Contribution
Madam Deputy Speaker, thank you for allowing me to speak in this debate. I am pleased to follow the hon. Member for Gower (Tonia Antoniazzi), and I agree with what she said about farmers. I draw attention to my entry in the Register of Members’ Financial Interests.
This Budget was an omnishambles. Not only have the Government being dripping leaks for the last month, which undermined market and business confidence, but the OBR, in error, yesterday published the Budget on its website 45 minutes before it was given at the Dispatch Box. This is unprecedented. The pound went down, and some of the hedge funds, which were already betting against the market, made millions. This does not provide confidence and stability in our public finances. It is undeniable that the financial position is much worse than it was when we were responding to the Budget last year.
Put simply, the Government are spending more than this country can afford. Last year, the Chancellor announced £40 billion in tax rises. We were promised that this would be a once-in-a-lifetime increase and would have filled the so-called black hole, so why has the Chancellor come back this year with another huge tranche— £26 billion—of tax rises? This tax burden will be equivalent to 38.3% of GDP by the end of this Parliament, and staggeringly, tax in this country is at an all-time record high. Interestingly, spending will go up now, but many taxes will not go up until 2028-29, around the time of the next election, so Labour MPs should take careful note of the measures that the Government introduced yesterday.
A growth rate of 1.5% per annum is lower than forecast, and growth per head is at the bottom of the G7 league. However, for the OBR to downgrade productivity rates to just 1% by 2029-30 is alarming, because it implies that growth will continue to flatline. Staggeringly, the chairman of the OBR has said that nothing—I repeat, nothing—in the Budget will score towards increased growth.
The Public Accounts Committee, which I have the privilege to chair, has been banging the drum for putting more money towards digital skills and the use of AI in all Departments and agencies. In the spring statement, most Departments were allocated more money for new technology. The PAC has heard time after time that old legacy IT equipment needs to be replaced, because new digital technology is needed to accommodate AI such as large learning models, and old analogue systems are much more prone to cyber-attacks.
Yet any improvements in efficiency are offset by the debt and the interest to service it. Last month, the UK national debt reached a staggering record £2.6 trillion, and the debt interest alone will be £136 billion a year by 2029-30. That would be the third largest Department if it were a Department, and it does not treat a single child or educate anybody.
One thing I can say about this Budget is that it is not discriminatory in whom it hurts. Working people, savers, pensioners, drivers, farmers, homeowners and businesses— I could go on—are all being taxed more to pay for this out-of-control spending. This is not a Budget for working people; it is a Budget to pay for the massive increase in the welfare state. Indeed, as a stark example, the Government announced yesterday that they would increase the help to save scheme for universal credit claimants, which of course is tax-free, whereas ordinary working taxpayers will see the tax on their savings increase by 2%. Where is the fairness in that? The OBR has forecast that the welfare state is going to rise by a staggering £73.2 billion to £406.2 billion over the next five years.
One aspect of the economy at the moment is that the unemployment rate has increased to 5.1%. At the end of last year, it was 4.3%. Sadly, we now have 1.79 million people out of work, and I suspect that everything announced in the Budget yesterday will only increase that figure. As I said in an intervention on my right hon. Friend the shadow Chancellor, what is really sad about those figures is that the unemployment rate for 16 to 24-year-olds is nearly 5%.
On the two-child benefit cap, in April 2025 there were 37,020 households in the UK on universal credit with exactly five children and an additional 18,260 households with six or more children. As a father, I know how much it costs to bring up children. It is the best decision I ever made, but I know the costs associated with childcare. Many parents up and down this country, including my constituents, are taking tough decisions about not having any more children, and they are paying out more and having to work harder to afford their existing children. Where is the fairness in this system?