Income tax (charge)

Debate between Jim Shannon and Jeremy Hunt

Thursday 31st October 2024 Commons Chamber

[Jeremy Hunt (Godalming and Ash) (Con)]

It is a pleasure to open this day of the Budget debate with you in the Chair, Madam Deputy Speaker, for what will be my last contribution as shadow Chancellor. I am aware that may be a relief to Members on the Government Benches, and possibly to those on the Opposition Benches as well.

Yesterday’s Budget was the biggest tax-raising Budget in British history. It was a huge tax on business and takes our tax burden up to German levels for the first time. After the pandemic, the previous Government also put up taxes, but we started to bring them down, because higher tax leads to lower growth. Indeed, the Office for Budget Responsibility said that yesterday’s £40 billion of tax rises would lead to lower pay, lower living standards, higher prices and more expensive mortgages. Without remorse and without hesitation, a triumphalist Government have ripped up the pre-election promises that they made in the biggest ever assault on our economic competitiveness since the 1970s.

Let us look at the promises cast aside so casually. The Chancellor said that she would not change the debt target, because she was “not going to fiddle the figures or make something different to get better results”. Yesterday, she did exactly that. In May she said that Labour policy

“will be fully costed and fully funded. No ifs, no ands, no buts”—

and no additional tax rises. A total of 30 times this year, she promised not to do exactly what she did yesterday. She even said that she wanted to bring the burden of tax down. Ordinary families, small businesses and working people believed her. Yesterday, they were betrayed.

It went further. When we said in the election that taxes would go up by £2,000 per household over four years, the Leader of the Opposition at the time accused the then Prime Minister of a deliberate lie. Three months on, they will go up not by £2,000 over four years, but by £2,000 every year. Paul Johnson called it a

“straightforward breach of a manifesto commitment”.

The Institute for Fiscal Studies has today said:

“The continued pretence that these changes will not affect working people risks further undermining trust.”

The OBR said that 76% of the impact of the national insurance rise would pass through to lower wages.

And because the Government planned this all along, we now know why they rushed so fast to concoct the fiction of a black hole—something that was not corroborated by the OBR yesterday. It was cover not just to raise national insurance, but to impose countless other tax rises on working people: capital gains tax up; energy taxes up; stamp duty up; and taxes on family farms up—something we will oppose, for the sake of farmers up and down the country.

Working people whose wages the Chancellor promised to protect will see them go down; businesses whose profits fund new investment will see them raided; markets to which she promised stability are absorbing the biggest tax-and-spend Budget in a generation; and all of us on the outside are left wondering which is worse, the damage to the economy or the damage to trust.

[Jim Shannon (Strangford) (DUP)]

There is not one person on the Opposition Benches who is not concerned about the inheritance tax changes. If I am honest, I do not think there is one Member on the Government Benches who represents a farming community and is not also worried. The measure has been universally condemned by all the farmers I have spoken to, and I live in a farming community. The National Farmers Union, the Ulster Farmers Union and others are up in arms about this inheritance tax. The sum of £1 million draws everybody into that scheme, and because of that, we must vote against it. I say to those on the Government Benches: guys, you have got it wrong, and this time you will be condemned. When it comes to election time, the people who you have hurt will remember.