Cost of Living: Fiscal Approach

Richard Burgon Excerpts

Wednesday 25th May 2022 Westminster Hall

[Richard Burgon (Leeds East) (Lab)]

Today, I want to make a proposal. We have heard a lot recently about a windfall tax. We have even heard that the Prime Minister might be about to U-turn and deliver one. To make a real difference to people’s lives, it must raise serious funds, so today I call for £10 billion to be raised via a windfall tax on North sea oil and gas giants to help deal with the cost of living emergency.

Let us be clear: people’s bills are so high because North sea oil and gas companies are making vast excess profits. Those excess profits are not the result of innovation or extra investments; they are an undeserved and unexpected windfall that has come about simply because oil and gas prices have spiked as a result of the horrific war in Ukraine.

We have a choice. Either oil and gas companies continue to make eye-watering levels of excess profits or we use a windfall tax to help people through this crisis. Using figures from the Office for Budget Responsibility, we can estimate that North sea oil and gas companies will make post-tax profits of £15 billion in the financial years 2021-22 and 2022-23, which is almost £13 billion more than they would have made based on their average annual post-tax profits in the three years before 2020-21, when oil and gas prices started to increase. I therefore think it perfectly reasonable for £10 billion of that £13 billion to go to the taxpayer.

Before we hear the claim that such a tax would undermine investments, let us remember that BP has even admitted that a windfall tax would not affect its planned investments. Of course, some in the Conservative party who put profit before people may scream and shout about such a plan. However, the truth is that this is an emergency that people are living through, and in that context we need emergency measures.

Of course, the level of windfall tax that I propose will not be enough by itself. We will need windfall taxes on the wider energy sector and across other sectors that are making excess profits. We will need price caps on key essentials and we will need wealth taxes. However, a windfall tax to raise £10 billion will make a real difference to people’s lives, and we should get on with delivering it. The Government can and should do it. It is necessary and it is the right thing to do. They should get on with it now.

Financial Statement

Richard Burgon Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

I am always happy to hear suggestions from the hon. Gentleman and, indeed, to arrange a meeting for him. I wanted to make sure that those off the gas grid still benefited from the energy package that we put in place in February, and it will work on electricity meters, so that will happen. As a rural MP myself, I appreciate the issue that the hon. Gentleman raises, and I will happily arrange the meeting for him.

[Richard Burgon (Leeds East) (Lab)]

Oil and gas giants are making £900 profit per second, while millions of people are having sleepless nights worrying about whether they will be able to heat their homes. Does the Chancellor think that the right of these firms to make these super-profits is more important than the right of people to stay warm? If not, surely now is the time for a windfall tax on these profits to fund lowering people’s energy bills.

[Rishi Sunak]

I just remind the hon. Gentleman that we already have a supplementary corporation tax on oil and gas companies. They pay 40% corporation tax—twice as much as the rate paid by all other companies—and it is right that they do. Going forward, as the Prime Minister’s strategy will outline, we want to see more investment in the North sea, more British energy security and more British jobs.

Public Service Pensions and Judicial Offices Bill [Lords]

Richard Burgon Excerpts

Report stage
Tuesday 22nd February 2022 Commons Chamber

[Peter Grant]

As I said on Second Reading and in Committee, the SNP supports the intention behind this Bill and we will support it on Third Reading. The intention is to clear up a mess of the Government’s making. I also repeat that, as I said in Committee, I do not have any doubts at all about the sincerity of the Ministers who have led for the Government at various stages of the Bill. I am convinced that they want to get it right and to finish up with an Act that is as fair to everyone as it is possible to be. However, my concern with the Bill currently before us is that even after the Government’s amendments are added in, sizeable numbers of current or former public sector employees will lose out. Given where we have been forced to start from and the scale of the mess that the Government made of this previously, I am not sure that it would ever be possible to produce a Bill that would be fair to absolutely everyone, but the Bill as it stands can still be improved. To that end, we will support such amendments as Opposition Front Benchers want to press to a vote, particularly new clauses 8 and 9.

One of the issues I raised on Second Reading has certainly come to pass: the extraordinary number of amendments the Government had had to table to their own legislation during its passage through the House of Lords. We now know that including the 61 amendments they tabled in Committee and the 28 further amendments tabled today, by the time the Bill gets its Third Reading later on the Government will have had to amend their own legislation no fewer than 212 times. In fact, Members who attended the Bill Committee will have seen the spectacle of the Government tying themselves in knots trying to remove two entire clauses from the Bill and replace them with two entirely new clauses. It was only the speedy intervention of the Clerks and the Chair that prevented the Government from presenting us with a Bill that had all four clauses included despite the fact that some of them were completely contradictory to the others. Eventually the Government had to whip their own Members to vote down two clauses that the Minister had already moved, presumably by mistake.

