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Finance Act 2016
[The Chancellor delivered her speech with a cup of beer. Not in a pint glass though, because she’s basic.]
Mr Deputy Speaker,
Before I start this speech today it’s important to reflect on the state of our nation’s finances under Conservative rule: we saw successive years of low and stagnant growth with a near double dip recession in 2012 and wages falling as prices rose. Mr Deputy Speaker, this government has made it clear we want to turn a page and remind voters why they voted for us in 2014. But this government remains proud of its economic record. We’ve turned a page and are experiencing the highest growth in the Western world, had unemployment hit its lowest levels since 2008, managed stable inflation and kept the pound strong.
Mr Deputy Speaker, I can reveal that as a result of this budget we will have reduced the deficit we inherited by over a third since taking office. As a result of continued managed finances, we expect to eliminate the day to day spending deficit by the end of the decade, eliminate the deficit completely by 2023 and start paying down our debts by the end of this Parliamentary term.
This government has shown the public that there is another way, Mr Deputy Speaker. For too long we have been told the only way to manage our finances is to cut public services to the bone while handing out billions in tax giveaways for the most privileged few. All too many in this House still advocate this path.
Mr Deputy Speaker, we’ll take a new path where we can tell the British people we’ll invest in you rather than invest in the few. Where we’ll keep public services well-funded, our finances managed and will be able to reduce the tax burden and strengthen support for those who need it most: hard working British families.
Mr Deputy Speaker, I won’t pretend that all of these choices will be easy. To afford this while our finances need to be put in order, we will need to ask the wealthiest to contribute and we will need to have to make tough choices, regarding both how we tax and how we spend. As Nye Bevan said: “the language of priorities is the religion of socialism.” We will prioritise the British people first, not multinationals, unashamedly. To that end we’ll make it absolutely clear that austerity is over.
For direct taxes we’ve taken some crucial steps to ensure the burden of taxation shifts towards the wealthy whilst the majority of working Britons see their taxes cut. This starts with a £500 personal allowance rise, lifting thousands of more Brits out of income tax and representing a £100 tax cut for many working Britons. Whilst doing this we’ve protected the higher rate of income tax to protect the middle class, kept the additional rate the same and reduced the second additional rate to £125,000. In doing this, we’ve asked fewer than 3% of earners to spare a small bit more to keep our finances stable.
When discussing moving low earners out of tax Mr Deputy Speaker, we have for too long neglected to discuss national insurance. Whilst income tax was payable last year for those earning more than £11,000 – rightly putting millions of low income and part time working Britons out of tax – national insurance was paid by those earning £5876 or more, keeping them in the taxation trap while politicians wrongly boasted of taking them out of taxation.
I disagree with some assertions to scrap national insurance and harmonise it with income tax, Mr. Deputy Speaker: I believe national insurance has a crucial role to play in how we tax and where the tax money taken from NI is allocated. But where I do agree is that it is better for those taxes to be simplified and harmonised. That is what this government has done by lifting NI contributions to £180 a week, meaning employees will need to make £9360 before they pay a single penny of tax, lifting millions of part time workers and low paid Britons out of tax completely, and saving other taxpayers hundreds of pounds – at least £400.
This will be paid for by doubling the threshold of National Insurance to balance how the National Insurance system works, where lower earners ‘subsidise’ higher ones, rebalancing the playing field that bit more. The Conservatives make it clear they see fit to tax doctors to fund bankers: we’ll ensure any taxation goes to benefit working people and our NHS.
We have also decided that we will be reversing tax changes last year that saw employers pay more in national insurance. Though there was some truth in the principle of asking those who can spare change to do so, we believe this would better reflected on an apprenticeships levy of just 0.2% – this hits fewer employers, is targeted towards employers who can carry that heavier burden and promotes rather than discourages job creation by ensuring the funds go towards apprenticeships. Low taxation for low taxation’s sake may not be a religion the Labour Party subscribes to, Mr. Deputy Speaker, but we should ensure taxation is smart and has purpose: that is what these changes do.
We’ve taken further efforts in reforming taxation to assist businesses, Mr. Deputy Speaker. This includes reducing the lower rate of corporation tax to 15.5%, making Britain amongst the lowest taxers for small businesses, and reducing the main rate of corporation tax from 23% to 22%. These policies, alongside an extra £250 million investment into the British Business Bank, will ensure that Britain is a hub where good business that creates jobs, generates wealth and benefits communities and people are rewarded and where honest, hard work can thrive.
Whilst steps to increase the bank levy were necessary to ensure those who caused the crash paid more, Mr. Deputy Speaker, we have taken the decision to also ease the bank levy slightly, by 0.012%, as the worst of the financial crisis seems to be behind us. We have also kept business rates frozen in real terms for the main business rate multiplier whilst cutting business rates in real terms for smaller businesses.
Mr Deputy Speaker, this government has made it clear that we need to reform not just how we tax, but how we think about tax. For too long in this country we have taxed income too much and wealth too little: it’s time we shifted that dial to ensure the tax burden is lifted off the majority of British people whilst those who make millions from little more than speculation or from practices that harm our economy or environment pay little to nothing. We’ve continued this process by increasing petroleum revenue tax by 5% and supplementary corporation tax for oil extraction by 10%, promoting environmental sustainability and fairer taxation in the process.
We’ve also continued to implement these values by scrapping inheritance tax, Mr. Deputy Speaker. Yes – you heard correctly – a Labour led government scrapping inheritance tax. Mr. Deputy Speaker, whilst we believed the tax was fair from a distribution perspective, we understand the concerns by millions across the country who did not even pay the tax: a tax on people who died, hence the reviled ‘death tax’ title, appeared to be callous and unfair.
With that said, Mr. Deputy Speaker, we must ensure wealth continues to be taxed effectively whilst allaying these concerns. That is why we have introduced in inheritance tax’s place an ‘accessions tax’: a tax on accessions granted to each individual. Instead of taxing the estates of the deceased, we will ensure we fairly tax accessions each individual receives over their life.
There will be crucial exemptions remaining in place for businesses and agriculture, and there will be other allowances: accessions under £3000 will not be counted, and each individual over their life will get a tax-free limit of £125,000. Should they receive accessions over £3000 once that limit has been reached, further accessions will be charged annually at the rate of income tax.
These reforms and protections ensure the tax will be paid only by the wealthiest few, but the tax will still generate income – at most conservative estimate £11.5 billion, with the likely potential to garner billions more. This tax will be fairer on the middle class and fairer on our public services. To ensure our tax infrastructure is able to handle such a reform, we will be investing £300 million into HMRC, which has been estimated to be an adequate investment.
We will also ensure we gain funds back from those who have taken advantage of the British people for too long, Mr. Deputy Speaker. There’s been plenty of discussions floated around the House regarding the spikes in energy bills thrust upon the British people, often for no reason, whilst big bosses from these once publicly operated companies reap billions in profits. Alongside this for too long these companies have benefited from low taxes, particularly the water industry which has been granted exemptions. Additionally, they have benefited over the years from corporation tax cuts – including ones that this government are introducing this year.
Mr. Deputy Speaker, it is time for this government to ensure the British people take some of what has been taken from them and to give it back to help cut their taxes and fund public services without compromising our finances. We believe a windfall tax will be the most effective way to manage this, Mr Deputy Speaker: an interest which has acquired support and interest from across the political spectrum, including from previous Conservative Prime Ministers.
