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Category: Economy

  • Ed Davey – 2025 Response to the Budget Statement

    Ed Davey – 2025 Response to the Budget Statement

    The speech made by Ed Davey, the Leader of the Liberal Democrats, in the House of Commons on 26 November 2025.

    We look forward to the Treasury Committee challenging the Government on the details of the Budget. This Government were elected on a promise to tackle the cost of living and grow the economy, and this is the second Budget in which they have failed to do either. For millions of people struggling with higher bills, all this Budget really offers is higher taxes.

    The OBR sets it out in black and white: disposable income and living standards are down thanks to this Budget. Surely the Chancellor should have learned from her first failed Budget that we cannot tax our way to growth. Under the Conservatives, the UK’s tax burden reached its highest level since 1948 and it hit the economy, yet under this Budget the tax burden will hit an all-time high.

    There is an alternative to all these Conservative and Labour taxes, and the shocking reality is that the Government know it: a new trade deal with Europe—a major new deal to cut the cost of living and grow our Toggle showing location ofColumn 410economy. The truth is that Boris Johnson’s Brexit deal has cost the Treasury £90 billion a year in lower tax revenue. Imagine if the Chancellor had adopted our plan to reverse those Brexit costs. Imagine how much more we could be helping families and pensioners across our country with the cost of living. Imagine how we could be ending the cost of living crisis today.

    Sir Bernard Jenkin (Harwich and North Essex) (Con)

    Will the right hon. Gentleman give way?

    Madam Deputy Speaker

    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.

    Ed Davey

    I am happy to talk to the hon. Gentleman in the Tea Room afterwards.

    The Government know the damage that the Conservative-Reform Brexit deal has done to every family and business across our country, yet they choose to reject the single biggest policy for ending the cost of living crisis, turbocharging economic growth and boosting tax revenues without raising tax: a new trade deal with Europe. We need to properly fix our broken relationship with Europe, with a new customs union. We can grow our economy by freeing British businesses from the costs, barriers and red tape favoured by the Conservatives and Reform. Rather than trying to tax our way out of debt, as Labour is choosing to do, the Liberal Democrats would grow our way out of debt.

    To be fair to the Chancellor, she has recently spoken about the terrible damage that the Conservatives’ Brexit deal has done to our economy—a deal that promised to save us £350 million a week, but which ended up costing the taxpayer £1.7 billion every week. But where is the Chancellor’s urgency and ambition to fix the problem that she rightly identifies? Today she did not even mention the huge hit to the Treasury from Brexit. She is like a doctor who has diagnosed the disease but refuses to administer the cure. She is refusing to take up our plan for a brand-new deal with the EU—a much better deal for Britain than anything the Government have pursued so far, with a new customs union at its heart.

    Everyone but the most extreme Brexiteers now realises what a costly economic disaster the Brexit deal has been. Whether they are a young family struggling with ever higher food prices or a high street business just trying to survive the Chancellor’s latest new cost or tax, people are understandably looking for a credible economic policy to change their futures for the better, and it is crystal clear that only the Liberal Democrats are providing the leadership on our economy that people are crying out for.

    There are some measures the Chancellor announced today that we do welcome. At last, she has decided to tax the big online gambling firms by raising remote gaming duty, as the Liberal Democrats have been calling for. Problem gambling is related to hundreds of suicides every year, so of course online casinos and the like should pay more tax on their huge profits. Her decision to scrap the rape clause is an excellent one. I may not have heard the Leader of the Opposition, but I was not sure if she welcomed that. I hope the Conservative party will welcome it. The Chancellor’s decision to scrap the two-child limit is excellent. It was in our general election manifesto, and I am glad that she is Toggle showing location ofColumn 411now enacting Liberal Democrat policy. It is clearly the most effective way of lifting children out of poverty, and it will save taxpayers money in the long term.

    The biggest relief today for millions of families and pensioners is the action the Chancellor is taking to reduce energy bills, and we welcome it, but even after the Chancellor’s changes, the Budget will leave the typical household paying hundreds of pounds a year more on their energy bills than five years ago. More action will be needed, but we need action on energy bills that works.

    Reform and the Conservative party pretend that the answer to rising energy bills is to scrap our climate commitments and stop investing in renewables. They could not be more wrong. The Conservative-Reform energy policy would put up bills and make the UK even more reliant on imported fossil fuels, with their volatile and high prices. That would be a disaster for our economy, a disaster for our environment, a disaster for jobs and a disaster for people struggling with energy bills. A major winner from Reform’s energy policies would be Vladimir Putin, which might explain why the hon. Member for Clacton (Nigel Farage) is so keen on them. I urge the Government not to listen to the Conservatives or Reform, but to be more ambitious in cutting people’s energy bills and to take up our plan to cut energy bills even more right now and cut them in half within a decade, finally giving families and pensioners the relief they need from this cost of living crisis.

    While there are some things to welcome, as I have just done, there are quite a lot of measures in the Budget that will cause a lot of pain and unfairness, all of which could have been avoided if the Chancellor had gone for growth with Europe instead. Her plans to tax salary sacrifice will be hugely damaging to savings and pensions, and it looks like it is another NI hit on workers. Why, oh why, when the electricity vehicle market still needs a boost to get going, is she taxing electric vehicles? If she was not spending £1.8 billion on digital ID, many of these tax rises would not have been needed in the first place. Her failure to U-turn on the family farm tax is a huge error. If the Chancellor was really looking to tax those with the broadest shoulders, why not put a windfall tax on the big banks that are making billions at the taxpayer’s expense due to the side effects of quantitative easing?

    The worst tax hike of this Budget by far—the biggest tax rise in this Budget—is the Chancellor’s decision to repeat the Conservative policy of freezing income tax thresholds. Freezing these thresholds reduces the amount that people can earn tax-free and hits the lowest-paid the hardest. I have to say that hearing the Conservative leader criticising it now rings incredibly hollow—and I think the “Member for Bark-shire” was objecting to her comments. The Leader of the Opposition cheered Conservative Budget after Conservative Budget that did exactly the same thing as the Chancellor has done—raising taxes on the low-paid. The Conservatives dragged an extra 4 million people on very low incomes into paying income tax, and an extra 3.5 million people into paying the 40p rate. The OBR says that this Government are now planning to drag a further three quarters of a million low-paid workers into tax and nearly 1 million people into the 40p rate. Someone on the average salary is paying an extra £582 this year because of the Conservatives’ policy, and under the Chancellor’s plans they will pay an extra £300 a year by 2031.

    Contrast that with our record on income tax. We raised the personal allowance by £4,000. We cut income tax by £825 for millions of people, and took 3.4 million of the lowest-paid out of paying income tax altogether. It is clear that the Liberal Democrats are the only party that believes in cutting income tax for ordinary people; Labour and the Conservatives make them pay more.

    As well as adding income tax pain to families struggling with the cost of living crisis, the Budget will add to the cost of doing business crisis facing Britain’s hospitality sector, on which the Chancellor went nowhere near far enough. Our high streets are suffering. Pubs, restaurants, cafés, caravan parks, zoos and even our beloved theme parks are struggling against higher business rates and the Government’s misguided jobs tax. The Liberal Democrats called on the Chancellor to help them with an emergency 5% VAT cut for hospitality for the next 18 months. That would have been a lifeline for some of our most beloved local businesses and for people’s jobs, boosting local economies across Britain, and it is very disappointing that the Chancellor has not listened to our calls.

    Finally, can I say how disappointed I am at how little there was for carers in this Budget? As a carer myself for much of my life, I am determined to speak up for the millions of carers less fortunate than I am—the millions of family carers and care workers who make enormous sacrifices looking after loved ones, the carers who keep our NHS going and the carers who keep our society going. They deserve far more support from the Government, and I will keep pressing their case.

    I do welcome the carer’s allowance review, but it confirms our argument that the carer’s allowance system is out of date and in need of urgent change, and we are yet to hear commitments to such changes. I welcome the decision to reassess cases where overpayment has caused huge hardship, but with those changes not coming into force for another year, the Government must instruct the Department for Work and Pensions to immediately suspend repayments during that delay and swiftly deliver compensation. More needs to be done to help family carers juggle their jobs with their caring responsibilities, and we urgently need the social care commission to actually start fixing the system on a cross-party basis and make sure that our loved ones get the care they need. The Chancellor cannot claim to be supporting our NHS properly, however much money she puts in, while she and Treasury officials keep blocking the social care reforms that alone can transform the health service across the country and boost our economy.

    A caring society, a growing economy and a plan to drive down household bills, boost high streets and go for growth with Europe—that is the vision the Chancellor should have set out today. Instead we got a low-growth, high-tax Budget from a Government who I fear are just not listening.

  • Kemi Badenoch – 2025 Response to the Budget Statement

    Kemi Badenoch – 2025 Response to the Budget Statement

    The speech made by Kemi Badenoch, the Leader of the Opposition, in the House of Commons on 26 November 2025.

    Mrs Kemi Badenoch (North West Essex) (Con)

    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.]

    Madam Deputy Speaker 

    Order. Can colleagues who are exiting the Chamber do so swiftly and quietly, so that we can focus on the Leader of the Opposition?

    Mrs Badenoch 

    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.]

    Madam Deputy Speaker 

    Order. The Chief Whip in particular knows that we do not allow clapping in the Chamber.

    Mrs Badenoch 

    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.]

    Madam Deputy Speaker (Ms Nusrat Ghani)

    Order. Colleagues need most definitely to simmer down: just breathe a little and allow the Leader of the Opposition to be heard.

    Mrs Badenoch 

    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.]

    Madam Deputy Speaker (Ms Nusrat Ghani)

    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.

    Mrs Badenoch 

    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.]

    Madam Deputy Speaker 

    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.

    Mrs Badenoch 

    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—

    Madam Deputy Speaker (Ms Nusrat Ghani)

    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.

    Mrs Badenoch 

    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.

  • Rachel Reeves – 2025 Budget Statement

    Rachel Reeves – 2025 Budget Statement

    The statement made by Rachel Reeves, the Chancellor of the Exchequer, in the House of Commons on 26 November 2025.

    It is my understanding that the Office for Budget Responsibility’s “Economic and fiscal outlook” was released on its website before this statement. This is deeply disappointing and a serious error on its part. It has already made a statement taking full responsibility for its breach.

    We are rebuilding our economy. Over the last 16 months, we have overhauled our planning system to get Britain building; forged new trade deals with the United States, India and the European Union; reformed our visa system to bring the brightest and the best to Britain; changed the fiscal rules that we inherited from the Conservatives; and raised public investment to its highest level in four decades. In last year’s Budget, I raised taxes on business and the wealthiest to close the £22 billion black hole in the public finances left by the Conservative party. We used that money to fund the biggest ever settlement for our national health service.

    Those were the fair and necessary choices. We faced opposition to them—from opponents to planning reform who will always demand that the future is built somewhere else, not in their backyard; opponents to trade who want to take us down the path of isolation and division; opponents to investment who believe that the only good thing a Government can do is get out of the way; opponents who insist that the only way to balance the books is to cut public spending; and opponents who say that we do not need to balance the books at all. But we made these choices for a reason: because after 14 years of Conservative Government, working people demanded—and deserved—change, with investment, not cuts, to our public services; stability for our public finances, which is the single most important factor in getting the cost of living down; and economic growth, which is the best means of improving wages, creating jobs and supporting public services. That is what our plan, this Government and our Prime Minister are all about.

    Today’s Budget builds on the choices that we have made since July last year to cut NHS waiting lists, to cut the cost of living, and to cut debt and borrowing. No doubt, we will face opposition again, but I have yet to see a credible or a fairer alternative plan for working people. [Interruption.] These are my choices: the right choices for a fairer, a stronger and a more secure Britain.

    Madam Deputy Speaker
    (Ms Nusrat Ghani)
    Order. There is far too much noise. I expected so much better from you, Dr Luke Evans; you are meant to be a leader in your community. Simmer down.

    Rachel Reeves
    I am happy for them to shout as much as they like, Madam Deputy Speaker, as long as they do it from the Opposition Benches, where they cannot cause any more damage.

    I said that there would be no return to austerity, and I meant it. This Budget will maintain investment in our economy and in our national health service. I said that I would cut the cost of living, and I meant it. This Budget will bring down inflation and provide immediate relief for families. I said that I would cut debt and borrowing, and I meant it. Because of this Budget, borrowing will fall as a share of GDP in every year of this forecast. Our net financial debt will be lower at the end of the forecast than it is today, and I will more than double the headroom against our stability rule to £21.7 billion, meeting our stability rule, and meeting it a year early. These are my choices—not austerity, not borrowing, not turning a blind eye to unfairness. My choices are a Budget for fair taxes, strong public services and a stable economy. That is the Labour choice.

    Growth is the engine that carries every one of our ambitions forward, through stability, investment and reform. It is the platform from which British ambition can finally get moving again. Growth does not just appear out of thin air; it is built, patiently and stubbornly, by people who take risks; by founders who bet their savings on an idea; by firms breaking into new markets, developing new technologies and creating new jobs and new opportunities; and by the men and the women who work hard every day, in all parts of our country. Our job is not to watch from the sidelines, but to partner with them, backing them every step of the way, and to match private enterprise with public ambition.

    I thank my team of officials at the Treasury for their hard work in preparing this Budget. In the spring, the Office for Budget Responsibility forecast that our economy would grow by 1% this year. I said then that Britain would defy the forecasts, and defy them we have. The OBR has upgraded Britain’s growth for this year from 1% to 1.5%, reaching the same conclusions as the International Monetary Fund, the OECD and the Bank of England, which have already upgraded their forecasts.

    Today, the OBR has published the result of its review of the supply side of the economy. It is clear that this is not about the last 14 months; it is about the previous 14 years, the legacy of Brexit and the pandemic, and the damaging decisions by the Conservative party, which cut public spending, leaving communities and entire regions behind, starved our economy of investment, and weakened our public services.

