. That investment will create thousands more opportunities like theirs, be it in the design office, on the factory floor, or in our brilliant small and medium-sized businesses right across the supply chain.
Reindustrialisation is not just a headline; it is about creating good, stable jobs close to home. It is about opportunities for our suppliers, services and skilled craftspeople who support our growing factories, and it is about giving local communities a share in the manufacturing success that they help to create. As we in Derby know better than most, that has not always been the case. The manufacturing success that Derby residents have helped to create has not been shared with them, but things are changing, because with £10 million of Government investment behind Team Derby, we are putting that right. We are making sure that every pound of investment works as hard as it can, and makes things better for our city and our residents. Reindustrialisation is about making sure that the people and the place benefit from that work, which is why this Budget backs our communities.
Chris Coghlan (Dorking and Horley) (LD)
When my grandfather Lieutenant Austin Coghlan, a naval officer, served in the battle of the Atlantic, he did not expect to survive. That he did was in no small part due to the codebreakers at Bletchley Park, who diverted convoys away from U-boats. In the process, the codebreakers invented the world’s first computer, Colossus, which powered the economic development of the post-war world. The spill-over effect from military technology to civilian use is one of the most powerful forces for economic growth, and we can use it now.
Many have said that there is not much that is transformative in this Budget, but that overlooks the Chancellor’s decision to invest up to £5 billion in dual-use military technology through the British Business Bank and the National Wealth Fund, and to borrow jointly with our allies through the multilateral defence mechanism. I have called for that for the past two years on the Treasury Committee, so I am grateful that the Government and the Liberal Democrats have embraced that policy. Academics now recognise that the economic dominance of the United States has been powered by public research and development, especially in defence. In my Budget speech last year, I called for £5 billion more on public research and development, so that we spend the same share of GDP on that as the US does. The £5 billion in this Budget, while over four years, is a start.
Public investment in research in universities and laboratories is powerful because it de-risks the cost of developing new technologies, and enables private investment to take that research forward in start-ups. The London Business School’s Paolo Surico has found that innovation that is funded by the Government, but taken forward by the private sector, generates productivity and growth that is eight times larger than innovation taken forward by the private sector alone. More borrowing is of course a concern in the current fiscal environment, but as the Government have correctly identified, borrowing jointly with allies can remove most of the credit risk. The latest academic research enables us to forecast the returns with confidence. If this programme was scaled in increments of £2 billion a year annually over the next 10 years, it could lead to: growth finally returning to pre-2008 levels, transforming living standards; a debt-to-GDP ratio that is 2 percentage points or £60 billion lower; and meeting our NATO defence spending commitments.
British politicians in the 1930s were labelled the guilty men, because they failed to prioritise defence over the deficit. My grandfather’s generation paid the price. As a reservist, an infantry officer and an MP, I want to ensure that our generation does not.
Ashley Dalton (West Lancashire) (Lab)
I welcome the measures taken by the Chancellor in this Budget, which is clear-eyed about the pressures that people and businesses continue to face, but equally clear about our plan of action to support households so that they keep more of their money; to reduce costs for businesses; and to create the conditions for economic growth.
People across West Lancashire are working hard to make ends meet. There is no dearth of ambition and talent in our local communities, but when conflict in the middle east drives up global energy prices, my constituents feel the effects in their household budget. The extension of the 0% VAT rate on electricity until July 2027, the removal of standing charges from household gas bills and the £2.6 billion on the energy bills breathing space scheme are all welcome steps. In West Lancashire, 37,000-plus households will benefit from the £100 payment this winter.
The costs of global volatility are not only felt in the home, however. The conflict in the middle east has once again demonstrated how vulnerable motorists are to fluctuations in global fuel prices. I therefore welcome the extension of fuel duty tax cuts until July next year. I have spoken repeatedly about the need to improve public transport and rail connectivity in Skelmersdale in my constituency. We need to ensure that our communities are better connected to neighbouring towns, cities and economic opportunities. While I continue to encourage Reform-led Lancashire county council to work constructively with me to improve local transport for my constituents, I also recognise that in many parts of a rural constituency like mine, owning a car is currently a necessity. Measures to ease the pressure on motorists are particularly welcome in such rural constituencies, where the price at the pump is piling additional pressure on already overstretched families.
This Budget is not only for families. Our high streets are at the heart of our communities. They bring employment opportunities, economic growth and a sense of community, character and identity. As co-chair of the all-party parliamentary group on theatre, I am particularly conscious of the important role that our cultural venues, and particularly touring productions, play in supporting our local economy. The economic contribution of touring theatre extends well beyond the theatre itself; every pound spent on the theatre ticket generates a further £1.40 in local spending. I look forward to seeing how the Government can further support the touring sector and creative industries, and can ensure that theatres reach audiences across the country.
I welcome this Budget, which recognises the importance of our high streets and the contribution of small businesses. This is how we create jobs, strengthen our communities and deliver growth that people feel in every postcode, every day of their life.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
The most critical issue facing my constituents is affordability and the cost of living. The Budget should not be an annual announcement to appease markets and to protect and enrich corporations, executive shareholders, the rich and the super-rich, or even those in this place. It should not look after the wealthy at the expense of the poor; it should be about making the lives of the vast majority of people in our country better and more affordable and, for some, just bearable.
I met one such person. She lives in Batley, works full time, pays her taxes and does everything that we tell people they should do. She showed me her budget and asked a question that no one in modern Britain should have to ask: “Should I pay my rent, should I pay my bills, or should I buy food?” She asked that not because she is unemployed, not because she has mismanaged her finances and not because she lacks ambition, but because the weekly shop costs more, the gas bill costs more, the rent costs more and the journey to work costs more. Everything that a human being needs to live a simple, dignified life costs much more, and her wages simply do not keep up. That is the reality of the cost of living crisis. This Budget, although there are some welcome measures, does not do anywhere near enough to make life bearable, let alone affordable, for the many by making the few contribute a bit more.
We in this place earn more than £98,000. We will not feel the impact of energy prices that are 70% higher than 2020, and that will rise by 4% this month and by a quarter in January. The 60% to 70% increase in petrol and diesel prices will be a blip that will have little impact on our driving or lifestyle. Grocery prices have increased by 38.6% since 2020, according to the Commons Library, meaning that what was a weekly £100 shop now costs roughly £138.60. Car insurance rose by 82% between 2021 and 2024, and insurance premium indexes have increased by 126% since 2020. Nationally, average rents have climbed from roughly £975 a month to £1,375 a month.
Too often, Ministers speak about future economic improvements, while households wonder how they will get through the next week. Parliament must take some responsibility, because our duty is not simply to debate suffering, and not merely to acknowledge hardship. It is not enough to express concern. Our duty is to act, and this Government have let the people down.
Mary Glindon (Newcastle upon Tyne East and Wallsend) (Lab)
I welcome the positives in the Chancellor’s Budget, some of which include the freeze on fuel duty, increases in the minimum and national living wage and the small business rate relief threshold for retail, hospitality and leisure properties. There is also the fact that almost 56,000 households in my constituency will benefit from the £100 payment for properties in council tax bands A to D.
However, I must advise the Chancellor that there will not be good growth in NE6 and NE28 postcodes unless Ministers pull every lever at their disposal to support industry on the Tyne. The overhead electric cables are a constraint on investment, as they prevent the movement of large structures used in the offshore energy sector. News that the project to underground the cables is now effectively paused will push the 2034 completion date even further into the future. International yards are already capitalising on our offshore wind leasing rounds. Fixed-bottom assets are increasing in size and investment in floating offshore wind, which will see integrated units towed to sea, is set to overtake fixed-bottom by the early 2030s.
My constituency has the skills and infrastructure to sit at the forefront of the UK’s green future. It is home to a cluster of offshore supply chain firms and an expanding energy skills academy, and it is less than 100 nautical miles from the world’s largest offshore wind farm. Ofgem, National Grid and Ministers must act decisively, so that Tyneside can seize the opportunities that the green transition offers.
Olly Glover (Didcot and Wantage) (LD)
For all the positives in this Budget, the real disappointment is that it does not match the radicalism and the claims of the now endless Government social media and TikTok barrage. It is extraordinary, given everything that he said when he was Secretary of State for Defence, that the Chancellor has kicked the big defence spending decisions down the road. There are warm words, but there is no plan for helping people back into work—and, of course, nothing concrete on Europe, something that even the previous Chancellor acknowledged over the weekend needs to be addressed.
A big theme for my constituents is the need for infrastructure to support housing. I believe that there would be less despair and opposition to new houses if central Government listened to calls for transparency and ambition when it comes to infrastructure and public services to support housing growth. Setting and publishing targets for the amount of primary healthcare, transport, large-scale leisure or policing per head of population, based on an analysis of local demographic needs, and showing progress or otherwise against those metrics, would help to restore trust and would highlight where investment is needed. That is all the more important as local councils do not have direct control of most of these areas. The lack of acknowledgment of such challenges, let alone action on them, in the Budget is disappointing.
It is also regrettable that there are no rolling funds or investment programmes for major transport improvements. Without them, no hope has been created for a new railway station serving Grove and Wantage, accessibility improvements to Cholsey station, or electrification from Didcot to Oxford. We have to hope that the Government’s slow embrace of devolution, amid the utter shambles of local government reorganisation, will fill this void, but that very much remains to be seen given the number of unanswered questions.
There are some welcome measures to support hospitality, but small producer relief for small-scale producers of alcohol still excludes vineyards such as Hendred vineyard, which produces a few thousand bottles a year. That makes little sense: the alcohol intensity of a drink does not inherently correlate with how much it is abused, and English wine has a promising future.
Let me end by referring to what the Budget says about science and high tech. Despite some positive measures on AI safety and capital gains tax founders’ relief, the Government’s previous decisions on science mean that this is the biggest area of disappointment. My constituency contains a wide range of science and technology organisations, and the Government’s decision to cut Science and Technology Facilities Council funding significantly is incomprehensible and unforgivable. No wonder that after three months the Government have still not had the basis courtesy to reply to my letters about that. The 15% funding cuts in Harwell’s three national and globally significant research facilities—Diamond Light Source, the ISIS Neutron and Muon Source and the Central Laser Facility—will lead to significant decreases in operating time, of up to 25%.
I am used to the Government ignoring me, but perhaps they will listen to the deputy general secretary of Prospect, Sue Ferns, the Liverpool city region mayor, Steve Rotherham, and the physicist Brian Cox, all of whom have warned that the cuts would
“cause lasting and possibly irreparable damage to the UK’s scientific capabilities”.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
The real tests of this Budget are the families who notice every extra penny at the petrol station, every increase in the energy bill, and the pounds adding to the price of the weekly shop. The war in Iran carries a price tag for the globe, and that is clear at the petrol pump and in our energy bills. For motorists, and for more than 3,500 workers in transport and logistics in my constituency, the price at the pump matters. I therefore welcome the continued freeze in the fuel duty cut until July 2027, a measure that I have called for throughout the year.
I also welcome the end to standing charges for gas, and the £100 payment to those in council tax bands A to D. That will make the thought of bills during the upcoming winter that bit less stressful. If the Scottish Government do the same, more than 119,000 households in the West Lothian and Falkirk council areas will benefit. That money must be passed on. Our constituents cannot afford for it to disappear into the black hole created by the Scottish National party’s mismanagement of Scotland’s finances. These measures mean real reductions in bills, shifting the brunt of levies and standing charges away from the consumer just as the worst hits.
Kirsteen Sullivan
I will continue my speech, so that others can get in.
I am mindful that many people have high energy usage owing to health conditions and disabilities, so I would be grateful if the Minister outlined the support that those with health vulnerabilities will receive. I am also aware that many businesses continue to struggle with the high level of energy costs, especially manufacturers in energy-intensive sectors, so I would have liked to have seen an expansion of eligibility for the British industrial competitiveness scheme, and I hope the Chancellor will consider that. I also hope that the Scottish Government will take a leaf out of the Chancellor’s book, and replicate the cuts in business rates to give our high street businesses a boost.
