Budget Resolutions

Jim McMahon Excerpts

Thursday 7th March 2024 Commons Chamber

[Mel Stride]

I am sorry Madam Deputy Speaker, and I am sorry for Hansard, but it was quite enjoyable. This debate is about making work pay, and the right hon. Member for Leeds West had precious little to say about that. I wonder why that might be. Might it be because unemployment has always gone up under Labour Governments? That is a simple fact for her to think about. It rose by 1 million under the last Labour Government. Youth unemployment rose by 45% under the last Labour Government, and the number of households in which no one had ever worked doubled during the last Labour Government. I find it particularly striking that under Labour 1.4 million people spent almost a decade on out-of-work benefits. Labour should be ashamed of that record of its time in office.

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

The Minister mentions making work pay, but Unison has pointed out that a number of social care workers are being disadvantaged because HMRC mileage rates have not changed since 2010. Does the Treasury not believe that the cost of running a motor vehicle has changed in the last 14 years?

[Mel Stride]

One of the principal costs of running a motor vehicle is the fuel in the tank. Because of our stewardship of the economy, the Chancellor was able to announce yesterday that we are freezing fuel duty for the 14th year in succession, as well as beer duty, to help those supporting our vital pubs.

Yesterday’s Budget sets the course for a brighter future for our country. It is a Budget for long-term growth, with more investment, more jobs and an economy that is turning the corner. That has allowed us to cut taxes because this Government believe in rewarding aspiration and hard work.

--- Later in debate ---

[Sir Christopher Chope (Christchurch) (Con)]

It is a great privilege to follow the hon. Member for Glenrothes (Peter Grant), who speaks for the Scottish National party. What I did not really hear from him was the justification he and his party use for increasing taxes—something that is total anathema to almost everybody else speaking in the debate, who are complaining about the high level of taxes we already have.

I welcome the Government’s rethink on national insurance. As somebody who has regularly voted against increases in national insurance by previous Chancellors of the Exchequer, I am delighted by the change of heart.

I also welcome the rethink on the unfairness of the high income child benefit charge. When it was being legislated on, I put a lot of time and energy into asking questions about it and speaking and voting against it. However, I could not persuade anybody in the Conservative Government then that it was extremely unfair that a household with an income of £95,000 coming from one person was subject to this charge, while two earners were able to avoid it by each earning £45,000. That will now be put right; in my view, it is long overdue, but it is none the less welcome.

I would, however, be interested in asking the Minister a specific question arising from what was said about this issue: will the move to His Majesty’s Revenue and Customs using household-level information from 2026 enable the Government to introduce transferrable tax allowances and end the discrimination in the tax system against married couples? That would be an even bigger benefit of introducing household-level information and from taxing people on that basis. I hope that that will be one of the great spin-offs from this initiative, and I would be grateful if the Minister could respond to that point when he winds up.

I welcome the increase in the VAT threshold from £85,000 to £90,000. However, that is a pretty meagre 6% increase after seven years in which the threshold was frozen, and I would like to see it go even higher. I also welcome the Great British ISA, but why is it limited to £5,000?

Last night we had an amazing gathering in the Guildhall in London—I do not know whether any of my hon. Friends on the Front Bench were there. It was a celebration of the 50th anniversary of the Centre for Policy Studies, and it was a great occasion. It celebrated the work that Keith Joseph, Margaret Thatcher and Alfred Sherman did 50 years ago in setting up what has been the most successful Conservative think-tank of all time. I have to say, however, that there was universal disappointment in the audience that the overall tax burden has not peaked and that the Budget statement confirmed that it will rise even further in each of the next four years and beyond, despite the fact that we already have the highest tax burden ever. There seems to be no explanation as to why the Conservative Government are still pursuing that policy of increasing the tax burden.

As ever, the Prime Minister spoke eloquently, echoing the philosophy and founding principles of the Centre for Policy Studies. He spoke of the small state, the need for low taxes, and promoting enterprise and supply-side reforms. Indeed, his rhetoric chimed with the Chancellor’s own Budget statements, and I will quote three of them. The first was:

“Conservatives know that lower tax means higher growth.”—[Official Report, 6 March 2024; Vol. 746, c. 837.]

The second was:

“Keeping taxes down matters to Conservatives”.

