Income tax (charge)

Chris Vince Excerpts

Thursday 31st October 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to speak in this debate in response to the first ever Budget delivered by a female Chancellor. This Government have inherited a mess, and we know that the cause of that mess is the legacy of reckless economic mismanagement left behind by the previous Government.

The Liberal Democrats are glad that the Chancellor has listened to our calls for investment and support for the NHS to start repairing all the damage done to local health services by the Conservatives. We will continue to stand up for our constituents, and press the Government to act with urgency and to provide the support to public services that is so desperately needed. The NHS has been stretched to its limits after years of Conservative neglect, and the Liberal Democrats have been tirelessly campaigning for an emergency health and social care budget to get it back on its feet. We therefore welcome yesterday’s announcements. However, we need to see outcomes, including people being able to see a GP within 7 days, cancer treatment targets being met and people having a dentist appointment when they need one. We will hold the Government to account for delivering on these issues.

Millions of people have a long-term health condition that makes them too ill to work and millions more are stuck on NHS waiting lists. Many others cannot leave hospital because there is no care provision. The Liberal Democrats have always understood that we cannot have a thriving economy and strong public finances until we fix the crisis in health and social care, so we welcome some of the steps that the Government announced in this direction yesterday. The Liberal Democrats have campaigned on improving support for carers. While I am glad that the Government’s review will look again at getting rid of the cliff edge for carer’s allowance and the earnings limit, I hope that the Chancellor and her colleagues will consider a broader review to give family carers the support they deserve. We will hold them to account for ensuring that this new funding is delivered for patients and carers, including through extra GP and hospital appointments.

I also welcome the promise made by the Chancellor yesterday of full compensation for the victims of both the contaminated blood scandal and the Horizon scandal, and I hope that that can be delivered quickly to bring the victims closer to the justice they deserve. The previous Conservative Government yet again showed themselves to be totally shameless with the revelation that, while they promised to compensate the victims of the hideous infected blood scandal, they entirely neglected to set aside the funds to actually pay for them. It is essential that there is transparency in Government spending, and we are glad that the Government are strengthening the powers of independent bodies, such as the OBR, to ensure that taxpayers receive value for money.

We were glad that, during the Chancellor’s Budget, she committed to investing to modernise the systems of His Majesty’s Revenue and Customs using the very best technology, and we are glad that she has committed to recruiting additional HMRC compliance and debt staff. Investing in HMRC reduces the risk to businesses and individuals in navigating the bureaucratic and often complex processes associated with this service. I have heard from businesses in my constituency of the risks they face by not being able to directly speak to someone at HMRC. Strengthening these services with greater resources should benefit not only businesses, but all those required to complete self-assessment. Greater resources will protect citizens from unfair charges, including the loan charge, and allow people to access clear advice and support, making our tax system more efficient.

While I am pleased to support many of the announcements made by the Chancellor yesterday, I am concerned by her decision to raise employer’s national insurance contributions. I fear that this will be deeply damaging to many already struggling small businesses and care providers, so we urge the Government to at least consider exempting social care from the employer’s national insurance tax rise. The Chancellor has provided extra funding for the NHS and other public sector organisations to cover the cost of the tax rise. However, the vast majority of care providers are in the private sector, so will not benefit from this help.

Small businesses are the beating heart of our local economies. For years under the last Conservative Administration, these businesses have struggled, having to carry the burden of rising energy prices, interest rates and the red tape of the Conservative’s Brexit deal. I urge the Government to go further than the announcements made yesterday on business rates by fundamentally overhauling the broken business rates system, which is destroying our high streets and town centres.

The Liberal Democrats believe that there are much fairer ways of raising revenue. Our manifesto set out our calls for a fairer tax system, including raising money by reversing the Conservatives’ tax cuts for the big banks, or by asking the social media giants to pay a bit more. We do not believe that it is right or fair for the Government to instead increase the burden on small and medium-sized businesses, which are the engines of our economy and which are already struggling under the unfair tax system set out by the last Conservative Government.

We welcome yesterday’s news of increased funding for schools. Supporting children and young people must be central to any Government policy. After schools were left to crumble by the last Government, we are glad to see an increased investment in education. However, the Liberal Democrats oppose ending the VAT exemption for independent schools. We do not support taxing education, and we believe parents should have a choice about how they educate their children.

We were disappointed that at no point in the Chancellor’s Budget was there a mention of Europe. The Government cannot indefinitely ignore the damage that the Conservative’s shambolic Brexit deal continues to have on our economy.

