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Madam Deputy Speaker

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This government was given a mandate.

To restore stability to our economy

and to begin a decade of national renewal.

To fix the foundations

and deliver change.

Through responsible leadership in the national interest.

That is our task.

And I know that we can achieve it.

My belief in Britain burns brighter than ever.

And the prize on offer is immense.

As my Right Honourable Friend the Prime Minister said on Monday change must be felt.

More pounds in peoples pockets.

An NHS that is there when you need it.

An economy that is growing, creating wealth and opportunity for all

because that is the only way to improve living standards.

And the only way to drive economic growth

is to invest, invest, invest.

There are no shortcuts.

And to deliver that investment

we must restore economic stability

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INHERITANCE

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it is the first Budget in our countrys history to be delivered by a woman.

I am deeply proud to be Britains first ever female Chancellor of the Exchequer.

To girls and young women everywhere, I say:

Let there be no ceiling on your ambition, your hopes and your dreams.

And along with the pride that I feel standing here today

there is also a responsibility

to pass on a fairer society and a stronger economy to the next

generation of women.

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A black hole in the public finances

Public services on their knees.

A decade of low growth.

And the worst parliament on record for living standards.

Let me begin with the public finances.

In July, I exposed a 22bn black hole

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The Treasurys reserve, set aside for genuine emergencies

spent three times over

just three months into the financial year.

Today, on top of the detailed document that I have provided to the House in July

the government is publishing a line by line breakdown of the 22bn black hole that we inherited

It shows hundreds of unfunded pressures on the public finances

this year, and into the future too.

The Office for Budget Responsibility have published their own review of the circumstances around the Spring Budget forecast.

They say that the previous government and I quote - did not provide the OBR with all the [available] information to them

and - had they known about these undisclosed spending pressures that have since come to light

then their Spring Budget forecast for spending would have been, and I quote again: materially different.

Let me be clear: that means any comparison between todays forecast and the OBRs March forecast is false

because the party opposite hid the reality of their public spending plans.

Yet at the very same budget

they made another ten billion pounds worth of cuts to National Insurance.

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Thats why today, I can confirm that we will implement in full

the 10 recommendations from the independent Office for Budget Responsibilitys review.

But, the country has inherited not just broken public finances

but broken public services too.

The British people can see and feel that in their everyday lives.

NHS waiting lists at record levels.

Children in portacabins as school roofs crumble.

Trains that do not arrive.

Rivers filled with polluted waste.

Prisons overflowing.

Crimes which are not investigated

and criminals who are not punished.

That is the countrys inheritance

Since 2021, there had been no detailed plans for departmental spending set out beyond this year.

And [redacted political content] plans relied on a baseline for spending this year which we now know was wrong

because it did not take into account the 22bn black hole.

The previous government also failed to budget for costs which they knew would materialise.

That includes funding for vital compensation schemes

for victims of two terrible injustices

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the infected blood scandal

and the Post Office Horizon scandal.

The Leader of the Opposition rightly made an unequivocal apology for the injustice of the infected blood scandal on behalf of the British state

but he did not budget for the costs of compensation.

Today, for the very first time, we will provide specific funding to compensate those infected and those affected, in full

with 11.8bn in this budget.

And I am also today setting aside 1.8bn to compensate victims of the Post Office Horizon scandal

redress that is long overdue for the pain and injustice that they have suffered.

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and we will restore stability to our country again.

The scale and seriousness of the situation that we have inherited cannot be underestimated.

Together, the hole in our public finances this year, which recurs every year

the compensation schemes that they did not fund

and their failure to assess the scale of the challenges facing our public services

means this budget raises taxes by 40bn.

Any Chancellor standing here today would have to face this reality.

And any responsible Chancellor would take action.

That is why today, I am restoring stability to our public finances

and rebuilding our public services.

FISCAL RULES / OBR FORECASTS

Economy forecast/growth

As a former economist at the Bank of England, I know what it means to respect our economic institutions.

I want to put on record my thanks to the Governor of the Bank, Andrew Bailey

and to the independent Monetary Policy Committee.

Today, I can confirm that we will maintain the MPCs target of two per cent inflation, as measured by the 12-month increase in the Consumer Prices Index.

I want to thank James Bowler, the Permanent Secretary to the Treasury, and my team of officials.

Madam Deputy Speaker, I would also like to thank my predecessors as Chancellor of the Exchequer

for their wise counsel as I have prepared for this Budget.

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Finally, I want to thank Richard Hughes and his team at the Office for Budget Responsibility for their work in preparing todays economic and fiscal outlook.

Let me now take the House through that forecast.

The cost of living crisis under the last government stretched household finances to their limit, with inflation hitting a peak of above 11%.

Today, the OBR say that CPI inflation will average 2.5% this year, 2.6% in 2025, then 2.3% in 2026, 2.1% in 2027, 2.1% in 2028 and 2.0% in 2029.

Next, I move on to economic growth.

Todays budget marks an end to short-termism.

So I am pleased, that for the first time, the OBR have published not only five year growth forecasts

but a detailed assessment of the growth impacts of our policies over the next decade, too

and the new Charter for Budget Responsibility, which I am publishing today, confirms that this will become a permanent feature of our framework.

The OBR forecast that real GDP growth will be 1.1% in 2024, 2.0% in 2025, 1.8% in 2026, 1.5% in 2027, 1.5% in 2028 and 1.6% in 2029.

And the OBR are clear: this Budget will permanently increase the supply capacity of the economy

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boosting long-term growth.

Every Budget I deliver will be focused on our mission to grow the economy.

And underpinning that mission are the seven key pillars of our growth strategy

developed and delivered alongside business

all driven forward by our Financial Secretary to the Treasury.

First, and most important, is to restore economic stability. That is my focus today.

Second, increasing investment and building new infrastructure is vital for productivity, so we are catalysing 70bn of investment through our National Wealth Fund

and we are transforming our planning rules to get Britain building again.

Third, to ensure that all parts of the UK can realise their potential

we are working with the devolved governments

and partnering with our Mayors to develop local growth plans.

Fourth, to improve employment prospects and skills we are creating Skills England, delivering our plans to Make Work Pay and tackling economic inactivity.

Fifth, we are launching our long-term modern industrial strategy and expanding opportunities for our small and medium sized businesses to grow.

Sixth, to drive innovation we are protecting record funding for research and development to harness the full potential of the UKs science base.

And finally, to maximise the growth benefits of our clean energy mission, we have confirmed key investments such as Carbon Capture and Storage to create jobs in our industrial heartlands.

Our approach is already having an impact.

Just two weeks ago we delivered an International Investmen

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