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Finance Act 2001

Posted: Tue Jan 19, 2021 1:49 pm
by Sir Jack Anderson
The Chancellor presents the government’s 2001 budget – titled “Budget 2001: Prudent finances, responsible investment.” His drink of choice is water.

Mr. Deputy Speaker,

Before I lay out the proposals I am setting before the House, let me take us back to the country we were in 1997, when Labour had first taken government: we were still attempting to come back from another recession overseen by the Conservative government, unemployment was at an unacceptable 7% and volatile and crushing interest rates. And we should also remember what we saw in our public services after decades of neglect and mismanagement – record numbers of patients waiting more than six months for crucial operations. Children attending schools with overcrowded classrooms, outdoor toilets and outdated facilities. Crime soaring out of control.

The electorate trusted Labour when we knew they were tired of the status quo and when we offered something new. It has already been established planning an economy from the centre and rigid statism had failed. But we learned the hard way that the same Conservative free market dogma had been failing us too. And that was a sad truth the country could unite behind: in the previous decades, successive governments had failed public services. They’d failed businesses. They’d failed homeowners. They’d failed families.

Labour offered a simple solution: if we invested in people prudently and if we worked with businesses and public services, we could see our country succeed and prosper.

It had not always been easy. The state the country had been left in demanded difficult choices – sacrifices, often. There is still much work to be done. But this government has delivered real results, and we see that in the economic figures. Thanks to prudent economic management, Britain has avoided the global recession and growth has continued at a strong 2.5%. Inflation has remained stable at 2%. Interest rates have remained stable at 6%. We’re seeing more investment, more productivity and wages have been boosted by 4%.

These aren’t just statistics on a spreadsheet, as easy as it may be for many in his House to view them as such. Those statistics mean more prosperity for businesses, more certainty for homeowners and more wealth for our crucial public services. They also mean we have the flexibility to start investing not just in those in Britain who need help the least, who have already experienced prosperity, but providing crucial ladders to prosperity for the working people of Britain so we can all play our part in creating wealth and prosperity.

And we have been able to do this in a fiscally sustainable manner, Mr. Deputy Speaker. After the investments and tax cuts we have made in this budget we still see a surplus of £14.65 billion. If you exclude current spending, we have increased the surplus by £2 billion to £26 billion. The result of this is debt falling by 2.6%, from 31.8% to 29.2%.

This doesn’t just mean a stronger economy, Mr. Deputy Speaker. It means we have fiscal flexibility to continue investing next year just as we have this year. It means a 3.2% cut in how much public money is continuing to service interest, with £200 million more this year going into our public services. That, Mr. Deputy Speaker, is what this government means when it says prudence with a purpose.

But what have we done with the investments we have made while managing to keep our fiscal situation in strong shape? The answer, Mr. Deputy Speaker, is plenty.

We have lifted the starting rate of income tax to £5000 – lifting thousands of the poorest out of income tax altogether and saving millions across the country £60 this year. We have lifted thresholds with inflation and there have been no raises to the level of income tax or national insurance.

We have also abolished the starting rate of corporation tax, relieving the tax burden of businesses and start-ups by up to £660 million, allowing crucial start-ups and the innovators and entrepreneurs that power them to prosper and join the 100,000 businesses that have been created since Labour have come to power.

Mr Deputy Speaker, I understand there will be many across the opposition benches who will appreciate the tax cuts announced by Labour today, but who will want us to go further. But it’s crucial to remember that fiscal responsibility does not just extend to spending. Just as we must spend sensibly, we must cut taxes sensibly too. To do otherwise would compromise the strong fiscal position Britain has found itself in and to tilt us back towards boom and bust economics which only promise more tax rises in the future.

It is this government’s intention to abolish the starting rate of income tax, and to cut the basic rate to 20%. It is also this government’s intention to see corporation tax, particularly the small companies rate, lowered. But I’ll remind both this House and the public that in a race, the tortoise always beats the hare.

In that vein, this year we have seen no raises in either capital gains or inheritance tax. But where the government has focused its more reforming efforts is on stamp duty.

Mr. Deputy Speaker, for too long we have focused our energy discussing the fair taxation of income in this country, and not the fair taxation of wealth – which we often ignore despite it being a more crucial indicator of life chances than income and despite it having less productive value than income, and despite millions who accumulate their incomes in wealth paying nothing while working and middle-income Britons work hard to have one fifth to nearly half of their incomes taxed.

The government’s changes today are an attempt to begin to reflect this and to build on more long-term work that needs to be done to ensure we have a fairer taxation system that makes work pay. That is why we have created more tiered, progressive approach to stamp duty.

The government’s changes will see the majority of working and middle class better off. We have lifted stamp duty so that nobody who buys the average house will pay a penny in stamp duty, and we’ve cut the stamp duty to 1% for anyone buying property worth less than £280,000. This constitutes stamp duty relief for the vast majority of working to middle class buyers, with taxes increased on a progressive scale between 3-5% for those buying properties over £250,000 – three times the average house price.

These changes favour a shift in wealth to working and middle class individuals, only levying between 3-5% stamp duty increase on the wealthiest and raising up to £4 billion for our public services whilst keeping our fiscal position strong.

Mr. Deputy Speaker, with indirect taxes there have been no increases and all duties have been frozen either in real or nominal terms. VAT remains the same, with exemptions added for museums and art galleries so that they can be free of charge to the general public: making art and education accessible for all and encouraging visitors to attend great British institutions like the VA who had seen a dramatic collapse in their attendees since charges were introduced by the last Conservative government. This move also perfectly complements the 2% real terms rise in Britain’s arts budget.

Alcohol duties have been frozen – a real terms cut – to help out our pubs, breweries and distilleries.

Tobacco duty has been increased in line with inflation, and will continue to be monitored. The government has been encouraged by the drop in tobacco consumption but is prepared to take swift action to protect our National Health Service from any further burden if necessary.

And this government has taken action to protect motorists, cutting fuel duty in real terms by a penny and freezing vehicle excise duty. Mr Deputy Speaker, when the last Conservative government introduced the fuel duty escalator which they now protest there was a real incentive to do so: petrol prices were low, and pollution had become a huge concern in many communities.

As those prices have increased, motorists have found themselves increasingly burdened by the Conservatives’ fuel duty escalator with little assistance. While this government condemned the destructive and illegal protests last year, we have heard the concerns of motorists who have felt left behind and made their voice heard in a legal and just way. That is why I am also announcing the removal of the fuel duty escalator, Mr. Deputy Speaker, and will make it clear the government will freeze fuel duty in nominal terms next year and at least by real terms the year afterwards. Future policy will then be reviewed, with levels of pollution and the price of fuel taken into consideration.

It can often be hard to strike an appropriate balance, Mr. Deputy Speaker, but that is what this government seeks to do.

With the sustainable tax reforms we’ve made, we have also ensured there is apt fiscal room to invest in public services and in families. For pensions alone we have invested in those who have worked hard their whole lives and ensured they are rewarded – with our rise of £3.25 meaning we are on track to hit our target of the basic state pension hitting £77 by 2003, all pensioner benefits retained, and a 5% increase added to the state second pension so we can put resources towards tackling the immense pension poverty we had seen built by the previous government. Now that this government has put us in a strong fiscal position, we can guarantee to the pensioners of this country that we will ensure pensions always increase by earnings and that this government has your back.

Disability and sickness benefits have been increased in line with inflation, with the exception of a Disability Tax Credit we have introduced to replace Disability Living Allowance – ensuring that those who are disabled, whether they work or not, are granted £2100 a year returned to them. The government has also invested significantly in Carer’s Allowance, ensuring it increases with earnings so we can thank those who sacrifice countless hours to care for those that need it the most, relieving that burden from our social care system and NHS in the process.

