Budget Resolutions - Income Tax (Charge)

Part of the debate – in the House of Commons at 4:50 pm on 31st October 2018.

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Photo of Steve McCabe Steve McCabe Labour, Birmingham, Selly Oak 4:50 pm, 31st October 2018

The Chancellor tried hard, but I have a feeling we will all be back here in the spring and that Monday’s event will look largely irrelevant. The mantra now is that the pain and suffering has been worth it, but according to a recent study, only 8% of my Selly Oak constituents share the Chancellor’s view that the years of austerity have been worth it, particularly when they reflect on the damage to infrastructure and public services. Eight years of austerity have not cleared the deficit and the Tories no longer promise a budget surplus. In fact, it seems the new Tory norm is to settle for a deficit of around £20 billion a year.

I welcome the review of the worldwide light vehicle test, but a bigger man might have acknowledged that it was his premature decision on vehicle excise duty that sent entirely the wrong signal about clean diesel engines and threatened the job prospects of thousands of Jaguar Land Rover workers in Birmingham and the west midlands. He might also have recognised the £110 million loss of revenue resulting from untaxed motor vehicles on our roads.

We could upgrade vehicle number plates so that they electronically reveal the tax and insurance status of all vehicles on our roads, and we could use automatic number plate recognition technology to maintain this, while reducing car crime and saving police time. With recorded crime at its highest level for 13 years and less than 9% of recorded offences resulting in someone being charged, there has never been a better time to be a criminal. Why is the Chancellor not interested in collecting revenue and cutting crime?

We are asked to welcome the Chancellor’s digital tax, but it will raise about £400 million a year, which is 0.7% of what corporation tax raises. If he had postponed the 2% cut in corporation tax, he would have had another £5 billion for policing, education or children. At 19%, our corporation tax rate is still the lowest in the G20, apart from Switzerland and Singapore. Almost half his tax cuts benefit the top 10% of households. It is true that 26 million basic rate taxpayers will gain an average £20, but 4 million higher rate taxpayers will gain 11 times that. While food bank use has doubled, he has added £l billion over five years to universal credit but seems to have forgotten that three quarters of the £12 billion of welfare cuts announced in 2015 remain Government policy. Among the cuts he has forgotten are next April’s £1.5 billion benefit freeze, which will cost a couple with children at the lower end of the income scale £200. Those are Conservative priorities.

The cut in the apprenticeship levy for smaller firms is welcome, although I would like to know when it will be introduced. Is it still April next year; is it being delayed; or will it only apply to new starters? And what has the Chancellor done to incentivise providers to engage with groups that are grossly under-represented in the apprenticeship figures?

I welcome the business rate rebate for small retailers, but how much of a boost will £30 to £100 a week be to a struggling newsagent or publican in Selly Oak, and who will really benefit from the future high streets fund? It is spread so thin that it will not reach most places. I doubt this Chancellor has ever even heard of Stirchley High Street. What we need is some action on the absent landlords, often London-based, who spend so little on the maintenance of these shops and charge exorbitant rents that go hand in hand with excessive business rates. Of course, all this needs to be viewed against the background of a situation where nothing has been done to combat retail crime, and even shoplifters are no longer even arrested. Retail crime is costing us at least £700 million a year. That is another consequence of reckless cuts to policing and the criminal justice system; it is just as big a problem as anything else.

I do not think that the Chancellor really wanted to deliver this Budget; he just got boxed in, just as he is boxed in when it comes to making the real decisions that would benefit the economy; but the ideologues do not care, and that is why we are ignoring our schools, dismissing crime, forgetting our children’s services and ignoring the WASPI women and everything that would make a difference to this economy.