Finance Bill

Bobby Dean Excerpts

Committee of the whole House
Tuesday 10th December 2024 Commons Chamber

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

We come to the final Back-Bench contribution, and have saved the best until last. I call Bobby Dean.

[Bobby Dean (Carshalton and Wallington) (LD)]

Before I address capital gains tax directly, I will make a few short remarks about the state of the national conversation about tax more generally, which I think is highly relevant. I note that tax is always something to be “hit by” in politics—it is violent; we are “hammered” by it—so the debate ends up focusing on who is deserving or undeserving of such punishment. As a result, few organisations are viewed as legitimate targets for taxation. Very rarely do we in politics have the bravery to talk about the virtue of paying tax—what it pays for, how it benefits us all, and why collectively contributing to schools, hospitals and physical infrastructure is sensible investment that we should be proud to make.

That is where the political conversation falls slightly out of step with the mood of the public. Believe it or not, I have had conversations about tax on the doorstep, and I mostly meet people who are proud to make that contribution. Let me be clear: this is not some special plea to talk about tax in a warmer, fuzzier way in order to improve the civility of public discourse. Nor should it be confused for advocacy of a high-tax based economy. I raise that point because our distorted public conversation means that we end up with a dysfunctional tax system that is neither efficient nor equitable. Where we are with capital gains tax is a good example of that.

Decades of wrangling over whether capital gains tax stifles entrepreneurship or is merely a ruse for the rich often results in a pretty reductive focus on rates. It seems that that happened again in the Budget, and I fear that we have missed an opportunity to make that tax better. As others have explained in putting capital gains tax into context, it is paid by around 350,000 people and raises around 2% of total tax revenue, and 12,000 people account for two thirds of that revenue. That tax does not necessarily affect a broad section of society, but it does play an important role in investment in the economy and in the overall sense of fairness in our system.

Let me start with the economy. It makes no sense to me for the Government to make changes to capital gains tax without sorting out the tax base. If we do not index capital gains for inflation, we are not really taxing the thing that we say we are taxing. We should be focused on the real gains—otherwise, we risk taxing those who simply hold on to an asset for a long time, and ultimately we end up discouraging long-term investment.

Secondly, we ought to be targeting capital gains tax at those making the larger gains—if large gains are to be had, those investments will be made anyway. Smaller gains, however—the stuff at the margins—are where investment decisions could be at risk. Raising the CGT allowance a bit would go a long way towards addressing that, as would designing better-targeted reliefs that more precisely encourage investment.

Finally, we come to capital gains tax rates, whose alignment with income tax rates is often called for. The Government have of course moved a bit on that, but a focus on rates alone means that an inherent unfairness remains. There would still be the sense that there is one rule for small businesses and another for the giants. When he appeared before the Treasury Committee, Paul Johnson of the IFS remarked on another unfairness: someone can simply leave the country for a few years and dispose of an assets overseas—somewhere like Monaco—and they are then no longer responsible for capital gains tax. That is another inherent unfairness.

Ultimately, with the proposed changes only, the system will continue to disproportionately benefit the very wealthiest. It is for that reason that I cannot support the measure. If it passes, I hope the Government will consider carefully the impact of the change in isolation, and whether further reforms are necessary in future. Our tax system needs to ensure that everybody pays their fair share, and I do not think the Government have quite got this one right yet.

[The Chairman of Ways and Means (Ms Nusrat Ghani)]

We come to the Front-Bench wind-ups. Does the shadow Minister wish to speak?

Winter Fuel Payment

Bobby Dean Excerpts

Tuesday 10th September 2024 Commons Chamber

[Sarah Olney]

I thank the hon. Member for his intervention, but it is important to reflect on the disastrous legacy of the mini-Budget and the circumstances that many people continue to struggle with thanks to higher interest rates on their mortgage payments. Certainly, from the perspective of my constituents, that casts a much longer shadow, which the winter fuel payment cuts will do nothing to ameliorate.

