Oral Answers to Questions

Rachel Reeves Excerpts

Tuesday 10th March 2026 Commons Chamber

[Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)]

1. What steps her Department is taking to ensure that HMRC approved mileage rates are up to date.

[The Chancellor of the Exchequer (Rachel Reeves)]

I am grateful to my hon. Friend for raising this important issue. While the approved mileage allowance payment rates have not changed since 2011, I recognise that motoring costs have evolved significantly, and it is an important issue for many people who claim motoring expenses. We are, therefore, looking at the issue and will consider the matter further in the usual way, as part of a future fiscal event. Through steps such as freezing fuel duty, we are taking wider action in the meantime to ensure that people pay the lowest price possible at the pump, whether or not they use the approved mileage allowance payment.

[Jim McMahon]

I thank the Chancellor for that response; I welcome it, and so will millions of working people. This has been a long-standing campaign for Unison, and I am grateful to it and the RAC Foundation for taking on this case and to the Mirror for the coverage it has given to the campaign. The 45p a mile rate, set 15 years ago, is nowhere near the true cost of running a vehicle today, which was recently assessed at 67p a mile—and that was before fuel costs rocketed in the last week. Gemma, a social worker for over two decades, travels around 400 miles a month for work, which means she is paying over £1,000 a year just to do her job and care for other people. Gemma and the millions of working people like her will welcome the Chancellor’s statement today, but can this work be expedited, given the cost of living crisis?

[Rachel Reeves]

I genuinely thank my hon. Friend for all he has done to draw attention to this important issue. I am also grateful for representations from the trade union Unison, given that this particularly affects low-paid workers, including care workers like Gemma. We have a standard Treasury policy of keeping all taxes under review ahead of fiscal events, but as I say, this is one area that I will be keeping a very close interest in.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

The Chancellor will review mileage rates, but with her fuel duty freeze coming to an end in September and the next fiscal event not happening until later in the year, will she commit to review that decision at the end of this parliamentary Session if petrol prices are significantly higher than they are today, for the sake of people’s cost of living?

[Rachel Reeves]

The price of petrol today is 8p per litre lower than if I had followed the plans that were left to me by the previous Conservative Government. From April, it will be 11p per litre lower. Of course, we keep these things under review, but oil prices today are 24% lower than they were yesterday, so things are very volatile at the moment. That is why, as I said yesterday, the most important thing we can do to address the cost of living challenges people face is to de-escalate the conflict in the middle east, which is exactly what this Government are attempting to do.

[Sir Ashley Fox (Bridgwater) (Con)]

2. What assessment she has made of the potential impact of changes to business rates announced in the autumn Budget 2025 on the retail, hospitality and leisure sectors.

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[Michael Wheeler (Worsley and Eccles) (Lab)]

9. What fiscal steps she has taken to help reduce the cost of living for families.

[The Chancellor of the Exchequer (Rachel Reeves)]

Stability is the most important thing that we can do to get interest rates and inflation down, and tackling the cost of living—especially given the global headwinds—is my top priority. At the Budget, we took money off energy bills and froze prescription charges and train fares. The Government’s cheaper fuel finder scheme is now online, and it shows petrol prices at forecourts across the country. Yesterday, some petrol retailers charged almost 180p per litre, while others were charging less than 130p per litre. This Government will not tolerate price gouging, and I will be meeting with petrol retailers this week to raise concerns and to get prices down at the pumps for all our constituents.

[Bell Ribeiro-Addy]

The Trussell Trust’s recent “Hunger in the UK” report highlights the startling reality of food insecurity. It has found that rates are higher for private renters in receipt of housing benefit, either through local housing allowance or through the housing element of universal credit. Private renters on the lowest incomes cannot keep up with the rising cost of living, and maintaining the freeze on local housing allowance risks driving even more people into hunger and homelessness, because private renters receiving LHA will likely see an average shortfall of £243 a month. The Government have taken meaningful steps towards tackling food insecurity, but will the Chancellor build on this by lifting the freeze on local housing allowance?