    As a result of its review, the OBR is reducing its expectations for productivity growth by 0.3 percentage points to 1% by the end of the forecast. It says today:

    “Real GDP is forecast to grow by 1.5% on average over the forecast period…due to lower underlying productivity growth.”

    There is an impact on our public finances too. The OBR says that its productivity forecast will mean £16 billion less in tax receipts by 2030. Those forecasts are the Tories’ legacy, not Britain’s destiny. [Interruption.]

    Madam Deputy Speaker
    (Ms Nusrat Ghani)
    Order. It is very hard to hear the Chancellor over all the shouting. Mr Holmes, you promised me yesterday that you would be on your top behaviour in the first few minutes. I call the Chancellor.

    Rachel Reeves
    We beat the forecasts this year, and we will beat them again by boosting trade, not blocking it; by increasing investment, not cutting it; by championing innovation, not stifling it; and by backing working people, not making them poorer. Brick by brick, we have been building our economy—building roads, building homes, and getting spades in the ground and cranes in the sky.

    Growth begins with a spark from an entrepreneur. Half of new jobs in Britain are created by scale-up businesses, and we want those jobs created here, not somewhere else. Our job is to make Britain the best place in the world to start up, to scale up and to stay. We are widening eligibility for our enterprise incentives, so that scale-ups can attract the talent and capital that they need; expanding the enterprise management incentive, so that more companies can offer tax-relieved share options; re-engineering our enterprise investment and venture capital trust schemes, so that they do not just back early-stage ideas, but stay with companies as they grow; and introducing UK listings relief, with a three-year exemption from stamp duty reserve tax for companies that choose to list here in Britain.

    To continue this work, I am launching a call for evidence on how our tax system can better back entrepreneurs, and a targeted review with founders and investors at its heart, to make the UK an even more attractive place to grow a business. We are sending a simple message to the world: “If you build here, Britain will back you.”

    Our retail investment system should do the same. The UK has some of the lowest levels of retail investment in the G7, and that is not only bad for businesses, which need that investment to grow; it is bad for savers, too. Someone who had invested £1,000 a year in an average stocks and shares individual savings account every year since 1999 would be £50,000 better off today than if they had put the same money into a cash ISA. So from April 2027, I will reform our ISA system, keeping the full £20,000 allowance while designating £8,000 of it exclusively for investment, with over-65s retaining the full cash allowance. Thanks to our changes to financial advice and guidance, banks will be able to guide savers to better choices for their hard-earned money. Over 50% of the ISA market, including Hargreaves Lansdown, HSBC, Lloyds, Vanguard and Barclays, have signed up to launch new online hubs to help people invest here in Britain.

    At this Budget, consistent with the commitments in our corporate tax road map, I will retain our competitive corporation tax rate, the lowest in the G7, and retain our generous full expensing offer for business investment. I will also introduce a new 40% first year allowance, so that businesses can write off more of the cost of their investment up front, while reducing main rate writing-down allowances in line with fiscal constraints.

    Private investment is the lifeblood of economic growth, but growth needs public investment too. When faced with challenges, previous Chancellors have chosen to decrease, delay or cancel capital spending, but low investment is the cause of our productivity problems, not the solution. So my choice is not cuts, not stagnation, but to maintain the additional £120 billion of investment that I provided at the spending review: in transport to link our towns and cities; in energy infrastructure to power our businesses; and in housing, so that people can live near good jobs and growing businesses that pay decent wages. That is the Labour choice.

    I am grateful to the Financial Secretary to the Treasury for his work in driving our growth agenda forward. As we allocate investment for the infrastructure that is the backbone of economic growth across our country, today I will commit investment for the lower Thames crossing, and we are continuing to drive investment in city region transport, in the midlands rail hub and the trans-Pennine route upgrade, along with our commitment to the northern growth corridor, including Northern Powerhouse Rail.

    It this Labour Government that have overhauled our planning system, and I will today provide further funding to increase planning capacity through a new skills offer, as has been called for by the British Chambers of Commerce and the Confederation of British Industry. It is this Labour Government that have invested in nuclear power: in Sizewell C and in Culham. We are taking forward our commitment to slash electricity prices for thousands of manufacturing businesses, as Make UK and many others have called for. Today, I am pleased to welcome John Fingleton’s report—an ambitious plan to cut the red tape that has tied our nuclear industry in knots for decades—and within three months we will set out our plan for delivering his recommendations.

    We are proud of our industrial heritage and we are determined to build the industry of the future so that we buy, make and sell more here in Britain. That is why, as we increase defence spending, we are investing in Portsmouth, in Barrow and in Plymouth, and I am pleased to be supporting Team Derby, an initiative to drive growth in one of our defence industry hubs. It is why we stepped in to save British Steel in Scunthorpe and invested in Sheffield Forgemasters. It is why we have changed Government procurement so we can buy British when it is crucial to our national security. For steel, for shipbuilding and today for AI, we are driving innovation and building that great industry here in Britain.

    But it is not just what we invest in that matters; it is how we invest—putting money and power back in the hands of local and regional leaders. Today, we are devolving £13 billion of flexible funding for seven mayors to invest in skills, business support and infrastructure. I am extending the business rates retention pilots in the west of England, Liverpool city region and Cornwall until 2029, and providing £30 million for the Kernow industrial growth fund for sectors like critical minerals and marine innovation. I am establishing the Leeds city fund, a long-term agreement to retain business rates to fund local regeneration projects like the development of Leeds south bank, and I am allocating £20 million for the new Peterborough sports quarter and £16 million for a science centre in Darlington from the growth mission fund.

    The benefits of investment and growth must be built and felt in every part of our United Kingdom, so we are providing an additional £370 million for the Northern Ireland Executive, £505 million for the Welsh Government and £820 million for the Scottish Government over the spending review period through the Barnett formula. Sorry, I didn’t quite catch that from the SNP. Did they not show up? Perhaps they didn’t hear us: £820 million for the Scottish Government over the spending review period because Anas Sarwar asked us to. I am making targeted investments in our industrial strategy sectors across the UK.

    In Northern Ireland, I am providing £17 million to support businesses and strengthen the UK internal market, and backing advanced manufacturing through the Northern Ireland enhanced investment zone. Wales will be the host for two AI growth zones, creating more than 8,000 jobs supported by a £10 million investment in the semiconductors critical for that industry. We are building the UK’s first small modular nuclear reactors with Rolls-Royce at Wylfa in Anglesey—two Labour Governments working together in Wales to deliver for the people of Wales.

    In Scotland, I am committing over £14 million for low-carbon technologies in Grangemouth, £20 million to renew infrastructure at Inchgreen in Inverclyde and £20 million to redevelop Kirkcaldy town centre and seafront with construction starting next year. That is on top of the UK’s biggest ever warship export deal with the Norwegian Government to build frigates in Glasgow, supporting 4,000 jobs. Investment opposed by the SNP, jobs opposed by the SNP, defence opposed by the SNP, but secured by this Labour Government.

    A growing economy needs strong foundations of economic stability, with borrowing and inflation down and investment up. That is good for business, and it is good for working people so they have more money in their pockets. Economic stability, safeguarded by iron-clad fiscal rules, is our best defence against rising prices and the best way to improve living standards.

    We have all seen the alternative. Three years ago, in their clamour to cut taxes for the richest, the Tories under Liz Truss crashed the economy, sent mortgage rates spiralling and brought pensions to the brink. [Interruption.] They are being so loud, and yet I can’t even hear them now. I know that the leader of the Green party is a keen hypnotherapist, and believes that he can achieve remarkable things using only the power of his mind. Unfortunately, the only things getting bigger under his approach would be the deficit and the rate of inflation.

    For all the damage that the Conservative cuts did to our schools and hospitals, they also doubled the national debt. Our net financial debt this year will be £2.6 trillion, 83% of GDP, meaning that today £1 in every £10 the Government spend is on debt interest—not on paying down that debt, but just on paying the interest on the debt we inherited from the Conservatives.

    My fiscal rules will get borrowing down while supporting investment: the stability rule—that day-to-day expenditure must be met through tax receipts—and the investment rule, which allows me to increase investment while getting debt on a downward path. Those fiscal rules are non-negotiable. I met them at the Budget last year, I met them in the spring and I have met them today.

    While the current Budget balance is in deficit by £28.8 billion in ’26-27 and £4.6 billion in ’27-28, it moves into a surplus of £3.9 billion in ’28-29, £21.7 billion in ’29-30 and £24.6 billion in ’30-31—more than doubling our headroom against the stability rule and meeting that rule a year early, too. Our net financial debt is 83.3% in ’26-27, 83.6% in ’27-28, 83.7% in ’28-29, falling to 83.0% in ’29-30 and 82.2% in ’30-31. I said we would cut the debt and we are, with debt down by the end of the forecast. Going forward, to support our commitment to a single fiscal event and to further strengthen our economic stability, I will follow the recommendations of the International Monetary Fund by assessing the fiscal rules just once a year at the Budget.

    Despite the challenges we face on productivity, the path of our deficit reduction remains broadly the same as in the spring. Public sector net borrowing is due to be £112.1 billion or 3.5% of GDP in ’26-27, 3.0% in ’27-28, 2.6% in ’28-29, 1.9% in ’29-30 and 1.9% in ’30-31, ending at £67.2 billion, translating into an increase in the net cash requirement next year of £4.2 billion, taking the total to £133.3 billion. According to the IMF, we are due to reduce borrowing more over the rest of this Parliament than any other G7 economy.

    The Conservatives crashed the economy; we are protecting it. The Conservatives lost control of debt; we are getting debt down. The Conservatives let inflation and interest rates go through the roof, but since Labour took office the Bank of England has cut interest rates five times. I have made my choices: not reckless borrowing, not dangerous cuts, but stability for our economy, security for our public finances and security for family finances, too. Those are the Labour choices.

    Tory austerity left classrooms crumbling and waiting lists sky high, weakened our productivity and choked our economic growth, and now the Conservatives propose a further £47 billion of cuts to our public services. That is the equivalent of cutting every police officer in our country twice over. Then there is Reform, which promises more than £100 billion of cuts with no detail on where those cuts will come from or who will pay for them—a recipe for devastating damage to our public services.

    People voted for Labour because they want roads that are not full of potholes, police on our streets, and an NHS that is there when they need it. We are delivering that. Waiting lists are down by 230,000, and we have already delivered not just the 2 million additional appointments that we promised, but an additional 5.2 million appointments since the general election.

    I joined the Labour party almost 30 years ago because I could see that the Conservative Government I grew up under did not care much about schools like mine. Textbooks were rationed—[Interruption.] I know that many of you were not at schools like mine. [Interruption.]

    Madam Deputy Speaker
    (Ms Nusrat Ghani)
    Order. There is far too much noise, far too much excitement. People need to calm down a little.

    Rachel Reeves
    The Tories do not want to hear what they did to schools like mine, but I will tell them. Textbooks were rationed, libraries closed and kids herded into portacabins in the playground. I came into politics to change that. The money that I allocated at the spending review will fix the crumbling classrooms that the Conservatives left behind, and build the schools they promised but never delivered.

    Today, thanks to representations from my hon. Friends the Members for Wolverhampton North East (Mrs Brackenridge) and for Leeds South West and Morley (Mark Sewards), I will provide £5 million for libraries in secondary schools, building on the £10 million commitment to ensure that every primary school has a school library within this Parliament. Thanks to representations from my hon. Friends the Members for Bournemouth East (Tom Hayes) and for Luton North (Sarah Owen), I am providing £18 million to improve and upgrade playgrounds across England. Let there be no doubt that this Government are on the side of our kids and will back their potential.

    I will not allow the legacies of Conservative neglect to stain our society. Last year, I made changes to the Mineworkers’ Pension Scheme to ensure that its members receive the fair pensions that they are owed. This year, with thanks to the Minister for Pensions for all his work on this subject, I can go further. I have heard representations from Labour coalfield MPs, including my hon. Friends the Members for Bassetlaw (Jo White), for Blyth and Ashington (Ian Lavery), for Barnsley South (Stephanie Peacock), for Mansfield (Steve Yemm) and for Llanelli (Dame Nia Griffith), and I can today announce that I will transfer the investment reserve fund of the British Coal staff superannuation scheme to its members, so that the men and women who worked in our coal industry get a fair deal in their retirement, too. And there is more. Having heard representations from my hon. Friends the Members for Banbury (Sean Woodcock) and for Edinburgh South West (Dr Arthur), I will index for inflation on pensions accrued before 1997 in the pension protection fund and the financial assurance scheme, so that people whose pension schemes became insolvent—no fault of their own—no longer lose out as a result of inflation.

    Last year, I also provided funding to compensate the victims of the infected blood scandal, after the previous Government failed to budget for the costs of compensation. This year, I have listened to representations from my hon. Friends the Members for Eltham and Chislehurst (Clive Efford) and for Edinburgh South West. I thank the Minister for Employment for her representations over many years on this subject. As a result, I will exempt all payments from the infected blood scheme from inheritance tax, regardless of the circumstances in which those payments are passed down. That is how we should be spending taxpayers’ money: on dealing with injustices and building strong public services, not on waste and inefficiency.

    At the spending review, I set out an ambitious target for £14 billion of efficiencies per year by 2029. I am grateful to the Chief Secretary to the Treasury for driving that work forward, realising savings through artificial intelligence and automation, and by scrapping NHS England and reducing back-office staff by 18,000. At this Budget, I will find a further £4.9 billion of efficiencies by 2031, by getting rid of police and crime commissioners, cutting the cost of politics and local government, and selling Government assets that we no longer have any use for.

    These savings will be required across Government, but for our national health service, I will invest all those savings back into the care that people rely on—more nurses, more GPs and more appointments, restoring the services that faltered under years of Conservative decline and investing in the future of our national health service. Today, I am announcing £300 million of investment in technology to improve patient service, and 250 new neighbourhood health centres, expanding more services into communities so that people can receive treatment outside hospitals and get better, faster care where they live. More than 100 of those centres will be delivered by 2030, including in Birmingham, Truro and Southall. The Labour party founded our national health service, and we will renew our national health service.