[Chris Vince (Harlow) (Lab/Co-op)]

Do you not think the fact that you are supporting all the spending commitments but none of the tax rises is the reason that the Lib Dems will never be in government—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Sit down, please. The hon. Gentleman said “you” twice.

[Chris Vince]

rose—

[Madam Deputy Speaker]

I am not going to allow the hon. Gentleman to continue.

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[Dr Neil Hudson (Epping Forest) (Con)]

May I join you, Madam Deputy Speaker, and colleagues across the House in congratulating the hon. Members for Ribble Valley (Maya Ellis), for Livingston (Gregor Poynton), for Dagenham and Rainham (Margaret Mullane) and for Worcester (Tom Collins) on their fantastic maiden speeches?

We have heard that the Budget was about fixing the foundations of our economy, as both the Prime Minister and the Chancellor have claimed. If that is the case, many of my constituents in Epping Forest will be asking what exactly will be built on those foundations, and they may rightly be concerned that some of that building may well be on top of our precious greenbelt. At its heart, when fixing the foundations is promised but there is no coherent or evidence-based vision to underpin it, a misguided Budget like this one is what we end up with.

Before I go into further details, I must acknowledge some of the announcements in the Budget that I welcome. The freeze on fuel duty, maintained for years by our Conservative Government, is very welcome for my constituents, who no doubt have faced real worries about paying extra at the pump. I very much welcome the increase in SEND funding, which is so important to support our young people with special educational needs. A penny off a pint is welcome, but it is small beer for landlords, who will struggle to pass it on when they are hit by the national insurance rises for employers and the reductions in business rates relief. Reinforced autoclaved aerated concrete has unfortunately blighted a number of schools across my constituency, so the Labour Government honouring the previous Conservative Government’s commitment to funding rebuilding is most welcome, and I hope that we see action soon.

[Chris Vince]

I welcome his welcoming—I am sorry to repeat the word—of investment in schools that have RAAC. Does he agree that the time for the Government to spend money on repairing those schools was when Essex county council recognised the issue of RAAC in our schools in 2012? Had the Conservative Government done so, we would not be in the situation that we are in now.

[Dr Hudson]

The situation with RAAC has built up over many years, under Governments of all colours. It is important that we stand together to sort out the problem as soon as possible so that the educational experience of our young people, and the staff who teach them, is improved. I welcome the fact that we will make progress on that, and I hope that we see action soon in schools such as Buckhurst Hill community primary and Roding Valley high, which I visited just a couple of weeks ago. I discussed these very issues with staff and students.

Unfortunately, however, there are a number of areas in the Budget where putative short-term gain has been prioritised for little to nothing in the long term. With the NHS facing pressures, it is one thing to provide day-to-day funding, but it would be very short-sighted to suspend or withdraw funding for key infrastructure projects that would tackle the long-term issues facing the NHS. The rebuilds of Whipps Cross hospital in Leytonstone and the Princess Alexandra hospital in Harlow, promised by the previous Conservative Government and now put on hold by Labour, are so important for my constituents’ healthcare needs—not just today or tomorrow but in the long term. While I am pleased that the Government have listened to me by honouring the Conservative commitment on the new community diagnostic centre coming to St Margaret’s hospital in Epping, I urge the Government to fulfil those much-needed hospital rebuilds to address the healthcare needs of my constituents and of neighbouring constituents, including the constituents of the Health Secretary.

[Chris Vince]

I thank the hon. Member for giving way on two occasions. I would not normally intervene on a speech twice, but he referred to a hospital in my constituency: the Princess Alexandra. Although he and I may have political differences, I welcome the opportunity to talk about the Princess Alexandra hospital as often as possible. Does he recognise that part of the delay has been caused by the funding not being there for the new Princess Alexandra hospital, and does he recognise the work that I have done in lobbying the Secretary of State for Health and Social Care, who has committed to a new hospital but recognises the challenges, because the funding was just not provided for by the previous Government?

[Dr Hudson]

I thank the hon. Member, who is my neighbour, for his intervention. We have to get on with rebuilding the Princess Alexandra and Whipps Cross, and we need to do it quickly.

I also urge the Government to listen to my constituents’ concerns about the introduction of VAT on independent school fees. This tax on education impacts not only 2,000 pupils in my constituency at independent schools but our excellent local state schools. Some families will unfortunately have to move their children midway through the school year, or in the next year, to some of these fantastic schools, some of which are already oversubscribed, impacting class sizes. Independent schools provide a social good in my constituency and right across the country, providing access to high-quality facilities, and providing access bursaries. For many parents, independent schools are a choice borne out of hard work and sacrifice. For some, they are the best way their children with special educational needs can be supported, amid the difficulties and delays found in the process of receiving and delivering an education, health and care plan. Once again, the supposed short-term gain comes at the long-term expense of our children’s future, and the Government must look again at reversing that punitive measure.

