(4 weeks, 1 day ago)
Commons ChamberAs my hon. Friend the Member for Gateshead Central and Whickham (Mark Ferguson) pointed out, the motion we are debating is based purely on media speculation. It also conveniently overlooks the Conservatives’ own disastrous record. Let us not forget that it was the Conservatives who presided over 14 years of failure, during which the very foundations of our economy rotted away. It was on their watch that taxes were increased 25 times in the last Parliament and the costs of mortgages soared, crippling family finances across the country.
We have heard Conservative Members talk about covid, and Russia and Ukraine—and some even seem to acknowledge the travesty that was Liz Truss. However, a 2021 report from the cross-party Treasury Committee highlighted that the OBR had been warning since 2011 about an “unsustainable” fiscal trajectory in the public finances, although the Government failed to engage with that fact. Who was the Chair of the Treasury Committee making that shrewd analysis? It was of course the current shadow Chancellor. Before we got to Russia, covid and the disaster of Liz Truss, the Conservatives had already been mismanaging our economy.
Now the Conservatives come to this House to complain about a Budget that has not even been written, offering no credible economic plan of their own and continuing to make unfunded promises. This Labour Government took immediate emergency action to stabilise our economy, and made difficult but absolutely necessary decisions. We are already seeing the early signs of promise: wages are now rising faster than prices; we have had five interest rate cuts, bringing down the cost of mortgages; and we have secured three major trade deals.
The hon. Member and a number of his colleagues have referred to the reduction in interest rates as the sign of a growing economy. If he even googled it, he would realise that the first explanation for the Bank of England reducing interest rates is that it is worried about a weakening economy. Does he not realise that?
I have been told that we are speculating today, so I do not know whether I have to refer to my entry in the Register of Members’ Financial Interests. However, in an abundance of caution, I declare that I am a homeowner and I also have properties for rent.
The kids in Downing Street—whether in No. 11 or No. 10—think it is clever to fly kites about tax rises. We had it last year, from 4 July onwards, with briefings to the press saying there would be tax rises because of a wholly fabricated £22 billion black hole in the economy. That was fabricated as a fig leaf for tax rises that were not in the manifesto. From July to October, those stories dripped in one after the other—and what was the impact? It has been the collapse in business confidence to pandemic levels, the collapse in consumer confidence as a result, and unemployment beginning its inexorable rise month after month for every single month that this Government have been in office.
Now the Government are at it again. They have not realised their past terrible mistake, and they are doing it once more. Despite raising taxes by £40 billion last October and increasing borrowing by another £32 billion, they have created a genuine black hole, which the National Institute of Economic and Social Research suggests means that about £51 billion is required in higher taxes or lower spending. The briefings have started again—a property levy on mansions, the replacement of stamp duty with a national property tax, national insurance contributions on rental income and capital gains tax on primary residences with a value of more than £1.5 million. Even Which? magazine has said there may be changes to the in-life gifting regime to reduce inheritance tax.
Does my hon. Friend accept that speculation about all those new additional taxes causes more uncertainty, which itself causes the economy to slow further?
My hon. Friend is absolutely right. Do the Government not recognise that posturing from the Government Benches does not come for free? Construction activity has had a bigger fall recently than in the last five years due to the leaks from No. 10 and No. 11. The commercial property sector is in recession. There are hiring freezes and staff are being laid off. People are losing their jobs because of the Government’s kite flying. Residential property prices had a surprise fall last year.
We are asked to believe that growth is the No. 1 priority of this Government. They say they are going to build 1.5 million houses during this Parliament. Merely saying that does not make it true, when their policies serve to do exactly the opposite. If Members do not believe me, look at the markets—they are not politicians. Look at the 30-year gilts that the Government are paying today. Government debt is now running at 5.73%. That is the highest rate this century. The markets think that further tax increases will damage growth. That means they will damage the fiscal environment in the future. We will have less tax in the future because of the tax-raising decisions the Government are apparently going to take in November. Labour is planning, literally, to rob Peter to pay Paul. This is no way to run an economy.
As someone much more famous than me once said, the problem with socialism is that you eventually run out of other people’s money. Stop now. Stop before it is too late to avoid a vicious debt spiral. I fear—I genuinely fear this—that the Government will be forced to cut spending. They have two options: they can be forced to do so by the markets in a chaotic fiscal event, or they can take the responsibility of government seriously and take the difficult but necessary decisions on spending that the country needs them to take as a responsible Government. Otherwise, they will be swept away by their own incompetence.
