A VOTE took place last night, fast tracking the Johnson government’s 1.25% hike on National Insurance to pay for social care announced only on Tuesday, with Labour voting against.
Labour’s Rachel Reeves, shadow Chancellor, opposing the Bill to bring the hike in, told Parliament yesterday: ‘Sales on property, on financial assets like stocks and shares. There are no additional taxes on people receiving their income that way, but plenty of additional taxes on ordinary working class people.
‘Why does this government keep coming after the same people time after time after time. Asking ordinary working class people to pay more of their income.
‘In contrast, who has been shielded by the Chancellor? Which types of income will pay NO additional tax?
‘They include those who get their income through financial assets, from stocks and shares, from sales of property, from pension income, sub-interest income, property rental income, inheritance income. Fancy that! I do not doubt that the champagne glasses were clinking in Mayfair last night.
‘But not in Mansfield, not in Middlesbrough, and not Thirsk either.
‘95% of the revenue that the government plans to raise from this tax bombshell comes from employment. What a contrast. Yesterday Amazon reported an additional £1.9 billion pounds worth of sales but they only paid £3.8 million pounds more in corporation tax, with much of their profits diverted to Luxembourg.
‘Yet with the changes announced today, a graduate on a typical entry level salary will now pay a marginal tax rate of almost 50% and not a word from the Chancellor or any of his ministers about any of this.’
Moving the motion, Tory Financial Secretary to the Treasury Jesse Norman said to jeers: ‘The government has acknowledged that this policy involves a breach of our manifesto. It has done so directly, it has done so cleanly and it has done so honestly.
‘But I would put it to the House, and in a deeper sense, this measure serves to redeem a promise and to discharge an obligation, it is a profoundly Conservative thing to do, to provide for future generations, without increasing borrowing, without increasing spending and in a way which is sustainable and we have gripped a nettle that for so many years has been ignored by the party opposite.’
Meanwhile on the issue of Amazon’s tax, the GMB union highlighted the working conditions of Amazon staff.
Mick Rix, GMB National Officer, said: ‘Thousands of businesses across the UK have folded during the pandemic. Yet despite making billions from lockdown shopping, and trousering millions in government contracts and subsidies, Amazon has paid a frankly insulting amount of tax back into Treasury coffers.
‘At the same time, Amazon workers suffer unsafe, dehumanising work practices; breaking bones, falling unconscious and being taken away in ambulances. Ministers must get a grip of this runaway company and make sure pandemic profiteers pay more.’
There were a number of Tory rebels who announced during the debate that they were opposed to the measure and would vote against the bill.
Tory MP Jake Berry for Rossendale and Darwen said income tax is a much fairer way of raising revenue.
Berry said: ‘This is the issue of our age, how we deal with an ageing population.
‘But I don’t believe what we are planning to do with National Insurance is the correct way.
‘My constituency is an area with low incomes, the lower your income, as a proportion of that income the more you pay with National Insurance. Those on the lowest incomes pay the most proportionately.
‘In the longterm this will massively damage the prospect of our party. With a heavy heart I won’t be supporting the government’s proposals tonight.’