Budget Resolutions

Emma Reynolds Excerpts

Tuesday 3rd November 2026 Commons Chamber

[The Chief Secretary to the Treasury (Emma Reynolds)]

This Budget provides breathing space now and fresh hope for the future, which is the focus of today’s debate. I thank all hon. and right hon. Members across this House who have made contributions—not only today, but over the four days of the debate on this Budget—on the action we are taking in government to steer Britain through the global economic storms, kick-start good growth in every postcode, strengthen our national security and chart a new course for our country in the years ahead.

Many Members, including my hon. Friends the Members for Barrow and Furness (Michelle Scrogham) and for Rossendale and Darwen (Andy MacNae), rightly stressed the challenges we are facing because of the storms in the global economy. We have heard a lot from Opposition Front Benchers—most of it hot air—but there was not a word of apology for calling on this Government to join the war in the middle east that is driving up energy costs, inflation and the cost of Government borrowing. We cannot wish away these global economic storms. Instead, my right hon. Friend the Chancellor has set out a course to steer this country through them.

We have chosen to use some of the fiscal headroom established last year to absorb the impact of the Iran war and to protect the economy, British businesses and family budgets. As my hon. Friends the Members for Cities of London and Westminster (Rachel Blake) and for Darlington (Lola McEvoy) rightly said, fiscal discipline underwrites every policy of this Government. We will meet the fiscal rules in full, and for the first time, in the third year of the forecast. Last year, borrowing fell to its lowest level in six years as a percentage of GDP, and it continues to fall across the forecast.

We will not take any lectures from the shadow Chancellor, the hon. Member for Arundel and South Downs (Andrew Griffith) or the shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire (Richard Fuller). They like to claim that they were innocent bystanders who just happened to be Treasury Ministers at the time of the Liz Truss mini-Budget. We all know that they were the architects of the mini-Budget. The shadow Chancellor still maintains, and said as recently as September, that there were a “lot of good things” in the mini-Budget, and to this day the British people are paying the price for his failure. Liz Truss’s stint in office might have been short-lived, but the impact was long-lasting.

The contrast with this Labour Government could not be clearer. I am proud that the IMF has said that the UK stands out as a country where

“action to reduce debt and deficit has been taken decisively”.

It has said that we will have the lowest deficit in the G7 by 2029. As my hon. Friend the Member for Macclesfield (Tim Roca) rightly said, the British economy has proven more resilient than many predicted, including Opposition Members. Indeed, it has defied expectations. The Tories and Reform like to talk down our economy, but the fundamentals of the British economy are strong. Public investment is up. Business investment is up to its highest level in 10 years. Productivity has finally turned a corner, and we had the joint-fastest growth in the G7 in the first half of this year.

[Sir John Hayes]

The Minister talks about people talking down the economy, but the Joseph Rowntree Trust says that Labour is overseeing the sharpest fall in living standards in 65 years. I wonder whether she thinks it is wrong. If she does, how much are the Government overseeing in terms of declining living standards?

[Emma Reynolds]

The last Parliament was the worst Parliament on record for living standards. Since the last election, living standards have increased by 1.8%. I urge the right hon. Gentleman to read the executive summary from the OBR, which stated:

“As a net importer of energy, the rise in energy prices constitutes a negative terms-of-trade shock for the UK, which pushes up on inflation and lowers real household disposable incomes.”

Those are the global headwinds we are facing.

[Graham Stuart]

Following on from my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes), the Minister will be aware that the Joseph Rowntree Foundation suggests that constituents of mine—families—will be at least £440 worse off in this Parliament. It will be the worst Parliament ever. There is no covid and no new Ukraine impacting on energy prices. Can she answer my right hon. Friend’s question? Is the Joseph Rowntree Foundation wrong or right?

[Emma Reynolds]

What I say to the right hon. Gentleman is that wages have risen faster in the first two years of this Government than they did in the first 10 years of his Government, so we will take no lectures from him or his party.

Against this backdrop, the Chancellor is providing immediate breathing space for families and businesses. Our £100 household energy payment will support 20 million households in England. That is 80% of households, and it will be paid for by a time-limited 3% increase to the bank surcharge, which the Conservatives will oppose in the Lobby.

We are going further on bills, by extending the removal of VAT on electricity until July and extending the 5p cut on fuel duty, and next year we will abolish gas standing charges. I thank my hon. Friends the Members for Camborne and Redruth (Perran Moon) and for Bracknell (Peter Swallow), and many others, for welcoming this energy support package. Overall, in 2026-27, households in England are estimated to benefit by about £160 on average from the support that we are providing on energy, according to new analysis published this morning. Households on the lowest incomes are expected to benefit the most, with the bottom 20% benefiting by about £230 on average, almost four times as much as the top 20%. Because we know that higher energy costs are a challenge for business too, we are reducing bills by up to 25% for more than 10,000 eligible businesses from next April through the British industrial competitiveness scheme, as was mentioned by my right hon. Friend the Business Secretary earlier. That will help to support the British firms at the heart of the future of Britain’s reindustrialisation.

Beyond energy, we are supporting families by giving self-employed dads paid paternity leave, and I thank my hon. Friends the Members for Reading West and Mid Berkshire (Olivia Bailey) and for Dagenham and Rainham (Margaret Mullane) for welcoming that measure. We are backing British businesses and high streets, and here I would like to correct the record. Of course the brilliant men and women across the country who run small businesses are working people, and I thank them for their contribution to our local economies and our local high streets—the bakeries, the cafés, the restaurants, the beauticians, the hairdressers, the local pubs, and so much more. In the first week of this new Government in July 2024, we cut an extra 20% from business rates for pubs, social clubs and live music venues from April next year. I thank my hon. Friend the Member for Hyndburn (Sarah Smith) for her invitation to the pub in her constituency, and I look forward to going there to eat the goulash.

