National Insurance Contributions Increase

Richard Graham Excerpts

Tuesday 8th March 2022 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for bringing that to the House’s attention. It is exactly why Labour said that the warm home discount should be expanded to ensure that the money goes to the people who need it, not the landlords.

At the same time as the Government are asking hard-working British people to pay more in tax, they are writing off billions of pounds in fraud. Ordinary people are paying for this Government’s waste. The Chancellor repeatedly ignored warnings about the holes in his covid business support schemes, resulting in £4.3 billion of public money being written off. That does not even include the amounts lost to bounce back loan fraud, including taxpayer cash handed out to drug dealers and organised criminals. That fraud currently stands at £4.7 billion, so that is £9 billion and counting handed to fraudsters. Then there is the colossal Government waste during the pandemic, with £8.7 billion lost on unusable personal protective equipment, all paid for by the taxpayer. Billions has been spent on crony contracts that have not delivered, and every single cheque has been signed by the Chancellor.

[Richard Graham (Gloucester) (Con)]

rose—

[Rachel Reeves]

Let me just finish this point. Yesterday, we saw a whole new meaning to burning through money. After wasting billions on unusable PPE, the Government are literally burning it to get rid of it—putting taxpayers’ money through the furnace. The Conservatives’ promise to get value for money for taxpayers has gone up in flames. Taxpayers do not want to keep picking up the price of these dodgy contracts, fraud and waste. I will be very interested to hear the hon. Gentleman’s views on that.

[Richard Graham]

I am grateful to the hon. Lady. The difficulty is that this is a debate about the national insurance contributions increase; it is not a debate about her wide range of thoughts on all sorts of other aspects of the economy. The problem with this particular debate is that this additional tax, which is hypothecated exclusively for health and care, will make a huge difference to millions of people across the country, including in Leeds, who have been waiting for elective surgery, want to see social care resolved and need the extra funds for it to happen. In addition, it is progressive, because the top 14% of taxpayers will pay half of the revenue raised. Surely she would approve of that.

[Rachel Reeves]

The hon. Gentleman knows that the average household in Gloucester will be £1,299 worse off because of the double whammy of tax increases and price increases. I think they would be pretty concerned about the amount of taxpayers’ money that is being written off in fraud and waste—money that is being burned by the Government.

Despite waste and fraud costing more than this year’s national insurance contribution rise will raise, the Prime Minister says that the tax rise is necessary. That is the great deceit. On the steps of Downing Street in 2019, he claimed to have a plan for social care. Yet almost three years on, we know that the Government’s approach to social care will not stop people selling their home to pay for care, it will not deliver a penny more to improve care today, and it will not add a single minute of care and support for those who need it. Even then, NHS waiting lists are set to rise even further for the next two years. The Government will not fix the problems with our social care sector or our NHS. Never before have taxpayers been asked to pay so much and got so little in return.

It is time for the Chancellor to urgently change direction. The national insurance tax rise was wrong in September and it is even worse in March. It is the wrong tax at the wrong time: the cost of living is higher, inflation is out of control, wages are not keeping up, energy bills are going through the roof and family finances are stretched, yet the Chancellor refuses to back our windfall tax plans to help.

The Chancellor has not turned up today, but my message to the Minister is that he must turn up to the spring Budget with a plan to make a difference to the cost of living. The Chancellor’s tax rise should not go ahead. MPs can send the strongest signal today by backing our calls to cancel the national insurance tax increase next month. They know full well that our country believes that it is time to change course.

The Conservative Government are not doing enough to cushion the blows. In fact, when it comes to the tax rise, they are piling on the pressure and making matters worse. They must think again and back Labour’s motion today.

--- Later in debate ---

[Mr Clarke]

Making sure that we spend taxpayers’ money wisely is the central duty of any Government. It is something that, as Chief Secretary, I work very hard on with officials and Departments to make sure that we scrutinise spending in the way that delivers best value.

Some fairly spurious points have been raised about our record on issues such as PPE procurement, and we need to remember what I think could best be described as the brass neck of the Opposition in calling us out on this issue, when I think the hon. Member for Leeds West suggested at one point that we should procure our PPE from historical theatre re-enactment companies or fancy dress companies. Procuring PPE at pace brought with it some inevitable challenges, and it is vital that we had the resources to deal with the situation we faced at the time.

[Richard Graham]

The debate this afternoon is fascinating in a number of ways. The first one is that the hon. Member for Leeds West (Rachel Reeves) rightly pointed out that Government is about choice. I remember vividly coming into this place in 2010, when the maximum someone could earn before paying tax was £6,000. It is now £12,500, which means £1,000 more in take-home pay for millions of our constituents. My right hon. Friend has confirmed that more than 6 million taxpayers will not be paying anything at all towards the 1.5% increase in national insurance, which will pay for their families’ and their parents’ hospital care and social care.

[Mr Clarke]

I entirely agree with what my hon. Friend has said, and it is a reflection of the fact that we have taken sensible measured steps against what has been a recurring series of unprecedented challenges—the financial crisis, our exit from the European Union, covid, and now the backdrop of conflict in Ukraine. All these things have had a major impact on the world around us, but our focus has consistently been on supporting people to do the right thing and to protect their finances.

--- Later in debate ---

[Richard Thomson]

I say that I very much doubt that, and there is analysis by the Institute for Fiscal Studies that suggests very differently, but again this comes back to the marginal rate of tax and there is no doubt that this is going to have a greater impact on the marginal rate of low earners than that of higher earners.

[Richard Graham]

Will the hon. Gentleman give way?

[Richard Thomson]

I would like to make some progress.

[Richard Graham]

On a point of order, Mr Deputy Speaker. The hon. Member has made some very good points but I do believe he has inadvertently misled the House by claiming that those who are least well-paid will be paying the most on the tax when we have just heard from the Chief Secretary that over 6 million earners will not be contributing a penny towards the cost of the national increase rise. Mr Deputy Speaker, may I give the hon. Member, through your offices, the opportunity to withdraw his earlier remark?

[Mr Deputy Speaker (Mr Nigel Evans)]

That sounds like a debating point as opposed to a point for the Chair.