It continues to follow the government’s mantra of smart taxation, Mr. Deputy Speaker. Calculated in a similar way to the last windfall tax implemented by the dawn of the last Labour government nearly two decades ago, it will raise £9 billion pounds this budget. The last windfall tax was found to not increase prices for consumers or decrease investment. We fully expect this to remain the case. For too long big utility fat cats have taken from the British people: this budget will ensure they give back.
Similarly this government will also ensure we finance our social care package to end the social care crisis once and for all: as I have said in this House before Mr. Deputy Speaker, we will be introducing a social insurance charge on those who reach age 65 should they have assets worth over £150,000: such a payment can be paid upfront or deferred until death should that be the preferred option. This will ensure they pay only £30,000 to contribute towards a National Care Service that will provide care free at the point of use for all that need it, ending the scourge of those affected paying up to £100,000 and raising the £7 billion necessary for us to say that no longer will you be given free treatment if you get leukaemia but charged should you get dementia.
In following our plan to rebalance taxation to work for the many and not the few Mr Deputy Speaker, we have made crucial changes to housing taxation: we have scrapped the first rate of stamp duty, ensuring that those buying a house will not spend a penny more in tax until that home is worth 250,000 – over the national average – whilst ensuring that homes £500,000 and over are charged stamp duty rates 1-3% higher. This will ensure those with higher incomes pay more whilst benefiting the vast majority of homeowners.
Onto more indirect taxation Mr. Deputy Speaker, we will ensure VAT remains frozen and exemptions remain in place. This includes exemptions on gaming and lottery duties, Mr. Deputy Speaker.
There has been a consensus on all sides that the way the betting industry works at present disadvantages too many vulnerable communities. This government agrees with this assessment that has come from the Opposition benches, which is why we’ve increased the gambling levy to 33% and we will commit to whatever legislation we can to assist vulnerable people who for too long have been exploited by the gambling industry.
Just four years ago, Mr. Deputy Speaker, Britain hosted a phenomenal Olympics and presented a phenomenal performance to boot, coming third. This year British athletes will represent us in the 2016 Olympics in Rio, where I’m sure they’ll do just as brilliantly. The potential of so many of those athletes who represented Britain, and many other brilliant causes across the country, are all supported by the national lottery’s good causes fund. I cannot in good conscience support any call for an Olympian Tax that could shave that fund by up to a fifth.
Onto duties Mr. Deputy Speaker you may notice that I have broken the new tradition to drink water during the budget speech and have chosen a budget tipple [forces self to sip]. It’s not my usual, admittedly, though we have given wine a real-terms cut, but I may as well use today to take advantage of the news that beer has been cut by 1p, a 2p cut in real-terms. Spirits remain frozen in real terms. To keep our NHS well-funded, we will raise tobacco duties by 25 pence.
Mr Deputy Speaker, as I mentioned at the beginning of the budget speech if we’re to meet our commitment to reduce the deficit and continue to invest in the British people tough decisions on taxation are going to have to be made. This government has shown a commitment to make those tough calls by ending the pledge to cut fuel duty in real terms. These cuts have happened consecutively over the past six years, and there was a case for it when the fuel duty cuts were implemented. This government, however, believes the prudent thing to do would be to keep fuel duty frozen in real terms to generate the necessary revenue for our police, our NHS and our military – as it will remain frozen this year, this will be done without hurting motorists.
We will also use the taxation system to raise revenue for public services whilst promoting environmentally friendly practices by raising high C02 vehicle excise duty by £47.60 while keeping low and medium C02 vehicle excise duty frozen in real terms. We will also raise the carbon price to £15, Mr. Deputy Speaker.
We have protected the thresholds for most tax reliefs, Mr. Deputy Speaker. Alongside that, to allow small businesses to grow we’ve increased enterprise investment schemes by more than a quarter. We’ve continued promoting the government’s strategy to promote R&D by increasing R&D tax credit to a lucky 13% and after the success of attracting cultural monoliths such Star Wars to film and invest in the UK, we’ll continue to strengthen the UK’s film and creative industries by raising film and TV tax relief to 30%.
Mr. Deputy Speaker, we have ensured the vast majority of social security benefits remain protected in real terms, but have taken the tough decision to ensure some other benefits will remain frozen.
Most crucially, we’ve continued this government’s mission to tackle poverty for working Britons and tackling child poverty by increasing child tax credits by £1.70 and working tax credits by £1.67. This increases the money in struggling families’ pockets by an average of around £250.
Despite the Right Honourable Gentleman for North East Bedfordshire, who I wish the best on his resignation Mr. Deputy Speaker, being committed to the conspiracy that the Labour Party that destroyed the blight of pensioner poverty and ensured from its inception pensioners remained linked to earners wanted to scrap the state pension altogether, I am afraid I will disappoint him today by announcing this government remains committed to the triple lock alongside protecting pensioner benefits, Mr. Deputy Speaker.
More than that, we’ve ensured we target the fight against pensioner poverty by investing up to 3.5% into the pension credit, ensuring there are even more resources there for pensioners who need it the most.
Most crucially, we’ve invested in carer’s allowance in this budget Mr. Deputy Speaker, increasing it dramatically so that it matches job seekers allowances, making carers over £450 a year better off. Mr. Deputy Speaker, despite being the unsung heroes of Britain – often being a group in the utmost poverty and spending hours of their lives nursing after overs – carers and their plight have often been neglected. In introducing the NCS, and in strengthening this benefit, this government will let over a million of Britain’s most selfless people know that they are not alone, and we stand with them.
So too do we stand with students, Mr. Deputy Speaker. We’ve continued our gradual and sustainable reduction of tuition fees this year, almost halving tuition fees to just £5000 a year with the aim of eliminating fees by the end of this Parliament. We have strengthened per student funding in a real term increase that means student funding has been protected on the whole since we have been in government.
While the Conservatives make it clear in their Opportunity Agenda which is only an agenda to end opportunity that they will saddle students in tens of thousands of pounds of debt not just by defending tuition fees but by scrapping grants for the poorest students, we’ll make it clear we will promote higher education for all regardless of their background. Education, Mr. Deputy Speaker, is not a commodity but a right: we will champion that.
But it is absolutely right that paths forwards must be utilised for those who may not just see their path in University or academia, Mr. Deputy Speaker. We don’t do that with division, lotteries, quotas or bureaucracy though. We do it by investing in those young people. As the Conservatives overpromise and underdeliver, with our apprenticeship levy we’ll put our money where our mouth is and invest in over 300,000 apprentices this year across all ages, delivering on our promise to create a million apprentices by the end of Parliament.
Onto infrastructure, Mr. Deputy Speaker, we’ve heard a lot from a lot of Southern Tories accusing me, a Scottish woman, of being ‘Londoncentric.’ It doesn’t quite beat the Shadow Home Secretary, my commiserations on his loss, accusing Scottish and Welsh women of treating Scottish and Welsh people as ‘second class citizens’ while he’s tucked away in one of the wealthiest areas in London but here we are. But again, we see a pattern emerge: while the Conservatives overpromise and underdeliver we’ll put our money where our mouth is.
That’s why I’ve put a preparatory fund for £50 million into HS3 and this government will be introducing legislation to ensure Northern cities can be properly connected and become the economic hubs they have the potential to be. This government noted the benefits of HS3 before the Conservatives thought it was trendy, and we’ll put in the money to boot.