That incident served only to highlight what many of us on the Opposition Benches have been saying from the beginning—that the Government still cannot reassure us that they are genuinely fully in control of this Bill. I worry that they are very quickly running out of last chances to put it right. There is still a danger that the Bill that receives its Third Reading later today will have flaws and weaknesses that neither the Government nor anybody else have spotted yet. Most of today’s Government amendments are part of the process of picking up flaws or ambiguities in the original Bill, and we will not oppose them. We have some concerns about new clause 7, which provides for a lessening of parliamentary scrutiny in some cases. The Minister has not yet convinced me that that is an appropriate thing to do. I hope that when he winds up he will explain why new clause 7 is appropriate and why, in some cases, parliamentary scrutiny should be diluted in any way.

As I indicated earlier, we will support new clauses 8 and 9 in the name of the hon. Member for Hampstead and Kilburn (Tulip Siddiq). New clause 8 would provide a means of compensating scheme members who, through no fault of their own, stand to lose out as a result of the Bill. The Bill rights a wrong for a very large number of people in public pension schemes but goes in the opposite direction for some, and we should not forget about them. The new clause does not commit the Government, or indeed the scheme employers, to any additional expenditure, but it would require the Chancellor of the Exchequer at least to recognise that this is an issue and to look at whether there are realistic and reasonable ways of resolving it.

New clause 9 would require the Government to review how the Bill operates in the real world—as opposed to the assessment, as with any Bill, before discussions on it began—with regard to equalities. Given how many substantial changes the Government have already had to make to the Bill, it is prudent to accept that, once it comes into force, it might have consequences that the Government have not foreseen, which the new clause would attempt to protect against.

New clause 1, in the name of the right hon. Member for Newark (Robert Jenrick), is a different matter altogether, and the SNP is minded to oppose it. We have heard some of the arguments in favour of it—they are similar to comments made on Second Reading—which simply do not wash. I will not get into an argument now about the BDS movement. If the Government genuinely think that that organisation is a threat to peace and stability in the middle east or elsewhere, they could bring forward legislation to address it—they have had over two years of this Parliament to do so, and they still have time—but this is not the Bill for that.

[Richard Burgon (Leeds East) (Lab)]

Does the hon. Gentleman share my concerns that the new clause tabled by the right hon. Member for Newark (Robert Jenrick) risks barring ethical investment decisions across the board—for example, in relation to Saudi Arabia? Given that future Governments might decide to support regimes that abuse trade unionists, for example—as we have seen in Colombia in recent years, or in Chile in the past—the new clause would be not only anti-democratic but would risk ethical investment decisions and human rights policies around the world.

[Peter Grant]

The hon. Member is absolutely right. If the new clause was intended purely to limit the activities of the BDS movement as a precursor to possible further restrictions later on, a very different new clause would have been tabled, and it might have been possible to word it in a way that we would not have significant problems with, but this new clause is far too wide. It could give the Secretary of State—any Secretary of State—the power to prevent any public pension fund from considering any kind of ethical, sustainability or other factors simply because they decide that they are contrary to UK foreign or defence policy.

Downing Street Garden Event

Richard Burgon Excerpts

Tuesday 11th January 2022 Commons Chamber

[Michael Ellis]

I acknowledge that people of the Muslim faith and indeed people of the Christian and Hindu and other faiths, including the Jewish faith, have all suffered considerable interruption to their high holy days. I absolutely accept that, and for many people of strong faith that is very painful. They did so around the world, in other countries too, in the wider public interest, to support the public health of all. They were asked to do that and they did so in order to protect their fellow citizens. We respect that and admire that. We asked people to do that with a heavy heart, but we did so for the best reasons.

[Richard Burgon (Leeds East) (Lab)]

The unavoidable truth is that the public believe the Prime Minister is a liar who treats them with contempt. There is a crisis of public confidence. Is not the only way to restore public confidence for the Prime Minister, for once, to act in the public interest and resign now?

[Michael Ellis]

I do not think the public believe what the hon. Gentleman believes.

