(1 year ago)
Commons ChamberToday, the Chancellor confirmed what the British people already know—that there is nothing the Conservatives can say or do to hide their 13 years of failure. Government Members may have been patting each other on the back during the Chancellor’s statement, but the British people will not be celebrating. After everything that we have heard today: taxes will still be at their highest during peacetime; inflation is forecast to be higher in the years ahead than it was according to the Office for Budget Responsibility’s forecast in March; mortgage payments will still be rising for millions as their deals end; and after 13 years of low growth, we are still on a path of decline, with economic growth forecast for next year slashed by more than half.
Nothing that the Conservatives have said today will overcome the damage that they have done over the past 13 years. Nothing that they have said will overcome the cost of living crisis that families across the country are facing. Household incomes will still be 3.5% lower next year in real terms than before the pandemic, the biggest hit to living standards on record. Inflation has been upgraded in every year of the forecast period, with prices now set to be 7% higher at the end of the forecast period than the OBR forecast them to be in March. The truth is that working people are worse off under this Conservative Government.
I am sure the Chancellor will want people to focus on his announcement of a cut in the main rate of employee national insurance, but, frankly, coming after 25 tax rises in this Parliament alone, it is insulting to suggest that the British people will be fooled. Under the Conservatives, the tax burden is set to increase by £4,300 per household. Let us not forget, that, just two years ago, the Chancellor and the now Chief Secretary to the Treasury walked through the Division Lobby to put national insurance up. They may wish to forget that, but the British people will not. It is as if the Tories have nicked your car, but expect you to be grateful when they pay for your bus fare home.
After 13 years of low growth, and with taxes already at their highest level in more than 70 years, the British people will see straight through this Government’s desperate attempts to woo them. It had been rumoured that the Government were planning to cut inheritance tax in this statement. Of course, people want to be able to pass on what they have worked hard for to their children, but in the middle of a cost of living crisis, when families face rises in mortgage costs, in prices across the board, and in NHS waiting lists, we simply could not understand how the Conservatives saw that tax cut for the wealthiest 4% as a priority. The truth is that this would have been the wrong tax cut—
On a point of order, Madam Deputy Speaker. Is it appropriate for the Opposition spokesman to be talking about measures that were actually not announced today?
All our constituents who pay mortgages are concerned about the increase in rates. Did the hon. Member hear the Governor of the Bank of England accept yesterday, as he has in earlier Treasury Committee sessions, that it is the Bank of England taking independent decisions to tackle inflation that has led to those increases? The hon. Member is wrong to label them “Tory” mortgage increases.
The Opposition accept the independence of the Bank of England, unlike some Government Members, but frankly that was a fairly shameless attempt by the hon. Member to distance herself from what the Government did to the economy last year in their disastrous mini-Budget. The British people will not forget, as they are still paying the price.
(1 year, 5 months ago)
Commons ChamberIt is important, briefly, to first recognise the context in which we consider amendments and new clauses to the Bill. Yesterday we heard the news that the average rate for a two-year fixed-rate mortgage has now breached 6% for the first time since December. That news will leave the 400,000 people across the country whose existing fixed deals end between July and September feeling anxious and fearful. They face the prospect of having hundreds of pounds less in their pockets each month when their current deal expires and they have to re-mortgage. That is not to mention all those on variable rates, who have already seen their payments rise relentlessly as a result of interest rates going up again and again.
Across the country, mortgage payers are facing interest rate rises above 6% for the second time in 12 months. The first time came in the wake of the Conservatives’ disastrous mini-budget last autumn; now it is because inflation means that banks expect interest rates to stay higher for far longer than anyone feared. The truth is that mortgage payers are feeling pain because the Tories crashed the economy and have no plan to fix it. What is more, we know the current increases in mortgage payments come after 13 years of low growth and stagnant wages. They also come after 25 tax rises by the Government in this Parliament alone, increases that have pushed the tax burden in this country to its highest level in 70 years.
I will begin considering the detail of our amendments on Report by focusing on something very rare indeed: a tax cut from this Government. That tax cut is included in clause 18. Through that section of the Bill, the Government will be spending £1 billion of public money a year to benefit the 1% of people with the biggest pension pots. Ministers may claim that their decision was driven by a desire to get doctors back into work, but since the policy was first announced the Government have flatly rejected any call to consider a fairer and less costly fix targeted at doctors’ pensions.
It is not just Labour who have been questioning the Government’s approach; the Conservative Chair of the Treasury Committee, the hon. Member for West Worcestershire (Harriett Baldwin), said that even she was surprised that Ministers had opted for a blanket cut rather than a bespoke policy for doctors. That is why we will be voting today for our amendment 1, which deletes clause 18, thereby abandoning plans for this blanket change that fails to spend public money wisely. As our new clause 1 makes clear, the Chancellor should finally do what so many have been calling on him to do and produce an alternative approach to pensions that is targeted at NHS doctors and provides taxpayers with value for money.
I put on the record that while the hon. Gentleman quotes me correctly, I underline that I was pleasantly surprised.
I thank the hon. Lady, I think, for that intervention. I am trying to work out exactly what point was being made there, but I think the overall point is clear. There is concern from all sides at £1 billion a year of public money being spent on a blanket change, rather than something targeted at NHS doctors.
