Taxes

Debate between Ashley Fox and Jerome Mayhew

Wednesday 12th November 2025 Commons Chamber

[Jerome Mayhew (Broadland and Fakenham) (Con)]

This will be a very simple speech, because it has only a single fundamental point, which is that honesty in politics matters. That should not be a controversial statement. In debates in this place, we are advocates for a political philosophy, and for certain political tactics, and yes, we should put forward our case as attractively as possible, perhaps using statistics that make our case more effectively than others, but if we downright mislead the public, a line is crossed. That is wrong, because it is taking the public for fools.

In the election of 2024, the Labour party had a manifesto on which every single one of its Members was elected. There was an identified £7 billion that they intended to raise through tax rises, but a core promise at the very heart of the manifesto was that apart from that, there would be no tax rises—in particular, no increases to national insurance contributions, income tax or VAT. That is the very basis of their electoral mandate, and even then, they only managed to secure 34% of the vote. The first breach of those promises came in October last year: the tax rises were for not £7 billion, but £40 billion. That was justified by a wholly fictitious £22 billion black hole, a figure that the Office for Budget Responsibility refused to support, and that the Institute for Fiscal Studies and the Financial Times, among others, could not identify.

The Government raised taxes on employers; it was a tax on jobs of fully £25 billion. The IFS said that was a “straightforward breach” of their manifesto. We were told that this was a one-off, and that the Government had “wiped the slate clean”. The Chancellor of the Exchequer’s words were that they were

“not coming back with…more taxes”;

they had fixed

“the foundations of our economy”,

and she said, “It’s now on us.” Those are not my words, but the words of the Chancellor of the Exchequer.

The second Budget is in just two weeks’ time, and no global event has blown this Government’s plans off course. There has been no pandemic, and there has been no European invasion sending electricity and energy prices through the roof. If things have changed, it has been as a direct consequence of the political and economic decisions of the Government.

[Sir Ashley Fox (Bridgwater) (Con)]

Would my hon. Friend agree that what has actually changed is the inability of the Prime Minister and the Chancellor to control their Back Benchers, who now feel free to demand whatever public expenditure they think is convenient?

[Jerome Mayhew]

My hon. Friend is entirely correct. The Prime Minister tried—half-heartedly, admittedly—to save £4.5 billion from the welfare budget. He put his Secretary of State for Work and Pensions in the ridiculous position of starting a debate arguing for £4.5 billion of savings from long-term disability and health benefits, only for her to end the very same debate advocating for a £300 million increase in those same benefits. The Prime Minister has lost control of his Back Benchers, and he has lost control of his Government’s spending.

We have had no global event, but we do have Government policies that have been economically disastrous. Labour is truly the tax-and-spend party. It has raised the tax burden to the highest in history—certainly since the second world war. As for spend, it raised £40 billion in tax, borrowed a further £30 billion, and increased spending by £70 billion. According to the Government’s own plans, they intend to borrow half a trillion pounds extra during the course of this Parliament. And for what? Has there been reform of public services? No. Public sector productivity has declined. We are getting less for our money—even more so in healthcare, where the decline in productivity is fully 8.3%. What they have done is increase wage inflation. For public sector pay, it is more than 6%, whereas in the private sector, it is a third less.

The Government are coming back for more. They intend, we are told through multiple briefings to newspapers, to breach their core election manifesto pledge and raise taxes, because they cannot reduce spending.

--- Later in debate ---

[Sir Ashley Fox]

The hon. Gentleman will know that the Liberal Democrats joined a coalition Government in 2010 with the Conservatives. We inherited a deficit of £156 billion in 2010—11% of GDP—and it took 10 years, to 2020, to reduce that steadily to 2% of GDP. For all the moaning and whining from the Labour Benches about austerity, what we were trying to do—as a coalition Government for five years and as a Conservative Government for the remainder—was to live within our means, and that is tough. That is really difficult. It is about improving public services, but without necessarily hosing money at them. We see that most successfully in the field of education. In England we have seen a dramatic increase in reading standards and the standards of examination of English pupils caused by genuine reforms. That compares very favourably with what has happened in Scotland and Wales, where those reforms did not take place. The skill of government is in improving public services without always spending more money. The Liberal Democrats used to have a few Members who were called “Orange Book” Members. It is a shame there are so few of them left.

Who does the Chancellor think she is kidding when she says she has not increased taxes on working people? Try telling the farmers in my constituency that they are not working people, or the young family where both parents work and are saving to pay the stamp duty on their first home. As Labour Members will recall, that first Budget was not well received, so to draw a line under her broken promises, the Chancellor said:

“We’ve now wiped the slate clean. It’s now on us. We’ve put everything out into the open, we’ve set the spending envelope for the course of this Parliament. We don’t need to come back for more.”

Except we know that that is not true. She is coming back for more. She is now set to break that promise again by putting up taxes again.

[Jerome Mayhew]

Does my hon. Friend have any idea why the Chancellor has changed her mind or what it is that has affected her decision? Just a year ago, she said that she did not need to come back for more, but now she says she does. Has there been any great global shock, or does he think the problem lies closer to home?