Oral Answers to Questions

Richard Burgon Excerpts

Tuesday 7th December 2021 Commons Chamber

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

10. What recent steps he has taken to help reduce economic inequality.

[Richard Burgon (Leeds East) (Lab)]

20. What recent steps he has taken to help reduce economic inequality.

[The Chancellor of the Exchequer (Rishi Sunak)]

I am pleased to say that the distribution analysis published in the Budget showed that the actions of this Government since 2019, over this Parliament, will benefit those on the lowest incomes the most. Income inequality is also lower than it was in 2010, and we on the Conservative Benches know that the best way to reduce inequality is to get people into fantastic, well-paid jobs, which is exactly what we are doing.

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[Rishi Sunak]

The hon. Lady makes a fair point; the Economic Secretary to the Treasury is doing work on exactly that issue. The Government have committed to bringing forward legislation, if required, on access to cash, but I would be very happy to look into the specific circumstances of her constituent. If she writes to me, we will do that.

[Richard Burgon]

As ever, the Chancellor’s warm words do not match the reality faced by so many people across the country. Take disabled people, for example—[Interruption.] Rather than groaning, will hon. Members please listen? Disabled people have been disproportionately attacked by Tory Governments over the past decade through austerity, cuts to benefits and, most recently, a cruel lack of support during covid. Nearly 2 million disabled people were not given the £20 uplift in benefits, including thousands of households in my seat of Leeds East. Every December, we mark the United Nations International Day of People with Disabilities, so if the Government are genuinely interested in tackling economic inequality, will they—[Interruption.] It is not funny, grow up. Will the Government backdate the payments to disabled people and others on so-called legacy benefits who have been left out and let down over the past 18 months? Disabled people deserve to be treated better.

[Rishi Sunak]

I am enormously proud of the Government’s commitment to those who are disabled. We looked after them during the crisis and we continue to support them. We recently announced £500 million for the disabled facilities grant, more investment in the Department for Work and Pensions to help close the disability employment gap and—this is something I am personally proud of—investment in Changing Places, which means that those with disabled children or adults will have access to the high-quality facilities that they need to enjoy days out with their family. I assure the hon. Gentleman that I and the Government are committed to helping all those who need our help, and we will continue to deliver on that promise.

Finance (No. 2) Bill

Richard Burgon Excerpts

Committee stage
Wednesday 1st December 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD)]

I confirm that the Liberal Democrats will not be supporting the Bill and will be supporting the Opposition amendments. There are several specific reasons for that, which I have expressed previously, including that the Bill fails to address the cost of living crisis in this country and fails to adequately address the need to have and to shift to a greener, more sustainable economy. It also fails to address the concerns that the hon. Member for Gordon (Richard Thomson) expressed about the changes to the banking surcharge, which strike many people in the country as inappropriate at the moment.

I will focus on one issue that is dealt with by new clause 17, which has been tabled by my party. The Minister mentioned the innocuously titled basis pay rate and the basis period reform. One of the frustrating things about the Bill is that the more we look into the detail, the more we find to object to. Hidden in it are huge accounting changes that will make life much harder for tens of thousands of farming businesses, and other partnerships and sole traders around the country. Under the basis period reform, farmers will have to submit two tax returns instead of one, doubling their administrative burden.

Proud farming communities from Shetland to Shropshire are worried about the costs and burdens that will come with those changes. In Shropshire alone, there are more than 6,000 partners and directors in the sector who are likely to be affected by the reforms. Like many others from communities in the so-called blue wall, they find that the Government are taking them for granted and saddling them with administrative burdens and costs—and yet more promises that somehow seem to be ignored. They will force farmers to submit estimated tax returns when there is no good way of knowing the value of a crop yield when it is still in the ground.

We would like Ministers to put those plans on hold immediately and listen to farmers’ concerns. They should at least offer them an extended deadline, so that they do not have to estimate their profits but can submit just one final tax return. They should also explore the options laid out by the Office of Tax Simplification about changing the tax year to a 31 December end date. Farmers across the country have already seen their basic payments cut by at least 5% and could be facing even more costs. They deserve better. This is unfair and counterproductive, and it is yet another reason why people are disappointed with what they have heard about this Finance Bill.

Therefore, the Liberal Democrats will not vote to support the Bill, but we will support the Opposition amendments.

[Richard Burgon (Leeds East) (Lab)]

As always, it is a pleasure to serve under your chairship, Dame Eleanor. I wish to speak in support of new clause 16, which is in my name, and new clause 8, which has been tabled by my hon. Friend the Member for Hemsworth (Jon Trickett).

Both new clauses aim to tackle the gross injustice of taxes on share dividends being set at less than income tax rates. They are both part of a wider push for tax justice and wealth taxes—a push made ever more urgent by the growing inequality that we have seen throughout the pandemic. I also support the new clause on this issue from the Leader of the Opposition and the new clause on the banking surcharge. It is shameful that the Government are cutting taxes for banks while increasing the tax burden on working families.