    I will take the same approach for defence spending that I take for NHS spending, reinvesting savings back into our national security. In our age of insecurity, Britain will continue to stand with our allies, working in collaboration to secure a sustainable ceasefire for Ukraine, and maintaining our commitment to NATO, with the UK set to spend 2.6% of GDP on defence by April 2027.

    The public rightly expects that we stamp out fraud, error and waste, and put that money to good use in our schools, hospitals and other frontline services. My right hon. Friend the Home Secretary has already announced that she will claw back excess profits from the use of hotels to house asylum seekers, as we phase out the use of those hotels entirely. And we will consult on reforms to indefinite leave to remain and access to taxpayer-funded benefits.

    The introduction of digital ID will break the link between illegal migration and illegal working, and His Majesty’s Revenue and Customs and the fair work agency will crack down on the illicit businesses that blight our high streets and undercut legitimate firms, enforcing the minimum wage, investigating dodgy businesses and increasing scrutiny of the gig economy, as well as tracking down fraudulent business owners who vanish without paying their taxes. I thank my hon. Friends the Members for Great Grimsby and Cleethorpes (Melanie Onn), for Leigh and Atherton (Jo Platt) and for Kensington and Bayswater (Joe Powell) for their representations on this subject. I will take further steps to prevent and track down unpaid tax. Together, these reforms will raise nearly £10 billion a year by 2030, including through new powers for HMRC to pursue the promoters of tax avoidance schemes.

    I am building on our successful use of targeted checks on welfare claims to root out fraud and error and to prevent public money from being paid to people who are not entitled to it. I thank Tom Hayhoe, the covid corruption commissioner, for his work in helping to chase down nearly £400 million from dodgy pandemic spending and contracts. Tory contracts handed out by Tory Ministers to Tory peers and Tory friends—[Interruption.] That money belongs in our schools, in our hospitals—[Interruption.]

    Madam Deputy Speaker
    (Ms Nusrat Ghani)
    Order. It is so noisy in here we can barely hear the Chancellor. Everybody needs to calm down.

    Rachel Reeves
    I would not want any hon. Member to miss this. We are chasing down that money and have almost £400 million back from dodgy pandemic spending and contracts. Tory contracts handed out by Tory Ministers to Tory peers and Tory donors. That money belongs in our schools and in our hospitals, and we are getting it back.

    Finally, we are ramping up sanctions on Russia and freezing known Russian assets. Let me be clear, I do not mean the hon. Member for Clacton (Nigel Farage). Under the Conservatives —[Interruption.]

    Madam Deputy Speaker
    Order. We do not need commentary from the Back Benches. Mr Dewhirst, you are so loud; it is remarkable how far your voice carries.

    Rachel Reeves
    Under the Conservatives, the cost of our welfare system increased by nearly 1 percentage point of GDP—equivalent to £88 billion in just five years. The broken welfare system that we inherited wrote off millions of people as too sick to work. We will reform that system, so that it is a system that does not count the cost of failure, but rather one that protects people who cannot work and empowers those who can.

    We have brought back face-to-face assessments for disability benefits—those are the face-to-face assessments that the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), got rid of when he was Work and Pensions Secretary. Our changes to universal credit will get 15,000 people back into work—a figure confirmed today.

    The former Heath Secretary, Alan Milburn, will review the causes of rising youth inactivity, and we are already taking action. I am grateful to the Federation of Small Businesses and Small Business Britain for their representations on apprenticeships, and today I am announcing funding to make the training for under-25 apprenticeships completely free for small and medium-sized enterprises. I am funding our new youth guarantee, providing £820 million over the next three years to give the young people who were let down by the Conservatives the support and opportunity they deserve, guaranteeing every young person a place in college, an apprenticeship or personalised job support. After 18 months, 18 to 21-year-olds will be offered paid work, not benefits.

    The Motability scheme was set up to protect the most vulnerable, not to subsidise the lease on a Mercedes-Benz, and so I am making reforms that will reduce generous taxpayer subsidies. Motability have confirmed that it will remove luxury vehicles from the scheme, getting the scheme back to its original purpose of offering cost-effective leases to disabled people.

    Taxpayers’ money should not be spent on pensions for people abroad who only lived here for a couple of years and may never have paid a penny of tax. The Conservatives allowed thousands of people living abroad to buy their way into the state pension for as little as £3.50 a week, debasing the purpose of our pension system. I will abolish access to class 2 voluntary national insurance contributions for people living abroad, increasing the time that someone has to live or work in Britain to 10 years, and increasing the contributions they must pay. These reforms improve our welfare system: they support our young people; protect those who need it most; and put an end to Conservative waste and unfairness.

    To break the cycle of austerity we need a fair and sustainable tax system, one that generates revenues to fund the public services we all use, and supports investment to grow our economy. That does mean that today I am asking everyone to make a contribution. The previous Conservative Government froze personal tax thresholds from 2021 until 2028. Today, I will maintain all income tax and equivalent national insurance thresholds at their current level for three further years from 2028—[Interruption.]

    Madam Deputy Speaker
    (Ms Nusrat Ghani)
    Order. The noise is far too high.

    Rachel Reeves
    The Leader of the Opposition supported these freezes when her party made them; she might want to forget about that, but the British people never will.

    At the same time, we are ensuring that people only in receipt of the basic or new state pension do not have to pay small amounts of tax through simple assessment from April 2027. I will also keep the plan 2 student loan repayments threshold at its 2026-27 level for three years.

    I know that maintaining the thresholds is a decision that will affect working people. I said that last year and I will not pretend otherwise now. I am asking everyone to make a contribution, but I can keep that contribution as low as possible because I will make further reforms to our tax system today to make it fairer, and to ensure the wealthiest contribute the most.

    The Conservatives knew that our tax system did not work. Time and time again, they ducked the necessary reforms, leaving a system unfit for a changing economy, with unfairness that they refused to address. Currently, a landlord with an income of £25,000 will pay nearly £1,200 less in tax than their tenant with the same salary, because no national insurance is charged on property, dividend or savings income. It is not fair that the tax system treats different types of income so differently, and so I will increase the basic and higher rate of tax on property, savings and dividend income by 2 percentage points, and the additional rate of tax on property and savings income by 2 percentage points. Even after these reforms, 90% of taxpayers will still pay no tax at all on their savings.

    I also believe that, as well as narrowing the gap between the tax on income from assets and income from work, a fair society is one where the wealthiest pay their fair share. The reforms I made last year will raise an additional £8 billion a year by 2030 from wealth. I increased taxes last year on private equity, private schools and private jets, and I abolished the non-dom tax regime. This year I will make two changes to cap trust charges and prevent avoidance. I reformed inheritance tax on agricultural and business assets and this year—[Interruption.] This year I am aligning those reforms with wider inheritance tax rules by allowing the transfer of the 100% relief allowance between spouses, balancing the taxation of these valuable assets with the realities of family life.

    In this Budget, I will take further steps to deal with a long-standing source of wealth inequality in our country. A band D home in Darlington or Blackpool pays just under £2,400 in council tax, nearly £300 more than a £10 million mansion in Mayfair, and so from 2028, I am introducing the high value council tax surcharge in England, an annual £2,500 charge for properties worth more than £2 million, rising to £7,500 for properties worth more than £5 million. This will be collected alongside council tax, levied on owners, and we will consult on options for support or deferral. This new surcharge will raise over £400 million by 2031 and will be charged on less than the top 1% of properties.

    Reliefs in our tax system cost the taxpayer billions of pounds a year, but many of them no longer serve their original purpose. The Government rightly provides generous tax relief for people paying into a pension, relieving income tax on all contributions and on the investment itself, as well as national insurance relief on employer contributions, at a cost of over £70 billion a year to the Exchequer. This Budget makes no changes to those reliefs or to the tax-free lump sum.

    However, salary sacrifice for pensions, which was intended to be a small part of our pensions system, is forecast almost to treble in cost to other taxpayers, from £2.8 billion in 2017 to £8 billion by 2030, with the greatest benefit going to the highest earners, or to those in the financial services sector putting their bonuses into pensions tax-free, while those on the minimum wage or whose employers do not offer salary sacrifice do not benefit at all. That is not sustainable for our public finances, putting pressure on the tax that everyone else pays.

    I am therefore introducing a £2,000 cap on salary sacrifice into a pension, with contributions above that taxed in the same way as other employee pension contributions. It is a pragmatic step so that people, especially on low and middle incomes, can continue to use salary sacrifice for their pension without paying any more tax than they do now.

    To give individuals and employers time to adjust to these new arrangements, these changes will come into effect in 2029.

    The coalition Government introduced 100% relief from capital gains tax on business sales made to employee ownership trusts, creating a route for gains to go completely untaxed when businesses are sold. I will reduce that relief to 50%, retaining a strong incentive for employee-owned companies. As we work towards doubling the size of the co-operative economy, the Department for Business and Trade will launch a call for evidence on how we can better support co-ops to grow. As a result of the changes that I have made to capital gains tax this year and last year, receipts are forecast to increase from £14 billion this year to £30 billion by 2030.

    To support our high streets, I am announcing a package of regulatory changes, as called for by UKHospitality and the British Retail Consortium. I will support the great British pub through our new national licensing framework, encouraging councils to back our pubs and to back late-night venues with greater freedoms. For business rates, I will introduce permanently lower tax rates for over 750,000 retail, hospitality and leisure properties—the lowest rates since 1991, paid for through higher rates on properties worth more than £500,000, such as the warehouses used by online giants. Alongside this, I will introduce a package of support worth over £4.3 billion over the next three years for a property of any size seeing a large increase in their bill. To support a level playing field in retail, I will stop online firms from undercutting our high street businesses, by ensuring that customs duty applies on parcels of any value.

    I will reform our motoring taxes, exempting search and rescue vehicles from vehicle excise duty, as called for by my hon. Friends the Members for Na h-Eileanan an Iar (Torcuil Crichton) and for Whitehaven and Workington (Josh MacAlister). All cars contribute to wear and tear on our roads, so I will ensure that drivers are taxed according to how much they drive, not just by the type of car they own, by introducing the electric vehicle excise duty on electric cars. That will be payable each year alongside vehicle excise duty at 3p per mile for electric cars, and 1.5p for plug-in hybrids, helping us to double road maintenance funding in England over the course of this Parliament.

    Alongside that, I am providing support to boost our British car industry: increasing the threshold for the expensive car supplement on electric vehicles to £50,000, saving over a million motorists £440 a year; providing £1.3 billion additional funding for the electric car grant, extending it to 2030, taking total funding to £2 billion; and delaying changes to the employee car ownership scheme. In addition, we are investing a further £200 million to accelerate the roll-out of EV charging, as well as 100% business rates relief for EV charge points for the next decade, with thanks to my hon. Friend the Member for Camborne and Redruth (Perran Moon) for his representations on that policy.

    I will improve competition in our taxi industry by ending ride-hailing companies’ use of a discount scheme intended for coach tours, as called for by Steve McNamara, general secretary of the Licensed Taxi Drivers Association: legislating to restrict access so that everyone pays fairly, and protecting £700 million of tax revenue each year.

    I am responding to our consultation on landfill tax, and listening to representations particularly from our house building industry. I will not converge towards a single rate, but I will prevent the gap between the two rates from widening, to balance the need to address tax avoidance in the current structure. I will today publish Ray McCann’s report into the loan charge, along with the Government’s response, setting out a new settlement opportunity that will finally allow people to finalise their position and draw a line under this long-standing issue. I thank my hon. Friend the Member for Milton Keynes Central (Emily Darlington) for her representations on this subject.

    I will continue with the planned uprating for tobacco duties that I set out last year, and uprate alcohol duties by inflation, alongside our plans to introduce a vaping products duty in 2026, and the changes to the soft drinks industry levy announced by my right hon. Friend the Health Secretary yesterday. I thank the Exchequer Secretary to the Treasury for his work on all the tax measures in this Budget.

    I will also reform gambling taxes in response to the rise in online gambling. Remote gaming is associated with the highest levels of harm, and so I am increasing remote gaming duty from 21% to 40%, with duty on online betting increasing from 15% to 25%. I am making no change to the taxes on in-person gambling or on horseracing, and I am abolishing bingo duty entirely from April next year. Taken together, my reforms to gambling tax will raise over £1 billion per year by 2031.

    As a result of the tax reforms I have made today, I can confirm that I will not be increasing national insurance, the basic, higher or additional rates of income tax, or VAT. I have kept everyone’s contribution as low as possible, through reforms to make our tax system stronger, closing loopholes, ensuring that the wealthiest pay their share, and building a tax system that is fairer for the future as our economy changes.

    On the day I became Chancellor, I said that I would judge my time in office a success if I knew that ordinary children from working-class backgrounds were living more fulfilling lives—their horizons expanded; their potential realised. I joined the Labour party, I came into politics, because I believe that every child has equal worth and deserves an equal chance to achieve their promise. The biggest barrier to equal opportunity is child poverty, because for every child that grows up in poverty, our society pays a triple cost.

    The first and heaviest is to the child: going to school hungry; waking up in a cold home, or in another B&B. While other children enjoy the advantages of parents with time to help with homework, or a quiet space at home to work in, too many go without. There is also the cost of supporting a family in poverty, which ends up in the lap of overstretched councils that can do no more than shunt them into temporary accommodation, at huge cost to local taxpayers. Then there is the future cost to our economy and our society, of wasted talent, and a welfare system that bears the cost of failure for decades to come: young people with so much to contribute, but whose potential is suffocated early by limited life chances and missed opportunities, struggling to make their way in a society that did not look out for them.

