Income Tax (Charge)

Lucy Allan Excerpts

Thursday 28th October 2021 Commons Chamber

[Barry Gardiner (Brent North) (Lab)]

The mistake with Budgets is to think that they are the beginning of a financial process. Often, they are the result of one. This Budget is the result of 11 years of austerity and under-investment. Wages flatlined, and our public services and infrastructure were ill-equipped for the pandemic and to be the engine of growth that we need to bring us out of the economic crisis it has precipitated.

The Budget is uncomfortable for Conservative Members of Parliament. No Government since the war has implemented a higher tax take from the people of this country.

[Lucy Allan (Telford) (Con)]

The hon. Gentleman said that it has been an uncomfortable Budget for Government Members. I have to say that I am extremely proud of the Budget, and later I will have the opportunity to say why.

[Barry Gardiner]

I am sure that the hon. Lady will explain exactly why she is so proud of the Budget. That is her right. However, it is clear that many of her colleagues feel that it is pulling them in different directions. I will come to explain why that is the case.

As I said, no Government since the war have implemented a higher tax take from the people of this country, yet wages are scarcely where they were 10 years ago, growth in the next three years will slow to a sluggish 1.3% and our country’s debt stands at the astonishing figure of £2.2 trillion. It was notable that yesterday the Chancellor referred to underlying debt rather than gross debt. Underlying debt is still a staggering 85.2% of GDP and, on his own admission, set to rise over the next three years. Gross debt is now 103% of GDP.

What of the deficit? After the global financial crisis had seen it skyrocket from £50 billion to £103 billion in 2010, George Osborne said he would eliminate it by 2015. The deficit at its peak in 2010 was £103 billion, or 6.9% of GDP. At year end in March, the last ONS release said that the UK’s deficit was £304 billion, or 14.5% of GDP. The hon. Lady may not feel uncomfortable about that, but I think that a number of her colleagues do, yet the Chancellor had the extraordinary brass neck to the tell the House that

“it is the Conservatives, and only the Conservatives, who can be trusted with taxpayers’ money.”—[Official Report, 27 October 2021; Vol. 702, c. 276.]

The Chancellor talked about building a stronger economy. His party has had 11 years to do that and it has failed. What should be of real concern is the Budget’s lack of direction. There is an extraordinary tension between No. 10 and No. 11, which are operating like a Doctor Dolittle character, with the Chancellor pushing for fiscal conservatism and the Prime Minister pulling for a bout of sunny optimism and lax monetary control. The truth is, they are afraid of the electorate and it showed in their spending decisions.

The Government are rightly relaxing the public sector wages freeze—to the horror of their Back Benchers—but they have wrongly imposed a £4 billion clawback on the very poorest in our society who rely on universal credit. Their changes to the taper relief show only how fearful they really are, but those changes do not nullify the impact of the clawback.

The Government have no strategy to tax wealth on unearned income. It is shameful that a cleaner on universal credit doing three jobs to make ends meet pays a higher rate of marginal tax and national insurance than her landlord. It is extraordinary that, instead of working with international partners to develop a proper tax framework for companies such as Amazon, they have done all they can to block one. It is extraordinary that the Chancellor has given £1 billion of tax cuts to the banks. Working families get tax rises; banks get tax cuts.

Priorities are the stuff of politics and the Chancellor has made his party’s priorities clear. But, in addition to the wrong priorities, the Government have been incompetent and profligate. The total investment announced yesterday for the next three years was £150 billion. That same day, the Public Accounts Committee reported that, despite being allocated an eye-watering £37 billion, Test and Trace failed to achieve its objectives, failed in its key purpose and, at the most critical time, failed to disrupt onward transmission. The Prime Minister had a phrase for money wasted like that—it referred to something being done up a wall. Delicacy prevents me from saying what it was.

The past 11 years of Conservative Government have seen our economy grow at just 1.8% per annum. Even taking into account the impact of the global financial crisis, in the years from’ 97 to 2010, when Labour were in government, the economy grew by 2.3%. No wonder the only person on the Conservative Benches to look pleased at the Chancellor’s discomfiture yesterday was the Foreign Secretary. The truth is he has taxed more and more unwisely, while presiding over unacceptably slow growth.

Many of us will recall the Government’s response to Labour’s manifesto commitment to invest £200 billion in the infrastructure of the country. They called it a magic money tree, but since then they have discovered a forest, even if their £130 billion infrastructure strategy now looks scarcely adequate to turbocharge our economy in the way that is required.

Let me now turn to the way that is required. It is to be regretted that the Chancellor does not use public transport when in London. Were he to do so, he would have seen the poster campaign that says, “The world is looking to you, COP26.” One of those posters says, “Secure our priceless planet. Or argue over cost.” Yesterday, the Chancellor could truly have given us a Budget of optimism: a Budget that addressed the infrastructure needs of our country, the skills development required for a just transition to a net zero economy, and the basis for sustainable economic growth. He failed, and did so in a way that displayed such an astonishing lack of awareness of the problem and what one can only call contempt for the reality of the crisis that it appeared a deliberate provocation to all those about to meet this weekend in Glasgow for COP26.

The Chancellor referred to the tax super-deduction of 130% allowances for capital investment. He failed to mention that these have no environmental or climate filter and that some of the biggest fossil fuel companies will be able to use them to receive from the taxpayer not only the entire cost of their polluting capital investments but a bonus 30% for doing so, in projects like the Cambo oil field,. This incentivises the very behaviour COP26 is trying to curtail.

The Chancellor announced a new lower rate of air passenger duty on domestic flights and support for regional domestic airports to incentivise air travel within the UK. Other countries have banned domestic flights where a fast rail link exists and have been investing in their low-carbon rail infrastructure. It is, frankly, obscene that it is often cheaper to fly within the UK than to take the train. My hon. Friend the Member for Bristol South (Karin Smyth) earlier remarked that a flight from her constituency in Bristol to Glasgow costs just £29.99, while the train costs £97.20. The Government’s investment priorities on this are wrong. They are wrong economically and they are wrong morally.

