Contribution
Our cheap power plan would lower bills across the board. The right hon. Gentleman’s plan is to just shift costs from green levies to general taxation.
Perhaps the most damning thing about this Budget is what it does not attempt to do. After seeing off Keir Starmer, this new Prime Minister wants to press the reset button and pretend that this first 100 days is a fresh start, but Labour owns the last two years and the last two Budgets. If the Prime Minister will not reverse their measures, the consequences of the decisions that have already been taken are his to own as well.
The national insurance rise has been devastating. Chef Tommy Banks said,
“Over the 20 years I’ve been in the industry, this is without doubt the hardest time it’s ever been to operate…I’m seeing restaurant owners saying, ‘We’re closing tomorrow. We’re going to make everybody redundant.’”
He says employer national insurance has increased his business costs by 162% and that, with a couple of hundred staff, that can mean half a million pounds.
The Employment Rights Act 2025 has not even begun to have its full effect, yet I spoke to a small business last week that is already having to shell out £8,000 to prepare for its implementation. Another is being quoted £200,000 in legal fees to fight a tribunal. Another is winding down its disability employment activities; it used to give opportunities to people with cognitive impairments who needed extra support, but it will no longer take the risk. Since 2024, 170,000 jobs have been lost, and by the OBR’s reckoning another 215,000 jobs are to go by the decade’s end. Does this Budget do anything to stop that slow-motion car crash?
There is no review of the farm and family business taxes, which are crushing our food producers and entrepreneurs at a time when the nation needs the food security they provide. I recently spoke to a business that has been in the same family since the 1850s. The owners cannot risk losing it on death, so they are trying to offload it early, at the expense of investment in the business itself. That will not generate growth. Last week, another private school closure, in Leweston, left parents and children in limbo because Labour refuses to review its envy-driven tax on independent schools.
The pressures on these businesses are flowing out into the wider economy, which is why everything is costing people more. It costs more to go out for a meal, have your hair done, take a few days away with the kids or buy the weekly shop. The Prime Minister now owns Keir Starmer’s choices.
The most damning part of the Budget was the difference between the Prime Minister’s homely “breathing space” rhetoric and the hard reality that real household disposable income is falling this year and is lower in every year of the forecast—nearly £1,500 lower than forecast under the last Conservative Government. What is everyone getting in return for all the extra tax? Better public services? No. The Government are spending £124 billion a year on debt interest alone. That is up £14 billion since March, and is more than we spend on defence, policing and prisons combined. Are we at least building up a buffer to make ourselves more resilient? No. The Chancellor has cut fiscal headroom to just £15 billion, the equivalent of barely 3.5 days of public spending. The Government are even kicking defence spending into the long grass.
Businesses are paying more tax, families are getting poorer, public services are not improving and the Government are leaving the country dangerously exposed to the next economic shock. There are only two sustainable ways out of that: grow or cut spending. On both, the Government are found wanting. Last week, Ministers went full Vicky Pollard when asked whether they would grip the welfare budget this Parliament: yes, said the Chancellor, and no, said the Treasury and No. 10. The Prime Minister said, “As soon as possible.” No, eventually concluded the Chancellor—yeah, but no, but yeah, but no. The Chancellor’s leader is making a fool of him.
What about growth? The Prime Minister’s big idea is to reopen the debate about rejoining the EU. That is a debate that the Business Secretary does not want to have: he says that it creates uncertainty for business, which companies explicitly do not want. [Interruption.] He is now trying to nuance his way out of it, but we know what he said. It is also a debate about free movement that the Home Secretary does not want. It is a debate that will tie us to the slow-growth lane, and we will pay for the privilege. Why do we have to pay the fees of EU students to access “Made in Europe” when our participation is in the EU’s interests and the matter has not yet been settled in the EU Parliament? The Prime Minister is weakening our hand to build a left-wing coalition that will keep him in power.
If growth is the goal, why does the Prime Minister not pull the levers that the Government already have by bringing down energy costs, making it easier to employ people, cutting tax and getting more people off welfare? Because those decisions require real courage and a willingness to test the mandate that the Prime Minister fears he lacks among those on his own Benches and in the wider country.
“Employers are not working people.” “There is no money.” “We failed to get public spending under control before crisis hit.” Those three Labour truths run through this Budget, which has been overseen by a Prime Minister who is more interested in the perception of being on people’s side than in the reality, and is offering a debate about a future he may not control rather than taking tough decisions that he could own today if only he were to find the courage.