    I do not intend to preside over a status quo that punishes children for the circumstances of their birth and demands that we all pay three times over for it. Since last July, we have rolled out free breakfast clubs in schools, and we are expanding free school meals to half a million more kids, lifting 100,000 children out of poverty as we do it. We have passed the Renters’ Rights Act 2025, and we have extended the childcare offer.

    I am proud of all that, but it is not enough, because there is one policy that pushes kids into poverty more than any other. It was introduced by the Conservatives. They said it would save money, and that it would bring about “behavioural change”, disincentivising poorer families from having more children. Even on its own terms the policy failed: the welfare bill has continued to rise, and there has been no difference in the size of families. What it has done since it was introduced is push hundreds of thousands of children into poverty. They said they were punishing parents’ choices, but it is the kids who have paid the price.

    They have paid the price for the policies of a party that opted for cynical gimmicks over real savings in our welfare system.

    I understand that many families are finding times hard, and that many have had to make difficult choices when it comes to having kids. There are many reasons why people choose to have children and then find themselves in difficult times: the death of a partner, separation, ill health, a lost job. I do not believe that children should have to bear the brunt of that.

    And neither can I in good conscience leave in place the vile policy known as the rape clause, which requires women to prove their child has been conceived non-consensually, to receive support. I am proud to be Britain’s first female Chancellor of the Exchequer and I take the responsibilities that come with that seriously. I will not tolerate the grotesque indignity to women of the rape clause any longer. It is dehumanising, it is cruel and I will remove it from the statute book.

    So because I am tackling fraud and error in our welfare system, cracking down on tax avoidance and reforming gambling taxation, I can announce today, fully costed and fully funded, the removal of the two-child limit in full from April. [Interruption.] It is amazing what people get so angry about. We have seen the Conservatives’ true colours today—the thing they get angry about is lifting children out of poverty—[Interruption.]

    Madam Deputy Speaker
    (Ms Nusrat Ghani)
    Order. Our constituents want to hear the Chancellor.

    Rachel Reeves
    I think our constituents have heard all they need to from Conservative Members today. We on the Labour Benches do not believe that the solution to a broken welfare system is to punish the most vulnerable. We are lifting 450,000 children out of poverty with the end of the two-child limit. Combined with other actions that we are taking, this Labour Government are achieving the biggest reduction in child poverty over a Parliament since records began. That is the difference that this Labour Government are making.

    I know how worried families are about the cost of everything. They are worried that their money will not stretch to the end of the month—

    Nigel Huddleston
    (Droitwich and Evesham) (Con)
    Just increase tax.

    Rachel Reeves
    I think if you have a house that is worth £5 million, then you can probably afford it, but Conservative Members get more exercised about reducing child poverty than they do about the richest paying more.

    Under this Government, wages have risen by more since we were elected than in 10 years under the last Government, with lower interest rates already saving families £1,200 a year off a typical new mortgage. Compare that to when Liz Truss was Prime Minister. But I know that people still face pressure on their budgets, day to day and week to week, and where there is more we can do to provide relief, we are doing it: extending the bus fare cap, cracking down on rip-off price hikes, freezing prescription charges and freezing rail fares for the first time in 30 years.

    I am increasing the basic and new state pension by 4.8%, an increase of £440 per year for the basic state pension and an increase of £575 per year for the new state pension, in line with our commitment to the triple lock. At the election, we promised a genuine living wage and we are delivering it. At the Budget last year, I increased the national minimum wage and the national living wage, and I am doing the same this year too. I am accepting the recommendations of the Low Pay Commission in full and increasing the minimum wage for 18 to 20-year-olds from £10 to £10.85 per hour, and increasing the living wage from £12.21 to £12.71 per hour.

    Under current plans, the temporary 5p cut to fuel duty that was introduced during the pandemic will come to an end in April and fuel duty will be uprated in line with inflation. But I know that the cost of travelling to and from work is still too expensive, so I am extending the 5p cut until September 2026. Because I know that changes in wholesale prices are not always passed on to motorists, I am bringing in new rules to mandate petrol forecourts to share real-time prices through a new fuel finder, empowering drivers to find the cheapest fuel, calling out rip-offs and strengthening competition, saving the average household £40 a year.

    One of the greatest drivers of the rising cost of living is energy prices. The cause of high energy bills must be tackled at source, and so we are investing in energy security—in nuclear and renewable energy—and in insulation through the warm homes plan, but that is not enough when people are struggling with energy bills today. The Conservatives’ energy company obligation scheme was presented as a plan to tackle fuel poverty. It costs households £1.7 billion a year on their bills, and for 97% of families in fuel poverty, the scheme—get this—has cost them more than it has saved. It is a failed scheme, and so I am scrapping it, along with taking other legacy costs off bills.

    As a result, I can tell the House today that for every family we are keeping our promise to get energy bills and the cost of living down, with £150 cut from the average household bill from April next year—money off bills and in the pockets of working people. That is my choice, not to neglect Britain’s energy security, like the Tories did, and not to leave working families to bear the brunt of high prices, like the Tories did, but to get energy costs down now and in the future. That is the Labour choice.

    And, Madam Deputy Speaker, one more thing: because of our action on bills and on prices, as a direct result of this Budget, the Office for Budget Responsibility confirmed today that inflation is coming down faster and will be a full 0.4 percentage points lower next year. That is the benefit of a Labour Government cutting the cost of living.

    This Labour Government are changing our country. In the face of challenges on our productivity, I will grow our economy through stability, investment and reform. I have met my fiscal rules and built our economic resilience for the future. I have asked everyone to contribute—yes—for the security of our country and the brightness of its future, but I have kept that contribution as low as possible by reforming our tax system, making it fairer and stronger for the future.

    I have protected our NHS, maintaining public investment and driving efficiency in government spending. I have taken action on our broken welfare system, rooting out waste and lifting children out of poverty. And I have cut the cost of living, with money off bills and prices frozen, all while keeping every single one of our manifesto commitments—[Interruption.]

    Madam Deputy Speaker
    (Ms Nusrat Ghani)
    Order. Mr Rankin and Ms Morton, your voices carry right across the Chamber—try to take a breath every so often.

    Rachel Reeves
    Those are my choices, not austerity and not reckless borrowing, but cutting the debt, cutting waiting lists and cutting the cost of living. Those are Labour choices, promised and delivered by this Budget—promised and delivered by this Labour Government. I commend this statement to the House.

    Provisional collection of taxes

    Motion made, and Question put forthwith (Standing Order No. 51(2)),

    That, pursuant to section 5 of the Provisional Collection of Taxes Act 1968, provisional statutory effect shall be given to the following motions:—

    (a) Stamp duty reserve tax (UK listing relief) (motion no. 60);

    (b) Rates of tobacco products duty (motion no. 65).—(Rachel Reeves.)

    Question agreed to.

  • Rachel Reeves – 2025 Mansion House Speech

    Rachel Reeves – 2025 Mansion House Speech

    The speech made by Rachel Reeves, the Chancellor of the Exchequer, at the Mansion House in London on 15 July 2025.

    Lord Mayor, Governor, Ladies and Gentlemen.

    My thanks go to the City of London Corporation for hosting us here this evening…

    …and to the Lord Mayor for his address…

    …as well as to the Economic Secretary to the Treasury for all her hard work.

    It is a year since my party was elected to office…

    …and year since I was appointed as Chancellor of the Exchequer.

    Recently, on a visit to a primary school, a young girl asked me –

    “if you could have any job in the world, what would it be?”

    Given the events of the last few weeks, I suspect many of you would have sympathised if I had said –

    “anything but the Chancellor.”

    But I didn’t.

    Because I am proud to stand here tonight and address you for a second time at Mansion House…

    …as the Chancellor of Exchequer.

    This evening, I want to talk about the progress we have made over the past year:

    Restoring stability;

    Securing investment;

    And delivering reform.

    And I want to talk about the future:

    The economy that we are building;

    The opportunities that we are seizing;

    And the prosperity that we together are creating.

    In my Mais lecture last year, I talked about how a resilient economy must be built on security.

    And the importance of that security has been brought into sharp focus in recent months.

    As the world changes before our eyes, and global economies are becoming more uncertain.

    The job of a responsible government is not just to watch this change –

    We must step up, not step back.

    We must build a dynamic economy on strong and secure foundations…

    …where success is not limited to a handful of sectors, a few people, or certain parts of the country…

    …but where the rewards of hard work are shared…

    …harnessing the contribution of every part of Britain.

    This is the foundation of an economy and a country that is more active and more confident…

    …where people and business look to the future and talk about hope…

    …talk about opportunity…

    …assured of their own capability, and of the ability of our country to boldly face the challenges ahead…

    …and certain in the prize when they succeed:

    Of higher wages and higher living standards;

    The renewal of Britain in every home and every high street.

    To put it simply: a Britain that is better off.

    The financial services sector is critical to my ambitions for our country.

    It is one of the largest and most successful sectors in the UK…

    …worth around 10% of total economic output…

    …and supporting 1.2 million jobs in clusters right around the UK:

    In Cardiff, and Belfast and Edinburgh where we have growing Fintechs;

    In Manchester, where BNY have their new Angel Square hub;

    And in London, the financial centre of the world.

    And financial services is also critical in people’s everyday lives:

    Whether that’s a couple looking to buy their first home;

    A budding entrepreneur wanting to start  their first business;

    Or people getting more out of the money they’re putting aside for the future.

    And that’s what these plans, that I will set out tonight, will deliver.

    Growth must be built on a platform of economic stability.

    When we came into office…

    …it was our government, this government, that restored Britain’s reputation as a beacon of stability by putting the public finances back on a firm footing…

    …getting debt on a downward path, while investing prudently alongside business.

    That was – and still is – the right choice…

    …because there is nothing progressive about a government that simply spends more and more each year on debt interest, instead of on the priorities of ordinary working people.

    And fiscal stability is a choice that reflects economic reality.

    National debt remains at its highest level since the 1960s…

    …and globally, the cost of borrowing has increased in recent years.

    This is not the inheritance that I would have chosen…

    …but it is the reality.

    And that is why the Prime Minister, and I and this government are remain committed to our non-negotiable fiscal rules.

    The stability that we have restored is already delivering:

    Four cuts in interest rates by the Bank of England since the General Election, reducing the cost of mortgages and business lending;

    And investment is returning to our economy.

    At the Spending Review, I set out £120 billion of public investment over the next five years…

    …and last month, the Prime Minister confirmed that the UK has attracted £120 billion of private investment – in just the last 12 months.

    In a globally competitive market…

    …firms all over the world are choosing to invest in Britain…

    …as one of the best places to start up, to scale up and to list:

    The FTSE is at an all-time high, today, for the first time ever, breaking 9000 points;

    London is home to the deepest equity capital market in Europe;

    It is the third biggest venture capital market globally;

    And the London Stock Exchange is the most international in the world…

    …with the FTSE soon to include shares listed not just in sterling but also in dollars and in euros.

    Last year, to ensure the UK remains competitive, we made significant changes to the listing regime…

    …for example, relaxing dual class share rules to give founders flexibility to pursue their growth ambitions.

    The FCA have today published their final Prospectus Rules…

    …simplifying the listing and capital raising processes for firms of all sizes.

    And, as I committed to last year at Mansion House, we are delivering PISCES…

    …a brand-new type of stock exchange for private company share trading…

    …with the first trading events due to take place later this year.

    And I am announcing a new Listings Taskforce with the Office for Investment…

    …to attract the best businesses in the world to IPO here in London.

    But we must do more to ensure that British savers benefit from the success of growing British businesses.

    Last year at Mansion House, I set out an overhaul of our pensions system…

    …and the Pension Schemes Bill, led by my colleague the Pensions Minister, will be signed into law in the next few months.

    The creation of Defined Contribution and Local Government Pension Scheme megafunds…

    …will mean larger and more powerful pots of funding invested productively across the country.

    Pension funds, and this government, are united in our determination to deliver higher returns for savers and more investment in the economy.

    That is why, since last year, funds covering the majority of the Defined Contribution market have committed to the Mansion House Accord…

    …pledging to invest at least 10% of their main funds into private assets such as infrastructure and growth markets…

    … with at least half of that going into UK projects.

    And I would also like to congratulate the Lord Mayor on his employer pension pledge…

    I am delighted, Lord Mayor, to see businesses such as Tesco, First Group and Octopus making this commitment…

    …and like you Lord Mayor I look forward to seeing more companies joining up.

    The UK economy is enhanced by its outward-facing approach…

    …and this year we have built on that with our new trade deals:

    A trade deal with the United States, where we were the first country to sign a deal so that British businesses are better protected against tariffs, and where we have worked with our G7 colleagues to avert new taxes.

    I’m pleased to welcome US Securities and Exchange Commissioner Hester Peirce here tonight…

    …who is driving forward proposals for greater digital collaboration between our two financial centres. Thank you for being here.

    And a trade deal with the European Union, where our strategic partnership will slash red tape and reduce costs for business…

    …as well as providing a platform to further deepen our relationship in future.

    And I am pleased to welcome the European Union’s Financial Services Commissioner Maria Luis Albuquerque.

    Maria Luis, we met earlier today to discuss our continued cooperation on financial services, and I look forward to working more closely with you.

    And a trade deal with India, with whom our recent FTA agreement will give us the best trading relationship of any country in the world with India.

    And we have concluded the first Economic and Financial Dialogue with China in six years.

    And we are implementing the Berne Financial Services Agreement with Switzerland too.

    At the G20 in South Africa later this week I will continue the call I made at the IMF Spring meetings –

    …for countries to come together to tackle trade imbalances and drive growth…

    …underpinned by stronger multilateral institutions.

    I look forward to hearing more on this from the Governor in his address…

    …and I would like to congratulate him on his recent appointment as Chair of the Financial Stability Board…

    …a testament to both Andrew and this government’s commitment to international standards.

    Britain is open for business;

    Open for trade;

    Open for investment.

    And that’s why we must be willing to change how we do things to stay competitive in that global economy.