Faced with a backlash over their plans to impose tax rises on working people, the Government made a very limited change, increasing the taxes on share dividends by 1.25%. That was done to try to give the impression that they were sharing the burden of the so-called health and care levy equally between ordinary working people and those lucky enough to live off their wealth. But that was just smoke and mirrors, done solely to deflect the media and distract the public, not to help to actually secure economic justice. That is obvious from the amounts that will be raised by the so-called health and social care levy. The national insurance increases will raise £11.4 billion a year, while the increases in tax on share dividends will raise just £600 million a year. We need to be clear about this: the Government’s change is woefully inadequate.

However, this can act as a watershed moment when we finally get to grips with the great injustice in our tax system that wealth is often taxed at much lower rates than income tax. It is clear, is it not, that our economy is rigged in the interests of the 1%? That has become even clearer during the pandemic, when we have seen the corrupt contracts that have been handed out or the fact that the billionaires have increased their wealth by £290 million a day while food bank use has hit record levels. How completely grotesque.

Our tax system is also rigged in the interests of the top 1%. One obvious way in which that happens is that those with wealth get special discounts on their tax rates. They pay lower tax rates than the vast majority, who have to go out to work day in, day out. My new clause seeks to put a stop to that racket, to that injustice. Why on earth is someone lucky enough to have inherited millions of pounds of shares and who now lives comfortably off their annual share dividends allowed to pay a lower rate of tax than people who have to go to work day in, day out? That is completely unfair and completely unjustifiable. It needs to change. Economic justice demands change, and my new clause would deliver that. It would raise tens of billions of pounds that could go towards funding a national care service, for example, in a progressive way by taxing wealth and not by hitting the pockets of working people.

Let us look at how this rigged system works in practice for those lucky enough to be in the top 1% of incomes. They currently have to pay a 45% rate of tax on income but pay way less on earnings from share dividends: just 38.1%. That tax discount applies even though payments to shareholders primarily go to a very wealthy minority. One quarter of the total income of the richest 1% is generated from dividends and partnership income alone.

The Government try to give the impression that we somehow live in some kind of shareholding democracy where everybody has an equal stake in owning shares, but I am afraid that that is just not true. TUC research shows that UK taxpayers earning over £150,000, which is just 1% of all taxpayers, captured about 22% of all direct income from UK dividends, so the wealthiest accumulate their money from share dividends instead of working, and the Government reward them for this with a tax discount. That is totally unjustifiable, totally unreasonable and totally indefensible.

The changes I have called for in new clause 16 would raise billions for the Treasury—billions that could go towards funding a national care service. Institute for Public Policy Research calculations in 2019 estimated that this would raise £29 billion over the lifetime of this Parliament, even after accounting for behavioural changes. But I am afraid the Conservative party does not want to tax the income of the super-rich who bankroll the party. This new clause has been tabled as an opportunity for the Government to really tackle the injustice in our taxation. It is absolutely outrageous and it needs to change, and that is why I put down this amendment.

[Lucy Frazer]

I will take the opportunity to respond to some of the points that have been made on the Bill, and I will start with those made by the hon. Member for Ealing North (James Murray). He started by suggesting that there was not a sufficient growth rate in the economy, but what the Budget documents show and the OBR has said is that there will be growth year on year for every year in the Budget forecasts.

The hon. Gentleman asked me to come back to him on cutting taxes for banks. I do not think he heard some of the points I made in my speech, because I did mention that the tax the banks are paying is not actually reducing, but increasing. I think he did not hear me say that they will be paying an additional £750 million in tax over the period to 2026-27, based on current forecasts.

The hon. Gentleman talked quite a lot about fairness—fairness to working people—and he suggested that the rise in the dividend payment was not fair. I do not accept that. What we have calculated is that the additional higher rate taxpayers are expected to contribute over three quarters of the revenue raised by this measure next year. It is interesting to note that the Resolution Foundation thought that this measure was indeed fair. It said that it welcomed the

“moves to address some of the fairness problems”

that came with choosing to focus on the tax increase on national insurance by raising dividend taxation.

The hon. Gentleman asked me a specific practical question on what support will be provided to traders who are affected by basis period reform, and I am very pleased to get back to him on that. I would like to reassure him that more than 80% of affected businesses are represented by a tax agent, but HMRC is currently exploring how best to help unrepresented taxpayers through basis period reform.

