Employers

Nusrat Ghani Excerpts

Wednesday 11th November 2026 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I inform the House that Mr Speaker has not selected the amendment.

I call the shadow Secretary of State.

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[James Murray]

If the hon. Gentleman wants to have a conversation about the tax gap, I am very happy to pick that up. When we came into office in 2024, one of our first priorities was to close the tax gap before asking for any further tax contributions from any other sources. That was an essential part of our wider plan to restore public services and the public finances and to create the conditions for economic growth. That work continues, and I am very pleased to be playing a role in the Treasury, continuing that work to close the tax gap and modernise the service His Majesty’s Revenue and Customs provides, so that more people pay the right tax first time and can pay it automatically without mistakes or errors creeping into the system.

Because of the decisions we have taken as a Government—including closing the tax gap, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) mentioned— we are providing certainty and stability. Meanwhile, the Conservative party cannot resist playing games with the public finances, irrespective of the fact that whenever it has done so in the past, it is working people who have suffered the most. Britain is a country of entrepreneurs, shopkeepers, manufacturers, publicans, start-ups, family firms and growing businesses, and I am proud of the people across our country who take on risk and put in every hour they can to start and grow businesses. Above all, they need—and they have—a Government who are prepared to do the hard work of building a stable economy in which businesses can prosper. Employers need stability in order to plan for the future, create good jobs, invest and innovate, and providing that foundation is our responsibility as a Government. That is why, in the face of global storms, fiscal discipline will always underwrite every promise this Government make. The opposite is true of the Conservative party.

Government is about making choices, not pretending that choices do not exist. We in this Government are choosing to back working people. We are choosing to back the employers who create jobs. We are choosing to back young people into work, and we will always choose, with fiscal discipline as our lodestar, to maintain the economic stability on which our success as a country depends. For all those reasons, I urge Members to reject the motion.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. To ensure that everybody can contribute, there will be a speaking limit of seven minutes for Back Benchers.

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[Dr Sandher]

I think about 90% of jobs in the oil and gas industry have disappeared over the past 20 or 30 years, including 150,000 in Aberdeen. That is basically because the North sea is a declining basin; we cannot change geological facts. As the hon. Member will know, the Rosebank decision is a quasi-judicial one that will be made by the Secretary of State for Energy Security and Net Zero.

I come back to the fact that in the 1980s, the Conservatives said, “If you just cut taxes, good times will follow,” but they did not follow for huge numbers of people and huge areas of this country. We also see the legacy of the Conservative Governments from 2010 to 2024: in the past few years, there have been 250,000 more young people not in education, employment or training; areas have not recovered; and there has been the longest wage stagnation since Napoleon’s time.

We have seen the outcomes of the Conservatives’ philosophy. They had 14 years in government, and it was not a success. We did not see good jobs across this nation, because there was not the means or materials for them, or a foundation of prosperity. There were not the skills; the number of apprenticeship starts for young people was down by a third. The population was not healthy; we had the longest waiting lists on record. There was not enough transport infrastructure—ours was the worst in western Europe—and energy costs were the highest in the G7. That was the legacy of your Government, because the only thing Conservative Members have ever believed—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I am not participating in this debate, but presiding over it, so “you” and “your” are not needed.

[Dr Sandher]

I apologise, Madam Deputy Speaker.

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[Patrick Spencer]

I thank my right hon. Friend for her assessment of the performance of the Government Front Benchers—I tried to intervene on the Minister. I have serious concerns; the Minister said, at the Dispatch Box, “We kept our manifesto commitment not to tax working people.” He then said that they introduced a NICs increase for employers, but in the same breath, he said, “Employers are working people.” Do you not agree with me that the Minister clearly does not understand what a business is, and that, in increasing NICs, he has increased taxes on working people and broken a manifesto promise?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Once again, “you” and “your” are not to be used when referencing colleagues.

[Priti Patel]

My hon. Friend is absolutely right. I do not want to insult anybody, but it is important for Members to speak on these issues if they have credible experience of them—if they have set up a business and come from a business background. I am afraid that government has become a blunt instrument now. Things are far too binary. The Government are not even thinking through the overall impact of their decisions on local businesses, and then they come to the Dispatch Box defending broken pledges. This House should spend much more time talking about our pride in the nation’s businesses. They are the wealth creators and employers who give people a hand up in life. They give people economic security.

I will speak for my great county of Essex, because I do not think it gets enough airtime in this Chamber. We are a county of entrepreneurs. Despite the damage that this job-destroying, business-bashing, tax-grabbing Labour Government are doing to our economy, we are fighting hard to survive. We have a range of amazing businesses, and I will list them, because I think the House might have experienced some of the fine produce from Essex. Wilkin and Sons in Tiptree makes the jam that is in the Tea Room. Linden Lady chocolates, made in Copford, are sold in the House of Commons shop. There is a range of Essex farmers and food manufacturers, whom we all depend on. A colleague spoke about food security; that matters. Maldon Salt, a very famous brand, comes from my constituency as well.

On the Opposition Front Bench, my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez) touched on pubs, salons and all those other employers that provide the gateway to jobs for young people. Those are the types of business that we must support—we absolutely need to give them a hand up right now. We need reductions in national insurance, and we must recognise that in a significant way. Businesses think that Labour Ministers have no idea about the fact that they are working 70 or 80 hours a week just to keep their businesses afloat. That work is to generate tax revenues that this wasteful and bloated socialist Government are, quite frankly, destroying in an unjustifiable way.

There must be a recognition, because businesses in my constituency feel let down by Labour and seriously want to fight back against the increase in national insurance, the red tape from the infamous Employment Rights Act 2026 and the taxes on family farms. Businesses are constantly facing a rising tax burden. Even the reliefs in the recent Budget, which Ministers want to gloat about, will not compensate for the overall pain that businesses are facing.

The Minister spoke about fiscal discipline, but fiscal discipline alongside high levels of borrowing and debt will not give the financial and economic stability that local businesses need in our country. Debt is not going down, and borrowing is going up. We know who pays for all that: businesses pay for it all. Ministers come and go—we all know that—and they can make whatever defence they wish, but the reality is that it is hard-pressed taxpayers who are constantly filling Government coffers right now for higher debt and borrowing. Businesses need some latitude and leeway—they really do. I implore and urge this Government to reconsider many of the policies that they are putting in place.

There is a silver lining; it is called the Finance Bill. When that sees the light of day on the Floor of this House, it will give Members the opportunity to challenge the Government to give headroom and breathing space to businesses by lowering taxes, being more responsible on national insurance contributions and freeing up businesses to employ more people. Importantly, it will give Members the opportunity to challenge the Government to give the British people the freedom to succeed and live their lives, completely unshackled from the burdensome taxes that this Government are constantly putting on them.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I call Danny Kruger, after whose speech the time limit will drop to six minutes.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. There is now a five-minute speaking limit for Back Benchers.

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[Ben Maguire]

I have sat here for nearly an hour and a half, and I have not heard anything from Conservative Members about how they will address the elephant in the room: how to generate economic growth and rebuild trade relationships with our closest partners in the EU and elsewhere. Instead, we just hear criticism of the national insurance jobs tax. I completely agree with the right hon. Lady about that, but we are not hearing anything—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. This is a debate about employers, not about our relationship with the EU.

[Esther McVey]

When it comes to getting costs down for employers, I would start with energy. I welcome the Government’s—eventually—approving the drilling in Jackdaw, and they need to admit to doing the same in Rosebank and going further. They should look at what our neighbours in Norway have managed to do by drilling in their country.

Let me return to the subject of family businesses. The Government showed a complete lack of knowledge of family businesses and how they are run when they capped what would have been 100% tax relief for business properties and taxed the assets as they did so. They did not understand that the life of a business can be a couple of years—it may not last—or it can go on for generations. It does not end when the founder of the business dies; it goes on. The Government did not seem to have a clue about that; they showed complete disregard.

The other thing my constituents talk about is why the Government hate wealth creators. Why do they hate the wealthy? It must be—has to be—the politics of envy and jealousy. Frankie Dyer of Barbakan Delicatessen—one company in my constituency, but it could have be any of the 365 hospitality businesses there—sent an open letter to the Prime Minister before the Budget. She wanted help, particularly with national insurance contributions, which have had the worst impacts on her business, now costing her an extra £1,000 per employee. If someone has 50 or more employees, they will have no profit left at all, and they certainly cannot invest to grow their business.

Frankie said that her business is second-generation, and it is 62 years old. It is now facing severe financial pressures. Despite the business having an annual turnover exceeding £2.3 million and winning more than 10 awards for its products, soaring operational costs—energy bills, tax obligations and national insurance—mean that the business is now struggling to stay afloat and to pay its bills each week. She is calling on the Government to reduce national insurance contributions. She wants to employ more young people, as does the whole of the hospitality sector. People in the industry want VAT, which those on the Labour Benches led them to believe would be reduced, to be reduced to 13%, and they want the charge on employment—the tax on jobs—to be reduced. The Government should reduce national insurance contributions.

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[Sarah Bool (South Northamptonshire) (Con)]

Fewer sentences have caused such shock and reaction than when the Chief Secretary to the Treasury said that employers were not working people. I feel so saddened for all those small business owners across my constituency who have worked so unbelievably hard and sacrificed so much to give so many other people the opportunity of work. I think about Magda, who runs the Omorfi Nails and Beauty salon in Towcester. She does not only employ staff; while also bringing up her family, she is studying medical practice so that she can help people with diabetes—a matter close to my heart—through podiatry. It is an insult to say that she is not hard working and a working person. No matter how many examples we give, the Government simply will not listen. I wish they would engage. The voices from all the stories told here today are those of actual people from our constituencies who are living and breathing this. I implore the Government to take this issue seriously.

At the very beginning of the debate, the Minister talked of breathing space. I think the only “Breathing Space” people recognise is the song by the Pet Shop Boys, but I think their version might be slightly more popular than the Chancellor’s. We ask businesses every single day to take risks. The contract must be that if we ask them to take a risk, we give them the confidence to be able to operate their businesses, not the shifting sands constantly coming from this Government and their Budgets. Actions ultimately speak far louder than words, because hope does not pay the bills, hope does not put food on the table and hope does not heat our homes.

As we have identified, the people suffering most are our young people. We have heard many examples of people who are struggling to get opportunities and jobs. One of the pubs in my constituency—I have just run a pub of the year competition—said that it put up an advert for just a couple of hours of work at the weekend for those under 18. It received 200 applications for just one job. There are so many young people who are absolutely desperate to get into the working environment, but they cannot because those businesses cannot give them the opportunity. That is a travesty that has happened on this Government’s watch.

Nearly 1 million young people are NEETs, with 60% of those being economically inactive—not just not in work but not even looking for it. There is a much deeper issue of youth detachment from the market, which hurts young people’s confidence, health and ability to earn an income, and it hurts the taxpayer, because it is incredibly hard for us to give young people opportunities if those jobs do not exist. That is why I welcome the Conservative proposal to halve national insurance contributions for the under-25s to get them into work.

I will flag—as I did in justice questions this week—that the Employment Rights Act has introduced many powers that the Government laud, but with them we are going to start to see an increasing amount of red tape. With that red tape comes an issue with employment tribunals. When people are going through a dispute with an employer, one of the most difficult times of their lives, they are going to discover that there is a huge backlog for tribunals. There are already over 70,000 open single cases. In reducing the time from two years down to six months to bring a tribunal claim, the Act is going to increase the workload and the backlog in the courts by a third. That is madness.

We are slowing down the economy with everything we do. The Employment Rights Act is exactly as the Conservatives describe: it is an unemployment rights Act. It is burdening our businesses and slowing down opportunities, but the Government and the Labour Benches just sit and stare. That is the problem: they are sitting and staring while hard-working people out there are trying to make a living. The Government need to start listening.

