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Category: Economy

  • Mel Stride – 2025 Response to the Spring Statement

    Mel Stride – 2025 Response to the Spring Statement

    The statement made by Mel Stride, the Shadow Chancellor of the Exchequer, on 26 March 2025.

    At the last Budget, the right hon. Lady said that she would bring stability to the public finances, but this statement, more appropriately referred to as an emergency Budget, has brought her to a cold—[Interruption.]

    Mr Speaker

    Order. Rightly, I wanted to hear the Chancellor, and I now want to hear the shadow Chancellor. [Interruption.] I do not need any help.

    Mel Stride

    This emergency Budget has brought the right hon. Lady to a cold hard reckoning. She has become fond recently of talking about the world having changed, and indeed it has. This country was growing at the fastest rate in the G7 only about a year ago. Just as the OECD, the Bank of England and other forecasters—including, we learn today, the OBR—have stated, growth has been halved for this year. It has been cut in two as a consequence of the decisions and the choices that the right hon. Lady has made on her watch. Inflation was down to 2%—bang on target—under a Conservative Government on the very day of the last general election. We are now told that this year we will be running at twice the level as was forecast under us in 2024. That will mean prices bearing down on households and on businesses right across the country, because of her choices.

    The OBR also says that unemployment will be rising this year, next year and the year after. In fact, across the forecast period it will not decline at all. So much for the right hon. Lady’s back to work plans. We have already seen what it means when it comes to controlling borrowing under this Chancellor. She has come forward now with a plan to squeeze spending later on in the forecast period, and she has of course told the OBR that these are the elements of spending restraint to which she will stick, but what do the markets think? Given her track record, and the fact that she has failed to control spending and borrowing to date, what does the right hon. Lady think the markets will make of her latest promises?

    Of course, the right hon. Lady says that none of this is her fault. It is the war in Ukraine, it is President Trump; it is tariffs; it is President Putin; it is the Conservatives; it is her legacy; it is anyone but her. What the British people know, however, is that this is a consequence of her choices. She is the architect of her own misfortune. It was the right hon. Lady who talked down the economy so that business surveys and confidence crashed through the floor. It was the right hon. Lady who confected the £22 billion black hole, a smokescreen that was only ever there to cover up for the fact that she and the Prime Minister reneged on their promises to the British people during the last general election, and a black hole that the Office for Budget Responsibility itself—ironically, at the Government’s behest—has said it will not legitimise. She chose to be reckless with a sliver of headroom against her fiddled targets. She borrowed and spent and taxed as if it were the 1970s. Little wonder that the Chancellor has tanked the economy, little wonder that we have an emergency Budget, all because of her choices.

    The Chancellor likes to tour the television studios and tell everyone that they should be thankful that she will not be ramping up taxes in this emergency Budget as she did before, but that will be cold comfort to the millions up and down the country who are waiting in fear and trepidation for the start of the new tax year, buckling under the burden of tax that will rise to the highest tax burden—on her watch—in the history of our country. May I ask the right hon. Lady whether, when she replies, she will give that much-needed reassurance, particularly to businesses, that she will not be ramping up taxes still further in the autumn? Even a basic economist knows that if you tax something, you get less of it. You do not need to have worked at the Bank of England for 10 years to know that.

    So what did the Chancellor tax? She taxed jobs and wealth creation. She has destroyed livelihoods. Businesses have been clobbered, big and small—small companies, the backbone of our economy—and enterprise has been crushed on the altar of her ineptitude. The Chartered Institute of Personnel and Development has told us that a third of the businesses affected will shed labour, with Morrisons losing 200 jobs, Tesco 400, and Sainsbury’s 3,000. No wonder the Federation of Small Businesses has said that outside the pandemic, business confidence has been left at its lowest level on record. However, it is not just businesses. It is charities, it is GPs, it is pharmacies, it is those who transport children with special educational needs, and it is hospices caring for the sick and the dying. In this House, the Labour party had the opportunity, yesterday and last week, to stop that, but they voted our amendments down, and we will never let their constituents forget it.

    If you ramp up taxes, Mr Speaker, and if you ramp up borrowing and spending without any commensurate improvement in productivity, it leads to growing inflation, and inflation has been increasing on this Government’s watch. It means that interest rates stay higher for longer. The Chancellor has just trumpeted the fact that there have been three interest rate cuts since the Labour party came to office. She knows full well that there would have been more than that had she managed—[Interruption.] She knows full well that interest rates are higher for longer because of the choices that she made. This has led to servicing costs for our national debt running at twice the defence budget, and today we have learnt from the OBR that debt interest is to increase still further—and none of this money will be spent on public services. It will be going down the drain.

    The real black hole is not the one that the Chancellor invented; it is the one that the Chancellor created. Is not the central problem that this Chancellor is a gambler? Even with her fiddled fiscal targets, she left way too little headroom. Is not the truth that while the right hon. Lady said of the last Budget that it was a

    “once-in-a-parliament reset”,

    she rolled the dice on a wafer-thin margin, and she lost? Reckless, with her fingers crossed, she fiddled the targets and she missed them. [Interruption.]

    Mr Speaker

    Order. I am not sure about the language being used. I think there are better and more constructive words that the shadow Chancellor would prefer to use in future.

    Mel Stride

    May I just point out that all the Chancellor’s fiscal headroom disappeared, not just some of it? In fact, she went underwater to the tune of £4.1 billion. Reeling from one fiscal event to the next is not a way to run the public finances, and breaking your fiscal rules to the extent that the right hon. Lady has in just six months is a public humiliation.

    May I now focus briefly on defence spending? We on this side of the House welcome the fact that the Government will reach 2.5% of GDP by 2027, as we pressed them to do, and we note the stepping stone along the way that the right hon. Lady has just announced, but we should go further than that. The 3% target should be brought forward to this Parliament. So may I ask the right hon. Lady: given the geopolitical tensions that she has raised, what provision she has made in her headroom, in her fiscal plans, for increasing defence spending more quickly in this Parliament, if that proves necessary? May I also ask her this: would she scrap the absurd Chagos deal, and put that money behind our armed forces?

    The economy is in a perilous state, but there was a different way. There were different choices on taxing and spending and borrowing, and on productivity, and on welfare. Let me just say a few words about welfare. It was the privilege of my life to serve as the Secretary of State for Work and Pensions, and when it came to welfare reform, with that privilege came a deep responsibility: the responsibility for welfare reform to be properly thought through, with a very clear plan—[Interruption]—I know that Labour Members do not like it, because it is an alien idea to their party—so that we could be fair to the taxpayer, but equally fair to the many people up and down the country, some of whom are highly vulnerable. That was an approach, on our watch, that led to £5 million of savings across the forecast period, and 450,000 fewer people going on to long-term sickness and disability benefits as a direct consequence.

    We would have gone further—much further—and we set out a clear plan in our manifesto to do exactly that, but those in the party opposite rushed their changes. They had no plan. There was not a single mention of the personal independence payment in the Labour party manifesto, and when they got into office, the Labour Government pussyfooted around and dithered. Why? Because it is deeply divisive within their rank and file. Then suddenly, when the Chancellor decided that she had run out of money, out went the word to find some savings in welfare, to scrabble around, to yank every lever possible.

    Then there was the spectacle, frankly, of what the OBR has said about the simply shambolic changes that were announced only last week by the Secretary of State for Work and Pensions. We have gone from incompetence to chaos. There have been more changes to this policy than there were at the last minute to the right hon. Lady’s LinkedIn profile. The result is the worst of all worlds: a wholly inadequate level of savings on welfare, with welfare costs spiralling ever higher, and changes that are likely to harm many vulnerable people. May I ask the right hon. Lady: when the Secretary of State for Work and Pensions came to the House last week with these changes, she did not provide an impact assessment, but was this because the OBR had not signed off the numbers, was it because the Department did not have enough time to produce one, or was it only provided today, as many of us suspect, because this was thought to be a good time to bury bad news?

    The forecast for growth is down, the forecasts for borrowing costs and inflation are up, and business confidence has been smashed into a million pieces. This Chancellor is constantly trying to blame forces beyond her control. The right response is not to duck responsibility, but to build a resilient economy. The right hon. Lady would have us believe that that is what she is doing, but how can we believe this Chancellor? How can we trust this Chancellor? She is the Chancellor who said she would not increase borrowing, but she did. She said she would not change her fiscal rules, but she did. She said she would not put up national insurance, but she did. She said she would not cut the winter fuel payment, but she did. She said she would not tax farmers, but she did, and she said she would not move to more than one fiscal event a year, and she just has. Now we are all paying the price of her broken promises. Today’s numbers confirm it. We are poorer and we are weaker. To govern is to choose, and this Chancellor has made all the wrong choices.

    Rachel Reeves

    I know that the shadow Chancellor has not been in his role for very long, but at least he is not misquoting Shakespeare today. If this was a Budget, it would be the Leader of the Opposition responding. I am glad that she is still in her place, but I know she will want to get back to her office for a lunchtime steak soon.

    The right hon. Gentleman talks about Budgets. Let me remind the Conservative party that the only emergency Budget we have seen in recent years was in response to their party’s disastrous mini-Budget—a mini-Budget that crashed the economy, sent mortgage bills spiralling and left a £22 billion black hole in our nation’s finances. Conservative Members may have forgotten about the damage that they did to our country, but the British people never will.

    As always, the shadow Chancellor talked a lot, but he did not offer a single alternative. He says he opposes our tax rises, but he cannot tell us whether he would cut the NHS to reverse them. He says he wants economic growth, but Conservative Members abstained on the very planning reforms that the OBR has said will kick-start growth. Mr Speaker, you do not change the country by abstaining or by sitting on the fence; you change the country by leading and by taking action, and that is what this Government are doing. The shadow Chancellor says he wants businesses to trade, but he does not want us to talk to the second largest economy in the world or, indeed, our biggest trading partners in the European Union. He simply is not serious. Four months into the job, and he has got no clue.

    The right hon. Gentleman wants to talk about growth, but he does not say anything about the fact that the OBR has upgraded growth next year and every single year after. He talks about pensioners, but he forgets that it is his party’s policy to scrap the triple lock, which we are protecting and which will mean the state pension rising next month by over £400. He talks about wages, but he forgets the fact that we are boosting wages by boosting the national living wage from next month. The shadow Chancellor says nothing about living standards or this morning’s fall in inflation, because the last Parliament was the worst on record, and the OBR has today revised up its forecast for family finances. Working people are always better off with Labour.

    The right hon. Gentleman is learning something, because at least this time he has asked a couple of questions, so let me respond to them. He asked what the markets should make of this. What the markets should see is that, when I have been tested with a deterioration in the headroom, we have restored that headroom in full. That is one of the choices that I made. He says that it is a sliver of a headroom. Well, it is 50% more headroom than I inherited from the Conservative party. When I was left with a sliver of headroom, I rebuilt it after the last Government eroded it. That is the difference that we have made. While they left the public finances and the public services in a mess, we wiped the slate clean, which means that we have the flexibility now to increase defence spending, as the leader of the Labour party has done. The Conservatives had 14 years to increase defence spending, and now they lately come to the party.

    The shadow Chancellor mentions welfare reform and his time at the Department for Work and Pensions. What a legacy: one in eight young people not in education, employment or training, and 1,000 people a day going on to personal independence payments. The OBR says today that welfare spending as a share of GDP will now start falling—a far cry from what we had under the Conservative party. The shadow Chancellor speaks about employment. The OBR says that employment will increase, that wages will increase and that living standards will increase. What a change, after 14 years of the Conservative party.

    The world is changing, and no one can be in any doubt about it, but the Conservative party is stuck in the past—divided, out of touch and carping from the sidelines. Conservative Members have no plan: no plan to kick-start growth, no plan to fix our public services and no plan to keep our country safe. The only plan for change they are working on is a plan to change their party leader, and we cannot blame them for that.

    If the Opposition have no plan, let me remind them about ours. The minimum wage up, real wages up, house building up, NHS investment up, investment in our schools up, investment in our roads up, defence spending up—and every single one of those policies is opposed by the party opposite. They are opposed by the Conservatives, opposed by Reform, opposed by the SNP, opposed by the Liberal Democrats and opposed by the Greens. It is the anti-growth coalition in action. They are the blockers. We are the builders—securing Britain’s future, protecting working people and delivering change.

  • Rachel Reeves – 2025 Spring Statement

    Rachel Reeves – 2025 Spring Statement

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

    This Labour Government were elected to bring change to our country, to provide security for working people and to deliver a decade of national renewal. That work began in July, and I am proud of what we have delivered in just nine months: restoring stability to our public finances, giving the Bank of England the foundation to cut interest rates three times since the general election, rebuilding our public services, with record investment in our NHS bringing waiting lists down for five months in a row, and increasing the national living wage to give 3 million people a pay rise from next week.

    Now our task is to secure Britain’s future in a world that is changing before our eyes. The threat facing our continent was transformed when Putin invaded Ukraine. It has since escalated further and continues to evolve rapidly. At the same time, the global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies. The job of a responsible Government is not simply to watch this change. This moment demands an active Government—a Government not stepping back but stepping up, a Government on the side of working people helping Britain reach its potential. We have the strengths to do just that as one of the world’s largest economies, an ally to trading partners across the globe, and a hub for global innovation. These strengths and the progress we have made so far mean that we can act quickly and decisively in a more uncertain world to secure Britain’s future and to deliver prosperity for working people.

    As I set out at the Budget last year, I am today returning to the House to provide an update on our public finances, supported by a new forecast from the independent Office for Budget Responsibility, ahead of a full spending review in June. I will then return to the House in the autumn to deliver a Budget in line with our commitment to deliver just one major fiscal event a year.

    Let me now turn to the OBR’s forecasts; I want to thank Richard Hughes and his team for their dedicated work. The increased global uncertainty has had two consequences: first on our public finances and secondly on our economy. I will take each in turn.

    In the autumn, I set out our new fiscal rules that would guide this Government. These fiscal rules are non-negotiable. They are the embodiment of this Government’s unwavering commitment to bring stability to our economy and to ensure security for working people, because the British people have seen what happens when a Government borrow beyond their means. The mini-Budget delivered by the Conservatives resulted in higher bills, higher rents and higher mortgages, and it was not the wealthy who suffered most when they crashed the economy; it was ordinary working people. They continue to feel the effects two and a half years later of the damage that the Conservatives did.

    Let me be clear: there is nothing progressive, there is nothing Labour, about working people paying the price for economic irresponsibility. The British people put their trust in this Labour Government because they knew that we—they knew that I—would never take risks with the public finances and would never do anything to put household finances in danger. We must earn that trust every single day.

    I set out two rules at the Budget. The first was our stability rule, which ensures that public spending is under control, balancing the current budget by 2029-30 so that day-to-day spending is met by tax receipts. The second was our investment rule to drive growth in the economy, ensuring that net financial debt falls by the end of the forecast period, while enabling us to invest alongside business.

    Turning first to the stability rule, the OBR’s forecast shows that before the steps that I will take in this statement, the current budget would have been in deficit by £4.1 billion in 2029-30, having been projected to be in surplus by £9.9 billion in the autumn, as the UK, alongside our international peers like France and Germany, has seen the cost of borrowing rise during this period of heightened uncertainty in global markets. As a result of the steps that I am taking today, I can confirm that I have restored in full our headroom against the stability rule, moving from a deficit of £36.1 billion in 2025-26 and £13.4 billion in 2026-27 to a surplus of £6 billion in 2027-28, £7.1 billion in 2028-29 and £9.9 billion in 2029-30. That compares with the headroom left by the previous Government of just £6.5 billion. That means that we are continuing to meet the stability rule two years early, building resilience to shocks in this, a more uncertain world.

    The OBR forecast that the investment rule would also be met two years early, with net financial debt of 82.9% of GDP in ’25-26 and 83.5% in ’26-27, before falling to 83.4% in ’27-28, to 83.2% in 2028-29 and then to 82.7% in 2029-30, providing headroom of £15.1 billion in the final year of the forecast, broadly unchanged from the autumn forecast.

    After the last Government doubled the national debt—[Interruption.] After they doubled the national debt, debt interest payments now stand at £105.2 billion this year. That is more than we allocate to defence, the Home Office and the Ministry of Justice combined. That is the legacy of the Conservative party. The responsible choice is to reduce our levels of debt and borrowing in the years ahead, so that we can spend more on the priorities of working people, and that is exactly what this Government will do. I said that our fiscal rules were non-negotiable and I meant it. I will always deliver economic stability and I will always put working people first. I said it at the election; I said it at the Budget; and I say it again today.

    Let me now set out the steps that the Government have taken. At the Budget we protected working people by keeping our promise not to raise their rates of national insurance, income tax or VAT. At the same time, we began to rebuild our public services after the Conservatives left a £22 billion black hole in our public finances. Ours were the right choices: the right choices for stability and the right choices for renewal, funded by the decisions that we took on tax.

    As I promised in the autumn, this statement does not contain any further tax increases, but when working people are paying their taxes while still struggling with the cost of living, it cannot be right that others are still evading what they rightly owe in tax. In the Budget, I delivered the most ambitious package of measures we have ever seen to cut down on tax evasion, raising £6.5 billion per year by the end of the forecast. Today I go further, continuing our investment in cutting-edge technology, investing in HMRC’s capacity to crack down on tax avoidance, and setting out plans to increase the number of tax fraudsters charged every year by 20%. These changes raise a further £1 billion, taking the total revenue raised from reducing tax evasion, under this Labour Government, to £7.5 billion. These figures are verified by the Office for Budget Responsibility and I to thank my hon. Friend the Exchequer Secretary for his continued work in this area.

    Last week, my right hon. Friend the Secretary of State for Work and Pensions set out this Government’s plans to reform the welfare system. The Labour party is the party of work: we believe that if you can work, you should work, but if you cannot work, you should be properly supported. This Government inherited a broken system: more than 1,000 people every day are qualifying for personal independence payments; one in eight young people are not in employment, education or training. If we do nothing, we are writing off an entire generation. That cannot be right and we will not stand for it. It is a waste of their potential and it is a waste of their futures, and we will change it.

    As my right hon. Friend said in her statement last week, the final costings will be subject to the OBR’s assessment. Today, the OBR has said that it estimates that the package will save £4.8 billion in the welfare budget, reflecting its judgments on behavioural effects and wider factors. This also reflects final adjustments to the overall package, consistent with the Secretary of State’s statement last week and the Government’s “Pathways to Work” Green Paper.

    The universal credit standard allowance will increase from £92 per week in 2025-26 to £106 per week by 2029-30, while the universal credit health element will be cut for new claimants by around 50% and then frozen.

    On top of that, we are investing £1 billion to provide guaranteed, personalised employment support to help people back into work, and £400 million to support the Department for Work and Pensions and our jobcentres to deliver these changes effectively and fairly, taking total savings from the package to £3.4 billion. While spending on disability and sickness benefits will continue to rise, these plans mean that welfare spending as a share of GDP will fall between 2026 and the end of the forecast period, which is very different from what we inherited from the Conservative party. We are reforming our welfare system, making it more sustainable, protecting the most vulnerable and, most importantly, supporting more people back into secure work and lifting them out of poverty.

    At the Budget, I fixed the foundations of our economy to deliver on the promise of change. That work has already begun. There are some 2 million extra appointments in our NHS; waiting lists are down; new breakfast clubs are opening across England; there have been the largest settlements in real terms for Scotland, Wales and Northern Ireland in the history of devolution; and asylum costs are falling—promises made, and promises kept, and every single one of them was opposed by Opposition parties.

    At the Budget, alongside providing an increase in funding for this year and next, I set the envelope for the spending review, which we will deliver in June, led by the Chief Secretary to the Treasury. That will set departmental budgets until 2028-29 for day-to-day spending, and until 2029-30 for capital spending.

    Today’s statement reflects two steps that we have taken on our spending plans. First, because we are living in an uncertain world, as the Prime Minister has set out, we will increase defence spending to 2.5% of GDP and reduce overseas aid to 0.3% of gross national income. That means that we save £2.6 billion in day-to-day spending in 2029-30 to fund our more capital-intensive defence commitments. Secondly, in recent months, we have begun to fundamentally reform the British state, driving efficiency and productivity across Government to deliver tangible savings and improve services across our country.

    Earlier this month, the Prime Minister set out our plans to abolish the arm’s length body NHS England, and to ensure that money goes directly to improving the service for patients. The Secretary of State for Health and Social Care is driving forward vital reforms to increase NHS productivity, and is bearing down on costly agency spend to save money so that we can improve patient care.

    The Chancellor of the Duchy of Lancaster is taking forward work to reduce the cost of running Government significantly—by 15%. That will be worth £2 billion by the end of the decade. This work shows that we can make our state leaner and more agile, and deliver more resources to the frontline, while ensuring that we control day-to-day spending to meet our fiscal rules.

    Today, I build on that work by bringing forward £3.25 billion of investment to deliver the reforms that our public services need through a new transformation fund. That is money brought forward now to bring down the cost of running Government by the end of the forecast period by making public services more efficient, more productive and more focused on the user. I can confirm today the first allocations from this fund, including funding for voluntary exit schemes to reduce the size of the civil service, and for pioneering artificial intelligence tools to modernise the state; investment in technology for the Ministry of Justice to deliver probation services more effectively; and up-front investment so that we can support more children in foster care, to give them the best possible start in life and reduce cost pressures in the future.

    Our work to make Government leaner, more productive and more efficient will help deliver a further £3.5 billion of day-to-day savings by 2029-30. Overall, day-to-day spending will be reduced by £6.1 billion by 2029-30, and it will now grow by an average of 1.2% a year above inflation; for comparison, in the autumn, that figure was 1.3%. I can confirm to the House that day-to-day spending will increase in real terms above inflation in every single year of the forecast. In the spending review, apart from the reductions in overseas aid, day-to-day spending across Government has been fully protected.

    I can also confirm our approach to capital investment. In the autumn Budget, I announced £100 billion of additional capital spending to crowd in investment from the private sector, in order to fix our crumbling infrastructure and create jobs in every corner of our country. Today, I am not cutting capital spending, as the Conservative party did time and again, because that choked off growth and left our school roofs literally crumbling. That was the wrong choice. It was the irresponsible choice. It was the Tory choice. Today, I am instead increasing capital spending by an average of £2 billion per year, compared with in the autumn, to drive growth in our economy and to deliver in full our vital commitments on defence. This Government will ensure that every pound we spend will deliver for the British people by increasing productivity, driving growth in our economy and improving our frontline public services.

