Budget Resolutions

Steve Barclay Excerpts

Monday 1st December 2025 Commons Chamber

[Steve Barclay (North East Cambridgeshire) (Con)]

The Secretary of State opened this debate by saying that we should look at the backdrop of the general election, which was a surprising way for him to open discussion on the Budget, not least because a central theme of the Budget is Labour doing the very opposite of what it said it would do at the general election. That can be seen first and foremost with the £26 billion of additional tax—on top of the £40 billion in tax in the Government’s first Budget—when Labour said at the general election that it had fully costed proposals and that it would not need to tax working people. Indeed, Labour said at the general election that growth was its No. 1 policy objective, and yet what do we see in the official documents from the OBR? We see growth forecasts down every year of the forecast.

Even the topic of this debate—“bearing down on inflation”—is the opposite of what the OBR says is happening, with inflation staying higher for longer as a result of the measures the Government have taken. Labour inherited inflation at 2%, and yet it is now forecast to stay at 3.5% next year and to be at 2.5% the year after. Indeed, on the topic of the cost of living, nothing hurts people’s incomes more than inflation, which pushes up bills and the cost of food and erodes people’s income.

The Government also promised to deliver jobs, but we can see the consequences of their first Budget: the changes to national insurance—the jobs tax—have meant that unemployment has been up every month that the Government have been in office, and the graduate recruitment situation is the worst on record. In response to this Budget, the OBR forecasts that unemployment will be at 4.9% in 2026-27. This Budget is supposed to be “bearing down on inflation”, but inflation is up. The Government talk about addressing the cost of living, but people are being taxed more, and more people are unable to get a job. Graduates in particular are being hit. We can see the difference between what Labour said at the general election and what it is delivering.

That all matters, because away from the big numbers—the billions that get quoted in Budget documents—are a whole series of individual measures that will bear down on people’s incomes and prospects. The Government’s measures will bear down on the small business owner who does not have the same security as a big public sector organisation, and who has put their own capital at risk; they will see a 2% increase in the dividend tax, on top of the corporation tax that they already pay. The measures will bear down on the pension saver, through the changes being made to salary sacrifice. The Government are also freezing income thresholds.

It is interesting that Labour Members cheered a Budget in which the Chancellor did the opposite of what she said last year that she would do. Last year, she said that it would be a breach of the manifesto to extend tax threshold freezes, and that is exactly what she did this time. It is worth looking behind the headlines, and bearing in mind what the official data says this will cost: in today’s prices, by 2030, the measure will cost a higher-rate taxpayer £600 extra, and a basic-rate taxpayer £220 extra. Those decisions will have real consequences on people’s take-home pay.

I represent a rural constituency, but this Government seem to dislike rural communities. We saw that last year with the family farm tax, and we are seeing it with the electric car mileage scheme, which disproportionately penalises rural communities. Again, that change was not in their manifesto. Looking at the consequences of the last Budget, the Institute for Fiscal Studies has said that national insurance changes are costing the average worker £900. These policies have real costs.

The tax changes are being sold as raising more money for, among others, the NHS. At the general election, the Government said that they would end the resident doctors’ strikes, but another one has been announced today. The NHS Confederation has said that this is not a Budget for the NHS, and under the Budget, an estimated £3 billion extra in drug prices will have to be absorbed. An announcement has been made that standards may be changed so that real mental health funding is flat, and just goes up in line with inflation, which is not the change that the Government promised.

[Mr Charters]

Will the right hon. Member give way?

[Steve Barclay]

I am happy to; perhaps the hon. Member wants to come in on the Government’s pay offer.

[Mr Charters]

I wanted to come in on the right hon. Member’s point about inflation. I am sure that he will welcome a Budget that reduces inflation. If he looks at the Blue Book—[Interruption.] Hang on a minute. Look at the Blue Book. It says:

“Government policy measures announced since March are expected to decrease inflation by 0.3 percentage points”.

Does he welcome that, or is he staying silent on fiscal measures that reduce inflation?

[Steve Barclay]

Clearly the hon. Member has just had a text message from the Whips Office. The reality is that the Government inherited inflation at 2%, and it is currently at 3.6%, and the OBR—the independent forecaster—forecasts it to be 3.5% next year. It takes a certain genius to intervene to show that the Government are going in the wrong direction.

This Budget is presented as being transformative for the NHS and for other services, but take community services; community health services in all our constituencies are hugely important. Waiting lists have been at about 90,000 since the general election, particularly for children, but we do not hear too much about that from the Government. We have heard very little in this debate about productivity, so let me close with one example. Last month, the Health Foundation said that there was only a one in six chance of the Government achieving the 2% annual productivity growth target that they set. Members might wonder why that matters. If productivity growth is at 1%, it will cost an extra £9 billion a year for the NHS. There is only a one in six chance of delivery, but if the Government do not deliver, there will be a very significant cost to the NHS.

This Budget puts up tax on working people in order to pay more in welfare. We can see that in a whole series of measures. We can also see the gulf between what the Government said at the general election and what the Chancellor has delivered. She has not even been consistent with what she said in her Budget last year.

[Several hon. Members rose—]