Contribution
I thank the shadow Chancellor for delivering a speech for which it was, this time, much clearer when it had ended.
The Opposition motion invites us to speculate on the contents of the Budget. As right hon. and hon. Members will be used to me and my colleagues saying, the Government do not comment on speculation and the Chancellor will deliver his Budget in this House on 28 October. However, I am free to share with the House some of the context in which the Chancellor will take his decisions.
The Budget comes amid unprecedented economic shocks, with conflicts in both the middle east and Europe hitting people here and around the world. However, we are not powerless. That is why we are giving families and businesses breathing space where we can and starting to make the big, long-term changes needed to create good jobs and growth in every postcode. Everything we do at this Budget will be built on fiscal stability. Our fiscal responsibility has been underlined by the IMF this week, and as it made clear, our country is forecast to have the lowest borrowing—that is to say, the smallest deficit—in the G7 from 2029. Our country is demonstrating strong resilience in the face of global challenges, with the joint second-fastest growing economy in the G7 this year.
To deliver good growth in every postcode and to provide breathing space for families and businesses, we must continue to take responsible choices. That is why, as the Prime Minister and the Chancellor have made clear, fiscal discipline will underwrite every promise this Government make to the British people. We will meet our fiscal rules at the Budget later this month with a buffer against uncertainty. We will control borrowing so that we can bring inflation down and reduce long-term pressures on our public finances. That is the right thing to do, because there is nothing progressive about a Government spending £1 in every £10 on debt interest, rather than on the priorities of working people.
This Government inherited public finances that were in a mess and public services that were in crisis. Since the general election, we have put the NHS back on its feet, with the waiting list down by more than 250,000 since the Government came to power. Last year we delivered the highest number of affordable homes in a decade. We are lifting over half a million children out of poverty by scrapping the two-child limit and expanding free school meals. We are investing in Britain’s future, with an additional £120 billion of capital investment across this Parliament, and in Britain’s roads, rail, energy and other infrastructure that is so important to driving growth. Through reforms to how our country works, from planning to pensions and skills, we have helped to create the conditions for private investment to rise by almost 5% since the general election.
We have always been prepared to take the responsible choices to fix the foundations of our economy, repair our broken public services and deliver the investment needed to support growth. That includes driving down waste and driving up efficiency in the public sector, with a 16% reduction in departmental admin budgets by the end of the spending review period. We are reprioritising spending so that taxpayers’ money is spent on their priorities, cancelling digital ID in order to remove VAT from household electricity bills, reprioritising Ministry of Housing, Communities and Local Government spending to help tackle homelessness and bringing the national bus cap down to £2 for 2027, funded by savings from the Department for Energy Security and Net Zero. We are reforming the welfare system through the Milburn and Timms reviews, while tackling welfare fraud and error to save over £14 billion by the end of 2030-31, and we have taken decisions on tax to ensure that we meet our fiscal rules of living within our means.
Our decisions on tax reflect our commitment to sound public finances. We want to make sure that those with broader shoulders make a fair contribution. Although very few people, if any, want to pay more tax, we recognise that only a small proportion of the largest estates pay inheritance tax, and it makes an important contribution to the public finances.
Inheritance tax is forecast to raise almost £15 billion in 2030-31 to help deliver public services, and it is currently payable on around one in 20 estates. Our reforms to agricultural property relief and business property relief, introduced in April of this year, are expected to raise around £300 million per year, while offering substantial protection for family farms and businesses. Through a 100%—