Income tax (charge)

Debate between Jeremy Hunt and Geoffrey Clifton-Brown

Thursday 31st October 2024 Commons Chamber

[Jeremy Hunt]

I thank my hon. Friend—I say “my hon. Friend” because he is a great friend to us—for what he has said and I could not agree with him more. When we talk about stability, anybody who has run a business knows that the most stable businesses in the country are family businesses that are passed from generation to generation. This is not just about farms, but about any small businesses that are passed down through the generations. This is a hammer blow to their plans to invest for the future.

I wish to move on, because the main argument that the Government make—I am sure that we will hear this from the Chancellor of the Duchy of Lancaster—is that all this is necessary to improve public services. We on the Conservative Benches want to say, right up front, that it is absolutely right to prioritise public services. As Health Secretary, I negotiated an increase in the NHS budget of £20 billion a year, and, in this year’s Budget, I increased it by a further £6 billion. Many times I said as Chancellor that I wanted to avoid austerity cuts to public services. We would have done so this time, not by using tax rises that harm working families and businesses, but by taking difficult decisions on welfare reform and productivity—decisions that were ducked yesterday.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

May I suggest that the difference between my right hon. Friend’s Budget and this one is that, although he gave considerable extra increases to the national health service, he coupled them with a need to increase productivity? There was no word in yesterday’s Budget about increasing productivity in the health service.

[Jeremy Hunt]

I thank my hon. Friend for his intervention, but there was an even more basic difference between our Budget earlier this year and this one: as a result of measures in our Budget, the growth rate went up, whereas as a result of measures in Labour’s Budget, the growth rate went down.

Reducing the number of working-age people claiming health-related benefits back to pre-pandemic levels would save £34 billion a year. It would bring more people into the workforce and improve the wellbeing of the individuals concerned, but welfare reform was dropped from the King’s Speech, and yesterday’s Budget saw the welfare bill rise by an average of £13 billion a year. According to the OBR, increasing public sector productivity—another area that we did not hear much about—to pre-pandemic levels would raise £20 billion a year. We heard some warm words about that, but delivering it requires difficult negotiations with the unions.

That was too difficult for the Government, who cancelled plans to reduce the civil service to pre-pandemic levels, increased the salaries of train drivers by £10,000, and gave junior doctors a 22% pay rise—all without asking for a single productivity improvement in return. It was no strings for the unions, but no help for 2.5 million pensioners in poverty. The Government should be ashamed. Picking the pockets of businesses, which do not vote, is the easy path, but when it damages economic growth, the result is less money for the NHS, less money for schools and less money for the armed forces, which is why, in the end, Labour Governments always run out of money.