My poor farmers were looking to the Budget for a little bit of help and assistance—88% of my constituency is agricultural land—but they are not getting any. Another big issue that we have to focus on are the massive issues in the pig industry. I will save that discussion for another day, but the industry is desperate for some support from the Government. I implore the Government one more time: please, do listen to the Opposition Benches. The Government may not want to on political grounds, but we are literally just voicing the concerns of our constituents. Please listen.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

Financial Services and Markets Bill [Lords]

Nusrat Ghani Excerpts

2nd reading
Tuesday 10th November 2026 Commons Chamber

[John Healey]

I think I can do better than answer about my instinct on the scope for that. I would point the right hon. Gentleman to the measures in the Bill. I would also point him to my exchange of letters with the Governor of the Bank of England about capital requirements and the expectation to see material change, bearing in mind the importance of the internationally competitive position of UK banks. He will know that the Bank is undertaking its own review of this area at the moment, and I hope we will get the results and any consequent changes before too long.

Finally, I have spoken about the importance of maintaining the UK’s pre-eminent position as a global financial centre. That requires maintaining the very highest standards in tackling illicit finance. We have in the UK a strong set of anti-money laundering rules, but the supervision of compliance with those rules is currently fragmented and inconsistent. Last year, the Government announced that the Financial Conduct Authority will take on responsibility for the anti-money laundering supervision of legal and accounting service providers, as well as trust and company service providers.

The Bill enables the FCA to take on those new responsibilities, meaning that we can reduce the number of bodies that have a role in anti-money laundering supervision from 25 to three. Additionally, as financial crime increasingly involves cryptoassets held outside the UK, the Bill will enable the Government to update existing cryptoasset recovery powers through secondary legislation. [Interruption.] Madam Deputy Speaker, you are encouraging me to conclude, so I will, but I hope you appreciate that I have taken a large number of interventions.

I believe there is a shared determination in this House to ensure that the UK remains the global location of choice for financial services firms to invest, innovate and grow. This Bill is a necessary step to strengthen that leading UK position on financial services: streamlining regulation and reducing the burden on businesses, supporting financial resilience through our credit unions, reforming consumer protection so that it is fit for this digital age, and raising levels of investment in our high-growth firms, all while maintaining our high standards of regulation and oversight. It is a Bill to generate good growth in every postcode and provide fresh hope for the future. I commend this Bill to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

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[Mark Garnier]

The hon. Gentleman raises a number of points. We are getting deep into the debate, but the very quick answer to his question is no, I cannot rule out getting rid of the ringfencing regime. It has already been made public that the policy of a future Conservative Government will be to do so. That is the debate we will be having in Committee, and I am sure the hon. Gentleman will be delighted to join us in Committee, where we can get into the debate in depth. It is great to see so many Members across the House putting themselves forward with their enthusiasm to get involved in the debate—my right hon. Friend the Member for Beverley and Holderness (Graham Stuart) will have found a friend.

My second point—of a number of points, although I am conscious that I am taking up a lot of time—is that we would like the Government to go further on bank capital requirements. UK banks, building societies and PRA-designated investment firms are required to maintain minimum levels of capital in proportion to their risk-weighted assets. That is to help ensure that firms remain resilient and to reduce the impact of failure. Clearly, no responsible Government would abolish capital requirements, but we need to question whether banks should be required to hold capital beyond what is genuinely needed for resilience. This is an important point.

We should acknowledge that the Bank of England has eased bank capital requirements in recent years, specifically at the end of 2025, when it revised down the benchmark for tier 1 capital from 14% of risk-weighted assets to 13%. However, it is worth remembering that the Parliamentary Commission on Banking Standards recommended 11%, so that benchmark is higher than we originally asked for. We believe that the current level is still too high. The most recent stress test carried out by the Bank of England found that

“all banks remained above their set capital minima at the low-point of the scenario. No individual bank was required to strengthen its capital position as a result of the test.”

From memory, it was a one-in-250-year event that the banks were being stress tested on. The system has to allow an element of risk—when I was on the banking commission, we made it very clear how important that was. We made it clear that it was okay for a bank to fail, but it was not okay for banks to bring down the entire system.

The important point is that there has to be an element of risk in the system, but that is not what has been delivered, meaning that the potential lending and financing capacity of our banking sector is significantly reduced—to the tune of about £450 billion each year, we reckon. That is an awful lot of money that is not going into the economy. UK Finance has advised me that each percentage point of the tier 1 capital stack potentially represents about £600 billion in liquidity, so 2% above the recommendation of the Parliamentary Commission on Banking Standards represents about £1.2 trillion. Leverage that up under the banks and we are potentially talking about £12 trillion that is not in circulation because of over-interpretation of the rules. But we do not want to get ahead of ourselves; we reckon that £450 billion is not in circulation because of that over-enthusiasm on the tier 1 stack. That is money that could be used more productively. It could be invested in our communities or in businesses, but it remains stuck on banks’ balance sheets.

While the Bill does not contain any specific measures dealing with bank capital requirements, we believe that it is a perfect opportunity to make the necessary changes—specifically, to reform the parameters within which the Financial Policy Committee and the PRA operate. As such, we will be putting forward changes in areas where we believe the Government may be encouraged to take some advice from the Opposition.

As we have heard, the Financial Ombudsman Service plays an incredibly important role in the UK financial services sector. It provides redress for consumers and small and medium-sized enterprises against FCA and PRA-regulated firms outside of the court system, and crucially, it provides a service that is low-cost and accessible for consumers. However, over the years, the FOS has gone beyond being a dispute resolution mechanism and has become a quasi-regulator. This is creating significant costs for firms, with research from TheCityUK suggesting that the cost of regulatory compliance across the financial sector now exceeds £34 billion. Importantly, firms are also being retrospectively penalised, despite having followed the law on the day of an occurrence that was subsequently deemed to be problematic.

The Bill makes some positive changes in this area, which we welcome. It narrows the fair and reasonable test so that there is no longer a presumption of guilt, and creates a 10-year complaint deadline. Those positive changes will help prevent the FOS from acting beyond its remit. However, again, we do not believe that they go far enough, and there are a number of issues that we will raise during our debates in Committee.

Madam Deputy Speaker, you will be pleased that this brings me to my final point.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Ah!

[Mark Garnier]

We are getting there. As I said at the beginning of my speech, the UK is a major financial centre with a rich history of innovation. We cannot afford to lose that reputation, so we must also be looking to the future. Digital assets will be a key part of that, as will the technologies that underpin them. We have been told time and again that the UK has no clear direction on digital assets, meaning that companies in the UK are being restricted from innovating, so we need to create a strategy that sends a clear signal to that industry. That is why the digital assets strategy in clause 50, which was introduced in the other place, is so important.

We tabled that amendment in the Lords for a few reasons. First, we want to send a clear message about where the UK is going; it is incredibly important that we define what the UK’s ambition is. Secondly, going back to the competitiveness point, other jurisdictions have these strategies. Thirdly, the significance of digital assets has not been identified in any recent Government strategy. Finally, the digital assets sector is incredibly diverse, beyond where the Government are currently looking—it is very innovative. For all of those reasons, we believe that the digital assets strategy and clause 50 are necessary, and that removing that clause from the Bill—if that is the Government intend to do—would send the wrong message to the sector.

Do not take our word for it; take the word of the organisations that support clause 50: the UK Cryptoasset Business Council, TheCityUK, Innovate Finance, the Payments Association, techUK, Global Digital Finance, the Crypto Council for Innovation, the International Digital Assets Counsel Association, CryptoUK and the Digital Money Association. All of those organisations know that

“Other jurisdictions are moving rapidly to attract digital-asset businesses, investment and talent.”

A clear strategy will help the UK to keep up with those other jurisdictions and demonstrate that we are embracing these new technologies. I know that the Economic Secretary to the Treasury feels passionately about this area of her brief, so I hope she will use her closing remarks—we will all be waiting in the Chamber until 10 o’clock to hear them—to reassure the industry and commit to retaining the digital assets strategy in the Bill.

To conclude, financial services and the related professional services are incredibly important to the UK. When they succeed, they help to empower our communities and unlock growth. The Economic Secretary to the Treasury understands that. She has a very good reputation in the City of London as being somebody who gets it, so I look forward to working with her over the next few weeks and months. I am sure we will have our disagreements, but where we do, it will be about the detail, not the overall direction of this Bill. I know we can remain focused on empowering the sector.

The financial services sector is also important to me personally. I spent the bulk of my working life—27 years—working in the City, and I know the amazing things it can do. Being the shadow Economic Secretary to the Treasury, I have seen at first hand that we still have so much potential across this great country of ours. If we get this Bill right, we can unlock even more. While the financial services sector may be at a crossroads, it is now time for us to get behind the sector, to shift into gear, to accelerate our efforts and to focus on the exciting journey ahead.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Treasury Committee.

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[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. I call Gareth Thomas, after whom the speaking limit will drop down to six minutes.

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[Dr Sam Rushworth (Bishop Auckland) (Lab)]

The Bill contains many good things that other Members have spoken to. The Chancellor pitched it as a Bill that will unlock investment for growth. If we want people to invest, we need them to have confidence. My right hon. Friend the Member for Hayes and Harlington (John McDonnell) and I did not collaborate on our speeches, but, as he pointed out, 36% of people surveyed by the FCA believe that financial firms are not honest. When the Bank of England asked people to sum up the finance industry in a word, the word that the British people picked was “corrupt”. The Financial Services Ombudsman is receiving 216,000 complaints a year, and it is easy to see why: £1 billion is now being lost every year in investment scams. The most notable example is London Capital & Finance, but there are others, including Blackmore Bond, Basset & Gold, Astute Capital and Godwin Capital.

The Bill addresses complex issues in which I claim no expertise, but I take a strong interest in them because they are of interest to the people I represent. I want to share the experience of ordinary people who have lost their savings to unregulated investment products. I myself lost a few thousand pounds to a scam. I set up a Facebook group years ago, and the first person who contacted me was a man from Manchester. He had worked as a binman throughout his career, getting up early in the morning, working in all weathers and saving for his pension. He took the lump sum of his pension and invested it in Astute Capital. He lost all of it.

I want to talk about what that looks like as a process. It begins with an ordinary person searching to compare high-interest savings accounts with banks. They put their contact details on the internet, and then they get unsolicited calls from people with posh accents offering them investment advice and suggesting that they put their money in an ISA. They have probably heard of ISAs, and they know it is a Government-approved and tax-incentivised way to save. The person will admit to them that they are not FCA-regulated, but they probably have not heard of the FCA and may not know what that means. They may also be told that their capital is at risk, but then that nice person with a posh voice explains to them, “I have to tell you that—it’s the legal bit—but let me explain to you why you’re actually okay. Everything you’re investing is fully asset-backed up to several times its value, and we spread the risk across multiple portfolios.”

The individual trusts, they invest and they wait three years. They look forward to getting their money back with the interest they were promised, but when that time comes—this happened to customers of Astute Capital—they get told, “We’re sorry; we can’t pay you. But if you just stick with us for another six months, it’s better than causing someone to whom we’ve lent your money to default.” So they wait another six months. Six months later, their bonds are forcibly converted into shares and they are told, “Don’t worry; soon enough you’ll be able to sell those shares, and your shares are worth more than what you invested”—except they are not, and eventually the company goes into administration.

And then what happens? The person loses everything. When they investigate it, they find that a director of Astute Capital was simultaneously a director of the firm to which their money was lent. As a director of both firms, he took away the security on the debt. An ordinary person would expect that, in such a situation, there is some sort of recompense. They would think it is illegal, but it is not. People are told that they are at fault because they should have known that they were investing in an unregulated company. I had a man say to me on the phone, “I can’t look my wife in the eye. I’ve lost everything that we’ve saved over all these years.”

What happens to the directors? What happened to Timothy John Smith, who was the director of two companies? According to Companies House, he is now at Axecap Ltd, another unregulated offshore broker with many warnings against its name not to invest. For me, the most troubling part of this is that these unregulated investment schemes are entirely legal or, if there has been illegal activity, there has been no investigation and nobody has ever been held accountable. That is why the public are in disbelief, because they expect the Government and laws to protect them. They do not think this unregulated space should be allowed.