[Rachel Reeves]

The Renters’ Rights Act 2025, which will come into force in the next month or so, will make a big difference to my hon. Friend’s constituents and to all our constituents who are contending with living in the private rented sector—particularly with issues such as evictions, but also with mid-term rent increases. At the same time, we have put £39 billion into our social and affordable homes programme so that more people can get a council house or a social home rather than living in the private rented sector. We are also getting rid of the two-child limit, which the Trussell Trust says will reduce demand for food banks.

[Michael Wheeler]

While cost of living pressures are affecting people across my constituency of Worsley and Eccles, young families face a perfect storm. Whether it is housing costs, expensive childcare or student loans, many young families are struggling, and research shows that the cost of living crisis is holding people back from even starting a family. Will the Chancellor outline what measures the Government are taking to alleviate the financial burdens on young families, in addition to their welcome moves to expand free childcare?

[Rachel Reeves]

We absolutely recognise the pressures facing families. Bringing stability back to the economy is the No. 1 thing that we can do for working families. There have been six cuts in interest rates since the general election, which has seen the average cost of servicing a mortgage come down by about £1,300 a year. The Renters’ Rights Act will come into force shortly to give greater rights to people in the private rented sector. The free childcare offer, which is now fully funded, ensures that parents with children aged between nine months and five years get free childcare if they are in work. From next month, the end of the two-child benefit limit will lift 450,000 children out of poverty.

[Graham Stuart (Beverley and Holderness) (Con)]

Richard from Beverley tells me that he paid £304 for his last tank of heating oil, yet if he orders it again now—and he needs to do so within four weeks—it will cost him £862. Families across rural areas such as Beverley and Holderness rely on heating oil to keep warm, yet because they are off-grid, they get no protection from the energy price cap. Some 1.5 million people across the country are affected, so what steps can the Chancellor take to alleviate the situation for rural families such as Richard’s, who are facing a huge spike in the cost of living through no fault of their own?

[Rachel Reeves]

First, everybody gets support with their electricity bill, regardless of how they heat their home. However, I do recognise the unique issues around heating oil; we had representations from the Labour group of rural MPs over the weekend, and my colleague the Financial Secretary to the Treasury is going to meet all MPs with an interest in this area tomorrow. I very much urge the right hon. Gentleman to come to that meeting, but the most important thing this Government are doing is trying to de-escalate the crisis in the middle east, because that is the way to get prices down for all our constituents, whether for heating oil or at the pumps.

[Kirsty Blackman (Aberdeen North) (SNP)]

Inflation might be lower than projected, but prices are still rising. Fuel prices at the pumps might be lower than the Tories promised, but they are still higher than they were, and energy costs are still not down to what the Government promised in their manifesto. Will the Chancellor recognise that families are really struggling at the moment and put in an emergency package of measures to support them through the cost of living crisis?

[Rachel Reeves]

In April, people will get £150 off their energy bills and prescription charges in England will be frozen as will rail fares. At the same time, we are getting rid of the two-child benefit cap, which will lift 450,000 children out of poverty, but the most important thing we can do for the price of petrol, diesel and heating oil is de-escalate the conflict in the middle east and get vessels moving again through the strait of Hormuz. That is why this Government are putting such efforts into de-escalating this crisis.

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

The level of poverty that 14 million people in the UK face is not inevitable; it is the result of political choices, and it damages our economy, costing around £75 billion each year. Will my right hon. Friend consider equalising capital gains tax with income tax and introducing a 2% wealth tax on assets over £10 million to lift people out of poverty and strengthen public finances?

[Rachel Reeves]

In my first Budget, I changed a number of taxes to ensure that the wealthiest are paying their fair share. We increased capital gains tax, reduced the number of tax loopholes, introduced VAT and business rates on private schools, extended the energy profits levy and got rid of the exemptions for private equity. In the Budget last year, I did more than any Chancellor has ever done to take children out of poverty. In the course of this Parliament alone, more than half a million children will be lifted out of poverty. I am proud to be the Chancellor who has delivered that.