Last week, I asked the Chancellor if she would give her full support to measures to boost the uptake of pension credit. I welcomed her commitment to work with the Secretary of State for Work and Pensions to maximise the take-up of pension credit by bringing forward the administration of housing benefit and pension credit—

[Bobby Dean (Carshalton and Wallington) (LD)]

We have spoken a lot about the take-up of pension credit in this debate already, but it is important to say that 800,000 pensioners—I think that is what the Minister said—are still not taking it up. Those people will, by definition, be harder to reach and the most vulnerable. I do not understand how the Government can, in good conscience, take away this guaranteed benefit at a time where there is no certainty whatsoever about their being able to get the other people signed up to pension credit in time.

[Sarah Olney]

I welcome my hon. Friend’s intervention. He makes an important point, although I would say that I welcomed the Chancellor’s commitment last week to work with older people’s charities and local authorities to raise awareness of pension credit. None the less, he is exactly right that many people will have this benefit taken away without knowing that there is pension credit for which they are eligible and should claim.

As the Lords Secondary Legislation Scrutiny Committee has highlighted, the DWP has assumed that the uptake of pension credit will increase by just five percentage points, and that will still exclude around 700,000 pensioners. Have the Government made a proper assessment of what the impact will be if uptake of pension credits increases by more than that amount? I continue to call for assurance that the Government will ensure that all those eligible for pension credit claim both the benefit itself and the winter fuel payment.

We will be voting against the scrapping of this stream of support for pensioners. Although we recognise that the Government face difficult choices given the appalling mess left by the Conservative party, the Liberal Democrats will continue to advocate for the necessity of winter fuel payments. The mismanagement of our economy by the outgoing Conservative Government has left formidable challenges and we understand that undoing that damage will not be easy.

Budget Responsibility Bill

Bobby Dean Excerpts

2nd reading
Tuesday 30th July 2024 Commons Chamber

[Bobby Dean (Carshalton and Wallington) (LD)]

I congratulate the hon. Member for East Renfrewshire (Blair McDougall) on that heartfelt speech. It was gracious of him to say that his was not the most beautiful of constituencies, but I think he is at least in the top 600 and possibly even higher after one or two whiskies. I also congratulate the hon. Member for Glasgow North (Martin Rhodes) on his maiden speech. The points he made about engaging with the public and making sure that we restore trust in this place are really important.

I am not going to speak about Scotland in my maiden speech. I am going to start by talking about where I came from. My parents are in the Gallery and I promised to stay grounded, so this is the place I want to start. I grew up on a council estate as the eldest of three boys. My dad worked long hours as a scaffolder and my mum worked two jobs, one in Burton’s by day and one as a cleaner at night. Things were not always easy, and times got so tough at one point that, as a young teenager, I moved into the care of my grandparents. I have found out in recent years that this is called kinship care. It is a pretty formal-sounding name, but it is basically where family agree to take on family. I am very grateful to my Nan and Pops for helping me back on to the right path, and I know that they would have been very proud of me if they had got to see this day.

Of course, it was not just family that got me here. I have had encouraging teachers, supportive friends, guiding therapists, a campaigning wife and a totally unreasonable bunch of people called activists who volunteer a silly amount of time to the cause. To all those that have been involved in my messy pathway to now, and especially to the people of Carshalton and Wallington who have put their faith in me: thank you. I am utterly humbled to be here and I do not take this responsibility lightly.

I had planned on describing my constituency of Carshalton and Wallington as a hidden gem, but since I started in this place a few weeks ago, I have kept bumping into staff that live there, so it is clearly a popular place. For those that do not know, Carshalton and Wallington is on the south London border with Surrey—or in Surrey, depending on who you speak to. I describe it as hidden because, despite being a London borough, you will not find us on the tube map. There are no London underground or London overground services in our borough, and this is an issue that I will return to at a later date. But my constituency is a gem. I am not going to say it is the most beautiful, but it is pretty beautiful. It has beautiful ponds and many award-winning parks, and we have the historic River Wandle and so many good pubs that it is really difficult to avoid them at the weekends.

