My hon. Friend makes the point very powerfully. I was going to illustrate it more generally by saying that families whose personal allowance will be frozen, such as the one she mentioned, and who lose the £20 a week from universal credit cuts—the very families that the Government proclaim they want to level up—will suffer.
Do not just listen to me. I am going to re-quote the quotation that my hon. Friend the Member for Ealing North (James Murray) used in his excellent speech. Listen to what the Government’s tax authority, HMRC, says:
“There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce.”
Is that what the Government really want?
Half the revenue will be paid by people who are under 45, most of whom will be hit by a 10% rise in NICs. That is regressive. National insurance kicks in at a lower level of earnings than income tax. That is regressive. The self-employed pay a lower rate. That is regressive. Income from assets such as rent from property remain untouched. That is regressive. And squirreled away in the policy document, the Government say that they expect that
“demographic and unit cost pressures will be met through council tax…and long-term efficiencies.”
That means further cuts and a hidden hike of the outdated council tax—a tax that hits those in Barking and Dagenham harder than those in Kensington and Chelsea. That is also regressive.
I am rather tired of being told by the Government that there is no alternative. There are plenty. For a Government committed to fairness between individuals, fairness between generations and fairness between income secured through wealth as well as work, there is a raft of better ways to fund health and social care. Put a penny on income tax and equalise rates for dividend and income tax: £13 billion. Equalise capital gains and income tax rates: £14 billion. Or, as suggested by academics Advani, Summers and others, plug the unfair gaps in national insurance by extending it in full—not just the levy, but all of it—to all investment income and working pensioners: £12 billion. If we scrapped the upper earnings limit and equalised the rates of NICs paid between high and low earners, we would not just raise enough to meet roughly the same amount as the Government propose; we could cut the main rate of NICs by 1.25 percentage points.
This unfair plan is simply not fit for purpose. The numbers do not stack up. The poor will pay for the rich. The young will pay for the old. The struggling tenant will pay for the wealthy landlord. The asset-poor worker will pay for the asset-rich retiree. Make no mistake: these are political choices—choices that fail working people, fail our NHS and fail those in desperate need of quality social care. I cannot support them.