Conduct of the Chancellor of the Exchequer

Daisy Cooper Excerpts

Wednesday 10th December 2025 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

It is a real delight to speak in this debate, because I honestly thought that I would not get the chance. There was a risk, I thought, that the shadow Chancellor might even filibuster in his own Opposition day debate, much as I enjoy his poetry readings and so forth.

We all know that the Budget process was a bit of a mess. It had more leaks than a sieve, lots of flip-flopping, and all the rest. By the time we got to Budget day, many of us were relieved that the process was over. But let us not pretend that this was all new. Previous Budgets had involved a number of leaks, and we all know that the Liz Truss mini-Budget must surely be the gold standard for sidelining the OBR.

[Clive Jones (Wokingham) (LD)]

What with the Chancellor’s flip-flopping on the Budget, the various leaks and the misleading comments about the state of the public finances, Labour is beginning to look as incompetent as the Conservatives in its running of the economy and the Government. Does my hon. Friend agree that Labour has let the public down, and must start being transparent with us all?

[Daisy Cooper]

I am grateful to my hon. Friend for making that point. I agree with him: transparency is critical. On transparency, we Liberal Democrats think that it is time to overhaul this entire process. Colleagues will know that when Sweden faced a similar crisis in its Budget process in the 1990s, it overhauled the process, and it now has a system in which a draft Budget is published. There is a lot of time for it to be debated, and amendments can be tabled by Opposition parties before the process is concluded. The public would welcome such transparency; it would then be incumbent on the Government and all Opposition parties to set out how they would fund their pledges, raise revenue and manage Government spending.

These debates over the last few weeks have raised questions about the role of the OBR, and I want to put it on the record that we Liberal Democrats think that we should keep the OBR. It plays an important role as an independent organisation that can scrutinise the Treasury, but there is scope for more democratic accountability, and to tease out the divergence between forecasts by the OBR and the Treasury.

I am slightly perplexed to see that the Opposition day motion focuses on process, not policy, and that it promotes spin over substance. This Budget has levied stealth taxes on households and on our high streets, and has fundamentally failed to galvanise growth. Maybe it is obvious to people at home why the Conservatives have not tried to focus on the substance: because those stealth taxes were started by the Conservatives and have been carried on by Labour. The Conservatives failed to fix the business rates system, and Labour has not taken forward fundamental change. It is clear that both parties continue to refuse to go for growth with Europe.

My hon. Friend the Member for North Norfolk (Steff Aquarone) asked a very reasonable and legitimate question about why the Treasury has not said whether it will provide funding for dental training places in his county and for his constituents. That was a legitimate question to ask, so I was disappointed that the Minister tried to say, in response, that we have not supported his tax rises, when we Liberal Democrats have repeatedly, over the last year and more, set out the different ways in which we would raise taxes, including by reforming capital gains tax, looking at other taxes and a windfall tax on the big banks, as recommended by the Institute for Public Policy Research and endorsed by independent economists. We have also set out how getting a customs union with the European Union would boost public finances by £25 billion a year. [Interruption.] I understand that the Minister and those on the Treasury Bench who are chuntering right now may wish to level their accusation at the Conservative party, but that does not stack up when talking to the Liberal Democrats.

[Dave Doogan]

Is the hon. Lady as frustrated as I am to hear the normally temperate Chief Secretary to the Treasury chuntering, “Do you agree with our taxes?”, as though there is only one way to raise fiscal revenues, and as though if we do not agree with Labour, we have got it wrong? That would be ironic, because there are many ways to raise taxes. Is she, like businesses across Scotland, concerned that this Government have taken £66 billion out of the real economy, with no care for what that will do to growth?

[Daisy Cooper]

I am concerned about the impact of this Budget on businesses, and particularly about business rates.

We have been very clear that we are trying to be a party of constructive opposition. In last year’s Budget, it was clear that the jobs tax would raise £10 billion, once we had adjusted for spending, for rebates for the NHS and education, and for changes to behaviour—not the £25 billion that the Government claimed. We set out a number of proposals that could have raised that £10 billion. We Liberal Democrats welcomed the Government raising remote gaming duty in this Budget, because that was in our manifesto at the last general election. I absolutely agree with the hon. Member for Angus and Perthshire Glens (Dave Doogan) that there are other ways of raising taxes, and we hope that the Government look at some of our proposals, including our ideas for reforming capital gains tax, which would be a fairer way of raising revenue. It would raise more money from the 0.1% of the population who are super-wealthy.

[Graham Stuart]

Let me make a point before the hon. Lady makes it herself: the jobs tax is a peculiarly misconceived tax. It is a £25 billion or £26 billion hit on the real economy, with all the lost jobs that we have seen as a result, and it does not even raise much money. Looking at all the negative impacts in the round, it may actually raise even less than £10 billion. There is a £25 billion or £26 billion hit, and the measure potentially raises less than £10 billion. It is economic madness, and it shows why the Government need to think more deeply.

[Daisy Cooper]

I agree with the right hon. Gentleman that the jobs tax has been damaging. I say to Treasury Ministers that the combination of the jobs tax and higher business rates bills will have a profound impact on the very small businesses on our high streets, and our high streets are critical to our communities. Most ordinary folk do not follow the statistics on growth, unemployment, GDP and everything else; when they walk out their front door and look at their high street, they decide how they would answer the question, “Is the economy working in our area?”. It is so vital that we support our high streets.

On that point, I genuinely urge Ministers to look again at the multiplier for retail, hospitality and leisure businesses. They talk in a very technical way about one element of the bills and continue to say that the rates are coming down. They have come down by 5p for retail, hospitality and leisure businesses, but Ministers gave themselves the power to reduce them by 20p. However, businesses heard “lower business rates”. They did not think about the technicality of how the rates are calculated; they just heard the word “lower”, and made decisions on that basis—but bills are now higher, and they are really struggling.

I have said it before, and I will say it again: we cannot tax our way to prosperity; we have to grow our way to prosperity. We hope very much that, as Ministers move ahead on this debate, they not only reform the OBR and Budget process, so we have more transparency in this House, but think again about going for growth with Europe.