Budget Resolutions

James Murray Excerpts

Tuesday 2nd December 2025 Commons Chamber

[The Chief Secretary to the Treasury (James Murray)]

I thank my right hon. Friend the Secretary of State for Health and Social Care for opening the debate.

Of course, today’s debate follows yesterday’s publication of the OBR’s report into the early release of the “Economic and fiscal outlook” and the subsequent resignation of Richard Hughes. Let me be clear that what happened last week with the EFO should never have happened, and nor should it ever happen again. We take the report’s findings very seriously. As I informed the House yesterday, we will work with the National Cyber Security Centre to take forward a forensic examination of potential premature access at previous fiscal events.

The OBR is a key part of our fiscal framework, and the OBR’s Budget Responsibility Committee continues under the experienced leadership of Tom Josephs and Professor David Miles. In the coming weeks, the Treasury will launch a competitive external recruitment process to appoint a new chair. As with all appointments to the Budget Responsibility Committee, the appointment of the new chair will be made by the Chancellor and will be subject to the consent of the Treasury Committee.

This Government put the utmost weight on Budget security, including the prevention of leaks of information, and a leak inquiry is under way. The Treasury will work closely with the OBR to ensure that robust security arrangements are in place before the spring forecast and for all future forecasts, and the permanent secretary to the Treasury will conduct a review of the Treasury’s security processes to inform future fiscal events.

As the Health Secretary so powerfully set out when he opened today’s debate, cutting NHS waiting lists is a top priority for this Government. We prioritised the NHS at the Budget because a strong health service where people can get the treatment they need is a priority for the British people. Our determination to get the national health service back on its feet and invest in the future of our country stands in stark contrast to the Conservatives, who offer nothing but decline. They offer cuts to funding for public services that are equivalent to firing every police officer in the country twice. After 14 years in power and one year in opposition, the Conservatives still refuse to take responsibility for the state they left the country in, and offer no apology for the damage they did to our public services and our economy when they were in power—and on top of that, they boast that they would do it all again.

The Government are taking the fair and necessary choices to renew our country. Last year at our first Budget, we fixed the foundations by funding the largest ever capital settlement for health, introduced fiscal rules to ensure that the books are always balanced, and chose to invest in roads, rail, energy and homes across the UK.

[Chris Hinchliff]

Throughout the Budget debate, all those on the Government Front Bench will have heard the concerns of Labour MPs who represent rural constituencies, as I have, about the proposed changes to agricultural property relief. Many of us feel that those changes are not properly calibrated. Will the Minister commit to keeping those changes under close review as they are rolled out, and will he take immediate action if we begin to see farms disappear?

[James Murray]

The changes that we have set out to agricultural property relief are a fair way forward. They represent generous relief for people, while raising money for the public finances. In this Budget, the Chancellor announced that any unused £1 million allowance for the 100% rate of agricultural property relief and business property relief will be transferable between spouses and civil partners.

Following the Budget last week, we are going further. Despite the challenges that we faced, with the OBR recognising the deep scars to the economy caused by the previous Government, we refused to repeat the mistakes of the past. We rejected uncontrolled borrowing and refused to slash investment. We chose to keep cutting NHS waiting lists, to cut the cost of living and to cut debt and borrowing.

The Chancellor delivered a Budget last week that made fair choices on tax, protected investment in our public services and made our economy more secure. As a result of our choices, people will see more money in their pockets, thanks to the increase in the living wage; they will see rail fares and prescription charges frozen; they will see £150 off their energy bills; and they will see action across the country as we tackle the scourge of illicit businesses blighting our high streets. In short, this was a Budget that we were elected to deliver—

[Simon Hoare (North Dorset) (Con)]

rose—

[Madam Deputy Speaker]

Order. The Minister is clearly not giving way to you, Mr Hoare, and the rest of us want to hear what he has to say.

[James Murray]

As the hon. Gentleman knows, Madam Deputy Speaker, I give way to him week in, week out in this place, so I know pretty much what he is going to say. I do not have much time, so I am going to make some progress. [Interruption.] The Opposition are very loud at the moment, but time and again there is deafening silence when they are asked to defend their record in government. They simply refuse to own up and face up to the damage they caused to our economy by slashing investment.

Our decision not to slash investment and to reject uncontrolled borrowing means that we have had to take fair and necessary choices on tax. We are being up front that those choices will mean everyone contributes more, but, as we promised last year, we are keeping taxes on working people as low as possible. We are doing that by reforming the tax system, increasing the rate of tax on property income and on those with £2 million-plus homes, increasing tax rates for online gambling while removing bingo duty, and ensuring that HMRC has the right technology for a modern, effective tax system. We are making the changes that the Conservatives always ducked, and we are keeping taxes on working people as low as possible.

