The reaction to “The Opportunity Budget”

A summary of the political reaction to Chancellor toastinrussian’s budget, delivered in the House of Commons on Saturday.

Secretary_Salami, as leader of the opposition, delivered the LibLab coalition’s official response to “The Opportunity Budget.”

Meta note: This article was complied when there were only 93 budget comments – there are now over 300. More will be added should I have time later today or tomorrow.

toastinrussian, the chancellor the exchequer, delivered the summer budget 2019 – dubbed “The Opportunity Budget” by the government – in the House of Commons yesterday. The headline announcements (read more on the budget’s key points here) included a new negative income tax to replace existing benefits, a graduate tax to implemented in 2021, a cut to all rates of income tax and VAT – with food and drink to be exempted from the tax – a £10 prescription charge, the introduction of an 82% land value tax to replace council tax, a new carbon levy of £20 per tonne, a school voucher system, a mental health overhaul, investment in more teachers and classrooms, and a new pay as you go system for business taxes.

The budget debate has seen a large number of MPs from across the political spectrum get up to offer their views on the policies included. Here is the Guardian’s summary of some of the reaction so far from each political party. It is not designed to be an exhaustive account of the claims and counterclaims but instead offer a flavour of the views expressed by each party so far and a brief summary of all sides of the debate to allow you to make up your own mind on this budget.

This article, in line with Guardian editorial standards, only quotes those who occupy a public office and does not include party members who are not Lords, MPs or the occupant of any ministerial, shadow ministerial, leadership or spokesperson roles. Members of parties without seats in the House may still be included provided they are either a senior member or a high profile figure.

Conservative party

The Conservative party’s reaction has been, as expected, overwhelmingly positive. pjr10th, the leader of the Commons called it a “a truly amazing budget”. He went on to say: “A progressive range of tax rates ensure that those well off are paying their fair share so those who are most in need can keep more of the vital hard earned money, and by altering the tax bands based on inflation, we are ensuring that the least well off in our society need no shoulder a undue higher tax burden.”

Energy Secretary Sophisticated_Murder said: “The Carbon levy, a tax which puts nearly £6 billion into the Government coffers, and the other £6 billion raised through this tax working directly to research new technologies, projects and schemes, all in the name of incentivising energy suppliers to increase energy efficiency and reduce carbon emissions.”

Welsh Secretary FinePorpoise said: “I would like to focus on Wales. That’s my job after all, and there’s only good news here. We are seeing the science and sustainability undertakings first put forth by the government fully funded in this budget. This is a win for Wales, and it ought to be commended.” Turning to the block grant increase demanded by Plaid Cymru in return for their support, he said: “Let us not forget the major item though, and that’s the block grant. At over sixteen billion pounds, it is generous yet reasonable for Wales where public service delivery is more costly for a variety of reasons. These include higher transport costs, less dense population patterns, and a more aged population in general. With this block grant, I can say that the Welsh Government will be able to provide a good settlement for Wales and properly deliver those essential public services that are not under the UK Government’s competency.”

Labour party

Labour’s reaction was far less welcoming, though the shadow home secretary, sam-irl, did offer some warm words to the chancellor: “Before I read this bill, I just want to congratulate the Chancellor and the rest of the budget team for completing this task.” The chancellor responded: “I would like to offer the Honourable Gentlemen my sincere thanks for his kind words, and I hope to respond to his speech later in this sitting.”

Opposition leader Secretary_Salami told MPs: “While I awaited something even worse than this, it should come as no surprise to anyone that I oppose this in the strongest of terms. On many points I will lay out in my speech I will concur and repeat what honourable members have already put forward. I would especially like to thank the leader of the Social Democrats for fantastically putting forward their thoughts on this budget, I agree with them wholeheartedly.”

On some of the budget’s specifics, Mr Salami said: “The VAT rates are set an unprecented low, which I do not agree with. While the VAT system is in need of updating and while there are flaws to how it works, it still contributes to a significant revenue, and setting it this low means we will miss out on that, meaning that other services will be cut in funding… corporation tax is no more, instead we have something called a dividend tax, which taxes companies that deal with dividends. My question then is, what about those companies that don’t pay dividends. Until someone can prove me wrong, I see this as a huge loophole that can be exploited.

