National Insurance Contributions (Reduction in Rates) (No.2) Bill

Steve Double Excerpts

2nd reading
Wednesday 13th March 2024 Commons Chamber

[Steve Double (St Austell and Newquay) (Con)]

Being the last to speak in these debates has become a bit of a habit—and with you in the Chair, Mr Deputy Speaker.

I rise to speak very much in favour of this Bill. It delivers a 2% cut in national insurance, which will be hugely welcomed by thousands of households in my constituency, and indeed across the country. For someone on the average wage, this change, combined with the 2% cut that we introduced in January, will mean a £900 cut, which, for a household with two people earning, is £1,800 a year. Although that is not life-changing money, for many working households across this country, that £150 a month will make a significant difference in easing the pressures on their household budgets and the challenges they currently face.

We must acknowledge that we can make this cut only because of the difficult decisions that we have consistently made over many years to be responsible in our handling of the public finances. I know I said that yesterday, but it needs to be continually repeated. This is against a backdrop of two of the biggest shocks to our economy and public finances that any of us will ever live through: the pandemic and then the war in Ukraine and the energy crisis it produced. The Government have spent nearly half a trillion pounds supporting the country, keeping people in work, and supporting businesses and households.

I know that Labour bangs on about the fact that we have had to increase taxes to pay for all of that, but we all know that, had Labour been in power over the past few years, the bill would have been even higher, because it wanted longer lockdowns and tighter restrictions. Every time we came forward with measures of support, Labour said that they were not enough and that we should be spending more. Therefore, as much as Labour Members may criticise—and they think it is their job to do so—the country knows that, had they been in power, the bills would have been higher and we would have had to put up taxes by even more in order to balance the books. But because of the difficult decisions that we have made, we are now able to start to cut taxes for people, which is hugely welcome.

Despite all that is being said, the reality is that the effective tax rate is at the lowest it has been since 1975. Let us not forget that shortly after 1975, under a Labour Government, the top tax rate in this country was 83%. I know why Labour Members talk about high taxes; it is because they know more about high taxes than anyone else. We also have to put this in the context of the personal allowance being increased since 2010, when it was £6,475. It is now £12,570. The personal allowance has almost doubled, which has been a welcome and important measure. The Labour party criticises us because we have had to make the difficult decision to freeze the personal allowance for a few years, but let us remember that, between 2010 and 2021, Labour voted against every single Finance Bill that we introduced to increase the personal allowance. Every time we tried to increase the personal allowance, Labour opposed it, so we will take no lessons from Labour when it comes to personal allowances.

I welcome the Government’s ambition to continue to reduce national insurance and ultimately scrap it, because it is a double tax on work. That is the right ambition, and let us be clear that it is an ambition. I know that Labour Front Benchers are enjoying making a point about that. After the fiasco of Labour’s £28 billion green deal promise—which was not a promise, then was, and now is not—I would have thought that Labour would know the difference between an ambition and a promise. It is an ambition, and it is absolutely right to have that ambition. I looked up a headline from 2020 in The Guardian—not the most pro-Conservative, right-wing newspaper—which said, “A truly bold Chancellor would scrap national insurance”. I am very happy that we have a bold Chancellor who has said that the Government’s ambition is to scrap national insurance.

[Gavin Newlands]

The hon. Member mentioned the green deal. I have hundreds of constituents who were essentially screwed under the 2010 Government’s green deal with the Lib Dems. Rogue builders were allowed to screw them out of thousands of pounds. The Government have done nothing for my constituents. What does he have to say about that?

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Mr Newlands, you are incredibly intelligent. Maybe next time you will think of a different way of expressing that.

[Steve Double]

I am not sure what the hon. Member’s intervention has to do with the Bill, but I am sure that all his constituents who are in work will welcome the 4% cut in national insurance. The Scottish National party has raised taxes to their highest level anywhere in the United Kingdom, so I am sure that his constituents will be grateful for the Bill.

Like my hon. Friend the Member for Aberconwy (Robin Millar), I represent a constituency with a higher-than-average number of pensioners. Some of them have been in touch with me questioning why, as far as they could see, there was nothing in the Budget for them. Clearly, cutting national insurance does not affect them because they do not pay it. We have to remember that the Government have kept the triple lock commitment. Pensioners rightly had a 10% rise in their pensions last year. I was one of those who fought hard in the autumn of 2022 to ensure that we kept that commitment. Next month, they will rightly get a further 8.5% rise in their pensions. When those measures are combined, pensions will have gone up by 18.5% over two years, which is a significant rise. We have rightly kept our promise to pensioners. It is in that context that the Government have now rightly focused on supporting people in work and in jobs, which is very welcome.

We have to set this Bill and the 2% cut that it delivers in the context of the 2% cut that we made in January and the fact that, because of our careful management of the public finances and the economy, inflation is coming down and the green shoots of growth are back in our economy. For those reasons, we are able to make the decision to cut national insurance. I am happy to vote for the Bill this evening.

[Mr Deputy Speaker (Mr Nigel Evans)]

To start the wind-ups, I call Tulip Siddiq.