    Let me turn to the impact of increased uncertainty on our economy. To deliver economic stability, we must work closely with the Bank of England, supporting the independent Monetary Policy Committee to meet the 2% inflation target. There have been three interest rate cuts since the general election, and today’s data shows that inflation fell in February, having peaked at 11% under the previous Government. The Office for Budget Responsibility forecasts that consumer prices index inflation will average 3.2% this year, before falling rapidly to 2.1% in 2026 and meeting the 2% target from 2027 onwards, giving families and businesses the security that they need, and providing our economy with the stable platform that it needs to grow.

    Earlier this month, the OECD downgraded this year’s growth forecast for every G7 economy, including the UK, and the OBR has today revised down our growth forecast for 2025 from 2% in the autumn to 1% today. I am not satisfied with these numbers. We Labour Members are serious about taking the action needed to grow our economy; we are backing the builders, not the blockers, with a third runway at Heathrow airport and through the Planning and Infrastructure Bill. We are increasing investment with reforms to our pension system and a new national wealth fund, and tearing down regulatory barriers in every sector of our economy. That is a serious plan for growth. That is a serious plan to improve living standards. That is a serious plan to renew our country.

    A changing world presents challenges, but also opportunities for new jobs and new contracts in our world-class defence industrial centres from Belfast to Deeside, and from Plymouth to Rosyth. In February, the Prime Minister set out our Government’s commitment to increasing spending on defence to 2.5% of GDP from April 2027—the biggest sustained increase in defence spending since the end of the cold war—and an ambition to spend 3% of GDP on defence in the next Parliament. That was the right decision in a more insecure world—we are putting an extra £6.4 billion into defence spending by 2027—but we have to move quickly in this changing world, and that starts with investment. Today, I can confirm that I will provide an additional £2.2 billion for the Ministry of Defence in the next financial year—a further down payment on our plan to deliver 2.5% of GDP by 2027. This additional investment is about increasing not just our national security, but our economic security.

    As defence spending rises, I want the whole country to feel its benefits, so I will now set out the immediate steps that we are taking to boost Britain’s defence industry, and to make the UK a defence industrial superpower. We will spend a minimum of 10% of the Ministry of Defence’s equipment budget on new, novel technologies, including drones and artificial intelligence-enabled technology, driving forward advanced manufacturing production in places like Glasgow, Derby and Newport, creating demand for highly skilled engineers and scientists, and delivering new business opportunities for UK tech firms and start-ups. We will establish a protected budget of £400 million in the Ministry of Defence—a budget that will rise over time—for UK defence innovation, and a clear mandate to bring innovative technology to the frontline at speed.

    We will reform our broken defence procurement system, making it quicker, more agile and more streamlined, and giving small businesses across the UK better access to Ministry of Defence contracts—something welcomed by the Federation of Small Businesses. We will take forward our plan for Barrow, a town at the heart of our nuclear security, working with my hon. Friend the Member for Barrow and Furness (Michelle Scrogham). We are providing £200 million to support the creation of thousands of jobs there. We will regenerate Portsmouth naval base, securing its future, as called for by my hon. Friend the Member for Portsmouth South (Stephen Morgan). We will secure better homes for thousands of military families—the homes that they deserve, which were denied to them by the previous Government—in the constituencies of my hon. Friends the Members for Plymouth Moor View (Fred Thomas), for Plymouth Sutton and Devonport (Luke Pollard) and for York Outer (Mr Charters) and in Aldershot. That is the difference that this Labour Government are making.

    Finally, we will provide £2 billion of increased capacity for UK Export Finance to provide loans for overseas buyers of UK defence goods and services. I want to do more with our defence budget, so that we can buy, make and sell things here in Britain. I want to give our world-leading defence companies and those who work in them further opportunities to grow, and to create jobs in Britain, as military spending rightly increases all across Europe. To oversee all this vital work, my right hon. Friend the Defence Secretary and I will establish a new defence growth board to maximise the benefits from every pound of taxpayers’ money that we spend, and we will put defence at the heart of our modern industrial strategy to drive innovation, which can deliver huge benefits for the British economy. That is how we make our country a defence industrial superpower, so that the skills, jobs and opportunities of the future can be found right here in the United Kingdom.

    As the previous Government learned to their detriment, there are no shortcuts to economic growth. It will take long-term decisions. It will take our putting in the hard yards. It will take time for the effect of the reforms that we are introducing to be felt in the everyday economy. It is right that the Office for Budget Responsibility should consider the evidence and look carefully at measures before recognising a growth impact in its forecast, but I can announce to the House that the OBR has considered and has scored one of the central planks of our plan for growth.

    In my first week as Chancellor, I announced that we were pursuing the most ambitious set of planning reforms in decades to get Britain building again, and in December we published changes to the national planning policy framework, driven forward tirelessly by my right hon. Friend the Deputy Prime Minister. We are reintroducing mandatory housing targets, and bringing grey-belt land into scope. The OBR has today concluded that these reforms will permanently increase the level of real GDP by 0.2% in ’29-30—an additional £6.8 billion for our economy—and by 0.4% of GDP within 10 years, which is an additional £15.1 billion in the British economy. That is the biggest positive growth impact that the OBR has ever reflected in its forecast, for a policy with no fiscal cost. Taken together with our plans to increase capital spending, which we set out in the Budget last year, this Government’s policies will increase the level of real GDP by 0.6% in the next 10 years. That is the difference that this Labour Government are making.

    Those are policies to grow our economy promised by a Labour Government, delivered by a Labour Government and opposed by the parties opposite.

    The planning system that we inherited was far too slow. The OBR has concluded that our reforms will lead to house building reaching a 40-year high, with 305,000 homes a year by the end of the forecast period. Changes to the national planning policy framework alone will help build over 1.3 million homes in the UK over the next five years, taking us within touching distance of delivering our manifesto promise to build 1.5 million homes in England in this Parliament. Those are homes promised by this Labour Government, homes built by this Labour Government and homes opposed by the parties opposite.

    The impact on our economy goes further still. I said at the election that we could not simply tax and spend our way to prosperity. We need economic growth, so I can today confirm that the effect of our growth policies, including our planning reforms, means an additional £3.4 billion to support our public finances and our public services by 2029-30. Those are the proceeds of growth, promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

    Earlier this week, we provided an additional £2 billion of investment in social and affordable homes next year, delivering up to 18,000 new homes, and allowing local areas to bid for new development across our country, including sites in Thanet, Sunderland and Swindon. That is more security for families across the country, promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

    To build these new homes, we need people with the right skills. Earlier this week, my right hon. Friend the Education Secretary announced more than £600 million to train up 60,000 more construction workers, including through 10 new technical excellence colleges across every region of the country, giving working people the chance to fulfil their potential. Those are new opportunities for our young people, promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

    All this is just the start. The Planning and Infrastructure Bill passed its Second Reading on Monday. That was no thanks to the parties opposite. Once that Bill completes its passage, it will help deliver the homes and infrastructure our country badly needs. I say to the parties opposite: the British people will be watching. If the parties opposite do not support these reforms, let us be clear about what that would mean: they are opposing economic growth, they are opposing more homes for families and they are opposing good jobs across our country. We on the Government Benches are clear about whose side we are on; the parties opposite must decide, too.

    This Labour Government are taking the right decisions now to secure Britain’s future. Today, I can confirm to the House that the OBR has upgraded its growth forecast next year and every single year thereafter, with GDP growth of 1.9% in 2026, 1.8% in 2027, 1.7% in 2028, and 1.8% in 2029. By the end of the forecast, our economy will be larger compared with the OBR’s forecast at the time of the Budget. That is the difference that this Labour Government are making.

    This is not just about lines on a graph; it is about improving people’s lives. Working people are still feeling the pinch after a cost of living crisis caused by the Conservatives that caused interest rates and inflation to go through the roof, so I am pleased that the OBR confirms today that real household disposable income will now grow this year at almost twice the rate expected in the autumn. Compared with the forecast in the final Budget delivered by the Conservatives, and after taking inflation into account, the OBR says today that households will be on average more than £500 a year better off under this Labour Government. That will mean more money in the pockets of working people and higher living standards—promised by this Labour Government, delivered by this Labour Government and opposed by the parties opposite.

    The world is changing. We can see that, and we can feel it. A changing world demands a Government who are on the side of working people, acting in their interest, acting in the national interest, not retreating from challenges, and not stepping back. It demands a Government with the courage to step up to secure Britain’s future and to seize the opportunities that are out there and before us. I am impatient for change. The British people are impatient for change after 14 years of failure, and we are beginning to see change happen. Our plan for change is working. Defence spending is rising. Waiting lists are falling. Wages are up and interest rates are cut. That is the difference that this Labour Government are making.

    Today, the OBR confirms that our plan to get Britain building will drive growth in our economy and put more money in people’s pockets. There are no quick fixes, but we have taken the right choices: returning stability to our economy after years of mismanagement by the party opposite, and delivering security for our country and security for working people. That is what drives this Government; that is what drives me as Chancellor; and, that is what drives the choices I have set out today. I commend this statement to the House.

  • Anneliese Dodds – 2025 Speech on New partnerships for Growth at the LSE

    Anneliese Dodds – 2025 Speech on New partnerships for Growth at the LSE

    The speech made by Anneliese Dodds, the Minister for Development, at the LSE on 3 February 2025.

    Thank you so much, Julia [Dame Julia Hoggett, CEO of the London Stock Exchange], and a very good morning to all of you.

    Thank you so much for joining us today, I really appreciate it.

    It was an absolute thrill to see the market open this morning.

    I am very keen to hear from as many of you as possible, so I’m not going to speak for too long.

    I want to leave plenty of time for questions.

    But I do want to share a few reflections with you this morning.

    This is, as Dame Julia kindly said, the second time I had the privilege of opening the London Stock Exchange.

    I had the privilege of speaking in this room almost two years ago, and it was then as now a very moving moment, because sat in the front row were some of the first women, in fact the first women, and others who set foot on the London Stock Exchange because they had not been allowed to do so until then.

    What a privilege to have been there for that moment, as for this moment.

    Two years ago, when I was here, I spoke about my own family background – with my dad having worked in financial services.

    And I want again to place on record, my respect for the work that goes on in this building, and across the country.

    Businesses in the financial sector power jobs and growth across the UK, and indeed often around the world as we’ve just heard.

    Well, of course, a lot has changed in the last two years, since I was last here.

    I am addressing you, not as a shadow minister – but now as the Minister for Development, and for Women and Equalities.

    We have a new government focused on growth and restoring our reputation on the world stage.

    And the Prime Minister and the Chancellor have set us all a guiding mission to grow our economy, and bring opportunity to people across our country.

    They have been clear that supporting growth and development around the globe is not just the right thing to do.

    It is an essential part of how we unlock growth, jobs, trade, investment, and pride in our economy here at home as well.

    Indeed, as the Foreign Secretary said in a major speech at the start of the new year, in today’s contested, competitive world, what we need now is a whole new level of global engagement – drawing on our greatest strengths.

    That absolutely includes the expertise, experience, and dynamism in this room.

    Clearly, the City of London and wider UK financial sector must be at the heart of how we meet the opportunities and challenges of our time.

    Twenty years ago, people marched and campaigned to Make Poverty History.

    That call was heeded and huge progress was made.

    Debt was cancelled, and development assistance was ramped up.

    Lives were saved and lives were changed.

    Today, the challenges we face are growing and becoming increasingly complex – not least because our world is so deeply interconnected.

    We have all seen how shocks can indeed reverberate across the globe.

    A vicious cycle of conflicts.

    The pandemic.

    The climate and nature crisis, and others.

    We have seen supply chains disrupted, and investor confidence shaken – harming our economy, here at home.

    Yet we have all seen the power of harnessing this interconnectedness as well.

    By working together – we can get ahead of global shocks, mitigate their impact, and unlock new opportunities for growth.

    For outward investment by UK businesses.

    To build future markets for UK exports.

    To support low-and-middle-income countries to grow their economies as well.

    As the UK’s Minister for Development, and for Women and Equalities, I am determined to build genuine partnerships across the Global South, based on genuine respect, and in service of our mutual interests.

    Indeed, in all of the visits I’ve undertaken over the last 6 months, from Indonesia to Malawi, to the major global gatherings of the UN General Assembly, the World Bank Annual Meetings, and the climate summit at COP29 – I heard loud and clear that our drive for growth is an ambition our partners all share.

    They want respectful, modern partnerships that benefit us all, too.

    They want to tap into your expertise and the innovative financial solutions you are pioneering – to harness the power of private finance.

    They want to work with us to build resilience to shocks.

    To escape the trap of unsustainable debt.

    To break down the barriers to private investment.

    And they want to work with us to champion much-needed reform of the global financial system, so we unlock more opportunities for everyone – from millions of women and girls around the world whose game-changing potential has yet to be unleashed, to investors right here in the City of London.

    Your hard work is at the heart of these partnerships.

    Already, 115 African companies are listed here.

    London is the world’s number one hub as I said before for green finance.

    All of this puts the UK in pole position to be the leading source of investment for emerging markets – and to build on the reputation you have worked so hard to develop.

    So today, I want to focus on four key areas, where the government and the City can make the most of the important roles we have to play – to support stable, resilient long-term growth, here at home, and around the world.

    Mobilising private capital – to help us maximise the impact of public and private finance.

    Reforming international financial institutions – to make sure they are bigger, better, and fit for the future.

    Tackling unsustainable debt – to achieve the fast, orderly restructuring that helps countries avoid default and supports stability.

    And scaling up insurance – to get more finance in place before disasters strike, to protect and promote growth across the world.

    First – mobilising private capital.

    Together, we can maximise the impact of billions of dollars of public money – and unlock many billions more.

    Consider that globally, there are some $121 trillion of assets under management.

    Currently, Africa accounts for less than 1% of the overseas portfolio allocation of UK pension funds.

    Yet Africa’s GDP growth – and I know I don’t need to tell many in this room of this – is projected to outpace the global average – and almost 70% of UK savers say they want their investments to consider impact on people and the planet.

    It is time to lean in.

    So, I was delighted to hear the Chancellor announce her plans – to consolidate the UK’s fragmented £1.3 trillion pension fund landscape, and create larger, more agile funds, capable of investing in high-growth emerging and developing markets.

    This is exactly the kind of opportunity we need to embrace.

    And I’m delighted that today, a new report from leading UK-based institutional investors sets out how the UK can continue to be the climate finance hub for the world.

    The report makes it clear that investing in other countries to accelerate the transition to clean energy is critical – to growing our economy at home, and to building financial stability long-term, in the UK, and right around the world.

    The Energy Secretary is rightly championing this through the new Global Clean Power Alliance, that the Prime Minister launched at the G20 in Rio.

    Well, today I am pleased to announce that alongside the Economic Secretary to the Treasury, I am convening an Investor Taskforce – to increase UK private investment for climate and development, in markets around the world.

    We are building partnerships with public markets like the London Stock Exchange to pursue this.

    In just four years, our flagship MOBILIST initiative has mobilised almost $250 million for listed products focussed on climate and development globally – including recent investments, like the infrastructure securitisation through Bayfront.

    This method of structuring bank infrastructure loans makes it possible for institutional investors to purchase them through investment-grade listed instruments.

    MOBLIST also helped achieve a $100 million first close for the Green Guarantee Company that will provide up to $1 billion of guarantees – for institutional investors buying green bonds, including those listed on the London Stock Exchange, and green loans issued in the private credit market.

    Today, I am pleased to announce up to £100 million of additional funding for MOBILIST – so we can build on this innovative work pioneering public market investment in emerging markets.

    This will allow MOBILIST to provide a platform for even more partners to draw on UK financial expertise – unlocking opportunities for investments in green growth, and helping more businesses to access new and affordable sources of capital across Asia, Africa, and Latin America.

    MOBILIST is not the only way that we are doing this.

    When I visited the London-based Private Infrastructure Development Group, funded by the UK and others – I saw how they are developing and de-risking infrastructure projects across Africa and Asia.

    The UK financial sector has been a key partner for them.

    For example, one arm of the group – GuarantCo – has guaranteed bonds and loans, to unlock $5.7 billion of private investment in infrastructure, benefitting over 44 million people.

    And – breaking news – I am delighted that a new $50 million deal with Standard Chartered Bank – signed today – will allow them to expand further.

    As another example, take British International Investment, or BII – the world’s oldest Development Finance Institution, at the forefront for 75 years.

    The BII teams were full of ambition when I visited their HQ in November.

    I am always proud to tell our partners that 25% of BII’s new investment commitments already meet the 2X Challenge standard – to increase investment in women.

    By making this a priority, BII is funding everything from affordable housing led by women in India, to making lines of credit accessible to small-scale retailers run by women in Nigeria – supporting jobs and growth.

    And when I sat down with key African investors alongside partners from the City in the autumn, I was able to highlight that over half of BII’s portfolio is invested in Africa, and at least 30% of BII’s investments are in climate finance.

    So today, I want to encourage you to engage with their live call for proposals that is open right now.

    BII are looking for innovative pilots to be funded through a new facility announced by the PM at UNGA in New York – that we expect to mobilise over $500 million of institutional investment.

    We are supporting public markets to mobilise finance in other ways as well.

    UK support has been instrumental in helping Ethiopia to launch its first public stock exchange just a few weeks ago, with support from the UK government through Financial Sector Deepening Africa – or ‘FSD Africa’ for short.

    This exchange brings transparency and international-standard accounting to listed companies – and the diverse ownership that should improve accountability, and broaden both the gains from growth, and the buy-in.

    We are sharing UK expertise on financial regulation with our partners as well.

    Through a partnership with the Foreign, Commonwealth, and Development Office, the Bank of England is now supporting more than 10 countries to improve monetary policy and strengthen financial stability – from Nigeria to South Africa, and from Bangladesh to Indonesia.

    And in the last few days we have signed a new partnership with the Financial Conduct Authority, that will lead to them sharing knowledge with partner countries – to ensure that markets are competitive and fair.

    That is good for our partners – and it is good for us as well.

    Last year, Tanzania’s NMB Bank cross-listed East Africa’s first sustainability bond on the London Stock Exchange and the Dar es Salaam Stock Exchange – again, with support from FSD Africa, and an anchor investment from BII.

    The $73 million raised through this ‘Jamii’ Bond will support renewable energy, food security, jobs, and growth.

    In fact, thanks in no small part to your hard work, these sorts of listing are becoming a trend on the London Stock Exchange.

    Last year, the Brazilian Government dual-listed its first $2 billion sovereign sustainable bond on the London Stock Exchange.

    That was followed by a full listing of its second $2 billion sustainable bond, a few weeks later.

    All of this was enabled by UK support that helped Brazil develop a Sovereign Sustainable Bonds framework.

    Now, as we heard earlier, just a few weeks ago, the first $500 million Climate Investment Funds Capital Markets Mechanism bond was issued on the London Stock Exchange.

    It generated considerable investor interest.

    As has already been mentioned of course, it was over-subscribed six times over.

    Further issuances could raise up to $7.5 billion over ten years, for new investments in clean energy in developing countries – leveraging UK government contributions, and those from our international partners.

    So, I could not have been more delighted to open the market this morning – and to congratulate the Climate Investment Funds and World Bank Treasury on issuing this promising new bond today.

    Now, of course, no one in this room is going to invest in developing economies, or provide climate finance – simply because it is a nice thing to do.

    You are making those investments and building those partnerships because they represent a remarkable opportunity – to marry investment in the economies and technologies of the future, with the experience and expertise of the City of London.

    Let us keep up the momentum – so the London Stock Exchange continues to be the preferred choice.

    My second point is about reforming international financial institutions.

    We are asking a lot of all of you – but of course, there are certain things that only governments can do.

    And reforming the multilateral development banks or MDBs is one of the biggest ways that we are holding up our end of the bargain.

    Every year, the World Bank Group and various regional development banks multiply every pound the UK government and other shareholders put in.

    Last year alone, they raised around £30 billion from bond issuances in London.

    Together with finance raised on other markets around the world, this allowed them to deploy over $170 billion to low-and-middle-income countries.

    This finance is on much more affordable terms than many of our partners could access directly – thanks to the banks’ triple-A credit ratings.

    They use this to invest in high-impact public and private projects.

    Green infrastructure, healthcare, education, women and girls – all underpinning the foundations for growth around the world, and here in the UK.

    So clearly, pursuing reforms that make the MDBs bigger, better, and fit for the future is key.

    As the Prime Minister set out at the UN General Assembly last year –that is exactly what we are using the UK’s influence to do, in partnership with the Global South.

    Indeed, when I travelled to Washington D.C in October, as the UK Governor of the World Bank Group, I made it my priority to agree changes to its risk appetite, that will unlock an additional $30 billion over ten years.

    This builds on UK government guarantees that have made it possible for the World Bank and other MDBs to lend an additional $6 billion, across Africa, Asia, and the Pacific.

    Ahead of the next big ‘Financing for Development’ summit in Seville this summer – we must do more.

    To make sure the MDBs can shoulder more risk.

    To create more opportunities for private companies to invest in emerging markets.

    And to empower the women and girls who have the power to lift up whole families, communities, countries, and economies.

    Thirdly – we have to tackle the unsustainable debt that is dampening global growth.

    As we take the next steps now, we need the City to be at the forefront of expertise and solutions, to make sure that countries facing unsustainable debt burdens can restructure it effectively.

    Clearly, fast, orderly restructuring can help countries avoid default, and support stability.

    This is squarely in the interest of lenders, such as bondholders and commercial lenders here in the City.

    Obviously, it is squarely in the interests of borrowers too.

    I heard that loud and clear from the governments of Malawi and Zambia during my visit at the end of last year.

    With some 95% of African bonds issued under English Law, the UK has a key role to play.   We need to leverage this.

    Half of the lowest income countries are now in debt distress, or at high risk of it.

    Some 3.3 billion people are living in countries that are spending more on servicing their debt, than on the health and education services that underpin long-term, global growth.

    So, I want us to build on the successes of Collective Action Clauses that featured in over 90% of new bond issuances.

    These have been rolled out widely since their introduction in 2004.

    They have played an important role in ensuring a smooth process and strong private sector participation, in recent debt restructuring negotiations in Ghana and Zambia – avoiding situations where one or two bondholders can hold up a deal.

    This is a great example of what market-friendly innovation can achieve.

    My challenge to the commercial banks now is to introduce the equivalent clauses for syndicated lending – that the UK government has worked with the International Capital Markets Association, legal and financial advisors based in the City, and international partners to develop.

    No lender has implemented them – yet.

