(1 week ago)
Commons Chamber
Dan Tomlinson
I will give way to the right hon. Member for East Antrim (Sammy Wilson) and come back to the right hon. Member for Gainsborough (Sir Edward Leigh).
The Minister is putting on a brave face because a manifesto commitment has been broken. People are going to pay more in income tax despite the promises that were made. Does he recognise that, for many people, this is not money to renew public services, but money squandered on giving compensation to foreign Governments for land that we owned—the Chagos islands—and are now paying for; money that will be spent on an ID system that is totally unnecessary and will not serve the purpose it is meant to; and money spent on net zero commitments that have destroyed our economy and added little in benefits to the public?
Dan Tomlinson
The right hon. Gentleman is welcome to express his views on a range of policies. On the final issue that he raises—net zero and our transition to a cleaner and greener economy—independent analysis, the Government’s Climate Change Committee and the long-term fiscal risk report of the Office for Budget Responsibility have set out clearly that not making that transition, both in the UK and internationally, comes with larger long-term costs for the public finances because of the growing costs of adapting to climate change. It is clear that we need to make that change, for the environment and for the long-term health of our public finances. The OBR’s fiscal risks report is always a good read; I hope that he is, like me, looking forward to the next edition in the summer.
My hon. Friend is absolutely right. That is why I want to ask the Minister, as he does, how this will be delivered. What is the definition of what the Chancellor has described, albeit to the media? How will this work, and why is it not in the Bill? We know that when the Government have spoken before, they have not stuck to it.
Does the hon. Gentleman accept that regardless of whether we are talking about a small tax or a large tax, the Chancellor promised that there would be no tax on people who went out to work every day, and no increase in tax on pensioners? It is not really a question of degree; it is about whether the promise is being broken. Clearly, from what the Minister said tonight, the promise will be broken.
Exactly. I have nothing to add to that; the right hon. Gentleman puts it perfectly. New clause 14 would require a proper assessment of clause 10’s impact on state pensioners, and new clause 15 would require an assessment of the cost of the Chancellor’s so-called exemption from small amounts of tax—let her define that in a piece of legislation; I do not think she will be able to. Clause 10 is simple: another Labour tax promise has been broken and pensioners will pay the price. I hope that Members from across the Committee can see that and that they will vote with the official Opposition tonight.
Vikki Slade
I always value the interventions of the hon. Member. As the aunt of a young GP, Bethan, who has more than £100,000-worth of debt, I think it is ridiculous that our young people are being saddled with this situation. I have constituents who have deliberately gone to study in Wales so that they are able to get that benefit. It is time for us to look collectively at analysing the cumulative impact of the issues faced by our young, aspirational adults, because we will see more of them deciding to go abroad, and we desperately need our home-grown talent to stay.
Thirdly, I turn, as most Members have done, to pensioners. The older age group will have been pleased to hear that they are due to be exempted from the tax threshold if their only income is the state pension, but two constituents—Colin from Wareham, who is a regular correspondent, and John from Lytchett—have written to suggest that the Chancellor may have inadvertently misled Martin Lewis. I will not use their other accusation, as I will get into a lot of trouble. One said that most pensioners are expected to survive on a weekly state pension that is four times lower than the average wage, and that mandating that they be taxed will plunge many older people into desperation and poverty. They have suggested that it is not quite accurate that the state pension alone will not be taxed—I am using my words very carefully—so can the Minister assure me and my constituents, like others, that from April, those with no income other than the state income and modest savings will pay no income tax, particularly because there appears to be nothing in the Bill about that?
Finally, given that millions of people with tiny private pensions and, in particular, many pensioners will be dragged into tax, will the Minister consider the Lib Dem proposal for a pensioners’ “red phone” to ensure that they do not spend hours hanging on the telephone?
Tonight’s debate is not just an opportunity for the Opposition to have a go at the Government. Many people who are getting cynical about politics will say, “Well, of course you would expect them to have a go about taxation and the Government’s behaviour on that issue.” However, this debate goes far beyond that, because the implications of what we are discussing tonight are very serious.