But it is still crucial that HS2, connecting those potential economic hubs to our capital, goes ahead. We’ve already seen the Conservatives renege on Crossrail and I have no doubt they’ll do the same for HS2 which is a project that brings growth and jobs to the North and to the whole of Britain. To further help commuters across the country, this government has also invested to ensure the cost of rail fares does not remain too sky high and are kept at a more sustainable 2%.
But in order to avoid Londoncentrism, Mr. Deputy Speaker, we must turn the conversation to buses. Buses are used more frequently by disadvantaged people and people living in towns, particularly up North. If we’re to end Londoncentrism, we must shift the conversation and resources from trains and to buses. That is why in this budget we increase the subsidy per bus journey by almost a third.
And in this budget, we continue our mantra of investing in innovation, by committing almost £500m to research councils and introducing a £100m innovation fund, which will aim to invest in those small ideas before they’re rolled out into major programmes – promoting innovation and research from its very offset.
Mr Deputy Speaker, we must never let the Conservatives tell us that Labour, the party that created the NHS, is not the party of the NHS. We’ve put any claim otherwise by having this government lead the biggest cash increase in the NHS’ history: an extra almost £14 billion pounds in funding for the health and social care budget.
With those funds we’ve managed to give the NHS the necessary funding, building and staffing it requires – including an additional 4500 beds, and an extra 3,000 doctors and nearly 11,000 nurses to boot. But as well as adding staff we’ve continued an end to the pay cap, increasing retention and letting those who work in our NHS know this government stands with them and will ensure they continue to get real terms increases to their pay.
Alongside that with these additional funds we have ensured prescription charges and dental charges are frozen, translating to real terms cuts. We have continued our promotion of research and innovation within the NHS by adding £150 million to medical research.
But alongside investing in our NHS it’s crucial we put Labour values – the NHS’ very values of a system available to all, free at the point of use – to its core and crucially reform it so that it serves those who need it most.
One of those follows a long-standing Labour tradition, Mr Deputy Speaker: to take great liberal ideas and transform them into great socialist realities, although I’m sure the Deputy Prime Minister will forgive me after we cooperated to get this policy into action. That is to introduce a ‘patient premium’, similar to the pupil premium. This will be £630 million that will be £33 more in general health spending and £17 extra in public health spending per head in the 20% most deprived regions. Inspired by the pupil premium, it is desperately needed after the Tories had already watered down a system introduced by the last Labour government to ensure that the poorest, who often suffer worse health outcomes as a result of their poverty, are given that crucial leg up within our health service.
And perhaps most crucially this government will add onto its existing legacy on making radical change to benefit working people to establish a National Care Service, with that £7 billion providing care free at the point of use for those in England. This isn’t just humane, but it is practical and is estimated to possibly save the NHS over half of what it will cost by ending the inefficiencies of a disconnected health and social care system that has those needing care taking up hospital beds, Mr Deputy Speaker.
For education, we have built the necessary schools and protected per pupil funding whilst ensuring the pay cap ends for our teachers too. We have strengthened the pupil premium by up to £200 per pupil, ensuring that the resources are there for the most disadvantaged pupils and giving them a strong start in life.
But Mr. Deputy Speaker if we are going to ensure children get the best start in life we must start even earlier. Disadvantages begins to manifest around ages three and four. To that end, we must begin to lay the foundation for a system of universal childcare: this isn’t just good for children, but it frees parents – particularly mothers, making it good for gender equality – to be more productive. We’ve started by offering 10 hours of free childcare from ages 0-1, and another 5 hours for 1-2 and 2-3 year olds.
But there is evidence disadvantage begins in pregnancy, if not earlier: your parents’ postcode at birth can affect your life chances down the road. To remedy that, we’ve reversed cuts to Sure Start and I make the guarantee that we will never let Sure Start, one of Labour’s greatest creations, down.
Our defence budget has rightly been brought into scrutiny by the media lately after years of austerity, Mr. Deputy Speaker. And while this government believes it was right to identity efficiency savings within our defence budget, those efficiency savings should allow us to invest the necessary funds into more meaningful projects: we will not let them fall into the void as the Tories did years before us.
We’ve made a significant investment into our defence budget: almost £5 billion that includes hiring 20,000 new soldiers and ensuring our brave troops are well paid by maintaining the triple lock on soldiers’ pay. But we must not just pay our soldiers well and hang them out to dry once their service ends, often after they have been through traumatic circumstances that may leave them struggling in an evolving jobs market. That is why we will be allocating £250 million into assisting veterans with housing, healthcare and employment once their service ends.
We’ve also invested £3.2 billion into a Ministry of Defence capital plan and £3.6 billion into procurement funding – with £250 million of that funding earmarked for space and cyber procurement. Mr. Deputy Speaker, those expecting moonraker will be disappointed, but those hoping Britain remains able to stand against new cyber threats posed will rest assured we have put the funding to ensure Britain is secure online as well as off. Those investments alongside a £100 million Ministry of Defence innovation fund ensures that we meet our NATO spending commitments.
But our international commitments extend far beyond what we can do with guns and ships, Mr Deputy Speaker: our soft power, our diplomacy, our assisting others, gives us just as powerful a voice and as powerful leverage on the global stage. We have already discussed extensively how we can help refugees by bringing them to our shores, and whatever problems have been posed we have created political consensus in doing so. But it is only right we continue to help those who may not make it to the UK, Mr Deputy Speaker: by meeting our 0.7% aid commitment and also earmarking an additional £1.8 billion we do just that. We have also invested an additional £150 million into our security services.
Mr. Deputy Speaker, this budget we have ensured that prisons have been given the appropriate investment. Perhaps more crucially we will tackle crime at its root, and having already reversed police cuts we will build on the progress we have made by hiring 2,000 new police officers.
Mr. Deputy Speaker, this government will invest to keep Britain safe, which is why we will also begin the process of ending austerity for our fire services by hiring 2,000 new firefighters. There have also been almost £150 million put aside for security services here at home.
Mr. Deputy Speaker, all parties pledged that they would commit to the 250,000 refugee target. This government still remains committed to the target of taking in 100,000 refugees this year. Having had £500 million set aside last budget, we have ensured that £1.2 billion has been found so we can provide that crucial assistance to those most in need – meaning Britain will be taking a leading role both at home and abroad.
Mr. Deputy Speaker, the Tories often talk about wasteful spending but there is no greater example of wasteful spending than help to buy. It inflates the housing market and does very little in terms of getting people their first home: so we will scrap it. With the money saved we have been able to invest in the homelessness action fund by nearly a fifth, build over 3,000 new social homes a year, tackling the housing crisis at its root by adding to housing supply instead of artificially fuelling housing demand with expensive gimmicks.
That is why, Mr. Deputy Speaker, we will also ensure £500 million of this year’s billion pound capital spending burst will go towards the British Housing and Infrastructure Development bank, which we will ensure prioritises housing for first time buyers.
Mr. Deputy Speaker, I’m sure I speak for all of us in the House regardless of party allegiance when I say that our thoughts are with all of those affected by the recent floods which is why it’s absolutely imperative that we redouble our efforts to tackle climate change. Though this government has invested hundreds of millions into the environmental agency and will we able to establish the Coastal and Inland Flooding Agency. But we must take our fight to the very root of these causes and this government does just that, ensuring that we strengthen renewable energy subsidies, invest up to £250 million into energy research and allocation £250 million to the green investment bank to invest in natural capital, make the environmental growth fund permanent and promote environmentally sustainable vehicles.
