Budget Resolutions
Debate between Nigel Huddleston and Michael Shanks(1 month, 3 weeks ago)
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Nigel Huddleston
That is quite amazing. I opened my speech by saying, “Let’s focus on the facts.” Is Labour really claiming to be the party of employment? Every single Labour Government in history have left office with unemployment higher than they began with.
The Secretary of State for Work and Pensions outlined how we will help the very people whom the hon. Member for Bristol South (Karin Smyth) mentions. Far from saying that everything is fine and that people have never had it so good, we are being honest with the public by saying, “We know that you have been through an incredibly difficult time.” That is precisely why we intervened to such an extent, providing over £450 billion of support during the pandemic and since. It was out of necessity. That support was needed. It is important that we are honest with the British public that the money clearly needs to be paid back. We have higher taxes out of necessity, but as my hon. Friend the Member for Folkestone and Hythe said, we reduce taxes out of choice when we can. We increase them out of necessity, and we reduce them out of choice. The Opposition do not have that philosophy.
From April 2024, we are further reducing national insurance contributions, and employees across the UK will see their national insurance contribution rate cut from 10% to 8%. Alongside the cuts we already made to NICs at the autumn statement, this is a total annual tax cut of £900 for the average worker on £35,400 a year. Self-employed national insurance will be cut further too, to 6%; 2 million self-employed will also get a tax cut, worth, on average, £650 a year. Those measures will incentivise, encourage and support more people into work or to work longer hours. The OBR says that, when combined with the autumn reduction, our national insurance cuts will mean the equivalent of 200,000 more people in work, filling one in five vacancies and adding 0.4% to GDP, and 0.4% to GDP per head.
This latest cut to NICs is the latest step towards our long-term ambition to end the unfairness that means that if somebody gets their income for having a job, they pay two types of taxes—NICs and income tax—but if they get it from other sources, they pay only one. When it is responsible and when it can be achieved without compromising high-quality public services, we will continue to cut NICs, making work pay. I believe that my neighbour, my hon. Friend the Member for The Cotswolds, outlined the precise wording from the Chancellor yesterday on that.
Of course, this should be seen in the context of our overall record on jobs, which is impressive. Since 2010, more than 2.5 million more people are in work. That is equivalent to 800 jobs created every day of the Conservative- led Administrations.
Michael Shanks
Does the Minister agree, however, that many of those jobs are part of a low-wage economy? The OBR, which he cited, said that in the 13 years of the Conservative Government pay has gone up by just £17 a week, which contrasts with the 13 years of Labour when it went up by £183 a week. Does he agree that many of these jobs are low paid and precarious?
Nigel Huddleston
The hon. Gentleman was clearly not listening yesterday to the Chancellor, who had a key focus on jobs. That is precisely why we are lifting so many people out of poverty and why we have had a focus on increasing the national living wage over the years. Let us not forget that the tax-free allowance was about £6,500 under Labour, whereas it is more than £12,500 now. We have lifted so many people out of paying tax altogether, and that has been a key focus and strategy of this Government.
Oral Answers to Questions
Debate between Nigel Huddleston and Michael Shanks(2 months, 3 weeks ago)
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Nigel Huddleston
The reason we have had to raise taxes is £350 billion of support during the pandemic, which I did not hear the Opposition oppose, and an additional £100 billion to help people during the cost of living crisis, which I did not hear the Opposition oppose. We therefore had to increase taxes out of necessity, but we reduce them out of choice, which is exactly what we are doing. Labour increases taxes out of necessity and then continues to increase them out of choice.
Michael Shanks (Rutherglen and Hamilton West) (Lab)
The Financial Secretary to the Treasury (Nigel Huddleston)
The Government remain committed to increasing economic growth in Scotland and right across the UK. As part of 110 growth measures in the autumn statement 2023, the Government introduced tax policies that are projected to stimulate economic growth in Scotland and across the country. That includes making full expensing permanent and the largest ever cut to employee and self-employed national insurance contributions, which means more people working.
Michael Shanks
The EY Independent Treasury Economic Model Club forecast published yesterday found that the UK’s growth forecast of 0.8% this year is only slightly outperformed by the even more disappointing 0.7% growth in Scotland. Given this Parliament has hiked taxes 25 times, and the Scottish National party now think that those on modest incomes in Scotland should pay even more tax, does the Minister agree that the people of Scotland are simply paying the price for two Governments with no economic credibility?
Nigel Huddleston
No, I do not agree. The hon. Member should be aware that the OECD suggests that in the coming years we will be growing faster than France, Italy and Germany. Of course, the Government have a strong track record against our OECD friends over the last 14 years, and Scotland benefits from this economic growth.