In this Budget, the Chancellor has gone further by taking 70,000 more small retail, hospitality and leisure properties out of paying business rates altogether. For all other businesses in those sectors, we are freezing their business rates in real terms. I thank my hon. Friend the Member for Aylesbury (Laura Kyrke-Smith)—my constituency neighbour—for what she said about that change in business rates, and the 2,000 small high street businesses across Buckinghamshire, including Aylesbury and indeed High Wycombe, that will be taken out of business rates altogether. To pay for this—as was mentioned by my hon. Friend the Member for Heywood and Middleton North (Mrs Blundell)—we are increasing machine games duty for higher-stakes machines, and we are carving out adult gaming centres and vape shops from business rate reliefs. We are also ensuring that online marketplaces collect and pay VAT, which they should be doing already.

Many Members have mentioned young people during the debate. We want young people to have the chance to earn, learn and get on. As the Chancellor has rightly said, we have a moral duty to the next generation. We are raising pay for low-paid workers, while being careful not to price young people out of that crucial first job. We have also expanded access to work experience, and provided record funding for apprenticeships. We have introduced a scheme for first-time buyers, and have capped student loan interest rates at 6%.

My hon. Friends the Members for Lichfield (Dave Robertson) and for Merthyr Tydfil and Aberdare (Gerald Jones) mentioned the mineworkers pension scheme. It is this Labour Government who returned the investment fund to the members of the scheme in a previous Budget, and in this Budget the Chancellor has rightly introduced a measure to ensure that not a penny of the surpluses will come back to the Government. Instead, 100% of surpluses will go to the scheme members. As for the outstanding issue of the guarantor’s fund, the Chancellor has made it clear that we will go on to ensure that the full transfer takes place.

As well as making decisions to provide breathing space now, the Chancellor took action for the long term to kick-start growth throughout the country, which is the only way to keep Britain’s families and Britain’s finances secure for the long term. That begins with, first, delivering the most ambitious devolution package in a generation. We are putting power in the hands of local leaders because they know the right levers to pull to drive growth and job creation in their local areas.

Secondly, this Budget delivers radical reform of our energy system, because our priority is to bring energy costs down to help British business to compete and British households to cope. We will only buy and build new projects where they lower bills and can connect to the grid. We will further break the grip of international gas prices on our bills by moving more of our old renewables on to fixed-price contracts, and we will build cheaper, faster grid connections through GB Grid.

[Wera Hobhouse]

Given that the Minister has just said that the Government want to support households but also move away from expensive fossil fuels, why make cuts to the boiler upgrade scheme and the warm homes plan?

[Emma Reynolds]

We are securing energy in our country and giving people an energy support package, as I outlined.

Crucially, we are putting an end to the Tories’ practice of loading levy costs on to bills, because, unlike them, we are determined to bring down energy bills for families.

Thirdly, we are supporting companies to start, scale and stay in the UK. We are introducing a new founders’ relief for founders of high-growth companies, and a new young entrepreneurs allowance to cover a year of living costs for young founders while they turn their ideas into businesses. Crucially, and as recommended by the women in tech taskforce, we are establishing a new scale-up programme to support female founders. The British Business Bank will also double its commitments to women-led businesses.

Finally, we have taken action to tackle the big challenges facing our country—most importantly, on defence. The first duty of any Government is to keep the country safe, and I am proud that this Labour Government have driven the biggest boost in defence spending since the end of the cold war. At the Budget last week, we took difficult decisions to reprioritise budgets across Whitehall in order to fund the £15 billion defence investment plan in full. At the spending review next year, we will set out the details of how we will meet our NATO commitment to spend 3.5% of GDP on defence by 2035. Crucially, that includes setting a target of 3% by 2030. This is a “credible path” to the UK meeting our NATO commitments—not my words, but those of the NATO Secretary-General, Mark Rutte, who has welcomed our plans.

I know that there is plenty of disagreement in this House on the measures in the Budget, but there is one area where I think we agree: we stand shoulder to shoulder with the people and Government of Ukraine. This Budget provides £10 billion of additional economic and military support for Ukraine. Together, we are sending a clear message to Moscow that Britain will stand with Ukraine for as long as it takes.

This is a Budget built on fiscal discipline. It charts a way through difficult global economic headwinds. It provides breathing space for families and businesses now. It kick-starts work on the big changes needed to put this country on a better course on devolution, energy and defence, and it will deliver good growth in every postcode and strengthen our national security. This is a Budget built on Labour choices—breathing space today, and fresh hope for the future.

Question put and agreed to.

Resolved,

That income tax is charged for the tax year 2027-28.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).

2. Income tax (main rates)

Resolved,

That for the tax year 2027-28 the main rates of income tax are as follows—

(a) the basic rate is 20%,

(b) the higher rate is 40%, and

(c) the additional rate is 45%.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

3. Income tax (default, property and savings rates)

Question put,

That—

(1) For the tax year 2027-28 the default rates of income tax are as follows—

(a) the default basic rate is 20%,

(b) the default higher rate is 40%, and

(c) the default additional rate is 45%.

(2) For the tax year 2027-28 the property rates of income tax are as follows—

(a) the property basic rate is 24%,

(b) the property higher rate is 44%, and

(c) the property additional rate is 49%.

(3) For the tax year 2027-28 the savings rates of income tax are as follows—

(a) the savings basic rate is 24%,

(b) the savings higher rate is 44%, and

(c) the savings additional rate is 49%.

(4) In consequence of the provision made by paragraphs (2) and (3), sections 5 and 7 of the Finance Act 2026 (which had set the property rates and savings rates for the tax year 2027-28) are repealed.

And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.