The third was that

“lower-taxed economies have more energy, more dynamism and more innovation.”—[Official Report, 6 March 2024; Vol. 746, c. 848.]

I could not agree more. Yet we have a Budget that is actually increasing the overall burden of taxation and that seems to run counter to that rhetoric. My constituents are concerned about actions rather than words, and I hope that, in responding to the debate, my hon. Friend the Minister will explain why the Budget’s content does not fit with that rhetoric.

Where does that leave us? As we approach a general election—from my point of view, the sooner we have one, the better—I want to be able to tell my constituents that they have a choice between a Conservative Government who are really committed to the enterprise economy, following in the steps of the Centre for Policy Studies, Margaret Thatcher and Keith Joseph, and a Labour Government who are committed to ever higher taxes and burdens on individuals, with dire consequences for economic growth. At the moment, however, I am not sure that that is being spelled out with sufficient clarity to enable us to make the case as strongly as I would like when the general election comes.

Another issue raised in the Budget is that of low, if not declining, public sector productivity, which is a scandal of the highest order. Lip service was paid to addressing the problem of low productivity in the national health service, but low productivity has been endemic in the NHS for years. I was looking at a book produced by Lord Crisp—Nigel Crisp—when he worked for the NHS, and in it he refers to the low or declining productivity in the NHS between about 2000 and 2010. The latest figures also show a decline in productivity in the NHS. Two years ago, the Government committed themselves to productivity increases of 2% per annum in the NHS. I thought that that was already policy, but I see in the Budget statement that the head of the NHS, Amanda Pritchard, is saying, “Well, with the extra initiatives from the Government, we might even be able to get to a productivity increase of 1.9%.”

[Jim McMahon]

I will give the hon. Gentleman a second to take a breath. Does he accept that the NHS does not sit in isolation? It is part of a wider ecosystem of public services, and it reflects local communities. So many preventive early intervention services, such as those provided by local government, have been taken away, and that has an impact. Like me, the hon. Gentleman will be aware that we have seen 900,000 fewer workers in local government since 2010, but 900,000 more workers in central Government, and the civil service has grown too. That shift has definitely had an impact on productivity.

[Sir Christopher Chope]

I agree with the hon. Gentleman that, by expanding the public sector and the number of administrators, we are undermining our attempts to increase productivity. The OBR says that a 5% increase in productivity would give us a £20 billion dividend, so instead of fussing about £1 billion here, £100,000 there or whatever, why do the Government not concentrate on productivity?

One example of the lack of productivity is the increase in bed blocking. I have an example from my constituency, which I raised in a parliamentary question recently. On 31 January, 308 patients in acute hospitals in Dorset were there with “no criteria to reside”, which is how what used to be called bed blocking is described these days. If we take a ballpark figure and say that each of those beds costs about £1,000 a night, that is £300,000 a night. If we multiply that by the 365 days of the year, we get an enormous figure. Money is being wasted through the NHS’s inability to address that long-standing problem.

Despite the establishment of integrated care boards, the problem is getting worse, rather than better—the whole essence of integrated care boards was to try to link together all the players.

--- Later in debate ---

[Rachel Maclean (Redditch) (Con)]

It is a privilege to follow the previous speakers, and the hon. Member for Bethnal Green and Bow (Rushanara Ali). Today’s theme is making work pay. I believe that this is one of the key challenges facing our country. Conservatives believe in conserving, but what is it that we seek to conserve? In a word, freedom. As Ronald Reagan said:

“Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same”.

There is nothing more important to the cause of individual freedom for human beings than the opportunity to work. It is the only moral way to achieve financial security. It is the path to a better life. It is not the meaning of life, but there is no meaning in life without work. It is:

“The force that through the green fuse drives the flower”,

as Dylan Thomas said.

God put Adam and Eve on Earth to work. I believe that was a wise decision, because good, hard, challenging, stressful and important work, done well, makes people happy and purposeful. It is not just a means to an end for generating taxes; the true gifts of life are to be found in the struggle on the hard road. We Conservatives are not blind to the reality of human nature. We do not pretend that people are not motivated by financial incentives. It is not selfish to want to earn more for ourselves and to work hard for it. I believe that in the Budget that was set out yesterday by the Chancellor, Mrs Thatcher would have found much to be pleased with. In 1975, she said that

“the person who is prepared to work hardest should get the greatest rewards and keep them after tax…we should back the workers and not the shirkers…it is not only permissible but praiseworthy to want to benefit your own family by your own efforts”.