    We have ripped up the planning rules;

    We have swept away regulations;

    We have published our industrial strategy;

    And today we can go further, by announcing the Financial Services Growth and Competitiveness Strategy…

    …including my Leeds Reforms…

    …named after one of the UK’s great hubs for financial services…

    …and the city that I have been proud to represent as a Member of Parliament for fifteen years.

    These are the most wide-ranging package of reforms to financial services regulation in more than a decade.

    At Mansion House last year, I said we must regulate for growth and not just for risk…

    …and we are delivering on that commitment…

    …while continuing to protect financial stability…

    …so that the benefits of a thriving and growing financial services sector can be realised for people all over Britain.

    Let me set out the details of that package in four parts:

    First, I am rolling back regulation that has gone too far in seeking to eliminate risk;

    Second, I am delivering targeted changes in the areas where the UK already has particular strengths;

    Third, I am making changes to capital requirements to unlock more productive capital;

    And fourth, I am introducing measures to boost retail investment so that more savers can reap the benefits of UK economic success.

    I will begin with the biggest reforms.

    As I promised last year, I am delivering the most significant reform to the Financial Ombudsman Service since its inception…

    …including proposing to limit for ten years for claims.

    This will speed up the time it takes for consumers to get redress for their complaints…

    … returning it to its original purpose as a simple, impartial arbitration service…

    …and ensuring that it no longer acts as a quasi-regulator.

    And I welcome the announcement today, made by the Financial Ombudsman Service that will reduce the interest rate it applies before a decision from 8% to base rate plus 1%.

    I am introducing new targets for the FCA and PRA to cut times on authorisations and approvals…

    …and I have tasked the FCA with assessing the impact of the Consumer Duty and whether it unduly effects wholesale activity…

    …to ensure that regulators are really regulating for growth.

    And I am streamlining the Senior Managers and Certification Regime…

    …reducing the burdens it imposes on firms by 50%…

    …and slashing approval timelines…

    …so you can bring in talent to your business more quickly.

    My next set of reforms provide targeted regulatory support to the areas where the UK does already have a comparative advantage.

    For insurance – where Britain is the destination of choice for underwriting complex, specialised and high-value risk…

    …I am introducing a new competitive framework for captive insurance.

    For asset management – where the UK is the world’s second largest centre…

    …I am futureproofing the regulatory regime and will publish draft legislation in early 2026.

    For sustainable finance, I am determined to focus our efforts on policies that matter most to our world-leading sector and support investment in the transition…

    …so, after consultation and consideration, I have decided not to pursue a green taxonomy…

    …but instead work with regulators through the Transition Finance Council to capitalise on the £200 billion opportunity of the global transition to net zero.

    And for Fintech – where almost half of Europe’s Fintech’s are already based here in the UK…

    …the PRA and FCA are launching a scale-up unit to support innovative firms to grow in the UK, including in our world-leading payments system.

    And I will drive forward developments in blockchain technology…

    …including tokenised securities and stablecoins…

    …and an ambitious design for a new digital gilt instrument…

    …so that UK financial services can be at the forefront of digital asset innovation.

    And because I believe the UK is the best place in the world for financial services…

    …today I’ve announced the Office for Investment’s new concierge service.

    Launching by October this year, it will provide a tailored service to companies considering setting up and expanding in the UK…

    …and I am grateful to Chris Hayward from the City of London Corporation, for his work to drive this forward.

    Thank you Chris.

    Now, let me turn to the changes I am making to capital requirements…

    …to allow UK banks to do more lending and release more capital for investment into our infrastructure and into our businesses.

    First, I am supporting the Bank of England’s decision to raise the asset threshold for MREL requirements to between £25 and £40 billion.

    This will benefit the challenger banks and bring increased competition and innovation to the market…

    …and support those businesses to expand their footprint here in the UK.

    Second, I am confirming our approach to Basel 3.1…

    …implementing lower capital requirements for domestically focussed banks from January 2027…

    …while preserving flexibility on our approach for international banks to ensure the UK always remains competitive while aligning with international standards.

    Third, I have committed to meaningful reform of the UK’s ringfencing regime…

    …recognising that now is the time to go further in tackling inefficiency and boosting growth…

    …while retaining the aspects of the regime that support financial stability and protect consumer deposits.

    And fourth, following the new, growth focussed remit letter I sent in November…

    …I welcome the Financial Policy Committee’s announcement that it will review the overall level of bank capital needed for UK financial stability…

    …reporting back to me by the end of this year.

    The review will inform the work the Treasury is taking forward with the Bank…

    …to ensure the prudential framework strikes the optimal balance to deliver resilience, growth and competitiveness.

    And I welcome the recent changes the Financial Policy Committee has announced to the loan-to-income limit on mortgage lending…

    …which the PRA and FCA are implementing immediately…

    …that means tens of thousands more people could be able to get a mortgage in the next year alone…

    …with Nationwide already offering its ‘Helping Hand’ mortgage to more first time-buyers…

    …supporting alone an additional 10,000 each year.

    And my thanks to Dame Debbie Crosbie for her leadership.

    My final set of reforms are focussed on boosting savings investment.

    I recognise the potential for ISA reform to improve returns for savers…

    …and access capital for UK businesses.

    I have confirmed that Long-Term Asset Funds can be included in stocks and shares ISAs…

    …allowing long-term ISA investors to benefit from this innovative product.

    And I will continue to consider further changes to ISAs…

    …engaging widely in the coming months…

    …and recognising that despite the differing views on the right approach…

    …we are united in wanting better outcomes for both UK savers and for the UK economy.

    For too long, we have presented investment in too negative a light…

    …quick to warn people of the risks, without giving proper weight to the benefits…

    …and our tangled system of financial advice and guidance…

    …has meant people cannot get the right support to make decisions for themselves.

    That is why we are working with the FCA to introduce a brand-new type of targeted support for consumers ahead of the new financial year.

    And I also welcome the campaign to promote the benefits of retail investment which will launch next April…

    …and the action to look at our current approach to risk warnings – and that will report back in January…

    …and I’m grateful to Chris Cummings of the Investment Association for spearheading both of those initiatives.

    Thank you very much Chris.

    Today, I have placed financial services at the heart of this government’s growth mission…

    …recognising that Britain cannot succeed and meet its growth ambitions…

    …without a financial sector that is fighting fit and thriving.

    The reforms I have set out this evening are the next chapter in how I intend to support this growth…

    …and I thank Gwyneth Nurse and her brilliant team at the Treasury for all of their hard work on this package.

    I knew that Gwyneth would get the biggest clap …

    I am also pleased to have been able to work in lockstep with our regulators…

    …and I want to extend my thanks both to Nikhil Rathi and Sam Woods for their innovation and the work they have done in response to my updated remit letters last year.

    Thank you Nikhil and thank you Sam.

    We have been bold in regulating for growth in financial services…

    …and I have been clear on the benefits that that will drive…

    …with a ripple effect felt right across all sectors of our economy…

    …putting pounds in the pockets of working people.

    Getting better deals on their mortgages…

    better returns on their savings

    and more jobs paying good wages across our country

    As I look ahead…

    …it is clear that we must do more.

    In too many areas, regulation still acts as a boot on the neck of businesses…

    …choking off the enterprise and innovation that is the lifeblood of economic growth.

    Regulators in other sectors must take up the call I make this evening…

    …not to bend to the temptation of excessive caution…

    …but to boldly regulate for growth…

    …in the service of prosperity for our whole country.

    I’m really proud of how far we have come in the last year as government and as a country.

    I know that the changes that we have made will reform and transform our economy and our country.

    And I know that you will waste no time in seizing the opportunities that lie ahead:

    To build a stronger economy;

    To deliver the renewal of Britain;

    And to make working people in all parts of Britain better off.

    Thank you very much.

  • Rachel Reeves – 2025 Statement at the 2025 Spending Review

    Rachel Reeves – 2025 Statement at the 2025 Spending Review

    The statement made by Rachel Reeves, the Chancellor of the Exchequer, in the House of Commons on 11 June 2025.

    My driving purpose since I became Chancellor is to make working people in all parts of our country better off, to rebuild our schools and our hospitals, and to invest in our economy so that everyone has the opportunity to succeed after 14 years of mismanagement and decline by the party opposite, culminating in a £22 billion black hole in the public finances. That was the Conservatives’ legacy, and the first job I faced as Chancellor was to set it right. So at the Budget last October and again in the spring, I made the choices necessary to fix the foundations of our economy. We wasted no time in removing the barriers to growth: the biggest overhaul of our planning system in a generation; launching Britain’s first National Wealth Fund; and reforming our pensions system to unlock billions of pounds of investment into our economy.

    We are starting to see the results. The stability we have provided has helped support four cuts in interest rates, saving hundreds of pounds a year for families with a mortgage. Real wages have grown by more in the first 10 months of this Labour Government than in the first 10 years of the Conservative Government. And the latest figures show that we are the fastest growing economy in the G7. Countries around the world are lining up to do business with Britain again, with new trade deals with India, the United States and the European Union.

    We are renewing Britain, but I know that too many people in too many parts of our country are yet to feel it. This Government’s task, my task as Chancellor, and the purpose of this spending review is to change that—to ensure that renewal is felt in people’s everyday lives, in their jobs, and on their high streets. The priorities of this spending review are the priorities of working people: to invest in Britain’s security and Britain’s health and to grow Britain’s economy so that working people are better off.

    Today, I am allocating the envelope I set out in the spring. I am enormously grateful to my excellent team of officials at the Treasury and to my right hon. Friend the Chief Secretary to the Treasury for his tireless work throughout this process, crunching the numbers and looking at the assets and liabilities. On that note, I thank all my Cabinet colleagues for their contribution to this process—they are all assets to this Labour Government.

    In this spending review, total departmental budgets will grow by 2.3% a year in real terms. Compare that to the Conservatives’ choice of austerity. In contrast to our increase of 2.3%, they cut spending by 2.9% a year in 2010. Let us be clear: austerity was a destructive choice for both the fabric of our society and our economy, choking off investment and demand and creating a lost decade for growth, wages and living standards. That is their legacy.

    My choices are different. My choices are Labour choices—the choices in this spending review that are possible only because of my commitment to economic stability and the decisions this Government have made. The Conservatives’ fiscal rules guaranteed neither stability nor investment, and that is why I changed them. My fiscal rules are non-negotiable, and they are the foundation for stability and investment.

    My first rule is for stability: day-to-day Government spending should be paid for through tax receipts. That is the sound economic choice. It also the fair choice, because it is not right to expect our children and future generations to pay for the services we rely on today. This first rule allows me, as I set out in the Budget, to allocate £190 billion more to the day-to-day running of our public services over the course of this spending review compared with the previous Government’s plans.

    My second fiscal rule enables me to invest in Britain’s economic renewal while getting public debt on a downward path. This rule allowed me to increase public investment by more than £100 billion in the autumn and a further £13 billion in the spring. That is investment to rebuild our transport networks, our defence capability and our energy security—in short, to grow our economy.

    I have made my choices: tough decisions for stability and changing Britain’s fiscal rules for investment. Today, I am delivering that investment for the renewal of Britain. Now, it is time for the parties opposite to make their choices. The spending plans I am setting out today are possible only because of the decisions I took in the autumn to raise taxes and the changes to our fiscal rules, every one of which was opposed by the parties opposite. Today, they can make an honest choice and oppose these spending plans as they opposed every penny I raised to fund them, or they can make the same choice as Liz Truss: spend more and borrow more, with no regard for the consequences.

    In their clamour to cut taxes for the richest, the Conservatives crashed our economy, sent mortgage rates spiralling and put our pensions in peril. I will never take those risks. Yet Reform is itching to do the same thing all over again. The hon. Member for Clacton (Nigel Farage) may be playing the friend of the workers now, but some of us are old enough to remember when he described the disastrous Liz Truss Budget as “the best Conservative Budget” since the 1980s. [Interruption.] Mr Speaker, after the damage is done, he still nods along. Reform has learned nothing. His party has been in Parliament for less than a year, yet it has already racked up £80 billion of unfunded commitments. Reform is simply not serious. Every day it becomes clearer that it is Labour—and only Labour—that has a credible plan for the renewal of Britain.

    As I said in my spring statement, the world is changing before our eyes. Since the spring, the challenges that we face have become even more acute. The signs of our age of insecurity are everywhere, so we are acting on the promise in our plan for change: building renewal on the foundations of national security, border security and economic security. As the Prime Minister said earlier this month,

    “A new era in the threats that we face demands a new era for defence and security.”

    That is why we took the decision to prioritise our defence spending by reducing overseas development aid. Defence spending will now rise to 2.6% of GDP by April 2027, including the contribution of our intelligence agencies. That uplift provides funding for my right hon. Friend the Defence Secretary, with an £11 billion increase in defence spending and a £600 million uplift for our security and intelligence agencies. That investment will deliver not only security, but renewal in Aldermaston and Lincoln; in Portsmouth and Filton; on the Clyde and in Rosyth. Investment in Scotland, jobs in Scotland, and defence for the United Kingdom—opposed by the Scottish National party; delivered by this Labour Government.

    Investing in our armed forces, our military technology and our supply chains also brings huge opportunities: £4.5 billion of investment in munitions, made in factories from Glasgow to Glascoed, Stevenage to Radway Green; and over £6 billion to upgrade our nuclear submarine production, supporting thousands of jobs across Barrow, Derby and Sheffield. We will make Britain a defence industrial superpower, with the jobs, the skills and the pride that come with that.

    A more unstable world presents new challenges at our borders too. Conflict has opened the way for organised criminal gangs. The British people rightly expect us to have control of who comes into our country. The Conservatives said that they would “take back control”. Well, Mr Speaker, they lost control. With one failed policy after another, there was no control and no security. In contrast, in the Budget last year I announced £150 million to establish the new Border Security Command, and today, to support the integrity of our borders, I can announce that that funding will increase, with up to £280 million more per year by the end of the spending review period for our new Border Security Command.

