1. What assessment she has made of the potential impact of her Department’s policies on household budgets. (900554)

14. What steps she has taken to help support households with the cost of living. (900567)

The Government recognise that energy costs, inflation and global pressures continue to squeeze household budgets. That is why we have taken careful, targeted action through the great British summer savings package which launches on Thursday, cutting VAT on summer activities so that adventure parks, soft play centres, cinemas and theatres will be cheaper, alongside the work we are doing to maintain the triple lock and to lift children out of poverty.

The Chancellor has overseen huge tax rises for those who work hard and do the right thing. Now they have been hit by soaring energy bills—a situation that is even more acute for many of my constituents who rely on heating oil. How does the Chancellor think that squares with the Government’s pledge to cut energy bills?

The measures I took in my Budget last year took £150 off energy bills by getting rid of some levies altogether and moving others to general taxation. If we look at the most recent inflation numbers, inflation in the UK was 2.8% last month, which compares to 3.2% in the eurozone and 4% in the US. Food inflation was at its lowest rate for 17 months.

The Chancellor will know that I have raised the need to take action on the costs faced by farmers and families alike, both of which she has done. The great British summer savings scheme will be a brilliant help with the cost of giving kids a great school holiday, particularly the free bus travel for five to 15-year-olds throughout August. Does the Chancellor agree that continuing to look at how we can support affordable bus travel for constituents like mine in Cannock Chase will be very important even beyond the great summer break to come?

As my hon. Friend knows, we are investing £3 billion in local bus services to both improve the service for passengers and freeze bus fares until at least March next year. This summer there will be unlimited free travel for children aged between five and 15 in his Cannock Chase constituency and across the country. I also give a special shout-out to my mayor, Tracy Brabin, for the beautiful Weaver Network of electric buses, manufactured in Northern Ireland and Yorkshire, and serving the people of West Yorkshire.

2. What steps she has taken to support people adversely affected by the loan charge. (900555)

The Government introduced legislation in the Finance Act 2026 to provide for a new settlement offer for those affected by the loan charge. The Government will write off the first £5,000 of liabilities, and that is in addition to the proposals put forward by the independent reviewer, Ray McCann.

The Minister will be aware that tens of thousands of people continue to suffer because of the loan charge scandal, and that successive Governments, both Labour and Conservative, have failed those people. They have dithered, delayed and ignored reviews, causing confusion, worsening the financial harm and anxiety for so many people. Surely the Minister must agree that the victims deserve resolution and closure, so that they can move on with their lives?

I do agree that those who have been affected by the loan charge need to be able to move on with their lives. That is why the Government put forward a generous settlement offer at the last Budget that went further than the proposals set out by the independent reviewer. I would just note that it was a Government that the hon. Gentleman supported for 14 years who introduced the loan charge and did not do enough to reform it for those who were affected by it.

3. What steps she has taken to help support people with the cost of living in Falkirk. (900556)

The Government remain dedicated to raising living standards for people in Falkirk and across the UK by driving economic growth and bearing down on inflation, which I know continues to squeeze household budgets. Measures announced in my Budget last year are already taking effect: raising the national living wage and the national minimum wage; maintaining the triple lock on pensions; and extending free school meals to more families. Our great British summer savings package builds on that, reducing VAT on a whole range of summer attractions, including, I believe, Airthrill in my hon. Friend’s constituency.

The cut to VAT for family days out this summer starts along with the summer holidays later this week. This is a Labour Government acting to bring down the cost for families visiting Falkirk’s fantastic tourism, leisure and hospitality attractions. Many families are anxiously looking at the other side of the summer, with energy bills rising as a direct consequence of the illegal Iran war. Does the Chancellor agree that any forthcoming targeted energy bill support must similarly extend to working families?

We timed the great British summer savings so that they start on the first day of the Scottish school holidays and continues to 1 September, when children in England, Wales and Northern Ireland return to school. We hope that the scheme has a big impact on families around the country, alongside the free bus travel in England in August.

We did not start the war in the middle east, we did not join it, and I have been clear about my views on it, but the war is clearly having consequences here at home. We will continue to monitor the situation and take every action necessary to support families.

4. What assessment she has made of the adequacy of the temporary reduction in the rate of VAT in supporting the hospitality sector in Northern Ireland. (900557)

I thank the hon. Member for giving me another chance to talk about the great British summer savings scheme, which the Chancellor has just talked us through. It is fantastic that it is coming into place in just a couple of days’ time and will run until the end of the summer holidays. It extends across all four nations of the United Kingdon, benefiting businesses in Northern Ireland as well as in Great Britain.

Given Northern Ireland’s unique position in the United Kingdom, sharing an open border with the Republic of Ireland where the VAT rate is 13.5% for the hospitality industry, will the Chancellor look to reduce the rate of VAT for the hospitality sector in Northern Ireland—at minimum for a trial, if not permanently—to maintain price competitiveness, safeguard UK jobs and businesses, and make us more competitive with the Republic of Ireland?

