National Insurance Contributions (Reduction in Rates) (No. 2) Bill

Keir Mather Excerpts

Committee of the whole House
Wednesday 13th March 2024 Commons Chamber

[James Murray]

I thank my hon. Friend for that important intervention, setting out just some of the problems created by this reckless plan that the Conservatives have put out into the public domain and are refusing to explain or withdraw.

We know that if the Chancellor’s proposal to merge national insurance and income tax were to be followed, it would push up income tax by 6.5%, meaning pensioners would pay, on average, £800 more a year. My hon. Friend also makes important points about the impact of the plan on eligibility to the basic state pension. Again, Members on the Government Front Bench have not answered those questions. They had nothing to say on any of those points, which are concerning people across the country, when they responded earlier.

We have tabled new clause 1 because it will force the Government to come clean about these issues. Ministers are refusing to stand at the Dispatch Box to explain how they will fund their £46 billion black hole or to withdraw their policy entirely. New clause 1 will force them to set that out. Because they have been unwilling to explain how they will fund their plan, we will force them to come clean on its impact on public finances.

[Keir Mather (Selby and Ainsty) (Lab)]

Not only is there concern about where the funding would come from, but in the Treasury Committee just now the Chancellor refused to rule out increasing income tax in order to fund the abolition of NI contributions. The House of Commons Library has said that merging NICs and income tax would require an 8% increase in the basic and higher rates of income tax. What will that do for the long-term future of the UK economy?

[James Murray]

I thank my hon. Friend for bringing us that update from the Treasury Committee about what the Chancellor has been saying. Again, we can see the Chancellor being reckless by talking about merging national insurance with income tax without having a second thought for what impact that would have on hard-pressed taxpayers, particularly pensioners. Pensioners do not currently pay national insurance on their earnings and would be hit by a tax increase as a result of national insurance and income tax being merged. That is another example of how reckless these plans are, and how reckless it is for Treasury Ministers to refuse to stand up and explain how their plans would be funded.

The public deserves to know. If Ministers vote against our new clause or they refuse to come clean, then the British people will have it confirmed, yet again, that the Conservatives cannot be trusted with the economy, public finances or the finances of households across our country.

Budget Resolutions

Keir Mather Excerpts

Tuesday 12th March 2024 Commons Chamber

[Laura Trott]

I praise the hon. Gentleman for the work that he has done on this very important issue, and I know that the capital we are providing will help with issues such as the one he has highlighted.

We cannot just put more money into public services and hope for the best. I was delighted to read that the hon. Member for Bristol North West (Darren Jones) said recently that he was in favour of reforming public services, not splurging on them. Well, here’s hoping that the Labour party breaks the habit of a lifetime. I genuinely hope that he will agree with some of the measures on productivity that we have set out today, because outcomes are determined by how things are done. By focusing on outcomes, not funding, we can deliver real value for the taxpayer. It is a trap to think that simply spending more buys us better public services. Simply spending more is also not sustainable.

[Keir Mather (Selby and Ainsty) (Lab)]

On the subject of unfunded spending commitments, we on the Treasury Committee learned from the Office for Budget Responsibility this morning that the Government have not told it about the £46 billion ambition to scrap national insurance contributions altogether, and because the OBR has not been told, it cannot forecast the economic impact that that may have. How does that bake in long-term economic stability for the United Kingdom?

[Laura Trott]

Unlike the Labour party’s massive £28 billion unfunded tax commitment until 2030, our long-term ambition to cut national insurance and erase the double tax on work does not have a date on it. We have shown that, through careful stewardship of the economy over time, we can reduce people’s taxes without cutting spending.

Simply spending more is not sustainable. If no action is taken, public spending is forecast to grow faster than GDP from 2030; that accounts for pressures that we cannot avoid, such as demographic changes. That must be managed, using all the tools at our disposal—and not by borrowing more, or increasing taxes on the British public. Instead, we have to assess how we deliver public services, and improve them to make the UK more productive and ensure the long-term sustainability of public finances. Yes, this is about money, but it is also about delivering the best services for the public, because productivity is not a theoretical concept; it affects us all, in each area of our everyday lives.

I want better outcomes for children, and teachers being able to spend more time with pupils, rather than filling out paperwork. I want the police to spend more time on the beat, not on forms. As a Member of Parliament representing constituents in Sevenoaks and Swanley, I want nurses and doctors spending time with patients, not having to look at computer screens. Better public productivity means better value for money, better support for frontline workers to do their jobs effectively, and better results.

In last week’s Budget, the Chancellor announced that we are allocating £4.2 billion to investment in productivity. The package is broad and comprehensive, and includes £3.4 billion for the NHS—double its current budget for tech and digital transformation. The NHS says that that will unlock over £35 billion in the coming years—10 times the amount we will put in. At the next spending review, that will be the model for all our public services. The package also includes £105 million for 15 new special free schools across England, which I know will be welcomed across the House. That will create over 2,000 high-quality places for children with special educational needs and disabilities, and prevent local authorities’ use of costly independent provision.

The Budget provides £165 million to tackle the shortage of children’s home placements and to rebuild the children’s home estate. That will reduce the need for expensive and unsuitable emergency provision that does not produce the right outcomes for the children who need our help the most. There is £334 million to cut crime by improving policing technology, and £17 million for modernisation of Department for Work and Pensions services, and replacing the paper-based system for benefits. As a former Pensions Minister, I know the impact that such modernisation has had on the state pension. However, this is just the start. I am also committed to driving forward work to embed productivity at every level across the whole public sector.

