Income Tax (Charge)

Gareth Snell Excerpts

Monday 4th November 2024 Commons Chamber

[Mel Stride]

My right hon. Friend is right that this is another broken promise. At the general election, the now Secretary of State for Environment, Food and Rural Affairs gave an unequivocal guarantee to farmers across the country that there was no question of farms being brought into inheritance tax. There is a good reason for the exemptions and relief, because if inheritance tax is levied on family farms that are passed down to another generation, those farms will have to be broken up, with parts sold off to pay the tax.

I am glad that my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) mentioned this, because the OBR has said that, by 2030, this measure will raise the princely sum of £520 million, which is enough to run the national health service for just one day. Has a more modest sum ever raised so much misery? I think not.

The Chancellor assured us that she will not fiddle the figures by changing the fiscal targets, yet we have seen the fiscal targets changed to allow this Government to borrow an additional £140 billion.

This is not a good time for the Secretary of State to talk about pensioners, but she mentioned them at the end of her speech. They were so badly let down by the means-testing of the winter fuel payment, and they were not told in advance to expect anything like it. Ten million pensioners across the country will lose up to £300 as a consequence of this measure. The Government claim that only the wealthiest, only the millionaires, will be affected, but two thirds of pensioners below the poverty line will have this benefit removed.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I am grateful to the new shadow Chancellor for giving way. I could be wrong, but was he not the Secretary of State who took through the legislation to suspend the triple lock—the one and only time it has been suspended—which has since cost pensioners £500 a year every year?

[Mel Stride]

We fought for the “triple lock plus” in our manifesto, which would have spared millions of pensioners from being dragged into income tax, many for the first time, under this Government’s arrangements. There were, as the hon. Gentleman knows, particular circumstances in October 2022, including inflation surging above 11%.

What are the broad effects of this Budget? The tax burden will rise to the highest level in the history of our country—higher than in 1948, when we first started to collect the data. We will be borrowing a staggering £140 billion over the next five years. What are the consequences of that, apart from passing on debt to future generations, who will have to pay it by way of higher taxation in the future? It is the crowding-out of private business investment, which this Government say they are eager to drive up.

If we look at OBR’s forecast from the spring Budget last year and for inflation in every year under this Budget, it is higher in every single year. Why? Because there has been a huge fiscal splurge, particularly in the first two years of the forecast, that will require a monetary response, so interest rates will stay higher for longer. That will mean, the OBR estimates, an extra 0.25% on mortgages—or over £400 extra for the average family, up and down the country. According to the OBR’s forecast, wages will stagnate across the period, with lower real household disposable income than under the spring forecast, when the Conservative party was in government.

I am surprised that the Secretary of State raised the subject of living standards. The Joseph Rowntree Foundation estimates:

“The average family will be £770 worse off in real terms by October 2029 compared with today.”

I am also surprised that she raised the issue of poverty. When we were in government, we faced so many lectures from Labour Members, while we were bringing poverty down—the number of pensioners in absolute poverty fell by 200,000.

--- Later in debate ---

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I would like to place on the record my congratulations to my hon. Friends the Members for North Somerset (Sadik Al-Hassan), for Wrexham (Andrew Ranger) and for Huddersfield (Harpreet Uppal) on their amazing maiden speeches today.

I listened on Wednesday to the contribution from the hon. Member for West Worcestershire (Dame Harriett Baldwin)—I notified her that I was going to quote her speech—who said that this was

“a Budget of the public sector, by the public sector, for the public sector.”—[Official Report, 30 October 2024; Vol. 755, c. 854.]

She said that as though it were a bad thing. I urge the Government to reject the false dichotomy being set up by the Conservative party, in which investment in the public sector is somehow a drain on the national expenditure, and putting money into our public services is somehow inherently bad for our society and our state.

When I speak to businesses, yes, they raise with me their concerns about national insurance increases— I think businesses have done so with every Member across this House, and it would be foolish to suggest otherwise—but they also ask me questions like, “Can you fix the A50 so we can expand and get more things moving down from JCB?” and “Can you get some proper mental health support so we can get workers back to work quicker when they are struggling with their mental health?” They tell me that they struggle with the supply of skilled young people and are asking desperately for investment in skills to make sure that there is a ready pipeline of young people who can do those jobs. It is therefore completely fatuous to suggest that the investment that this Government are putting into the public sector will be in some way detrimental to the growth of our economy and the success of our private industry.

[Nick Timothy (West Suffolk) (Con)]

Will the hon. Gentleman give way?

[Gareth Snell]

No, there is no time—I am terribly sorry.

I say this as one of those pesky trade unionists the Conservative party seems in such opposition to: when the Conservatives talk about the significant pay for trade unions, first of all, it is not for the trade unions, but for the members of those trade unions, all of whom are working people. Most of them live in Conservative Members’ constituencies, and some of them may have even voted for them—sadly, not all trade unionists vote Labour. However, their pay goes into their pockets, and from there it goes on to their high streets and the shops in their communities. It is not hoarded away as offshore wealth. It is not put into some clever accountancy scheme. It is used to buy kids’ school shoes. It is used to buy Saturday morning breakfast in the local café. It goes back into the economy in a way the Conservatives simply seem to misunderstand.

In the short time I have remaining, I say to the Government: please do not listen to the siren voices that suggest that the investment we are putting in is bad for our economy. It is not. It is good for our state, it is good for our country and it is good for our economy.