The Budget delivers a further £600 million for Scotland, amounting to over £18 billion more since Labour was elected in July 2024. I am calling on the Scottish Government to use that £600 million extra and invest in the services on which my constituents rely and which they use day in, day out.
While we cannot predict every shock that comes from overseas, we can choose how we respond to them. We choose to protect families at the petrol pump and in their energy bills, and we choose to back British workers, British businesses and British manufacturing. That is what this Budget is about: giving my constituents greater security today, while building a stronger and more resilient economy for tomorrow.
Charlie Maynard (Witney) (LD)
The Chancellor said in his speech last week that people were looking to Government
“not to solve all their problems but to give them a bit of breathing space”.—[Official Report, 28 October 2026; Vol. 792, c. 304.]
That may be partly true, but I think it demonstrates the lack of ambition that sits behind this Budget. The Government should be solving the systemic problems in our economy, or at least making a much more serious attempt to do so than we saw last week. Those problems are at the root of why so many families are struggling to make ends meet and so many businesses are failing. When the economy is as damaged as it is, when public sector debt sits at 104% of debt to GDP—according to the International Monetary Fund—when productivity is decreasing, when consumer confidence is down and when housing costs continue to rise, I think it is the Government’s job to do something substantial towards solving the country’s problems.
Make no mistake: the various incremental measures that the Chancellor announced, such as those on household energy bills, will be welcome, but they are not sufficient to
“move the dial on growth”,
in the words of the Institute for Fiscal Studies. As bigger, more difficult decisions are kicked down the road for another time, what my constituents want to know is how they are to absorb another year of no real earnings growth, while mortgage increases are coming down the pipe on the back of a likely Bank of England rate rise this week. My constituents want to know that the public services on which we all rely are safe, and they are not. My constituents want to see genuine hope for a future with better jobs and more opportunities, and they want to know that our food supply is secure and our rural economy will be supported. Across the board, however, this Budget was too unambitious, and ducked the big decisions that our country is crying out for.
Let me give two examples that could “move the dial”. First, the Chancellor’s speech was silent on Britain’s relationship with our biggest trading partner, the European Union. Our country prospers when fair, dynamic markets for goods, services, capital and labour operate effectively. If the Government are serious about our economy and want growth, they should get on with opening negotiations for our country to rejoin the EU now. Secondly, if we are serious about getting our national debt under control, we must look at reforming our fiscal rules. Why? Because they do not work. That is demonstrated by the fact that for the last 25 years there has not been a single year in which tax receipts exceeded spending. Our fiscal rules front-load spending in the early years, and difficult decisions—as epitomised by last week’s Budget—are put off, frequently to the other side of an election. There are good international examples from which we can learn. Other countries, such as Switzerland and Sweden, do this better. I therefore urge the Chancellor to take steps to rejoin the EU, and to establish a cross-party commission exploring more prudent fiscal rules.
Amanda Martin (Portsmouth North) (Lab)
We live in an ever-changing world where global issues impact on our everyday lives, so I am pleased that this Budget is about making a difference to working people and families in Portsmouth North, with little changes that make a big difference. People in my city are worried about the cost of energy. This Budget responds by extending the removal of VAT on electricity until 27 July, removing gas standing charges and putting £100 directly into the bank accounts of 40,000 households across Portsmouth North. That sits alongside the new British industrial competitive scheme for businesses.
However, energy is not the only cost putting pressure on families. For many people in Portsmouth North, getting to work or school means getting in the car, and the cost of filling up hits hard. Extending the 5p fuel duty cut and keeping fuel duty frozen helps motorists and businesses to manage these costs every day. Cost of living measures are also about allowing people to keep enjoying life and coming together, so I am pleased to see that changes in this Budget will mean that half of the retail, leisure and hospitality businesses in our region will no longer pay business rates at all.
We must invest in our future. The Your First Home scheme means lower deposits and more opportunities for young people, and I look forward to seeing more details.
We must also keep our country safe. In Portsmouth—our naval city—defence means more than national security; it means jobs, skills and opportunities for local people. The Government are spending £14 billion more on defence than the previous Government did, and the £3.9 billion for the naval dockyard is brilliant. That, alongside the investment from previous Governments, is great.
One announcement is especially close to my heart: paternity pay for the self-employed. For too long, self-employed men have faced an impossible choice between spending those precious first few days with their newborns and returning to work because their bills will not wait. Labour introduced paternity leave, but self-employed dads and non-birthing partners were left behind. This Budget takes an important step: for the first time, they will be able to receive paternity pay—that is a point of principle. For a builder, a plumber, a taxi driver, a shopkeeper or a farmer, this means real support at the most important moment of their life. Up to £194 a week for two weeks might not be enough, and the Minister will not be surprised to hear that I want to see longer leave and more generous pay, but for someone who currently gets nothing, this change means real help with their bills, less financial pressure and, more importantly, more time with their new-born child. Being there for your child should not be a luxury that is reserved to those who can afford it.
I want to quickly thank the incredible campaigners who have helped deliver this change, including all at the Dad Shift, On The Tools and Movember. Most importantly, I thank the hard-working tradespeople across the country who have made their voice heard and trusted me to bring their voice to this place. This victory is theirs, and they should be so very proud, just as I am so very proud of them. How can we ask young men to take up apprenticeships in our trades if we do not protect their future and their families? This is personal for me: my dad was a tradie, my brother is a tradie, and so was my grandad. I am incredibly proud of all of them, and I want something different for my own sons.
Sir Ashley Fox (Bridgwater) (Con)
I was disappointed that the Chancellor did nothing to change the gift aid rules, which would have helped the Bridgwater carnival and many other community organisations and charities. The Bridgwater Guy Fawkes carnival is the most magnificent spectacle. It is Britain’s oldest carnival and the largest illuminated carnival in Europe, and it is taking place on Saturday. Like so many good causes, the carnival raises much of its funds in small cash donations, often loose change collected in a bucket on the night, yet it can only claim gift aid for a maximum of £2,000 on those small donations—a figure that has not been increased for 10 years. Will the Chancellor please consider increasing the limit? That would make a huge difference to organisations that collect so much of their funds in small cash donations.
Despite making so many changes in his Budget, the Chancellor has not reinstated the listed places of worship grant scheme, which his predecessor abolished. This means that communities who worship in a listed building, such as the parish of St Andrews in Burnham-on-Sea, will have to bear the full cost of VAT on the repairs that their historic church requires. The scheme that replaced the old one is less generous and has a capped budget. We should cherish our beautiful listed churches and take care of them for future generations. I will continue to press the Chancellor to renew the scheme in full, to make sure that our congregations are not charged an extra 20% for vital repairs.
There are 98 separate measures in the Red Book, and many of them will further complicate Britain’s already byzantine tax code. Do we really need a new founders’ relief from capital gains tax? We are told that it will be for
“qualifying founders of high-growth, innovative companies”.
That perhaps sounds good for a Labour tax relief, but would it not be better to lower the rate of CGT for everyone, rather than add another carve-out for accountants and lawyers to argue about? Britain needs lower tax rates with fewer exemptions, not additional complications that drive up the cost of compliance.
The fundamental problem that Britain faces today is simple: we are running out of money. Unless we change course soon, every other problem will become harder to solve. Our national debt is now £3 trillion, and every year Labour is adding tens of billions more. At a time of international uncertainty, we must spend more on defence, but this Government cannot do so because they refuse to cut welfare. We need a plan to cut debt, fund defence and get Britain growing again.
Chris Curtis (Milton Keynes North) (Lab)
I will speak about the devolution measures announced in the Budget and the fiscal devolution pathway that has been set out. We normally hear two arguments for devolution: first, that decisions should be made closer to the people they affect rather than in Whitehall, and secondly, that investment should be spread more fairly beyond London and certain pockets of the south-east. I agree with both those arguments, but I think there is a more important argument: devolution can help us grow the economy and make the British state work better.
After nearly two decades of stagnation, we desperately need to raise productivity, build infrastructure more quickly and unlock growth across the country. I believe that devolution can be one of the best ways of doing that, but it needs to come with fiscal devolution. Some 95% of tax revenue in Britain is raised by central Government, rather than at a regional or local level. Meanwhile, France raises three times as much at a sub-national level, and in Germany it is much higher still. The Centre for Cities has found that there is a strong relationship between fiscal devolution and wages across devolved economies. Correlation is not always causation, but there are obvious economic reasons why that relationship exists.
Today, when councils approve new housing, attract employers or build infrastructure, they take the political risk and bear many of the up-front costs, but much of the additional tax revenue goes straight to the Treasury and eventually gets redistributed elsewhere. Even when councils retain that money, it can disappear at the next funding reset, as we saw earlier this year. Local leaders bear the cost of growth, while the Treasury collects the proceeds. That is why I welcome the Chancellor’s commitment to increase business rates retention, giving mayors a share of business rates growth from next year, and to give mayors a share of income tax receipts from 2028. If we want local leaders to take difficult decisions in favour of growth, their communities need to share in the rewards.
Stable future revenues can also allow local areas to borrow against future growth to pay for the infrastructure needed today, and it is good to see the Government looking at how that can happen through bodies such as the Greater Cambridge Development Corporation. I hope that is something we can look at in Milton Keynes in the future.
I want to finish by saying that although many areas across the country will benefit from the proceeds of the Government’s announcements on devolution, I am disappointed that it was announced this week that my local area will not be one of them. That is despite the hard work and determination of many MPs across this Chamber to get devolution across Bedfordshire and Milton Keynes. Indeed, the Government came forward with a package of nearly £1 billion to get this over the line. It was unfortunately vetoed by one local government leader in Central Bedfordshire, who decided to put politics ahead of the people he was elected to represent. He has let the local area down, and I hope the Government will continue to work with all local leaders in the area to see if they can find a solution.
Jim Allister (North Antrim) (TUV)
Taken as a whole, this Budget is really rather insipid, because it deliberately avoids many of the big-ticket areas, such as our runaway benefits budget, which it does nothing at all about, and the need to put together a properly funded programme to adequately build the defence of this nation—again, an issue that this Budget leaves untouched.
But at least we have a Budget. I say that because in my part of the United Kingdom, we are entering the eighth month when, because of a catastrophic failure of devolution in Northern Ireland, we do not even have a budget for this year, never mind next year. I say to the Treasury and the Secretary of State for Northern Ireland that this cannot go on. They need to bring that budget through this House so that there is the money to pay for the public service pay rises and everything else, which is now at risk because of the dysfunctional failure of the Stormont Executive.
One of the other things this Budget is silent about—yet it is something that, if the Government have their way, will be very important—is the cost of the Government’s intended reset with the EU. I will take but one example, which is the proposition that the United Kingdom should participate in the EU’s electricity market. When we look at the European Council decision that created the mandate for the EU to negotiate with the United Kingdom about the UK entering the EU’s electricity market, we find that the mandate includes the words
“an agreement on the financial contribution of the United Kingdom towards reducing economic, social and territorial disparities between the regions of the Union”.
In other words, the United Kingdom, as a cost of joining the EU’s electricity market, will be required to make a contribution—no doubt a sizeable contribution—to the EU’s cohesion fund.
It is the same with the sanitary and phytosanitary agreement and with all the other targets of the reset, yet this Budget fails to tell us what the cost of any of that will be. The Government need to front up and tell the public not the glossy impression they like to create of advantage from the reset, which is phoney, but the actual monetary cost. What is it, Minister?
Emily Darlington (Milton Keynes Central) (Lab)
Milton Keynes MPs are like buses: you wait a long time, and two come at once.
It costs us £133 billion every year because women are excluded from paid work on equal terms with men. I have worked closely with Members from across these Benches, as well as the Women’s Budget Group and the Good Growth Foundation, to put together an unashamedly female agenda for how we can realise the £113 billion of gross value added that we would see every year if women could fully participate in the economy. I want to thank my right hon. and hon. Friends the Treasury Ministers for their engagement on this really important document.
