Spending Review 2025
Debate between Daisy Cooper and Rachel Reeves(4 days, 18 hours ago)
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Daisy Cooper (St Albans) (LD)
It has been almost a year since Labour swept to power with the promise of change, but we are still not seeing the scale of ambition needed to turn the country around. We welcome the announcement of investment in the NHS, but it will not work unless the Government invest in social care too. We welcome the investment in infrastructure, but it will not work unless the Government invest in skilling up the workforce that we need to build it. Cutting billions in real terms from departmental budgets seems unnecessary when the Government could instead go for growth and get a much deeper trading relationship with Europe—a move that could raise an extra £25 billion a year for the public purse. As long as the Government fail to truly tackle the red tape and trading barriers blocking British businesses, the Government’s grip on economic growth is more akin to a handbrake than an accelerator.
The last Conservative Government left our NHS on its knees. On their watch, waiting lists were soaring, hospitals were crumbling and our high street healthcare was hollowed out. Can the Chancellor confirm that this funding will deliver the extra 8,000 GPs needed to guarantee everyone an appointment within seven days, or within 24 hours if the matter is urgent? Can she confirm that this funding will bring dentists back into the NHS and put an end to dental deserts? Will she promise that this funding will mean that every cancer patient starts treatment within 62 days? Will she promise that the Government will meet the Prime Minister’s own pledge for 92% of routine operations to take place within 18 weeks? Will she and the Health Secretary—they are sitting side by side—set up a crumbling hospitals taskforce to look at creative funding ideas, bring construction dates forward and put an end to the vicious cycle and false economies of delayed rebuilds leading to rising repair costs, as we saw under the previous Government?
Then, of course, there is the elephant in the NHS waiting room: the crisis in our social care services. The Chancellor knows, the Health and Social Care Secretary knows, this whole Parliament knows: today’s investment in the NHS will be like pouring water into a leaky bucket if hospitals cannot discharge patients who are well enough to leave because there are no care workers to help them recover at home. The fair pay agreement that the Chancellor talked about is of course welcome, but it is barely a baby step, and it is nowhere near enough to bring social care back from the brink. At a bare minimum, we need a higher minimum wage for our care workers to stop the sector haemorrhaging staff to other sectors. When will the Chancellor finally recognise that we will never fix the NHS if we do not fix social care too? Will the Government finally act with urgency by committing to conclude the social care review by the end of this year, not in three years’ time?
On housing, we warmly welcome the Government’s investment in social homes. Will they now commit to the Liberal Democrats’ target of building 150,000 social homes every year?
Other public services are crying out for investment, too. Our communities need proper neighbourhood policing to feel safe, our farmers need fair support payments to keep putting food on our tables, and people of all ages deserve access to training and skills to build their future and to power our economy forward. That is why it is so disappointing that the Chancellor has today made things so difficult for our public services by cutting unprotected budgets by billions. Yes, we know she was faced with the fallout from the most reckless, out-of-touch Conservative Government in recent memory, but being responsible is not just about making tough decisions; it is about having the moral courage to make the right ones. Yet this Government seem determined not to adopt the one policy that could put rocket boosters on our economy and raise billions for our public services: a proper trade deal with Europe.
A new, bespoke customs union with the European Union could boost our GDP by more than 2.2%, securing additional revenue to the tune of £25 billion a year—a huge boost to businesses and our struggling public services. If the Chancellor can U-turn on the winter fuel payment thanks to a skinny EU trade pact worth just 0.2% in extra GDP, just imagine how many more U-turns she could perform with a proper trade deal worth ten times as much.
We Liberal Democrats strongly support the allocation of 2.5% of GDP on defence, but we want Ministers to go further and faster to bolster our national security in today’s uncertain world. Will the Chancellor agree to cross-party talks in which we can work together to set a pathway to 3% of GDP well ahead of 2034? Will the Government use some of today’s investment to reverse the Conservatives’ irresponsible cut of 10,000 troops? Will she ensure that investing in our national security becomes a lever for economic growth, putting much greater emphasis on British steel producers and SMEs as we scale-up our defences, and ensuring that British start-ups can use defence innovation for the public good?