[Sir Ashley Fox]

I would suggest two reasons. First, our economy has slowed down as a result of the very tax increases that the Chancellor has imposed. Secondly, the feral Labour Back Benchers have made them lose their nerve. The Prime Minister and the Chancellor therefore cannot control public expenditure in any way at all. The British people are already paying the highest tax burden in 70 years and Labour wants to increase it further. It is sad to say that this Government have no clue as to how the economy works. I genuinely believe that their Front Benchers want to reduce unemployment, but have they ever considered that if they increase employer national insurance charges and the cost of employing labour, businesses might use less of it? If they pass an Employment Rights Bill that increases the cost of labour, might businesses use less labour? Might that be why unemployment has increased every month since they took office? Is that why unemployment increases under every Labour Government?

Labour is just as ignorant on the effects of taxes and spending. If the Government tax entrepreneurs, there will be less enterprise. If they increase benefits, they should not be surprised if it becomes more attractive to claim them. Unfortunately, Labour’s answer to every question is more spending because, of course, it is what they do best: spending other people’s money. We never hear about its plans to improve efficiency or get better value for the taxpayer because there are no such plans.

Labour’s higher taxes and borrowing are leading to higher unemployment and lower growth. We are in a doom loop created by the Chancellor, and if we are to revitalise our economy, the first step is for the Government to control public expenditure. That is why we have outlined our plans to reduce expenditure by £47 billion. We will reduce welfare spending by £23 billion. Unlike the Liberal Democrats, Reform UK and other high-spending left-wing parties, we would keep the two-child benefit cap. We would reduce the size of the civil service to where it was in 2016, saving £8 billion, and reduce overseas aid by a further £7 billion. We would use those savings to cut both borrowing and taxes to bring about a new spirit of enterprise and confidence in our country.

It is ironic that it is the Conservatives calling today for the Government to stick to their manifesto promise not to increase taxes. The British people will notice if they break that promise for a second time.

Property Taxes

Debate between Ashley Fox and Jerome Mayhew

Wednesday 3rd September 2025 Commons Chamber

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I have been told that we are speculating today, so I do not know whether I have to refer to my entry in the Register of Members’ Financial Interests. However, in an abundance of caution, I declare that I am a homeowner and I also have properties for rent.

The kids in Downing Street—whether in No. 11 or No. 10—think it is clever to fly kites about tax rises. We had it last year, from 4 July onwards, with briefings to the press saying there would be tax rises because of a wholly fabricated £22 billion black hole in the economy. That was fabricated as a fig leaf for tax rises that were not in the manifesto. From July to October, those stories dripped in one after the other—and what was the impact? It has been the collapse in business confidence to pandemic levels, the collapse in consumer confidence as a result, and unemployment beginning its inexorable rise month after month for every single month that this Government have been in office.

Now the Government are at it again. They have not realised their past terrible mistake, and they are doing it once more. Despite raising taxes by £40 billion last October and increasing borrowing by another £32 billion, they have created a genuine black hole, which the National Institute of Economic and Social Research suggests means that about £51 billion is required in higher taxes or lower spending. The briefings have started again—a property levy on mansions, the replacement of stamp duty with a national property tax, national insurance contributions on rental income and capital gains tax on primary residences with a value of more than £1.5 million. Even Which? magazine has said there may be changes to the in-life gifting regime to reduce inheritance tax.

[Sir Ashley Fox]

Does my hon. Friend accept that speculation about all those new additional taxes causes more uncertainty, which itself causes the economy to slow further?

[Jerome Mayhew]

My hon. Friend is absolutely right. Do the Government not recognise that posturing from the Government Benches does not come for free? Construction activity has had a bigger fall recently than in the last five years due to the leaks from No. 10 and No. 11. The commercial property sector is in recession. There are hiring freezes and staff are being laid off. People are losing their jobs because of the Government’s kite flying. Residential property prices had a surprise fall last year.

We are asked to believe that growth is the No. 1 priority of this Government. They say they are going to build 1.5 million houses during this Parliament. Merely saying that does not make it true, when their policies serve to do exactly the opposite. If Members do not believe me, look at the markets—they are not politicians. Look at the 30-year gilts that the Government are paying today. Government debt is now running at 5.73%. That is the highest rate this century. The markets think that further tax increases will damage growth. That means they will damage the fiscal environment in the future. We will have less tax in the future because of the tax-raising decisions the Government are apparently going to take in November. Labour is planning, literally, to rob Peter to pay Paul. This is no way to run an economy.

As someone much more famous than me once said, the problem with socialism is that you eventually run out of other people’s money. Stop now. Stop before it is too late to avoid a vicious debt spiral. I fear—I genuinely fear this—that the Government will be forced to cut spending. They have two options: they can be forced to do so by the markets in a chaotic fiscal event, or they can take the responsibility of government seriously and take the difficult but necessary decisions on spending that the country needs them to take as a responsible Government. Otherwise, they will be swept away by their own incompetence.