--- Later in debate ---

[Lucy Allan (Telford) (Con)]

Thank you, Mr Deputy Speaker, for calling me to speak in this important debate. I thank the hon. Member for Ceredigion (Ben Lake) for what I see as a perfect model of constructive opposition. He gave a thoughtful, considered and helpful speech; I hope that the Treasury takes up some of the points that he raised. I thank him for making that contribution to the debate.

I am extremely grateful to the Chancellor for supporting businesses in my community throughout the pandemic and protecting jobs. There is no doubt that there is still a very challenging and difficult environment for businesses, so of course I welcome all measures in the Budget to support business. I pay tribute to the many businesses that have struggled and struggled, but succeeded in getting through the pandemic with the help of the Chancellor. They have my full support as we move forward in what will continue to be a challenging time.

I would like to congratulate Mr John Ellis, a publican in my constituency. John, who runs the Elephant and Castle in Dawley and the Crown Inn in Oakengates, has campaigned for his sector harder than any constituent I have ever met. Throughout the pandemic and in the prelude to the Budget, he wrote letters to me and to the Chancellor; he met me; he bought me pints of beer. He gave me a full insight into the very serious challenges that the pub sector faces. Mr Ellis may not be 100% satisfied with the Budget and its measures for supporting pubs and hospitality, but I know that he will be delighted by many measures in it.

I am extremely proud of this Budget. I am proud of it because it is a Conservative Budget—a Budget that supports families and incentivises and rewards work.



Like all other Members—whether they will admit to it or not—I am delighted that this Budget puts more money into the pockets of the lowest-paid constituents in Telford, and specifically provides support for the struggling families whom we must support if we want to create opportunity for young people. As we all know, whether we admit it or not, these measures will make a real difference to the lives of our constituents, particularly those who struggle the most.

At the heart of the Budget are incentives and rewards for those who work The universal credit policy that we now have is by far the most effective tool in helping people back into work. We on this side of the House do not agree with disincentives to work and keeping people trapped on benefits, and I know that many on the other side also believe in helping people back into work. The incentives in the Budget are welcome because a job gives people so much more than a route out of poverty. It gives them a sense of identity and of belonging—they are part of a community—and of personal responsibility, and they are surrounded by a support network which is particularly helpful in tackling the mental health issues that so many people have experienced during covid. That is why I am so grateful to the Chancellor for, since the start of the pandemic, prioritising jobs and skills as key to our economic recovery.

I particularly want to draw the Chancellor’s attention to the fantastic work being done at Telford College in my constituency in respect of skills such as engineering, HGV training, digital and maths. In almost every sector one could think of, the college is delivering opportunity across our community, and, vitally, providing local businesses with the skilled people whom they need in order to succeed. I invite the Chancellor to come to see this inspiring college for himself: I know how impressed he will be by students and teachers alike.

I must also thank the Chancellor for the levelling-up money that has been coming to Telford. Earlier in the year we were awarded £22.3 million, and an additional £1 million for an exciting programme of projects that will build opportunity across our community. The jewel in the crown was a digital and maths hub to provide access at every level to all who want to improve their skills. My thanks must go to the town deal board for its work on this, and to our excellent council officers, who are as dedicated as I am to Telford’s future. The Budget has also confirmed the provision of a diagnostic health hub at the Princess Royal Hospital to tackle the backlog. That is desperately needed. While the health challenges that face Telford are perhaps a subject for another debate, there is no doubt that this will change lives, and we are truly fortunate to have been selected as one of the areas to receive such a hub.

Let me sound a note of caution. My constituents understand full well that getting the NHS back on its feet will take time. They understand full well that it will cost money, and they understand full well that they must make their contribution and share the pain of paying for it. My constituents are reasonable people who want the NHS to succeed. However, they want to know that their money, the levy money, will be spent wisely. I hope it will feature clearly on payslips, so that people have an understanding of the significant contribution that they are making to healthcare and social care. I want it to be spelt out, because I think that that will help to bring greater accountability to health trusts and boards to ensure that they deliver good-quality healthcare for my constituents and their families, rather than spending money on shiny projects such as state-of-the-art specialist units to which local people may never need access. We have seen that happening in Telford: having already been given £312 million for a specialist unit upgrade, the health bosses decided to put in a further bid for £560 million.

I understand that we all want to invest in better hospitals, but this really is not about buildings. As we emerge from the pandemic and try to recover and ensure that the NHS gets back to functioning at full capacity, I urge the Chancellor not to give money to those kinds of projects but to invest in tackling our backlog, as he has done in this Budget, and in ensuring that people can access their GPs and get through to them on the phone. That is what local people really want. They want better healthcare that they can access.

I would like to end by saying that sometimes it is good to say thank you, as I have been doing throughout my speech. There are those who say that the money is never enough, that things are never good enough and that Telford is missing out, and my local Labour council is never satisfied, no matter how much money comes to Telford. It very nearly scuppered the Telford levelling-up bid by saying that it had been cancelled. This upset not only the towns fund board but many people who were invested in that project. It is important to recognise when things are going well, and to look at what is getting done despite the extraordinarily challenging circumstances.

All of us in this House know that Ministers have given their all to get us through the pandemic and out the other side and to rebuild our economy, and I am grateful to every single one of them, whether or not I agree with everything they say and do. They have tried their best and given their all, and we all owe them a debt of gratitude. My constituents are grateful to the Prime Minister. On that note, Mr Deputy Speaker, I would like to thank you for including me in this debate, which I much appreciate.