Mr. Deputy Speaker, alongside investing in English local government to offset business rate rises we have spoken with the Cornish First Minister to ensure they have been given the appropriate administrative funding for their first year in office, with a Barnettesque formula to be devised for Cornwall next year.
For Scotland and Wales, we also understand that the people there do not just want devolution, Mr. Deputy Speaker: they want the resources to ensure that devolution works. With our budgetary changes adding up to £2.4 billion for Scotland, £1.2 billion for Wales and almost a billion pounds for Northern Ireland we have also ensured we have established a ‘Union fund’ consisting of £300 million given to both the Scottish and Welsh governments. When we say austerity is over, Mr Deputy Speaker, we’ll ensure it’s over in all four nations of our United Kingdom.
That is what this budget is about, Mr. Deputy Speaker: bringing this country together and reminding us all that while we have our differences, and our differences make us strong, we are one union. Austerity has made too many communities feel left out. We’ve seen the division rife in our political culture. We were told by the last coalition that we’re all in this together – by cutting taxes for the poorest, investing in public services and our communities whilst managing our finances we’ll make sure that mantra can be reflected in action, not just words.
For those reasons I am proud of this budget and I commend it to the House, Mr. Deputy Speaker.
"[we] would rather die than leave the Labour Party." - Emily Thornberry.
Before I begin, I'd like to first ask that we take a moment to recognize the people across our country who have been impacted by the widespread flash flooding, and that we honor the emergency service personnel and members of the armed forces who have bravely come to their aid. I'm sure I speak for the whole House when I say our thoughts are with all those effected, and that we remain united in our conviction to work effectively and expediently to provide them with the assistance they need.
Thank you, Madam Speaker.
Our economy is at a pivotal crossroad. After weathering the great recession, and after surviving two years of anemic growth as a result of this Coalition Government's financial mismanagement, we now face a looming economic slowdown that has impacted major economies across the globe. The economic challenges facing Britain are serious, and they require bold action to overcome them. It was my hope, in the interest of our nation, that the Chancellor's budget would provide those bold solutions. Sadly, she has not.
Put simply, Madam Speaker at a time when we needed the Government to deliver a budget that would put the economy into turbo drive, they gave us a budget more akin to an engine failing to start.
What we needed out of this budget was a pro-growth, job creating, opportunity expanding agenda. A bold, confident signal to world markets that Britain is open for business and the ideal place for your company to set up shop. What we got was anything but. The Chancellor's budget provides a virtually non-existent tax cut to British workers, and to British business. It does nothing to reverse the ludicrous, growth-preventing taxes they've put on British banks. Nothing to incentive investment, or shore up confidence in British markets.
We needed a roar, and instead we got a whimper.
The Chancellor has of course attempted to present her budget as the economic formula Britain needs at this present juncture. So Madam Speaker, lets go line by line and dissect this budget for what it really is.
First, let's look at deficit reduction. I'm sure the Chancellor hoped we wouldn't notice it, but the Government's massive U-turn on their own deficit reduction promise could not be more obvious. I've got a copy of Labour's manifesto handy, clearly they haven't read it since the day it was printed, so allow me to do the work for them. It reads: "we will eliminate the deficit completely by 2019/2020." Well, Madam Speaker, would you look at that! We are now told by the Chancellor that the deficit will certainly be eliminated... just not by 2020, but now by 2023. Just two years into their term and the Chancellor has now completely abandoned the promise on which they were elected.
First it was 2020, now it's 2023, this time next year, who's know what it will be. For years this Labour-led Government has promised to eliminate the deficit, but I'm simply not buying it and I'm confident the British people aren't either. While the Government is spending billions of the taxpayer's money on investment projects that are providing no discernible benefit to the British economy, they continue to make minimal reductions to the deficit and endlessly extend the date by which they are to eliminate it. So let's call this what it is: another broke promise by a Government that couldn't care less about keeping their commitment to the British people.
Now, Madam Speaker, let's move to the Government's strategy, if you can even really call it a "strategy" on taxation. Beside a measly £500 and £800 pound increase in the tax allowance for taxpayer in the Basic and Higher rates of tax, they've done absolutely nothing to reduce the tax burden for hardworking Britons experiencing stagnating wages and rising costs. You'd think, Madam Speaker, that maybe this would be the time for a true tax cut. That maybe, just maybe, the Government would release a budget that truly put money back into the hands of the British people so they could in turn fuel the economic growth needed to overcome the worldwide slowdown.
Unfortunately, that is simply too much to expect from a Coalition Government that has proven themselves years after years to be an incompetent steward of the nation's finances. The British people need, and deserve, a true tax cut to ensure they're taking home more of their hard earned pay. It's long overdue, but the Chancellor couldn't care less about getting it done. It is a disappointing missed opportunity, and a great disservice to working Britons across the country.
On business tax cuts, the Government seems to be headed in the right direction, cutting corporate tax rates for small businesses and businesses at large. That appears to be the case, Madam Speaker, until you examine the other ways in which the Government has in fact made it more expensive for businesses to operate in this country. They've raised taxes on the use of vehicles to transport good, on air fuel duties, and on oil companies that will invariably pass off the cost of the Government's tax hikes onto businesses and consumers. They've lessened their tax on banks, the institutions SMEs and entrepreneurs rely on for capital and investment, by a measly 10th of a percent. Once again, the Government had the chance to show they are on the side of British business, and they failed miserably.
Finally, Madam Speaker, let's discuss the Government's new "Accessions Tax." The Chancellor mentions this only briefly in her speech, likely because she's hopeful we'll ignore it, but of course this is the sort of Opposition that makes a point to carefully examine what this Government is doing to our economy. In essence, Madam Speaker, the Government has introduced yet another tax in the hopes of taking more money away from British families hoping to pass on what they've earned to future generations. The only difference now is that the Government doesn't have to wait until your dead to tax you, but instead can tax you every time you attempt to pass off your earnings to your children and your grandchildren. More people than ever before in our country are become millionaires and billionaires, working for decades to lift themselves out of poverty and make something of themselves. Rather than allow them to pass on what they've earned to future generations, generations of Britons who are likely to reinvest that money back into the economy, the Government has decided it would be of better use in the hands of the state. Such a shame.
On Housing spending, Madam Speaker, I'd like to call attention to one aspect of the Government's plan in particular: their decision to totally and absolutely gut the Help To Buy scheme. H2B, following in the success of Margaret Thatcher's Right To Buy scheme, made it easier and more possible for British people to own their own home. The Government's calls it wasteful spending, but I imagine the thousands of families who are now on their way to owning their home as a result of the scheme would characterize it very differently. This is yet another attempt on behalf of the Government to make it harder for hard working people to realize their dream of becoming home owners. I and my party will do everything in their power to reverse it.
There are a number of areas on spending, from health to education spending, that I know my Shadow Ministers are eager to challenge the Government over, and I will reserve their right to do so. But on spending I will say one thing: despite their attempts to save face in the wake of their defense spending fiasco, the 5 billion pounds the Government has chosen to invest in our armed forces is too little and too late. If we are to restore the greatest of our armed forces, it's going to take more than a one time increase of some 5 billion pounds. Government on both sides of this House, from Labour to Conservative governments, have underfunded our military to an embarrassing degree. It was this Government, Madam Speaker, that cut the defense budget last year by some 3 billion. So when looking at the matter carefully, and understanding the 3 billion cut they must make up for, they're truly only providing 2 billion new pounds in investment to the armed forces. If we are to meet the challenges of the 21st century, if we are to restore our armed forces, and if we are to effectively protect the British people that we are all here to serve, we need a Government that will meaningfully re-invest in a military suited to the modern age. That Government, Madam Speaker, is unfortunately not the one we currently have.