The hon. Member for Gordon (Richard Thomson) rightly talked about the importance of getting to net zero. He will know—he will have attended many debates in this House and I am sure he will have read our net zero strategy—about the emphasis the Government place on net zero. He talked about his work in Aberdeenshire, so I hope that he welcomes the investment we have made in that area in Scotland. We continue to deliver on important existing commitments in Scotland, including £27 million for the Aberdeen energy transition zone and £5 million for the global underwater hub, which will help support Scotland’s standing as a world leader in clean energy.

The hon. Gentleman also mentioned the important issue of playing by the rules, which Conservative Members think, as he does, is very important. I am sure he will be pleased to know that, since 2010, the Government have introduced over 150 new measures and invested over £2 billion extra in HMRC to tackle fraud.

The hon. Member for Edinburgh West (Christine Jardine) mentioned the cost of living. Obviously, many of the spending measures are in the spending review, rather than in the Finance Bill, so I hope she will not mind my mentioning some of our spending measures. The significant tax cut for people on universal credit, and the raising of the national living wage, are two measures that are really helping those on lower incomes.

Oral Answers to Questions

Richard Burgon Excerpts

Tuesday 2nd November 2021 Commons Chamber

[Helen Whately]

I congratulate my hon. Friend, because his constituency is indeed receiving £20 million from the levelling-up fund to deliver a new civic hub in Radcliffe, which will improve access to adult education while freeing up vital space for a new secondary school. As I am sure he saw in the Budget and spending review last week, we are fully committed to providing people with the skills that they need to succeed in life.

[Richard Burgon (Leeds East) (Lab)]

My constituency is officially one of the most economically deprived constituencies in the country. If the rhetoric of levelling up is going to be a reality, the bid from Leeds City Council to upgrade and redevelop Fearnville sports centre to turn it into Fearnville wellbeing centre is exactly the kind of bid that should be agreed. Local people were therefore shocked when, the day after the Budget, the leader of Leeds City Council received a letter from the Government turning down the bid. The Chancellor is sitting on the Front Bench; will he step forward now and agree to meet me, the leader of Leeds City Council, James Lewis, and a delegation of local residents with a view to approving the council’s bid for the upgrade of Fearnville sports centre?

[Helen Whately]

I thank the hon. Member for his question, which gives me the opportunity to remind him that his area is receiving hundreds of millions of pounds of investment in transport infrastructure. We look forward to receiving further bids for future rounds of the levelling-up fund, for instance. We are delighted to invest in constituencies such as his.

Health and Social Care Levy Bill

Richard Burgon Excerpts

Committee stage & 3rd reading
Tuesday 14th September 2021 Commons Chamber

[John Redwood]

I do not think that that is possible at all. Property costs vary to an incredible degree across the country. Levels of staff provision are different in different homes, the quality and level of service are different, and the needs of individual residents are different. Some are in relatively good health, and do not need to find the back-up or assistance that others require. What I want to see—and I think that we need to debate this more than we have so far—is better quality for everyone who needs end-of-life care or time in a nursing home. My right hon. Friend has suggested that some are quite basic, and I think we need to worry about that and work at it.

For me, the big care problem is whether it is adequate. I am not quite as worried about the family finances as I am about the experience of the elderly person and whether it is good enough, and, where the state is the sole funder or a substantial funder of the care, whether we are doing a good enough job in allowing a reasonable quality of care in terms of staffing numbers, training of staff and staff wages. When elderly relatives in my family have been in care, we have always wanted to make sure that the staff were well remunerated, rewarded and motivated, and had proper training, support and back-up from the care home, because I wanted them to be well looked after.

There is a much happier environment if the people working in the home are proud of it and have, for instance, a decent career structure. I therefore think that we need to be very careful about a cost-down or standard-cost approach. We need to understand the variety of life, but we also need to make sure that those who rely entirely on state support, or who may be becoming more reliant on it under the Government’s likely policy, will none the less look forward to a reasonable standard of care, and that the people who work with them and for them are treated well by employers who respect them and offer them a career structure, proper training, decent support and all those other good things.

In conclusion, I hope the Government will look again at some of these points to ensure that there is no muddle over the true costs of these services and the contribution that the tax will make, if they insist on it, because it will be quite a small contribution as a proportion of the whole. Will they also look at a big care issue that does not get enough attention in the Bill, which is the quality of the care? That leads immediately into the quality of the experience for the employees, their career structure and their ability to create good atmospheres in care homes that are of a high standard. Can we also have a bit more thought and more information on what this will mean for individuals going into care homes and their supporting families? I am afraid that I still do not have a clear explanation to offer my constituents as to what their experience would be under these proposals.

