National Insurance Contributions (Increase of Thresholds) Bill

Debate between Richard Thomson and Matt Rodda

Committee stage
Thursday 24th March 2022 Commons Chamber

[Matt Rodda]

I am grateful for the opportunity to speak in this important debate this afternoon. I would also like to thank my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and my hon. Friend the Member for Eltham (Clive Efford) for their new clauses, which I will speak to. I want to take this opportunity to talk about two groups of people, both of which are under real pressure due to the cost of living crisis. Those two groups are families in work, many of whom are on universal credit, and pensioners, many of whom have partners on universal credit.

First, I would like to give a bit of context. It is clear that we now face an unprecedented cost of living crisis due to soaring food and energy prices. Working families and pensioners are about to be confronted with the frightening prospect of the kind of cut to their standard of living not seen since the 1970s. Recent events in Ukraine have been shocking. However, the cost of living crisis predates Putin’s awful war and his vicious attack on the Ukrainian people. It was clear in the autumn that food and fuel prices were starting to rise steeply, but the Government have actually made matters worse despite those warning signs.

The Prime Minister and the Chancellor have made a series of choices that have made things worse. They decided to increase national insurance. They also decided to break the triple lock and failed to increase the state pension in line with inflation. To make matters even worse, they decided not to introduce a windfall tax, even when it was clear that such an approach would have provided cash to ease bills for families and pensioners. However, they did not have to take this damaging approach. They made a choice. They took the decision to act in this way, knowing full well the impact their policies would have. I contrast this with the approach set out by the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), whose windfall tax proposals would have helped those struggling to get by with a payment of up to £600 per household. Sadly, people across the country will now pay the price for the choices made by the Government.

I suggest to those on the Treasury Bench that it is worth looking at what is being said about the spring statement in the media and by commentators. For example, the chief executive of the Resolution Foundation said that it was hard to make sense of the spring statement. With just a hint of irony, he said:

“This package only makes sense if your only test for policy choices was can you prove you’re a tax cutter and you’ve already announced a rise in national insurance”.

The FT was somewhat less diplomatic. It described the spring statement with these words:

“Chancellor builds war chest for 2024 but offers minimal help for families reeling from increasing household bills”.

These choices will all have a huge impact on local communities up and down the country. I have been thinking about many of my own residents in Reading and Woodley, such as people running small businesses, teaching assistants, nurses, IT consultants, residents who work in retail and manufacturing, and parents who are under real pressure to pay for the weekly shop. The Government’s policies will also hit those who are a little bit older, such as pensioners who are struggling with the high cost of heating in an area with many terraced houses that are difficult to insulate.

Even at this late stage, I ask the Chancellor and those on the Treasury Bench to reconsider their approach. There is no doubt that this country faces a real cost of living crisis. That has been clear since the autumn. The Chancellor and the Prime Minister had the opportunity to look at a number of policies, including a windfall tax on the energy companies, which would have offered up to £600 of much-needed help. Sadly, they chose to impose extra costs on families and pensioners at the worst possible time.

[Richard Thomson]

The SNP is generally supportive of all the amendments that have been tabled, and I echo the comments of the right hon. Member for Hayes and Harlington (John McDonnell), who made a number of points about the importance of understanding the intended purpose and impact of legislation before it takes effect. I made that point ad nauseam during the passage of two Finance Bills, but I keep returning to it because it is important that we understand what we are doing and that we avoid, as far as possible, the law of unintended consequences.

Quite apart from the evidence base they would provide for legislative scrutiny, the amendments might provide a corrective to the poor policy choices that Ministers have made in recent times.