Budget Resolutions and Economic Situation

Mike Martin Excerpts

Wednesday 28th October 2026 Commons Chamber

[Peter Kyle]

Well, we should certainly legislate to remove the barriers to growth, because some barriers require legislation. Let me illustrate that with one point.

When I was Secretary of State, I visited a fantastic company called Ocean Infinity down in Southampton, which is building and deploying globally—it is a global leader—autonomous marine vehicles. I was taken to see one of its vehicles, which was 36 metres long, being built. These are huge investments, with these vehicles doing extraordinary work autonomously for marine biology and drilling, going to remote marine places on Earth. I was taken one deck below on an autonomous vehicle and shown one room. I was asked, “What do you notice in there?” There was a washing machine and a tumble dryer—in an autonomous boat. Why? Because the law requires any boat more than 34 metres long to have a washing machine and a tumble dryer for its crew.

Conservative Members may laugh at my suggestion of a growth Bill, but there are some things that need to change in the law to unlock the stupidity out there in how we regulate certain sectors simply because of the passage of time. I say to all hon. Members who worry deeply about deregulation or the modernisation of the regulatory landscape that there are absurdities out there that are holding businesses back. If we aggregate that one example of a tumble dryer and a washing machine across our economy, we can start to see the need for real positive action.

[Mike Martin (Tunbridge Wells) (LD)]

Would the right hon. Member back a national security exemption for regulations such as those he cited whereby, if what is being developed is clearly for our national security, health and safety and other regulations fall away to enable us to get that into the field quickly?

[Peter Kyle]

I am grateful for that constructive intervention. I am certainly in favour of looking at mechanisms for when we discover absurdities in the regulatory system. We know how long it takes to get legislation through the House or even introduced to the House as there are so many priorities, so we need to be able to act in the interim. We should look at that, and the House should give those powers where needed in such circumstances. Of course, national security is the No. 1 priority of any Government at any moment in time—it certainly should be.

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[Richard Tice (Boston and Skegness) (Reform)]

Poorer—that is what every household in the country is, including in my constituency of Boston and Skegness. This year alone, real household disposable income is down 0.8%, and every single year between now and the end of this parliamentary term, the average household’s real disposable income is down compared to what the OBR forecast just six months ago. Let us look at the other main economic data: GDP growth for 2027 is forecast to be down once again—from 1.6% to 1%—under this failing Labour Government; and GDP growth per capita is forecast to be down from 1.3% to 0.9%.

And let us just look at what is up, shall we? Government borrowing in this financial year alone is up almost £20 billion compared to what the OBR forecast just six months ago. Over the lifetime of this Budget book for the next five years, Government borrowing will be over £65 billion more than the OBR forecast just six months ago. This is a Government who are completely out of control in terms of spending. That is why the bond markets are applying what is known internationally as “the moron premium” to the United Kingdom under this Labour Government.

Credit where credit is due, this Chancellor does know where the real problems are and he has tried to do a little bit. He understands that there is a crisis with energy bills, which are now forecast to go up by an extra £466 per household in January, and then by another £200 per household in April—all because of the madness of net zero and the rush to renewables, which is happening as we speak. Every single day, NESO is having to tweak and twiddle the dials and add balancing costs to the tune of some £50 million. That is ten times what it was just a few years ago. Next year, it will cost £200 per household for the balancing costs on the grid alone. This is completely out of control. The Chancellor has shuffled the cards in the pack. He has moved a bit from bills to general taxation, but he has not dealt with the real crux of the crisis, which is that the rush to renewables is driving up all our household energy bills at a catastrophically high rate.

Now, I am constructive sort of guy, so I want to give credit where credit is due, so let me say that the Government have done the right thing in approving Jackdaw—but they need to go further. Ministers know in their heart of hearts that they need to approve the oilfield at Rosebank—the Prime Minister was tempted to confirm it at question time today—and grant many more licences in the North sea, because that is our energy treasure; that is where the jobs are and where the growth is. This Government are completely failing on growth. The energy crisis is getting worse, and everybody needs to understand that. If we use our energy treasure, the bills will come down.

If we look at property and housing—again, credit where credit is due—the Chancellor has eased regulations to try to build more homes on brownfield sites. I think he might have read the teal paper I released in September on how to reduce the cost of construction and get more things built. He is right to remove the need for biodiversity requirements on brownfield sites, but there is so much more to do to reduce the construction cost of the new homes that I think we all agree we need to build. There is a £15,000 to £20,000 increase in the cost of homes because of unnecessary regulations, but again the Chancellor has not grasped the real opportunities to go for it and reduce the cost of building. That is what we need. We all agree that we need more affordable social housing, but to do that we have to reduce and remove unnecessary restrictions and the delays in getting planning consents.

We now know that the Secretary of State for Housing, Communities and Local Government has given up on her 1.5 million target. In reality, we will be lucky to get to half that number—750,000 homes instead of 1.5 million. These are the lost opportunities from a Government obsessed with regulation, obsessed with process and obsessed with bureaucracy. They cannot do the right thing to deregulate and get some growth.

