European Union Finances: Annual Statement

James Murray Excerpts

Thursday 26th March 2026 Written Statements

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

I am today laying before Parliament, “European Union Finances Statement 2025: Statement on the implementation of the Withdrawal Agreement” (CP 1538). This is an annual publication; this year’s edition covers the period from 1 January 2025 to 31 December 2025. This publication is available on the gov.uk website.

The publication sets out the Government’s updated estimate of the financial settlement on withdrawal from the EU. HM Treasury estimates that the total net value of the financial settlement is £30.9 billion since the UK ceased to be an EU member state in February 2020. Of this, £25.7 billion has been paid up to the end of December 2025, and the forecast of future outstanding net liabilities is £5.3 billion.

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Devolved Governments: 2025-26 Funding

James Murray Excerpts

Tuesday 24th March 2026 Written Statements

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

In addition to changes in devolved Government funding at supplementary estimates 2025-26, and in line with the statement of funding policy, the Welsh Government have chosen to draw down £285.901 million in resource DEL (excluding depreciation), £53.395 million in capital DEL (general) and £10.704 million in capital DEL (financial transactions) from the Wales reserve in 2025-26. This is in line with the funding arrangements set out in the Welsh Government’s fiscal framework.

There have been further changes to devolved Government funding due to the application of the Barnett formula that were processed after the finalisation of supplementary estimates 2025-26. In 2025-26 these have resulted in changes of:

-£0.208 million resource DEL (excluding depreciation) and £2.890 million capital DEL (general) for the Welsh Government

-£0.344 million resource DEL (excluding depreciation) and £0.188 million capital DEL (general) for the Scottish Government

-£0.468 million capital DEL (general) and -£0.921 million capital DEL (financial transactions) for the Northern Ireland Executive in 2025-26.

The Northern Ireland Executive will also carry forward an increase of £0.078 million capital DEL (general) and defer a -£0.145 million resource DEL (excluding depreciation) reduction to 2026-27.

The Welsh Government will also return £11.790 million resource DEL (excluding depreciation).

Revised 2025-26 devolved Government funding is as follows:

Northern Growth Strategy: Next Steps

James Murray Excerpts

Thursday 19th March 2026 Written Statements

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

My noble friend the Financial Secretary to the Treasury (Lord Livermore) has today made the following written ministerial statement.

On Tuesday 17 March, the Chancellor updated Parliament on the Government’s economic plan to increase living standards, build resilience and bolster the security of the UK economy. I am today setting out more detail on a core part of that plan—how the Government will drive growth in the north of England, working alongside local leaders, as part of our wider regional growth strategy.

Today the Government have laid the “Northern Growth Strategy: Next Steps” (CP 1549). As set out in the “Northern Growth Strategy: Case for Change” (CP 1485) published in January, there is significant national benefit to boosting growth in the north. Just growing the north’s five most populous mayoral strategic authority areas’ productivity to the national average could add around £40 billion per year in gross value added, alongside around £15 billion per year in fiscal revenues. That is why the Government have put the north of England at the centre of their regional growth plans including through unlocking the northern growth corridor, stretching from York to Liverpool across the Pennines; and making the most of unique strengths in the north-east, and wider north.

The publication laid today sets out how investment in Northern Powerhouse Rail will serve as the backbone for economic transformation across the region, alongside action to grow and densify northern cities, to back industrial strategy clusters where they excel, and to decentralise our political system and put real power in the hands of local leaders. This publication begins a new phase of deeper engagement with a wide range of local partners, to further develop the northern growth strategy, with a further update intended for the autumn.

The document sets out the next steps the Government are taking now, to support their strategy, including through:

City Investment Funds

The city investment funds, announced earlier this week by the Chancellor, provide £2.3 billion of new grant, loan and patient capital funding, with up to £1.7 billion going directly to mayors of the largest city regions in the north, to unlock large-scale city centre development, in particular where there are issues around viability.

The fund will bring together different types of finance, deployed flexibly to accelerate projects, expand city-centre housing and office markets, and support major regeneration schemes across the north, including:

The Victoria North development in Manchester, one of the largest city-centre regeneration schemes in the UK

Transformation of Liverpool central gateway and sites at the Knowledge Quarter

Regeneration and densification around Leeds City station, Leeds South Bank, and the new Bradford Northern Powerhouse Rail station

Developing projects in the Don Valley corridor, Sheffield city centre innovation spine, and Rotherham town centre

Accelerating development across the proposed mayoral development zone spanning Newcastle and Gateshead, with Gateshead Quays and Forth Yards as flagship anchors.

By combining early catalytic funding with a long term focus on reinvestment, city investment funds will support sustainable growth, crowd in private capital, and help cities realise their full economic potential.

Industrial Strategy Cluster Partnerships

The Government are backing five areas in the north, supported by £150 million clusters investment from the British Business Bank, supercharging growth driving sectors where they already excel. New place based partnerships will be established with local leaders, businesses and universities to strengthen and accelerate growth in the north’s globally competitive industrial strategy clusters. For example:

Transforming Greater Manchester into a “global growth cluster” in life sciences, advanced manufacturing and digital and technologies, including through investing hundreds of millions into the development of Manchester digital campus. The campus will bring together 8,800 civil servants and Ministers in the heart of the city, solidifying Manchester’s status as a digital and AI hub, bringing more high-skilled jobs to the area, and saving the taxpayer billions through consolidating existing estate.

Strengthening Liverpool city region’s role as a leading centre for life sciences and digital technologies, including through investment in a new national cryogenics facility that will help establish the north-west as a hub for ultra-low temperature research, expected to attract investment from sectors such as quantum, healthcare and fusion; creating high-quality jobs and boosting our national security.

Supporting West Yorkshire’s financial services and professional and business services “Northern Square Mile” in Leeds, promoting it as a destination for global financial services businesses supported by the Office for Investment: Financial Services concierge service.

Working with partners to further develop the clean-energy “supercluster” across the north-east, Tees Valley, York and North Yorkshire, and the Humber. The Government will work in partnership with local leaders and businesses to attract and develop clean energy industries investment and infrastructure into the region.

Building on South Yorkshire’s strengths in advanced manufacturing and defence through its £50 million defence growth deal to strengthen sovereign manufacturing capability. This will boost the region’s strengths in the research, development and engineering of materials critical to the next generation of defence capabilities.

Fiscal Devolution

Looking ahead to the Budget, the Chancellor confirmed that she has asked Treasury officials to work with mayors and businesses to develop a road map for future fiscal devolution. This will set out plans to give regional leaders a share of the revenue from some national taxes and will consider income tax alongside other taxes. The Chancellor’s objective is to provide mayors with the long-term financial certainty that they need to invest in a way that is practical and responsible. Therefore this work will be guided by four key principles: empowerment, accountability, sustainability and fairness.

The Government will continue to develop the northern growth strategy in partnership with local stakeholders. To support this, an invitation for views is being launched alongside the document laid today. This sets out a series of questions around connectivity, regeneration and densification of cities, business investment, skills, and culture. The invitation for views will close on 31 July 2026. The Government will review responses over the summer to strengthen the approach, ahead of a further update in the autumn.

Across the north, places are demonstrating what sustained investment, strong local leadership and clear long-term direction can achieve. The challenge now is to build on that momentum and scale it up at pace. We look forward to working together with mayors and local partners on this collective endeavour over the coming months.

The report is published on gov.uk: https://www.gov.uk/government/publications/northern-growth-strategy-case-for-change/northern-growth-strategy-case-for-change

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Oral Answers to Questions

James Murray Excerpts

Tuesday 10th March 2026 Commons Chamber

[Preet Kaur Gill (Birmingham Edgbaston) (Lab/Co-op)]

3. What fiscal steps she is taking to support the community ownership of assets.

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

Through the English Devolution and Community Empowerment Bill, the Government are introducing a strong, new community right to buy. That will empower communities to take ownership of and protect local assets. Alongside those new powers, the Pride in Place programme will provide up to £5.8 billion over 10 years to support 284 neighbourhoods, enabling local people to choose to fund a range of activities, including developing or restoring important community assets.

[Preet Kaur Gill]

After 14 years of Conservative austerity, many communities like mine have seen the assets that matter most to them hollowed out. I welcome the Government’s community right to buy, because putting local people in control of local assets is simply common sense. In my constituency, Woodgate and Bartley Green will receive £20 million through Pride in Place funding over the next decade thanks to this Government. Does the Minister agree that tackling barriers such as access to finance will help communities to take ownership of local assets and rebuild neighbourhoods?

[James Murray]

My hon. Friend is absolutely right. Pride in Place funding can be used for communities to take ownership of and support local assets, from youth centres to libraries and cultural venues. I am very glad to hear that the funding will make such a positive difference to her constituents in Woodgate and Bartley Green, and I am proud that this Government are putting people in control of what happens in their local area.

[Calum Miller (Bicester and Woodstock) (LD)]

Across my constituency, there are three things that small villages tend to have: a pub, a church and a village hall. The community asset policy will support community ownership of the pubs, but I am hearing from those who run large faith buildings that they are deeply concerned about the changes to VAT relief on listed buildings. Will the Minister agree to meet me and others who are literally trying to repair the church roof to discuss that uncertainty?

[James Murray]

As the hon. Gentleman will be aware, this scheme is operated by the Department for Culture, Media and Sport, so I am happy to ask colleagues in that Department to come back to him.

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[John Glen (Salisbury) (Con)]

5. Whether she has made an assessment of the potential impact of the Office for Budget Responsibility's growth projections for 2026 on future departmental spending levels.

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

At the spring forecast last week, my right hon. Friend the Chancellor showed that we have the right economic plan. Our plan has lowered inflation, borrowing, debt and debt interest payments. Our approach means that investment is up, helping to create the conditions for growth across the UK. Our firm approach to public spending is helping to keep public finances on a sustainable path.

[John Glen]

Given that the Chancellor has pencilled in 0.3% real-terms growth in public spending in 2029-30, and assuming that health spending is at its historical average, the special educational needs and disabilities spend is as per the proposals, and defence is at 3%, that will leave a 2.5% real-terms cut in unprotected Departments. What plans do the Chancellor and Chief Secretary to the Treasury have to fill that £13 billion gap in the 2029-30 envelope?

[James Murray]

If the right hon. Gentleman looks at the plans that we set out through our spending review, he will be clear that we are increasing spending by £50 billion a year by 2028-29 compared with the previous Government’s plans. At the same time, we are ensuring that taxpayers get value for money. We are making £3.9 billion of efficiency savings by 2029-30, rising to £5 billion by 2030-31.