    Alongside that, we are tackling the asylum backlog. The Conservative party left behind a broken system: billions of pounds of taxpayers’ money spent on housing asylum seekers in hotels, leaving people in limbo and shunting the cost of failure on to local communities. We will not let that stand. I can confirm today that, led by the work of my right hon. Friend the Home Secretary, we will be ending the costly use of hotels to house asylum seekers in this Parliament. Funding that I have provided today, including from the transformation fund, will cut the asylum backlog; allow more appeal cases to be heard; and return people who have no right to be here, saving the taxpayer £1 billion per year. That is my choice, that is Labour’s choice, that is the choice of the British people.

    If we want national security in a dangerous world, that does not stop at the strength of our armed forces or at our borders. I have long spoken about what I call “securonomics”—the basic insight that, in an age of insecurity, Government must step up to provide security for working people and resilience for our national economy. Put simply: where things are made, and who makes them, matters.

    Take energy: the Tories neglected our nuclear and renewables sectors and closed our gas storage facilities, leaving us exposed to hikes in energy prices when Russia invaded Ukraine, and it was working people who paid the price for their mistakes. Labour understands that energy security is national security. Because it is the right choice for bills, jobs and growth, this Government are investing in the biggest roll-out of nuclear power for half a century, with a £30 billion commitment to our nuclear-powered future.

    Yesterday my right hon. Friend the Energy Secretary and I announced £14 billion for Sizewell C, which will produce energy to power 6 million homes and support more than 10,000 jobs, including 1,500 apprenticeships, in order to build the nuclear workforce of tomorrow. That is not all. We are investing over £2.5 billion in a new small modular reactor programme. Our preferred partner is Rolls-Royce—a great British company based in Derby. This investment is just one step towards our ambition for a full fleet of small modular reactors, and it provides a route for private sector-led advanced modular reactor projects to be deployed across the UK.

    Alongside these actions, we are making nuclear-approved land available in Sellafield to attract private investment and create thousands more jobs. I thank my hon. Friend the Member for Whitehaven and Workington (Josh MacAlister) for his work in this area. To strengthen Britain’s position at the forefront of a global race for new nuclear technologies—a cause championed by Mayor of the East Midlands Claire Ward and my hon. Friend the Member for Bassetlaw (Jo White)—and to support pioneering work taking place in West Burton in Nottinghamshire, we are investing over £2.5 billion in our nuclear future.

    To back British industries, pioneering work in carbon capture, usage and storage will take place. Last year we announced funding for two sites, one on Merseyside and one in Teesside, where we are building the world’s first commercial-scale CCUS plant. Today I can announce support for the Acorn project in Aberdeenshire to support Scotland’s transition from oil and gas to low-carbon technology—a challenge and an opportunity well understood by the leader of Scottish Labour Anas Sarwar and my right hon. Friend the Scotland Secretary. We are also backing the Viking project in Humberside—a cause long supported by my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn).

    Because I am determined to ensure that the energy technologies of the future are built here and owned here and that jobs come to Britain, this spending review invests in the wholly publicly owned Great British Energy, headquartered in Scotland. These investments will ensure that the towns and cities that powered the last industrial revolution play their part in our next industrial revolution. Reducing our reliance on overseas oil and gas, protecting working families from price shocks, and a new generation of energy industries for a renewed Britain—that is my choice, that is Labour’s choice, that is the choice of the British people.

    Economic security relies on our ability to buy, make and sell more here in Britain. In April, this Government faced a choice: to let British Steel in Scunthorpe go under or to intervene. [Interruption.] That choice was a choice not of the metal trader but of this Labour Government. We heard representations from workers, trade unions and my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin). My right hon. Friend the Business Secretary and I were not prepared to tolerate a situation in which Britain’s steel capacity was fatally undermined. We were not prepared to see another working-class community lose the pride, prosperity and dignity that industry provides, so we did intervene to save British Steel and the jobs that come with it, and I am proud of that decision.

    The Government will invest in Scunthorpe’s long-term future and the future of steelworks across our great country. In a vote of confidence in our home-grown steel, Heathrow airport, where we are backing London by backing a third runway, has signed the UK steel charter—a multibillion-pound airport expansion backed by Labour and built with British steel.

    Building our train and tram lines, our military hardware and our new power stations will mean orders for steel made in Britain at Sheffield Forgemasters, where we are investing in nuclear-grade steel, and in Port Talbot, where the spending review confirms the £500 million grant to Tata Steel. A future for British-made steel and a proud future for Britain’s steel communities. Things built to last, built here in Britain—that is my choice, that is Labour’s choice, that is the choice of the British people.

    This Labour Government are backing British business. There will be more to come in the weeks ahead with our 10-year infrastructure strategy and our modern industrial strategy: a plan drawn up in partnership with businesses and trade unions. When I speak to businesspeople and entrepreneurs about what they need to succeed, they say that they need the chance to innovate, they need access to finance and they need a deep pool of talent. We have heard that message, and today we are taking action.

    First, on innovation, which is a great British strength. Our universities are world-leading, and we are proud of them. We want our high-tech industries in Britain to continue to lead the world in years to come in car production, in aerospace and in life sciences, so we are backing our innovators, backing our researchers and backing our entrepreneurs with research and development funding rising to a record high of £22 billion a year by the end of the spending review. Because home-grown artificial intelligence has the potential to solve diverse and daunting challenges, as well as the opportunity for good jobs and investment here in Britain, I am announcing £2 billion to back the Government’s AI action plan overseen by my right hon. Friend the Secretary of State for Science, Innovation and Technology.

    Secondly, to champion those small businesses seeking access to finance as they look to grow, I am increasing the financial firepower of the British Business Bank with a two thirds increase in its investments, increasing its overall financial capacity to £25.6 billion to help pioneering businesses to start up and scale up, backing Britain’s entrepreneurs and backing Britain’s wealth creators.

    Thirdly, as we invest, if we are to thrive in the industries of the future, we must give our young people the skills they need to contribute to our national success as scientists, engineers and designers, and as builders, welders and electricians. I know the ambition, the drive and the potential of our young people; it cannot be right that too often those ambitions and that potential are stifled. Young people who want training find courses are oversubscribed and are turned away at the door, forcing growing businesses, eager to recruit that talent, to look elsewhere—potential wasted and enterprise frustrated. So today I am providing record investment for training and upskilling with £1.2 billion a year by the end of the spending review to support over a million young people into training and apprenticeships so that their potential, their drive and their ambition is frustrated no longer.

    On the subject of skills, we should all recognise the Leader of the Opposition’s own commitment to lifelong learning. At the weekend, she promised to learn and “get better” on the job. I am sure that Opposition Members will be supporting her in that endeavour. Good luck with that.

    As we build a strong, secure and resilient economy, working people must feel the benefits. That starts with the security of a proper home. Our planning reforms have opened up the opportunity to build. Now, we must act to make the most of those opportunities, and a plan to match the scale of the housing crisis must include social housing, which has been neglected for too many decades, but not by this Labour Government. So, led by my right hon. Friend the Deputy Prime Minister, we are taking action. I am proud to announce the biggest cash injection into social and affordable housing in 50 years with a new affordable homes programme in which I am investing £39 billion over the next decade—direct Government funding that will support house building, especially for social rent. I am pleased to report that towns and cities including Blackpool, Preston, Sheffield and Swindon already have plans to bring forward bids to build those homes in their communities.

    I have gone further. Last autumn, I enabled greater use of financial transactions to support investments in our infrastructure alongside strict guardrails that ensure that money is spent wisely through our public financial institutions. So, in line with that commitment, I am providing an additional £10 billion for financial investments, including to be delivered through Homes England, to crowd in private investment and unlock hundreds of thousands more homes. Homes built by a Labour Government; homes built for working people.

    But it is no good investing in new skills, new jobs and new homes if they are not properly connected. That is why last week, with the support of my right hon. Friend the Transport Secretary, I announced £15 billion of investment to connect our cities and our towns—the biggest ever investment of its kind—with investments in buses in Rochdale, train stations in Merseyside and Middlesbrough, mass transit in West Yorkshire and metro extensions in Birmingham, Tyne and Wear and Stockport. Alongside that, we are backing Doncaster airport.

    Today, I am announcing a four-year settlement for Transport for London to provide certainty and stability for our largest local transport network to plan for the future. For other regions in the UK, I am today providing for a fourfold increase in local transport grants by the end of this Parliament to make the improvements put off for far too long, to improve the journeys that people make every day.

    To unlock the potential of all parts of Britain, we are going further by investing in major rail projects to connect our towns and cities. In October, I announced funding for the trans-Pennine route upgrade—the backbone of rail travel in the north, linking York, Leeds and Manchester—with a quarter of that route expected to be electrified by this summer. I know the commitment of my hon. Friends the Members for Huddersfield (Harpreet Uppal), for York Outer (Mr Charters) and for Colne Valley (Paul Davies) to this issue, and today I can announce a further £3.5 billion of investment for that route. But my ambition, and the ambition of people across the north, is greater still, so in the coming weeks I will set out the Government’s plan to take forward our ambitions for Northern Powerhouse Rail.

    I have also heard the representations of my hon. Friends the Members for Milton Keynes North (Chris Curtis), for Milton Keynes Central (Emily Darlington), and for Buckingham and Bletchley (Callum Anderson), and I can tell the House today that to connect Oxford and Cambridge and to back Milton Keynes’s leading tech sector I am providing a further £2.5 billion for the continued delivery of East West Rail. On a matter that I know is of great importance to my hon. Friends the Members for Lichfield (Dave Robertson), for Birmingham Northfield (Laurence Turner) and for Birmingham Erdington (Paulette Hamilton), I can announce today that I am providing funding for the midlands rail hub: the region’s biggest and most ambitious rail improvement scheme for generations, strengthening connections from Birmingham across the west midlands and into Wales, too.

    For 14 years, the Conservatives failed the people of Wales. Those days are over. Following representations from my right hon. Friend the Secretary of State for Wales, the First Minister of Wales, and Welsh Labour MPs, today I am pleased to announce £445 million for railways in Wales over 10 years, including new funding for Padeswood sidings and Cardiff West junction. That is the difference made by two Labour Governments, working together to undo a generation of underfunding and neglect.

    This Government take seriously their commitment to investment, jobs and growth in every part of the UK. I have heard the concerns of my hon. Friends the Members for Mid Cheshire (Andrew Cooper), and for Rossendale and Darwen (Andy MacNae), and the Mayor of the Liverpool City Region, Steve Rotheram, that past Governments have under-invested in towns and cities outside London and the south-east. They are right, so today I am publishing the conclusion of the review of the Treasury Green Book, which is the Government’s manual for assessing value for money. Our new Green Book will support place-based business cases, and make sure that no region has Treasury guidance wielded against it. I said that we would do things differently, and that we wanted growth in all parts of Britain, and I meant it.

    Backing our nations and regions means backing our devolved Governments, and this spending review provides the largest settlement in real terms since devolution was introduced, with £52 billion for Scotland, £20 billion for Northern Ireland by the end of the spending review period, and £23 billion for Wales. Having heard representations from many Welsh Labour colleagues, and because I know the obligation that we owe to our industrial communities, I am providing a multi-year settlement of £118 million to keep coal tips safe in Wales.

    I know what pride people feel in their communities—I see it everywhere I go—but I also know that, for too many people, there is a sense that something has been lost as high streets have declined, community spaces have closed, and jobs and opportunity have gone elsewhere. The renewal of Britain must be felt everywhere. Today I am pleased to announce additional funding to support up to 350 communities, especially those in the most deprived areas—funding to improve parks, youth facilities, swimming pools and libraries, and to support councils in fighting back against graffiti and fly-tipping, including in Blackpool South, Stockport, Stoke-on-Trent Central, Swindon North, and Newcastle upon Tyne East and Wallsend.

    And there is more. Job creation and community assets are vital to our growth mission, but too often, regeneration projects are held back, gathering dust in bureaucratic limbo. We are changing that. We will establish a growth mission fund to expedite local projects that are important for growth—projects such as Southport pier, an iconic symbol of coastal heritage that has stood empty since 2022; Kirkcaldy’s seafront and high street, where investment would create jobs and new business opportunities; and plans for Peterborough’s new sports quarter, to drive activity and community cohesion. People deserve a Government who share their ambition for their communities, and who deliver renewal, growth, and opportunity, and that is what you get with a Labour Government.

    If people are to feel pride in their community, enjoy their public spaces, and spend time on their high streets, they must feel safe when they do so—safe in the knowledge that when people break the law, they feel the full force of the law. The Conservative party left our prisons overflowing and on the brink of collapse, and left it to us to deal with the consequences. We are taking the necessary action, so my right hon. Friend the Justice Secretary and I have announced that we are investing £7 billion to fund 14,000 new prison places, and putting up to £700 million per year into reform of the probation system. Today, I will do more. I am increasing police spending power by an average 2.3% per year in real terms over the spending review period, to protect our people, our homes and our streets. That is more than £2 billion, supporting us to meet our plan for change commitment of putting 13,000 additional police officers, police community support officers and special constables into neighbourhood policing roles across England and Wales.

    I am determined that every family, as well as every place, should feel the benefits of Britain’s renewal. Falling interest rates, supported by our commitment to economic stability, are already saving many families hundreds of pounds a month on their mortgage. I have accepted pay review body recommendations for our armed forces, nurses, teachers and prison officers, giving public sector workers the fair pay rises that they deserve. In autumn, I increased the national living wage—a pay rise for around 3 million hard-working people. This Government are doing more: we are banning exploitative zero-hours contracts, strengthening statutory sick pay, and ending the use of unscrupulous fire-and-rehire practices. Those are my choices; those are Labour choices.

