Taxes
I wonder whether the right hon. Gentleman could help me out by explaining what a working person is.
Showing every spoken contribution, including 5,750 under 12 words. Hide short remarks
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Welfare Spending
The family hubs are a great thing. The Minister said that they have gone to every local authority, but, if I have read the data correctly, none has gone to South Shropshire. Will she look into that and see whether we can get them there?
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Welfare Spending
Will the hon. Lady give way?
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Welfare Spending
I thank the hon. Member for giving way. The Government have not yet set out their policy on the two-child limit. If they decide not to scrap it, will he support that policy?
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Welfare Spending
On that point—
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Taxes
The Chief Secretary talks about the Budget. I have spoken to small businesses across my constituency that are feeling the impact of last year’s tax rises, and they are concerned about uncertainty and a lack of clarity. Does he really understand the impact that last year’s attacks on small businesses are having, and how devastating they are for our constituents?
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Taxes
rose—
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Taxes
Order. It has become apparent already that if we are to get everybody in, we will have to set a formal time limit. After the next speaker, I will put in place a six-minute time limit. If there are a lot of interventions, which will of course add time, it will be reduced smartly to five minutes and possibly even to four minutes.
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Taxes
Order. I call John Slinger.
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Taxes
Order. I call Bradley Thomas.
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Taxes
Order. I am not saying anything. Please address the Chair.
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Taxes
Order. The right hon. Gentleman is very experienced. He should have been here at the start of the debate if he wanted to intervene.
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Taxes
Order.
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Taxes
I call the shadow Minister.
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Taxes
I beg to move, That this House notes that the Government was elected on the basis of a manifesto commitment not to increase taxes on working people and not to increase National Insurance or the basic, higher, or additional rates of Income Tax, or VAT; accordingly regrets the decision to raise employers’ National Insurance contributions in the Autumn Budget 2024; further regrets the proposed changes to Agricultural Property Relief and the burden on taxpayers from increases in Council Tax, which is forecast to increase at its highest rate in 20 years; calls on the Government to reaffirm the statement made by the Chancellor of the Exchequer in the Autumn Budget 2024 that, from 2028–29, personal tax thresholds will be uprated in line with inflation once again; regrets that the Government plans to bring those whose only income is the State Pension into paying Income Tax this Parliament; and urges the Government not to introduce new taxes on the value of assets owned such as savings, homes and pensions, which would drive wealth creators away from the UK. This is the Government of broken promises. The Labour party said during the general election campaign that it would do nothing on taxation, and yet it came straight into government and placed £25 billion-worth of taxation on businesses up and down our country. We know the consequences of that: it killed growth nearly stone dead, and it has cost around £3,500 pounds by way of lower wages alone to the average working family. It is a clear breach of the Labour party’s manifesto. Members need not take my word for it—they can take Paul Johnson’s, when he was the head of the Institute for Fiscal Studies. He has also been on the airwaves recently describing the move as not just a breach of the Labour party manifesto, but a “blatant” breach. We had the Secretary of State for Environment, Food and Rural Affairs—then the shadow Secretary of State—out reassuring farmers, looking Tom Bradshaw, the president of the National Farmers Union, in the eye and telling him that at least when it came to inheritance tax, farmers had nothing to fear from a future Labour Government. How wrong they were! Then there was the winter fuel payment debacle. Labour reassured pensioners up and down the country that it would not be means-testing the winter fuel payment. Before somebody jumps up and says, “Well, it only excluded millionaires,” it did not—some 80% of pensioners living below the poverty line were denied those payments and had to go through a long and cruel winter. The U-turn, when it finally came, will come as little comfort to pensioners who are now about to be dragged into income tax for the first time as a result of the Labour party’s policies. In opposition, the Labour party said it would freeze council tax, and yet we have seen in the latest spending review a £7 billion increase in council tax levied across this Parliament. According to the IFS, it is the largest increase in council tax in a generation—and that from the party that said it would not be putting up taxes on working people. Does it not think that working people pay council tax?
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Taxes
Indeed, my hon. Friend is absolutely right. We need to stand up for everybody—even our toolmakers. Let us be frank: we have had to table this motion today, which seeks to do nothing other than reaffirm the commitments that the Labour party has already made, because of the litany of broken promises that I have just shared with the House.
