Amendment of the Law

Andrea Leadsom Excerpts

Thursday 22nd March 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The British economy is stagnating, unemployment is rising month by month, the Government’s deficit reduction plans have gone wildly off track, middle and lower-income families and pensioners are facing rising petrol prices, rising energy bills and falling living standards—and what did the Chancellor do in his Budget yesterday? Did he admit that his economic plan has failed? Did he act to kick-start the stalled recovery? Did he give any hope to young people facing long-term unemployment? Did he set out any vision of how, over the next 20 years, Britain can compete in the world and win the investment and skilled jobs we need? Did he ease the pressure on families by cutting fuel duty, or by cancelling perverse and unfair cuts to tax credits and child benefit? No. The centrepiece of the Chancellor’s Budget, his top priority, and the political imperative for this oh so political Chancellor, was to spend more than £3 billion next year cutting the top rate of income tax for existing top rate taxpayers. People earning more than £150,000 a year—300,000 of them—are getting an average tax cut of £10,000 a year. How out of touch can he get?

To add insult to injury, the Chancellor sprung another surprise tax rise by freezing the age-related personal allowance for 4.5 million pensioners and abolishing it entirely for soon-to-be pensioners. People on modest incomes who have worked hard and saved hard all their lives will be hit by the Chancellor’s tax grab on pensioners while he gives a £40,000 tax cut to 14,000 millionaires. What can we say about that?

[Andrea Leadsom (South Northamptonshire) (Con)]

rose—

[Michael Fallon (Sevenoaks) (Con)]

Will the right hon. Gentleman give way?

[Ed Balls]

I will in a moment.

Let me say to the Chancellor today: some of the electorate he really cares about—the selectorate in his own Conservative party—may be cheering, although after this morning’s headlines, I am not so sure.

[Andrea Leadsom]

Will the right hon. Gentleman give way?

[Ed Balls]

I will in a second—I look forward to it.

As the Financial Times reports this morning:

“Some Tory backbenchers offered support for the measure”—

on pensioners—

“although they refused to be identified for fear of alienating their elderly constituents.”

Perhaps in a second some of those Conservative Back Benchers will break cover and back the pensioners tax grab in the Budget, but they are right to be worried, because all across the country, the real electorate will be thinking, “A tax cut for millionaires, paid for by millions of families and pensioners across this country? Same old Tories: looking after their friends while families and pensioners pay the price.”

[Andrea Leadsom]

Will the right hon. Gentleman give way?

[Ed Balls]

I will happily give way to the hon. Lady. Perhaps on behalf of the thousands of pensioners in her constituency who will lose from the tax grab, she will tell us whether she supports the Chancellor.

[Andrea Leadsom]

I am grateful to the shadow Chancellor. Is he as delighted as I am that we will be introducing within the next couple of years a single, unmeans-tested pension at a significantly higher rate than the current one?

[Ed Balls]

We will have to wait to see the details. There will be some winners and some losers, but the one thing that we can categorically confirm today is that thousands of pensioners in the hon. Lady’s constituency will lose up to £300 a year as a result of yesterday’s Budget. She did not say whether she supported that—hardly a clarion call of support for the Chancellor’s pensions tax grab.

--- Later in debate ---

[Andrea Leadsom]

Will the right hon. Gentleman give way?

[Ed Balls]

No.

I am going to read again what the Business Secretary said on the top rate of tax, because it is such a great quote:

“Some believe that if taxes on the wealthy are cut, new revenue will miraculously appear. I think their reasoning is this—all those British billionaires who demonstrate their patriotism by hiding from the taxman in Monaco or some Caribbean bolt-hole will rush back to pay more tax but at a lower rate. Pull the other one.”

I have to ask him then: why is he going to stand here today and defend a Budget that tries to do just that?

We all know what the Deputy Prime Minister said last September. Let me tell the House—if anyone is interested in what he says. He said:

“I do not believe that the priority at a time like this is to give a tax cut to a tiny, tiny number of people who are much, much better off than anybody else.”

Let us be honest. None of us is remotely surprised that the Deputy Prime Minister has completely capitulated, just as he did on VAT, tuition fees and the NHS, but the Business Secretary is another matter. He knows that our proposal to kick-start the recovery is right because he told the Chancellor to do it. He knows that our proposal to set up a business investment bank is right because he told the Prime Minister to do it. And he knows that cutting the top rate of tax now is the wrong priority, deeply unfair and a betrayal of his and his party’s values and progressive tradition.

We all know all we need to know about the Deputy Prime Minister, but we all had—and have—higher hopes for the Business Secretary. I have to say to him—and to his colleagues—that I understand the incredibly difficult position he is now in, but I have to ask him: what on earth would the Vince Cable of five years ago think of what he is doing now? As the sketch writer in The Independent wrote last week:

“Vince has been so hammered by events…It isn’t clear any more that he could ‘press the nuclear button’ hard enough to make it go off.”

Prove us all wrong, Vince—prove us all wrong.

The Chancellor used to say, “We’re all in this together.” Not any more. In tough times, the choices that this Tory-led Government are making tell us everything we need to know about them and how totally out of touch they are with what life is like in our country. Here are the facts. The Chancellor’s plan has failed. Trying to raise taxes and cut spending too far and too fast has backfired. The country needs a Budget for growth and jobs. Instead, we got more of the same, and with his tax cut for millionaires, he is piling insult upon injury for millions of families and pensioners across this country.