‘ANOTHER U-TURN!’ | Mel Stride DESTROYS Reeves’ ‘OBVIOUS’ cost of living economic plan

Added: 2026-05-22

[00:00:00]Why has she been so hell-bent on raising fuel duty during an enemy an energy crisis? Well, inevitably, Madam Deputy Speaker, the U-turn has finally come.

[00:00:13]But, Madam Deputy Speaker, it is astonishing to hear the Chancellor claiming that the government can afford to help households because the forecasts have improved.

[00:00:25]Is the Chancellor seriously suggesting that the economic outlook is now better than at the time of the last fiscal forecast? Chancellor.

[00:00:36]>> [singing] >> Thank very much, Madam Deputy Speaker.

[00:00:40]And with permission, I'll make a statement on the government's economic response to the war in Iran and the action that we are taking to support families and businesses with rising costs.

[00:00:51]Madam Deputy Speaker, the government has the right economic plan.

[00:00:55]I said I would grow the economy. And last week, the Office for National Statistics confirmed that Britain's economy was the fastest growing in the G7 for the first quarter of this year.

[00:01:07]We beat the Office of Budget Responsibility's forecast in the spring with economic growth at 0.6% in the 3 months to March.

[00:01:16]And because of the resilience of our economy, this week, the International Monetary Fund upgraded Britain's forecast for this year.

[00:01:25]I said I would cut borrowing. Borrowing last year was 20 billion pounds lower than the previous year. And the latest forecasts show it falling in every year of this Parliament.

[00:01:37]The IMF has backed our economic plan saying that the government's fiscal framework strikes, and I quote, a good balance between deficit reduction and growth-friendly spending.

[00:01:48]I said I would cut the cost of living.

[00:01:50]Since the election, interest rates have been cut six times.

[00:01:54]Real wages have continued to rise in every single month since I became Chancellor.

[00:02:00]And yesterday, the ONS confirmed that inflation fell in April faster than expected, making the UK the only G7 economy where inflation fell last month.

[00:02:14]Mr. Madam Deputy Speaker, we have the right economic plan. But the conflicts in the Middle East poses a significant challenge to the world economy, including our own.

[00:02:25]I have not shied away from my criticism of the war.

[00:02:29]I believe it to have been a mistake.

[00:02:32]Nor have I ignored the costs that it will bring to bear on the British people.

[00:02:36]I've been clear-eyed about my duty to do what I can to support families and businesses.

[00:02:43]To be responsive to a changing world and responsible in the national interest.

[00:02:50]Next week, Ofgem will confirm the level of the energy price cap that will apply from July.

[00:02:55]I know that any increase will be felt by families.

[00:02:59]Because of the decision that I made at the budget last year to cut £150 from energy bills, we have lessened the impact of rising prices. And current external forecasts suggest that the cap from July will be at a similar level to the cap in April last year.

[00:03:19]We stand ready to act if market conditions worsen significantly later this year. And I have been leading cross-government contingency work on design of potential future targeted and temporary support.

[00:03:34]For businesses, any support will also need to be carefully targeted at firms most exposed to the crisis.

[00:03:41]But while many firms have been insulated from recent price rises through fixed-price contracts, there are sectors that face particular structural issues related to energy costs.

[00:03:52]That is why we have already increased support for our most energy intensive industries through the British industry competitiveness scheme, and we've brought that forward.

[00:04:01]And it is why we have also built resilience in our critical infrastructure and industrial strategy sectors where supply chains are critical for growth and security.

[00:04:11]Following representations from my right honorable friends, the members for Redcar, Mid Cheshire, and Bathgate Little Lingao, and building on the good work of the Minister for Industry, I'm today establishing a 350 million pound critical chemicals resilience fund to support strategically important producers.

[00:04:33]And having listened to my right honorable friend my honorable friends, including the members for Stoke-on-Trent Central, North and South, and my honorable friend the member for Amber Valley, and workers represented by the GMB Union, I am today announcing a new 120 million pound fund to help our historic ceramics industry.

[00:04:56]Helping them to increase efficiency and drive down energy costs because we will always stand up for British industry and for British jobs.

[00:05:06]The government has also this week set out additional targeted support for those businesses most exposed to rising fuel costs.