[Richard Burgon (Leeds East) (Lab)]

I am speaking in support of new clause 3, which would require the Chancellor to look at different taxes to raise income. There are many other ways to raise this money and, in particular, I believe that we need to look at ways to tax wealth rather than taxing working people. Wealth in this country is concentrated among the top 1%, so instead of imposing a tax bombshell of £12 billion a year on working people, the Government could focus on the wealthy. They choose not to; instead, we have a tax system rigged in favour of those who already have wealth. They pay lower taxes than the millions who have to go out to work to make a living. The truth is that the Government’s proposal makes that situation even worse, and that is not right. The Government could reform capital gains tax, so that instead of lower taxes for wealthy people, that money could be used to fund social care, but they choose not to do so. They could raise many more billions of pounds by a direct wealth tax on the richest 1% with assets of more than £5 million, but they choose not to do so.

I am backing new clause 3, because there is always an alternative. That the Government refuse to back such alternatives speaks volumes. Aneurin Bevan once said that socialism was the language of priorities, but conservatism is the language of priorities too: the priority of safeguarding the wealth of the super-rich and sticking the boot into working people. This is the same old Tory party, attacking working people and defending the wealthy. We have heard a lot in this debate about so-called tough choices, but when politicians speak the language of tough choices, it usually means that they are taking the path they think is easiest. The truth is that the Government are taking the easy choice: not levelling up but kicking down and taking a hands-off approach to the wealth of the super-rich. There are alternatives, and that is why I am backing new clause 3.

[Mr Richard Holden (North West Durham) (Con)]

I thank the hon. Gentleman for giving way, and I would also like to welcome the hon. Member for Nottingham East (Nadia Whittome) back. It is great to see her back on the Opposition Benches. There is a similarity between what the hon. Gentleman is saying and what those on the Government Front Bench are saying; at least they are both putting forward proposals. He is putting forward a wealth tax and the hon. Member for Aberdeen South (Stephen Flynn) proposed the scrapping of Trident, but the Government are at least being honest in saying that people are going to have to pay more through national insurance: £907 a year for a Member of Parliament and £80 a year for somebody on the national minimum wage. Has the hon. Member for Leeds East (Richard Burgon) managed to convince those on his Front Bench to be as honest as he and the Government are in coming forward with an actual proposal for what they would do?

--- Later in debate ---

[Richard Burgon]

I had actually finished my remarks, but I would be happy to take this up with the hon. Gentleman on another occasion if he so wishes.

[The Chairman of Ways and Means (Dame Eleanor Laing)]

I have to say I was not quite sure about that. I thought that the hon. Member for Leeds East (Richard Burgon) had finished, but the hon. Member for North West Durham (Mr Holden) nevertheless managed to make his intervention. He may indeed have wanted more, but the hon. Member for Leeds East read the mood of the House very well.

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[Richard Burgon]

It is useful that Members on both sides of the Committee are coming clean with all sorts of ideas. I would assert the principle of universalism—universalism of the welfare state and universalism of the NHS.

[Sir Christopher Chope]

I thought that might be the hon. Gentleman’s response. Today we are talking about social care as well as healthcare, and the principle of universalism does not apply to social care because it is and will continue to be the subject of means-testing.

The Government talk the talk of integrating health and social care, and I had an exchange with my right hon. Friend the Minister on this subject. He justifies having a health and social care levy on the basis that they are interdependent. If they are interdependent and we are moving towards an integrated scheme, why do we not apply the same principles to both NHS healthcare and social care? We could have means-testing for healthcare, in the same way as we have for social care, or we could not have any means-testing for social care, in the same way as we do not have any means-testing for healthcare. If we are going to merge the two schemes, we need to resolve those anomalies. I am afraid that everything that has come out of this short debate shows that the Bill is a muddled fudge that perpetuates the distinction between health and social care but does not meet the challenge I put to the Minister: why not have a distinct social care levy?

Is it reasonable that we should have co-payment in the NHS? If so, it would generate an enormous amount of additional income. We essentially have co-payment on prescription charges, ophthalmology services, dentistry and, increasingly, audiology services. The idea that we should have co-payment more widely, so that people who can afford it contribute, say, half the cost of an orthopaedic operation, seems to be anathema to the Government. I do not understand why, if they want to get more money into the system.

Our system differs from most overseas systems. We are not spending more on healthcare in this country, but we are spending more on publicly funded healthcare and not enough on privately funded healthcare. I would like to see a Government strategy to encourage more investment by ordinary individuals in the healthcare system. I have a private Member’s Bill on co-payment coming up in the new year, but perhaps before that we might be able to get some movement from the Government on these principles. We have co-payment in the social care sector. If it is all right in the social care sector, why is it not all right in the healthcare sector? We are excluding hotel costs—the board and lodging costs—from the £86,000 social care threshold, but we do not charge any hotel costs to rich people who are in hospital. Why not? There does not seem to be any logic in that.