I want to talk about what this Budget delivers for women. It bolsters us, it promotes us and it protects us. It bolsters us with paternity leave and adoption leave for self-employed people, with breakfast clubs and with VAT cuts in energy bills. We know that, more often than not, it is women who are trying to make the household bills add up at the end of the month and women who are the first people in the family to go without when there is not enough.
The commitment to the gender pay gap and pay transparency is so important, but women are business owners too, particularly on our high streets, where our hairdressers and nail technicians are seeing business rate cuts. High-tech, high-investment, science-based industries will also have fair investment practices, with tech-forward standards to improve workplace culture, £200 million—double the previous commitment—for women-led businesses through the British Business Bank and a scale-up programme to help them flourish.
Finally, this Budget protects women and girls. It establishes for the first time a misogyny taskforce to tackle the core issues that are holding women back, keeping them scared and destroying equality in our society, with £55 million of funding over two years to meet the commitment to halve violence against women and girls in a decade. It will strengthen our law enforcement activity, improve protection for victims, and identify and disrupt harmful behaviours.
This is a Budget for women, because if women succeed, our country succeeds.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Order. Members have been very disciplined with interventions, but they may wish to note that several Members have absented themselves from the Chamber without any notice.
Charlotte Cane (Ely and East Cambridgeshire) (LD)
On growth in every postcode, the Chancellor seems to have forgotten the people in Ely and East Cambridgeshire. There was nothing in the Budget and no funding for the Ely junction improvements, which would increase capacity on that rail line for freight and for passengers and make it more reliable. There was nothing to reduce rail fares, which are getting out of many people’s reach.
There was nothing to help the county council with the phenomenal cost of mending our soil-affected roads. It estimates the cost to be £500 million, an amount that no county council can find. It is roughly 10 times its annual budget for road repairs. We have roads that, over this summer, actually had no earth underneath them any more, and when people go out to repair them, they instead have to close the road, because there is no earth on top of which to repair it.
On buses, it is great that we have capped bus fares, but many of my villages do not have buses at all. There was nothing in the Budget about improving bus routes and getting more buses. There was nothing on the A10. The money for that has been removed, and nothing has been put back in the Budget. So is growth really for every postcode? Not for mine.
As for the farmers, who had that catastrophic sustainable farming incentive process that closed within hours, there is nothing for them. There is nothing to recognise the problems they had over this long, hot, dry summer. We need to back our farmers. They are in my postcodes, and they feed all of us.
On the breathing space, there are some good things in the Budget to help people with the cost of living, but not for people on heating oil. I have had a letter from a young mum who tells me that she has to find £650 just to buy the minimum amount of oil that can be delivered, and that would not last her the winter. She cannot ask for money from the crisis and resilience fund, because she had that back in the spring, and she has been told she cannot ask again. Yes, she will probably get £100 in January, but she needs £650 now. To add insult to injury, the Chancellor has cut the budgets for helping people get away from their dependence on oil heating, so I cannot even be sure that all my constituents can take advantage of moving on to heat pumps or other technology. At the very least, will the Chancellor please look again at how he can help people on oil central heating, because they desperately need it this winter, and please can we not just tell them to eat gherkins?
Samantha Niblett (South Derbyshire) (Lab)
There were many welcome announcements in this Budget to help give people a little breathing space—from the £100 for households in council tax bands A to D to paternity leave payments for self-employed fathers. I personally really welcome the investment in getting more women into tech, as recommended by the Government’s women in tech taskforce. At a time when trust in the tech industry is low, we need women in tech more than ever. I refer Members to my entry in the Register of Members’ Financial Interests, because I have quite a focus on that.
However, following a meeting yesterday at Gresley Old Hall with members of the mineworkers’ pension scheme in South Derbyshire, I want to focus on them. I speak today on behalf of 1,141 scheme members and their families in my constituency. These men spent their working lives doing some of the hardest and most dangerous jobs in our country. They kept our lights on, our homes warm and our industries running. Their pensions are deferred wages earned through years of dangerous work, not taxpayer handouts.
I welcome the transfer of the £1.5 billion investment reserve in 2024, and the Chancellor’s announcement to end surplus sharing so that 100% of future surpluses go to members, but the job is not finished. There is still approximately £1.2 billion in the guarantor’s fund, and members need certainty that it will be transferred in full without further delay. Yesterday, what I had hoped would be a meeting to celebrate progress became one where I found myself apologising, because people who have waited decades for justice are once again being asked to wait again, and time is running out. About 100 former miners die every week, and some will never live to see the justice they have spent years campaigning for.
This is also about our former coalfield communities. That money will be spent in our towns and villages in supporting local shops, businesses and families, and in helping growth in postcodes in South Derbyshire. I have raised this directly with Treasury Ministers and the Prime Minister’s office. I have also pledged to donate my next annual parliamentary salary increase to charity until miners and their families receive what they are owed. I stand in solidarity with them, not just in words but in deeds too.
I want to finish with words from Gary Chamberlain, who I met yesterday:
“If you think this is a storm in a teacup, think again. This is just the start of it.”
Gary is right. For Gary, for my 1,141 MPS member constituents and their families, and for mining communities across the country, I say this to the Government: please release the remaining £1.2 billion, give members the certainty they deserve and ensure that their bonus payment arrives on 23 December, as originally planned, in time for Christmas.
We are the Labour party. It is only a Labour Government who will deliver justice for our miners. We must not be a Labour Government who ask them to wait yet again. Our miners have given enough to this country. It is time this country gave them what they are owed.
Andrew George (St Ives) (LD)
It is a pleasure to follow the hon. Member for South Derbyshire (Samantha Niblett). She refers to the fact that this is a Labour Budget, but I want to highlight how it does not contribute as I would hope it would—of course, good growth in every postcode is a good thing—to combating widening inequality. I am not sure it lives up to what I believe the Labour party argues for.
I submitted early-day motions 939, 940 and 963, which provide constructive proposals to the Chancellor on addressing widening inequality. They were constructive proposals, as one would expect me to provide. The Conservatives want to focus on the benefits bill, and of course we should, but they do not seem to want to focus quite so much on the benefits bill of tax benefits for the wealthy. It is that area that I wish to concentrate on most.
Some 23% of the Government tax take—£217.5 billion —is available in tax reliefs, as Treasury Ministers know full well. The Treasury Committee has identified that 80% of those tax reliefs have never been publicly costed or evaluated. I hope the Government will look at these matters. I will come on to one on housing in a moment.
The Secretary of State referred to my private Member’s Bill, which is up for debate on Friday 13 November. It addresses both the need for first homes before second homes, and need before greed in the planning system. I hope that Labour Members will come along to support the Bill. What concerns me in particular is the business rates relief system. The Red Book, on page 130, refers to the availability to small businesses of rates relief for the retail, hospitality and leisure sector. That includes, of course, holiday lets. The problem is that, because holiday lets have invariably been second homes, people have flipped their property from council tax to business rates, applied for small business rates relief and then paid nothing at all. The Government have extended the valuation from £12,000 to £18,000, which has then made a larger group of people, who are wealthy enough with their second properties, now able to take advantage of this particular loophole.
In areas like mine, with large numbers of second homes, we would like the half a billion pounds that has gone from the taxpayer into the pockets of second home owners, to be put into social and affordable housing. It is driving inflation in the system and creating further inequality. I do hope the Government will look at this issue again, think again and address it.
Linsey Farnsworth (Amber Valley) (Lab)
This Budget contains a series of practical measures that will make a real difference to families across Amber Valley. While some may dismiss individual announcements as small measures, it is their combined effect that matters. Taken together, they provide genuine breathing space for thousands of people across Amber Valley. They include: expanded childcare and free breakfast clubs for families; support for households worried about energy bills; and measures to help people with transport costs for work and leisure.
Becky Gittins
What my hon. Friend has just said, about the cumulative effect of lots of announcements making a difference, is really important. In my constituency of Clwyd East in north Wales, we pay some of the highest standing charges anywhere in the country, with people in north Wales paying a standing charge of 68p a day, in comparison to the 43p paid each day by people in London. Does she agree with me that not only is that measure welcome but, as well creating that breathing space, it is a huge step to fairness in our energy system?
Linsey Farnsworth
I do agree with my hon. Friend. It is very important that there is breathing space right across the country, just like growth in every postcode.
The Budget is only one part of a much wider programme of reform. The high streets strategy, the modern service framework for dementia and frailty, reforming social care, bringing decision making closer to our communities through devolution, and of course our 10-year plan, will all be transformative for my constituents.
I want to turn to another matter addressed by the Budget, which echoes the point made by my hon. Friend the Member for South Derbyshire (Samantha Niblett). It is a big issue in our local community. It is extremely personal to me and to hundreds of people in my constituency.
I am proud to be a former coalminer’s daughter, and I am proud to be a Labour MP with a Government committed to finally delivering justice for mineworkers, because—let us face it—only a Labour Government will do so. Since Labour came into office in 2024, we have seen real progress on this topic. The MPS investment reserve has been transferred to scheme members, increasing annual pensions by around £29 per week. Last week the Chancellor announced that every penny of the surplus from the MPS will remain with the members rather than being split with the Government and the standstill rule has been abolished. Those are important improvements, but as the Chancellor himself said last week, the job is not done.
My dad suffers from emphysema, white fingers and damaged knees from years of working at the coalface, and now also late-stage dementia. When I learned that a final settlement for MPS members would not be reached in this Budget, I made it clear to Ministers what that means. It means there is a very real possibility that my dad will not live to see the justice he deserves. That is not unique to our family. Around 19 former miners die every single day. That means that since the Budget, 85 miners will already have passed away without seeing this issue resolved. Let us be clear: this is not Government money, and this is not taxpayers’ money; this is the miners’ money.
The Chancellor committed to ensuring the full transfer of the guarantor’s fund and I welcome that completely, but we cannot wait any longer. We cannot wait until a new fiscal event. We must finish the job and we must do it now.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I am sure that hon. Members will be delighted to know that I am putting the time limit back up to four minutes.
Manuela Perteghella (Stratford-on-Avon) (LD)
I welcome aspects of this breathing space Budget. Additional investment in council housing, support for rough sleeping programmes and some positive news on business rates with action to revive our high streets are all steps in the right direction. But for many families, businesses and communities, such as those in my constituency, the Budget does not go far enough to address the pressure they face every day, including the brutal cost of living. People in Stratford-on-Avon worry about the future of their local high streets, about heating their homes this winter, and about whether their favourite shop, pub, café or restaurant—businesses that give our towns their character—will still be there next year. That is why I believe that the Budget misses opportunities in a number of important areas.
Our small businesses on high streets—the independent businesses that make our towns unique and create jobs for local people—face pressure from every direction. Under this Government, rising employment costs, energy costs, business rates and regulatory burdens are all taking their toll, and empty units are blighting our streets up and down the country. We need stronger powers for councils to bring long-term vacant properties back into use, and more support for the independent businesses that give our towns their character. The business rates discount will help some, but many will be left in the cold.
Hospitality is of particular importance to Stratford-on-Avon; one in nine constituents are employed in the sector. That is why I am disappointed that the Government did not go further on VAT for hospitality. A temporary reduction in VAT would have provided immediate help to businesses, while helping consumers who are also feeling the squeeze. Businesses in my constituency tell me that a VAT reduction for hospitality would have allowed them to keep the lights on after the busy Christmas period.
On fuel poverty, while the payment of £100 is welcome, we know from the Resolution Foundation that 1.4 million low-income households are in higher council tax bands, and they will miss out on that untargeted payment. Will the Minister look at that cohort urgently, so that they do not fall through the cracks? While I am on the subject, council tax is a deeply unfair tax—we know it, and the Minister knows it, and it needs to change.
