Income Tax (Charge)

Debate between Graham Stuart and Jack Rankin

Tuesday 5th November 2024 Commons Chamber

[Jack Rankin (Windsor) (Con)]

The theme of this debate is public services, but there has been a distinct lack of discussion from Government Members about what delivers the finances necessary to fund those services; this is the Budget, after all. The answer is simply the productive economy, and small businesses in particular.

The Government talk a good game about wanting better funded public services, and each and every one of us in this House would be hard pressed to find a constituent who disagreed, but the Government’s measures—particularly the jobs tax in the Budget, but also their wider agenda in the Employment Rights Bill, through which we are moving to French-style labour laws—are an attack on where that money comes from.

We must always remember that every single penny spent by the British state has to be earned in the private sector. Chucking money at an unreformed public sector while ballooning public sector pay, and doing that on the back of the productive economy and small business, shows a distinct lack of real world, private sector experience among Government Members. My first memories are of my parents going to night school on alternate evenings to get the qualifications they needed to set up their small business. Their aim was simple: to give my brother and me opportunities that they could never have dreamed of. In doing that, they paid hundreds of thousands of pounds—I ended up with quite a prosperous upbringing, I admit—into the Government exchequer. They created apprenticeships and skilled jobs in a tough part of urban Greater Manchester. They not only transformed our lives but improved the lives of children around them, and created opportunities for local people while paying for public services through their taxes.

[Graham Stuart]

Does my hon. Friend agree that the absence on the Government Front Bench of anyone with any experience of running a business, when businesses create the wealth that pays for public services, may explain why the Budget is so financially illiterate?

[Jack Rankin]

I thank my right hon. Friend. That absolutely shows, as we see from the Office for Budget Responsibility forecasts mentioned by my hon. Friend the Member for Isle of Wight East (Joe Robertson). Putting up taxes unsustainably may mean adrenaline into the public sector from an injection of cash, but the medium and longer-term result will be lower growth, which will mean that public services are just getting a larger slice of a smaller pie.

It is clear to me that the tax burden is higher than is necessarily sustainable. Tax rises now will not necessarily flow into greater revenue, particularly in the medium term. I ask the Government to check their approach, support small businesses first and foremost, and focus their public service efforts in the first instance on productivity reforms.