Unfortunately, harming aspiration flows not just through that education tax but in the measures that affect the everyday lives of the working people the Labour Government claim to speak for—if they have finally worked out who “working people” are. If someone strives to own their own business, they will be forced to pay increased employer national insurance contributions for having that aspiration. Business owners will have their business rates relief cut. People who rely on the bus to get to work or appointments will be penalised by the bus fare cap increase from £2 to £3. We Conservatives introduced the £2 bus fare cap, which helps people in urban and rural communities alike, and we promised to deliver it for the whole of this Parliament. The Labour Government have callously ripped up that lifeline bus ticket.

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[Andrew Rosindell]

No, I will not give way.

The Chancellor yesterday painted a dire picture of our country’s future. Under Labour, it is not the economy that is booming but the size of the state, with an ever-increasing burden of taxation on working people. Under this Government, it is not the businessmen in my constituency of Romford who are being supported with the future success of their enterprise but the climate alarmist, with a public energy company that will not even produce any energy. How sensible is that? It is not the young family in areas such as Collier Row or the pensioner in Rush Green—both in my constituency—who are being supported by, for example, a decrease in stamp duty or help with energy payments, but, of course, the union bosses who are able to deliver over-inflated pay rises to the public sector, and the private sector is once again paying for that.

Despite the Government’s talk of growth, this Budget is preparing us for the return of the dark days of the 1970s, with hard-working people paying the price. Indeed, the Government are so lacking in aspiration for this country that they want the Office for Budget Responsibility not only to mark their work but, it seems to me, to do their homework completely. They are even gifting the OBR more powers, as was outlined in the King’s Speech.

In my view, Britain’s potential is far greater than a high-tax, low-growth and dysfunctional big state. Far from my “giving up on Britain”, as the hon. Member for Rossendale and Darwen (Andy MacNae) said—quite the opposite—I love this country, I believe in this country, and I hate to see what socialism has done to this country over the years. Labour Governments always end up in a worse situation than when they started, and Conservative Governments always have to come in and pick up the pieces, and restore the economy back to prosperity and vibrancy again. In five years’ time, I am sure we will have to do the same.

It is now clear that, under this Labour Government, the British people face a tyranny of taxation. Not content with the record-breaking tax burden that already exists, Labour is adding to the load on the shoulders of hard-working people. Under Labour, it will be harder than ever to buy a property. The journey to work of my constituents in Romford who are lucky enough to own their own home is going to be even more expensive than it is already under the control of the Mayor of London, Mr Khan, with the rise in bus fares. Once they get to work, my constituents will have far less in their pay packet, because the increase in national insurance paid by employers will, of course, clearly be passed on to employees. It is nothing but a stealth tax by this supposedly transparent Labour Government, and it is job destroying. Businesses in my constituency have already been telling me that they will not be employing people because of this reckless increase in national insurance. My constituents, all our constituents, might even lose their jobs. [Interruption.] They will lose their jobs, as businesses struggle with the national insurance increase. The costs of that will be phenomenal, and the growth-crushing increase in capital gains tax will also have a big impact.

As if that was not enough, when someone sadly passes away, the Labour Government want to make it even harder for them to pass on what they have earned throughout their life to their loved ones, by expanding inheritance tax to pensions and so on. That is incredibly cruel. People pay tax throughout their life, and will pay more tax when they die. Is that really the kind of thing a Labour Government should be doing? It will harm a lot of families who would inherit but will not be able to because of the cash grab from this Budget.

I do not believe that the Government are pro-worker at all. They cannot even define what a worker is. Labour used to be the party of the state from cradle to grave. Now it seems to be the party of taxing my Essex constituents from cradle to grave and beyond. This has been a very Essex-weighted debate, with contributions from my hon. Friends the Members for Epping Forest (Dr Hudson) and for Harwich and North Essex (Sir Bernard Jenkin), my right hon. Friend the Member for Maldon (Sir John Whittingdale), the hon. Member for Harlow (Chris Vince) and others. People in my county of Essex are very disillusioned by all this, because they are aspirational and hard-working. They are market traders and small business people. They will be devastated by all this. I warn Labour Members that they will find that out when they next knock on doors in their constituency.