First, there are the macroeconomic impacts of the decision not to make work pay, because of higher taxation. The Government have hung a lot of their predictions of economic success on obtaining economic growth, but one thing we will not do is tax our way to growth. This will be an anti-growth measure, which will have implications not just for this year but future years and future Budgets. Secondly, it will have personal consequences for many people facing the current cost of living crisis and finding it difficult to stretch their income to meet their needs.
Lastly, the decision will have an impact on people’s confidence in the democratic system. The Government will get this Bill through tonight. They will get it through because they have a massive majority, and they have a massive majority because they made massive promises. They promised that people would not face income tax increases, and I have no doubt that that influenced how many working people voted. However, the Minister has accepted tonight that by the end of this period, £28 billion will have been raised. One reason I support new clauses 3, 13 and 14 is that they at least give people an opportunity to realise what the Government are doing to them, and they show that politicians in this House want there to be honesty with the people. If there was not honesty when the manifesto was written and presented, let us ensure that there is honesty when the implications of the decisions that this Government are making become clear to the citizens of this country. These are confidence measures.
Let us just remind ourselves of what the Government promised—we have been around this a number of times tonight. They promised that they would not increase taxes on working people. They then went on to define “working people” as people who go to work every day, yet we know that by freezing the thresholds, people who go to work every day and are therefore subject to income tax being charged on the money they earn will pay more. Working people know that a promise to them has been broken.
I think the Chancellor knows that, given her statement at the first Budget that changing the thresholds would be a tax on working people.
Of course she does. That is one reason why I believe that the new clauses are important—they recognise the need for people to be made aware of the consequences, and the impact on them, of decisions that are being made in this House by a majority Government who got there by making promises that are not being kept.
What is that impact? The Minister has already told us: £23 billion more tax will be paid. He justifies that by saying—I think he mentioned this twice—that the Government have sought to be fair, and to place the burden on those with the broadest shoulders. When 750,000 people who are currently earning £12,500 per year are dragged into the tax system, that does not strike me as fair. It strikes me as placing a burden on people who go out to work every day, do not earn a great deal of money or have a great reward for it, and now find themselves having to pay tax when they never thought they would have to.
As I said in an earlier intervention, people might be willing to pay taxes if they thought it would lead to things that would improve their lives. We had that promise at the first Budget—that the Government were putting up taxes by £40 billion, or whatever it was at that stage, to improve public services. Have public services improved? No, they have not. Has the money been spent on public services? No, it has not. Yes, wage increases have been given, but as the OBR has said, there have been no productivity increases as a result of the extra money that has been spent. If taxpayers thought they were going to get some benefit from these changes, they might have been willing to accept them, but of course, they are not getting that benefit.
What are we getting? We are getting wasteful expenditure. As has already been mentioned, £5 billion will be spent on taking money from those who go out to work and paying it to those who do not go out to work. That is not fair, and it does not make any economic sense, either. Then, of course, there is all the other wasteful expenditure that the Government have engaged in, such as the Chagos deal. We had the Chagos islands—we had our bases there and so on. We are now going to pay somewhere between £38 billion and £47 billion to the Government of Mauritius to give the islands back and then lease them back again. You can understand why people ask, “Is that what I want my taxes to be spent on?” Of course it is not.
The Government estimate that their ID cards system will cost £1.8 billion, while the London School of Economics says that the cost could be £10.7 billion. The Government say that it is to stop illegal immigration, when we know full well that it would not matter if we had six ID cards—those who come into this country illegally will seek to work illegally, and there are other means of checking up on them anyway. There are also the new bureaucracies that the Government have set up. One of their first actions was to set up a huge bureaucracy, Great British Energy, at a cost of £9 billion. Again, what benefit will we get from that? The Government have said that it will deliver their net zero policies, but is it necessary to have a bureaucracy of that nature? I know that many Members do not agree with me on this issue, but we are spending billions of pounds on restructuring our economy to meet net zero targets when many other countries are saying, “We are not prepared to damage our economy in that way.”
Given the proposals we are debating tonight, the new clauses I have spoken to are not all that demanding. All they say is, “Let’s have some transparency about what all this means to the people who are having to pay the money.” That is not too much to ask. I hope that people will consider that when they cast their vote tonight.
The one thing I say in conclusion is that we seem to have a Government who, as their first choice, will spend taxpayers’ money, rather than looking at how the money they already take from taxpayers can be used more effectively.