“A school voucher system has been proved to not work- there are countless of articles to be found that prove that the system is inherently flawed. I vehemently oppose the graduate tax and will continue to do so in the case of this budget. I also believe that the figure set for funding of grammar schools should be significantly lower, we should put that money into public schools that don’t deal with selection or reform the system of grammar schools instead. I would also argue that the 300 million for developing renewables is ridiculously small given the timeframe we have until the effects of climate change kick in, and with the estimated costs of climate change being tens of trillions of pounds. I can not help but feel that it’s too little too late.”

Shadow Business Secretary Gren_Gnat told the House:” If we needed any proof that the Tories hate the welsh it’s all right here in this budget of division the Scots are getting nearly twice as much as the welsh per head despite Wales being more impoverished and the northern Irish are getting a much better deal then the welsh too. There is a reason wales has some of the greatest poverty in Europe and that’s because of the Tories and their refusal to help a nation that has been repeatedly ransacked for is resources to help the English isn’t it time the Tories gave something back?” This is despite the budget’s investment in the Swansea Tidal Pool, Welsh poverty reduction fund and a higher block grant as negotiated by Plaid Cymru.

LPUK

As the junior governing party, the LPUK have also been staunch defenders of the budget. The deputy prime minister said: “At long last this much needed budget has arrived, the United Kingdom has been crying out for a budget of this calibre which keeps the burden of taxation… low and rejects the failed Keynesian demand management of the past. Throughout my career I have fought against tinkering on the edge and for real change and that is what this bold, ambitious budget does. I am glad the Libertarian party has played a pivotal role in this budget and the setting of taxation rates. Together, the Conservatives and Libertarians are getting Britain back on track. Before I begin my speech I would like to thank toastinrussian for [the] hard work that has gone into this budget.

“Firstly we begin with the tax rates and tax reform which keep the burden of tax low, enabling people to keep their own money.Lower taxes lead to higher growth because there would be a tax system that led to far fewer distortions of economic decisions, it is likely that employment, productivity and wage levels would rise considerably. Our tax policy incentives work,investment, risk taking, and entrepreneurial activity. This tax reform is similar to that of President Trump’s plan which has proved to be a huge success for the US economy, our tax reform will lead to a larger economy and higher wages. Each of these economic benefits can result in more tax revenue. I welcome the ambitious plans of the government, this is what I have been calling for years and was a pivotal part of the LPUK campaign and I am pleased to have delivered tax reform with my Conservative colleagues.

“From education to the home office to Defence this budget delivers good initiatives and adequate funds for our public services meaning. In my capacity of Defence Secretary I welcome the fact Defence spending is above and beyond the 2% target and am proud to be supporting our veterans and army. I could talk about each of the 53 pages of the budget all day, as this is a thoroughly amazing budget with numerous good pledges and spending policies we have debate throughout the term from right to buy enabling the poorest to get on the housing ladder to private school vouchers allowing the poorest to be able to access a private education. This budget is the budget of opportunity, it will unleash the United Kingdom’s potential through bold policies that we know work, through the forces of the free market which have delivered prosperity across the world.”

Liberal Democrats

The Liberal Democrat response was also very critical. Randomman44, the shadow transport secretary, focused on climate change and the railways in his speech. “as one of the world’s leading economies, we as a House should do all we can in order to combat climate change. Therefore, I am interested in seeing that the Government has attempted to do this through giving £100 million to build Electric and Hydrogen charging stations around the country. However, at the same time, the Government is including a very low Fuel Duty for the Budgetary term… the Government has also allowed £100 million for electrifying railway lines across the country, which should reduce our reliance on Diesel and Coal. However, this figure is low, and will not help the situation effectively. It costs at least £100,000 for a kilometre of track to be electrified, so this budget only allows for under 1000 kilometres of track to be electrified, which is a small amount for the United Kingdom’s expansive railway network.”

Shadow Education Secretary HiddeVdV96 also focused on his policy brief, telling the House: “The ‘Opportunity Budget’…., well the Government certainly grasps every opportunity to disappoint the nation. As said in the debate on the White Paper on Higher Education, I still disagree with this Graduate Levy with every part of my being, it’s just an ordinary tax on people who have gone to college already. The Chancellor said in the foreword that this Government places opportunities at the core of its budget. I don’t really see what opportunity this causes, except the opportunity to make people pay that didn’t choose for this weird tax.

“The School Voucher Scheme is a start to make private education more accessible for everyone, a very small start nonetheless. I don’t see how someone that makes £30,000 is able to afford private education if they only get a discount of £7,916 a year. If this Government really wants to do something about the non-high class people enjoying private education they should make this discount either higher or making sure that the non-high class people have more money.”

