PARLIAMENTARY DEBATE
Topical Questions - 27 January 2026 (Commons/Commons Chamber)

This Government have a plan to grow the economy and reduce the cost of living, and it is the right plan for Britain. We are cutting the cost of living and the national debt and creating the conditions for growth in all parts of our country. We have had six cuts in interest rates since the general election, reducing typical mortgage costs by £1,200 a year, and have secured record levels of inward investment and trade deals with countries around the world. The FTSE has hit record highs, and while other countries are increasing barriers to trade, I was in Davos talking to allies about how to reduce them. Our economic plan is the right one to build a stronger and more secure Britain, and I am focused on delivering it.

While I am looking forward to the statement a little later from the Exchequer Secretary to the Treasury, I would like to push him, if I may. I recently visited one of my local pubs, the Masonic Arms on Lark Lane—which is a fantastic venue—and met Guy and Amelia. Currently, the overall sector picks up 2.8% of UK business rates nationally, but has only 0.5% of the turnover of UK businesses. This is clearly not a fair tax for pubs; it is the result of a uniquely skewed business rates system that actively penalises many pubs. What long-term steps can the Minister take to help pubs like the Masonic Arms and the wider hospitality sector?

As my hon. Friend knows, we have permanently reduced the multiplier for business rates for retail, hospitality and leisure, but my hon. Friend the Exchequer Secretary will set out the support for pubs in more detail later today. We are determined not only to support pubs, which are the lifeblood of so many communities, but also to support the whole of our retail, hospitality and leisure sector. We are putting more money in people’s pockets by cutting energy bills and train fares and getting people back to work, so that they have more money to spend on the things they love, not just on the essentials.

I call the shadow Chancellor.

Under the previous Government—when the right hon. Gentleman was in government—7,000 pubs closed. We have permanently lowered the tax rate that retail, hospitality and leisure businesses pay. When I became Chancellor of the Exchequer, we faced a situation in which all of the covid support was going to disappear overnight. We have put £4.3 billion of taxpayers’ money into supporting our retail and hospitality sector, including pubs, but we recognise the distinct problems that pubs face. That is why, unlike the previous Conservative Government, we are setting out more support.

Some of the numbers that are bandied around by the right hon. Gentleman do not reflect the reality, because they do not reflect the £4.3 billion of transitional support that we have put in to taper those increases in business rates. I do not think anyone in this House seriously believes that temporary support during the pandemic should continue infinitely. That would not be the right thing, and it would not be affordable for other taxpayers. That is why we are gradually tapering the support, with a £4.3 billion support package in the Budget and some more targeted support for pubs later today. I remind the right hon. Gentleman that he could have taken action when he was in government. Instead, there was a cliff edge, with no support for pubs or any other sector of the economy.

As my hon. Friend sets out, there are significant challenges in adult social care, and we have already made available an extra £4.6 billion, including funding to start to implement the fair pay agreement. As she will probably be aware, Baroness Louise Casey is leading an independent commission to build consensus on reform. Its first phase will report this year, with a focus on how to make the most of existing resources.

I am not sure whether the hon. Gentleman thinks that the Chancellor of the Exchequer should not be in Davos, but I think it is important that the Chancellor is there banging the drum for Britain and bringing investment here. While I was in Davos, we secured new investment and worked with our allies on securing new trade deals for Britain. While the Opposition like to talk our country down, we are getting on and delivering a lower cost of living and higher economic growth.

I thank my hon. Friend for bringing this matter to the House’s attention. I cannot comment on individual cases of covid fraud and tax, but that person would not be the first member of Reform who took a fraudulent covid loan—[Interruption.] The hon. Member for Boston and Skegness (Richard Tice) is here just in time. I am not sure whether he is still the shadow, shadow, shadow Chancellor or not.

When the Liberal Democrats had the chance, what did they do? They put up VAT on hospitality businesses. Now they are coming up with ideas, without the plans to pay for them. They want to increase borrowing over and over again, rather than ensure that we support businesses in a fair and sustainable way over the years to come.

I could not agree more with my hon. Friend, and that is why I announced—on the basis of many representations from colleagues, including her—a comprehensive set of measures at the Budget to crack down on illegal high street activity. We want our high streets to thrive, but we must crack down on these illegal businesses selling counterfeit goods and often harbouring more dangerous criminal activity. That is why we put money into that area in the Budget.

Let me start by thanking the emergency services in the hon. Gentleman’s constituency for all their work to ensure that people are kept safe, and to respond to the challenges that people face as a result of flooding. We are determined to support public services across the board, and the decisions taken by my right hon. Friend the Chancellor in past Budgets and in the spending review mean that we have sustainable funding for our public services in all parts of the country.