In conclusion, Madam Speaker, I'd like to respond to the comments made by the Chancellor at the close of her speech. The Chancellor argues that this a budget that will "bring this country together." If by that the Chancellor means this budget is one that will unify us in an equally strong sense of disappointment and dismay, she is absolutely right. Because at a time when world markets are slowing, we need and deserve a budget that will ensure British markets are expanding. That will continue the fiscal discipline needed to ensure we have a sound basis on which to continue to fund the NHS, our police, and our schools. We need a budget that will unleash the full potential of the British worker, the British business, and the British farm by cutting taxes, reducing regulations, and investing in needed infrastructure and technological advancements. On all those marks, Madam Speaker, this budget has failed. And as a result, this budget has failed Britain.
I urge my colleagues on all the sides of the House, for the good of The United Kingdom, fail this budget. The British people deserve so much better.
Member of Parliament for Bracknell
Shadow Foreign Secretary
Chairman of the Conservative Party
Chief Whip of the Conservative party
Mr Deputy Speaker:
I thank my Rt Hon Friend the Chancellor for her superb presentation of the government’s budget for this coming year.
I also welcome the Leader of the Opposition to the House for his first debate in his new role. I wish I could say that he had broken his record of making unsubstansiated statements. Unfortunately, Mr Deputy Speaker, the Leader of the Opposition has proven, once again, that his is out of his depth in confronting the issues that Britain faces.
Mr Deputy Speaker, the Leader of the Opposition has commented on the changes to taxation on individuals made in this budget. He is correct, Mr Deputy Speaker, that we increased the personal allowance by £500, which will save most taxpayers £100 a year. He is correct, Mr Deputy Speaker, that we raised the upper threshold for the basic rate by £800, which will save hundreds of thousands of British families £320 a year. Those are real savings for British families in income tax. However, Mr Deputy Speaker, those are not the highlight of this budget.
What the Leader of the Opposition neglected to mention, which was so aptly highlighted by my Rt Hon Friend, were the significant changes made to National Insurance Contributions, Mr Deputy Speaker. Mr Deputy Speaker, these tax changes will lift every Briton making under £9360 out of taxation. For every working Briton, Mr Deputy Speaker - every single one - these changes will put over £418 back in their pocket. Mr Deputy Speaker, it may come as a surprise to the Leader of the Opposition that National Insurance is a tax paid by every working Briton - some of the well off on the benches opposite have a habit of overlooking these things. However, for the working man and woman - and especially for low earners that make below the personal allowance threshold - these changes do make a big difference, Mr Deputy Speaker. And I am proud that this government is delivering these changes.
Mr Deputy Speaker, the Leader of the Opposition touches on our changes to business taxation. The small business and main rates of the corporation tax do indeed go down, Mr Deputy Speaker. We also increase tax incentives for research and development and funds for programmes to promote investment in innovative new businesses. Those are real policies that will promote business growth in Britain. He mentions our reduction in the bank duty, which was imposed in order to ensure that banks paid their fair share for the financial crisis that they created. As the worst excesses of the financial crisis subside, we are reducing that levy responsibly.
The Leader of the Opposition does mention our changes to vehicle and carbon taxation. Yes, we are increasing duties on high carbon vehicles - a small fee paid towards investments in green energy and electric vehicles that will reduce our carbon emissions. Yes, we increase the carbon price - which will further provide an incentive for businesses to decrease carbon emissions. However, Mr Deputy Speaker, our changes and in corporate taxation more than adjust for these changes in green taxation.
The matter of the accessions tax, Mr Deputy Speaker, I will leave to my Rt Hon Friend the Chancellor. However, I will note, Mr Deputy Speaker, that by tying this to income tax rates, working Britons will pay a lower rate of tax than they would have under the inheritance tax.
Mr Deputy Speaker, the Leader of the Opposition goes on about Help to Buy - a programme that even the free market Adam Smith Institute has promoted abolishing. The economic reality, Mr Deputy Speaker, is that Help to Buy doesn’t really help first time homebuyers - it raises prices for first time homebuyers. Instead, Mr Deputy Speaker, the government has implemented real change homebuyers, such as eliminating the Stamp Duty for homes under £125,000. This will save homebuyers £1250. That is no small savings, Mr Deputy Speaker, and it accomplishes this without artificially inflating the price of homes that result in a higher cost for British families.
It is bold, Mr Deputy Speaker, for the Leader of the Opposition to forego the opportunity to comment on our policies on the NHS, on education, on climate change, on infrastructure investment, and on policing. He refuses to comment on our plans to introduce a National Care Service. He refuses to comment on our innovation surge that will fuel productivity across the United Kingdom. He refused to comment on our investment in skills and training by creating places for 300,000 new apprentices this year. He refuses to comment on our groundbreaking investment in child care which will provide quality services for children and ease the burden on working families. Perhaps, Mr Deputy Speaker, the Leader of the Opposition is so unusually quiet because he has nothing to criticise. What a welcome surprise that is, Mr Deputy Speaker.
Mr Deputy Speaker, the Leader of the Opposition has presented his critique of the budget and he has been found wanting. He fails to understand that National Insurance Contributions are a tax that hit the lowest paid in our society far more than that best off. He calls a tax cut of over £500 pound for the lowest paid Britons “nothing”, Mr Deputy Speaker - a true revelation about just how out of touch he is with the finances of working families. However it is not nothing. This is a budget that will give working families that hand up that they need. It will help working families with children by providing them with quality child care. It will improve the finances of working families with children by investing in the Child Tax Credit and the Working Tax Credit. And on top of that it will give them a £500 tax cut. For a working, single mother earning £15000 a year, this budget will put £700 back in her pocket - and that’s before accounting for the cost of child care.
Mr Deputy Speaker, this budget for working Britons. Despite the claims of the Leader of the Opposition, the reality that this budget is a budget for working Britons is beyond doubt. It is a budget that I once again commend my Rt Hon Friend for presenting.
I must, in my position as Secretary of State for Defence, comment on the provisions contained in this budget for the support of our nation’s armed forces, veterans, and defence apparatus.
We are moving, Mr Deputy Speaker, towards a significant capital investment plan in our armed forces. The current capital investment, set at an additional £15 billion over the next four years, will finance the expansion of the Royal Navy, including the purchase of additional Type 45 destroyers, expanding the planned acquisition of Type 26 frigates, and new Astute-class submarines, accelerating the deployment of fifth generation strike aircraft, such as the Joint Strike Fighter, and deploying critical naval search and surveillance aircraft, which were scrapped under the past Tory administration, in the Royal Air Force, and restructuring our armed forces to meet the challenges that we face in the modern era. It marks a dramatic departure from the 2010 Strategic Defence Review, which altered our force posture and set into motion the events reducing the ability of the British armed forces to project around the world. Details of the exact investments made as part of this multi-year capital package will be announced shortly.