How right she was in 1975, and how right we are as Conservatives to do that now.

That is why I welcome the Budget measures, especially the cut in national insurance, which will save the average worker £900, and the average self-employed worker—we have a lot of them in Redditch—£650 per year. Combined with the changes to high-income child benefit and the childcare support that we have previously talked about, the reduction in inflation, and the economy starting to turn a corner after a very difficult time, I know that those measures will be welcomed by hard-pressed families in Redditch juggling work and home life.

Of course, the welfare state and benefits are necessary in today’s world. Our fellow citizens rely on us when they are sick, or struck down by life’s blows, or cannot sustain themselves, but the pandemic has had a worrying impact, and I have seen a loosening of the links of the social contract between all our citizens as a result. We cannot ask a shrinking pool of workers to pay out of their taxes for a growing cohort of people who cannot or will not work. Benefits must only ever be a last resort for those truly unable to work—never a lifestyle choice caused by faulty wiring in our system.

It is tempting to view the Budget as a single event. It happens over a day, and there are headlines in the media. We look at it through the obsessive lens of our 24-hour news cycle and social media feeds, but we should not judge it in that way, and nor should we look at the events happening in our country as unique. We are not an outlier. Every country around the world has suffered from the pandemic, and the energy crisis caused by the war in Ukraine. As my hon. Friend the Member for Thurrock (Dame Jackie Doyle-Price) rightly said, the public are not fooled—they definitely understand and can see what is going on. They can also see that, over the course of 14 years, it is the Conservatives who have made huge strides in reversing Labour’s “something for nothing” culture. We have ensured that welfare is truly targeted at the people who really need it, meaning that we can be more generous to really vulnerable citizens.

After all, Keith Joseph first articulated the concept of the cycle of deprivation, and he set about helping people to break out of it. A Conservative Government implemented the life-changing universal credit reforms so successfully being rolled out across our country. Those reforms were conceived and led by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). That was the true genesis of the value that work must always pay.

Every time we have made reforms to welfare, the Opposition parties have howled that we are cruel and heartless. It is totally fake outrage. The true moral failure is to let people languish on benefits and not expect any better from them. That is Labour’s legacy, and we saw record levels of unemployment in every age group when they last left office, in particular among young people and women. We were prepared to take the hard decisions about universal credit. I have the scars on my back from standing here to defend the Government’s decisions at the time. But guess what? The apocalypse did not arrive.

Instead, we now see record numbers of people in work, including record numbers of women and record numbers of women over 50. Government analysis has consistently shown that universal credit is having a positive impact on labour market participation for all groups, including single parents and other vulnerable groups who face the most barriers when returning to work.

[Jim McMahon]

Most people who experience the benefits system will understand and support the need for a more simplified one that works around working people. The hon. Lady must also accept, however, that that was not the design of universal credit that met such opposition. The five-week wait limit before entitlement was drawn, for example, meant that people were getting into debt unnecessarily when they were entitled to the benefit earlier. She must accept that even given the principle of a simplified system, the way it was done was not right.

[Rachel Maclean]

I do not accept that, and I do not wish to rerun all the previous debates. The Government have listened to a lot of the issues involved in the roll-out of an incredibly complicated system, and the evidence speaks for itself. Universal credit has helped more people get into work, and work is always the best route out of poverty.

Before I move on, I will make a few comments about mental health conditions. A category of people in our country are the economically inactive, which is sad to me and many of us, because those people are fundamentally not free—they are dependent on the state. My concern is that the number of working-age adults who are out of the labour market because of long-term sickness has been rising since 2019, from about 2.2 million people then to about 2.5 million in the summer of 2022. I understand that that started before the covid pandemic.

The biggest relative jump in economic inactivity due to long-term sickness is among the under-35s, whose main complaints are depression, bad nerves or anxiety. I have two psychology degrees, and I fully understand mental illness and mental ill health. I also believe in using words precisely. I am therefore alarmed to see the conflation of the terms depression and anxiety together with “bad nerves”. Bad nerves? Both anxiety and depression are clinically recognised conditions; bad nerves is not.

