Budget Resolutions

Rebecca Long Bailey Excerpts

Monday 1st December 2025 Commons Chamber

[Rebecca Long Bailey (Salford) (Lab)]

When Government choose to act, when they choose to listen and when they choose compassion, millions of lives are changed. The decision to scrap the two-child benefit cap will lift nearly half a million children out of poverty and ease the suffering of almost a million more. It is a humane, necessary intervention, and the Chancellor should rightly be proud of what she has done. All those who campaigned tirelessly for this over the past year should feel immensely proud. I am hopeful that this is just the beginning of a wider ambitious programme of reform to restore fairness, rebuild our economy, and restore the hope, which we thought was lost, that life will get better for every passing generation.

I know how hard the Chancellor has worked. She knows that we need money for our public services, after 14 years of crippling austerity, which have held our country back and destroyed our public sector, but restoring the public finances is the first building block of growth. That is not an easy task when we are working with a tax system that has needed fundamental reform for decades. I hope that the next step will be to design a tax system rooted in fairness and clarity, and a long-term strategy that lifts up those on modest incomes, supports young people striving to build their futures and ensures that national prosperity is shared, rather than hoarded. We should eliminate the structural unfairness whereby normal people’s salaries are taxed at higher rates than income derived from wealth, and the freezing of tax rates, which quietly drags millions more people into tax bands that were never designed for them.

It was good last week to see the Government introduce an online gambling tax, and a tax on homes worth more than £2 million, but I hope we will now explore the many more options available to us to restore fairness. We could tax capital gains and dividends at the same rate as wages. We could tax share buy-backs, and reintroduce the investment income surcharge that the Tories scrapped in 1984. We could charge VAT on financial services such as wealth management. We could look at a whole plethora of wealth taxes and so much more.

The same principles of fairness must extend to the broader financial sector. The banking industry benefits from extraordinary Government support, with deposit guarantees, central bank facilities and vast rounds of quantitative easing, while the public receive little in return. Governments of all stripes continue to grant what is now an annual £23 billion in interest payments on central reserves. That was meant to be a temporary fix to help following the financial crash, but many EU countries have stopped paying that interest. We could look at doing that, too.

The same forward-thinking approach is needed on energy policy. Removing green levies from bills will bring welcome relief, but families still face high costs, while energy giants have made more than £125 billion in profits since 2020. The Government have an opportunity to ensure that the energy system works for the public good, and to consider windfall taxes, fair pricing and even forms of public ownership. A resilient, affordable green energy system would strengthen the whole economy.

More broadly, the economy urgently needs strengthening. The OBR forecasts only 1.5% growth this year and sluggish productivity for the rest of the decade, and that is the result of 14 years of short-termism, of putting short-term dividend extraction before long-term industrial strategy, and of the UK investing barely 18% of GDP in productive assets. That is far behind countries such as France, Germany, China and India. We are not punching above our weight, but we should. Without proper investment in infrastructure, green industries, modern transport, digital systems and manufacturing, we simply cannot build the prosperous future we deserve.

We have made a fantastic start this week. The Chancellor’s strategies—such as Pride in Place, which will see parts of Salford receive £20 million over the next 10 years—are welcome, but we need further announcements on industrial strategy and strategic investments over the coming year. We have waited years for this. We have millions of people who are ready to work, build, care, invent and dream. Let the Budget be the spark that drives wider transformation, so that we have a fairer economy, a fairer society and a Government who match the courage and aspirations of their people.