Mel Stride Emergency Budget Response

Today [Wednesday 26^th March 2025 ] Mel Stride MP, the Shadow Chancellor of the Exchequer, delivered his response to Rachel Reeves MP's Emergency Budget.  

Mel Stride MP, the Shadow Chancellor of the Exchequer, said: 

Checked against delivery

“At the last budget, the Right Honourable Lady said she would bring stability to the public finances.

Stability to the public finances.

But this statement more appropriately referred to as the emergency budget has brought her to a...

This emergency budget has brought the Right Honourable Lady to a cold hard reckoning.

She has become very fond recently to talk about the world having changed, well indeed it has.

This country was growing at the fastest rate in the G7 only about a year ago. And just as the OECD and the Bank of England and other forecasters and now we learn today the OBR have states.

Growth has been halved in this year. Cut in two as a consequence of the decisions and the choices that the Right Honourable Lady made on her watch.

Inflation, which was down 2%, bang on target on the very day of the last general election under a Conservative government.

We are now told this year will be running at twice the level of this forecast under ourselves in 2024.

This is going to mean prices bearing down on households and businesses right across the country because of her choices.

And the OBR are also says that unemployment will be rising this year and next year and the year after and in fact across the forecast period it will not decline at all.

So much for the Right Honourable Lady's back to work plans. We have already seen what it means when it comes to controlling borrowing under this Chancellor.

And yes, she has come forward with a plan to squeeze spending later on in the forecast period and she has of course told the OBR that these are the elements of spending restraint which she will stick.

But what do the markets think and can I ask the Right Honourable Lady, given her track record, given the fact that she has failed to control spending and borrowing to date, what does she think the markets are going to make of her latest promises?

But the Right Honourable Lady, says of course none of this is her fault but it is the war in Ukraine, it is President Trump, it is tariffs, it is President Putin, it is the Conservatives, it is her legacy, it is anybody but her.

But what the British people know this is a consequence of her choices.

She is the architect of her own misfortune.

It was the Right Honourable Lady who talked down the economy.

Who talked down the economy so that business surveys and confidence crashed through the floor.

It was the Right Honourable Lady who confected the £22 billion blackhole.

A smoke screen that was only ever there in order to cover up for the fact that she and the Prime Minister renegaded on their promises to the British people during the last general election

And a blackhole that the OBR are themselves and ironically the Government's behest have said they will not legitimise.

She chose to be reckless with a sliver of headroom against her fiddled targets.

She borrowed and spent and taxed like it was the 1970s.

Little wonder that the Chancellor has tanked the economy, little wonder we have an emergency budget, all because of her choices.

Now, the Chancellor likes to tour the television studios and tell everybody they should be thankful she will not be ramping up taxes in this emergency budget as she did before.

But that will be cold comfort to the millions up and down the country waiting in fear and trepidation for the start of a new tax year.

Buckling under the burden of tax that will be rising to the highest tax burden on her watch in the history of our country.

And so, could I ask the Right Honourable Lady, if when she replies in a moment, she will give that much needed reassurance particularly to businesses that she will not be ramping up taxes still further in the autumn.

Even a basic economist knows that if you tax something you get less of it, you don't have to have worked at the Bank of England for ten years to know that.

So, what did the Chancellor tax?

She taxed jobs and wealth creation, she's destroyed livelihoods, businesses clobbered big and small, small companies, the backbone of our economy, enterprise trust on the altar of her ineptitude.

The CIPD telling us a third of the businesses affected will shed labour.

Morrison is losing 200 jobs, Tesco 400, Sainsbury's 3000 jobs lost.

No wonder the Federation of Small Business say that outside of the pandemic business confidence has been left at its lowest level on record.

But it is not just businesses, it is charities, it's GPs, it's pharmacists, those who transport children who have special educational needs, and it is hospices caring for the sick and the dying.

In this House, the Labour Party had the opportunity yesterday and last week to stop that, but they voted our amendments down.

And we will never let their constituents forget it.

If you ramp up taxes, if you ramp up borrowing and spending without any commensurate improvement in productivity it leads to growing inflation.

And inflation has been increasing on this Government's watch.

It means interest rates stay higher longer, the Chancellor just now trumpeted fact it had been three interest rate cuts since the Labour Party came to office.

She knows full well there should have been more than that had she managed, she knows full well, she knows full well, she knows full well, Mr Speaker.

She knows full well that interest rates are higher for longer because of the choices that she took.

