Health and Social Care Levy Bill — House of Commons, 2021-09-14
Topic: Macroeconomics
James Stewart Murray (Labour, Centre-left): The right hon. Lady raises points about the backlog in the NHS. We have had 10 years of a Conservative Government, of whom she has been a key part. She is responsible for the backlog, along with all her colleagues on the Conservative Benches. They should take some responsibility for the mess they have caused We know that social care desperately needs more funding, but are the Government raising taxes for those with large portfolios of stocks and shares? No. Are they increasing taxes on landlords who rent out multiple properties? No. Are they going further to tackle large online multinationals that shift their profits overseas? No. The Government have gone for a tax rise on working people and businesses creating jobs Last week, the Government tried to soften the blow by claiming that their tax plans are fair because this tax rise on working people is accompanied by a tax rise on dividends. So where is the tax rise on dividends? The Government’s proposal documents last week admitted that that might be legislated for in the next Finance Bill, and indeed there is nothing on raising taxes on dividends in the Bill in front of us today. They are pulling out the stops to increase taxes on working people as quickly as possible, ramming this legislation through in one day, but when it comes to dividends and a tax that the Prime Minister acknowledged last week would affect "better-off business owners and investors"—[Official Report, 7 September 2021; Vol. 700, c. 154.] suddenly there is no rush. Let us not fall for the claim that the dividend tax rise will make the Government’s proposals fair. The dividend tax—if it ever happens; we have only the Prime Minister’s word for that, after all— would raise only 5% of the total revenue. Some 95% of the tax bill would land on employment If we want to understand the impact of this tax rise on people and their jobs, let us start by looking at the Government’s own view. Their own tax information and impact note on this tax rise was signed off personally by the Financial Secretary to the Treasury and published on 9 September—curiously, this was a couple of days after the Government’s proposals were announced. It says in no uncertain terms: "There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce." Five years ago, the Prime Minister’s predecessor began her time in office claiming to be an ally for people who are "just about managing". Now we have the Government’s own report admitting that they are the ones who will suffer The report is blunt too about the impact of this tax rise on businesses. It makes it clear: "Behavioural effects are likely to be large, and these will include...business decisions around wage bills and recruitment." It is there in the Government's own analysis: this will be a tax blow to jobs and wages. Others agree, with the chair of the Federation of Small Businesses saying last week: "Breaking a manifesto promise by increasing National Insurance Contributions just at the moment when firms are struggling to get back on their feet would be devastating for small businesses and the local communities they serve...If this hike happens, fewer jobs will be created by the UK’s small business community over the crucial months ahead." The British Chambers of Commerce agrees, warning: "A rise in National Insurance Contributions would represent a hammer blow to jobs growth at this crucial point in the UK's economic recovery." The CBI president said: "National Insurance increase will directly hurt a business’s ability to hire staff, at a time when businesses have faced a torrid 18 months and are now fighting crippling labour shortages." Do the Financial Secretary and the Chief Secretary think the Federation of Small Businesses, the British Chambers of Commerce and the CBI are all wrong? Perhaps the Financial Secretary will get up to tell me the answer to that. [Interruption.] Sorry, I thought the Financial Secretary was keen to get to his feet to respond to my question. He does not want to, no. He does not want to answer whether he thinks the FSB, the BCC and the CBI are all wrong. Do other Members from his party think they are wrong?