When I was elected, I raised this issue with the Financial Conduct Authority. It told me that it needs a bigger mandate to regulate this space, which it has not been given. In my last 30 seconds, I ask that the Bill be amended to give a mandate to the FCA to have oversight of unregulated activity, to make directors personally liable, to require directors of unregulated investment companies to demonstrate that they have acted responsibly, to automatically bring unregulated mini-bonds within FCA supervision, and to create a general compensation scheme for the victims of unregulated investments.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Noah Law to make the final Back-Bench contribution. Those who contributed earlier should make their way back to the Chamber.

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

I warmly welcome the Bill and its goal of creating a more transparent financial services sector that can continue to play a key role in creating growth and prosperity for the whole of the UK. I refer the House to my entry in the Register of Members’ Financial Interests.

Having spent a decade in investment banking and financial advisory work, I have some understanding of both the potential of our financial services and the reforms that they need. The proposed reforms to credit unions are extremely positive. By virtue of being owned by their members, credit unions are uniquely incentivised to put surplus profits into providing better services, rates and returns for their members—something that, as a Co-operative Member, I am delighted to support. I am delighted to support the efforts of my hon. Friend the Member for Peterborough (Andrew Pakes) in this space too.

The Bill will make it easier for credit unions to accept new members. It removes unnecessary administrative blocks and provides greater support, allowing more people to join credit unions, which are rooted in their communities and committed to delivering for them. Expanding access to credit unions also means access to more affordable lending, which gives those in the most dire financial circumstances access to credit at reasonable rates, instead of leaving them at the mercy of predatory lenders. Credit unions encourage saving, responsible borrowing, and investment in our communities and local economies. The reforms in this Bill will make accessing them easier than ever. As my hon. Friend the Member for Harrow West (Gareth Thomas) pointed out, we eagerly await the response to the review of fair access to banking and capital markets.

More widely, I am glad to see the industry support the aims of this Bill and the support for the better regulatory strategy, accountability, deadlines and the proposed improvements to the senior managers and certification regime. By requiring the FCA and the PRA to report annually on their efforts towards competitiveness and growth, we ensure that the Government, regulators and the industry pull together in one direction for the financial sustainability of our country.

Additionally, by improving the way in which regulators make decisions, we can improve the confidence of investors in our financial services. The reduction in the statutory period of authorisations and variations of permission from six to four months, and the period for incomplete applications being reduced from 12 to 10 months, ensures a smoother system for firms and leaves a lot less up in the air. Delays in regulatory decisions can be hugely costly for firms, and can even mean postponing fund launches and major investment decisions, and affect firms’ ability to grow, innovate and compete internationally. A simple regulatory system provides greater clarity for firms, better transparency for the public and the Treasury, and benefits us all. I welcome the Bill’s allowing the Treasury to introduce secondary legislation to amend specified determination periods, once again demonstrating the Government’s willingness to work closely with Britain’s most valuable and prosperous of industries.

I am very grateful to the Chancellor for his acknowledgment that we have asked the sector to do its bit to contribute to sound and prudent public finances— I would argue that that prudence, to quote the right hon. Member for Beverley and Holderness (Graham Stuart), who is no longer in this place, “dwarfs” short-term fiscal interventions—and it directly contributes to sound and prudent finances in an otherwise globally turbulent macroeconomic environment, after the public did their bit to safeguard the sector through its most challenging of times. Consequently, we in this House must also give due care and attention to this incredibly valuable sector. I do believe that the Chancellor has shown that, even when those difficult decisions have to be made, this need not be a zero-sum game.

I would like to think this Bill can be just one of many stepping stones as part of an ongoing effort throughout this Parliament to ensure a healthy level of risk taking in this most expert of financial markets that we have in the UK. In that regard, I welcome the targeted reviews of ringfencing requirements alongside the Bank of England’s own review of capital requirements to promote thriving banking and capital markets—public, private and, of course, mutual.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

Financial Statement and Budget Report

Nusrat Ghani Excerpts

Wednesday 28th October 2026 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Before I call the Chancellor of the Exchequer, I remind hon. Members that copies of the Budget resolutions will be available to them from the Vote Office in Members’ Lobby at the end of the Chancellor’s statement and, of course, online. I also remind hon. Members that interventions are not taken during the Chancellor’s statement nor during the replies of the Leader of the Opposition or the leader of the Liberal Democrats. I call the Chancellor of the Exchequer.

[The Chancellor of the Exchequer (John Healey)]

This is a Budget for the working people of Britain, for British businesses big and small, delivered at a time when global uncertainties and pressures are swirling worldwide and hitting people here at home. It is a Budget built on fiscal discipline, which matches immediate action today with clear direction for the future: first, by giving Britain some breathing space on the cost of living and the cost of business; secondly, by backing the enterprise of British business to unleash innovation and growth in every postcode; and thirdly, by tackling the big challenges on energy, national security, public service procurement and transformation, and housing.

In this Budget, I will set out the new approach that this Administration is taking—led by the vision of our new Prime Minister, demonstrated in our first 100 days and carried through today’s Budget, the 10-year plan for Britain and the spending review next year, to steer us through the global economic storms today, chart a new course for Britain in the years ahead, and give people fresh hope for Britain’s future.

It is an honour to stand here as Chancellor of the Exchequer to deliver my first Budget. I had hoped that I might be the most closely watched member of the Government this week until the Prime Minister went on “Gogglebox”.

At the outset of this Budget statement, I want to pay tribute to my predecessor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves)—Britain’s first ever female Chancellor after 800 years. She brought fiscal discipline to this country. She took—[Interruption.] She took the decisions required to boost investment, cut NHS waiting lists—

[Madam Deputy Speaker]

Order. Colleagues who are chuntering will need a lot of stamina as we have many hours to go. Let us keep the Chamber calm.

[John Healey]

My right hon. Friend took the decisions required to boost investment, to cut NHS waiting lists and to lift half a million children out of poverty. I also want to thank my outstanding team of Treasury Ministers and officials, and the Office for Budget Responsibility for producing today’s forecasts.

Analysts like to speak of economic headwinds, but what we face today are global economic storms, with trade tensions acting as a drag on global growth and Putin’s illegal invasion of Ukraine approaching now the end of its fifth year. The OBR sets out that the war in the middle east is a key driver affecting its forecasts today. The Government continue to work with our allies to end the conflict and restore shipping through the strait of Hormuz.

We did not want this war, and we rejected the calls from the Leader of the Opposition to jump two-footed into it. It is a war that has driven up costs on British families and on British businesses. Inflation, which was due to fall earlier this year to the 2% target, has now risen, driven by higher oil and gas prices. Oil is up from around $70 a barrel to well over $100 and gas prices have nearly tripled since February. For families, that means higher prices at the pump, higher energy bills and higher mortgages. For businesses, it means higher running costs and more expensive business loans.

The impact is felt in the public finances, too. Driven by the conflict in the middle east, Government borrowing costs across the G7 are reaching highs not seen for decades. In today’s forecast, the OBR predicts that we will spend £14 billion more on debt interest this year. Those are the storms we face. We cannot wish them away. We must choose the course we steer through them.

Fiscal discipline is my first commitment as Chancellor. More than ever, it underwrites every promise the Government make to the British people. In the Budget today, I meet the fiscal rules: the stability rule that day-to-day spending must be covered by tax receipts; and the investment rule that Government debt, defined as public sector net financial liabilities, must be falling as percentage of GDP. This year, for the first time, I must meet those rules in the third year of the forecast, and I do. My plans continue to reduce Government borrowing so that we spend less on debt interest and more on the priorities of the British people.

First, the stability rule. In the Budget today, I have chosen to use some of the headroom established last year to absorb the impact of the Iran war to protect the economy and to protect family budgets. My choices in the Budget mean that I have kept the Labour manifesto promise not to raise tax on working people—[Interruption.] I have rejected—[Interruption.]

[Madam Deputy Speaker]

Order. Mr Bowie, you are sitting far too close to me to be that noisy.

[John Healey]

I have also rejected broad-based tax rises or slashing public services, recognising that families and businesses need breathing space. The OBR confirms today that headroom against the stability rule will be £15 billion in 2029-30 before rising to £22 billion in 2030-31. That is what a buffer is for: use it when you need it; rebuild it when you can. Despite the global challenges, the Budget puts us on track to eliminate the current budget deficit and get Britain’s finances into the black within three years.

As a Labour Government, last year we cut borrowing to its lowest level in six years, from 5.1% to 4.4% of GDP. I continue that work today. In today’s forecast, borrowing falls to 4.2% this year, 3.4% next year, 2.9% in 2028-29, 2.1% in ’29-30 and 1.8% in ’30-31 and ’31-32. Our debt as a percentage of GDP is 83.2% this year, 83.8% next year and in ’28-29, before falling to 83.1% in ’29-30, 82.3% in ’30-31 and 81.7% in ’31-32.

It is because of our Labour decisions and it is because of our Labour plans that the International Monetary Fund has said that the UK now stands out as a country where

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

It projects our UK deficit will be the lowest in the G7 by 2029. The last time the IMF called the UK a standout was when Liz Truss crashed the economy. Her new book says she could have taken the British people to Mars. In reality, what she achieved in government, with help from the shadow Chancellor, was blowing a big black hole in the budget. That is the difference between Labour in government and a Conservative Government before us.

During this year of global economic shocks, forecasters predicted that the UK economy would slow down. Those predictions of gloom were about as accurate as the predictions of who would be the Chancellor. [Laughter.] Britain is defying expectations. In the first half of this year, our economy was the fastest growing in the G7, alongside the US. That is testament to the British people—the innovators, the business leaders and the workers on the frontline—and it is testament to the Labour decisions taken over the last two years. Government investment, up; business investment, up; productivity, up; and real wages, up. More since the election than in the first 10 years of the previous Conservative Governments.

I will never be complacent, but these are signs of resilience in the UK economy. Three months ago, the Bank of England upgraded its forecasts for UK growth this year, two weeks ago the IMF did the same, and today the OBR has upgraded its forecast to 1.2% this year, followed by 1% next year, 1.6% in 2028, 1.8% in 2029, 1.7% in 2030 and 1.6% in 2031. Yes, there are real challenges ahead, but Britain has beaten the forecasts this year, and with the action I am taking today, I believe Britain can beat the forecasts again.

Despite our economy’s resilience, I know that people are under pressure. Too many people feel this country is not working well for them. In particular, households and businesses face challenges from rising energy costs due directly to the conflict in the middle east. In the face of that, what matters is how we respond as a Government, and my choice in the Budget today is to give families and businesses some breathing space now and to begin the radical reform of energy to reduce bills in the future.

Last week, my right hon. Friend the Energy Secretary opposed—approved—[Laughter.]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. We have a long way to go. Dr Luke Evans, you will have to write yourself a prescription to calm down.

[John Healey]

At least they are still awake, Madam Deputy Speaker.

Last week, my right hon. Friend the Energy Secretary approved the Jackdaw gas field, boosting our energy security. This will protect hundreds of jobs and add an estimated £2.9 billion to the UK economy—a pragmatic, common-sense decision. Alongside that, I launched a new energy wealth fund for the UK. Today, I am setting a new course on energy to get UK energy costs down in line with Europe. From this point, our Labour Government priority is, first and foremost, cheaper energy, with clean power key to achieving it. This is possible because of the progress we have made towards clean power over the last two years, and this Government remain unshakeably committed to net zero by 2050. This will demand deep reform of our energy system, starting at the Budget today and carried through the 10-year plan into the months and years ahead.

For many years under Conservative Governments, policy costs were simply loaded on to household bills through levies. Today, I am putting an end to that. We will introduce a new cost control framework to drive down all aspects of energy bills, and I will scrap the upcoming gas shipper obligation—a levy to fund hydrogen projects—and instead back those projects directly from Government.

I am making further big changes to bring bills down in the long term. First, on clean power generation, this Government will only buy and build new projects when they lower bills and when they can connect to the grid. Secondly, we will further break the grip of international gas prices on our bills by moving more of our old renewables on to fixed-price contracts. Thirdly, we will build cheaper, faster grid connections through GB Grid, and reform the complex web of institutions that govern the system. This is how we deliver the radical change that Britain needs on energy. It will not happen overnight, so I am taking immediate action to give families and businesses breathing space in the here and now.

