Budget Resolutions

Yuan Yang Excerpts

Thursday 27th November 2025 Commons Chamber

[Yuan Yang (Earley and Woodley) (Lab)]

I rise to welcome the Budget, because despite the difficult economic times we are in, the Chancellor has made decisions that are strong, sound and fair. It is a strong budget that more than doubles the fiscal headroom to £22 billion. It is a sound budget that improves the economic efficiency of some of our taxes and maintains our capital investment in the country’s future. It is a fair budget that lowers the cost of living, saving us money on rail fares and energy bills, and raising half a million children out of poverty.

First, on the headroom, this Chancellor has the strength to do what previous Chancellors have shied away from doing. Headroom is important to buffer us from the volatility in the global economy. It buffers us against shocks that we cannot predict. I am glad to see that the Chancellor has also followed the International Monetary Fund’s recommendations to assess the fiscal rules annually, which will improve the predictability of policymaking.

Yesterday during the Budget debate, the former Chancellor, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), accepted my intervention. I asked why he had left us with the lowest headroom in the history of the OBR. He said that he did not raise more headroom because he would have had to cut spending or raise taxes, and he was not prepared to do those things. I therefore take it with a pinch of salt when the shadow Chancellor says in this debate that suddenly they have dreamt up plans in the past 12 months in opposition, when they did not have such plans in 14 years of governing. The response of the right hon. Member for Godalming and Ash was that he was not prepared to do the things that were necessary. That is like someone saying to their flatmate that they did not do the washing up because they would have had to tidy up and get their hands wet, and they were not prepared to do those things. He took the weak option. He shied away from making important economic decisions—he left us with his dirty plates—and is now lecturing us about making difficult choices.

I am glad of the right hon. Gentleman’s honesty, and his acceptance of my intervention, because it shows us a deeper truth: the previous Tory Government could not cut further, because they had already cut everything they could, and then some, leaving us with courts backlogged for years, prisons overflowing and child poverty at its highest this century.

Secondly, this is an economically sound Budget. Different forms of income should not be taxed differently. This is not just about fairness; it is about economic incentives. Landlords should not pay lower effective rates of tax than their tenants, and those who can afford an accountant should not be able to benefit from structuring their income as dividends, thereby paying a lower rate of tax. I welcome the raising of rates on property savings and dividends to make them closer to the rates paid on earned income, reducing the bad incentives to restructure income for tax avoidance. The tax system is not just about raising funds for public services; it is about shaping the economy and building in the right incentives to encourage productive behaviour.

I am glad that the Chancellor will reform the system of enterprise investment and venture capital trust schemes and review the tax system’s impact on entrepreneurs. I meet many of them in my constituency in Reading, which is a brilliant place for companies on all scales, from university spin-outs to world-leading giants. We have a particular concentration in life sciences, pharmaceuticals and IT services—services the OBR might be able to benefit from. Whether I am visiting Oxford Quantum Circuits in Thames Valley science park or a blockbuster film set at Shinfield Studios, I see my constituents building the British industries of the future, and when I visit schools, I encourage the schoolchildren to dream big and to take their share of that future.

But what of those children? The previous Conservative Government put 700,000 more children into poverty. Almost one in three children are growing up in relative poverty. That is the highest this figure has been this century. In Earley and Woodley, which is easily in the richest fifth of all constituencies in the UK, I get letters from parents who cannot feed their children during the half-term holidays. Because of the Chancellor’s Budget, 1,750 children in my constituency will be lifted out of poverty.

The hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) said that it was possible to find “cases” of people falling into poverty. I would urge him to look at the figures. Poverty can befall anyone. According to “Understanding Society”, the largest longitudinal household panel study we have, the poverty entry rate—those who start off above relative poverty one year and find themselves impoverished the next—is around 8%, which means that one in 12 of our constituents could, in any given year, find themselves suddenly in dire straits. That could be because of divorce, bereavement, illness, bad health or bad luck, and that is what the social security system is for.

