Tax Fairness

Barry Gardiner Excerpts

Tuesday 12th March 2013 Commons Chamber

[Sheila Gilmore (Edinburgh East) (Lab)]

I am pleased to follow the hon. Member for Rochester and Strood (Mark Reckless) because much of this debate seems to have been spent in an argument between the two coalition partners about how they would define certain types of taxation, and the problem with the amendment is that it has to look two ways at once. The Liberal Democrats have been prepared to break rank on other issues, but this matter is clearly not one of those. Interestingly, it is often on crucial financial or welfare issues that they do not break ranks but keep voting with the Tory-dominated Government, which is regrettable.

These are issues of fairness. We have heard a lot from those on the Government Front Bench and the Liberal Democrats about the increase in the tax threshold, which they suggest is much better than anything else that could have happened—it is better than the 10p tax rate, so we should be satisfied with it. We must remember, however, that for many people that tax threshold was bought at the expense of big losses in things such as tax credits.

For many families, the net effect of such measures means not that they are better off but that they are worse off, and the Liberal Democrats in particular must face up to that. In order to get the tax threshold through —that was clearly part of the coalition agreement—the Liberal Democrats have had to accept some pretty unpalatable things that go with it and, on balance, a lot of low-income households are not particularly grateful for that. The increase in the threshold also has other consequences. It is an expensive way to help the low paid because of the way it goes to everyone, not just the low paid.

[Barry Gardiner (Brent North) (Lab)]

I am following my hon. Friend closely and she makes a powerful case. Does she agree that many of our constituents feel that the Liberal Democrats are not so much ameliorating the Conservative Government as facilitating it?

[Sheila Gilmore]

Indeed, and back in the beginning the decision to go into coalition with the Conservatives—rather than, for example, entering into a looser agreement —was to facilitate many of these measures. In crucial votes of the kind I have mentioned, the Liberal Democrats have not broken rank at all. We have heard a lot of warm words, particularly from the Deputy Prime Minister, about things such as the mansion tax, but when we get down to it, they turn out to be only warm words and not something that Liberal Democrat Members are prepared to stand up for in this House and within the coalition.

Fairness is a large part of what we must all be about. Over the past three years, the very poorest people, those on low earnings or those who, for example, are unable to work because of illness and disability, are bearing substantial contributions that we are told cannot be alleviated because our economic recovery will be put at risk. Over the past few weeks we have had heated debates about the bedroom tax. The issue has been raised on numerous occasions and we have been told time and again that it is essential to make those savings to reduce the deficit.