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

The Government’s spending plans look very, very iffy. The Minister has a chance of fitting in with the Chancellor’s fiscal rules—if there is no further downgrade on economic growth, which seems unlikely; if the Government have the backbone to rein in public spending and to increase taxes in the last years of the Parliament, which seems very unlikely; if the Government do not have to step in with any significant energy support because no money has been set aside; and if the Government can get £4.8 billion in salary sacrifice in 2029-30 revenues, which the industry says is a pipe dream. So here is another “if”. If the Minister’s spending plans start to fall apart, will he prioritise cuts in public spending over tax increases?

[James Murray]

I will give the hon. Gentleman an “if”. If he were honest and remembered his time in Liz Truss’s Government, he might not have the gall to make comments like that across the Dispatch Box—

[Mr Speaker]

Order. All Members are honest. Please think about what you are saying. You cannot individually attack a Member for not being honest. We are all honourable Members, as you well know. I call the honourable Minister.

[James Murray]

Thank you very much, Mr Speaker. I apologise unreservedly for the implication about the hon. Gentleman: I know that he is a very decent and honourable man, and I withdraw that comment. He may have unintentionally misled the House by failing to declare his part in the Liz Truss Government and the impact that that had on public spending. As he will know, we have stuck to the fiscal rules that this Chancellor introduced at the beginning of this Government in every fiscal event that we have had. Those fiscal rules are ironclad. We have sustainable plans for public spending, and we are ensuring that we are managing the economy in a way that the hon. Gentleman’s party could only dream of.

[Catherine West (Hornsey and Friern Barnet) (Lab)]

7. What fiscal steps she is taking with Cabinet colleagues to help reduce the level of use of food banks by families.

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[Liz Jarvis (Eastleigh) (LD)]

T3. David, who owns the Steam Town Brew Co. in my constituency, tells me that his biggest concerns right now are inflation and the ability to plan ahead. What reassurance can the Minister give him that businesses in my constituency will be supported with the stability and certainty that they need?

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

Businesses in the hon. Lady’s constituency, and indeed across the country, can know that, whatever instability we face in the world in the months and weeks ahead, the Government have done the right thing for the economy by bringing down inflation, interest rates, borrowing, debt and debt costs. All that puts us in the strongest possible position to be resilient going into the future.

[Sam Carling (North West Cambridgeshire) (Lab)]

T9. Young people in North West Cambridgeshire and across the country are struggling to access mortgages and get on to the housing ladder due to thin credit files. Will the Minister explore requiring lettings agents and large landlords, with the consent of tenants, to report rental payment data to credit reference agencies so that a record of paying rent on time can contribute to tenants’ credit histories and help them access mortgages?

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[Jessica Toale (Bournemouth West) (Lab)]

The junction of Surrey Road and Prince of Wales Road; Wimborne Road, between Kinson library and Bear Cross; and Hankinson Road, around Winton rec—these are some of the more than 35 roads in Bournemouth West where residents have told me potholes are out of control. Lib Dem-led Bournemouth, Christchurch and Poole council has been given £7.5 million to maintain our roads and fix potholes. I will be writing to BCP council later today, but in the meantime, will the Minister join me in urging it to get its act together and finally fix our roads?

[James Murray]

As my hon. Friend makes clear, we need to ensure that our extra funding for local roads maintenance is spent effectively, and that local residents can hold councils like Bournemouth, Christchurch and Poole to account. The Liberal Democrats have typically not been shy about mentioning potholes in their leaflets; now is their time to deliver.

[Sir Desmond Swayne (New Forest West) (Con)]

T8. The Chancellor said that she will meet representatives of the North sea oil industry to see how it can help. The proper question is how she can help it, is it not?

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[Chris Webb (Blackpool South) (Lab)]

Two weeks ago, I held an emergency cost of living summit in Blackpool, after record numbers of families, particularly single mums, contacted us in food crisis. They could not access the council’s discretionary fund. Will the Minister outline how the new crisis and resilience fund will ensure that families in my constituency can get the support that they need, especially over the weekend?

[James Murray]

My hon. Friend is right to point to the crisis and resilience fund as an important lifeline for families across this country. We work with local authorities to make sure that the funding gets to the frontline, because local councils best understand where the most acute pressures are in their areas. I am, however, happy to discuss this with him later.

[Claire Young (Thornbury and Yate) (LD)]

Heat batteries are the only clean heat technology certified by the microgeneration certification scheme that is excluded from VAT relief under the energy-saving materials framework. This penalises smaller homes and lower-income households that cannot accommodate a heat pump. Will the Chancellor commit to removing that anomaly, and meet me and representatives of the UK heat battery industry to discuss it?

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[Adam Jogee (Newcastle-under-Lyme) (Lab)]

My constituents in Newcastle-under-Lyme are sick and tired of poor-quality, dangerous roads. The county council has resources from this Government, and must stop being missing in action. What message does the Minister have for Staffordshire county council?

[James Murray]

My hon. Friend is right that we need councils across the country to use the extra funding that the Government have made available for local road maintenance to fill those potholes. Councils will have to publish their data online, so that local people can monitor, through a traffic light system available on gov.uk, how their council is performing.

Public Service Pension Scheme: Indexation and Revaluation 2026

James Murray Excerpts

Thursday 26th February 2026 Written Statements

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

Public service pensions are a cornerstone of the remuneration package for hard-working people across our public services. Ensuring that they maintain their value over time is essential to delivering dignity in retirement for current and former public service workers.

Legislation governing public service pensions in payment requires them to be increased annually by the same percentage as additional pensions (state earnings-related pension and state second pension). Public service pensions will therefore be increased from 6 April 2026 by 3.8%, in line with the annual increase in the consumer prices index up to September 2025, except for those public service pensions that have been in payment for less than a year, which will receive a pro-rata increase. This will ensure that public service pensions take account of increases in the cost of living and their purchasing power is maintained.

Separately, in the career average revalued earnings public service pension schemes introduced in 2014 and 2015, pensions in accrual are revalued annually in relation to either prices or earnings depending on the terms specified in their scheme regulations. The Public Service Pensions Act 2013 requires His Majesty’s Treasury to specify a measure of prices and of earnings to be used for revaluation by these schemes.

The prices measure is the consumer prices index up to September 2025. Public service schemes that rely on a measure of prices, therefore, will use the figure of 3.8% for the prices element of revaluation.

The earnings measure is the whole economy year-on-year change in average weekly earnings (non-seasonally adjusted and including bonuses and arrears) up to September 2025. Public service schemes that rely on a measure of earnings, therefore, will use the figure of 4.8% for the earnings element of revaluation.

The effective date of revaluation listed in the order is 1 April 2026, but some schemes have chosen to move their effective revaluation date to 6 April 2026 in order to manage interactions with the annual tax allowance.

Revaluation is one part of the amount of pension that members earn in a year and needs to be considered in conjunction with the amount of in-year accrual. Typically, schemes with lower revaluation will have faster accrual and therefore members will earn more pension per year. The following list shows how the main public service schemes will be affected by revaluation:

Oral Answers to Questions

James Murray Excerpts

Tuesday 27th January 2026 Commons Chamber

[Alice Macdonald (Norwich North) (Lab/Co-op)]

22. What steps she is taking to providing funding for rail infrastructure.

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

Investment in our railways is a crucial part of our plan to unlock economic growth in every nation and region of the UK. Earlier this month, my right hon. Friend the Chancellor announced our plans for Northern Powerhouse Rail. That transformational programme is backed by up to £45 billion of investment in the long term, which will be key in unlocking economic potential across the north.

[Dave Robertson]

People across Lichfield, Burntwood and the villages are delighted that this Government have funded the midlands rail hub project, meaning a doubling of the number of trains from Lichfield to Birmingham every hour. Ministers could go even further, though, by investigating the reopening of the Derby-Burton-Lichfield line, including a stop in Alrewas for the National Memorial Arboretum. Despite warm words from my predecessor, no business case exists for that. Can the Minister confirm that this Labour Government are not done with investing in transport in the midlands, and will he look again at the Derby-Burton-Lichfield line?

[James Murray]

I thank my hon. Friend for highlighting the value of the midlands rail hub, which we invested in at the spending review. We are determined to invest more in transport in the midlands. Indeed, at the spending review the Government committed to investing £4.4 billion there through transport for city regions funding. My hon. Friend is a great advocate for services that will benefit his constituents, and I will ask the Rail Minister to respond about the specifics of the line that he raises.

[Alice Macdonald]

I welcome the investment the Government have made in rail, including East West Rail, but there are still several projects that would hugely benefit passengers and the local economy in the east. Those include upgrading the Trowse swing bridge near Norwich and, of course, Ely and Haughley junctions. Will the Chief Secretary to the Treasury meet me and other colleagues from the east of England to discuss how we can advance those key infrastructure projects for the region?

[James Murray]

East West Rail is a transformational project that will unlock economic growth and housing. Just yesterday, I was glad to host a representative from East West Rail at an infrastructure roundtable at the Treasury with my right hon. Friend the Secretary of State for Housing, Communities and Local Government. My hon. Friend is another powerful advocate for her local area, and I will happily discuss this matter with the Rail Minister and get back to her.

[John Glen (Salisbury) (Con)]

Last week I met Lawrence Bowman, the chief executive of South Western Railway. I am keen to make sure that all the Government’s changes take positive effect in Salisbury and south Wiltshire, so that tracks, signal and stock can be improved. Will the Minister make sure that there is a suitable reference board along the commuting line into Waterloo, so that when Lawrence Bowman’s business plan is delivered, there will not be any delays when he has to interact with local authorities—a concern that he raised with me last week?

[James Murray]

I thank the right hon. Gentleman for raising the concerns of the services used by his constituents. I can assure him that I will look into those and get back to him.

[Ian Roome (North Devon) (LD)]

The Tarka line in North Devon has seen a massive increase in footfall. However, the line is often closed because of the lack of infrastructure upkeep. Will the Minister meet me to discuss various funding opportunities? It is a rural line that is vital for students to get into Exeter and for people’s job opportunities—I know that the Government are all about job growth.

[James Murray]

The hon. Gentleman is absolutely right: we are all about job growth. I fear I will be quite busy after this set of questions with taking up projects in different constituencies, but that is absolutely right, because we all want to make sure that we have better investment—particularly in transport and infrastructure—for our constituents. I assure him that I will look into the matter and get back in touch with him.

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[Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

T2. The three-year local government funding settlement is a welcome return to long-term planning. Newcastle city council faces a 34% rise in adult social care costs, compared with only a 15% rise in core spending power. That is taking more and more money away from the many services that my constituents depend upon. Will the Chancellor work across Government to consider changes to the adult social care funding formula and/or an increase to the recovery grant so that Newcastle city council can meet the costs of adult social care?

