Health and Social Care Levy

Peter Bone Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Mr Steve Baker (Wycombe) (Con)]

I want to begin by thinking through what Labour would do if it were in power. [Interruption.] I am very grateful that the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) has just outlined some of the things that he might do. If I understand the Labour Front Benchers correctly, I think they suggested that they would use stamp duty or various transaction taxes on assets. I am grateful that Ministers are here, because I think that they know, as I know, that there is no way that the money needed would be raised—[Interruption.] I am grateful that the Minister says, “Correct”. It says in the document that not enough money would be raised from stamp duty and transaction taxes on assets. It is fanciful, and the hon. Gentleman’s proposals are likewise, I am afraid.

We would need to change one of the big taxes. Would Labour Members put up VAT from 20%? Of course they would not because it is regressive. It is a bad idea. It is already too high and it already hits everyone, so they would not put up VAT. Would they put up income tax? I think they would get the same advice that these Ministers have had from the same officials. I think they might be advised that we are already in a position where income tax is rather too dependent on the decisions of a small number of top earners. This is the sort of evidence we have had at the Treasury Committee for a very long time, so I think that we would find that, actually, they were not able to put up income tax.

So where would that leave Labour? That would leave it with the big tax that has always, as the document points out, been used to fund health and social care: national insurance contributions. I think that Ministers, if they were from Labour, would be presented with a distributional analysis like the one I have here, which our Ministers have. Labour Ministers would look at it and see that actually, distributionally, it is really only the top two deciles who are net losers. Deciles from the bottom through to No. 8 are either gaining or, in the case of the eighth decile, right there in net overall, neither gaining nor losing. I think that what Labour would do if it was in power is what it did last time it was in power and needed money for the NHS: it would put up national insurance contributions.

My constituents in Wycombe are very reasonable people. While knocking on doors in Marlow Bottom just last Saturday, I discovered constituents who recognise that we have suffered an enormous pandemic that has done so much to damage the public finances and people’s lives, as other hon. Members have said. But where are we going? That is the second point that I want to touch on. This is what I think Labour would do in power, and that is the problem—sorry, Ministers.

If we look, as I am sure colleagues have done, at the future debt trajectory for the United Kingdom produced by the Office for Budget Responsibility, we can see that our public finances are in an unsustainable state. I could easily give quotations—they are in my pocket—but if I recall correctly, the OBR’s 2018 report describes debt getting to about 260% by about 2057 and says something like, “Of course, policy would have to change by then.” I have always taken that to be a euphemism for “Of course, we would have to default on our age-related spending promises.” That is the consistent finding of the Office for Budget Responsibility on our long-term public finances. Sooner or later—in all our lifetimes, hopefully—we will find that the state cannot afford the promises that it has made to older people.

That is the problem that we face today. It is not about the national insurance contribution rise planned today, which I believe is a levy that the Labour party would adopt if it were in power; the problem is that we have no better ideas than putting up taxes to raise more money for public services.

[Mr Peter Bone (Wellingborough) (Con)]

My hon. Friend makes the powerful point that this is what Labour would do in power. Why are we doing it as Conservatives?

[Mr Baker]

That is the fundamental problem that I face today, because I believe that this is just the beginning of the generational crisis of our inability to fund the promises that have been made progressively for more than 100 years, since the National Insurance Act 1911. I have talked about it ad nauseam, particularly in relation to a Bank for International Settlements paper that sets out charts showing that all western welfare states, and indeed Japan, are in the same boat. Some of the cuts to age-related spending that would need to be made to balance the books are just implausible.

We are in a dreadful position. Historically, when this country has been in a dreadful position economically and socially and on a trajectory towards ruin, there has proven to be only one party capable of rescuing the situation, and of course it is the Conservative party. At some stage in our lifetime, the Conservative party will have to rediscover what it stands for, because I have to say that at the moment we keep doing things we hate because we feel that we must.

My hon. Friend the Minister for Covid Vaccine Deployment stood at the Dispatch Box today and explained that vaccine passports go against his instincts and those of my right hon. Friend the Prime Minister; at one point I think he said that they went against everything that he stood for. We have heard hon. Members say—there are quotes on the internet from former Ministers and Cabinet members—that they hate raising taxes, but do not see how they cannot vote for it. Tonight, colleagues will say, with a good heart, “I just must,” because we all know that we cannot let NHS waiting lists get to where they are going as a result of the pandemic. Well, I know that too, but this I also know: we are going to have to do things differently.

We have to rediscover our confidence as free market Conservatives and the radical reforming zeal of the 2010 Parliament and the big society. We have to show people that we can secure a bright, prosperous and free future that provides for their needs in their old age, but without coming back to higher taxes every time there is a squeeze on the public finances. Down that road is ruin. We all know that eventually socialists run out of other people’s money.

I am sorry, Ministers, but I cannot vote with the Government tonight. Some of us have to be seen to stand for another path.

--- Later in debate ---

[Mr Peter Bone (Wellingborough) (Con)]

It is a great pleasure to follow my hon. Friend the Member for Guildford (Angela Richardson), who set out her position very clearly.

I have to say that this is the first time in all my time in Parliament that a Ways and Means motion has been debated all day. It seems to me that this has been more like a general debate on the NHS and social care. I remind the House that Parliament says:

“A ways and means resolution is needed to authorise the creation, extension or increase of taxes or other charges…Ways and means motions are most commonly put to the House for agreement immediately after second reading”.

In other words, there is a Bill that we discuss; it is laid out there. There should have been a social care Bill. We should have had that Bill and been able to debate the principle of it and then immediately afterwards voted on the Ways and Means, but we have got this mixed up with giving more money to the national health service.

A Ways and Means motion to increase a tax in order to pay more money to the health service is quite acceptable. I mean, we are creating a new tax. The motion today does not refer to 1.5% or to how much will be spent on social care. It just says that we are bringing in a new tax. We are doing that, though, without having the detail. If this was a Budget, the Chancellor would stand up and make a powerful speech, and there would be an immense amount of applause on that day for what he said. People would then read the Red Book, for five days they would unpick the Budget, and then we would vote on the Ways and Means motion.

I am very unhappy with today’s procedure. Although I support the idea of more money for the NHS and I have no objection to it being done through national insurance, I absolutely object to saying that this has anything to do with the Health and Care Bill, because that has not been through the House. Social care should be paid for separately. We should have the Bill and debate it, it should go through Committee stage and through the Lords, and then it should be paid for. I have no idea which clever-clogs in No. 10 thought it was a great idea to mix these two things up. Social care is one of the most important things—if not the most important—that this House will have to decide on. It should be done separately and properly.

The Opposition should be working with us. They have scored so many political points today. My hon. Friend the Member for Milton Keynes North (Ben Everitt) said it: last night was one of those nights when we do not sleep because we are worrying about how to vote. Should I vote for this because I want to support the Prime Minister? Should I vote against it because I do not agree with the principle? Or should I do nothing because I think it is a good idea and a bad idea at the same time, because the Government have mixed the two things up? I will make my decision after having listened to the shadow Minister and the Minister; as of now, I have no idea what I am going to do tonight.