Richard Graham (Gloucester) (Con)
It is a pleasure to join this debate, albeit one attended by literally zero Back Benchers of His Majesty’s loyal Opposition.
This debate and the changes to national insurance raise narrow issues of the amount of tax being paid by our constituents, wider issues relating to the question posed by the shadow Minister, the hon. Member for Ealing North (James Murray)—“Are you better off today than you were in 2010?”—and broader still questions about the value and purpose of life and what matters most to our constituents. I shall touch on all three in turn.
On the narrow issue, the national insurance payments mooted in the Bill, there is widespread agreement that they are good news for our constituents, because they mean lower tax. It is recognised that there is social justice in the measures, because they are not applicable to those earning more than £50,000 a year. We already know that no party in this House will oppose them. On the narrow issue, therefore, the Chancellor, the Treasury and those involved in creating the Bill have clearly got it right.
As my hon. Friend the Member for West Worcestershire (Harriett Baldwin) pointed out, this can easily be seen to be one of the measures by which we judge a turning point in the wider economy. After all, only a few months ago there were widespread expectations that the economy would be in recession, unemployment would be rising, taxes would be increasing, and there was very little wiggle room for the public finances to be seen to improve. All those things have been turned around. None of us can say with certainty that we are in full summer, but the green shoots are evident and things are changing.
On the broader issue of what we measure to answer the question, “Are our constituents better off today than in 2010?” there are different aspects. I suspect the shadow Minister had most clearly in mind a simple calculation of whether salaries net of inflation were higher or lower, and if we take that on its own, it will be a challenge for many Government Members to demonstrate that the answer is yes. For my constituents in Gloucester, average take-home pay has risen from £25,000 to £31,000, but their salaries have not kept up with increases in inflation. That is only part of the equation though; we need to take into account all the different forms of taxation, which include council tax. It is a cliché but true that council tax rises faster and is higher in Labour-run councils, whereas the Conservative-run council in Gloucester has done a good job of keeping it as low as possible over the last 14 years. Then, there is the question of take-home pay. As I pointed out to the shadow Minister, because income tax now applies only at £12,500, rather than at just over £6,000, the take-home pay element has increased by £1,000.
Other than that relatively straightforward financial calculation, there are many measures on which I hope all of us would want to answer “Yes” to the question, “Are you better off today than you were in 2010? I shall pick out a few of these crucial indicators, because they are relevant to the wider context of the Bill.
The Centre for Cities report is an excellent source of data for those who live in cities, so let me highlight a few elements of what its latest report said about Gloucester. We are one of the 10 lowest cities for economic inactivity. In effect, we have low unemployment and high employment —in fact, ours is the third highest employment rate, having risen last year from 76% to 84%, a 7.5% increase. The regional average is 79%, so we are way ahead of the south-west’s average. That means that many more people have purpose in their lives—they have occupations they can thrive in; they are bread-earners at home and useful role models for their children—and the city as a whole has a strong sense of purpose.
It is often forgotten, but many people remember vividly that their jobs were kept by the £400 billion spent during by the pandemic. The furlough scheme ensured that during the pandemic people could shelter at home, confident that their job would still be there, and those who had their own business know that the vast majority of those businesses would undoubtedly have gone bankrupt during the pandemic. The small businessmen and women, the self-employed, the entrepreneurs, all came through that period intact, whereas under a different scheme that would have cost taxpayers’ less, they would have struggled. The question, “Are you better off today than in 2010?” needs to encapsulate other questions: “Was your business able to survive? Was your job kept? Were you still able to be self-employed during a period when so many people around the world were struggling horribly?”
We in Gloucester are extraordinary in that our city has one of the very lowest percentages of population with no formal qualifications. In fact, extraordinarily, Gloucester has fewer people with no formal qualifications than Cambridge, and we are only 1% behind Oxford. The skills of my constituents are different from many of those in Oxford or Cambridge. A large number of our people are highly skilled with higher apprenticeships working in industries like aerospace, nuclear and high-level engineering. Those occupations, apprenticeships and higher apprenticeships have increased hugely over the last 13 or 14 years and are seriously threatened by the prospect—any prospect—of a Labour Government.
Let me illustrate that statistically. Since 2010, there have been almost 15,000 new apprenticeship starts in Gloucester—15,000 in a population of about 100,000. The run rate of apprenticeships nationally—5.5 million new apprenticeships since 2010—would have been almost halved under the Labour run rate between 2005 and 2010. Were Labour’s current proposals on apprenticeship spending to go through, it has been suggested that 140,000 apprenticeships would no longer exist. Therefore, the skills that my constituents have, which are being valuably used in leading sectors that are being supported by the Treasury and this Government, would be at serious risk under a new Government who did not value apprenticeships so highly.
The question, “Are you better off today than you were in 2010?” could also be rephrased, “What will happen to your skills, your purpose, your job and your future earnings under the changes proposed by the Labour party, which is so sadly absent here today?”
There are different issues that we need to consider in answering the question, “Are you better off today?” Education is vital for all of us, and everyone in the country needs to be more aware that our PISA rankings have risen from 25th to fourth in reading and from 27th to 16th in mathematics. I might be one off on both, but it is a significant leap forward. Those skills are vital to all our young constituents getting the opportunities they deserve.
Within infrastructure, there is the whole question of public transport. Gloucester has additional train services to Bristol, Worcester and down to London. There is a wider range of services, sports, culture and leisure, and cultural regeneration and the role of heritage are incredibly important to any city. Gloucester’s more than 40 wins from the National Lottery Heritage Fund have brought alive our old buildings and rebuilt pride in the city. These things are all part of answering, “Are you better off today than you were in 2010? Is where you live a better place today than it was in 2010?”
National insurance contributions are coming down sharply, which will mean an average saving of around £350 to each of my constituents and £450 for those on salaries over £35,000. All of that will be appreciated, but it is about the wider context in which it happens: the gradual recovery and the sense of green shoots coming through after a difficult year. That is important, and then there is the wider context of what has been achieved over the last 13 to 14 years. We must all take that into careful consideration.