In the first week of this new Government, we took VAT off electricity for 29 million households. Today, I am extending that VAT cut through the winter and spring to July, taking £50 off the annual price cap. For business, our new British industrial competitiveness scheme will take 25% off electricity bills for 10,000 firms at the heart of British industry. It will go live in April, and I confirm that we will make backdated payments for energy costs this year too. Next year, working with my right hon. Friend the Energy Secretary, we will go further to make bills fairer. Gas standing charges cost people over £100 a year, regardless of how much gas they use, so from next year, through Ofgem, we will remove standing charges from household gas bills. We will set out similar reforms to follow for electricity bills.

Let me say this to families at home. I know that, with the conflict in the middle east, rising energy bills are a real worry. I know that people look to the Government at times like this, not to solve all their problems but to give them a bit of breathing space—so today, I am taking one further step. This winter, for 20 million households in council tax bands A to D, I am announcing a £100 energy payment for households. It will be paid directly into people’s bank accounts to deal with rising energy bills. That is a £2.6 billion scheme to take the pressure off in the coldest months and see people through to the spring. The Scottish, Welsh and Northern Ireland Governments will receive their share of this funding, and I call on them to do the same and give people in all nations of the UK breathing space on their energy bills this winter.

Madam Deputy Speaker, £50 off VAT, £100 off council tax. For this winter, two tax cuts; for next year, fairer bills; and for the long term, radical reform of the energy market to produce cheaper power. Breathing space now and hope for the future, delivered to the British people by this Labour Government.

For millions of people, the cost of living and the cost of doing business are the same—the home is the office, the van is the family car. Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years. With the war in the middle east still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers and farmers. For anyone who relies on their car for work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and I am making permanent the increase to the standard mileage rate introduced earlier this year.

In this Budget, I am acting on other costs, too. To help with the weekly shop, I am suspending tariffs on over 100 supermarket products to keep prices down. For pensioners, I am delivering the new pension tax allowance, so that pensioners with income of up to the value of the full new state pension will not pay income tax in this Parliament. For ex-mineworkers, I am guaranteeing that every penny of the pension fund surplus now goes to miners. I know the job is not done, and I will go on to ensure the full transfer of the guarantor’s fund. For carers, I am getting rid of the cliff edge on earnings, so that people do not lose their entire carer’s allowance when they earn a penny over the threshold. For 2.3 million of our lowest-paid workers, I am increasing both the national minimum wage and the national living wage by 3.9%.

I know that, for families, the worst thing is feeling that their kids are missing out—even on little things—because money is tight. So today I am announcing £15 million for organisations like Dolly Parton’s Imagination Library and BookTrust, which give books to children. I have heard calls for pay transparency on job adverts to close the gender pay gap, and we will act soon to make sure that women are paid and promoted fairly. This Labour Government are determined to make the economy work better for all families, so I have listened to representations from colleagues across the House about paternity leave, and I am making a down payment on change today. As a mark of respect for their role, I will make self-employed fathers and partners eligible for paid parental leave for the first time.

Since day one, I have said that I will be a Chancellor who champions the small British firms that give character to our communities: the bakeries, the cafés, the hair salons—they make the places we live and work the places we love. I want these businesses to invest, to recruit and to expand, so today I am taking action to support our high streets. In the first week of this Government, we cut 20% off business rates for pubs, clubs and music venues from April next year. I have heard calls from Members across this House and a call from one Member in particular—my right hon. Friend the Member for Makerfield (Andy Burnham)—so I am increasing the threshold for small business rate relief for retail, hospitality and leisure businesses from £12,000 to £18,000. That means for 70,000 more businesses, I am not just cutting their rates; I am taking them out of paying business rates altogether. That means half of our shops, restaurants and gyms will pay no business rates at all. For all other businesses in these sectors, I will freeze their rates in real terms so that none faces an above-inflation rise for the next two years.

To pay for this support for our high streets, I am raising taxes on gambling by increasing machine games duty from 20% to 25% for higher-stakes machines, while protecting pubs and seaside arcades. I will carve out adult gaming centres and vape shops from business rate reliefs and extend the business rates transitional relief supplement for another two years. I will also strengthen the requirements for online marketplaces so that sellers cannot avoid paying VAT when they sell online.

For those who feel like celebrating tax cuts for our high streets, I am providing a £10 million alcohol duty relief for around 2,000 small British brewers and British cider makers. Breathing space now, fresh hope for the future—delivered to the British people by this Labour Government.

I have made my commitment to fiscal control clear, and every policy in this Budget is fully funded. I have begun by making sure that people pay the tax they owe when they owe it and by closing loopholes in our tax system. First, I am giving His Majesty’s Revenue and Customs funding to improve compliance and stronger powers to collect overdue tax from those who can clearly afford to pay but ignore repeated contact. I am reforming the administration of self-assessed income tax from 2029, bringing more of these taxpayers in line with the majority, so that they make smaller, more regular payments instead of facing large bills that are often harder to pay.

Secondly, I am changing outdated rules so that people taking profits out of their companies are taxed consistently, and I will protect the treatment of genuine commercial transactions and families passing their businesses down to the next generation.

Thirdly, I am modernising the tax treatment of investment by foreign sovereigns. This will bring UK rules more in line with other investment and other nations, while remaining still one of the most generous regimes in the world.

Fourthly, I will resolve the question of VAT for larger taxi companies, ensuring they play by the same rules no matter where they are located, while still protecting smaller local firms.

Providing support for British families and businesses has meant raising some tax to meet my commitment to fiscal discipline. I have done this in a balanced way, protecting the incentives for business investment and the incentives and income from work. I am maintaining full expensing in corporation tax for eligible assets. For other assets, I will provide greater up-front relief for new investment, increasing the main rate first-year allowance from 40% to 50%, while reducing the main writing down allowance rate from 14% to 12%.

I am reducing the threshold for business asset disposal relief in capital gains tax from £1 million to £500,000, meaning no change for three in four claimants. I am increasing the rates of tax on income from property and savings by a further two percentage points from April 2027, with no change to tax on income from dividends and no change to tax on income from employment. Eighty-eight per cent of people will pay no more tax on their savings, and I am taking a new approach today to encourage people on ordinary incomes to save and to invest. I will not go ahead with the cut to the tax-free amount that people can put into a cash ISA. The limit will stay at £20,000 per year tax-free for people of all ages. To make investment more accessible, I will work with the sector to create a new “starter ISA” to reward first-time investors.

Finally, let me turn to banks. Our world-leading banks make a huge contribution to this country—in the tax they pay and in the jobs, industry and investment they support. As Chancellor, I want to say directly to our banks: I celebrate, and am grateful for, the role that you play. Amid the global economic storms, I am looking to our banks to help fund breathing space for British families, so banks will pay an extra 3% on the bank surcharge. This will be time limited to pay for immediate support on energy bills, starting in January and ending 15 months later.

I have made my choice at this Budget: asking a bit more of our banks to support ordinary people and raising taxes on gambling to support good growth on every high street. I challenge the Leader of the Opposition. Does she support today our support for British families and British firms, and does she back the action we are taking to pay for it?

The only way we keep Britain’s families and Britain’s finances secure for the long term is with an economy that is growing strongly. Our country is one of the most innovative in the world. We have top-ranking universities, vibrant start-ups and deep capital markets. Just today I can announce over £1 billion of new life sciences investment from Kindeva, Vertex and Convatec, backed by almost £70 million of Government funding, and supporting over 1,000 jobs. I can announce that Rolls-Royce will develop its next generation of turbine engine technology here in the UK, in partnership with this Government—a £2.5 billion investment supporting thousands of jobs across the midlands, Bristol and the UK. I want to build on our strengths to unleash the innovation power of Britain to drive competition and raise profits in British business—drawing a line on the costs holding business back with stronger public control, as I have done today on energy; proudly backing Britain’s entrepreneurs to succeed; and unlocking the potential of every part of this country with a new wave of devolution.

The biggest barrier to fast-growth firms here in Britain is investment here in Britain. In today’s Budget, I am boosting investment through our public financial institutions, with a further £20.4 billion for the National Wealth Fund and the British Business Bank over the coming years, supporting 140,000 jobs. I will work with pension providers, asset managers and the wider industry to accelerate more private investment into Britain’s innovative, fast-growth firms. We will prevent regulation from holding back investment by removing regulation and tariffs worth £800 million to business. We will legislate for a regulatory carve-out so that innovative products such as drones and medicines can be safely tested and rapidly scaled. I am re-establishing the Better Regulation Executive to cut outdated regulations and admin burdens on businesses and workers—scrapped by the Tories; re-established by this Labour Government.

I am determined that we use public procurement to back British businesses, buy British goods and promote British exports, so I am expanding challenge-led procurement, just as I did in Defence, so that the Government can be the first customer for innovative firms. I am developing a new definition of UK supplier, to identify companies that are creating genuine wealth, genuine investment and jobs here in Britain. [Interruption.]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Mr Cartlidge, I think you have spoken more words than the Chancellor during this statement—[Hon. Members: “More!”] Ms Atkins, do not lead that with a “More”. I call the Chancellor.

[John Healey]

Thank you, Madam Deputy Speaker.

Nowhere is the necessary role for the state clearer than in artificial intelligence, and we must forge a British way to seize opportunities and guard against risks that is based on security. We are already world leaders in AI safety and security, which today’s Budget backs with an extra half a billion pounds. It is based on sovereignty, with our first-of-its-kind sovereign AI unit protecting UK interests by channelling Government investment into strategic British AI firms, backed today with another £140 million.

To ensure that our most sensitive data stays under British control, I am setting out a new deal for data centres in the UK. When the NHS uses AI to treat patients, we want that data here. When our armed forces use AI to keep us safe, we want that data here. So here’s the deal: I am today launching a new British data centre covenant with strict tests that data centres must meet to invest in local communities, create local jobs and protect local water supplies. In return, critical data centres will get the grid connections they need, and where necessary be allowed to build onsite generation while they wait. Built on sovereignty and security, I want to ensure that the British people can benefit from the huge potential upsides of AI, with a new AI challenge prize to find innovative uses for AI in public services, and the union learning fund to back workers. That is how Britain leads on AI: secure, safe and working for the British people.

Let me turn to enterprise. Britain does not lack great entrepreneurs, but too often we invent the technologies that the world wants here in the UK, then see the jobs and profits go somewhere else. High-growth firms make up less than 1% of small and medium-sized businesses, and they generate more than half the output. From the start-ups of today to the scale-ups of tomorrow and the billion-pound companies of the 2030s, I want to see them succeed and stay in Britain. So for those just starting out, I am tripling the trading allowance—the amount someone can earn from a new venture tax-free—from £1,000 to £3,000. I am launching a new young entrepreneurs allowance, which will cover a year of living costs for young founders while they turn their ideas into businesses. As recommended by the women in tech taskforce, I am also announcing a new scale-up programme to support female founders, and the British Business Bank will double its commitments to women-led businesses and funds to £200 million.

We need to get the best talent into our fast-growth firms, so I am reforming skilled worker visas and non-compete clauses in contracts, so that people who help build one successful company can move easily on to the next. Building on our world-leading enterprise management incentives scheme, today I am launching EMI2, doubling the generosity of the company share option plan so that more companies can hire and retain top talent as they grow.

Let me say this to the men and women building their businesses in Britain: I know that starting a company means taking a risk, often leaving a secure job to build something when there is no guarantee that it will work. I believe that when business founders take that risk, build an exceptional company and create wealth for Britain, we should recognise that success and keep those people here to invest again. That is why today I am announcing founders’ relief, a brand new relief in capital gains tax, with a 10% rate on lifetime gains up to £10 million for the founders of our most successful firms. That is how we make Britain the place where the companies of the future are built: entrepreneurs backed by this Budget, investment backed by this Budget, talent backed by this Budget, innovation backed by this Budget, growth backed by this Budget, and delivered to the British people by this Labour Government.

