This morning, the Treasury Committee has published more data showing that it is increasingly difficult to contact HMRC by telephone. While I fully endorse what the Minister has just said about the long-term strategy to move people online, it cannot be done by randomly shutting down HMRC’s telephone lines.
The Minister had an excellent digital track record in the private sector before he came into Parliament. May I urge him to use that experience to make this much more of a gradual transition for those law-abiding citizens of ours?
]]>As I was saying, as a cross-party Committee, we were never going to agree on the level and scope of taxes, but we do agree that the tax system is too complicated. We have a very complicated tax system in this country, and well over 1,000 different tax reliefs. Despite the abolition of the Office of Tax Simplification, there have been some major tax simplifications under this Chancellor. We have heard about the way in which he eliminated, in the autumn statement, the national insurance class; about how he has simplified the lifetime allowance for pensions; and, today, about how he has started to tackle some of the perverse cliff edges, high marginal tax rates and disincentives to work in the tax system. By raising the VAT threshold, he has helped small businesses, which might otherwise have held back because they did not want to go through that threshold. On universal credit, we have done so much over the years to reduce high marginal tax rates and disincentives.
It was great to hear the Chancellor really focus today on addressing the high-income child benefit charge. When we introduced it—I voted for it at the time—£50,000 a year was a high rate of income. With the progress on higher incomes, the median income has increased from about £22,000 in those days to about £35,000 now. These days, £50,000 is not more than about 40% over the median income. It was right for the Chancellor to recognise that today in his Budget statement. He has made the taper that much less of a disincentive to taking on work above that income level. Of course, I would have loved him to have done even more, but I am very grateful for all that he has done.
Let me come to a rapid close by saying that it is clear that the Conservatives have a plan. It is clear that there is a plan to get inflation down; to increase the growth rate and the growth capacity of the UK economy, without sparking inflation again; and to get debt falling. I think we can all see that the plan is working. We should stick to that plan and not go back to square one.
]]>Other measures announced today will help on the growth front. Cutting national insurance is also a smart way to help growth. It not only puts more money in working people’s pockets—27 million people across this country will see an extra £900 a year in their bank account—but will make work more attractive. We have heard from the Office for Budget Responsibility that cutting national insurance has the biggest marginal impact on bringing people back into work; the figure from the last cut was 94,000. It will be interesting to see whether the OBR continues to expect this to have a significant impact. It is a really smart way to cut taxes for working people—and the measure is UK-wide, so the effect will be felt in Scotland as well.
I turn to the issue of debt falling. We can see that the bond markets have stabilised, and OBR numbers confirm progress on debt. I draw the House’s attention to a report that our Committee recently published on the Bank of England and its quantitative tightening. It is selling £100 billion of gilts into the market this year, and it has acknowledged that that increases the cost to the Exchequer of borrowing by between a tenth and a quarter of a percentage point. Our Committee wanted to flag up the impact that that could have, and to send a message to the independent Bank of England about some of the ways in which quantitative tightening has an impact on the real economy. As a cross-party Committee, we were obviously never going to agree on the level or scope of taxes, but one thing we have unanimity—
]]>There will be a range of views across the Chamber on the role of the Office for Budget Responsibility. We all know, of course, that all forecasts are likely to be wrong. The Treasury Committee will scrutinise the Office for Budget Responsibility next Tuesday morning, and we look forward to asking questions about its assumptions. My view is that it is a bit like that quote of Sir Winston Churchill about democracy being the worst form of government except for all the others that have been tried: although all economic forecasts are likely to be wrong in some way, and the Office for Budget Responsibility’s forecasts are often not the most accurate, they are a lot better than the alternatives of either the Treasury marking its own homework or having a Budget with no forecast from the Office for Budget Responsibility. I think the OBR’s forecasts reassure the markets on which we are so dependent for our borrowing.
There has obviously been good progress on inflation since the peak of over 11% after Putin’s evil invasion of Ukraine, and it is vital that all of today’s Budget measures are seen through the lens of inflation, because we do not want anything that could prevent that progress towards the 2% that the Bank of England expects by the middle of this year.
The Chancellor told us that he was looking through that lens in announcing today’s measures, which contain a range of things that will really help, including continuing the 5p off fuel duty at the pumps for another year, which will be very helpful to drivers in West Worcestershire and elsewhere in the country. The freeze on alcohol duty will be welcomed in pubs in West Worcestershire and across the country. The public sector productivity plan is crucial to ensuring that we get value for money from our public services.
On the second economic objective of growth, we can all welcome the fact that employment growth has been so strong. The economy has created more than 800 jobs a day over the past 14 years. We have seen steps taken in previous fiscal events to grow the size of the UK’s productive economy. Now that we are at full employment, productivity becomes incredibly important, because it helps to sustain non-inflationary growth.
To stimulate all-important investment in the economy, last year’s big announcement of full expensing was made permanent in the autumn statement. Today, we have heard that full expensing will be extended to leased assets. The BBC fact check noted that when the measure was first announced, it was expected that the economy would benefit greatly. The Chancellor said that its impact on the economy would be huge, and the Office for Budget Responsibility said that it would increase business investment by 3% a year. The policy came into force on
Today we heard about further welcome steps to increase business investment and other investment in the UK economy—tax reliefs for some creative industries, British individual savings accounts to encourage more long-term investment in our economy, the back-to-work plan, the childcare plan, and many other measures that will unlock growth.
]]>I want to end my remarks with an inspiring quotation that I heard this week, which sums up why am persisting with this issue. I was very inspired to hear these words by Nora Ephron, the great US screenwriter:
“Whatever you choose, however many roads you travel, I hope that you choose not to be a lady. I hope you will find some way to break the rules and make a little trouble out there. And I also hope that you will choose to make some of that trouble on behalf of women.”
So I say to my Government: “Come on. I will continue to make a little trouble on this subject until you let this Bill pass.” Alternatively, we could agree today to make this small and symbolic change for our country’s sake and for the sake of equality between future generations of men and women.
]]>I will conclude my remarks by saying that my only interest in the issue is as a female parliamentarian—the 341st woman ever elected to this place in our nation’s history.
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