I understand that the VAT rate in Northern Ireland is different from the rate in Ireland—there are different rates of VAT across Europe. It is important to remember that VAT is a national tax in the UK, at 20% across the country. It is important to have consistency for businesses operating across the UK. Significant cuts to VAT come with significant fiscal costs. For example, halving the rate of VAT on hospitality would cost the Exchequer about £11 billion.

5. What steps she is taking to reform business rates. (900558)

I am very busy today, Mr Speaker, as ever. I thank the hon. Member for asking about business rates. She will know that we have already started the work of reforming the business rates system so that we can put in permanently lower multipliers for high street businesses. As part of tax update day, we will be consulting on ways to collect more of the VAT that online sellers dodge by making online marketplaces liable for VAT on both UK and overseas business sales of goods. We will put every penny of the additional revenue raised into improving the business rates system for high street businesses.

When I met Chipping Sodbury chamber of commerce recently, business owners told me that the business rates system is broken and unfair, in part because it is based on turnover, not profit. In response to a letter, the Exchequer Secretary promised to bear in mind the points that I had raised ahead of future Budgets. Does he now accept that the business rates system is broken, and that rather than being reformed it should be abolished and replaced with a fairer system?

We have a tax on profits in the UK, which is corporation tax. In our corporate tax road map, we have committed to keeping that stable in this Parliament, rather than having it jump around as it did in the last one. It is important to have a broad tax base, so it is reasonable for business rates to continue to be—as they have been since the late 1980s—set in accordance with an estimate of the rents of properties. I do not think it would be right to change that.

The Minister will know that coastal towns, such as Poole, which I represent, rely on small businesses. Poole would not be Poole without its restaurants or ice cream parlours. Polling this week shows strong public support for higher levies on big tech. Could this be a way to raise revenue to cut business rates and support the bricks-and-mortar shops that give life to our high streets?

I understand my hon. Friend’s point. There are many businesses in rural and coastal communities across the country that we want to see thrive and grow, which is why the Chancellor announced the great British summer savings scheme, which will run until 1 September. On the point about the online giants, we are looking at further ways to raise more revenue by going after those online giants dodging VAT. In the last Budget, the Chancellor changed the multipliers in the business rates system so that the tax rate paid by a small high street business would be 33% lower than that paid by large properties, such as those occupied by online giants.

I call the Liberal Democrat spokesperson.

It was recently reported that the newly elected hon. Member for Makerfield had pledged that he would cut business rates for pubs, clubs and music venues by 20% if he became Prime Minister. Given that the hon. Member is facing the near certainty of becoming Prime Minister, I ask those on the Front Bench whether the Treasury has started modelling the numbers to deliver on that pledge, and if not, when that work will begin.

I have to correct the Liberal Democrat spokesperson—I do not think that this hon. Member has a near certainty of becoming Prime Minister any time soon. [Laughter.] It is good that my newly elected right hon. Friend the Member for Makerfield (Andy Burnham) has taken inspiration from the decision that we made in January to cut business rates for pubs, bars and live music venues by 15% so that we can back the great British pub and other hospitality venues.

6. Whether she plans to update the Treasury Green Book supplementary guidance on wellbeing. [R] (900559)

The Treasury published the Green Book supplementary guidance on wellbeing, which helps officials to assess how their policies and projects affect the wellbeing of citizens, in 2021. In February, this Government published an update to the Green Book that reaffirms the importance of considering wellbeing. Most importantly, my new Green Book will support fairer and more balanced decisions on investment in every part of the country, including outside London and the south-east, across urban, rural and coastal communities, so that projects have a better chance of securing Government funding.

I thank the Chancellor for her response. With the constantly growing evidence base behind it, wellbeing economics offers Governments an increasingly sophisticated means of supplementing conventional economics in decision making. It reveals that big-ticket items very often offer little wellbeing benefit to our constituents, while much cheaper interventions can have a dramatic impact. Wellbeing levels have even been shown across Europe to be a better predictor of electoral outcomes than traditional economic measures. Would the Chancellor be willing to meet me and other members of the all-party parliamentary group on wellbeing economics to discuss how wellbeing economics can enhance the work of the Treasury?

I will ensure that the relevant Minister meets my hon. Friend and others to discuss how we can make further enhancements to the Green Book. Something that has held Britain back for too long is that projects outside London and the south-east, including in rural and coastal communities, have missed out on funding because of the way in which the Treasury used to evaluate those projects. I have changed those rules so that we can make investments in all parts of the United Kingdom.

In my constituency, Chess Dynamics, part of Cohort, is a world-leading developer of counter-drone and air defence technology, yet like much of the defence sector, it has been left waiting for clarity on future investment. Given the recent turmoil at the top of the Labour party, can the Minister assure us that the vital defence investment plan will not be pushed back even further and finally give defence manufacturers the go-ahead—

Order. That is not relevant to the question.

7. What fiscal steps she is taking to support the defence investment plan. (900560)

I am pleased to update the House that I met the Secretary of State for Defence and the Chief of the Defence Staff yesterday to talk through the defence investment plan. The Ministry of Defence is producing a defence investment plan that will meet the scale of the challenges and meet the moment with increased readiness. I am confident that the new defence investment plan will be published before the NATO Ankara summit. It will involve more money spent more effectively and will meet the scale of the challenges facing our country.