Before I conclude, I must thank the Chancellor for finally completing the world’s slowest U-turn, on the unfair winter fuel payment cut. Now that she has U-turned, will she do the right thing and backdate the payment for all those who lost out on support last winter but who are now eligible under the new rules? And now that she has U-turned once, will she make it a hat trick and also change course on the PIP and carer’s allowance cuts? Perhaps she might even look again at the growth-crushing jobs tax and the other changes affecting our high streets, small businesses and family businesses, and consider instead the fairer ways of raising the same amount of revenue that we Liberal Democrats have set out time and again: asking the big banks, social media giants and online gambling companies to start paying their fair share of tax.
After years of chaos and incompetence under the last Conservative Government, this was a unique opportunity to draw a line under the social care crisis, squeezed budgets and sluggish economic growth. I strongly urge the Chancellor to ignore those who talk down Britain’s economic potential, to rip up the red tape holding British business back, and to strike a properly ambitious trade deal with Europe that will turbocharge our economy and bring in billions to rebuild our public services. The Government say that their No. 1 mission is growth. That is the way to deliver it.
Rachel Reeves
I thank the hon. Lady for her comments. I know she has not had a chance to look at the figures yet, but it is not right to say that there are real-terms cuts to public services. Public service spending is increasing by 2.3% a year on average over the course of the spending review.
I will start on investment in the NHS and social care. As I set out in my speech, we have already delivered 1,500 more GPs and put £26 billion into the NHS in the first phase of the spending review. I note that that compares with the £8 billion that the Liberal Democrats said they were going to put into the NHS in their manifesto. We have already put £26 billion in, and we will put more money in today and in every year of this Parliament.
The new hospital programme is being rolled out. I think the Health Secretary met just last week with Members of Parliament who are having hospital improvements in their local communities, including many Liberal Democrat MPs, so the hon. Lady should be aware that we are making improvements to the fabric of our hospitals as well as investing in technology, scanners and so on to improve productivity in our health service.
With regard to social care, as the hon. Lady knows, we are introducing the fair pay agreement—that is something that the Health Secretary and my right hon. Friend the Deputy Prime Minister are very much committed to. As the hon. Lady will know when she looks at the documents, we have increased local government spending power so that we can put more money into social care. In addition, Louise Casey is doing her review into the future of social care.
We are going big on infrastructure. We announced £100 billion more in the Budget last year and another £13 billion in the spring statement, and we are backing that up with skills. As I set out in my speech and as is detailed in the spending review documents, we are making the biggest ever investment in young people’s skills so that they can access the new jobs that are being created in defence, house building and other infrastructure.
On red tape and backing business, it is a little bit ironic that the Liberal Democrats voted against the Planning and Infrastructure Bill yesterday, yet they come to the House today saying that they want to do away with red tape and go for growth. Well, we want to go for growth, and that is why we took that legislation through Parliament. Perhaps the hon. Lady will ask her party’s Lords to vote for growth in the other place.
We have done trade deals with the US, India and the EU. I think the Liberal Democrats opposed the trade deal with the US, but apparently they now think that trade deals are the way to go—well, so do we. That is why my right hon. Friend the Business and Trade Secretary has three of them helping our automotive sector, our steel sector and our farming communities.
We will use defence spending to support growth—the Defence Secretary and I have been very clear about that—and, as I set out in my speech, to make Britain a defence industrial superpower. I say gently to the Liberal Democrats and the hon. Lady that if we want to support investment in public services, we have to increase the tax rises to get there. They voted against the national insurance increase, which is what has enabled us to make the investments that I have set out today.
The hon. Lady says that she wants a wealth tax. We changed inheritance tax, and the Liberal Democrats voted against it. We introduced VAT on private schools, and the Liberal Democrats voted against it. Either they are serious about investing in public services, in which case they need to back the tax increases, or they want to go down the route of the magic-money-tree Conservative party and just borrow more to pay for things.
On the winter fuel allowance, we have made our choices clear: we will keep the means test, but it will be paid to people with a pension of less than £35,000. I think the Liberal Democrats want to make it a universal benefit again.
