Tim Farron
Main Page: Tim Farron (Liberal Democrat - Westmorland and Lonsdale)Department Debates - View all Tim Farron's debates with the HM Treasury
(3 days, 6 hours ago)
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Sir Mel Stride
If the right hon. Lady wants to make the rules, she should live by them. That message will go out to businesses and families up and down the country. There is no way that they can avoid the juggernaut of taxes that are coming down the track.
Tim Farron (Westmorland and Lonsdale) (LD)
In return for the right hon. Member’s generosity in giving way, I will say something pleasant about the last Conservative Government. [Interruption.] I know—wait for it! It will be just one thing.
The last Government allowed councils like Westmorland and Furness, run by the Liberal Democrats, to double council tax on second homes. It is right to do that because excessive second-home ownership annihilates communities in the lakes and the dales, the west country and elsewhere. But can I encourage the Conservatives and the party in government now to do something that would do much more to limit the number of second homes than that: bring in a new planning category of use, so that national parks and councils can manage the numbers and save communities?
Sir Mel Stride
I thank the hon. Gentleman for his kind words about the Conservative party—I am sure that they are deeply felt and very genuine. What the Deputy Prime Minister should be doing is delivering more homes. It is quite clear that the target of 1.5 million homes, which the Government claim they will deliver at the rate of 300,000 a year, will not be met. I am quite happy to be proven wrong, but I very much suspect that I will not be, unfortunately.
We have ended up in a situation in which a huge black hole is looming. The National Institute of Economic and Social Research puts it at possibly as much as £40 billion. The economic mismanagement of the Labour party is a recurrent theme. In the October Budget—the Government’s first—there was headroom of about £10 billion against the fiscal rules. That, plus £4 billion more, was blown by the time of the spring statement—the emergency Budget. Once again, it appears that considerably more has been blown all over again.
That is no surprise. The U-turns on winter fuel payments and on welfare reform, which we have already discussed in this debate, led to unfunded commitments of around £6 billion—unfunded commitments after the Chancellor had said that the Labour party would never find itself in that position. What she said has simply not happened. What signal does it send to the markets when the Government cannot control spending? In the long-term, it will be interesting to see what the Office for Budget Responsibility has to say about its forecasts for growth. In recent times, 30-year bond yields have hit a 27-year high. We are paying more to borrow than Greece. There is a potential debt crisis looming, and this country could be on the brink—all on Labour’s watch.
James Murray
I am going to make some progress, because a few moments ago I said I would do so. I have been gently reminded by Madam Deputy Speaker that I really must live up to my promise on that front.
The right hon. Member for Central Devon asked me questions in his opening remarks—indeed, his colleagues have their sheets from the Whips, and they have been dutifully following up in their comments—but they are on matters that we cannot talk about today. There are of course other important facts that the right hon. Gentleman does not want to talk about, but the British people have not forgotten them. There is the £22 billion black hole in our public finances, which the previous Government hid from the light. There is the disastrous mini-Budget, which caused damage to households across the country and to our reputation around the world. We had stalled housing, unfinished infrastructure and public services brought to their knees by under-investment and disinterest. The Conservatives do not want to talk about those things because that is the legacy of the last Government. We found out just today that the right hon. Gentleman does not even want to talk about things happening in Conservative councils, as my hon. Friend the Member for Basingstoke (Luke Murphy) raised so importantly in his contribution earlier.
Now that the Conservatives are in opposition, the right hon. Gentleman’s party and Reform Members are talking Britain down. They want to claim that Britain is broken, but I believe that Britain is unbreakable. Our country is full of potential. It is home to hard-working people, brilliant businesses, world-leading universities and research institutions, cultural giants and the promise that if people work hard and contribute to the country, it will be a place where they can succeed. Yet undeniably, after 14 years of Tory mismanagement, far too many working people feel that the economy is stuck.
James Murray
My hon. Friend is absolutely right; economic growth is of course critical to our plans. She points to the trade deals that we secured. She and other hon. Members will know that the UK was the fastest-growing G7 economy in the first half of this year. There is much more for us to do, but we are showing that because of the right decisions that we have taken we are starting to move in the right direction.
Tim Farron
I do not want the Minister to speculate, but I want him to consider something. We talked about people not paying taxes. A significant minority of owners of second homes in my constituency let their property out for just a few days a year; as a result, they can claim to be a small business and pay no council tax or business rates. People on the minimum wage in my constituency are subsidising those people who pay no council tax at all. Will he change that situation to protect our communities?
James Murray
I congratulate the hon. Gentleman on an inventive way of encouraging me to speculate on tax measures. I am aware of the issue that he points to, and I thank him for raising it in this context, but I am not able to make any decisions on taxation at the Dispatch Box today.