In addition to a capital investment we are investing in the technologies of the future. Part of this is an investment in a sixth-generation jet fighter, an area that since the 2010 Strategic Defence Review has been neglected. However, an additional point is launching a procurement and organisational programme focused on the United Kingdom’s space and cyber capacities. The hack at Sony Pictures revealed the extent to which foreign, hostile states are developing cyber capabilities and additional investment must be made in order to counter these activities. This investment will be combined with our investment in the reserve forces in order to form specialised units designed to combat hybrid warfare and tackle cyber threats to British security. Additional policy as to a global cyber strategy will be announced in due course. Likewise, the development of space-based platforms or weapons that could damage British space capabilities demands the development and deployment of additional defensive platforms designed to protect British and allied satellites. Sadly, for the readers of The Sun, I must announce that there will be no Special Air Service units based in space at this time.
The Defence Innovation Fund, which will be accompanied by additional policy announcements and legislation in due course, is further designed to support the work of Britain’s armed forces by investing in innovation within the Ministry of Defence. This will include expanding training programmes for members of the armed services in critical fields, such as advanced computing, in concert with industry leaders. Such training will be critical for preparing the armed services for engaging in cyber defence. Additionally, we intend to use this fund to support activities like “Hack MoD”, which will, in an extremely secure environment, promote the identification of weaknesses in the Ministry of Defence’s cybersecurity apparatus. It is an innovative solution to a practical problem faced by British armed forces. Moreover, this fund will be used to expand links between the Ministry and high tech and innovative industries, such that the Ministry of Defence can be a first customer and driving force behind innovation in the United Kingdom.
Finally, Mr Deputy Speaker, this budget invests in those that have served - it establishes a fund to support British veterans. For too many years, Mr Deputy Speaker, under the blight of austerity, Britain’s veterans have gone without the support that they need. This action fund will provide local authorities with the funding that they require in order to ensure that no British veterans go homeless. It will work to ensure that the transition of British veterans into post-service health and social care moves seamlessly. It will work to provide veterans with the training and job opportunities that they need in order to succeed when they return home from service. These are the investments that we need to be making in those who served our nation, Mr Deputy Speaker, and I am proud that this government is making them.
Mr Deputy Speaker, this is an excellent budget for our armed forces and, as Secretary of State for Defence, I commend it to the House.
MP for Hammersmith
Parliamentary: Unknown (13)
Media: Unknown (17)
Policy: Unknown (18)
Mr Deputy Speaker, [clears throat]
The Leader of the Opposition and I share something in common today for once: this is a debut for us both. A debut as Leader of the Opposition for him in this House today, and a budget debut for myself. I have no doubt the British people watching can see the difference between this government and the Opposition: a government of bold action, and an Opposition of empty words and rhetoric that means nothing once you scrape through the surface. The British people do not need the macho politics of 'roaring' - they need real, innovative policies that will improve their lives, put more money in their pocket and leave their public services strong. This is exactly what the government are providing.
I see when the Conservatives speak of there 'barely' being a tax cut for British people they betray their ignorance. Firstly, I would like to thank the Leader of the Opposition for the positive spin of me giving people an income tax cut of £500-800, though frankly, I believe the Leader of the Opposition could do less sneering at women who dare 'handle the nation's finances' in a way he deems inferior whilst he shows an innate failure to understand the mechanics of personal allowance and income tax - displaying the exact ignorance of our tax system his predecessor mocked my predecessor for. And yet he feels entitled to say that he should handle the nation's finances. Not on my watch, Mr. Deputy Speaker.
Moving on, what the Leader of the Opposition fails to mention are the numerous other tax cuts we have taken to ensure the British people have more pounds in their pocket. He's said nothing on National Insurance reforms we've made, which saves at least £400 a year for the majority of British people and more crucially benefits low earners and part time workers who need that tax cut the most. He's done nothing to mention the vast majority of alcohol duties we've cut. Yes, Mr. Deputy Speaker, we've delivered an income tax cut - but we've delivered so much more. Alongside our investments in tax credits, the money we will put into British people's pockets will rival that of the Conservatives' old tax plans without compromising our public services. That is crucially important.
On deficit reduction Mr. Deputy Speaker, the Leader of the Opposition should be aware how coalitions function. He's just gotten into a very cozy one where he is the junior partner to the nationalists in Wales and has told his voters in Wales that their vote for him informed by his stance on the European Union only matters until it no longer gets him into power. Just like the Leader of the Opposition did a few weeks ago, we have a coalition agreement that sets forward this Labour led, not Labour government's, deficit reduction targets and I am proud to announce that unlike the last Conservative government we are on course to meet those targets, Mr. Deputy Speaker. The Conservatives think overpromising and underdelivering is the way to go for our economy, Mr. Deputy Speaker: I respectfully disagree.
Mr. Deputy Speaker, the Opposition claim we have not given business strong enough tax cuts but the cuts we've made to businesses and investment, including changes to R&D and enterprise investment exceed the cuts to genuine small business and innovation the Conservatives had made with their 'opportunity agenda' which was only an agenda that destroyed opportunity. We make no apology to change our tax system to ensure that those businesses practice more environmentally friendly policy, Mr. Deputy Speaker - and our investments into the Green Investment Bank ensure we will be with them every step of the way should they make that transition.
And I'm intrigued to see the Opposition have such a vehement hatred for the bank levy, Mr. Deputy Speaker, to the extent they think reasonable, sustainable adjustments to the bank levy as the worst of the financial crisis is behind us could never be enough. You'd almost think they weren't the government that introduced the bank levy, but here we are: the Leader of the Opposition has a habit of reneging on sensible policies introduced by a once great Conservative Party, and I'm saddened to see he hasn't quite kicked that habit.
And in his speech we see whose side the Leader of the Opposition is on, Mr. Deputy Speaker: Britain's millionaires and billionaires. Mr. Deputy Speaker, this government will celebrate those who make something out of their innovation or hard work - but they must pay their fair share so they do not shut the door on anyone else. More people have become millionaires and billionaires, but under the last Conservative government more working families and more children also slumped into poverty. The Leader of the Opposition finds time to mention millionaires and billionaires, but what about those struggling who have seen years of tax credit squeezes? What about those who depend on an NHS which during austerity saw winter crisis after winter crisis? Lets even ask the Leader of the Opposition what about his traditional voter base, the middle classes who despised the death tax? He's said nothing for them and wants to protect the death tax even if it means strapping public services of crucial funds so he can protect the wealthy few. I won't talk about millionaires or billionaires Mr. Deputy Speaker - I'll talk about small business owners, teachers, doctors, nurses, and working and middle class Britons who have bold ideas and lots of drive but are held back. That's who I champion and I do not apologise for it.
Again Mr. Deputy Speaker, I take no apology for deeming help to buy wasteful spending. For every person it helped buy a home, it put thousands more out of home ownership: the very definition of wasteful spending this government will take action to clamp down on. Mr. Deputy Speaker, being the woman incapable of handling the nation's finances I am, I surely must not understand basic economic principles of supply and demand. I must not understand that we have a housing supply issue - one that isn't resolved by gimmicks and one that isn't resolved by spiking demand without increase supply. This government has invested to ensure we build, the Opposition will only invest in programmes that make housing prices higher for everyone.
Mr. Deputy Speaker, the Prime Minister has already promoted our defence investments brilliantly. What I will say is that while we will continue to invest in our military, and while we have ensured we meet the 2% NATO target, we will not engage in any fiscally irresponsible numbers games, especially with the Conservatives who voted through up to £5 billion in cuts for our defence budget. This government ensured that spending in our armed forces was done more efficiently which made up the bulk of the 'cuts' the Leader of the Opposition bemoans: what was unfortunate was that we did not immediately reinvest those saving. This budget, we reinvest those savings and more, ensuring that our military is as efficient as it is well invested and meaning after this budget our armed forces come out stronger as a result of the actions this government has taken.
