Income Tax (Charge)

Helen Morgan Excerpts

Tuesday 5th November 2024 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I declare an interest as a vice-president of the Local Government Association. I welcome the shadow Secretary of State to his place. He responded to my first Adjournment debate on a Thursday before Easter, and I was very grateful, but he will be disappointed to hear that we have not seen the improvements in ambulance response times that we would have liked to see in Shropshire.

Last week’s Budget brought £22 billion of investment for the NHS. By anybody’s standards, that is a big number, so the Liberal Democrats welcome the investment. The NHS was left in a dire state by the Conservatives, and it is clear that something radical must be done. What is the Conservatives’ legacy? Well, we all know: crumbling hospitals, 7 million people on NHS waiting lists for secondary operations, our constituents struggling to access a GP when they need one, dental deserts such as the one in North Shropshire, appalling ambulance waiting times with horrifying outcomes, and a tsunami of a mental health crisis waiting to overwhelm us. It is clear that investment is needed, which is why the Liberal Democrats put the NHS at the front of our election manifesto and our campaigning since.

It is very important that the £22 billion is spent wisely to keep people healthy and to save money in the future, so I look forward to hearing how the Budget will affect the public health grant and mental health services in particular. Those are two really important areas where we can invest to save taxpayers’ money, and to get better health outcomes for people and avoid their suffering in the future.

It is also really important that the £22 billion of investment is not undermined by a decision made by the same Government on the very same day. It is hard to believe that the decision to increase employer’s national insurance contributions and to lower the threshold—at a cost of £566 per person—was properly thought through before the Budget was delivered last Wednesday. That decision is going to hit GP practices, hospices, social care providers and the charities that provide so much additional care outside the formal NHS structure. A local GP got in touch with me over the weekend to say that the decision will

“serve to directly undermine access and patient care at a time when practices are already under strain due to years of neglect.”

Another said it will “kill the family doctor”.

Why will it kill the family doctor? Because GP practices are not eligible for employment allowance. They cannot put up their prices, and their only option is to cut staff and services, which would be a disaster. The Conservative Government proved that if we cut the number of GPs, we end up with a really big problem in the NHS—one that we are fighting now. Labour’s plan to increase the number of GPs, which is welcome, is surely in jeopardy because of the increase to employer’s NICs. The Liberal Democrats are calling on the Government to exempt GPs from the NIC hike or ensure that they are funded to cover it. Otherwise, no one is going to see their GP within seven days—a right that the Liberal Democrats think people should have.

I want to touch on social care, which feels a bit like the elephant in the room and is likely to be significantly affected by the change in thresholds and rates of employer’s national insurance contributions. We all know that the sector is in crisis, and the Budget took note of this but did not really go far enough to address it. I think we can all agree that we cannot fix the NHS without fixing social care. We know that there are thousands of patients in hospital who are medically fit to be discharged and who would recover better in their own bed at home, but who are stuck in a hospital because the social care packages are not available to allow them to return home.

That bed blocking, which is a horrible term, causes patients to be unable to flow through a hospital when they are admitted. It causes the queues of 12, 13 or 14 ambulances that we see outside hospitals in Shropshire on a regular basis, and it means that those ambulances do not arrive when somebody is in a life-threatening position in their community. Social care is so important in dealing with this urgent problem.

[Stuart Anderson (South Shropshire) (Con)]

As the MP for South Shropshire, I have been in the same meetings as the hon. Lady, who represents North Shropshire. In Shropshire, about 80% of council funding goes to social care. Does the hon. Member believe that we need a fairer system to support funding for social care in Shropshire?

--- Later in debate ---

[Helen Morgan]

Fair funding for rural authorities, and indeed all local authorities, is something I have talked about many times in this House, and I absolutely agree with the hon. Gentleman on that.

We saw £600 million allocated to social care in the Budget and an increase in the national living wage, both of which are obviously welcome, but the huge pressure on private providers as a result of the national insurance contributions increase will be really problematic, unless councils are funded to pay those additional costs. It is not clear that the funding announced in the Budget will even touch the sides of the crisis in local government funding or in social care. We all know that this is a thorny problem, and that funding social care is extremely expensive and difficult; that is why cross-party talks are so urgent. I urge the Secretary of State to instigate those as soon as possible, so that we can work towards a permanent fix for social care. Liberal Democrats believe that free personal care on the Scotland model would be the best way of achieving that, and the Institute for Public Policy Research says that we could save £3.3 billion by 2031 by implementing that model. That would be a good investment, because it would save taxpayer money and it would keep people in their homes—where they want to be—with dignity.