(2 weeks ago)
Commons ChamberUrgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Dan Tomlinson
I thank my hon. Friend for his reminder that the previous Government and previous Conservative Prime Ministers were roundly rejected by the country at the last general election. People in rural communities and communities up and down the country voted for change for the better with this Labour Government and for a Government who will continue to represent and support farming communities up and down the country. Let me praise my hon. Friend on his recent appointment to the Environment, Food and Rural Affairs Committee, to which I know he will provide an invaluable contribution in his continued representation of rural communities.
I wish you and the staff of the House a happy new year, Mr Speaker.
Regardless of the reason for the change in policy—whether it is simply fear of the electoral consequences of breaking election and manifesto promises to farmers, or a belated recognition of the importance of the farming industry to feeding the nation in an increasingly unstable world—I welcome these changes. However, I would point out to the Minister that despite his assurances, 25% of farmers in Northern Ireland will still fall over the threshold he has announced, which will have an impact on family farms because of the cost of land and so on. Having seen the disaster of the policy, does he accept that the only answer is to abolish it altogether?
Dan Tomlinson
No, I do not accept that. That is not the answer.
(1 month, 1 week ago)
Commons ChamberThrough the financial inclusion strategy led by the Economic Secretary to the Treasury, we are extending Help to Save within the universal credit system, and working with banks and building societies. I know that, as a Labour and Co-operative MP, my hon. Friend works closely with the co-operative movement and with building societies to ensure that more people from low-income backgrounds can save for the future.
Low-income families have been hit by being dragged into tax bands that they were not in before and by energy costs, and now the chief executive of Aldi has said that unless the Chancellor reviews her raid on farm inheritance tax, rising food prices will hit those families as well. If she will not listen to the farmers, will she at least show some concern for consumers, and look again at this tax?
Since the Budget, the Co-op has cut or frozen the prices of 2,700 essential products at a cost of £1 billion, recognising the impact that the cost of living still has on families, but also reflecting the Budget package that supports our high streets, including our supermarkets.
(1 month, 2 weeks ago)
Commons ChamberAs my hon. Friend knows, the OBR has already published its forecasts at various rounds during the Budget process. The process is iterative between the Treasury and the Office for Budget Responsibility. I am sure my hon. Friend welcomes the fact that in the Budget, we cut the cost of living, cut NHS waiting lists and cut Government borrowing.
The Government have had a lucky break with the coincidence of the OBR’s confession and report on its leak of the Budget details, which has given the Minister an opportunity to use the shame of the OBR to deflect from the real criticism that should lie with the Chancellor, who, weeks before, was using selective information and distorting the forecasts to cover up the fact that she was taking money from those who work to pay those who do not work. Is that not the real shame of what we are discussing?
The real focus of the Chancellor has been on cutting the cost of living, cutting NHS waiting lists and cutting Government borrowing. I hope that the right hon. Gentleman, like all Members of this House, values the importance of the Office for Budget Responsibility and takes this matter with the same seriousness that we in government do.
(7 months, 1 week ago)
Commons ChamberI am pleased that Stockton will be benefit from some of those investments, because pride in place is so important for all our communities. Some of the most deprived parts of the country have missed out on funding for too long, which is why we are pleased to be able to rectify that and ensure, for example through the Green Book reforms, that money goes to where it is most needed.
First of all, I welcome the fact that, at least in real terms, the Northern Ireland budget has been maintained over the spending period, although I would point out to the Chancellor that a 0.5% real increase will not enable the Northern Ireland Executive to match the real increase in spending on health and policing which will be taking place in the rest of the United Kingdom.
May I emphasise again the preference that she has given in this budget to money for a Gaelic Athletic Association ground? In blundering into this issue, she has given the Executive a massive financial headache. She requires £50 million to be matched by funding elsewhere. The Executive will be required to find about £200 million to make up the deficit, raising expectations and, I believe, creating tension within the Executive as a result. I think it was wrong for her to try to interfere in the minutiae of spending of the Executive in that way. As a general point, maybe in the autumn many people who welcome the headlines today will be regretting the tax increases they will face to pay for the announcements today.
