Income Tax (Charge)

Part of the debate – in the House of Commons at 5:59 pm on 15 March 2023.

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Photo of Barry Gardiner Barry Gardiner Labour, Brent North 5:59, 15 March 2023

It would be churlish not to welcome some aspects of this Budget. [Hon. Members: “Hear, hear.”] Yes, absolutely. The extra money for childcare is not comprehensive and it does not recreate the life-changing Sure Start of the last Labour Government, but it will make a real difference to parents of young children. But what chutzpah! What chutzpah of the Chancellor to steal some of the proposals of my hon. Friend Bridget Phillipson and take credit for addressing childcare costs, but then delay implementation of the policy until the middle of next year, in time for a Labour Government to pay for it.

I welcome the action taken on prepayment meters, which will make a real difference to some of the poorest families in our country. But again, what chutzpah. My hon. Friend Dawn Butler, my constituency neighbour, has been urging every Chancellor since George Osborne to resolve this inequality. I welcome the action taken to allocate £20 billion—over 20 years—for carbon capture, use and storage. But again, what chutzpah. Thirteen years ago, the incoming Tory-Liberal Government inherited £4 billion already allocated to CCUS, and they cut it.

Too often, debate in Parliament degenerates into set speeches, but the Budget debate is one of those occasions when we really can take on each other’s speeches and respond to what has been said. I listened very carefully to Mr Rees-Mogg, who attacked the Chancellor and pointed out the failures of his party to adopt a consistent economic policy to lower the overall tax take. He said that they should have thought through the tax take policy in

“a way that would actually work”.

It is just a pity that he was not part of any Government who could have done anything about it.

The question my constituents would ask is: work for whom? I have spoken before in this Chamber of the queues that stretch down the Ealing Road in my constituency and around the corner, where I live, in Chaplin Road—extending over half a mile—waiting for the food bank at the Shri Sanatan Mandir to open. For the past 13 years, the economy has not actually been working for them. It has been working for the individuals who have managed to amass a pension pot in excess of the £1,060,000 lifetime allowance limit. After today, it will work even more for those people, as they can shelter even more money from tax.

The right hon. Member also posed what I thought was a rather rhetorical question to the House. He asked:

“But who knows best how to spend their money—the businesses or the Government?”

He did not stay for an answer, but my constituents might have replied: best to achieve what? If it is to spend that money in such a way as to maximise the return to their shareholders, the right hon. Member is correct: the answer is business. However, if it is to spend that money in such a way as to achieve the maximum public good, it is undoubtably the Government, by using the money paid in tax to keep us safe by paying our armed forces; to keep us healthy by paying for our NHS; or to keep us wealthy by investing in education and apprenticeships, so that those businesses have the supply of skills and labour they need to make that profit in the first place.

I also support the Government’s desire to boost enterprise and to grow wealth in our country. I understand the case for R&D tax credits, even at the level of 100%, but they should not contradict the Government’s other objectives. If they pay those credits to international companies such as Amazon, which will pay no tax in the UK while siphoning its profits out of the country, it is not our economy that they are growing.

Equally, it makes no sense to be paying 100% of the cost of oil and gas companies such as BP and Shell for exploitation of new fossil fuel reserves in the North sea, which will contradict our net zero objectives. These companies are already making record profits on the backs of bill payers in the UK. I would ask the Chancellor to put a green filter on R&D tax credits.

At a time when our household energy bills are the highest in history, the OBR says that real household disposable income is decreasing by 4.3% this year and by 5.7% over the next two years. That is the largest decline since the year before I was born—and I, though I may feel like one, am no spring chicken.

The Chancellor had four E’s, but he missed out the most pressing E of all: the environment. The Committee on Climate Change set out that we will not achieve our net zero target without a strategic programme to reform our regulatory frameworks and market design that galvanises between £300 billion and £430 billion of investment and removes the barriers to the construction of a new renewable energy infrastructure. I am afraid this Budget simply does not measure up.