Budget Resolutions and Economic Situation

Debate between Rachel Reeves and Theresa Villiers

Thursday 16th March 2023 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

The reality of yesterday’s Budget is clear: long-term growth downgraded, household incomes falling, public services on their knees. Families are facing the biggest hit to living standards since records began. The only surprise was a huge handout to the richest 1% of pension savers. Yet again, working people and businesses—the key to our economic success—have been put at the bottom of the pile. 

The questions people will be asking themselves after 13 years of Conservative Government are these. Am I and my family better off? Are our school, hospitals and transport systems working any better than 13 years ago? Frankly, is anything in Britain working better today than it did when the Conservatives came into office? The answer to those questions is a resounding no. 

Labour believes that the tax burden must be shared fairly. That is why I have announced today that Labour will reverse the changes to tax-free pension allowances. It is the wrong priority, at the wrong time, for the wrong people. Instead, we would create a targeted scheme to encourage doctors to work overtime and not to retire early. That could be done at a fraction of the cost, as the British Medical Association has said.

The Government’s policy to give tax cuts to the wealthiest 1% is unravelling before our eyes. Paul Johnson, the director of the Institute for Fiscal Studies, says that even on the “optimistic” Office for Budget Responsibility costings, it will cost an eye-watering £100,000 per job retained. The Resolution Foundation said:

“The beneficiaries from these reforms stand to gain large amounts, and they are heavily concentrated among the very rich”.

It added that

“this giveaway could lead to inheritance tax ‘abuse’”.

Pensions expert John Ralfe has said that

“this is not about supporting a hard-pressed NHS, it is really a tax giveaway...for the very highest earners.”

Labour recognises the mess that the Government have got into with our NHS workforce planning, and we have called for changes to doctors’ pensions, but we will oppose this untargeted scheme for the wealthiest and we will put this measure to a vote in Parliament next week. I defy Conservative Members to vote in favour of a policy that they know will do absolutely nothing to lift the living standards of their constituents.

Last autumn we saw the Chancellor of the day announce reckless tax cuts to help the richest, too. Why does this keep happening? The reason why the Tories get the wrong answers is that they have the wrong priorities for our country and the wrong analysis of the economy. Wealth does not just trickle down from the top; it comes from the efforts of millions of working people and thousands of businesses. That is Labour’s approach to growth.

[Theresa Villiers (Chipping Barnet) (Con)]

The right hon. Lady denounces the abolition of the lifetime allowance, but it was actually something that never applied under Labour at all. If Labour is so concerned about its loss, why did it not introduce it in the first place?

[Rachel Reeves]

Gordon Brown introduced a lifetime allowance for pensions savings, as I am sure the right hon. Lady remembers. However, the point here is about priorities. For all our constituents, there is an average tax increase per household of £650, starting next month with the freezing of the tax thresholds and the increase in council tax. Yet yesterday, the only permanent tax cut provided in the Budget was for people who already have pensions savings of more than £1 million. I just do not believe that that is the priority for our constituents, and I think hon. Members right across the House, if they think about it, know that too.

Mr Deputy Speaker—is that what I call you?

Flood Response

Debate between Rachel Reeves and Theresa Villiers

Monday 10th February 2020 Commons Chamber

[Theresa Villiers]

Yes, I am happy to give my hon. Friend that assurance, and I understand that DEFRA officials have been engaging with the people putting forward the bid, which will be looked at very seriously.

[Rachel Reeves (Leeds West) (Lab)]

Kirkstall in my constituency was devastated by floods on Boxing day 2015, and we were on high alert all day yesterday. In many ways Leeds had a close escape yesterday, but there remains a £23 million gap between what the Government have committed to flood defences in Leeds and what is needed to protect us against the floods we experienced just four years ago. We had a lucky escape yesterday but may not be so lucky next time. When will the Government release that £23 million so that Leeds gets the flood defences we need?

[Theresa Villiers]

As I have said, we have an extensive programme that we are in the course of delivering; we are determined to do that to ensure that many more homes and businesses are protected from flooding.