The former Defence Secretary has blown apart the defence investment plan, revealing that the Treasury was prepared to offer only a pitiful increase in defence spending—just 0.08% by 2030—despite growing threats across the world. At the same time, the Treasury continues to fork out billions for welfare and the net zero agenda. Innovative small and medium-sized enterprises in defence are effectively locked out of MOD contracts and denied the opportunity to scale their capabilities. As the Chief of the Defence Staff put it,

“the price of peace is increasing”.

Will the Chancellor commit this morning to filling the £28 billion gap in defence investment by 2030 to secure our position on the world stage, or will she stand in the way of the delivery of the DIP that we need?

As I just said, the DIP will be published before the summit. It will involve more money spent more effectively, and it will meet the scale of the challenges we face. Frankly, I will take no lectures from the Conservatives, who left our armed forces, in the words of their former Defence Secretary, “hollowed out”. Our forces hit rock bottom for pay, morale and numbers. The Tories do not like to mention the £12 billion of cuts that they made to defence in their first five years in office. We are turning that around with the biggest uplift in defence spending since the end of the cold war. This Labour Government will continue to invest in defence, with contracts awarded to firms here in Britain to keep our country safe.

I call the Chair of the Treasury Committee.

My right hon. Friend is right to highlight those challenges. Throughout the 10-year equipment plan, there was always a £14 billion deficit that never seemed to go away. It is great that we are seeing more investment, but could the Chancellor update the House on what conversations she or her Ministers are having with Governments in Europe and with Canada about the Defence, Security and Resilience Bank and the multilateral defence mechanism for funding and procuring defence across NATO?

I thank my hon. Friend for her question. As Members will know, this Government are working on plans with our NATO allies for a multilateral defence mechanism. We have already signed a treaty agreement with Finland and the Netherlands, and we are working closely with Scandinavian, Baltic and eastern European countries. The multilateral defence mechanism will enable us to procure jointly and stockpile equipment off the balance sheet, ensuring better value for money for taxpayers and enabling innovative forms of finance to fund our defence. We are also working closely with Canada on the multilateral defence mechanism and the Defence, Security and Resilience Bank, which lends to smaller businesses in the supply chain, so that we have one model to help us better fund defence in our country and across Europe.

I call the shadow Minister.

It is good that the Chancellor has had those meetings, but perhaps they have come too late, because when the former Defence Secretary resigned, he said that the Treasury was “unwilling” to provide the resources needed to defend the country against rising threats. The Chancellor has said that national security always comes first, so why this dereliction of duty? Why is she failing to tackle the ever-expanding welfare budget and blocking the defence investment plan from getting the funding needed to meet the threats that we face?

The hon. Gentleman is literally sitting two places away from the right hon. Member for Central Devon (Sir Mel Stride)—the former welfare Secretary who presided over a record increase in welfare spending.

We have commissioned Alan Milburn to do a review—the first part of which was published recently—to address the problem that we inherited of young people not in employment, education or training and get young people back into work. I am proud to be the Chancellor who has overseen the biggest uplift in defence spending since the end of the cold war. We funded that through our difficult decision to reduce overseas development assistance, but that was the right choice. When we set out the defence investment plan ahead of the Ankara NATO summit, the whole House will see the further changes we are making in order to better support defence in an increasingly unstable world.

8. What assessment she has made with Cabinet colleagues of the potential impact of her Department’s policies on levels of youth unemployment. (900561)

UK employment levels are strong by historic and international standards. The hon. Member is right, though, to highlight a structural challenge when it comes to young people being out of work and, for that matter, education. That is why we have committed £2.5 billion over the next three years to the youth guarantee, helping to deliver up to 500,000 opportunities to earn and learn.

Some 42% of employers have cut back on graduate recruitment, and across Bromsgrove and the villages there has been a 25% increase in youth unemployment over the last two years. With unemployment undoubtedly weighing heavily on the Chancellor’s mind, does she regret the choices she has made and the impact that they are having on young people’s futures?

The background to this is that employment is up 920,000 since the election. As I just said, there are structural challenges when it comes to youth unemployment. I gently refer the Tories to the fact that we saw a 250,000 increase in the number of those not in education, employment or training in the last three years that they were in office, and youth apprenticeships saw a 40% fall when they were in office. This Government are getting on with supporting young people. That is why this month will see the introduction of a £3,000 hiring bonus for firms that take on someone aged 18 to 24 who has been looking for work for six months.

What is the Minister’s assessment of the unemployment issues for graduates? Will he and the Treasury team pledge to consider carefully the evidence that the cross-party Treasury Committee took from thousands of graduates, and come up with a fairer system that equalises plans, so that the year in which graduates enrolled in university does not matter, and graduates pay more or less the same for their graduate loan?

