Budget Resolutions and Economic Situation
It is a pleasure to follow the hon. Member for Boston and Skegness (Richard Tice), though I disagree with the vast majority, if not all, of what he said. As we have seen, growth is running at about 2.1%. We have not seen that economic performance for about 10 years, with the exception of 2022, as we emerged from the pandemic. In the 2024 general election, we promised that we would fix the foundations; that cannot be done overnight. We said that we would produce the highest growth rate in the G7 and we have done that. I am proud of the Government’s record, as, I am sure, are all my colleagues on the Labour Benches. That is not just about what we have heard today; it is about what has happened over the last few years. I want to place on record my thanks to the last Labour Prime Minister and his Chancellor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves), for their stewardship, because they delivered fiscal discipline, bold economic reforms and good growth. We face the impacts of global events at home when doing the weekly food shop or filling up at the pumps, with Trump and Netanyahu’s war in Iran set to cost each household £2,500 by the end of 2027. Listening to the Chancellor, today’s Budget looks to build on the fiscal foundations and I welcome the measures laid out. It will give families the breathing room they need by extending the VAT on electricity bills this winter and spring into July next year, taking £50 off; cutting standing charges on gas bills, saving £45 for the average household; knocking green levies off bills; and providing a council tax rebate of £100 to help 20 million households with their energy bills—that will help almost 40,000 households in my constituency of Warwick and Leamington. Today’s Budget cannot fix the cost of living overnight. Between 2010 and 2024, real weekly average wages rose by just £16, but if we had matched the wage growth seen in Germany, our earnings would be £3,600 a year higher. The extension of the 5p tax cuts on fuel duty to July is welcome, as is holding down red diesel. I congratulate the Chancellor for helping motorists, particularly business users, with the higher mileage rate increasing from 25p to 35p. That will make a significant difference. The average house price in my constituency 30 years ago was five times the average annual salary. Today, it is 10 times the average annual salary. That is why I welcome the Government’s announcement; it is critical to increase supply to help young people to stay in their areas and to help key workers to locate themselves near their work. That is particularly relevant not just to the businesses in <span id="365" class="column-number" data-column-number="365"></span>my constituency but to Warwick hospital. When it comes to the delivery of affordable housing and council homes, extending the discounts on the local authority borrowing rate is important, and the introduction of the £4.7 billion Your First Home programme is welcome. I am delighted to see the Chancellor backing UK businesses by taking more of them out of paying business rates. The raising of the small business rate relief threshold means that 52% of all retail, hospitality and leisure businesses will pay no business rates at all, and the real-terms business rates freeze for eligible businesses will benefit 535 properties in my constituency. The Chancellor also mentioned the relief for family businesses, and the relief for entrepreneurs and founders, which is particularly welcome and innovative. I commend him on that. On the reindustrialisation programme, the additional investment announced, totalling £20 billion and supporting 100,000 jobs in sectors such as AI, defence and green energy, will strengthen our economic resilience. In Warwick and Leamington, we are very well positioned to take advantage of that, in particular through our advanced manufacturing, automative and defence businesses. Let me highlight just one company, given that we have been talking about innovation and have heard that are no £1 billion businesses in the UK. A company just down the road in Oxford—a spin-out of a PhD project at Oxford University—had zero money in 2009, but by 2019, just 10 years later, it was worth £100 million and was subsequently bought by Mercedes. To build on the point made by my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) about pensions, ISAs and encouraging greater investment in the United Kingdom, I believe that there is a lot of money in this country as liquid assets and we have to use much more of those assets, such as those in ISAs, to invest in the United Kingdom. I would like to see more encouragement and more fiscal incentive for individuals to use their savings to invest in the United Kingdom or in the UK’s defence sector. On devolution, it is welcome that there is transitional growth funding. I agree with the combining of powers—for Warwickshire, Coventry or the west midlands, whichever way we end up—and believe that it is important. I really do hope, though, that areas such as mine will not lose out just because of the mistakes made with local government reform back in the 1970s, when Coventry was hived off from the rest of Warwickshire. I welcome the long-term thinking that the Prime Minister is bringing to his role and how he sees Government. Working with countries such as Vietnam, we will see the benefits of a long-term plan and the strategy for delivering permanent growth and long-term prosperity for communities. We must have AI sovereignty, either through strategic leverage of the AI stack or through a sovereign frontier AI model, so I welcome the Chancellor’s announcement on a sovereign AI unit. I welcome the measures in the Budget, particularly what has been done to help households through this incredibly tough time—a tough time brought on by external events, whether it be the war in Ukraine or the unnecessary war in Iran brought about by Trump and Netanyahu, which has seen energy prices spike dramatically during the past 10 months. These are significant headwinds, <span id="366" class="column-number" data-column-number="366"></span>and there is only so much a Government can do to battle them, but I really appreciate the measures that this Government and this Chancellor have introduced to address them. I agree with my colleagues that this Budget has been delivered by a Chancellor who is renowned for his steadfastness, durability and seriousness. He brings all his personal qualities to the role of Chancellor, and his first Budget underlines his vision and the seriousness with which he wants to steer our country through a very difficult time. I look forward to supporting the Budget.