Budget Resolutions

Polly Billington Excerpts

Wednesday 26th November 2025 Commons Chamber

[Sir Edward Leigh (Gainsborough) (Con)]

The benefit bill is now unsustainable in this country. Really, the main reason I will say what I want to say today is that I hope we can create some consensus in the House to try to deal with this problem, which is imposing a massive level of debt on families.

I am absolutely sure that the Government accept that this burden is unsustainable, and I am absolutely certain that if they came to the House with sensible proposals to try to get people off benefit, Her Majesty’s loyal Opposition would support them in that endeavour. The Government ducked the challenge earlier in the year to cut benefits and thereby encourage more people into work. We said at the time that we were prepared to support the Government to try to deliver those cuts, and I am sure that those on the Conservative Front Bench would repeat that promise.

[Ms Polly Billington (East Thanet) (Lab)]

May I confirm that the right hon. Gentleman is then perfectly happy for children to continue to live in poverty while we try to reform the welfare benefit system?

[Sir Edward Leigh]

I was not actually making that point. What we were discussing earlier in the year was people seeking work, and trying to encourage people to get back into work. I can understand the political imperative of what the Chancellor has done today—to sustain her position with her Back Benchers—but the problem is that the Government will create a perverse incentive for people on benefit with larger families to stay out of work. I am not sure that is good for their morale or the economy. It is not good for anybody. It seems a very easy hit for the Chancellor today, but I think it will have perverse results.

As a Member representing a rural constituency, I want to say a word about the family farm tax. The Budget’s extension of inheritance tax for business assets over £1 million has, as we know, imposed a major new burden on long-established family farms in my constituency and elsewhere. Although I could understand the Government targeting larger estates and people who were acquiring estates to avoid inheritance tax, the new family farm tax affects not just large landed estates but ordinary farms worked by generations of the same families. I recently visited a tenant farmer in my constituency. He is affected because his tenancy—he does not own the and—is a capital asset, and he will be taxed perhaps as much as £300,000 on it, which affects the family’s ability to stay in farming.

As we know, many family farmers lack liquid assets, which forces them to hold cash back, restructure, borrow or consider selling part of their business. Because the dividends used to pay inheritance tax are themselves taxed, these family farms face an effective tax rate of about 33%. The measure affects a significant share of medium-sized, long-standing firms even though it raises less than £500 million annually. It achieves maximum social and economic destruction for minimal financial reward. The policy also discourages business growth, because expanding a family firm increases future tax liabilities on heirs.

Some advisers are recommending that owners sell businesses outright to avoid future tax complications. A climate of unpredictable tax changes creates fear among owners and undermines long-term planning. The uncertainty over succession planning is freezing investment and expansion across affected businesses. The arguments can be repeated, but I appeal to the Government to listen to the National Farmers Union, which has come up with sensible compromises that would keep family farms in business and achieve the Government’s objective.

Let me say a bit about the benefits bill. Four million universal credit claimants are now excused from even looking for a job. This is a disaster in terms of self-reliance, the economy and much else. We know that the numbers have grown sharply since the pandemic. A surge in reported illnesses—particularly mental health conditions—is the main driver. Two thirds of recent work capability assessments cite mental or behavioural disorders. My right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) has blamed the collapse in the assessment process for the rise in successful claims, with remote and paper-based assessments introduced during covid having weakened checks on eligibility. That, again, is something on which we could co-operate across the House. It is a question not just of cutting benefits but of summoning people in, helping them and giving them confidence to try to get back into the workplace. Unless we do that and tackle the perverse incentives in the whole benefits system that discourage people from working, we will fail as a nation.

--- Later in debate ---

[Richard Tice]

The Minister clearly does not know the facts of the Budget that he is presiding over. The numbers in the Blue Book show that borrowing will be £21 billion more than the OBR forecast back in March. Over the next four years, borrowing will increase by over £60 billion. To help the Minister: mathematically, that is up.

All the data and the numbers are going in the wrong direction, but it did not need to be this way. The Government could have followed Reform’s fine recommendations. The Chancellor could have said to the Governor of the Bank of England, “Stop paying voluntary interest on the quantitative easing reserves.” She could have also said that we should stop quantitative tightening, which is why we have the highest QE programme in the western world. She could have said that we should reduce the foreign aid budget. She could have said that we should stop paying welfare to overseas nationals in order to protect British citizens. She failed to make those choices, and that is why we have had to increase taxes to the highest levels ever.

