Rachel Reeves
MP for Leeds West and Pudsey · Labour · United Kingdom
“I thank my hon. Friend for his question and his work on the Treasury Committee. On pensions reform, through the Mansion House accord and Sterling 20, we have got pension funds to commit to investing more in British businesses, both through British venture schemes and in British infrastructure.”
“I thank my hon. Friend for her question. As Members will know, this Government are working on plans with our NATO allies for a multilateral defence mechanism. We have already signed a treaty agreement with Finland and the Netherlands, and we are working closely with Scandinavian, Baltic and eastern European countries.”
“At a time of great global uncertainty, it is more important than ever that we deepen ties with our closest allies and biggest trading partners, whose values we share, and whose interests are bound to ours.”
“Today the Government have responded to the covid counter-fraud commissioner’s recommendations in a report that I commissioned, which confirms that the Conservative Government left the door open to more than £10 billion of pandemic fraud.”
“As I just said, the DIP will be published before the summit. It will involve more money spent more effectively, and it will meet the scale of the challenges we face. Frankly, I will take no lectures from the Conservatives, who left our armed forces, in the words of their former Defence Secretary, “hollowed out”.”
“I thank my hon. Friend for bringing the story of Darren and Nicole to this House. I hope that they and their children will benefit from the change I made to the two-child limit for universal credit, as well as from the rolling out of free breakfast clubs to all primary schools, and the introduction of free school meals for all children wh…”
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“The Minister says that we are still short of money, but this Government made the choice to water down proposals that would have brought in £15 billion a year. They made that choice because they are not interested in levelling the playing field on taxes. In four manifestos now, the Conservatives have said that they would ease the burden of business rates. If the Government want advice ahead of the Budget, they can look at the speech that I wrote for our party conference in which I set out what Labour would do. Instead, they propose to kick this into the long grass and to do nothing to help our high streets and our small businesses.”
“The Chancellor would have a lot more money to play with if he had gone ahead with President Biden’s proposals for a 21% global minimum rate of corporation tax. There are choices in politics, and this Chancellor chose to water down the 21% proposals to 15%. As a result, he has lost £5 billion or £7 billion. We would have used that money to reduce— [Interruption.] We will use that money to reduce the burden of business taxation, and I hope that the Ministers will stand up today and say that they will use the global minimum rate of corporation tax to ease the burden on high streets and small businesses. That is the choice that a Labour Government will make, and we will hear shortly whether it is the choice that this Government will make. [Interruption.] You are not doing anything!”
“At the general election less than two years ago, the Prime Minister said to voters: “Read my lips, we will not be raising taxes on income or VAT or national insurance.” The Chancellor of the Exchequer—I am not sure where he is today—went further and solemnly said: “Our plans are to cut taxes for the lowest paid through cutting national insurance.” The Government have broken their legally binding promise on international development, they are breaking it again on the triple lock, and the country is now littered with Tory broken promises torn from the election manifestos of all Conservative Members—promises that they made to their constituents and their country. Promises used to count for something; today the Tory word, and guarantees from the Prime Minister, count for absolutely nothing at all.”
“There are two tests for the package announced yesterday. First, does it fix social care? Secondly, is it funded fairly? The answer to both those questions is no. It is a broken promise, it is unfair, and it is a tax on jobs.”
“I will come on to that in a moment, but that sums it up. You went into the election with a set of promises, and now you are breaking them one by one.”
“I will clarify: Conservative Members are breaking their promises one by one by one. The Government will claim that that is all down to the pandemic, but in March this year—a year into the pandemic—the Chancellor promised that national insurance would not go up. He said, “this Government are not going to raise the rates of income tax, national insurance or VAT…Nobody’s take-home pay will be less than it is now”. —[ Official Report , 3 March 2021; Vol. 690, c. 256.] Another Tory promise up in flames. That was not before the pandemic; it was a year into it, and a matter of months later this bombshell on work to fund social care is a broken promise. It is unfair, and it is a tax on jobs.”