Here we are, well over a year into this new Administration, this new Labour Government, and it is clear that they have fundamentally mismanaged the economy in their first year in office. What do we see? Borrowing costs up, growth flatlining, taxes rising and businesses being absolutely hammered. To fix this mess to the tune of £50 billion—who knows what it might be—Labour is now threatening to hike taxes on anyone they have not already squeezed into submission.
It is clear that the Labour Government are coming after people’s property. It was not enough for them to legislate to compulsorily purchase people’s gardens and homes by giving local authorities and Natural England more power through the Planning and Infrastructure Bill, and to acquire them not at market value, but at a disregarded value relating to agricultural property value if they are a farm. If the Government do not manage to grab it, they certainly intend to tax it.
As if that tax on people’s homes or gardens was not bad enough, Labour is also coming after people’s businesses. Through the changes to inheritance tax relief, agricultural property relief and business property relief, the Government have destroyed one of the sole business environments that our communities and businesses rely on—the ability to pass an asset on to the next generation and for them to earn an income from it. Across my constituency, soft furniture makers such as Fibreline, brewers, farmers, hotels and those involved in the hospitality sector have all actively taken the decision to slow the amount of investment they are willing to put in to grow their own businesses. Why? Because of the threats coming out of the Labour Government’s previous Budget in October last year and the Budget coming down the line.
My hon. Friend is making a powerful speech. He mentions the hospitality sector. Does he recognise the Government’s cruel decision to reduce the business rates discount for the hospitality sector from 75% to 40%? It does not sound too bad, but it is actually a tax increase of 140% on the struggling hospitality sector. What impact does he think that has on future investment plans?
My hon. Friend makes a valid point. Many of our family businesses, whether in the hospitality sector or in other sectors, are actively withholding a level of investment in their businesses which they want to grow and thrive. I have spoken to many farming businesses and many family businesses in my constituency who have worked out what their BPR or their APR liability is likely to be over a 10-year plan, and are therefore holding the level of investment back, because they may have to give it to the Chancellor and not invest it for the future growth of their business. That is not good for the health of the communities and businesses we represent.
Then there is council tax, with the looming threat of council tax revaluations potentially coming down the line, raising the council tax liability on many constituents, with properties potentially moving into higher tax bands. Bradford residents, who include those in Keighley, Ilkley, Silsden and the Worth valley, have already had our council tax raised by 10%. This threat is being added by the Labour Government when council tax is increasing. And then there is the cut to business rates relief, which is impacting many of our businesses.
With the threat of a revaluation process coming down the line, I want to raise the case of the Valuation Office Agency. Just this morning, I spoke to the Rock family, who have developed Providence Park in Keighley, with a huge amount of public funding going into the project. Despite the project completing its construction phase in April, they are now being told that despite an application being submitted, the valuation office is not even progressing with providing the business rate liability. It will therefore be more difficult for the Rock family to let those business premises. What is the Minister doing right now to put pressure on the valuation office to get a grip, pull its finger out and get those rates looked at, not just for Providence Park, but for the many businesses up and down the country that are struggling to get understanding from the valuation office?
This debate is about property taxes. We know that the Government have indicated that they are going to come for property owners in the Budget that is coming down the line—they indicated it in the previous Budget through the changes they made to inheritance tax. The Government must change course for the health and the good of the economic prosperity of our country.
(4 weeks, 1 day ago)
Commons ChamberI thank the right hon. Member for Central Devon (Sir Mel Stride) for opening the debate. I can tell that he spent his summer polishing some of his rhetorical flourishes, which he has shared with us today, but I suggest that he could have spent his time rather better.
Thank you for your words of congratulation, Mr Speaker. It is a real honour to be here as Chief Secretary to the Treasury. May I put on record my tribute to my predecessor, now the Chief Secretary to the Prime Minister, my right hon. Friend the Member for Bristol North West (Darren Jones), for all his fantastic work, notably delivering the spending review? I welcome the Exchequer Secretary to the Treasury, my hon. Friend the Member for Chipping Barnet (Dan Tomlinson), to his new role. I thoroughly enjoyed the role myself, and I am sure that he will be excellent in it.
