Income Tax (Charge)

Tom Hunt Excerpts

Thursday 28th October 2021 Commons Chamber

[Tom Hunt (Ipswich) (Con)]

It has been quite painful to sit through some of the speeches today and hear how negative they have been about a Budget that has been put together in incredibly difficult circumstances. It is entirely wrong just to pour negativity on it and to say that it is pork barrel politics when there are so many examples of Opposition right hon. and hon. Members whose areas are benefiting from this funding. I was pleased to see a poll in which over 50% of the public approved of this Budget and 17% disapproved. Those are very positive numbers.

What is crucial here is economic credibility. One of the problems that Labour has is a lack of economic credibility. A lot of that goes back to the note that was left saying, “I’m sorry, there’s no money left.” That is still in the minds of millions of voters up and down the country. The thing about getting economic credibility is the need to be open and honest about the fact that there are difficult decisions that have to be made. If the Opposition pretend that there are no such difficult decisions, then it will be very difficult for them to gain any kind of credibility.

[Catherine West]

Will the hon. Gentleman give way?

[Tom Hunt]

The Opposition can agree to every kind of spending pledge under the sun, whether it is saying, “We don’t want to cut international aid from 0.7% to 0.5%”, or whatever else, but at no point actually prioritise and say, “We think this is particularly important, so we will make up the money in this way.”

[Catherine West]

rose—

[Tom Hunt]

All we get when the Opposition vote against the increase in national insurance, say, is vague strategies about wealth taxes, so we do not get any detail about how much will be raised in what way. Yesterday, the shadow Chancellor of the Exchequer went on the attack against the independent schools sector as though that alone is going to start raising the billions of extra money we need to do. That is just typical Labour class warfare to no end whatsoever.

[Catherine West]

rose—

[Tom Hunt]

I am not going to take any interventions at the moment, okay, so stop trying.

In terms of the circumstances we face at the moment, the right hon. Member for Doncaster North (Edward Miliband) asked why we broke a manifesto pledge on tax. The key reason was the pandemic, and actually we spent £407 billion on dealing with the pandemic. That is why we had to do what we did. It was remarkable—the furlough scheme was absolutely the right thing to do, and it was incredibly impressive how quickly it was put together and it saved millions of people’s jobs. But when we were coming to end of that scheme, I was concerned myself about what it would do to unemployment. The suggestion that it could have been 12% was not unreasonable, and I feared that it could be around that level. The fact that it is 5% at the moment is a significant achievement. Regardless of our politics, every Member in this House should be really pleased about that and the fact that there are huge numbers of people in work, in a secure job, who we feared might not be. A lot of that is to do with the ingenuity of the Treasury, the Chancellor and his team. I thank them for that because it saved many of my constituents’ jobs.

On help with the cost of living, I very much welcome the decrease in the universal credit taper by eight points. The key thing about universal credit is that it was to try to ensure that it always pays to work—that work pays. Decreasing the universal credit taper by eight percentage points furthers that aim and saves some of the people on the lowest incomes a significant amount of money. That is to be welcomed. We should probably work to try to reduce it even more in future, but in a sustainable way that matches up with being responsible with our public finances.

Freezing fuel duty is also to be welcomed, as is increasing the national living wage. Apparently we are stealing Labour’s clothes—that is what I have heard—but I would like to think we are doing so in a responsible, sustainable way. It is absolutely right that as a party and as a Government we are single-minded about trying to do everything we can to support some of those on the lowest incomes in society. Many of those people are in my constituency. They are on lower incomes but want to work to get a higher income, and want the support to do so. There is a lot in this Budget that does that.

I am very passionate about the hospitality sector in Ipswich. We have some of the country’s best pubs, and we have some great breweries in Suffolk. The biggest cut in beer duty for 50 years is to be welcomed. I was one of the 100 Conservative Members of Parliament who wrote to the Treasury requesting that this happened. Only recently I was at the Belstead Arms, with its fantastic landlord Steve, who started the pub up in January 2010 and has got through a remarkably difficult period. He, for one, is very happy about this decision, as are the other 40 to 50-odd landlords in Ipswich, some of whom I will be visiting this weekend, but not too many.

The business rate reduction is also very welcome. It is one of the biggest reforms of business rates we have seen. It is not just tinkering; it goes much further than that.

Many right hon. and hon. Members will know that special educational needs are one of the things I feel most strongly about, partly because I myself had learning difficulties. I know I am a bit of a broken record in talking about that. I had dyslexia and dyspraxia. When I was 12, I had the reading and writing age of an eight-year-old. I was very lucky to get the support that I needed, so I am acutely conscious that a huge number of young people who are in the same position that I was do not get the support that they need. Not everything about special educational needs is about money, but a lot of it is, because most of the most powerful interventions we can make in special educational needs are resource-intensive. It is incredibly welcome that that has been recognised by increasing the special educational needs and disabilities budget by £2.6 billion over the next three years, with 30,000 extra special needs places. Yes, special schools are part of this, but better provision within a mainstream setting is part of it as well.

I see extra money for SEND as an investment, whether it is for prisons, where about a third of prisoners have some kind of learning disability—I reckon it is actually more like 50% if we diagnosed everyone who went in—or for children in care, over 50% of whom have learning disabilities. There is often pressure on families when their children’s needs are not met. Recognising that is incredibly important, and that is what the Government have done.

