Amendment of the Law

Paul Blomfield Excerpts

Monday 26th March 2012 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

This Budget is based on the old Tory adage, “If you want to make the rich work harder, pay them more; if you want to make the poor work harder, pay them less”, with the added twist of clobbering the old at the same time. But its real disgrace is the way in which the Liberal Democrats rolled over and agreed to the cut in the 50p tax rate.

When The Daily Telegraph 500 first wrote their infamous plea for a cut in that rate—

[Ian Swales (Redcar) (LD)]

Will the hon. Gentleman give way?

[Paul Blomfield]

No, I will not give way—any more than the right hon. Member for Bath (Mr Foster) did when I tried to intervene on him on that point.

When that letter was written, Lord Newby, the Liberal Democrat tax spokesperson, was quick to reject the appeal, but unfortunately the orange book clique that now runs the party won the day, and we should not be surprised. Back in March 2010, before the general election, the now Deputy Prime Minister boasted to The Spectator that his politics were defined by his belief in “freedom from tax” and in a smaller state.

[Lorely Burt (Solihull) (LD)]

Will the hon. Gentleman give way?

[Paul Blomfield]

No, I will not give way.

What happened to the party of Paddy Ashdown, whom I remember celebrating taxation as

“the subscription we pay to live in a civilised society”?

The Liberal Democrats are hiding their shame for backing the tax handout for the rich behind the fig leaf of the rise in the tax threshold. They claim, as the right hon. Member for Bath did earlier, that it helps the poorest—

[Ian Swales]

Will the hon. Gentleman give way?

[Paul Blomfield]

No, I will not give way. The Liberal Democrats would not give way to me on this point earlier.

The Liberal Democrats claim that the rise in the tax threshold is a progressive measure that helps the poorest; the truth is that it is not and never has been. We were reminded by the hon. Member for Grantham and Stamford (Nick Boles) at Prime Minister’s questions last week that the cause was originally championed from the right of the Conservative party by Norman Tebbit, but it was rejected even by the Thatcher Government as unjustifiable. It gives the same cash benefit to somebody earning £10,000 as to somebody earning £100,000—[Interruption.] Members should listen to this point. It gives a tax handout to, for example, every Member of this House. We, frankly, are not among those most in need; at this time, people such as us and those who earn more do not need a payout. The cruellest trick is to pretend that it is a progressive measure.

The Institute for Fiscal Studies looked at the impact of lifting the personal allowance and stated, first, that

“the poorest third of adults do not benefit at all”;

secondly, for families, that

“the highest average gain occurs in the second-richest tenth of the income distribution”;

and concluded that the assertion that increasing the personal allowance is progressive

“is not true if one considers the gains across all families”.

This Budget fails the test of fairness, it fails the test of growing the economy and it should fail to win the support of this House.