Family benefits have also been increased in line with inflation, with the government acting in a way that benefits families of all shapes and sizes. While this government respects the institution of marriage, we respect that couples will make the best choices for themselves and their families. That is why instead of a single £1000 tax break to the married, and instead of this government deciding to take a route that would penalise widows and domestic violence victims, this government will be here to support the children of Britain and the hard workers of Britain instead. Instead of a single £1000 tax break, the government’s policy will see up to £1200 extra put into the pockets of working families this year alone, whether they are married or not. And, Mr. Deputy Speaker, our policy will not be so cruelly designed as to financially penalise individuals who are widowed or who wish to leave abusive partners as the Marriage Tax Allowance’ proposals would.

We will be putting an extra pound on the child benefit, an extra £10 a week into the Working Tax Credit and we have established a children’s tax credit worth up to £500 a year for families. We have also put an above wages level of investment into Income Support to assist the most vulnerable, and increased maternity pay by almost a third, meaning we will support working women who choose to have children and provide them with almost £2000 extra a year.

In establishing these tax credits and tools that support families and tackle poverty and want, we’ve established that we would make work pay. Because there is no greater weapon against poverty than employment, Mr. Deputy Speaker – and we will continue to support Britons in employment and Britons into employment. That starts with the establishment of a £1 million to ensure skills tests are given to the social security claimants, with the appropriate training offered to those who need it.

But there is no point encouraging individuals to work if the government is not encouraging job creation, Mr Deputy Speaker. Whether it’s relieving businesses of their tax burden or investing in our economy, Mr. Deputy Speaker, that is Labour’s mission.

And thanks to our prudent spending, this government is now investing more into our economy – into the economic affairs budget – than we are on interest repayments. This has allowed us to give 5% increases to Regional Development Agencies, the small business service, innovation grants to business and export credit guarantees, helping power up every region across the country and establishing innovation and creation across the United Kingdom.

It means not just a 10% boost in the research budget, but a rise of investment research across departments. Nuclear energy research almost doubled, a 10% boost in medical research, a 10% boost in University research funding, a 10% boost in defence research and a 40% increase in the Environmental Affairs research budget – these all represent the government laying down the foundations for an R&D revolution, where Britain can lead the world in innovation and development.

This government will use that power to tackle the rising concerns around pollution, environmental degradation and global warming. In one budget, we have increased the spending on renewable energy to £500 million. I’ll be clear to the House this is only a start, but it is a crucial start. In tackling these environmental ills, we can’t just protect our economy from long term threats – but we can create jobs, promote British energy independence and create the green and pleasant land that was so articulated in the Jerusalem the first majority Labour government wished to create.

We will also be doing this by promoting a £600 spending package into transport, assisting motorists with £50m permanently put into highways investment, trebling rail investment, investing £250 million into local transport grants and £25 million into London transport grants and ensuring that every part of the country can benefit from transport investment.

We will also be going further than any government has in generations to boost the employment prospects of young people across Britain, and in diversifying the economy to benefit those across the country. The New Deal introduced by this government was a remarkable success in tackling the short term problem of youth unemployment inherited by this government, and key programmes within it have been kept and even expanded – with £25 million put forward to establish a New Deal for rural communities, £25 million set aside for a New Deal for coastal communities and £50 million put forward to establish a New Deal for deprived communities.

But, to promote economic efficiency we have scaled the New Deal for 18-25 year olds to £100 million, and invested the remaining funding – £1.2 billion to the New Deal Apprenticeship programme, an unprecedented and historical investment into apprenticeships in Britain that will tackle the issue of youth unemployment not just in the short term, but in the long term too. Apprenticeships are a powerful economic tool, Mr. Deputy Speaker: they provide opportunity to those who need it most, diversify our economy and equip young people with specialised and practical skills that are too often missing within our workforce. But successive governments have understated, if not ignored, their power. This government will not, which is why we will make the creation of a mass apprenticeship scheme the most vital plank of our innovation revolution.

And while infrastructure, innovation and business make the beating heart of the British economy, we know what the soul of Britain itself is: none other than our National Health Service. Mr. Deputy Speaker, all of us know someone who works for the NHS, or who owes their life to our health service. It has woven itself into our communities and into the story of our lives and our nation, never failing to be there for us when we need it – even in the face of immense pressure and at times underfunding.

But if neglected, even the strongest fabric can tear. This government will never forget the debt all of us owe to the NHS and will be more than willing to pay it back. That is why we will be giving the NHS the biggest cash boost since its creation – with £4.6 billion invested into the Health Service we owe so much to. As I outlined to the House weeks ago, we need a long term funding settlement for the NHS, but this government will not sit around and wait. We will take action now.

With those funds, we have in this year alone exceeded our staffing targets as set out in the manifesto with 5,000 nurses and 2,500 doctors hired, but we’ve shown our immense gratitude with a 5% pay raise – representing a £1000 boost to the wages of NHS nurses. We’ve extended NHS bedding capacity by 2,000, build 40 new clinics, put £75 million into dentistry and nearly £100 million social care, cut the burden of prescription charges on the working and middle class sick and seen £750 million put into clinical commissioning to tackle excessive waiting times and significant investment in training and public health.

But there is no investment as crucial as the investment in education, Mr. Deputy Speaker. I made that abundantly clear when I announced the New Deal Apprenticeship Scheme, and we must build that across every layer of education. That is why in real terms, our biggest budgetary increase has been in education.

And our approach with investment has been to tackle education from cradle to grave and ensure it is there to nurture a variety of talents, not to see education as merely academic schooling at to leave it there. We know early interventions are the most effective, which is why we have guaranteed free nursery hours for all parents who have a child aged zero to five and invested more than £30 million into Sure Start – but we have a moral responsibility to step in and lift up those who have been failed in the past. That is why we have put £186 into the adult skills budget to eradicate illiteracy.

But we have still taken action to clamp revitalise our schools. Alongside the £1.5 billion Future Classrooms programme, we have put £1 billion extra in current spending for both primary and secondary schools, hired 4,000 teaching assistants and over 4,000 teachers – exceeding our manifesto target, and giving them our teachers a well-deserved £1000 pay rise in the process.

And instead of relying on cheap stunts to gain votes in our University sector, we’ve protected funding and taken the evidence-based approach to lifting up disadvantaged children: expanding the Widening Participation budget by 10% and giving a 7% boost to student grants.

Together, this marks the radical action a government that pledged to put education first takes – and we will continue to make education an absolute priority.

On the global stage, we will continue to invest in strengthening Britain’s power and influence, which is why we have invested in Britain’s soft power, contributing to the UN population fund and nudging our international development spending closer to that crucial 0.7% target to help the global poor and establish Britain’s place on the world stage as an aid superpower. But it is also why we have invested in our hard power too – putting forward the necessary £455 million investments in vessels and contributing £230 million in defence research, allowing Britain to not just defend herself if necessary, but to defend our allies, interests and values too. And we will thank our troops for the sacrifices they make, giving them a £1000 pay rise this year.

And while working to keep Britain safe from outside threats, we have invested to keep Britain’s streets safe too. We have taken an approach that is both tough on crime and tough on its causes – hiring 1,600 new policemen, giving them a significant pay rise, putting £50 million into our immigration services to keep our borders secure and expanding prison capacity by 3,000 places, whilst ensuring we invest to compensate and protect victims with our £40 million victims’ compensation fund.