    So today, I am announcing that the UK government will offer support for the first ten transactions that put ‘majority voting provisions’ into existing or new lending to low-or-middle-income countries.

    Together, we can speed up debt restructuring negotiations with syndicated lenders – and get growth recovering more quickly in cases where debt has become unmanageable.

    We can do more on Climate Resilient Debt Clauses as well.

    The UK government was the first bilateral creditor to offer these clauses.

    Several other lenders have followed since.

    The difference they can make is significant.

    They allow repayments to be paused when a shock hits.

    This frees up fiscal space for countries responding to a crisis.

    Helps avoid default.

    Supports stability.

    And safeguards growth.

    Just look at Grenada.

    At the end of last year, following Hurricane Beryl – these clauses were triggered on government-issued bonds

    The result was $30 million of interest payments being suspended over the following year – thanks to the bondholders who pioneered these clauses.

    Already, we are going further.

    In October, I announced that the UK will support small states to take up Climate Resilient Debt Clauses in their World Bank loans, by covering the fees.

    In the long run these should be offered at no cost – improving sustainability, and offering benefits both to borrowers and lenders.

    All of this builds on the leadership of countries like Grenada and Barbados who championed these clauses.

    Today, I am reiterating our call on all creditors to offer these clauses in their sovereign lending, by the end of this year – including private sector lenders here in the City.

    I want to see greater transparency on debt as well.

    This improves investors’ understanding – and reduces the hidden debt that poses substantial risks for creditors here in the City.

    It lowers the cost of borrowing for our partners.

    And it allows citizens across the world to hold their governments to account for borrowing and using resources.

    Already, the UK government publishes all its new lending quarterly, on a loan-by-loan basis.

    Now, we want to see other public and private creditors meeting the same standards of transparency in their lending – especially to low-income countries.

    The UK will keep under review if further action is needed – working together with the private sector, to combat high levels of indebtedness.

    Fourth and finally, we need to get insurance and other contingent finance in place before disasters strike, so we protect and promote growth around the world.

    Extreme weather events are on the rise, as we all know.

    Millions of the world’s poorest and most vulnerable people are bearing the brunt of repeated shocks.

    Yet currently, less than 2% of crisis finance is of the ‘pre-arranged’ variety – that makes sure every pound spent yields three or four times its worth in benefits.

    Changing that is so important – to help countries receive the rapid payments they need to avoid losses.

    To reduce the need for humanitarian support.

    And to protect growth and jobs.

    Once again, the City is well-placed to meet the needs of this growing, and largely untapped market – as a global leader in innovative insurance and managing risk.

    In Africa, the Caribbean, South-East Asia and the Pacific, the FCDO has helped to establish regional insurance schemes – helping countries get cheaper prices by buying insurance from the private sector as a group, pooling their risk.

    London reinsurers underwrote a quarter of the first eight pools that have allowed Africa to transfer over $1 billion of risk, through the UK-funded African Risk Capacity.

    On a visit at the end of last year, I saw first-hand the difference that payouts from the African Risk Capacity are making to people in Zambia and Malawi, as they respond to a devastating recent drought.

    I was proud to tell them that this was made possible by UK government subsidies for insurance premiums – for countries that otherwise wouldn’t have been able to afford them.

    Now, I want us all to engage with the ground-breaking report published by a high-level industry panel, that I helped to launch last week – on how we can strengthen the provision of insurance and other contingent finance, and scale up the use of pre-arranged finance.

    Improving modelling, and the way we price risk.

    Championing innovative parametric insurance.

    De-risking investments upfront.

    This work is so important for giving investors confidence, expanding markets in development economies, improving returns, and strengthening the UK’s role as a leading global financial hub.

    Cultivating a virtuous cycle of global resilience and growth is in all our best interests.

    Your expertise, innovation, and investment are critical.

    So, my pledge to you is that I will make it a priority to build stronger partnerships between the Foreign, Commonwealth, and Development Office and the City.

    So we face up to unprecedented challenges.

    Embrace new opportunities.

    And reinvigorate hope for our shared future – and for sustained and sustainable economic growth here and overseas – by working towards it together, in the months and years ahead.

    Thank you.

  • Rachel Reeves – 2025 Speech on Kickstarting Growth

    Rachel Reeves – 2025 Speech on Kickstarting Growth

    The speech made by Rachel Reeves, the Chancellor of the Exchequer, on 29 January 2025.

    Thank you everyone.

    It’s fantastic to be here at Siemens at this amazing facility.

    Today, I want to talk about economic growth.

    Why it matters.

    How we achieve it.

    And what we are going to do further and faster to deliver it.

    Before we came into office…

    … the Prime Minister and I have said loud and clear:

    Economic growth is the number one mission of this government.

    Without growth, we cannot cut hospital waiting lists or put more police on the streets.

    Without growth, we cannot meet our climate goals…

    … or give the next generation the opportunities that they need to thrive.

    But most of all…

    … without economic growth…

    … we cannot improve the lives of ordinary working people.

    Because growth isn’t simply about lines on a graph.

    It’s about the pounds in people’s pockets.

    The vibrancy of our high streets.

    And the thriving businesses that create wealth, jobs and new opportunities for us, for our children, and grandchildren.

    We will have succeeded in our mission when working people are better off.

    I know that the cost of living crisis is still very real for many families across Britain.

    The sky high inflation and interest rates of the past few years have left a deep mark…

    … with too many people still making sacrifices to pay the bills and to pay their mortgages.

    But we have begun to turn this around.

    Everything I see as I travel around the country gives me more belief in Britain.

    And more optimism about our future.

    Because we as a country have huge potential.

    A country of strong communities, with small and local businesses at their heart.

    We are at the forefront of some of the most exciting developments in the world…

    … like artificial intelligence and life sciences…

    … with great companies like DeepMind, AstraZeneca, Rolls Royce… and of course Siemens…

    … delivering jobs and investment across Britain.

    We have fundamental strengths – in our history, in our language, and in our legal system – to compete in a global economy.

    But for too long, that potential has been held back.

    For too long, we have accepted low expectations and accepted decline.

    We no longer have to do that.

    We can do so much better.

    Low growth is not our destiny.

    But growth will not come without a fight.

    Without a government willing to take the right decisions now to change our country’s future for the better.

    That’s what our Plan for Change is all about.

    That is what drives me as Chancellor.

    In my Mais lecture in March last year, I set out my approach to achieving economic growth…

    … and identified the fundamental barriers to realising our full potential.

    The productive capacity of the UK economy has become far too weak.

    Productivity, the driver of living standards…

    …has grown more slowly here than in countries like Germany and the US.

    The supply side of our economy has suffered due to chronic underinvestment…

    … and stifling and unpredictable regulation…

    … not helped by the shocks we have faced in recent years.

    The strategy that I have consistently set out…

    … is to grow the supply-side of our economy…

    … recognising that first and foremost…

    … it is businesses, investors and entrepreneurs who drive economic growth…

    … a government that systematically removes the barriers that they face – one by one and has their back

    This strategy has three essential elements:

    First, stability in our politics, our public finances and our economy – the basic condition for secure economic growth.

    Second, reform – reform which makes it easier for businesses to trade, to raise finance and to build.

    And third, investment, the lifeblood of economic growth.

    Let me explain each of those in turn.

    Stability – the first line of our manifesto was a promise to bring stability to the public finances.

    It is the rock upon which everything else is built.

    And it is the essential foundation of our Plan for Change.

    Because economic stability is the precondition for economic growth.

    That’s why the first piece of legislation that we passed as a government was the Budget Responsibility Act…

    … so never again will we see our independent forecaster sidelined.

    At my first Budget in October…

    … it was my duty as Chancellor…

    … to fix the foundations of our economy, and repair the public finances that we inherited.

    To restore stability and create the conditions for growth and investment.

    I set out new fiscal rules which are non-negotiable, and will always be met.

    We began to rebuild our NHS and our schools – the start of a programme of public service reform.

    I capped the rate of corporation tax – and I extended our generous capital allowances for the duration of this parliament – as the CBI and the BCC have long called for.

    And I protected working people after a cost of living crisis…

    … by freezing fuel duty…

    … and with no increases in their National Insurance, Income Tax or VAT.

    But taking the right decisions and the responsible decisions does not always mean taking the easy decisions.

    The increase in Employers’ National Insurance contributions has consequences on business and beyond.

    I said that up front in my Budget speech.

    I accept that there are costs to responsibility.

    But the costs of irresponsibility would have been far higher.

    Those who oppose my Budget know that too.

    That is why, since October, I have seen no alternative put forward.

    No alternatives to deal with the challenges we face.

    No alternatives to restoring economic stability…

    … and therefore no plan for driving economic growth.

    Alongside stability, we need to drive forward the reform which makes investment more likely…

    … by removing the constraints on the supply side of our economy…

    … making it easier for businesses to trade…

    … to raise finance…

    … and to build.

    Let me first address our approach to trade.

    We stand at a moment of global change.

    In that context, we should be guided by one clear principle above all.

    To act in the national interest…

    … for our economy…

    … for our businesses…

    … and for the British people.

    That means building on our special relationship with the United States under President Trump.

    The Prime Minister discussed the vital importance of growth with the President last weekend…

    … and I look forward to working with the new Treasury Secretary, Scott Bessent…

    … to deepen our economic relationship in the months and the years ahead.

    Acting in our national interest also means resetting our relationship with the EU – our nearest and our largest trading partner – to drive growth and support business.

    We are pragmatic about the challenges that we have inherited from the last government’s failed Brexit deal.

    But we are also ambitious in our goals.

    … we will prioritise proposals that are consistent with our manifesto commitments…

    … and which contribute to British growth and British prosperity…

    … because that is what the national interest demands.

    Our approach to trade also means building stronger relationships with fast-growing economies all around the world.

    That is why I led a delegation to China for the first Economic and Financial Dialogue since 2019…

    … alongside world-leading financial service businesses, including HSBC, Standard Chartered and Schroders…

    … unlocking £600 million of tangible benefits for the UK economy.

    And I am pleased to confirm that the Business and Trade Secretary will shortly visit India …

    … to restart talks on the free trade agreement and bilateral investment treaty.

    Our businesses can only realise these opportunities if they can recruit the skilled staff that they need.

    So we are reforming our employment system to create a national jobs and careers service.

    We have created Skills England to meet the skills of the next decade in sectors like construction and engineering.

    And we will deliver fundamental reform of our welfare system.

    That includes looking at areas that have been ducked for too long…

    … like the rising cost of health and disability benefits…

    … and the Secretary of State for Work and Pensions will set out our plans to address this ahead of the Spring Statement.

    Next, the Immigration White Paper, that will bring forward concrete proposals to bring the overall levels of net migration down.

    But we know that the UK is in an international competition for talent in vital growth sectors.

    That is why last week, I set out plans for attracting global talent.

    We will look at the visa routes for very highly skilled people…

    … so the best people in the world choose the UK to live, work and create wealth…

    … bringing jobs and investment to Britain.

    To help businesses access the finance and support they need to grow…

    … we have delivered significant reforms to provide greater flexibility for firms and founders to raise finance on UK capital markets, by rewriting the UK’s listing rules.

    In my Mansion House speech, I announced a series of reforms to our pensions system…

    … including the creation of larger, consolidated funds…

    … which have much greater capacity to invest in high growth British companies at the scale that we need them to.

    The consultation on these reforms is already complete and the final report will be published in the Spring.

    Yesterday we confirmed that we have plans to go further, whilst always protecting the important role that pension funds play in the gilt market.

    We will introduce new flexibilities for well-funded Defined Benefit schemes…

    … to release surplus funds where it is safe to do so…

    … generating even more investment into some of our fastest growing industries.

    I know too that businesses are held back by a complex and unpredictable regulatory system…

    … and that is a drag on investment and innovation.

    We have already provided new growth-focused remits to our financial services regulators…

    … we have announced a new interim Chair of the Competition and Markets Authority…

    … and we have established the Regulatory Innovation Office, with an initial focus on synthetic biology, space, AI, and connected and autonomous vehicles.

    But we need to go further and we need to go faster.

    So earlier this month, I met the Heads of some of our largest regulators.

    They have already provided a range of options to drive growth in their sectors…

    … and proposals for how they can be more agile and responsive to businesses…

    … and we will publish that final action plan in March to make regulation work much better for our economy.

    To get Britain building again…

    … we have delivered the most significant reforms to our planning system in a generation.

    I have been genuinely shocked about how slow our planning system is.

    By how long it takes to get things done.

    Take the decision to build a solar farm in Cambridgeshire – a decision the Energy Secretary took only a few weeks into the job in July…

    The Deputy Prime Minister has already driven significant progress across government in addressing these issues.

    My colleagues have determined 13 major planning decisions in just six months…

    … including for airports, data centres and major housing developments.

    We have significantly raised housing targets across our country and made them mandatory, so that we can build one-and-a-half million homes in this parliament.

    We have reformed decades-old “green belt” policies, making it easier to build on the “grey belt” land around our major cities.

    And we have opened up our planning system to build new infrastructure – like onshore wind farms or data centres driving the AI revolution.

    Having listened closely to calls from business groups like the Institute of Directors…

    … and businesses across our economy about the need to speed up infrastructure delivery…

    … including Mace, Skanska and Arup who are here today…

    … and members of our British Infrastructure Taskforce like Lloyds, Blackrock and Phoenix…

    … we have now set out plans to go even further.

    Last week we confirmed our priorities for the Planning and Infrastructure Bill …

    … to rapidly streamline the process for determining applications…

    … to make the consultation process far less burdensome…

    … and to fundamentally reform our approach to environmental regulation.

    The problems in our economy…

    … the lack of bold reform that we have seen over decades…

    … can be summed up by a £100 million bat tunnel built for HS2…

    … the type of decision that has made delivering major infrastructure in our country far too expensive and far too slow.

    So we are reducing the environmental requirements placed on developers when they pay into the nature restoration fund that we have created…

    …so they can focus on getting things built, and stop worrying about bats and newts.

    And to build our new infrastructure like nuclear power plants, trainlines and windfarms more quickly…

    … we are changing the rules to stop blockers getting in the way of development…

    … through excessive use of Judicial Review.

    This Bill, the Planning and Infrastructure Bill, is a priority for this government.

    It will be introduced in the Spring…

    … and we will work tirelessly in parliament to ensure its smooth, and speedy and rapid delivery.

    By providing a foundation of economic stability…

    … and by delivering the reforms needed to make it easier for businesses to succeed and grow…

    … we will create the right conditions to increase investment in our economy – the final key element of our strategy.

    Investment and innovation go hand in hand.

    I want to see the sounds and the sights of the future arriving.

    Delivered by amazing businesses like Wayve and Oxford Nanopore.

    They are the future.

    And Britain should be the best place in the world to be an entrepreneur.

    That is why we protected funding for research and development…

    … and it is why one of the first decisions I made as Chancellor…

    … was to extend the Enterprise Investment Scheme and the Venture Capital Trust schemes for a further 10 years…

    … to get more investment into new companies, driving their innovation and growth.

    I am determined to make Britain the best place in the world to invest.

    That was my message in Davos last week.

    That ambition demands action.

    The International Investment Summit that we hosted in October delivered £63 billion of investment right across our country…

    … from Iberdrola doubling its investment in clean energy in places like Suffolk…

    … Blackstone investing £10 billion in a data centre in Northumberland…

    … and Eren Holdings investing £1 billion in advanced manufacturing in North Wales.

    While the lifeblood of growth is business investment, a strategic state has a crucial role to play.

    That is why we established the National Wealth Fund…

    … to create that partnership between business, private investors and government to invest in the industries of the future…

    … like clean energy.

    Today I can announce two further investments by the National Wealth Fund.

    First, a £65 million investment for Connected Kerb, to expand their electric vehicle charging network across the UK.

    And second, a £28 million equity investment in Cornish Metals…

    … providing the raw materials to be used in solar panels, wind turbines and electric vehicles…

    … supporting growth and jobs in the South-West of England.

    There is no trade-off between economic growth and net zero.

    Quite the opposite.

    Net zero is the industrial opportunity of the 21st century, and Britain must lead the way.

    That is why we will publish a refreshed Carbon Budget Delivery Plan later this year, which alongside the Spending Review, will set out our plans to deliver Carbon Budget 6.

    Today, I can also announce that we are removing barriers to deliver 16 gigawatts of offshore wind…

    … by designating new Marine Protected Areas to enable the development of this technology in areas like East Anglia and Yorkshire…

    … crowding in up to £30 billion of investment in homegrown clean power.

    And there’s more.

    Our industrial and manufacturing base, brilliantly represented by Make UK, have been banging their heads against the wall for years at the lack of a proper industrial strategy from government.

    That is why we have launched our modern industrial strategy…

    … to drive investment into the industries that will define our success in the years ahead.

    We have already provided funding to unlock investment in sectors like aerospace, automotives and life sciences…

    … and we have set out reforms to boost financial services, the AI sector and creative industries.

    We are not wasting any time, and we will move forward with the next stages of the Industrial Strategy ahead of its publication in the Spring.

    We will work with the private sector to deliver the infrastructure that our country desperately needs.

    This includes the Lower Thames Crossing, which will improve connectivity at Port of Tilbury and Dover, London Gateway and Medway…

    … alleviating severe congestion…

    … as goods destined for export come from the North, and the Midlands and across the country to markets overseas.

    To drive growth and deliver value for money for taxpayers, we are exploring options to privately finance this important project.

    And we have changed course on public investment, too…

    … with a new Investment Rule to ensure that we don’t just count the costs of investment – we count the benefits too.

    We are now investing 2.6% of GDP on average over the next five years, compared to 1.9% planned by the previous government..

    … delivering an additional £100 billion of growth-enhancing capital spending…

    … which catalyses private sector investment…

    … in more housing…

    … better transport links…

    … and clean energy.

    These are significant steps in just six months…

    … and we are seeing some encouraging signs in the British economy.

    The IMF have upgraded our growth prospects for 2025…

    … the only G7 country outside the US to see this happen.

    This gives us the fastest growth of any major European economy this year.

    And a global survey of CEOs by PWC, has shown Britain is now the second most attractive country in the world for businesses looking to invest.

    The first time the UK has been in that position for 28 years.

    This is all welcome news.

    But there is still more that we can and will do.

    I am not satisfied with the position we are in.

    While we have huge amounts of potential, the structural problems in our economy run deep.

    And the low growth of the last 14 years cannot just be turned around overnight.

    This has to be our focus for the duration of the parliament.

    Because the situation demands us to do more.

    And today I will go further and faster in kickstarting economic growth.

    Our mission to grow our economy is about raising living standards in every single part of the United Kingdom.

    Manchester is home to the UK’s fastest growing tech sector.

    Leeds is one of the largest financial services centres outside of London.

    These great northern cities have so much potential and promise…

    …which our brilliant metro mayors, Andy Burnham and Tracy Brabin, are working hard to realise…

    … just like our other metro mayors are doing to deliver new opportunities in their areas.

    And there is so much more that government can do to support our city regions.

    To achieve this requires greater focus on two key areas: infrastructure and investment.

    If we can improve connectivity between towns and cities across the North of England, we can unlock their true growth potential…

    … by making it easier for people to live, travel and work across the area.

    At the Budget, I set out funding for the Transpennine Route Upgrade…

    … a multi-billion-pound programme of improvements that will connect towns and cities from Manchester to York via Stalybridge, Leeds and Huddersfield.

    We are delivering railway schemes to improve journeys for people across the North…

    … including upgrades at Bradford Forster Square and by electrifying the Wigan-Bolton line.

    We have committed to supporting the delivery of a new mass transit system in West Yorkshire.

    And in Spring, we will publish the Spending Review and a 10-Year Infrastructure Strategy…

    … which will set out further detail of our plans for infrastructure right across the UK.

    New transport infrastructure can also act as a catalyst for new housing.

    We have already seen the benefits that unlocking untapped land around stations can deliver in places like Stockport…

    … where joint work spearheaded by Andy Burnham and council leaders has delivered new housing and wider commercial opportunities.

    We will introduce a new approach to planning decisions on land around stations, changing the default answer to yes.

    We are working with the devolved governments to ensure the benefits of growth can be felt across Scotland, Wales and Northern Ireland…

    … including by partnering with them on the Industrial Strategy to support their considerable sectoral strengths.

    And in December, I met with Metro Mayors from across England.

    They told me that more opportunities for investment are vital if their local economies are to grow in the years ahead.

    We are listening closely to them.

    As the Metro Mayor of Liverpool, Steve Rotherham, has called for…

    … we will review the Green Book and how it is being used to provide objective, transparent advice on public investment across the country, including outside London and the Southeast.

    This means that investment in all regions is given a fair hearing by the Treasury that I lead.

    The Office for Investment is going to be working hand in hand with local areas…

    … to develop a commercially attractive pipeline of investment opportunities for a global audience…

    … starting with the Liverpool City Region and the North East Combined Authority, led by Kim McGuinness.

    The National Wealth Fund is establishing strategic partnerships to provide deeper, more focused support for city regions, starting in Glasgow, West Yorkshire, the West Midlands, and Greater Manchester.

    We are supporting key investment opportunities across the UK.

    The government is backing Andy Burnham’s plans for the redevelopment of Old Trafford, which promises to create new housing and commercial development around a new stadium…

    … to drive regeneration and growth in the area.

    We are moving forward with the Wrexham and Flintshire Investment Zone…

    … focusing on the area’s strengths in advanced manufacturing…

    … backed by major businesses like Airbus and JCB…

    … to leverage £1 billion of private investment in the next ten years…

    … creating up to 6,000 jobs.

    So I can announce today that we will work with Doncaster Council and the Mayor of South Yorkshire, Oliver Coppard…

    … to support their efforts to recreate South Yorkshire Airport City as a thriving regional airport.

    And finally, I am pleased to announce a partnership between Prologis and Manchester Airport Group in the East Midlands, where the Metro Mayor Claire Ward is doing an excellent job growing the local economy there.

    Prologis and MAG will work together to build a new advanced manufacturing and logistics park at East Midlands Airport …

    … unlocking up to £1 billion of investment and 2,000 jobs at the site…

    … a major investment from a global business into our country…

    … representing a huge vote of confidence in the East Midlands and in the UK.

    This is just the start of our work to get more investment into every nation and region of Britain.

    Next, I want to set out further detail for plans for the area we are in today.

    Oxford and Cambridge offer huge potential for our nation’s growth prospects.

    Only 66 miles apart…

    … these cities are home to two of the best universities in the world…

    … and the area is a hub for globally renowned science and technology firms.

    This area has the potential to be Europe’s Silicon Valley.