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Taxes
My right hon. Friend is absolutely right, and under his stewardship, things were so much better. As he points out, the Government have resiled from any attempt to control the welfare bill—an unfunded tax commitment of £5 billion. That, plus the U-turn on the winter fuel payment, is more than £6 billion of unfunded commitments that the Government are responsible for—unfunded commitments that they said they would never see themselves making. He is absolutely right: the legacy that he left when he was Chancellor in the previous Government was the highest growth in the G7 for our economy. We had near record levels of employment, and near record low levels of unemployment. We had had 13 consecutive months of real wage growth, and inflation had been brought down from over 11% due to the Ukraine war, to bang on 2% on the day of the general election. Where is inflation now? It is almost double what the Government inherited.
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Taxes
I think what the hon. Gentleman said was a gross impertinence, Madam Deputy Speaker. He also referred to you as an absolute “shower”, which is totally unreasonable. I have always been a great admirer of yours, as you know, and always will be. [Hon. Members: “ Name him!”] Name the hon. Gentleman—quite. We have a Government who are grossly incompetent. As soon as they came into office, what did they do? They talked down the economy. It is no surprise that the British Chambers of Commerce is now saying that the No.1 concern of its members is high taxes, or that the latest survey by the Institute of Chartered Accountants in England and Wales once again shows that business confidence is down—and that is for the fourth survey in a row.
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Taxes
My right hon. Friend is absolutely right. When it comes to criticising this Government, it is always confusing whether to address those on the Front Bench or on the Back Benches, because they are never quite in the same place. The big mistake that the Government made was to talk down the economy by going on about this confected black hole of £22 billion—something that the Office for Budget Responsibility has already debunked. The Government should stop using that number. They are the ones who created a black hole of some £6 billion, as I have just set out, and they should focus not on the black hole that they have invented, but on the one they have created. It is that black hole that is creating speculation across the summer about what will happen in autumn, damaging confidence and damaging businesses up and down the country.
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Taxes
I am not sure that I fully understood the point, but the hon. Gentleman seems at least to accept that there is a real black hole when it comes to this Government, of at least £6 billion.
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Taxes
Well yes, exactly. The Government will look to any floating branch or whatever to cling on to, to try to look a little better than they truly are. We have seen a Government who have indulged in spending like it was the 1970s. The result of that has been to push up inflation, which has led to interest rates being higher for longer than they otherwise would have been. It is all very well for Labour Members to trumpet the fact that there have been four interest rate cuts since they came into office. The reality is that if they had not lost control of inflation, there would have been more and they would have come more quickly. The headroom that the Chancellor has against her fiscal targets is wafer-thin. This is the usual Labour way: spending and spending and spending until it runs out of other people’s money.
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Taxes
It would be sensible for the hon. Lady to look at those on her own Front Bench and ask why they take these appalling anti-business decisions. The answer is that hardly any of them have any experience of private business or of setting up a company—in fact, not one senior Front Bencher from her party has that. That is unlike the Conservatives—whether that is myself; the shadow Home Secretary, my right hon. Friend the Member for Croydon South (Chris Philp); the shadow Business Secretary, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith); or others—who actually understand the real world of business.
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Taxes
My hon. Friend is absolutely right. The reality is that if we tax something, we tend to get less of it. This Government have taxed business, so it is not surprising that the economy has been damaged as a consequence. An often fair question asked of the Conservatives is: what would we do? Let me answer that question directly. First, we would have taken very different choices. We would not have loaded up taxation on businesses and stifled growth in the way that Labour has: we would have focused on productivity. We would not have come into office and given the train drivers 14% and the junior doctors 22% with no strings attached whatsoever. We were told by the now Health Secretary during the run-up to the general election that all we needed to do was get around the table with the unions and settle and the problem would go away—well, the junior doctors are back for more.
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Taxes
I will momentarily. We would of course have tackled the welfare bill, as we did when we were in office. We made £5 billion-worth of savings, as scored by the Office for Budget Responsibility, and we had 450,000 fewer people going on to long-term sickness benefits as a direct consequence of our policies. We had a clear plan to go into government and save £12 billion a year in addition.