[Pippa Heylings (South Cambridgeshire) (LD)]

With tensions in the middle east pushing up global oil and gas prices again, households are understandably worried that yet another international crisis will mean higher energy bills and a higher cost of living at home. In my South Cambridgeshire constituency, like in others we have heard about today, many rural and semi-rural households have to use oil for heating, and they have seen prices double over the past week. I have heard that the Chancellor is considering measures to support them. Will she support the Liberal Democrats’ call to zero rate VAT on heating oil for three months for all those residential homes, and will she consider other measures to protect them from massive spikes in their bills?

[Rachel Reeves]

There are two things going on with heating oil. First, we have the conflict in the middle east, which we are trying to de-escalate, and secondly, we have price gouging. The way to deal with that is to ensure that customers are treated fairly and companies are not ripping off their customers. That is why we have asked the Competition and Markets Authority to look at the issues around heating oil, but we have to get to the root of the problem, which is that vessels are not flowing through the strait of Hormuz, and some businesses are using this crisis as an opportunity to rip off consumers. Rather than throwing public money at something when that is not the solution, let us deal with price gouging and getting the oil flowing.

[Mr Speaker]

I call the shadow Minister.

[James Wild (North West Norfolk) (Con)]

The Chancellor promised in her first Budget that she would not extend the freeze on income tax thresholds, because it

“would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.]

In her second Budget, the Chancellor broke her promise with a £23 billion tax rise, bringing a million more people into paying higher rate tax. When people are set to struggle with the cost of living over this Parliament, why are the Government choosing to make their lives harder?

[Rachel Reeves]

Some people have short memories, haven’t they, Mr Speaker? I remember the Conservatives freezing those thresholds on a number of occasions. We said in our manifesto that we would not increase the headline rates of national insurance, VAT and income tax that working people pay, but I did say clearly at the Budget last year that we would have to ask everyone to make a greater contribution, because of the downgrade in productivity, which is a result of the mismanagement of the economy by the last Government over 14 failed years.

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[Daniel Francis (Bexleyheath and Crayford) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

[The Chancellor of the Exchequer (Rachel Reeves)]

The conflict in the middle east affects all of us, and I understand the anxiety felt by families and businesses. Rapid de-escalation in the middle east is the best way to protect businesses and working people from rising costs, which is why I continue to work closely with G7 colleagues to call for immediate de-escalation and to guarantee the security of vessels moving through the strait of Hormuz. I am clear-eyed about the situation we face. I will be both responsive to a changing world and responsible in the national interest to protect public finances and to help families and businesses with the cost of living.

[Daniel Francis]

I thank my right hon. Friend for her comments and support and echo what she has said about the situation in the middle east. The charity Shelter has long campaigned for people with no fixed address to be able to access bank accounts, including without ID. Which groups of people might benefit the most from the leadership shown by the Labour Government and from banks on this issue?

[Rachel Reeves]

I thank my hon. Friend for his question and pay tribute to my hon. and learned Friend the Economic Secretary to the Treasury for all the excellent work that she has done to take this agenda forward. The lack of a bank account does make it harder for people to secure stable employment and stable housing. That is why our financial inclusion strategy secured a commitment from the major banks to work with Shelter directly to make it easier for people without standard ID to access a bank account. This partnership with Shelter will particularly help to break the cycle of homelessness and support people to rebuild their lives, which we all want to see.

[Mr Speaker]

I call the shadow Chancellor.

[Sir Mel Stride (Central Devon) (Con)]

For every single year of the last Conservative Government, we froze fuel duty, and we did so to stand up for hard-working families. Given that petrol prices are surging at the pumps, why has the right hon. Lady chosen now to put up fuel duty?

