Financial Statement and Budget Report
Order. We do not need commentary from the Back Benches. Mr Dewhirst, you are so loud; it is remarkable how far your voice carries.
5,750 spoken contributions under 12 words (interjections such as “Will the hon. Member give way?”) are hidden. Show them
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Financial Statement and Budget Report
Order. Mr Rankin and Ms Morton, your voices carry right across the Chamber—try to take a breath every so often.
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Financial Statement and Budget Report
We now come to the motion entitled “Income Tax (Charge)”. It is on this motion that the debate will take place today and on the succeeding days. The questions on this motion and on the remaining motions will be put at the end of the Budget debate on Tuesday 2 December. I call the Chancellor of the Exchequer to move the motion formally.
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Budget Resolutions
Order. Can colleagues who are exiting the Chamber do so swiftly and quietly, so that we can focus on the Leader of the Opposition?
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Budget Resolutions
Order. The Chief Whip in particular knows that we do not allow clapping in the Chamber.
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Budget Resolutions
Order. Colleagues need most definitely to simmer down: just breathe a little and allow the Leader of the Opposition to be heard.
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Budget Resolutions
Order. Conservative colleagues are drowning out the Leader of the Opposition’s speech, so just be mindful that nobody at home will be able to hear her.
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Budget Resolutions
Order. If you are on the Front Bench, I can obviously see you, Mr Kyle. There is no need for you to be chuntering this loudly. Everyone else can see and hear you as well.
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Budget Resolutions
Order. Mr Vince! And Mr Thompson, you are so enthusiastic that I was worried a moment ago that you would knock Mr Waugh off his seat. We need to calm down and breathe, and we need to ensure that we can hear the Leader of the Opposition.
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Budget Resolutions
Order. Members who are leaving the Chamber should do so quietly and quickly before we come to our first Back-Bench contribution. Other Members who are trying to catch my eye should resume their seat; I have noticed them bobbing. I call the Chair of the Treasury Committee.
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Budget Resolutions
Order. You are a senior Member of the House, and I made it very clear earlier that no interventions should be made on party leaders.
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Budget Resolutions
Order. Colleagues are now permitted to make interventions, which a Back Bencher may accept or decline them.
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Budget Resolutions
Order. How on earth can “you” do that? We cannot start off these four days of Budget debate with the words “you” and “your”. Come to your conclusion quickly and using the right language.
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Budget Resolutions
Order. I will remind colleagues that interventions must be short and to the point, and must be an actual question, not a statement.
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Budget Resolutions
Order. The hon. Member used the term “you”. Perhaps focusing, and looking at the Chair, will stop colleagues from doing so.
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Budget Resolutions
Just shy of 60 Members wish to contribute, so there is a speaking limit of 10 minutes to begin with.
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Engagements
May I first pay tribute to the many farmers who have come to Westminster today to protest about the shameful attack on them in last year’s Budget? I want them to know that the Conservatives stand with them. [Interruption.] This has been the most chaotic lead-up to a Budget in living memory, with resignations, hostile briefings—[Interruption.]
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Engagements
Nobody wants this Budget, Mr Speaker! We have had resignations, hostile briefings and leaks galore. Even in the past 10 minutes, there has been an unprecedented leak of the OBR analysis. These leaks have been so serious that even the former chief economist of the Bank of England has said that Labour’s “fiscal fandango” is “the single biggest reason growth has flatlined”. Does the Prime Minister agree with Andy Haldane, and does he have an explanation for this complete shambles?
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Engagements
We are talking about the leaks. The Prime Minister does not seem to appreciate the impact of these Budget leaks on the UK economy. Even the Chief Secretary to the Prime Minister has said this morning that the leaks were unacceptable, so will the Prime Minister launch an investigation into the Budget leaks and punish those responsible?
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Engagements
The Prime Minister talks about the decisions that the Chancellor has already taken. If they were that great, we would not have all the farmers protesting outside. The Prime Minister does not want to talk about leaks, but we can see that the chaos in No. 10 is having real-world consequences. Instead of focusing on the economy, they have been fighting like rats. Several journalists reported that No. 10 sources had briefed against the Health Secretary and other senior Cabinet Ministers; the Prime Minister then told us that these briefings did not come from No. 10. Will he repeat, on the Floor of the House, the claim that none of his advisers has briefed against members of the Cabinet?
