Budget Resolutions - Income Tax (Charge)

Part of the debate – in the House of Commons at 4:19 pm on 1st November 2018.

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Photo of Ian Murray Ian Murray Labour, Edinburgh South 4:19 pm, 1st November 2018

I should like to speak about the Budget by referring to a number of tests. The first test is to ask what it will do for growth in this country. Even the Office for Budget Responsibility expects growth of only 1.6% by 2023, which would be the lowest medium-term growth rate since records began and a historically low growth rate for this country even since world war two.

The second test is to ask whether the Budget is a spending splurge, as the Government keep suggesting. Well, it certainly is not. As many of my hon. Friends have said, if we strip the extra NHS spending out of the Budget, we can see that all the other departmental budgets are either flat or going backwards in real terms. The Institute for Fiscal Studies has also said that if we strip out spending on the NHS, we see that the Budget does nothing to reverse any of the cuts that we have seen over the past eight years.

That leads us to the claim that austerity is dead. Is this indeed the end of austerity? It is not. It is the start of the Government saying that it is the end of austerity. This is the same Government who said in 2010 that the deficit would be removed by 2015, so we can believe the Prime Minister saying that. However, the Prime Minister saying that this is the end of austerity means that she is admitting that austerity existed. As my right hon. Friend Mr McFadden said, every cut that we see across the country now lies at the door of this Prime Minister and No. 10.

Let us look at the priorities being given to tax changes. The Government could easily have brought forward the personal allowance extension for the lower paid and left the upper end as it was, but they have chosen to spend the majority of that personal allowance extension on the very richest in society. That was the wrong thing to do at a time when the deficit looks as though it will never be eradicated under the Government’s long-term plan. Let us also look at the corporation tax cuts. The Government could have said that they would not take forward the 2p corporation tax cut that they announced in the 2017 Budget, because they already have the lowest corporation tax in the G7 and do not need to take that money. It could have been put towards truly ending austerity.

Let me finish with the biggest lie in Budget history. There is no Brexit deal dividend in this Budget. That was a lie by the Chancellor. Even Standard & Poor’s has said that if there is a no-deal Brexit, unemployment will double, every household will be £3,000 a year worse off, inflation will peak at 5% and the recession will be as long as the one that followed the financial crisis. That is not a Brexit deal dividend. That is the Government’s dereliction of duty towards the economy of this country.