Budget Resolutions

Julia Lopez Excerpts

Tuesday 3rd November 2026 Commons Chamber

[Jonathan Reynolds]

The agenda known in shorthand as “Made in Europe”, which affects the CADA and the Industrial Accelerator Act—it runs through as many as 50 different pieces of EU legislative files—is a top priority not just for me and Ministers in my Department, but for the whole Government. It cannot be the case that we must seek a bespoke solution for each separate area. We need something that provides business with certainty going forward. We need to recognise—in a way that the previous Government did not, frankly—that whatever our relationship to the EU, what the EU does will affect us. That is the nature of integrated supply chains and a key market on your doorstep.

I am confident that the approach that the Prime Minister has led from the front—I credit him with this—has given us the space to provide the answers for that agenda. It is a far more productive approach than the kind of adversarial relationship we saw towards the European Union from the previous Government. The bottom line is that it gets results for people in this area.

[Julia Lopez (Hornchurch and Upminster) (Con)]

You are giving them everything they want.

[Jonathan Reynolds]

I am tempted to respond to that, but I will proceed with my speech; as ever, we are all waiting to hear from those on the shadow Front Bench. Actually, I will bite—go on. [Laughter.] When it concerns something of such fundamental importance to British industry as access to the single market, when it is and always will be our major trading market, gaining access for British businesses and businesses based in the UK and ensuring that British workers will not lose their jobs is not giving the other side everything that they want—it is delivering for Britain in a way that the Opposition never quite managed.

--- Later in debate ---

[Julia Lopez (Hornchurch and Upminster) (Con)]

The Government gave today’s Budget debate a theme: “Fresh hope for the future”. The debate will be closed by the Chief Secretary to the Treasury, who this weekend let slip,

“I don’t think employers are working people”.

I recommend that she does not deliver her message of fresh hope to the salon owners, café owners, shop owners, services firms, gym owners, pub landlords, builders, dentists and restauranteurs in her constituency of Wycombe, for she may never get served again. These are the people who are not only providing for themselves but taking risks to build businesses that employ and serve others. Everything that they do is fuelled by the hope that their relentless hard work will one day create something bigger than themselves—a better life for their families and employees. But they feel hopeless right now. Many are questioning whether they can make the numbers work. Tax, regulation and energy costs have all relentlessly climbed. But if businesses put their prices up again to cover those costs, they risk driving their customers away. That is the reality they face as working people.

They are filling shifts themselves because they can no longer afford the staff. They work harder simply to stand still. They are wondering whether they can continue to justify the sacrifice to their families. But if they pack up, it is a problem for us all, because it is their taxes that are helping to keep this show on the road.

When the Chief Secretary to the Treasury said, “I don’t think employers are working people”, it was one of those Labour truths—the sort of truth that Labour Chief Secretaries have such form in letting slip out. “I’m afraid there is no money. Kind regards—and good luck!”—the handover note of another Chief Secretary after Labour’s last chance in power in 2010. But who left the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) with no money when he wrote that fateful note? It was one of his predecessors as Chief Secretary—a man who during his second tilt at the Labour leadership was forced to apologise for his own failure to get public spending under control before a brutal financial crisis hit. That Chief Secretary is now the Prime Minister, and his first Budget suggests that he has not learned his own lesson.

“Employers are not working people,” “There is no money,” “We failed to control public spending before a crisis, sorry”—three Labour admissions, three different moments in our recent political history that tell us an awful lot about the way that this party governs. They are a neat summary, too, of this Budget, for there is precious little in it for working people. Labour has no money to fund the basics of defence, and it is failing to get public spending under control. No wonder that despite all the briefings about a Budget for bloody-minded entrepreneurs, it undershoots at almost every opportunity.

Take business rates. I welcome the Chancellor’s decision to exempt 70,000 businesses from rates altogether, but Conservative plans would take a quarter of a million firms out of paying rates. On the minimum wage, it is right that the Chancellor has not levelled it up for younger workers, but Conservative plans would halve employer national insurance for under-25s. Labour offers employers the temporary bung of the youth guarantee, but that scheme is necessary only because this Government have made it so much more expensive and risky to take people on.

If entrepreneurs look under the bonnet of the new founders’ relief, they will discover something hopelessly complex that is likely to benefit very few. This is no return of entrepreneurs’ relief, and it comes as this Government halve the limit on business asset disposal relief. Last year 61,000 people claimed that relief, and only a few hundred are thought likely to benefit from founders’ relief. Labour’s entrepreneurship adviser, Alexandra Depledge, has left her role after mere months, saying that the Government treat entrepreneurship and innovation as “a sideshow”.

What about sole traders and freelancers, such as personal trainers, electricians and creatives—the people who do not have an army of accountants? The reward for their hard work is having to report their earnings to His Majesty’s Revenue and Customs more frequently so that they can be squeezed for more tax, while there is no such vigilance on checking the eligibility of benefits claimants. Has the Chancellor ever had to deal with the realities of cash flow—of a few good months followed by a fallow period?