[00:05:15]For hauliers, the government is granting a 12-month road tax holiday for HGVs, saving the typical heavy lorry up to 912 pounds.

[00:05:25]To support farmers and the rail freight industry, I've decided to cut duty on red diesel by over a third until the end of this year.

[00:05:36]And having heard from my honorable friend the member for Oldham West, Chadderton and Royton, and the trade union Unison, I can today announce a 10p per mile increase in tax-free mileage rates, backdated to April 2026, benefiting those who need to drive for work, from care workers to plumbers.

[00:05:59]Madam Deputy Speaker, when a country faces challenges because of higher oil and gas prices, we must ensure that those who benefit from increased prices and volatility pay their fair share.

[00:06:11]In my first budget, I extended and increased the energy profits levy.

[00:06:16]Last year, I announced a new permanent windfall tax regime on oil and gas prices.

[00:06:22]Last month, I increased the electricity generator levy, alongside further action to weaken the link between high gas prices and electricity prices.

[00:06:33]Today, I am bringing forward specific changes to the tax state the taxation of foreign branch profits, changing how companies are taxed in relation to their overseas activities.

[00:06:46]Currently, some oil and gas groups that operate overseas through foreign branches have structured their tax affairs in a way which ensures they pay little or no corporation tax on their UK energy trading profits.

[00:07:00]Today, we are putting an end to that practice.

[00:07:05]We expect these reforms to raise hundreds of millions of pounds a year and fund the package of measures set out today, with costings certified by the OBR forecast in the usual way.

[00:07:18]Madam Deputy Speaker, I know the pressure that family finances are under.

[00:07:23]That is why I've already taken action to provide help.

[00:07:27]I increased the national living wage and the national minimum wage to their highest rates ever.

[00:07:33]I have frozen prescription charges for 2 years in a row, and I have frozen rail fares for the first time in 30 years.

[00:07:40]I've taken 150 pounds off energy bills, which contributed towards the fall in inflation last month.

[00:07:48]But, I want to go further.

[00:07:50]And today, I am taking further action to ease the burden on family finances.

[00:07:55]First, on fuel duty.

[00:07:58]I have already extended the 5p cut twice since the election, and I can confirm today that there will be no rise in fuel duty this year, recognizing the pressure that the war has put on fuel prices.

[00:08:11]Second, I know that the cost of the weekly shop is often one of the biggest worries for families.

[00:08:17]So, last month, I met with supermarkets to urge them to do all they can to keep prices low.

[00:08:22]And today, I am taking action by suspending tariffs on over 100 different foods sold in supermarkets. And I am clear that I expect supermarkets to pass these savings on in full to their customers.

[00:08:39]And third, I will not tolerate any company exploiting the current situation to make excess profits at consumers' expense.

[00:08:48]So, I am bringing forward tough new powers so that the Competition and Markets Authority and other regulators can take action when firms break the rules.

[00:08:59]Fourth, for many families, driving is not always an option.

[00:09:03]Buses are the most popular form of public transport in Britain with over 4 billion journeys made last year.

[00:09:11]I have already extended the £3 bus fare cap to March 2027.

[00:09:16]And today, I can confirm that bus travel across England will be free for children aged between 5 and 15 throughout August.

[00:09:27]Finally, Madam Deputy Speaker, I recognize that what matters for families is not just getting by, but being able to enjoy time together without worrying about the next bill.

[00:09:38]That is why I am launching the Great British Summer Savings Scheme to help families and support our hospitality sector.

[00:09:45]So, I can today announce a temporary cut in the rate of VAT on summer attractions from 20% to 5% over the summer holidays.

[00:09:57]This will apply to ticket prices for both adults and children, covering attractions such as fairs, theme parks, zoos, and museums.

[00:10:06]It will include children's tickets for cinemas, concerts, soft play, and the theater.

[00:10:12]And it will cut the cost of children's meals in restaurants and cafes from 20% VAT to 5% as well.

[00:10:21]These changes will apply across the UK from the start of the Scottish school holidays on the 25th of June and run until the end of school holidays in England, Wales, and Northern Ireland on the 1st of September.

[00:10:34]This is Madam Deputy Speaker. This government has the right economic plan.