My hon. Friend has done significant campaigning on this issue in recent months, and we all know why. The Government obviously inherited the student loan system situation, and we have already acted to cap the interest rate on student loans. We look forward to reading her Committee’s report, and, I am sure, to her ongoing campaigning on this issue.

9. What assessment she has made of the potential impact of reducing up-front venture capital trust income tax relief on VCT fundraising. (900562)

At the Budget, the Government announced a comprehensive package of entrepreneurship tax measures, designed to provide substantially enhanced support for scaling businesses across the UK. That includes doubling the maximum amount that a company can raise through the enterprise investment scheme and the venture capital trust scheme. Overall, the changes to those schemes are forecast to generate about £100 million per year of additional investment in high-growth, scaling companies, thanks to the increased scheme limits in the Budget.

A recent industry survey revealed that 62% of VCT founders are scaling back growth plans, 45% are cutting headcounts, and 25% are leaving the country. Will the Government reverse the Chancellor’s plans to cut this relief, or will her legacy for Britain’s tech sector be lower growth, fewer jobs and lasting damage?

Absolutely not; we have real confidence in the British venture capital sector. In the 2025 Budget, we doubled the investment limits and gross assets threshold for the enterprise investment and venture capital trust schemes. Those changes are supporting growth and development.

I call the shadow Minister.

May I start by congratulating the former Economic Secretary, the right hon. and learned Member for Northampton North (Lucy Rigby), on her promotion to Chief Secretary? In the eight months that I shadowed her in her previous role, she made a strong impact and gained significant, well-deserved respect from those in the financial services industry. May I also welcome my fourth Economic Secretary, and wish her the very best of luck in the role?

As the Leader of the Opposition said in a speech last week, tax and regulation is getting in the way of financial services lending and investing in the UK economy. Does the new Economic Secretary think that the next Chancellor will do a better job of ensuring growth for this country?

This Chancellor has secured six interest rate cuts. We are creating the conditions for investment in business. Investment in skills and innovation is up; investment in regional infrastructure is up; and whole-economy investment is up by 4.9% since the election. This country is the best place for start-ups and scale-ups, thanks to the economic stability that the Chancellor has been securing.

10. What discussions she has had with Cabinet colleagues on potential funding for improving transport connectivity for border communities. (900563)

Effective transport links are vital to the prosperity and wellbeing of people across the country, including in our border communities. We have been working closely with the Welsh Government to deliver a plan for Welsh rail, and we continue to work with devolved Governments to ensure that border communities stay connected.

I thank the Minister for her answer. The Forest of Dean sits on the English-Welsh border, and many of my constituents rely on cross-border transport links to access work, education and healthcare. Does she agree that improving connectivity in border communities can play a significant role in driving economic growth? What consideration is the Treasury giving to supporting investment in key cross-border transport infrastructure?

Border communities rely on strong transport links, and my hon. Friend is a strong advocate for the interests of his constituency and those in the surrounding area. The Government are delivering for people in all parts of the UK, including investments that will benefit those on both sides of the English-Welsh border. That includes the investment in places like Padeswood, on the Wrexham to Liverpool line, as part of the £445 million of investment allocated for rail enhancements in Wales at the 2025 spending review.

The TriLink scheme, which connects north-west England with the south of Scotland and upgrades the west coast main line—the busiest railway line in western Europe—has been deferred by this Government and their predecessors for years. This very likely contributed to the near-fatal derailment at Shap just a few months ago. Does the Minister think that the right hon. Member for Makerfield (Andy Burnham) believes that the north-west of England exists beyond the M62, and if he does, will he invest in upgrading the railway line, for the good of everyone in England and Scotland?

My right hon. Friend the Member for Makerfield (Andy Burnham) will speak for himself, but I am confident that his view is that growth extends far beyond the area that the hon. Gentleman referred to. Most importantly, this Government’s approach is to ensure that growth can be generated right across the country, rather than in just a few postcodes.

11. What fiscal steps she is taking to help develop transport infrastructure in the north-west. (900564)

This Government are committed to improving transport connectivity right across the north of England, and we know that part of how we can deliver that is by recognising that decisions about local transport are better made locally. That is why we are giving mayors and local leaders the powers and the funding to make decisions locally; through the transport for city regions fund alone, there will be £4.1 billion for Greater Manchester and the Liverpool city region between 2027 and 2032, and there will be further devolution through the integrated settlements.

As the Chancellor will know, northern powerhouse has been spoken about since 2014, which is 12 years ago. If we are to get Northern Powerhouse Rail off the ground and delivered, we cannot let valuable land that could create tens of thousands of jobs and boost the northern economy be used as a cheap option. What recent conversations have there been with local leaders regarding the proposed underground station at Manchester Piccadilly?

This Government, for the first time, have backed Northern Powerhouse Rail with actual money in the spending review. The programme will improve connections between key cities—Liverpool, Manchester, Bradford, Leeds, Sheffield and York. We have not yet taken a decision on the type of station that we will deliver at Manchester Piccadilly, but I recognise my hon. Friend’s preference for an underground station. I recently met Bev Craig, the leader of the city council, to discuss how the Government can support Manchester’s ambition for an underground station at Manchester Piccadilly.