Conservative Members will appreciate that today’s motion, as tabled, simply cannot form the basis of a specific debate on individual tax measures. Members from across the House will know that the Government do not respond to speculation in advance of a Budget, which the Chancellor has today announced will take place on 26 November. This has long been the case: the shadow Chancellor knows it well and he knows that it would be irresponsible to engage in that speculation. Whatever political rhetoric he and his colleagues will use in today’s debate, and no matter how many variants of the same question they ask, I know that he will understand that I cannot engage with speculation about individual tax measures ahead of the Budget.
The hon. Gentleman says that he cannot speculate on individual tax measures, but will he deny that the No. 11 machine has been leaking these stories to the national press over the summer?
I am not going to engage in speculation about tax measures or any of the mechanics around them. The hon. Member and his hon. Friends will simply have to wait until 26 November to hear the specifics of the Budget. At that point, I am sure that he and his colleagues will have plenty to say.
(3 months, 1 week ago)
Commons ChamberI am always happy to meet my hon. Friend. I can confirm that in the design and funding of NISTA, I have funded a particular team to work on the management of disputes under the old PFI contract schemes to make sure that we are getting the best outcomes and best deal for the public sector.
I cannot believe it, but I agree with the hon. Member for Walthamstow (Ms Creasy). It is a shock to the system, but the Chief Secretary has announced the return of the public-private partnership. The last Labour Government were a byword for disastrous contractual negotiations, and that led to the infamous £1,000 lightbulb. Given that Labour was so bad at these contract negotiations last time around, what confidence does the Chief Secretary have that he will be any better this time around?
I am usually confident in my abilities, to be frank. We will be consulting on some of the design details. We will be using private capital for social infrastructure only in particular potential use cases. We mention in the strategy today certain types of primary neighbourhood healthcare centres. We will be transparently consulting on that detail, and we will only allow such capital to be used in a way that is value for money. We will not be returning to the PFI contracts of the past.
(6 months, 1 week ago)
Commons ChamberI am just flummoxed by the Government’s approach to the Bill. Clause 1 raises employer national insurance from 13.8% to 15%. Almost more damagingly, clause 2 reduces the threshold at which they start paying it from £9,100 to just £5,000. The Government know how damaging this measure is for healthcare. We can see that because they have taken action to exempt the NHS from it. That will cost billions of pounds, because healthcare providers cannot just diversify as other sections of the economy might be able to. They cannot raise prices. A general practitioner’s customer is the state, and prices are fixed by the Treasury. As a result, the Government know exactly what the impact of this proposal will be on hospices. We have already heard that without an exemption, they will face an additional £30 million of costs every year as a result of these changes.
When the Bill was first announced, I assumed that there had been an oversight by the Treasury and that it would be addressed as the Bill progressed. But both last week and this week, the Lords have moved to fix what was originally considered to be perhaps an oversight. Today’s decision to seek to reverse Lords amendments 1B and 5B in particular demonstrates beyond doubt that it is not an oversight but a deliberate decision taken by Labour to penalise hospices for the care of the dying, and to do what with that money? We may be in the obscene position in a few weeks’ time of funding for state-assisted dying being raised by taxing palliative care. This is absolute madness. If Members wanted any other reason why they should not support the Government, that is an overwhelming one.
I make one last reference to the emptiness of the Government Benches. There are now two Labour Members sitting there who are not required to be—[Interruption.] I take it back, there is only one. That indicates to me that Labour Members do not want to be associated with the Bill. They will scurry through the Lobby later, but they are not brave enough to stand up and defend the decision of their Government.
You do not need any convincing of this, Madam Deputy Speaker, but were you to, the Lords amendments demonstrate why we need a House of Lords. They are the ones standing up and delivering the amendments that this Government are trying to wriggle out of this afternoon. Amendments 1B and 5B, which the Government are trying to derogate from, are essential for our care services. The financial strain that the Government’s national insurance contributions will put on the care sector is astronomical—some predictions are of around £2.4 billion on social care alone. Ultimately, that will lead to reductions in services and, unfortunately, closures, especially in the hospice sector.
The Minister has repeated what he and other Ministers have said on many occasions: they are giving a certain amount of money to the hospice sector, but as Opposition colleagues have stated, that is capital spending. What they desperately need is revenue spending to cover the cost of the rise in national insurance contributions.