[Rachel Reeves]

As the right hon. Gentleman knows, the plans that we inherited from the previous Government would have seen fuel duty go up just a few months after the general election. We did not think that was the right approach, so we reversed the Conservative plans that we inherited to freeze fuel duty and to keep the 5p discount introduced during the pandemic. In April this year, under the plans that I inherited, fuel duty would have gone up again, but we do not think that is the right thing to do. Therefore, in a staggered approach from the autumn this year, the 5p cut introduced during the pandemic will begin to be unwound. At the same time, we have just introduced the cheaper fuel finder, which yesterday showed the divergence in prices paid by customers on petrol forecourts. Some paid 130p a litre and others 180p per litre, so it is really important that people use that cheaper fuel finder to shop around. I shall be meeting petrol retailers later this week to make it clear that we will not accept price gouging.

[Sir Mel Stride]

Given the rapidly rising cost of oil and gas, why does the right hon. Lady believe that it is better to import it than to extract it from the North sea?

[Rachel Reeves]

The price of oil and gas is particularly volatile at the moment, given the conflict in the middle east. My understanding, as we came into the Chamber today, was that prices of oil were down by something like 25% on the day. The most important thing that all of us can do to deal with what is happening to prices at the moment is to support de-escalation. That is the Labour party’s policy, but I am not sure what the policy of the Conservative party is. None the less, that is the best way to get down both the price of petrol at the pumps and of heating oil. The North sea will play an important part of our energy mix for many years to come, which is why I met North sea oil and gas companies just last week to talk about what more they can do and how we can help.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

T4. When it comes to the rising cost of living, may I ask the Chancellor to look again at the rural fuel relief scheme? The scheme is meant to give a 5p discount per litre on petrol and diesel in specific island rural communities, but I have checked and found that, in Stornoway in my constituency, petrol is 138.9p today, yet in the middle of Glasgow it is 129.9p—9p cheaper. The scheme works in reverse, with urban drivers having all the advantages of competition and choice. The scheme costs little, but inflation has reduced it by 35%. I ask the Minister to press the accelerator and go an extra mile.

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[Damien Egan (Bristol North East) (Lab)]

T5. Given the events in the middle east, can the Chancellor share with us what work is being done here and alongside our NATO allies and other partners to understand the economic consequences, people’s changing needs and the impact that has on Government spending when countries face times of conflict?

[Rachel Reeves]

I am proud to be the Labour Chancellor who has overseen the biggest uplift in defence spending since the end of the cold war. Just last week we announced a £1 billion helicopter deal with Leonardo, based in Yeovil, just down the road from my hon. Friend. Yesterday I confirmed to the House that the Ministry of Defence has access to the special reserve. That means that the added costs of deploying additional capabilities in the middle east will be funded entirely by the Treasury special reserve.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

T2. I am the Member of Parliament for one of the largest rural constituencies in the United Kingdom, so the rise in the cost of heating oil is obviously a major concern for me. I welcome the opportunity to meet the Financial Secretary, and I hope that liquefied petroleum gas can also be on the agenda for that meeting, because that is a heating source for many of my constituents. People such as Craig Ritchie in Symington will be looking for concrete outcomes from that meeting, given that they face a 200% rise in their oil costs.

[Rachel Reeves]

I thank the right hon. Gentleman for raising the important issues with heating oil that his constituents are facing. I very much hope that he will be able to attend the meeting tomorrow. There are two key issues: making sure that vessels can again flow through the strait of Hormuz, which requires a de-escalation of the crisis; and stopping the price gouging that some businesses are engaged in at the moment. That is why I have asked the CMA to look at that too.

[Paul Davies (Colne Valley) (Lab)]

T6. In my constituency, Co-operative Care Colne Valley is testament to the value and importance of co-operatives. It delivers ethical, not-for-profit home care services for the disabled and elderly. The group’s community ownership and local empowerment demonstrates the value of co-operatives. Will the Minister advise me what steps her Department is taking to drive the growth of co-operatives across our communities?