Government statistics, obtained following several questions that I posed to the Department, do not break down the number of people self-reporting under each condition, and there is no data or information on how that concept of bad nerves is defined, assessed, treated, understood or prevented as a separate condition from depression and anxiety. That is because there cannot be. Having “bad nerves” is a totally meaningless phrase. No one knows what it is, so how can people decide if they are unfit to work if they have it? I have bad nerves about standing to speak in this Chamber, and my constituents have bad nerves when they are navigating the day-to-day challenges of juggling work and family. The phrase sounds like something out of a good housewife manual in the 1950s.

I simply do not believe, frankly, that bad nerves is a reason to be on sickness benefits, and yet figures from the labour force survey indicate that 1.3 million people are economically inactive due to some combination of bad nerves, anxiety and depression. We do not know how many are off because of each condition or how many are off because of bad nerves. I think it would be a good idea for the Department and the Ministers I can see on the Front Bench to understand on a more granular level what conditions are preventing our constituents getting back into work, so that we can target more efficiently the taxes of our constituents who are working hard for long hours and paying into the system, so ultimately reducing the bill.

--- Later in debate ---

[Damian Collins]

My hon. Friend is quite right: if anything, Labour wanted the lockdown to carry on longer, meaning that the debts would have been even higher. Had the Conservative party not put the public finances back in order, we would have started that pandemic with much higher levels of debt than we did. The necessary decisions were made to put the economy right.

The borrowing has gone on because of the need to pay for covid. It has been complicated by a war in Ukraine —again, I have not heard any Labour Members say that we should not have supported the Ukrainian people.

[Jim McMahon]

The hon. Gentleman’s speech is giving the impression—I understand why—that the world was rosy up until covid came and that the problems followed afterwards, but before covid, there were 2 million more people on the NHS waiting list than under the previous Labour Government. The NHS was in a fragile state, as was the national debt, which was over £1.5 trillion before covid hit. The hon. Gentleman cannot say that that is strong foundations.

[Damian Collins]

No, I did not say that at all. What I said was that we picked up the pieces of an international banking crisis, with no plan from the previous Government for how that would be paid for. It was entirely down to the Conservative party to find that money. The criticism was that the previous Labour Government were increasing borrowing before the banking crisis hit. They were already borrowing for political reasons—to sustain spending they could not afford—and then had to bail out the banks on top of that. If Members are going to criticise the past 14 years of Government, let us start where the problem started, which was before we came into power. We were required to pick up the pieces of the mess we inherited.

There are big things that happen, which require responsible Governments to take big, responsible decisions. That sometimes means that they have to put up taxes in order to pay for borrowing to get through a crisis. Let us not pretend that that is not the case, but the question is whether Governments have a serious, credible plan and whether they are prepared to be honest with the British people about what that plan entails. On the back of the pandemic, we have had to put up taxes and borrowing to pay for that. We have done that, and we are now at a decision point. As the economy recovers and the OBR projects that debt will fall, what can we do? What path should we go down? As the Chancellor has set out, the priority of this Government is to recognise that because taxes had to go up to pay for the pandemic, we want to reduce taxes when we can. We want to lift that burden from the British people and start to reduce taxes.

If any hon. Members want to come in at this point, I am happy to give way.

--- Later in debate ---

[Damian Collins]

I do not agree with that. Just looking at my own constituency, we have had two brand new secondary schools built, a big new special needs school, and primary schools as well. There has been investment in most school buildings, and we have seen a huge amount of investment in the infrastructure of this country. References have been made to the decision not to complete the northern leg of high speed 2. Of course, that money is not being taken out of infrastructure spending—it is just being spent on different things. That is a point that has not been made.

As the economy recovers and debt is predicted by the OBR to fall, we have a decision to make. The priority of the Government is to reduce taxes, and they have done so through the national insurance cuts made in the autumn statement and again in the Budget: a 4% cut in national insurance, and yes, a longer-term ambition that that tax may go altogether. That is not an unfunded commitment; it is saying, “That is the priority. That is the decision we would take—the direction we would go in.”

[Jim McMahon]

Will the hon. Gentleman give way?