This has led the servicing costs for our national debt, which is running at twice the defence budget, and today we have learned from the OBR that debt interest is to increase still further.

None of this money is going to be spent on public services.

It will be going down the drain.

The real black hole is not on the Chancellor invented; it is the one the Chancellor created.

It's not a central problem the fact that this Chancellor is a gambler.

Even with her fiddled fiscal targets she let way too little headroom.

And is not the truth whilst the Right Honourable Lady said at the last budget was a once in a parliament reset, she rolled the dice on a wafer-thin margin and she lost, reckless with her fingers crossed.

She fiddled the targets, and she missed them.

Can I just point out that all of her fiscal headroom disappeared, not just some of it.

In fact, she went underwater to the tune of £4.1 billion.

Mr Speaker, reeling from one fiscal event to the next is not the way to run public finances.

And breaking your fiscal rules to the extent that the Right Honourable Lady has in just six months is a public humiliation.

Mr Speaker, can I briefly focus on defence spending?

We on this side of the House, we welcome the fact that as we pressed the Government to do, they will reach 2.5% of GDP by 2027.

And we note the stepping stone along the way that the Right Honourable Lady has just announced.

But we should go further than that.

The 3% target should be brought forward to this Parliament.

So, can I ask the Right Honourable Lady, given the geopolitical tensions she has raised, what provision has she made in her headroom, in her fiscal plans, for increasing defence spending more quickly in this parliament if it proves necessary?

And can I ask her would she scrap the absurd deal over Chagos deal and put that money behind our Armed Forces?

Mr Speaker, the economy is in a perilous state but there was a different way, there were different choices on taxing, and spending, and borrowing, and on productivity, and on welfare.

Let me just say a few words on welfare.

It was the privilege of my life, Mr Speaker, to have served as the Secretary of State for Work and Pensions.

And when it came to welfare reform, with that privilege came a deep responsibility.

The responsibility for welfare reform to be properly thought through with a very clear plan.

So, I know they do not like it because it is an alien idea, Mr Speaker, to the party opposite.

So that we can be fair to the taxpayer but equally fair to the many people up and down the country, some of whom are highly vulnerable.

This was an approach on our watch that led to 5 billion of savings across the forecast period.

And 450,000 fewer people going on to long-term sickness and disability benefits as a direct consequence.

And we would have gone further, much further, having set out a clear plan, a clear plan, we set out a clear plan in our manifesto to do exactly that.

But the party opposite rushed their changes.

They had no plan.

There was not a single mention of PIP, Personal Independence Payments in the Labour Party manifesto.

When they got into office they pussyfooted around and dithered, and why?

Because it is deeply divisive within their rank and file.

And then suddenly, when the Chancellor decided that she had run out of money looking, out the word went, to find some savings in welfare and scrabbling around to yank every lever possible.

And the spectacle, frankly, Mr Speaker, of what the OBR has said about changes that were only announced last week by the Secretary of State for Work and Pension is simply shambolic.

We have gone from incompetence, Mr Speaker, to chaos.

There have been more changes on this policy than there were at the last minute to the profile of the Right Honourable Lady on LinkedIn.

The result is the worst of all worlds, a wholly inadequate level of savings on welfare with welfare costs still spiralling ever higher.

And changes that will likely to harm many vulnerable people.

So, could I ask the Right Honourable Lady, when the Secretary of State for Work and Pensions came to the House last week with these changes because she did not provide an Impact assessment.

Was this because the OBR had not signed off the numbers?

Was it because the department did not have enough time to produce one?

Or was it only provided today, as many other suspect because this was thought to be a good time to bury bad news?

Mr Speaker, the forecast for growth is down, for borrowing costs are up, for inflation is up, and business confidence has been smashed in a million pieces.

This Chancellor constantly trying to blame forces beyond her control.

The right response is not to duck responsibility but to build resilient economy.

The Right Honourable Lady would have us believe that is what she is doing.

But how can we believe this Chancellor?

How can trust this Chancellor?

She is the Chancellor who said she would not increase borrowing, but she did.

She said she wouldn't change her fiscal rules, but she did.

She said she wouldn't put up National Insurance, but she did.

She said she wouldn't cut Winter Fuel Payments, but she did.

She said she wouldn't tax farmers, but she did.

And she said she would not move to more than one fiscal event a year and she just has.

And now we are all paying the price of her broken promises

Today's numbers confirm we are poorer, and we are weaker.

To govern, Mr Speaker, is to choose.

And this Chancellor has made all the wrong choices.”