Mr. Deputy Speaker, it is not enough to run a prison on the cheap and believe that delivers the most efficient service. Safety cannot be delivered on the cheap or flogged off to the highest bidder. Overcrowded prisons could lead to riots that could risk the safety of Britain’s streets, and releasing prisoners without ensuring the cycle of crime is broken risks creating more victims and perpetuating a vicious cycle which compromises safety or lives. While this government does not inherently oppose the role private providers can play in delivering public services, the evidence has made it clear private run prisons are not effective, which is why we will be bringing prisons in house. Alongside this, we’ll be investing £150 million in rehabilitation, ensuring that those who pay their debts to society and are prepared to work hard to reintegrate into it can do so, and preventing the brutal perpetuation of crime in the future.

As aforementioned, we have taken a bold approach to ensuring we have a greener, more sustainable future with cleaner energy, investing £13 million into countryside and rural regeneration, putting nearly £70 million into energy efficiency and protecting our communities from the effects of environmental degradation by putting over £40 million into the environment agency, with the lion’s share of that funding being invested in flood prevention.

In housing, we’ve put over £400 million to encourage local councils to get building and into social housing, particularly in the communities that need it the most. And we have taken bold action against rough sleeping – investing nearly £100 million this year alone. Labour came into office with a bold pledge: to cut rough sleeping by two thirds in the short term and to eliminate rough sleeping in the long term. We’ve successfully done the former, Mr. Deputy Speaker, and we will give the rough sleeping unit the resources to tackle the remaining, more complex cases.

In local government we’ve taken a more balanced approach, exceeding the £400 million investment in councils to protect local services, whilst also ensuring waste is not encouraged and keeping council tax as low as possible. This year, council tax will be raised at one of its lowest rates since its establishment, and the rise in council tax will not exceed the rise in wages whilst we also protect services. And we will ensure we share prosperity across the UK, putting nearly £500 million extra into Scotland, nearly £250 million extra into Wales and nearly £200 million extra into Northern Ireland.

I made clear that investments come with a cost, Mr. Deputy Speaker, which is why I am clear that stamp duty for the most expensive homes in the United Kingdom had to be raised. I am honest to the British people where we need to make sacrifices to safeguard their future. On spending outside the departments I’ve mentioned, we have exercised necessary funding restraint which means there will be a small real terms cut which can be delivered without compromising services by taking efficiency measures.

Mr. Deputy Speaker, I crafted this budget with an overarching mission: to maintain prudent finances, to invest in our public services and to ensure we have a fairer taxation system. On that, this government has succeeded. This budget guarantees we maintain a strong fiscal position going forwards so that we can continue investing in our public services without excessive or unfair taxation being necessary. It guarantees success not just in the short term, but resilience in the long term.

With pride, I commend this budget to the House.

Budget: https://docs.google.com/spreadsheets/d/ ... =604492038

Re: Finance Act 2001

Posted: Tue Jan 19, 2021 1:54 pm
by Elizabeth Tanner
Margaret Beckett MP, Leader of the House

I beg this bill be printed and read a second time.

Re: Finance Act 2001

Posted: Tue Jan 19, 2021 4:28 pm
by Blakesley
I call the Leader of the Opposition!

(Speech due by 8:49 am Eastern time or 1:49 pm UK time. Debate opens for 4 days as soon as the speech is posted. Time limits will be strictly enforced.)

Re: Finance Act 2001

Posted: Wed Jan 20, 2021 1:39 pm
by Will Frost
Mr Deputy Speaker,

As the Chancellor of the Exchequer rose to give his speech presenting the Government’s budget, I sat on the Opposition benches and listened carefully to the way in which he presented the context that surrounds where we are as a country. As he described the present state of our economy, I couldn’t help but wonder what fantasy version of Britain the Chancellor is living in. Because the country he is describing, Mr. Deputy Speaker, is a nation entirely different from the United Kingdom that exists today as a result of four years of Labour failure. The Government inherited a more prosperous, more dynamic, and more free economy after years of successful financial management at the hands of the Conservative Party. And what do they have to show for it? A shrinking economy, anemic job growth, and rampant stealth taxation. The Chancellor is absolutely right about one thing; these aren’t just meaningless statistics, they reflect aspirations and livelihoods that have been crushed as a result of this Government’s abject failure to develop a growing economy. Make no mistake about it: after four years in power, Labour has left our economy contracting and the hopes of millions of working people diminished.

Today, Mr. Deputy Speaker, I would like to judge the Government’s budget on the basis of the Chancellor’s own words. He has claimed that the solution Labour is offering is a strategy based on investing in the British people, working with private enterprise, and strengthening our public services. That is how, in a sentence, the Chancellor and this Government would hope to characterize their budget. While the message they’re presenting to the British people might look good at first glance, the reality of this budget is anything but what was promised. In attempting to present himself as a Chancellor who’s capable of doing everything for everyone, he’s developed a budget that in reality achieves nothing for anyone. When our economy desperately needs decisive action, we find ourselves stuck with a Chancellor paralyzed in inaction. When our public services need support and reform, we’ve gotten nothing more than aimless bureaucrats tinkering around the edges of the state. And when our country is calling out for principled leadership, we find ourselves with a Government incapable of providing it.

For weeks we’ve been watching as Government Ministers continually raised the expectations of this budget, promising to use it as a means to usher in a new age of prosperity in the United Kingdom. Instead, we’ve been left with a budget of missed opportunities, misguided spending, and broken promises. Labour had hoped to use this budget to outline the ideological direction of their second term, but instead they’ve presented a mismatch of policies with no cohesive direction for the future of our country. It is a budget devoid of big ideas, lacking a central purpose, and missing its heart. It’s as if the stage curtains have been drawn open only for the audience to find that the band has gone missing, the microphone cut, and the balloons deflated and scattered across the floor. You don’t have to take my word for it - all you have to do is look at the budget itself.

The Chancellor begins by laying out the Government’s tax plan. Now a rational person, looking at the economic situation we find ourselves in, would determine that now more than ever we need real tax cuts that will enable working people to take home more of what they earn. But rational thinking, of course, would be too much to hope from this Chancellor. Raising the starting rate of taxation to £5,000 pounds barely puts a dent in the tax burden faced by working people, and the Chancellor knows this. The miniscule increase in pre-tax earnings is a slap in the face to people across this country struggling under the weight of Labour’s onslaught of new taxes and regulations. What an incredible freudian slip we’ve just seen from the Chancellor, when moments ago he said that this increase in the starting rate would amount to an extra £60 when he clearly meant to say £600. Frankly the Chancellor was right the first time around; after you take into account rising prices, a litany of failed public sector promises , and Labour’s penchant to tax people through stealth, most individuals will be no better off than an additional £60 pounds! Working people need real relief, they need real tax cuts. Half measures and weak willed gestures simply will not get the job done, and it is unfortunate that that’s all the Chancellor is willing to offer.

The Government had the chance to unlock the full potential of the British economy by trusting the British to keep more of the money they earn, instead Sir Jack Anderson wants to hoard it all in his own little piggy bank. And this is a key point I want to make: we need a Government that is actually committed to creating a low-tax economy, and with this budget Labour has proven that they will never be that sort of Government. The Chancellor and his team at the Treasury aren’t actually interested in making the wholesale reforms to Britain’s tax code that we need to unleash the full force of the British economy. How have I come to that conclusion? Just look at the budget! No reduction in cuts to the starting rate of income tax, or the basic rate, or the higher rate. No cuts to capital gains tax when we desperately need to attract new investment into the economy. No reductions in corporation tax for small and regular sized businesses by even half a percent, providing zero support or economic relief to the employers who power the British economy! And that, Mr. Deputy Speaker, is perhaps the greatest mistake made by the Chancellor in this budget. Yes, it is a good thing that the Government has abolished the starting rate for corporation tax but that is not going nearly far enough. Small businesses are the backbone of our economy, they employ the majority of British workers, and they deserve a Government that is going to back them 100%. What did they get from the Chancellor in his budget? Absolutely nothing.