“How does the Minister expect his constituents to pay for care without selling their home? I will happily take an intervention from him—”
“I would go further than my hon. Friend: neither of those things were true, because the Government have no plan for social care and we have a tax increase. The sad truth at the heart of this so-called health and social care levy is that it will not deliver on social care for at least three years from now, and even then it is uncertain when the Government might allow some money to trickle down. Under the Prime Minister’s plan, many will still face the threat, as my right hon. and learned Friend the Leader of the Opposition set out today, of selling their home to fund care. Many of those with a house worth £186,000—that includes many constituents of Conservative Members—will still have to sell their home to fund £86,000, within the cap. That is before the costs of living in a care home.”
“We should be looking at all forms of income, not just income from people who go out to work. A landlord who rents out a number of properties will pay nothing, whereas his tenants in work will. That is not fair, and that is why we cannot support the motion this evening. The Minister told us three important things today.”
“With all respect to the Minister, I asked how he would suggest that one of his constituents with a house worth £186,000, and no other savings, will pay £86,000 for their care without selling their home. It is clear that he does not have an answer to that question, because there isn’t one.”
“My hon. Friend makes the point very well. People will still have to sell their homes to pay for care under these plans. There were three important points—”
“I have already taken an intervention from the Minister, and he did not answer the question. [ Interruption. ] Okay, I will take the intervention on the basis that he answers the question that I and my hon. Friend the Member for Rhondda (Chris Bryant) have asked: how on earth does someone pay £86,000 when their house is worth £98,000 or £186,000? Let’s have the answer.”
“That is only set to increase, with the GMB predicting 170,000 vacancies for care workers by the end of the year—one in 10 jobs unfilled. Labour’s plans will prioritise older and disabled people, shifting the focus of support towards preventive early help, and our guiding principle will be “home first”, because that is what the overwhelming majority of people want.”
“This is not a plan to fix social care. There is no plan for care workers, who were underpaid and undervalued before the pandemic—before being sent out on to the frontline by this Government without the personal protective equipment that they needed. Some £8 billion was cut from social care by Tory Governments in the years before the pandemic, ignoring the rising demand, with care workers paid less than they can live on. This Government are not interested in bringing employers and unions together for a positive plan for the future of social care. They are not interested in making the care sector a career of choice, with decent pay and conditions and proper investment in skills. We know that half a million care workers are needed by 2030. There were 100,000 vacancies in social care before the pandemic.”
“The Minister is wasting the House’s time, because he is not answering the question. There were three important points in the Minister’s opening speech. The first was that it is impossible to say what the impact of these proposals will be on waiting lists. The second was that spending for local authorities will be considered in the Budget. There is no detail at all about what money local authorities will get, and we are being asked to vote for a tax increase without a plan to fix social care. The third point the Minister made, in answer to the Chair of the Public Accounts Committee, my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), was that councils will pay this levy as employers, so they will face increased costs but without any guarantee that they will get additional money to fund care.”
“The truth is that the Tories are all tax and no strategy. When it comes to the NHS and social care, last year the public clapped them; this year the Tories tax them. There are far too many outstanding questions, with no detail published yesterday. What other tax rises on working people are set for further down the line, given that the Prime Minister refused to rule them out yesterday? Will council tax have to rise to make the sums add up? How will the Government relieve the burden on councils and care homes? Again, there was no detail on that yesterday, and there is no detail today. Mike Padgham of the Independent Care Group said: “It’s not clear how the money is going to…the front line.” That means that providers will be squeezed, and working conditions and pay impacted. This just does not add up.”
“My hon. Friend is exactly right. The Conservatives walked out of cross-party talks in 2010, and despite offers from my hon. Friend the Member for Leicester West (Liz Kendall), they have never resumed. So much for the plan; what does this mean for ordinary people funding it? The Chancellor’s tax on jobs does not just let down those needing care or working in the care sector; it is a tax on all those in work. As daily covid cases continue to climb, the only shielding that the Government are interested in is protecting the wealthiest few from paying more tax. As I said, a private landlord owning and renting out multiple properties will not pay a penny more, yet their hard-working tenants who work for a living will be hit hard. It is deeply unfair.”