(8 months, 1 week ago)
Commons ChamberThere still seems to be confusion among Opposition Members about what the OBR publication set out. It reiterates the costings that were published at the time of the Budget, on 30 October. It explains how those costings were arrived at, so that people can understand the calculations behind them, but the costings are the same as those published at the time of the Budget.
Mr Speaker, if you look at the Register of Members’ Financial Interests, you will see a reference to my family farm in my constituency. Last Sunday, I drove one of our tractors to Fakenham racecourse to support the farmers’ protest against the APR and BPR. I talked to other farmers, and the key complaint was that there had been no consultation on the changes, and no time for older farmers to adjust their affairs. All those concerns have been rubbished by Ministers time and again, most recently today. Now that the OBR confirms that it is more difficult for older people to restructure their affairs quickly, will the Government finally listen, show some humility, and consult on how best to tackle the tax shelterers while still protecting our farmers?
The comments in the OBR publication yesterday about older individuals reference a point that has been made since the Budget in debates in this place and elsewhere. We have pointed out that our reform of agricultural property relief and business property relief maintains generous exemptions from inheritance tax; £1 million is subject to relief, and there is the 50% relief beyond that, the existing nil-rate bands, and other exemptions in the system.
(8 months, 1 week ago)
Commons ChamberI thank my hon. Friend for that question. I know she studies closely the work of Professor Michael Marmot on life expectancy and the impact of health inequalities on our country. At the Budget, we increased the minimum wage. In addition, we extended the household support fund and reduced the amount that could be taken in deductions from universal credit, all to try to put more money in the pockets of ordinary working people, to reduce some of those inequalities and tackle the cost of living crisis.
One of my GP surgeries called me this morning to highlight the impact of the rise in national insurance contributions, which will cost it £40,000. It can only respond by freezing cost of living pay increases for all its support staff. Does the Chancellor finally accept that working people up and down the country are paying the price for her tax rises?
(10 months ago)
Commons ChamberI will make some progress.
As the Chancellor set out in the Budget, we believe that before making any changes to the tax rates that people pay, it is vital that we do everything we can to close the tax gap. That is why, in the Budget, the Chancellor announced a step change in our ambition to do so, with a package raising £6.5 billion of additional tax revenue by 2029-30. This package will ensure that more of the tax that is owed is paid, and that taxpayers are supported to pay the right tax first time. Our plan involves boosting the capacity of His Majesty’s Revenue and Customs to ensure compliance and reduce debt, alongside changes to legislation, some of which this Finance Bill delivers, to remove loopholes used to reduce tax liabilities.
That is why this Bill includes measures such as introducing capital gains on the liquidation of a limited liability partnership, closing a route increasingly used to avoid paying tax. The Bill reforms rules for overseas pension transfers, closing a gap that allows individuals to transfer significant pension savings overseas tax-free. And the Bill implements the cryptoasset reporting framework, tackling complex compliance cases where a significant proportion of offshore risk sits.
In our manifesto, we said that we would take on the tax gap, and that is what we are doing in government.
The Minister recognises the importance of reducing the tax gap, so will he commend the previous Conservative Government for halving the tax gap they inherited from Labour in 2010?
As we all know, efforts to close the tax gap thoroughly stalled under the previous Government, and we have brought renewed focus to this effort. It is one of our top priorities. Before increasing any tax rates, we must ensure that people pay the tax that is owed. Frankly, if the previous Government had been doing such a great job, how is it that our Government have been able to find an extra £6.5 billion to close the tax gap in our first Budget alone? That was in our manifesto, and that is what we are delivering.
In our manifesto, we made other specific commitments on tax, and I will set out now how the Bill seeks to implement them. First, let me turn to non-doms in the tax system. As right hon. and hon. Members will know, this Government believe that everyone who is a long-term resident in the UK should pay their taxes here. That is why this Government are removing the outdated concept of domicile status from the tax system, and why we are implementing a new residence-based regime from 6 April 2025. We have long argued for such a change to be made. Although the previous Government ended up being forced towards our position, they never implemented any changes. Under this Government, we will finally make the reforms necessary to make the system fit for the 21st century.
