Income Tax (Charge)

Part of the debate – in the House of Commons at 5:38 pm on 15 March 2023.

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Photo of Ruth Cadbury Ruth Cadbury Shadow Minister (International Trade) 5:38, 15 March 2023

It is a pleasure to follow the intriguing speech of Nigel Mills. He and several other Conservative Members seem to have doubts about some elements of this Budget. I am sure the Chancellor is pleased that he has managed to be in post long enough to deliver a Budget and is hoping not to torpedo the economy like his predecessor.

This is yet another Conservative Budget that fails to invest in public services, fails to address the cost of living crisis, fails to adequately support businesses and, most of all, fails to plan for the future. Today was the chance to unlock Britain’s potential, but the Budget has been a series of titbits to paper over the cracks of the Conservatives’ failure, after 13 years in government, to deliver consistent and green growth.

In September, the Government delivered a mini-Budget that shook our economy and delivered a huge shock to businesses and residents across my constituency. Meanwhile, we are in the middle of a largely avoidable cost of living crisis. Real household incomes are due to fall by 5.7% over the next two years—the largest fall in living standards since comparable records began.

Turning to business, over the past month I have spoken to so many businesses—locally and nationally—that are struggling, or want to grow but are being let down by the Government because of either the Government’s incompetence, sky-high energy bills, or delays in key decisions. Many are family-owned businesses: last week, I met a family in the pub that they run in Isleworth. Their previous energy contract ended in October, and they had no choice but to be locked into a contract that means they are going to be paying three times their previous energy costs over the next year. They are locked into a rate that could put them under. The energy bill relief scheme, which ends in March, will be of no help to them due to the sheer scale of that locked-in rise, and I am not sure that the draught duty extension announced today will be enough to help that pub.

When I visit businesses on Chiswick High Road, they tell me time and time again just how broken our business rates system is. It is outdated, unfair, and hammering businesses when they most need support. The chair of the Federation of Small Businesses, Martin McTague, has said today that

“today’s Budget will leave many feeling short changed…the Government’s lack of support for small firms in critical areas is glaring”,

and from what I can see, there has not been a lot of extra support from Make UK or the British Chambers of Commerce. That is why we need a Labour Government who will support businesses and workers and invest in public services. Between those things, we will get our economy growing.

Collaboration, not short-termism and delay, is key to how Government should behave towards business. Whenever I meet business leaders, I hear example after example of the Government’s inconsistency. The ban on offshore wind turbines that existed for more than a decade meant that UK firms were exporting wind turbines, rather than building them for our own energy grid. We know that the UK is falling behind in ensuring that electric vehicles and batteries are built in the UK. New plants could provide well-paid and skilled jobs here, but the Conservatives have simply failed to plan or invest. The chief executive of the Society of Motor Manufacturers and Traders said after today’s statement that

“There is little…that enables the UK to compete with the massive packages of support to power a green transition that are available elsewhere.”

He is another key business leader who does not agree that the Chancellor is removing obstacles that stop businesses investing, as he promised today. Delays in confirming future standards, such as vehicle safety standards, mean delay in future production decisions.

Of course, all of this stems from this Government lacking an industrial strategy and from inconsistency with other policies. Where does pausing HS2 and cutting the budget for walking and cycling sit with reducing congestion on our roads and our rail networks, net zero, and investing in jobs and manufacturing? The chair of the National Infrastructure Commission, Sir John Armitt, said that this lack of planning, especially around HS2, is impacting on the “confidence and certainty” that businesses need when making investment decisions. Whether it is housing, lab space, skills, or capacity in the energy grid, it is clear that the UK lacks the basic infrastructure we need to grow our economy. Businesses want to do the right thing; they want to invest in new and greener technology, like the industrial launderette or the retailer of green mopeds that are in my constituency. They want to grow—they want to shift to greener technology and grow their sales and their business—but they are not being given the tools to do so, and I see little, if anything, in today’s Budget to encourage them.

For many of my constituents, this Budget will simply continue the pain that 13 years of Conservative Governments have brought for them: underfunded public services, low growth and rising costs. Families and businesses across my constituency are struggling, yet this Budget offers them nothing new—oh, sorry, I do apologise, there is one new thing: the pre-announced “free” childcare places for one and two-year-olds. I spoke on this subject in Westminster Hall a couple of weeks ago. Will those places be properly funded so that childcare settings do not go under? Will the policy provide places for the children who will benefit the most: those whose parents are not yet getting 15 hours’ regular work per week, or those with disabled children?

In conclusion, this Budget does little to get this country out of the doom loop of low investment and low growth, yet high taxation.