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[John Milne (Horsham) (LD)]

T7. Even while sitting here, I have had word from a constituent whose heating oil cost has risen, in one go, to 129.9p plus VAT per litre. I recognise that the Chancellor has been pressed by a number of Members on this. Can she assure us of immediate action, as vulnerable residents are in immediate crisis?

[Rachel Reeves]

While only 4% of people in Great Britain use heating oil, I recognise that this is a particular issue for many constituents, and in Northern Ireland the figure is more than 60%. I am keen for the hon. Gentleman to take these issues to the meeting with the Financial Secretary to the Treasury tomorrow. We are working closely with the Competition and Markets Authority to stop price gouging. There is no reason why a company should be charging twice as much as it was for heating oil; we need to put a stop to those practices.

[Jessica Toale (Bournemouth West) (Lab)]

The junction of Surrey Road and Prince of Wales Road; Wimborne Road, between Kinson library and Bear Cross; and Hankinson Road, around Winton rec—these are some of the more than 35 roads in Bournemouth West where residents have told me potholes are out of control. Lib Dem-led Bournemouth, Christchurch and Poole council has been given £7.5 million to maintain our roads and fix potholes. I will be writing to BCP council later today, but in the meantime, will the Minister join me in urging it to get its act together and finally fix our roads?

[Sir Desmond Swayne (New Forest West) (Con)]

T8. The Chancellor said that she will meet representatives of the North sea oil industry to see how it can help. The proper question is how she can help it, is it not?

[Rachel Reeves]

Alongside the Budget last year, we published the new North sea oil and gas strategy, which, for example, allows tie-backs, so that more use can be made of existing fields. The previous Government brought in the energy profits levy when energy companies’ profits went through the roof after Russia’s invasion of Ukraine. That is still in place, so that when prices are high, we can bring money in to help people with their bills.

[Lloyd Hatton (South Dorset) (Lab)]

I welcome the Chancellor of the Exchequer’s work to get the Leonardo helicopters contract over the line, as that will help protect defence jobs right across Dorset, Somerset and the wider south-west. Will the Treasury and Ministers continue to work with the Ministry of Defence to secure investment in the defence sector in Dorset and across the west country?

[Rachel Reeves]

I thank my hon. Friend for what he said about the Leonardo contract at Yeovil, which supports many thousands of jobs in Somerset, and indeed Dorset. I am proud to be the Chancellor who has overseen the biggest uplift in defence spending since the end of the cold war; that has enabled us to support this investment and many others.

[Freddie van Mierlo (Henley and Thame) (LD)]

T10. The £100,000 tax trap means that some residents, if they have a student loan, are paying 71% marginal rates. That is one of the reasons why salary sacrifice is so popular—but those people want to use that money in the economy now. What is the Chancellor doing to address the tax trap at £100,000?

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[Antonia Bance (Tipton and Wednesbury) (Lab)]

Given the global situation, what discussions has the Chancellor had with Cabinet colleagues on helping to keep industrial energy costs manageable? Will she work with colleagues to bring in the British industrial competitiveness scheme, which would cut manufacturing energy costs by 25%, as soon as possible?

[Rachel Reeves]

My hon. Friend is a powerful advocate for the energy-intensive industries, and for manufacturing more widely. The supercharger is being extended from April this year. That will help 500 of the most energy-intensive businesses, and increase their discount from 60% to 90%—and next year, the BIC scheme comes in. Given what is happening in the middle east, we will continue to look closely at what we can do to help our energy-intensive industries.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Over 50% of properties in the Scottish Borders are not on the mains gas grid and are completely dependent on heating oil. They are being hammered by the increase to the price of heating oil over the last week or so, and they need to see concrete action from this Government to stop the excessive prices and the profiteering. What are the Government going to do?

