Income Tax (Charge)

Vikki Slade Excerpts

Monday 4th November 2024 Commons Chamber

[Vikki Slade (Mid Dorset and North Poole) (LD)]

There is no doubt that the Conservative Government left our public services in tatters and the NHS on life support. This Government were left with no choice but to make tough decisions. I understand that, having led a council that had been Conservative-run. Important decisions about employee pay were delayed, there were vanity projects and money wasted, and reserves were slashed so badly that the council was on the verge of bankruptcy. However, to govern is to choose, and I am shocked by the short-sightedness of some of the decisions made in last week’s Budget.

It is true that the average worker will not see a tax rise on their payslip, but their employer will now be calculating whether there will be any pay rises at all next year or whether to issue some of their workers with their P45. Shops, pubs and cafés facing increases in national insurance and the national minimum wage are already struggling as households deal with cost of living pressures and from their own rising prices for energy and for stock, and they were promised full reform of business rates. Instead, their costs will skyrocket as their 75% business rate relief is slashed to 40%. Granted, the relief has been made permanent, but where is the commercial landowner levy or the charge on the internet giants? Surely taxing the wealthiest would be fairer, rather than hitting small businesses with a tax that takes no account of profits or purpose?

I said it last week, and I will say it again now: rental auctions and compulsory purchase changes may in theory get the markets moving, but if businesses in high streets such as Wareham in my constituency of Mid Dorset and North Poole cannot afford to trade, the high street cannot redefine its purpose.

I, like my colleagues, have been contacted by businesses, public sector organisations and charities sharing their calculations of the impact of the national insurance changes. Corfe Mullen dental practice recently recruited a graduate dentist specifically to serve the child NHS population, boosting capacity in my area. The increase in NI for staff has wiped out half her annual salary. If we are to stop dentists leaving the NHS, we need exemptions for them now. Julia’s House children’s hospice has calculated that its NI increase is £242,000 a year. Shockingly, Tops nursery, which has several early years settings in my constituency, has calculated an increase of half a million pounds, without any additional increase in childcare funding.

The Lib Dems have called for taxes on energy giants and the big banks. We agree that those with the broadest shoulders should pay more, but this Budget has mistaken whose shoulders are broad, so I ask the Government for urgent consideration of two things: first, rethinking the national insurance change to exempt organisations allied to the NHS and education, such as GPs, hospices and nurseries, and instead to get the extra money from big banks and share buybacks; and secondly, to postpone the reduction of retail, hospitality and leisure relief until full business rate reform is ready to keep our high streets alive.