Income tax (charge)

Mims Davies Excerpts

Thursday 31st October 2024 Commons Chamber

[Mims Davies (East Grinstead and Uckfield) (Con)]

I congratulate all hon. Members who have made their maiden speeches. May I wish the hon. Member for Livingston (Gregor Poynton) well in his time in this place?

I agree with my right hon. Friend the Member for Maldon (Sir John Whittingdale) that the failure of the Budget, and its long preamble, mentioning covid and the war on our continent, was very stark. However, I would like to start on a positive note. I am the 380th woman elected to Parliament, and it was truly a historic moment to see the first female Chancellor at the Dispatch Box. She said that it would give hope to other women who were watching, and I absolutely agree. I just hope that our businesses, and sectors such as hospitality, feel that hope.

It was very pleasing to hear the announcement of the compensation schemes for infected blood victims— my constituent Robert, in East Grinstead, has been campaigning very hard on that—and for victims of the Post Office scandal, which will be welcomed by many of my constituents. It is also pleasing that fuel duty has been frozen, and I thank all my hon. Friends and campaigners who made sure that there was support in this area of the family finances. I am pleased about that, and, indeed about the cladding interventions. There is a welcome boost for funding for special educational needs and disabilities, and something for the dreaded potholes, although we have yet to find out how far that funding will stretch.

However, 10 independent schools are in peril in my constituency, and their food providers, staff and many others are very worried about where they will go if they are displaced. There is no funding in this Budget to deal with such displacements. I would have welcomed more support for the Sussex wine sector; I am sure that you would agree with me on that, Madam Deputy Speaker.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. That point was not about the consumption of wine; I have many vineyards in my constituency, as the hon. Member does.

[Mims Davies]

It is very important to support people working in the wine sector. Viticulture is alive and well in Sussex, Essex and across the country. If the train drivers’ needs have truly been satisfied, the services from East Grinstead to the capital simply must improve. That is my plea to the Southern rail service.

Despite the leaks and the pre-Budget announcements, it came as something of a shock to hear the full announcements in the Budget yesterday. There can be no mistake: the cost to the country is very dear. According to the OBR, the direct and indirect costs amount to £52 billion. The new Labour Government cannot escape the fact that, in their first Budget in 14 years—as they keep reminding us—they are set to raise taxes by a staggering £40 billion. Taxes will be at their highest level since 1993, and that builds on the winter fuel payment debacle. Despite Labour Members’ glee and their waving of Order Papers, when they go back to their constituencies or open their emails, they will see a very different story. Their constituents, like mine, will face the largest tax burden in our history, and working people will pay the price, as the Chancellor has now agreed.

Let me turn to younger voters and those keen to get on the housing ladder. Stamp duty is back for first-time buyers. One of my Conservative councillors in Copthorne and Worth highlighted this morning that the purchase of two rental properties has fallen through because the margins were already very tight. Yesterday’s decisions mean that two couples will now not be homeowners.

In Handcross and Pease Pottage, one of my councillors, Mr Prescott, mentioned the Budget of broken promises. His organisation will face a cost of £70,000, it will lose two people, and the delivery of programmes will be stopped. That is the reality of these decisions. Small businesses—often those that are women-led, such as salons—will see the impact of the national insurance rise. I will be interested to see the effect across all sectors, particularly as the measures are a clear breach of the Labour manifesto. Despite Labour’s retrospective revisionism, the effect will be felt right across the land. On every radio station that I listened to on my way in this morning, the dismay across sectors, affecting real people’s lives, was everywhere.

The national insurance rise affects charities and organisations, such as our hospices and air ambulances. As the shadow Chancellor said in the media this morning and again here today, picking the pockets of business, charities and organisations is not cost-free. The Institute for Fiscal Studies confirmed that the rise will hit the lowest-paid workers through lower pay, and the OBR has said that it will hit employment. So much for not raising taxes on working people. Two manifesto commitments have been broken.

[Yuan Yang (Earley and Woodley) (Lab)]

My constituents told me on the doorstep that their No. 1 priority was to improve the NHS. If the Conservative party were still in government, it would be overseeing steep cuts across the NHS and our public services. Would the hon. Lady be happy to be part of such a programme?

[Mims Davies]

Nobody here wants any negatives for their constituencies from the Budget, least of all for health services. However, I have family in Wales who have been living under a Labour Government, and they know the reality of what is coming down the line.