12. What steps she is taking with Cabinet colleagues to support industry. (900565)

We are cutting electricity costs for up to 10,000 businesses through the British industrial competitiveness scheme, and expanding the supercharger scheme. We are also strengthening key supply chains and protecting jobs through the steel strategy, the new £350 million critical chemicals resilience fund, and the £120 million in support for our ceramics sector.

I welcome the decisions taken by the Chancellor and Government colleagues to revise the electric vehicle targets for 2030, following representations from the industry, unions and MPs. Targets are really great, but they need to match capabilities and market realities. What assessment has she made of how the change will safeguard jobs in the automotive supply chain in my constituency of Stourbridge and across the UK?

I thank my hon. Friend, and other MPs who speak for constituencies with automotive businesses, for their representations. As she said, we are bringing forward the review of the zero emission vehicle mandate, so it will now take place this year—a year earlier than planned. In that, we will look at a slower phase-in of those targets to bring us closer, for example, to where the EU is. Automotive is the crown jewel of British manufacturing. We must not let targets damage our sector; that would lead to money being paid out to foreign companies, such as those in China, that produce more electric vehicles. That is why we have made the changes, and why we are having the review.

Mid Buckinghamshire is home to a number of businesses that are part of the supply chain for the aerospace and defence industries. Those businesses rely on steel that is categorically not made here in the United Kingdom. If the Department for Business and Trade fails to rectify the cliff edge that is coming on steel tariffs, what will the Treasury do to backfill that and ensure that many businesses, such as those in my constituency, do not become completely unviable?

The hon. Gentleman makes an important point about making sure that we get the balance right. We are supporting steel made in Britain, which the previous Government neglected; we are backing it through the nationalisation of the steelworks in Scunthorpe and more support for Port Talbot and Sheffield, but I also recognise the challenge that some British companies will face. This is why, for example, as is shown by the work that we are doing with the EU on the upcoming EU-UK summit, we want a steel alliance, to reduce tariffs on steel.

I call the shadow Minister.

Next week, those swingeing 50% tariffs on steel imports will hit manufacturing businesses across the country, putting thousands of jobs at risk. While they are intended to protect domestic production, industry is warning that many grades simply are not made in the UK in the quantity needed. It is a simple question for the Chancellor: will she guarantee that tariffs will not apply where businesses cannot get steel in the UK?

Our steel strategy protects the UK steel industry, so that more orders can come to British Steel and other steel manufacturers in the UK. We will not allow our steel sector to be undercut by cheap foreign imports.

13. If she will make an assessment of the potential merits of increasing levels of economic co-operation with the EU. (900566)

At a time of great global uncertainty, it is more important than ever that we deepen ties with our closest allies and biggest trading partners, whose values we share, and whose interests are bound to ours. It is 10 years today since the Brexit referendum, but the economic impact from the deal negotiated by the previous Government is stark. Indeed, recent studies indicate that its impact could be as great as an 8% reduction in GDP. I have worked closely with my counterparts across the EU as part of this Government’s commitment to resetting the UK-EU relationship, most recently at meetings of the G7 in Paris, and meetings with the European Bank for Reconstruction and Development in Riga. They have been clear that they would welcome closer ties, which will be in all our interests. At the upcoming UK-EU summit, we hope to be able to conclude deals on food and agrifood, on linking to the EU emissions trading schemes, and on an ambitious youth mobility scheme.

Today does indeed mark 10 years since Britain voted to leave the European Union. One of the consequences of Brexit has been to bury my constituents in red tape. My farmers cannot export without doing reams of paperwork, and small businesses are seemingly locked out of European markets. The EU remains the world’s largest trading bloc, and it sits on our doorstep, so will the Chancellor set out a path to an ambitious UK-EU reset—something that my party has called for—including a new customs union that would slash costs for British businesses, open markets for our farmers, and bring down prices for the British consumer? Or will we have to wait for her successor to show that ambition?

I have been working hard in this Labour Government to reset the relationship so damaged by the choices of the Conservatives. That is why we have committed to this second UK-EU summit, after the agreement between President Ursula von der Leyen and our Prime Minister last year to finalise the deal on food to help our farmers, on youth mobility to help our young people, and on emissions trading to help keep the cost of energy down.

Given what my right hon. Friend has rightly said about the disastrous deal negotiated by the Conservatives once we left the EU, when the next UK-EU summit does eventually happen, will it not be time— after we have successfully concluded discussions on the priorities of the UK-EU reset—to discuss the opportunity, costs and benefits for more key parts of our economy of rejoining the single market?

I understand why my hon. Friend makes those arguments; we are clearly poorer outside the European Union than we otherwise would have been. We made a manifesto commitment that we would not rejoin the single market or customs union, or return to the free movement of labour. Those red lines stand, but within them there is an awful lot that we can do to improve relations. We are doing just that.