Rachel Reeves
Okay, that is just the Tories—well, they need to explain how they would pay for it.
I appreciate the fact that the hon. Lady welcomes some of our policies, but the job of the Chancellor and the Government is to ensure that the sums add up. We made difficult decisions last October, but I stand by those difficult decisions; without them, today we would not have been able to make the investments we have made in schools, energy and our health service. I am proud of what we have achieved as a Government, and I am proud of the investment that we are putting in today.
Oral Answers to Questions
Debate between Daisy Cooper and Rachel Reeves(3 weeks, 5 days ago)
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Daisy Cooper (St Albans) (LD)
In the Budget the Government reduced business rates relief, which is hitting small businesses hard. Under current plans, in the next financial year small independent businesses could see their rates go up by 80% and chains could see theirs go down by 40%. I have shared that analysis with Ministers; will the Chancellor please promise that she will look at it personally to ensure that this—I think—unintended consequence does not come to pass and independent businesses do not close, leaving even more of our high streets looking the same?
Rachel Reeves
The hon. Lady will know that in the Budget, at a cost of about £1.5 billion, we were able to extend business rates relief, which was due to end entirely under the plans we had inherited from the Conservative party. As she will also know, we are reforming the way in which business rates work so that there are permanently lower rates for hospitality and retail sectors, particularly on our high streets.
Daisy Cooper (St Albans) (LD)
Yesterday the Chancellor said that she understands the concerns that some people have about the limit at which the winter fuel payment is removed. Does she therefore now agree that restricting the eligibility so tightly was a mistake?
Rachel Reeves
As the hon. Lady knows, when I became Chancellor last year, we inherited a £22 billion black hole in the public finances—not in some year in the future, but in the financial year that we were already three or four months into. This meant that we had to make difficult and urgent decisions to put our public finances back on a firm footing—because, unlike the Conservatives, I will never play fast and loose with the public finances.
Speaker’s Statement
Debate between Daisy Cooper and Rachel Reeves(2 months, 1 week ago)
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Daisy Cooper (St Albans) (LD)
People up and down the country will be incredibly concerned about what Trump’s trade war means for their living standards and their communities. At the same time, people want to show that Britain is not going to take Donald Trump’s trade tariffs lying down. We welcome the Chancellor’s announcement that the Government will be working further and faster with our allies abroad. Can she confirm that any new trade deals will be brought before this House for a vote before they are ratified? At the same time as working with our allies abroad to create new export markets, will the Chancellor and the Government commit to a “Buy British” campaign as part of a broader national effort to encourage people to buy British here at home?
Rachel Reeves
I thank the hon. Lady for those questions. This is a time for pragmatism and cool heads, not to rush a response. We are working closely with business. My right hon. Friend the Secretary of State for Business and Trade announced in the House last week a call for evidence on the response that businesses are looking for. Ratcheting up barriers to trade and ratcheting up tariffs will not be in our country’s interests, whether in terms of inflation or, indeed, for supply chains. We need to have cool heads and think about the national interest, not give knee-jerk reactions.
We are very much focused on doing deals with other countries around the world. There is the EU-UK summit on 18 May. We are hosting the economic and financial dialogue with Minister Sitharaman, who is coming to London today for those conversations, and those discussions are ongoing with a number of countries. Of course, any treaties would be brought forward for ratification by this House.
In terms of buying British, I think everyone will make their own decisions. What we do not want to see is a trade war, with Britain becoming inward-looking, because if every country in the world decided that they wanted only to buy things produced in their country, that would not be a good way forward. Our country has benefited hugely from access to global markets, and we will continue to want to be able to do that, because that is in our national interest, for working people and businesses in this country.
Oral Answers to Questions
Debate between Daisy Cooper and Rachel Reeves(2 months, 1 week ago)
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Daisy Cooper (St Albans) (LD)
I welcome the fast action by the Government to convene the automotive industry in reaction to President Trump’s damaging tariffs, but the measures in and of themselves will not create new export markets or stimulate demand here in the UK. Will Ministers look at Liberal Democrat calls to reintroduce the plug-in car grant and equalise VAT for electric vehicle pavement charging? Will the Government instruct the valuation office to scrap business rates for EV charging bays until the transition is complete?