Mr. Deputy Speaker, having responded to the budget and defended it, I want to just remark that what the Leader of the Opposition has failed to mention speaks volumes louder than what he decided to mention. Of course I expect scrutiny from Shadow Ministers, Mr. Deputy Speaker - but British people who care about our NHS, police or pensioners deserve more than waiting on those Shadow Ministers while the Leader of the Opposition is completely voiceless at best or dismissive at worst.
Nothing on the NHS. Nothing on police. Nothing on schools. Nothing on Scotland or Wales. Mr. Deputy Speaker, now budget season is on us and we need to engage in realities and not just spin and sloganeering it's now abundantly clear that this Conservative Party is all style and no substance and it has been for a while. That might get you good media attention, Mr. Deputy Speaker. It might give you polling boosts. But it does not make for running an economy well. And I have no shame in making that my priority.
"[we] would rather die than leave the Labour Party." - Emily Thornberry.
Mr Deputy Speaker,
I want to start by thanking the Chancellor for her speech. I worked closely with her throughout this process, and I think this budget is one that will deliver for all Britons, and help create a fair, free and open society. This budget balances and promotes those fundamental values of liberty, equality and community, and helps bring closer both a country and a world where nobody shall be enslaved by poverty, ignorance or conformity. This government has much to be proud of in its record so far, and this budget builds upon that record.
Throughout this budget, we see continued evidence of the influence of liberal thought, social democratic philosophy, and the policy priorities and principles of Liberal Democrats in government. Whether by reforming and rationalising our government and our tax system, integrating fiscal discipline at the heart of government, taking concentrated action on the key injustices of our day, or pursuing an investment-driven and environmentally sustainable economic policy, the Liberal Democrat approach to government has been a constant throughout this government. This budget builds on that legacy, further delivering upon the progressive, evidence-driven programme of government that we promised the British people in 2014.
Firstly, let us talk about the pro-investment economic policy that this government has implemented. This government promised to reverse decades of underinvestment and deliver a programme of capital investment that creates a long-term investment capacity for infrastructure and innovation, improves the UK’s ability to seize opportunities and face challenges, and invests directly in the areas such as regional imbalances, low housing supply, and the need for environmental and sustainable growth. The party opposite has opposed those measures at every turn - and even now, when this strategy has directly led us to being the best-performing Western economy, the party opposite continues to criticise it. Even when the Conservatives call for the exact same kind of investments - for example, in renewable energy, electric vehicle charging infrastructure, regional public transport links - they oppose the government proposals that made these investments years earlier.
For example, take the Industrial Strategy Challenge Fund, set up in 2014 to provide key investments, in research and the surrounding business environment, in order to build upon key strengths that we already have as an economy, where there is a growing or stable global market for British products, and where we can be a force of massive good in addressing big societal challenges - such as the opportunities and disruption posed technological innovation or environmental challenges such as packaging waste and greenhouse gas emissions. The Fund has had a popular take-up rate, showing that this government was right to identify a need there. Certain sectors have seen substantial increases in innovation. Coupled with our increasing science and research budgets, this government’s pro-innovation credentials are impressive.
Or take the British Housing and Infrastructure Development Bank, we have been hearing from housing firms such as Taylor Wimpey and Kier that this has been an introduction that meets a real need, that it has led to a substantial increase in acquiring sites and building new homes, and that they look forward to more government commitments here. I believe that two aspects of the Bank that are particularly promising are the integration of housing and infrastructure investments where possible and the Bank’s ability to leverage not just public but private funds as well. This government’s investment strategy is working.
And of course, because we made those commitments earlier on, the need to make similar investments now has been dramatically lessened. It is a classic example of forward-thinking investment improving not just our short-term economic position but our long-term fiscal health. What we’re doing now is continuing to build on what has worked. We’re giving an extra cash infusion to the British Business Bank, to the Green Investment Bank, and to the Housing and Infrastructure Development Bank. That means more support for start-ups and scale-ups; more support for building up regional economies; more support for the Environmental Growth Fund, an eco-facing companion to the Regional Growth Fund, continuing this government’s efforts to decarbonise local communities and help those communities with high reliance on fossil fuels; more support for investing in our natural capital, from bodies of water to forests, preserving these resources for future generations; more support for electric vehicles; more support for helping first-time buyers and renters get on the property ladder, get an affordable roof over their heads, replacing the inflationary failed policy experiment that is Help to Buy.
Fundamentally, this government has favoured investment for a simple reason. It is the definition of penny-wise pound-foolish to, as the Conservatives propose, put off making the investments that we need to make. This government has been focused on a new industrial strategy that, as I told the House two years ago, recognises the importance of the foundational economy, adapts to deindustrialisation, addresses regional inequalities, promotes social mobility, prioritises green energy and green growth, and establishes Britain firmly at the forefront of the fourth industrial revolution. These investments were forward-thinking and necessary. Coupled with this government investing in science and research, public transport, regional growth, and health and social care, it is clear who deserves the trust to serve as stewards of our nation’s economy. It is not the party opposite. A government involving the Liberal Democrats is a government that will invest.
This is a budget of fiscal responsibility. This government came in with a commitment to, by 2018-19, have a cyclically adjusted current budget that is balanced, and, from that year, to begin reducing the share of debt as GDP. We are on track, thanks to our pro-growth policies in difficult economic waters and our prudent economic policies, to deliver on these commitments. Thanks to the Liberal Democrat influence in government, there is a new £15 billion anti-tax dodging strategy, closing loopholes, rationalising rules, ramping up enforcement. We have promoted a transition to green taxation, one this budget accelerates, shifting the business tax burden away from worthwhile investment and innovation, instead taxing pollution, inefficient energy use and unnecessarily wasteful supply chains, closing loopholes for fossil fuels. We have worked hard to achieve a culture of fiscal discipline - without cutting essential services or making short-termist decisions - via reforms to contracting, procurement, administration, asking all departments to reinvest a little bit more from efficiency savings into easing the pressures on the public purse.
Now this budget builds on that. Finally, we have gotten rid of the wasteful and counterproductive Help to Buy initiative. We’ve stepped up green taxation - including the carbon price - further still. I welcome, in particular, the accessions tax. It is one of those amazing win-wins in public policy - we deliver something fairer, more logical, without loopholes, while at the same time increasing revenue. It was actually, I believe, talked about at the 2012 Lib Dem conference. Some details were different, of course, but the underlying principles are the same, and that is great.
And we are able to produce a fairer, more business-friendly tax environment, creating that lean, adaptable, entrepreneurial economy that we need. The tax breaks for film and TV - and, as per 2012 tax rule changes, animation and video games - have been increased by 5%, helping keep our world-class creative industry growing strong, moving from strength to strength, attracting world-class talent and big name productions while at the same time supporting new entrants. The R&D tax credit, gone up to 13% - we are, of course, investing more in innovation directly, but this move will help open the floodgates for more investment, from the private sector too, wherever it is needed. Enterprise Investment Schemes, expanded, creating more incentives to invest in the small businesses that are the lifeblood of our economy.