15. What steps she has taken to help support people with the cost of living in Wythenshawe and Sale East constituency. (900568)

The Government are committed to easing cost of living pressures for people in Wythenshawe and Sale East, and across the UK. Budget measures are already helping households; we are freezing prescription charges for the second year in a row, freezing rail fares for the first time in 30 years, and taking £150 off energy bills, as well as protecting pensioners through the triple lock and lifting half a million children out of poverty.

My constituents Darren and Nicole shared with me their story of hardship in raising five children on one income. Like me, they are grateful to this Chancellor for ending the two-child benefit cap. Will she consider an independent process for advising the Government on how much universal credit needs to be, if people are to afford everyday items?

I thank my hon. Friend for bringing the story of Darren and Nicole to this House. I hope that they and their children will benefit from the change I made to the two-child limit for universal credit, as well as from the rolling out of free breakfast clubs to all primary schools, and the introduction of free school meals for all children whose parents are on universal credit, which will start in September and be available at primary, secondary, nursery and further education levels. As the Trussell Trust has said, the decisions I made in my Budget mean that the cruel two-child limit, which drove countless families into hardship and forced them to turn to food banks to survive, will end.

16. What assessment she has made of the potential impact of Heathrow airport’s expansion on economic growth in regions outside London. (900569)

We have been clear that Heathrow expansion needs to benefit everyone, not just London. The Department for Transport has shown that expansion would deliver UK-wide support for trade, with 40% of the estimated GDP benefits from expansion being outside London and the south-east.

When the Chancellor announced her support for Heathrow expansion last year, she claimed that it would deliver 0.43% GDP growth. The Heathrow expansion national policy statement snuck out last week predicts a 90% reduction in that figure to just 0.05% growth; what little growth there might be will largely be sucked out of other parts of the country, such as Birmingham and Manchester. Will she now finally admit that Heathrow expansion is not the grand growth plan she thought it was, and that it will hurt areas outside London the most?

Nothing was snuck out. A third runway at Heathrow means more than 60,000 good local jobs, and more than £40 billion for the British economy. The hon. Lady’s question rather highlights the Lib Dems’ curious approach to growth. When they were in government, they decimated our economy with austerity, and now they oppose all the investment in infrastructure needed for growth. This Government are taking a wholly better approach.

17. What progress she has made on strengthening the economy since July 2024. (900570)

Since I became Chancellor, our economy has grown by 2.3%—the fastest growth among European G7 economies in that period. Over that time, we have progressed our strategy for stronger and more secure growth through fiscal stability by bringing in an additional £120 billion in public investment, by crowding in private investment through the National Wealth Fund and the British Business Bank, because I changed our fiscal rules; and by removing structural barriers to growth, including through big reforms to our planning and pensions systems and through progress on reducing regulatory burdens, particularly on smaller businesses.

The long-term strength of the economy depends on long-term investment in the UK. UK growth companies still struggle for capital, while UK savers’ money flows to trackers, which are concentrated on a small number of US stocks. That is bad news for our future. My right hon. Friend the Chancellor has made brilliant progress on reforming pensions, but can she reassure me that the Treasury is looking at further reforms, to increase the amount of UK savers’ money that is invested in our future?

I thank my hon. Friend for his question and his work on the Treasury Committee. On pensions reform, through the Mansion House accord and Sterling 20, we have got pension funds to commit to investing more in British businesses, both through British venture schemes and in British infrastructure. Those changes were secured by the Pension Schemes Act 2026 taken through Parliament by the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Swansea West (Torsten Bell). That, for the first time ever, requires investment in UK businesses and in infrastructure. We are also making reforms to how our ISA system works so that for people under the age of 65, after investing £12,000 in cash, any additional money has to be invested in stocks and shares, helping start-up and scale-up businesses grow and stay in Britain.

The Chancellor has obviously had to make some tough decisions since 2024, but the right hon. Member for Ilford North (Wes Streeting) wants her to go further by aligning the capital gains tax rate to the higher rates of income tax. Did she examine the behavioural effects of such a policy before she made a much more modest increase in her first Budget?

In my two Budgets, I have raised an additional £30 billion through taxes for more wealthy people, whether that is through the changes to the non-dom rules, VAT and business rates on private schools, taxes on private jets, the high-value council tax surcharge or, indeed, the increases in capital gains tax. Combined, that is an extra £30 billion secured for our public services, to stabilise our public finances and get debt down as a share of our economy by asking those with the broadest shoulders to pay more.

I call the shadow Minister.

I am sorry, but the Chancellor’s recollection of her record is fantasy economics from a fantasy economist. Is it not the case that her true record is poor decision making: with U-turn after U-turn on winter fuel payments, business rates and family farm taxes; tax after tax on jobs, investment and savings; a country more indebted with higher interest rates; and a Chancellor unable to cut welfare and unwilling to fund our defence?

I am incredibly proud of my record as Chancellor of the Exchequer: the fastest growing country in the G7 within the EU, wages rising faster than inflation every single month since I became Chancellor, record investment coming into the United Kingdom, rolling out free breakfast clubs and free school meals, 500,000 children lifted out of poverty, creating the National Wealth Fund and leveraging in private sector investment. Those things are only possible because of the decisions I have made as Chancellor. As a result, for the first time since 2019, Government borrowing was less than 5% of GDP—a far change from the mess I inherited from the Conservatives.