When I talk about unleashing Britain’s innovation power, I mean in every part of Britain. That is why we reformed the Treasury’s investment manual, the Green Book, so that we can invest in the potential of every town and city. That is what I do today in the west midlands with £10 million for a new market hall in Stafford; in the south-west with £10 million for Bristol’s Temple quarter and £3 million to help Plymouth’s young people get jobs in defence; in the east of England with new access to Government borrowing for the Greater Cambridge Development Corporation; and in the north with £15 million to upgrade the Leeds College of Building, £10 million for Bury’s indoor market, £20 million to restore Liverpool’s Littlewoods building and £3 million for a tech company incubator in the Don valley. I can announce that we will hold the next international investment summit in Gateshead in the spring.

The devolved Governments will receive equivalent funding for the measures in this Budget, and today I am also investing directly in high-growth industries in Scotland, Wales and Northern Ireland. In Wales, there is £2.5 million for a science park in north Wales, £11 million for the Aberavon bridge and £30 million for Cardiff Parkway station; in Scotland, there is £18 million for advanced chip design led by Edinburgh University and £6 million for Glasgow’s Scottish event campus; and in Northern Ireland, there is £7.5 million for AI and cyber in Belfast. [Interruption.]

[Madam Deputy Speaker]

Order. I am sorry to interrupt the Chancellor again, but Mr Holmes, just like last year, your voice is carrying far too heavily across the Chamber, and the hon. Member for Bridlington and The Wolds (Charlie Dewhirst) promised me and his young daughter this morning, on the way to work, that he would behave—he has let himself down and his daughter down. [Interruption.] Order. I call the Chancellor.

[John Healey]

All power to your elbow, Madam Deputy Speaker.

London is the UK’s economic powerhouse, but if our other great cities matched their counterparts in France and Germany, growth in this country would be transformed. Local leaders should not have to come cap in hand to Whitehall to build a new tram or a new concert hall, and when those projects lead to growing local companies and rising local incomes, it should be those same areas that keep the proceeds.

This radical rewiring of the state is a dual mission, led by the Treasury and No. 10 North. In today’s Budget, I am announcing new good growth funds for mayors and incubator capital for areas without mayors. I am announcing flexible funding to invest in local economies, boosted by a further £1.5 billion of devolved loans for mayoral authorities—funds that will back projects such as the new Black Country metro extension, led by the Mayor of the West Midlands; the urban regeneration in Gateshead Quayside, led by the Mayor of the North East; and, in my home region, the reopening of Doncaster airport, led by the Mayor of South Yorkshire.

This is unfinished business for me. As a Treasury Minister in the last Labour Government, I was proud to help create the regional development agencies. They delivered economic growth and local regeneration, before they were axed in 2010 by the Tory-Lib Dem coalition Government. But there is a further step that we never took—the most radical act of devolution in a generation: the devolution of tax revenues. That is the step I take today, alongside this Budget—a road map for fiscal devolution.

For the first time, I am making the commitment that 100% of business rates will be retained locally by the end of the decade, so if local leaders help businesses to start and grow, more of the rates they pay will stay in that area. From next year, 20% of business rates revenues will go to mayors, and from 2028, a share of income tax receipts will go to mayors as well.

Also from 2028, mayors and other strategic authorities will have new powers to introduce an overnight visitor levy. Taken together, these are long-term funding streams that they can use to back investment into big local infrastructure, so that more of the money that is raised locally can be invested and spent locally, on projects like the Trent sports district, led by the Mayor of the East Midlands, and the Bakerloo line extension, led by the Mayor of London. These are new powers for the people who know their areas best—not sentimentality, but supply side economics. It is the biggest wave of devolution in a generation, driving good growth in every postcode, delivered to the British people by this Labour Government.

I decided on an early Budget to give the country a bit of breathing space, and to provide stability and direction in the face of speculation. We will continue to map out that direction for Britain through the Prime Minister’s 10-year plan and the spending review.

The Labour party is the party of public services. Since 2024, we have rejected austerity, we have been rebuilding our public services with over £40 billion a year of extra day-to-day spending, and we are making our streets and borders safer, fixing crumbling classrooms, extending childcare and restoring our NHS, spending £37 billion more on health this year than in the last year of the last Conservative Government. Today I am accelerating our work to halve violence against women and girls, and setting up a new misogyny prevention fund, partnering with the private sector.

I want to pay tribute to my Cabinet colleagues and thank them for everything they are doing, prioritising within their Department budgets in the face of tough fiscal constraints. In today’s Budget, I am fully funding the defence investment plan, including through capital reprioritisation across Whitehall. This honours the commitment made both by me and by the Prime Minister.

As we look ahead to the spending review, we start from a position of strength, with spending at that higher base. There will be choices we have to make about priorities, as we have shown we can, and efficiencies we must deliver, as we have shown we can. Last year, Departments hit double their productivity and efficiency target, generating £16 billion of savings. Asylum costs, which tripled under the last Conservative Government, have been cut by £1 billion under this Labour Government.

Strong public services and strong fiscal discipline are two pillars of our Labour approach, but delivering the next spending review will also require a fundamental rewiring of the state. First, a digital overhaul of Government. In the Budget today, I am investing in AI for the civil service transformation, to support saving a further £600 million from back-office costs. Alongside my right hon. Friend the Health Secretary, I am launching a review of NHS productivity and AI, so staff can spend their time with patients and not on admin.

Secondly, streamlining the state through devolution, reducing the double running between central and local Government. Today’s Budget provides £100 million for a local apprenticeship service to match young people with local firms, funded from savings in welfare fraud and error.

Thirdly, a new focus on prevention. Just as we ringfence capital spending to invest in future success, so at the next spending review I will ringfence prevention spending that brings down costs in the future, with new preventative departmental expenditure limits.

When it comes to welfare, the last Conservative Government left a broken system—a broken system that we are changing. Bringing back face-to-face assessments, rebalancing universal credit so it does not force people to label themselves as too sick to work, reforming Motability and clamping down on those living abroad from accessing a UK state pension on the cheap, but there is more to do. I refuse to write off a million young people, like the last Conservative Government. I refuse to see disabled people suffer the indignities of a system that has been found “not fit for purpose”, and I refuse to allow the burden of paying for this failing system to fall on taxpayers for decades to come. As the Prime Minister and I have both said, we will bring down the welfare bill, and we will do it in a Labour way.

Alan Milburn and the Timms panel will publish their final reports next month. This Government will then set out our response before the end of the year, with a White Paper and legislation to follow next year. The Prime Minister has already announced that from 2030 we will adjust the triple lock, so that the state pension rises every year and keeps pace with earnings and inflation. This will save £15 billion a year by the end of the 2030s—£50 billion by 2050. A new settlement for older generations: a rising state pension and a national care service that is there when older people need it, taking the burden off families and taking the burden off our NHS. Taken together, these reforms reject crude cuts that intensify cost of living pressures and drive up costs elsewhere in the system. Taken together, these reforms will rebuild our welfare system so that it supports people from youth into old age. This is our Labour approach—tackling long-term challenges, improving public services and restoring hope for the future.

Let me now come to two more long-term challenges, First, defence. The week in Kyiv started with Russia launching another brutal ballistic missile attack on the city. This morning, the Prime Minister and I called President Zelensky to tell him about our commitments in the Budget. He told us, “You have made my day.” There will be £10 billion of additional economic and military support, based on loans, export finance guarantees and half a billion in urgent military funding for this winter. The whole House—the whole country—is united for Ukraine. Today, we send a clear message to Moscow: Britain will stand with Ukraine for as long as it takes.

In this new era of threat, the demands on our UK defence are rising. Keeping the people safe by equipping our armed forces is the first duty of any Government. I say this as Chancellor; as a former Defence Secretary; and as a dad whose son is an Army reservist—a reservist who came back four years ago from early training to say that they had no kit and no bullets to fire. That is the truth. For 14 years, Conservative Governments hollowed out and underfunded our armed forces. I am proud to be part of a Labour Government who have made the biggest increase in defence spending since the end of the cold war.

This year, our defence budget is £14 billion higher than it was in the Conservatives’ last year of government. At the spending review next year, I confirm that I will set out the details of how we will meet our NATO commitment to spend 3.5% of GDP on defence by 2035, with a target date for 3% in 2030. Today, I am getting work under way to get there in a fiscally sustainable way. That will include looking hard at public spending, as I have done today to fund the defence investment plan, but I am also determined to use more innovative financing, alongside the private sector and our international allies.

First, I am launching today the new innovative defence finance taskforce to lead this work ahead of the spending review. Secondly, I am now confirming that we will commence treaty negotiations on the multilateral defence mechanism—or bank—with Finland, Poland, and the Netherlands to boost defence investment and joint procurement across NATO allies. Thirdly, we will expand our defence industrial base by getting the maximum amount of private investment into defence, including through public-private partnerships. Fourthly, as an immediate step, I can tell the House that the national wealth fund and the British Business Bank will launch a new focus on defence, dual-use technology and sovereign capability, deploying up to £5 billion of investment and lending over the next four years.

I will ensure this record defence investment works twice: once for our national security, and once for British jobs and British business. Places across all four nations—Barrow, Rosyth, Aldershot, Plymouth, Glascoed and Belfast—reindustrialised and transformed. Security for our nation, jobs for our people, fresh hope for the future—delivered for Britain by this Labour Government.

Let me now turn to housing. On Monday, the Prime Minister and I met Les at the Connection project at St Martin-in-the-Fields, just a stone’s throw from this Chamber. He had spent three months sleeping on the streets; now, he has a room, medical help and a bit of hope for the future. Les told me:

“Now I have the chance, I want to make something of my life.”

Anne, the nurse at the project, put it this way. She said that they

“put the team around the person”.

That is what we will do as a nation.

The Conservatives did promise to end rough sleeping, yet when they left office it had doubled. Ten years ago, as shadow Housing Secretary, I argued that rough sleeping was a shame on the nation. I said it could be solved, but only with national will. Government can fix this, if they choose, and this Government have chosen. We have already promised everyone sleeping rough a route off the streets this winter, and today, I confirm a further £430 million to keep that offer open for the rest of this Parliament—not just this winter, but every winter. This is a moral mission for me, a moral mission for the Prime Minister and a moral mission for the Labour party.

Home is the heart of all our lives. It is the foundation on which we raise our families and build our hopes. Rough sleeping is the sharp end—a symptom of a system that feels broken to too many people. Since the 1980s, Britain has lost over 2 million council homes. Tonight, more than 170,000 children will sleep in temporary accommodation. Two in five young people are trapped, paying more than a third of their income in rent while they watch their hopes of buying their own home slip away. I am taking action today to deal with immediate pressures and taking decisions to start to deal with the long-term challenges.

To get more homes built, I am drawing the line on constant changes to building regulations. There will be no major changes to building regulations in this Parliament, except where critical for safety, and I am removing biodiversity requirements for more brownfield sites. To get more council homes built, I am extending cheaper borrowing for councils and making all land sold to social housing providers VAT-free. Today, I am providing an additional £1.5 billion for the social and affordable housing programme, taking our total Government commitment backing council housing to £40 billion. The Conservatives sold off our council houses; Labour is now building them back.

Finally, for every young person who is working hard, saving what they can and dreaming of their first home, I am taking action. I am announcing that a first-time buyer ISA will replace the lifetime ISA. From today, I am dealing with the LISA penalty, so that if the home you want costs more than the limit, you will get back at least what you put in. And I am going further. From next spring, we have a new scheme for first-time buyers who do not have the bank of mum and dad behind them: Your First Home—an equity loan scheme, which I am funding today with £4.7 billion of Government-backed lending. Hope starts with a home. A route off the streets, a secure home to raise your kids, the keys to your own front door—delivered to the British people by this Labour Government.