    I know that for many people the cost of living remains a constant challenge. That is why we are capping the cost of school uniforms. I can tell the House today that I am extending the £3 bus fare cap until at least March 2027. Earlier this week, we announced that over three quarters of pensioners will receive the winter fuel payment this year. And there is more: to get bills down, not just this winter but in winters to come, we have expanded the warm homes plan to support thousands more of the UK’s poorest households. That includes providing £7 million to homes in Bradford, £11 million to homes in Rugby, and £30 million to homes in Blackpool. Today I can announce that I will deliver in full our manifesto commitment to upgrading millions of homes, saving families and pensioners across the country up to £600 off their bills, each and every year. I am determined to do everything in my power to put more money in people’s pockets, to give people security and control in their lives, to make working people better off, and to show them that this Labour Government are on their side.

    Taxpayers work hard for their money, and they expect their Government to spend their money with care. For the first time in 18 years, this Government have run a zero-based review, and made a line-by-line assessment of what the Government spend—something that the Tories did not bother to do in 14 years. As a result of that work, and our wider drive for efficiencies, led by my right hon. Friend the Chancellor of the Duchy of Lancaster, in this spending review I have found savings from the closure and sale of Government buildings and land, from cutting back office costs, and from reducing consultancy spend—all of which the previous Government failed to do. Those reforms will make public services more efficient, more productive, and more focused on the user. I have been relentless in driving out inefficiencies, and I will be relentless in cutting out waste, with every single penny reinvested in our public services.

    I joined the Labour party almost 30 years ago because I knew, growing up, that the Conservative party did not care much about schools like mine, or the kids I grew up with. I joined because I believed that every young person should have an equal chance to succeed, no matter where they come from or what their parents do. I believe that just as strongly today as I did then. That is why, at the Budget last autumn, I ended the tax loophole that exempted private schools from VAT and business rates. I put that money where it belongs: into helping the 93% of children in our state schools. The Conservatives opposed money for their local state schools, but I will always prioritise those schools. That was my choice; that is the Labour choice.

    Because of decisions that we made in this spending review, last week, this Government, working with my right hon. Friend the Education Secretary, announced that free school meals will be extended to over half a million more children. That policy alone will lift 100,000 children out of poverty—children in schools from Tower Hamlets to Sunderland, and from Swansea to Bridgend.

    Last year, at the Labour party conference, I was proud to announce the first steps in our plan to deliver breakfast clubs for every child, with an initial roll-out to the first 750 schools. We will continue with that national roll-out as part of our manifesto commitment, so that no child goes hungry, and every child can have the best chance of thriving and succeeding. I know that a good start in life does not start at school, so I can also announce £370 million for school-based nurseries, to put us firmly on track to meet our plan for change commitment to a record number of children being school-ready. On children’s social care, to break the dangerous cycle of late intervention and low-quality care, I am providing £555 million of transformation funding over the spending review period, so that children do not needlessly go into care when they could stay at home, and so that, where state intervention is necessary, there is better care, and there are better outcomes.

    Last week, I was pleased to announce, with my right hon. Friend the Secretary of State for Culture, Media and Sport, that more than £130 million from the dormant assets scheme, run with the financial services sector, will be allocated to funding facilities for our young people, to give every child the chance to take part in music, sport and drama, and to fund libraries in our schools, so that the confidence and opportunities that those resources open up are no longer the preserve of the privileged few. Those are my choices, those are Labour choices, and those are the choices of the British people.

    Overall, I am providing a cash uplift of over £4.5 billion a year in additional funding for the core schools budget by the end of the spending review, backing our teachers and our kids. People who went to ordinary comprehensives in the ’80s and ’90s are all too familiar with the experience of being taught in temporary classrooms. The previous Conservative Government oversaw another generation of kids being herded into cold and damp buildings as school roofs literally crumbled. It was not acceptable when I was at school, and it is not acceptable now. I am therefore providing investment, rising to nearly £2.3 billion per year, to fix our crumbling classrooms, in addition to £2.4 billion per year to continue our programme to rebuild 500 schools, including Chace community school in Enfield, Woodkirk academy in Leeds and Budmouth academy in Weymouth. Investing in our young people, investing in Britain’s future and investing in opportunity for all: that is Labour’s choice.

    Finally, let me turn—[Hon. Members: “More!”] I knew they would cheer. Let me turn to our national health service. It is our most treasured public service, and people rightly expect an NHS that is there when they need it; that an ambulance will come when they call one; that a GP appointment will be available when they need one; and that a scan will be performed when they are referred for one. I am hugely grateful to our nurses, our doctors, our paramedics and other healthcare professionals for everything that they do.

    If we want a strong economy where working people can fulfil their potential, we must have a strong NHS—not, as the Reform party have called for, an insurance-based system. We believe in a publicly funded national health service, free at the point of use. Perhaps the hon. Member for Clacton should spend more time focusing on the priorities of the British people, and less time in the Westminster Arms—although, after this week, perhaps the Two Chairmen pub might be a better fit.

    At the Budget, I took the decisions necessary to provide an immediate injection of funding to get the NHS back on its feet. I commend my right hon. Friend the Health Secretary for all the progress that he has already made. In less than a year, this Government have recruited 1,700 new GPs, delivered 3.5 million extra appointments and cut waiting lists by more than 200,000. Fixing our NHS also means delivering fundamental reform across social care, so we are backing the first ever fair pay agreement for that sector. I am also increasing the NHS technology budget by almost 50%, and we are investing £10 billion to bring our analogue health system into the digital age, including through the NHS app, so patients can manage their prescriptions, get their test results and book appointments all in one place.

    We are shifting care back to the community and providing more funding to support the training of thousands more GPs to deliver millions more appointments. We are investing more in prevention, to meet our manifesto commitment of providing mental health support teams in all schools in England by the end of this Parliament. Those investments will enable the delivery of our upcoming 10-year plan for health and will put the NHS firmly back on the path to renewal.

    To support that plan, to back the doctors and nurses we rely on, and to make sure that the NHS is there whenever we need it, I am proud to announce today that this Labour Government are making a record cash investment in our national health service, increasing real-terms, day-to-day spending by 3% per year for every single year of this spending review—an extra £29 billion per year for the day-to-day running of our health service. That is what the British people voted for and that is what we will deliver: more appointments, more doctors and more scanners. The national health service: created by a Labour Government, protected by a Labour Government and renewed by this Labour Government.

    This is a spending review to deliver the priorities of the British people: security, with a strong Britain in a changing world; economic growth, powered by investment and opportunity in every part of Britain; and our nation’s health, with an NHS fit for the future. I have made my choices. In place of chaos, I choose stability; in place of decline, I choose investment; and in place of pessimism, division and defeatism, I choose national renewal. These are my choices, these are Labour choices, and these are the choices of the British people. I commend this statement to the House.

  • Keir Starmer – 2025 Comments Following UK’s Economic Trade Deal with the US

    Keir Starmer – 2025 Comments Following UK’s Economic Trade Deal with the US

    The comments made by Keir Starmer, the Prime Minister, on 8 May 2025.

    Just a few moments ago, I spoke to President Trump, the President of the United States.

    And I am really pleased to announce to you, and I wanted to come to you to announce it, that we have agreed the basis of an historic Economic Prosperity Deal.

    That is a deal will protect British businesses and save thousands of jobs in Britain, really important, skilled, well-paid jobs.

    It will remove tariffs on British steel and aluminium, reducing them to zero.

    It will provide vital assurances for our life sciences sector, so important to our economy and grant unprecedented market access for British farmers without compromising our high standards.

    And for the great British cars that you make here, that we see all around us, this deal means that US tariffs will now be cut from 27.5% to 10% for 100,000 vehicles every year, that’s a huge and important reduction.

    And I know from when I was last here, how much that will have been weighing on your minds when you knew the size of the tariffs that would otherwise be in place.

    To get that decrease was hugely important to me and I can tell you my teams were working really hard on this deal night and day for weeks. I was working with them.

    And in politics what matters sometimes is who you have in your mind’s eye when you are making these deals, who do you have in your mind’s eye when you are taking decisions.

    What I took away from here last time was you and the brilliant work that you do and had you in my mind’s eye as we did that.

    We have scope to increase that quota as we go forward, this is not fixed, this is where we have got to.

    And all of these tariff cuts will come into place as soon as possible and that’s really important in relation as well to the work that you are doing, and the brilliant cars that you make.

    And as Adrian has said I was here with you just a few weeks ago and I promised you that I would deliver in the national interest.

    And today I am really pleased to come back here, to be able to look you in the eye and say I have delivered on the promise I made to you.

    And that’s why as soon as I knew this deal was coming in today, I said I want to come back to JLR to talk to the workforce there, for whom this means so such.

    Now of course we are the first country to secure such a deal with the United States.

    In an era of global instability that is so important. The great challenge of our age is to secure and renew Britain.

    And that is what we are going to do.

    Acting in the national interest.

    Shaping this new era – not being shaped by it.

    If it’s not good for Britain, we won’t do it.

    If it doesn’t mean more money in people’s pockets, we won’t do it.

    If it doesn’t mean security and renewal in every part of the country – we won’t do it.

    But that doesn’t mean we’re turning inward.

    Instead, we are sending a message to the world that Britain is open for business – seeking trade agreements with India on Tuesday, with the US today, and working to boost trade with other partners too – including of course the EU with who we have an important meeting just a week on Monday.

    Making deals that will benefit working people.

    You know – in recent years an idea has taken hold that you show strength by rejecting your allies.

    That you shut the door, put the phone down, storm off. I’ve had plenty of people urging me to do that rather than stay in the room and fight for the interests of our country.

    I want to be absolutely crystal clear – that is not how this Government operates. It is never how this Government operates. We don’t storm off, we stay in the room, and we negotiate, and we work for our country with the national interest at the foremost of our mind.

    Because the other way of working doesn’t deliver the benefits that working people need.

    And so I also want to be clear – this is just the start.

    With the deal we have done today we can say: jobs saved. Jobs won. But not job done.

    Because we are more ambitious for what the UK and US can do together.

    So we are hammering out further details to reduce barriers to trade with the United States across the board.

    We have £1.5 trillion invested in each other’s economies, creating 2.5 million jobs across both countries.

    There are so many areas where I think we can even more than that and put more pounds in the pockets of working people across the United Kingdom.

    As the two biggest services exporters in the world, we will work to bring down barriers, creating jobs in our thriving services sectors – in Leeds, in Manchester, London and Birmingham.

    As the only two western nations with trillion-dollar tech sectors we will go further to deepen our partnership in new technologies to shape the innovations of this century together and create the jobs of the future.

    Because, look – our history shows what we can achieve when we work together.

    And what timing for this deal, that we have agreed this deal on VE Day.

    80 years ago, today Churchill was addressing the nation at the end of the Second World War. Victory in Europe.

    And we were standing the United Kingdom with the United States on defence and security. For 80 years we have been the closest of partners, and today we have added to that trade and the economy in the special relationship between us.

    Defined by peace and economic prosperity.

    So, it is fitting today that we renew the bond on the 80th anniversary of VE Day.

  • Rachel Reeves – 2025 Speech at the Innovate Finance Global Summit

    Rachel Reeves – 2025 Speech at the Innovate Finance Global Summit

    The speech made by Rachel Reeves, the Chancellor of the Exchequer, at the Innovate Finance Global Summit held on 29 April 2025.

    Thank you Janine, and good afternoon everyone.

    It’s a pleasure to be here today to mark the 11th year of UK FinTech Week …

    … brought together once again by Innovate Finance…

    …who continue to champion tirelessly our FinTech sector.

    As Chancellor, I’ve always said it’s my job to back the builders…

    … back the wealth creators…

    …and the job creators.

    So my job is to back all of you in this room.

    After all, it’s thanks to your work that the UK is a world leader in FinTech.

    When I was working at the Bank of England 20 years ago…

    …FinTech was in its infancy…

    …an offshoot of financial services…

    …and there was certainly no such thing as FinTech week.

    But times have changed, the industry has changed.

    Last year, the UK’s FinTech sector attracted $3.6 billion of investment – more than any other country bar the US.

    Almost half of Europe’s FinTech unicorns are based here in Britain…

    …and roughly a third of all UK unicorns are FinTechs – a higher share than anywhere else.

    Companies like Allica Bank and Zilch, who were both recently named among the fastest growing companies in Europe by the Financial Times …

    …Or Zopa, for whom 2024 marked another year of extraordinary economic growth.

    Last week when I was in Washington for the IMF Spring Meetings…

    … I spoke to industry, legislators, and policymakers…

    …as well as US firms already operating here in the UK.

    I set out our strengths as an open trading nation with trade links around the world…

    …and as a nation that can provide political and financial stability and certainty to businesses…

    …in an uncertain world.

    The UK has a long history of breaking new ground in Financial Services.

    We were the first country to develop uniform Open Banking standards…

    …and we were one of the first countries to establish a system for near-instant digital payments with the Faster payments system in 2008.

    In my Mansion House speech last year, I published the National Payments Vision…

    … setting out the government’s ambition for seamless account-to-account payments…

    …and demonstrating our commitment to a regulatory environment that cares about managing the burden we put on businesses.

    Something that we will build in with the consolidation of the Payment Systems Regulator into the FCA.

    The UK is Europe’s leading hub for investment…

    …raising more equity capital than the next three European exchanges combined last year.

    I am committed to building on these strong foundations…

    …with an ambitious programme of reforms.

    Last September I chose to extend the UK’s generous venture capital schemes…

    … the Enterprise Investment Scheme and the Venture Capital Trust scheme…

    …which – alongside the Seed Enterprise Investment Scheme – offer generous tax reliefs…

    …in return for investing in British business.

    And we will soon publish the final Pension Investment Review, ahead of the introduction of the Pension Schemes Bill…

    …where we will legislate to unlock up to £80 billion of investment into companies like yours…

    start-up, scale-up, and fast growing businesses.

    …delivering a major consolidation of the Defined Contribution market and the Local Government Pension Scheme…

    …so that pension funds have sufficient scale to invest in growing industries like FinTech.