T1. If she will make a statement on her departmental responsibilities. (900579)

This Government have the right economic plan—the fastest growth in the G7 at the start of this year, the second fastest rate of growth in the G7 since the election, and inflation lower than forecast, with food inflation at its lowest level for 17 months despite the disruption in the middle east. Wages have risen faster than prices in every single month since I became Chancellor. I am tackling the cost of living challenges with rail fares, prescription charges and fuel duty frozen, and with money off energy bills. Our economic plan is the right one, and I will continue to deliver for the British people.

Sometimes we do not say thank you enough, so I would like to offer my heartfelt thanks to the Chancellor for listening. She listened to me, my fellow MPs, our pottery workers, our GMB union and especially Sharon Yates by offering a £120 million support and growth package for our ceramics sector. Can the Chancellor now outline how she will ensure that smaller manufacturers benefit from this fantastic new scheme?

I thank my hon. Friend for that question and for the representation that he and other MPs representing ceramics constituencies have made. It was a real honour for me to meet the impressive force of nature that is Sharon Yates when I visited Dunoon, a ceramics business in Staffordshire, a couple of months ago. I pay tribute to her and the campaigning trade union, GMB, Ceramics UK and all campaigning Labour MPs on their efforts. As a result, they have been heard, and our £120 million package of support for ceramics announced earlier this year will give a positive future for the sector.

May I remind everybody that we are on topical questions, and lots of Members need to get in? I call the shadow Chancellor.

Given all that is going on, this could be the last time. The legacy of this Chancellor has been the highest taxes on record, a benefits bill spiralling out of control, and unemployment 300,000 higher than it was at the last general election. The right hon. Lady trumpets 2.8% inflation, but that is still well above target, and only last year it was the highest in the G7, to the detriment of millions up and down our country. Under her plans, how much more does she intend to borrow in this Parliament than under the plan she inherited?

Let’s talk about my record: six cuts in interest rates; wages rising faster than inflation; trade deals secured; investment delivered; support for our energy-intensive industries; half a million children lifted out of poverty; record investment in our national health service; more money for local transport infrastructure right around the country; the biggest uplift in defence spending since the end of the cold war; and an economy that has constantly beaten the forecasts—an economy that is growing, and an economy where inflation has come down. Compared with the disastrous 14 years when the Conservatives were in office, I would take our record any day.

May I repeat what I just said? Chancellor, there are lots of Government Members who need to get in. I have to get through this list. You have to help me to help them ask their questions.

The right hon. Lady cannot bring herself to answer the simple question I asked. I will tell her: she is borrowing one quarter of a trillion pounds more than the plans that she inherited—that is her legacy. We hear that the right hon. Member for Makerfield (Andy Burnham) is considering borrowing even more. Does she agree that that would be utterly reckless and that the bond markets will not wear it?

When the Conservatives were in office, in the last Parliament they borrowed more than the G7 average every single year. This year we are borrowing less than the G7 average and have brought down Government borrowing to 4.2% of GDP in the most recent data. We have brought forward our fiscal rules so that they kick in two years earlier, and we are meeting those fiscal rules, to ensure that we have sustainable public finances—a far cry from those that I inherited.

T2. Staffordshire’s MPs hunt as a pack, and we are all grateful for the package of support for the ceramics industry. It is important for jobs and livelihoods in Newcastle-under-Lyme, where we make excellent British bricks. May I urge the Chancellor to do whatever possible to increase the use of British-made bricks in construction projects right across our United Kingdom? (900580)

I thank my hon. Friend for the representation that he makes on behalf of the ceramics industry in Newcastle-under-Lyme. The £120 million funding will be launched in the autumn. We are working with the sector now, and it will be available for firms of all sizes, because it is important that small ceramics manufacturers can benefit, as well as larger ones.

I call the Liberal Democrat spokesperson.

Today is exactly 10 years since the country voted to leave the EU, and thanks to the Conservatives, the post-Brexit red tape has created 2 billion pieces of extra paperwork for British businesses—enough to stretch around the world 20 times. The hit to growth is the equivalent of the Treasury losing out on £90 billion every single year. Surely by now the Labour Government and the Labour party must recognise that if they want to go for growth and raise revenue, they should drop their red lines on Europe.

With all respect, the Liberal Democrats backed that referendum 10 years ago, and they were part of the Government who legislated for it. Unlike the Liberal Democrats, the Labour party actually sticks to its manifesto commitments.

T4. The loss of Grangemouth’s refinery was a loss to Scotland’s economy. The Chancellor rightly consulted on including refined products in the carbon border adjustment mechanism to level the playing field for domestic refining—a level playing field the Tories did not pursue before the closure of Grangemouth was announced in 2023. Will the Chancellor meet me and other colleagues to discuss the merits of accelerating the inclusion of refined products in the CBAM? (900582)

I thank my hon. Friend for his strong representation on behalf of his constituency and the important refining industry. I have seen the letter to the Chancellor that has been sent by colleagues and I would be very happy to meet my hon. Friend and other interested Members.