    To make that a reality, we need a systematic approach to attract businesses to come here and to grow here.

    At the moment, it takes over two and a half hours to travel between Oxford and Cambridge by train.

    There is no way to commute directly by rail from places like Bedford and Milton Keynes to Cambridge.

    And there is a lack of affordable housing right across the region.

    In other words, the demand is there…

    … but there are far too many supply side constraints on economic growth here.

    We are going to fix that.

    The Ox Cam arc was initially launched in 2003 – over 20 years ago.

    We are not prepared to miss out on the opportunities here any longer.

    So working with the Deputy Prime Minister…

    … who is already driving forward vital work in the region…

    … we are going further and faster to unlock the potential of the Oxford-Cambridge Growth Corridor.

    First, we are funding the transport links needed to make the Oxford Cambridge growth corridor a success…

    … including East-West Rail, with new services between Oxford and Milton Keynes starting this year…

    … and road upgrades to reduce journey times between Milton Keynes and Cambridge.

    East West Rail will also support vibrant new and expanded communities along the route.

    We have already received proposals for New Towns along the new railway…

    … with 18 submissions for sizeable new developments.

    At Tempsford – the nexus of the East Coast Mainline, the A1 and East West Rail…

    …we will move quicker to deliver a mainline station, meaning journey times to London of under an hour…

    … and to Cambridge in under 30 minutes when East West Rail is operational.

    Second, we are ensuring that the area has the right infrastructure and public services in place to support the growth corridor as it expands.

    A new Cambridge Cancer Research Hospital is being prioritised for investment as part of wave 1 of the New Hospital Programme.

    Water infrastructure has also been a major hindrance to development.

    So we have now agreed water resources management plans, unlocking £7.9 billion of investment in the next 5 years…

    …including plans for the new Fens Reservoir serving Cambridge and the South East Strategic Reservoir near Oxford.

    And I can confirm today that the Environment Agency have now lifted their objections to new development in Cambridge, following this government’s intervention to address water scarcity…

    … which means 4,500 additional homes, new schools, and new office, retail and laboratory space can be built.

    Third, I am delighted that Cambridge University have come forward with plans for a new flagship innovation hub at the centre of Cambridge…

    … to attract global investment and foster a community that catalyses innovation, as other cities around the world like Boston and Paris have done.

    Just yesterday, Moderna completed the build for their new vaccine production and R&D site in Harwell, right here in Oxfordshire, alongside a commitment to invest a further £1 billion in the UK.

    And we are creating a new AI Growth Zone in Culham to speed up planning approvals for the rapid build-out of data centres.

    And finally, to take this project forward at real pace…

    … and catalyse private sector investment into the region…

    … I am pleased to announce that the Deputy Prime Minister and I have asked Lord Patrick Vallance to be the champion for the Oxford Cambridge Growth Corridor.

    Lord Vallance has extensive experience across the sciences, academia, and government.

    He will work with local leaders and with the Housing and Planning Minister to deliver this exciting project…

    … including with Peter Freeman, who is already doing excellent work in Cambridge…

    … and a new Growth Commission for Oxford, which will help to accelerate growth in the city and its surrounding area.

    This is the government’s modern Industrial Strategy in action.

    With central government, local leaders and business working together…

    … the Oxford and Cambridge Growth Corridor could add up to £78 billion to the UK economy by 2035 …

    … driving investment, innovation and growth.

    Finally, I come to the decision that perhaps more than any other…

    … has been delayed…

    … has been avoided…

    … has been ducked.

    The question of whether to give Heathrow …

    … our only hub airport…

    … a third runway…

    … has run on for decades.

    The last full length runway in Britain was built in the 1940s.

    No progress in eighty years.

    Why is this so damaging?

    It’s because Heathrow is at the heart of the UK’s openness as a country.

    It connects us to emerging markets all over the world, opening up new opportunities for growth.

    Around three-quarters of all long-haul flights in the UK go from Heathrow.

    Over 60% of UK air freight comes through Heathrow.

    And about 15 million business travellers used Heathrow in 2023.

    But for decades, its growth has been constrained.

    Successive studies have shown that this really matters for our economy.

    According to the most recent study from Frontier Economics, a third runway could increase potential GDP by 0.43% by 2050.

    Over half – 60% of that boost, would go to areas outside London and the South-East.

    … increasing trade opportunities for products like Scotch whiskey and Scottish salmon – already two of the biggest British exports out of Heathrow.

    And a third runway could create over 100,000 jobs.

    For international investors, persistent delays have cast doubt about our seriousness towards improving our economic prospects.

    Business groups, like the CBI, the Federation of Small Businesses and the Chambers of Commerce right across the UK…

    …as well trade unions like GMB and Unite are clear…

    … a third runway is badly needed.

    In 2018, the previous government steered its Airports National Policy Statement through parliament.

    But no action was taken.

    It simply sat on the shelf.

    We are taking a totally different approach to airport expansion.

    This Government has already given its support to expansion at City Airport and at Stansted.

    And there are two live decisions on Luton and Gatwick which will be made by the Transport Secretary shortly.

    But as our only hub airport, Heathrow is in a unique position – and we cannot duck the decision any longer.

    I have always been clear that a third runway at Heathrow would unlock further growth…

    … boost investment…

    … increase exports…

    … and make the UK more open and more connected.

    And now, the case is stronger than ever…

    … because our reforms to the economy…

    … like speeding up the planning system…

    … and our plans for modernised UK airspace…

    … mean the delivery of this project is set up for success.

    So I can confirm today that this Government supports a third runway at Heathrow…

    … and is inviting proposals to be brought forward by the summer.

    We will then take forward a full assessment through the Airport National Policy Statement.

    That will ensure that the project is value for money – and our clear expectation is that any associated surface transport costs will be financed through private funding.

    And it will ensure that a third runway is delivered in line with our legal, environmental and climate obligations.

    Heathrow themselves are clear that their proposal for expansion will meet strict rules on noise, air quality and carbon emissions.

    And we are already making great strides in transitioning to cleaner and greener aviation.

    Sustainable Aviation Fuel reduces CO2 emissions compared to fossil fuel by around 70%.

    At the start of this month, the Sustainable Aviation Fuel mandate became law.

    And today I can announce that we are investing £63 million into the Advanced Fuels Fund over the next year…

    … and we have today set out the details of how we will deliver a Revenue Certainty Mechanism to encourage investment into this growing industry.

    These measures will encourage more investors to back production in the UK, bringing good, high-skilled jobs to areas like Teesside…

    … demonstrating that investment in the right technology can help us deliver both our growth and our clean energy missions.

    Now is the moment to grasp the opportunity in front of us.

    By backing a third runway at Heathrow, we can make Britain the world’s best connected place to do business.

    That is what it takes to make bold decisions in the national interest.

    That is what I mean by going further and faster to kickstart economic growth.

    The work of change has begun.

    We have already made great progress.

    But I am not satisfied.

    And I know that there is more to be done.

    We must go further and faster if we are to build a brighter future.

    The prize on offer is immense.

    The next generation with more opportunities than the last.

    An engineer in Teesside, working in some of the most exciting industries of the future – from carbon capture to sustainable aviation fuel.

    A scientist in Milton Keynes or Bedford, working in our life sciences industry to solve some of the most important medical challenges in the world.

    A small business owner in Scotland, knowing that they can expand and export to new markets right across the globe.

    Wealth created, and wealth shared, in every part of Britain.

    This is a Government on the side of working people.

    Taking the right decisions to secure their future, to secure our future.

    Stepping up to the challenges we face.

    Ending the era of low expectations.

    Putting Britain on a different path.

    Delivering for the British people.

    And I am determined, this Government is determined, to do just that.

    Thank you.

  • Rachel Reeves – 2024 Mansion House Speech

    Rachel Reeves – 2024 Mansion House Speech

    The speech made by Rachel Reeves, the Chancellor of the Exchequer, at the Mansion House in London on 14 November 2024.

    Lord Mayor, Governor, Ladies and Gentlemen.

    It’s an honour to be here with you this evening.

    Thank you to the City of London Corporation for hosting us.

    It is a privilege to follow the Lord Mayor’s address…

    … and to give my first Mansion House speech.

    As the Lord Mayor said, there are so many reasons to be optimistic about our country…

    … and I absolutely share his ambition for our potential.

    The potential of our financial services sector.

    The potential we have to make Britain more competitive.

    And critically, the potential that we have to grow our economy.

    That is why…

    … both in opposition and now in government…

    … improving economic growth has been at the very heart of everything that I am seeking to achieve.

    In my Mais lecture earlier this year…

    … I set out my view that we are in a moment of flux…

    … and a new approach was required to build secure and sustainable growth…

    … on the platform of stability, investment and reform.

    When I arrived at the Treasury just over four months ago…

    … I said on day one that economic growth was now our national mission…

    … as I set out plans to tackle some of the longstanding issues in the supply-side of our economy.

    And two weeks ago, I delivered my first budget as Chancellor of the Exchequer.

    It was a once in a parliament budget to wipe the slate clean.

    It was a budget that tackled two elements in our plan for economic growth.

    First, it provided economic stability…

    … by putting our public finances back on a firm footing.

    That required difficult choices.

    On spending, on welfare, and on tax.

    But by making those tough choices now…

    … we are providing stability for the long-term.

    Because instability in our public finances leads to instability in our financial markets.

    That is not good for investment.

    That is not good for growth.

    And it is not good for business.

    So by drawing a line under instability…

    … business can now plan for the future.

    And we have provided stability for our public services too…

    … which now deliver within the spending envelope that they have been set…

    … and through reform, they must live within their means.

    The second step that we took to improve economic growth at the budget…

    … was to change course on public investment.

    Public investment was set to fall by nearly 1% of GDP under the plans that I inherited.

    That would have held back our growth potential for many years to come.

    As the International Monetary Fund have set out…

    … low levels of public investment have been a major contributing factor to the UK’s weak growth performance…

    … not least, because it makes it harder to catalyse the private investment that we so badly need.

    Now, as a result of the measures that we have taken…

    … public investment will be £100bn higher over the next five years…

    … creating jobs…

    … and driving growth and opportunity across the United Kingdom.

    This will be delivered alongside a series of vital guardrails…

    … to ensure that spending delivers the very best value-for-money…

    … provides returns for taxpayers…

    … catalyses private investment…

    … and significantly boosts growth and productivity.

    Because of the steps that we took…

    … the Office of Budget Responsibility have set out that, in the long-term…

    … our policies would permanently increase the supply capacity of our economy.

    But that does not represent the height of my ambition.

    I know that we can do more…

    … to go further and faster in realising our growth potential.

    So that is why economic growth will continue to be the central mission in the weeks, months and years ahead.

    Having focused on economic stability and public investment in the budget…

    … tonight I will set out the steps that we are taking …

    …to drive growth across the other key areas that have long been my priority.

    Increasing private investment.

    And reforming our economy.

    Let me begin with our plans to increase investment.

    More investment is how we spur innovation and growth.

    It is how we boost the efficiency and the capacity of our economy.

    And it is how we create the new opportunities and high-skilled jobs in every part of our country.

    Today, I am focusing on how we continue to attract investment across the world.

    And how we increase private investment…

    … by working in partnership with business…

    … and specifically, with the financial services sector.

    Before entering politics, I worked as an economist at the Bank of England.

    And then in financial services.

    Before we came into government…

    … I was clear that financial services must play a central part in our economic vision…

    … and our plans for economic growth.

    Because I know that this sector is the crown jewel in our economy.

    It employs 1.2m people, from London to Edinburgh, and from Manchester to Belfast.

    It is one of the country’s largest and most productive sectors, accounting for 9% of our economic output.

    And it is a global success story, as the Lord Mayor has said: we are the second largest exporter of financial services in the G7.

    But we cannot take the UK’s status as a global financial centre for granted.

    In a highly competitive world…

    … we need to earn that status…

    … and we need to work to keep it.

    I have been determined to do just that since becoming Chancellor.

    Just one week into office, I welcomed the biggest changes to the UK’s listing regime in over three decades…

    … to reform our capital markets…

    … increasing the flexibility for firms and founders of British high growth companies…

    … so we have more British success stories…

    … like Raspberry PI and Applied Nutrition…

    … IPO right here in the UK.

    In our first month, we launched the landmark Pensions Review, and I will return to that later in my speech.

    And in September, we announced the final stage of our post-crisis reforms to banks’ capital requirements…

    … marking the end of the journey to ensure that banks are well-capitalised…

    … working side by side with the Governor…

    … strengthening the resilience of our banking system…

    … whilst protecting banks’ ability to lend to small and medium enterprises…

    … and also for infrastructure.

    Now, we must build on the steps we’ve already taken.

    In the Spring, we will publish the first ever Financial Services Growth and Competitiveness Strategy.

    This will give the financial services sector the confidence it needs to invest.

    Financial services is one of the eight growth sectors in our modern industrial strategy…

    … recognising that, just as in other parts of the economy…

    … we must constantly work to remove barriers to growth and investment.

    This approach will ensure that we promote our strengths across the world.

    And today, we are setting out the five, priority growth opportunities on which that strategy will focus…

    … Fintech…

    … sustainable finance…

    … asset management and wholesale services…

    … insurance and reinsurance…

    … and capital markets.

    And we will work in partnership with you…

    … on the development of the strategy…

    … ahead of its publication in the Spring…

    … driven forward by our City Minister, Tulip Siddiq

    By providing the basis of long-term stability for the sector…

    … we are laying the foundations for more private investment.

    The UK has the lowest levels of business investment in the G7 as a percentage of GDP.

    In the Budget, we confirmed our plans to capitalise the flagship impact investor, the National Wealth Fund…

    … to invest in the industries of the future…

    … and catalyse over £70bn of private investment.

    And in the last month alone, the National Wealth Fund has struck a number of deals…

    … including funding to deliver full fibre broadband across the UK…

    … and to support the building of new infrastructure in Wales.

    The PRA, the Treasury and the National Wealth Fund will work together to crowd in investment by insurers…

    … in productive assets…

    … taking full advantage of the new Solvency UK regulatory regime.

    That includes investment in clean energy projects.

    I want London to be the place where the billions needed to finance the energy transition are financed…

    … and we have already mobilised significant private capital through the International Investment Summit last month…

    … including £4bn for the East Anglia 2 wind farm…

    … and £2bn to build new solar farms in Essex, Yorkshire and Wiltshire.

    This week, the Prime Minister welcomed the launch of the Climate Investment Fund Capital Market Mechanism on the London Stock Exchange.

    Tonight we are building on these foundations to deliver a world-leading sustainable finance framework.

    This will be built in partnership with industry…

    … and we will be co-launching the Transition Finance Council alongside the City of London Corporation.

    This presents a huge opportunity for the UK financial services sector…

    … and I am determined that we win this race for global business.

    Alongside our National Wealth Fund…

    … we must ensure that there are a wide range of other vehicles to drive private investment.

    Tonight, I want to focus on our plans in one of those key areas: pension funds.

    Our pensions market is one of the largest in the world.

    There will be £800bn of assets in workplace Defined Contribution schemes…

    … and £500bn of assets in the local government pension scheme…

    … by the end of this decade.

    Pension funds will always play an important role in the gilt market…

    … but for too long, pensions capital has not been used to support the development of British start-ups, scale-ups or to meet our infrastructure needs.

    I have long been of the view that this hurts our economy…

    … because our highest-potential businesses cannot expand…

    … and savers are not seeing the returns on their investment which they deserve.

    So I was pleased when the previous government, led by my predecessor as Chancellor…

    … working with industry…

    … took steps through the Mansion House Compact…

    … to encourage more pension fund investment into productive assets.

    I welcomed those reforms and we will take them forward…

    … but now we need to go further.

    That is why one of my first steps as Chancellor was to announce the Pensions Investment Review…

    … led by our first ever joint Treasury and DWP Minister for Pensions, Emma Reynolds…

    … who has worked with many of you over recent months.

    Australian pension schemes invest around 3 times more in infrastructure investment compared to Defined Contribution schemes in the UK…

    … and 10 times more in private equity, including in high growth businesses, compared to the UK.

    One of the key reasons for this is the much larger size of their funds…

    … while our pensions landscape remains highly fragmented.

    That means many of our pension funds do not have the capacity to invest at the scale required.

    And more often than not, it is Canadian teachers and Australian professors…

    … reaping the rewards of investing in British productive assets through their pensions schemes…

    … rather than British savers.

    That’s not good enough…

    … and we need to change that.

    So tonight, we are publishing the interim report of the Pensions Investment Review.

    It sets out our plans to create Canadian and Australian style-“megafunds” to power growth in our economy…

    … and start the most significant set of changes to the pensions landscape since the Turner Review…

    … underpinned by a clear commitment to legislate for these changes for the first time…

    … in the Pension Scheme Bill next year.

    We will deliver a significant consolidation of the Defined Contribution market…

    … to enable schemes to deliver better saver outcomes…

    … while investing to support growth.

    And we will legislate on measures to consolidate the Local Government Pension Scheme…

    … one of the largest pension schemes in the world…

    … and require that the 86 Local Government Pension Scheme administering authorities consolidate all their assets into 8 pools.

    These reforms will deliver real change in our economy.

    Through consolidation of the DC market and Local Government Pension Schemes into megafunds…

    … previous domestic and international experience suggests…

    …that we could unlock around £80bn for investment in private equity, including exciting growth businesses…

    … and in vital infrastructure projects including transport, energy and housing projects here in the UK.

    We will take a more proactive approach to working with investors to ensure that capital is directed to the UK’s biggest growth opportunities.

    We are creating NISTA and we will publish a ten-year infrastructure strategy…

    … to ensure that there is a pipeline of projects to attract that investment.

    We have established a new pathfinder British Growth Partnership…

    … to crowd-in institutional investment into venture capital funds and innovative businesses here in the UK.

    This work is already making an impact.

    I can confirm this evening that Aegon UK…

    … will be a substantial cornerstone investor…

    … and Natwest Cushon…

    … and they have now agreed to work with the British Business Bank on the launch of the British Growth Partnership…

    … with a view to making an investment in the initial fund.

    The final area I want to focus on when it comes to investment is the importance of looking internationally.

    Last month, with the support of many people in this room – including the Lord Mayor and Barclays, HSBC, Lloyds, and M&G – we hosted an International Investment Summit in London…

    … where we saw £63bn of investment flow into the UK.

    That shows the potential that we have to attract funding from across the world into our country.

    But I want to be clear-eyed about the context in which the UK…

    … and its businesses…

    … will be operating under in the years ahead.

    We face geopolitical uncertainty.

    There are other countries who are looking for the very same economic opportunities as we are.

    And we face structural challenges too, including those which have come from Brexit.

    It will not be straightforward to navigate all of these headwinds.

    We should be honest about that.

    But as we navigate them…

    … I will be guided by a clear principle.

    I will always do what is in our national interest…

    … for our economy…

    … for our businesses…

    … and for the British people.

    That means free and open trade…

    … especially with our most economically important partners.

    That includes the United States…

    … our single most important destination for financial services trade…

    … and there is so much potential for us to deepen our economic relationship on areas such as emerging technologies.

    I look forward to working closely with President-Elect Trump, and his team, to strengthen our relationship in the years ahead.

    And of course our biggest trading partner is the European Union.

    We will not be reversing Brexit or re-entering the single market or customs union…

    … but we must reset our relationship.

    That will be my message when I attend the Eurogroup meeting of finance ministers in Brussels next month.

    We must recognise that our markets are highly inter-connected…

    … and ensure that on the economy and in financial services…

    … our approach supports growth and delivers investment.

    And where there are other important economic opportunities for the UK…

    … including by engaging with significant and fast-growing economies like India, China and the Gulf states…

    … we will look to realise those opportunities, too.

    Alongside economic stability…

    … and higher levels of investment…

    … we need reform.

    Supply-side reform has been a central part of our work in the last four months…

    … through changes to our planning system to unlock housing and new infrastructure…

    … policies to reduce economic inactivity, improve skills and bring people back into the workplace…

    … and a focus on place-based measures to deliver growth right across the UK.

    I know the Governor will have more to say on the topic of supply-side reform shortly.

    Tonight, I want to build on the work we have done…

    … which puts reform at the heart of this government’s agenda.

    First, I am clear that this must include reform of our public services.

    In the budget, I set out our future spending plans…

    … to ensure that our public services have the investment that they need for the years ahead.

    That additional investment comes with the clear expectation of better value for money…

    … and higher productivity.

    As the Secretary of State for Health said yesterday…

    … taxpayers welcome the additional investment we put it into the NHS…

    … but they worry it won’t be spent wisely.

    So reform will be a central focus of the second phase of the Spending Review right across government.

    We will use digital technology more effectively.

    We will focus on prevention, to manage pressures in the system.

    We will join-up services across government to increase efficiency and to bring costs down.

    And we will harness the knowledge and expertise of business leaders as we do so…

    … so that we can ensure that we bring the best ideas into government from beyond Whitehall, too.

    Alongside this …

    … we need economic reform to unlock the full potential growth potential of the British economy.

    Our approach to regulation is a critical part of that.

    As the Prime Minister has already set out, the key test for regulation is whether it will make our economy more dynamic and more competitive.

    So we will review the strategic guidance that we give to the CMA and to other major regulators…

    … to underline the importance of growth.

    That includes our financial service regulators.

    It was right that successive governments made regulatory changes after the Global Financial Crisis…

    … to ensure that regulation kept pace with the global economy of the time…

    … but it is important that we learn the lessons of the past.

    These changes have resulted in a system which sought to eliminate risk taking.

    That has gone too far…

    … and, in places, it has had unintended consequences that we must now address.

    Let me set out some examples.

    First, while the Senior Managers and Certification Regime has helped to improve standards and accountability…

    … some elements of it have become overly costly and administratively burdensome.

    So the Treasury, the FCA and the PRA will shortly publish the outcomes of our review…

    … including a commitment to consult on removing the current Certification Regime from legislation.

    Second, as the PRA have acknowledged…

    … post-crisis pay structures made the UK an international outlier on deferral arrangements…

    … so we will support their intention to consult on reducing the length of pay deferrals…

    … helping firms to attract and retain talent.

    Third, some of our regulatory requirements are duplicative, and they could be streamlined…

    … so I look forward to seeing the outcomes of the FCA’s Handbook Review…

    …which can free up resources for businesses to innovate and to grow.

    And finally, while regulation has been successful in improving the quality of financial advice being offered to consumers…

    … many people do not get the help with their finances that they want and need…

    … so the FCA will shortly consult on transformational changes to financial advice and guidance…

    … to ensure that people get the right support.

