Contribution
Families and businesses across the country will have heard yesterday’s Budget and been disappointed that the Government missed their second opportunity to seriously address some of the key issues we are facing. Energy bills remain sky high, the cost of employment continues to rise, and, with no substantial reference to Brexit, the Chancellor is ignoring the single biggest measure which could boost economic growth.
Increasing the minimum wage is of course welcome news for millions of low-paid workers, but unless businesses are able to grow there is a danger that it will result in fewer jobs being available overall. Businesses from all sectors across the UK continue to struggle with high energy bills, compounded by the burden of last year’s NICs rise and concerns about the impact of the Employment Rights Bill on their monthly employment costs. The cost of employment has risen significantly over the past year, with nearly 70,000 job losses in hospitality alone since just last October. This has obvious challenges for businesses, many of whom will find it difficult to absorb further costs. However, these businesses provide vital social value and essential entry-level jobs, offering many young people their first job.
Adding national insurance to salary sacrifice pension contributions also pushes up the cost of employment. Last week, I asked the Chancellor what information her Department holds on the number of people who use salary sacrifice schemes. To my astonishment, the Treasury responded by stating that His Majesty’s Revenue and Customs does not hold that data on the number of employers offering, and employees using, salary sacrifice schemes. I am also concerned about the impact on investment if pension contributions are squeezed, because we know that pension funds have a significant role to play in ensuring that UK companies get the scale-up investment they need. We know that parties across the House are committed to boosting UK investment.
The Chancellor reinforced her commitment to fund the lower Thames crossing project, of which £900 million will be publicly financed. In the spring spending review, the Government announced a £1 billion structure fund as part of their 10-year infrastructure strategy. Does that mean that the Government have now only budgeted £100 million to be spent on critical transport improvements over the next nine and a half years? Does that mean I should give up all hope of ever getting funding for Hammersmith bridge in my constituency to be reopened? And the reason I am asking that question here in the Chamber is because on five occasions this year I have asked for a meeting with the Department for Transport to discuss its plans, and whether the structure fund will be allocated for the bridge’s repairs, and every single time that request has been denied. If the Chancellor is asking London residents to pay ever-increasing bills, local residents in my constituency will expect to see a fair proportion reinvested into their community. London is the UK’s financial hub. The failure to even talk to me about fixing Hammersmith bridge is indicative of the Government’s attitude towards London residents.
That question is particularly pressing for residents in my constituency, as they will be disproportionately impacted by the mansion tax. Not only is this an extremely limited revenue raiser, but it will also impact London residents more than in any other region in the UK. The Department for Work and Pensions’ own figures show there is less discretionary spending, after housing costs, in London than anywhere else. What is really needed here is wholesale reform to council tax and stamp duty, so we can look again at how property is taxed. I have heard people say that residents in Darlington pay more than those in Mayfair. Let me tell the House that a band A resident in my constituency pays more council tax than a band F resident in the borough next door. This is not about equalising council tax rates between poorer and richer houses. We already pay a considerably elevated amount of council tax in Richmond. [Interruption.] This is not equalising rates between boroughs; this is simply placing an additional expense—[Interruption.] I am sorry; would the Minister like to intervene? I can tell him that the poorest in my constituency are paying more council tax than extremely wealthy constituents in the borough next door, and this measure will do nothing to equalise that.
I will turn to the 2% increase in tax on landlords. I hear what the Government are saying about equalising sources of income, but they need to consider the impact that this will have on the availability of rental properties, particularly in London. We have already seen a big withdrawal of landlords from the property market in London, which is squeezing availability and affordability. Additional taxes will not do anything to address the housing shortage in London.
Briefly, the Valuation Office Agency has an 18-month backlog on business rate challenges. I want to hear what the Government are doing to boost the Valuation Office Agency and how much that will cost. They are only going to make £400 million from the mansion tax, and a lot of that will be spent on administration. I really want to hear from the Minister about that.