My hon. Friend is absolutely right. The hon. Member for Clacton (Nigel Farage) is warmly welcoming people who spent 14 years undermining public services, who wrecked the economy, who botched Brexit, and who were booted out by the British people in 2024—and Reform’s latest recruit was so bad that she managed to get sacked by Liz Truss.

That is an important question, because too many people have been let down by the scheme that was introduced by the Conservatives. I am sure that the hon. Lady noted the Energy Secretary’s announcement last week about the £15 billion warm homes plan, which will ensure that work to upgrade the quality of British homes continues in the years ahead for all households, but particularly for low-income households. She will also be aware that ongoing remediation work will take place as part of that scheme.

This Government are backing investment in Teesside to create the good jobs that my hon. Friend’s constituents deserve. I know that Teesside is very well placed to lead for our country across a range of sectors. For example, £4 billion is going into the UK’s first carbon capture, usage and storage cluster in Teesside, including the world’s first at-scale gas power station with CCUS.

Ten years ago, this place introduced legislation preventing banks from applying tax deductions after paying compensation for wrongdoing. Now lenders are set to pay out billions of pounds in connection with the motor finance scandal, but they will be able to reduce their tax bills because most of those companies have channelled their money via subsidiaries. Does the Minister agree that that is not in keeping with the spirit of the law, and will the Government do something about it?

The hon. Member has referred to the motor finance redress situation. As the House would expect, we are monitoring that very closely, and we want to see the issues resolved in an efficient way that provides certainty for consumers and for firms. As the hon. Member knows, seeking to change the rules on corporation tax would mean deviating from our commitment to certainty and predictability in the tax system, as set out in our corporate tax road map.

I wish you a speedy recovery, Mr Speaker.

I welcome the economic steps that the Chancellor has taken against Russia’s illegal invasion of Ukraine, and I encourage her to go further, but does she agree that the British public can have confidence in our sanctions regime only if those in political leadership across all parties, including the shadow Attorney General, do not have ongoing involvement in advising Russian oligarchs?

Like many, I was staggered by reports that senior counsel appointed by Mr Abramovich in relation to proceedings in Jersey include the shadow Attorney General. I cannot speak for the Opposition—I had many years of doing that—but our focus remains ensuring that there is no further delay in proceeds from the sale of Chelsea football club reaching humanitarian causes in Ukraine. If Mr Abramovich fails to act quickly, this Government are fully prepared to pursue legal action to release the funds. We know whose side we are on: we are on the side of the Ukrainian people, and of Britain’s national interests.

More than 80% of households in Bromley and Biggin Hill have at least one car or van—a figure significantly higher than the average in Greater London—so the decision to remove the 5p fuel duty reduction hits them particularly hard. This is the latest in a slew of measures against motorists, including increased congestion charges and the ultra low emission zone charge, which is really hitting them in the pocket. Why does the Labour party continue to use motorists as a cash cow?

We have extended the temporary 5p fuel duty cut until the end of August 2026, and rates will then gradually return to early 2022 levels. The planned increase in line with inflation will also not take place. That will save the average driver £49 next year, compared with previous plans.

While pubs may have a large lobby, we know that independents power our local economy. I have looked through the spreadsheets showing the business rates for our independent businesses after the relief has been applied. Businesses in my city will see an increase of up to 93% in their business rates. What engagement has the Minister had with small independents to ensure that they are safeguarded through the relief that he is about to announce?

It is important to note that there is a 40% relief in the system for smaller and independent businesses. It will be phased out over the coming years; we have put in transitional relief protection. As the Chancellor said earlier, that is reasonable. Members from across the House will agree that it would not be right to have temporary pandemic support still in place at the end of the decade.

I will not challenge you to a corridor race today, Mr Speaker, but good luck with your leg.

I wrote to the Chancellor on 8 January, with the support of 7,000 small businesses from across the spectrum—not just pubs. They are concerned about not only rate re-evaluations, and the vicious tax rises that they have had to suffer, but the cost of the Employment Rights Act 2025. When can the 7,001 of us expect a reply?

I regularly reply to letters and parliamentary questions from the hon. Member and those on both sides of the House.

There are many small and medium-sized enterprises in advanced manufacturing supply chains in my bit of the Black Country. Does the Chancellor agree that successfully implementing our industrial strategy is vital to securing the growth, through small businesses, that we need to get British industry back on track?

I thank my hon. Friend for the work that she does to champion small businesses, and all businesses in the Black Country, but particularly those in her constituency. Advanced manufacturing is one of our industrial strategy sectors in which we have huge strengths as a country. We are determined to support such businesses in growing and fulfilling their potential.