Small business rates, frozen. The bank levy, brought down slightly, in recognition of how the worst of the financial crisis - and the fiscal crisis, too - is now behind us. And corporation tax cuts, helping all businesses create jobs, but most of all, small businesses. Stamp duty, made more progressive, made fairer, more amenable to those just entering the property market. NI reformed, giving tax cuts for lower earners. A still expanding personal allowance for income tax. This is a liberal, progressive economic strategy, and it is one that is working.
The Prime Minister and Chancellor have talked at some length about the defence investments made in this budget - and it is worth repeating that this government did not, in the last budget, take a hacksaw to defence spending, the mistake we made was not reinvesting those savings made from efficiency savings straight away. Now, we’re doing that, in a forward-thinking way, that addresses the new threat landscape in the 21st century - of the need to protect satellite infrastructure, of the importance of cybersecurity, of the need to revitalise the Royal Navy and the Royal Air Force. Of the need to help our veterans, provide them with the support and gratitude that they need. But beyond that, we are protecting our place in the world and promoting our values by providing the resources needed to implement this government’s European Council proposal on refugees.
We continue this government’s sterling work, too, on fixing great injustices at home. A patient premium - following in the footsteps of the dramatically successful pupil premium, another great Liberal Democrat innovation - to directly target health inequalities. A National Care Service, ending, conclusively, the scandal of poorly integrated social care. An extra cash infusion into the Homelessness Action Fund. Long overdue increases to the Child Tax Credit and the Working Tax Credit.
Now, in the interests of time, I’ve restricted my speech to a few themes - investing, fiscal responsibility, great injustices - but this is a budget that must be commended to the house in the strongest possible terms. It continues this government’s record of bold thinking and worthy investments, of fiscal prudence and forward-looking sustainability.
Graham Adiputera (Lib Dem - Sutton and Cheam)
Deputy Prime Minister
Liberal Democrat Leader
Secretary of State for Business, Energy and Climate Change
Secretary of State for Culture, Media and Technology
Parliamentary - 36
Media - 53
Policy - 48
First of all, I join my fellow Member of Parliament and Leader of the Opposition in recognizing our fellow citizens that have been affected by the flash flooding, I thank all the volunteers and emergency services and armed forces for their brilliant job. I send my support to the families and friends of the victims, we will overcome by working together, because this country United won’t be destroyed and won’t have opponents.
The introduction of a new budget is the main proposal that one Government can introduce in this House, the most important bill of every year of the term, and today, in 2016, a new budget is more important than ever before, unfortunately, we are suffering an economic slowdown that needs active policies by the government to help wealth creators to continue with their businesses, with economic growth and with the hiring of more people, as a businessman I can say that the current policies of the Coalition are not good for Britain’s economy, and it’s a shame, and the worst of everything is that they don’t asked help to the Conservative Party to help them with the budget, because they know that as the responsible party that we are, with a great experience of good government and economic management, they wouldn’t have leadership of the budget, once again, they put their partisan interests above national interests.
This nation needs a Government that backs those that generate wealth across the country, those that hire people and make it possible for many families to have an income they will spend on other businesses, unfortunately, what we have here today is a more recession budget, we all remember the Governments that this country had with Labour in Number 10, we already saw it in the different regions of the United Kingdom, and this Opposition is ready to avoid another mismanagement of the Coalition.
Dear colleagues, I remember the last campaign of the past by election in Watford, the Deputy Prime Minister and all the Liberal Democrats including their candidate, constantly repeating and talking about deficit reduction, about the achievements of the Coalition regarding this issue, unfortunately, they were not talking about achievements, they were talking about failed illusions, and voter knew that and punished the Coalition, today what we have are Liberal Democrats as partners in crime with Labour in a Coalition that is delaying a basic need for British economy that is deficit reduction, first 2020, now 2023, and in 2023 if they have a miracle and rule it will be in 2030, we have a Coalition of broken promises, a Coalition that spends more than what we have and does nothing to prevent it but delaying time of reduction while our national debt increases to pay the price of their broken promises, debt is Money that we could use in public services.
As a businessman, I’m afraid of this budget, it's a budget created to make a good impression on the public instead of helping the British, if you take a look for the first time it seems that the Coalition is reducing taxes on companies, completely false, the effect of the so falsely called tax cuts is negative, because they increase businesses costs by raising taxes and duties on the use of vehicles to transport good, on air fuel duties etc. Let’s take a look to the deal between the Welsh Tories and Plaid Cymru where we propose real tax cuts and proposals to boost the economy.
Conservatives always proposed a plan to boost and protect our economy and jobs while we were pursuing the enrichment of our welfare State, it’s strange but under a leftist Government, the budget introduced here today does little to support some of the important columns of the mentioned welfare State.
Healthcare, Education, Housing spending and others are in danger under this Coalition government, we need a strong commitment of this Government and Chamber to invest adequately, I’m not going to unveil the necessary amount or the specific topics that must be supported by the budget, because our Shadow Cabinet is working on proposals about this, because as I said in the past, if the Government is not ready to work for Britain, we as Conservatives are ready.
This budget is not optimistic for Britain, is not the necessary one to preserve our economic power and welfare State, I ask my honourable colleagues to vote against it and force the Government to work in a budget of consensus that will really work for the British people.
MP for Richmond Park
Parliamentary: Unknown (8)
Media: Novice (22)
Policy: Unknown (6)
I thank the Shadow Home Secretary for his contributions, even if the mention of crime or Home Office budget policy was not mentioned whatsoever. But I digress, and find it easier to lend some forgiveness to someone who ensures that debate in this House is certainly never boring.
Mr. Deputy Speaker, I like to think the Shadow Home Secretary's remarks on partisanship are naive and ignorant rather than disingenuous. By working with the Liberal Democrats to create this budget, this is a budget that is cross party in its very nature. But the most crucial thing is not that the government passes a cross party budget but that it creates a budges that the majority of representatives in this House, elected by the general public, vote for. That has very much happened. Not only have the Conservatives raised this House and called for a 'budget of consensus' months after they had the opportunity to do outreach and, I can confirm, absolutely not done so - but I would like to ask the Right Honourable Gentleman to name a single time in government they have reached out to other parties, excluding their coalition partners, to establish a 'budget of consensus'. I'll be waiting.
Mr. Deputy Speaker, I've heard the claim the government have increased 'air taxes' multiple times from the Conservative Party. I do not know where this has come from. The government have not raised air passenger duty beyond inflation in this budget.
Finally Mr. Deputy Speaker, while completely ignoring that we're set to his our fiscal targets as outlined in the coalition agreement, the Conservatives are calling for even more spending without the responsibility to call for any tax rises in the process. Apparently despite investing in the working and child tax credits the Conservatives squeezed, putting more families into poverty, the Conservatives now claim we do not invest enough in the welfare state.
The Opposition simply must be called out for their fiscal irresponsibility and their bluff. They want even lower taxes and a bigger tax cut than the huge tax cuts proposed in this budget, Mr. Deputy Speaker. They want tens of billions spent more on defence, Mr. Deputy Speaker. They want to throw more money at the welfare state, Mr. Deputy Speaker even after this government has invested in working families. And despite not proposing a single way to raise the money to do this they are saying we do not take our fiscal discipline far enough. They have lost their mantle as the party of fiscal responsibility in their effort to chase good poll numbers. It's time for them to practice what they preach and outline their fiscal plans in detail for the public so we can see where this magic money rainforest has come from.
"[we] would rather die than leave the Labour Party." - Emily Thornberry.