Budget Sets Out Energy Relief Amid Growth And Debt Clash

High-Level Summary

The sitting covered Scottish Affairs questions, Prime Minister’s Questions, the Chancellor’s Budget statement and the subsequent Budget debate, followed by a point of order, a petition and an adjournment debate on flood resilience. Scottish questions addressed devolution, oil and gas employment, clean energy, economic growth, businesses, steel and energy independence; Prime Minister’s Questions covered the UK-EU relationship, public services, rough sleeping, carers, Ukraine, Wales and constituency issues. The Budget set out temporary energy and fuel-cost support, measures for high streets and businesses, investment in growth, defence and housing, and proposals on devolution and welfare. The Budget debate revealed competing assessments of borrowing, taxation, growth, welfare and defence, and was adjourned for continuation. A provisional tax motion was agreed, the coastal-communities petition was presented, and the flood-resilience debate concluded with the question agreed to before the House adjourned.

Detailed Summary

Scottish Affairs questions: devolution, energy and the Scottish economy

The Secretary of State, Douglas Alexander, said the Government supported deeper devolution in Scotland, including transferring power from Holyrood to local communities, and proposed working with the Scottish Government on regional economic empowerment. Graham Leadbitter asked for legislation establishing Scotland’s equal right to choose its future; Alexander replied that there was “certainly no consensus in favour of a referendum in Scotland”. Patricia Ferguson argued for further devolution to councils, cities and towns, while Harriet Cross argued that centralisation by the Scottish Government, rather than a lack of powers, was the main issue. Alexander said the Government’s approach included decentralisation within Scotland and was not limited to transferring powers between Parliaments.

Questions on oil and gas focused on employment, Jackdaw, Rosebank and new licensing. Alexander said domestic oil and gas would remain part of the energy mix and supported a transition plan, while Opposition Members called for more drilling and licences and Government Members highlighted Jackdaw and the energy wealth fund. On Rosebank, Alexander said that “there is a process that needs to be followed, following the evidence and reaching a determination”; no approval decision was announced in the exchange. Other questions covered planning delays, nuclear power, carbon capture, rural heating costs, GB Energy, fisheries, youth hubs and Dalzell steelworks. On Dalzell, Alexander said that the Government wanted the site operational and were examining the situation.

Prime Minister’s Questions: Europe, public services and security

The Prime Minister, Andy Burnham, opened with condolences following the train crash in Spain and the storms in the UK, and paid tribute to the retiring Clerk of the House. Luke Charters raised sewage pollution and public control of water; Burnham said the Government would introduce a strengthened water Bill that would lift the bar on public ownership. The principal exchange with Kemi Badenoch concerned a possible EU referendum and freedom of movement. Burnham said the manifesto red lines would remain in place during the Parliament, while arguing for improved UK-EU arrangements ahead of the forthcoming summit, including less red tape for businesses. Badenoch argued that the Government were reopening a settled debate; Burnham did not add a commitment beyond the stated manifesto position.

Other exchanges produced commitments or stated positions on rough sleeping, carers, Ukraine, Wales and Scottish island air services. Burnham said the Government were increasingly confident that everyone would receive an offer of support before Christmas; agreed to meet Edward Davey on carer’s allowance and social care; reaffirmed support for Ukraine and further sanctions; offered Wales greater devolution of employment support; and said that access to the European Geostationary Navigation Overlay Service was under review. He also said that applications for the £15 million on-farm reservoir-development fund would open shortly.

Budget statement: fiscal policy, energy, business, public services and devolution

The Chancellor, John Healey, presented a Budget focused on immediate cost-of-living support, business investment and longer-term reform. He said that the Government would meet their fiscal rules while maintaining a buffer and forecast that borrowing would fall over the forecast period, with debt declining later in that period. Measures included extending the VAT cut on domestic electricity to July, a £100 winter energy payment for households in council tax bands A to D, extending fuel-duty measures, removing household gas standing charges from the following year, and reducing electricity bills for 10,000 industrial firms through the British industrial competitiveness scheme. The Chancellor also said that “The Scottish, Welsh and Northern Ireland Governments will receive their share of this funding”.