    I am determined to make sure that the UK remains one of the best places in the world for FinTechs to start-up, scale-up and to list…

    …benefitting from our stable and liquid markets.

    Last July, the FCA implemented a fundamental rewrite of the UK’s Listing Rules, the biggest reforms in a generation.

    These new rules now put the UK in line – or in many cases ahead – of other global markets in giving companies the flexibility to pursue their growth ambitions…

    …backing their aspiration…

    …and allowing them to raise large amounts of capital more easily.

    And for those companies who want to remain private for longer, we are developing the new Private Intermittent Securities and Capital Exchange System – or PISCES…

    …which we will legislate for next month.

    This is a brand new type of stock exchange for trading private company shares…

    …supporting private companies to scale and grow…

    …and providing a steppingstone to IPO.

    Finally, we’ve reformed the rules to allow greater investment research to be produced on UK listed companies…

    …and reducing the burdens imposed on public companies through the UK’s Corporate Governance Code.

    I want the UK to be a place where you can take risks…

    …innovate and experiment…

    …and find new ways to deliver for your customers.

    When I met with senior leaders from across the FinTech sector last month…

    …you told me about the importance of getting the balance of regulation right…

    …especially on digital assets.

    I agree.

    While the UK will always be committed to high international standards…

    …I am determined that our regulatory framework supports economic growth.

    That’s why I’m delighted that we are today publishing draft legislation for the UK’s comprehensive regulatory regime for cryptoassets…

    …engaging with all of you to ensure that the final legislation – planned for later this year – delivers for government and most importantly for the industry…

    …and makes the UK a great place for digital asset companies to invest and innovate.

    For the UK to be a world-leader in digital assets…

    …international cooperation is vital.

    Which is why I discussed continued U.S. and UK engagement with Secretary Bessent last week…

    …including further dialogue at the upcoming UK-U.S. Financial Regulatory Working Group in June…

    …to support the use and responsible growth of digital assets…

    …maintaining the deep historic relationship between the world’s two largest financial centres through this period of significant technological change.

    Regulation must support business, not hold it back.

    Our regulators were among the first to embrace and develop sandboxes…

    …including the Digital Securities Sandbox, where I’m delighted that we already have a broad range of firms all looking at different proposals for tokenising our financial markets.

    Last November, I announced that this government will issue a Digital Gilt Instrument…

    …an entirely new debt instrument…

    …using distributed ledger technology…

    this will enable us to experience first-hand the benefits of digital technologies in debt issuance.

    And I know that there is appetite to go further.

    Last week, Secretary Bessent and I also discussed how our officials could explore opportunities to support industry to innovate cross-border…

    …in line with proposals put forward by US Securities and Exchange Commissioner Hester Peirce about a transatlantic sandbox for digital securities…

    …potentially allowing greater digital collaboration between capital markets in New York and London.

    I’ve talked about what we’ve already done, and some ideas for the future.

    Financial services is one of the key growth-driving sectors in the UK’s modern industrial strategy…

    ….with FinTech as a priority growth opportunity…

    …and I look forward to publishing the Financial Services Growth and Competitiveness Strategy at my upcoming Mansion House address…

    …which I can today confirm will take place on the 15th July.

    At Mansion House last year I set out my vision on economic growth…

    …and the new approach required to build sustainable growth…

    …on a platform of stability.

    At Mansion House this year I’ll talk about how we can go further and faster in realising that growth.

    By publishing the Financial Services Growth and Competitiveness Strategy…

    …I will set out our strategy for the rest of this parliament and beyond…

    …building on our strengths in areas including capital markets, insurance and asset management…

    … supporting firms to innovate by ensuring they can access and develop the talent they need…

    …and promoting the UK as a great place to do business globally.

    Backing the builders in FinTech means improving outcomes for businesses and consumers…

    …revolutionising how we invest and trade…

    And driving growth and prosperity, here in the UK.

    It’s incredible how far Fintech has come in the past decade…

    And I’m enormously optimistic about the future.

    From the huge growth of the sector that has already taken place…

    …to the passion, drive and commitment I see from all of you to make FinTech a huge UK success story…

    …it is clear that our job in government is to back you, back the builders, back the change makers all the way.

    And I am ready to do just that.

    Thank you very much.

  • Keir Starmer – 2025 Remarks to UK Business Leaders in Downing Street

    Keir Starmer – 2025 Remarks to UK Business Leaders in Downing Street

    The remarks made by Keir Starmer, the Prime Minister, on 3 April 2025.

    Thank you for joining me in Downing Street today.

    Last night, the President of the United States, acted for his country. That is his mandate.

    Today, I will act in Britain’s interests, with mine.

    I understand how important this is for your business as it is for the British people.

    So, we move now to the next phase of our plan.

    Decisions we take in the coming days and weeks, will be guided only by our national interest. In the interest of our economy. In the interests of the businesses around this table.

    In the interests of putting money in the pockets of working people. Nothing else will guide me. That is my focus.

    Clearly, there will be an economic impact from the decisions the US has taken both here and globally.

    But I want to be crystal clear – we are prepared.

    Indeed, one of the great strengths of this nation is our ability to keep a cool head.

    I said that in my first speech as Prime Minister and that is how I govern.

    That is how we have planned and that is exactly what is required today.

    Nobody wins in a trade war. That is not in our national interest.

    And we have a fair and balanced trade relationship with the US.

    Negotiations on an economic prosperity deal, one that strengthens our existing trading relationship – they continue, and we will fight for the best deal for Britain.

    Nonetheless, I do want to be clear I will only strike a deal if it is in the national interest and if it is the right thing to do for the security of working people.

    Protects the pound in their pocket, that they work so hard to earn for their family.

    That is my priority. That is always my priority.

    So – today marks a new stage in our preparations.

    We have a range of levers at our disposal, and we will continue our work with businesses across the country to understand their assessment of these options.

    As I say – our intention remains to secure a deal.

    But nothing is off the table.

    We have to understand that just as with defence and security, so too for the economy and trade we are living in a changing world.

    Entering a new era. We must rise to this challenge.

    That is why I have instructed my team to move further and faster on the changes I believe will make our economy stronger and more resilient.

    Because this government will do everything necessary to defend the UK’s national interest.

    Everything necessary to provide the foundation of security that working people need to get on with their lives.

    That is how we have acted – and how we will continue to act.

    With pragmatism. Cool and calm heads.

    Focused – on the national interest.

  • Daisy Cooper – 2025 Response to the Spring Statement

    Daisy Cooper – 2025 Response to the Spring Statement

    The speech made by Daisy Cooper, the Liberal Democrat Spokesperson on the Economy, in the House of Commons on 26 March 2025.

    The people of this country are crying out for change, but they feel they are just getting more of the same. Of course, it was the Conservative party that wrecked the public finances, but we are eight months into the new Government and people are left wondering, “Where is the change that was promised?” The Chancellor says that the world is changing, so why will she not change course with it? The Chancellor said she wanted a dash for growth, but with her national insurance jobs tax she shot herself in the foot before she even crossed the start line.

    After the Government’s disastrous Budget, the Government had the chance today to change direction, fix our finances, kick-start growth and deliver a small business Budget. The Government could have scrapped the jobs tax, which will hammer our high streets, and instead ask the big banks, social media giants and online gambling companies to pay their fair share instead. The Government could have changed their approach to trade, launching talks to boost growth through a new trading deal with our European neighbours. Instead, the Government have made the wrong decisions to cut public services, hit disabled people and inflict more pain on our small businesses and high streets. In doing so, they have delivered no change and almost no growth at all.

    After years of Conservative mismanagement, people can see just how broken our public services are. They cannot see a GP, they cannot see a dentist, they are fighting for an education plan and, they are picking up the pieces of a broken social care system. Everything is broken. Nothing works. That is why people are impatient for the change they were promised.

    We have to bring the welfare bill down and support more people into work. That is right for people and our economy, but cutting support for someone who needs help getting dressed and washed in the morning is not just wrong; it does absolutely nothing to support that person into work. If anything, it does the exact opposite. It will also have knock-on impacts for the entitlements of their family carers, too. Will the Chancellor come clean about this? If the Government are serious about cutting welfare spending, they must get serious about fixing health and social care. Will the Chancellor speed up the social care review and ensure that it concludes no later than the end of this year?

    In the Chancellor’s quest to slim down the civil service, I wonder why she has not looked at the mountain of red tape created by the previous Government’s terrible trade deal with Europe. A whopping 2 billion extra pieces of paper have had to be completed by businesses since Brexit, enough to wrap around the world 15 times. If we manage to cut the red tape, we can give British businesses a tailwind, deliver far more growth than is currently predicted, increase the fiscal headroom to deal with global headwinds, and free up precious time and money in our civil service. That would be real change.

    Business was promised change too. Today’s statement should have been a small business Budget. We Liberal Democrats have repeatedly raised the alarm about the impending damage of the national insurance jobs tax, bigger business rates bills and changes to reliefs for family farms and family businesses. Those changes will be a hammer blow to small and family businesses, leaving communities facing the prospect of an epidemic of boarded-up shopfronts. They will be a hammer blow to community health and care providers who stop our NHS from falling over. This is not the change that was promised. Instead, I say again that the Chancellor should look again at much fairer ways to raise the tax revenue our public services desperately need by reforming capital gains tax more fairly and asking the big banks, the social media giants and the online gambling companies to pay their fair share.

    I know the Chancellor must contend with President Trump’s trade war, which is causing global economic turmoil, but our response to Trump’s bullying cannot be to cower in the corner and just hope that he is nice to us. We cannot sit on our hands while British steel is hit with Trump’s tariffs. We Liberal Democrats warmly welcome the Chancellor’s move to raise defence spending to 2.5% of GDP, but instead of cutting the aid budget, which abandons the world’s poor and damages our soft power, she should be covering the cost by raising the digital services tax, handing the tab to Elon Musk and Trump’s other billionaire backers. At the very least, can the Chancellor categorically rule out any reduction in the tech tax in an attempt to appease the White House, especially when disabled people in Britain face eye-watering cuts?

    To conclude, I have a series of questions. Will the Chancellor recognise that cutting public services that are already stretched is a false economy? Will she accept that trying to bring down the welfare bill without fixing health and social care is a road to nowhere? Will she listen to the warnings of small and family businesses that her jobs tax will do more harm than good? Will she look at the fairer ways of raising revenue that we Liberal Democrats have put forward? And will she take the bold action we need to grow our economy by rebuilding our broken trading relationship with Europe? The public were promised change. Where on earth is it?

    Rachel Reeves

    The hon. Lady says, “Where is the change?” Let me tell her: more money into our NHS, with 2 million additional appointments and waiting lists falling five months in a row; rolling out breakfast clubs in primary schools from April this year; increasing defence spending to protect us in a more uncertain world; additional support for carers, the living wage up, the Employment Rights Bill and so much more. That is the difference we have made in nine months, and we have only just got started.

    The hon. Lady talks about trade. We believe in free trade. We are an open trading economy and we benefit from trade links around the world, including with our single biggest trading partner, the United States of America. It is right that we work with our allies in the United States to ensure that that free and open trade continues. That is in our national interest and this Government will always act in our national interest. At the same time, there will, as the hon. Lady knows, be a summit between the UK and the EU in May, where we will look to re-set our relationship, so we can see more free trade and the better flow of trade, especially for our smaller businesses to be able to export around Europe.

    The hon. Lady talks about welfare. She has not admitted that there is a single problem in the welfare system as it exists today. I am not willing, and this party is not willing, to write off one in eight young people who are not in education, employment or training. It is why, for example, we announced this week, with my right hon. Friend the Secretary of State for Education, an additional 60,000 training places to train people up in the construction industries of the future, and a £1 billion package of personalised targeted support because there are many disabled people—the hon. Lady knows this—who are desperate to work but are not getting the support and were denied support by the previous Government. That is why we have said there will be additional support for the most sick and disabled, and that personal support for getting people back into work. That is the right approach, so that we have protections for those who need it, work for those who can, and a sustainable system that is here for generations into the future.

    I want to take on the hon. Lady’s main point. She wants all the money for public services, but she does not want to raise the taxes to pay for them. At the moment, we spend £105 billion a year in interest on Government debt. It seems that she would just like more of that debt. She says that people cannot see a GP or a dentist. How does she and the Opposition parties think that we pay for those things? They cannot object to the tax increases and support the money we have invested in our public services. To say otherwise, I am afraid, is fairytales and the magic money tree—it just does not add up. The difference on the Labour Benches is that we will put money into our public services, explain where it comes from, and ensure that the public finances are on a firm footing. That is the difference between our party and the Opposition parties.

  • Meg Hillier – 2025 Response to the Spring Statement

    Meg Hillier – 2025 Response to the Spring Statement

    The response made by Meg Hillier, the Chair of the Treasury Select Committee, in the House of Commons on 26 March 2025.

    My right hon. Friend inherited a very difficult challenge when she became Chancellor of the Exchequer last July, and she is absolutely right that the books need to balance. This is not other people’s money we are spending, but taxpayers’ money—our constituents’ hard-earned money—and she is right to be tough as Chancellor. We look forward to quizzing her at the Treasury Committee next week, and I am sure she is looking forward to it just as much.

    The Chancellor announced an extra £2 billion a year in capital spending, and she talked about extra defence spending. Could she give some more detail about where she hopes that extra £2 billion a year will go?

    Rachel Reeves

    I thank my hon. Friend for that question, and I do indeed look forward to attending the Treasury Committee next week. I was pleased to serve on the Treasury Committee in the past, and it is a pleasure to give evidence to it.

    We will set out in the spending review—my right hon. Friend the Chief Secretary will set out in the spending review—the allocation of the additional capital money. However, I was able to announce today the £2.2 billion for defence from next year, as well as the £2 billion as a downpayment to build the affordable and social housing that we need. Those are two examples of the priorities of this Government to get Britain building and to secure our national security.