For every person sitting at home watching this debate, wondering how the Government’s proposals are going to impact you, this is what I want you to know.

(Croft pauses, looking up into the press gallery and at the cameras in the House)

The Chancellor and the Prime Minister he works for had the power to give you back more of the money you work for, and to allow business owners to keep more of the profits they work to earn, but they chose not to. This budget was a choice, Mr. Deputy Speaker, and with it the Chancellor made clear his desire to prioritize his personal spending projects over the wellbeing of hard working British people. The Chancellor could have chosen to cut your taxes, to reduce the tax burden on small business owners, and to reduce capital gains tax to attract investment… but he didn’t. He’ll have to live with that decision for the rest of his political career, but more importantly, the British people will be forced to live with the economic consequences of his decision. No matter how long the Chancellor stands at the dispatch box and tries to spin himself out of this failure, the truth of the matter will never change. The Government had the agency, the ability, and the authority to allow you to keep more of what you earn, more of the money you make to support your family, and more of the income your businesses rely upon to expand and hire more people. Instead, they chose to allow the Chancellor to run wild with funding for his vanity projects.

Allow me, Mr. Deputy Speaker, to take a closer look at the £23 billion in new spending announced in the Chancellor’s budget. When the Chancellor’s mirage of grand rhetoric and bold one liners fades, it becomes increasingly clear that many of the Chancellor’s £23 billion worth of new spending commitments sound a lot better on paper then they do in reality. The £40 million in new funding the Government has pledged to strengthen border security seems great, until you realize that it amounts to a miniscule 3.5% increase in the Immigration and National Service’s budget. As violent crime continues to rise, it seems promising that the Government has decided to hire 1,600 new police officers and maybe finally start to get tough on crime. Until, of course, you realize that these new officers won’t even cover the number of officers that have been sacked since New Labour came to power. The Government’s commitment to build new schools seems great, until you realize that these new buildings are being funded by freezing school maintenance and subjecting students in existing school buildings to endure inadequate and unsafe learning environments. Their plans to spend more money to build new houses seems amazing, until you remember that their strategy amounts to nothing more than throwing more money at a Soviet-style housing authority that has barely been reformed since the end of the Second World War. High levels of investment in Scotland, awarded during a time where Holyrood is coming under intense scrutiny for wasted spending, have been paid for by providing Wales with less funding than the Government is giving Northern Ireland. Just scratching below the surface of so many of these spending commitments exposes them for what they really are: half measures that do next to nothing to solve the issues we face as a nation.

Let’s be clear, Mr. Deputy Speaker, £23 billion in new spending is no small increase. When the numbers get this big they can start to seem intangible, so I want to take a moment to put them into perspective. There is no such thing as “government money.” There is only money that hardworking men and women earn, and then is given to the state via taxation. I say this because I want to emphasize to every British person that the Government is spending £23 billion of your money, and you deserve to know whether or not it’s being spent effectively. Labour is spending more of your money to combat crime, yet four years later and violent crime is continuing to rise. Labour is spending more of your money on the NHS, yet four years later patients are still struggling to find available beds and rural hospitals have been left in a state of disrepair. Labour is spending more of your money on education, yet four years later truancy is continuing to rise and exam results are flatlining. The Conservative Party will never oppose properly funding our public services, but we will always oppose a Government that aimlessly throws money at our problems without any underlying strategy and no results to speak for. If we are going to ask the British people to hand over their money in order to finance our public services, they should have confidence that their money will be put to good use and will meaningfully improve the services they’re funding. Doing that requires comprehensive reform to state services, ensuring that they work better and that money is utilized more effectively. Only by pairing higher funding with fundamental public sector reform will we deliver the value for money the British people deserve and rightfully expect. I would advise the Chancellor to spend a little less time taking advice from the wannabe doctors on the Government’s front bench, and more time listening to one Dr. Albert Einstein when he said, “the definition of insanity is doing the same thing over and over again and expecting different results.” The past four years of misguided funding have failed, and it’s time the British people are given the chance to try something different and end the insanity.

When I say that this is a budget built on broken promises, I mean it. As Leader of the Opposition it is my responsibility to hold the Government accountable to the promises they make to the British people. Which is why, Mr. Deputy Speaker, it is my duty to confess to the British people that this budget is one riddled with U-turns and broken commitments. Amidst a pensioner poverty crisis, New Labour fought the 2001 election campaign on a manifesto that promised “security for all pensioners.” In his first budget, the Chancellor ripped up that manifesto commitment by failing to provide pensioners with a real terms increase in their state pensions. Just weeks ago, the Government publicly made clear their commitment to honor the 1998 Strategic Defense Review, a promise they have now U-turned on by failing to recruit the 3,000 soldiers the review recommended. Of all these U-turns and broken promises, the most glaring is perhaps the Government’s announcement on flood-prevention spending. Minutes ago, the Chancellor took to the dispatch box to boast that the “lion’s share” of the £40 million in new funding appropriated to the Environment Agency will go towards flood prevention. After the tragic and disastrous flooding that swept across England last year, Defra commissioned the Institute of Civil Engineers (ICE) to prepare a report that would outline the necessary steps the Government would need to take in order to properly protect against future floods. In their report, which was released earlier this year, ICE concludes that £80 million pounds, more than double what the Chancellor has allocated in this budget, would be the absolute “minimum level of investment to maintain defences in a safe condition.” People's lives are literally on the line because the Government is unwilling to listen to the very reports they commissioned. So much for listening to the experts.

Another consistent promise made by the Chancellor has been his desire to help those most in need. It was President Reagan, a fellow cowboy if I do say so myself, who said that the nine most terrifying words in the English language are, “I’m from the government, and I’m here to help.” The Chancellor’s version of lending a helping hand proves just how right the President was. When the Chancellor says his budget “helps” one particular group or industry, what he really means is that he’s decided not to go out of his way to make life worse for them… this time around. Freezing alcohol duty isn’t going to help distilleries in Scotland and pub owners across England attract new business, it’s just going to make their lives marginally less difficult. Offering limited additional support to university students won’t help the untold numbers of young people who will never attend university in the first place because of the fear of not being able to afford packing back the tuition fees that they owe. The Chancellor making the conscious decision to raise council tax, but promising that it’s “one of the lowest increases in history,” doesn’t actually help families, it just lessons the blow of the Government’s anti-family agenda. Freezing incapacity benefits for some of the most vulnerable in our society doesn’t make them any better off, it just forces them to go on languishing under enormous pressure and major hardship. These aren’t bold decisions that advance a progress society, Mr. Deputy Speaker, they are the Government’s sloppy attempt to slap a bandaid over a bullet wound.

This is not a budget for a bold, proud, confident Britain in the 21st century. This is not a budget that will make our people more prosperous, our businesses more competitive, or our public services more effective. It is a budget of missed opportunity, mismanaged spending projects, and broken promises. At a pivotal point in our country’s history, we desperately needed leadership from the Chancellor to chart a strong course forward and to unleash the full entrepreneurial spirit of the British people. Instead, we got a few soulless spreadsheets churned out by a team of calculator-pushing academics working in the dark recesses of Number 11. That is how the 2001 Labour budget will be remembered - a swing and a miss, an unforced error, an own goal. The British people were counting on the Chancellor, Mr. Deputy Speaker. Sadly, his leadership was nowhere to be found.