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Engagements
The Prime Minister expects us to believe him, but no one does. We all know that he did not have a serious leak inquiry. What he did was ask Morgan McSweeney to investigate Morgan McSweeney, and then Morgan McSweeney discovered that Morgan McSweeney was innocent. All this calls into question the Prime Minister’s judgment. We read this weekend that he wants the former Deputy Prime Minister back in his Cabinet; he must have forgotten that she had to resign only a few months ago for tax evasion. When did the Prime Minister decide that lawbreakers can be lawmakers?
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Engagements
It is not tittle-tattle. We all know that the Prime Minister is only talking about welcoming the Deputy Prime Minister back because he is desperate to shore up his crumbling leadership, but if he does welcome her back, will he set a condition that she must pay back the £40,000 of property taxes she avoided—the same property taxes that the Government are very happy to put on everyone else—and return her £17,000 of severance pay?
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Engagements
That sounds like a no. I have never heard the Prime Minister speak so highly of people avoiding their taxes. In summary, this just looks like a Government who are a slow-motion car crash. The Prime Minister’s Cabinet Ministers are briefing against each other, his MPs are planning for life after him, and the most chaotic run-up to a Budget in recent memory is happening on his watch. Even the Chief Whip is telling MPs that he wants out. The truth is simple: his MPs do not trust him, the markets do not trust him, and the public certainly do not trust him. When will he finally accept that the chaos starts and ends with him?
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Budget Resolutions
May I congratulate the right hon. Lady on delivering her second Budget? I hope she enjoyed it, because it really should be her last. What a total humiliation—[Interruption.]
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Budget Resolutions
It is a total humiliation. Last year, the Chancellor put up taxes by £40 billion—the biggest tax raid in British history. She promised that she would not be back for more. She swore that it was a one-off. She told everyone that from now on, there would be stability and she would pay for everything with growth. Today, she has broken every single one of those promises. If she had any decency, she would resign. At the last Budget, she said she was proud to be the country’s first-ever female Chancellor; after this Budget, she will go down as the country’s worst-ever Chancellor. Today—[Interruption.]
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Budget Resolutions
Today the Chancellor has announced a new tax raid of £26 billion, and Labour Members were all cheering. Household income is down. Spending policies in this Budget increase borrowing in every year. That smorgasbord of misery we just heard from her can be summed up in one sentence: Labour is hiking taxes to pay for welfare. This is a Budget for “Benefits Street”, paid for by working people. This Budget increases benefits for 560,000 families by an average of £5,000. The Government are hiking taxes on workers, pensioners and savers to pay for handouts to keep their Back Benchers quiet. These are the same—[Interruption.] They can chunter all they like. These are the same Back Benchers who cheered last year when the Chancellor taxed jobs and left more than 100,000 people without an income. They cheered because they did not understand the consequences of what they were doing, and they still do not. It has not been an easy time for the Chancellor. No one liked seeing her sitting on the Government Benches as it dawned on her that her own Back Benchers were going to do to her political career what she has done to our economy. She could have chosen today to bring down welfare spending and get more people into work. Instead, she has chosen to put up tax after tax after tax—taxes on workers, taxes on savers, taxes on pensioners, taxes on investors and taxes on homes, holidays, cars and even milkshakes. There are taxes on anyone doing the right thing. She and this Government have lost what little credibility they had left, and no one will ever trust her again. What is amazing is that the Chancellor has the nerve to come to this House and claim that this is all someone else’s fault. She has a laundry list of excuses. Labour Members blame the Conservatives as if we have been sneaking into the Treasury under the cover of darkness to give pay rises to the unions. The Chancellor inherited an economy with inflation at 2% and record-high employment. She has tanked it in just over a year. She has endless excuses—she blames Brexit and Donald Trump, but she needs to blame herself. I have some news for the Chancellor—she did not seem to understand what the OBR was saying. Inflation is up, not down, and that inflation was stoked by her tax and spend decisions. The economic and fiscal outlook says that the OBR