Classical Liberals

Revealing that their party had been in negotiations for a budget deal, Classical Liberal Leader Twistednuke said: “As some members of the house are aware, negotiations between the Classical Liberals and the Government took place on this budget… The Government agreed to zero rate food and drink for VAT, fund fiber to premises internet across the country and delay the implementation of the hated Graduate Tax. But the Classical Liberals would have had to give as well, most importantly by supporting a prescription charge that we truly hate with every fiber of our being… our MPs voted, for we are a democratic party, and together with a heavy heart we decided not to support this budget. We appreciate the Government not removing the offers made to us.”

“As to why we cannot support this budget, firstly, there is the issue of the Graduate Tax. While this budget does delay the Tax until 2021, it does not amend the fundamental problems with the tax. Under the Government’s proposals a person who paid their fees upfront will pay the tax, a person who has paid their fees off entirely through a lifetime of hard work will pay the tax. This is fundamentally unfair. They have already paid.

“Secondarily is the prescription charges. We continue to believe that free at the point of use healthcare in the NHS should be exactly that, free. Any essential medical interventions should be funded collectively through general taxation. Under the Government’s plans everything from vasodilators to antidepressants would garner a fee. While that fee is small, it is against the very spirit of the NHS.”

But they ended their speech by recognising what they called the budget’s “silver linings.” “As Minister for Health in Northern Ireland I am eagerly awaiting my department’s share of the pie in the Block Grant, which by historical comparisons is very generous. I also look forward to seeing tax cuts across the board for the poorest in our society, which will bolster our economy for the turmoil ahead as we finalise our departure from the European Union.”

Former party leader Duncs11 also spoke in opposition to the budget, calling his choice to vote against it “one of the easiest decisions I will have taken as an MP.” He said: “While the Graduate Tax is one of the most major issues I have with this budget, it is also not the only issue. Those who remember the debates I had with the “New Liberty party” as they called themselves back then will know I like sin taxes. I really like sin taxes. I believe they are our route to a healthy society, whilst maintaining the ideal of personal choice. I am thus saddened to see the rate of tobacco duty set so low. I would personally have this rate set significantly higher, and I worry that the Government’s decision to set the rate of tobacco duty so low could have really dire consequences for our fight against the scourge of second hand smoke.”

The Classical Liberals’ spokesperson on education, Zygark, took aim at the other education policies contained in the budget besides the graduate tax, though he says it is “one of the key reasons I oppose this budget.” He said: “I consider grammar schools to be a completely ridiculous idea. Why should a school be able to select who they educate? All grammar schools serve to do is reduce equal opportunities for education among children, with data showing that students from a better off background being more likely to attend a grammar school, and that grammar schools serve only to damage social mobility. Furthermore, grammar schools score similarly to non-selective schools on attainment, and areas with grammar schools do not drive up standards as many proponents for grammar schools have claimed.

“Onto the fair funding formula. While it is commendable for the Government to state their ambition to ensure no school is underfunded, this budget is extremely vague in stating how they do this, past saying that the formula “takes note of the higher needs of some children.” I ask that the Education Secretary comes to the House and explains this fair funding formula.

Foreign Affairs Spokesperson and Deputy Leader Tommy1Boys, who is also a cabinet secretary in the Scottish government, took aim at the support given by Plaid Cymru and the Irish Parliamentary party to the budget. “However Mr Deputy Speaker, I don’t share the views of others that because I am involved in devolved politics, I should vote for this budget just for the block grants,” he said. “When you vote on a budget, you vote on all of it, not just the good bits or the bad bits, and it is why I am opposing this budget. There are good things in it, but there are bad things. I cannot look my constituents in the eye and say I did the right thing voting for a budget that means they face extra living costs simply to be able to survive the night. I will be opposing this budget, and urge my colleagues to do so as well.”

He also pointed out what he says is a potential mistake. “One error I have come across in this budget which is deeply concerning is the Carbon levy. The levy is not due to come into force until FY2020, but the Government says it will receive £11bn in revenue this year from it. Could the Chancellor perhaps clarify this and ensure if a mistake has been made it is rectified to the House?”