The announcements today are all within the envelope that I already set out through the tax increases and the changes to the fiscal rules in autumn and then the decisions in the spring statement. All we have done today is allocate the envelope that we already set out. As I said at the time, public services would now need to live within the means that we have set at that Budget. This statement does not spend a single penny more or a single penny less than the money that was already allocated.
On the specific issue the right hon. Gentleman raises, I am very happy to pass on what he says to the Northern Ireland Secretary and to ensure that there is a meeting between the relevant Minister and the relevant Members of Parliament.
(7 months, 2 weeks ago)
Commons ChamberI thank my hon. Friend for her question and her vociferous campaigning to ensure that we deliver on our promises to invest in left-behind areas across the country after years of failed promises on levelling up from the Conservative party. It is right that we find that money and invest it in her community. One important point to make is that this is not the total amount of funding that the Government are putting into her community; this is just transport funding devolved to the mayoral combined authority. There will be further announcements in the coming weeks in relation to energy infrastructure, industrial policy, skills, housing and public services in which we will be able to show very clearly the difference that a Labour Government are making, working in partnership with brilliant Labour MPs such as my hon. Friend to deliver the change that people voted for.
The Minister is right in stating that modern growth relies on dynamic, interconnected regions and that stronger transport links are vital for businesses to expand their markets for goods and services. While he has announced £15.6 billion to improve transport links in other parts of the United Kingdom, his Government are spending £140 million on creating a border post in my constituency that disrupts the transport links between Northern Ireland and the rest of the United Kingdom, costing businesses, slowing transport and dissuading some businesses from supplying to Northern Ireland. What will he do to improve the transport links between Northern Ireland and Great Britain for logistics? The current disruption is slowing growth and causing businesses to fail.
The right hon. Member raises important points that my colleagues in the Department for Transport will no doubt have heard. I am sure that he is talking to them about the delivery of that project. The Government have put record investment into Northern Ireland, and we have reset the relationship. Under the last Government there was not even any conversation about Northern Ireland, whereas now I am in frequent communication with the Northern Ireland Executive, who, might I say, of all the colleagues I have had to negotiate with for the spending review, are the toughest? This Labour Government will be delivering a good deal for Northern Ireland, as we will for every nation and region of the country.
(9 months, 1 week ago)
Commons ChamberWhat discussions has the Chancellor had with the Northern Ireland Executive to ensure that the national wealth fund is used to promote economic growth in Northern Ireland? Does she not agree that the big impediment to growth is the fact that she is taxing businesses to death?
The Office for Budget Responsibility has revised growth upwards from next year, and expects the economy to be bigger at the end of the forecast period than it thought at the time of the Budget last year. We are using the national wealth fund, the British Business Bank and UK Export Finance to support businesses throughout the UK, and we were recently able to announce significant investment at Thales in Belfast to create jobs in the defence industry there for the export of goods to Ukraine.
(9 months, 3 weeks ago)
Commons ChamberAt the Budget last autumn, we increased taxes by £40 billion without asking working people to pay more. We did that by abolishing the non-dom tax status, increasing the rates of capital gains tax, tightening the rules around inheritance tax and, yes, by asking businesses to pay more as well. We have already raised taxes to put more money into our health service, reduce NHS waiting lists and provide free breakfast clubs at primary schools. Today’s spring statement shows that we can grow the size of our economy through planning reforms and therefore ensure more money for our public services. The Government’s No. 1 priority is growth, so I am so pleased that the OBR has said that by the end of this Parliament the economy will be bigger than that we inherited it from the Conservatives.
The Chancellor has claimed today that she is building foundations for the economy, but sadly those foundations are built on sand—increased borrowing, higher inflation, lower growth, jobs taxes and so on. How will such structures stand against the economic forces that will be affecting the United Kingdom, as she has described today? Specifically, what proportion of the transformation fund will be available to the Northern Ireland Executive for the important transformation of public services in Northern Ireland?
I thank the right hon. Gentleman for his question. The OBR is clear that the economy at the end of this Parliament will be bigger than it previously envisaged—bigger than the plans we inherited from the previous Government—and the average person with real household disposable income will see their income rise by £500. We are already beginning to deliver the change that we promised. At the Budget last year I was able to announce the biggest ever settlements for Scotland, Wales and Northern Ireland. That continues to be the case after today’s spring statement.