expects inflation to stay higher for longer. Everybody else has read the OBR analysis, but she still has not. She blames higher than expected borrowing costs. Where does she think they came from? [Hon. Members: “You!”] Those borrowing costs are driven by the Chancellor’s lack of grip. Labour Members are saying those costs came from us, but she is paying more to borrow than Greece. She is paying more to borrow than at any point under the 14 years of Conservative government—perhaps if Labour MPs read a book sometimes, they would know something—which included an energy crisis sparked by a war in Ukraine and a global pandemic. What is the Chancellor’s excuse? She is taking the public for fools, but they are under no illusions about whose fault this is. The fact is that the bad choices the Chancellor is making today—choices to break promises, choices to put up taxes, choices to spend more of other people’s money—are because of the bad choices she made at the last disastrous Budget. If you want growth, you need to start with knowing what kind of country you want to be and make a plan to get there. You need to create certainty for the people and businesses who will drive growth. There is no growth and no plan, because Labour focused on settling scores and scratching the itches it had while in opposition. The Chancellor promised stability. She delivered chaos. Just look at the circus around this Budget: first, the leaks—then more leaks to try to undo the damage; calling panicky press conferences and U-turning on her U-turns; rolling the pitch one day only to plough through it the next. She had the cheek to talk about stability, but she has become the first Chancellor in history to release the whole Budget ahead of time. This is extraordinary, and it tells us everything we need to know about her grip on the Treasury. She is making the UK a shambolic laughing stock to international investors, and if she does not resign for breaking her promises, she should sure as hell go for this. What have we got for all this chaos and disorder? There are 1 million more people claiming universal credit than there were at the time of the last Budget. Government spending? Up. Welfare spending? Up. Universal credit claimants? Up. Unemployment? Up. Debt interest? Up. Inflation? Up. And what about the things that we want to go up? Growth? Down. Investment? Down. Business confidence? Down. The credibility of the Chancellor? [Hon. Members: “Down!”] Not just down, but through the floor. These figures are shocking. Does the Chancellor really think that anyone will be confused by the sleight of hand in her speech? Her speech today was an exercise in self-delusion. Today she had an opportunity to apologise and show some humility; instead, we have been fed puff pieces in The Times and the FT showing a woman wallowing in self-pity and whining about mansplaining and misogyny. Let me explain to the Chancellor—[Interruption.]
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Budget Resolutions
All we have had is wallowing in self-pity and whining about misogyny and mansplaining, so let me explain to the Chancellor, woman to woman, that people out there are not complaining because she is female; they are complaining because she is utterly incompetent. Real equality means being held to the same standard as everyone else. It means being judged on results. Take the Chancellor’s bright idea: the Office for Value for Money. It has been closed down because it did not save a penny. In fact, it cost the taxpayer £1.6 million. You could not make this stuff up. I have identified a way to save taxpayers huge amounts of money, by sacking just one person: the woman sitting opposite me. The ex-chief economist of the Bank of England was not mansplaining when he said that the uncertainty around today’s Budget is “the single biggest reason growth has flatlined”. What did the Chancellor think would happen when she went on breakfast telly to do an emergency public service announcement: “I interrupt your Cheerios to bring you this frightening message about income tax”? Then, unbelievably, she changed her mind three days later. No wonder people are in despair. She says she wants people to respect her—[Interruption.]
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Budget Resolutions
The Chancellor says that she wants people to respect her, but respect is earned. She apparently told Labour MPs this week, “I’ll show the media, I’ll show the Tories—I will not let them beat me.” Show us what? Making stuff up at the Dispatch Box, incompetent chaos and the highest tax burden in history? She said to them, “I’ll be there on Wednesday, I’ll be there next year, and I’ll be back the year after that.” God help us! She is spineless, shameless and completely aimless. Talk to any business and or anyone looking for a job—unemployment is up every single month since Labour has been in office. [Interruption.] Labour MPs do not want to hear it, but it is true. They are shouting and complaining, but they cannot create jobs. It is the worst year for graduate recruitment on record. Are they proud of that? [Interruption.]
