Income Tax (Charge)

Rachael Maskell Excerpts

Thursday 28th October 2021 Commons Chamber

[Kwasi Kwarteng]

I gently suggest that the hon. Member looks at the work of the Jet Zero Council, which my right hon. Friend the Chancellor and I have been pushing. We want the UK to be the head of very low carbon emission flying. I am very enthusiastic about that. We will be leaders in that technology, and I do not think it makes sense simply to penalise and turn our backs on aviation. We should be trying to enhance aviation and decarbonise it, and that is exactly what we intend to do.

[Rachael Maskell (York Central) (Lab/Co-op)]

Will the Secretary of State give way?

[Kwasi Kwarteng]

I have to make progress. I know that hon. Members are springing up and down because they wish to make interventions, but I am sure they will be making speeches later in the debate.

We on the Government Benches understand what has sadly eluded the grasp of Opposition Members: we must create competition. We must back business and incentivise innovation in a free-market economy, not go back to a state-run, Soviet-style command economy.

The Labour party manifesto has been mentioned. I remember reading it. Like the right hon. Member for Doncaster North, I am somewhat of an insomniac—more so now, I dare say—so sometimes I have to read lots of these things. It said that we should get to net zero by 2030. As my hon. Friend the Member for Crewe and Nantwich (Dr Mullan) observed, even the unions that Labour is supposed to represent and that bankrolled it, rejected that proposal as completely unrealistic and destructive to our economy. That manifesto said not only that we should get to net zero by 2030, which is completely unrealistic, but that the state would own 51% of offshore wind farms. Imagine that. The right hon. Member for Hayes and Harlington (John McDonnell) said that, as Chancellor, he would nationalise 51% of offshore wind. I remember speaking to the industry, and it said, “Why on earth would we want to own 49% of what the right hon. Member for Hayes and Harlington owns 51%?” It was a completely absurd and unrealistic policy. On the green agenda and the net zero agenda, the Government have far more to offer the country than a souped-up, half-heated, Soviet-style approach to solving what is a fundamentally difficult problem.

For one year—so far—businesses in the retail, hospitality and leisure sectors will get a 50% discount on business rates. That is why my right hon. Friend the Chancellor decided that the business rates system should be more responsive and agile, with more frequent revaluations taking place every three years. That is a good, positive step that will give much more flexibility to the system.

I am also delighted to reflect on how the Budget told a great story about innovation. Innovation is a huge driver of productivity and progress, and unleashing innovation is a fundamental duty for my Department and for me as Secretary of State. We have launched Help to Grow, which will drive small and medium-sized enterprise productivity. We have also started a new co-investment venture capital fund that will be used to drive innovation and provide scale-up capital for businesses in need of that. The Budget confirms the eligibility criteria for our new scale-up visa, which all businesses I speak to, and small businesses in particular, say they need help in pursuing. We will unlock greater private sector innovation. We are reforming research and development tax reliefs to support modern research methods and to focus our minds specifically on the problem and challenge of innovation. Increasing R&D investment to £22 billion will confirm the UK as a science and technology superpower. We must make sure our small businesses, which after all are the heart of the British economy, have the support they need, which is why my right hon. Friend the Chancellor strengthened the British Business Bank in yesterday’s Budget, increasing its regional financing programmes to £1.6 billion and expanding its coverage, helping innovative businesses across the country get greater access to the finance that they need.

--- Later in debate ---

[Rachael Maskell (York Central) (Lab/Co-op)]

Thank you for calling me in this important debate, Mr Deputy Speaker. As ever, it is a real honour to follow my hon. Friend the Member for Easington (Grahame Morris), who spoke so eloquently about cancer. In the Budget, there was not a word about the call from the Association of Medical Research Charities to have a medical research charity partnership fund to fund vital medical research. Charities have been so hard hit during the pandemic, yet there was not a whisper from the Government yesterday.

The people and the planet will pay for yesterday’s Budget. While the Chancellor’s job is to positively spin each announcement, it is what is not said that exposes the economic reality and fragility. We must remind ourselves, after more than a decade of economic regression, that we are in this place because of the mismanagement of the pandemic. The Government were ill-prepared, despite warnings. They ignored those warnings, then were slow to act.

