Commons Sense

House of Commons · Ministers' Questions

Spending Review: Economic Growth

Tuesday 20 May 2025 · 4 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 3 Partly answered 1 Not answered 0

Key points

  • The Chancellor agrees that state-led investment in infrastructure and neighbourhoods is essential for economic growth.
  • The government has doubled the employment allowance to 10,500 to help small businesses.
  • The government increased the tax rate on energy companies to 78%, up from 75% set by the previous government.

Topics (select to filter)

Questions & Answers

Q1 Patrick Hurley Lab Southport
Economy Transport Local Government
Context

The MP references several specific projects in Southport such as the Marine Lake Events Centre, the Enterprise Arcade and the new Market Quarter.

Question

Whether it is the Marine Lake Events Centre, the Enterprise Arcade or the new Market Quarter in my Southport constituency, my town has benefited from state-led investment in neighbourhoods and the public realm. Does the Chancellor agree that investment policies of this sort are essential to driving economic growth in our regions and nations and will help us to finally turn the page on the failed austerity policies of the Conservative party?

Answer from The Chancellor of the Exchequer (Rachel Reeves)

I absolutely agree, and that is why we have reversed the Conservatives’ decisions to cut capital spending. Instead, we are preserving that capital investment, which means spending £113 billion more on road, rail, energy, homes and digital infrastructure than would have been spent in the plans we inherited. We are also spending on day-to-day things, such as making sure that we have police on our streets, and working with our mayors, including Mayor Steve Rotheram, to ensure we get investment into the places that most need it.

Answered
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Q2 Jas Athwal Lab Ilford South
Business & Trade
Context

The MP mentions several small businesses in Ilford South, including restaurants and local shops such as Delhi O Delhi and Mr Bunns Bakery.

Question

Small businesses are the backbone of our economy. In Ilford South we have many small businesses, ranging from restaurants like Delhi O Delhi, Mr Bunns Bakery, tea shops like Mi Chaii to local shops like the Chopra convenience stores. They make Ilford an amazing place to eat, shop and do business. Will the Chancellor join me in commending the local businesses that make the high street the beating heart of Ilford South, and will she lay out what steps she is taking to support these entrepreneurs?

Answer from The Chancellor of the Exchequer (Rachel Reeves)

At the Budget, we more than doubled the employment allowance to £10,500 to take many small businesses out of paying national insurance altogether. On corporation tax, we have maintained the small profits rate to help smaller businesses, and to help entrepreneurs raise finance and grow, the Government have extended the enterprise investment scheme and the venture capital trust scheme. I very much add my words of support to businesses across Ilford, and I commend the work my hon. Friend does to champion them.

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Q3 Harriet Cross Con Gordon and Buchan
Employment Energy
Context

The MP highlights recent job losses in the energy sector, including Harbour Energy cutting 25% of its onshore workforce.

Question

Earlier this month, Harbour Energy announced that it would be cutting 25% of its onshore workforce, blaming the Government’s punitive fiscal position and challenging regulatory environment. When the news was announced, the Chancellor said that this was just a commercial decision by one company, so how does she explain the other energy sector jobs that have been lost in north-east Scotland in just the last few weeks? Belmar Engineering is entering liquidation, with 48 job losses. Well-Safe Solutions faces 45 job losses. Beam, a subsea technology company, has made all 200 staff redundant. With Harbour Energy’s cut of 25% of its workforce—250 jobs—we are talking about 600 jobs in total. How can the Chancellor explain that, and how will she support the industry in the spending review?

Answer from The Chancellor of the Exchequer (Rachel Reeves)

My hon. Friend the Exchequer Secretary to the Treasury is working closely with businesses right across the energy sector. The previous Government increased the rate of tax on energy companies to 75%, and we increased it by three percentage points to 78%, reflecting the fact that energy companies have enjoyed huge profits since Russia’s illegal invasion of Ukraine. When people’s bills have gone up, it is right that we ask the energy companies making those profits to contribute a little more.

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Q4 Richard Fuller Con North Bedfordshire
Economy Science & Technology
Context

The question stems from concerns about the government's approach to using advancements in artificial intelligence technology to enhance public sector productivity and economic growth.

Question

Within the spending review, the key is to improve public sector productivity. As the Chancellor knows, one of the key aspects in doing that is the use of technology. This Government have substantial advantages over the next few years with major advances in artificial intelligence technology, but those can only be captured if the Treasury sets clear directions for Departments, including incentives and penalties. What directives has His Majesty’s Treasury given to Departments to improve productivity through the adoption of artificial intelligence? Specifically, does that advice include a requirement for the use of agentic AI during the multi-year spending period?

Answer from Rachel Reeves

I thought the hon. Gentleman was going to welcome the investment of Universal Studios in Bedfordshire, which will be a massive boon to the county’s economy. On supporting the adoption of AI, we are doing two key things. First, we are supporting that sector investing in the UK, and the deal we secured with the US will help bring more investment into our digital sector. Secondly, and crucially, we are improving the productivity of our public services. The hon. Gentleman will see more about that when we publish the spending review on 11 June. We are absolutely determined to boost productivity in the public sector, after the mess in which it was left by the Conservatives.

Partly answered

Not addressed: Specific directives from HM Treasury regarding AI adoption and requirements for agentic AI were not explicitly addressed.

How: Welcoming Investment, General Commitment To Productivity Improvement

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