Our new regime will be internationally competitive and focused on attracting the best talent and investment to the UK. Our reforms will scrap the planned 50% reduction in foreign income subject to tax in the first year of the new regime; introduce a new residence-based regime for inheritance tax; retain and reform overseas workday relief, encouraging employees to spend more of their earnings in the UK; and extend the previously announced temporary repatriation facility to three years, from April 2025.
The new rules mean that, from April 2025, anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains, as is the case for other UK residents. That is a much simpler and clearer test than exists under the current regime. The Office for Budget Responsibility confirmed that these reforms will raise £12.7 billion in revenue over the five year forecast period. That funding is crucial for meeting our commitments to fixing the public finances.
Secondly, in government we have decided to go further than our manifesto commitment to increase the non-resident stamp duty surcharge, and we will instead increase the higher rate of stamp duty on additional dwellings, from three percentage points to five percentage points above the standard residential rate. That increase to the higher rate of stamp duty will raise more money than set out in the manifesto—a total of £310 million by 2029-30—and will go further to rebalance the housing market.
The OBR’s certified costing assumes that an increase in the higher rate of stamp duty by two percentage points is expected to result in 130,000 additional transactions over the next five years by first-time buyers and other people buying a primary residence. We estimate that approximately half those who paid a non-resident stamp duty surcharge also pay the higher rates of stamp duty, so the change will improve the comparative advantage of UK resident home movers, while ensuring that no additional barriers are faced by those coming to the UK and buying their main home.
Thirdly, the Bill delivers our manifesto commitment to introduce the 20% standard rate of VAT on private school fees. That will apply to any charges charged on or after 29 July for terms starting after 1 January 2025, and it sits alongside our changes to private schools business rates relief in the Non-Domestic Rating (Multipliers and Private Schools) Bill. Ending tax breaks for private schools is a tough but necessary decision that will secure additional funding to help the Government deliver their commitments to improve education in state schools across the country, and achieve the aspiration that every parent has for a high-quality education for their children.
No. I can tell those Members that when additional money is spent on the state sector, it improves the life chances and opportunities of my constituents.
I am grateful to the hon. Lady for giving way. Could she identify which subsidy she is talking about?
I am talking about the VAT relief that existed for private schools. [Interruption.] Yes, it was a subsidy. Politics is full of choices, and a Government’s first responsibility is to ensure that they balance the books. If a Government are responsible, they will invest in decent public services and create conditions for economic stability. I want to concentrate on that final point for a moment. We have heard remarks from Opposition Members on small and medium-sized businesses; I say to those Members that when I speak to local businesses in Barking, they say that the economic instability over the past few years is what has created pressure for them.
I welcome, in particular, the Government’s tax announcements on non-dom loopholes. The Government changing the residential base means they will increase revenue by almost £13 billion. The rate changes on capital gains mean we will maintain our position as having the lowest capital gains tax of any European G7 economy. These measures are a collection of decisions that show we are prioritising investment in public services, alongside an absolute commitment from the Government to create economic stability to achieve the future growth that this country deserves.
We are debating the Finance Bill following an election. In usual times, such a Bill would enact what was said in the winning party’s manifesto, but not this time. On the electoral trail, all the Labour Members who are now Ministers repeated what was said in the Labour manifesto time and again: their plans were “fully costed” and “fully funded”. They repeatedly said that they had no plans to raise taxes beyond VAT on private schools or to increase public borrowing. The manifesto said, in bald terms, that
“we will not increase National Insurance”.
There was no qualification to that—it was there in black and white.
It is extraordinary that we are debating a Finance Bill that has no correlation to the manifesto that it comes after. The electorate were profoundly misled. The reality is that the Labour party is increasing spending by more than £70 billion. Labour Members use the argument of their fantasy black hole, which has been thoroughly debunked by the independent Government body, the Office for Budget Responsibility, the independent IFS and the Financial Times. No one believes Labour, because that black hole is not there. It is not a black hole; it is more like a red herring.
The reason for that red herring is that Labour needed it as the excuse to do what it always intended to do—put up taxes and increase spending on public workers. Why did it do that? Because Labour Members—all of them— knew that if they had been honest with the electorate and told them that Labour was going to be a tax and spend party, no one would have voted for them. Even then, only 34% of the public did. It was a big con on the electorate. That is why we have a petition live on the Government website that says:
“I believe the current Labour Government have gone back on the promises they laid out in the lead up to the last election.”
As of this afternoon, 2.75 million people have signed that petition because they feel misled by this Government.