Re: Finance Act 2001

Posted: Wed Jan 20, 2021 6:14 pm
by Rebecca Flair
Mr Deputy Speaker,

As the Leader of the Opposition so correctly pointed out this Budget is a missed opportunity, a chance in a million to invest in our future and cut taxes at the same time and the Government opted to do neither. That does not inherently make this a bad Budget though Mr Deputy Speaker, no matter what the protestations of the Leader of the Opposition claim the economy is growing but has slowed, inflation is stable and that is to the credit of the Governor of the Bank of England, and unemployment is falling to the credit of the many entrepreneurs who risk their life's savings and more every single day to build a better life for themselves and their families. It is a shame that the Chancellor has felt the need to steal these accomplishments for himself because the Labour Party are responsible for so many great fiscal accomplishments in the last four years. They balanced the books, left disastrously askew by the Conservative Party, but only using Conservative Party spending plans. They kept our schools and hospitals from deteriorating, by investing the bare minimum to try and protect their precious surplus. And they cut taxes on the poorest in our society by £60, or rather they cut taxes by £40 because earnings growth of 4% stripped away £20 of the tax cut reducing it by a third.

Perhaps I am being too harsh on the Government Mr Deputy Speaker, after all in 1997 the country was up a particular creek without a certain paddle. The economy was not more prosperous, more free, or more dynamic in 1997 because it was run by a Conservative Party that had made incompetence its watchword, a theme they seem keen to resurrect based on recent events. The Leader of the Opposition is absolutely incorrect when he claims that the current situation is down to the Conservative Party, it was the Conservative Party who crashed the car, it was the Conservative Party who gave us Black Wednesday, and it was the Conservative Party who have given us a recession in all three of the last decades. 1973/74 recession, 1980/81 recession, 1992/93 recession all on the party to my right's watch. One could be forgiven for thinking that these mistakes are in the past Mr Deputy Speaker but right now, here in this very chamber today, the Leader of the Opposition seems determined to make more. He believes that an economy that grew by 2% is shrinking, he believes that a pension increase of nearly 5% is a real terms cut, and he believes that in 1997 the he was a part of left us in any fit state as an economy. The Labour Party may have used Conservative Party spending plans to get us back to balance, but they were only necessary because the Conservative Party proper had made such a mess of the economy before they left.

But Mr Deputy Speaker I could talk about the Conservative Party's ineptitude and incompetence all day, yet we are here to discuss the Budget in front of us, a budget which eschews tax cuts and spends thriftily to build a surplus so that nobody can call this Government as fiscally negligent as the last one. Sadly this is the great problem at the heart of this Budget. A £40 tax cut does not stimulate the economy back into action at a time when the rest of the World is in the grips of a recession. We need to be stimulating domestic demand because at the present time there isn't as much of it to go around outside our borders. A paltry increase to £5,000 for the lowest rate of tax will not cut the mustard in the same way that the Liberal Democrats would with a complete abolition of the bottom rate of tax. The Chancellor is proud that workers will pay £40 less tax under his scheme, I am proud that workers will pay £400 less income tax under my party's scheme, furthermore I am proud that workers who earn less than £6,000 a year will pay no tax on it at all because we have equalised the National Insurance Contribution threshold. That is how you inject certainty, security, and prosperity into the economy. The Liberal Democrats' tax plans will make the average two working parents family nearly £1000 a year better off just from the income taxes we cut, let alone the real terms freeze to Council Tax and the litany of other proposals we have put together. A budget with a surplus of nearly £15bn is the perfect time to give back to our communities, with a current surplus of over £25bn even more so, but the Chancellor wanted to build a surplus so here we are with workers earning less than £5,000 still having to pay taxes on that income.

Then there is the Government's support for our businesses Mr Deputy Speaker. Now I welcome the grant funding that is being allocated, I welcome the Regional funding, I welcome the variety of streams the Government have attempted to open through this Budget but businesses need one thing above all else, they need to be competitive. Our economy currently has 2% inflation and with a budget like this, a budget which is ever so slightly expansionary, that number will increase putting up prices and making our businesses less competitive abroad and reducing our domestic population's spending power. So why, why when we have such a surplus, why did the Government not choose to alleviate the VAT burden on our families, on our businesses, and on our communities? This Government has decided to keep a 2.5% premium on all goods that could easily have been reduced to give our businesses another feather to their cap, another opportunity to export, and another opportunity to keep their prices low for our domestic consumers. Mr Deputy Speaker if I have one message for the party opposite this afternoon it is that a surplus is a great thing to have, but it is meaningless if we do not use it to put money back in families' pockets and invest in our public services, I urge the Government to consider reducing the emphasis on having a big surplus next year and instead focus on having a rainy day fund surplus and public services that we can be proud of.

Speaking of public services Mr Deputy Speaker while I must confess that it is welcome that the Labour Party are now producing their own rather than copying Mr Major's homework I am disappointed with some of the choices that the Government have made. For example Mr Deputy Speaker the sheer intransigence they have shown with regards to benefits for our sick and incapacitated. Sickness is an affliction which affects us all, and can strike at any time, any man or woman present here could one day have to rely on Statutory Sick Pay just as easily as anyone in the gallery, or on the street. Anyone be they merchant or miner could fall ill and need to fall back on Statutory SSP, so I ask the Chancellor why he treats them as if they have any choice in the matter with this Budget? I can understand the rationale in freezing unemployment benefits in real terms, even if I believe that the unemployed deserve some standard of living improvement, but those on SSP or Incapacity Benefit are there not from laziness, not because they are shirking, and not from some desire to grift the taxpayer but because they have nowhere else to go. A person with a chronic and debilitating condition cannot work, it would be inhumane to make them work, or to even search for work, do they deserve stagnant living conditions? Once upon a time the Labour Party rejected the notions of the deserving and underserving poor, now apparently one can be an undeserving pauper just from the luck of the draw.

Mr Deputy Speaker if there is a lost opportunity anywhere in this Budget then it is in the devolution contents. Local people know what local services they need far better than any of us do which is why I am so concerned by this Budget's lack of commitment to local and regional devolution. In the Liberal Democrat Shadow Budget we made sure to push localism at every opportunity including investing nearly £1bn into local health Commissioning Grants, investing over £200mn into Regional Development Agencies, and putting £100mn in funding to back small and start-up businesses in our communities. The Government by contrast barely struggle to give real terms increases to many of these projects so I ask the Chancellor what makes him believe that national government knows more about local needs than local authorities and local people? It is the same in Local Government, the Liberal Democrats have pledged nearly £2bn to our devolved governments in Scotland, Wales, and Northern Ireland to spend on behalf of the people, we have ensured that Council Tax is frozen in real terms eschewing the double inflation raise offered here and the double-digit raises we have been confronted with in the past instead opting to fund Local Government with proper grant money representing a £3.5bn increase for our Councils. 7 reopened train stations a year is welcome, very much welcome in following the Liberal Democrat model for reversing the Beeching Cuts, but we have no knowledge of how these stations shall be chosen, what criteria they will use, or even when the work will begin. How will the Government force service providers to run services to them? Nationalisation, an option Labour have neglected to take up at this point, allows us to take a community-led approach to rail provision and ensure that our services are run in accordance with the needs of our rural and suburban areas, not for profit. I urge the Chancellor and the Secretary of State for Business to reconsider here as well.

