Income tax (charge)
Alex Ballinger Excerpts(4 days, 22 hours ago)
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Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
May I start by paying a huge tribute to the hon. Member for Worcester (Tom Collins) for his maiden speech? It was clear, and he paid a sincere tribute to his predecessor, for whom we all have a great deal of affection. I am sure that the hon. Gentleman will have a great future in this place, and I look forward to hearing more speeches from him.
I agree with the final remark made by the Chancellor of the Duchy of Lancaster: this Budget marks a new chapter in the economic performance of this country, it is true, but I suspect that his predictions and mine, which I will make clear in my speech, are rather different. Starting on the plus side, there are measures in the Budget that we should welcome. My constituents who live in rural areas will be particularly pleased that fuel duty is to be frozen for another year, because often they have very little choice in how to get to work; they must do so by car. As I said in an intervention yesterday, I welcome certain Government contingencies, such as on the infected blood and Horizon scandals, that have now been funded. The onus is very much on the new Government to ensure that the people affected are paid as quickly as possible, even if only with an interim payment, so that they can start, at long last, to rebuild their life. Spending on special educational needs in Gloucestershire is a particular problem, so increased funding will be welcomed by parents whose children need help in that area.
The Public Accounts Committee held several sessions in the last Parliament on rebuilding schools and hospitals, particularly those affected by asbestos and reinforced autoclaved aerated concrete, commonly known as RAAC. We also looked at the huge project of restoration and renewal in this House. If the Government gets those investment projects under way, I will welcome it, but the PAC will scrutinise them to see how we can get value for money.
Contrary to what was said in leaks to the press before the Budget, the pensions industry appears to have been largely untouched in the Budget—perhaps Ministers will confirm that when they wind up the debate—and the trick now is to encourage large pension funds to invest in UK infrastructure. We did not hear anything about that in the Budget yesterday, but I know that the Government are thinking about it.
As predicted, we have a higher fiscal burden in this country under this Labour Government than ever in our history. The Office for Budget Responsibility could not find the fabled £22 billion black hole; instead, it found £9.5 billion associated with deteriorating circumstances, and that will happen to any Government in any fiscal year; £9.5 billion is equivalent to some of the public sector pay increases that we have seen, particular to highly paid train drivers.
The Chancellor has increased taxes and borrowing by a staggering £40 billion each—the largest increase in any Budget for 30 years. The Conservatives left office with low inflation, high employment, particularly for younger people, and the fastest growing economy in the G7. In stark contrast, in this Budget the Chancellor has put up national insurance, and we have inheritance tax up, capital gains tax up, mortgages up, stamp duty up, employment costs up, and business confidence down. The OBR has downgraded our GDP growth, based on the Budget, in every year of the next five-year forecast. That will affect everybody in this country; they will continue to see their living standards fall as a result.
There are lots of topics that I would like to cover, but I have chosen to cover those that will affect my constituents most adversely. First is national debt. UK national debt is £2.5 trillion, which is not far off 100% of GDP, and it is growing at a staggering rate of almost £16 million an hour, or £400 million a day. The interest for servicing the debt has now reached more than £100 billion, which is equivalent to the budget of the fifth largest Department, and it is completely dead money. As a result of the Budget, the debt will rise even further, by £50 billion, involving even higher servicing costs, which will result in higher taxes to pay for it in future years.
On a really important point, the OBR has forecast that national debt will triple over the next 50 years. That is completely unsustainable and should be a real wake-up call to the fact that we have to correct that dire structural problem. But the Budget has made the problem far worse. We cannot just change the rules to make the results sound better. Interest rates, including mortgages, will be higher for longer, and our children and grandchildren will now be saddled with the debt, which they will have to repay, for longer.
Alex Ballinger (Halesowen) (Lab)
I congratulate the hon. Gentleman on his recent appointment as Chair of the Public Accounts Committee. Would he like to apologise for the £22 billion black hole that the previous Government left behind, and the contribution that made to the awful debt situation that the Government inherited?
Sir Geoffrey Clifton-Brown
I thank the hon. Gentleman for his comments about my election, and the PAC looks forward to scrutinising all Government expenditure carefully. He has fallen into the same trap as everybody else. Unfortunately, the OBR said yesterday that it could not find the £22 billion black hole. I do not have the exact quote, but the Government were advised, “When in a black hole, stop digging.” I suggest gently to Labour Members that they stop digging, because it could not be found.
The Chancellor announced that she expects national insurance contributions to rise by a staggering £25 billion, although she promised in the election that they would not. During the election, she said that the measures would not be a tax on working people; clearly she believes that entrepreneurs, who spend their time, energy and talent forming new business, are different. They will be heavily taxed, and changing the employment rules will make it more difficult to employ extra people. A 15% national insurance tax and a savage cut to the threshold, down from £9,100 to £5,000, will harm any business in my constituency employing more than four people. It could be the difference between a business growing and providing more jobs and a business not surviving.
We must all remember that the private sector, and individuals who work hard and put their livelihoods on the line, take financial risks to boost productivity and provide the growth the country needs, and they must be nurtured if they are to succeed. Small businesses account for more than 90% of all businesses.