    As these examples show…

    …the UK has been regulating for risk, but not regulating for growth.

    So while maintaining important consumer protections…

    … upholding international standards of regulation…

    … and protecting the vital stability of our financial services system…

    … now is also the moment to rebalance our approach….

    … and take forward the next stage of reforms needed to drive growth, competitiveness and investment.

    The last government introduced legislation to make growth and competitiveness secondary objectives for our regulators…

    … which we supported in opposition.

    Tonight I can announce that we have issued new growth-focused remit letters to the Financial Conduct Authority…

    … Prudential Regulation Committee…

    … Monetary Policy Committee..

    … Financial Policy Committee…

    … and the Payment Systems Regulator.

    These make clear that I expect them to fully support this government’s ambitions on economic growth.

    I welcome the work that the FCA and PRA have already started…

    … and I look forward to seeing their next steps to deliver that growth and competitiveness.

    I have also heard from many of you that our approach to redress can cause uncertainty..

    … and be a drag on investment.

    The Financial Ombudsman Service plays a vital role for consumers to get redress when things have gone wrong, and that will not change.

    But reform is needed to create a surer climate for investment.

    So we have worked closely with the FCA and the Ombudsman to develop a new agreement between the two institutions…

    … with clearer expectations on how they cooperate…

    … including on historic market practice and mass redress events.

    And I strongly welcome their joint Call for Input, to be published tomorrow…

    … which seeks to significantly improve the rules governing how the Service operates.

    Alongside these measures…

    … we are tonight setting out a range of further steps…

    … to build a true partnership between government and the financial services sector…

    … and unlock its potential.

    Let me take you through them.

    Because reforming capital markets is a priority for this government…

    … we are today committing to legislate to establish PISCES…

    … an innovative new stock market…

    … by May 2025…

    … to support companies to scale and grow.

    We are supporting innovation in the financial services sector…

    … by launching a pilot to deliver a Digital Gilt Instrument…

    … referred to as DIGIT…

    … using distributed ledger technology.

    Insurance markets are also pivotal in supporting growth.

    So we are today publishing a consultation on captive insurance…

    … where a new approach could cement the UK’s position as a leading financial services centre.

    And alongside the regulators’ continued efforts, we will consider further steps to improve the UK’s Insurance Linked Securities offer.

    To protect the integrity of the financial services sector…

    … we are working with tech platforms and telco networks to reduce the scale of incidence and losses from fraud.

    To empower female entrepreneurs and support women in business…

    … we are backing the ambitious work of the Invest in Women taskforce, led by Debbie Wosskow and Hannah Bernard…

    … delivered alongside our Women in Finance Charter – led by Dame Amanda Blanc – which continues to go from strength to strength.

    To support the mutual sector…

    … we are launching our call for evidence on the credit union ‘common bond’…

    … and asking regulators to report on the mutuals landscape.

    And I welcome the work of Nationwide, Co-operative Group, Arla and Royal London to establish an industry-led Mutuals Council to drive growth in the sector.

    And finally, we are publishing our National Payments Vision…

    … including decisive action to progress Open Banking…

    … and support our fintech businesses.

    Lord Mayor, Governor, Ladies and Gentlemen.

    In the budget, two weeks ago…

    … we fixed the foundations…

    … and restored stability to our public finances.

    The precondition for a strong and successful economy.

    The changes that I have set out this evening will drive growth and competitiveness…

    … through investment and through reform.

    A long-term strategy to harness the strengths of our financial services sector.

    Making the UK a global leader in sustainable finance.

    Reducing uncertainty by developing the right approach to redress.

    Reinvigorating our capital markets by unlocking private investment through our pension funds.

    And reforming our approach to regulation to make it more dynamic and the sector more competitive.

    Taken together, these measures represent the most pro-growth financial services package since the financial crisis.

    Because we cannot rest on our laurels.

    Where we have strengths…

    … we must build on them.

    Where we have weaknesses…

    … we must address them.

    And in everything we do, we will work together…

    … with you …

    … in partnership.

    Because that is what our country needs to prosper and to grow.

    Thank you very much.

  • Rachel Reeves – 2024 Budget Statement

    Rachel Reeves – 2024 Budget Statement

    The 2024 budget statement made by Rachel Reeves, the Chancellor of the Exchequer, in the House of Commons on 30 October 2024.

    Madam Deputy Speaker, on 4 July, the country voted for change. This Government were given a mandate: to restore stability to our economy and to begin a decade of national renewal; to fix the foundations and deliver change through responsible leadership in the national interest. That is our task, and I know that we can achieve it.

    My belief in Britain burns brighter than ever, and the prize on offer is immense. As my right hon. Friend the Prime Minister said on Monday, change must be felt: more pounds in people’s pockets; an NHS that is there when we need it; and an economy that is growing, creating wealth and opportunity for all, because that is the only way to improve living standards. The only way to drive economic growth is to invest, invest, invest. There are no shortcuts, and, to deliver that investment, we must restore economic stability and turn the page on the last 14 years.

    This is not the first time that it has fallen to the Labour party to rebuild Britain. In 1945, it was the Labour party that rebuilt our country out of the rubble of the second world war. In 1964, it was the Labour party that rebuilt Britain with the white heat of technology, and, in 1997, it was the Labour party that rebuilt our schools and our hospitals. Today, it falls to this Labour party—to this Labour Government—to rebuild Britain once again. And while this is the first Budget in more than 14 years to be delivered by a Labour Chancellor, it is the first Budget in our country’s history to be delivered by a woman. I am deeply proud to be Britain’s first ever female Chancellor of the Exchequer. To girls and young women everywhere, I say: let there be no ceiling on your ambition, your hopes and your dreams. Along with the pride that I feel standing here today, there is also a responsibility to pass on a fairer society and a stronger economy to the next generation of women.

    Madam Deputy Speaker, the Conservative party failed our country: its austerity broke our national health service; its Brexit deal harmed British businesses; and its mini-Budget left families paying the price with higher mortgages. The British people have inherited the Conservative party’s failure: a black hole in the public finances; public services on their knees; a decade of low growth; and the worst Parliament on record for living standards.

    Let me begin with the public finances. In July, I exposed a £22 billion black hole at the heart of the previous Government’s plans—a series of promises that they made, but had no money to deliver—covered up from the British people and covered up from this House. The Treasury’s reserve, set aside for genuine emergencies, was spent three times over just three months into the financial year. Today, on top of the detailed document that I provided to the House in July, the Government are publishing a line-by-line breakdown of the £22 billion black hole that we inherited, which shows hundreds of unfunded pressures on the public finances this year, and into the future too.

    The Office for Budget Responsibility has published its own review of the circumstances around the spring Budget forecast. It says that the previous Government

    “did not provide the OBR with all the information to them”

    and that, had the OBR known about these

    “undisclosed spending pressures that have since come to light”,

    then its spring Budget forecast for spending would have been “materially different”.

    Let me be clear: that means that any comparison between today’s forecast and the OBR’s March forecast is false, because the previous Government hid the reality of their public spending plans. Yet at the very same Budget, they made another £10 billion-worth of cuts to national insurance. It was the height of irresponsibility, and they knew it. They had run out of road, and they called an election to avoid making difficult choices. So let me make this promise to the British people: never again will we allow a Government to play fast and loose with the public finances and never again will we allow a Government to hide the true state of our public finances from our independent forecaster. That is why I can today confirm that we will implement in full the 10 recommendations from the independent Office for Budget Responsibility’s review.

    The country has inherited not just broken public finances, but broken public services. The British people can see and feel that in their everyday lives: NHS waiting lists at record levels; children in portacabins as school roofs crumble; trains that do not arrive; rivers filled with polluted waste; prisons overflowing; crimes that are not investigated; and criminals who are not punished. That is the country’s inheritance from the Conservative Government. They had no plan to improve our public services and they had no plan to put our public finances on a sustainable footing—quite the opposite.

    Since 2021, there have been no detailed plans for departmental spending set out beyond this year, and the previous Government’s plans relied on a baseline for spending this year, which we now know was wrong because it did not take into account the £22 billion black hole. They also failed to budget for costs that they knew would materialise, including funding for vital compensation schemes for victims of two terrible injustices—[Interruption.]

    Madam Deputy Speaker (Ms Nusrat Ghani)

    Order. I have just spoken about respecting colleagues. The public are watching, and they want to hear what the Chancellor has to say. Simmer down.

    Rachel Reeves

    I would politely suggest that hon. Members listen to this, because it includes funding for vital compensation schemes for victims of two terrible injustices: the infected blood scandal and the Post Office Horizon scandal.

    The Leader of the Opposition rightly made an unequivocal apology for the injustice of the infected blood scandal on behalf of the British state, but he did not budget for the costs of compensation. Today, for the very first time, we will provide specific funding to compensate those infected and those affected in full, with £11.8 billion in this Budget. I am also today setting aside £1.8 billion to compensate victims of the Post Office Horizon scandal—redress that is long overdue for the pain and injustice that they have suffered.

    The leadership campaign for the Conservative party has now been going on for over three months, but in all that time there has been not one single apology for what they did to our country. The Conservative party has not changed—but this is a changed Labour party and we will restore stability to our country once again. The scale and seriousness of the situation that we have inherited cannot be underestimated. Together, the hole in our public finances this year, which recurs every year, the compensation schemes that the previous Government did not fund, and their failure to assess the scale of the challenges facing our public services, means that this Budget raises taxes by £40 billion. Any Chancellor standing here today would have to face this reality, and any responsible Chancellor would take action. That is why today I am restoring stability to our public finances and rebuilding our public services.

    As a former economist at the Bank of England, I know what it means to respect our economic institutions. I put on record my thanks to the Governor of the Bank, Andrew Bailey, and the independent Monetary Policy Committee. Today, I can confirm that we will maintain the MPC’s target of 2% inflation, as measured by the 12-month increase in the consumer prices index. I thank James Bowler, the permanent secretary to the Treasury, and my team of officials. I also thank my predecessors as Chancellor of the Exchequer for their wise counsel as I have prepared for this Budget. In particular, I thank the former right hon. Member for Spelthorne for his invaluable advice in this weekend’s papers, where he concluded that his mini-Budget “wasn’t perfect”. For once, he and I are in absolute agreement. Finally, I thank Richard Hughes and his team at the Office for Budget Responsibility for their work in preparing today’s economic and fiscal outlook.

    Let me take the House through that forecast. The cost of living crisis under the last Government stretched household finances to their limit, with inflation hitting a peak of above 11%. Today, the OBR says that CPI inflation will average 2.5% this year, 2.6% in 2025, 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2.0% in 2029.

    Moving on to economic growth, today’s Budget marks an end to short-termism, so I am pleased that, for the first time, the OBR has published not only five-year growth forecasts but a detailed assessment of the growth impacts of our policies over the next decade. The new charter for Budget responsibility, which I am publishing today, confirms that this will become a permanent feature of our framework. The OBR forecasts that real GDP growth will be 1.1% in 2024, 2.0% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028 and 1.6% in 2029. The OBR is clear: this Budget will permanently increase the supply capacity of the economy, boosting long-term growth. [Interruption.] It may sound shocking to Conservative Members, but this Government are boosting long-term economic growth.

    Every Budget that I deliver will be focused on our mission to grow the economy, and underpinning that mission are the seven key pillars of our growth strategy, developed and delivered alongside business, and all driven forward by our excellent Financial Secretary to the Treasury. The first and most important is to restore economic stability. That is my focus today. Secondly, increasing investment and building new infrastructure is vital for productivity, so we are catalysing £70 billion of investment through our national wealth fund, and we are transforming our planning rules to get Britain building again. Thirdly, to ensure that all parts of the UK can realise their potential we are working with the devolved Governments and partnering with our mayors to develop local growth plans. Fourthly, to improve employment prospects and skills we are creating Skills England, delivering our plans to make work pay and tackling economic inactivity.

    Fifthly, we are launching our long-term modern industrial strategy and expanding opportunities for our small and medium-sized businesses to grow. Sixthly, to drive innovation, we are protecting record funding for research and development to harness the full potential of the UK’s science base. Finally, to maximise the growth benefits of our clean energy mission, we have confirmed key investments, such as carbon capture and storage, to create jobs in our industrial heartlands. Our approach is already having an impact: just two weeks ago, we delivered an international investment summit that saw businesses commit £63.5 billion of investment into our country, creating nearly 40,000 jobs across the United Kingdom. But we cannot undo 14 years of damage in one go. Economic growth will be our mission for the duration of this Parliament.

    In our manifesto, we set out the fiscal rules that would guide this Government. I am confirming those today: our stability rule and our investment rule. The stability rule means that we will bring the current Budget into balance so that we do not borrow to fund day-to-day spending. We will meet that rule in 2029-30, until that becomes the third year of the forecast. From then on, we will balance the current Budget in the third year of every Budget, held annually each autumn. That will provide a tougher constraint on day-to-day spending, so that difficult decisions cannot be constantly delayed or deferred. The OBR says that the current Budget will be in deficit by £26.2 billion in 2025-26 and by £5.2 billion in 2026-27, before moving into surplus of £10.9 billion in 2027-28, £9.3 billion in 2028-29 and £9.9 billion in 2029-30, meeting our stability rule two years early.

    Monthly public sector finance data show that Government borrowing in the first six months of this year was already running significantly higher than the OBR’s March forecast, and the OBR confirmed today that borrowing in this financial year is now £127 billion, reflecting the inheritance left by the Conservative party. The increase in the net cash requirement in 2024-25 is lower than the increase in borrowing, at £22.3 billion higher than the spring forecast. Because of the action that we are taking, borrowing falls from 4.5% of GDP this year to 2.1% of GDP by the end of the forecast. Public sector net borrowing will be £105.6 billion in 2025-26, £88.5 billion in 2026-27, £72.2 billion in 2027-28, £71.9 billion in 2028-29 and £70.6 billion in 2029-30.

    Before I come to tax, it is vital that we are driving efficiency and reducing wasteful spending. In July, to begin dealing with our inheritance, I made £5.5 billion of savings this year. Today we are setting a 2% productivity, efficiency and savings target for all Departments to meet next year by using technology more effectively and joining up services across Government. As set out in our manifesto, I will shortly be appointing our covid corruption commissioner. They will lead our work to uncover those companies that used a national emergency to line their own pockets, because that money belongs in our public services, and taxpayers want it back. I can confirm today that David Goldstone has been appointed chair of the new office for value for money to help us realise the benefits from every pound of public spending.

    Today, I am also taking three steps to ensure that welfare spending is more sustainable. First, we inherited the last Government’s plans to reform the work capability assessment. We will deliver those savings as part of our fundamental reforms to the health and disability benefits system that my right hon. Friend the Work and Pensions Secretary will bring forward.

    Secondly, I can today announce a crackdown on fraud in our welfare system—often the work of criminal gangs. We will expand the DWP’s counter-fraud teams, using innovative new methods to prevent illegal activity, and provide new legal powers to crack down on fraudsters, including direct access to bank accounts to recover debt. That package saves £4.3 billion a year by the end of the forecast.

    Thirdly, the Government will shortly be publishing the “Get Britain Working” White Paper, tackling the root causes of inactivity with an integrated approach across health, education and welfare, and we will provide £240 million for 16 trailblazer projects, targeted at those who are economically inactive and most at risk of being out of education, employment or training, to get people into work and reduce the benefits bill.

    Before a Government can consider any change to a tax rate or threshold, they must ensure that people pay what they already owe. We will invest to modernise His Majesty’s Revenue and Customs systems using the very best technology, and recruit additional HMRC compliance and debt staff. We will clamp down on the umbrella companies that exploit workers, increase the interest rate on unpaid tax debt to ensure that people pay on time, and go after the promoters of tax avoidance schemes. Those measures to reduce the tax gap raise £6.5 billion by the end of the forecast, and I thank the Exchequer Secretary to the Treasury for his outstanding work on that agenda.

    I know that for working people up and down our country, family finances are stretched and pay cheques do not go as far as they once did, so today I am taking steps to support people with the cost of living. It was the Labour Government who introduced the national minimum wage in 1999. That had a transformative impact on the lives of working people. As promised in our manifesto, we asked the Low Pay Commission to take account of the cost of living for the first time. I can confirm that we will accept the commission’s recommendation to increase the national living wage by 6.7% to £12.21 an hour, worth up to £1,400 a year for a full-time worker. And, for the first time, we will move towards a single adult rate, phased in over time by initially increasing the national minimum wage for 18 to 20-year-olds by 16.3%, as recommended by the Low Pay Commission, taking it to £10 an hour—a Labour policy to protect working people, being delivered by a Labour Government once again.

    Secondly, I have heard representations from colleagues across this House, including my hon. Friends the Members for Shipley (Anna Dixon) and for Scarborough and Whitby (Alison Hume), and the right hon. Member for Kingston and Surbiton (Ed Davey), about the carer’s allowance and the impact of the current policy on carers who are looking to increase the hours that they work. Carer’s allowance currently provides up to £81.90 per week to help those with additional caring responsibilities. Today, I can confirm that we are increasing the weekly earnings limit to the equivalent of 16 hours at the national living wage per week—the largest increase in the carer’s allowance since it was introduced in 1976. That means that a carer can now earn over £10,000 a year while receiving carer’s allowance, allowing them to increase their hours where they want to, and keep more of their money. I am also concerned about the cliff edge in the current system and the issue of overpayments. My right hon. Friend the Work and Pensions Secretary has announced an independent review to look at the issue of overpayments, and we will work across the House to develop the right solutions.

    Thirdly, we will provide £1 billion from next year to extend the household support fund and discretionary housing payments to help those facing financial hardship with the cost of essentials. Fourthly, having heard representations from the Joseph Rowntree Foundation, the Trussell Trust and others, I will reduce the level of debt repayments that can be taken from a household’s universal credit payment each month from 25% to 15% of their standard allowance. That means that 1.2 million of the poorest households will keep more of their award each month, lifting children out of poverty, and those who benefit will gain an average of £420 a year.

    Our plan to make work pay will also protect working people. I know that Conservative Members are deeply interested in our plans. Having seen their colleagues repeatedly dismissed at short notice, I know that they are worried about their future under the right hon. Member for North West Essex (Mrs Badenoch). They should rest easy knowing that our plan will protect working people from unfair dismissal; it will safeguard them from bullying in the workplace; and it will improve their access to paternity and maternity leave. I hope the new shadow Cabinet will soon be grateful for those increased protections at work.

    It is right that we protect those who have worked all their lives. In our manifesto, we promised to transfer the investment reserve fund in the mineworkers’ pension scheme to members. I have listened closely to my hon. Friends the Members for Easington (Grahame Morris), for Doncaster Central (Sally Jameson), for Blaenau Gwent and Rhymney (Nick Smith) and for Ayr, Carrick and Cumnock (Elaine Stewart) on this issue. Today, we are keeping our promise, so that working people who powered our country receive the fair pension that they are owed.

    Our manifesto committed to the triple lock, meaning that spending on the state pension is forecast to rise by over £31 billion by 2029-30, to ensure our pensioners are protected in their retirement. That commitment means that while working-age benefits will be uprated in line with CPI at 1.7%, the basic and new state pension will be uprated by 4.1% in 2025-26. This means that over 12 million pensioners will gain up to £470 next year, up to £275 more than uprating by inflation. The pension credit standard minimum guarantee will also rise by 4.1%, from around £11,400 per year to around £11,850 a year for a single pensioner.

    While I have sought to protect working people with measures to reduce the cost of living, I have had to take some very difficult decisions on tax. I want to set out my approach to fuel duty. Baked into the numbers that I inherited from the previous Government is an assumption that fuel duty will rise in line with the retail prices index next year and that the temporary 5p cut will be reversed. To retain the 5p cut and to freeze fuel duty again would cost over £3 billion next year. At a time when the fiscal position is so difficult, I have to be frank with the House that that is a substantial commitment to make. I have concluded that, in these difficult circumstances, while the cost of living remains high and with a backdrop of global uncertainty, increasing fuel duty next year would be the wrong choice for working people. It would mean fuel duty rising by 7p per litre, so I have decided today to freeze fuel duty next year, and I will maintain the existing 5p cut for another year, too. There will be no higher taxes at the petrol pumps next year.

    The last Government made cuts of £20 billion to employees’ and self-employed national insurance in their final two Budgets. Those tax cuts were not honest, because we now know that they were based on a forecast that the OBR says would have been “materially different” had it known the true extent of the last Government’s cover-up. Since July, I have been urged on multiple occasions to reconsider those cuts—to increase the taxes that working people pay and see in their payslips—but I have made an important choice today: to keep every single commitment that we made on tax in our manifesto. I say to working people, I will not increase your national insurance, I will not increase your VAT, and I will not increase your income tax. Working people will not see higher taxes in their payslips as a result of the choices I am making today. That is a promise made and a promise fulfilled.

    Any responsible Chancellor would need to make difficult decisions today to raise the revenues required to fund our public services and restore economic stability. So in today’s Budget, I am announcing an increase in employers’ national insurance contributions. We will increase the rate of employers’ national insurance by 1.2 percentage points to 15% from April 2025, and we will reduce the secondary threshold—the level at which employers start paying national insurance on each employee’s salary—from £9,100 a year to £5,000. This will raise £25 billion per year by the end of the forecast period. I know that this is a difficult choice; I do not take this decision lightly. We are asking businesses to contribute more, and I know that there will be impacts of this measure felt beyond businesses, too, as the OBR has set out today. [Interruption.]

    Madam Deputy Speaker (Ms Nusrat Ghani)

    Order. Our constituents are watching—they need to be able to hear the Chancellor. Simmer down.

    Rachel Reeves

    In the circumstances I have inherited, it is the right choice to make. Successful businesses depend on successful schools, healthy businesses depend on a healthy NHS, and a strong economy depends on strong public finances. If the Conservative party chooses to oppose this choice, it is choosing more austerity, more chaos and more instability. That is the choice our country faces, too.

    As I make this choice, I know it is particularly important to protect our smallest companies. Having heard representations from the Federation of Small Businesses and others, I am today increasing the employment allowance from £5,000 to £10,500. This means that 865,000 employers will not pay any national insurance at all next year, and over 1 million will pay the same or less than they did previously. This will allow a small business to employ the equivalent of four full-time workers on the national living wage without paying any national insurance on their wages.