Rachel Reeves
The support that we announced yesterday on the phase-out of internal combustion engine cars was very much welcomed by the automotive sector. It will give much more flexibility around the allowances and around plug-in hybrid vehicles. All of that is welcome, but we are keeping a watching brief as well as trying to ensure that there are new markets for cars made in Britain in other countries around the world by securing more trade deals.
Spring Statement
Debate between Daisy Cooper and Rachel Reeves(2 months, 2 weeks ago)
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Daisy Cooper (St Albans) (LD)
The people of this country are crying out for change, but they feel they are just getting more of the same. Of course, it was the Conservative party that wrecked the public finances, but we are eight months into the new Government and people are left wondering, “Where is the change that was promised?” The Chancellor says that the world is changing, so why will she not change course with it? The Chancellor said she wanted a dash for growth, but with her national insurance jobs tax she shot herself in the foot before she even crossed the start line.
After the Government’s disastrous Budget, the Government had the chance today to change direction, fix our finances, kick-start growth and deliver a small business Budget. The Government could have scrapped the jobs tax, which will hammer our high streets, and instead ask the big banks, social media giants and online gambling companies to pay their fair share instead. The Government could have changed their approach to trade, launching talks to boost growth through a new trading deal with our European neighbours. Instead, the Government have made the wrong decisions to cut public services, hit disabled people and inflict more pain on our small businesses and high streets. In doing so, they have delivered no change and almost no growth at all.
After years of Conservative mismanagement, people can see just how broken our public services are. They cannot see a GP, they cannot see a dentist, they are fighting for an education plan and, they are picking up the pieces of a broken social care system. Everything is broken. Nothing works. That is why people are impatient for the change they were promised.
We have to bring the welfare bill down and support more people into work. That is right for people and our economy, but cutting support for someone who needs help getting dressed and washed in the morning is not just wrong; it does absolutely nothing to support that person into work. If anything, it does the exact opposite. It will also have knock-on impacts for the entitlements of their family carers, too. Will the Chancellor come clean about this? If the Government are serious about cutting welfare spending, they must get serious about fixing health and social care. Will the Chancellor speed up the social care review and ensure that it concludes no later than the end of this year?
In the Chancellor’s quest to slim down the civil service, I wonder why she has not looked at the mountain of red tape created by the previous Government’s terrible trade deal with Europe. A whopping 2 billion extra pieces of paper have had to be completed by businesses since Brexit, enough to wrap around the world 15 times. If we manage to cut the red tape, we can give British businesses a tailwind, deliver far more growth than is currently predicted, increase the fiscal headroom to deal with global headwinds, and free up precious time and money in our civil service. That would be real change.
Business was promised change too. Today’s statement should have been a small business Budget. We Liberal Democrats have repeatedly raised the alarm about the impending damage of the national insurance jobs tax, bigger business rates bills and changes to reliefs for family farms and family businesses. Those changes will be a hammer blow to small and family businesses, leaving communities facing the prospect of an epidemic of boarded-up shopfronts. They will be a hammer blow to community health and care providers who stop our NHS from falling over. This is not the change that was promised. Instead, I say again that the Chancellor should look again at much fairer ways to raise the tax revenue our public services desperately need by reforming capital gains tax more fairly and asking the big banks, the social media giants and the online gambling companies to pay their fair share.
I know the Chancellor must contend with President Trump’s trade war, which is causing global economic turmoil, but our response to Trump’s bullying cannot be to cower in the corner and just hope that he is nice to us. We cannot sit on our hands while British steel is hit with Trump’s tariffs. We Liberal Democrats warmly welcome the Chancellor’s move to raise defence spending to 2.5% of GDP, but instead of cutting the aid budget, which abandons the world’s poor and damages our soft power, she should be covering the cost by raising the digital services tax, handing the tab to Elon Musk and Trump’s other billionaire backers. At the very least, can the Chancellor categorically rule out any reduction in the tech tax in an attempt to appease the White House, especially when disabled people in Britain face eye-watering cuts?
