(5 months, 4 weeks ago)
Commons ChamberI am delighted to have caught your eye in this important Budget debate, Madam Deputy Speaker. I am also pleased to follow the hon. Member for Warwick and Leamington (Matt Western), although I disagree with almost every word he said. That is the nature of this place —we are entitled to debate these matters.
I have listened to the speeches from Opposition Members today. Both they and most of the financial commentators who have criticised the Budget—I totally agree with my hon. Friend the Member for Folkestone and Hythe (Damian Collins) on this—have failed to mention that we have been through two catastrophic world shocks: namely, the pandemic and the unexpected war in Europe, in Ukraine. They have had catastrophic effects on our economy. I ask all the Opposition Members who have criticised the Budget this: would they not have spent the money on the furlough scheme or the business loan scheme? Would they not have helped people out with energy loans? Of course they would have, so they would be in exactly the same place as we are, grappling with today’s economic problems.
A number of measures in the Budget are to be warmly welcomed, and I will come to one or two of them. I am particularly pleased that inflation has come down from a high of 11.4% to 4% today, and it is forecast to be below the Bank of England’s target of 2% by the end of this year. That is the most important thing we can do for the cost of living of all our constituents, above all tax reductions or anything else. I warmly welcome that. I will turn to some of the individual measures in the Budget, before moving to public sector productivity measures. After that, as my hon. Friends on the Front Bench will not be surprised to learn, I will mention the tourist tax.
My constituents will welcome a number of measures set out in the Budget, particularly the cut in employee national insurance contributions. Taken with those of the autumn statement, they amount to £900 for the average working person in this country earning £35,000. I suggest to everybody across the House that that is a significant increase in the take-home money that our constituents will see in their pockets today. That, combined with the number of our constituents who are self-employed—a particularly important and growing sector—means £650 for someone earning £28,000, which is also warmly welcome. That will encourage our hard-working constituents to work longer hours and become more productive.
As my right hon. Friend the Chancellor said yesterday, national insurance is a double tax on working people. National insurance combined with income tax is an unfair tax arrangement for working people. If we are to start making tax cuts, which I hope we will, it must be right to try to drop one or other of them, and that is why I warmly welcome the cut in national insurance.
Let me make one important point, which I hope the hon. Gentleman will consider when he intervenes. Yesterday the Chancellor said that, through our tax cuts and by raising the personal allowance, the tax on ordinary working people today is at its lowest level since 1975, and possibly since the war, although we do not have records to prove that. It is lower than in America, France, Germany or any G7 country. The ordinary working person’s tax burden through national insurance and income tax is extremely low at the present time.
It is clear that the tax burden is actually the highest it has been in 70 years. The hon. Gentleman raised a point about national insurance contributions. I assume that he has seen the email that the Chancellor of the Exchequer sent to all Conservative party members, making it clear that the plan is to scrap NICs in the next Parliament. Does he accept that that is the Government’s plan, because it is in that email in black and white? Does he also accept that that would leave a £46 billion black hole in the public finances?
I think the hon. Gentleman is misrepresenting what my right hon. Friend the Chancellor said yesterday. I have Hansard here. I cannot look through it quickly enough to give the exact wording the Chancellor used, but he basically said that when the economy is in a fit state to so do, and when economic conditions allow, such a move is an ambition—that is not a promise or a commitment to anything at all; it is just, as my right hon. Friend said, a commitment to travel.
I will give way to the hon. Gentleman, but I hope he is not going to misrepresent what the Chancellor said. I will have to get it in Hansard, but I will give him one more chance.
As the hon. Gentleman will be aware, I am an avid reader of the Chancellor’s emails to Conservative party members. He states:
“We want a simpler, fairer tax system where you only pay tax once. If we stick with our plan that’s working, we’ll be able to make progress towards that goal in the next Parliament.”
If that is not a commitment to scrapping NICs in the next Parliament, leaving a £46 billion black hole—why do they not just own up to it, and then explain how they are going to fill that black hole?
I am grateful to the hon. Gentleman for intervening a second time, because I now have the exact words from Hansard. The Chancellor said:
“When it is responsible, when it can be achieved without increasing borrowing, and when it can be delivered without compromising high-quality public services, we will continue to cut national insurance as we have done today, so that we truly make work pay.”—[Official Report, 6 March 2024; Vol. 746, c. 852.]
I do not think it is as the hon. Gentleman is saying. I think he is misrepresenting the words of my right hon. Friend the Chancellor, and I hope he will not persist with that line of questioning.