Property Taxes

Oliver Ryan Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sir Ashley Fox (Bridgwater) (Con)]

This Government were elected on a manifesto to increase spending by £9.5 billion. That was to be paid for through £7.3 billion of extra taxes and £3.5 billion of extra borrowing, all of which was set out in the Labour manifesto. It was a modest plan with a prudent margin—exactly the sort of plan one might expect a party in opposition to put forward to show that it can be trusted to run the public finances. Labour Members might reflect on the fact that had they implemented the plan, the British economy would be in better condition than at present.

In its first Budget, Labour increased public expenditure not by £9.5 billion, but by £70 billion. How those on the Labour Benches cheered with delight at the thought of all the extra spending: pay rises for train drivers, with no conditions; pay rises for junior doctors, with no strings; money for Great British Energy; and more money for the British Business Bank—all so the Government can invest in projects that the private sector does not think will make a return.

We all know how this story ends: Labour will use all the business acumen that the Cabinet has at its disposal to create a modern version of British Leyland. It is what Labour does best: spending other people’s money, and borrowing yet more money that other people’s children can repay. But all this extra spending and borrowing comes at a price, and the Government are now paying 5.7% interest to borrow money for 30 years. That is the highest level since 1998, and this surge in borrowing costs reflects the market’s lack of confidence in the Chancellor’s ability to manage Britain’s finances.

[Oliver Ryan (Burnley) (Lab/Co-op)]

Does the hon. Gentleman accept that the surge in borrowing costs actually started with Liz Truss’s mini-Budget and has not really stopped since the trajectory started?

[Sir Ashley Fox]

I do not accept that at all. This surge is entirely due to the Chancellor losing control of public expenditure, and the increased cost of servicing our national debt adds further pressure on the British taxpayer.

Having presented her Budget, the Chancellor said:

“We’re not going to be coming back with more tax increases, or indeed more borrowing.”

The problem is that no one believes her. The markets do not believe her, and Labour Back Benchers certainly do not believe her. They now know that they only have to threaten to rebel on any item of public expenditure and the Chancellor will cave. We saw that on the welfare reform Bill, which was brought forward to save a modest £4.5 billion. What happened? The first whiff of a rebellion, and the Bill was gutted, leaving the taxpayer to pick up the cost.

In that context, over the summer we saw briefings from the Treasury testing the water on a whole series of potential tax rises: higher rates of council tax, a land value tax, capital gains tax on family homes, lowering the thresholds for inheritance tax and an annual property levy on the family home. No wonder the Deputy Prime Minister is being so careful about which of her many homes is her primary residence.

The Chancellor is clearly desperate to raise more money. It is a cruel irony, is it not, that having invented a £22 billion black hole to justify her taxing and spending, the Chancellor now finds herself facing a black hole entirely of her own making? It is her jobs tax and other tax rises that have caused the economy to slow and unemployment to rise. Her increase in public expenditure has fuelled inflation, which has led to higher wage demands and increased benefit costs.