I am glad it looks like the Minister will have a long time to answer these points and the other important points raised by my hon. and right hon. Friends. If we are going to have a complete review and fundamental change of outlook on health and social care, we need to meet those challenges. What is the answer as to why we do not charge hotel costs for millionaires in hospital? That would introduce more income into the service and bring it into line with what happens with social care.

Those questions remain to be answered, but there are a whole lot more besides. I was looking at the Official Report of an exchange in the other place yesterday evening. The Parliamentary Under-Secretary of State for Health and Social Care, Lord Bethell, said that

“we recognise that family carers play a vital role. When we announced an additional £4.5 billion over three years for social care, it included a commitment to take steps to ensure unpaid carers have the support, advice and respite they need.”

We know that there are about 1.6 million unpaid carers, and that was leading them to believe that there was some sort of dividend around the corner for them. However, Lord Lilley picked up on that point and asked the Minister to

“confirm that…there would be only £1.5 billion a year going to social care from the large increase in national insurance”.

Obviously, that is correct. He then asked the Minister to

“confirm that nearly half of that will be absorbed by the need to pay for the extension of free social care to those with valuable homes…That means that nothing will be left to help domestic carers.”

That was a perfectly straightforward question, and as it was not answered in the other place last night, I hope that the Financial Secretary can answer it tonight. The answer that that Health Minister gave—perhaps the Treasury has a better view on this—was that

“the maths that my noble friend has done is a little bit premature.”

I did not think that maths could ever be premature. He continued:

“The White Paper will come out later this year; it will spell out the precise financial arrangements, and I am looking forward to that.” —[Official Report, House of Lords, 13 September 2021; Vol. 814, c. 1130.]

The Minister was implying that he did not really have a clue as to what was going to be in it when it came out. That is an example of the muddled thinking, the failure of the Government to answer precise questions and the very dangerous policy of raising expectations among our constituents that somehow they are all going to be able to relax and spend all their hard-earned savings and use their houses for themselves without having to contribute much towards the long-term costs of social care.

May I throw out a suggestion arising from that exchange in the other place last night? If we have 1.6 million people providing free care for their loved ones, why are we choosing to impose upon them an extra levy, an extra tax? Surely it would be reasonable—clause 4 enables this to be done by subsidiary legislation—to exclude those who are looking after their loved ones, doing the right thing and saving the state a lot of money. We could say, “In return for doing that, you will be exempt from the 1.5% levy.”

Finance (No. 2) Bill

Richard Burgon Excerpts

Committee stage & Committee of the Whole House (Day 1)
Monday 19th April 2021 Commons Chamber

[The First Deputy Chairman]

We are having one or two technical issues, so we will go straight to Richard Burgon.

[Richard Burgon (Leeds East) (Lab) [V]]

I wish to speak to my new clause 7, which would require the Government to publish an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000.

The coronavirus crisis has not only shone a spotlight on the deep inequalities in our society and their deadly consequences, but deepened them. Deep inequalities scar our nation. As we come out of this pandemic, if we are to learn the lessons and build a more equal, less divided and more inclusive society, then we need to address decades of failing tax policy. Ensuring higher taxes on those on the very highest incomes has an important role to play in building that fairer society. Since Thatcher, the Tory mantra has been that low taxes on the rich benefit everyone, but years of keeping taxes low for the very rich did not in fact boost economic growth; instead, it allowed inequality to run completely out of control. That has been proven by new research by the London School of Economics and King’s College London showing that reducing taxes on the rich leads to higher income inequality that has an insignificant effect, in any positive fashion, on economic growth or unemployment.

In short, trickle-down economics has been a lie. Now is the time to acknowledge that and address it by creating a fairer tax system. My amendment calling for a new 55% income tax rate would target those on very high incomes of over £200,000 per year—the richest part of the top 1%, or about 300,000 people. The current highest income tax rate is just 45% for those earning above £150,000—not much more than for those earning £50,000. Yet 40 years ago the average top income tax rate for the wealthy OECD member countries was 62%. The top income tax was 60% even under Margaret Thatcher, so perhaps even the Thatcherites on the Government Benches will consider offering their support for the amendment. This increase would affect less than 1% of the population—about 200,000 people, according to HMRC.

