Income Equality and Sustainability

Lord Young of Cookham Excerpts

Wednesday 6th May 2020 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, the House is grateful to the most reverend Primate for this debate. It is timely because the Government are about to embark both on a spending review and a Budget which between them will shape the nation’s response to the pandemic, as well as setting out the Government’s response to the competing priorities we debate this afternoon.

On 12 March, the Prime Minister said, “I must level with the British public.” He was talking about the impact of the virus on the nation’s health. We now need the same frankness about its impact on the nation’s economy. Six months ago, a number of commitments were made in good faith by my party in its manifesto:

“We will not borrow to fund day-to-day spending … We promise not to raise the rates of income tax, National Insurance or VAT”,


and

“debt will be lower at the end of the Parliament”.

Those commitments are unsustainable, and we should say so now. In particular, leaving untouched the most progressive tax we have makes it impossible to respond to the compelling case made by the most reverend Primate and the right reverend Prelate the Bishop of Durham.

I have two practical suggestions. First, we should abolish the universal winter fuel allowance, and roll the savings of up to £3 billion into social care, which has had a raw deal in recent settlements.

Secondly, we should introduce at least one new council tax band on top of band H. In a recent report, the IFS described council tax as

“increasingly out of date and arbitrary, and highly regressive with respect to property values. It is ripe for reform.”

It is absurd that the most valuable properties pay only three times as much tax as the least valuable. Ideally, there should be a revaluation, but that will not happen. However, a new, higher band would make the tax more progressive and bring in more resources for local government.

Clarity on the manifesto; replacing an untargeted benefit with help for social care; and a more progressive local tax. Those are the building blocks towards the fairer society advocated by the most reverend Primate.