Many households remain vulnerable to high energy costs, which is why I am concerned about the reduction in funding for the warm homes plan. Investing in warmer homes cuts bills and reduces carbon emissions; it is one of the smartest investments that any Government can make, particularly for families and older residents already struggling with the cost of living.
The Budget and the Government’s wider plan place considerable emphasis on devolution. Warwickshire is a long way away from a mayor. People in my constituency want local services that are responsibly rooted in the places that they serve. Any organisational devolution must strengthen local democracy and voices, because whether we are talking about high streets, fuel poverty, housing or hospitality, the people closest to those challenges are often those best placed to solve them. For my constituents, the Budget does not go far enough to support small businesses, tackle fuel poverty and help communities thrive.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
This Budget puts families and businesses at its heart. It provides a breathing space on the cost of living today, while giving people fresh hope for the future.
I am proud to be the granddaughter of a coalminer, and this Government have done so much already to right historical injustices in the mineworkers’ pension scheme. I welcome the commitment to ending the surplus sharing arrangement and standstill mechanism, but that only rights part of the injustice. Since 1994, successive Governments have taken more than £4.4 billion from the scheme, in return for a guarantee that has cost the public purse nothing. It cannot be right that the remaining £1.2 billion in the guarantor fund has still not been released to benefit former miners and their widows. For many, time is running out. I ask again, as I have asked before, that the Chancellor looks at this and delivers justice for mineworkers across the country.
I particularly welcome the measures in the Budget to tackle rising energy bills. With conflicts overseas pushing up prices at home, families are understandably worried about how much it costs to heat their home. That is why the £100 household energy payment is so important. In North Warwickshire and Bedworth, around 37,920 properties will benefit.
In a constituency like mine, driving is not a luxury. For so many people, it is the only reliable option for getting to work, taking the children to school and going about daily life. It is why my parents made me learn to drive as soon as I turned 17. I ensured that residents’ concerns about fuel costs were heard, and I am delighted that the Chancellor listened, extending the 5p fuel duty cut until July 2027. For a family already struggling to make ends meet, every extra pound at the pump matters. The impact of fuel duty goes beyond families filling up their cars; it affects the lorry drivers delivering food to our supermarkets, the businesses transporting goods across the country and, ultimately, the prices that we all pay at the check-out.
Before coming to Parliament, I spent 20 years working as a property solicitor in a high street firm in my constituency. One of the things that I loved most about that job was helping first-time buyers. I remember the happiness of seeing young people come through my door, proud of the amount that they had saved for their deposit. They would tell me about their plans for the future. These were people putting down roots in our communities, and there was nothing quite like the moment when they finally collected their keys.
However, the longer I did that job, the fewer first-time buyers came through my door. I watched as owning a home became increasingly out of reach for young people, particularly those who did not have the bank of mum and dad to fall back on. That is not the future I want for the next generation in North Warwickshire and Bedworth. That is why I am delighted that the Chancellor has announced the new £4.7 billion Your First Home scheme, which is expected to help around 70,000 first-time buyers on to the property ladder.
This Budget is taking action on the very issues that my constituents have raised with me: the cost of heating their home and filling up their car; supporting the industries they work in; and helping their children and grandchildren on to the housing ladder. It is a Budget that gives families breathing space today, supports the businesses and workers who keep our country moving, and offers young people fresh hope for the future.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
I want to thank Nick Coombes from my office for his help on this speech.
Unsurprisingly, I am disappointed by the Chancellor’s first Budget. From a new Administration who spent a by-election and leadership campaign claiming that they had all sorts of plans and ambitions to fix the economy after the previous Labour Administration constantly talked us down, we have a “do no harm” Budget that does decidedly little to help pensioners, fund our armed forces, support young people or back the businesses that are essential to creating jobs. The tax burden has continued to rise above record levels; inflation has not been at the 2% target since before the first Budget of this Labour Government; and the welfare bill is set to go up by another £60 billion—and neither the Prime Minister nor the Chancellor is willing to commit to reducing it in this Parliament.
As the Leader of the House has said, we are now spending more on debt interest than on the Army and schools combined, which is clearly wrong, especially when we face some of the biggest and most rapidly evolving threats since the cold war. Yet the Chancellor, who resigned as Defence Secretary over the previous Administration’s refusal to increase defence spending to 3% of GDP, has delivered a Budget that has deferred the difficult choices necessary to keep our country safe until next year, in favour of the Prime Minister’s plan to prioritise social security over national security.
Young people are already struggling for support to get into education, employment or training. The increase in employer national insurance contributions, and now the further increase in the minimum wage, will make young people even more expensive for small businesses to hire, while pushing more and more workers into higher tax brackets.
This was the Chancellor’s first opportunity to take bold steps to correct the errors of the previous Labour Budgets, and to provide support for businesses and entrepreneurs, which would have been a notable break from the massive tax hikes and regulatory burdens that have so far fallen on businesses under this Government. The Prime Minister and the Chancellor needed to use this opportunity to take drastic action to slash the size of the state, and to get Britain working again—to support those who are working, and to encourage into work those who are not working, but who are able to. My constituents are happy to support those in genuine need, but this Labour Government have come back every year for more money from the same hard-working people they promised not to raise taxes on to fund an ever-increasing welfare state.
This “do no harm” Budget has led to the worsening of the OBR forecasts on inflation, economic growth, unemployment and living standards, and has left my constituents disappointed. I hope that the Prime Minister’s 10-year plan and the upcoming spending review have some much-needed good news and serious economic support for businesses and young people in South West Hertfordshire.
Euan Stainbank (Falkirk) (Lab)
First, I want to rebut some of the nonsense that we heard from the SNP earlier. Scotland’s budget is going up by £600 million because of the choices made in this Budget for Scotland’s public services—that is up by £18 billion since Labour came into office—and talking of a £650 million cut is inadvertently misleading this House. I may say something a wee bit ruder outside the House.
This Budget will abolish gas standing charges, abolish VAT on electricity bills and give £100 to 1.8 million Scottish households between council tax bands A and D —if it is confirmed that the SNP will choose to hand it over in that way. The prices at the pumps that our constituents complain about have been brought about directly by the US and Israel’s war in Iran, but we have made a choice to freeze fuel duty, which I welcome, and maintain the 5p fuel duty cut till June. That is alongside the red diesel duty cut, which will be welcome in the many eligible sectors, especially agriculture.
As for working people in Falkirk, the permanent increase to the tax-free mileage should help traders who use their own vans for work. I also welcome the tripling of the trading allowance to £3,000. This Budget also rightly supports pensioners. Many pensioners in my constituency live on the state pension alone; as it has risen, too many have ended up with the administrative irritation of paying small amounts of income tax, with all the paperwork and worry that that brings. I welcome the new pension tax allowance from April 2027, which addresses that directly. It means that pensioners whose income is no more than the full state pension will not pay income tax.
To deliver good growth in my postcode, it is vital that we invest in the Grangemouth industrial complex, as I said last week. I welcome the British industrial competitiveness scheme, and the back-payment to 2026, but while I acknowledge the heightened cost of extending it to every manufacturing business—I believe that would be about £3.5 billion—I think, as do other colleagues, that we should look at extending it, especially for manufacturing businesses that are reliant on gas, and that have decarbonisation timescales that are not as quick as we might like.
I welcome the restatement of the Government’s intent to include refined products in the carbon border adjustment mechanism. It will be a vital tool in levelling the playing field, after the undermining of domestic refining. The same un-level playing field led to the closure of Grangemouth, because it was not dealt with over multiple years. A cross-party group wrote to the Treasury regarding this. I think it is important that we put a deadline on when we will introduce this, because this positive signal needs to be translated into real protection for our existing refining sector, as well as for the bio-refining sector that the Prime Minister rightly believes has huge potential to deliver for Grangemouth.
Turning to the Acorn project, I agree with the principle of getting better value for taxpayers’ money across Government capital plans, so that we can free up money for defence. I agree that that should include energy projects in our constituencies. Some of the rhetoric that we have heard from the SNP and their Ministers on supporting the project has been downright reckless and self-defeating. However, I hope that the Minister can acknowledge that much of the reasonable scrutiny on this has not been met with the clearest of answers. I would like to hear confirmation that the new route for previously committed funding has the support of all existing and committed commercial partners, and confirmation about the amount of funding committed already that is not being changed. I would also like to know why funding has been changed for Acorn but not for other carbon capture, usage and storage projects, such as Viking in Humberside, and, more broadly, what the changes will mean for reindustrialisation in communities like Grangemouth that are supposed to benefit from this infrastructure, especially considering that they have not had a fantastic experience with the debt equity model of the National Wealth Fund.
This Budget creates breathing space for families in Falkirk who are worried about the end of the month, and for the poorest pensioners who dread getting a tax letter. It lifts some of the pressure. This Government have shown in the Budget that they will act for working people, pensioners and industry. I ask Ministers to turn that breathing space into future certainty, particularly for an industry that can define the next 50 years positively, through new jobs, as it has defined the last 50.
John Milne (Horsham) (LD)
This Budget has around 100 separate measures, but most would never have featured in the previous Chancellor’s Budgets—not because of any particular policy difference, but because they are just too small. It is less “Steady as she goes”, and more “Let this grind to a complete halt.”
As far as taxation goes, by far the biggest impact comes from a policy that was not even mentioned: the continued freeze on personal tax thresholds. This year alone, it means another half a million people will start paying tax for the first time, and a further half a million will be pushed into a higher tax bracket—all a function of that handy Chancellor’s trick: fiscal drag. Understandably, the Conservatives give the Government an easy ride on this, as it was their idea in the first place.
When it comes to welfare, the critical Milburn and Timms reviews have both been conveniently kicked to the other side of the Budget, but the issues that we face are not what people think they are. It has been said so many times that everyone assumes it must be true that millions of people are getting personal independence payment or universal credit health awards for mild anxiety. The appeal of this story is that it makes people think that we can slash social support for vulnerable people and feel morally good about it. Unfortunately, it is just not true. In reality, absolutely no one gets PIP for mild or severe anxiety, or for any form of mental health condition. That is because PIP is not awarded according to condition. Rather, applicants are assessed according to their daily abilities or lack of them—whether they can wash themselves, cook for themselves or manage short distances walking. There is not even a category for mild anxiety.
I find it incredible that politicians, including Members who are the welfare spokespeople for their parties, can continue to ask for something that they must know by now is not possible. What chance have we got of making smart reforms to the economy if politicians cannot even get the basic facts straight?
While we continue to wait for all the missing parts of the Budget over the coming weeks and months, I urge caution. Welfare cuts are just a right-wing version of the magic money tree. As a proportion of GDP, today’s spend on non-pension welfare is roughly the same as it was in the mid-80s, when a certain Margaret Thatcher was Prime Minister. At that time, the Defence budget was twice what it is today, so clearly the current level of welfare spend is perfectly compatible with meeting our defence targets, and welfare is not the reason why our defence budget is in such trouble. The peace dividend did not go to UC and PIP; it went to the NHS and pensions.
Above all, this is a challenge caused by a general decline in the economy, not welfare. Yes, it is always important to control welfare spend, and I support that, but slashing welfare on the basis of an arbitrary financial target invented simply to raise enough to pay for some dramatic manifesto pledge is not a credible path to anything. What we have is a Budget that does not seek to do anything very much about anything; the real battles have yet to come.
Josh Fenton-Glynn (Calder Valley) (Lab)
For my constituents and those across the country, life is hard, and it has not shown signs of getting easier. The previous Government were the first in decades to preside over a fall in the standard of living and, with Trump’s war in the middle east, things are unlikely to get better as quickly as we would like. That is why I welcome the support being provided to households facing higher energy costs. For many families, an extra £100 will not transform their circumstances overnight—no one is pretending otherwise—but every pound matters, and that support matters, too.
In Calderdale, almost nine out of 10 houses are expected to be eligible for the £100 household energy payment. That means that the overwhelming majority of my constituents will receive direct support this winter. For many people, the support will ease some of the pressures on their household budgets at exactly the moment they need that the most.