    Let me now come to capital gains tax. We need to drive growth, promote entrepreneurship and support wealth creation while raising the revenue required to fund our public services and restore our public finances. Today, we will increase the lower rate of capital gains tax from 10% to 18% and the higher rate from 20% to 24%, while maintaining the rates of capital gains tax on residential property at 18% and 24%. This means that the UK will still have the lowest capital gains tax rate of any European G7 economy.

    Alongside these changes to the headline rates of capital gains tax, we are maintaining the lifetime limit for business asset disposal relief at £1 million to encourage entrepreneurs to invest in their businesses. Business asset disposal relief will remain at 10% this year before rising to 14% in April 2025 and to 18% from 2026-27, maintaining a significant gap compared with the higher rate of capital gains tax. Together, the OBR says that these measures will raise £2.5 billion by the end of the forecast.

    In a sign of this Government’s commitment to supporting growth and entrepreneurship, we have already extended the enterprise investment and venture capital trust schemes to 2035, and we will continue to work with leading entrepreneurs and venture capital firms to ensure that our policies support a positive environment for entrepreneurship in the UK.

    Next, I turn to inheritance tax. Only 6% of estates will pay inheritance tax this year. I understand the strongly held desire to pass down savings to children and grandchildren, so I am taking a balanced approach in my package today. First, the previous Government froze inheritance tax thresholds until 2028. I will extend that freeze for a further two years, until 2030. That means that the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants and £1 million when a tax-free allowance is passed to a surviving spouse or civil partner.

    Secondly, we will close the loophole created by the previous Government, made even bigger when the lifetime allowance was abolished, by bringing inherited pensions into inheritance tax from April 2027. Finally, we will reform agricultural property relief and business property relief. From April 2026, the first £1 million of combined business and agricultural assets will continue to attract no inheritance tax at all, but for assets over £1 million, inheritance tax will apply with a 50% relief at an effective rate of 20%. This will ensure that we continue to protect small family farms, with three quarters of claims unaffected by these changes.

    I can also announce that we will apply a 50% relief in all circumstances on inheritance tax for shares on the alternative investment market and other similar markets, setting the effective rate of tax at 20%. Taken together, these measures raise over £2 billion by the final year of the forecast.

    Next, I can confirm that the Government will renew the tobacco duty escalator for the remainder of this Parliament at RPI+2%, increase duty by a further 10% on hand-rolling tobacco this year, and introduce a flat-rate duty on all vaping liquid from October 2026, alongside an additional one-off increase in tobacco duty to maintain the incentive to give up smoking. We will increase the soft drinks industry levy to account for inflation since it was introduced, as well as increasing the duty in line with CPI each year going forward. These measures will raise nearly £1 billion per year by the end of the forecast period.

    We want to support the take-up of electric vehicles, so I will maintain the incentives for electric vehicles in company car tax from 2028 and increase the differential between fully electric and other vehicles in the first-year rates of vehicle excise duty from April 2025. These measures will raise around £400 million by the end of the forecast period.

    Let me update the House on our plans for air passenger duty—and I can see the Leader of the Opposition’s ears have pricked up. Air passenger duty has not kept up with inflation in recent years, so we are introducing an adjustment, meaning an increase of no more than £2 for an economy class short-haul flight. But I am taking a different approach when it comes to private jets, increasing the rate of air passenger duty by a further 50%. That is equivalent to £450 per passenger for a private jet to, say, California. [Laughter.]

    Let us now turn to our high street businesses. I know that, for them, a major source of concern is business rates. From 2026-27, we intend to introduce two permanently lower tax rates for retail, hospitality and leisure properties, which make up the backbone of our high streets across the country, and it is our intention that it is paid for by a higher multiplier for the most valuable properties. The previous Government created a cliff edge next year, as temporary reliefs end, so I will today provide 40% relief on business rates for the retail, hospitality and leisure industry in 2025-26 up to a cap of £110,000 per business. Alongside this, the small business tax multiplier will be frozen next year.

    Next, I can confirm that alcohol duty rates on non-draught products will increase in line with RPI from February next year. However, nearly two thirds of alcoholic drinks sold in pubs are served on draught, so today, instead of uprating these products in line with inflation, I am cutting draught duty by 1.7%—[Hon. Members: “Hear, hear!”]—which means a penny off the pint in the pub.

    Alongside the changes I am making today, I am publishing a corporate tax road map, providing the business certainty called for by the CBI, the British Chambers of Commerce and the Institute of Directors. This confirms our commitment to cap the rate of corporation tax at 25%—the lowest in the G7—for the duration of this Parliament, while maintaining full expensing and the £1 million annual investment allowance, and keeping the current rates of research and development relief to drive innovation.

    In our manifesto, we made a number of commitments to raising funding for our public services. First, I have always said that if you make Britain your home, you should pay your taxes here, too, so today I can confirm that we will abolish the non-dom tax regime, and we will remove the outdated concept of domicile from the tax system from April 2025. We will introduce a new, residence-based scheme, with internationally competitive arrangements for those coming to the UK on a temporary basis, while closing the loopholes in the scheme designed by the Conservative party. To further encourage investment into the UK, we will extend the temporary repatriation relief to three years and expand its scope, bringing billions of pounds of new funds into Britain. The independent Office for Budget Responsibility says that this package of measures will raise £12.7 billion over the next five years.

    The fund management industry provides a vital contribution to our economy, but as our manifesto set out, there needs to be a fairer approach to the way that carried interest is taxed, so we will increase the capital gains rates on carried interest to 32% from April 2025, and from April 2026 we will deliver further reform to ensure that the specific rules for carried interest are simpler, fairer and better targeted.

    In our manifesto, we committed to reforming stamp duty land tax to raise revenues, while supporting those buying their first home. We are increasing the stamp duty land tax surcharge for second homes, known as the higher rate for additional dwellings, by 2 percentage points to 5%, which will come into effect from tomorrow. This will support over 130,000 additional transactions from people buying their first home or moving home over the next five years.

    Next, we are committed to reforming the energy profits levy on oil and gas companies. I can confirm today that we will increase the rate of the levy to 38%. The levy will now expire in March 2030, and we will remove the 29% investment allowance. To ensure that the oil and gas industry can protect jobs and support our energy security, we will maintain the 100% first-year allowances, and the decarbonisation allowances, too.

    Finally, 94% of children in the UK attend state schools. To provide the highest-quality support and teaching that they deserve, we will introduce VAT on private school fees from January 2025, and we will shortly introduce legislation to remove their business rates relief from April 2025, too.

    We said in our manifesto that these changes, alongside our measures to tackle tax avoidance, would bring in £8.5 billion in the final year of the forecast. I can confirm today that they will in fact raise over £9 billion to support our public services and restore our public finances. That is a promise made and a promise fulfilled.

    I have one final decision to announce on tax today. The previous Government froze income tax and national insurance thresholds in 2021, and then did so again after the mini-Budget. Extending their threshold freeze for a further two years raises billions of pounds—money to deal with the black hole in our public finances and repair our public services. Having considered the issue closely, I have come to the conclusion that extending the threshold freeze would hurt working people. It would take more money out of their payslips. 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 and national insurance thresholds beyond the decisions made by the previous Government. From 2028-29, personal tax thresholds will be uprated in line with inflation once again. When it comes to choices on tax, this Government choose to protect working people every single time.

    Those are the choices I have made to restore economic stability and protect working people. My next choice is to begin to repair our public services. In recent months, we conducted the first phase of the spending review to set departmental budgets for 2024-25 and 2025-26. I thank my right hon. Friend the Chief Secretary to the Treasury for his tireless work with colleagues from across Government. Because I have taken difficult decisions on tax today, I am able to provide an injection of immediate funding over the next two years to stabilise and support our public services.

    The next phase of the spending review will report in late spring, and I have set out the overall envelope today. Day-to-day spending from 2024-25 onwards will grow by 1.5% in real terms, and today departmental spending, including capital spending, will grow by 1.7% in real terms. At the election, we promised that there would be no return to austerity, and today we deliver on that promise, but given the scale of the challenge that we face in our public services, there will still be difficult choices in the next phase of the spending review. Just as we cannot tax and spend our way to prosperity, neither can we simply spend our way to better public services. We will deliver a new approach to public service reform, using technology to improve public services and taking a zero-based approach, so that taxpayers’ money is spent as effectively as possible, and so that we focus on delivering our key priorities.

    In the first phase of the spending review, I have prioritised day-to-day funding to deliver on our manifesto commitments. I want every child to have the very best start in life, and the best possible start to their school day. I know that my right hon. Friend the Secretary of State for Education shares my ambition, so today I am tripling investment in breakfast clubs to fund them in thousands of schools. I am increasing the core schools budget by £2.3 billion next year to support our pledge to hire thousands more teachers in key subjects. So that our young people can develop the skills that they need for the future, I am providing an additional £300 million for further education. Finally, this Government are committed to reforming special educational needs provision, to improve outcomes for our most vulnerable children and ensure that the system is financially sustainable. To support that work, I am today providing a £1 billion uplift in funding—a 6% real-terms increase from this year.

    There is no more important job for Government than keeping our country safe, and we are conducting a strategic defence review, to be published next year. As set out in our manifesto, we will set a path to spending 2.5% of GDP on defence at a future fiscal event. Today, I am announcing a total increase in the Ministry of Defence’s budget of £2.9 billion next year, ensuring that the UK comfortably exceeds our NATO commitments, and providing guaranteed military support to Ukraine of £3 billion per year for as long as it takes. Last week, alongside my right hon. Friend the Defence Secretary, I announced, in addition to that, further support for Ukraine, on top of our NATO commitment. That support comes through our £2.26 billion contribution to the G7’s extraordinary revenue acceleration agreement. That will be repaid using profits from immobilised Russian sovereign assets.

    As we approach Remembrance Sunday, it is vital that we take time to remember those who have served our country so bravely. I am today announcing funding to commemorate the 80th anniversary of VE and VJ Day next year, to honour those who served at home and abroad. We must also remember those who experienced the atrocities of the Nazi regime at first hand. I would like to pay tribute to Lily Ebert, the Holocaust survivor and educator who passed away aged 100 earlier this month. I am today committing a further £2 million for Holocaust education next year, so that charities such as the Holocaust Educational Trust can continue their work to ensure that those vital testimonies are not lost, and are preserved for the future.

    To repair our public services, we need to work alongside our mayors and local leaders. We will deliver a significant, real-terms funding increase for local government next year, including £1.3 billion of additional grant funding to deliver essential services, with at least £600 million in grant funding for social care and £230 million to tackle homelessness and rough sleeping. We are today confirming that Greater Manchester and the West Midlands will be the first mayoral authorities to receive integrated settlements from next year, giving mayors meaningful control of funding for their local areas. To support our high streets, we are taking action to deal with the sharp rise in shoplifting that we have seen in recent years. We will scrap the effective immunity for low-value shoplifting introduced by the Conservative party, and having listened closely to organisations such as the British Retail Consortium and the trade union USDAW, I am providing additional funding to crack down on the organised gangs that target retailers, and to provide more training for our police officers and retailers, in order to stop shoplifting in its tracks.

    Finally, I am today providing funding to support public services and drive growth across Scotland, Wales, and Northern Ireland. Having discussed the matter with the First Minister of Wales, Eluned Morgan, my hon. Friend the Under-Secretary of State for Wales (Dame Nia Griffith), and my hon. Friend the Under-Secretary of State for Justice (Alex Davies-Jones), I am today providing £25 million to the Welsh Government next year for the maintenance of coal tips, to ensure that we keep our communities safe. To support growth, including in our rural areas, we will proceed with city and growth deals in Northern Ireland, in Causeway Coast and Glens, and the Mid South West. We will drive growth in Scotland, which is a key priority for Scottish Labour and our leader, Anas Sarwar, including through a city and growth deal in Argyll and Bute.

    This Budget provides the devolved Governments with the largest real-terms funding settlement since devolution, delivering an additional £3.4 billion to the Scottish Government through the Barnett formula—funding that must now be used effectively in Scotland to deliver the public services that the people of Scotland deserve. This Budget also provides £1.7 billion to the Welsh Government, and £1.5 billion to the Northern Ireland Executive in 2025-26. I said there would be no return to austerity; that is the choice I have made today.

    To rebuild our country, we need to increase investment. The UK lags behind every other G7 country when it comes to business investment as a share of our economy. That matters. It means that the UK has fallen behind in the race for new jobs, new industries, and new technology. By restoring economic stability, and by establishing the national wealth fund to catalyse private funding, we have begun to create the conditions that businesses need to invest, but there is also a significant role for public investment. For too long, we have seen Conservative Chancellors cut investment and raid capital budgets to plug gaps in day-to-day spending. The result is clear for all to see: hospitals without the equipment they need; school buildings not fit for our children; a desperate lack of affordable housing; and economic growth held back at every turn. Under the plans I inherited, public investment was set to fall from 2.5% to 1.7% of GDP, but in Washington last week, the International Monetary Fund was clear: more public investment is badly needed in the UK.

    Having listened to the case made by the former Governor of the Bank of England, Mark Carney, the former Treasury Minister, Jim O’Neill and the former Cabinet Secretary, Gus O’Donnell, among others, I am confirming our investment rule. As was set out in our manifesto, we will target debt falling as a share of the economy. Debt will be defined as public sector net financial liabilities—or net financial debt, for short. That metric has been measured by the Office for National Statistics since 2016 and forecast by the Office for Budget Responsibility since that date, too.

    Net financial debt recognises that Government investment delivers returns for taxpayers by counting not just the liabilities on a Government’s balance sheet, but the financial assets, too. That means we count the benefits of that investment, not just the costs, and we free up our institutions to invest, just as they do in Germany, France and Japan. Like our stability rule, our investment rule will apply in 2029-30, until that becomes the third year of the forecast. From that point onwards, net financial debt will fall in the third year of every forecast. Today, the OBR says that we are already meeting our target two years early, with net financial debt falling by 2027-28 and £15.7 billion of headroom in the final year.

    So that we drive the right incentives in Government investments, we will introduce four key guardrails to ensure capital spending is good value for money and drives growth in our economy. First, our portfolio of new financial investments will be delivered by expert bodies, such as the national wealth fund, and must by default earn a rate of return at least as large as that on gilts. Secondly, we will strengthen the role of institutions to improve infrastructure delivery. Thirdly, we will improve certainty, setting capital budgets for five years and extending them at spending reviews every two years. Finally, we will ensure greater transparency for capital spending, with robust annual reporting of financial investments based on accounts audited by the National Audit Office and made available to the Office for Budget Responsibility at every forecast. Taken together with our stability rule, these fiscal rules will ensure that our public finances are on a firm footing, while enabling us to invest prudently alongside business.

    The capital plans I now set out to drive growth across our country and repair the fabric of our nation are possible only because of our investment rule. Let me set out those investment plans. Today, we are confirming our plans to capitalise the national wealth fund to invest in the industries of the future, from gigafactories to ports to green hydrogen. Building on those investments, my right hon. Friend the Business Secretary is driving forward our modern industrial strategy, working with businesses and organisations such as Make UK to set out the sectors with the biggest growth potential. Today, we are confirming multi-year funding commitments for these areas of our economy, including nearly £1 billion for the aerospace sector to fund vital research and development, building on our industry in the east midlands, the south-west and Scotland; more than £2 billion for the automotive sector to support our electric vehicle industry and develop our manufacturing base, building on our strengths in the north-east and the west midlands; and up to £520 million for a new life sciences innovative manufacturing fund.

    For our world-leading creative industries, we will legislate to provide additional tax relief for visual effect costs in TV and film, and we are providing £25 million for the North East combined authority, which it plans to use to remediate the Crown Works Studios site in Sunderland, creating 8,000 new jobs.

    To unlock these growth industries of the future, we will protect Government investment in research and development, with more than £20 billion-worth of funding. This includes at least £6.1 billion to protect core research funding for areas such as engineering, biotechnology and medical science through Research England, other research councils and the national academies. We will extend the innovation accelerators programme in Glasgow, Manchester and the west midlands. With more than £500 million of funding next year, my right hon. Friend the Secretary of State for Science, Innovation and Technology will continue to drive progress in improving reliable, fast broadband and mobile coverage across our country, including in rural areas.

    We committed in our manifesto to build 1.5 million homes over the course of this Parliament, and my right hon. Friend the Deputy Prime Minister is driving that work forward across government. Today, I am providing more than £5 billion of Government investment to deliver our plans on housing next year. We will increase the affordable homes programme to £3.1 billion, delivering thousands of new homes. We will provide £3 billion-worth of support in guarantees to boost the supply of homes and support our small house builders. We will provide investment to renovate sites across our country, including at Liverpool Central Docks, where we will deliver 2,000 new homes, and funding to help Cambridge realise its full growth potential.

    Alongside this investment, we will put the right policies in place to increase the supply of affordable housing. Having heard representations from local authorities, social housing providers and Shelter, I can today confirm that the Government will reduce right-to-buy discounts and that local authorities will be able to retain the full receipts from any sales of social housing, so that we can reinvest them back into housing stock and into new supply. By doing that, we will give more people a safe, secure and affordable place to live.

    We will provide stability to social housing providers with a social housing rent settlement of CPI plus 1% for the next five years, and we will deliver on our manifesto commitment to hire hundreds of new planning officers to get Britain building again. We will also make progress on our commitment to accelerate the remediation of homes, following the findings of the Grenfell inquiry, with £1 billion of investment to remove dangerous cladding next year.

    The last Government made a number of promises on transport, but failed to fund them. Working with my right hon. Friend the Transport Secretary, I am changing that. We are today securing the delivery of the trans-Pennine upgrade to connect York, Leeds, Huddersfield and Manchester, delivering fully electric local and regional services between Manchester and Stalybridge by the end of this year, with a further electrification of services between Church Fenton and York by 2026, to help grow our economy across the north of England with faster and more reliable services.

    We will deliver East West Rail to drive growth between Oxford, Milton Keynes and Cambridge, with the first services running between Oxford, Bletchley and Milton Keynes next year, and trains between Oxford and Bedford running from 2030. We are delivering railway schemes that improve journeys for people across our country, including upgrades at Bradford Forster Square station, improving capacity at Manchester Victoria and electrifying the Wigan to Bolton line.

    My right hon. Friend the Transport Secretary has also set out a plan for how to get a grip of HS2. Today, we are securing delivery of the project between Old Oak Common and Birmingham, and we are committing the funding required to begin tunnelling work to London Euston station. That will catalyse private investment into the local area, delivering jobs and growth.

    I am also funding significant improvements to our road network. For too long, potholes have been an all-too-visible reminder of our failure to invest as a nation. Today that changes, with a £500 million increase in road maintenance budgets next year—more than delivering on our manifesto commitment to fix an additional 1 million potholes each year. We will provide over £650 million of local transport funding to improve connections across our country, in towns such as Crewe and Grimsby and in our villages and rural areas from Cornwall to Cumbria. While the previous Government’s policy was for the bus fare cap to end this December, we understand how important bus services are for our communities, so we will extend the cap for a further year, setting it at £3 until December 2025. Finally, we will deliver £1.3 billion of funding to improve connectivity in our city regions, funding projects such as the Brierley Hill metro extension in the west midlands, the renewal of the Sheffield Supertram, and West Yorkshire mass transit, including in Bradford and Leeds.

    To bring new jobs to Britain and drive growth across our country, we are delivering our mission to make Britain a clean energy superpower, led by my right hon. Friend the Energy Secretary. Earlier this month, we announced a significant multi-year investment between Government and business in carbon capture and storage, creating 4,000 jobs across Merseyside and Teesside. Today, I am providing funding for 11 new green hydrogen projects across England, Scotland and Wales—they will be among the first commercial-scale projects anywhere in the world—including in Bridgend, East Renfrewshire and Barrow-in-Furness. We are kick-starting the warm homes plan by confirming an initial £3.4 billion over the next three years to transform 350,000 homes, including a quarter of a million low-income and social homes, and we will establish GB Energy, providing funding next year to set it up at its new home in Aberdeen.

    Overall, we will invest an additional £100 billion over the next five years in capital spending—that is possible only because of our investment rule. The OBR says today that this investment will drive growth across our country in the next five years and, in the longer term, increase GDP by up to 1.4%. It will crowd in private investment, meaning more jobs and more opportunities in every corner of the UK. That is the choice that I have made: to invest in our country and to grow our economy.

    Today, I am setting out two final areas in which investment is so badly needed to repair the fabric of our nation. My hon. Friend the Member for Lewisham West and East Dulwich (Ellie Reeves) and I joined the Labour party because of the condition of our schools in the 1980s and 1990s under Conservative Governments. When we were at secondary school, my sixth form was a couple of prefab huts in the playground. My school, like so many others, was rebuilt by the last Labour Government, but after 14 years of Tory government, progress has gone backwards: school roofs are crumbling and millions of children are facing the same backdrop as I did. I will be the Chancellor who changes that.

    Today, I am providing £6.7 billion of capital investment to the Department for Education next year—a 19% real-terms increase on this year. That includes £1.4 billion to rebuild over 500 schools in the greatest need, including St Helen’s primary school in Hartlepool, Mercia academy in Derby and so many more across our country. We will provide £2.1 billion more to improve school maintenance—£300 million more than this year—ensuring that all our children can learn somewhere safe. That will include dealing with reinforced autoclaved aerated concrete-affected schools in the constituencies of my hon. Friends the Members for Watford (Matt Turmaine), for Stourbridge (Cat Eccles) and for Hyndburn (Sarah Smith) and beyond, alongside investment in new teachers and funding for thousands of new breakfast clubs. This Government are giving our children and young people the opportunities that they deserve.

    I come to our most cherished public service of all: our NHS. My right hon. Friend the Health Secretary is beginning to repair the damage of the last 14 years. In our first week in office, he commissioned an independent report into the state of our health service by Lord Darzi. Its conclusions were damning. While our NHS staff do a remarkable job, and we thank them for it, it is clear that in so many areas we are moving in the wrong direction. A hundred thousand infants waited over six hours in A&E last year. Three hundred and fifty thousand people are waiting a year for mental health support. Cancer deaths here are higher than in other countries. It is simply unforgiveable.

    In the spring, we will publish a 10-year plan for the NHS to deliver a shift from hospital to community, from analogue to digital and from sickness to prevention. Today, we are announcing a down payment on that plan to enable the NHS to deliver 2% productivity growth next year. These reforms are vital, but we should be honest: the state of the NHS that we inherited after—I quote Lord Darzi—

    “the most austere decade since the NHS was founded”

    means that reform must come alongside investment. So today, because of the difficult decisions that I have taken on tax, welfare and spending, I can announce that I am providing a £22.6 billion increase in the day-to-day health budget and a £3.1 billion increase in the capital budget over this year and next. This is the largest real-terms growth in day-to-day NHS spending outside of covid since 2010.