There has been huge suffering in our society over the past year, yet the very wealthiest in our society—the billionaires and the super-rich—have exploited this crisis to further line their pockets. We cannot go on layering inequality on top of inequality. Now is the time to act. Publishing an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000 would be an important stepping-stone towards building a fairer and better society. That is why I would like to press my new clause 7 to a vote.

[Bell Ribeiro-Addy (Streatham) (Lab) [V]]

I speak in support of amendment 15 and new clause 8 in my name, and amendments and new clauses in the names of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and my hon. Friend the Member for Leeds East (Richard Burgon).

My amendment 15 is tabled with the aim of highlighting the importance of the so-called £20 uplift for tax credit recipients from the covid-19 support scheme, and the damage that the Government’s decision to not continue this beyond September will cause. In March 2020, the Chancellor announced a temporary uplift of £20 per week to universal credit via the standard allowance of the working tax credit basic element for the 2020-21 financial year. A one-off payment is being made to tax credit recipients to cover a six-month period from April to September 2021 to continue this support.

As Members will know, payments from the covid-19 support scheme for working households receiving tax credits are being introduced under the Coronavirus Act 2020. Clause 31 introduces an exemption from income tax for payments made to tax credit recipients. My amendment 15 would require the Government to publish an equalities impact assessment of the provisions of clause 31, which must cover the impact of the provisions on households at different levels of income, people’s protected characteristics, equality in different parts of the United Kingdom and regions of England, and child poverty. That is because while the £20 per week top-up will temporarily be retained, helping some 6.5 million families for a further six months, this does not allay the fears that families will have going into next winter. Rather, it is clear to almost everyone—Action for Children, Child Poverty Action Group, Save the Children, the Joseph Rowntree Foundation, the trade union movement and so on—apart from the Government that the £20 increase and the associated tax relief, as per clause 31, should be made permanent and paid to all claimants, given that poverty levels were already too high pre-pandemic. Extending the £20 uplift is vital because struggling families cannot keep afloat without it, but that will be as true in six months as it is now.

Finance (No. 2) Bill

Richard Burgon Excerpts

2nd reading
Tuesday 13th April 2021 Commons Chamber

[Richard Burgon (Leeds East) (Lab) [V]]

The coronavirus crisis has not just been a public health emergency; it has been a social emergency as well—a social emergency worsened by the Government’s catastrophic handling of the crisis, which, as the Office for Budget Responsibility says, led to one of the worst economic downturns of any major economy.

Of course, for some, the pandemic has not been half bad—in fact, it has been a very good crisis for some. Serco and the like have been able to use the crisis to get their hands on contracts that should have been in the public sector, and boosted their profits. We have seen how contracts worth billions have been handed over to those with political connections to top Tories, and the Greensill case involving the former Prime Minister is no one-off—

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. I appreciate that the hon. Gentleman is not here in the Chamber and so is not getting the atmosphere of the debate, but no matter what the rules are, this debate is about the Finance Bill. It is only about the Finance Bill and matters within the Finance Bill, which is pretty wide-ranging. The hon. Gentleman appears to be making a speech that he might wish to make tomorrow. Could he please stick to the Finance Bill today?

[Richard Burgon]

Thank you, Madam Deputy Speaker. The example I have just given is one of how our system works, and I would argue that that is entirely relevant to the Finance Bill, because while the super-rich have been able to profit from the crisis, the Government have washed their hands of others who needed support. Just this week, millions relying on legacy benefits such as employment and support allowance for disabled and sick people got a pathetic 37p increase in their benefits. What a snub, especially after already being refused the £20 additional payment that went to those on universal credit. With that 37p increase, the Government are deliberately punishing disabled people. It is yet another example of how they seek to make the vast majority pay for one of the world’s deepest economic collapses.

I will vote against the Bill because it fails to give NHS staff the proper pay rise they need, because it cuts the pay of millions of public sector workers and hands billions in giveaways to mega-corporations such as Amazon, many of which have done very well out of the crisis, because it leaves many of the lowest earners facing tax rises and because later this year it will cut social security payments for people who really should get much more help. I will vote against the Bill because it serves the few and not the many. This crisis has not only shone a spotlight on the deep inequalities in our society but widened them. We should be coming out of it with a more equal society, but, to help us do that, where is the tax on the companies that have made super-profits during the crisis? Where is the one-off tax on the super-wealthy as other countries are doing? I will vote against the Bill and table an amendment calling on the Government to take measures for a super-tax on the super-rich. We need to start to build a society that serves the many, not the few. That is what the Bill should be about, but it is no surprise that, with this Government, it is anything but.