I want to finish by talking about levelling up and whether it is working for Ipswich. I think that in many respects levelling up is working for Ipswich. When some of my constituents heard about levelling up they feared that it was all about the north and the midlands. They were concerned that deprived parts of East Anglia would be forgotten—I actually mentioned that in my maiden speech. There are many examples of where the Government do recognise that it is not just about the north and the midlands. Ipswich has received £25 million from the town deals, and there are 11 discrete projects, many of them focused on skills. They are at the heart of levelling up and they make a massive difference to the lives of many of my constituents. We have had safer streets funding—in particular, for two parts of town with the worst problems of antisocial behaviour. We have a freeport just down the road in Felixstowe—one of just eight—which will hopefully bring forward 10,000 new jobs. We also have an opportunity area in Ipswich—one of only 12.

But there is one area where I would like to see the Government go a lot further. If we are going to sort out levelling up, we need to look at the way in which we fund our public services, and more specifically the funding formulas that lie behind the way in which those public services are funded, principally in two areas: education, particularly special educational needs; and police funding, where I do think Ipswich gets a raw deal. In Suffolk, police spending per head is £114.20 while in London it is £298, but we also compare very unfavourably with similar counties.

On SEND, there is a multi-academy trust with one school in Tower Hamlets and one school in Ipswich, and spend in Tower Hamlets is four times higher for children with mild to moderate learning difficulties, two and a half times higher for moderate to significant, and two times higher for significant to severe. It does not matter where it is—whether a child with a learning difficulty is in Ipswich, Birmingham or London, they are of the same inherent worth and value. There is no reason why random historical funding formula anomalies should mean that they get less funding and support per head than any other young person. That needs to be looked at.

I welcome this Budget. It is focused on the cost of living, focused on levelling up, and focused on allowing us to recover from an unprecedented pandemic.

[Mr Deputy Speaker (Mr Nigel Evans)]

I remind everybody that, unlike yesterday, there are wind-ups at the end of the debate today. Members are expected to come back for the wind-ups if they have participated in today’s debate.

--- Later in debate ---

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

It is a pleasure to respond to today’s debate on behalf of the Opposition. Although the Secretary of State for Business, Energy and Industrial Strategy is not in his place, I begin by congratulating him on becoming a father for the first time. He would not tell us his age, but if he is an older dad, as I was, I suspect that he is learning the reason that people have children in their 20s and 30s. That is a lesson that we learn when we have them a little bit older in life, so I give him my full solidarity and best wishes on his new baby.

I thank all right hon. and hon. Members for their contributions to the debate, which were wide-ranging. Several hon. Members talked about the need for business rates reform in the longer term, which the Opposition very much support. Others raised continuing issues with universal credit and made the point that the changes made yesterday will benefit only a minority of those affected by the cut of £20 a week that was implemented a few weeks ago. There were also contributions on artificial intelligence, the return of inflation, bank closures and many other issues.

Several Welsh colleagues raised coal tip safety. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Gerald Jones) rightly reminded us that it has been just over 55 years since the tragedy in Aberfan. I remember visiting the graveyard in Aberfan as a young man with my friend Huw Lewis, the former Assembly Member for the constituency: I will never forget the pictures of children on the graves, lovingly cared for and frozen in time forever. Fifty-five years on, I hope that the UK Government and the Welsh Government manage to reach agreement on securing the safety of coal tips for the future. I thank hon. Friends for raising the matter.

The Budget, like all Budgets, covered many things, but the stand-out feature was the Chancellor’s admission that taxes are set to rise to their highest levels since the early 1950s—higher than under Norman Lamont, higher than under Ken Clarke, higher than under Denis Healey, higher than under any of the Chancellor’s predecessors. Corporation tax, personal allowance freezes, national insurance, council tax—there is one tax rise after another. A new analysis today shows that the combination of them is set to mean £3,000 more in taxes per household than when the Prime Minister came into office.

The reason for all the tax rises is simple: the Tories have become the party of high taxation because they are the party of low growth. In the 11 years in which they have been in office, economic growth has averaged just 1.8%. In the previous decade, it averaged 2.3%.

[Tom Hunt]

I find it somewhat unbelievable that the right hon. Member cannot see that perhaps the £407 billion that we spent fighting the pandemic might have something to do with what he has just identified.

[Mr McFadden]

If the hon. Member reads the OBR report, he will find that it says very clearly that the effect of the pandemic is smaller in the long run than the effect of the low growth over which his party has presided for more than a decade.

As I was saying, in the decade before the Conservatives came to office, growth averaged 2.3%. Let us look at what the difference between those rates means to people. The difference, added up over the years, is worth £9,000 a year to every household in the country, and from the Exchequer’s point of view, the difference would be £30 billion a year more to fund our public services. It is that more than anything—that appalling record on economic growth—which has forced the Chancellor to raise taxes. The British people are being forced to pay the price of the Government’s long-term economic failures.

The long-term effect of this lack of growth is far greater than the impact of the pandemic. When we look beyond the huge fall in GDP last year, due to the pandemic, and the bounce back from it this year and next, the growth picture does not change. The OBR is predicting economic growth averaging about 1.5% between 2024 and 2026. It is that low growth which creates the projections of real wages barely rising in the coming years. In his dreams, the Prime Minister is Winston Churchill; in his rhetoric, the Chancellor is Margaret Thatcher; but in its actions, this Government is Ted Heath.

The Chancellor and the Prime Minister have trapped the country in a vicious circle of low growth, rising inflation, stagnating incomes and rising taxes. The economic legacy of this Chancellor will be a country on the path of low growth and high taxation, but his political legacy will be as the man who buried forever the Tories’ reputation as a low-tax party.