Income Tax

Andy Sawford Excerpts

Wednesday 28th November 2012 Commons Chamber

[Rachel Reeves]

Given the cuts to departmental budgets, it is not surprising that some applications are not being processed and that, as a result, families are missing out on the tax credits to which they entitled, pushing them further into hardship.

How will households throughout the country feel next year, when those earning more than £1 million get a tax cut of £107,000? What is the Government’s message to people who work hard and want to get on in life? We remember when the Conservatives liked to think of themselves as the party of aspiration. Baroness Thatcher liked to claim she stood up for people who wanted to work their way up, and yet, under this Government, people who get a pay rise or promotion lose their child benefit. Imagine that! A person who earns £49,000 a year and has three children will lose thousands of pounds in child benefit if they take a pay rise or promotion. What a terrible position to put people in.

The truth about the Government is this: pensioners pay more, low-paid parents pay more, and a family working hard to get on in life and provide for their children pay more, but millionaires pay less. That tells us everything we need to know about the Government and their values. For many, 2012 will be remembered as the year the Chancellor’s drastic cuts began to hit home, but for the richest, 2013 will be remembered as the year they received their tax give-away from this Robin-Hood-in-reverse Chancellor.

Last week, the Prime Minister compared the economic situation we face to war. It is true that we are facing a period of national upheaval, but that is why it is crucial that the Government are a uniting force, not a dividing one. Is this really the time for a tax cut for the richest? During the second world war, the public queued to get their copy of the Beveridge report, because it set out the beginnings of a welfare state in which everyone had a stake. In the period of reconstruction after the war, that spirit and sense of national mission led to the creation of the national health service.

The Government do not understand the need for one nation politics, or the need to take people with them and share the burden of sacrifice fairly. Instead, they will be remembered as a Government who divided. Indeed, of the richest who are receiving the tax give-away, 85% are men, but around 70% of the revenue raised from direct tax and benefit changes will come from women. Fifty-two per cent. of those benefiting from the millionaires’ tax give-away are based in London and the south-east, but long-term unemployment is rising in the north. The poor are expected to work harder, because otherwise they will be made poorer, but the rich will work harder only if they are made richer. There is one rule for the very richest and another for everybody else. It is the same old out-of-touch Tories.

When the Chancellor came to the House to deliver his 2011 Budget, he said that

“now would not be the right time to remove it when we are asking others in our society on much lower incomes to make sacrifices”.—[Official Report, 23 March 2011; Vol. 525, c. 957.]

He was right then, and he is wrong now. He revealed his true colours in this year’s Budget.

[Andy Sawford (Corby) (Lab/Co-op)]

Does my hon. Friend recall the remarks of the parents whom she and I met at the Pen Green centre in Corby, who spoke about many local priorities, including vital local services such as our hospital? They did not believe the millionaires’ tax cut was the right priority for people in Corby and east Northamptonshire or for people throughout the country.

[Rachel Reeves]

Although my hon. Friend has been in the House for a lot less time than many Government Members, he speaks more sense than they do, on behalf of his constituents in Corby and east Northamptonshire, who sent a clear message to the Prime Minister two weeks ago when they elected my hon. Friend and booted out the Conservatives. He is right to stand up for their interests. They do not want the tax cut for millionaires; they want help for ordinary families, for pensioners and for young people getting back to work. That is what people in Corby and the rest of the country want.

The Chancellor waved goodbye to the pretence of being on the side of working people in this year’s Budget. He waved goodbye to saying, “We’re all in this together,” and, “Those with the broadest shoulders should bear the greatest burden.” The Budget was the U-turn that revealed his true motives and told people for whom he stands. People will not forget that, when times were tough and they needed support, the Government cared only for those who needed it least. The Tories are back to doing what they do best. It is the same old out-of-touch Tories.