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

As my hon. Friend sets out, there are significant challenges in adult social care, and we have already made available an extra £4.6 billion, including funding to start to implement the fair pay agreement. As she will probably be aware, Baroness Louise Casey is leading an independent commission to build consensus on reform. Its first phase will report this year, with a focus on how to make the most of existing resources.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

T5. While the Chancellor was enjoying her trip to Davos last week, inflation went up, as did unemployment, reversing the progress of the previous Conservative Government. Did the Chancellor or her Cabinet colleagues pick up any ideas in Davos that could reverse those trends, support our businesses and high streets and end the hiring recession that her Budget has caused?

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[Edward Morello (West Dorset) (LD)]

T8. Vast swathes of Bridport, Beaminster, Maiden Newton, Yetminster and Thornford—whole parts of West Dorset—are under water. Dorset and Wiltshire Fire Service is doing an amazing job of rescuing residents who are trapped either at home or in cars, but unfortunately it will suffer a £1.2 million shortfall in the long-term funding settlement because the Treasury’s underlying assumptions are incorrect. Will the Chancellor meet me, so that we can show her why this is a problem for the service?

[James Murray]

Let me start by thanking the emergency services in the hon. Gentleman’s constituency for all their work to ensure that people are kept safe, and to respond to the challenges that people face as a result of flooding. We are determined to support public services across the board, and the decisions taken by my right hon. Friend the Chancellor in past Budgets and in the spending review mean that we have sustainable funding for our public services in all parts of the country.

[Dame Nia Griffith (Llanelli) (Lab)]

T7. I thank my right hon. Friend the Chancellor for bringing us record investment, financial stability and repeated interest rate cuts, but does she share my astonishment that Reform is not only welcoming treacherous Tories who did so much to wreck our economy and public services, but actually entrusting them with economic policy?

[James Murray]

My hon. Friend is absolutely right. The hon. Member for Clacton (Nigel Farage) is warmly welcoming people who spent 14 years undermining public services, who wrecked the economy, who botched Brexit, and who were booted out by the British people in 2024—and Reform’s latest recruit was so bad that she managed to get sacked by Liz Truss.

[Wendy Chamberlain (North East Fife) (LD)]

T9. I heard the Minister’s words to the hon. Member for Shipley (Anna Dixon) about the energy company obligation 4 scheme, but the vague promise in the warm homes plan to put right poor-quality work under ECO4 seems like empty words to my constituents who are affected. Will the Treasury consider the only viable alternative to this disastrous scheme, which is redress?

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

T10. Ben Houchen’s Teesworks saga has seen more than half a billion pounds of taxpayers’ money funnelled into enriching a few business people, while the opportunity for a sovereign wealth fund investment programme has been squandered. What steps are being taken to ensure that there is meaningful investment for economic growth and development in Teesside?

[James Murray]

This Government are backing investment in Teesside to create the good jobs that my hon. Friend’s constituents deserve. I know that Teesside is very well placed to lead for our country across a range of sectors. For example, £4 billion is going into the UK’s first carbon capture, usage and storage cluster in Teesside, including the world’s first at-scale gas power station with CCUS.

[Bobby Dean (Carshalton and Wallington) (LD)]

Ten years ago, this place introduced legislation preventing banks from applying tax deductions after paying compensation for wrongdoing. Now lenders are set to pay out billions of pounds in connection with the motor finance scandal, but they will be able to reduce their tax bills because most of those companies have channelled their money via subsidiaries. Does the Minister agree that that is not in keeping with the spirit of the law, and will the Government do something about it?

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[Rebecca Smith (South West Devon) (Con)]

At the weekend, Storm Ingrid caused the sea wall at Dawlish to collapse in two new places, and we wait to see the damage caused by Storm Chandra today. Both storms are once again exposing the vulnerability of the main rail line to Devon and Cornwall, which is vital for the local economy. Given the reported lack of a Treasury emergency reserve, can the Chancellor guarantee contingency funding for any urgent and unplanned resilience work required and not covered by a fiscal event?

[James Murray]

I thank the hon. Lady for raising the situation in her constituency. All Departments across Government have had their budgets set, and they include a contingency for covering known pressures. One of the ways that we have managed spending settlements differently from the previous Government is that all Departments must recognise that unexpected pressures will come along. They need to prepare for that, and should have robust plans for responding when such things occur.

[Chris Webb (Blackpool South) (Lab)]

Southshore in my constituency has the highest concentration of deprived communities and the most deprived ward in the country. We have developed a local people’s plan for work to regenerate the area. Will my right hon. Friend the Chancellor meet me to discuss this plan, so that we can regenerate the most deprived area in this country?

Covid-19: Financial Support

James Murray Excerpts

Thursday 15th January 2026 Commons Chamber

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

I, too, congratulate the hon. Member for Stratford-on-Avon (Manuela Perteghella) on securing this debate. I thank hon. Members from both sides of the House for their powerful contributions. Although much of the debate has rightly focused on the detail of the financial support made available by the then Government during the pandemic, we have also heard many deeply personal stories about businesses and individuals who were directly affected.

In two months’ time, the country will come together to mark the sixth anniversary of the start of the pandemic. That will be an opportunity for us all to remember and reflect, and to pay tribute to all those who died, whose loss is still so keenly felt in all our constituencies. The pandemic cost over 227,000 lives in our country, and I know that loss and grief are still felt by families whose loved ones were lost during that difficult period.

As the hon. Member for Richmond Park (Sarah Olney) said, reflecting on the pandemic is also a moment to express our gratitude, once again, to all those who worked throughout the pandemic to provide vital and, in many cases, lifesaving services to all of us across the country. It is also a moment to recommit to learning the lessons of what happened during that time, so that we are better prepared for future crises. The Government are committed to learning those lessons and doing all we can to protect businesses and individuals across Britain in future.

As well as having a huge impact on the lives of people and their families across the country, as we have heard today, the pandemic was a huge economic shock. GDP fell by a record 19.4% and thousands of businesses faced closure, so it was necessary to support businesses and individuals affected. We supported putting in place the measures mentioned by the shadow Minister, the hon. Member for North West Norfolk (James Wild), including the coronavirus job retention scheme, the self-employment income support scheme, and various business grants and Government-backed loan guarantees. It is right, however, that we as a country now reflect on how those schemes were implemented by the Government of the day.

As we have heard from many hon. Members, a number of people experienced genuine hardship and distress because they were excluded from the available schemes. Many of those experiences have been described powerfully in today’s debate, including by the hon. Member for Stratford-on-Avon in her opening speech and by my hon. Friend the Member for Montgomeryshire and Glyndŵr (Steve Witherden). We also heard a number of other stories about individuals and businesses across the country from my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham), the hon. Member for Ely and East Cambridgeshire (Charlotte Cane), and my hon. Friend the Member for Mid Cheshire (Andrew Cooper), who also spoke about the significance of economic resilience and preparedness for the future—an important topic that I will return to in a moment.

We also heard from the hon. Members for Wimbledon (Mr Kohler) and for Dewsbury and Batley (Iqbal Mohamed), and my hon. Friend the Member for Falkirk (Euan Stainbank), who spoke about the impact of the pandemic on young people, which has had a lasting effect, as we are all keenly aware. The hon. Members for Didcot and Wantage (Olly Glover) and for Mid Dunbartonshire (Susan Murray) also spoke about their affected businesses and constituents. One of the themes of those contributions was about what we as a country are doing to prepare for the future, to ensure that if a similar crisis happened again, we would be better prepared. As a Government, we are considering how we might better target and reach excluded groups in future, including through better real-time data collection.

As hon. Members know, the official covid-19 public inquiry is considering how future emergency schemes could be better tailored to the modern labour market. The inquiry recently held public hearings focused on economic support for people and businesses during the pandemic, and it will publish its final report in due course. The Government, including the Treasury, fully participated in those hearings and provided a substantial amount of evidence. We will carefully study and consider any recommendations, mindful of our responsibility to vulnerable groups and our commitment to value for money.

As hon. Members have also made clear, no assessment of the previous Government’s record during the pandemic can ignore the fact that billions of pounds of taxpayers’ money was lost to fraud. That was a failure of monumental proportions, and we are all continuing to pay the price. That is why, on taking office, we took action to recoup the money owed, including by appointing Tom Hayhoe as the covid counter-fraud commissioner. In December he published his report, and the findings are shocking.

According to the commissioner, covid fraud cost the taxpayer a staggering £10.9 billion—that is enough to fund daily free school meals for the UK’s 2.7 million eligible children for eight years. Of course, we recognise that our predecessors in government were responding to a crisis, the nature of which demanded acting at speed, but the cynical exploitation of pandemic support was foreseeable.

Last year, an arrest was made following an HMRC investigation into a company, Luxe Lifestyle, which was awarded a £25 million PPE contract, having been referred to the procurement VIP lane by a Conservative Minister and a party chairman. The company won that contract despite having no employees, no assets, no turnover and £9,000 of debt. While Luxe Lifestyle did end up supplying some items, they were all inadequate and unusable. That is just one example. It does not begin to scratch the surface of covid fraud, but we have heard no apology today from the Conservatives for their actions—no apology to this House, and no apology to the British people who have been left to pick up the bill.

We cannot allow this ever to happen again. That is why the Government introduced tougher sanction powers in the Public Authorities (Fraud, Error and Recovery) Act 2025 to help recover stolen funds, and why we have rolled out specialist fraud recovery teams to track down suspected fraudsters and recover taxpayer cash. Since coming to office, the Government have recouped almost £400 million paid in error or that was obtained illegally through covid fraud. As the Chancellor has made clear, this fraud is a fraud against the British people, and we will leave no stone unturned, leave no question unasked, and leave no fraudster unchallenged until we have cleared up the mess we inherited.

While we work to fix those problems, we are also turning towards the future, making sure our country is well prepared to face future crises. Much has been learned already from the covid-19 pandemic, but the scale of the economic emergency facing the country nearly six years ago underlines the need to continue embedding these learnings into the Government’s systems and processes. As I have already set out, we have taken tough action to track down the fraudsters who profited on the previous Government’s watch. We are improving and enhancing the Government’s analytical and modelling capabilities, to ensure that we can better target support schemes in future. We have launched the National Situation Centre, enabling us to identify and plan for a range of risks and improve our crisis response.

We have conducted, through Exercise Pegasus, the largest cross-Government pandemic simulation in British history, helping to make sure we are better prepared than before, that our plans are battle-tested, and that we are ready to adapt. As the official covid-19 inquiry draws to a close, we stand ready to study any recommendations and to take action where needed.

The economic implications of the covid-19 pandemic for this country were profound. In response to this unprecedented crisis, it was of course necessary to act quickly for our economy and for our communities. But we know that mistakes were made, and the British people were defrauded to the tune of over £10 billion. That is money that should have been spent on schools and hospitals but which has instead gone into the pockets of fraudsters and criminals. There will also undoubtably be wider lessons to draw from the design of support schemes and the impact those schemes had on various groups across the economy.