What does the Minister say to childminders in Melton and Syston who are concerned about potentially increased administrative burdens and cash-flow pressures, as a result of changes under Making Tax Digital for businesses with a turnover of at least £50,000? It is scrapping the blanket 10% wear and tear allowance, and replacing it with a requirement for line-by-line item accounting, with childminders having to pay up front and claim back later.

This is an important issue that is of concern to childminders. I have replied to correspondence on this topic from the right hon. Member, I think, and from others in this place. I would be happy to talk to Members about it. I think the change is proportionate and reasonable, and we have engaged closely with the sector to make sure that the burden will be proportionate for those who are affected by it.

Thanks to the policies of the Labour Treasury team, Sandwell will receive £1.5 million to smarten up our towns. Does the Chancellor agree that local people should have a say in how that funding is spent, and will she encourage people in Rowley, West Bromwich and Oldbury to fill in my survey about how we spend this Government cash?

I very much encourage people in my hon. Friend’s constituency to fill in her survey. The Pride in Place money, which we are allocating across some of the most deprived parts of the country, will make a huge difference in regenerating areas left behind by the previous Government. I encourage everyone in all our communities to get involved, and to shape those plans, because those plans can only be improved by direct contact with the people who stand to benefit from them most.

Link has doubled down on its decision not to grant Totnes a banking hub, despite the Prime Minister telling Members at Prime Minister’s questions that every community that wants one should have one. Will the Chancellor agree to review the criteria for banking hubs, so that people have access to face-to-face banking services, not just access to cash, when the last bank turns its back on its customers and leaves town?

The Government of course recognise the importance of in-person banking services and access to cash, as the hon. Member and I have discussed. As she knows, in-person services are provided through traditional bank branches, banking hubs, post offices and other means, and I will continue to monitor the situation. As she knows, I have listened very carefully to her concerns, and I am happy to do so again.

Earlier this month, the House of Lords Financial Services Regulation Committee published a report on private markets, highlighting the potential risks to economic stability, and the Bank of England has also undertaken a stress test of the ecosystem. What actions is the Minister considering taking with regulators to strengthen transparency and oversight of private markets, so that we can mitigate any systemic risks?

My hon. Friend is right that the rise in private markets has brought benefits, including to growth and financial stability—we have discussed that many times in the context of pensions—but it does come with new risks. The Treasury and regulators have increased their focus on those risks in the non-bank sector in recent years and, as I am sure he is aware, have played a leading role in the response to emerging non-banks’ risks internationally. In particular, the Government emphasised in the November remit letter to the Bank of England’s Financial Policy Committee that the committee should continue to consider risks in private markets. We are considering the House of Lords Committee’s recommendations, and will respond in due course.

At the weekend, Storm Ingrid caused the sea wall at Dawlish to collapse in two new places, and we wait to see the damage caused by Storm Chandra today. Both storms are once again exposing the vulnerability of the main rail line to Devon and Cornwall, which is vital for the local economy. Given the reported lack of a Treasury emergency reserve, can the Chancellor guarantee contingency funding for any urgent and unplanned resilience work required and not covered by a fiscal event?

I thank the hon. Lady for raising the situation in her constituency. All Departments across Government have had their budgets set, and they include a contingency for covering known pressures. One of the ways that we have managed spending settlements differently from the previous Government is that all Departments must recognise that unexpected pressures will come along. They need to prepare for that, and should have robust plans for responding when such things occur.

Southshore in my constituency has the highest concentration of deprived communities and the most deprived ward in the country. We have developed a local people’s plan for work to regenerate the area. Will my right hon. Friend the Chancellor meet me to discuss this plan, so that we can regenerate the most deprived area in this country?

We were pleased to be able to allocate Pride in Place funding to my hon. Friend’s constituency, in recognition of its levels of deprivation. That comes alongside policies such as getting rid of the cruel two-child benefit cap, which the previous Government introduced, and investing record amounts in social housing. This Government are delivering for the people of Blackpool. I am very happy to meet my hon. Friend.

Constituents of mine have restored the Alyth hotel. It has gone from near dereliction to being an outstanding venue for dining and drinking, and a hotel. However, they are smothered by the compound burden of VAT rates, wage costs, duty increases, employer national insurance contributions, energy costs and the squeeze on spending. That is why there were 8,000 fewer jobs in hospitality in December than in November, and 20,000 fewer than in September. Will the Chancellor consider reducing VAT on hospitality to the 7% it is in Germany, the 9% it is in Ireland, or the 10% it is in Spain and Italy?

I suggest that the people of Scotland ask who was in charge in Scotland for the last two decades, kick them out at the next election, and give Labour a chance.