When it comes to growth, the Chancellor has already beaten the forecasts once, with improved growth reported this year. We are determined to beat the forecasts in future years too, because we will not let the previous Government’s record hold Britain back in the future. We are backing entrepreneurs with tax breaks for businesses to scale and stay in the UK. We have secured hundreds of billions of pounds of private investment, and we are making sure that investment goes to every region and nation of the UK, so that everyone across the country feels the benefits of growth.

Families across the country plan how much to spend week in, week out. They budget, save and economise to stay on top of their household finances. We will hold ourselves to the same, and higher, standards when it comes to taxpayers’ money. We will always make sure that the Government live within their means and make every penny count. We have already begun to improve the efficiency of Government, saving £14 billion a year by 2029 through greater use of AI and automation, as well as reducing unnecessary bureaucracy and duplication through the abolition of NHS England.

At last week’s Budget, we set out our plan to make a further £4.9 billion of efficiencies by 2031, beginning by getting rid of police and crime commissioners, cutting the cost of politics and selling Government assets that we no longer need. This means we can make sure that taxpayers’ money—

[Sir Edward Leigh (Gainsborough) (Con)]

Will the Minister give way?

[James Murray]

Oh, go on then.

[Sir Edward Leigh]

As a matter of interest, why did Labour Chancellor Hugh Dalton resign?

[James Murray]

The right hon. Gentleman may not have been here, but a colleague of his asked me that same question before. Unfortunately, I did not know the history of that story; I shall have to look it up on Wikipedia tonight to find out. [Laughter.] Clearly, it was before my time.

Our focus on spending public money wisely means we can make sure taxpayers’ money is spent on what matters: the NHS, schools, roads and railways, our armed forces and the police. This Budget means that we can continue to invest in the future. That investment in our future includes our decision to lift 450,000 children out of poverty. Those children should not go hungry simply because of the circumstances of their birth, and their life chances should not be written off before they have even got going.

We do not want to be a country where one in ten 15-year-olds goes hungry once a week because they cannot afford a meal. We want to be a country that recognises the profound damage that child poverty causes to us all. This Labour Government are taking the opportunity to change that. We do not want to be a country where £1 in every £10 of public money is spent on the interest on our national debt alone. That is why it is crucial that we cut borrowing and increase our fiscal headroom. That is the way to make sure that our country is less vulnerable to global shocks. We are determined to make our economy more resilient and ensure that taxpayers’ money is spent on taxpayers’ priorities.

There is an old saying that to govern is to choose. Politics is about making choices, yet the Conservatives are never keen to be judged by the choices they made when they were in government. They chose to cut investment in the foundations of our society, gutting our NHS, failing our schools and abandoning great swathes of the country and the next generation. They botched the Brexit deal, which stifled British trade and wrapped our businesses in red tape. They oversaw a covid recovery that left us lagging behind our neighbours while their donors and cronies pocketed millions of pounds of taxpayers’ money, and they were responsible for a mini-Budget that crashed our economy, did great damage to our global reputation and cost mortgage payers hundreds of pounds a month.

Our Government are willing to choose and ready to stand by our choices. I am proud of the choices that we have made in this Budget. Those are choices that protect the NHS and get waiting lists down; cut the cost of living and take £150 off energy bills; and reduce the national debt and bring down the cost of borrowing. We will invest in the infrastructure that will drive growth and productivity across the country. We will not leave the broken welfare system unchanged, and we will spend every penny of taxpayers’ money wisely. Those are fair choices, those are necessary choices, and those are the right choices for the future of our country.

Question put and agreed to.

Resolved,

That income tax is charged for the tax year 2026-27. 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 2026-27 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 and savings rates)

Resolved,

That—

(1) For the tax year 2026-27 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 2026-27 the savings rates of income tax are as follows—

(a) the savings basic rate is 20%,

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

(c) the savings 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.

4. Income tax (dividend rates)

Question put,

That—

(1) In section 8 of the Income Tax Act 2007 (which provides, among other things, for the dividend ordinary rate and dividend upper rate)—

(a) in subsection (1) (the dividend ordinary rate), for “8.75%” substitute “10.75%”, and

(b) in subsection (2) (the dividend upper rate), for “33.75%” substitute “35.75%”.

(2) The amendments made by this Resolution have effect for the tax year 2026-27 and subsequent tax years.

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.