Further measures included raising the small business rate relief threshold, freezing rates in real terms for other eligible retail, hospitality and leisure businesses, supporting small brewers and cider makers, changing tax-compliance arrangements, increasing the bank surcharge temporarily, and introducing measures on savings and investment. Growth measures included additional funding for the National Wealth Fund and British Business Bank, support for artificial intelligence and data centres, founders’ relief, procurement reforms and regional projects. The Chancellor announced a road map for fiscal devolution, including the retention of 100% of business rates locally by the end of the decade and new powers for mayors and strategic authorities. He also set out measures on welfare reform, defence, Ukraine, rough sleeping, social and affordable housing and first-time buyers. The final welfare reports were due the following month, with a Government response before the end of the year and a White Paper and legislation the following year; the details of how the Government would meet the defence spending target were to be set out at the next spending review.

Provisional collection of taxes

The House agreed a motion giving provisional statutory effect to specified stamp duty land tax and value added tax resolutions under the Provisional Collection of Taxes Act 1968. The transcript records: “Question agreed to.” The Deputy Speaker then stated that the debate on the Income Tax (Charge) motion would continue that day and on succeeding days, with the questions on the motions to be put at the end of the Budget debate on 3 November.

Budget debate: competing assessments of borrowing, growth, welfare and defence

Kemi Badenoch, Leader of the Opposition, argued that the Budget did not adequately address debt, welfare, defence or growth. She welcomed selected measures, including the absence of a wider capital-gains-tax increase, changes to individual savings accounts and fuel-duty support, but criticised the overall level of taxation and borrowing and the deferral of difficult decisions. Her defence criticism was that the Budget provided “a plan to have a plan”. Mel Stride and other Opposition Members raised similar concerns about higher debt, weak growth, business taxation, rural areas and hospitality. Edward Davey argued that stronger growth required a closer trading relationship with Europe, including eventual participation in the single market and customs union; the Prime Minister had said that those changes would not take place in the current Parliament.

Government and other Members defended the fiscal framework and the measures for households, businesses, growth and devolution. Meg Hillier, Chair of the Treasury Committee, welcomed the focus on stability, investment, housing, individual savings accounts and defence, while stating that Select Committees would scrutinise the detail and question the Chancellor on 11 November. Other speakers supported energy-bill assistance, small-business relief, housing and artificial-intelligence investment, while calling for further action on carers, rural heating oil, universities, farming, alcohol harm and local accountability. Several Members challenged the defence timetable and the effect of resource spending on operational readiness, while supporters said the announced pathway would meet the stated targets. The debate was adjourned and ordered to resume the following day.

Petition on support for coastal communities

Neil Duncan-Jordan presented a petition signed by constituents in Poole calling for action on affordable housing, coastal economies, household energy costs, waterways and stronger representation for coastal communities. The petition asked the House to urge the Government to implement “a strategy for coastal communities that supports affordable housing, coastal economies, lower household energy costs, cleaner waterways and stronger representation for coastal communities within Government”. It also referred to high housing costs, low wages, seasonal employment and pressures on local services. The petition was presented; no further decision was recorded in the transcript.

Flood resilience

Ellie Chowns argued that increasing flood risk required earlier investment, better planning, natural flood management, stronger co-ordination between agencies and support for farmers. She cited benefit-cost ratios of between 3:1 and 5:1 for several flood-resilience measures and called for greater local involvement in the flood recovery framework, sustainable drainage in new developments, better catchment management and more water storage. Emma Hardy, the Minister responsible for flooding, described the Government’s combined flood-and-drought approach, including regional water planning, nature-based solutions, improved defences and public information. She said that the Government had invested £2.65 billion in the first two years and that the 10-year programme was forecast to benefit 200,000 properties over three years; it was also “forecast to generate more than £27 billion of avoided economic damage”.

Hardy said that national planning policy required sustainable drainage systems in new developments, and that the relevant Minister would hear Chowns’s concerns about the flood recovery framework. The Minister also referred to the Flood Action online service, the flood and drought resilience taskforce and investment in existing defences. The question was agreed to and the House adjourned.