National Insurance Contributions Increase

Grahame Morris Excerpts

Tuesday 8th March 2022 Commons Chamber

[Jerome Mayhew]

The hon. Member made a number of interventions on the Minister, and I refer him to the full responses that were given.

The question that I take from that is: how we will pay for the proposals? It seems to me that there can be only three answers. We can take money from other priorities in Government, we can borrow, or we can increase taxation. So far, I have heard no suggestions of other areas of Government spending that should be reduced. The Opposition typically move to defence spending as a simple way of extracting money for other commitments, but that is unlikely to be an area of future reductions in today’s environment; in fact, I submit that it will be the opposite.

[Grahame Morris (Easington) (Lab)]

The hon. Member is seeking suggestions. What does he think about the £8.7 billion of personal protective equipment that has been incinerated and gone up in flames? Surely nobody in their right mind would suggest that that is a good use of public money. Is it not possible to claw back some of those costs from the suppliers, if indeed the supplies were defective?

[Jerome Mayhew]

I am grateful to the hon. Member for his intervention. I suggest that a very good use of public money was emergency funding for PPE when we most desperately needed it in a national lockdown. It was inevitable that there would be a trade-off between speed—everyone in the House was cheering the Government on at the time—and maximising the effectiveness of every single contract. I hope that the Government make no apology for the speed with which they dealt with the crisis. They should be commended for that.

It has also been suggested that we should crack down on fraud. The hon. Member for Leeds West (Rachel Reeves) referenced a £4.7 billion headline in covid-related fraud, but she failed to give the Government credit for the actions that they have taken to address that. We have the Taxpayer Protection Taskforce, which has recruited 1,265 staff. We also have the work done on powers for the Insolvency Service and Companies House to link company directors directly to their bounce back loans, which has been used on 61,758 companies, catching loans worth £2.1 billion. The combination of those two factors means that the new estimate, which she did not find time to refer to, is not £4.7 billion but £3.3 billion. Fraud is therefore reduced to an estimated 7.5% of contracts, which is at least within spitting distance of the average for Government programmes of, I am sorry to say, as much as 5%.

--- Later in debate ---

[Grahame Morris (Easington) (Lab)]

Thank you, Madam Deputy Speaker, for calling me to speak in this important debate.

Like the constituents of all Members of this House, my constituents are experiencing a cost of living crisis, but for many in Easington, this is not a new or a temporary crisis. We need only look at food poverty and the normalisation of the use of food banks, many of which have been overwhelmed after a decade of Tory policies. In 2010, the Trussell Trust distributed around 40,000 emergency food parcels; last year, more than 2.5 million parcels were delivered. Shocking though those figures are, they do not even count independent food banks, such as those that operate in my constituency, including the much-valued service run by the East Durham Trust and the Dawdon Community Centre. Those figures, which show the exponential increase in food bank usage, are a sign of economic failure. People should be angry at a growing, Government-imposed cost of living crisis in which millions of families are experiencing hardship, as some of them have for more than a decade now.

There is no doubt about it: the Conservative party is making life harder for ordinary families. As many Opposition Members have said, poverty and policies that lead to increased poverty and inequality are a political choice—a political choice that the Government party has made in this case. Prices are rising: food, energy, fuel, diesel, petrol and housing costs are rising. Government Members were all elected on a promise not to increase taxes, and that includes national insurance contributions, which I understand the Prime Minister himself personally signed off.

We know that the Prime Minister’s political promises, whether made at the Dispatch Box or in an election manifesto, are ephemeral. An average worker’s income will be cut by more than £250 a year due to this national insurance hike. It will wipe out the council tax rebate that Ministers have referred to, as well as half of the Government’s mandatory energy loan.

The majority of my constituents will not see the benefit of capping social care costs because of the relatively low value of their properties. The Government’s policies make the poorest pay to protect the assets of the wealthy and the inheritance of the richest in society; I will come back to that in a moment. They will entrench poverty and economic inequality for generations to come.

This is a bad policy and a bad tax for the communities I represent, who face a social care tax double whammy next month. My constituents suffer not only from the policies of the national Conservative Government, but locally from the Tory-led coalition and alliance on Durham County Council. I quote the Tory leader of the Conservative group, who holds the finance portfolio on the council:

“There is no crisis in adult social care in County Durham. Members must take their information from our council reports and not from primary school level BBC National news reports.”

We have all been put firmly in our places.

Councillor Bell, I am sad to say, is being supported and facilitated by the Liberal Democrats, the Green party and the independents. They will be raising the council tax adult social care precept by 3% in Durham, despite having been elected on a manifesto promise that there would be zero increase in council tax. My constituents are being hit by two Tory taxes to pay for the cost of social care. Of the national insurance contribution we are discussing, I am not sure any of it will go to social care, but we shall see.

I will pick up on a point made by my hon. Friend the Member for Sheffield South East (Mr Betts) about the inherent unfairness of council tax. That tax disproportionately hits the poorest living in low-value properties. In my Easington constituency, of more than 40,000 hereditaments or properties, 75% are in band A. A home in band A in Easington, valued at £80,000, is paying around £29.75 a week in council tax. In contrast, a Russian oligarch’s band H home in Kensington, valued at £125 million, pays just £50.52 a week in council tax. It is a disgrace.

The Government have the wrong priorities, and last night’s votes on the Economic Crime (Transparency and Enforcement) Bill showed that. We do not need more tax—we need fairer tax. They should scrap the national insurance tax hike, work with me and others and with the Fairer Share campaign to scrap council tax, and support a proportional property tax to counter the cost of living crisis.