Income Tax (Charge)

Paul Waugh Excerpts

Tuesday 5th November 2024 Commons Chamber

[Tom Tugendhat (Tonbridge) (Con)]

I pay tribute to the hon. Member for Stourbridge (Cat Eccles), who gave a very full description of the constituency that she is privileged to represent. Her predecessor, Suzanne Webb, was a great friend of mine. The hon. Lady has taken over from a fine individual, who is now contributing in many other ways to our national life. I also pay tribute to the hon. Member for Yeovil (Adam Dance), who has the great good fortune of representing my godson, a farmer in his constituency, who will no doubt be contacting the hon. Gentleman shortly about some of the issues that have arisen in recent days.

I myself want to speak about those issues. Today, we are rightly speaking about public services—the NHS, on which we all rely, and those important elements in our lives that keep us together, underpin our economy and really hold us strong. But we are not just speaking about the product, the outcome—the output of those doctors, that money or those services. We are also speaking about the input, because we simply cannot have the one without the other. That is what I want to address.

What we have seen in this Budget is not just the largest tax rise in decades, the highest tax take since the war and greater indebtedness, effectively burdening our children with what we are spending today. When it comes to the fundamental challenge, the Budget is failing to understand how an economy works and why the relationship between generations matters so much. The story that the Budget tells is about a Government who do not understand what a family, generation or business is and do not understand why businesses investing today need the ability to plan long-term and not just be taxed halfway through.

The point is seen most obviously in the tax on farming and on the inheritability of farming property. The truth is that farms are unlike many businesses; they cannot simply be salami-sliced in the hope that they will survive. That just does not work. Individuals end up being forced to decide not just to pay the 20% that the Government ask for but to sell the 100% to liquidate the assets required. That is injecting a dangerous short-termism into the economy.

The truth is that the Government can really only do two things. The first, really important thing is to keep us safe. We all know that the first job of government is national defence and national security. But the second thing, often overlooked, is the ability to extend time horizons. It is very difficult for individuals to have time horizons beyond a certain point. In early human existence, the horizon was a harvest or a season; in the Anglo-Saxon period, people may have got it to a generation or possibly even a reign. But the genius of the industrial age and our democratic age has been to extend that time horizon over generations. We have done that through the rule of law and through understanding taxation and the predictability of an economy. We have done it because we have understood that if parents invest, children, grandchildren and great-grandchildren can reap the rewards.

What the Government have done, I am afraid, is to reverse that. They have shortened the time horizon and assumed that people—all our citizens—are not investors in the future, but employees of today. That fundamental misunderstanding of what it is to grow an economy is why this Budget is so bad.

[Paul Waugh (Rochdale) (Lab/Co-op)]

Will the right hon. Gentleman give way?

[Tom Tugendhat]

As the hon. Gentleman is an old friend, I will—for one minute.

[Paul Waugh]

I thank the right hon. Gentleman on the Tory Benches, which are singularly understaffed right now. But it is the almost criminal levels of understaffing in our NHS that affects most of our constituents. He is an honourable gentleman, so does he not feel a sense of shame that, every single day in our NHS, midwives, doctors and nurses cannot fill their staff rotas? They cannot do the job that they want to do and that we need them to do.

[Tom Tugendhat]

It is a pleasure to hear the hon. Gentleman, who has come off the fence and now has a seat; he can express his views freely. What fills me with sorrow is when I look at the future—when I look at the businesses that have invested so hard in places such as Tonbridge and now cannot pass that on over generations and over time. The investment timeline is being reduced and so is the growth. Do not just take my word for it—the Office for Budget Responsibility, the National Farmers Union and every business in this country have been clear on the point. The Government are not just taking the eggs from the golden goose; they are slaughtering the goose by trying to get the eggs out quicker. That simply does not work.

We all know what is going to happen next: the Government are going to have to come back for more. We just need to look at the predictions by various financial bodies over the last few days, which have been talking about our running out of the money raised in the Budget in the next two or three years. We know why that is going to happen. This Budget is not investing—worse than that, it is not encouraging investing. It is trying to exploit.