    Let me set out what this funding is delivering. Many NHS buildings have been left in a state of disrepair, so we will provide £1 billion of health capital investment next year to address the backlog of repairs and upgrades across our NHS. To increase capacity for tens of thousands more procedures next year, we will provide a further £1.5 billion for new beds in hospitals across our country, new capacity for over a million additional diagnostic tests, and new surgical hubs and diagnostic centres so that people waiting for their treatment can get it as quickly as possible.

    My right hon. Friend the Health Secretary will be setting out further details of his review into the new hospital programme in the coming weeks and publishing in the new year, but I can tell the House today that work will continue at pace to deliver those seven hospitals affected by the RAAC crisis, including West Suffolk hospital in Bury St Edmunds and Leighton hospital in Crewe. And finally, because of this record injection of funding, the thousands of additional beds that we have secured and the reforms that we are delivering in our NHS, we can now begin to bring waiting lists down more quickly and move towards our target for waiting times to be no longer than 18 weeks by delivering on our manifesto commitment for 40,000 extra hospital appointments a week. That is the difference that this Labour Government are making.

    The choices I have made today are the right choices for our country—to restore stability to our public finances, to protect working people, to fix our NHS and to rebuild Britain. That does not mean these choices are easy, but they are responsible. If the Conservatives disagree with the choices that I have made, they must answer: what choices would they make? Would they again choose the path of irresponsibility—the path taken by Liz Truss—and ignore the problems in our public finances all together? If that is their choice, they should say so. But let me be clear: if they disagree with my choices on tax, they would not be able to protect working people. If they disagree with our plans to fund public services, they would have to cut schools and hospitals. If they disagree with our investment rule, they would have to delay or cancel thousands of projects that drive growth across our country.

    This is a moment of fundamental choice for Britain. I have made my choices—the responsible choices—to restore stability to our country and to protect working people. More teachers in our schools, more appointments in our NHS, more homes being built, fixing the foundations of our economy, investing in our future, delivering change and rebuilding Britain. We on the Government Benches commend those choices, and 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) Value added tax (private school fees) (motion no. 34);

    (b) Stamp duty land tax (additional dwellings: purchases before 1 April 2025) (motion no. 35);

    (c) Stamp duty land tax (purchases by companies) (motion no. 37);

    (d) Rates of tobacco products duty (motion no. 46).—(Rachel Reeves.)

  • Rachel Reeves – 2024 Speech at Labour Party Conference

    Rachel Reeves – 2024 Speech at Labour Party Conference

    The speech made by Rachel Reeves, the Chancellor of the Exchequer, on 23 September 2024.

    Conference, thank you.

    This time last year, I stood on this stage and I made a commitment.

    I promised that we would get Britain building again.

    Repair our NHS.

    And power growth in every part of Britain.

    Today, after fourteen wasted years, I stand here as your Chancellor of the Exchequer, ready to deliver on that commitment.

    At this conference, we welcome more than 200 new Labour MPs – members of the most diverse Parliament in our country’s history.

    Labour winning for the very first time, in sears like South-East Cornwall, the Isle of Wight, Aldershot, Banbury and Basingstoke; in Hexham, Altrincham, and the Ribble Valley.

    And Labour is back, in the service of communities that we never should have lost.

    In our port, coal, steel and mill towns. From Bolsover, Bassetlaw and Grimsby to Hartlepool, Rother Valley, Newton Aycliffe, and Bridgend.

    And Conference, in Edinburgh, in Glasgow, across the central belt and out in the Western Isles, Labour is back in Scotland too.

    So let me pay tribute to the people in this hall who made that difference.

    Those who stayed and fought through the hard years.

    Those who came back to our party under Keir’s leadership.

    And those who joined us for the first time.

    You helped change our party and you gave us this priceless chance to change our country for the better.

    To all of you – a huge thank you.

    In this hall one year ago, I stated my intention.

    That the next time I addressed you, I would do so as the first female Chancellor of the Exchequer.

    Today, Conference, you can consider that a promise fulfilled.

    Eight hundred years of the post of Chancellor of the Exchequer has existed.

    Every one, a man.

    On the fifth of July this year, we made history.

    Every woman watching this will know no matter how high you climb, how hard you work, how qualified you are, there will always be moments when you are reminded some people still do not believe a woman can get the job done.

    But millions of women in our party, in our trade unions and in every walk of life, beat back those doubts.

    I’m here today because I worked hard, yes.

    But most of all, I’m here because of the efforts of those who went before me.

    Trailblazing women like Jennie Lee, Barbara Castle, and our friend, our inspiration, Harriet Harman.

    And I’m here because of thousands of women, many of you in the hall today, who broke down barriers and defeated low expectations to pave the way for the rest of us.

    I am a Labour Chancellor because of that collective endeavour.

    I am the first woman Chancellor because of that collective endeavour.

    And that collective endeavour does not stop here.

    It falls to me, and to our generation of Labour women, to follow in the footsteps of those who went before us. To write the work of all women back into our economic story. To show to our daughters and our granddaughters that they need place no ceiling on their ambitions.

    That is the Britain we’re building.

    That is the Britain that I believe in.

    But Conference, why is it that the British people put their trust in us for the first time in five general elections?

    It is because, thanks to Keir’s leadership, we left no stone unturned to show that Labour is the party of economic responsibility and the party of working people.

    We were elected because, for the first time in almost two decades, people looked at us – looked at me – and decided that Labour could be trusted with their money.

    That is more than a political choice, or a single line in any manifesto.

    It is about our values.

    Because we saw what happened two years ago what happens when governments play fast and loose with the public finances: when the prices of food, energy and housing soar, it is working people with mortgages, rent and bills to pay who suffer the consequences.

    I will not take that risk.

    I will repay the trust that people put in us.

    Trust is hard earned – and is easily squandered.

    Just ask the Conservatives.

    They paid the price for their incompetence, their dishonesty, their rule breaking.

    We’ve had years of division and decline that left working people worse off, not just in the heaviest defeat in their party’s history, but the heaviest defeat for any governing party in British history.

    And Conference I can tell you – today I am so proud that our women’s Parliamentary Labour Party is bigger than the entire Conservative parliamentary party.

    And so, where will the Conservative Party go next?

    What a clash of the titans their leadership contest has become.

    The former Home Secretary who called the Rwanda scheme “batshit” and, of course, is now pledging to bring it back.

    The former Immigration Minister, who found himself too right-wing to work with Suella Braverman.

    The “moderate” candidate, the former Security Minister, who says he “acts on his principles” – previously demonstrated by backing Liz Truss to be Prime Minister.

    And then there’s the former Business Secretary who claims she “became working class” at the age of sixteen.

    But Conference, the Tories’ failure was not just because they were incompetent or deluded.

    Not just because they put party before country – though, of course, both of those are true.

    It is because they do not understand the world as it is today.

    They do not understand the premium on economic stability, in an uncertain world.

    They do not understand that, in our new age of insecurity, government cannot just get out of the way and leave markets to their own devices.

    Instead, the Tories cling to the discredited trickle-down and trickle-out dogma that a strong economy can be built through the contribution of just a few people, a few parts of the country, or a few industries.

    Their ideas choked off investment, opened wide gaps between different parts of the country, and it suffocated growth and living standards.

    We will not make those mistakes.

    Yet, when their ideas were found wanting, what did they do? They doubled down.

    Never forget what the Conservatives did: two years ago today, in their clamour to cut taxes for the richest, they crashed the economy, sent mortgages spiraling, and put pensions in peril.

    You will hear many things at their conference next week.

    But you won’t hear an apology.

    No apology for the cost of your mortgage.

    No apology for crumbling classrooms and rising waiting lists.

    No apology for mismanaging our public finances, degrading our institutions, and crashing our global standing.

    They do not care.

    And they have learned nothing.

    So be in no doubt, given the chance, they will try and do it all over again.

    Only we, only the Labour Party, can stop them.

    So we must have no complacency.

    A relentless focus on the priorities of the British people.

    And iron discipline.

    We cannot give them that chance.

    So let’s resolve together today that we will not give them that chance.

    Now, I know that you are impatient for change. I am too.

    But Conference, because of that legacy left by the Conservatives, the road ahead is steeper and harder than we expected.

    You don’t need to take my word for it.

    Figures released only on Friday showed another month of record borrowing.

    Debt at one hundred percent of GDP.

    That is the inheritance that they left, in black and white.

    In my first weeks at the Treasury, the true extent of the Tories’ irresponsibility was revealed to me: £22 billion of spending plans, this year, that the previous government did not disclose.

    Which they had no plan to pay for and which they had covered up from Parliament and from the British people.

    Departments had been allocated money which they were spending, but which did not exist.

    The money was not there.

    A £22 billion black hole – which, if not tackled now, will pose risks for years to come.

    That included more than £6 billion overspend on the asylum system – including their failed Rwanda policy.

    Almost £3 billion on rail projects.

    The nation’s reserve – intended for genuine emergencies – set to be spent three times over only three months into the financial year.

    They were reckless.

    They were irresponsible.

    And they acted in that way, not because they believed it was right for our country – but because they believed it might rescue their party from defeat.

    They promised solutions that they knew could never be paid for.

    Roads that would never be built.

    Public transport that would never arrive.

    And hospitals that would never treat a single patient.

    They showed no regard for ordinary, working people.

    And they did not care about the consequences.

    It was made clear to me that failure to act swiftly could undermine the UK’s fiscal position – with implications for public debt, mortgages and prices.

    And so, I took action to make the in-year savings necessary.

    We are reviewing plans for new hospitals, promised by the Conservatives, but which they did not budget for.

    We cancelled road and rail projects, promised by the Conservatives, but which they did not budget for.

    And I made the choice to means test the winter fuel payment, so that it is only targetted at those most in need.

    I know that not everyone – in this hall, or in the country – will agree with every decision I make.

    But I will not duck those decisions. Not for political expediency. Not for personal advantage.

    Faced with that £22 billion black hole that the Conservatives left this year and with the triple lock ensuring that the state pension will rise by an estimated £1,700 over the course of this Parliament, I judged it the right decision in the circumstances we inherited.

    I did not take those decisions lightly.

    I will never take the responsibilities of this office lightly.

    And I will never take lightly the trust of voters who have been burned too often by politicians who put ideology, party and self-interest over the interests of the British people.

    And so, we must deal with another Tory legacy.

    Conference, I know how hard people work for their money.

    Taxpayers’ money should be spent with the same care with which working people spend their own money.

    And so, one year ago, I promised you that this Labour government would wage a war on Tory waste.

    It has begun.

    I pledged that we would aim to halve government consultancy spend – and we have already announced savings this year.

    I pledged that we would cut down on the excesses of Tory ministers’ private air travel – and we have already cancelled the £40m contract for Rishi Sunak’s VIP helicopter.

    And I pledged that we would act on the carnival of waste and fraud that took place during the COVID pandemic.

    Billions of pounds of public money handed out to friends and donors of the Conservative Party.

    Billions more defrauded from the taxpayer.

    More than a billion pounds spent on PPE that either did not arrive or was not fit for purpose.

    All under the cover of the greatest crisis of my lifetime.

    On entering government, we found £674 million of contracts in dispute, where we inherited a recommendation from the previous government that any attempt to reclaim that money should be abandoned.

    The Tories simply did not care.

    But Labour will not stand for it.

    I will not stand for it.

    So: as I promised, we are appointing a Covid Corruption Commissioner.

    It could not be more urgent.

    And I have put a block on any contract being abandoned or waived until it has been independently assessed by that Commissioner.

    I won’t turn a blind eye to rip-off artists and fraudsters.

    I won’t turn a blind eye to those who used a national emergency to line their own pockets.

    I won’t let them get away with it.

    That money belongs in our police, it belongs in our health service, and it belongs in our schools.

    And Conference, we want that money back.

    Next month, I will deliver the first budget of this Labour government.

    The first Labour budget in fourteen years.

    And because I know how much damage has been done in those fourteen years, let me say one thing straight up: there will be no return to austerity.

    Conservative austerity was a destructive choice for our public services – and for investment and growth too.

    Yes, we must deal with the Tory legacy – and that means tough decisions.

    But I won’t let that dim our ambition for Britain.

    So, it will be a budget with real ambition.

    A budget to fix the foundations.

    A budget to deliver the change that we promised.

    A budget to rebuild Britain.

    And my budget will keep our manifesto commitments.

    Every choice we make will be within a framework of economic and fiscal stability.  You’d expect nothing less.

    We said we would not increase taxes on working people, which is why we will not increase the basic, higher or additional rates of income tax, national insurance, or VAT.

    And we will cap corporation tax at its current level for the duration of this Parliament.

    Conference, as promised, we will extend the Energy and Profits Levy on oil and gas producers to invest in homegrown energy here in Britain.

    We will end the non-dom tax loopholes.

    And we will crack down on tax avoidance and tax evasion.

    That is the difference that a Labour government will make.

    We are already delivering on that last promise to cut down on tax avoidance and tax evasion.

    Strengthening the powers of HMRC, under the leadership of the Exchequer Secretary James Murray and recruiting 5,000 new tax compliance officers.

    Because this government will not sit back and indulge the minority who avoid paying the taxes that they owe.

    And Conference, we will enact another manifesto commitment.

    Because I know every parent has aspiration for their children. And I know the strain that our state schools have been under.

    This government will introduce VAT on private school fees, to invest in our state schools.

    It is the fair choice, the responsible choice, the Labour choice, to support the 94 percent of children in state schools.

    That is the Britain we’re building.

    That is the Britain that I believe in.

    This budget will be a budget for economic growth.

    It will be a budget for investment.

    Because today we find ourselves at the very bottom of the G7 league table for economy-wide investment as a share of our GDP.

    And we must change that.

    Conference, I believe in a better Britain.

    A Britain of opportunity, fairness, and enterprise.

    I know that country has sometimes felt far off in recent years.

    As our growth, our productivity and family finances fall behind.

    But it doesn’t have to be that way.

    The British capacity for inventiveness, enterprise and old-fashioned hard work has not gone away.

    So believe me when I say – my optimism for Britain burns brighter than ever.

    My ambition knows no limits.

    Because I can see the prize on offer, if we make the right choices now.

    Stability is the crucial foundation on which all our ambitions will be built.

    The essential precondition for business to invest with confidence and for families to plan for the future.

    The Liz Truss experiment showed us that any plan for growth without stability leads to ruin.

    So we will make the choices necessary to secure our public finances and fix the foundations for lasting growth.

    Stability, paired with reform, will forge the conditions for businesses to invest and for consumers to spend with confidence.

    Growth is the challenge.

    And investment is the solution.

    Investment in new industries, new technologies, and new infrastructure.

    Let me put what we are doing into some perspective.

    If the UK economy had grown at just the average rate of other OECD economies under the Tories, our economy would be £140 billion larger today.

    That would have provided an extra £58 billion to invest in our public services without raising a single tax rate by a single penny.

    Revenue to invest in our schools, our hospitals, our police, and all our public services.

    And that’s not the limit of my ambitions.

    Because, with growth, we will create jobs that pay enough to raise a family on – for you and your children.

    Put real money in the pockets of working people.

    And wealth in all of our communities, that flows into vibrant high streets.

    This is how we’ll make Britain the best place to start and grow a business – whatever background you come from, wherever you grew up.

    Things built to last, and exported around the world are made here in Britain.

    This is how we’ll achieve what we promised – the five missions that will comprise a decade of national renewal.

    That is the Britain we’re building.

    That is the Britain that I believe in.

    During the election campaign, I visited businesses all over Britain.

    From historic brands seizing the opportunities of the future, to innovative start-ups at the cutting edge, to high street businesses breathing new life into their local communities.

    Our world-leading universities, creative industries, life sciences, tech companies and professional services.

    I see immense potential, everywhere I go.

    But for every success story, there is potential held back.

    Entrepreneurs struggling to access finance.

    High street businesses punished by our outdated system of business rates.

    Builders frustrated by a planning system which hands power to the blockers.

    Exporters tied up in red tape by a failed Brexit deal.

    Too many people out of work through chronic illness, waiting for treatment, or without the skills, training and security they need to fulfil their potential.

    And a welfare state that does not always incentivise work.

    Brilliant young people shut out of the opportunities they deserve.

    And whole industries held back by underinvestment or the lack of a real strategy for their future.

    So we must learn the lesson from the Tories’ failure.

    We must build for growth, in a changed world.

    In this age of insecurity, growth requires stability but not stability alone.

    It requires active government.

    And it requires the contribution of people in every part of Britain, not just a few.

    Where there are vested interests, outdated practices or institutional barriers obstructing productive investment – we will confront them head on.

    Where active government is called for, this government will act.

    And Conference, it is time that the Treasury moved on from just counting the costs of investments, to recognising the benefits too.

    So we are calling time on the ideas of the past.

    Calling time on the days when government stood back, left crucial sectors to fend for themselves, and turned a blind eye to where things are made and who makes them.

    The era of trickle-down, trickle-out economics is over.

    And so, I can announce that next month, alongside the Business Secretary Jonathan Reynolds, we will publish our plans for a new industrial strategy for Britain.

    A strategy for driving and shaping long-term growth in our manufacturing and service sectors.

    A strategy to unlock investment, create jobs and deliver prosperity.

    A strategy to help break down barriers to regional growth, speed ahead to net zero and clean power by 2030, and build prosperity on strong and secure foundations.

    Because when I said that this Labour Party is proudly pro-business and proudly pro-worker – I meant it.

    This mission – for investment, for growth, for jobs – is why in a few weeks’ time, this government will be hosting a major international investment summit bringing together hundreds of business leaders, to send a simple message.

    That after years of instability and uncertainty, Britain is open for business once again.

    And this mission is why we will reform our pensions system; overhaul business rates; give power to our mayors and regional leaders; deliver a plan to get waiting lists down and people back to work; and forge a closer relationship with our neighbours in the European Union, while pursuing trade deals to open up new markets too.

    It’s why we launched a new National Wealth Fund, to invest in new and growing industries right across Britain.

    And it is why Angela Rayner and I have wasted no time in ripping out the blockages in our planning system so we can get Britain building again.

    You know, within 72 hours of taking office, we did more to unblock the planning system than the Conservatives did in fourteen years – including an end to the senseless Tory ban on onshore wind.

    And conference, we won’t stop there.

    Onshore wind to bring down your energy bills.

    New data centres, for good jobs in the industries of the future.

    And housing – for the decent home that every family deserves.

    That is the Britain we’re building.

    That is the Britain that I believe in.

    If you want to start or grow a business.

    If you want to export overseas.

    If you want to build in Britain but fear local opposition and delay.

    If you have felt the quiet desperation of jobs, opportunity and investment slipping away.

    Then be assured: your ambitions, your hopes, your future will not be held back any longer.

    I have promised this hall before that what you will see, in your town, in your city, is a sight we have not seen often enough in our country.

    Shovels in the ground.

    Cranes in the sky.

    The sounds and the sights of the future arriving.

    We will make that a reality.

    Jobs in the automotive industry of the future in the industrial heartland of the West Midlands.

    Jobs in life sciences, across the North West.

    Clean technology across South Yorkshire.

    A thriving gaming industry in Dundee.

    And jobs in carbon capture and storage, on Teesside, Humberside, and right here on Merseyside too.

    Wealth created, and wealth shared, in every part of Britain.

    That is the prize.

    That is the Britain we’re building.

    That is the Britain that I believe in.

    And Conference, because growth must be built by the many, its proceeds must be felt by the many too.

    And because of the indignity and insecurity that stems from the broken link between hard work and fair reward, we will deliver on another promise: a new deal for working people.

    With a ban on exploitative zero hour contracts; an end to fire and rehire; and a minimum wage which takes into account the real cost of living.

    So, at last, we will have a genuine living wage in our country.

    For dignity. For security. For growth.

    This Labour government will make work pay.

    That is the Britain we’re building.

    That is the Britain that I believe in.

    Within weeks of entering office, we faced another choice.

    We could accept the independent pay review bodies’ recommendations and give public sector workers their first above inflation pay rise in fourteen years.

    Or we could allow further industrial disruption to wreak havoc on our public services.

    Patients having hospital appointments cancelled.

    Parents unable to send their children to school.

    Key workers – the men and women who kept us safe during the pandemic – forced to pay the price for a crisis that they did not create.

    The Conservatives gave no guidance to the pay review bodies on affordability, nor did they budget for the recommendations they offered.

    And the Conservatives will deny that this was a choice that had to be made at all.

    They will claim that it was a viable strategy to let industrial action continue, to let a crisis in recruitment and retention spiral and let public services deteriorate yet further.

    That was not a choice I was willing to make.

    And it was not a choice that was in the national interest either.

    So, I am proud. I am proud to stand here as the first Chancellor in fourteen years to have delivered a meaningful, real pay rise to millions of public sector workers.

    We made that choice. We made that choice not just because public sector workers needed that pay rise.

    But because it was the right choice for parents, patients and for the British public.

    The right choice for recruitment and retention.

    And it was the right choice for our country.

    If the Conservative Party, if they want a fight about this.

    If they want to argue we should have ignored the independent pay review bodies.

    That public sector workers’ pay should fall further behind the cost of living.

    That ordinary families should pay the price of industrial action.

    If the Conservatives Party want a fight about who can be trusted to make the right choices for our public services and those who use them.

    Then I say bring it on.

    Public services that we can be proud of, once again with a Labour government.

    That is the Britain we’re building.

    And that is the Britain that I believe in.

    Let me tell you where I’m coming from.

    My mum and dad were primary school teachers.

    And I’m really proud of that.

    My mum was a special needs teacher at my school.

    And my dad was a headteacher at another local primary.

    I know how hard my parents worked.

    How dedicated they were.

    The long hours they both put in – my sister Ellie and I playing in my dad’s office while he worked late.

    And they had to do so in the face of a Conservative government that, in its every action, showed it didn’t care about kids in schools like theirs.

    Ordinary, comprehensive schools like the one I went to and the kids I grew up with.

    My mum and dad lived their values and they taught me the value of public service.

    Of hard work.

    Of giving something back to the community.

    I joined this party because of three words spoken in a conference hall in Blackpool twenty eight years ago: education, education, education.

    I joined this party because I believe that strong public services are the backbone of any decent society.

    Because I believe that people should rise and fall on their own merit, not on the circumstances of their birth.

    And because I believe that we do not have to choose between a fair society and a strong economy.

    I don’t want kids to succeed ‘against all odds’.

