National Insurance Contributions (Increase of Thresholds) Bill

Debate between Anthony Browne and Wendy Chamberlain

2nd reading
Thursday 24th March 2022 Commons Chamber

[Wendy Chamberlain]

Thank you, Madam Deputy Speaker. I also thank my hon. Friend for her intervention. We know that the price cap does not support those who are off-grid. That was a point Members made in Monday’s Opposition day debate in relation to pensioners, and in other places. I hope that the Government will consider that and if they do not do something about it now, I hope they will do so in future.

Yesterday’s statement was all smoke and mirrors. It increases the disparities between unearned and earned income.

[Anthony Browne]

I was intrigued by the hon. Lady’s comments that a VAT cut would increase economic activity, leading to more tax receipts and therefore it would pay for itself. I very much welcome the idea that tax cuts help to promote economic activity, but if she believes that VAT cuts pay for themselves, does she believe we should always have VAT cuts? How low would she bring VAT? I have to say that that analysis is not shared by Treasury economists.

[Wendy Chamberlain]

I find it interesting, given the criticism always given to those on this side in relation to the European Union and VAT, and what we could not and could not do, that I am experiencing criticism from Conservative Members about proposing cutting VAT. I am proposing a temporary measure to help boost the economy in the short term, and I am happy to have a further discussion with the hon. Gentleman about what levels of VAT might look like.

We are seeing an increase in the disparity between unearned and earned income. We are ignoring those who are being pushed into poverty, and we are not addressing the cost of living, which the Chancellor’s statement was supposed to deal with yesterday. Today’s Bill does too little, too late. The measures announced in it will come into effect only in July this year. Payments at the higher rates will remain in place for the next three months. The NI hike will cost employees £2.1 billion in that time. The cost of living crisis is biting right now, today, and the Chancellor must look to implement the changes earlier than outlined. I am not fooled by this Government, and neither is the country. If this is the best the Chancellor can do, they know, as I do, that they deserve another Chancellor.