As a Government, we will continue to enhance our resilience to future shocks. We have set to work on that since the election, and our efforts will intensify after the official covid-19 inquiry publishes its final report. We will do whatever is necessary to build a safer and more secure country for the future. I will end by again thanking all hon. Members for sharing the experiences of their local businesses and individual constituents in the debate.

Conduct of the Chancellor of the Exchequer

James Murray Excerpts

Wednesday 10th December 2025 Commons Chamber

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

I thank the Opposition for giving me another opportunity to remind Conservative Members how the Budget cut the cost of living, cut NHS waiting lists and cut Government borrowing.

I have seen the shadow Chancellor across the Dispatch Box so much in recent weeks, on what feels like a daily basis, that I might almost miss him over the recess—almost. No matter how many times I have seen him across the Dispatch Box, he has shown that he does not want to talk about the fact that this Budget takes £150 off energy bills, freezes rail fares and prescription charges, lifts 550,000 children out of poverty, increases our headroom to £21.7 billion, and gets debt falling and cuts borrowing in every year. This Budget invests in our NHS, our defence, our roads and our railways, and in every region and nation of the UK. The Conservatives do not want to talk about the substance of the Budget because they can see that the Chancellor has delivered a Budget that delivers for working people.

[Dave Doogan]

I did not expect the Minister to give way. He says that energy bill payers in the UK are now £150 better off, forgetting that energy bills are currently almost £600 higher than Labour promised they would be at the election. Ofgem has come in with an additional £108 for infrastructure charges. Energy bills will go up again in January and again in April. Does he want to reflect on what he has said? Is that really the record on which he is standing?

[James Murray]

I am unclear whether the hon. Gentleman supports our £150 off energy bills and our extra £150 off for those 6 million households on the lowest income. That will benefit people right across the UK with the cost of living challenges they face. We know that that is what matters to people right across Britain.

Instead of focusing on what this Budget means for people across Britain, we heard the shadow Chancellor’s comments on a motion that focuses so much on process. While I accept that process is very important, it has been covered extensively in recent weeks—indeed, most recently by the Chancellor in the Treasury Committee this morning—so let me put on record our response to the motion and to the comments that the shadow Chancellor made about process.

Let me begin by again addressing the speech that the Chancellor made on 4 November. When the Chancellor addressed the country that morning, her purpose was simple: to give the British people an honest sense of the circumstances we were facing and the principles that would guide her as she took decisions at the Budget. She wanted to highlight the challenges that our country was facing and her priorities in the face of those challenges, and that is exactly what she did.

Following the OBR’s review of productivity—the review of the impact of 14 years of the Conservatives being in power—the Chancellor knew that we faced a downgrade. To understand the scale of the impact, members of the Opposition need only to consult the Budget document. There, they will see that the OBR’s productivity review, which covered the Conservatives’ time in office, reduces

“the amount of revenue the OBR expects the government to collect by around £16 billion in 2029-30.”

[Graham Stuart]

I think it is the dishonesty that is catching at everybody’s throat. A year ago at the Budget, the Chancellor said that she was not going to freeze income tax thresholds because—I think I quote—it would be an additional tax on working people, and therefore in breach of the Labour manifesto. A year later, she did exactly that, and then claimed that it was not a breach of the Labour manifesto. That is rank dishonesty. That is why Madam Deputy Speaker is allowing language that would not normally be used in this Chamber: because this motion and this Government mean we have to address issues that normally do not occur.

[James Murray]

The right hon. Gentleman is mistaken. We have kept to our manifesto commitment not to raise the rates of income tax, national insurance on working people, and VAT. We also said in our manifesto that we would keep taxes on working people as low as possible, and we have been able to do that only because of the other fair and necessary choices that the Chancellor made on taxation.

[Graham Stuart]

Will the Minister give way?

[James Murray]

I will give way if the right hon. Gentleman will tell us whether he supports our changes to council tax on high-value properties.

[Graham Stuart]

On the issue of the manifesto, will the Minister confirm that it does not say that it would not raise the income tax rates? It just says that it would not raise those taxes. The word “rates” is not in there. It is that that is misleading. It is that that makes everyone outside throw things at their television, because they are disgusted by a Government who cannot face up to simple truths!

[James Murray]

The word “rates” is definitely in there. The manifesto talks about the income tax rates and additional, main and higher rates of income tax, and it is very clear that we were talking about the rates of tax on working people. As I said, the manifesto also says that we will keep taxes on working people as low as possible. I note that the right hon. Gentleman did not take my suggestion to comment on some of the other tax choices we took at the Budget—the fair and necessary choices. The Opposition are picking and choosing what they want to refer to in the Budget. The Budget is a package. If they do not like it, they should explain what they would do instead.

[Sir Mel Stride]

On the matter of picking and choosing, the right hon. Gentleman is absolutely right that on 4 November, the Chancellor did point out that there was a downgrade in productivity; we now know that to be £16 billion, and she knew that at the time. Does the right hon. Gentleman accept, however, that she did not mention—it was omission—the upgrade to the number, which was twice as much as that £16 billion, and that she thereby gave an inaccurate reflection of the state of the public finances at that time?

[James Murray]

The Chancellor set out the productivity review that was under way by the OBR. In fact, if the right hon. Gentleman consults the OBR document published on Budget day, he will see in black and white that the productivity downgrade reduced tax receipts by £16 billion. The Chancellor was clear in her speech on 4 November that this, combined with the clear need to increase headroom to build resilience in public finances, would require everyone to contribute, and that is what happened.

[Sir Mel Stride]

rose—

[James Murray]

The right hon. Gentleman had a very long time to comment earlier in this debate—I may give way to him later.

[Dr Murrison]

The Minister is a reasonable man, and I imagine that he would subscribe to the Government’s much-vaunted duty of candour that they are selling in their Public Office (Accountability) Bill, which is currently in Committee. The Bill is so important to the Government that the Prime Minister himself had to introduce it on Second Reading. Will the Minister examine what has happened over the past couple of months? Does he really believe that the Treasury, and in particular the Chancellor of the Exchequer, can truly be said to have discharged that duty of candour in their dealings?

--- Later in debate ---

[James Murray]

As the right hon. Gentleman should know, this Government take our responsibilities to public office incredibly seriously, and we have made sure we focus on that in the way we conduct ourselves in office. In speaking to people on 4 November, the Chancellor was setting out the challenges that we knew we were facing and the principles that would guide her in approaching decisions ahead of the Budget. It was important to set out the priorities she would have in taking her decisions on Budget day.

[Sir Mel Stride]

The right hon. Gentleman is being very generous with his time. Does he accept that on 4 November, the Chancellor knew that there was an upgrade to the state of the public finances of around £32 billion due to additional tax, inflation and other factors? If he does accept that, could he explain to the House why no mention whatsoever was made of that fact by the Chancellor?

[James Murray]

What the Chancellor knew when she gave her speech on 4 November was that headroom stood at a precarious £4.2 billion, and that was before previously announced policy measures had been accounted for. As I have said before in this House, and as Professor Miles of the OBR said to the Treasury Committee, that was a very challenging fiscal situation. If I had been at this Dispatch Box trying to justify a headroom of £4.2 billion or less, that would have been completely indefensible. Doing nothing was not an option—£4.2 billion of headroom would have been insufficient and deeply irresponsible.

In her speech at the beginning of November, the Chancellor was clear that she would seek to build more resilient public finances, with headroom to withstand global turbulence. She set out her priorities for the Budget, and those priorities were exactly what the Budget delivered. The apparent astonishment of Conservative Members that a Government could set out circumstances honestly, explain their approach and then deliver as promised is very telling—it must be an alien concept that they never considered during their time in office. As the Chancellor set out on 4 November and then delivered in her Budget, she wanted to cut NHS waiting lists, and that is exactly what we are doing. Waiting lists are already down by 230,000, with an extra 5 million appointments delivered since the election and 250 new neighbourhood health centres on the way.

[Antonia Bance (Tipton and Wednesbury) (Lab)]

One of the things I am most proud of—having stood on doorstep after doorstep in Tipton, Wednesbury and Coseley at the general election, hearing people tell the dreadful stories of how long they and their relatives had been waiting for hospital treatment—is the 45% fall in people waiting more than a year for their operation in the Black Country, in our hospital trusts. I am glad the Chancellor made the decisions she did in the last Budget that have enabled that.

[James Murray]

I thank my hon. Friend for talking about the experience of her constituents. She is absolutely right that the NHS is so important to all of us, and it is so important for the Chancellor to protect it in the Budget. The decisions she took protect our investment in the NHS in order to get it back on its feet, which will improve people’s experiences right across the country.

[Chris Vince (Harlow) (Lab/Co-op)]

On the topic of the NHS, the point I made in the previous debate is really important. The investment in the NHS is not just an investment in buildings; it is an investment in people, including working people. I have lots of people in my constituency who are self-employed—sole traders, as we call them. Does my right hon. Friend agree that those people having to wait years for an NHS appointment is bad for the economy and bad for their pockets?

[James Murray]

My hon. Friend is absolutely right that although improving the NHS is a clear priority, because of all of our experiences and because of our reliance on it to keep ourselves and our families healthy. Investing in the NHS is also an economic investment, because people being out of the workforce due to ill health is a serious drag on our economy—that is the situation we inherited from the previous Government. Our investment in the health service and our desire to get the NHS back on its feet is the right thing to do, not just for families across the country but for economic growth.

[Steff Aquarone (North Norfolk) (LD)]

Will the Minister give way?

[James Murray]

I will give way one more time, and then make some progress.

[Steff Aquarone]

On the same topic, the way this Budget was handled has undermined public confidence in North Norfolk in many ways, few more so than the fact it produced radio silence on our long-pledged dental school at the University of East Anglia. Does the Minister agree that if the Treasury had spent a little less time on its fiscal fandango and more time on delivering dentistry improvements in North Norfolk, this Budget might have gone down better with many of my local residents?

[James Murray]

I would take the hon. Gentleman more seriously if he spent a little less time opposing the decisions we take on tax to fund public services, because we are taking fair and necessary decisions on tax precisely to fund the NHS and the other public services on which we all rely.

I have set out at length what we are doing to protect the NHS, but the Chancellor’s second priority going into the Budget was to tackle the cost of living, and that is exactly what we are doing. At this Budget, the Chancellor chose to freeze rail fares for the first time in 30 years, to extend bus fare caps, to freeze prescription charges, to increase the basic and new state pension, to raise the minimum and living wages, to extend the fuel duty cut, to help more than half a million children who would otherwise live in poverty, and to save the average household £150 off their energy bills. As the Bank of England deputy governor told Members yesterday, this Budget will reduce inflation by between 0.4% and 0.5%.

