National Insurance Contributions Increase

Christine Jardine Excerpts

Tuesday 8th March 2022 Commons Chamber

[Rachel Reeves]

I fully agree with the hon. Gentleman. A buy now, pay later scheme for energy prices, based on the premise that prices are going to fall, does not bear any relation to the facts. That is why I say, when the facts change, so should the Government’s policies. They should not just carry on steering the boat in the wrong direction, towards the storm.

It is fair to say that the Prime Minister’s word has recently been deeply discredited, but let me remind the Chamber what he previously said about tax:

“Read my lips: we will not be raising taxes on income, or VAT, or national insurance.”

This is not just another of the long list of broken vows from a leader who has a fleeting relationship with truth and accuracy. This manifesto breach now belongs to the entire Conservative Government and especially the Chancellor, who seems not to want to take responsibility for his own tax rises. Let us not forget that last March, a year into the pandemic, the Chancellor said,

“We’re not going to raise the rates of income tax, national insurance, or VAT.”

This is not just the wrong thing to do; it is a broken promise. It is a clear and flagrant breach of the Conservative party’s own manifesto. They promised the public that they would not do this, and now they are going back on their word.

The Chancellor is not here to defend his new tax on jobs—I do not know why—but it is becoming increasingly clear that rather than help people now when they really need it, the Chancellor is telling his colleagues and briefing newspapers that he will make people wait until an election, when he wants to make a new set of promises to win people’s votes. People need help now and the Government should act now, not play games with people’s living standards. Voters are smarter and savvier than the Chancellor assumes. They have already seen through his buy now, pay later loan scheme, meant to help with energy bills. It is not too late for the Government to look again at Labour’s proposal for a one-off windfall tax on oil and gas producers in order to cut household energy bills by up to £600 this year. The case for our proposal gets stronger by the day, and the Chancellor should adopt it, but instead of easing the cost of living crisis, the Conservatives are the cost of living crisis.

[Christine Jardine (Edinburgh West) (LD)]

The hon. Lady is making a very powerful speech and some excellent points with which I agree. Does she agree that the Government are gambling with taxpayers’ money, rather than investing it? They are gambling that the price will go down, when we all know it will go up, and they are not looking to those people who have made a massive profit over the past two years, both from the energy crisis and in the pandemic, to try to relieve the burden on those who have been hardest hit.

[Rachel Reeves]

Politics is about choices; the hon. Lady makes an important point. This Government are making the choice to increase taxes on ordinary working people and those who employ them, while on the Opposition Benches, we say that those who have benefited from the high energy prices should pay a bit more in tax to relieve the pressure on ordinary working people. We have a Conservative Minister who goes on the TV and radio and says that energy companies and the North sea oil and gas companies are struggling right now. Tell that to my constituents, the hon. Lady’s constituents and all our constituents who are struggling to pay the bills, while the profits keep coming in for the big oil and gas producers.

--- Later in debate ---

[The Chief Secretary to the Treasury (Mr Simon Clarke)]

The world has been appalled by Russia’s unprovoked, unjustified and illegal invasion of Ukraine. Every one of us has been shocked by the scenes of sheer horror that have unfolded over recent days and moved by the bravery of ordinary men and women defending their country against a merciless enemy. As the Prime Minister wrote at the weekend, the Ukrainians’ valour has helped to unite the international community.

We cannot let down that brave nation in its hour of need, which is why we are calling on the world to join forces and maximise our economic pressure on Putin’s regime. That means going further than the unprecedented sanctions that are already in place, including by working with our allies to further isolate Russia from the international financial system and by expelling more Russian banks from the SWIFT network. The cost of inaction against Putin’s war machine would be too great to contemplate; we have seen the price of appeasement before.

We must brace ourselves, however, for the fact that a robust united global opposition to Russia’s unprovoked aggression will have costs of its own. I am acutely aware that the conflict has economic repercussions that largely stem from a higher global energy price that, over time, may spill over into other commodities including wheat. Those repercussions are being felt across the world, including here at home.

That is why, this financial year and next, we will provide over £20 billion to help the public with the cost of living. That includes over £9 billion of direct support with higher energy costs for about 28 million households, with £200 for every household in Great Britain through the energy bill support scheme and a further £150 for every household in council tax bands A to D in England. In total, that means that about 80% of households will receive £350 of support. That builds on our further support for heating bills including increasing the warm home discount, the winter fuel payment and the cold weather payment, which together provided £2.5 billion to households last winter. The £500 million household support fund has been helping the most vulnerable with the cost of essentials over the past months.

More broadly, we are taking further steps to support people’s finances. We have cut the universal credit taper rate by 8p from 63p to 55p and we have increased the work allowance by £500 a year, which will ensure that nearly 2 million people keep more of what they earn and will put an extra £1,000 a year into their pockets.

[Christine Jardine]

Does the Minister appreciate that, for Opposition Members and our constituents, and possibly for many of his constituents, that now seems too little, too late and inappropriate for the situation in which the country finds itself?

[Mr Clarke]

I do not demur; we are faced with a serious challenge on the cost of living. The Government entirely accept that and are working to address it, but we must address it in a smart and financially sustainable way. A £20 billion package is a major commitment to support families across the UK. Of course, we continue to keep all our options under review to ensure that we can act in a way that is commensurate with the severity of the situation.

From next month, we will increase the national living wage by 6.6% to £9.50 an hour for those aged 23 and over, which will benefit more than 2 million workers across the UK by £1,000 a year. We have also frozen fuel duty for the 12th year in a row. That is on top of the help that we are already providing to those on low incomes with their housing costs and council tax bills.