T3. Will the Chancellor explain why she is now clawing back VAT on the compassionate medicines scheme, which means that this Labour Government are taxing free cancer drugs given to children? Will she reverse that decision? Patients are starting to miss out on the treatments they really need. (900581)

I regret to inform the hon. Gentleman that that policy was implemented by his Government—[Interruption.] It was in 2023 that HMRC wrote to businesses that were not paying the VAT, unlike some others that were, and began the enforcement action—it started under his Government. However, I recognise the challenges that these rules are causing, so today I confirm that the Government will soon bring forward a new approach, consisting of either changes to the VAT rules or a reimbursement scheme. The changes will be effective for donations of medicines made on or after today.

T6. In all our constituencies, small hospitality businesses, such as Shotsmiths in Beckenham and the Alma pub in Crystal Palace, provide important third spaces, bringing life to our high streets and providing good jobs. The Chancellor has visited my constituency to outline additional support for local pubs. Will she set out what further steps she is taking to ensure that these small businesses can grow and thrive? (900584)

I have not only visited my hon. Friend’s constituency, but I went to school there and I am well aware of many of the pubs in Beckenham and Penge. This summer, from this Thursday, the great British summer savings programme will benefit businesses in Beckenham and Penge and around the country. VAT rates on children’s food in restaurants, pubs, cafés and bars will be cut, and children’s entertainment venues in Beckenham and Penge and around the country will also see cuts in VAT.

T5. Today marks 10 years since the Brexit referendum. Since that date, we have had 10 Home Secretaries, nine Foreign Secretaries, eight Chancellors, seven Defence Secretaries and 6 Prime Ministers. Does the Chancellor agree that such instability has acted as a break on growth in this country and can she set out what she plans to do to reverse that trend? (900583)

In the first quarter of this year we were the fastest growing economy in the G7. Since I became Chancellor, we have had growth of 2.3%, which is the second fastest rate of growth in the G7. We are growing our economy by bringing investment and stability back to the UK, and businesses are following our lead by investing in our country.

T7. Last week, the Chancellor announced the biggest insourcing of Government caterers, cleaners and security officers that we have seen in a very long time, when the current contract ends. Does she agree that that move will finally recognise workers who have been undervalued and under-appreciated for far too long? (900585)

When we were in opposition, I promised the biggest wave of insourcing in a generation, and we are now working in government to deliver exactly that. The Government Property Agency contract that expires in 2028 will come back in house, so people working at around 40 locations across government in London and around the country will find that instead of being employed by an outsourcing company, they will be employed directly by the Government. They will have the same terms and conditions as other civil servants, making a huge difference to them and their families.

In an earlier answer, the Minister ruled out a VAT reduction for hospitality businesses across the United Kingdom. Will he at least meet me, Hospitality Ulster and the Northern Ireland Food to Go Association to discuss the concept of a Northern Ireland-specific pilot?

I would of course meet the hon. Member.

T8. My constituency has been extremely lucky in getting £20 million for Glascote Heath and Stonydelph under the Pride in Place programme, which gives local people the ability to choose how the funding is to be spent. Will there be more rounds of this funding or similar schemes so that local people can be put in charge of how their money is spent? (900586)

The Pride in Place programme provides £5.8 billion of support to 284 neighbourhoods right across the country, including five places in my hon. Friend’s constituency, which she does so much to advocate for. We will set out more details of further funding in the Budget.

In my constituency, we have lost the Scotbeef abattoir and the famous Donald Russell butchers in recent months, both of which were crucial to the agricultural supply chain. Both blamed high energy costs and the increased costs of doing business, such as the huge rises in national insurance under this Government and big business rate rises under the SNP. What steps is the Treasury taking to support, not suffocate, the agricultural supply chain and other crucial elements of the farming sector?

I thank the hon. Member for the representations she makes on behalf of the businesses in her constituency. This Government are taking every step we can—within the tight fiscal constraints that we inherited from the previous Government—to reform, and invest in, our business rates system so that we can raise revenue in a fair and sustainable way. I am sure that the Chancellor and colleagues across Government will continue to listen to representations and consider what further changes we can make at the Budget to support businesses.

T10. The Tory Government squandered billions of pounds of public money on covid fraud, waste and corruption. Will the Chancellor tell the House what measures she is taking to address this issue on behalf of taxpayers? (900588)

Today the Government have responded to the covid counter-fraud commissioner’s recommendations in a report that I commissioned, which confirms that the Conservative Government left the door open to more than £10 billion of pandemic fraud. That is money that could have gone into our NHS and our schools, and we have acted in the last two years to claw it back. Today we set out how we will go even further, launching a powerful new public authorities fraud investigation and enforcement service, with new powers to ensure that we get that money back directly from fraudsters’ bank accounts. Nearly 2,000 directors have been disqualified and 86 criminals have been prosecuted in actions that will bring more money back to the public purse. I want those who have defrauded the taxpayer to know: there is nowhere to hide; we are coming after you; you will pay that money back.