Finance (No. 3) Bill

Rebecca Pow Excerpts

Committee: 1st sitting: House of Commons
Monday 19th November 2018 Commons Chamber

[Julian Knight]

My hon. Friend is correct. The very recent change will benefit basic rate taxpayers to the tune of £120 a year—a direct tax cut for millions of hard-working Britons—and that is to be welcomed.

[Rebecca Pow (Taunton Deane) (Con)]

Does my hon. Friend—I nearly called him my right hon. Friend, but he is not yet; perhaps he will be in the future—agree that the difference in the figures is stark? The personal allowance was £6,475 when this policy kicked in in 2010, and it has gone way up to £12,500. Surely, that is of huge benefit to the people we want to give more money to.

[Julian Knight]

I thank my hon. Friend for that short intervention. She makes a really good point, and it is almost the next point that I was going to make. The personal allowance will have nearly doubled in just eight short years. That is against a backdrop of trying to get the public finances under control from a debt of £152 billion a year—11% of GDP—which is an astronomical level outside wartime. It represents a real achievement for the Government to have been able to put this amount of money into the pockets of millions of hard-working Britons each year, so that their living standards can rise, despite the difficult decisions we have had to make.

Members from all parts of the House will probably know that I am no particular lover of the Liberal Democrats, and I am pleased to say that in my constituency of Solihull, we are now 24,000 votes ahead of them. However, I pay tribute to them in one respect. In the 2010 coalition agreement, we took on board what the Lib Dems had been proposing, and it was an excellent idea. I am pleased that the Conservative party was open enough to take on that idea and follow it through, from the coalition agreement, to raise those standards of living and raise personal allowances. I pay tribute to that sort of ideas process from the coalition. We have carried it on, as we see it as a key way in which to reduce inequality and expand opportunity.

--- Later in debate ---

[Julian Knight]

My hon. Friend is completely correct. The realities are that the more tax people keep in their pockets—the more of their earnings they keep, without that money going through the Government filter—the more efficient it is, the better it is for the economy, and the better it is for what is known as the multiplier effect through a local economy. My hon. Friend’s on-the-ground view, reported here in Committee, is testament to why the process really benefits high streets and wider local economies.

[Rebecca Pow]

My hon. Friend has not yet touched on this, but the Government have kept down the corporation tax rate. Does he agree that in areas such as the south-west, where productivity is on average lower than it is in the rest of the country, it is crucial that we leave more money in local businesses so that they can invest, which will help with skills and eventually raise productivity?

[Julian Knight]

My hon. Friend is absolutely correct. Not only does cutting corporation tax increase the tax take, as we know, but in the round it allows companies to employ more people—I think that it has made a major contribution to the jobs miracle in this country—which then feeds through the taxation system and the multiplier and into the economy more widely, thereby boosting growth and productivity, plus the tax take down the line.

The abolition of stamp duty for first-time buyers of shared ownership properties worth more than £300,000 is an important step for our economy and for strivers in our country. We all know the difficulties that come about in respect of home ownership. I got my first home when I was 31—many years ago, I hasten to add—but I had to buy outside London to get on to the ladder. Even then, people were making enormous sacrifices to find their way on to the property ladder.

Frankly, the situation that I faced is nothing compared with what younger people face now. Not only is it now more difficult in respect of having the income required to get the amount of loan needed to buy, but many people have to rely on what is known as the bank of mum and dad. All that has a damaging effect on equality in our society and the passing down of wealth through the generations if we end up in a situation where those who gain housing wealth do so only if their fathers or mothers had that housing wealth themselves.