National Insurance Contributions (Secondary Class 1 Contributions) Bill

Dan Tomlinson Excerpts

2nd reading
Tuesday 3rd December 2024 Commons Chamber

[Dan Tomlinson (Chipping Barnet) (Lab)]

It is good to speak in this important debate. This is an issue of much importance, in part because it touches on trust in politics. We know from looking at the datasets that trust in politics has fallen to a record low in this country. People sadly do not trust politicians any more to deliver on the commitments they set out in their manifestos and to bring the change necessary to improve our public services. That is the data we can see, and we can see it because of the decisions of the Conservative party.

[Patrick Spencer]

Does the hon. Member not think that the fact the Labour party went into the last general election promising not to raise taxes on working people might be part of the problem?

[Dan Tomlinson]

We have stuck to the commitments we made in our manifesto, and that is why the British people will see over the months and years to come that they voted for change and investment in our public services, and that is what this Budget makes possible.

When we came into power in July, we faced a difficult economic inheritance. I wish we had taken power in more benign circumstances, but Opposition Members will know that public sector debt had increased to 100% of GDP—the same size as the economy—and trillions of pounds, constraining our ability—[Interruption.] They are chuntering from the Front Bench, but it is true that public sector debt increased to 100% of GDP—a massive increase on the Conservatives’ watch—making it more difficult for us to manage the public finances in a sustainable way, which is what we want to do and what they failed to do.

We also took over after 14 years of failure on productivity and wage growth. If wages had grown in line with the pre-financial crisis trend, families in my constituency and constituencies across the country would not be £100 or £200 better off a year; each worker would be £10,700 better off a year.

[Stuart Anderson]

On productivity, all the public sector wage increases that have been given since the Government have been in power come with no productivity requests or increases. How does the hon. Member square that circle?

[Dan Tomlinson]

I think we will see productivity increases in the NHS, because part of the reason that it has struggled for productivity in recent years is that it has not had the necessary investment, so doctors and nurses have not had the beds and capital expenditure that they need in their hospitals. I have been to Barnet hospital in my Chipping Barnet constituency and spoken to the chief executive of the trust. They were clear that what has happened nationally, and has filtered through to their hospital, is that capital spending budgets have been raided to fund day-to-day spending, and that has made it more difficult for the NHS to be productive. More beds and £3 billion for scanners and other capital equipment will make a difference to productivity in the NHS. [Interruption.] Conservative Members know that that is the case.

Let us just go back to the inheritance that the Labour Government face. We have high public debt, low productivity and wage growth. Our economy has also been hampered because the Conservative party has made it much more difficult for us to trade with our nearest neighbours. That has been bad for competition and productivity across the country. I could go on about the economic inheritance, but I do not wish to make hyperbolic statements or overdo it; we can just look at the facts presented to the Labour Government.

[Bradley Thomas]

When the Conservative Government headed by David Cameron were elected in 2010, the circumstances that they faced following Labour’s trashing of the economy meant that it took two and a half to three years to get the public on board. That stands in great contrast to what happened this summer, when Labour inherited good economic circumstances, with the economy growing and inflation down. In fact, has the electorate not been deceived?

[Dan Tomlinson]

The economy was not growing at a fast pace when we took over; we were growing slower than five other G7 countries in the quarter before the Conservative party lost power. That is the truth. Conservative Members can deny it if they want, and come up with a fancy way to analyse the economic statistics in order to claim that we were the fastest-growing economy in the G7, but in the final quarter before they lost office—and in 2023—we were growing slower than five other G7 countries. We were growing faster than other countries in 2022 only because we were recovering from the pandemic. They know that that is the case.

I fear that, in their stance today, Conservative Members are again covering themselves in the pong of the Liz Truss Administration. That Administration made the mistake of not making efforts to balance day-to-day public spending and tax increases. That is what caused interest rates to rise and the economy to be in much turmoil. The Labour Government are ensuring that increases in day-to-day spending are matched by increases in tax revenues—[Interruption.] I said increases in day-to-day spending are being matched by tax revenues.

[Damian Hinds]

rose—

[Dan Tomlinson]

I will give way.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. The hon. Gentleman has already taken two interventions, and the clock will now continue to run for every subsequent intervention that he takes, just in case he was not aware of that and wants to take this intervention from Mr Hinds.

[Dan Tomlinson]

Maybe I will take further interventions when I speak in tomorrow’s debate, Madam Deputy Speaker, because I know that many Members still wish to speak.

In my final 13 seconds, let me conclude by saying that the risk for the Conservative party is that it forgets the importance of managing the public finances, which gives us the economic stability from which growth can come. By voting against the Government, Conservative Members will make that more difficult, and will signal that they do not wish to have economic stability and growth.

--- Later in debate ---

[Gareth Davies]

There is really nothing to add to that. The hon. Gentleman made that point in his speech and at Treasury questions—it is a very important point.

In just six months, we have hit the highest tax burden in history. Debt is up, with debt interest payments above £100 billion—for the first time ever—in every year of the forecast. Today’s Bill will result in lower wages, higher prices and a tougher employment market. I urge this Government to reverse course, but I will not hold my breath. Instead, I think I can predict what the Minister is going to say. She is going to say three things when she stands up to speak. First, she is going to try to blame the Conservative party—blaming everybody else for this clear political choice. She will not explain the £8 billion on GB Energy—an energy company that will not actually reduce bills or produce any energy—or the £10 billion on public pay splurges that come with no reform on productivity, or £7 billion on rebranding the national infrastructure bank. Perhaps if the Government dropped those pet projects—which will not actually grow the economy—they would have a little more money and would not have to screw with small businesses and make people unemployed.

Secondly, the Minister will forget that she is in government and that I am in opposition. She will ask me what my party would do instead. To that, I simply say that we would fund the NHS well, but we would also reform it.

[Dan Tomlinson]

Would the shadow Minister increase borrowing or increase a different tax, or are there some public spending cuts that he would like to announce?

[Gareth Davies]

I hope the British people are listening to this: none of those things. I remind the hon. Gentleman, although he was not here, that NHS spending increased by 45% in cash terms in the last Parliament under a Conservative Government. The issue is not spending—the Labour party will never get this—but reforming the NHS, as my hon. Friend the Member for Bromsgrove (Bradley Thomas) said. It is about growing our economy faster than the Labour party would grow it, according to the OBR, as my hon. Friend the Member for Isle of Wight East (Joe Robertson) said. We would tackle the welfare bill—£12 billion of savings that we set out in government—and we would boost productivity, because if public sector productivity returned to pre-pandemic levels, £20 billion would be saved.

Finally, the Minister will try to suggest that she is bringing stability, even though businesses and consumer confidence have plummeted ever since she and her colleagues took office. Let us remind ourselves of what she means by stability. In just a few months, we have seen a Downing Street chief of staff sacked, a Cabinet Minister resign, a Back-Bench MP quit the party, key manifesto promises like cutting energy bills by £300 completely dropped, a delayed spending review, fiddled fiscal rules and, just this week, complete confusion about whether the Prime Minister will drop his economic growth pledge. It is all so predictable, yet so damaging to our economy. The Bill breaks Labour’s manifesto. We cannot back it. We will not vote for it. We urge the Government to think again