[Rachel Reeves]

I agree with the hon. Gentleman. We are trying to de-escalate the conflict in the middle east, because if we can get vessels moving again through the strait of Hormuz, we will deal with a lot of these problems. I am working closely with both Lloyd’s of London—I met its representatives yesterday—and my G7 colleagues to ensure that those vessels can get moving again. At the same time, I think that everybody has heard the stories in this Chamber and from our constituents about the problems of price gouging. We have to address that, and I have asked the CMA to look at it. Members across the House will have a chance tomorrow to set out their case to the Financial Secretary to the Treasury in more detail, so that we have all the information needed to make the case.

[Adam Jogee (Newcastle-under-Lyme) (Lab)]

My constituents in Newcastle-under-Lyme are sick and tired of poor-quality, dangerous roads. The county council has resources from this Government, and must stop being missing in action. What message does the Minister have for Staffordshire county council?

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[Paul Waugh (Rochdale) (Lab/Co-op)]

My constituent in Rochdale, Louise Marshall, wrote to me this weekend because she is worried sick about the massive price rise she is facing for heating oil. Can the Chancellor assure me, notwithstanding the meeting we are all going to have with the Financial Secretary to the Treasury, that we can be absolutely crystal clear that under this Government, we will not tolerate price gouging or war profiteering from oil companies that try to rip off their customers?

[Rachel Reeves]

I absolutely agree with my hon. Friend. The price gouging that we see is totally unacceptable, which is why we have already asked the Competition and Markets Authority to look at this. Whether we are talking about petrol at the pumps or heating oil, there is no excuse for any business to use this as an opportunity to rip off customers.

[Sir Jeremy Hunt (Godalming and Ash) (Con)]

One of the things that makes our economy less resilient is high levels of debt. The Chancellor and I have both followed fiscal rules that allowed us to claim that debt was falling, when in fact it continued to rise, both in absolute terms and as a proportion of GDP. Does she think it is time to consider a new fiscal rule that actually reduces debt—for example, a rule that public spending will not increase faster than economic growth?

[Rachel Reeves]

Debt is lower in every year of the forecast that I published last week than it was in the plans that I set out in the Budget just back in November. The fiscal rules that I introduced in the October after I became Chancellor said, first of all, that we had to balance day-to-day spending with tax receipts, and that is important. They also stated that, subject to getting debt down as a share of GDP, we could invest in the things that can actually grow the economy. The right hon. Gentleman and I both know that growth is the best way to ensure that our public finances are sustainable, and that we improve living standards for working people.

[Perran Moon (Camborne and Redruth) (Lab)]

The Government’s new industrial strategy has signposted a path to further economic growth and prosperity. There are certain regions of the UK that can play a significant role in this growth, so would Treasury Ministers consider working with the Department for Business and Trade to make Cornwall an industrial strategy zone?

[Rachel Reeves]

In the Budget last year, we introduced the Kernow growth fund to support the Cornish economy because of its specific strengths around critical minerals, defence and clean energy. The National Wealth Fund and the wider Government will do everything we can to unlock the huge opportunities that we know exist in Cornwall.

[Dr Ellie Chowns (North Herefordshire) (Green)]

Given the recent Institute for Fiscal Studies report that says that the Treasury’s excessively narrow focus on fiscal rules leads to dysfunctional policy making, and given recent global events showing the uncertainty of fiscal forecasting, does the Chancellor recognise that it is time to move to a more flexible and strategic approach to fiscal rule-making and fiscal policymaking?

[Rachel Reeves]

I totally reject the premise of that question. The fiscal rules that I introduced as Chancellor have unlocked £120 billion for capital investment. We will be spending £50 billion more on day-to-day spending by the end of this Parliament, but at the same time, we are bringing debt down, bringing the deficit down, bringing inflation down, and bringing interest rates down for all our constituents. Economic stability is the way to grow our economy and make working people in all our constituencies better off, and if we forget that, it is ordinary working people who pay the price.