Then Mr Deputy Speaker we have our public services where, I must confess, I would like to begin by indicating my party's support for several measures. We believe that a good idea is a good idea and should be praised so I commend the Chancellor on his strives in Early Years funding and for his willingness to attempt to invest in the capital at the heart of our public services, but his plans lack real follow-through. When the Chancellor's new clinics are constructed which equipment will they use? The procurement budget has barely increased so how will the Doctor afford his stethoscope? How will the new equipment be maintained? The maintenance budget has been frozen in real terms. It's the same story in Education Mr Deputy Speaker, 190 new schools being maintained on a budget that is frozen in real terms and barely covered the pre-existing schools we already have. The Chancellor can talk about schools being failed by the Conservative Party all he likes, I will agree with him every step of that particular argument, but unless he is prepared to invest in maintenance his new schools will go the way of countless schools under the Conservative Party's stewardship. Equally while the Chancellor lauds the support he has given to university students he continues to leave the ticking time bomb that are university tuition fees dangling over our young people's heads for many decades to come. His proposal may be better than the dumpster fire ideas of the Tory Party, which is not saying much, but the fact of the matter is that he is still charging students for utilising their human rights and then daring to put those skills to the public good by using them in the economy at a later time. Education in this manner is a net positive for our society, taxing or charging it serves only to disincentivise hard working students across the land or make them pay for doing so at a later date respectively.

Finally Mr Deputy Speaker I wish to touch upon our justice and emergency services systems because there is a fair amount to unpack. The Government have wisely determined that we do not have enough police officers and have rightly tried to hire more, but I must ask them why they have chosen to set such a narrow focus? Before Conservative Party mismanagement it was commonplace to see a bobby on the beat on every street, this could be an opportunity to restore police relations in communities which have long distrusted them and it would do wonders to reduce rural crime so I urge the Government to, in future, think a little bit bigger when it comes to policing ambitions. Equally I wish the Government would take a similar approach to our justice system. With prisons overcrowding it is only right that we increase the number of prison cells at our disposal but this is only a short term approach to treat the symptoms of a much larger disease. It has long been said that prisons are a training ground for prisoners, they get put away for shoplifting, they get released, and then they're back in for aggravated burglary. Locking someone up until you have to let them out is now provably a disastrous decision for any Government committed to long term solutions to an age old problem. I welcome the Government's move to increase rehabilitation funding but they must do better, I urge the Government to continue the transition away from punishment-focused justice towards a mixture of both punishment and rehabilitation. Those who do wrong must absolutely face punishment for that, but how can they repay their debt to society if they're in and out of prison?

Mr Deputy Speaker as I have said before I will say again, this Budget is progress. This budget is progress from 18yrs of Conservative Party cuts, mismanagement, and incompetence. This Budget is progress delivered by a Chancellor who at least knows what he is talking about compared to a Leader of the Opposition who does not. But this Budget is also a missed opportunity. Eleven figure surpluses do not come around every day and it is borderline negligence for the Government to hoard this finance during a time when a lot of the rest of the World is in recession or just emerging. This Government chose to only give a £40 tax cut to people, it chose to keep prices higher with VAT, it chose not to invest in maintenance of our public services, and it chose to ignore the sick. Mr Deputy Speaker I cannot support this Budget but I urge the Chancellor to adopt a change in approach and recognise that a surplus for the sake of a surplus is pointless, only through investment and tax cuts for the people can a surplus find any real meaning.

Re: Finance Act 2001

Posted: Thu Jan 21, 2021 2:44 pm
by Andy Edwards
Mr Deputy Speaker,

I first want to note how amused I am by the comments from the Member for Gordon, who notes that in increasing spending in important areas including early years education and child care, the NHS, and transportation, that this budget is expansionary and could add to the low rate of inflation. But then immediately says this budget is not stimulating enough, not spending enough, and not cutting enough taxes. It is both too expansionary and not expansionary enough. I can understand the desire to criticize the Government's budget from one direction or the other, while I might not agree, but to use both arguments simultaneously uses an impressive, almost Olympic-like, leap of logic.

But I do not rise to speak about the comments from the Member for Gordon, who has her reasons to make the comments she does. I do rise because it is important to go beyond the Right Honourable Chancellor's excellent comments when it comes to the expenditures that are forecast in this finance bill with respect to the Home Office.

First, as the Chancellor states, we are putting more officers on the beat and out into our communities; and we're going to give front-line officers a wage increase of £1,000 this year as a way of thanking them for the services they provide to Britain each and every day. We're also giving them tools to better engage with the communities they serve through funding for training to combat racism and to reach out to ethnic minority communities that deserve the same sense of security and service as the rest of us but that they have been denied. The spending for this training, in conjunction with other measures that will be laid before this House, represents an honest desire to fully implement the recommendations of the Macpherson report which has been so maligned by the Opposition but which is supported by the police and which is needed to help every community in Britain feel safe.

I make this comments just as the Opposition has released their own budget proposal. To that end I would like to focus on the expenditures we have offered for rehabilitation; the Government is providing a full £100 million annually more towards this process than the Opposition would- a full 25% increase over the Opposition's proposals. Rehabilitation is important in that it helps to cut down on reoffending and the costs associated with it. It is estimated that reoffending costs run into the billions annually, and by helping people expand their education and get jobs when they are released we do more to cut down this reoffending more than almost any other policies. Our spending in this area will be more effective at stopping future crimes from happening at all than the Opposition, and I'm proud to be a part of a Government that realises that causal relationship and is doing something about it.

When it comes to immigration, we are providing a similarly generous pay increase to those that watch our borders and enforcing out existing laws- again, as a way of thanking them for their hard service. The results of the hard work of our immigration officers and offices as a result of this Government's leadership and policies is evident in the claims that are processed. There were 109,000 initial decisions made on asylum applications in 2000- more than triple the 33,000 made in 1999. This is evidence of a professional and effective immigration workforce that is clearing out a backlog that goes back to before 1995. So they absolutely deserve wage increases that they are getting and the continued support that this budget provides.

The focus on this budget is on principled, responsible spending. This is a good thing as it allows us to maintain a surplus for the times that it is actually needed. But responsible spending isn't just about being thrifty; it's about putting funding in areas where it would be of most benefit, and I think I can say that those were choses that were well-made when it comes to the Home Office. We are increasing police forces as we promised. We're paying those forces more as they deserve. And we're living up to the charge of making sure we better serve our communities- whether it's through the implementation of Macpherson report recommendations or clearing a disastrous asylum backlog that dates back to the times where the Opposition could still craft meaningful policies rather than today. I'm proud of the work the Chancellor has put into this budget, and I am sure that it will benefit this country and our communities in this year and years to come.

Re: Finance Act 2001

Posted: Sat Jan 23, 2021 3:13 am
by Sir Jack Anderson
Mr Deputy Speaker,

I'd like to thank those from all parties who have contributed to this important debate. But I do feel it is important to address criticisms, especially criticisms which have no grounds in reality which I have heard in this House. So I will be prompt for your benefit, Mr. Deputy Speaker.

The first one is the Leader of the Opposition's completely unfounded claim that the economy is "shrinking" or "contracting", Mr. Deputy Speaker. I don't think I have anything more to say than that is simply wrong. I also think his claim that the creation of more than 80,000 jobs in a single year in the midst of a global recession is 'anaemic', Mr. Deputy Speaker: but considering his rampant support for an ideology that saw unemployment reach among its highest levels in the UK, and ideology he still continues to promote Mr. Deputy Speaker, I find there is an irony there. The Tories left an employment crisis in this country, and it was this government that cleaned it up and continues to promote both enterprising policies and sufficient investments to still clean the Conservatives' mess.

