Budget Resolutions and Economic Situation

Debate between Ian Swales and Ian C. Lucas

Wednesday 19th March 2014 Commons Chamber

[Ian Swales (Redcar) (LD)]

This Budget represents another step in dealing with the economic mess left by the Labour party. Everybody at home knows that if they live on borrowings and max out their credit card, they will one day have to cut their standard of living. It is completely disingenuous of the Labour party to pretend otherwise. The Liberal Democrats want a stronger economy and a fairer society. We are proud that our No. 1 manifesto commitment to cut income tax for 25 million people by raising the threshold to £10,000 will be met next month, and that the Chancellor has gone further in this Budget by raising the figure to £10,500.

We hear a lot from the Opposition about tax cuts for millionaires, and they are now complaining about tax rises. Since April 2010, millionaires have paid higher taxes on their income, on their capital gains, on their pension contributions, on their spending and on their private jets, and they have had to engage in less tax avoidance. We know that the Chancellor in the previous Labour Government, the right hon. Member for Edinburgh South West (Mr Darling), put the higher rate of income tax up from 40%—they kept it at that level throughout their time—to 50% on 6 April 2010. That was an important day for two reasons: first, the higher rate went up to 50%; and secondly, Parliament was dissolved. Labour Members were on the Government Benches only for a few hours while the top rate was 50%, so we should not take any lessons from them.

All the Budget documents show that the rich are paying a lot more. [Interruption.] The hon. Member for Wrexham (Ian Lucas) shouts from a sedentary position about VAT, but VAT is on spending, and I have news for him: millionaires spend the most, and they therefore pay the most VAT.

[Ian Lucas (Wrexham) (Lab)]

When the hon. Gentleman sought the votes of the people of Redcar, he assured them that he would not support a rise in VAT, so why did he do so when he went in with the Tories?

[Ian Swales]

When I stood in Redcar, I had not seen the note left by the then Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), saying that there was no money left.

I am pleased that the Government will give further support to apprenticeships. There have been 1.5 million of them in the country, with more than 4,000 in my constituency, and I welcome today’s news about an extra 100,000 apprenticeships. I welcome the cut in beer duty, and I pay tribute to my hon.—he ought to be right hon. one day—Friend the Member for Leeds North West (Greg Mulholland) for his relentless campaigning on the issue. I also welcome the cut in fuel duty, which will help hard-working people all over the country. We would certainly have paid a lot more under the Labour party’s plans.

Finance Bill

Debate between Ian Swales and Ian C. Lucas

Tuesday 28th June 2011 Commons Chamber

[Ian Swales]

I rise to speak against new clause 6 and I note that we have had no costings from its proposer, the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards). I would be interested to find out what he thinks the policy would cost. I can report that there was no dancing in the streets of Redcar when the VAT was reduced from 17.5% to 15%, and neither have we had riots in the streets about the rises from 15% to 17.5% and then to 20%.

[Ian Lucas]

There may not have been dancing in the streets, but after that reduction in VAT there was economic growth—something that has not happened as a result of the hon. Gentleman’s new-found friends’ policy, which he is now following, but which he refuted and rejected in order to get elected.

[Ian Swales]

I thank the hon. Gentleman for that intervention. I believe that the policy that his Government followed cost £12 billion; it would be difficult to spend £12 billion and not give some stimulus to the economy. I shall come to my view on that in a moment.

There was hysteria about the VAT rate among Labour Members, but if people in the street were not shouting about it, it is worth asking why. Our predecessors in this place knew that putting VAT on everything would be a very regressive measure, so they did not do that. They recognised that the basic costs of living should be VAT-free. In fact, when it was first introduced in 1979, some reporters described it as a luxury tax. Let us just think about all the things that are VAT-free: rent, mortgages, council tax, water costs, fares on buses, trains and planes, prescriptions, dental and optical care, newspapers, magazines, books, betting, bingo, the lottery, postage, TV licences, children’s clothes and shoes and, above all, food. Although gas and electricity were originally VAT-free, they now have a fixed VAT rate of 5%.

[Ian Lucas]

Because of the Labour Government.