This is a Labour Budget for the worker, the sole trader, the parent at the school gate, and the young person desperate to start their first job or start their first business. These are my choices: raising revenue from those who can afford to pay; no tax rises on wages or dividends; and cutting taxes for millions of families and businesses. Just as the British people helped to support our banks 20 years ago, it is our banks that will help to give families breathing space today. For our high streets, it is gaming machines and vape shops that will help to provide the funding for our pubs, shops and cafés to thrive—breathing space now, while taking the long-term action to get costs down for good.

The decisions I have taken today will help to steer Britain through. When the storms pass, what matters is where Britain is heading—a Britain reindustrialised; a Britain with power returned to communities, threats deterred and global opportunities seized. In our first 100 days, this Labour Government have set a course for fresh hope, good growth and support for those who need it. We know who we are, and we know where we are going. [Interruption.]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Mr Bhatti, there is no need for that.

[John Healey]

We know who we are, and we know where we are going. We can see the Britain we want to be. It is a vision burned into every line of this Budget statement—breathing space now, fresh hope for the future, delivered to the British people by this Labour Government. I commend this statement to the House.

Provisional Collection of Taxes

Motion made, and Question put forthwith (Standing Order No. 51(2)),

That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—

(a) Stamp duty land tax (local government pension scheme pools) (motion no. 49);

(b) Stamp duty land tax (withdrawal of group relief) (motion no. 51);

(c) Value added tax (electric vehicle charging) (motion no. 55).—(John Healey.)

Question agreed to.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on succeeding days. The questions on this motion and on the remaining motions will be put at the end of the Budget debate on Tuesday 3 November. I call the Chancellor to move the motion formally.

Economic Growth

Nusrat Ghani Excerpts

Monday 7th September 2026 Commons Chamber

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

With permission, I will make a statement on the Government’s plan to deliver good growth in every postcode.

At the G20 in North Carolina last week, the Chancellor and I met Finance Ministers from leading economies to discuss our shared economic challenges. Global instability, conflict and trade frictions are continuing to drive up inflation and interest rates around the world. While these shocks are international in nature, their impact is also being felt here in the UK—from the cost of the weekly family shop to the cost of Government borrowing.

Britain has shown resilience in the face of these pressures and the economy is now turning a corner: our growth was the fastest in the G7 in the first half of this year, Government borrowing fell to its lowest level in six years last year and interest rates have been cut six times since the general election. We are building on our strengths—our world-class universities and our world-leading sectors, such as life sciences, defence, technology, creative industries and financial services—and, because of the choices that this Labour Government have already taken, we are in a stronger position today to capitalise on the opportunities for growth across our economy.

In the context of a more uncertain world, we must continue to make responsible choices. Fiscal discipline will underwrite every promise this Government make. Both the Prime Minister and the Chancellor have made clear their commitment to meeting the fiscal rules, with a buffer against uncertainty. We will address the long-term pressures on our public finances to put debt on a sustainable downward path. As the Chancellor said earlier today, there is nothing progressive about spending £1 in every £10 on debt interest.

In his statement to this House last week, the Prime Minister laid out a clear diagnosis of what has gone wrong in our economy: political power was centralised, the economic fundamentals were privatised or outsourced, and our country was de-industrialised. The solution is a fundamental shift in the way our country works. No. 10 North and the Treasury are working together to build a stronger, more strategic centre of government and a more active state. Together, we will support the ambitions of local leaders and exert public influence and direction over the essentials, including transport and housing. We will devolve power and resources to local leaders. London is of course an economic powerhouse, but if our city regions could emulate the success of second cities in France and Germany, growth in our country could be transformed.

The Chancellor has instructed public investment institutions to focus on regional growth. To build on our high growth areas, the Oxford-Cambridge corridor and the northern growth corridor, he has today announced a new £150 million northern scale-up fund, delivered by the British Business Bank, to back the most innovative and fast-growing firms from Liverpool to Newcastle. The new Northern 500 will also bring together 500 of the north’s most ambitious mid-sized businesses into a single growth community, focused on scaling, investment and productivity. The National Wealth Fund will establish new strategic partnerships with South Yorkshire, the Liverpool city region, the north-east and Cardiff, giving those areas support to build their investment pipelines. At the Budget next month, the Government will go further, with a road map for fiscal devolution—a permanent transfer of power and resources from Whitehall to our regions. This plan will drive economic growth and productivity in three key areas: supporting investment, boosting innovation and getting more people into good jobs.

First, I will turn to investment. Business investment has increased by nearly 5% since the general election, but in a highly competitive world we must do more to reduce the barriers that firms face. The Government will tackle the thicket of consultation, litigation and administration that is holding up private investment, including by extending our reforms of judicial review from energy to all major infrastructure. We will bring an end to the consultation culture across Government, supported by new guidance from the Attorney General on legal risk to give Ministers confidence to make decisions. As the Chancellor has set out, we will make further changes to the Treasury’s Green Book, reducing the discount rate from 3.5% to 3%, to ensure that the Treasury rulebook does not go against key regional infrastructure projects and that places across the country get a fairer hearing in spending decisions. Work is already under way to progress place-based business cases in Plymouth, Birmingham, Liverpool and Port Talbot, and at the Budget we will publish guidance to allow more areas to do the same.

The second driver of growth is innovation. The UK has a fantastic record on innovation. We are world leaders in frontier technologies, quantum computing, nuclear fusion, space technology and AI. But too often, ideas born here have to go elsewhere to find the capital they need to scale. Today we are setting out a new ambition to double the number of unicorns in this country. The Government will identify and back these high-potential firms, providing them with the necessary capital to scale. New cross-economy sandboxing powers will also enable firms to test frontier technologies safely. Building on the important work already taking place in defence and sovereign AI, the Chancellor will work with Government Departments to earmark new, dedicated funds to back British innovation.

The third vital driver of growth is jobs. Our objective is to get more people into good, highly skilled jobs, and to make the most of the untapped talent that exists across the country. That is why, two weeks into office, the Prime Minister set out a bold new plan to transform technical education, and why, this autumn, Alan Milburn will set out his full recommendations to Government on how to address the blight of youth unemployment. This is our moral duty—not only our fiscal duty—because it cannot be right that so many young people are stuck on benefits.

The plan for growth is underpinned by fiscal discipline. It will hand power to local leaders and unlock the potential of our regions. It will build a strong, strategic centre of Government and enable greater public direction and influence over the essentials. It will back British business, goods and exports, creating wealth and prosperity in all parts of the country. It is a plan to build hope and optimism across our economy, and to drive good growth in every postcode. I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Chief Secretary to the Treasury.

--- Later in debate ---

[Emma Reynolds]

I thank the Chair of the Treasury Committee for her question, and I agree with her: public financial institutions must make independent decisions about the businesses that they support. The Chancellor has talked today about new strategic priorities for the NWF, and that is also the right thing to do. That goes in parallel with what my hon. Friend was saying.

On oversight of mayoral strategic authorities, my hon. Friend is right that if we are going to devolve more power and, critically, more resources, there should be more oversight. The First Secretary of State has talked about the role of others, including Members of this House, in holding mayoral strategic authorities to account when they receive those new powers.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Charlie Maynard (Witney) (LD)]

I thank the Chancellor and the Minister for their speech and statement. We know that the Conservatives’ Brexit deal has hit national GDP by as much as 8%, costing the country up to £90 billion a year in lost tax revenues. Will the Government now pull the largest zero-cost growth lever available to them by negotiating a growth and defence partnership with the EU, including joining the single market and a new customs union, rather than clinging to the same failed red lines, which are costing businesses billions every year? Being outside the single market and the customs union directly links to the 13% fall in the UK’s export of goods since 2022, which has hit traditional manufacturing regions the worst—the same places that the Government’s reindustrialise-the-north agenda claims to prioritise. I would like to understand whether she acknowledges the reality of that linkage or not.

I welcome the Chancellor’s emphasis on the importance of fiscal credibility and, linked to that, meeting the fiscal rules. However, the reality is that those rules have been easily gamed by successive Governments, with our budgetary process being summarised as speculation without scrutiny, short-term headroom chasing and gaming the system, with an approach of jam today, which is spending, and pain tomorrow, which is tax, but tomorrow never arrives. The result is that it has been more than 25 years since we had a balanced Budget, and our national debt is now six times larger than 20 years ago.

Will the Chief Secretary demonstrate that she is serious about tackling our debt and agree that a key way to do that is to grow our economy? Will she consider what we can learn from how other countries such as Switzerland, Sweden and New Zealand have addressed and solved their budget process problems?

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. We have the Health Bill debate later on today, so we are pressed for time. I ask colleagues to keep their questions short and the Minister to be on point.

--- Later in debate ---

[Emma Reynolds]

We are working with the mayor on that issue. Our colleagues will get back to you on that.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Hopefully they will get back not to me, but to the hon. Member.

[Emma Reynolds]

I am sorry, Madam Deputy Speaker.

Taxation (Energy and Vehicles) Bill

Nusrat Ghani Excerpts

2nd reading & Committee of the whole House
Wednesday 1st July 2026 Commons Chamber

[Rachel Blake]

I thank my hon. Friend for his thoughtful intervention. I absolutely agree that this will make a real difference to those workers who drive for their work. This is a long overdue measure, and I am very happy to put the Bill forward today.

The proposals represent the largest ever increase to the mileage rates, benefiting around 2 million employees and 1 million self-employed individuals, and saving over £120 a year for a worker doing 6,000 business miles. Looking beyond 2026-27, the Government have already committed to a review of the rates, and will set that out at the Budget.

Recognising the key role that the road haulage sector plays in transporting goods across the UK, and its disproportionate exposure to fuel costs, the Government are introducing a 12-month holiday from vehicle excise duty for the majority of heavy goods vehicles for licences taken out between 1 July 2026—today—and 30 June 2027. That will save a typical HGV £600, on top of savings from fuel duty. Fuel costs make up a substantial proportion of HGV operating costs, and this action will help prevent cost pressures arising from the conflict in the middle east spreading across the economy.

The announcements on mileage rates and HGV VED were part of a wider package of measures announced in May, including on fuel duty. In total, the decisions taken since the 2024 general election to freeze fuel duty will save motorists 11p per litre, or £120 for the average car, £250 for the average van and over £2,000 for the average HGV, compared to previous plans. For those reasons, I commend the Bill to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

--- Later in debate ---

[James Wild]

I agree with the hon. Gentleman on that point, which I will come to shortly. I just note that when the Secretary of State for Energy Security and Net Zero had the opportunity to really break that link, he backed away from doing so. This measure does so in a limited way, but it does not make the ambitious reforms that could have been made by the Energy Secretary.

The electricity generator levy—[Interruption.] I am sure the Parliamentary Private Secretary, the hon. Member for Hitchin (Alistair Strathern), can intervene if he is allowed. The electricity generator levy was introduced by the previous Government in 2023 as a temporary windfall tax applying to revenue above the benchmark price. It was a short-term response to exceptional circumstances and is due to end in 2028. What do the Government propose? To increase the rate from 45% to 55% and to extend it beyond 2028, with no end date. This is another example of Ministers reaching for higher taxes while offering no certainty in return.

The Government say, to answer the point made by the hon. Member for St Austell and Newquay (Noah Law), that the increased rates will support the decoupling of gas prices by incentivising generators into voluntary wholesale contracts for difference, but while the new higher levy applies from today, those new contracts are yet to be seen, the proposed strike price is not known, the likelihood of generators accepting them is therefore unknown and in question, and the value for money for taxpayers is yet to be proven. Will the Energy Secretary still be in post to oversee the reforms? We all sincerely hope he will not be in the Treasury.

In the winding-up speech, will the Minister provide an update on when the consultation on the CfDs will be launched, when the first contracts are set to be awarded, and if that will be through an auction or an allocation round? The Government have said that their intention is to extend the levy beyond 2028, but with no clarity on when it will end. The Government do not know how long they want it to last and have said there will be further legislation on that point. The Exchequer Secretary, in the debate on the resolutions last week, said that this was something “the Government are considering”. That is hardly a robust approach when bringing legislation before the House. Indeed, it seems like a hasty measure to give the Chancellor something to announce.