The Chancellor’s final priority going into the Budget was to cut our national debt and Government borrowing, and that is exactly what we are doing.

[Sean Woodcock (Banbury) (Lab)]

The Conservatives have spent a lot of this debate saying that apologies are due from the Government, yet under them £11 billion of taxpayers’ money was lost in covid fraud. Does the Minister agree that if an apology is due from any party in the House, it is them?

[James Murray]

My hon. Friend is absolutely right. Sorry seems to be the hardest word to say for Opposition Members when it comes to covid fraud, the state in which they left the NHS, the Liz Truss mini-Budget and everything they did to public services and our economy, writing off the next generation and vast swathes of our nation. They should stand up and say sorry.

The priority for the Chancellor at the Budget was also to make sure that we cut our national debt and Government borrowing. Because of choices that the Chancellor made at the Budget, borrowing will fall as a share of GDP in every year of this forecast. Net financial debt will be falling as a share of GDP by the end of this Parliament, and will be lower by the end of the forecast than when we came into office. As I have said already, our headroom now stands at £21.7 billion, meeting our stability rule a year early, giving businesses the confidence to invest and leaving Government freer to act when the situation calls for it.

Whatever mischief the Conservatives try to make and however personal they make their attacks, the truth is that the Chancellor was clear about the challenges the country faces. She set out her priorities in taking those challenges head-on, and she delivered a Budget that meets the priorities of the British people now and in the future.

[Paul Holmes (Hamble Valley) (Con)]

As usual, the Chief Secretary to the Treasury is out here defending the Chancellor. I feel quite sorry for him. He has reeled off a number of policies that his Chancellor and his Government have made a choice about, but before the election, the Chancellor said that those choices would be on the back of a fully costed manifesto. Instead, taxes have gone up to pay for those choices, and that means that the manifesto was not fully costed. The motion therefore is correct, is it not, that the Chancellor misled the country before the election and in this Budget?

[James Murray]

The hon. Gentleman said he feels sorry for me—he needn’t. I am proud to be defending a Labour Budget in this Chamber. Frankly, I might repay the sympathies to him: I feel sorry for him to be stuck on the Opposition Benches, where I fear he may be for a long time.

The other point of process in the motion, to which the shadow Chancellor referred in his comments, is speculation ahead of the Budget. Let me start by addressing the premature publication of the “Economic and fiscal outlook”. We know that the EFO is a highly sensitive document, which is obviously not meant to be published until after the Chancellor has finished presenting the Budget to the House. The fact that it was accessed online before she began her Budget speech was a serious matter.

[Mr Louie French (Old Bexley and Sidcup) (Con)]

The Minister refers to the accidental or deliberate release of this information, but we know that on 14 November the press were briefed, clearly with incorrect information. Will he confirm to this House today who gave authority for that press briefing to go ahead, which misled not only the press, but the country?

[James Murray]

I think the hon. Gentleman is incorrect in what he said. He said that I may have implied the premature publication was deliberate; I certainly did not. It is none the less a serious matter, which is why we are responding to it with the commensurate seriousness that it deserves. We know that the OBR rightly took responsibility for this mistake, and soon afterwards—while we were discussing the matter at these Dispatch Boxes last Monday—its chair, Richard Hughes, resigned. That, of course, is a matter for Mr Hughes, and is his decision. The Chancellor wrote to him to thank him for his professionalism and dedication. Many Members and I have made clear our gratitude for his work as a public servant. Nonetheless, it was a serious breach, and the Government are acting with seriousness in response.

[Chris Vince]

I read the OBR report with interest. One of its recommendations that caught my attention was this:

“We recommend that the process for publishing the EFOs…should immediately be removed from the locally managed website and conducted in an environment more appropriate to the nature of the task”.

May I ask the Chief Secretary, or his Treasury colleagues, to find out whether “immediately” means that that has been done?

[James Murray]

My hon. Friend is right to point out that the OBR’s report contains a series of recommendations. It was, in fact, published within a few days of the premature publication. We are acting on its recommendations, including the recommendation that we should determine whether this has happened before, at previous fiscal events. While the OBR indicated that it might have happened earlier this year, at the time of the spring statement, it did not look into previous fiscal events, either under this Chancellor or under Chancellors in the last Government. We are looking into that to find out what happened.

More widely, beyond the EFO and the OBR, we put the utmost weight on Budget security, as I told the House last week. That is why, as I have told the House, a leak inquiry is under way, with the full support of the Chancellor and the whole team at the Treasury. In addition, the permanent secretary to the Treasury will conduct a review of its security processes, which will inform future fiscal events. The Budget security review will happen in the new year, and we will publish the outcome once it has concluded. More immediately, however, while recognising the seriousness of what happened with the OBR’s forecast, we remain fully committed to working with an independent OBR, and we recognise its vital role as a core part of our fiscal framework. The Government will soon launch a competitive external recruitment process to appoint a new chair, subject to the consent of the Treasury Committee. In the meantime, Professor David Miles and Tom Josephs will jointly lead the OBR until the new chair is in place.

I am happy to come here every day to explain the decisions that we took in the Budget in the interests of the British people. It is clear that the Conservatives do not want to talk about £150 off energy bills, freezes in prescription charges and rail fares, our investment in our NHS, and the fact that we are cutting debt. They do not want to confront the fact that this is a Budget that not only delivers for Britain, but does so in challenging times. It is a Budget that invests in Britain, supports the NHS, helps people with the cost of living, and gets our debt and borrowing down. It is a Budget delivered by a Chancellor who takes challenges head-on, makes the right decisions for our country, and meets the priorities of the British people. It is a Budget from a Government who will not let Britain’s future be defined by the failures of Governments past. This is a Budget that we are proud of, and we reject the Opposition motion.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

Oral Answers to Questions

James Murray Excerpts

Tuesday 9th December 2025 Commons Chamber

[Euan Stainbank (Falkirk) (Lab)]

9. What fiscal steps she is taking to support industry in the Forth valley.

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

As my hon. Friend will know, last year the Government signed a £100 million Falkirk and Grangemouth growth deal with the Scottish Government. At the Budget this year, we further recognised Grangemouth’s centuries of history as a key UK industrial site by announcing additional investment of up to £14.5 million to support industrial projects that can create jobs. Alongside that, the National Wealth Fund is ready to invest £200 million alongside the private sector to help unlock Grangemouth’s full potential and secure our clean energy future.

[Euan Stainbank]

I welcome the additional £14 million-plus to get new industry delivered quickly in Grangemouth and the £25 million to finalise the freeport in the Budget two weeks ago. Forth Valley college is vital to giving local working-class kids the skills they need to grasp the new opportunities that must come to Grangemouth, but it has been failed by the SNP Scottish Government’s staggering 20% cut to colleges since 2021. The Alloa campus now faces closure. Will the Minister consider stepping in with direct skills support for this vital college?

[James Murray]

Education and skills policy, including the funding and operation of colleges, is fully devolved to the Scottish Government. That means that it is for Scottish Ministers to decide how to support Forth Valley college with the overall settlement. As my hon. Friend will know, the spending review provided the Scottish Government with their largest settlement in real terms since devolution in 1998, and the Budget provided an additional £820 million to Scotland through the Barnett formula. In the months ahead we will be campaigning to ensure that decisions about how to invest that funding in Scotland’s future will be taken by Anas Sarwar and a Scottish Labour Government.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The challenges experienced by the businesses of Forth valley are the highest industrial energy prices in the G7, Labour’s farm tax, Labour’s family business tax, Labour’s £26 billion raid on the cost of employing people, Labour’s fiscal drag on everybody’s earnings, the Potemkin support for Grangemouth, the ambivalence to Mossmorran and the defunding of the Acorn project. For how long does the Minister think Scotland should put up with this chaos from Westminster?

[James Murray]

The hon. Member is happy to criticise tax decisions taken by this Government, but where does he think the largest spending review settlement since devolution began came from? Where does he think the £820 million announced at the autumn Budget came from? He needs to support the tax decisions we take if he wants the investment to go into Scotland.

[Liam Conlon (Beckenham and Penge) (Lab)]

10. What fiscal steps she is taking with Cabinet colleagues to support patients in the NHS.

[Dr Simon Opher (Stroud) (Lab)]

19. What fiscal steps she is taking with Cabinet colleagues to support patients in the NHS.

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

The spending review 2025 provided record investment in the NHS, including the largest ever health capital budget. That investment has enabled a reduction in waiting lists of 230,000, with an extra 5.2 million NHS appointments. At autumn Budget 2025, the Chancellor protected NHS investment by allowing it to retain and reinvest efficiency savings in 2028-29, as well as making available up-front funding to abolish NHS England: a move that will unlock £1 billion in savings by the end of the Parliament, which can instead be used to support frontline care.

[Liam Conlon]

I thank the Minister for his response. When I was in sixth form at the end of the last Labour Government, I became one of the youngest people in Britain to have a hip replacement. I will always be grateful to the incredible NHS staff who cared for me. But between 2011 and 2024, because of savage Tory cuts, the waiting list for hip replacements at King’s College hospital trust, which serves my constituency of Beckenham and Penge, more than doubled. The Tories left thousands of people waiting months on end, but thanks to record investment from this Labour Government, those waiting lists are starting to fall. Will the Minister commit to continuing that investment in the NHS?

[James Murray]

I thank my hon. Friend for his question. Like him, I will always be grateful to the incredible NHS staff who got me back fighting strong after I was diagnosed with a neuromuscular condition in my 20s. People across the country have stories like ours because we all depend on the NHS, and that is why it is such a priority for us as a Government to invest in our health service to get it back on its feet and build an NHS that is fit for the future.

[Dr Opher]

I thank the Chancellor for investing in our community care. In Stroud, the two beating hearts of our community—GP surgeries and our village pubs—reduce social isolation. Today, the publicans are meeting at Stroud Brewery to discuss the impacts of business rates. May I invite the Minister to discuss how we can help our pub landlords—perhaps over a pint?

[James Murray]

My hon. Friend is right to point to the role that pubs play at the heart of local communities—I assume that the pubs and GP surgeries in his example are separate. As my hon. Friend the Exchequer Secretary set out earlier, we are in a situation where the temporary pandemic business rates relief is coming to an end and the new revaluation, which is post pandemic, comes into effect. In that context, we are supporting the high street, including pubs, with permanently lower tax rates for eligible retail, hospitality and leisure, as well as a support package that means most properties seeing increases will see them capped next year at 15% or less, or £800 for the smallest properties.

