Income tax (charge)

Debate between Sarah Olney and Wendy Chamberlain

Thursday 31st October 2024 Commons Chamber

[Sarah Olney]

I am glad the hon. Gentleman has raised that point. I refer him to our general election manifesto in which, as I have already said, we set out a range of tax-raising measures, including reversing the Conservatives’ tax cuts on big banks and taxing the social media giants. There are plenty of ways that the Government could have raised taxes more fairly than by placing additional burden on small businesses, which will be the engine of economic growth.

Brexit is another reason why our economy is not growing in the way it should. I urge the Government to acknowledge the seriousness of yesterday’s report from the OBR outlining the continual damage that Brexit red tape causes UK businesses, and the OBR finding that weak growth of trading, exacerbated by Brexit, will reduce the overall trade intensity of the UK economy by 15% in the long term. We understand that rebuilding our relationship with Europe is a gradual process. However, we are disappointed that the Government have ruled out joining the single market in the future, even when relationships improve. We urge them to consider the breadth of benefits that a strengthened trading relationship with Europe would bring. The Liberal Democrats want to forge a new partnership with our European neighbours —built on co-operation, not confrontation—and to move to a new comprehensive agreement.

[Wendy Chamberlain (North East Fife) (LD)]

Does my hon. Friend agree that, although the new Government say they want to reset their relationship with Europe, if the No. 1 thing on the European Union’s mind is a youth mobility scheme that the Government are ruling out, they are not going to get very far?

[Sarah Olney]

I am grateful to my hon. Friend for making that point, and she is absolutely right. The first thing we should be doing is negotiating a youth mobility scheme. We owe it to our young people, who are struggling more than most in the current economic environment.

The mismanagement of our economy by the outgoing Conservative Government has left deep challenges, and we understand that undoing that damage will not be easy. Nevertheless, it is not right for the consequences of these decisions and for this burden to be carried by some of the most vulnerable in our society. In July, I urged the Chancellor to remove the two-child limit on social security payments in her first Budget, and we are disappointed that this did not happen. No child should grow up without adequate food, a warm home or security for their future. Currently, 1.6 million children are affected by the two-child benefit cap. Parents subject to these limitations have less available income for childcare costs, and therefore experience barriers to employment. The Liberal Democrats believe that removing this cap is the most cost-effective way of immediately lifting children out of poverty and getting more parents back into the workforce.

I and my Liberal Democrat colleagues have also listened to our constituents and heard from countless pensioners who are worried about how they will afford their energy bills this winter. Since the cut to the winter fuel payments was announced, I have been inundated with expressions of local people’s disappointment at this decision. We will continue to urge the Government to give their full support to measures to boost the uptake of pension credit, and to ensure that all those eligible for pension credit claim both the benefit itself and the winter fuel payments.

For years, the previous Government failed to keep our communities safe from crime. It is vital that the new Government urgently restore the proper community policing that local people deserve. I ask the Government to clarify how and when the Chancellor will fund the thousands of new neighbourhood officers that her Government have promised. The Metropolitan Police Service has drawn on its financial reserves, slashed spending and sold off assets. During the election, our constituencies were promised more community police officers, but the Met has already made cuts and savings of over £1 billion, and next year it is facing a funding gap of over £450 million.

The Liberal Democrats are pleased to see the Chancellor’s goody bag of infrastructure projects, yet I personally was disappointed that this did not extend to funding for Hammersmith bridge. Some 22,000 vehicles a day used to cross the bridge, and those cars are now causing gridlocked traffic throughout my constituency in Mortlake, East Sheen and Barnes. It will cost £250 million to fix Hammersmith bridge, a sum no local authority can afford to pay, so I hope the Government will consider what more they can do to assist with the bridge’s reopening.

We all agree that we need economic growth and a stable economy after the chaos caused by the last Government. We know that this dire economic situation requires tough decisions. I welcome many of the steps that the Chancellor announced yesterday, but the Government must ensure that this does not come at the expense of the most vulnerable. I ask the Government to set out a timeline for the delivery of their proposals for investment, and I urge them to act with the urgency required to ensure that people can access the services they need when they need them. The cost of living crisis will not be solved by hitting families, pensioners, family farms and struggling small businesses, and our economy will not grow strongly again unless we repair our broken relationship with Europe.