Our brilliant NHS and GP staff, scientists, lab technicians, nurses and volunteers are giving the whole country some much-needed hope as the vaccination programme progresses. But we know that the health crisis caused by Covid-19 is far from over, and that the damage to jobs and the economy resulting from the pandemic will be with us for a long time to come.
This is why the finance bill, which had its second reading last week, should have focused resolutely on supporting families in all their many forms, on securing jobs and on backing struggling businesses. Beyond the immediate response to the Covid crisis, the government should also have used this bill – and last month’s Budget – to set out solutions to the problems that this country has been unable to get on top of for years, from social care to the climate emergency and the housing crisis.
Instead, as I set out at the second reading last Tuesday, this bill takes a hammer blow to family finances. The government’s freeze of income tax personal allowances means half the country is set to pay more next year. This bill will do nothing to stop the sharp council tax rise that the Chancellor is forcing councils to implement right now; it supports his plan to cut £20 a week from Universal Credit this autumn; and it comes as the government – in this year of all years – is set to hit our NHS nurses with a real-terms pay freeze.
It tells you everything about the Conservatives’ priorities that they are taking money from people’s pockets at the same time as letting some of the world’s tech giants and other huge companies off paying tax altogether.
You read that right. Rather than helping families get through the tough times ahead, this government is giving tech giants a whopping tax break. That tax break is being handed to big businesses through the so-called ‘super deduction’ – a £25bn boon for companies that the Chancellor called “the biggest two-year business tax cut in modern British history”.
The super-deduction allows companies to use qualifying investment to reduce their tax bills. The big winner will be big business, with most small and medium-sized businesses only benefiting marginally. TaxWatch UK has dubbed it the ‘Amazon tax cut’ because it could wipe out Amazon UK’s corporation tax bill entirely.
The truth is, the Tories are stuck in their own past if they think that tax cuts for big business is what our economy needs. Even the US is moving away from this under their new President, and around the world people agree with us that investment in jobs and growth is what is needed.
A tax break for tech giants who already don’t pay enough is not the answer – yet the Conservatives are pushing ahead with it whilst making families pay more. That is why we voted against their finance bill last Tuesday, and it is why we will turn up the heat on the Tories again today by voting to cancel their plans to raise costs on income tax payers and to push for a vote on our ‘Amazon amendment’.
Our ‘Amazon amendment’ would explicitly stop the Tories’ tax break going to the biggest tech firms, as well as other big firms that do not support workers’ rights and the living wage. Amazon workers have helped so many people with deliveries throughout the pandemic; the government should be improving their lives, not giving a huge tax break to their bosses.
In the debates that follow, we will push the government further over other parts of the bill, including its continuing failure to tackle tax avoidance and the lack of action to stop yet more springing up in the new free ports.
We are not only concerned by what’s in this bill, but by what’s missing too. There is no plan to tackle the big problems that we have faced in this country for a decade or more. We know that under this government our country’s social care system has been underfunded, and its workers chronically underpaid. The Conservatives’ response to climate change has stubbornly lacked the urgency, ambition, and scale that it needs. And their answer to the housing crisis has been to leave it up to developers and speculators, letting down an entire generation.
This bill was an opportunity for government to invest in better social care, new green infrastructure and the council housing that we need. That would create jobs, improve lives, and finally start to tackle the problems that our country faces. The Conservatives have had more than ten years to do something about these challenges. The Budget and this finance bill have proved again that they are unable – or unwilling – to do so.
Above all, the British people need a government who are on their side and committed to making this the best country to grow up and grow old in. The irresponsible choices in this finance bill and last month’s Budget – as well as the problems both ignored – show this Conservative government fails that test.
The Conservatives have also wasted and mismanaged billions of pounds of public money and left us in the worst economic crisis of any major economy. Now we see a return of Tory sleaze and a push to return to the same insecure economy that left Britain one of the most unequal countries in Europe before the pandemic.
Labour would rebuild stronger by backing Britain’s businesses and protecting family finances, with a relentless focus on supporting new jobs across the entire UK, securing a bright future for our high streets and backing our key worker heroes.