Let me go back briefly to the broader context. It is absolutely crystal clear from the opening remarks of the right hon. Member for Central Devon, and from what all his colleagues have said so far, that Conservative Members are still in total denial about any responsibility they have for the situation that the country finds itself in. They act as if being behind the wheel for 14 years is irrelevant to where we find ourselves now. It may be that they think that if they do not talk about it, the British people may forget the last Government’s responsibility for getting us into the current situation, but the British people know that the Conservatives did this to our country. That is why the British people put their faith in us at the last election.
While there is clearly more to do to bring down inflation and the cost of borrowing, it is clear that we have turned a corner by taking the right decisions for our country. We have taken the decisions to address the black hole in the public finances, fix our foundations and clear up the mess that we inherited from the previous Government. As a consequence, as I mentioned a moment ago, in the first half of this year we were the fastest-growing economy in the G7; we outpaced France, Germany, Japan and the United States.
Since taking office, this Government have welcomed around £100 billion in investment into the UK, with 384,000 jobs being created over the same period. We have cut red tape and changed planning regulations to deliver 1.5 million new homes over the course of this Parliament. We already have nearly 100,000 new homes on large developments that were previously stuck in the planning system or simply not progressing as fast as they should be; they are now being given the support that they need to make that progress quickly. In just over a year, the Bank of England has cut interest rates five times, which means that someone on a tracker mortgage of just over £200,000 will be better off by around £100 a month. Crucially, real wages have risen more in the time since the last election than they did in the first 10 years of the previous Government.
The choice at the next Budget is clear. Over 14 years, the last Government made wrong choices time and again. They, their many Prime Ministers and many Chancellors all embraced the cycle of austerity, debt and decline, and we will never repeat that. We will continue to invest in Britain’s renewal, using every power at our disposal to drive forward an economy that works for working people. As I said, the Government do not respond to speculation, especially ahead of a Budget, and in any case we are not writing a Budget this far out.
The Budget that the Chancellor delivers in November will be carefully considered and designed to get the balance right between making working people better off and raising enough money to fund our public services and getting the country moving once again through investment and growth. Of course, it will also undergo proper scrutiny by the OBR. I was going briefly to address the taxes mentioned in the motion, but I suspect that I should skip over that part of my speech. [Interruption.] I am getting a gentle indication from you, Madam Deputy Speaker, that I have come to the right conclusion.
If we are to get this country moving again, investment from both businesses and Government is essential. We must therefore strike the right balance in our tax system, so that we can put more money in the pockets of working people while supporting the private sector to invest and grow and funding our public services. Members on both sides of the House will have their own views on what the right balance is, and I look forward to hearing those views today. I thank all hon. and right hon. Members in advance for their contributions.
Daisy Cooper
I could not agree more with my hon. Friend. I would love to see that registration programme, although we Liberal Democrats have repeatedly said that it is only the first step. Registration is something that the Airbnb-type platforms actually want, because it enables them to pinch properties from other platforms. It does not solve the problem we have of lots of additional homes being used as Airbnbs, not by young people—or, in fact, by anybody who wants to be able to rent a property in their area. It is important that local authorities have the power to strike the right balance between tourism and enabling the people they need in their local area to afford to live there.
Tim Farron
My hon. Friend makes an extremely good point. In my constituency, we have seen a collapse in the long-term private rented sector, which has pushed hundreds of people out of our communities—they are not able to contribute, to be part of the workforce, or to send their children to our schools. Surely, an answer would be the ability to create short-term lets as a separate category of planning use, just as we are calling for with second homes. That would allow councils and national parks to make sure there are enough homes for local people to live in.
Daisy Cooper
Again, I absolutely agree with my hon. Friend. I recall—as I am sure he does—that in the previous Parliament, we Liberal Democrats tabled a number of amendments to legislation introduced by the Conservatives, to try to make that happen. Unfortunately, those amendments were not accepted by the now official Opposition.
In principle, a land value tax could help address land banking. All of us in this House say that we want to build on brownfield first, but of course, part of the problem is that big developers can land bank. We Liberal Democrats have repeatedly tried to table amendments to ensure that local authorities could buy that land at land value, rather than hope value. In principle, there are some merits to at least considering a land value tax, but the devil will be in the detail. If the Government bring forward any such proposals, we will scrutinise them closely.
There are a couple of major omissions from the official Opposition’s motion, one of which—as I have already outlined—is business rates. Business rates are a property tax facing small businesses, and the business rates system is broken. We have heard repeated promises, both from the previous Government and this one, that business rates will be fixed, so it is incredibly disappointing that as yet, we have not seen an ambition to replace the business rates system. Instead, we have seen tinkering around the edges, and the Government’s proposals will potentially make business rates a little bit worse, particularly as they will target hospitality. There is another major omission: the motion should refer to giving local authorities real power to regulate the location and number of short-term lets, particularly in the south-west and Cumbria, but also in many other areas.