That failure to spend public money wisely is evident again in the Bill’s proposal to reduce air passenger duty for domestic flights, the impact of which our new clause 10 seeks to uncover. Again, at a time when public finances are under severe pressure, household budgets are being stretched in all directions and the cost of inaction on climate change grows by the day, it is baffling that a tax cut for frequent flyers is the Government’s priority for spending public money.
The hon. Gentleman is right to describe the state of the economy as a doom loop. It is on a managed path of decline, which even the former Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng) described as a “vicious cycle of stagnation”. The fact is that without any stability or certainty and without a plan for growth, we cannot get the economy out of that doom loop, which is exactly what we are pressing the Government to do.
I know that Conservative Members may be feeling rebellious today, so perhaps they will consider supporting our new clause 6, which requires the Chancellor to follow Labour’s lead and set out a plan for business taxes that increases certainty and investment. The truth is, however, that even if the Conservatives did set out a plan, no one would believe that they would or could stick to it. Everyone knows that this Prime Minister is weak, hostage to his party, and unable to lead. Only a new Labour Government can bring the stability and certainty that businesses need.
That is what we need in order to boost investment, create jobs and grow Britain’s economy. That is what we need to get us off this path of managed decline, to provide security for family finances once again, and to make people across Britain better off.
I rise to speak to new clause 2 and amendment 7, which were tabled in my name and those of all the other members of the cross-party Treasury Committee.
“Taxes are far too complex.”
Those are not my words but the words of the Chancellor of the Exchequer when he gave evidence to our Committee. The amendments to which I am speaking would give legislative effect to the recommendations of the report we published last week on the work of the Office of Tax Simplification. The report is on the Table, and I encourage all hon. and right hon. Members to read it.
Across the House, I think we can all agree that, regardless of the level of tax, the tax system itself has become far too complex. To give an example, as a result of the Committee’s current inquiry on tax reliefs, we have finally found out how many tax reliefs there are in the tax code—1,180. The unnecessary complexity in our tax code makes the tax system expensive and difficult for HMRC to administer, makes the tax system confusing and makes it difficult for taxpayers to understand the choices on offer and the consequences of those choices for their after-tax income.
A complex tax system can be hugely costly for taxpayers and for those responsible for compliance with the tax code. The Financial Secretary to the Treasury was kind enough to give evidence to our Committee on the VAT system last week, and she described it as the “most complex” part of the tax system. VAT creates a crippling compliance burden for small businesses and, as a result, there is a massive pile-up of companies just underneath that £85,000 turnover threshold. This shows that small, potentially dynamic, growing businesses—the engines of our economy—would rather stay under the threshold than deal with the VAT system.
Unfortunately, the VAT threshold is far from the only cliff edge in our tax and benefits systems. At worst, these cliff edges result in people being worse off for earning more money. In recent evidence to a joint session of the Treasury Committee and the Work and Pensions Committee, we heard how people can suddenly find themselves much worse off, after losing entitlements such as free school meals and council tax support, when they earn only a little more money. Indeed, next winter a person who earns an extra £1 will take home £900 less because they lose the cost of living support entitlement, which we reflected in a recent report. People would actually be better off by working less, or perhaps not working at all, and surely that is something we do not want to see in our tax and benefits systems.
(1 year, 10 months ago)
Commons ChamberI thank my hon. Friend for drawing attention to the impact that tax avoidance has on the public purse and on people across this country and to the fact that the Prime Minister probably understands some of these issues very well indeed.
As my hon. Friend set out, people are feeling the impact on this country’s economic growth as we lag so far behind other countries around the world. People are feeling the impact of so many parts of our public services breaking at the seams, and people are feeling the impact as the big challenges of the future get kicked ever further into the long grass.
We need a Government with a plan to grow the economy, with the drive to get ahead of the challenges of the future and with the determination to reform and strengthen our public services. Nowhere is that clearer than with the NHS, as more than 7 million people wait months and even years for treatment, unable to work or to live their lives to the full. We know that, to make the NHS fit for the future and able to support a healthy society and economy, it desperately needs reform and sustainable funding from a growing economy.
The hon. Gentleman is making a typical, anti-aspirational socialist rant straight out of the book called “Politics of Envy”, but he is not actually speaking to the motion on the Order Paper. Why has he put “28 February” in that motion when he could just wait for the Budget on 15 March?
It would only be a Conservative MP who could criticise an Opposition shadow Minister for suggesting that people should pay their fair share of tax.
I was speaking about the NHS, so let us look at the Government record on the NHS and see what can be done. We know that, after 1997, Labour’s reforms and funding from a growing economy meant that our country had an NHS of which we were proud. If we win the next general election, as my hon. Friend the Member for Ilford North (Wes Streeting) the shadow Health Secretary has set out, one of the first steps we will take to get the NHS back on track is to use some of the money raised by scrapping non-dom status to implement a workforce plan that addresses the root cause of the crisis the NHS is in. Under our plan, we would double the number of medical school places to 15,000 a year. We would double the number of district nurses qualifying each year. We would train 5,000 new health visitors a year. We would create 10,000 more nursing and midwifery clinical placements each year.
On a point of order, Mr Deputy Speaker. Is it in order for the Opposition spokesman to be talking in such general terms about a wide range of things, without actually addressing the motion on the Order Paper?