I welcome the expansion of the warm home discount, too. By widening eligibility, the Government have almost doubled the number of households in the scheme to 6 million. That means millions more families receiving £150 off their energy bills this winter.
Too often, those on the lowest incomes have faced what is known as the poverty premium, made famous by Terry Pratchett with his “Captain Vimes’s Boots” theory of economics: the less money you have, the more things cost. We see that in our insurance costs, in the costs of credit and, importantly, in the cost of fuel. That is why ending standing charges will make a difference, as those who use less energy will pay less.
Helping those households is not simply about fairness; it is also good economics as the money from these measures will not sit unused, stored thousands of miles away in the Cayman Islands, but be spent in local communities on local high streets, helping local people. People will use it to pay bills, buy essentials and support local businesses, which will contribute to their high streets.
The same principle applies to our businesses across Calder Valley. Business owners are ambitious to innovate, are determined to succeed and want it to be easier to invest, grow and create jobs. Whether because of energy costs, red tape or being locked out of Government contracts, for many of them the main concern has been staying afloat, not growing or taking on new people. That is why I welcome some of the changes to business rates announced in the Budget. Raising the threshold for small business rate relief for retail, hospitality and leisure from £12,000 to £18,000 means that 70,000 additional businesses will pay no business rates at all. In Calder Valley, that will make a huge difference to our collection of independent shops, cafés and pubs.
Speaking of pubs, I am proud to see support for Britain’s small independent breweries. Calder Valley is home to fantastic independent breweries including Eagles Crag and Vocation. I am proud to have made a significant contribution to them over the years, but finding room to grow has not been easy. The support announced in the Budget will be welcomed across the brewing sector.
While some Budgets look worse as time goes on—the famous omnishambles Budget and the Liz Truss Budget among them—this is one that will look better, with its help for small businesses and support for households. This Budget backs working people. This Budget backs British industry. It backs communities in Calder Valley, and I am proud to back it.
Robbie Moore (Keighley and Ilkley) (Con)
The Chancellor’s big phrase in this Budget has been “breathing space”. It has been said time and again, but it is utterly false, because the Chancellor has not given businesses any breathing space at all. There is no breathing space on employer national insurance. Labour’s job tax stays exactly where it is, punishing employers for yet another year. There is no breathing space on wages. The national living wage has actually gone up by 3.9% from April, on top of the Employment Rights Act 2025, with nothing announced to help employers meet the costs.
Even the Office for Budget Responsibility warns that these policies will seriously damage job creation in this country. There has been no real breathing space on business rates. The Chancellor says that he is freezing business rates for retail, hospitality and leisure in real terms, but the British Retail Consortium has rightly pointed out that this is just “smoke and mirrors”. This is not breathing space at all. This is our businesses being stifled yet again by this Labour Government. I ask the Minister: what are their ambitions for British businesses? It seems evident from this Budget that they do not have any. They are taxing our British businesses again and again.
All this matters because it is impacting my constituency, which is full of hard-working people. I think of the independent shops on Cavendish Street and Low Street fighting to keep Keighley a thriving place, as well as the cafés, boutiques and family businesses on the Grove and Brook Street in Ilkley, and those businesses right across Silsden, Steeton and Riddlesden and our wider area who are working incredibly hard. The pubs, the tradespeople, the hairdressers, the start-ups—they are all hard-working people, yet this Government think that employers in those small independent businesses are not workers. They put out that narrative as if those employers need to be taxed more.
Let me tell the House about one of those businesses, which I visited just yesterday. The Turkey Inn in Goose Eye is a pub that is much loved by locals and visitors alike, and I called in there last night to have a meal. The owners of that pub are grafters. They produce excellent food that is second to none and they support our local community with many local activities. They do everything right, working day in, day out to support the community, but yesterday, on the back of this Budget, they announced that they were cutting their opening hours from seven days a week to just four, and they were clear about why. In their own words, they said:
“With no measures in the budget to help small hospitality businesses and local pubs like ours, we must take this step”.
That is the verdict not of a politician or of a Labour think-tank but of hard-working people in my constituency who have been impacted by this third Labour Budget.
The Turkey Inn is not alone. I speak to pubs and small independent businesses every single week in my constituency and they are telling me the same thing. Labour is not on the side of our hard-working businesses, and that is impacting them. This Labour Budget has not provided any breathing space at all. This Government must wake up and listen to our small and medium-sized businesses, who are the backbone of our communities and our local economies, because they are pushing them to breaking point. If the Government do not wake up and listen, I fear for all of them. A simple policy of tax, tax, tax on our businesses with more regulation is stifling those businesses, not helping them thrive.
Sureena Brackenridge (Wolverhampton North East) (Lab)
For most people in Wolverhampton and Willenhall, the real test of a Budget is simple: does it make life a little easier? I hear about and absolutely understand the pressure of household bills, the cost of raising a family and the challenges facing our local businesses. That is why I will continue to raise their concerns right here in Parliament and make sure that their voices are heard at every level of Government, at every opportunity that I get.
Of course, everyone would like more giveaways in a Budget, but many people also understand that the Government have a responsibility for the state of our public finances. We have seen the consequences of getting the balance wrong. The wider energy and cost of living support package during the 2022 energy crisis cost taxpayers around £51 billion net in one year alone. That required extraordinary borrowing, adding to our national debt and the interest payments that taxpayers, including future generations, will continue to carry.
This Budget takes a very different approach to providing immediate support. Around 44,900 properties in Wolverhampton North East—almost 99%—are in council tax bands A to D, and that means a large number of local households will benefit from the £100 household energy payment from January. Alongside the extension of 0% VAT on electricity, which is expected to take around £50 off the annual Ofgem price cap, that means around £150 in combined support. Martin Lewis, the famous consumer champion, has highlighted that the £100 payment could broadly cover the forecast increase in energy costs for a typical household over the three winter months. I am also pleased to see the end of gas standing charges, especially for low gas usage households. Importantly, the Government are asking banks to contribute more to help to pay for that support, rather than relying on borrowing.
I particularly welcome the help for our high street. Raising the small business rates relief threshold from £12,000 to £18,000 means that many more independent shops, cafés and restaurants will pay no business rates at all. For some owners, that could mean a saving of around £300 a month. Across the west midlands, around 52% of retail, hospitality and leisure properties will pay no business rates. For qualifying businesses that still have a bill, there will be a real-terms freeze in the business rates multiplier. In Wolverhampton North East, around 975 premises will benefit.
I am also pleased that 10 schools in Wolverhampton North East have now secured free breakfast club funding. That means more children starting the school day with a good breakfast, ready to learn, and parents having a little more help with the pressures of family life.
People are still feeling the pressure, and no one pretends otherwise, but we have to be able to afford the support that we offer and pay for it responsibly. There is more to do, and I will keep making that case in Parliament.
Claire Young (Thornbury and Yate) (LD)
The Chancellor called this a “breathing space” Budget, but it seems only to be breathing space for the Government to put off the hard decisions. It is not a breathing space for my constituents, with frozen tax and student loan repayment thresholds. It is not a breathing space for my local businesses: the rise in employer national insurance contributions has not been reversed, there is no emergency VAT cut for hospitality to help our high streets, and on business rates, which I have repeatedly raised in this House, the Budget just tinkers with a system that needs wholesale reform.
The Budget is not a breathing space for farmers. There is no change in the family farm tax. The cut to fertiliser tariffs will make little difference when, as the NFU has pointed out, much already arrives tariff-free. I am disappointed that the Budget does not treat food security as national security.
The Budget is not a breathing space for local transport users. In a Budget that mentions the north repeatedly, the west barely gets a look in. South Gloucestershire is mentioned once—a brief reference to a mass transit system that we have been hearing about for decades and that is unlikely to touch our rural villages. A £1 bus fare cap and discounted rail fares would have helped families in the short term, and investment in rural transport would help them in the longer term. The west of England is a growth engine outside of London. It deserves more ambition than that.
The Budget is not a breathing space for energy bill payers. Suppliers forecast that the price cap will rise by around a quarter in January. Although welcome, the £100 for this winter and the promise of scrapping gas standing charges in the future do not touch the sides. Scrapping the standing charge will save people just £45 on average—and only those who actually use gas. One in five properties in Thornbury and Yate is heated by oil. Those households have no price cap at all, and there is nothing to ensure that the removal of import tariffs on kerosene is passed to consumers. The surest way to bring down bills is to insulate homes and move people off volatile oil and gas, so why is there a £1 billion cut in the warm homes plan?
What of the promised growth? When will we hear about plans for new nuclear at Oldbury? The outcome of Great British Energy Nuclear’s review was promised this autumn. If data centres that meet the new British data centre covenant are to get priority grid connections, then, given the problem with providing nuclear connections, where is the grid capacity for new homes to meet the Government’s own housing targets? Where is the investment in skills in the rural west of England so that our local young people can access the technical jobs available? This Budget is a missed opportunity to provide real breathing space for our constituents, our businesses and our economy.
Amanda Hack (North West Leicestershire) (Lab)
Thank you, Madam Deputy Speaker, for giving us breathing space with a little bit more time. It is a pleasure to respond to this Budget by talking about growth in every postcode.
North West Leicestershire is a former mining area, so I welcome the progress made on the miners’ pension. I welcome the confirmation that surplus sharing and the standstill will be abolished to protect bonus pensions, helping members to benefit from the success of their pensions. No Government have ever done more on pensions for former mineworkers than this one, but as the Chancellor said himself, the job is not finished. It is clear that more work is needed to resolve the substantial undistributed guarantor fund surplus currently held within the mineworkers’ pension scheme. The miners who powered our country and our homes and who supported us deserve our support now, and I want to reassure my constituents that I will do just that.
North West Leicestershire is home to one of the three sites in the only inland freeport in the UK. The site in Leicestershire has created considerable concern, which I share, particularly for Diseworth—an 825-year-old village with heritage status. While the new data centre covenant is helpful, I worry that it will apply only to AI and not to the creation of new mega-sheds more broadly, which impacts communities such as mine. The other two sites in the freeport are covered by the Mayor of the East Midlands, so I welcome the Chancellor’s announcement on devolution and the settlement for Leicester, Leicestershire and Rutland—something I have long called for. I look forward to continuing the discussions on how devolution will deliver greater benefits and strategic powers to ensure that the freeport site for Leicestershire has a mayor fighting its corner.
The powers offered to mayors on transport could be transformational for Leicestershire. Transport connectivity is a significant barrier to growth locally. My constituent Eli spoke to me recently about the impact that poor public transport has on their access to further education. They said:
“I wake up before six in the morning to catch a 7 am bus to college, which is always packed, standing room only due to there being too many students for the capacity of the public bus services. Even if I do everything right, the buses are unreliable—either being late or completely absent—which is treated as my responsibility by my college”.
A lot is said about demand in rural areas. In fact, Arriva increased its patronage by 30% for one of my local routes because it started one bus stop earlier, connecting the route to another village and allowing more kids to get to college. Just think about what we could achieve if we want to grow even more. North West Leicestershire still has no passenger rail service anywhere in the constituency, making it home to the two largest towns in the country without any access to rail, which restricts growth and investment. If we want growth in every postcode, transport has to be a priority.
North West Leicestershire has so much potential, including in our SME sector. I know that this will surprise you, Madam Deputy Speaker, but nearly 30 years ago I wrote my dissertation on small business support, so I know how much we limit our growth if we fail to invest in small businesses. I have always advocated for dedicated business support, just like we saw in the universal offer we had from Business Link. We now have a patchwork that is devolution dependent—another reason why devolution for Leicestershire is so vital.
Samantha Niblett
I thank my hon. Friend for giving way—we are neighbours and friends in our neck of the woods, but I benefit from being part of a mayoralty that can have money devolved to my region, and she does not. Does she agree that, as well as we work together now, it would be even better if we could be part of the same funding pot and overall leadership?