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Budget Resolutions
Labour MPs do not want to hear the truth, but I am speaking for all those people out there who are sick of this Government. Companies like Merck and Ineos are slashing investment plans. The construction sector has shrunk. How is that house building target going, by the way? I will tell you, Madam Deputy Speaker: the Government are miles behind and will not even come close to what we achieved. Business confidence is at record lows. No wonder that today future growth was revised down for every year of the scorecard. The papers are reporting that one in eight business leaders is planning to leave Britain. Even one of Labour’s biggest ever donors, Lakshmi Mittal, has fled the country. What we have in front of us is a Budget littered with broken promises. The Chancellor stood on a manifesto that promised better returns for UK savers. Today she is putting up taxes on savings and on salary sacrifice even. She promised to give pensioners the security in retirement that they deserve. Today she slapped higher taxes on people saving for their pension. She promised to make Britain the best place in the world to invest and do business. Today she has raised the dividend tax rates. She and the Prime Minister had already broken their promise to freeze council tax, but today she has decided to go even further, introducing a new property tax clobbering family homes that will only raise small amounts. This is Labour’s Britain: people who work hard and save hard to buy their homes get taxed more, while those who do not work—those who, in some cases, refuse to work—get their accommodation paid for by taxpayers. To top it all off—because taxing your home, your car, your savings and your pension was not enough—the Chancellor has, by her own admission, broken her manifesto promise on income tax. In the last Budget, she said: “I am keeping every single promise on tax that I made in our manifesto, so there will be no extension of the freeze in income tax…thresholds”. She also said that “extending the threshold freeze would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.] But today she has done exactly that. Why should anyone believe anything she has promised in this Budget? Where is the money going? There are small changes to rail fares and prescriptions. Those are distractions while the Chancellor steals your wallet. The real story is that Labour has lost control of welfare spending. Not only will working people have their tax thresholds frozen while benefits go up in line with inflation, and not only has Labour abandoned reforms that would have saved the taxpayer £5 billion after pressure from its own Back Benchers, but today Labour has added another £3 billion to the bill by scrapping the two-child benefit cap. We introduced that cap, because it means that people on benefits have to make the same decisions about having children as everyone else. Even Labour voters know that it strikes the right balance between supporting people who are struggling and protecting taxpayers who are struggling themselves. Just this summer, the Chancellor admitted that lifting the two-child benefit cap was not affordable, but that was before the Prime Minister accidentally fired the starting gun on the race to replace him. Now he and the Chancellor are buying the votes of their own MPs with taxpayers’ money. If she wants to reduce child poverty, she should stop taxing their parents and stop destroying their jobs. She congratulated herself on a new tax on landlords. Let me tell her this: hiking tax on landlords will only push up rents. It will push landlords out of the market, and the people who will suffer are the tenants. Then she talks about taxes on electric vehicles. Those changes will hit rural drivers the hardest, but we know that Labour does not care about rural people. All this Budget delivers is higher taxes and out-of-control spending. Nobody voted for this. The Chancellor must take responsibility. She chose to impose the jobs tax, driving unemployment higher month after month. She chose to abandon welfare reform, meaning that the benefits bill is spiralling. She chose to spend more and more money she did not have, leaving taxpayers to foot the bill. She is out of money, out of ideas, out of her depth, and she has run out of road. The country simply cannot afford a Chancellor who cannot keep her own promises. Her position is untenable, and she knows it. [Interruption.] She is talking to the Prime Minister. Is he mansplaining to you, by the way? Is he mansplaining? Would you like some help? The Prime Minister should grow a backbone and sack her, but he will not, because he knows that if she goes down, he goes down with her, so we are stuck with them both, Laurel and Foolhardy. Does the Chancellor have any sympathy for the people facing Christmas without a salary because of her jobs tax, or for the retailers suffering sleepless nights because of their plummeting Christmas sales? People out there are crying. Last year, we had the horrors of the Halloween Budget. This year, it is the nightmare before Christmas. As for her, she is the unwelcome Christmas guest. Ten minutes through the door and she has eaten all the Quality Street. Let me tell the Chancellor something she has forgotten. Behind every line in today’s Red Book is a family, a home, and a lifetime of work and sacrifice. People are frightened, and they have every reason to be—the Chancellor has spent the last year terrifying them. Every decision that she and the Prime Minister make puts more pressure on the people who keep this country going. If Labour is the party of working people, why is it that every day under this Government, thousands more people are signing off work and on to benefits? It is the Conservatives who are the party of work. The Labour party should be renamed the Welfare party. The Government are making a mistake. The British public do not want higher welfare spending; they want people in work, providing for themselves. They want to live in a country where hard work pays—where what you put in reflects what you get out, and we agree with them. There is an alternative, and we Conservatives have set it out. This Budget could have saved £47 billion, including £23 billion from welfare. The Chancellor could have applied our golden economic rule, allocating half those savings to cutting the deficit and using the rest to cut taxes. [Interruption.] Oh, they are all pretending that they are not listening. It is the shame of the mess that they have made—