--- Later in debate ---

[Keir Mather (Selby and Ainsty) (Lab)]

This is my first opportunity to respond to a Budget in this House and, like so many other milestones I reach in this place, I feel like I am doing so while living through a form of parliamentary purgatory. We are trapped with a Government who forbid the public to remove them, who starve parliamentarians of meaningful legislation to scrutinise, and who have now put a Budget before us that is as impotent as it is self-aggrandising—hollow and inadequate, with no agenda and no real plan for growth.

Indeed, the only growth we have seen is in the list of this Government’s broken promises: improving living standards, broken; inflation returning to target, broken; increasing productivity, broken; growth, broken; levelling up the north, broken. Increasingly our country is broken, too, the victim of 14 years of Conservative negligence, of which this Budget is merely the latest sorry chapter.



What is most galling is the staggering dishonesty of the Budget’s central claim that working people will be better off as a result of its measures. It introduces a £9 billion tax cut based on implausible austerity, sandwiched between a £27 billion tax rise the year before and a £19 billion tax rise in the two years to come. For every 5p that this Budget gives back to families in Selby and Ainsty, the Government take away 10p as part of a tax burden that has risen to its highest level for 70 years. Selby families will be £870 worse off as they suffer through the Prime Minister’s recession, while inflation forces them to pay more for their weekly shop, using real wages that are below what they were in 2008.

This Budget is little more than an insult to the public’s intelligence—a prime instance of the Government’s offensively low expectation that working people will not realise the extent of their inadequacy to meet the challenges those people face. Central to the Budget’s failings is the absence of a real plan for growth. I am not sure how the Government still have not grasped this point after 14 years, but there can be no hope of sustained economic growth in this country without well-resourced public services. How can businesses grow if we do not modernise and expand our transport infrastructure? How can British workers be productive if they have to leave the workforce to care for parents or children? How can we level up our country with local government stripped to the bone? How can we have vibrant high streets when crime continues to blight our town centres? Well-funded public services are the bedrock of economic growth, yet this Chancellor intends to reduce real per capita spending for unprotected Departments by 13% between 2024-25 and 2028-29. That is £19 billion-worth of cuts, or a repeat of 71% of the austerity that we saw from the first austerity Parliament.

The Chancellor was in charge of our NHS during a portion of that Parliament, when the justification for hollowing out our welfare state was fixing the roof while the sun was shining. Minister, the sun is not shining now—in fact, it has not been shining for some time. Our public services are in desperate need of support, but this Government are too happy to continue putting critical services on the chopping block to aid their dogma to realise the danger they are causing. It is the same old Conservatives, putting party before country and ideology before reality, and making the British public suffer the consequences. That is the tragedy of this Budget: the missed opportunity to do what is right and achieve the growth we need. I am glad that the Chancellor finally woke up to the necessity of scrapping the non-dom status, but under Labour’s plans, that money would have gone into our NHS, creating more dental appointments and more capacity. Politics is about priorities, and the Chancellor has clearly decided that election giveaways based on fiscal fiction are the order of the day.

With all that being said—the Minister may like to hear this—there is one area of the Budget about which I am pleased: the announcement of the £105 million earmarked for the opening of new special educational needs and disabilities schools for children. That announcement is an opportunity to reiterate my plea for the Government to do everything possible to ensure the speedy delivery of the Selby district’s SEND school, which has had Department for Education funding allocated since 2019, but for which building work has not even begun. Hopefully, that will go some way towards ending the scourge of young people in my constituency with additional needs having to travel in taxis for hours a day, to villages and towns as far away as Scarborough and Harrogate, just to get the learning and education they deserve.

Overall, we are left with a situation where our country has stalled, and a Budget that fails to grasp the economic opportunities of our time while doing nothing to heal the deep structural damage that lies beneath our broken economy. It is high time that the Conservative party lets the British public give their verdict on these 14 years of wasted potential, and I have no doubt that their decision will be for change.

UK Economy

Keir Mather Excerpts

Monday 19th February 2024 Commons Chamber

[Bim Afolami]

It is—and I would add something else: the figures for home repossession were much higher when there was a recession under the Labour Government in 2008-09, in comparison with our record now, and unemployment now is much lower than it was then. Though we are in challenging times, the economy is turning a corner. Our record compares very favourably Labour’s.

[Keir Mather (Selby and Ainsty) (Lab)]

The Chancellor said last May that he was comfortable with the prospect of a recession. Now that my constituents in Selby and Ainsty are suffering under that recession’s effects, would the Minister chalk it up as a job well done?

[Bim Afolami]

The hon. Gentleman will do well. There is nobody on the Government Benches who welcomes adverse economic situations for anybody. That is why we are doing everything we can—straining every sinew—to grow the economy. All the measures I have laid out will continue, but they would be put at risk by those on his Front Bench being in office.

Autumn Statement

Keir Mather Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Jeremy Hunt]

My right hon. Friend is absolutely right. High inflation is destabilising for an economy: it stops businesses investing, it stops families spending, and it causes misery to people who see the cost of their weekly shop go through the roof. That is why it has been our No. 1 priority. It would be great if it were Labour’s, too.

[Keir Mather (Selby and Ainsty) (Lab)]

It is frankly embarrassing that the Chancellor and the Prime Minister have spent this afternoon celebrating inflation staying 2% above target, while families in Selby and Ainsty face 10% food inflation every time they use the supermarket. What message does the Chancellor think his celebrations send to those hard-working families?

[Jeremy Hunt]

It is not celebrating that has halved inflation from 11.1% a year ago; it is hard work and difficult decisions, which unfortunately were mainly opposed by Labour.