Income tax (charge)

Debate between Sarah Olney and Chris Vince

Thursday 31st October 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to speak in this debate in response to the first ever Budget delivered by a female Chancellor. This Government have inherited a mess, and we know that the cause of that mess is the legacy of reckless economic mismanagement left behind by the previous Government.

The Liberal Democrats are glad that the Chancellor has listened to our calls for investment and support for the NHS to start repairing all the damage done to local health services by the Conservatives. We will continue to stand up for our constituents, and press the Government to act with urgency and to provide the support to public services that is so desperately needed. The NHS has been stretched to its limits after years of Conservative neglect, and the Liberal Democrats have been tirelessly campaigning for an emergency health and social care budget to get it back on its feet. We therefore welcome yesterday’s announcements. However, we need to see outcomes, including people being able to see a GP within 7 days, cancer treatment targets being met and people having a dentist appointment when they need one. We will hold the Government to account for delivering on these issues.

Millions of people have a long-term health condition that makes them too ill to work and millions more are stuck on NHS waiting lists. Many others cannot leave hospital because there is no care provision. The Liberal Democrats have always understood that we cannot have a thriving economy and strong public finances until we fix the crisis in health and social care, so we welcome some of the steps that the Government announced in this direction yesterday. The Liberal Democrats have campaigned on improving support for carers. While I am glad that the Government’s review will look again at getting rid of the cliff edge for carer’s allowance and the earnings limit, I hope that the Chancellor and her colleagues will consider a broader review to give family carers the support they deserve. We will hold them to account for ensuring that this new funding is delivered for patients and carers, including through extra GP and hospital appointments.

I also welcome the promise made by the Chancellor yesterday of full compensation for the victims of both the contaminated blood scandal and the Horizon scandal, and I hope that that can be delivered quickly to bring the victims closer to the justice they deserve. The previous Conservative Government yet again showed themselves to be totally shameless with the revelation that, while they promised to compensate the victims of the hideous infected blood scandal, they entirely neglected to set aside the funds to actually pay for them. It is essential that there is transparency in Government spending, and we are glad that the Government are strengthening the powers of independent bodies, such as the OBR, to ensure that taxpayers receive value for money.

We were glad that, during the Chancellor’s Budget, she committed to investing to modernise the systems of His Majesty’s Revenue and Customs using the very best technology, and we are glad that she has committed to recruiting additional HMRC compliance and debt staff. Investing in HMRC reduces the risk to businesses and individuals in navigating the bureaucratic and often complex processes associated with this service. I have heard from businesses in my constituency of the risks they face by not being able to directly speak to someone at HMRC. Strengthening these services with greater resources should benefit not only businesses, but all those required to complete self-assessment. Greater resources will protect citizens from unfair charges, including the loan charge, and allow people to access clear advice and support, making our tax system more efficient.

While I am pleased to support many of the announcements made by the Chancellor yesterday, I am concerned by her decision to raise employer’s national insurance contributions. I fear that this will be deeply damaging to many already struggling small businesses and care providers, so we urge the Government to at least consider exempting social care from the employer’s national insurance tax rise. The Chancellor has provided extra funding for the NHS and other public sector organisations to cover the cost of the tax rise. However, the vast majority of care providers are in the private sector, so will not benefit from this help.

Small businesses are the beating heart of our local economies. For years under the last Conservative Administration, these businesses have struggled, having to carry the burden of rising energy prices, interest rates and the red tape of the Conservative’s Brexit deal. I urge the Government to go further than the announcements made yesterday on business rates by fundamentally overhauling the broken business rates system, which is destroying our high streets and town centres.

The Liberal Democrats believe that there are much fairer ways of raising revenue. Our manifesto set out our calls for a fairer tax system, including raising money by reversing the Conservatives’ tax cuts for the big banks, or by asking the social media giants to pay a bit more. We do not believe that it is right or fair for the Government to instead increase the burden on small and medium-sized businesses, which are the engines of our economy and which are already struggling under the unfair tax system set out by the last Conservative Government.

We welcome yesterday’s news of increased funding for schools. Supporting children and young people must be central to any Government policy. After schools were left to crumble by the last Government, we are glad to see an increased investment in education. However, the Liberal Democrats oppose ending the VAT exemption for independent schools. We do not support taxing education, and we believe parents should have a choice about how they educate their children.

We were disappointed that at no point in the Chancellor’s Budget was there a mention of Europe. The Government cannot indefinitely ignore the damage that the Conservative’s shambolic Brexit deal continues to have on our economy.

[Chris Vince (Harlow) (Lab/Co-op)]

Do you not think the fact that you are supporting all the spending commitments but none of the tax rises is the reason that the Lib Dems will never be in government—