Now, the Conservatives may seem to have abandoned even pretending to promote fiscal responsibility Mr. Deputy Speaker, and would prefer to gamble the economy on their tax cuts but here's the simple truth: the government has invested more than £2.5 billion in tax cuts, Mr. Deputy Speaker. Tax cuts that make fuel cheaper, that lift the poorest out of income tax altogether, that put money back in the average working Britons' pocket. Now, I concede £60 is not a significant amount - but this government has embarked on a sustainable tax cutting programme: we will continue to cut taxes for those Britons in a way that is responsible. Those words may mean very little to the Leader of the Opposition, who wants to fund tax cuts that'll disproportionately benefit the wealthiest on the backs of British taxpayers - edging us closer towards another era of unsustainable borrowing, but I will be frank that this will not do.

The Opposition demand I let go of any responsibility because they want a feelgood budget over strong economic stewardship. They act like children who want more, more and then more again until there's no money left: more on tax cuts. More on various spending projects. They do not want to hear no, but the adults are thankfully in charge Mr. Deputy Speaker so they better used to hearing it.

The Opposition paint a picture of me 'hogging' a surplus to myself, or to store it in my personal piggybank. That cannot be further from the truth Mr. Deputy Speaker, and my wife will be disappointed after hearing such rhetoric to hear that £14 and a half billion pounds is not going into our bank account. Because we know where it will go Mr. Deputy Speaker: it will go to lowering interest payments which mean more investment for our public services; it will go towards reducing the burden of debt the Opposition wish to saddle on the backs of working Britons, giving us fiscal leeway to respond to economic shocks. It will go towards ensuring we do not see a bouncing and unsustainable inflation rate as we saw from the Conservatives. It will go towards creating a more prosperous economy.

The Leader of the Opposition reminds I will live with that responsibility for the rest of my career. I will, and happily.

The 'injection' the Leader of the Opposition talks about is not a good one. It is a bad one. You may get a rush at first - but the boom will lead to rocketing inflation, then later down the line it will lead to growth eating away at all of that progress. We saw what sacrifices the government had to make when that last happened: businesses closed down. Homes were repossessed. And the government, in stark contrast to this current budget, had to make large cuts and tax rises. It was a difficult and brutal period, and it is one I do not want to see us go back down.

I agree with one sentiment from the Leader of the Opposition: there is no such thing as government money. There is taxpayers money, that we collectively contribute towards. There is an economy that we all share, and all need to thrive so we can prosper and create the businesses, jobs and innovation of the future. The Leader of the Opposition wants to saddle those taxpayers to more debt and more boom and bust.

This government is committed to reforming public services - but we're committed to properly funding them, too, unlike the Leader of the Opposition's proposals which are to copy this government's homework on schools and hospitals but to underfund everything else and to even cut crucial investment into our economy, and to justify this underfunding with vague promises of reform and nothing else. Mr. Deputy Speaker, vague promises of reform do nothing for hospitals which desperately need clinical commissioning funding to cut waiting times. Those vague promises of reform mean nothing to parents struggling with high childcare costs. Those vague promises of reform mean nothing to motorists who need investment into roads, and passengers, businesses and workers who desperately need an improved public transport system which he sees fit to not put a penny towards.

It is simply not responsible to brush away the real concern from taxpayers about the lack of investment into their public services with one word: reform. And budgets do not exist to provide wholesale public sector reform - they exist to ensure we provide sufficient investments to public services that need it. The Opposition do not wish to do this. They wish, instead, to see our NHS go without. To see our education system go without. To see our economy go without.

The Conservatives know in their chase for good policy and for artificially inflated numbers, they have ditched any sense of responsibility or stewardship. They want to tell the British public there are no hard choices to be made. And that is why they have made the untrue claim that the government is not raising pensions in real terms: I suppose, Mr. Deputy Speaker, it isn't a complete falsehood because we are going above and beyond for our pensioners. And we take no shame in addressing the disgraceful pensioner poverty the Conservative Party left behind, and cannot be trusted to address.

The Leader of the Opposition claims we did not hire the 3,000 soldiers recommended in the Strategic Defence Review, completely unaware we had implemented that recommendation in 1998 and we are going above and beyond the terms set by the Strategic Defence Review, promising to invest more in our defence budget than other parties.

The Leader of the Opposition wishes to criticise our slow but steady investment into the Environment Agency, so that we can sustainably hit the funding requests they had made. Again, he neglects to mention we have pledged more towards this than any major party: but we've made clear we will address those deep concerns responsibly.

The Leader of the Opposition states that the most terrifying words you can hear are "I'm from the government, and I'm here to help." We can ask those affected by floods, affected by mass unemployment, or who are sick and in need of healthcare what the scariest words really are: "I'm from the government, and I'm not here to help." That is the mantra of the Leader of the Opposition. He won't help, but he will be wholly irresponsible with your money on the process - gambling your money and the economy on tax cuts for his donors, giving nothing to your public services and getting our economy into debt in the process. The Shadow Chancellor, Mr. Deputy Speaker, said he wanted his plans to make the British lion roar again. But under the Leader of the Opposition's failure to even acknowledge basic truths, to answer basic questions and to follow basic competencies, we know this would be a roar of pain and defeat.

I now turn to the Member for Gordon's comments, and though I disagree with much she says, I do commend her ability to acknowledge nuance, to unite around shares basic economic facts and to employ criticism without descending into hysteria. That would be a valuable lesson for the Conservative Party to take.

Firstly, while she calls the government's budget inflationary, I would quite disagree: while there has been fiscal expansion, we are confident that with the surplus we have maintained inflation would be reasonably managed. In fact, I fear it is larger fiscal easing she is advocating that may be more concerning in regards to inflation. I also would dismiss her claims our basic rate changes amount to just a £40 tax cut, because earnings growth means people are earning more - and our changes mean they are saving more on average, not less, as a result of any tax changes.

I could address the Honourable Lady's critiques one by one, but my Honourable Friend the Home Secretary has addressed her point on rehabilitation and the significant investments the government has made there quite well. It would also feel pointless as the Honourable Lady's critiques do all centre around similar themes: why not offer a £9 billion tax cut here? Or an extra billion or so of investment there?

The answer I would give to the Honourable Lady, though I believe the tax cuts she proposes are fairer and her commitment to public sector investment is more genuine, are similar to the ones I had provided to the Leader of the Opposition: we need a sense of responsibility. We need a sense of knowing that we cannot have it all. We need to be honest with the British public and level that there are hard choices so be made, and we cannot bank our whole economic strategy on spending a surplus that has been painstakingly built over the years.

Yes, the government has eased fiscally to invest in our public services - and to make investments that are, I would point out, historical in their scope. But that does not mean an unsustainable programme of tax cuts alongside massive spending.

The Honourable Lady acknowledges this budget is progress. But we cannot build a stack of cards and say job done when it would only take a gust of wind to blow that progress away. We must continue to make investments, continue to make them sustainably and look into the long term as we do so. That is the heart of the government's strategy, and I will not be ashamed to say tell the British public radical change does not happen sustainably overnight and to tell the British public they can't have it all - because that is a strategy of boom and bust that will mean tomorrow they will have nothing, and that is something I cannot in good conscience promote.

Re: Finance Act 2001

Posted: Sun Jan 24, 2021 1:20 pm
by Astrid Goldman
Madam Speaker,

I want to start by associating myself with the remarks made by my Right Honourable Friend the Chancellor of the Exchequer and thanking him and the team at the Treasury who managed the Government's presentation so professionally and diligently. It is always interesting to be in Government while a budget is being prepared and I found the Treasury team to be most accommodating and thoughtful in their reflections.