“Members laugh, but they will not be laughing when constituents come to their surgeries and ask why this Government are taking money away from them.”
“That is exactly the question that all our constituents ask, but as the Minister has failed to say today when the backlog will be cleared, we have to wonder whether this plan adds up, and when any money at all will be available for social care. The incomes of working people just are not of interest to this Government. I asked the excellent staff of the Library to examine the impact on a typical worker in constituencies such as mine in Leeds West, the Minister’s in Hereford, and the Chancellor’s. Let us imagine that our worker is a new police constable—a single mum with two children, earning £26,000 a year. She rents her home in the private sector. She is eligible for universal credit. What have this Government done for her? [ Interruption. ] Hon.”
“Analysis from the New Economics Foundation shows that 2.5 million working households will be hit by the Tory double whammy of cuts to universal credit and an increase in their national insurance. Put that on your leaflets at the next election.”
“No, I think the hon. Lady should listen to this. What have this Government done for that worker and her family? The Chancellor has frozen her pay this year. The Chancellor has frozen her income tax personal allowance. The Chancellor is taking £20 a week away from her and her family in universal credit, and her council tax bill has gone up by £80. Now the Chancellor is coming back for more and asking for 1.25% of her income in national insurance. Why do this Government keep coming after the same people time after time, asking ordinary working-class people to pay more of their incomes? If we add it up, the total cost to that worker and her kids—this is all of our constituents—will be an extra £1,234 next year. That is not just a one-off.”
“I am not sure what the constituents of South Ribble will make of that, but I know what they will think after seeing less money in their pay cheques time after time because of decisions by this Government. There are choices, and they are difficult ones. This Government are choosing to tax ordinary working-class people. Labour would ask those with the broadest shoulders—the wealthiest in our communities—to pay more. This Government make a different choice; they can justify that to their constituents.”
“I think many councils and the people who work for them and provide social care at a local level will be incredibly worried about what they are hearing from this Government, which is that council costs are going to go up while they are getting no additional money.”
“I will give way again in a moment, but I have taken a lot of interventions—a lot more than the Minister. In contrast, who has been shielded by the Chancellor? Which types of income will be paying no additional tax after today? They include those who get their income from financial assets, stocks and shares, sales of property, pension income, annuity income, interest income, property rental income and inheritance income. Well, fancy that. I do not doubt that the champagne glasses were clinking in Mayfair last night toasting the Chancellor, but not in Mansfield, not in Middlesbrough, not in South Ribble and not in Thirsk either. Some 95% of the revenue the Government plan to raise from this tax bombshell comes from employment. What a contrast.”
“That is why we have put forward what we can: an amendment calling for an assessment of this tax on jobs—an assessment that the Chancellor is unwilling to provide.”
“The Chancellor wants the country to believe that this is the only way to do it, but the point is that it is not. The Prime Minister and the Chancellor have deliberately chosen to go after those who are working hard for their money. Labour understands—I understand—how hard people work for their wages. I do not believe that the Chancellor considers the lives of people outside this place in any detail before he takes decisions like this. The Government, as was mentioned earlier, are rushing this through without publishing a proper analysis of the impact on jobs, on different parts of the country and on different incomes. They are not even allowing proper amendments. Members will know that we are limited in how we can amend the motion this evening.”
“Let me just make this point. What a contrast. Yesterday, Amazon reported an additional £1.9 billion-worth of sales, but it is paying only £3.8 million more in corporation tax, with much of its profits diverted to Luxembourg. Yet with the changes announced yesterday, a graduate on a typical entry-level salary will now pay a marginal tax rate of almost 50%. And not a word from the Chancellor or any of his Ministers about any of that. Politics is about choices and there are other ways to raise this money. The Chancellor wants the country to believe that— [ Interruption. ] Sales on property or on financial assets such as stocks and shares—there are no additional taxes on people who get their incomes in that way, but plenty of additional taxes on ordinary working-class people.”
