National Insurance Contributions Increase
Debate between Oliver Heald and Simon Clarke(2 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Clarke
I entirely agree with what my hon. Friend has said, and it is a reflection of the fact that we have taken sensible measured steps against what has been a recurring series of unprecedented challenges—the financial crisis, our exit from the European Union, covid, and now the backdrop of conflict in Ukraine. All these things have had a major impact on the world around us, but our focus has consistently been on supporting people to do the right thing and to protect their finances.
Sir Oliver Heald
Does my right hon. Friend agree that the rise in the national living wage should not be ignored and is important in helping people at the bottom of the income spectrum? It is right to take such measures, but the Opposition’s asking for more money the whole time but not being prepared to put in any resource is a ridiculous smoke and mirrors job.
Mr Clarke
It is, and my right hon. and learned Friend is precisely right because, in the end, it is poorest who will lose out the most if we lose control either of our public spending or of inflation. To illustrate, a 1 percentage point rise in both inflation and interest rates would increase spending on debt interest by nearly £23 billion a year, and that threat is not a notional one. In January 2021 we spent £1.6 billion on servicing our debt, but in January this year we spent £6.1 billion. We cannot fund increases in spending on our health service and social care by increasing borrowing. Members will surely agree that to leave ourselves vulnerable at this time by further increasing our debt burden would be highly irresponsible. These are not always easy choices, but we will be the ones to reconcile the need to reduce our debt burden with the growing pressures on the state, and that means responsible choices about taxation.