National Insurance Contributions (Rate Ceilings) Bill — House of Commons, 2015-09-15
Topic: Macroeconomics
Barbara Mary Keeley (Labour, Centre-left): Thank you, Mr Deputy Speaker. I thank the House for giving me leave to speak again We have had a very lively debate on this somewhat peculiar measure. As I said earlier, many people will wonder why we are debating it at all—we have spent a considerable time on it—and many commentators have called it a gimmick. If the Prime Minister commits not to raise income tax, national insurance contributions or VAT in the run-up to an election, surely such a commitment should be taken at face value. The essence of this debate is that what the Prime Minister commits to should not be questioned, but taken at face value. However, other pledges made by the Prime Minister and his party have been broken. The commitment made in 2010 not to raise VAT was followed by an increase in VAT to 20% soon after the Conservatives entered government. I have found several other broken pledges that I would like to refer to Government Members. Before the 2010 general election, David Cameron—[Interruption.] Sorry, the Prime Minister told Andrew Marr that he had no plans to cut front-line services. Interestingly, for a Leader of the Opposition preparing for government, he said that if "any cabinet minister if I win the election…comes to me and says, ‘Here are my plans’ and they involve frontline reductions, they’ll be sent straight back to their department to go away and think again." Since then, we have seen cuts in the number of NHS nurses, hospital beds, firefighters and front-line police officers As I said earlier, the Prime Minister said he had absolutely no plans to raise VAT. On child benefit, he said at a Cameron Direct event: "I would not means test it." The coalition Government in effect abolished the benefit for higher earners and then froze it for three years. On the NHS, he said, "No more top-down reorganisations", which is perhaps the most infamous broken pledge. It was made both by the Prime Minister and by the person who became Heath Secretary. On education maintenance allowances, the Prime Minister said in January 2010, again at a Cameron Direct event: "We don’t have any plans to get rid of them." On Sure Start, he said: "Yes, we back Sure Start." Over 550 Sure Start centres have closed, while more than half those still open no longer provide on-site childcare. I could go on and on, mentioning the future jobs fund and what the Chancellor said about bankers’ bonuses and many other pledges As I said earlier, following our discussion on the Bill, the next item of business will be a debate on the Government’s cuts to tax credits, which will leave some 8 million families over £1,000 a year worse off, on average. Let me say again that the matter we are voting on—or not voting on, because we support it—was a Labour pledge. [Interruption.] Presumably Government Members do not want a vote and would prefer the Bill to be supported. I have said that we will support it, so why raise such matters? There is no question about it We first pledged not to increase national insurance contributions, and, as I said earlier, we will not oppose the Bill. I have not heard any Member say that they oppose it. I say to Treasury Ministers—I hope that they will take this serious point away from the debate—that breaking pledges and using gimmicks, such as the so-called tax lock, further undermines people’s already reduced belief in government and politics. As I said earlier, one of the concerns that many people have in this policy gimmick is that it will place a serious constraint on the Treasury and, indeed, on the Government’s ability to raise taxes or to maintain the flexibility needed to raise revenue in response to economic events. That is the other serious point that I was making. The Government, as I and my hon. Friends have said, will have to resort to measures such as delaying the uprating of thresholds and removing reliefs, as they did in the last Parliament The suspicion remains that future Budgets will mean further increases to taxes like the insurance premium tax, which seemed to be regarded in the last Budget as an easy target. I am disappointed that Ministers declined my offer for them to use this debate to pledge that no further increases would be made to the insurance premium tax in this Parliament. The insurance premium tax, which we debated at length, will bring in £8 billion for the Government by 2021, but will hit many millions of hard-working families. It may lead, as I mentioned last week, to the negative consequence of even more uninsured drivers. The rate of uninsured drivers is already nearly 3% or 1 million vehicles on the road. We have to think about the negative consequences of the tax increases that we saw in the summer Budget As I have said on a number of occasions, we will not oppose the Bill. It implements our pledge and we stick by it.