Some 70% of children growing up in poverty are in working families. There is something wrong with an economy that produces these outcomes. That is why it is important that this Government are raising the minimum wage and giving workers more power to negotiate their terms in the workplace. At the same time as fixing the foundations, we have to put out the fire on the roof, because poverty is an urgent challenge; if we do not address it now, it threatens to burn the house down.

We speak a lot about the post-pandemic cohort of young people who are not in employment, education or training, but why are there so many? This is the austerity generation. New evidence published yesterday by the Work and Pensions Committee shows that individuals exposed to multiple instances of childhood adversity, such as poverty and poor parental health, were five times more likely to be NEET. An estimated 53% of NEET cases today are attributable to persistent poverty and family adversity. Our children are the future of our economy; we have to invest in them and in our future. That is why I am proud to support a sound, strong and fair Budget.

--- Later in debate ---

[Helen Whately (Faversham and Mid Kent) (Con)]

To govern is to choose, and the Chancellor has chosen. She has chosen spending over saving, higher taxes over welfare reform, and benefits Britain over working Britain. She would rather raise taxes by £26 billion than shave a single penny off the welfare bill. She will make people who work and save pay more for the benefits of millions who do not.

I say that the Chancellor chose, but are these her choices or those of Labour Back Benchers? Just a few months ago, when debating the Government’s personal independence payment reform Bill, those Back Benchers were the ones who stood up and said things like, “I didn’t come here to cut benefits.” They were the ones in and out of meetings with No. 10 while the debate was going on in this Chamber, and they were the ones who forced the Disability Minister to stand up during that debate and announce that there would, in fact, be no savings. The Government’s welfare Bill then became a spending Bill, which Labour Back Benchers all voted for, of course.

The Chancellor could have used the Budget to right that wrong—or could she? The wolves have been circling ever since. This was not a Budget for Britain; it was a Budget for Labour Back Benchers. It was a “save our skin” Budget, but in saving her own skin, the Chancellor is selling the country down the river at a cost of £26 billion to taxpayers and 200,000 jobs, on top of the 150,000 that have already been lost since Labour has been in power and the thousands more that the unemployment rights Bill will destroy.

[Yuan Yang]

Three quarters of the tax raised by this Budget will go towards building fiscal headroom, doubling it—something that previous Conservative Chancellors never did. Does the hon. Lady welcome the investment in the gilt markets that international investors have now shown, demonstrating their confidence in the UK economy?

[Helen Whately]

This Budget is simple: taxes are going up on working people to pay for more benefits. That is the story of this Budget.

The Chancellor told the country that she was spending to bring down the cost of living. Really? For whom? Inflation is up, tax is up and wage growth is down. The only group of people who are going to be better off are those on benefits—the 10 million people of working age whose benefits will be uplifted by inflation, the thousands more who will go on to sickness benefits in the year ahead, and the half a million households who will get money from the lifting of the two-child cap. Those households will receive £5,000 more on average by the end of this decade, at a cost of £3 billion to the taxpayer, and some will get much more. A family with five children could get an extra £10,500, while a family with eight children will be able to get an extra £21,000, nearly as much as the annual pay before tax of a full-time worker on the minimum wage.

Labour Members have told us again and again today how Labour is fixing child poverty by giving out that extra money. We all care about children—we all want children to get the best start in life. [Interruption.] Come on. Labour Members are chuntering at me, but they cannot doubt the fact that everyone in this place wants children to get the best start in life. Handing out money might improve the poverty statistics that they like so much to crow about, but it will not solve the problem. Work is the best way out of poverty, and the Government’s handout will make parents less likely to work.

There are couples across the country—couples in work—who are wondering whether they can afford another child. Thanks to this Budget, their taxes are going up, and their incomes may well go down. Thanks to this Budget, some of them will decide to have no more children, or no children at all. That is sad, and it is unfair. Labour Members have been crowing about the Budget, but as my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin) said earlier, the threshold rises it contains could even drag some working families below the relative poverty line that they like to talk about so much.