Amanda Hack
I thank my hon. Friend for making that incredibly important point. The Mayor of the East Midlands does not cover the whole of the east midlands, and I think that gives us the opportunity to continue to talk.
Because I now have a bit of time left, I note that the Chancellor confirmed that land sold to social housing providers will now be VAT free. After two decades working in the social housing sector, I cannot express the difference that that will make to social homes and growth in our communities. House building is also a massive builder of growth; it helps brick manufacturers in my constituency, and it helps builders and local tradespeople to grow. We should not underestimate that important step forward.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate; thank you for calling me, Madam Deputy Speaker. I wish to welcome some of the good things in the Budget, because it is not all bad news, by the way—[Interruption.] Members should not put their thumbs up just yet—I am coming to the parts about which I have important Northern Ireland-based concerns.
I am concerned for the squeezed families of Strangford, who look at the Budget and have little cause for celebration. Look at the uncertainty facing the local business community in Northern Ireland. Standard small business rates relief is being permanently expanded in England, yet there is zero certainty that our small and medium-sized enterprises back home will see an equivalent benefit. Our highly capable SMEs, which form the bedrock of the Northern Irish economy, need iron-clad guarantees, not vague hopes.
The working middle class go to work and pay their taxes. They try to build something for their children, yet they are treated like a bottomless well of revenue by the Treasury. Take, for example, a hard-working family in my constituency of Strangford—a schoolteacher and a mid-level nurse. They have managed to put away a modest amount of savings to help fund their children’s university education. They will get no help for their children’s education and future, yet they will be forced to work on past retirement to ensure that their child has a chance at a future.
Nowhere is that clearer than in the cruel and punitive approach to family inheritance tax. Our agricultural sector in Northern Ireland is in a state of absolute panic. I have spoken with the Ulster Farmers’ Union, which tells me that generations of family farms—the very lifeblood of our rural communities—are now halting investment decisions because of inheritance tax fears. Passing a family business or a family farm down to the next generation is not a luxury; it is a way of life, and the Budget threatens to dismantle that.
On the Barnett formula, let us be realistic: the Barnett consequentials are totally inadequate. Why is that the case? Throwing a general lump sum at the Northern Ireland Executive and hoping that it covers police, health and education is a failure of governance. We need an allocation method equivalent to that for Wales, not a funding system that is not fit for purpose. That must be sorted out. Funding must be based on genuine local need, not a rigid, detached mathematical formula. We must protect our middle class, safeguard our family farms, and give Northern Ireland the specific, targeted support that it desperately needs.
Our hard-working middle class see no benefit for themselves, and even less for their children. When a parent works 50 hours a week, pays their taxes—big taxes—plays by the rules and still cannot see a path to a better future or a stable inheritance for the next generation, the social contract is broken. If the Government continue to bleed the middle class dry to paper over the cracks of their own fiscal failures, they will destroy the very aspiration that keeps this nation, this great United Kingdom of Great Britain and Northern Ireland, moving forward. The Budget offers no security on defence, and no reason to build a business and to work hard. It relies on the ethic of some to make up for the lack of ethic in too many. The Government must look closely at the people it punishes, because they need to breathe, and I do not believe the Budget provides that.
David Burton-Sampson (Southend West and Leigh) (Lab)
I start by thanking my right hon. Friend the Chancellor for the measures that he laid out in his Budget last week, and for his focus on giving my constituents breathing space as we navigate through tough global headwinds. Like him, I pay tribute and offer my thanks to the former Chancellor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves). It is clear that through her work and clear focus on fiscal discipline, she helped to stabilise the economy, despite the significant headwinds, and to create the headroom that has enabled us to take the positive actions set out in this Budget.
I am lucky to have my office on Leigh Road in Leigh-on-Sea. Along with Leigh Broadway, it is a thriving high street, full of small independent shops and hospitality businesses, including Tiny, a sandwich shop, Juice Bay, which does fantastic smoothies and juices, and Float On Records. They are all new businesses and it is great to see so many new businesses opening despite the challenges we have faced of late. That shows me that there is confidence in our economy and belief in our country. And it is not just in Leigh: Mez, a delicious Turkish restaurant, recently opened in Westcliff—I can vouch for that as I had my dinner there on Saturday.
However, I have listened to businesses in my constituency that tell me that sometimes things can be challenging. That is why I am delighted by the Government’s announcement that more retail, hospitality and leisure businesses will be completely exempt from business rates, meaning that around 52% of those types of business in the east of England will pay absolutely no business rates whatsoever. That is help for businesses. An additional 484 businesses in my constituency will have their business rates frozen in real terms until 2029, giving business owners time to plan ahead, while many others will see their business rates reduced.
When my constituents get home from their days out shopping, they will know that they have support with paying their bills. In addition to extending the 0% rate of VAT on electricity, an enormous 39,520 households in my constituency will benefit from the £100 payment to combat rising energy costs. I know that will help many people, from young families through to pensioners.
Speaking of pensioners, I welcome the excellent news that pensioners on low incomes will not have to pay income tax on their state pension. I am glad to hear the announcement that pensioners who rely solely on their state pension income will get to keep all of it. The Budget also provides the security that comes with knowing that pensions will continue to rise in line with earnings, while the adjusted triple lock will mean we can focus on providing a high-quality national care service.
Finally, I was really glad to hear that self-employed fathers and partners will now get statutory paternity pay. I have personally championed that, alongside many colleagues, and I pay particular tribute to my hon. Friend the Member for Portsmouth North (Amanda Martin) for her work in this area and in championing this cause.
This Budget shows that the Government are listening to people in my constituency and taking action to fix the issues they have raised. The constituents I spoke to at the weekend know that the times that we are in and that we face are difficult, and they are grateful for everything this Government are doing to support them.
Mr Paul Kohler (Wimbledon) (LD)
I refer the House to my entry in the Register of Members’ Financial Interests.
This country faces fundamental problems: the faces at the top may have changed, but once again Labour has shown itself incapable of making the tough calls. This morning, I hosted a post-Budget roundtable for local employers in my constituency. I regret to report that the business community in Wimbledon shares my concern about this short-term, lacklustre Budget. By kicking the can down the road, this mañana Budget has failed the businesses that are critical to growing the economy. Rather than providing businesses with breathing space, the Chancellor has many of them drowning in crippling taxes and excessive regulation.
Raising the business rates relief threshold to £18,000 is, of course, welcome, but high streets across my constituency, in Wimbledon, Raynes Park, New Malden and Morden, will see little benefit. Craig Hurring, the chief executive officer of Love Wimbledon, informed me today that the change will benefit an estimated 1% of the businesses in his business improvement district. Other changes that are in the pipeline are making matters worse. A company that manages fantastic serviced office space for new businesses in Wimbledon tells me that new restrictions on business rates relief mean that it will have to increase rents by up to 25%—a huge cost to start-ups.
Business rates are crippling my local businesses. Gina Conway runs an award-winning hair and beauty salon in Wimbledon. She employs 38 people and trains up to 20 apprentices every year, but she tells me that
“the pressure for most salon owners is too much to bear”.
The long shadow of covid, soaring energy bills, VAT and crippling business rates are killing high street businesses.
I was honoured to be present for the excellent maiden speech by the hon. Member for Holborn and St Pancras (Sagal Abdi-Wali). I own a bar in Covent Garden in her constituency, so it feels a bit like she is my MP—I will invite her to it one day. That means that I know at first hand how the night-time economy is suffering. Since 2020, the UK has lost almost three in 10 late-night venues, and across the sector we continue to lose the equivalent of 13 businesses every week.
The changes for self-assessment taxpayers are just as worrying. The Chancellor said that he would champion
“the small British firms that give character to our communities”.—[Official Report, 28 October 2026; Vol. 792, c. 305.]
Instead, 2029 risks becoming a brutal cash crunch, with 18 months of tax squeezed into 12 months. Increasing the tax on rental income is misguided. As the OBR has outlined, it will inevitably result in fewer homes to rent and higher rents.
I fear that the new Prime Minister is repeating his predecessor’s mistakes. His only plan is to have a plan. The Budget makes no substantive progress on addressing welfare spending, social care or defence readiness. The only glimmer of hope is the Prime Minister’s recent comments on Europe, but even here my constituents still do not know what he really intends. According to Goldman Sachs, a close relationship with the EU could boost our economy by at least £60 billion per year.
The Prime Minister must be bold. He must tear up his predecessor’s red lines, seek unfettered access to the world’s largest market and let British business realise its full potential.
Josh Newbury (Cannock Chase) (Lab)
In this third day of the Budget debate, I worry about repeating what has already been said, so I will focus on two issues of particular importance to my communities in Cannock Chase. Before I do so, briefly, I welcome the cost of living support in this Budget—£100 back on council tax, VAT kept off electricity bills for longer, standing charges taken off gas and the continuation of the fuel duty freeze. Those measures will not solve every financial pressure, but they will provide welcome relief at a time when it is needed most.
Let me turn to my beautiful home county of Staffordshire, which, thanks to this Government, will soon be able to catch up with the likes of Derbyshire and Nottinghamshire with the announcement of a mayoral strategic authority. That is a massive opportunity, particularly for our towns, which, as my hon. Friend the Member for Stafford (Leigh Ingham) always says, must be at the heart of the national growth and renewal that this Government stand for. Our big cities have done well, but it is the turn of the towns, and having those powers and the funding that comes with devolution gives us the tools we need to turn our potential into reality.
Perhaps surprisingly to many, our towns have, on average, more than twice the proportion of their workforce employed in manufacturing as our cities, at around 9% compared with 4%, yet employment growth over the past decade has been almost twice as high in cities, at 10.7%, compared with just 5.4% in our towns. We cannot seriously talk about rebalancing our economy while allowing that gap to persist, but that requires investment and, crucially, proper transport connections.
For too many people, particularly young people and those without access to a car, getting to work, college or an apprenticeship remains unnecessarily difficult. That is where devolution matters, because a mayoral authority with meaningful powers over transport, skills and economic development gives Staffordshire the opportunity to join those things up and be the masters of our own destiny. I hope that it will also bring some much-needed stability to our county’s leadership. Since last May, Staffordshire county council has had not one, not two, not three, but four leaders, courtesy of the chaos of Reform UK. Staffordshire needs a little less political musical chairs and a lot more long-term focus on the priorities of our communities.
Let me turn to the second issue: the mineworkers’ pension scheme. As the proud representative of nearly 1,000 MPS members, I will always raise my voice in support of those who risked their lives to power our nation. Alongside them and my fellow coalfield Labour MPs, we pressed the Government to release the £1.2 billion guarantor’s fund, end the standstill mechanism and ensure that all future surpluses go to those who earned that money in the first place.
The MPS investment reserve was returned to members by this Labour Government two years ago, and the Chancellor’s decision in this Budget to end surplus sharing and the standstill are major steps forward. However, we are deeply disappointed that the Budget did not include the transfer of the guarantor’s fund—a measure that would have put money back into the pockets of our retired miners. There was a clear expectation that this would be done, finally righting the wrongs of the past 32 years. I welcome the Chancellor saying from the Dispatch Box that it will be done, but we must never forget that this money came from the graft of our miners —it is their deferred wages, and it belongs in their bank accounts. With 100 MPS members passing away every week, we must move as quickly as possible, and we certainly cannot wait for next year’s Budget.
This Budget brought forward support with the cost of living, and it is allowing Staffordshire to take control of its own destiny. I wish it had sealed full justice for our MPS members, but we are now so close to ending their fight, and they can count me as an ally right until the very end.
Johanna Baxter (Paisley and Renfrewshire South) (Lab)
The cost of living is the No. 1 issue that is raised with me on the doorstep by constituents across Paisley and Renfrewshire South, so there is much to welcome in this Budget, which gives much-needed breathing space for many working households. We Labour Members do not think that the increase in the national minimum wage is a bad thing—it is a good thing. The increase in the mileage rate will help working people, and I am glad that the Chancellor has extended the VAT cut for energy bills and will look to abolish gas standing charges. I also welcome the £100 household energy payment for households in council tax bands A to D, and I am hopeful that the SNP will pass this on to people across my constituency.