Let me build on the questions I have had from constituents this morning. Family businesses are directly affected. A local funeral directors group with national reach said that it believes that the Treasury has its figures wrong on the impact of the changes to agricultural property relief and business property relief. The cap and the 20% rate must surely be a simple mistake, the group writes. To meet the inheritance tax bill and pay their liability, firms will have to extract capital, incurring a 38% dividend tax rate, which is above the proposed 20% rate of reduced IHT. Given that capital gains tax is at 24%, it makes no sense for family businesses to pass on their shares to family. They will simply have to sell them or their business. I have been implored to ask those on the Treasury Bench to ensure that the Government consult and listen to family businesses, at the very least.

The Chancellor of the Duchy of Lancaster talked about Conservative Members opposing the Budget. We are opposing it. It is anti-choice, anti-growth, anti-business—particularly anti-family businesses—and anti-aspirational. It is focused on more borrowing. Disgracefully, as has been said, it pits the public sector against the private sector. Happy Hallowe’en, because everybody here knows that this is the ghost of a Labour Government of the past. They are back and haunting every single constituency.

I represent a rural constituency, and it is clear that local farmers will be hit by the changes to inheritance tax—we just need to read the messages from the NFU today. I am afraid that the subterfuge and the hoodwinking of the farming community will be felt not just by Opposition Members, but across everybody’s communities.

I recently read out in Westminster Hall the words of a local farmer, whose concerns were purely about business confidence at that point. The same farmer wrote to me again this week—I remind the House that farmers are working people, and they work 365 days and 52 weeks a year—to say:

“My family’s farm and estate are currently economically viable but there is no chance that they would ever produce sufficient cash flow to make it possible for us to cover any significant amounts of inheritance tax. If we are struck by excessive taxation we will no longer be able to produce 7,000,000 litres of milk per annum or timber for the nation. The heritage of 200 years could be gone.”

Farmers across my constituency are stunned. This is a hammer blow for family businesses, as the shadow Chancellor said, and we will oppose the Budget. It does not fix the foundations; it is a set of dangerous ground works.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Maya Ellis to make her maiden speech.

--- Later in debate ---

[Richard Baker]

I thank the hon. Member for his intervention. In Scotland we say, “Facts are cheils that winna ding.” The fact of the matter is that 900,000 additional children were lifted out of poverty by the previous Labour Government, and the rise and use of food banks under this Administration has been exponential —to the extent that, now we as a Government are dealing with food banks running out of food because of the level of poverty that we have inherited. This Budget will fix the foundations of our economy. It will redistribute wealth, tackle poverty and invest in growth. That is why we can look forward to what will be achieved by this Government, thanks to the decisions taken by my right hon. Friend the Chancellor of the Exchequer.

Anybody looking at events in Scotland will see that my constituents have suffered from two Governments failing to deliver on investment and failing to deliver on growth. Their mismanagement of the public finances stands in sharp contrast to the measures that have been bought forward by my right hon. Friend the Chancellor of the Exchequer, who has taken some challenging decisions on taxation, to ensure that there is no return to austerity and that we can invest in growth.

The Budget gives us the chance to move on from the reckless incompetence of the Tories here in Westminster and of the SNP in Holyrood. It is a chance to move on from the catastrophic mini-Budget of Liz Truss—a mini- Budget that caused so much damage to my constituents. The hon. Member for East Grinstead and Uckfield (Mims Davies) conjured up images of Halloween in her speech, but the economic nightmare was caused by the Conservative party, and our constituents paid the price in their living standards.

Those of us in Scotland cannot underestimate the impact of the shambolic stewardship of Scotland’s finances by the SNP. It is one thing for the SNP to crash the finances of its own party, but quite another to crash the finances of our country. The SNP Government have completely mishandled contracts for much-needed new ferries. Other public sector projects have been overspent by millions, while others have been delayed or cancelled. They have also failed to spend hundreds of millions of pounds which had been allocated to them in structural funds. Funding for our local authorities has been slashed. The housing budget has been cut, and the Institute of Fiscal Studies assessed that the Scottish health budget faced a real-terms cut under the SNP in this financial year.

While we know that this Budget is fixing the foundations, so that we can deal with the reckless approach of the previous Government here, the SNP cannot simply blame everyone else for its own mistakes, as, yet again, it has attempted to do over the past 24 hours.

[Mims Davies]

The hon. Gentleman is making an excellent speech, not least because he has mentioned both me and my constituency, so I am grateful to him for that. On that point about the SNP blaming everyone else, he has just blamed the SNP and then blamed us. While he is looking at all this guilt, he should consider the merry-go-round operating under Labour with its jobs for the boys. Perhaps he might like to address that issue.

[Richard Baker]

I think the guilt should be felt by those on the Conservative Benches. The fact is that we have inherited a £22 billion black hole in the country’s finances, and that has been assessed independently by the OBR. That is how blame should be apportioned.