The House of Lords Constitution Committee previously recommended that for fast-track legislation, sunset clauses should be the default presumption. An amendment to add one is outside the resolutions of this House, but we have tabled a new clause that would require the Government to come forward before the due end date in March 2028 to say whether they think the levy should continue.

There is an absence of any publicly available costings on the measures. That is true for all the measures, yet this House is being asked to approve an indefinite extension. When the levy was first introduced, the Office for Budget Responsibility predicted that it would raise £2.3 billion a year, but the out-turn in 2024-25 was only £700 million. That matters, because part of the rationale for the higher levy is to generate revenues to support businesses and households. What measures is the Minister proposing in that regard? Surely not the Thorpe Park VAT cut, because that is funded by changes to corporation tax. Can the Minister enlighten us on what other benefits the consumers—my constituents—are getting from the tax?

The levy needs to be seen in the context of the Government promising to reduce energy bills by £300—instead, bills have increased by around that amount. That is what happens when Governments do not have a plan. The Conservatives would cut bills for businesses and consumers through our cheaper energy plan, taking VAT off energy bills, axing the carbon tax and legacy subsidies, and backing the North sea to get drilling.

The second measure on increasing mileage payments to 55p for 10,000 business miles is something that we support. It is right that those workers, including carers, who are using their own vehicles for work should not be left to absorb the rising cost. The measure is backdated to the start of the financial year. When winding up, can the Minister guarantee that His Majesty’s Revenue and Customs will not pursue anyone for any income tax or national insurance contributions that may otherwise have arisen on payments made before the legislation took effect?

The increase applies only to the first 10,000 miles. When we debated the resolution, the Minister said that the Government considered an increase in the 25p rate, but that it did not represent good value for money. If Ministers accepted that the 45p rate needed to be increased, can the Minister explain how they justify leaving the longer-distance rate untouched at 25p? As has been set out, this is the first increase for some time, which raises the question of how we can avoid such a long period between increases in future. I accept that indexation would be complicated, but what commitments will the Minister make to regularly review increases?

Mileage is an important part of motorists’ costs, but the bigger impact comes from fuel duty. At the last Budget, the Chancellor announced plans to scrap both the 15-year freeze and the 5p cut that the Conservatives put in place. It was only after pressure from the Opposition that the Chancellor made a U-turn. However, it was only a partial one, and those costs are going to start hitting from as soon as January. For the logistics sector, which pays £5.4 billion in fuel duty, a 1p increase per litre will increase costs by nearly £83 million. Perhaps the new Chancellor will recognise the folly of that approach and reverse the plans they inherit.

We welcome the HGV vehicle excise duty holiday. That duty had been frozen since 2014 until Labour came into office. For a year from today, HGVs will pay just £1, which will be a significant saving for the sector. However, the Government must recognise the full scale of the pressures facing hauliers and accept responsibility for those they have added; the Chancellor did not have to increase business rates, transport taxes and fuel duty.

More than 95% of road haulage firms are small businesses with small margins, so any increase in costs is a challenge. The Government say that the measure will save £600 for a typical lorry, and £900 for the largest vehicles. At peak prices, filling a single HGV costs more than £1,000. Yes, the measure is helpful, but not markedly so.

Taken together, the measures reveal a Government reaching for short-term fixes while avoiding the harder questions. On the generator levy, they are demanding higher taxes without certainty or proper costings—all while displaying a lack of urgency on reforms to decouple energy prices. Mileage allowances are a partial change, and one that leaves high-mileage workers behind. The vehicle excise duty holiday is a temporary relief without a plan for what comes next.

The Conservatives welcome the measures, as far as they go. However, they have not been brought forward by choice; they have been forced by the consequences of the Chancellor’s decisions. Taxes remain at record highs, and are set to go higher, costs continue to rise, and growth has stalled. Against that backdrop, the measures offer very limited relief.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I will now announce the results of today’s deferred Divisions.

On the draft Employment Tribunal (Extension of Time Limits) (Miscellaneous Amendments and Transitional Provisions) Regulations 2026, the Ayes were 323 and the Noes were 107, so the Ayes have it.

On the draft Employment Tribunals Extension of Jurisdiction (England and Wales) (Amendment) Order 2026, the Ayes were 318 and the Noes were 107, so the Ayes have it.

I call the Liberal Democrat spokesperson.

[The Division lists are published at the end of today’s debates.]

Taxation (Energy and Vehicles)

Nusrat Ghani Excerpts

Wednesday 24th June 2026 Commons Chamber

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

I beg to move,

That provision may be made increasing the rate of the electricity generator levy to 55%.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

With this it will be convenient to discuss the following:

Motion on income tax (mileage amounts)—

That—

(1) In the table in each of—

(a) section 230(2) of the Income Tax (Earnings and Pensions) Act 2003 (approved amount for mileage allowance payments), and

(b) section 94F(2) of the Income Tax (Trading and Other Income) Act 2005 (appropriate mileage amount),

for “45p” substitute “55p”.

(2) In consequence of paragraph (1), in section 94F(3) of the Income Tax (Trading and Other Income) Act 2005, for “45p” substitute “55p”.

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

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

Motion on vehicle excise duty (temporary rates for good vehicles)—

That—

(1) The Vehicle Excise and Registration Act 1994 has effect in relation to vehicle licences, other than trade licences, taken out in the period beginning with 1 July 2026 and ending with 30 June 2027 as follows.

(2) Paragraph 9 of Schedule 1 to that Act (rates for rigid goods vehicles exceeding 3,500 kgs revenue weight) has effect in relation to goods vehicles to which sub-paragraph (1), (2)(b) or

(3) of that paragraph applies and which are used in the course of a trade as if—

(a) in sub-paragraph (1), for “shall be determined in accordance with” to the end there were substituted “and not exceeding 44,000 kgs is £1.”;

(b) where sub-paragraph (2) applies in relation to rigid goods vehicles mentioned in paragraph (b) of that sub-paragraph, in that sub-paragraph for “basic goods vehicle rate” there were substituted “£1”;

(c) in sub-paragraph (3), for “£1,703” there were substituted “£1”.

(3) Paragraph 10 of that Schedule (rates for certain rigid goods vehicles exceeding 11,999 kgs) has effect in relation to goods vehicles to which sub-paragraph (1) of that paragraph applies and which are used in the course of a trade as if—

(a) in sub-paragraph (3), for “to be determined in accordance with” to the end there were substituted “£1.”;

(b) in sub-paragraph (7), for “£654” there were substituted “£1”.

(4) Paragraph 11 of that Schedule (rates for tractive units exceeding 3,500 kgs) has effect in relation to goods vehicles to which sub-paragraph (1), (2)(b) or (3) of that paragraph applies and which are used in the course of a trade as if—

(a) in sub-paragraph (1), for “shall be determined in accordance with” to the end there were substituted “and not exceeding 44,000 kgs is £1.”;

(b) where sub-paragraph (2) applies in relation to tractive units mentioned in paragraph (b) of that sub-paragraph, in that sub-paragraph for “basic goods vehicle rate” there were substituted “£1”;

(c) in sub-paragraph (3), for “£1,703” there were substituted “£1”.

(5) Paragraph 11C of that Schedule (rate for certain tractive units exceeding 41,000 kgs but not exceeding 44,000 kgs) has effect in relation to goods vehicles to which that paragraph applies and which are used in the course of a trade as if for “£10” there were substituted “£1”.

(6) Where subsection (2) of section 3 of that Act (6 month licences) applies in relation to a vehicle for which any of paragraphs (2) to (4) has effect, that subsection has effect as if, in paragraph (a), for “£50” there were substituted “£0”.

(7) Article 3(1)(b) of the Vehicle Licences (Duration of First Licences and Rate of Duty) Order 1986 (S.I. 1986/1428) has effect in relation to vehicle licences, other than trade licences, taken out in the period beginning with 1 July 2026 and ending with 30 June 2027 for vehicles for which any of paragraphs (2) to (5) has effect as if for “£50” there were substituted “£0”

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

[Dan Tomlinson]

The Chancellor has committed to doing what she can to support families and businesses to be responsive in a changing world and responsible in the national interest. The measures before the House assist the Government in that objective.

The way that the current energy system works means that households and businesses pay more for their electricity when the gas price is high. The electricity generator levy already recoups some of the excess returns made by renewable generators when high gas prices push electricity prices over the current threshold of £82.61 per megawatt-hour. The Government have decided to increase the rate of the levy from 45% to 55% from 1 July. That will do two things: first, it will ensure that a large proportion of any exceptional revenues from high gas prices are passed back to the Government, providing a revenue stream so that money is available to support businesses and families with the impacts of the conflict in the middle east; and secondly, in the longer term it will support the new voluntary contracts for difference scheme, which was announced in April, by encouraging participation in the scheme.

In March, the Government announced a review of mileage rates for employees using their own vehicle for work and the self-employed who use the simplified expenses rates. In recognition of the pressures facing drivers as a result of the effects of the Iran war, the Chancellor announced in May the first uprating of mileage rates in 15 years, backdated to April, to provide immediate support to both groups. Mileage rates will increase for 2026-27 from 45p to 55p for the first 10,000 miles, and then 25p thereafter, with effect from 6 April. That represents the largest ever increase to these mileage rates, benefiting around 2 million employees and 1 million self-employed individuals, and saving over £120 a year for a worker doing 6,000 business miles.

It was a privilege recently to meet care workers and the Unison general secretary to hear directly about the difference that this uprating will make to those on the frontline. The general secretary said to me and the Chancellor that this measure is good news for people providing essential public services. It was an honour to meet those who work day in, day out looking after people across the country. I am glad that this measure will have a positive impact on those who do such vital work. Looking ahead, beyond 2026-27, the Government have already committed to a review of those rates and will set out further steps at the Budget.

The third measure recognises the key role that the road haulage sector plays in transporting goods across the UK and its disproportionate exposure to fuel costs. The Government are introducing a 12-month holiday from vehicle excise duty for the majority of heavy goods vehicles, which will save a typical HGV £600 on top of the savings from fuel duty. Fuel costs make up a substantial proportion of HGV operating costs, and this action will help to prevent cost pressures from the Iran conflict spreading across the economy.

The announcements on mileage rates and HGV VED were part of a wider package of measures announced in May, including on fuel duty. In total, the decisions taken since the 2024 general election to freeze fuel duty will save motorists 11p per litre, or £120 for the average car, £250 for the average van and over £2,000 for the average HGV, compared with the plans we inherited from the previous Government.

This Government are taking action to support the economy at a time of global economic uncertainty following the Iran conflict. Our approach of targeting support at those groups who are hardest hit by the conflict will ensure that the measures we take are effective, while protecting the economy from the effects of reckless borrowing that took place under the previous Government.

[Dan Tomlinson]

The hon. Gentleman says it was for covid, but he forgot to mention Liz Truss.

This Government’s record shows that despite that instability, our plan is working. UK GDP growth in the past two years was the second fastest in the G7. Real household disposable income per person has grown by more than 2% so far in this Parliament, compared with a fall of more than 2% in the last Parliament. Real wages have increased in every single month since this Government took office, with wages rising faster than inflation. These measures will continue that track record and demonstrate that this Government are committed to supporting working people.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

--- Later in debate ---

[Mr Toby Perkins (Chesterfield) (Lab)]

I do not intend to detain the House for long. I welcome the motion to increase the electricity generator levy, which—alongside the Government’s plans to encourage participation at a competitive price in long-term fixed contracts for low-carbon generators—will weaken the link between electricity and gas prices, with the overall effect of bringing down energy bills for my constituents and consumers across the UK, as well as for British businesses.

I also welcome the long-overdue increase in the approved mileage allowance for workers from 45p per mile to 55p. It is very noticeable that over the 14 years I was in Parliament under a Conservative Government, that rate stayed exactly the same, while the cost of petrol rose by around 33% and the cost of diesel by around 44%. Every single year, those workers were worse off than they had been the year before.

