Finance Bill

Nusrat Ghani Excerpts

2nd reading
Wednesday 27th November 2024 Commons Chamber

[James Murray]

I regret giving way to the right hon. Gentleman. I invite him to return to the Chamber next Tuesday for the Second Reading of the National Insurance Contributions (Secondary Class 1 Contributions) Bill, when I will also be speaking. We can have a full debate on national insurance then, which I am sure he and his colleagues are looking forward to. I hope they will support it in the Lobby because, no doubt, they support the extra investment in the NHS which that decision funds. I thank him in advance for signalling his good grace and support for our measures.

After we were elected, we said that we would take the difficult decisions necessary to fix the public finances. We said that we would close the tax gap, implement our manifesto pledges and protect working people. We said that we would deliver economic stability, fiscal responsibility and the certainty that businesses need to invest and grow. This Bill plays a central role in achieving those goals and I commend it to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Chancellor.

--- Later in debate ---

[Torsten Bell (Swansea West) (Lab)]

I wish to reflect on the tone of the shadow Minister’s remarks. Looking at chart 4.5 in the OBR’s document, I can see a big rise in the tax to GDP ratio, but from the right hon. Gentleman’s indignant tone, one would think that there had never been a tax rise under the previous Government. What the chart shows is a significantly larger rise in the tax to GDP ratio, because of the decisions taken by the previous Government, so is it not the case that the right hon. Gentleman’s tone does not reflect the facts of the decisions he took?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Before the shadow Minister responds, may I caution him against using the word “deceit” in the Chamber? No doubt he will now want to respond to the intervention.

[Mel Stride]

Madam Deputy Speaker, I will of course be guided by you on that matter. On the hon. Gentleman’s point, there is no doubt that, as we went into the last general election, the analysis of the manifestos of the three major parties showed that Labour’s manifesto would have by far the greatest increase on the tax burden. What Labour has done is to break its manifesto and go still further to take us, as the OBR has said, to what will be the highest tax burden in the history of our country. It is as simple as that.

--- Later in debate ---

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. The hon. Member for Swansea West (Torsten Bell) has twice used the word “you” when heckling. I will not let him off in the future.

[Mel Stride]

I take it as a familiar mark of respect from the hon. Gentleman.

The fact of the matter is that the ONS’s figures for the third quarter of this year show growth of 0.1%. That is one seventh of what has been achieved in the United States. In September, the third month of the quarter, there was negative growth. The reason for that is very clear. When this Government came to office, the first thing that they did was talk down the economy, and talk about black holes and what a terrible mess everything was in, as cover for what they intended to do all along. That had an impact on purchasing managers’ index surveys. We can see the slump in business confidence in the data, and the Government are now reaping the whirlwind. We have now had a Budget that will do even more damage to growth.

What will happen to inflation? Let us go back to our friends at the OBR. In every single year of its forecast, inflation is higher than in every single year of the forecast based on our last Budget back in the spring—a fiscal splurge up front that will translate into higher prices and higher interest rates for longer, meaning higher mortgage rates. Before Labour Members start jumping up and down at the M-word, the Government now own mortgage interest rates, and they are being affected in the wrong direction as a result of their policies. What about living standards? They are down and flatlining. The Joseph Rowntree Foundation says that by October 2029 the average family will be £770 worse off in real terms than they are today.