[Damian Collins]

In one moment. What we have heard in today’s debate—particularly from the shadow Chancellor, the right hon. Member for Leeds West (Rachel Reeves)—is that Labour would go down a different path. Labour would spend more; they call it investment, but basically, Labour would spend more. Labour’s priority is not to cut taxes. It is begrudgingly going along with the tax cuts we have announced because it does not want to oppose them, but there was certainly no statement made today that suggested Labour would seek to cut taxes.

Labour would seek to spend more, so that is the choice for the British people at the next election and moving forward: as the nation recovers from the shocks it has been through, and as the Chancellor has got the discretionary money to spend, do we give that money back to the British people? Do we let them keep more of what they have earned, or do we just spend it on their behalf? That is the classic separation between our parties, which has existed for generations. The belief to which the Labour party is still wedded is that growth is created—something that we both want to see—by the Government spending more. What has been demonstrated over the decades is that by backing the British people, and their ingenuity and hard work, we generate the growth we need. That is the separation that we see now.

The shadow Chancellor said at the beginning of her speech that she would not make unfunded commitments on spending or taxes, but she has done so today, because now that the money from the non-doms is no longer available to fund the things that Labour wanted to spend it on, there is no plan in place. On the radio this morning, she said that she would find the money; today at the Dispatch Box, she said that there would be a detailed piece of work to seek it out, but we still do not know what the plan is. The only thing the Labour party could point to today that would increase revenue is taxes on private schools, which will not pay for much at all, so we have an unfunded commitment to spend more—we do not know how; I imagine that it will be borrowing more, but it could be taxes going up—and some specific unfunded commitments. The Labour party will not say where the money will come from, but what it has said today, loud and clear, is that cutting taxes is not its priority. There has been no ambition today to say that we should cut taxes at all.

--- Later in debate ---

[Jim McMahon]

I thank the hon. Gentleman for giving way twice. He has mentioned a number of times the need to repay any debt and borrowing. He will know that part of the borrowing for HS2 was going to be serviced through the revenue from HS2 ticket sales, and through moving more freight off-road and on to rail, to be carried by the track that was freed up. Is he absolutely confident that the new transport projects, including on potholes, that will be funded by the spare capital that has been freed up will be serviced through revenue, or will that be a funding gap in the future?

[Damian Collins]

I am confident that the robust plan that the Government set out for spending that money on other transport projects will deliver.

What I would say about High Speed 2 in the north—based on my own constituency experience in Kent, where we have High Speed 1—is that Folkestone in my constituency has benefited enormously from high-speed rail. I believe that these big infrastructure projects deliver benefits in time that are sometimes intangible and difficult to predict at the beginning. However, for HS1, the train only goes at high speed on the high-speed line as far as Ashford. The same rolling stock then runs on the traditional railway to Folkestone, Dover, Canterbury, Ramsgate, and other places on the Kent coast. A high-speed rail service that runs at high speed on the high-speed line from Birmingham to London, but with those trains starting elsewhere in the north of England, will still deliver huge benefits in reduced journey times and attracting other investment. That has certainly been our experience in Kent, and that is why I have always supported high-speed rail for the north: I think it can deliver the same thing. I still think it will deliver big benefits for the north-west, even though the trains will only go on the high-speed line from Birmingham down into London.

In addition to the points I have made about the very clear difference between the two parties with regards to taxing and spending—whether we want to cut taxes, or put spending up—I will focus on one or two specific things. The Chancellor noted in his speech that Britain has become a global centre for television and film making. Sometimes, that is said as if it is a happy accident; that, despite the fact that people could have invested anywhere in the world, they decided through serendipity to invest in the UK. The reason that the UK now has this leadership position, which is not one that we had in 2010, is that we have invested in making it happen. We have recognised that in a highly global market, production tax credits mean that people will bring production investment to the UK, rather than taking it elsewhere in the world. That generates revenue for the Treasury—my hon. Friend the Member for Christchurch (Sir Christopher Chope) is not in his place, but that is another great example of Mr Laffer’s curve at work. When we reduce the tax burden, the investment goes up, and the revenue goes up with it.