The motion to temporarily reduce vehicle excise duty is also welcome. Right now, HGVs pay about £1,700 on average per vehicle; the motion would change that to £1 this year. Last month, I visited Spectrum Freight in Chesterfield, where we discussed the challenges the industry is facing. It and other businesses in the industry will very much welcome the Government’s sensible approach to supporting the sector at this difficult time.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Charlie Maynard (Witney) (LD)]

The electricity generator levy is a windfall tax on UK electricity generation from nuclear, renewable and biomass sources, and it raised £0.7 billion in the last financial year. The EGL is a revenue-based tax that currently applies at a rate of 45% on exceptional generation receipts above a benchmark price of £77.94 per megawatt-hour, with an allowance of £10 million per company. In contrast, the energy profits levy applies to oil and gas production in the UK and the UK continental shelf, and raised £2.9 billion in the last financial year. We support the goal of seeking to fund cost of living support through emergency revenue measures during the gas price shock, but we also note that power wholesale prices are now around £90 per megawatt-hour, compared with a spike of £135 per megawatt-hour and a pre-Iran conflict price of £80 per megawatt-hour. How much is this measure likely to raise, given the move in prices? It feels like the horse may have already bolted, so I would be interested to hear the Minister’s thoughts on that.

We recognise that this measure is a nudge to accelerate the shift of legacy renewable generators away from volatile wholesale prices and towards fixed contracts for difference, using a higher tax rate as leverage. If legacy renewable generators—those on the renewables obligation, not those already under CfDs—sign up to a wholesale contract for difference, they exchange their volatile wholesale revenues for a fixed strike price. That is obviously good news for consumers, who are insulated from future gas price spikes on that portion of generation because the generator is no longer passing through the wholesale prices, and the Government capture any upside via the Low Carbon Contracts Company when wholesale prices rise.

The second motion will increase the mileage allowance. Again, this seems a logical step, and one that we are happy to support. I note that the 45p rate has been frozen since 2011, so it has been 15 years without an adjustment. Over that period, the costs of fuel, insurance, tyres and servicing have all risen materially, so while 55p is a meaningful correction, it is questionable whether it fully catches up with accumulated inflation. This change will have a positive impact overall, not least for people in professions such as care work, who do a lot of driving between appointments. I refer again to the Lib Dem proposal to cut fuel duty by 10%—if the Chancellor took that proposal on board, it would combine with the increase in mileage allowance to make a significant difference in the pockets of people who often have to drive for work. I also note that the cost of this change has not been set out, only that it is

“subject to scrutiny by the Office for Budget Responsibility and will be set out at a future fiscal event.”

Personally, I do not think that is good enough. The Treasury team should set out the cost of any change in the tax take, whether positive or negative, when it is proposed.

Finally, the 12-month vehicle excise duty holiday for HGVs is a sensible and welcome measure, and we will not oppose it. Our hauliers, such as Chris Hayter in Witney, are critical. They are the backbone of our economy, and I understand that the Minister knows them well. We need to be honest about what this change is and what it is not. Our haulage sector was already in crisis before the conflict in Iran. Insolvency rates in road freight have been running at record levels. Margins were being squeezed by rising insurance costs, driver shortages and the lingering disruption of years of post-Brexit paperwork. The Iran conflict has simply poured fuel—at £1.85 a litre—on to a fire that was already burning.

The VED holiday saves a typical operator about £600 a vehicle. We welcome every penny of that, but against a fuel cost shock that is adding £1 billion a year to the industry’s cost base, it is by the Government’s own figures a quarter of the problem. Many operators will burn through that saving in a matter of weeks at the pump. What the sector needs alongside this is a serious long-term plan on fuel duty RPI indexation, which threatens to push costs higher again next April, on driver recruitment and retention, where the shortage remains acute, and on the transition to cleaner vehicles, where smaller operators have been left without a credible path to decarbonisation. We will support this measure through Parliament because the people driving these lorries deserve the relief now, not after another round of consultations.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Minister to wind up.

High Speed 2: Impact on Communities

Nusrat Ghani Excerpts

Tuesday 19th May 2026 Commons Chamber

[David Simmonds]

On that point—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. The hon. Lady has been incredibly generous in ensuring that everyone can get in, but the debate has to conclude at 7.46 pm. It is her time, but she may wish to consider leaving some time for the Minister.

[David Simmonds]

I am incredibly grateful to my hon. Friend and constituency neighbour. Does she agree that there is a positive that could come out of this process, and from her trenchant efforts to secure an upgrade to the status of Colne Valley Regional Park? Granting the park a higher degree of planning protection would be a significant win for our constituents and others. Perhaps the Minister might consider putting a little pressure on Government colleagues to secure that positive benefit for future generations to enjoy.

SS Richard Montgomery: Masts

Nusrat Ghani Excerpts

Tuesday 21st April 2026 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for bringing forward this debate. He has illustrated the issue and the concerns over the explosives, although the second and up-to-date assessment seemed to indicate that maybe the threat is not the same. I want to ask him about marine and maritime history and the three masts. Does he agree that the ultimate goal is to protect local maritime history by creating a lasting public display for locals and tourists alike? Does he not further agree that our maritime history—my constituency of Strangford has incredible maritime history—should be promoted in schools across the United Kingdom and that schools should be encouraged to visit these masts, as we do in Northern Ireland with the Titanic museum in Belfast, to gain a better understanding of our strong history? He should be congratulated on bringing this issue forward. None of us—not me—would have known about it but for his knowledge.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I congratulate the hon. Member for creating a link back to the topic.

[Kevin McKenna]

Yes, for any community that has strong links to the sea, the stories of the sea run deep in everyone’s veins. As I was about to come on to, there is an amazing mural in the middle of Sheerness of a fairly mean-looking mermaid who has her hands gripped around the plungers of a TNT detonator, threatening Sheerness. People have a sense of pride about that mural and the stories, and it matters to all the communities that surround the area where the Montgomery is laid to rest.

It is important that we ensure that the masts are preserved for the future and, building on what the hon. Member for Strangford (Jim Shannon) said, people locally are keen that if these masts are removed, they come to land. The Government, as I say, are removing the masts. We do not know what condition the masts will be in when they come off the ship, but certainly people in Sheppey would love to have one of the masts, at least, returned to the mainland.

--- Later in debate ---

[Kevin McKenna]

Absolutely. As I have talked to people on Sheppey, some people have gone, “The masts are all ours! We have to have them all.” There are three masts—we can share. I know that it matters to people in Southend; I have had communications from some of my hon. Friend’s constituents, and also from people more generally.

There is one extra snag in this project. Currently, the masts are the responsibility of the United Kingdom Government. There was an Act of Parliament in 1973, largely pulled together for the Richard Montgomery so that we could take on what has been described as the most dangerous wreck in Britain. Although for decades the United Kingdom Government have been responsible for ensuring that the masts are safe and that shipping transits around them safely, as soon as anything comes off the wreck, it reverts to its original owners, which are the United States Government. Although I know that people locally would like the masts, and I am sure that the United Kingdom Government would be happy for them to come to Sheppey and to Southend, we will have to ask the United States Government for one of the masts. There are three masts; Southend could have one, Sheppey could have one, and maybe one could go into the ballroom that Donald Trump is building at the moment—they would look great covered in gold leaf. Beyond that, this means that we must engage in a bit of diplomatic discussion with our American allies. It would be a massive testament to our partnership with our American friends during the second world war, and since then through NATO. It is a way of bringing that story to life for people. We could use this to bring us together, as it would bring people in Southend and Sheppey together. It could reignite—not literally; that would be terrible—the bonds with our American allies.

I have a few questions for the Minister, some of which have been raised by my constituents. A no-fly zone has recently been extended around the wreck of the Montgomery, including bans on drones. Several constituents would like to know why and what has changed. Are the changes reflective of any additional concern about the explosive nature of the Montgomery’s cargo? People would also like to know what this would involve, and what we need to do to ask the Americans if we can have the masts. Do the Government still believe that the masts should be kept in the United Kingdom? I would also like some general evaluation of the Government’s ideas about a timeline for the removal of the masts and what it would involve.

This is quite a romantic story in its way. Shipwrecks always have a degree of romance to them, and the Montgomery has the added frisson of an incredible amount of explosives, which, as my hon. Friend the Member for Southend West and Leigh (David Burton-Sampson) said, adds a little bit of fear. The wreck speaks to me about how such stories get embedded in communities, even over a few decades. The people of Sheppey really care. I have a petition running at the moment, and I hope that there is a petition in Southend, too. I encourage anyone to sign my petition so that we can show the strength of feeling and the real desire to finally bring the masts of the Richard Montgomery home to the United Kingdom, home to Sheppey and home to Southend.

[Madam Deputy Speaker]

The most dangerous wreck in Britain—respond to that, Minister!

Middle East: Economic Update

Nusrat Ghani Excerpts

Tuesday 21st April 2026 Commons Chamber

[Rachel Reeves]

I thank the Chair of the Energy Security and Net Zero Committee for that question, and for his important work on this issue. There are two ways to reduce the number of days in which the gas price sets the electricity price. First is to invest more in home-grown renewables and in nuclear, so that more of the mix is made up of electricity. The second way is to delink gas and electricity prices, first by increasing the electricity generators levy to bring in money but also—this is crucial—by incentivising those companies that are currently getting the market price to go instead on to a contract for difference, which gives greater certainty for families, pensioners and businesses with their bills. That is exactly what we are doing.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

I thank the Chancellor for advance sight of her statement.

The Chancellor should have come here today to explain how she was going to use the £20 million extra that the Treasury is pulling in every single day through higher VAT, a higher energy profits levy and other taxes, to tackle the immediate cost of fuel crisis that is facing families and businesses today. The Chancellor is fundamentally wrong when she says that a knee-jerk response would have put household finances at risk through higher inflation and higher interest rates. We need just to look at what other countries are doing. The Government could have used that £20 million to drive down prices—the price of petrol at the pump, the price of train and bus fares, and the price of home-charging electric vehicles. Slashing those prices could have helped the Chancellor to control inflation and higher interest rates. That is what other countries are doing, and what we Liberal Democrats are calling for.

The Liberal Democrats were the only political party to have in our manifesto a commitment to break the link between gas and electricity prices, so we are glad that 18 months on, the Government have finally listened.

In addition to the measures outlined today, may I ask the Chancellor about two specific things? First, has she spoken to any banks about rolling out low-interest loans for householders who want to do the right thing and adopt energy-saving measures, but are struggling with the up-front costs? Secondly, I met the Competition and Markets Authority on Monday. The CMA and Ofgem both agree that there is a case to answer about the broken energy market and why hospitality and small businesses are being blocked. Will the Chancellor join me in writing to Ofgem and asking it finally to investigate, without any further delay, a broken energy market that is blocking hospitality and small businesses from accessing the best deals?

Spring Forecast

Nusrat Ghani Excerpts

Tuesday 3rd March 2026 Commons Chamber

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. To support me in getting more Members in, can questions please be short?

[Rachel Reeves]

I know that my hon. Friend’s Portsmouth constituency will benefit from Pride in Place funding to invest in those places that were forgotten by the previous Government. It will also benefit directly from the uplift in defence spending, which will ensure not only our country’s security, but good jobs that pay decent wages in Portsmouth. Our reforms to the Green Book mean that coastal communities will get their fair share, and will get an opportunity to bid for funding to help grow their economy through the £120 billion that we are putting in for capital investment.

--- Later in debate ---

[Rachel Reeves]

My hon. Friend is right about the shadow Chancellor’s blood pressure—but, frankly, I am worried about his future employment prospects.

NHS waiting lists are falling because of the money that we have put in, but my hon. Friend makes a point about overall investment in the economy. After lagging behind pretty much every other advanced country in the world, since the general election we have had the fastest investment growth in the G7.

[Madam Deputy Speaker]

For the final question—the one we have been waiting for—I call Chris Vince.

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

I thank the Chancellor for her statement about two hours ago. Fortunately, my Shakespeare quote for the day is “brevity is the soul of wit”, so I will be very quick. We know that the national debt soared under the last Government, and that £1 in every £10 is spent on servicing that debt. What difference can we make to public services in Harlow if we can spend less on debt repayment and more on those services?