Budget Statement

Lord Butler of Brockwell Excerpts

Friday 12th March 2021 Lords Chamber

[Lord Butler of Brockwell (CB) [V]]

My Lords, I congratulate the noble Lords, Lord Benyon, Lord Khan and Lord Cruddas, on their maiden speeches.

I make a single point on the proposed 1% pay increase for the National Health Service. I accept that to decelerate borrowing, the Government need to restrain their own wage costs. On the other hand, the public want to express their gratitude to the NHS. My conclusion is that the pay review body should determine ongoing NHS pay levels on what is necessary to recruit and retain staff, but there should be a one-off bonus to recognise the extraordinary demands of the last year on the NHS.

I have a specific suggestion. A one-off, tax-free bonus of £1,000 to all in the NHS would cost £1.3 billion. How should that be paid for? While many in the economy have suffered in the last year, the income of others has been maintained or even enhanced. A temporary 1% increase in the 40% higher rate of income tax would raise something over £1 billion, which would go a long way towards covering the bonus I have suggested.

Of course, I am well aware that the Government’s manifesto ruled out increases in income tax rates. However, in this exceptional situation, a one-off surcharge for this fiscal year to reward NHS employees would be acceptable to those in the higher tax ranges. If I may speak personally, it would certainly be acceptable to me. I hope that this suggestion might be considered.