Inflation rises are costly, and they hit the poorest hardest. The Office for Budget Responsibility predicts that inflation could rise to 5% or even more. Inflation will really hit the poorest people in our constituencies, with energy, food and housing costs soaring. That will mean that family budgets will rapidly move into the red because of the contents of the Chancellor’s red box. Inflation will mean that many more families will visit one of York’s 16 food banks, 15 of which are in my constituency, and that many more will go without. That process will be accelerated for those who have just had £20 a week stripped from their working tax and universal credit payments, including 7,850 people in my constituency, at a time when the Government have also announced increases in national insurance contributions. Those in my constituency are living in a place where house prices and rents are rising more sharply than just about anywhere else in the UK. That £20 cut embeds inequality and injustice, yet the proposals from Government keep driving inequality through housing. There was not a word yesterday about how to fix that or the homes that people live in, so many of which are damp and overcrowded, with families struggling in them.

While York’s Poverty Truth Commission will unveil the depth of this crisis, the Chancellor failed to bring fresh thinking to his Budget. A wealth tax, as many in business now call for, would have seen redistribution and been a first step to tackling entrenched disparity. With York as one of the most inequitable cities in the UK, we need to see that change.

While underemployment and underpay in York make living there more expensive than most places in the country, the relief for the hospitality sector will act as a sticking plaster to address some of the issues that it is facing, yet not all. Staff shortages are pressing down on the hospitality sector and making many businesses so unviable that they can open for only a few days a week—we see the notices going up in their windows. What was missing yesterday was how we are going to not only address that issue, but transition to secure and better jobs for our future economy. Of course any wage rise helps, but when the pressures are escalating disproportionately on the least well off, a £10 minimum wage was needed as a starter. As the Labour conference determined, it should rapidly rise to £15 an hour.

When we talk about the current staff recruitment challenges, we need to understand the pressure that is putting on our private sector businesses and our public sector. For example, there is a deficit in people providing the care services that are vital to address some of the challenges facing the wider NHS. If we cannot care for people in our communities, we need the Government to step in, yet we heard no response from the Chancellor yesterday as to how that crisis will be addressed.

On business rates, we again saw sticking plasters coming out of the Chancellor’s pockets to cover the wound, but there is still a gaping hole and we need more innovation to address those rates. A property related tax belongs to a different era. As the hon. Member for Harrogate and Knaresborough (Andrew Jones), who is no longer in his place, said, we cannot have an analogue tax in a digital economy. That is why we need reform. I have talked to businesses in my constituency, 65% of which are independent and innovative in what they are doing. They are calling for a tax that looks at profit and turnover to address their contribution proportionately. We need to address those issues because, time and again, we have seen offshore landlords not paying attention to what is happening on our high streets. It is about time that they were held accountable.

Most seriously, the Chancellor’s silence on support for local authorities to run good local services was telling. Our City of York Council’s leader has squandered public funds on pay-offs, but my constituents should not pay a heavy price. They deserve decent services, but the Chancellor failed to say how they will be provided without cuts and rises in council tax. For example, how will the cost of repairs be met for schools such as All Saints Roman Catholic School, which desperately needs a new school estate, or Tang Hall Primary School, which is so cold in winter that children wear hoodies to keep warm? That is the reality facing us, and it has to change.

There are other issues, such as the Sure Start programme. Yesterday, we heard a big brag from the Government about putting £500 million into 150 new family hubs, but we must remind ourselves that £974 million and 1,400 Sure Starts have been cut, which means that, for many years, many families did not get the support that they had had. On family hubs, the voluntary sector is expected to be a partner, but again that sector is really struggling and there was nothing from the Chancellor.

Although, obviously, I welcome the reannouncement of the funding for the National Railway Museum, as I have welcomed it each time the Chancellor has mentioned it, we need more investment in our city. That is why I was disappointed that York’s response to the green new deal, BioYorkshire, did not get a mention yesterday. It would bring forward, ahead of COP26, a proper green new deal and transition, as well as vital regeneration and crucial jobs for the future to my city.

As our planet continues to melt and burn and flood, the Chancellor failed to mention its fate. Holding down road and air travel costs will only accelerate its demise, not stem it. In just five years’ time, the UK will have spent its carbon budget. The Budget made the wrong calls. We just do not have time on our side, yet the Chancellor did not address that crisis. I am perplexed as to why, when the economic Budget is announced, the carbon budget is not addressed at the same time. They should be addressed together, hand in glove.

As the Chancellor stalls on funding for the poorest on our planet by suppressing overseas development aid until 2024-25, he also suppresses the green transition they need to make. Famine and droughts, conflicts and floods are forcing 80 million people to leave their homes and land to eat and live. Opposition Members cannot cheer the Chancellor with his veil of optimism, because we know that our constituents are not fooled. They see the trail of devastation that the Government are leaving for Labour one day to mop up. The Chancellor who said he would do “whatever it takes” left 3 million people stranded during the covid crisis. Yesterday, he abandoned not just the people but our precious planet.