Budget Resolutions

Debate between Jim McMahon and Christopher Chope

Thursday 7th March 2024 Commons Chamber

[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.