“I will give way just twice more: to my hon. Friend the Member for Leeds North West (Alex Sobel) and then to the hon. Member for Sevenoaks (Laura Trott).”
“My hon. Friend speaks well of what our constituents in Leeds North West and Leeds West will be facing with that double whammy of universal credit and the national insurance increase, in addition to the other tax increases from this Government. I will take a final intervention and then I will start to wind up.”
“After the last year and a half the country deserves a much better future, a recovery that enhances and enriches all our lives and in all parts of the country. Social care is a huge challenge and there are other challenges coming too. We need to do things differently. Labour’s test is simple: does it fix the problem and does it do it in a fair way? The answer to both of those questions is no. That is why Labour will vote against this unfair, job-taxing, manifesto-shredding tax bombshell this evening.”
“Will it give social care the resources it needs for the next three years? [Hon. Members: “No.”] Is there a plan to reform social care? [Hon. Members: “No.”] Will it create more and better paid jobs in the economy? [Hon. Members: “No.”] Is it fair across the regions? [Hon. Members: “No.”] Will people be prevented from selling their homes to fund their care? [Hon. Members: “No.”] Will this tax bombshell help our economic recovery? No. Is it the last tax increase in this Parliament? No. This whole thing is unravelling. No wonder that Ministers are in a desperate rush to get it through. The Chancellor is absent today. Perhaps he has gone for a swim. Covid has tested the people of our country like nothing else in any of our lifetimes.”
“The CBI says that it “will directly hurt a business’s ability to hire staff at a time when businesses have faced a torrid 18 months.” The Federation of Small Businesses says that “this increase will stifle recruitment, investment and efforts to upskill”. They are joined by the trade unions. The TUC says it is wrong to hit young people and low-paid workers “while leaving the wealthy untouched.” We agree with businesses and we agree with our trades unions, too. They are right. This is a tax on jobs. It is a tax on the economic recovery and we will not support it. Let us go back to the key questions that need answering. Will this plan deliver what is promised for our health and social care sectors? No. Will it clear the NHS backlog by the end of this Parliament? No—and the Health Secretary says no.”
“What do the Chancellor and the Minister think the effect of this tax rise on jobs will be? That has not been set out. It could mean an attempted squeeze on wages and conditions, even higher prices for customers, or the scaling back of recruitment and growth plans. It will affect people and it will affect the Exchequer, too. It is a false economy. The Chancellor and the Minister do not need to take my word for it. The British Chambers of Commerce described it as: “a drag anchor on jobs growth” and believes it will “dampen the entrepreneurial spirit needed to drive the recovery”. Make UK says it is “ill-timed as well as illogical”.”
“We had a clear plan to bring down waiting lists, a plan that this Government are sorely lacking. The economic circumstances are different, too. The Government’s tax on jobs comes at the worst possible time. Businesses create jobs and will drive our recovery. Labour is a party that is pro-worker and proudly pro-business, too. I am proud of the decisions that the former Prime Minister and the former Chancellor made that brought down waiting lists to their lowest ever level—targets that have never been met under 11 years of Tory Government. We want business to succeed, to invest more, to employ more, to pay more and to create more wealth. These are still precarious times, with many businesses in all our constituencies not yet back to full capacity and others considering how they are going to repay the loans taken on during the pandemic.”
“The Prime Minister’s and the Chancellor’s plans to increase national insurance will hit workers and businesses hard at the worst possible time. The British Chambers of Commerce described it as a “drag anchor” on jobs growth. The Federation of Small Businesses stated: “If this hike happens, fewer jobs will be created”. The TUC said that it is wrong to hit young and low-paid workers while “leaving the wealthy untouched”. We agree. Will the Chancellor of the Exchequer therefore explain why he is choosing a tax on jobs rather than on other forms of income?”