[Bob Blackman (Harrow East) (Con)]

One of the challenges that the NHS faces is dealing with people who are street homeless and who have to go into hospital for treatment. They are then discharged, and it is almost like a rotating saw, unfortunately. What is needed now is targeted funding to ensure that the NHS discharges people to somewhere they have a safe place to live. Will the Minister take up that challenge, particularly at this time of year?

[James Murray]

The hon. Member is right to point to the fact that people showing up in hospital can often reflect other social issues, whether homelessness, child poverty or other challenges. As a Government, we take tackling homelessness—by which I mean temporary accommodation and rough sleeping—incredibly seriously and we will publish a homelessness strategy shortly.

[Mr Will Forster (Woking) (LD)]

Ashford and St Peter’s hospital, which serves my constituency, has an £80 million repair backlog. When will the Government allocate sufficient funding to fix our crumbling hospitals, including Ashford and St Peter’s?

[James Murray]

As the hon. Gentleman will know, the coalition Government, of which his party was a part, slashed capital investment in our health service. We have restored capital investment in our health service, which is critical to getting it back on its feet. If he is requesting greater investment in the NHS, I hope that he will change his mind, correct the record and support the tax changes that we have made in order to make that possible.

[John Milne (Horsham) (LD)]

11. What fiscal steps she is taking to help increase growth in rural areas.

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

Growth is the No. 1 mission of this Government, and we are committed to unlocking growth in every corner of this country. We have committed £2.7 billion per year to supporting sustainable farming, £2.3 billion of transport funding for places beyond city regions through the local transport grant, and more than £1.9 billion for gigabit broadband and 4G connectivity. That funding will help to tackle key blockers to growth in rural areas, unlocking the opportunities and benefits of growth for people right across the UK.

[John Milne]

Later today I will chair a meeting of the all-party parliamentary group for rural business and the rural powerhouse, which focuses on generating rural growth. If we could push rural productivity closer to western European averages, it would fix the Government’s budgetary black hole all by itself. Will the Minister agree to set a measurable target for increasing rural productivity so that we can hold the Government to account on progress?

[James Murray]

I welcome the hon. Gentleman drawing attention to the importance of productivity in the UK economy and our prospects for growth. As we know, the Office for Budget Responsibility reviewed the productivity impact of the previous Government’s record in office and found that the decisions they had taken over those 14 years meant that we had a £16 billion revenue hit to the public finances in the target year of the scorecard. We know that means that productivity has been downgraded as a result of decisions taken by the previous Government, but that gives us an opportunity—an opportunity to not be held back by the failures of the previous Government and to exceed those forecasts in future.

[Noah Law (St Austell and Newquay) (Lab)]

Cornish communities and small and medium-sized enterprises in the supply chains of Cornwall’s most promising industries alike will have been delighted by the Chancellor’s announcement of the Kernow industrial growth fund in the recent Budget. Does the Chief Secretary to the Treasury agree that those funds should be invested prudently and sustainably and that the proceeds should be recouped for the Cornish public’s coffers so they can be invested in future projects?

[James Murray]

My hon. Friend and many of his neighbouring MPs are excellent advocates for Cornwall and for the benefits that Cornwall can bring to growth, both in the region and right across the country. I know that, in the Budget, the Chancellor was keen to support investment in future industries in Cornwall. For the local council to deliver that, we will work closely with it to make sure that money is well spent. The key thing for us is to ensure that we enable people in Cornwall to be part of the economic growth mission of this Government.

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

As this is my last question before Christmas, I want to ask my counterpart a nice and constructive one. As he will know, rural residents and businesses already pay more on fuel than their urban counterparts and there are fewer public transport options. Can he advise what were the results of his assessment of the relative impact of the Budget’s introduction of road pricing on rural, compared with urban, areas?

[James Murray]

I think the hon. Gentleman is referring to the changes we announced in the Budget in relation to electric vehicles and their contribution towards public finances. If people drive electric vehicles, wherever in the country they drive them, they benefit from investment in roads and maintenance alongside those of us who drive petrol cars, so it is important to ensure that we make the tax system fit for the future. This is a decision that people have talked about for many years. The hon. Gentleman’s party ducked it, alongside many other difficult decisions, but we are taking them head-on to ensure that we are fit and stable for the future.

[Lorraine Beavers (Blackpool North and Fleetwood) (Lab)]

T1.   If she will make a statement on her departmental responsibilities.

--- Later in debate ---

[Josh Fenton-Glynn (Calder Valley) (Lab)]

T5. Having worked on child poverty for over a decade, I have seen at first hand the damage to health, education prospects and life chances that poverty can cause, put at £40 billion a year by the Child Poverty Action Group. Can the Chancellor assure me that the child poverty strategy will build on the historic Budget announcement on the two-child cap, and do more to reverse the appalling rise in poverty that we saw under the Conservatives?

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

The child poverty strategy published last week sets out the steps that we are taking to support families now, as well as the building blocks that we are putting in place for the long term. We will lift 550,000 children out of poverty by removing the two-child limit and through other measures, including the expansion of free school meals.

[Sir Ashley Fox (Bridgwater) (Con)]

T2.   Unemployment is higher today than it was on the day the Chancellor took office. Will she tell the House why that is the case?

--- Later in debate ---

[Tom Hayes (Bournemouth East) (Lab)]

An independent and effective OBR is critical for our country, but it needs to do better. Why can the OBR not count? Why can it not forecast accurately, given that the economy grew 50% faster than it had predicted in March? Why can it not even publish the Budget document without making a dog’s breakfast of it? Is it not time for the OBR to properly price pro-growth measures and get behind our growth mindset?

[James Murray]

I can be clear that we are committed to the OBR’s independence as a forecaster and to the core role it plays within our fiscal framework. The Chancellor has also been clear, however, that forecasts are not our destiny. We will not let Britain be held back by the failures of the previous Government. At the Budget, the OBR revised upward its growth estimate for this year, and we are determined to exceed forecasts again.

[Chris Coghlan (Dorking and Horley) (LD)]

T4. Public research and development is so powerful for economic growth that US patents funded by it generate 12 times more growth than those that are not. But does the Chancellor accept the judgment of the OBR that UK public R&D will generate no additional incremental growth because we are not increasing it enough?

--- Later in debate ---

[Edward Morello (West Dorset) (LD)]

T6. The cost of delivering public services in rural Britain is higher than in urban areas. The cost to access services is higher for communities in rural places like West Dorset than it is for those in urban Britain. Will the Treasury commit to reviewing the funding formula, so that local government, integrated care boards, fire services and all our vital community services get the funding that rural communities deserve?

[James Murray]

The Ministry of Housing, Communities and Local Government recently published “English indices of deprivation 2025”, which included the supplementary report on how deprivation manifests in rural areas. I can assure the hon. Gentleman that the Government will further consider those assessments of deprivation, as well as other inputs, when deciding funding models for local areas.

[Dave Robertson (Lichfield) (Lab)]

Constituents across Lichfield, Burntwood and the villages will be pleased to see the Government taking action on the cost of living by reducing energy bills, but they want the benefits to be fair and felt by all bill payers. What steps will the Chancellor take with Cabinet colleagues to ensure that reductions in energy bills are reflected in standing charges, not just in unit prices?

--- Later in debate ---

[Gill German (Clwyd North) (Lab)]

I warmly welcome the second rise in the national minimum wage under this Government. Some 160,000 workers in Wales have already benefited since the rise in April. Many of them are younger workers, particularly in the retail and hospitality sector, which is so important to my constituency at Christmas and beyond. What assessment has been made of the impact of the national minimum wage rise on younger workers, and what progress has been made on equalising the national minimum wage with the national minimum wage for under-21s?

[James Murray]

About 300,000 young workers are expected to benefit from the national minimum wage increases in April 2026. The Low Pay Commission was given a remit to develop its preferred path and pace for the equalisation of the 18-to-20 national minimum wage and the national living wage. The 18-to-20 national minimum wage rate from April 2026 makes steps towards that commitment.

[Alison Bennett (Mid Sussex) (LD)]

T9.   The Government seem set on pushing on with the family farm tax, despite opposition from the Liberal Democrats—and indeed from Labour Members. Will the Minister at least revisit the forestalling clause, which would help older farmers in Mid Sussex and across the country to avoid the consequences of backdating the legislation?

--- Later in debate ---

[Alison Hume (Scarborough and Whitby) (Lab)]

Alexander Dennis is a British electric bus manufacturer employing more than 700 people in Scarborough. Major bus contracts are due to go live in early 2026. Will the Minister confirm that this Government are backing British-built buses over Chinese imports, and can he confirm that the changes to public procurement processes will be implemented in time for taxpayers’ money to be spent on buying British buses?

[James Murray]

We have a proud history of manufacturing in this country, including in my hon. Friend’s constituency, and we will capitalise on that history as we drive our future growth. The UK is a leader in bus manufacturing, and the Government are committed to supporting the sector, including through the Department for Transport’s UK bus manufacturing expert panel. As a Government, we want to back British buses, unlike the SNP.

[Olly Glover (Didcot and Wantage) (LD)]

T10. The Government created the National Wealth Fund to encourage investment in innovation in critical sectors, such as clean energy and sustainable aviation fuel. How will the Chancellor make sure that the wealth fund uses different, and maybe even better, risk criteria than commercial banks and financial entities?

[James Murray]

The National Wealth Fund is at the forefront of public investment, investing in early-stage companies and projects to support innovation, boost jobs and create growth. It will work closely and collaboratively with other public financial institutions such as the British Business Bank, Innovate UK and UK Research and Innovation to support innovative companies across the UK.

[Sarah Owen (Luton North) (Lab)]

Removing the two-child benefit cap means that 5,000 children in Luton North will be lifted out of poverty. Many live in households where parents work but ends still do not meet. Does the Chancellor agree that action like this and the youth guarantee scheme will end the vicious cycle of poverty for good?

OBR: Resignation of Chair

James Murray Excerpts

Wednesday 3rd December 2025 Commons Chamber

[Sir Mel Stride (Central Devon) (Con)]

(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the resignation of the chair of the OBR.

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

Last week, the “Economic and fiscal outlook” was accessed prematurely ahead of the Budget. The Office for Budget Responsibility took full responsibility for this and conducted a review into what had happened. That report was published on Monday, and I came to this House to make a statement. The report found “systemic issues”, which led, in its words, to the

“worst failure in the 15-year history of the OBR.”

While I was making that statement on Monday afternoon, Richard Hughes, the chair of the OBR, resigned. The Chancellor has written to Mr Hughes to thank him for his many years of public service, and I have put my thanks on the record in this House, too. That decision was a matter for Mr Hughes.

