Budget Resolutions - Income Tax (Charge)

Part of the debate – in the House of Commons at 6:10 pm on 30th October 2018.

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Photo of Karin Smyth Karin Smyth Labour, Bristol South 6:10 pm, 30th October 2018

It is an absolute pleasure to follow my hon. Friend Emma Hardy, who made an excellent speech.

We have had the usual smoke and mirrors about the real money that is going into the NHS through this Budget, but I think that everybody outside the Chamber agrees that it is not enough to meet the increase in demand that we all know about. Equally as concerning, however, is the fact that the percentage of the NHS budget that will be part of public spending over the forthcoming years will rise to roughly one third of overall spending. That says an awful lot about what we are not spending money on, as well as what we are spending.

Sometime soon, we will have the 10-year plan. The taxpayers, whom the Secretary of State was so concerned about earlier, will have absolutely no say in that plan, the priorities or how the resources are allocated. It is a completely missed opportunity to treat the public as grown-ups in the debate about health funding so that they are clear about the cost of health services, the extent of spending and the quality that money can buy, and understand what they are prepared to pay for.

Let me speak briefly about VAT. Page 50 of the Red Book refers to some tinkering around the edges of VAT, but the Government make no mention of closing the loophole that has been exploited by some NHS trusts. I visited a Treasury Minister recently to talk about wholly owned companies saving VAT. The Treasury seems unconcerned about the loss of income from VAT on wholly owned companies, and the Department of Health and Social Care seems totally unconcerned about the competing fragmentation of our services. It would be really good if both Departments had a chat with each other, decided what the policy should be and sorted it out.

I want to concentrate now on the Budget. Bristol is a city of high employment, and also a city with high rates of ill health and disability. The greatest inequalities are in my constituency, with people living on average for 19 years in ill health. The Marmot review on health inequalities estimated that between £36 billion and £40 billion are lost in taxes, welfare payments and costs to the NHS through health inequalities. This is a huge opportunity for us to do better.

I want to touch on universal credit and social care. Some 5,900 of my constituents currently claim employment and support allowance and the Government intend, at some point, to migrate them on to universal credit. In successfully claiming ESA, my constituents have been subject to the work capability assessment. Many have been initially refused, but then have successfully appealed that decision on one or more occasion. They will have proved to the Department for Work and Pensions that their long-term disability or ill health means that they cannot work and need financial support. There is still no recognition or understanding that these constituents will never work again. They do not need incentives or sanctions to work. The DWP agrees that they cannot work, but universal credit offers them no benefit, only a loss of income. Surely it is time to halt the migration of anyone currently claiming ESA and allow new claimants with an illness or disability to claim that benefit. We need a proper rethink about how we support those who most need our help.

The problem on social care is well documented. We know how many people are losing support, but it is still a silent misery for thousands of families, because until someone goes into the system, they do not understand how bad it is. The King’s Fund said that public awareness of the system is very poor and that

“As long as the public view the issue from behind a veil of ignorance, it is easier for national politicians to trade on…rivals’
proposals”.

I do not want to trade on fear and misinformation; I want us to set a path for what we need. I would like the Budget to have helped, but it has not. The language needs to change. Spending on social care is not a drain, a time bomb, a burden or a threat to assets. It is an investment in people and in our future. Every business, every public service and every family is struggling to cope with social care, and investing in it is an infrastructure issue. It is essential to our prosperity.

The cycle of ill health, disability and poverty is well known, as is the problem of low productivity, and poor educational attainment does not help. Last month, one of my colleges came up with the Love Our Colleges campaign to talk about underfunding in further education and the need to bridge the skills gap. College funding has been cut by 30% since 2009 at the same time as costs have increased dramatically, including for pensions. At the same time, however, the number of adult courses has dropped by 62% and the number of health and social care courses by 68%. How can that be a priority when there is that level of disinvestment? This is a huge problem in Bristol South because we do not send youngsters to higher education—further education is the driver of prosperity for our people.

As I highlighted earlier, also not mentioned was the OECD report on early years education. There was nothing in the Budget about this, despite evidence that early years education is a driver of prosperity. Nursery schools, which are under the control of local authorities, were forgotten even in the Chancellor’s miserly throwaway comment. He has not given them anything. They do not even get the pittance he threw away in the Budget.

Finally, I want to say something about our police services. Some 75% of recorded incidents are currently non-crime and include missing persons reports and issues relating to people experiencing mental health crises, all of which are highly resource intensive. I am currently on the parliamentary police force scheme and spending a lot of time with our police force, so I have seen this at first hand. The police funding formula has not been updated for a decade and does not reflect current demand. The police and crime commissioner has been clear about this. In Avon and Somerset, we have a very good system for analysing demand and the associated resource needs, but we are still not getting the money, even though we have proved we need the resource.

In conclusion, the Government are ignoring all the data and evidence, and not linking up their policies in order to deliver the improved productivity that this country needs and which will drive prosperity for all our constituents.