“You cannot have it both ways. Cutting national insurance either benefits jobs or it does not. The Chancellor told voters at the election: “Our plans are to cut taxes for the lowest paid through cutting national insurance”. That promise is now in flames. The Chancellor is not cutting national insurance; he is putting it up. It cannot be right that nurses and builders are set to pay hundreds of pounds more each year in national insurance, yet those getting their incomes from a large portfolio of shares, stocks and property will pay not a penny more. Labour cannot and will not support this Tory Government’s manifesto-breaking, economically damaging and unfair tax on jobs. So let me ask the Chancellor again: why will this Government not fund health and social care in a way that is fair for families and for businesses?”
“Member for Sutton Coldfield (Mr Mitchell), who advised colleagues to beware the traps set for the unwary; my right hon. Friend the Member for Leeds Central (Hilary Benn), who said that this motion is just not who we are as a people; and the right hon. Member for Haltemprice and Howden (Mr Davis), who said, “When it is a choice between lives and money, I choose lives.” The reason there has been a consensus from five previous Prime Ministers across both parties, including the right hon. Member for Maidenhead (Mrs May), on the importance of the 0.7% commitment is that the case for overseas aid both expresses the moral responsibilities that we have and is firmly in the national interest.”
“Together, we have reduced maternal and infant mortality, as my right hon. Friend the Member for East Ham (Stephen Timms) spoke about. And together, we have ensured that girls in the poorest places in the world can go to school, as we all take it for granted that our daughters and granddaughters can go to school. Yet today the Government seek to undo that great progress. Instead of being a global leader, this Government seek to retreat on the international stage. I can see the understandable discomfort that that is causing hon. and right hon. Members on the Government Benches, who know the consequences of this decision and the short-sightedness of what the Prime Minister has said and what I fear the Chancellor will go on to say. I commend in particular the contributions of the right hon.”
“The Government say that global Britain is at the heart of how we engage with the world, but this move to unilaterally cut overseas aid is a direct attack on what it means to be global Britain. It is a decision that will reduce our power, reduce our influence in the world and undermine our security here at home. At this moment perhaps more than any other, we should be looking to project our power and influence for good around the world, to create change in our national interest but in the global interest, too. I am proud—we should all be proud, in this House and across our great nations—of what we have achieved together through overseas aid. Together, we have pushed polio to the verge of eradication. Together, we have improved water and sanitation for more than 1.5 million people.”
“They know full well that it breaks the proud promises that we all made at the election only 18 months ago, not just during crisis but for as long as the Conservatives are in government, so I urge hon. and right hon. Members to reject the motion and do what they know is right for the poorest people in the world, and to honour the proud commitments that we all made in the national interest.”
“It is because this is ideological; it is not about value for money. If this cut goes through this evening and the House votes for it, it will diminish Britain. It will reduce our power and influence for good in the world, and it will undermine our security here at home too. This is not just about how much aid we give overseas. It is about the country that we are and the country that we want to be. Whether a Government or a football team, when someone is on the world stage, how they conduct themselves and whether they lead by example really matters. Many hon. and right hon. Members on the Opposition Benches—and on the Government Benches too—know in their heart and in their head that what the Government propose is profoundly wrong.”
“If we vote for the Chancellor’s proposal today, this will not just be for a year; it will hang over us for as long as the Conservatives are in government. If the Chancellor is serious about saving money—and I believe in value for money in every pound of taxpayers’ money spent—why did he happily sign off cheques for £2.6 million on a media briefing room that will not properly used and £200 million on a vanity yacht project to sell global Britain around the world—why not invest that money on overseas aid instead? There was £37 billion on a test and trace system that does not even work, and £2 billion on crony contracts for friends and donors of the Conservative party. What exactly does it say about the priorities of this Government? Why is the overseas aid budget being singled out for cuts by this Government?”
“In the past 30 years, the current budget balance test being proposed by the Chancellor today has been met only five times, and only for one year under a Conservative Government. But the test proposed by the Chancellor goes further than that, because it does not just refer to a “current budget balance”; it refers to a “sustainable current budget balance”. In the past 30 years, that has been met only under a Labour Government. So if the Chancellor’s small-print conditions are applied to the latest OBR forecasts, we will not be achieving a current budget surplus in the whole of the forecast period. These are not tests to go back to 0.7% of GNI spent on overseas aid; they are tests to stop that ever happening under a Conservative Government again. So let us be clear about what we are voting for.”