That has had huge benefits for this country: the investment in our creative industries, the jobs that people have in studios and film production—jobs that simply did not exist before—and the fact that we remain a massive global centre for investment. We have introduced tax credits for high-end television production, animation, video games, orchestras and touring exhibitions. I was very pleased to see in the Budget yesterday that those tax credits will be extended to smaller-budget independent productions, which will massively open up opportunities for smaller film companies to attract investment.

However, the big thing we have seen is the investment in studio space. Britain rivals any place in the world for studio size, which makes it, after California, the global home of film and television. One of the barriers to further investment in studios—I am thinking of a very exciting and ambitious studio project just outside my constituency in Ashford, an investment that will benefit the whole of east Kent—is that if someone builds a film studio on derelict land, which studios are often on, the business rates cost would go up massively. Is that fair, given that the uplift was generated by massive external investment? If the Chancellor recognises that, and gives new studios a 40% reduction in business rate uplift for 10 years, it will unlock a further pipeline for investment, allow us to consolidate our global leadership, and be a huge boost for the creative sector in this country.

I want to mention nuclear technology and small modular reactors. I have a constituency interest in this: Dungeness nuclear power station is in my constituency, and it would be an ideal site for small modular reactors. The Government have launched a competition to design them, and the Chancellor is encouraging people get their tenders in. I hope that we will consider that the benefit is not just us producing the clean energy that we need for the future, but us backing British industry. A British-designed and built SMR manufacturing process in this country will meet our needs, but this could also be a fantastic export industry for Britain.

I urge the Government and the Chancellor to carry on backing this new nuclear technology, to support the design competition, and to back one of the bidders. Ideally, a British company such as Rolls-Royce would be great, but there are other excellent bidders. The Government should also support the roll-out of this technology. Through their civil nuclear road map, they have established how they intend to do that, and they acknowledge that they need more nuclear sites. As a result of the road map and the consultation on it, I hope that other sites, such as Dungeness in my constituency, will be identified where this technology can be deployed.

Huge investment in green energy and new nuclear has been delivered under this Government. In 2010, when we came into government, we still had not completed the national policy framework on nuclear energy, and there had not yet been any decision about where nuclear would go. The new fleet of power stations, and the investment —and there is a lot—has entirely taken place under this Government, which is something I whole- heartedly support.

In closing, a number of hon. Members have talked about housing, and a lot of important points were made about levelling up in the Budget, and in the statements released by Ministers alongside it. New house building is incredibly important for delivering economic growth, and growth of our communities. I was very pleased that Folkestone town centre was a beneficiary last year of a significant levelling-up investment. I encourage the Department for Levelling Up, Housing and Communities and Homes England to continue their discussions with Folkestone and Hythe District Council about backing the new garden town proposal in Otterpool Park in my constituency, which will not only deliver homes that people need, but create a great many new jobs in east Kent for the coming decades.

--- Later in debate ---

[Sir Geoffrey Clifton-Brown]

I am grateful to the hon. Gentleman for intervening a second time, because I now have the exact words from Hansard. The Chancellor said:

“When it is responsible, when it can be achieved without increasing borrowing, and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today, so that we truly make work pay.”—[Official Report, 6 March 2024; Vol. 746, c. 852.]

I do not think it is as the hon. Gentleman is saying. I think he is misrepresenting the words of my right hon. Friend the Chancellor, and I hope he will not persist with that line of questioning.

[Jim McMahon]

I think we can all recognise a Conservative campaign headquarters rebuttal on its own Chancellor when we hear it. The substantive point was that the NICs cuts mean there is a lower tax burden, but we must be clear for the record that that is not correct. This is the highest tax burden since 1948. The hon. Gentleman must recognise that freezing the personal tax allowance has a significant impact on all taxpayers.

[Sir Geoffrey Clifton-Brown]

Again, I hope we will not have my right hon. Friend’s welcome ambition to reduce national insurance traduced in the way that it has been. I do not think we will get very far by continuing that argument. Indeed, you will probably reprimand me, Madam Deputy Speaker, if I go too far down that rabbit hole.

I was going on to say that it is not just workers, through the reduction in national insurance, who will benefit from this Budget, because of course pensioners will too. Pensioners will see a significant increase in their pension through the triple lock of a huge 8.5% this year. Together with the enormous rise in the personal income allowance that we have introduced over the years, from £8,500 to £12,500, that will affect not only those on the basic state pension but also those who earn a little bit of income on top. They will see that our measures have considerably benefited the amount that they receive in their pocket.