As Margaret Thatcher warned us—[Laughter.] Well, she did rescue our country’s economy; let’s be honest about it. [Interruption.] She really did, and we are still benefiting today from the reforms that she introduced. As Margaret Thatcher said, any Government who impose high taxation are taking power away from the people and giving themselves power over the people. Of course taxation at some level is always necessary. It has to be in place to support our nation’s armed forces, to support families and protect pensioners, and for investment in necessary infrastructure and public services for the future. But what are the Labour Government doing with all the hard-earned money that the working people of this country have created? I think they will be spending billions of pounds on things that will go to waste.

[Chris Vince]

Does the hon. Gentleman not think that there was quite a lot of waste under the previous Government? There were dodgy personal protective equipment contracts that did not result in money being spent on PPE. Is that the sort of waste our Government should claw back?

[Andrew Rosindell]

I have to say that I agree with the hon. Gentleman. The last Government wasted a huge amount of money—[Interruption.] No, they did. No wonder we lost the election. But this is not a political point; this is about how we run the country effectively and efficiently. My hon. Friend the Member for Harwich and North Essex made a range of serious points about how we are going to survive as a country. We cannot keep spending money like this. It does not work, and future generations will suffer because of it. The last Government failed, but this Government are going way further. This is all simply unaffordable, and I worry about the future of our country if we cannot see where this will eventually lead.

The Labour Government are spending billions of pounds on a renewable energy company that will not produce any energy—another vanity project. They are spending billions of pounds on public sector wage hikes, and are pouring even more taxpayers’ money into public services, with virtually no concrete productivity targets.

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[Chris Vince (Harlow) (Lab/Co-op)]

It is Halloween this evening, so I thought that I would come as the scariest thing that I could think of—I am wearing a blue tie. More seriously, thank you, Madam Deputy Speaker, for the opportunity to speak in this important debate. I also thank the Chancellor and the Treasury team, including the Exchequer Secretary, who is here today, for the incredible amount of hard work they put into the Budget.

As a former councillor who served on a council that was Labour-controlled for nine of the 14 years of Conservative Government-imposed austerity, I know of the huge challenges involved in putting forward a progress budget, a forward-thinking budget and a budget that gives hope, at the same time as dealing with a gaping black hole in finances.

However, as I often paid tribute to Harlow council’s finance lead, former councillor Mike Danvers, for balancing the books as well as protecting services and staff during those difficult times—something that the Conservative administration that followed were unable to do—I congratulate the Chancellor and her team on performing a miracle, frankly, with the Budget they have presented to the House.

The Labour Government were elected on a manifesto that put economic growth and stability at its heart, recognising that anything else would continue the reckless legacy of the previous Government, and this Budget does just that. We were elected as a Government to make tough decisions and we have shown already that we will not shy away from those tough decisions. We were also elected on a manifesto that focused on fixing the foundations of our NHS, and I am pleased that we have a Budget that will allow my right hon. Friend the Secretary of State for Health and Social Care to do just that.

This Government are providing an additional £22.6 billion of resources to the NHS, delivering 40,000 elective appointments a week to make progress towards a commitment that patients should expect to wait no longer than 18 weeks from referral to consultant-led treatment a reality. The capital investment in public services includes £1.5 billion to deliver capacity for more than 30,000 NHS procedures, over 1.25 million more diagnostic tests and new beds across the NHS. And there is £1 billion to reduce the backlog of crucial NHS maintenance, repairs and upgrades. The Government are investing £1.4 billion to help rebuild our schools; £1.2 billion pounds to deliver extra prison spaces; half a billion pounds to invest in local roads and deal with the dreaded potholes, which we will all be aware of; and £1 billion in new funding for extending the household support fund.

However, Members will be unsurprised to know that, as the new chair of the all-party parliamentary group for young carers, although the carer’s allowance is not paid to young carers, I really welcome the fact that the carer’s allowance weekly earnings limit is being raised to improve financial security for carers and support them into work, or to allow them to work more hours if they choose: 16 hours a week, or £196 a week—a rise of £45. It was with real delight that I was messaged by a friend who suffers from cerebral palsy, to talk about the massive difference that will make to his family. He is going to buy me a pint, apparently, but he also pointed out that the pint will cost less.

[Alex Ballinger]

My hon. Friend has given a long list of the achievements of this Budget, but he has neglected to mention that the Labour party has taken one penny off a pint of beer.

[Chris Vince]

I have cut down on my drinking now, so it does not help me as much as it would have done in the past, but I am delighted that we have done that, and delighted with the many achievements that we announced yesterday.

However, this is just the start. We know that rebuilding our economy, our public services and our country will take time, but I know—this Budget confirms it—that under this Labour Government we have the leadership and the will to make life better for everyone in our society, not just the privileged few.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.