Income Tax (Charge)

Debate between Emma Reynolds and John Hayes

Monday 4th November 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Emma Reynolds)]

I am proud that last week we saw the first Labour Budget in almost 15 years delivered for the first time by a woman, my right hon. Friend the Chancellor. This was recognised by my hon. Friends the Members for Monmouthshire (Catherine Fookes), for Basingstoke (Luke Murphy) and for Paisley and Renfrewshire South (Johanna Baxter), and indeed by Members across the House including the hon. Members for South West Hertfordshire (Mr Mohindra) and for South Devon (Caroline Voaden).

This is a Budget for jobs, opportunities, investment and economic growth that drives down poverty and protects the payslips of working people. It is a Budget that invests in skills and our economic foundation and delivers the change that we promised during the election. Crucially, it is a Budget that restores economic stability and begins the vital work needed to rebuild our public services, which were left in a state of ruin by the Conservatives. The NHS, schools, roads, affordable housing: that is the difference that a Labour Government make.

This was a lively debate with many contributions from across the House and I want to congratulate all hon. Members, even if I did not agree with them all, on keeping to strict time limits of two or three minutes. I particularly welcome my three hon. Friends who gave excellent maiden speeches. My hon. Friend the Member for Huddersfield (Harpreet Uppal) spoke movingly and proudly about her late mum’s role as a care worker, and spoke proudly about the industrial and sporting heritage of her constituency. My hon. Friend the Member for North Somerset (Sadik Al-Hassan) spoke proudly of his constituency being home to the first mass production of penicillin. His experience as a pharmacist will be very valuable to this House. My hon. Friend the Member for Wrexham (Andrew Ranger) explained that Wrexham association football club is the third oldest in the world. That was news to me, and I was glad to hear about that. He also said that his constituency is home to the world’s oldest lager brewery and to other thriving breweries and major manufacturing companies. I would like to thank my hon. Friends for those maiden speeches.

Many hon. Friends and Members across the House welcomed the Government’s allocation of funding to two vital compensation schemes: those for the contaminated blood scandal and the Horizon Post Office scandal. The previous Government talked about those schemes but did not allocate any money for them.

I know that many hon. and right hon. Members are concerned about the changes to agricultural property relief, so I want to say something about these changes and in particular to answer the hon. Member for Mid Buckinghamshire (Greg Smith), one of my neighbours. A couple who jointly own a farm will be able to pass on land and property valued up to £3 million to a child or a grandchild tax-free. That is made up of £1 million when they combine their standard £500,000 tax-free allowances and an additional £1 million tax-free allowance each for agricultural property inheritance. I hope that gives some comfort to hon. Members across the House. At least the former Chancellor but one, Kwasi Kwarteng, was honest about the track record of the previous Government when he said last week:

“We Tories have to be honest—Rachel Reeves is dealing with our mess”.

This is a once-in-a-generation Budget that turns the page on Tory austerity and economic chaos. In addition to the £20 billion black hole in our public finances, with the last Government spending Treasury reserves three times over, there is also a record number of people relying on food banks, 700,000 more children growing up poor, the biggest increase in economic inactivity in the UK for 40 years, millions on NHS waiting lists, crumbling schools and overflowing prisons. We are determined to fix these problems.

Many hon. Friends mentioned the increase to the national living wage that we have introduced, by 6.7% to £12.21 per hour, which will be a pay rise for 3.5 million people across the country. We are also moving towards a single national minimum wage for all eligible adults, starting with the biggest-ever increase to the rate of pay for 18 to 20-year-olds, which will help nearly 200,000 young people—that is a difference that a Labour Government will make. In addition, our youth guarantee will help young people to fulfil their potential and follow their dreams.

[Sir John Hayes]

I am grateful to the hon. Lady for giving way, as she does not have much time. As an economist, she knows that it is not what we spend but what we get for it—it is value for money that counts. What is she specifically doing about productivity, which is a perennial problem in many countries, including our own?

[Emma Reynolds]

First, we want to escape the doom loop of low growth and low productivity that we inherited from the previous Conservative Government. Each Department will have to meet a 2% productivity challenge. This is not a cut to departmental spending but a Treasury requirement to ensure better productivity across the civil service.

Our Get Britain Working White Paper, which we will announce in the coming weeks, will set out reforms to our jobcentres and will empower local leaders to tackle economic inactivity in their towns and cities. This is backed by £240 million of new funding for 16 trailblazer projects. It is because we recognise that many working people face extra barriers to taking up work or increasing their hours that the Chancellor announced the biggest-ever rise in the earnings limit for carer’s allowance to help carers balance work and caring responsibilities. That is a difference that a Labour Government will make.

We will also tackle poverty and help those most in need, which is why this Budget extends the household support fund in England and discretionary housing payments in England and Wales. After conversations with the Trussell Trust, the Joseph Rowntree Foundation and many others, we are introducing our new fair repayment rate, which will reduce the cap on deductions from universal credit from 25% to 15% of the standard allowance. This will help 700,000 of the poorest households with children. And because people who have worked hard and saved all their lives deserve security and dignity, we are maintaining the triple lock, which will see state pension rises of around £1,700 over the course of this Parliament.

This is the first Labour Budget in almost 15 years. We shun the choices of the last Conservative Government. They chose low growth, low productivity and decline in our public services. We choose investment and growth, restoring economic stability, fixing the foundations, rebuilding the NHS and our other public services, pushing forward with a decade of national renewal, recruiting more teachers, bringing down NHS waiting times, building more affordable homes and, yes, filling more potholes.

This is a Budget that makes a choice about rebuilding our public services, rebuilding Britain and investing in vital infrastructure. This is a Budget that invests in the future of our country, and I commend it to the House.

Ordered, That the debate be now adjourned.—(Anna Turley.)

Debate to be resumed tomorrow.