Moving on to our commitment to families, we recognise the importance of easing the financial strain, especially for parents. I have listened closely to those constituents in the Cotswolds who have contacted me about how they have had to tighten their purses since the covid pandemic, when so many found their work interrupted, as well as about the cost of food and energy price rises in the years following. People in rural areas will be particularly pleased to see another freeze on fuel duty, because they rely very much on having to use their cars.

I am pleased that the threshold for the high-income child benefit charge has risen from £50,000 to £60,000. It will directly impact nearly 500,000 families, providing an average boost of £1,300 per household, empowering families and ensuring that every child has the support they need to flourish. I welcome the British ISA, which allows for a £5,000 investment. It should have been more. I also welcome the incentivisation of nuclear investment assets. Rather than hitting savers, we bolster economic resilience and pave the way for a brighter future for generations to come. I welcome the disclosure moves for local government pensions that will encourage investment in UK infrastructure projects.

Our commitment to families and businesses remains unwavering, from child benefit to increasing VAT registration from £85,000 to £90,000. That should have been more, but it will help a number of businesses.

--- Later in debate ---

[Jim McMahon (Oldham West and Royton) (Lab/Co-op)]

It is interesting to follow the hon. Member for Hastings and Rye (Sally-Ann Hart). I will leave it there.

The test of any Budget is simple, and we all know it, in politics and elsewhere in life: are working people better or worse off? The fact is that Britain is worse off. There are higher taxes, lower wages and a stagnant economy. The tax burden is at its highest for over 70 years, since 1948, and the national debt is at its highest since the 1960s. Average households will still be £870 worse off after all the Budget measures, and this will be the only Parliament on record in which living standards fell lower at the end of it than they were at the start.

The real cruelty is not that the Budget was a missed opportunity for the Conservative party to gain some ground; it is that working people do everything that is asked of them and more, but that work is not rewarded. Real pay has gone up by just £17 a week over 14 years of Conservative Government. Compare that with the last Labour Government, under which wages rose by £183 a week over 13 years. Even the national insurance reductions pale into insignificance when we consider that the personal tax allowance freezes will take £41 billion from working people. In the end, working people are worse off, and they know it.

Working people know that the communities where they live and work, and that they care about and are invested in, are feeling the strain, as are public services. People are waiting longer for NHS treatment than ever before. Even before the pandemic, which has been used a number of times as a reference point, 2 million more people were on waiting lists than when Labour was last in office. Today, waiting lists stand at 7.6 million, impacting more than 6 million patients. What of the nation’s productivity, when there is low life expectancy, which in some cases is going down, and when quality of life is compromised by pain, worry and stress? How can we talk about productivity in the economy when the nation is simply not well?

There is a firm poverty postcode lottery. The King’s Fund reported that people who lived in the most deprived areas of England were twice as likely to wait more than a year for treatment as those who lived in more affluent areas. It is a postcode lottery on health, and an inequality that is not right in the modern age. There is no healthy economy without a healthy society. That the Chancellor does not get it is one thing, but for a Chancellor who was previously Health Secretary not to get it beggars belief, frankly.

We all know that health and social care are interlinked, and that people’s wellness and the economy are interlinked. Labour will get the NHS back on its feet—we did it before and we will do it again—but we were disappointed not to see more interaction between health and social care yesterday. Like the Local Government Association, I was disappointed not to see a focus on adult social care.

Let me focus on Oldham, a borough of nearly a quarter of a million people—good, decent people who should have been front and centre of this Budget. There, like everywhere else, they know that good public services are the foundation of a good economy, not a burden placed on it. They know the cost when public services are overwhelmed by demand, staff are under immense pressure, and those they love do not get the care they need.

Many MPs will know this from our surgeries, but not that long ago, if people were having a struggle with housing, adult social care, SEND support or a range of other different public services, it would have been the exception and not the rule that they were found to be in a difficult position. Now, however, we all know that when people come to us to say that they have a housing crisis, we have to reply, “That’s the rule for many; it’s not the exception any more.” When people say that the person they love cannot get adult social care, we say, unfortunately, “That’s the rule now for too many; it’s not the exception any more.” When parents come and say that they are fearful for their children because they have not got the SEND assessment and support needed, we say too often, “That’s not the exception any more; it’s the rule for too many people.” The public service infrastructure for too many people has completely been eroded.

