Queen's Speech reaction: Giveaways to the wealthy on the radar of opposition MPs

MPs will spend six days debating the Queen’s Speech. Economy and jobs will be the focus on Thursday 29 June, the final day of debate. That day’s debate will be followed by votes to approve, in effect, the Government’s programme.

Some relevant extracts from the first two days of debate follow.

Conservatives
The Prime Minister Theresa May praised the Tories’ economic record. She said the deficit is down by three quarters, employment is up by 2.9 million and, because of policies such as the national living wage and taking four million of the lowest paid out of income tax altogether, inequality has been reduced to its lowest level for 30 years. She said: “We will encourage businesses to grow and create jobs by continuing to cut corporation tax, because that is how to raise more money, not less.”
 
Secretary of State for Communities and Local Government Sajid Javid said 520,000 people are receiving universal credit, which is ‘helping to transform lives’. Secretary of State for Work and Pensions David Gauke said welfare reforms are restoring fairness and supporting people into work. Gauke said universal credit continues to ‘deliver to plan’ and is being rolled out in a gradual, safe and secure way to ensure a successful delivery. The MP added that the attributes of universal credit is that it does not have the cliff edges of the legacy system that we have run up to now which features all the ‘disincentives to work for more hours and take on more work’, although the tape rate has been reduced recently.
 
Sir Peter Bottomley said employment taxation is far too high. “If we take the total cost to an employer of employing somebody and see what the employee is left afterwards, the gap is enormous”, he said. John Redwood agreed with Sir Peter and added we need people to be able to retain more of what they earn and we need employers to be able to afford extra employees.  Andrew Mitchell urged his Tory colleagues to ‘explain once again’ how ‘sky-high tax’ levels bring in less revenue and how raising corporation tax costs jobs, deters business and drives investment away. Sir William Cash said foreign direct investment, which ‘soared’ to £197 billion in 2016—up from £33 billion in 2015, according to the OECD, is an incredible record for the UK.  Richard Drax wishes the UK had a simplified tax system, ‘as it gets more complicated with every Budget. The easier the taxes are to collect and the lower they are, the more money the Government will find’.

Labour
Labour Leader Jeremy Corbyn cautioned the Government against following people whose idea of patriotism is to run the UK as ‘an overseas tax haven’. Corbyn said this would threaten jobs and public services here far more than in mainland Europe. He criticised the Government for in ‘recent years… having thrown away tens of billions of pounds in tax giveaways to the very richest’. He said Labour would end austerity by making ‘big business… pay a little more in tax, while retaining a lower corporation tax rate than any other G7 country’. 

Keith Vaz said former Chancellor George Osborne’s legacy on the sugar tax is something that we all celebrate. Treasury spokesman Jonathan Reynolds said the Tory view that prosperity lies in cutting public services and public spending to pay for cuts to corporation tax and other reliefs, has been soundly rejected by the electorate.  Seema Malhotra would have liked a productivity Bill in the Queen’s Speech to address the issues that the UK needs to face to deal with its productivity challenge. She would like a more ‘thoughtful’ sense of how our wider net of tax reliefs can make a contribution, and new strategies for entrepreneurship that include women and business.

John Healey, Secretary of State for Housing, said seven years of Tories in government have led to big income tax cuts for the top earners, with more tax cuts to come for the richest on wealth ‘that they do not even earn’. In a long speech, he highlighted Labour’s ‘new deal’ for first-time buyers, with no stamp duty, guaranteed ‘first dibs’ on new homes built in their local areas, and 100,000 new FirstBuy homes at a discount price linked to local average incomes. On Universal Credit, Debbie Abrahams criticised ‘digital by default’ and the six-week ‘long hello’ before people get their first payment. “There is also the mess around having four-weekly as opposed to monthly payments. Some people have two payments in one month and then have to reapply because they reach the amount they are allowed.

SNP
The party’s new Westminster Leader Ian Blackford said his MPs will oppose the removal of the pension triple lock, ‘so that our pensioners still see the pension that they worked for rise’. He said that the SNP had led the challenge to the proposed cuts in working tax credits in the last Parliament and that it was SNP MP Alison Thewliss who championed the campaign against the changes in tax credits for families with more than two children. Marion Fellows said the SNP in Westminster will fight for a moratorium and review of the closure of HMRC offices in Scotland and across the UK, for beneficial ownership of companies and trusts to be made public, for measures to improve the transparency of tax paid by major international companies, and for further action by the UK Government to tackle international tax avoidance. “If these measures were taken, there might be no need for austerity cuts at all, or at least they could be lessened”, she said. “Finally, we will fight to abolish the premium-rate telephone charge for those seeking advice or claiming benefits from the Department for Work and Pensions”, she added.

Lib Dems
Lib Dem Leader Tim Farron said that ‘if we want the best health and social care in the world, then we will have to pay for it [in higher taxation]’. Lib Dem Stephen Lloyd criticised George Osborne’s  ‘ludicrous’ taper that means that people on universal credit are barely better off in a low-paid job than they are on benefit, which, he argued, defeats the whole purpose of universal credit.

DUP
DUP’s Jim Shannon supports the financial guidance and claims Bill, especially the proposal to create one agency.

The Hansard report of the first day’s debate can be found here and of the second day here.

By Hamant Verma