[Mike Martin]

The hon. Member seems to be extolling the benefits of building houses, so can he explain why the Reform party in Tunbridge Wells is campaigning to restrict house building?

[Richard Tice]

Far from it—we are actually trying to build more houses on brownfield sites, because that is what we should do all over the country, including in the great town of Tunbridge Wells. We need to make it easier to build on brownfield sites. At the moment, house builders are giving up all over the country because the costs are too high.

I think the Chancellor has been looking at some of our excellent Reform policies, but while he is right to lift the income tax threshold for pensioners, he could have gone much further and lifted it for everybody—up to our recommended level of £15,000—by being more dramatic about cutting the vast amount of wasteful spending on welfare and cutting foreign aid to overseas nations that do not need it. Those are the differences between the right things to do and the lost opportunities of this Government.

I think the Chancellor has listened to another Reform policy, which is to lift the threshold on business rates, but he has not gone far enough. While the £18,000 threshold is better than £12,000, it needs to be much higher. That is another lost opportunity.

We have a nation of voters, and every household who looks at this Budget book and listens to the Budget will say, “No, thanks. Every single year between now and 2030-31 we’re all getting poorer than the OBR forecast just six months ago.” People feel it and they sense it. They know that their money is being wasted on bureaucracy and unnecessary quangos—more taskforces and quangos have been set up during this Budget. It could have been so much better. I feel that this Chancellor has just not had the courage or the strength. He has not risen to the occasion. He has tried, but it is not good enough. We are facing a financial crisis and an energy crisis, and we need a Government who do the right thing—a Government who cut our bills. This Budget is a lost opportunity.

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[Mike Martin (Tunbridge Wells) (LD)]

It is an honour to follow the hon. Member for Caerphilly (Chris Evans), and I want to pick up his last theme, which was the defence of our country. Specifically, I want to talk about our readiness to fight a war. The Defence Secretary said just last week that we had to be ready within 1,000 days to fight a war against Russia, so this is really about preparing for the war that is in front of us, rather than for a war.

I want to make a slight digression and pick up on something the Chancellor said today. He said:

“In today’s Budget, I am fully funding the defence investment plan”.

I want to compare the figures in today’s Red Book with the figures laid by the previous Chancellor when the DIP announcements were made on 30 June. For 2027, in the DIP, we see a total budget for the MOD of £73.8 billion. In today’s Red Book we see a figure of £72.8 billion, so there is a gap of £1 billion. It is the same for 2028-29. I am sure that those on the Treasury Bench will have heard me, but perhaps the Chancellor would like to clarify his statement, because it does not seem that he is fully funding the DIP, according to the figures that were laid before Parliament.

Going back to readiness, the defence investment plan is, by its very nature, about capital projects. Over the past decade in the MOD, capital expenditure has gone up by about 130%, which is obviously very welcome, but day-to-day expenditure has flatlined in real terms. Looking at the Red Book today, and the RDEL for the MOD in 2027-28, we see that day-to-day expenditure in the MOD is actually being cut by 2%. Day-to-day expenditure in the MOD means spare parts, maintenance, munitions, training and operations.

I chair the all-party parliamentary group on rearmament, and we are currently running an inquiry into the state of the British military. What we are hearing is sobering stuff. We have no submarines that are at sea, which is in part a maintenance problem. We have aircraft that we are unable to disperse around different airfields because we do not have sufficient levels of stocks. We have the Navy cutting training courses for tank commanders. We have not run a submarine course for submarine commanders for many years. We have to send them to other nations to train them. This cut in resource expenditure, in day-to-day expenditure in the MOD, is having a real effect on our ability to be ready for war now, and that has a direct effect on our ability to deter Russia by 2030, which is exactly what the Government tell us we need to be doing.

I always apply the Granny Martin test to these things, which is to look at what people do rather than what they say. The Government seem to be saying that we need to be ready to fight a war by 2030. We have had a whole slew of announcements, with the Defence Secretary and the Security Minister saying that we need to stockpile food. I think we get it: it is a dangerous world and we need to be ready for war by 2030. But then why do we have a defence investment plan in which two thirds of the capital expenditure is after 2030, and that will deliver projects well into the 2030s?

If we really need to be ready for war by 2030, we need to focus on readiness. That means taking some of that MOD capital expenditure and putting it in the day-to-day budget, because that means we can train our forces, maintain our equipment, and have stocks, spares and munitions. Without that, our forces will wither, the training of our people will decline, morale will decline, and we will simply not be able to get ships out to sea or planes in the air.

Last week the APPG ran a session on the RAF, and we heard that for just £50 million we could build hardened shelters on our airbases. At the moment, we have exquisitely expensive planes that are sitting out in the open on the airbases. Do these people watch the news? Do they see what the Ukrainians are doing to Russian airframes? For relatively small amounts of money, we could get ready for the war that the Government say we face. That is what we should be focusing on, rather than projects that deliver after 2030.