[00:10:39]We promised to grow the economy and we have. We promised to cut inflation and we have. And we promised to cut the cost of living and we are. Promises made by a Labour government, promises delivered by a Labour government, and I commend this statement TO THE HOUSE.

[00:10:58]>> [cheering] >> CHANCELLOR.

[00:11:01]THANK YOU. THANK YOU, MADAM Deputy Speaker, and could I thank the Chancellor for advanced sight of her statement. Of course, the press got even more advanced sight of it. Madam Deputy Speaker, the decision taken to cancel the increase in fuel duty is welcome. It has been a long time coming. The Conservative Party has been campaigning against the fuel duty rise for months, but the Chancellor has defended that policy repeatedly.

[00:11:31]That left motorists and businesses worried about even higher fuel prices in September.

[00:11:38]It was always obvious that the fuel duty increase would need to be cancelled.

[00:11:43]Obvious to everyone except the Chancellor. So, can I ask, why did the Chancellor fight us on fuel duty for so long? Why has she been so hell-bent on raising fuel duty during an enemy an energy crisis? Well, inevitably, Madam Deputy Speaker, the U-turn has finally come.

[00:12:06]But, Madam Deputy Speaker, it is astonishing to hear the Chancellor claiming that the government can afford to help households because the forecasts have improved.

[00:12:18]Is the Chancellor seriously suggesting that the economic outlook is now better than at the time of the last fiscal forecasts? When we have had the Iran conflict, to which our economy is highly exposed thanks to this government's ruinous choices.

[00:12:37]The Chancellor has just pointed to the IMF forecast being upgraded this week.

[00:12:44]But, let's be very clear about what is going on here.

[00:12:48]The IMF adjusted their growth forecast for this year up slightly to 1%.

[00:12:54]But, until April, they were forecasting 1.3%.

[00:12:59]So, where exactly is the supposed growth dividend? Will she directly address that point?

[00:13:06]This is exactly the same game that the government played last year when they U-turned on cuts to the winter fuel payment. They claimed then they were U-turning because the economy was improving when, of course, it was due to political pressure. Nobody bought it then, and nobody is buying it now.

[00:13:28]Once again, we have a weak government caving in to the inevitable after spending months defending a truly terrible decision.

[00:13:38]Madam Deputy Speaker, the Chancellor claims the measures announced today will be funded by a number of different tax measures. But most of the measures she mentions are already in place and baked into the OBR's forecasts. So given the Chancellor has not announced any measures to control government spending, can she confirm that in fact the measures she is announcing today will be funded at least in part by yet more government borrowing?

[00:14:06]And can she confirm whether fuel duty rates will still be rising to the same level as previously planned after December or whether today's announcement will mean a permanent reduction in fuel duty?

[00:14:19]Madam Deputy Speaker, whilst we on this this side of the house welcome some of the measures the Chancellor has taken today, like the increase in mileage allowances, this is all very minor compared to the inflation this government have fueled since coming into office. And the tax rises that the Chancellor has imposed.

[00:14:40]Today's announcements will bring little com- hundreds of thousands of people who have lost their jobs, to the countless businesses that have folded, and to those high streets which are now hollowed out.

[00:14:53]The reality is that we are in a terrible position to deal with the consequences of this latest energy crisis thanks to the actions that this government has taken.

[00:15:05]The Chancellor claimed growth is up. It is actually down. She claimed borrowing is down, it's 75% up compared to the plans that she inherited.

[00:15:18]She claimed she's fighting inflation. We have the highest inflation in the G7.

[00:15:25]She claimed she's cutting energy bills.

[00:15:28]Energy bills have gone up under this Labour government.

[00:15:32]And of course, she didn't mention unemployment.

[00:15:36]On the energy, Madam Deputy Speaker, on energy, this government have made a conscious decision not to exploit our own natural resources in the North Sea, weakening our economy and our energy security whilst importing oil from Putin's Russia at the cost of Ukrainian lives.

[00:15:57]Families and businesses are facing Families and businesses are facing rising costs and rising taxes. People are losing their jobs. The country is hurting. If the Chancellor was serious about the challenges we face, she would commit to getting spending down, tackling the benefits bill, getting taxes down to strengthen our economy.

[00:16:21]But thanks to the Chancellor's mistakes and the weakness of this dying government, this statement today is all we get. Does the Chancellor really think this is enough?