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Taxes
I think this debate is actually about the tax policy of this Government. As I have clearly set out—[Interruption.] To be fair, there was the small matter of covid, which came along and shrank the UK economy by 10% overnight. People at the time speculated that we would see mass unemployment, the like of which our country had never, ever seen, yet through our intervention we ensured that that did not happen. Likewise, when the Ukraine-Russia war brought inflation to our shores through energy price spikes, peaking at 11.1% at the back end of 2022, we took the tough decisions, along with the Bank of England, to bring that inflation down. In the meantime, we protected millions of low-income families up and down the country from the consequences of that inflation. That came with a £400 billion price tag, so it is not surprising that some taxes had to rise in order to pay for that.
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Taxes
My right hon. Friend is absolutely right. With the increasing Government debt to which this Government are constantly adding, and the higher interest rates for longer for which they are responsible because of their extravagant spending, we are spending about £100 billion a year on simply servicing that debt, which is twice what we spend on defence. That is not sustainable, and things will get worse under this Government.
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Taxes
I would be delighted to talk the hon. Gentleman through that. The preceding Labour Government left this country with a deficit of 10.1%, or £160 billion a year, so clearly we had to get on top of that deficit. It is a simple fact of economic life that if a country is running a large deficit, its debt increases, but by the time of covid, we had largely settled that deficit. For the reasons that I gave a moment ago, of course we added to the debt and the deficit at that point, because we had to intervene to stabilise the economy. However, the inheritance that we received in 2010 was the start of that debt climbing. The hon. Gentleman should acquaint himself with the economic history. What approach can this Government take in the autumn? They are not going to be saved by growth—that is for the birds. The OBR, the Bank of England and the International Monetary Fund have all downgraded growth, and the Office for National Statistics recently announced that for the second month in a row, we have had an economic contraction. How else might the Chancellor make the numbers add up? Well, despite Ministers insisting that their commitment to the fiscal rules remains non-negotiable, there are reports of potential changes to the broader fiscal framework, including the early use of the flexibility of a 0.5% of GDP range for the current budget target, which would allow £12 billion to £13 billion of extra borrowing. However, that would be a breach of faith. There are similar reports that Ministers might move to just one OBR forecast a year, to avoid an embarrassing emergency Budget like the one we saw in March. However, that would completely abandon the commitment not to sideline the OBR, so when the Minister comes to the Dispatch Box will he reconfirm that the Government’s commitment to the fiscal rules also applies to the fiscal framework, and that we will continue to have two OBR forecasts per year? The Government should be looking not for yet more borrowing, but to rein in spending. However, the welfare debacle shows that they are utterly incapable of doing that, so that leaves just taxes. The motion before us today simply asks the Minister to confirm the Chancellor’s commitment not to extend the freeze on tax thresholds. She specifically said in her Budget speech that such a move “would hurt working people. It would take more money out of their payslips.”—[Official Report, 30 October 2025; Vol. 755, c. 821.] When the Minister comes to the Dispatch Box, will he confirm that he, too, holds that position? Will he also rule out wealth taxes? We have already seen tens of thousands of people—high net worth individuals—leaving our country. I know that socialists may say, “Good riddance to them—they are wealthy”, but the Adam Smith Institute calculates that the tax forgone as a consequence of their departure is equal to the tax paid by around half a million people on average earnings. The Labour party has no plan to stem that exodus of talent and wealth creation. Whatever decisions are taken in the autumn, they will be bad ones, and as nervous markets look on, they may prove disastrous. It may even be that this Government take us to a dark place; it is hoped not, but if history is any guide to the future, the lights are surely flashing red. Surely, too, the British people, those hard-working men and women up and down our country—the businesses, the entrepreneurs, the farmers who toil all hours, our charities, our hospices, our veterans, our elderly, and all those who embody the very best of all that our country can be—deserve answers about the promises made to them, and about whether their pay packets, their pensions and their savings are safe. Surely, they deserve better than this wretched, rotten and defunct Labour Government.
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Afghanistan
What worries me more than the lifting of this super-injunction is the fact that we have closed down all the Afghan schemes at the very time that undocumented Afghans who felt it necessary to flee to Iran and Pakistan are being rounded up for forcible repatriation to an Afghanistan led by the Taliban. I understand that the investigation into our obligation to the Triples—the special forces that our forces trained—will continue, and I welcome that. Will the Secretary of State confirm that despite the closure of the schemes, anybody who is found to have worked closely with our armed forces and is in imminent danger can still be rescued and admitted to this country?
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Industrial Electricity Prices
25. What steps his Department is taking to help reduce industrial electricity prices.
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Industrial Electricity Prices
On Friday, I visited C&M Precision Ltd, a small manufacturing company in my constituency. Electricity represents easily its biggest cost. What is the Minister doing to listen to small and medium-sized enterprises like C&M who feel that their voice is simply not being heard?