“That is right and it happens automatically, without the cuts being proposed on top. As the hon. Member for East Worthing and Shoreham (Tim Loughton) puts it, the “simplicity” of the 0.7% commitment is “built into the formula: our payments go up in times of plenty and fall back when our economy is stretched.” But with a 30% reduction—that is what we are talking about today—in just one year, never has our aid budget been cut so savagely, so suddenly and by so much. Let us be very clear about the tests for returning to 0.7% of GNI spent on overseas aid. The second test the Chancellor set out is on our debt to GDP ratio falling. The OBR has forecast that that will not be met next year or the year after; at the very earliest it will be met in the financial year 2024-25. Let us look at the first test.”
“793.] Where is that leadership today? Crucially, overseas aid helps us respond to pandemics. Covid cannot be eliminated anywhere if it is not eliminated everywhere. These cuts will impede the ability of some of the poorest countries in the world to mobilise their public health systems and roll out this vaccine effectively. What good does that do any of us here? Until covid is under control globally, the risk is that this virus mutates and comes back to Britain and threatens all of us, including those who have already been double vaccinated. The Chancellor knows full well that our country’s commitments are as a proportion of our gross national income, and that is right; it means that as our economy grows our generosity as a country grows, but as our economy shrinks so does our generosity to those in the poorest parts of the world.”
“I thank the hon. Gentleman for that intervention, and he speaks powerfully of what he has seen. What has guided former Prime Ministers and Ministers is a moral compass, and I ask the Chancellor what moral compass guides the Prime Minister and Ministers today, as we cut the lifelines of support, and in the midst of a global pandemic as well. For several decades, we have recognised that the world is increasingly interdependent, and that overseas aid helps tackle poverty, infectious diseases and climate change, and reduces conflict, terrorism and the need for people to flee their own countries and seek refuge elsewhere. The Chancellor himself made that point in 2015, arguing that “this Government’s commitment on international aid is a tangible example of…leadership”. —[ Official Report , 20 October 2015; Vol. 600, c.”
“Thank you, Mr Speaker. Whether on social care, on Northern Powerhouse Rail or on tackling climate breakdown, there is a growing gap with this Government between what is promised and what is actually delivered. The Treasury’s response to the net zero review was first due to be published in autumn last year, yet it is nowhere to be seen. The COP26 climate summit begins in November. While the UK is hosting, the Government cannot lead with authority, because the fact is that we cannot have a climate strategy without a sustainable economic plan behind it. Will the Chancellor please tell the House on what date he will publish the final report of the net zero review?”
“Then why not publish the net zero review, Chancellor? When it comes to this Government’s net zero strategy, tomorrow never comes. There is no time to waste, because it is the responsibility of all of us to hand on to our children and grandchildren a more sustainable planet, creating new opportunities for our pioneering British industries and investing today in the jobs of the future, whether in hydrogen, tidal energy or electric vehicles, to ensure the fair and just transition that we need to see. So, as the Chancellor still cannot give a date, months after the event, for when he will publish his final report on the net zero review, will he commit to ensuring that our net zero carbon targets are hard-wired through the forthcoming spending review, as I would do as Chancellor?”
“Given the WhatsApp messages from the Prime Minister about his own Health Secretary that have been revealed today—Madam Deputy Speaker, I will use more diplomatic language than the Prime Minister could manage—how can we have confidence in Government Ministers when the Prime Minister thinks that the person in charge of the pandemic response is “hopeless”?”
“Where is the much-needed plan that would enable us to do that? Where is the plan for greater ventilation in workplaces, including public buildings and schools? Where is the plan to shift contact tracing to a local level, where we know it works best—not in a centralised, Serco-led call centre? Where is the proper support for people needing to self-isolate? Those are all essential measures to save lives and livelihoods, and to avoid the stop-start approach that has characterised the Government’s response to the pandemic.”