Income Tax (Charge)

Steve McCabe Excerpts

Thursday 4th March 2021 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab) [V]]

I am not sure that people will think the Chancellor is being straight about stealth taxes, resulting in the largest tax burden since 1969; that they will applaud pension taxes, as doctors leave the NHS or cut their hours; or that they will support a 50p rise for statutory sick pay. Almost 2.5 million excluded self-employed are still going to be left high and dry. In response to my survey, 85% of constituents said that they wanted help for those excluded.

The support schemes sound impressive, but they involve complex applications and administration. The fear is that they will not reach the right people in time. Small businesses need easy access and affordable help, especially with rent and cash flow, which are real impediments to survival.

My constituency has large numbers of young unemployed and many self-employed people at risk. Some 94% of my Selly Oak constituents said in response to my Budget survey that they wanted action on unemployment to be a priority. How will that happen unless programmes are simplified and better targeted? We need training for the young unemployed—not sluggish, dead-end schemes—as well as rapid reskilling for those who lose their livelihoods and joined-up training.

Why does the super deduction policy take no account of whether investment would have occurred anyway, the areas that will benefit, or if it might end up costing rather than saving jobs? It would be better to tie it to research and development. We could have a targeted plan to shift support to parts of the country other than Oxford, Cambridge, London and the south-east. The number of R&D jobs in London and the south-east is already three times greater than in the midlands, not because it is more creative, but because it has access to greater funding. If the Chancellor wants electric cars built in the midlands, new jobs in climate change adaptation, machine learning in medical technology and food security, he needs to direct resources to those areas that can deliver. If the uplift in public R&D was linked to a targeted policy and focused on projects outside the golden triangle, that could mean a further £9 billion boost.

The Chancellor could also establish a fresh round of technology institutes, build on the Catapult network by announcing long-term funding, and expand university enterprise zones. That is how to level up, and that is how to create new jobs and a thriving economy.