Budget Resolutions

Suella Braverman Excerpts

Wednesday 6th March 2024 Commons Chamber

[Suella Braverman (Fareham) (Con)]

I rise to welcome many elements of today’s Budget, notably the cut to the main rate of employees’ national insurance from 10% to 8%; the changes to the high-income child benefit charge, which will help half a million families; and the raising of the VAT threshold for small businesses from £85,000 to £90,000. Speaking on behalf of many small and medium-sized businesses in Fareham, I know that they will warmly welcome that change.

However, the real test for us today is to ask ourselves whether the measures that have been announced will turn the tide. Will they turn the tide on the highest tax burden in 70 years, since world war two? Will they turn the tide on our prospects of galvanising the British economy and stimulating growth after a decade of sluggish productivity? Will they turn the tide and send the message to British taxpayers that we, the Conservatives, are the party of low tax and on their side? Those are the real questions that we need to ask ourselves, honestly and with dispassionate fairness, because if we are not honest with ourselves, we have no one else to blame if we hand the keys of power to the Labour party.

I want the British people to know what that will mean for them. A Labour Government will mean tax rises to fund £28 billion-worth of uncosted promises—Opposition colleagues are shaking their heads, but it is true. A Labour Government will mean undoing Brexit and aligning the UK more closely with the European Union, and opening our borders to potentially unlimited numbers of people from the EU. Just as night follows day, a Labour Government would also—as every Labour Government in our history have done—leave this country with more unemployment and more job losses than when they entered government. That is something I do not want to see, and I am incredibly proud that since 2010 this Conservative Government have created 800 jobs a day. That jobs miracle is something that Conservative Members can all be proud of. It will bring huge prosperity and wellbeing to millions of people across the country.

Our approach as Conservatives must be one of responsible management of the public finances. Yes, we want to cut taxes, because that is the way to stimulate growth and then reinvest more tax revenue in delivering first-class public services. I am very proud of our track record on public service delivery over the past decade: whether it is the increased numbers of doctors and nurses, the phenomenal improvement in our literacy and numeracy rates in English schools, or 20,000 new police officers, I am proud of many of the outcomes that we have produced thanks to our commitment to our vital public services.

Just in my local area, Fareham Community Hospital has seen an increase of new services—from a new chemotherapy unit to same-day access to a GP service and a regional renal dialysis centre, all in the last few years—and there has been a £58 million investment in a new accident and emergency department at our local Queen Alexandra Hospital.

To be fair to the Government, things have been incredibly tough and challenging over the last few years. Needless to say, we paid the wages of millions of people to, in effect, stay at home. I am very proud of the furlough scheme, but I do think that we all need to reflect—again, dispassionately and fairly—on the decisions we made during the pandemic. My own view, with the benefit of hindsight—I am not absolving myself of any responsibility because I sat in Cabinet at the time of these decisions—was that we actually did spend too much, we did lock down too soon and too hard, and we did shut schools in a way that was harmful rather than helpful. In the event of a similar pandemic, I hope that we do not make the same mistakes again. I do not blame anyone—it was a time of unprecedented fear and uncertainty—but I think we have to learn the lessons, so that in the event of something similar happening we do not repeat those decisions. I think we overreached, overspent and overcompensated for what could have been handled in a less damaging way for the economy and for the British people in the medium term.

Returning to the Budget, if we are serious about putting the British taxpayer first, personal taxes are a good place to start, which is why I welcome the changes to national insurance. However, I agree with my right hon. Friend the Member for Haltemprice and Howden (Sir David Davis), as my preference would have been a 2p cut off the basic rate of income tax, an increase in the personal allowance and raising the income tax thresholds to properly fix a tax regime that has, I am sad to say, become a disincentive to work and endeavour in too many cases. A cut of 2p off the basic rate and an increase in the personal allowance—say from £12,500, where it currently stands, to £20,000, or even to £15,000 or £16,000—would have helped poorer households and lifted about 20% of all taxpayers out of tax altogether. Cutting income tax rather than national insurance would help a broader range of taxpayer, including workers, savers and pensioners.

Let me say a word about pensioners. Yes, they have the benefit of the triple lock, but it is fair to say that since 2010 the income tax bill of the retired has increased by hundreds of pounds—some estimates put it at £400. The value of the triple lock has actually been depleted because of the fixed thresholds in income tax and, in particular, the personal allowance. I do regret that income tax was not chosen as the tax to cut over national insurance, because pensioners have lost out as a result.

I think those thresholds need to be raised to tackle the invidious problem of fiscal drag. We have seen too many workers—millions, in fact—on low or middle-level salaries being dragged into higher tax brackets in a way that was never intended. Nurses, teachers and police officers are paying a 40% rate of income tax, which was never the plan, because the frozen thresholds have not been raised in line with inflation. It has been proved that that is a disincentive to promotion and to working longer hours, and it is a reason why many more people are choosing to take early retirement or to work less. That is a drag and has an adverse impact of our tax system. I think this was a missed opportunity, and I hope the Prime Minister remembers the promise he made during his leadership campaign that he would plan to cut the basic rate of income tax eventually in this Parliament.

How do we actually pay for some of these tax changes? I agree with my right hon. Friend the Member for North East Somerset (Sir Jacob Rees-Mogg) that we really have to start questioning the validity of the forecasts and the assessments made by the OBR. One way that savings could be made is in looking at net migration and overall levels of legal migration. I am very pleased that the OBR seems to have shifted away from its orthodox view, which has traditionally been that more people coming into the country, largely on low wages, is necessarily a net benefit for the economy. Just last month, David Miles of the OBR attenuated that view by saying that, no, we cannot assume there to be fiscal benefits from increased migration. There have been assessments that the UK has paid £24 billion since 2020 to cover the costs of non-working migrants, and the IFS has confirmed that non-EU net migration has had a net fiscal cost overall. Getting net migration down is key to saving costs.

I would have liked to have seen many other areas included, such as cutting public spending, which has been mentioned already. Overall, this Budget has some welcome elements, but it also represents something of a missed opportunity to properly send a message that we are on the side of the British taxpayer, that we will lower taxes, and that we will galvanise the economy to produce growth.