(9 months, 3 weeks ago)
Commons ChamberI rise on behalf of the official Opposition to support Lords amendments 1B, 5B, 8B and 21B. It feels like only last week that we were all here, but it is clear that our colleagues in the other place feel as strongly as the Opposition do about these amendments, as they have returned them to us with a similar aim once again.
Lords amendments 1B, 5B and 8B seek to address two of the most serious consequences of the Bill that should concern and unite us all: that a rise in secondary class 1 national insurance could lead to a significant reduction in health and social care services, including our hospices, hitting the most vulnerable in our society; and could represent a complete hammer blow to the future aspirations and very survival of small businesses throughout the country.
We all know that the Chancellor has an addiction to creating fiscal black holes. First she used a fictional black hole, discredited by the Office for Budget Responsibility, as an excuse for her manifesto-breaking tax rises. This has led to more black holes, only this time they are very real because they are being felt out there in the real economy. The Bill before us today will create black holes in the finances of hospices, GP practices, farms, fruit shops, butchers, bakeries and businesses of all shapes and sizes, but especially the very smallest.
Does the shadow Minister find it puzzling that the NHS will be exempt from these changes, yet the many services on which people depend for their health—dental services, social care and so on—will be hit by this rise in national insurance contributions? [Interruption.] No services will remain unaffected, so people will not experience the healthcare that they require.
It is rare that questions come with a musical accompaniment, but the right hon. Gentleman’s mobile ringtone made for a great effect. None the less, his point is the right one, which is that, whether it was intended or not, the rationale for the Bill is to “protect”—in the Government’s words—public services. I could say “bolster” public services if I were being generous. The fact is that the Government are taxing public services on which we all rely and he is absolutely right to emphasise that.
Lords amendments 1B and 5B seek to provide the power to exempt from both prongs of attack of the Chancellor’s jobs tax: care providers, NHS GP practices, NHS-commissioned dentists, NHS-commissioned pharmacists, and charitable providers of health and social care, such as hospices. And it is hospices specifically that I want to speak more about today.
Hospices are there at what, for many, will be the hardest moments of their lives. They provide vital physical and emotional support to individuals who are coming towards the final chapter of their lives and for their loved ones. In short, hospices are there to look after us at our most difficult time. So, whether through funding, charitable donations or legislation, they deserve our utmost support to continue in this task.
However, as I set out in Committee, this disastrous jobs tax will cost hospices up to £30 million next year alone. Hospice UK has repeatedly warned this Government that the Bill risks a reduction in hospice services, which will lead only to even greater pressure on NHS palliative care services.
Of the more than 200 hospices across our country, around 40 provide care for children. These are children who are living with terminal illness, many of whom have an all-too-limited time left in this world. The organisation Together for Short Lives estimates that the Labour Government’s decision to raise national insurance will add almost £5 million to the annual cost of providing care for seriously ill children and their families. Let us be clear: this will mean that every children’s hospice in England alone will need to spend an average of £140,000 more just to maintain services for the children in their care, after paying the additional tax that this Bill will impose. The Government cannot seriously be demanding that staff and volunteers at charitable children’s hospices—the very people who already give their heart and soul to look after sick and dying children—fundraise their share of £5 million next year alone just to keep their lights on and their doors open.
At Treasury questions on 21 January, the Chancellor stated, in response to an excellent question from my Lincolnshire colleague, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), that the settlement for hospices announced by the Health and Social Care Secretary just before Christmas includes money to specifically “compensate” hospices for the national insurance increase. That is not correct, and I am pleased that at least this Minister has tried to acknowledge that point.
The Lords amendments seek to address a clear, present and insurmountable financial challenge for significant elements of health and social care delivery in all our communities. The Government say, in the most spurious and disingenuous way, as though they did not understand their role in the health service, that social care providers, GPs, dentists and pharmacies are contractors. How they are dealt with by His Majesty’s Revenue and Customs is irrelevant. It is the role that they fulfil in our society and in the delivery of health and social care services that is at stake. These are not contractors that can go and develop new markets somewhere else. Their market is exclusively within the NHS and health and social care up and down these islands. Many properly commercial businesses will not manage to pivot their way out of this attack from Labour—and GP practices, pharmacies, care providers, nurseries and hospices certainly will not.
