Income Tax (Charge)

Rachel Hopkins Excerpts

Thursday 4th March 2021 Commons Chamber

[Rachel Hopkins (Luton South) (Lab) [V]]

Yesterday’s Budget needed to do two things: first, support communities and businesses through the economic crisis created by the pandemic; and secondly, outline a comprehensive strategy to kick-start the UK’s recovery. However, the Chancellor failed to deliver on both counts.

All I can draw out from the Chancellor’s Budget speech is that, rather than meaning redistributing wealth and investment and giving working class people a real stake in their economy, “levelling up” seems to mean moving part of the Treasury to Darlington, creating a few freeports and rehashing old funding. It is smoke and mirrors to cement the status quo—policies that fail to provide a vision for a more prosperous, fairer society and that will not improve people’s day-to-day lives.

There is nothing for the NHS, social care, schools or local council services, and no meaningful plan to tackle the housing crisis. Rather than levelling up living standards, the Budget has downgraded them, with a public sector pay freeze, forcing councils to increase council tax, and announcing a £20-a-week cut to universal credit in six months’ time.

My Luton South constituents needed to see plans for a more secure, equal and sustainable future, with the Chancellor committing to a new green economy based on full employment and a strong public sector. By choosing to adopt a half-baked, unambitious version of Labour’s commitment to a green investment bank, the Chancellor failed fully to comprehend the scale of the climate emergency we face. The funding made available to the bank offers only a fraction of that recommended by the National Infrastructure Commission, and no new investment has been announced for green recoveries in key industries such as automotive and aerospace.

The free market is incapable of addressing the climate crisis—in fact, I would say that it was market failure that created the crisis—so policies that weaken the state’s role in the market, such as the super deduction tax, only reduce the Government’s ability to incentivise and direct investment towards a green transition. Instead, the UK needs an innovative, Government-led industrial strategy that stimulates green growth and job creation, ensuring that the transition is equitable and that everyone has the opportunity to have a well-paid, skilled job—something that the market is incapable of delivering.

Last week, Unite the union highlighted seven shovel-ready projects that would help the UK to develop as a modern manufacturing nation. Investing in those projects would have wide-ranging benefits. For example, building gigafactories and rapid charging infrastructure would help Vauxhall in Luton South transition to manufacturing electric vehicles. Labour has repeatedly called for a £30 billion green economic recovery to create 400,000 secure, unionised jobs in clean industries. We must not return to the same insecure, unequal, unsustainable economy that preceded the pandemic.