Financial Statement — House of Commons, 2018-10-29
Topic: Macroeconomics
Philip Hammond (Conservative, Centre-right): I hear the hon. Lady, but her point is slightly blunted by the fact that she made it in the autumn of 2016, again in the spring of 2017 and again in the autumn of last year As well as making work pay, we want working people to keep more of the money that they earn. When we came into office, the personal allowance stood at £6,475 and the higher rate threshold was at £43,875. In April, I raised the personal allowance to £11,850 and the higher rate threshold to £46,350, as steps towards our manifesto commitments of £12,500 and £50,000 respectively by 2020. Those manifesto commitments were, of course, made before our new funding pledge to the NHS. I have received representations that the least painful way for taxpayers to contribute to increased NHS funding would be to abandon our manifesto pledges and freeze the personal allowance and the higher rate threshold at current levels. Let me reassure the House that, unlike the right hon. Member for Islington North (Jeremy Corbyn), my idea of ending austerity does not involve increasing people’s tax bills. I did not come into politics to put taxes up, and the improvement that we have delivered in the public finances means that, based on the Office for Budget Responsibility’s forecast published today, I do not need to do so. I can therefore confirm today that I will meet our manifesto commitments for April 2020 to raise the personal allowance to £12,500 and the higher rate threshold to £50,000, before indexing both in line with inflation from 2021 to 2022. But our careful management of the economy allows me to go further, so I will raise both the personal allowance and the higher rate threshold to these levels from April 2019, delivering our manifesto commitments one year early. A tax cut for 32 million people, £130 in the pocket of a typical basic rate taxpayer, meaning that, since 2015, we have taken 1.7 million people out of tax altogether and nearly 1 million people out of higher rate tax. As a result of the announcements that I have made today, a single parent, receiving universal credit and working 25 hours a week on the national living wage will benefit by £890 next year—the hard work of the British people paying off in hard cash in their pockets We have turned an important corner and now we must pull together to build the bright, prosperous future that is within Britain’s grasp if we choose to seize it— embracing change, not hiding from it, building on the inherent strength of the British economy and the indomitable spirit of the British people Under this Conservative Government, austerity is coming to an end, but discipline will remain. [Interruption.] Austerity is coming to an end, but discipline will remain. That is the clear dividing line in British politics today: between a Conservative Government delivering on the British people’s priorities, supporting our public services, investing in Britain’s future, keeping taxes low and getting our debt down; or the Corbyn party, whose idea of ending austerity is to raise taxes to their highest level in peacetime history, which would send our debt soaring, squander the hard-won achievements of the past eight years and take this country back to square one. We are at a turning point in our history and we must resolve to go forwards, not backwards, and work together to build a Britain that we can all be proud of. I commend this statement to the House.