Contribution
The right hon. Gentleman may not have been here, but a colleague of his asked me that same question before. Unfortunately, I did not know the history of that story; I shall have to look it up on Wikipedia tonight to find out. [Laughter.] Clearly, it was before my time.
Our focus on spending public money wisely means we can make sure taxpayers’ money is spent on what matters: the NHS, schools, roads and railways, our armed forces and the police. This Budget means that we can continue to invest in the future. That investment in our future includes our decision to lift 450,000 children out of poverty. Those children should not go hungry simply because of the circumstances of their birth, and their life chances should not be written off before they have even got going.
We do not want to be a country where one in ten 15-year-olds goes hungry once a week because they cannot afford a meal. We want to be a country that recognises the profound damage that child poverty causes to us all. This Labour Government are taking the opportunity to change that. We do not want to be a country where £1 in every £10 of public money is spent on the interest on our national debt alone. That is why it is crucial that we cut borrowing and increase our fiscal headroom. That is the way to make sure that our country is less vulnerable to global shocks. We are determined to make our economy more resilient and ensure that taxpayers’ money is spent on taxpayers’ priorities.
There is an old saying that to govern is to choose. Politics is about making choices, yet the Conservatives are never keen to be judged by the choices they made when they were in government. They chose to cut investment in the foundations of our society, gutting our NHS, failing our schools and abandoning great swathes of the country and the next generation. They botched the Brexit deal, which stifled British trade and wrapped our businesses in red tape. They oversaw a covid recovery that left us lagging behind our neighbours while their donors and cronies pocketed millions of pounds of taxpayers’ money, and they were responsible for a mini-Budget that crashed our economy, did great damage to our global reputation and cost mortgage payers hundreds of pounds a month.
Our Government are willing to choose and ready to stand by our choices. I am proud of the choices that we have made in this Budget. Those are choices that protect the NHS and get waiting lists down; cut the cost of living and take £150 off energy bills; and reduce the national debt and bring down the cost of borrowing. We will invest in the infrastructure that will drive growth and productivity across the country. We will not leave the broken welfare system unchanged, and we will spend every penny of taxpayers’ money wisely. Those are fair choices, those are necessary choices, and those are the right choices for the future of our country.
Question put and agreed to.
Resolved,
That income tax is charged for the tax year 2026-27. And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
The Deputy Speaker put forthwith the Questions necessary to dispose of the motions made in the name of the Chancellor of the Exchequer (Standing Order No. 51(3)).
2. Income Tax (Main Rates)
Resolved,
That for the tax year 2026-27 the main rates of income tax are as follows—
(a) the basic rate is 20%,
(b) the higher rate is 40%, and
(c) the additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
3. Income tax (default and savings rates)
Resolved,
That—
(1) For the tax year 2026-27 the default rates of income tax are as follows—
(a) the default basic rate is 20%,
(b) the default higher rate is 40%, and
(c) the default additional rate is 45%.
(2) For the tax year 2026-27 the savings rates of income tax are as follows—
(a) the savings basic rate is 20%,
(b) the savings higher rate is 40%, and
(c) the savings additional rate is 45%.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
4. Income tax (dividend rates)
Question put,
That—
(1) In section 8 of the Income Tax Act 2007 (which provides, among other things, for the dividend ordinary rate and dividend upper rate)—
(a) in subsection (1) (the dividend ordinary rate), for “8.75%” substitute “10.75%”, and
(b) in subsection (2) (the dividend upper rate), for “33.75%” substitute “35.75%”.
(2) The amendments made by this Resolution have effect for the tax year 2026-27 and subsequent tax years.
And it is declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.