The Budget provided £2.6 billion for education, £1 billion for SEND, £22 billion for the NHS and several billion more for things like councils. Would the hon. Gentleman’s constituents in Broadland and Fakenham welcome the contribution of those funds to the NHS, schools and councils, or would he not like that investment to go into his constituency?
There were a number of points in the hon. Gentleman’s intervention. First, how much money should be spent? Secondly, what should it be spent on? And thirdly, where should we get it from? I will go straight to the heart of where we can get the money from: if we return public service productivity back to 2019 levels, there are tens of billions of pounds to be saved; if we return the size of the civil service to the 2019 level, before the big covid expansion, there are tens of billions of pounds to be saved; and if we return welfare spending on disability back to pre-covid levels, which my right hon. Friend the Member for Central Devon (Mel Stride) was in process of doing before the general election, there are tens of billions of pounds to be saved.
In a moment. If we add that all up, there would be £50 billion that could be spent on the frontline. However, the problem with the Labour party is that it takes money and spends it on inflation-busting wage rises for its union paymasters, but not on increasing and improving the outcomes for the people who use services. That is the big difference between the Conservative party and the Labour party. The focus of our spending is not the people providing the services; we are for the people who use those services—the people of this country.
My hon. Friend is making a typically eloquent and excellent speech. I challenged a number of Labour Members to outline that public services can be invested in if, in addition to some of the tax-raising mechanisms they have chosen, we have economic growth. Will my hon. Friend outline how much growth has been cut by under the Government’s proposals compared with ours? Am I correct in thinking it is 0.7% over the Parliament?
My hon. Friend is entirely correct: over the course of the forecast period, the Office for Budget Responsibility estimates that growth will be cut by 0.7%. It is worse than that, however, because we also have an increase in taxes on businesses of £25 billion through the national insurance contributions, which the OBR tells us will be paid for overwhelmingly by reduced pay for workers, amounting to £7.5 billion. It also forecasts that more than 50,000 full time-equivalent jobs will be lost as a result of the policies that Labour Members plan to vote for.
The hon. Member keeps talking about his Government having been in the process of making a mark on productivity. Having left us with the worst productivity slowdown in 250 years, will he tell us how long the process would have taken?
The hon. Gentleman’s intervention was not on the point that he rose for, but there is one thing that he does not mention, and that is the covid impact. [Interruption.] Hon. Members can laugh about it, but we spent £400 billion supporting the economy and the people of this country in a once-in-a-century impact on our economy.
Does he agree with me that there seems to be a collective amnesia among colleagues on the Labour Benches? If we had taken their advice during covid, when we were making reasonable decisions, not only would we have seen the longer lockdowns that the now Prime Minister was calling for, but more economic damage, which they now deny ever happened in the first place.
My hon. Friend is absolutely right, and there is a point worth making here. Since covid, the private sector has improved productivity by about 6%. Productivity in the public sector has yet to improve, although before the general election it was starting to do that.
I will not. I want to make some progress because I have been quite generous in giving way.
The OBR says that more than 50,000 jobs will be actively lost as a direct result of the decisions Members on the Labour Benches are about to take. I think that is an underestimate. I have been talking to businesses in my constituency of Broadland and Fakenham over the past few weeks and, as a former entrepreneur, I have been taken aback by quite how badly the tax and spend decisions of the Labour party have gone down with my small and medium-sized employers. Their accounts to me suggest that those choices are affecting their decisions on employment, and particularly on employing young people.
One employer said to me just two weeks ago that 18-year-olds are harder to employ than, say, 25 or 26-year-olds because overall more of them will fail in their job as they get used to the working environment. Employing 18-year-olds used to be worthwhile because the national minimum wage was lower and national insurance contributions did not have to be paid on the first £9,200 of their employment. That advantage has been removed and it is now disproportionately more expensive to employ an 18-year-old than older members of staff. That is a real-life case, where the employer told me they will stop employing young people in their business. Is that really what Labour Members wanted to achieve? That is what is happening already.
I am not telling anyone anything; I am reporting what businesses are telling me. As a direct consequence of the actions of the Members on the Labour Benches, young people are not being employed who otherwise would have been. The OBR says that will lead to more than 50,000 jobs being lost. Time will tell, but I think that is an underestimate.