Meanwhile, by taxing banks the Chancellor risks making them less internationally competitive while driving up the cost of borrowing for businesses across the economy. Shifting energy costs from green levies to general taxation does nothing to tackle the underlying drivers of our staggeringly uncompetitive energy prices. The Chancellor slipped out another Labour truth last week when he said that the Energy Secretary opposed Jackdaw. I expect that she is opposing Rosebank, too. We can forget reindustrialisation.

Consider British food producers. It is all well and good to take a few pence off imported gherkins—we support cheaper goods—but at the same time Labour should help domestic producers compete. They are hamstrung by higher taxes, higher energy bills and rising wage costs.

[Jonathan Reynolds]

The hon. Lady knows that her party left us with the highest industrial energy costs in the developed world. Is she saying that she opposes taking policy costs off bills and putting them into taxation? I think she said that, but that would obviously result in higher bills than we have now.

[Julia Lopez]

Our cheap power plan would lower bills across the board. The right hon. Gentleman’s plan is to just shift costs from green levies to general taxation.

Perhaps the most damning thing about this Budget is what it does not attempt to do. After seeing off Keir Starmer, this new Prime Minister wants to press the reset button and pretend that this first 100 days is a fresh start, but Labour owns the last two years and the last two Budgets. If the Prime Minister will not reverse their measures, the consequences of the decisions that have already been taken are his to own as well.

The national insurance rise has been devastating. Chef Tommy Banks said,

“Over the 20 years I’ve been in the industry, this is without doubt the hardest time it’s ever been to operate…I’m seeing restaurant owners saying, ‘We’re closing tomorrow. We’re going to make everybody redundant.’”

He says employer national insurance has increased his business costs by 162% and that, with a couple of hundred staff, that can mean half a million pounds.

The Employment Rights Act 2025 has not even begun to have its full effect, yet I spoke to a small business last week that is already having to shell out £8,000 to prepare for its implementation. Another is being quoted £200,000 in legal fees to fight a tribunal. Another is winding down its disability employment activities; it used to give opportunities to people with cognitive impairments who needed extra support, but it will no longer take the risk. Since 2024, 170,000 jobs have been lost, and by the OBR’s reckoning another 215,000 jobs are to go by the decade’s end. Does this Budget do anything to stop that slow-motion car crash?

There is no review of the farm and family business taxes, which are crushing our food producers and entrepreneurs at a time when the nation needs the food security they provide. I recently spoke to a business that has been in the same family since the 1850s. The owners cannot risk losing it on death, so they are trying to offload it early, at the expense of investment in the business itself. That will not generate growth. Last week, another private school closure, in Leweston, left parents and children in limbo because Labour refuses to review its envy-driven tax on independent schools.

The pressures on these businesses are flowing out into the wider economy, which is why everything is costing people more. It costs more to go out for a meal, have your hair done, take a few days away with the kids or buy the weekly shop. The Prime Minister now owns Keir Starmer’s choices.

The most damning part of the Budget was the difference between the Prime Minister’s homely “breathing space” rhetoric and the hard reality that real household disposable income is falling this year and is lower in every year of the forecast—nearly £1,500 lower than forecast under the last Conservative Government. What is everyone getting in return for all the extra tax? Better public services? No. The Government are spending £124 billion a year on debt interest alone. That is up £14 billion since March, and is more than we spend on defence, policing and prisons combined. Are we at least building up a buffer to make ourselves more resilient? No. The Chancellor has cut fiscal headroom to just £15 billion, the equivalent of barely 3.5 days of public spending. The Government are even kicking defence spending into the long grass.

Businesses are paying more tax, families are getting poorer, public services are not improving and the Government are leaving the country dangerously exposed to the next economic shock. There are only two sustainable ways out of that: grow or cut spending. On both, the Government are found wanting. Last week, Ministers went full Vicky Pollard when asked whether they would grip the welfare budget this Parliament: yes, said the Chancellor, and no, said the Treasury and No. 10. The Prime Minister said, “As soon as possible.” No, eventually concluded the Chancellor—yeah, but no, but yeah, but no. The Chancellor’s leader is making a fool of him.

What about growth? The Prime Minister’s big idea is to reopen the debate about rejoining the EU. That is a debate that the Business Secretary does not want to have: he says that it creates uncertainty for business, which companies explicitly do not want. [Interruption.] He is now trying to nuance his way out of it, but we know what he said. It is also a debate about free movement that the Home Secretary does not want. It is a debate that will tie us to the slow-growth lane, and we will pay for the privilege. Why do we have to pay the fees of EU students to access “Made in Europe” when our participation is in the EU’s interests and the matter has not yet been settled in the EU Parliament? The Prime Minister is weakening our hand to build a left-wing coalition that will keep him in power.

If growth is the goal, why does the Prime Minister not pull the levers that the Government already have by bringing down energy costs, making it easier to employ people, cutting tax and getting more people off welfare? Because those decisions require real courage and a willingness to test the mandate that the Prime Minister fears he lacks among those on his own Benches and in the wider country.

“Employers are not working people.” “There is no money.” “We failed to get public spending under control before crisis hit.” Those three Labour truths run through this Budget, which has been overseen by a Prime Minister who is more interested in the perception of being on people’s side than in the reality, and is offering a debate about a future he may not control rather than taking tough decisions that he could own today if only he were to find the courage.