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Budget Resolutions
Even the dog is laughing at the Chancellor, Madam Deputy Speaker. The Chancellor could have abolished stamp duty on homes to get the housing market moving, and she could have abolished business rates on shops to breathe life into our high streets. She could have introduced our cheap power plan, which would save a lot more money than what she announced, and would bring down energy costs for homes and businesses. That is what she should have done. The Chancellor should be on the side of people who get up and go to work, people who take a risk to start a company, and people working all hours to keep their business afloat. She should be on the side of the farmer trying to hand something over to the next generation, and the investor deciding whether to spend their money in the UK or elsewhere. She should be on the side of the young person looking for their first job, the saver doing the right thing and putting money away for a rainy day, and the pensioner trying to enjoy a decent retirement. This country works when we make the country work for those people. Only the Conservatives are on their side, and our plan for them is simple: bring down energy costs, cut spending, cut tax, back business, and get Britain working again.
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New Nuclear Sites
1. What discussions he has had with the Secretary of State for Energy Security and Net Zero on the potential for new nuclear power sites in Scotland.
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New Nuclear Sites
What discussions has the Secretary of State had with the SNP Government in Scotland, whose luddite approach and ideological blinkers prevent Torness, Dounreay and Hunterston from being considered for future nuclear projects—and all the jobs and investment that go with them?
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Driving Test Availability: South-east
Unfortunately, it was right that Loveday Ryder, the previous chief executive of the DVSA, had to resign because of this terrible ongoing problem. Does the hon. Gentleman agree that we need new leadership at that organisation, to grip this problem with alacrity? We must particularly address the problem of bots sweeping up the tests, as there is not much point in increasing the number of tests if the bots capture them. We are then back to the 6 am problem of parents dialling in, which he has articulated so well.
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Budget Resolutions
The number of jobs lost in hospitality since last year’s Budget, just over a year ago, exceeds 110,000 as a result of the Chancellor’s choices.
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Budget Resolutions
This Budget underlines the cost of a Labour Government who are making bad choices that are hurting working people. Once again, the Government talk about growth, but it is clear that the biggest growth that will come from the Budget is in people’s tax bills. This is a Budget that takes £12 billion from people who work or who have spent most of their adult lives working hard and doing the right thing, and gives it to people on benefits. It doubles down on the mistakes that the Chancellor made in last year’s Budget that have killed jobs, damaged our high streets and made our country poorer. The proof is there for all to see in the OBR forecasts, which were helpfully published early. Unlike last year, when the Chancellor told the House that the OBR was going to back up her claims of a £22 billion black hole, but when we read the document it said nothing of the sort, today we could see the gaping chasm between the Chancellor’s claims and the reality contained in the report as she was delivering the Budget. The OBR is clear that it is downgrading growth forecasts not since Brexit or anything that happened under the last Government, but since March. These are downgrades under this Labour Chancellor, caused by this Labour Chancellor. The Chancellor boasted that this year’s projections increase expected growth to 1.5%, which is still less than was being predicted at the time of last year’s Budget when she told us that 2025 would see 2% growth, but she was silent about the growth forecasts being slashed for every subsequent year of the forecasting period. The OBR says that inflation will stay higher for longer. At a time when the cost of living is falling and inflation is at low levels in other countries, we are the outlier. That is the result of the Chancellor’s choices. It is clear that, despite the claims of the hon. Member for Rugby (John Slinger) a few moments ago, debt will rise as a proportion of GDP, not fall. That is a direct result of the Chancellor’s extra borrowing. It is also clear that the OBR expects the cost of that borrowing to be higher—to cost the public purse more money each year. While long-term borrowing rates have fallen for most major economies since July last year, the rate that we must pay on UK Government bonds has risen.