I want to mention hospices. When Macmillan Cancer Support speaks, no matter what colour our rosette, we should listen. It has highlighted clearly what the measures mean for end-of-life care. There have been 15 years of chaos in the United Kingdom, most of it economic; there has been the lost decade of Brexit, and its catastrophic effect on the UK’s economy and the material welfare of people up and down these islands. I ask: who can we blame? Who is culpable? Who has their fingerprints all over it? Not terminally ill children in hospices, who will, as a result of the Bill, suffer as a result of the debilitating effect on the care with which they are provided. The Minister and his Government could do a simple thing: give hospices a derogation from the grasping hand of the Bill, and protect children in the worst imaginable circumstances.
From the outset, the Government’s fiscal misadventure has been met with opprobrium from all manner of sections of the economy and society, but they have held firm. I pay tribute to the Minister; he fronts up here every time with a smile, and does his best to defend what he has to. That is his job, and I do not judge him for that, but the bottom line is that the Government have yielded, not to children in hospitals, or to people trying to deliver social care and free up hospital beds by preventing delayed discharge, but to the bankers by restoring their bonuses, and to the non-doms who want all the benefits of living in this country but do not want to pay for it. That speaks volumes about what a Labour Government in this day and age are all about.
I hope that I can have this intervention without a musical interlude. I apologise to you, Madam Deputy Speaker, for having my phone switched on. Will the hon. Member accept that not only are services likely to be affected, as he has outlined, but the Government’s aim of raising additional revenue will be affected as well? As he pointed out, they have given in to the bankers and non-doms because of the fear of losing revenue. Anecdotally, we know that many businesses, whether those supporting the national health service or other small businesses, will cut back on the number of staff that they employ because they cannot afford them, and that will lead to a loss of national insurance and tax contributions. It could be an own goal for the Government if they cause pain to businesses but do not get any revenue from it.
I agree entirely. This is a £24 billion fiscal drag that is intended to create growth. Work that one out if you can, because it is beyond my ken. The Government will not make derogations for key elements of health and social care, because the benefit of the £24 billion drag on the economy that the right hon. Gentleman pointed out is, after compensation, already down £10 billion. If they compensate the people who they definitely should, such as GPs, pharmacies, care providers and hospices, that would take it down to somewhere around £7 billion or £8 billion. What type of Chancellor and Treasury orthodoxy says, “We place a £24 billion burden on the economy in exchange for an £8 billion return for the Treasury”? It is absolutely catastrophic. It is misadventure writ large, and it has Labour as its logo.
(11 months, 3 weeks ago)
Commons ChamberMy hon. Friend knows that I have long been an advocate and campaigner for climate justice and our net zero plans, but I am clear that by working with partners and investors to unlock investment in the UK, we will also unlock investment in the net zero transition, and get the industry, the jobs and the capabilities that we need to deliver a net zero future. That will allow people across the country to do other things that they want to do, such as go on holiday.
As I listened to the Chief Secretary declare that this is all about putting our country on a new path towards a brighter future, I was reminded of a wee song that we used to sing when we were children: “There is a happy land, but it’s far, far away.” Unfortunately, many of these projects are long term. They will not be delivered even in the lifetime of this Parliament, and they will not offset the anti-growth policies that the Government have already announced, which are devastating industry.
The Chief Secretary said that he wants to deliver for people in every part of the country, but there was not one mention of a project in Northern Ireland, or any indication of what the Government will do with the anti-growth impacts of the protocol and the Windsor framework. What is there in the statement for the people of Northern Ireland and for growth prospects in Northern Ireland?
We always get a bit grumpy as we get older, don’t we, Madam Deputy Speaker? But I agree with the right hon. Gentleman: we should go back to our childhoods and sing the song of that bright future that is ahead for all of us. It will cheer our spirits and lift the House as we look forward to the future with positivity.
Look, we have made announcements today that will benefit the Northern Ireland economy, not least in the aerospace, life sciences and pharmaceutical sectors. On a recent visit to Northern Ireland, I heard about the businesses innovating and investing in these spaces, and they will benefit from the announcements today. As he knows, the Government are in negotiations with our counterparts in Europe to improve trade barriers, which I am sure, in time, will benefit the Northern Ireland economy as well.