In many places the market has completely failed. We see that in adult social care and in children’s services, where the cost of placements is significantly impacting on local authority budgets. Then we come to temporary accommodation, which has to be mentioned. In Oldham, the cost of temporary accommodation has increased from £1.9 million to £6 million in just a few years. That is not the real story, of course; that is just financial pressure. The real story is that behind every figure is a family, a family in desperate need. In Oldham, 1,000 people are in temporary accommodation, including 500 children—500 boys and girls in temporary hotel accommodation, sharing a room, mixed gender, mixed age groups and often in mixed hotels, where the hotels are not even block booked to stop private clients being able to access the facility. That is not right, it is not safe and it reflects a broken market.

In the end, we need to rewrite the British contract, because it has failed too many working people. The idea that if people roll their sleeves up, work hard and make a contribution, they can get on in life and build something for themselves and their family, has been taken away from people. More than that, the generational progression that should be there has been denied. I look at my children growing up now and I see a housing market that is moving further and further away from them, not closer. People in my community see that the good, well-paid, skilled working-class jobs are something of the past and not the future. That fundamentally hits at the heart of the British contract, so we need a different way. As chair of the Co-operative party, I would say that we should be looking at many examples in the co-operative movement.

Ownership matters. We have seen a complete hollowing out of ownership in our communities. Look at our high streets and our town centres: we do not even know who owns the building that has been boarded up for 10, 15 or 20 years. Ownership matters.

On energy, we see that people are paying more and more for their gas and electricity to oligarchs and offshore interests, when here we are not building something that we can own together. That is where the Labour party is setting out a different path. With onshore and offshore renewables through Great British Energy, we can own something together, where we get to share its value, where we can take back control of our energy supply, our energy security and our energy bills.

In the end, this comes down to the Government deciding to choose a path and a course. I think that some of those issues should be beyond politics. Part of the problem with British politics is that things follow the parliamentary cycle far too much, when some are far more structural, such as adult social care and the future of health and social care. There should be a bigger response to that than whatever the Chancellor of the day thinks at a moment in time. Greater consideration should be given to the future world of work, and ensuring that work pays and gives people the opportunity to live a decent life. When we do not have that big politics and those big ideas, I am afraid we end up in the same situation that we found ourselves in yesterday: frankly, vacuous and without ideas.

--- Later in debate ---

[Nigel Huddleston]

The hon. Gentleman was clearly not listening yesterday to the Chancellor, who had a key focus on jobs. That is precisely why we are lifting so many people out of poverty and why we have had a focus on increasing the national living wage over the years. Let us not forget that the tax-free allowance was about £6,500 under Labour, whereas it is more than £12,500 now. We have lifted so many people out of paying tax altogether, and that has been a key focus and strategy of this Government.

[Jim McMahon]

On low income tax payers, by the Government’s own assessment how many people have been brought into taxation because of the freeze on the personal tax allowance?

[Nigel Huddleston]

The hon. Gentleman is making an important point. I said earlier that, unfortunately, we have had taxes at a higher level than we want, but now we are in a position to reduce them. Reducing them and focusing on NICs is impactful for 29 million workers—anybody earning above £12,500. People now need to earn more than £1,000 a month before they pay any tax whatsoever.

As I said, when we came into power unemployment was near 8%, but it is now about 4%. We should not take full employment, or near full employment, for granted. We all know that every Labour Government have increased unemployment—that is not an impressive record but it is a consistent one.

I particularly want to reflect today on how our plan rewards hard-working families. The Government believe that people’s careers should support rather than undermine another important role: parenthood. That is why at last year’s Budget the Chancellor announced the biggest ever expansion of childcare from September 2025, extending the 30-hour free childcare offer to all children of working parents from nine months old. That will result in an extra 60,000 parents entering the workforce in the next four years. But to deliver on that we need to support the private sector to play its part too, so yesterday we confirmed that the Government are guaranteeing the hourly rate paid to childcare providers to deliver the free hours offer.