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Welfare Spending
I am proud to be a member of the party of Wilberforce, Shaftesbury and Disraeli, who all understood that it is essential to free people from need, and that in that effort the state can be a force for good. But in freeing people from need we should not limit them to a life of dependency. It is entirely possible to believe that although welfare can be a force for good, so too can personal responsibility, and responsibility means making the kinds of choices that my hon. Friend has set out.
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Welfare Spending
rose—
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Welfare Spending
I am mindful of two of her predecessors in Birkenhead. The first is F. E. Smith, the great Tory, who talked about “all must have prizes”. Sometimes, in our modern Britain, it feels that all must have state support. The second is the late Frank Field, who is much regarded and revered in this House for his honesty about welfare reform. The Minister is right that successive Governments have failed to grasp this nettle. The truth is that the relationship between the state and the individual has changed over time. We need a welfare system that focuses support on those in the greatest need. She surely believes that, and that requires bold welfare reform. Is she up for that or not?
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Welfare Spending
I spoke earlier about F. E. Smith, who spoke about all having prizes who had “stout hearts and sharp swords”. The stout hearts drive us to do the best for those in the greatest need, but our sharp swords should make us brave enough to recognise that there are those who are absorbing welfare expenditure that should be spent on those needy people. That is what the Government ought to do, but I heard none of that from the Minister.
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Welfare Spending
My hon. Friend is right about the cost of benefits, but he is also right to suggest that they need to be directed to those in the greatest need—the most deserving. That is what we all want across this House. Sadly, because of family breakdown and the fragmentation of communities, the state has stepped in to do what was once done, in my early life, by families, individuals and communities. It is really important that this welfare reform is seen in that broader context, and that we direct the money to those with the greatest need.
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Taxes
There are two fundamental macroeconomic problems facing this country. One is productivity, and the second is mass immigration, which has displaced investment in domestic skills. The Budget did nothing about those, and yet the tax system could be used to address both.
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Clean Energy: Supply
The Minister will recognise that one way to increase the supply of clean energy is to enable community energy projects to supply local energy markets. When Ministers are asked about that, as he knows they have been many times, they generally say that there is no technical obstacle to it happening, but will the Minister recognise that there is world of difference between, on the one hand, something being technically possible and, on the other, that same thing being facilitated and encouraged so it really happens? Will he focus on the latter as the Government develop their energy market reforms?
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Taxes
Does the shadow Chancellor agree that, following the welfare U-turns, public finances today are in a far worse state than they were a year ago when the Government came into office? There is a crucial difference: a year ago, the Conservative Government were taking difficult decisions to bring taxes down in order to grow the economy; because this Labour Government are failing to take those decisions, there is only one way taxes can go, and that is up.
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Afghanistan
I commend the Secretary of State’s statement. I will not dwell on the past, because I am sure that the Defence Committee and other Select Committees will have a look at that. I want to ask him about where this goes in future. All these schemes are closing, but there are still people out there who do not recognise the statement in the report that there is no longer a widespread campaign of targeting individuals. I have one case in my mind. The Minister for the Armed Forces knows exactly who I am referring to: Sami Atayee, who has fled and is in hiding in Pakistan, and whose brother has been arrested during the pursuit. He was not directly employed by the British Government—he could not have been, for security reasons—but the testament of General Olly Brown and others all say that he saved lives for British servicemen and servicewomen. We surely owe people like that a debt of honour and gratitude for their work, so I simply ask the Secretary of State to look at what might replace the schemes that he has got rid of, which were inflexible, very narrow and often left out those who really did this Government a service. I would be grateful if he came up with some flexible idea that allows some of these people to seek succour here in the United Kingdom.
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Afghanistan
I commend the Secretary of State for the calm and sensible way in which he has announced the change in Government policy today. I can already announce to the House that, since the briefing earlier today, I have made preliminary arrangements for MOD officials to address the Public Accounts Committee to examine the cost implications. Some £400 million has been spent so far, and I think the Secretary of State said in parentheses that another £400 million will be spent on the 600 people currently based in Afghanistan who have received invitations under the scheme. Can he give me and the House an assurance that if those 600 people, who must be in some danger, do need assistance, it will be rapidly provided?