I would like to take this moment to recognise my predecessor, Elliot Colburn. This House will remember when he bravely spoke out about his own struggles with mental health. I have great respect for his willingness and openness to share his story, and I am certain that his bravery will give courage to others to speak up and seek help, too. I would also like to put on record my recognition of another predecessor, Tom Brake, who served my community of Carshalton and Wallington for over 22 years. He is a true local champion, and he is still spoken about fondly on the doorstep. The House will probably be aware of his tireless campaigning for St Helier hospital, and I plan to take up that issue at a later date, too.

There is much more I would like to share about my constituency over time but, unlike the hon. Member for East Renfrewshire, I will not take up that time now because I am keen to get involved in today’s debate as well. I want to start by joining my hon. Friend the Member for Richmond Park (Sarah Olney) in welcoming the thrust of the Government’s proposals to give more powers to the Office for Budget Responsibility to scrutinise major fiscal announcements. The inappropriately named mini-Budget sent shockwaves across the country, with mortgages soaring, pensions on the brink of collapse and market confidence damaged so badly that I feel we will be dealing with the trust issues caused by that disruption for quite some time.

Yet the state of our country’s finances is not just down to one fiscal event. The populism that infected everything that the last Government did was laid bare by the Chancellor yesterday, and I am so angry about the mess that has been left behind. It is always the most vulnerable that suffer the most when the Government gets things so drastically wrong, and we must never let such reckless gambles be taken with our country’s finances ever again.

While I am optimistic that the fiscal lock will provide the public and markets with some reassurance on this, I do hope that the Government do not feel locked into one particular model of fiscal management. The key lesson to take from the disastrous mini-Budget should be not that there is only one way to run the economy, but that, whatever choices the Government make, they should be informed by good information and stand up to rigorous analysis. It will be my intention from these Benches to encourage the Government to take seriously the calls from many respected economists to ensure that fiscal responsibility goes hand in hand with maximising the growth potential of the country over the long term. This is particularly relevant to major capital investments such as the rebuilding of St Helier hospital in my constituency. Our local NHS trust faces huge costs every year trying to maintain an unfit building. We must not forget that there is a cost to not investing, too.

When talking about growth, let us remember that it has not only a rate but a direction, and that necessarily involves political choices and cannot be left to expert analysis alone. While the OBR can rightly describe what actions will increase growth and by how much, we in this House still have a crucial role to play in selecting what actions will meet all of society’s goals. A purpose-driven industrial strategy, as proposed by the Liberal Democrats, will ensure that we deliver the right sort of growth, not least in relation to green industries.

The Chancellor is right to reiterate that the Government should not commit to any unfunded spending pledges, but there are many ways to fund the investment we so desperately need in our public services, and we do not have to increase tax on ordinary workers to do so. If the Chancellor is stuck for ideas, I would invite her to have a read of the Liberal Democrat manifesto, which includes ideas such as raising capital gains tax and reversing the Tories’ cuts for banks. There are fairer ways of raising the revenue we need, and we should look at them seriously.

It is at this point that I look back up to the Gallery, and I have some regret that my maiden speech was on the intricacies of fiscal responsibility. If Members would indulge me for a moment, before I close, I would like to make a brief translation by putting my points into footballing terms—Dad, this is mainly for you. The former manager played six up front and got hammered, but that does not mean that the new manager has to revert to a defensive five at the back. There are many different styles of play out there, and I think some will have bigger rewards. So let us get the balance right and get our country winning again.

[Madam Deputy Speaker (Ms Ghani)]

No doubt your mum and dad enjoyed that up in the Gallery. We now have another maiden speech—I call David Burton-Sampson.