I was talking about matters in Scotland, which I am sure will be of interest to the hon. Lady and her constituents. The Scottish Fiscal Commission stated that much of the pressure in Scotland comes from the Scottish Government’s own decisions on cuts in its last Budget. I very much welcome the additional £3.4 billion that will come to Scotland and our public services through this Budget. It is vital that the SNP learns from its mistakes, and undoes the damage that it has caused. I do not know where the SNP Members are today. Perhaps they are travelling back to Scotland in their own party campervan.

My constituents cannot put up any longer with lengthening waits for hospital treatment, with finding it so difficult to register for an NHS dentist, and with a housing crisis where so many people do not have the homes they need or cannot get a foot on the housing ladder. In my constituency, there can also now be no excuse for further delays by the Scottish Government in constructing a new health centre for Lochgelly. The SNP has promised to deliver this for over a decade, but has failed to do so.

In contrast, this Budget sets out a different vision for our public services. This Government will invest in homes and in our schools. Having worked with the disability charity, Enable, prior to taking my seat in this place, I am delighted with the announcements on social care and special educational needs. It is astonishing to hear some Members talk about our plans for wages in the social care sector. They seem to imply that our hard-working social care staff, who play such a huge role in our communities, should not get fair pay for that vital role that they carry out for us and for our loved ones.

The pension triple lock is protected. Representing a constituency where there are so many former miners— 849 members of the mineworkers’ pension scheme are living in Glenrothes and Mid Fife—I am delighted that this Government are ensuring that more than £1 billion owed to them will be returned, which will be an average of £29 a week more for each member, as my hon. Friend the Member for Livingston (Gregor Poynton) highlighted in his excellent maiden speech—one of so many excellent maiden speeches from Labour Members.

As many of my constituents benefit from this Government’s ending an injustice of the past, more can look to investment in the future. The Budget is redistributive, but it is a Budget for growth, too, boosting public investment by £100 billion over the next five years. A total of £125 million is immediately being invested in GB Energy, headquartered in Aberdeen. It was extraordinary, Madam Deputy Speaker, that when it came to the vote this week, SNP Members failed to back the establishment of GB Energy. Far from standing up for Scotland, the ones who were actually here were sitting on their hands.

Renewables is a key and growing part not only of the Scottish economy, but of our local economy in Glenrothes and Mid Fife. Along with GB Energy focused on establishing Scotland and the UK as a green energy powerhouse, the National Wealth Fund opens up the potential for us to invest in our renewables infrastructure. As we seek to secure a long-term future for the Methil fabrication yard in my constituency, investment in the facilities of that yard would ensure that the 200-strong skilled workforce can play a vital role in taking forward our ambitions for our renewables sector.

The election of Anas Sarwar as Scotland’s First Minister will be required for my constituency to reap all the rewards that the Budget has set the foundations for, but with £3.4 billion extra for Scotland in it, as the Scottish Trades Union Congress has said:

“The task now falls to the Scottish Government to take the decisions needed to invest, through progressive taxation, into our communities and public services. The Westminster blame game is finished.”

This is a Budget for our public services, and a Budget to boost investment. This is a Budget for Scotland.

--- Later in debate ---

[The Exchequer Secretary to the Treasury (James Murray)]

I thank my right hon. Friend the Member for Wolverhampton South East (Pat McFadden) for opening today’s debate, and for so clearly reminding us of the state in which the Conservatives left our country.

As many Members have rightly made clear today, yesterday’s Budget made choices about the future of our country. They were not just choices to get through the next few months until the next fiscal event, as we got used to under the last Government, but choices—sometimes difficult ones—about the long-term future of the UK economy and the public finances. The Chancellor’s Budget honoured our manifesto commitments by restoring economic stability, fixing the public finances and boosting long-term, sustainable investment in our country. The first Budget of this new Government turned the page on the last 14 years of chaos and decline. This Budget is a generational event to fix the foundations, so that we can deliver the change that the people of this country voted for. It begins to address the urgent pressures that our NHS, our schools, our police and our borders are under.

However, this Budget is not just about the coming year, nor even the whole of this Parliament; it is about making the right long-term decisions to create opportunities for people throughout the country, put more money in people’s pockets and begin a decade of national renewal.

[Mims Davies]

I thank the Minister for giving way; he is very generous. He has mentioned choices. Could he comment on the fact that the cost of borrowing is soaring after this tax-raising Labour Budget of broken promises? Labour Members have talked about a crashed economy, but now the Government are presiding over their own low-growth, slow-growth car crash, and they are living in denial themselves.