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Budget Resolutions
I think the hon. Lady is extremely brave to come to that point so early, given the levels that bonds are still trading at. The OBR report is clear that the extra cost of borrowing, which is not replicated in other major economies, amounts to an extra £3 billion a year by 2030—more than the OBR expected just in March. In short, we are paying what I understand the markets call a “moron premium” because of the Chancellor’s choices.
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Budget Resolutions
My hon. Friend hits the nail on the head. I would go slightly further and say that it is not about paying off the debt; it is purely about servicing additional borrowing. That has real consequences for working families. Perhaps the most concerning part of the OBR’s report is in paragraph 1.9, which says: “Growth in real household disposable income per person is projected to fall from 3 per cent” last year. It is falling not to 2%, or even to 1%, but to one quarter of one per cent on average for the next five years.
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Budget Resolutions
I will make a little progress; I can see the time. The difference between 3% per year and 0.25% per year in growth in disposable income adds up to £2,700 less per family in disposable income because of the Chancellor’s choices. We needed a Budget for jobs, but instead this was a Budget about saving the Prime Minister’s job by giving his mutinous Back Benchers the welfare rises that he forced them to vote against just last year. If the Government really wanted to support jobs, they would have undone some of the damage that the Chancellor did last year, particularly on hospitality. A number of Members have raised the issue of hospitality and business rate reform. Before the election, the Chancellor was clear that business rates would be reformed, which meant that pubs, restaurants and cafés would have lower bills. Instead, the owners of cafés, pub landlords and restaurant owners saw their business rate bills more than double in April. We have heard today from the Chancellor that—because of the effects of revaluation and the fact that she has decided to go with a reduction of only 10p on the multiplier, instead of the 20p signalled when the Government introduced the legislation last year—when the new regime comes in, we will again see the bills for those pubs and cafés increasing, even though business rate bills have only just doubled. This is a bad deal for hospitality. It will have a devastating impact on our high streets, and it is made only worse by the decision of the Chancellor to increase alcohol duties. That will hit pubs again, and make it more difficult for our pubs, our bars and our responsibly licensed venues to compete with supermarkets piling them high and selling them cheap.
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Budget Resolutions
I do not think such declarations are in my current entry in the Register of Members’ Financial Interests, but Members may wish to look at my historical declarations. I disclose that I have received some hospitality below the threshold from UKHospitality, the British Beer and Pub Association, the Campaign for Real Ale and the British Institute of Innkeeping. My hon. Friend is clearly right, although I think his figures are slightly out of date, because it is not 90,000 jobs that have been lost in hospitality; the latest figures from UKHospitality suggest that 111,000 jobs in hospitality have been lost since the Budget. As the Safeguarding Minister, the hon. Member for Birmingham Yardley (Jess Phillips), indicated earlier, these jobs ought to be an opportunity for social mobility. Instead, the Chancellor’s choices have been destroying those opportunities. The Budget, the measures that have been announced today and the taxes she has been piling on businesses and working people across the country will continue to destroy other opportunities, making our communities weaker, our economy poorer, and our families less well off.
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Engagements
Q7. Consequential to President Trump’s misunderstanding of Putin’s assessment going forward into—[Interruption.] Apologies, I have completely lost the thread of my question. What a day to do it! I am going to carry on—I am afraid the Prime Minister is not going to get away that easily.Consequential to President Trump’s misunderstanding of Putin’s strategic intent for both Ukraine and Europe is the Prime Minister’s solemn responsibility to keep this country safe. Given the known hypersonic and ballistic missile threat from Russia, and the fact that the United Kingdom has no current counter to that, what is the Prime Minister going to do to keep this country safe from those that have already threatened us?