Taxes

Debate between Charlie Maynard and Ashley Fox

Wednesday 12th November 2025 Commons Chamber

[Sir Ashley Fox (Bridgwater) (Con)]

During the general election, the Labour party said that it would not increase income tax, national insurance or VAT. It repeated that it would not increase taxes on working people. In its manifesto, it said it would increase spending by only £9.5 billion and that that was to be paid for by £7.3 billion in extra taxes and £3.5 billion in extra borrowing. That was a modest plan with a prudent margin. It was a plan put forward to the electorate to show that the party could be trusted with the public finances. My constituents might be surprised to learn, however, that if they now look on the Labour party website, that manifesto is rather more difficult to find than it was a couple of months ago.

It is fair to say that we Conservatives did not believe them, so we were not entirely surprised when, within weeks of moving into Downing Street, the Chancellor told the country that she would have to raise taxes after all. She had apparently found a magical £22 billion black hole. I say “magical” because nobody other than the Government seemed able to locate it—certainly, the Office for Budget Responsibility could not find it. It was, of course, a fiction to give the Chancellor cover for what she always intended to do, which was a massive increase in taxes, borrowing and spending, because that is what Labour does. Dogs bark, cats miaow and Labour increases taxes, borrowing and debt.

In her first Budget last year, the Chancellor did not raise taxes by the £7.3 billion promised in the manifesto. She increased taxes by £40 billion. She increased borrowing not by the promised £3.5 billion, but by £32 billion. And believe it or not, she did not increase spending by the promised £9.5 billion. She increased it by £72 billion. The Chancellor imposed £40 billion of extra taxes on our economy. She increased employer national insurance, stamp duty and capital gains tax and she imposed extra taxes on family businesses and family farms, then she pretended that none of those were taxes on working people.

[Charlie Maynard]

Will the hon. Member acknowledge that debt has risen from £0.5 trillion to £2.9 trillion from 2005 to 2026, forecast to March? That is nearly six times as much, and the great majority of that happened under the Conservatives’ watch. Yes, we can talk about covid, but covid is a very small portion of that—about £0.7 trillion—so what about the rest of it? Is anyone going to take any responsibility for that?

[Sir Ashley Fox]

The hon. Gentleman will know that the Liberal Democrats joined a coalition Government in 2010 with the Conservatives. We inherited a deficit of £156 billion in 2010—11% of GDP—and it took 10 years, to 2020, to reduce that steadily to 2% of GDP. For all the moaning and whining from the Labour Benches about austerity, what we were trying to do—as a coalition Government for five years and as a Conservative Government for the remainder—was to live within our means, and that is tough. That is really difficult. It is about improving public services, but without necessarily hosing money at them. We see that most successfully in the field of education. In England we have seen a dramatic increase in reading standards and the standards of examination of English pupils caused by genuine reforms. That compares very favourably with what has happened in Scotland and Wales, where those reforms did not take place. The skill of government is in improving public services without always spending more money. The Liberal Democrats used to have a few Members who were called “Orange Book” Members. It is a shame there are so few of them left.

Who does the Chancellor think she is kidding when she says she has not increased taxes on working people? Try telling the farmers in my constituency that they are not working people, or the young family where both parents work and are saving to pay the stamp duty on their first home. As Labour Members will recall, that first Budget was not well received, so to draw a line under her broken promises, the Chancellor said:

“We’ve now wiped the slate clean. It’s now on us. We’ve put everything out into the open, we’ve set the spending envelope for the course of this Parliament. We don’t need to come back for more.”

Except we know that that is not true. She is coming back for more. She is now set to break that promise again by putting up taxes again.