[Ms Billington]

Will the hon. Gentleman give way?

[Richard Tice]

I have been very generous with my time, but many others wish to speak.

It is time for change, because this Budget disincentives work and it disincentivises risk-taking, and some of the finest and brightest of our nation are seriously considering leaving the country.

There is, however, some good news: this is the last Budget that this Chancellor has given. Why? Because she has proven herself to be a learner driver with her multiple car crashes. Based on the parliamentary Labour party’s antics, it is probably also the last Budget that the Prime Minister will preside over. The final good news is that after the next general election, Reform will redesign and re-engineer the economy to make work pay, to make risk-taking pay and to get our economy growing again.

--- Later in debate ---

[Llinos Medi (Ynys Môn) (PC)]

Today should have been an opportunity to offer some hope, and to deliver for Wales. Unfortunately, the Chancellor has failed to do that, and our communities will still feel vulnerable.

We have been promised action on the cost of living, but nothing has been said about the unfair standing charges that see communities like mine on Ynys Môn pay £58 a year more than the UK average. On the cost of energy, one way to offer families immediate relief is to cut VAT on energy bills and review unfair standing charges.

The Budget has not addressed a travesty: Wales is a net exporter of energy, yet 25% of all Welsh households are in fuel poverty. To change that, Wales should have powers over the Crown Estate, equivalent to those in Scotland, so that the millions generated in profit from our natural resources can be returned to our communities, rather than going to Whitehall. Money for the NHS in the Budget is always welcome, but this money must be put into context. The lowest day-to-day spending increases from recent Westminster Governments for Wales’s public services have come from Labour.

Today was another missed opportunity for this Government to deliver for Wales. Classifying High Speed 2 and Oxford-Cambridge rail as “England and Wales projects” is denying Wales £4 billion. Rail spending per capita in Wales stands at £307, while in England the figure is £432. That is a clear injustice that the Government have failed to address today.

The leaking and briefing in the run-up to the Budget, and today’s unprecedented early publication of the OBR’s “Economic and fiscal outlook”, has made a mockery of the process. The speculation has caused unhelpful volatility for businesses and the markets. Uncertainty about borrowing costs for business and Government, and delays to interest rate cuts, are undermining the growth that our public services need, and provide no stability for businesses to flourish. That comes at a time when businesses in Wales are already suffering from the incoming hit of inheritance tax, which, it is estimated, will cost more than 9,000 jobs in Wales, yet the Treasury still refuses to conduct an impact assessment specifically for Wales. Today’s announcement does not take away any of the financial burden that our family farms feel. Today, I have received a message saying that Welsh farmers facing the terrible consequences of the inheritance tax are actually considering taking their own lives. That is the reality of this Government’s attack on our family farms.

Measures on the cost of living are welcome. However, despite the Budget’s policies, living standards and real household disposable income are negatively impacted by this Budget, as shown by the OBR. A rise in the minimum wage is welcome for the workers who keep our public services and local economies running, but without action on national insurance, small businesses will struggle to afford the increase. That issue is especially relevant for us in Wales, as the latest job figures show that Wales has the steepest increase in unemployment of the UK nations. To avoid further losses, we needed the Budget to support both workers and our small businesses.

[Ms Billington]

I am interested to know whether the hon. Lady welcomes the fact that the youth guarantee will benefit hundreds of young people in the Ynys Môn constituency. It will give free support for apprenticeships for the under-25s. That will help small and medium-sized businesses that want to recruit and train young people in Ynys Môn.

[Llinos Medi]

I am grateful for the opportunity to answer that question. Small businesses are the majority of our economy in Wales. While it is extremely important that they can offer apprenticeships, they need to be able to afford to employ people, and we need a skilled workforce if we are to give apprentices training opportunities. If that skilled workforce is not in place, apprentices will not have the same training opportunities. We need the whole package. National insurance changes have had a detrimental impact on small businesses in Wales, and we need a more strategic vision if we are to support small businesses.

The Chancellor’s Budget statement will have only compounded the confusion in Welsh households and businesses about what the Government’s plan means for them. The truth is that Labour today has not offered any hope for the people of Wales.