Finance (No. 3) Bill

Alex Chalk Excerpts

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

I should make another point about reducing the advanced rate to £80,000. The amount of money that that would raise would be negligible, if not actually negative, and the number of spending commitments tied to that proposal are disproportionate to any sort of potential income that could be raised, even in the best-case scenario. So the tax allowances as they stand in respect of the basic rate and the advanced rate strike the right balance for our economy in the future.

[Alex Chalk (Cheltenham) (Con)]

My hon. Friend talks about the incentives created by reducing the tax on individuals, but does he agree that this has an impact on businesses, too? Where high street businesses such as my local ones in Cheltenham now have a lower tax burden, with one third coming off their business rates, that provides an incentive for them to take on new employees, grow their business and deliver a more prosperous high street?

--- Later in debate ---

[Peter Dowd]

Quite simply, it is shameful—it is as simple as that.

New clause 2 would require the Treasury to undertake an equalities impact assessment of the changes to the personal allowance and its impact particularly on child poverty. This assessment will include households at different income levels, groups protected by the public sector equality duty and the regions and nations—this is the Labour party speaking for the whole of the United Kingdom.

Such an assessment is needed now more than ever. The Social Metrics Commission recently found, as I indicated before, that 4.5 million children are living in poverty in the United Kingdom. That is shameful. The Government claim that none of this matters as long as parents are finding work, which ignores the fact that work is no longer a sustainable route out of poverty. Indeed, the Joseph Rowntree Foundation found that more than two thirds of children in poverty live in a working family.

We know that the assessment set out in new clause 2 will further justify the United Nations special rapporteur’s investigation into this Government’s policy of austerity last week. The poverty envoy found that the policies of austerity had inflicted “great misery” on our citizens, and he went as far as to say that the “fabric of British society” is falling apart as a result. That is absolutely damning.

[Alex Chalk]

The hon. Gentleman is talking a lot about the politics of austerity. The United Kingdom last lived within its means in 2001. Under a Labour Government, when would the United Kingdom next live within its means?

[Peter Dowd]

I do not accept the premise of these trumped-up ideas from voodoo economics presented by the Tory party. The reality is that the report was absolutely damning. It was absolutely devastating, and Government Members should be ashamed that somebody from the United Nations should come to this country and objectively lay out the facts as they are.

Sadly, in true Trumpian style, the Government chose to ignore the UN special rapporteur. Live on “Channel 4 News”, the Financial Secretary to the Treasury buried his head in the sand, saying

“there is a…strong push to reduce poverty”.

Well, it is not getting pushed hard enough. The Financial Secretary refused to acknowledge that there are 1.5 million people living in destitution, despite repeated questioning. A cursory look at this Government’s policies demonstrates that, for eight years, they have felt it was reasonable to punish the poorest to let the bankers off the hook. How can this Government be so out of touch?

I now turn to new clause 3. According to HMRC’s own statistics, over £400 billion a year is spent in tax reliefs. Entrepreneurs’ relief costs £2.7 billion a year alone, and benefits only 52,000 people.

[Alex Chalk]

The hon. Gentleman is very generous in giving way a second time. If Labour Members were to get back into power, would they change the tax system so that people had to pay tax from £6,750, as in 2010? Does he agree that that would cost working people an additional £1,000-plus a year?

[Peter Dowd]

I suggest that the hon. Gentleman reads the shadow City Minister’s article on LabourList, which sets that out very clearly.