I concur wholeheartedly with what the Chancellor has given as his assessment of the state of the national finances before 1997. The claw-back of economic strength after the recession had been difficult for all of us. At that time, I was working as an Inspector of Schools for the Office for Standards and it was a common trend of schools and colleges I inspected in those days that headteachers were worried most seriously about paying their staff and finding the funds for necessary repairs. Indeed in many instances, governing bodies and PTA secretaries reported that they had been reduced to writing begging letters to local businesses and trades people to seek any support they could get. I distinctly recall a particular school fete in a primary school in Pontefract, the proceeds of which were a generous £500 or so and that the headteacher had been forced to tell the children in Assembly on the Monday morning that the money had, in fact, already been spent; paying off debts for the school minibus.

Madam Speaker, nobody wants to return to that scenario and careful management of the public purse is but one element in securing a fairer economy in this country. The Government has worked diligently to ensure that the finances are managed professionally and responsibly, the tax system becomes fairer and public money is invested strategically in public services that benefit everybody. That careful balance of our three major objectives in this budget has ensured we are able to keep the economy is positive growth, no mean feat in the midst of a global downturn, inflation stable and interest rates steady.

Madam Speaker, the Leader of the Opposition's response to this very detailed, very careful package has been lacklustre but also economically unsound. The Shadow Budget presented as a supposed alternative was a bizarre melting pot of quick-fixes and attempts at a good headline but offered incredibly little in terms of coherent economic strategy or protections for the public. Indeed, the Opposition's main crux of economic policy seems to be an overly simplified attempt at pushing through quick tax cuts and calling the job done. However, cutting taxes in the manner the Opposition suggests, without substantial investment in public services, prudence with the public purse and without a coherent plan, usually leads families worse off. While a tax cut is nice, it isn't a responsible commitment to making the economy fairer. It is isn't a proper commitment to reforming and improving public services and it doesn't offer security for those who need it.

Madam Speaker, the Opposition have criticised the Government for maintaining a reasonably substantive surplus because, in their view, money should be spent or dished out in tac cuts. That alone demonstrates their separation from the reality facing many working families and families just getting by today. Contrary to the myths about the economy being akin to a housewife's budget the Tories have spread for the last thirty years, this Government is economically literate enough so as to know that a substantive surplus is not simply money sitting in the coffers. It is insurance. It is insurance for the homeowners that the Government can protect their assets, it's insurance for the businesses that the Government can continue to protect and sustain growth, and it is insurance for tax payers that their money isn't going to be blown on debt relief or a one-time tax-cut treat, but on securing their jobs, keeping interest rates stable and strategically investing in our public services, this year and next.

Madam Speaker, there is much detail in this budget that the Chancellor has already laid out that will be of particular benefit to families in my constituency. Whether you are a working family just trying to make ends meet or a middle income family trying to give your children the best chance they have, the Government are ensuring the economy is fair and works for everybody. We have ensured that the UK avoids the global recession, a deep concern for anybody who remembers the Tory recessions of the 1980s and 1990s. By ensuring that growth is strong at 2.5%, inflation is stable at 2% and interest rates are steady at 6%, we are ensuring jobs are more secure and prices remain steady. Hugely important, Madam Speaker, for all families no matter your background.

Madam Speaker, our economic strategy has been to ensure wages rise, as they have done by 4% in this budget. I do not need to tell anyone the security that can bring to homeowners, people working to pay off mortgages, cars, university costs and keep their families going. This certainty for homeowners especially cannot have happened if the Government pursued a tax-break-quick-fix solution or an irresponsible high-cost panic-spend proposal. Madam Speaker, by lifting the rate of income tax to £5000 flooring, we have taken thousands of working families out of the tax system altogether and given millions an annual saving of £60. This fairer method of taxation, while maintaining responsible spending and prudence, allows us to not have to raise income taxes for anybody and to avoid hikes in National Insurance.

Madam Speaker, I am certain there are Honourable and Right Honourable Members who would rather see us hike taxes up to pay for higher spending splurges, or other Members who would rather see us slash taxation. However, I urge those members to consider what long-term economic insecurity those solutions would create. By avoiding the Liberal's panic-spending, and the Tories' quick-fix-tax-slashes, we are using a cautious approach to steer the British economy clear of a return to boom-and-bust economics. When it comes to proper, strategic investment in public services especially, taking our time to properly target will always be more effective and more efficient for taxpayers.

Madam Speaker, the longevity of our strategy and our commitment to sustainability in the public finances has allowed us to strategically target investment in our public services. Education remains this Government's highest priority. By increasing the surplus, ensuring falling debt and spending 3.2% less on debt interest in the budget, we are ensuing public funds, paid by taxpayers, are spent not on paying down debt but getting £200m straight into paying for schools, hospitals, GPS surgeries and local services; right where the money is needed. We can ensure that investment is not a one-time-treat but a sustainable option for the future.

In real-terms, Madam Speaker, I am pleased to say that Education is our biggest investment. Families will be pleased to note, I am sure, the £30m we are investing in SureStart early years provision and our guarantee that every parent of a child under 5 gets a minimum of two hours free child care every week. 2 hours may not sound a lot, Madam Speaker, but it the difference between being able to drop the kids off on time or facing being late five days a week and having to cut hours. Working families understand the difference that can make to a family's spending. I would much rather see Mums and Dads being able to organise a later pick-up than having to cut their hours, and thereby their wages, to get the kids because of childminder costs.

Madam Speaker, in primary schools, we have secured a £1bn investment and matched that same level of investment into our secondary schools. Madam Speaker, standards in primary schools have risen since 1997; with successes particularly in the quality of teaching and learning and the performance of the new National Curriculum. This additional £1bn for secondary schools will help us to repeat that success as children move through schools. Parents of secondary children, and parents of primary children nearing secondary age, will, I am sure, welcome this commitment to ensuring the highest standards of provision throughout a child's time at school.

With this money, Madam Speaker, the Department for Education and Children, will be able to hire 4,000 additional teachers and 4,000 additional teaching assistants to continue to address class sizes and we have been able to give teachers a minimum £1000 pay rise. I welcome in particular the additional 180 new schools we have been able to fund and I shall be unveiling plans for changes to City Academies, as well as additional provisions for community schools and additional school structure options, in the coming term.

Madam Speaker, I introduced the House recently to the Future Classrooms scheme, which sees an additional £1.5bn investment into refurbishing secondary school buildings and facilities; from IT suites to Design Technology machinery. This also comes with potential new buildings for schools who, through no fault of their own, have been left without adequate facilities for far too long. Future Classrooms is also able to support Primary Schools to match their secondary colleagues' IT and DT facilities with some grants available to them to ensure a curriculum that has high technological capacity and expectations throughout a child's time at school.

Madam Speaker, this is a budget that works for everyone. It is a budget that takes strategic investment seriously and it is a budget that responsibly steers clear of boom and bust. We are governing with prudence and sustainable economic conditions are at the forefront of our thinking. I welcome the Chancellor of the Exchequer's commitment to working families and ensuring the economy is fairer for all and I look forward to being able to vote it through this House and put this plan into action.

Re: Finance Act 2001

Posted: Sun Jan 24, 2021 7:21 pm
by Blakesley
Division! Clear the lobbies!

Re: Finance Act 2001

Posted: Sun Jan 24, 2021 7:22 pm
by Andy Edwards
AYE.