We will work closely with the OBR to ensure that robust security arrangements are in place before the spring forecast and for all future forecasts. The permanent secretary to the Treasury will conduct a review of the Treasury’s security processes to inform future fiscal events. As I said when I was again at this Dispatch Box closing the Budget debate yesterday, the Government put the utmost weight on Budget security, including the prevention of leaks of information. A leak inquiry is now under way with the full support of the Chancellor and the whole Treasury team.

There is also speculation in the press today surrounding the letter that the OBR sent to the Treasury Committee last Friday, which I wish to address clearly. The Chancellor was aware of that letter and was content for it to be published, and she agreed that with the permanent secretary.

[Sir Mel Stride]

Richard Hughes was a respected chair of the OBR, and his departure is a matter of deep regret. The circumstances surrounding his resignation remain unclear—although for the Chancellor, it has clearly been a useful distraction from her own conduct.

On Friday, the OBR took the unprecedented step of publishing the details of the pre-measures forecast rounds, and members of the OBR board were clear to the Treasury Committee yesterday that that step was taken because of serious concerns about partial leaks and briefings about their forecasts. In relation to the market-moving briefings made on 14 November, which suggested that the public finances were, after all, in a better position, David Miles stated to the Committee:

“I think there had been a misconception that there had been some good news. It didn’t exist.”

The board members also clarified that those concerns were raised by Richard Hughes with the Treasury before the Budget, and that the information published on Friday was approved by the permanent secretary.

What discussions did the Treasury, including the Chancellor, have with Mr Hughes immediately prior to his resignation? Mr Hughes said last week that he served

“subject to the confidence of the Chancellor”.

Did the Chancellor give Mr Hughes her full confidence? Was any pressure put on Mr Hughes to resign? Did the Chancellor approve the OBR’s publication on Friday and discuss it with the permanent secretary? I believe that the Minister has confirmed that, but perhaps he might do so again. [Interruption.]

--- Later in debate ---

[Sir Mel Stride]

Do Ministers agree with the OBR’s opinion that leaks and briefings about the forecasts damaged growth? If so, what action was taken by the Treasury regarding those leaks? May I ask once again whether it was appropriate for the Chancellor herself to opine publicly on the OBR’s productivity forecast before the Budget, given that those matters should remain strictly confidential?

As you know, Mr Speaker, I have written to the Financial Conduct Authority seeking a full investigation into matters relating to the Chancellor’s statements on the state of the public finances. I have also written again this morning to the permanent secretary at the Treasury, requesting a full investigation into all these matters.

[James Murray]

I thank the shadow Chancellor for his questions. As I made clear in my opening remarks, the decision for Richard Hughes to resign was a matter for Mr Hughes himself. I referred in my earlier remarks to the media reporting of the letter that the OBR published. The publication of that letter was agreed to by the Chancellor; it is completely untrue to suggest otherwise.

The reason for publishing the letter was the unique nature of the Budget and the context of the OBR’s productivity review, as it said itself, while acknowledging that that would not become usual practice owing to the importance of preserving a private space for discussions. We are completely committed to the OBR’s independence; it is a vital part of our fiscal framework. In fact, one of the first acts of this Parliament was to introduce a fiscal lock so that the OBR could never be sidelined.

The shadow Chancellor also referred to comments by Professor Miles at the Treasury Committee earlier this week. I note that, among his remarks, Professor Miles was very keen to be clear that the positive headroom number in the forecast of 31 October did not in any way suggest that the OBR assessment was that the fiscal outlook was problem-free.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

When I last spoke in this House, Richard Hughes was still chair of the OBR. I pay tribute to him. He was a tenacious champion for its independence. A highly intellectual man, he ably led that organisation and made an honourable decision to take responsibility for what happened last Wednesday.

The Minister says that a leak inquiry is under way in the Treasury; leak inquiries have a habit of not finding someone responsible. But if somebody is found responsible, will they follow the lead set by Richard Hughes?

--- Later in debate ---

[James Murray]

I will not speculate on the outcome of the leak inquiry, but it is under way now, with the Chancellor’s support. The Government take our obligations to this House very seriously, and last week we produced a Budget that delivers on our priorities for the British people.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

[Charlie Maynard (Witney) (LD)]

On behalf of my party, I thank Richard Hughes for his service. We respect his resignation. I also thank Laura Gardiner, Professor Ciaran Martin and Huw Stephens for the very quick turnaround of the investigatory report on the leak. In that report, the point is made that, unlike all other IT systems and services, the OBR’s website is locally managed and outside the gov.uk network. That decision was made, apparently, to ensure the OBR’s full independence from the Treasury. Will the Minister soon report back to the House with a timeline for decisions—between now and the OBR’s next report in spring 2026—on how these matters will be managed in future? Will he provide an outline of how the OBR website will be operated so that it is secure and maintains appropriate separation from the Treasury?

[James Murray]

As I have made clear, the Treasury will be focused in the coming months on ensuring that we have stronger information security in the spring forecast and all future forecasts. It is worth my adding that the OBR has in recent years had significantly increased funding: since 2021-22, its budget has increased by 45%. As an independent organisation, it has full discretion in how it uses its budget.

[Yuan Yang (Earley and Woodley) (Lab)]

I join the Chair of the Treasury Committee in thanking Richard Hughes for his service, and commend him for taking responsibility for the security leak that happened on his watch.

In testimony given to the Treasury Committee yesterday, the OBR described the “£21 billion average absolute revision” to their pre-measures forecasts as meaning, in effect, that between every six-month forecast, £21 billion on average is wiped off or added to the headroom. That leads me to ask: how can we ensure long termism in the UK’s fiscal institutions, despite this overall focus on headroom?

[James Murray]

The Chancellor set out at the Budget how important it is to increase our headroom. We have increased it to £21.7 billion, which is critical to reducing the cost of borrowing and protecting us against future shocks. The Chancellor also announced that the OBR’s spring forecast will not include an assessment of the Government’s performance against the fiscal rules, and the Government will not respond to it with fiscal policy; but the OBR will produce a forecast in spring, as expected.

[Sir Edward Leigh (Gainsborough) (Con)]

For what it is worth, I think the OBR has become too powerful. We live in a parliamentary democracy, not a quangocracy, and the Chancellor alone should be responsible. Does the Chief Secretary agree that in future all communications between the Chancellor and the OBR should be in deep private? That is the only way the system will work. Never again do we want selective leaks. Can he promise that that will not happen in the next Budget?

[James Murray]

The right hon. Gentleman and I disagree on the role of the OBR. As a Government, we are committed to the OBR’s independence and its vital role as a core part of our political framework. As I mentioned, one of our first acts in this Parliament was to introduce the fiscal lock to ensure that the OBR can never again be sidelined as it was by the previous Government. Regarding the private space between the OBR and the Treasury, the publication of the OBR’s letter, which as I mentioned was agreed to by the Chancellor, was due to the unique nature of this Budget in the context of the OBR’s productivity review. We acknowledged that that would not become a usual practice, due to the importance of preserving a private space for conversations.

[Luke Murphy (Basingstoke) (Lab)]

I echo fellow members of the Treasury Committee in commending Richard Hughes for his work and for taking responsibility for what the OBR itself acknowledged is the worst failure in its 15-year history. The shadow Chancellor failed to mention that Professor Miles stated in his testimony to the Committee yesterday that the Chancellor’s remarks on 4 November were entirely consistent with the forecast set out by the OBR at the time, in which the fiscal picture was not as rosy as the Opposition, bizarrely, now claim it was. Does my right hon. Friend agree?

[James Murray]

My hon. Friend is absolutely right to point to some of Professor Miles’s comments yesterday. There has been a lot of discussion in this place about the £4.2 billion headroom identified in the forecast by the OBR on 31 October and what, in our view, that implied about the fiscal situation. Professor Miles said that the

“£4 billion in the pre-measures forecast is not inconsistent with the sentiment that this is a very challenging fiscal position.”

It is because of that fiscal position that we made the choices that we did.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I welcome the fact that the Minister has just confirmed a leak inquiry is under way at the Treasury, and I will be paying close attention to that inquiry. Richard Hughes was an outstanding public servant, and he was truly independent. Will the Minister confirm that the person the Chancellor nominates to this position has to be endorsed by the Treasury Committee? Will he commit to someone of equal independence and stature being nominated to this position?

[James Murray]

As the hon. Lady will know, the process is now under way for an external recruitment of a new chair of the OBR. The normal process will be followed in terms of the Chancellor making the appointment and the Treasury Committee being involved. The hon. Lady mentions that I have confirmed the leak inquiry today; I have confirmed it again today, but I mentioned it in my remarks to the House yesterday.

[Clive Efford (Eltham and Chislehurst) (Lab)]

Over my years here, I have seen many Budgets. Members on the Government Benches wave their Order Papers on the day, then watch as the Budget unravels over the next 48 hours, but we do not seem to have had any of that with this Budget. It has been extraordinarily tight in what it seeks to achieve—[Interruption.] The Tories are protesting on the Opposition Benches about the individuals involved, rather than the content of the Budget itself, because they have very little argument to make.

[James Murray]

My hon. Friend is absolutely right to draw attention to that. While the process around the Budget is important, what this Budget means for people across Britain is that we have cut the cost of living, continue to cut NHS waiting lists, and cut Government borrowing.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The head of the OBR has taken responsibility and resigned, just like the BBC director general took responsibility for a crisis and resigned. Given the backdrop that the UK is in the throes of a full-on fiscal crisis of the Chancellor’s own making—both materially by removing £66 billion from the economy with no corresponding stimulus and objectively by briefings, counter-briefings, screeching U-turns, leaks, and a profound lack of discretion over market-sensitive information—why will she not resign?

[James Murray]

The Chancellor has delivered a Budget that takes the challenges of this country head on, cuts the cost of living, continues to cut NHS waiting lists, cuts Government borrowing, and meets the priorities of the British people.

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

The OBR’s investigation has two particularly striking findings: the first was the number of attempts to access the documents in question; and the second was the lack of security for those documents. What specific actions does the Minister believe the OBR should take to overcome those things at future fiscal events? Does he agree it is possible to have confidence in the principle of an independent OBR alongside undertaking meaningful and significant scrutiny of some of the organisation’s actions?

[James Murray]

I very much agree with the sentiment of my hon. Friend’s question. The OBR is a vital part of our fiscal framework—indeed, as I mentioned earlier, one of the first acts we took on entering government was to strengthen its role to ensure that it could never be sidelined. It is precisely because we see the OBR as holding such an important place in our fiscal framework that it is important that we maintain its integrity and trust.

My hon. Friend asks what further steps the OBR will take. We will work with the National Cyber Security Centre and the OBR to take forward the recommendation that a forensic examination of potential premature access at previous fiscal events is carried out. Let me add that there is no evidence of hostile cyber-activity, but the OBR report’s findings indicated access at previous fiscal events. That is a very serious matter that we will investigate.