We have a reduction in recruitment, a reduction in the employment of young staff, a reduction in investment and, as a result, we will have a reduction in growth over the course of the forecast period. But worse than that, we will have a reduction in living standards. This cost of living crisis, which has now been caused by Labour, will reduce living standards by 1.25% by 2029. That reduction is a direct result of the Budget, so if Labour Members vote for this Bill, they will be voting for increasing the cost of living crisis by 1.25%.
None the less, we have seen some increases: debt costs are increasing; inflation is increasing, which will exacerbate the cost of living crisis; and mortgage costs are increasing.
You talk about increasing inflation, yet we saw record levels of inflation—11%—under the Conservative Government, one third of which was caused by our exposure to gas shocks. Does he agree with this Labour Government that we need to invest in clean energy, so that we are no longer left vulnerable to foreign dictators and their control of fossil fuel markets?
Order. Before the hon. Member answers that intervention, I remind Members not to use the word “you”. Moreover, this is a debate on the Second Reading of the Finance Bill, so can we please make comments, interventions and speeches relevant to the Finance Bill?
I am grateful for that intervention. Inflation 11% was a direct consequence of the Russian invasion of Ukraine, as everyone knows, but what is important is that the Conservative Government took the difficult decision to get it down to a target of 2%. It is already creeping up under Labour, and it will be higher than it otherwise would have been as a direct consequence of these measures. Do not trust my word for that; that comes directly from the OBR. Again, the OBR tells us that mortgage rises will occur directly because of the decisions of Government Members. Union activity will be up, with the consequential impact on productivity and efficiency of our private sector. The size of the state will go up and, shamefully, the tax take will be the highest since records began. I will not support this Finance Bill, or its Second Reading, so Labour Members will have to take the consequences of their own decisions.
(11 months, 3 weeks ago)
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We have been told by the Government that the rationale for this policy is not class hatred or class warfare; it is a revenue-generation mechanism for state schools. It is a sort of novel, hypothecated tax: education has always been tax free in this country and, in fact, around the world. Even going back to the last flowering of Labour’s socialism in the 1970s, when there was beer and sandwiches in No. 10, there was no suggestion that we should take socialism into the classroom in the way that this Government are.
If tax take is in fact the rationale, where is the impact assessment? How much will actually be raised by this policy, and what costs will be associated with its implementation? We have already heard that some 10,000 students have left the private sector and are going into the state sector just this September. What impact will there be on the education of those children?
On Friday I went to see a local headmaster at a private school in my constituency—the only one that I am aware of. At this stage, I should register my interest: I have one child at a fee-paying school. The headmaster said that there are primary schools locally that are totally full and there is no space for those children leaving the private sector to go into local primary education. Where is the impact assessment on SEND children? Some 34% of the intake of that private school are pupils with special educational needs. Partly because of the delay in the EHCP process, will they be penalised? What happens when they get taken out of their educational setting and put into a new school with new friends, or a lack of them? What will be the impact on their personal education? What will be the impact on SEND provision in the county of Norfolk?
I am grateful to the hon. Member for giving way. I have always had great concern about segregation in our education system, but parents in York say that due to the different pedagogy environment and culture, certain independent schools provide the only way that their children with SEN, anxiety or care experience can currently access education. It is through necessity, not choice. Does he agree that the Government should publish an impact assessment not only for this, but for the Budget, so that we can assess the full analysis of this policy?
I am grateful to the hon. Lady, and I am sorry that she waited so long to intervene. I quite agree with the point that she makes. We need to have an impact assessment on another issue, which is the provision of boarding facilities for children in care, which again are provided in my constituency. The school provides full boarding for not just children in care, but the boarding pathway programme put forward by Norfolk county council for children on the edge of care. Their education is the single point of continuity in their lives, and this policy has a real risk of reducing that support and removing them from their school and their friends halfway through an educational year.
What assessment have the Government undertaken before the Budget on these policies and their costs, and what mitigation will they put in place? We have already heard about the impact on military families. Is it right to target the children of our servicemen for this hypothecated tax? Was targeting poor pensioners not enough for this Government?
Does my hon. Friend agree that the policy disproportionately affects families on lower and middle incomes, which the vast majority of these students come from? Parents I have spoken to in my constituency are really concerned. They have forgone foreign holidays, a new car and a bigger home because they have chosen to invest in their children’s education. Should the Government not encourage people to make those right decisions on behalf of their families, rather than penalising them?