To conclude, I have a series of questions. Will the Chancellor recognise that cutting public services that are already stretched is a false economy? Will she accept that trying to bring down the welfare bill without fixing health and social care is a road to nowhere? Will she listen to the warnings of small and family businesses that her jobs tax will do more harm than good? Will she look at the fairer ways of raising revenue that we Liberal Democrats have put forward? And will she take the bold action we need to grow our economy by rebuilding our broken trading relationship with Europe? The public were promised change. Where on earth is it?
Rachel Reeves
The hon. Lady says, “Where is the change?” Let me tell her: more money into our NHS, with 2 million additional appointments and waiting lists falling five months in a row; rolling out breakfast clubs in primary schools from April this year; increasing defence spending to protect us in a more uncertain world; additional support for carers, the living wage up, the Employment Rights Bill and so much more. That is the difference we have made in nine months, and we have only just got started.
The hon. Lady talks about trade. We believe in free trade. We are an open trading economy and we benefit from trade links around the world, including with our single biggest trading partner, the United States of America. It is right that we work with our allies in the United States to ensure that that free and open trade continues. That is in our national interest and this Government will always act in our national interest. At the same time, there will, as the hon. Lady knows, be a summit between the UK and the EU in May, where we will look to re-set our relationship, so we can see more free trade and the better flow of trade, especially for our smaller businesses to be able to export around Europe.
The hon. Lady talks about welfare. She has not admitted that there is a single problem in the welfare system as it exists today. I am not willing, and this party is not willing, to write off one in eight young people who are not in education, employment or training. It is why, for example, we announced this week, with my right hon. Friend the Secretary of State for Education, an additional 60,000 training places to train people up in the construction industries of the future, and a £1 billion package of personalised targeted support because there are many disabled people—the hon. Lady knows this—who are desperate to work but are not getting the support and were denied support by the previous Government. That is why we have said there will be additional support for the most sick and disabled, and that personal support for getting people back into work. That is the right approach, so that we have protections for those who need it, work for those who can, and a sustainable system that is here for generations into the future.
I want to take on the hon. Lady’s main point. She wants all the money for public services, but she does not want to raise the taxes to pay for them. At the moment, we spend £105 billion a year in interest on Government debt. It seems that she would just like more of that debt. She says that people cannot see a GP or a dentist. How does she and the Opposition parties think that we pay for those things? They cannot object to the tax increases and support the money we have invested in our public services. To say otherwise, I am afraid, is fairytales and the magic money tree—it just does not add up. The difference on the Labour Benches is that we will put money into our public services, explain where it comes from, and ensure that the public finances are on a firm footing. That is the difference between our party and the Opposition parties.
Oral Answers to Questions
Debate between Daisy Cooper and Rachel Reeves(4 months, 3 weeks ago)
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Daisy Cooper (St Albans) (LD)
The rising cost of borrowing will bring more misery to mortgage holders, with reports suggesting that some mortgage holders could pay an extra £500 a year. Given that potential global trade tensions could further affect the UK’s financial stability, what assurances will the Government provide that UK lenders remain in a strong position to support households and small businesses?
Rachel Reeves
Labour and Liberal Democrat Members are mindful of the last Government’s impact on mortgage borrowing costs for many of our constituents, and we are determined to tackle the cost of living crisis. As the hon. Member knows, I have written to financial regulators, including the Financial Conduct Authority, about regulating for growth, not just for risk, so that we can help more people get on the housing ladder and help grow our economy.
UK-China Economic and Financial Dialogue
Debate between Daisy Cooper and Rachel Reeves(5 months ago)
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Daisy Cooper (St Albans) (LD)
I thank the Chancellor for advance sight of her statement.
Let us be blunt: the Budget has not worked. The Chancellor says that the Government’s No. 1 mission is growth, but to date there are no signs that the Government are going to deliver it. The national insurance contributions rise is self-defeating. It undermines growth—it does not unleash it—and it piles pressure on to struggling small businesses and high streets. Nor does it raise anything like the sums of money for the NHS that the Government initially suggested it would. Now we have this much-lauded visit to China, which the Government themselves say is only worth £600 million to the UK over the next five years. That is equivalent to just five and a half hours of NHS spending a year—27.5 hours over the five-year period. All growth is welcome, but this really is small beer.