Euan Stainbank
Does my hon. Friend also call on the SNP to extend the business rates relief that our Labour Government have provided, especially considering that they have historically maintained a stricter system for high streets such as those in Paisley and Falkirk?
Johanna Baxter
I absolutely agree with my hon. Friend that the SNP should pass on that much-needed change. I also note that the Budget provides an additional £600 million for the Scottish Government, and I hope that they will actually spend it on improving our public services.
Today’s debate focuses on achieving good growth in every postcode, an ambition I wholeheartedly support. One route to growth in postcodes PA1, PA2, PA3 and PA4—I could go on, but Members get my drift—is revitalising our high street in Paisley. Paisley is Scotland’s largest town, and we have a shovel-ready project in the middle of our high street that received planning permission four years ago, which is regenerating the Paisley Centre. Realising that ambition needs Governments to come together, but it could bring 330 jobs to our area and breathe life into our high street. If Treasury colleagues would like to see that potential for themselves, I would be very happy to show them around the area.
Our Government were elected on a clear manifesto commitment to end the need for emergency food parcels. As chair of the all-party parliamentary group on ending the need for food banks, I know that food banks provide a lifeline when people have nowhere else to turn, but emergency food provision should never become a normal part of life in Britain. A report published last week by the Trussell Trust laid out the scale of the challenge. Some 9 million people across the UK—more than the entire populations of Wales and Scotland combined—are at severe risk of hardship and needing to turn to a food bank. Hardship does not happen in isolation; it is driven by inadequate incomes, the high cost of essentials, and a lack of the support that people need in their communities. We also know that some groups of people are at higher risk of hunger and hardship than others. People who have disabilities, those who are in low-paid or insecure work, and children remain disproportionately affected by severe hardship. As such, I hope that my right hon. Friend the Chancellor will reaffirm this Government’s commitment to end the need for emergency food parcels, and ensure that the upcoming 10-year plan sets out a clear path towards tackling the severe hardship that blights our communities.
The Government are rightly steadfast in our support for Ukraine. This House will be aware that I have campaigned extensively on the forcible deportation of Ukrainian children by Russia, and it was a pleasure to work with my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) when he was the Minister responsible for that issue. We worked on establishing a tracing pilot that provided vital intelligence on the whereabouts of thousands of Ukrainian children who had been taken by Russia. Save Ukraine is the leading non-governmental organisation working on the return and rehabilitation of Ukrainian children. When I met Save Ukraine representatives in September, they told me that the UK has been a leading partner. As of this morning, that practical support has helped them return 1,887 children. I therefore warmly welcome the announcement in the Budget that the Government have committed an additional £3 million to support the tracing programme until at least 2028, because the defence of Ukraine must also ensure the defence of its future. By committing to this vital work, we are doing just that. I thank the Chancellor for those measures.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
This Labour Government are helping families in Cornwall with their energy and fuel bills. Nearly 37,500 households in Truro and Falmouth will get £100 directly into their bank accounts. The drop in VAT and standing charges going will also help. In a rural and coastal constituency, where a car is not a luxury, the extension of the 5p fuel duty cut will help, as will the rise in travel rates, and the extension of the red diesel cut will help our farmers.
We are also tackling the specific challenges facing rural, off-grid communities. Some 14% of Cornish households rely on heating oil, including 5,000 families in Truro and Falmouth, which is well above the national average. Suspending those tariffs alongside more than £50 million of support for low-income households that use heating oil will make a real difference to those homes, as will regulating the market. By pairing that short-term relief with the warm homes plan, this Government are helping rural families to move towards cleaner, cheaper heating on their own terms. I have been working with the Department for Energy Security and Net Zero on a medium-term solution to license hydrotreated vegetable oil for use in heating. It has been trialled in Kehelland village in Cornwall with great success, and I hope to engage with DESNZ to get that rolled out further.
On devolution, Cornwall will be designated a single strategic authority. That will hopefully bring growth, funding and further devolution on top of the £30 million Kernow industrial growth fund announced last year. A delivery plan will now be worked up, and I look forward to seeing the further devolution of powers to unlock housing, skills and economic growth.
Truro and Falmouth enjoys a vibrant local tourist economy, with independent shops, bakeries, cafés and pubs. Raising small business rate relief to £18,000 means that 56% of retail, hospitality and leisure properties in the south-west will pay no business rates at all. Together with that real-terms business rates freeze, 6,500 hospitality, retail and leisure properties in Cornwall will benefit.
Crucially for Truro and Falmouth, the right to buy community assets scheme, support for co-ops and high street rental auctions will give local people the tools to take back vacant units and bring empty shops back into use. I would like to see those powers rolled out to our town and city councils. The unitary authority has limited resources and our town councils have grown to fill that gap. They are very capable and they could run those schemes in the absence of appetite from the unitary, and they know their high streets far better. We have many towns of approximately 20,000 people, each with an expanded town council.
In Cornwall, only 11% of our housing is social housing, against a national average of 18%. We have 26,000 households on the social housing waiting list. I therefore welcome extending preferential borrowing rates for councils. But Cornwall’s housing revenue account is struggling to put more investment into repairs, and rents are low in Cornwall, so rent convergence will take time. It means that the HRA has had to reduce the annual funds available for new homes. One of the barriers is the £90 million debt from the self-financing arrangements dating back to 2012. If that debt was reduced, Cornwall could do more. HRA and debt reform would allow council houses to be built once again in Cornwall.
There are root causes of our housing crisis in Truro and Falmouth. We have many holiday lets, which are a good thing for Cornwall, but I welcome the Government’s plans for a registration system. We need to go further to look at licensing, too, to check that insurance and fire safety documents are seen and that local authorities can inspect properties.
Tom Collins (Worcester) (Lab)
I know that people in Worcester will be looking for two things: some let-up in the endless pressure on bills and the public services that keep letting us down, and a genuine sense that there is a plan for things to improve— that there is hope. Let me start by recognising that those two aims have been front and centre as the Chancellor and the Prime Minister have developed this Budget. I believe in politics that is focused on people, and I believe that the Budget aims to focus on people. However, the challenges that we face require a deeper shift—not just adjustments to budgets, but something far more fundamental: an approach that recognises people’s real lived experiences, and puts them at the heart of our decisions and systems.
Digital technology is reshaping our world, and we need a fresh approach to digital safety. The Chancellor is right to say that we should build the data centres and artificial intelligence models that keep us secure, but we should also be insisting on safety by design for AI and online social platforms, and should be holding providers responsible.
We need an answer that matches the desperate urgency of the climate crisis. The Budget starts to recognise gaps in our energy policy, but it also risks creating new ones. It is right to recognise the importance of gas, but by casting hydrogen projects into further delay and insecurity, we risk our energy future altogether. The Government have accepted new gas extraction in the North sea at Jackdaw, but it is concerning to see that they are hesitating on providing support for the most powerful technology in decarbonising gas at the same time. I was watching David Attenborough before it was cool—
Tom Collins
Thank you!
My career has been spent developing green technology systems. I urge the Secretary of State to work rapidly to resource, accelerate and provide certainty for the core hydrogen projects that the UK needs for reindustrialisation and for a viable energy future. We are competing with other countries for investment, and we are at risk of losing. If we get it right, though, the UK can not only be more energy-resilient; we can even become energy-rich, and bring about a true renewal that would see the UK selling to Europe and the world.
There are other challenges across our system, and the crisis in Worcester’s A&E is stark evidence of that. I recently hosted a rough sleeping summit, bringing 30 organisations together to end rough sleeping in Worcester, and that will create new forms of joint working. However, we need this approach across the board, in health, social care, education, skills and justice, alongside the ambitious funding and goal-setting announced by the Chancellor. I welcome the Government’s provision of £163 million in the Budget to write off 90% of the debt that Worcestershire county council accumulated in making provision for children with special educational needs and disabilities—it creates the breathing room that we need to recover delivery in Worcester—but I am determined to work for deep reform of the system in our county, reform that puts families at the centre.
I urge the Chancellor to work with the Secretary of State for Energy Security and Net Zero, and members of industry, to address the shortfall in funding for hydrogen projects as a matter of urgency. However, with those corrections secured, and with ambitious action taken, I believe that we will have the opportunity to not only create room to breathe, but begin a journey that will give every single person real cause to hope again.
Dr Simon Opher (Stroud) (Lab)
At the close of the third day of debate on the Budget, I will not go into all the detail that I might have gone into. I will concentrate on support for our high streets, and the transfer of power from Westminster and Whitehall.
Over the weekend, I had the opportunity to go to our high street and talk to business owners. I talked, for instance, to Tom Berry, who owns probably the coolest record shop in Stroud, Sound Records. His business rates have been reduced from £400 a month to nothing. A great many businesses have had all their business rates removed because of the change to the small business rate relief threshold. A number of pubs now pay no business rates. For properties worth over £18,000, there will be a two-year real-terms rates freeze, providing much-needed stability at a time of great global economic uncertainty. I was delighted that the small producer relief on alcohol duty became more generous. Stroud Brewery and, in particular, my village brewery, Uley Brewery, have benefited. Uley Brewery’s famous pint of Old Spot ale will soon be available in the Strangers’ Bar, so I hope that Members will sample it. I would also like to say a little about pubs and VAT. This was not in the Budget, but we are looking at trying to reduce VAT on hospitality. A blanket cut to 10% would cost £12 billion and benefit organisations such as McDonald’s, but having a targeted approach would really help pubs.
On devolution, I strongly welcome this Government’s intention to shift power out of Westminster and Whitehall. We have one of the most centralised countries in the world, with over 95% of tax revenues going to central Government. We in Gloucestershire do not have a devolution deal at the moment, and I ask all parties involved to form a consensus, so that we can benefit from devolution. That is one of the best things that this Budget delivers.
The Budget has 98 measures to help with the cost of living. There is also £65 million for a community asset programme, which will help with community buy-outs. A little hidden thing is probably the most important thing in this Budget: prevention is ringfenced. That will be transformative for preventive therapies, particularly in health and elsewhere.
I really welcome this Budget. Thank you, Madam Deputy Speaker, for including me.
Madam Deputy Speaker (Caroline Nokes)
That brings us to the Front-Bench contributions. I call the shadow Minister.
Gareth Davies (Grantham and Bourne) (Con)
It is a great pleasure to speak in this debate. I thank all Members from across the House for their contributions tonight, particularly my hon. Friends the Members for Bromsgrove (Bradley Thomas), for Bridgwater (Sir Ashley Fox), for Keighley and Ilkley (Robbie Moore), for Mid Bedfordshire (Blake Stephenson) and for South West Hertfordshire (Mr Mohindra). I am also grateful for the very thoughtful contributions, particularly on welfare spending, from my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), and from my constituency neighbour and the Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh). I particularly enjoyed his contribution.
Most of all, let me congratulate the hon. Member for Holborn and St Pancras (Sagal Abdi-Wali) on delivering her maiden speech. I gave my maiden speech in a Budget debate, and it is a hard thing to do. I still remember how nervous I was, and I can tell her that it does not quite go away, I am afraid. I enjoyed her speech, which was excellent, and I know that her constituents and her family will be very proud to see her sat where she is. I wish her the very best for the future.
It is a genuine pleasure to close this day of the Budget debate on behalf of the official Opposition. Ironically, this has been billed as a “breathing space” Budget by the same people who have taken all the air out of the economy. The British people do not just want a breather. They want to get on, and there is little in this Budget for them.