[John Glen (Salisbury) (Con)]

Richard Hughes was a first-rate public servant, but he did the right thing on the narrow matter of the premature upload of the file last week. OBR representatives told us a number of things yesterday in the Treasury Committee. They told us that there was a £16 billion downgrade and £4.2 billion of headroom on 31 October, because there were also improved tax revenues. I do not think £4.2 billion can be characterised as a black hole, but it was a challenging circumstance—that is the truth. Will the Minister consider, in all future Budgets, that such a letter should be made available, at the same time that Budget publications and OBR publications are made available, setting out what was said to the Chancellor at what point? We could then verify whether the press conference on 4 November was very wide of the mark and gave a materially misleading view of what was actually happening.

[James Murray]

As will be clear, I agree with the right hon. Gentleman’s remarks about Richard Hughes’s contribution to public service. However, I disagree that the premature publication of the forecast last Wednesday was a narrow matter. The report showed that it was about not simply a single error, but more systemic issues, which it highlighted, so I disagree with the characterisation of that as narrow.

The right hon. Gentleman referred to some of Professor Miles’s comments at the Treasury Committee. Professor Miles confirmed that the £4 billion headroom identified in the forecast on 31 October was not inconsistent with the sentiment that this is a very challenging fiscal position.

The right hon. Gentleman also asked about the OBR’s letter, the nature of its being published and what it speaks about for the future. As I said earlier, the publication of the OBR letter was agreed to by the Chancellor due to the unique nature of this Budget and the context of the OBR’s productivity review, as it said itself, while acknowledging that it would not become usual practice, due to the importance of preserving a private space for discussion.

[Perran Moon (Camborne and Redruth) (Lab)]

The OBR leak was deeply disturbing, particularly in the light of international sensitivities. Can the Chief Secretary rule out foreign actors exploiting the OBR’s inadequate security at any point?

[James Murray]

The OBR’s report into the premature publication of its forecast found no evidence of hostile cyber-activity, but it looked at the spring forecast and identified what happened there. Concerningly, it identified that there had also been premature access to the forecast at that fiscal event. The report did not look further back at, for instance, the Chancellor’s first Budget last year or Budgets delivered by Conservative Chancellors under the previous Government. That is why it is so important that the Government take forward the report’s recommendation to conduct a forensic examination of potential premature access at previous fiscal events.

[Sir Julian Lewis (New Forest East) (Con)]

The Government seem to be keen to maximise the gravity of the OBR’s accidental leak while minimising the gravity of the Chancellor’s deliberate leaks. The Minister has twice frankly admitted not being aware of the case of Labour Chancellor Hugh Dalton, who resigned for inadvertently leaking to a journalist a single sentence of his 1947 Budget moments before it was due to be announced. Now that he has understood what actually happened then and that that was the paradigm case, does he think it holds any lessons or examples of conduct that the Chancellor ought to consider following?

--- Later in debate ---

[James Murray]

I came here this morning expecting to be critiqued by the Opposition for their view of Government policy; I did not expect a critique of my knowledge of history, but that appears to be the route that the right hon. Gentleman wants to take. When I gave way to the right hon. Member for Gainsborough (Sir Edward Leigh) yesterday, my right hon. Friend the Health Secretary said I was being too generous, and I am inclined to agree with him.

On the broader point just made by the right hon. Member for New Forest East (Sir Julian Lewis), I think we need to be really careful about downplaying the seriousness of the OBR publishing its forecast early. It is not a “narrow matter”, as the right hon. Member for Salisbury (John Glen) said; we cannot simply brush it away. This is a serious leak of highly sensitive information, and we take it very seriously as a Government.

[Andrew Lewin (Welwyn Hatfield) (Lab)]

Three years ago, the role of the OBR came into sharp focus after the delivery of another Budget, which became known as the mini-Budget, by which the markets were sent spiralling and the Bank of England was forced to take emergency action. Does my right hon. Friend agree that, while the events of this last week have been serious, we have taken action within a week? Three years on, we are still living with the consequences of the decisions taken by the Conservatives.

[James Murray]

My hon. Friend is absolutely right that people across Britain are still living with the consequences of what the previous Government did in that mini-Budget, when they sidelined the OBR. In fact, one of the reasons we are so keen to protect and strengthen the OBR’s integrity is the vital role it plays in our fiscal framework. The very first Bill passed by this Government included the fiscal lock, which now prevents the OBR from being sidelined.

[Mr Joshua Reynolds (Maidenhead) (LD)]

The Chancellor announced in the Budget that she would legislate for only one assessment of the fiscal rules every year, instead of two, which is the case at the moment. In the light of the change in the OBR’s leadership, will the Minister commit today to seeking the views of the incoming chair of the OBR about the economic and fiscal impact of that decision before the Government plough ahead with it?

[James Murray]

I want to be clear about what the OBR is required to do and what the Chancellor announced last week in the Budget. The OBR is required to produce two forecasts a year, and the Chancellor will commission a second forecast in due course. As she announced in the Budget, however, that forecast will not include an assessment of the Government’s performance against the fiscal rules, and the Government will not respond with fiscal policy.

[Chris Vince (Harlow) (Lab/Co-op)]

Was the Minister as surprised as I was to find out that such a sensitive document was being managed by something that was using WordPress? What reassurances can he give my constituents—what reassurances has he had from the OBR—that, moving forward, these sorts of documents will be password protected and, crucially, protected from foreign interference?

--- Later in debate ---

[James Murray]

I will admit that I was surprised to read the OBR’s report, which made it clear that any assumptions we might have had that this was a simple error were not true—more systemic issues were revealed in the report. As I understand it, there was functionality within the OBR’s IT and website systems to have greater security, but they were not configured correctly to provide that security. For me, that underscores the fact that this is not one inadvertent error by one official; it is a systemic issue with the information security, which is so important.

[Simon Hoare (North Dorset) (Con)]

Although I remain convinced that there are ways of delivering the guardrails that the Treasury needs without the OBR, I know that the Chief Secretary and the Chancellor are not persuaded of that argument. However, might the Chief Secretary be persuaded that the resignation of the chair of the OBR and the recruitment process that is now under way presents an opportunity for the Treasury and the permanent secretary to reflect on what they need the OBR to be doing for the next five, 10, 15 or 20 years? What skills does the OBR need, what shape does it need to be, and what does it actually need to do to get the economy right? Will they be availing themselves of this opportunity to recast the OBR and reflect on its roles and responsibilities?

[James Murray]

I thank the hon. Gentleman for his question—I am glad that, not having had time to take his intervention yesterday, we are now back to business as usual with frequent exchanges across the Chamber. We probably disagree about the OBR’s role, but I hope he recognises the benefit of one of the changes to what the OBR will do that the Chancellor announced in last week’s Budget. As I said to the hon. Member for Maidenhead (Mr Reynolds) a few moments ago, although the OBR is required to produce two forecasts a year, the Chancellor has announced that the spring forecast will not include an assessment against the fiscal rules, and the Government will not respond with fiscal policy.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I find it rather curious that Conservative Members have a lot to say about Hugh Dalton’s Budget in 1947, but so little to say about Liz Truss’s Budget in 2022.

[Dr Arthur]

Exactly. It is very curious.

All the staff in my office diligently followed Mr Speaker’s advice on cyber-security and the threat of foreign intervention in our IT, and it is right that we take these matters seriously. However, based on the reports we have seen, I am not convinced that the OBR had taken the same kinds of steps to protect its own systems. Were the OBR and other Government Departments and agencies offered this advice but just did not follow it, or has there been an oversight in how we are managing security right across Government?

[James Murray]

My hon. Friend is right to point out that while Conservative Members are keen to raise points of history, they seem to be rewriting history when it comes to their last few years in office. He asks an important question about cyber-security. The Government will work with the National Cyber Security Centre and the OBR to take forward the OBR report’s recommendation that a forensic examination of potential premature access at previous fiscal events be carried out. For the avoidance of doubt, I should reiterate that the report found no evidence of hostile cyber-activity, but my hon. Friend is right to point out that information security and cyber-security are important for all of us across Government. Indeed, that was reflected in the spending review.

[Sir Ashley Fox (Bridgwater) (Con)]

For the first time in its history, the OBR was forced to correct the record about the forecasting process in the run-up to the Budget. Is not the reason that the Chancellor selectively leaked information from the OBR to mislead the public and justify tax rises?

[Sir Ashley Fox]

I am grateful for your advice, Madam Deputy Speaker. Perhaps I can rephrase that: the Chancellor inadvertently misled the public to justify those tax rises.

[James Murray]

The OBR set out in black and white that the productivity downgrade reduced tax receipts by £16 billion, and identified the cause of that downgrade as the previous Government’s record in office, whether their slashing of public investment or their mishandling of Brexit. In her speech on 4 November, the Chancellor was clear that this productivity downgrade, combined with the clear need to increase headroom to build resilience in the public finances, would require everyone to make a contribution. That is what happened at the Budget.

[Tom Hayes (Bournemouth East) (Lab)]

It is a pleasure to see you in the Chair, Madam Deputy Speaker. I was disappointed, as were my constituents, by the botched and premature release of the Budget on the OBR website, and I welcome the news that the OBR is welcoming in an expert in cyber-security. I sincerely hope that it is not the Leader of the Opposition—who, as we know, has form with accessing websites improperly. After all, the Conservatives really could not do without her.

My question is about the cyber-security expert reporting back. When do the Government expect to hear back, and can we be assured that, in the interim, the OBR has got its security systems into the shape they need to be in?

[James Murray]

The Government take this matter very seriously indeed and will move urgently to take forward that recommendation of the report, working with the National Cyber Security Centre. Cyber-security is an important matter for the OBR, and indeed for all Government Departments and bodies all year round, but the forecast is especially market sensitive, so it is particularly important to ensure that it is not published prematurely. That is why we take so seriously what happened last week, what seems to have happened in the spring, and what may even have happened at previous fiscal events.

[Jim Shannon (Strangford) (DUP)]

The OBR’s assessments have an incredible impact on households and businesses in Northern Ireland, and indeed across the whole United Kingdom. Can the Minister please outline what steps will be taken to ensure full transparency around this resignation and to safeguard trust in the OBR’s future work, so that public confidence in our economy is in no way undermined?

[James Murray]

The hon. Gentleman is absolutely right to point out the importance of trust, and not just in the economy but in the public finances. In the Government’s view, the OBR’s role is a critical part of that trust. It is because of that role that the OBR plays in our robust and transparent fiscal framework that we take the premature release of this information so seriously and are following up the matters it raises so urgently.