The debate today covers other public services, and I want to touch on a couple; education is an important one, and we welcome the investment in it, but I want to talk a bit about SEND budgets and local authorities. Schools are under enormous pressure to provide SEND measures for the children they look after, and local authorities are under huge pressure to provide transport and specialist places. The £1 billion for local government will be insufficient to deal with social care, the SEND crisis and SEND transport. As the hon. Member for South Shropshire (Stuart Anderson) mentioned, Shropshire council is spending about 80% of its budget on social care, so without adequate measures for social care, it seems unlikely that this Budget will address all the problems that local authorities need to deal with.

We are therefore concerned about the decision to put VAT on private school fees. Schools such as Oswestry school in my constituency take a relatively large number of pupils who have failed to thrive in a larger setting. They have special educational needs but no education, health and care plan, and they might even have refused school altogether. There is a risk that those children, whose parents are saving hard to put them into that alternative place, will end up back in the state sector, where their needs are not met. They might refuse to go to school, and the school would struggle to cope with those additional children. The capital expenditure is welcome, and I hope that the demountable buildings at the Corbet school in Baschurch will benefit from that announcement, but I urge the Government to reconsider some of those measures.

On transport, it was disappointing to see the bus fare cap increased, although in Shropshire it will not make any difference, because it is almost impossible to catch a bus anywhere. We would really like to see some of the detail behind the public transport plans announced by the Chancellor, particularly the bus service improvement plan that Shropshire council has put forward, and railway schemes such as the Oswestry to Berwyn line.

Finally—it may be stretching it to call this a point about public services—I believe that farmers provide an essential public service in feeding us, looking after the countryside and protecting the rural environment, and it is disappointing to see that there is confusion between the Department for Environment, Food and Rural Affairs and the Treasury about how many farms will be affected. My sense from talking to local farmers in Shropshire is that the DEFRA numbers are more accurate.

[Peter Swallow (Bracknell) (Lab)]

Does the hon. Lady not see that by opposing every measure in the Budget to raise money while supporting every measure to spend more money on our vital public services, she is creating a bigger problem than the one we inherited from the last Government?

[Helen Morgan]

I thank the hon. Gentleman for his intervention. The point that we are trying to make is that some of the Budget measures will cost extra money. If we look at the detail on the national insurance contributions hike, for example, we see that changes in behaviour and exemptions for the NHS will reduce the amount of money raised to about £10 billion. We have absolutely put forward alternative measures to raise £10 billion. Whether by reversing the Tories’ cuts to the banking taxes or by putting taxes on online media giants, we would find alternative ways to raise those funds. The point about private school fees is the same. If we overburden the state sector with children who have special educational needs, difficulties and disabilities, those children will not have their needs met, and that will cost us more in the future. This is all about making sensible choices to save taxpayer money in the future and, most importantly, delivering public services to the people who need them most, whether they are trying to access NHS care or whether they need help to get through their school career in order to thrive and achieve their potential.

[Laurence Turner (Birmingham Northfield) (Lab)]

Will the hon. Lady give way?

[Helen Morgan]

I am just about to conclude, so I will carry on.

I was about to talk about farmers and the concerning differences between DEFRA and the Treasury on the number of farms that will be affected. My sense from talking to farmers locally is that the DEFRA numbers are more likely to be accurate, and I therefore think there may have been a serious misstep in the plan to raise what will be a relatively small amount of money.

Liberal Democrats welcome investment in the NHS. We welcome the ambition to undo the damage wrought on this vital service by the previous Government, but we are concerned that, in social care in particular, we are in danger of kicking a thorny problem down the road. We urge the Government to consider immediate cross-party talks on funding social care and providing a long-term solution. We are also really worried about the impact of increased national insurance contributions on key providers outside hospitals. We cannot have GPS going out of business because of a Government measure that was intended to improve and expand their services.

My constituents were fed up with being taken for granted by the Conservatives and they voted emphatically to change that situation, but I am sure that they are very worried that they are about to be ignored by Labour. I urge the Government to rethink their damaging policies on national insurance contributions and the care sector, to have another look at the impact of the Budget on family farms, which I think may have been underestimated, and to back the infrastructure that rural areas need.

[Several hon. Members rose—]