The subject of today’s debate is growth—a subject that was apparently chosen voluntarily by the Government. That is interesting, because paragraph 2.48 of the OBR’s assessment of this Budget clearly says that next year’s growth has been downgraded to 1%—cut by a third. The Chancellor said that this Budget would deliver “growth in every postcode”, but the OBR has read it and found that there will be lower growth across the country. [Interruption.] I have got to know the hon. Member for Chipping Barnet (Dan Tomlinson), who is chuntering away, and I know that he is about to stand up and say that the OBR has upgraded growth for this year by 0.1%. That is great, and I am delighted for him, but in March 2024, the OBR did not expect growth under a Conservative Government to be 1.2% this year. It expected the Conservatives to deliver 2% in 2026, so I am afraid to say that the OBR has downgraded its growth expectations and projections for this year, too.
The Secretary of State, who was very energised, said that the Government have cut business rates, but these are the guys who inherited high-street relief at 75%, cut it to 40% and then abolished it altogether. Under pressure from high-street businesses across the country, they are handing a little bit back and think it is all fine. It is like a burglar returning your TV and asking for a thank you. My hon. Friend the Member for Keighley and Ilkley was absolutely right to highlight that point.
Then there is the high-street bank tax. This is a tax on lending, mortgages and the high-street branches that people rely on in constituencies across the country. I thought this Government wanted to see more bank branches, not fewer, but fewer branches is exactly what will happen. The Minister is probably going to stand up and claim that this Budget is delivering for working families on the cost of living, but that is not the whole picture, is it? Living standards this year, across every postcode, are set to fall under a Labour Government, but it is okay because they can all live off cheaper gherkins.
The Government do not like to hear this, and no doubt I will be accused of talking down the economy, so let me be very clear: I talk up my country, but I talk down this Labour Government. I am not the only one; there are plenty of us. The Institute for Fiscal Studies said that the Budget has
“very little that will move the dial on growth”.
The CBI said that the Budget
“lacks the bold moves that would have made it easier for firms to invest, hire and grow.”
The British Retail Consortium said costs will
“keep climbing as the Chancellor failed to provide the breathing space he promised.”
Even the Government’s friends in the Resolution Foundation said the Budget
“did not rise to the scale of the challenges”.
Do not get me wrong: I do not believe that the Government are bad people. I just do not think they have any grasp of basic economics and reality. Just this weekend, as my hon. Friend the Member for Bromsgrove said, we heard that they do not even think that employers are working people.
In all of this, let us spare a thought for poor old Keir Starmer, who must have been sat watching the TV on Lord Alli’s sofa and wondering, “What was it all for?” The new Prime Minister booted him out with a story of transformation, almost revolution. After years and years of trying, the right hon. Member for Makerfield (Andy Burnham) finally becomes First Lord of the Treasury, and we all eagerly awaited his first Budget—his first chance to mould the country to his Mancunian grand vision—but what we got was the same old Labour: higher taxes, no action on welfare, and no real answers to the challenges facing our country today. This is continuity Keir without the mandate. Tinkering with little policies like the £2 bus cap is not going to keep us safe from Putin. It is not going to take a family out of poverty; it will just get them to the bank branch, which is closing, near the house that they cannot afford, with a mortgage that they will not be lent. When will Labour learn?
It does not have to be this way. Instead of fuelling a rise in unemployment and overseeing a spiralling benefits bill, the Government could reduce costs to businesses and cut the regulatory burden. We could get people off welfare and into work. We will happily work with the Chancellor in the national interest, if only he is brave enough to stand up to the Members chuntering behind him. Nothing has changed—not the tax hikes, not the welfare bill, not the excuses. All that has changed is the person holding the microphone.
I accept that the Prime Minister has been busy. We have watched him bounce from the Downing Street desk to the “Gogglebox” sofa and back home to Manchester. We know his favourite crisps, but we do not know his plan for the economy. He is a TikTok Prime Minister who chose a Chancellor on a tuk tuk. He has had a ride, and now he has taken the British people for one, too. A Chancellor who, for some reason, carried a miner’s lantern to the Labour party conference is now leading the economy down a dark tunnel, with no plan to get out. Back during the days of the coup, the Prime Minister told us, with a nauseating dose of cheddar cheese, that he wanted “hope in every heart”, but we got a hand in every pocket, with tax at record levels, debt higher, debt interest higher and youth unemployment spiralling. This is not just a missed opportunity; it is a dereliction of duty.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
It is a pleasure to close this Budget debate on good growth in every postcode. I thank Members from across the House for their contributions in today’s debate. In particular, I want to thank my hon. Friend the Member for Holborn and St Pancras (Sagal Abdi-Wali) for her fantastic maiden speech. She spoke powerfully of the “everyday way”, in her words, that people in her part of London look out for each other. I know that she will look out for her constituents every single day. I, along with Members from across the House, I am sure, warmly welcome her to the Labour Benches.
The Budget last week was a Budget to provide breathing space now and fresh hope for the future. It backed British business to unleash growth in every postcode and it kick-started the changes needed to put our country on a better course. It was also a Budget set against the backdrop of global economic storms, with trade tensions acting as a drag on global growth and Putin’s illegal invasion of Ukraine approaching the end of its fifth year. These shocks may be global, but the effects are being felt here at home.
According to the Office for Budget Responsibility, we will spend £14 billion more each year on debt interest compared with the previous forecast. The Government’s responsibility is, of course, to determine how to respond to that. We have chosen to respond by using some of the headroom, which was built up last year, to absorb the impacts of the war and to protect the economy and family budgets as much as possible. We have also chosen, crucially, to meet the fiscal rules in full, with borrowing falling in every year of the forecast.
Britain’s economic reputation was badly damaged under the Conservatives—so badly damaged, in fact, that the IMF publicly warned them to change course. The contrast now could not be clearer. The IMF said recently that the UK “stands out” as a country where we are taking
“action to reduce the debt and deficit”
and that action “has been taken decisively”. Despite the warnings from forecasters and the gloomsters on the Opposition Benches that our economy would slow down, Britain has defied expectations this year. The OBR has upgraded the UK’s growth forecast and in the first half of this year we had the joint-fastest growth in the G7. Productivity growth is up at 2.2% a year, compared with an average growth rate of 0.5% a year between 2015 and 2024.
Sir Ashley Fox
If everything is going so well, why is Britain paying more to borrow money than any other country in Europe?
Dan Tomlinson
The hon. Member is right to raise the fact that we are spending a large share of our budget on debt interest costs; £1 in every £10 is spent paying the interest on our debt. That was an increase that took place under the Conservatives after the spike in interest rates in 2022 under Liz Truss’s mini-budget, and the apprentice to Liz Truss is now the shadow Chancellor.
Real wages have risen more since the election than in the first 10 years of the Conservative Government. Opposition Members talked about the private sector in the economy. I would point out to them that whole-economy investment and business investment have grown by more in this Parliament so far than they did in the entirety of the last Parliament. We are turning the economy around from the hellscape it was under the previous Government.
We are building on our recent economic resilience through this Budget. We are delivering immediate measures to help with rising energy bills: a £100 household energy payment directly to those living in property bands A to D in England, alongside a reduction to 0% VAT on electricity until July. We are also abolishing gas standing charges on household energy bills, while extending the 5p fuel duty cut and the cut to red diesel. We are reducing bills by up to 25% for more than 10,000 eligible businesses from next April through the British industrial competitiveness scheme.
Bradley Thomas
If the picture is so rosy, can the Minister explain to me why, a couple of weeks ago, when I visited six businesses in my constituency, all in the hospitality sector, every single one of them said that they are not recruiting and nor have they recruited since the Government increased national insurance contributions? Why is he painting a picture that is different to reality? Why does he think they are not recruiting?
Dan Tomlinson
I cannot speak to the individual businesses in the hon. Member’s constituency, but I can point him to the forecast from the Office for Budget Responsibility that revises up employment by 200,000—employment increases every year of that forecast.
We are also making changes to support workers by increasing the national minimum wage and national living wage. We are increasing the higher mileage rate and making permanent the increase to the standard mileage rate announced earlier in the year, and we are backing our high street businesses, with retail, hospitality and leisure properties seeing their business rates either frozen in real terms, reduced or cut to zero next year.
The Secretary of State spoke powerfully and convincingly of the changes that this Government are making on devolution to drive good growth in every postcode, so I will not run through the points that she opened with. I was glad to hear that hon. Friends in constituencies where we will be extending devolution in England, particularly those towns and communities that missed out on the first wave of devolution under the previous Government, welcome that continued roll-out. It will mean that over 90% of England’s population is now on track to be covered by a strategic authority in the next couple of years.
The Opposition spokesperson, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), raised the issue of energy when opening the debate for the Opposition, and it is worth covering before we wrap up. At the Budget, the Chancellor set out a new pathway for energy that the 10-year plan will build on. Our priority is to bring energy costs down, to help business compete and to help families cope. Cheaper electricity will also boost electrification, increase our energy security and help decarbonise the whole economy.
First, we are addressing levies and policy costs on bills. The Opposition loaded £100 on to bills via levies; this Labour Government have already taken £150 off energy bills at the last Budget. The Chancellor when further last week, by drawing a line in the sand on levies. He has confirmed that there will be no new costs added to energy bills, with a comprehensive cost-control framework to follow at the spending review. He is also abolishing plans, first set out by the Opposition when in government, to add a further £10 a year to bills for hydrogen projects.
Secondly, we are backing network investment, adding new generation only if it is affordable and the grid can keep up. Between 2016 and 2020, network investment declined in real terms under the previous Government, just when it was clear that more intermittent power would mean that we need more capacity. Now that they are in opposition, the Conservatives have no serious energy policy left. Their only real answer is to retreat in full from net zero, banning people from being parliamentary candidates for the Conservative party if they support net zero by 2050. That is a big mistake, and one that I am confident the British people will reject at the next election.
In the Budget, we also committed to procuring clean power through the next auction round only if we are confident that it will lower bills. We will reform contracts for difference by allocation round 9 to support the lowest-cost system, fixing market distortions and siting assets in the right place. To Members who are committed to net zero on both the Government and Liberal Democrat Benches, let me be clear that it is only by getting electricity prices down, and ensuring that new clean power does not run ahead of the grid, that we can credibly achieve our net zero goals.
I will turn to a couple of points made by Members before I conclude. My hon. Friend the Member for Falkirk (Euan Stainbank) asked a number of questions about the Acorn project; I reassure him and Members on both sides of the House that the Government remain committed to Acorn and want to see it succeed. The change announced last week switches funding from grants to loans or equity stakes, which we hope will provide better value for money for the taxpayer. The existing partners confirmed that approach last week, setting out that the Budget announcement does not change Acorn’s current development programme. The relevant Minister in the Department for Energy Security and Net Zero will be meeting the developers later this week. Acorn is not the only scheme to be affected by recent prioritisation decisions. In fact, some schemes in England have been stopped entirely.
A number of Members on the Government Benches also raised the mineworkers’ pension scheme; they and others on these Benches have been relentless in their advocacy for mining communities. I particularly note the speech from my hon. Friend the Member for Amber Valley (Linsey Farnsworth). It was a powerful contribution, and it was heard loud and clear by those on the Treasury Bench. As my right hon. Friend the Chancellor said last week, he knows that the job is not done, and he will go on to ensure the full transfer of the guarantor’s fund. I know that he is working at pace to agree a way forward.
This is a Budget to deliver good growth in every postcode. It is underpinned by fiscal discipline, with borrowing falling in every year. It is the most decentralising Budget in modern British history, pushing power and resources out across the country. It marks an important moment in the history of UK energy policy, with a firm commitment to putting cheap electricity first. The Opposition added £100 to bills; we have taken £150 off. We are also drawing a line in the sand when it comes to new build costs.
This Budget supports businesses on the high street, taking 70,000 smaller high street properties out of business rates altogether; and in industry, by implementing a 25% discount to electricity bills for heavy users. Of course, we have also prioritised helping families now, with £100 off energy bills this winter for 20 million homes, funded through higher bank taxes, which the Opposition oppose. This is a big Labour Budget built on strong Labour choices—breathing space for today and fresh hope for the future.
Ordered, That the debate be now adjourned.—(Rachel Hopkins.)
Debate to be resumed tomorrow.