What are we to make of the Chancellor’s pledge to improve existing channels with China? It is nothing short of warm words and mixed messages. The Chancellor should not have gone to China unless there was a commitment that Jimmy Lai was going to be released.
Does the Chancellor now accept that the national insurance increase will damage growth? Does she accept that there were and still are much fairer ways to raise the necessary revenue without holding back our economy and our high streets? The international market jitters we have seen in the last few days are largely caused by the threat of tariffs by the new Trump Administration, so will the Chancellor guard against the risks of a Trump presidency by rebuilding our trading relationship with our European neighbours?
After the economic vandalism of the previous Conservative Government and their mini-Budget, our NHS and care services are still on their knees. Does the Chancellor accept that wealth and health are two sides of the same coin and that scaling back any investment in the NHS will be not only devastating for local communities but damaging for economic growth?
Rachel Reeves
I am slightly confused by the hon. Lady’s response. The Liberal Democrats opposed every decision we made to get the public finances under control at the Budget, and now they say that we need to spend more on public services. Well, I am afraid they cannot have it both ways. The only way there is more money for our public services is by raising it, as we did in the Budget—decisions that the Liberal Democrats apparently oppose.
The hon. Lady says that £600 million is not worth it. That is £600 million of tangible benefits for British businesses trading overseas. I would have thought she would welcome enhanced trade and investment as a way to create more good jobs paying decent wages in St Albans and, indeed, in all our constituencies.
The hon. Lady says that we should not go to China because we need to raise difficult issues. I am not sure how she thinks we are going to raise difficult issues unless we engage with the second biggest economy in the world. Because I went to China, I was able to raise issues around human rights, forced labour, Hong Kong and Jimmy Lai and the sanctioning of parliamentarians. We cannot raise those issues unless we are in the room. I was in the room and therefore able to do just that.
Labour is the party that put £20 billion into the national health service at the Budget in October. We were able to do that because of the difficult decisions we took, including on taxation. The hon. Lady seems to want the additional money for public services but without finding any way to pay for them. That is the way the Conservative party got into its troubles. I am afraid the Liberal Democrats are going down exactly the same path.
Oral Answers to Questions
Debate between Daisy Cooper and Rachel Reeves(7 months, 2 weeks ago)
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Daisy Cooper (St Albans) (LD)
Small businesses are the engine of our economy, but many of them are penalised for investing in their businesses because of the broken business rates system. Will the Chancellor ensure that investment is exempted from business rates, and will she ensure that the Budget tomorrow is the final Budget in which business rates are a permanent feature?
Rachel Reeves
I thank the hon. Lady for her question, and I too welcome her to her place.
Small businesses and high street businesses are the lifeblood of all of our communities, including hers in St Albans, and it is important that we support them. In our manifesto, we committed to reform of our business rates system. I will be setting out more details in the Budget yesterday tomorrow, as well as a business tax road map, which will give businesses certainty about the tax environment they will be working with for the next five years.
Public Spending: Inheritance
Debate between Daisy Cooper and Rachel Reeves(10 months, 2 weeks ago)
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Rachel Reeves
I have to be honest that the decisions I have made today are tough decisions. They are not the decisions that I wanted to make, or that I expected to make. Given the seriousness of the inheritance that I face, they are the right decisions, the responsible decisions, and the fairest decisions that I could make in the circumstances.
Daisy Cooper (St Albans) (LD)
The legacy of the Conservatives’ new hospitals programme is dire, but the Chancellor will know that there is also a cost to delay. We have life-expired buildings that will continue to need to be patched up until they are replaced, so I urge the Chancellor, as I urged the Secretary of State for Health and Social Care last week, to give the go-ahead to those projects that are ready to go and involve life-expired buildings. Will she review the outdated rules, and allow hospitals to spend more of their capital funds on helping with repairs and rebuilds?