    I want them to succeed because they deserve it.

    Because the odds aren’t stacked against them.

    That’s the Britain that I want to live in – just like every other parent who wants the best for their kids.

    So I will judge my time in office a success if I know that at the end of it there are working-class kids from ordinary backgrounds who lead richer lives, their horizons expanded, and able to achieve and thrive in Britain today.

    That starts by taking the first steps to delivering on another manifesto commitment: our promise, led by the work of our Education Secretary Bridget Phillipson, to introduce free breakfast clubs in every primary school across England.

    Today I can announce that that will start in hundreds of schools for primary school-aged pupils from this April, ahead of the national rollout.

    An investment in our young people.

    An investment in reducing child poverty.

    An investment in our economy.

    And an investment so that, in years to come, we can proudly say that we left behind a Britain where the next generation has a chance to do better than those who came before it.

    Conference – that is the Britain we’re building.

    That is the Britain that I believe in.

    The work of change is only just beginning.

    And the stakes are high.

    Trust is a fragile thing.

    And we’ve seen the consequences when mainstream politics comes up short.

    It falls to us to show that politics can be a force for positive change.

    Not through words, but through action.

    Through progress towards that Britain of opportunity, fairness and enterprise.

    That is our task.

    That is my task.

    It comes with a great weight of responsibility.

    I embrace it.

    It will mean hard work.

    I am ready for it.

    The British people put their trust in us.

    And we will repay it.

    And when someone asks you – does this government represent me?

    When they ask – whose side are they on?

    You can tell them: when you work hard, Labour will make sure you get your fair reward.

    When barriers obstruct opportunity and investment is constricted, Labour will tear down those barriers.

    When working people have paid the price for the Tory chaos, while waste spirals and tax is avoided, Labour will act.

    And when the national interest demands hard choices, Labour will not duck them.

    We will make fair choices.

    For decent public services and the people who rely on them.

    For investment and opportunity in every part of Britain.

    For an end to the naysaying, the division, the defeatism.

    An end to the low investment that feeds decline.

    And an end to easy answers, the empty promises, and the Tory stagnation.

    Conference, you can tell them that we stand – that we will always stand – with working people.

    We changed our party.

    Let us now change our country.

    This is our moment.

    Our chance to show that politics can make a difference.

    That Britain’s best days lie ahead.

    That our families, our communities, our country need not look on while the future is built somewhere else.

    That we can, and we will, make our own future here.

    A Britain trading, competing, and leading in a changed world.

    A Britain founded on the talent and the effort of working people.

    That is the Britain we’re building.

    That is the Britain I believe in.

    Together, let’s go and build it.

    Thank you.

  • Alison McGovern – 2024 Speech on Britain’s Labour Market

    Alison McGovern – 2024 Speech on Britain’s Labour Market

    The speech made by Alison McGovern, the Minister for Employment, on 18 September 2024.

    INTRODUCTION

    I want to thank everybody at the Institute and all the Commissioners for this important report today. It’s quite long and represents a very serious endeavour and brings evidence from every part of our country.

    And I think it’s such an important contribution to a moment in which I hope, and I will say this morning, we’ll see a page turned from the policy of the past to a new future for the Department that I proudly serve in Government.

    In July, the Secretary of State gave a speech in Barnsley setting out our plans to refocus the Department for Work and Pensions from being the department for welfare to a department of work.

    We’re going to change the Department for Work and Pensions fundamentally. Because if you go around Jobcentres they still have paper listings on the wall as if it’s 1985. Meanwhile, the rest of the economy is galloping to our AI future. Which is why Liz and I want to be clear we are making an employment service fit for the future, not stuck in the past.

    However, updating the Department for Work and Pensions is not just about technology. Today, I want to set out the failure at the heart of past thinking, and where our new policies will be led not just by new opportunities, but by fundamentally different principles.

    UNEMPLOYMENT IS A PROBLEM OF THE ECONOMY, NOT OF THE INDIVIDUAL

    The report published today describes the UK’s employment service as “the least well-used in Europe” – and I would add least well-loved – “often acting as an extension of the benefit system”. The report highlights the need for far-reaching reforms, including a “clearer separation between employment support and social security delivery”.

    And I agree, that point is at the heart of my speech today.

    I want to spell out fundamental flaws in thinking that have held us back.

    For too long, the question of how to increase employment in the UK has been reduced simply to a question of the individuals out of work. The only question has been whether the social security system undermines a person’s will to work.

    Because for too long, that narrow focus has dominated all thinking. We’ve lost sight of the labour market as a whole.

    For far too long in politics, we’ve asked whether this change or that change to social security will result in more people working, instead of looking at the options that people have in the labour market and asking ourselves whether those options and choices are good enough.

    This was always doomed to fail.  To know that, all you need to do is understand our past.

    William Beveridge called it out in 1909. He said: “The first question must be “not what is to be done with the unemployed individual, but why is he thus unemployed”.

    The truth is, for any individual, you can look at the ups and downs of life and describe why they aren’t working: they got sick, they had kids, there was a bus that could get them there but it was cancelled.  But when there are over 7.2 million people like that who are out of work, that is no longer an individual problem – it’s a failure of our whole economy. As Beveridge described it, it’s a problem of industry and a failure of organisation.

    Look at the evidence:

    • We’ve got millions stuck on waiting lists and 2.8 million out of work sick. Is that social security? Or the people in charge of the health service who were supposed to keep our country well?
    • We’ve got almost 1 in 8 of all young people on the scrapheap – is that the fault of social security– or was it the failure to help the lockdown generation?
    • We’ve got too many insecure jobs, with unpredictable working patterns. And that has nothing to do with social security.
    • And the welfare state is not to blame for the lack of buses after 6pm in northern towns. It is ridiculous.

    What people call ‘welfare’ has been the current obsession.

    HOW TO FIX OUR SOCIAL SECURITY SYSTEM AND DELIVER A THRIVING LABOUR MARKET

    But this was not a trap that the author of our social security system fell into.

    In his 1942 report, Beveridge wrote that his plan assumed “the establishment of comprehensive health and rehabilitation services, and maintenance of employment, that is to say avoidance of mass unemployment as necessary conditions of success in social insurance.”

    Beveridge did not think social security was a cure-all. He knew its success was conditional – that his system would not work without these two other post-war reforms: the goal of full employment, and the goal of a national health service at the disposal of all workers.

    Social security is there to smooth people’s incomes over time and to take account of life events we all have a strong chance of experiencing – old age, the birth of a baby, sickness or redundancy. Run well, it should be a counterweight to poverty and a stabilising force at a time of distress. But only if we acknowledge that tinkering with its edges will never solve the problems of the broader economy.

    Instead, we need to give people the good choices and chances that they need.

    Because markets can be a force for opportunity and prosperity. But we should also mould them, and shape them, and spread power widely within them. A market for labour that has businesses crying out for staff, and a queue at the foodbank door is failing this country.

    You’ll know that the Commissioners join Beveridge in prescribing the UK Government an objective to move towards full employment. And it’s why Liz and I also join the Commissioners – having announced our bold, long-term ambition to get to an 80% employment rate – the kind of clear objective that our hosts here at the Institute for Employment Studies say will help change the fortunes of our country.

    LEARNING FROM HISTORY: ECONOMIC CRISES AND ACTIVE LABOUR MARKET POLICIES

    The central point I want to make today is that’s right and we’ve forgotten our own history on this point. Particularly, the major turning point after the Second World War whereby the issue that caused the collapse of Ramsey McDonald’s second Labour Government – unemployment – was resolved. Post-war, it was accepted that the economy, and the labour market in particular, ought to keep people (men at least) in work and off the streets.

    The generation that experienced dreadful conflict and mass destitution decided they would put an end to it. They created a department for employment to train and rehabilitate people, industry full of apprenticeships, and of course the Employment Exchanges – what we now call Jobcentres – to connect the unemployed with jobs. The Commission’s report, in my opinion, reestablishes this lesson for the 2020s.

    Beveridge was not perfect, but he was definitely a man who made a difference.

    But it is the story of two women on either side of the Atlantic that I think can help us see even more forcefully why we need a rebirth of active labour market policy today.

    On one side of the Atlantic, Frances Perkins – first woman in the US cabinet, creator of the New Deal and author of the plan for prosperity in response to the destitution of the Great Depression.

    On the other side of the Atlantic, four years earlier, Margaret Bondfield. We all know who that is, right? The first woman in the UK Cabinet, dealing with ever rising unemployment and an unsustainable unemployment insurance bill.

    With active labour market policy for Bondfield not yet invented, the Labour Government collapsed and her political career was all but forgotten.

    Now if you read Bondfield’s memos from the time, and you can see her frustration, repeatedly making the case for increasing the national insurance fund to prevent hardship but with no answer to the cause of the problem. And the populists of the 1930s were at the gate, making the most of the economic distress.

    Caught in the middle, she was desperate for the answer that came just a few years later in the United States with Frances Perkins’ creation of the New Deal.

    Why do I tell her story?

    Because unlike Margaret Bondfield we can’t say we don’t know what the answer is because since then we’ve learnt from nearly 80 years of public policy in response to economic failure.

    We’ve learnt from that failure of the 1930s.

    We’ve learnt from the near full employment that came from the post war consensus.

    We’ve learnt from when the consensus broke down in the 1970s and other crises took over. Inflation became the big challenge that economic policy turned to face down – and the cost of that was a return to high unemployment.

    We’ve learnt from industrial collapse, which saw a move away from the mass employment provided by heavy industries like manufacturing and coal mining towards services and finance.

    We learnt what this would mean for towns and cities across Britain. When women joining the workforce concealed an even worse outcome for men.

    And we’ve learnt that this saw regional disparities deepen – in whole parts of the country, economies simply failed – and many are still yet to properly recover.

    Despite attempts to manage this, the number of people out of work due to sickness grew rapidly, with incapacity caseloads broadly doubling to 2.7m by the time we entered the 2000s.

    So we had to learn through the actions of the last Labour government in 1997, that in response to this horrendous situation, there had to be an explicit rebirth of active labour market policy, with the United Kingdom’s very own New Deal.

    A radical series of reforms designed to provide people with active tailored support to help get them back into work as unemployment fell and the economy grew.

    With a big focus on young people.

    The global financial crash in 2008 saw unemployment rise again and the Department for Work and Pensions then, in response, scaled up its active labour market policy operations.

    And as a result, the global crash did not have a long-term impact on the trend rate of employment. That is not to say everything was perfect, but it’s worth learning from.

    And I’ve certainly learnt from what happened in 2010.

    [Please note political content redacted here]

    Active labour market policy was shrunk back to a preoccupation with social security rules.

    And the results of the past 14 years show what’s been happening with our labour market.

    A quarter of working age people are not in work, with 2.8 million people out of the workforce due to long-term health problems.

    Over 4 million people in work and with work-limiting health conditions which may put them at risk of not fulfilling their potential or falling completely out of the labour market.

    And I want to say to you all this morning – now is the time to turn the page on that failure.

    Because just as in 1930, Margaret Bondfield said of the Unemployment Insurance Scheme that it “is being asked to meet situations for which it was never designed.

    The same is true of our social security system today.  We cannot load every economic problem we face onto minor tweaks in the social security rules.

    Which is why, as part of our Get Britain Working White Paper, we are bringing forward fundamental reforms to employment support.

    That includes changing the outcomes against which we measure its success – for example, not focusing alone on getting people into work but on achieving higher engagement with everyone, much higher employment in the short-term, and higher earnings too.

    We will overhaul Jobcentres in this country and we will get people into work long-term.

    We will have a new youth guarantee so not a single person will be left on the scrapheap when they’re young.

    And because Liz and I know the country doing well is no compensation if your town or city is being abandoned, we will make sure – as the Prime Minister says – that those with skin in the game – our mayors and regional leaders –have the levers they need to make change.

    As the Commissioners have laid out in their report, our highly centralised system needs to move towards a model more in line with those used in other high-performing countries – with more control at the local level.

    This big reform will be matched by the action we’re taking across the UK Government to support jobs and growth.

    We’ll soon be introducing legislation into Parliament so people’s work is better paid and more secure.

    Skills England will change the place of learning in this country to give everyone a chance of success.

    And we will create new Local Growth Plans powering towns and cities up and down the country.

    I know change won’t happen overnight, but I am determined to fix the foundations in the Department for Work and Pensions so that more families can benefit from the security, dignity and prosperity of good work.

    CONCLUSION

    The point I’m making here, I know is not a new or innovative one. As I’ve said, it’s the founding principle of our social security system –

    You cannot have well-functioning social security without full employment.

    Beveridge knew that.

    But let me conclude with a few small points that we could help Beveridge understand.

    Because whilst his principle remains the same, the circumstances we make these reforms in are very different.

    So it is for us to apply that principle to the society we have now – more than 80 years later.

    Where the health system – still as vital as ever – must address a very different set of challenges. Not infectious disease, but chronic poor mental health.

    Where women’s role in the workforce makes the need for a proper childcare system as pressing as Beveridge believed the need for a reformed health system was in the 1940s.

    Now Beveridge also didn’t give any evidence that he foresaw the rise of the motor vehicle, which – combined with inadequate investment in public transport – forces those who can’t afford a car to face limits on their ambitions – especially if they live in an area with fewer opportunities and chronically bad transport.

    Changing that will be part of better organisation for our economy and I hope that Beveridge might have thought was a good idea.

    Our desire for an 80% employment rate comes from a serious understanding of our country’s history, and also from facing the reality of the economy today. We have a serious understanding of the challenges and opportunities before us, and who they apply to.

    That is why what is not needed now is a sticking plaster, or a tweak or an amendment, but a change in principle, in policy and in practice. Leading to a better organised economy – and a market that works – spreading opportunity and prosperity to every corner of our country.

    Back in the 1930s, the New Deal provided Americans with a springboard and a safety net. And a recognition that you don’t get one without the other.

    What unites these moments in history that I’ve talked about is an ambitious idea about what can happen if you put a platform under people and see what they could do and what they could achieve.

    The report that the Commissioners have written – published today – I think is very ambitious. But I hope I have made the case, in my remarks, that it ought to be ambitious.

    Because for too long, our economic policy has shrunk the people of this country. Our new economic approach will see people for all they could be and all the opportunities they deserve.

  • Tulip Siddiq – 2024 Speech on the Government’s Vision for the Future of UK Capital Markets

    Tulip Siddiq – 2024 Speech on the Government’s Vision for the Future of UK Capital Markets

    The speech made by Tulip Siddiq, the Economic Secretary to the Treasury, at the London Stock Exchange on 6 September 2024.

    Good morning and thanks for the invitation. It’s so lovely to be here today, and it’s one of my first addresses in my new role as City minister.

    And it’s a very deliberate decision that I’ve taken, because growth is the defining mission of this government, which you’ve probably heard us say over and over again. From the top down to the centre out, we recognise the importance of capital markets to delivering this growth mission that we’ve consistently talked about for the last few years. And As the Chancellor herself said – many of you will have heard at Barclays CEO forum recently – “when the City succeeds, Britain succeeds”. Nothing demonstrates that better than our capital markets.

    It’s not just that when our markets do well, our economy does well. Already this year, more than £20 billion worth of equity capital has been raised in London alone, more than three times what has been raised in the next three European exchanges combined – to support businesses to invest, to innovate and to grow.

    And according to a New Financial report from 2020, 90% of large UK companies regularly use capital markets, supporting some 5.5 million jobs. It’s not just large companies which benefit from our markets. Over the last five years combined, more than half of all capital raised in European growth markets was raised in London. And although these facts speak for themselves, I’ll spell out what they say: that UK capital markets will underpin our mission of sustained and meaningful economic growth.

    But I also know that for our capital markets, stability and just the right amount of risk is the formula for economic growth. Whilst too much political change can unbalance that formula by moderating the market’s ability to signal opportunities for profit and risks of loss.

    So let me be clear to everyone who has raised this with me. We will not pursue change for its own sake. The economist Adam Smith once wrote about an invisible hand, a metaphor for the forces that guide decision-making in the market. Well, I want you to be in no doubt – because in the marketplace of ideas, evidence will be the hand that guides our decision making in policy making generally and capital markets policy specifically. You can describe our approach to the existing program of capital markets reform with this timeless saying, which is ‘if it ain’t broke, don’t fix it’. I hope that reassures some of the people who’ve raised this with me about continuity.

    And while reviewing the existing plans for reform to a capital markets there’s three things that I was struck by. Firstly, the proposals are technically rigorous. Secondly, they have the support of our financial services industry and its regulators. But lastly, and this is most importantly, I know they will support our mission of sustained and meaningful economic growth. And so I, and this government, will support them.

    And I’ll begin that support by highlighting some of the most exciting policy initiatives. Some of which Julia and I were discussing when we came in. For example, the FCA’s changes to our listing rules will revolutionise our markets. By making changes to rules on dual-class share structures, related party transactions and introducing a new international secondary listing category, we will directly align our markets with leading international counterparts and provide greater flexibility to firms and founders raising capital.

    The impact of some of these changes are already being felt, and I’m delighted that some firms are already taking advantage of them.

    The government will also continue to collaborate with a number of industry driven initiatives. Working closely with our Industry Technical group led by Andrew Douglas, and building momentum towards faster settlement of securities trades. And I look forward to the final report of the Task Force led by Sir Douglas Flint on improving the current system of share ownership and eliminating the use of paper share certificates.

    And we remain fully committed, as I just said before we came on, to take forward the new Private Intermittent Securities and Capital Exchange System – or PISCES – a world-first bespoke regulated market for private company shares. This will help investors to invest in exciting private companies and support innovative companies to grow – and ultimately to an IPO.

    To my mind, government works best when it’s underpinned by honest and open conversation. And that’s why it’s very important to me to thoroughly examine the feedback from the consultation earlier this year, and to ensure that all of your opinions are properly reflected in our decision-making process.

    And while it’s clear to me that there is huge support for the PISCES project, it is also clear that on the issues of disclosure and market abuse we need to tailor our thinking further. So please be assured that my officials and I will continue working with you. And in that spirit, my officials will be in attendance at the roundtable on PISCES later today, and I’ll ensure that all the conclusions from this roundtable are considered in our final proposal to ensure that PISCES does deliver on its promise.

    But I know that we can go even further to restore competitiveness to our capital markets.

    And of course, a lot of you will be looking forward to the Mansion House speech and the Budget later on, which will set out the plans for our sector in more detail. But I would urge you, if you haven’t already, to look at the report “Financing Growth” – that I published earlier this year – which unapologetically puts really reinvigorating our capital markets at the heart of this government’s growth mission. It’s what we campaigned on, and it’s what we intend to deliver in government.

    They include proposals to encourage the investment of capital freed by Solvency II reforms into UK infrastructure and green industries. To empower the British Business Bank with a more ambitious remit, for example, providing match funding to spin out seed funds. And a landmark review of the UK’s pensions and retirement saving landscape to explicitly consider the role of pension funds in capital and financial markets to boost both their returns and broader economic growth.

    Confirming this review was one of the first announcements made by the Chancellor, and this phase will be led by my colleague Emma Reynolds, who is the Minister for Pensions. She will be speaking here later today. And I encourage you to join this, which is the session on the UK pensions landscape, because Emma will outline the exciting plans that we’ve undertaken as a government.

    So, I do recognise that these proposals are challenging. I’m not naive about it.

    But I am confident looking around this room today and seeing the expertise here, that if we work together, we will be delivering this, because sustained and meaningful economic growth is not just the government’s mission, it’s a mission that we share with everyone in this room.

    So now let’s go out and deliver it.

  • Mohammad Yasin – 2024 Speech on the Economy, Welfare and Public Services

    Mohammad Yasin – 2024 Speech on the Economy, Welfare and Public Services

    The speech made by Mohammad Yasin, the Labour MP for Bedford, in the House of Commons on 22 July 2024.

    It is a pleasure to speak in support of the King’s Speech under a Government committed to putting country before party to improve lives in this country. That is what I pledged to the people of Bedford and Kempston, whom I thank for putting their faith in me again to work hard for them and to restore their faith in politics as a force for positive change.

    The last Government reduced our public services to a shadow of their former selves. In 2019 a study jointly funded by Bedford borough council and the NHS found that Bedford borough was 40% under-provided for in the primary care estate, despite a rapid growth in population since 2011. HMP Bedford has been in and out of special measures, so I am pleased that the Government have already taken action to improve the crisis in prisons.

    I am also pleased to see early priority given to strengthening community policing by increase numbers of officers and giving them greater power to deal with the antisocial behaviour that blights our communities. I hope this Government succeed where the last Government failed in implementing a fairer funding formula for Bedfordshire police. Wrongly funded as a rural force, it is one of the lowest-funded forces in the UK despite a £10 million year-on-year increase to £156 million for 2024-25.

    The housing crisis is causing untold misery to many of my constituents, so I am pleased that building houses will be a priority for our Government. It is indefensible that I know of parents who are beginning the summer holidays living in hotel rooms without access even to a fridge or a microwave to prepare food for their children because no suitable social housing properties are available. Even food bank vouchers are not helping when basic staples such as UHT milk cannot be kept fresh once opened.

    More than 15,000 children and 17,000 adults are on waiting lists for mental health treatment in the area covered by the NHS Bedfordshire, Luton and Milton Keynes integrated care board. For years the NHS provider has had the capital funds to bring in desperately needed in-patient mental health facilities, but the previous Government consistently refused to provide the capital expenditure cover so that we could have those facilities in Bedford. I hope the new Government’s plan to get the NHS back on its feet includes an overhaul of how new projects are funded, because the existing capital departmental expenditure limits are not working.

    Many of my constituents will be very happy to see planned legislation to bring rail back into public ownership and to reform bus services and franchises, including by allowing local control and supporting public ownership, but one of the most significant transport issues in my constituency is East West Rail. Bedford is uniquely adversely impacted by the East West Rail project, because the preferred six-track route requires the demolition and blighting of homes. Residents have been in limbo for more than five years in unsellable homes. The proposed planning and infrastructure Bill will speed up planning decisions for major infrastructure and house building and seek to reform compulsory purchase compensation rules to ensure that the compensation paid to landowners is fair. The statutory consultation stage is imminent, and I hope the Government will listen to the concerns expressed by my constituents and will not leave people in limbo while decisions are made without their knowledge, as has happened before. If we want to restore faith in politics, we have to ensure that our communities come with us on plans to affect their lives.

    The Universal Studios plan to build a park near Kempston is exciting, and I look forward to working with the Government to make sure we get this potentially huge investment opportunity for Bedford and Britain over the line.