Robert Halfon is MP for Harlow, a former Conservative Party Deputy Chairman, Chair of the Education Select Committee and President of Conservative Workers and Trade Unionists.
I am proud to present this blueprint for a workers’ Budget today.
It comes against our considerable achievements in having created record low unemployment; almost three million apprenticeship starts since May 2010; a lower tax regime for lower earners; a National Living Wage; and a fuel duty freeze that has lasted seven successive years.
Our record shows that we are the true worker’s party of the United Kingdom. We alone offer a ladder of opportunity to all our countrymen and women.
This Budget would cement our role as the Party which understands and cares about the working men and women of this country. It would meet their aspirations – and the country’s needs – in terms of the education, skills and training needed to achieve jobs, security and prosperity for the future.
It will focus on the six key issues that are most important to the people of the United Kingdom: the cost of living, housing, social injustice, our NHS, skills and jobs, and Brexit.
First, cutting the cost of living.
I mentioned before that we have introduced the National Living Wage, which means over £1,400 a year more for a full-time worker previously on the National Minimum Wage. In addition to this, we are continuing to reduce taxes for lower earners. I’m proud that no one pays Income Tax now until they earn £11,500, and that another 1.3 million people will be taken out of paying Income Tax altogether in the 2017-18 tax year.
However, we must go further.
We need to recognise that public sector workers, as the guardians of our nation’s health, education and security, need better pay. The Government must help lower-income workers across the board. We have to eliminate the welfare poverty trap and make work pay.
To enable this, we should take the bold step of cutting overseas aid by £4.1 billion a year by 2019-20. This is less than one third of the £13 billion the UK currently spends on overseas aid. The savings made should fund a fair pay rise for public sector workers, focusing on the lower paid. These savings will finance continuing pay rises until we have cleared the deficit and are in a position to fund future increases from tax revenues currently being spent on deficit reduction.
The Government should also look to use the aid budget to reduce National Insurance Contributions for lower-paid workers. For example, an additional £3 billion could raise the threshold from £157 a week to £188 a week and mean that workers paid the National Living Wage could work up to 25 hours/week without having to pay NICs.
This measure would further help eliminate the poverty trap, particularly for those who are transferring to Universal Credit.
I recognise that the 65 per cent tax rate on petrol and diesel remains a huge burden on motorists. It also has a significant impact on businesses, food prices (because of transport costs) and bus travel. So, we must maintain the fuel duty freeze, benefiting car drivers by £130, and van drivers by £350, every year.
We should also look at hypothecating the revenue raised from tax on fuel duty to ensure it is spent on building and maintaining roads.
The second priority is housing.
We must be radical to tackle the housing crisis. As Sajid Javid has already proposed, we will borrow £50 billion in order to build 300,000 houses a year, a level not seen since Harold Macmillan’s Government of the 1960s. The Government should also provide for further funding in the form of tax cuts for housing associations to encourage the building of social housing. This would come from a new Conservative Redistribution Fund, the workings and purpose of which I will outline shortly.
We must continue to fight against social injustice.
Continued cuts to Corporation Tax (from 30 per cent in 2008 to 19 per cent today) have encouraged business growth, meaning the Treasury raised £56 billion in 2016-17, 21 per cent extra revenue compared to the previous year. We should invest the extra revenue raised from cutting Corporation Tax in the Conservative Redistribution Fund. This money could then be used for capital investment in our NHS and on building social housing, as previously described.
The Government ought to create a new website for the Conservative Redistribution Fund so that the public can clearly see that the extra revenues raised as a result of reductions in the rate of Corporation Tax are spent on poorer communities. That is what we mean by Conservative Redistribution. It is what truly makes us not only the Party for workers, but a Party dedicated to tackling social injustice, too.
It should also be our continuing priority to bear down on crony capitalism and unfair markets, particularly in vital industries like energy. The announcement made yesterday by British Gas, who will be scrapping their expensive standard variable tariffs for new customers, marks a welcome direction of travel but it should be only the start.
Next, let’s protect our NHS.
We recognise that, quite properly, there is an umbilical cord between the British people and the NHS. Whist we will still be spending an extra £10 billion by 2020, we should also recognise that the smallest things can make the most difference. That is why we should be scrapping hospital car parking charges.
The cost of £200 million a year can be paid for by overhauling the procurement procedures in the NHS. Whatever the pressures on NHS budgets, it must be wrong that families who are visiting premature babies or cancer sufferers can pay an average of £40 per week in parking fees. Hospital car parking charges have been a stealth tax on the NHS for too long and this will stop.
The Government must prioritise vital skills and jobs for workers.
I am proud that the Conservatives have created over 1,000 jobs a day since May 2010, but Britain is still well behind on skills. We are ranked 22 out of 28 countries in the EU in terms of the proportion of employees in vocational training. The truth is, we face a ‘Nightmare on Skills Street’. If Britain is to be ready to face the fourth industrial revolution, we must put a rocket booster under Further Education (FE), skills and apprenticeships.
Although we have already announced £500 million to be spent on technical and vocational training, we should double this. The Government should build state of the art manufacturing and technical colleges in every town in Britain. These would be supported by existing FE colleges.
We must also expand the Apprenticeship Levy to all companies that have wage bills over £2 million, rather than £3 million. The extra revenue thus raised would help fund the opportunity for every young person who wants to go into Higher Education to study for a degree apprenticeship. They will take out no loan, earn while they learn and be virtually guaranteed a good job at the end. This must be our promise to the younger generation – to provide our young people with the opportunities we owe them, and provide our country with the skills it needs.
We must not hand over anything like £40 billion to Brussels. Instead, our priority must spending this precious taxpayers’ money on cutting our deficit and providing the vital public services our country needs as takes on the challenges and opportunities of the new, post-Brexit age.
This is a workers’ budget. It would help to cut the cost of living, build millions of homes – particularly affordable and social housing – while protecting our NHS, tackling social injustice, transforming our skills, and delivering a fair deal on Brexit.