Sir Bernard Jenkin
Yes, I do not think we did enough to dynamise the British economy. We did not do enough, but I was very grateful for the support of the Liberal Democrats for the first five years of the Conservative Government. That helped us to keep public expenditure under better control so we could begin that process.
GDP per head has really been flatlining. We are falling significantly further behind the United States, but what are the trends? On these trends, we will be overtaken by Poland by 2030 in terms of GDP per head. What are this Government doing to address the real long-term trends? Let us look to 2050. What is the shape of public expenditure going to look like in 2050? This Budget does not begin to address that. What will be our national debt on a long-term basis? What is happening to our demographic, including the ageing population and the ratio of people in work and out of work? What are this Government doing to address that trend and to address the immigration trend, because that is adding to the cost of our economy?
How will we be able to increase defence spending? The Chief of the General Staff has recently said that this country could well be directly involved in a war within the lifetime of this Parliament. We will have to spend more on defence, as well as controlling the rest of the public sector. It is many decades since health, education and welfare started swamping out every other kind of expenditure in the Government. If we are to survive as a country, we will have to address these very damaging long-term trends.
Sir Bernard Jenkin
If the hon. Gentleman will forgive me, I am just drawing to a close.
What is the true cost of decarbonisation? That is something that the Government are hopelessly naive about. It is as though investing in decarbonisation is somehow a get-out-of-jail-free card, and everybody’s bills will start to come down, but anyone involved in the industry will say that that is not the case. The need to dynamise our zombie economy is still there and being made worse by the burdens that this Government have inflicted on us. How will we re-industrialise our economy when deglobalisation has taken away the opportunity to import all the cheap things that we used to make, but no longer do? Those are the real strategic challenges, and the Budget does not begin to address them.
Alex Ballinger (Halesowen) (Lab)
It has been a pleasure to listen to so many excellent maiden speeches this afternoon, and to hear so many colleagues saying such positive words about a Budget that I am excited to support.
Every single Member on these Labour Benches represents a mandate: a mandate we were given by the British people when they voted for change on 4 July. They did not just vote for Labour Members to sit on these Benches and continue the last Government’s failed policies of austerity and decline; on 4 July, people voted for real change. I am delighted to say that this Budget has set us on a path that will change our country for the better. It begins the process of fixing the foundations of our broken economy, it sets in motion the investment needed to deliver change, and it remains steadfast that no working person will see higher taxes in their payslips.
The country knows that the Conservative party failed us with a cost of living crisis, a shoddy Brexit deal and a dreadful mini-Budget that fractured our economy, and working families in towns like Halesowen felt its failures hardest. People across my constituency have shared countless stories of their struggles to cope, with their bills going up, their wages stagnating and no help from the Government. The last Parliament was the first in modern history to leave living standards lower at its end than they were at its start.
People have been exasperated with our public services. They have watched relatives wait months and years for NHS treatment, seen their local services close, and seen the public infrastructure crumble around them. They were tired—tired of living under a Government that did not deliver on their commitments, tired of seeing our public services get worse year after year, and tired of waiting for a Government that would bring about genuine, lasting change.
Yesterday, I was proud to listen to the Chancellor as she set out the plan to change our country. I was delighted to hear her focus on fixing the foundations of our economy, on real investment in our public services and, rightly, on putting the burden on those with the broadest shoulders. With each announcement, I began piecing together what the Budget will mean for our community in Halesowen. It delivers a real difference for those most in need of help: a 6.7% increase in the national living wage, putting £1,400 more in the pockets of retail workers, pub staff and many others; an increase of the carer’s allowance earnings limit to £196 a week—carers’ charities in my constituency, such as We Love Carers, have said that that will make a vital difference to carers by allowing people on really low incomes to earn that little bit extra to support their families—and a £25 billion investment in our NHS, meeting our promise to bring waiting times down to no longer than 18 weeks, just as they were under the last Labour Government.
However, what I am most pleased by is the funding for our town centres and local communities. It pains me to say it, but our high streets have struggled in recent years—I have seen many independent shops close, and our community centres are really struggling—so I am delighted that the Government are providing £1 billion to support our high streets and communities, and the infrastructure that will support people across Halesowen. That includes £20 million to regenerate Halesowen town centre, and an additional £20 million to redevelop Haden Hill leisure centre in Cradley Heath. Both are really important projects that were promised under the last Government, but no funding was provided, so I am delighted to see that this Government have made that available. People deserve better, and Halesowen deserves better. It is time for revitalisation, and these commitments will do just that.
This Budget sets a precedent, and this Government are laser-focused on delivering for our communities. It is a Budget for growth, a Budget for investment, a Budget for fair taxation, a Budget for workers and a Budget for stability. It is a Labour Budget, and I am proud to support it. It is a Budget that will change our country, and I am hopeful for the years ahead.
Alex Ballinger
My hon. Friend has given a long list of the achievements of this Budget, but he has neglected to mention that the Labour party has taken one penny off a pint of beer.
Chris Vince
I have cut down on my drinking now, so it does not help me as much as it would have done in the past, but I am delighted that we have done that, and delighted with the many achievements that we announced yesterday.
However, this is just the start. We know that rebuilding our economy, our public services and our country will take time, but I know—this Budget confirms it—that under this Labour Government we have the leadership and the will to make life better for everyone in our society, not just the privileged few.