My hon. Friend is absolutely right. It feels as though the Government have a cartoonish characterisation of what a private education looks like—top hats and tails—but that is not the real experience of the modern private educational sector.
That brings me nicely on to the impact on bursaries. At the school in my constituency, 20% of fee revenue goes on bursaries. It is exactly that level of support for people with greater financial disadvantage that will be the first casualty of this unfair and ill thought-out policy. Again, it is an odd target for a tax take. What about the impact on local businesses? The school employs 286 people of all different types in my constituency, and job cuts are already under way. I ask the Government to think again. Surely the introduction of this ill thought-out policy halfway through the academic year needs to be revisited.
Then there is the impact on children who are sitting for public examinations. It is always bad when children have to change schools because of circumstances that are forced on them, but even more so when they are sitting for their GCSEs or A levels. At the very least, the policy should not be implemented for people in those years. For pupils applying for education, health and care plans, the delay in the Government process of undertaking those assessments should not mean that costs are forced on parents who are taking active steps to support the education of their children. For military families and for specialist music and dance schools, the Government have put forward no evidence to support their stated policy objectives. The policy feels rushed. The only people here to support it are those who are paid to do so, and it is vulnerable children in our society who will pay the price of these internal Labour politics.
(11 months, 3 weeks ago)
Commons ChamberI have a child at a private school. Government Members say that is not a problem. They say, “This is not a criticism of private education; this is merely a revenue-generation exercise, not social engineering or socialist class war.” It must be a coincidence, then, that this policy punishes aspiration, pulls children down rather than lifting them up, and is being rushed through, as we have heard time and again. It is a socialist, red-meat policy to placate the Labour Back Benchers who are having the gradual and terrifying realisation that they may well be single-term Members of this place.
The Government need to think again. We have heard serious objections to this policy—not to its implementation, because the mathematics of this place mean that the Government have sufficient support behind them to force anything through, however ill-advised, but we have heard serious recommendations for review, improvement and tweaking to undo some of the significant damage that this policy, unamended, will cause.
Introducing the policy on 1 January, halfway through the academic year, will damage children and children’s education. These are real people. Some 10,000 children have already left the independent sector. Their education, and that of thousands of others like them, needs to be considered by this Government. On children who are sitting public examinations this year, my hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) made a brilliant and serious point, which should be not cast aside but considered: if children studying under one exam board are transferred, in the exam year, to another system, what do they do? What is the Government’s answer?
On the subject of pupils who are applying for education, health and care plans, 34% of pupils at Langley school in my constituency are treated for SEND, and only nine of them have EHCPs. What do those other students do? Surely there should be a delay for pupils who are applying for EHCPs. We have also heard from gallant Members that military families are taking decisions now about their future in the armed services. There are also specialist schools for music and dance, which are important for the fabric of our community and the quality of life in this country; those things are not offered in the state system.
Does this not further make the case for the Government publishing in full their assessment of the impact that the measure will have on schools and children right across the country?
My right hon. Friend is absolutely right. The Government have published no evidence to support their stated objective. There has been no impact assessment. This measure is rushed, and vulnerable children are paying the price for internal Labour politics. Shame on you.
(1 year, 8 months ago)
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I will come on to that, but as ever, my hon. Friend makes an extremely important point.
After Northern Ireland, the north-east of England pays the least, but have a guess where 42% of the estates that attract inheritance tax are located—have a guess, Sir Robert. They are here in London and the south-east —the blue areas. [Interruption.] I am sorry; if the hon. Member for Broadland (Jerome Mayhew) wants to intervene, I am happy to accept an intervention. Does he want to intervene?
He is chuntering away, so I just wondered whether he wanted to come in.
It is amazing how inheritance tax can be avoided. The biggest exemption, of course, is the nil rate on leaving everything to a spouse. Other exemptions include transfers to qualifying charities or registered clubs, and lifetime gifts given within seven years before death—this one is interesting: wealthy grandparents use it as tax relief on paying their grandchildren’s private school fees. Another exemption is business property relief, which allows no inheritance to be paid on the transfer on death of shares in a business that is not quoted on the stock exchange. Many of those shares are in valuable family firms. Agricultural land also often passes tax-free. Debts owed by the deceased can be deducted from the tax bill.