Social Democratic party (including the Irish Parliamentary party)

Despite the IPP being the SDP’s Northern Irish wing, the two parties delivered different verdicts on the budget. The SDP’s leader, Saunders16, gave a lengthy speech on various elements of the government’s proposals and delivered a scathing critique. “With a mandate to pull the country back to the right in a way reminiscent of Margaret Thatcher, they have given it their best shot, but Mr Deputy Speaker, they may have the numbers, but they have not got a consensus.” He continued: “I have looked at every single part of this shameful budget that the government are hell-bent on pushing through on the back of a few pledges for Wales… Let me make this clear, Mr Deputy Speaker, I do condemn the government with every fibre of my being for using their majority to tear this country apart.”

“The government seem very proud that they have achieved a personal allowance of £20,420. What they fail to mention, is that this purely refers to income tax. The just about managing that this government were supposed to provide for remain burdened by income taxation, with 12% of their income above £7,104 going to the government in a tax bill via national insurance contributions. For someone earning £20,000, and no longer benefiting from negative income tax, this means £1,547.52 is taken from them. With a minimal welfare state outside of negative income tax, this will be catastrophic for many families across the country.

“VAT is set at 15%, an unprecedented low. While VAT might have its flaws, it is a consistently reliable form of revenue, and this reduction takes yet more money away from much more pressing causes like negative income tax. Still uncontent with this, the government is directing £10.5 billion towards a VAT refund. Mr Chancellor, at least pick one! The distributed profits tax sees more exceptionally low levels of revenue, when corporation tax across Europe is commonly set at around 23%. We could be generating around £20 billion more to put into our public services if we did not replace corporation tax, but that doesn’t matter for a government that wants to shrink the state regardless of the consequences.

“The lows of VAT and distributed profits tax make it even more laughable that this government is abusing land taxation to help pay for its irresponsibility, with a LVT that generates £90.20 billion. As a replacement to the old taxes of council tax and business rates, this clearly has its justification, yet the issue with council tax and business rates is that it made home ownership difficult. Mr Deputy Speaker, this makes the problem even worse, and instead of hurting the high street it is now taking a bulldozer to the just about managing in the South! Once upon a time, the right could claim to be on the side of property owners.

“The graduate levy is of course worthy of mention. While thankfully its implementation has been delayed, it remains a tax on achievement, and not just the achievement of our young people. This sorry tax applies to people who have already completed university! That makes it all the more disgusting that one tax the government thought it now has the fiscal headroom to abolish is capital gains tax.

“What makes this budget even more laughable than the destruction of the welfare state, or the cutting down of the state’s presence in taxation, is that the Chancellor of the Exchequer is either unaware of the existence of non-departmental spending or simply does not understand the scale of need faced in each area. Take the Department for Transport. £18.3 billion is going into it, which is reasonable until you realise a large part of transport and infrastructure is capital spending, and products undertaken outside of the department. It is at that moment you realise that transport is receiving half the funding it probably requires.

“To my friends in the opposition, hear this. Get out there, criticise this budget, lobby the more sensible members of the Conservative Party and try to take this down, but if it passes, do not get disheartened. Keep protesting, keep criticising and keep making it clear to the public that they deserve better. The general election is approaching, and our cause has never been so justified. And to my friends in the government, those who continue to believe in the Conservative party but are starting to think it is going too far: use this moment to be on the right side of history.”

Senior Irish Parliamentary party member, and former Libertarian, Abrokenhero told the House, in stark contrast to Mr 16: “I am overall lukewarm on it, and see a lot of things, good and bad in this proposed budget. But, Mr Deputy Speaker. I am a citizen of Northern Ireland, and I must stand up for Northern Ireland, and as such passing this budget is necessary. While the block grant for Northern Ireland is rather low, at only £12 billion, it is vital that Northern Ireland gains this funding to make sure we have the monetary resources to keep it up and running, so we can keep supporting government programs here, and fund projects which will be for the betterment of all citizens in Northern Ireland.”

Others

Smaller parties, such as the People’s Movement and the Democratic Reformist Front, were no more complementary than other opposition parties. Cornish People’s Movement spokesperson Baroness Brown Willy focused on her home region, saying: “In March 2014, then-Deputy Prime Minister Nick Clegg announced that Cornish language associations would receive £140,000 in funding from the Government. This government, and many governments before it, have refused to fund my language, in breach of the European Charter for Regional or Minority Languages. This budget does not contain a single penny for the Cornish Language. Where is the funding for my language?”

Democratic Reformist Front Leader ZanyDraco was charitable, but still expressed criticism. He said: “I anticipated to dislike this budget much more than I do after reading it and I applaud the Government for making a budget that isn’t sickening to read. I appreciate a Negative Income Tax being incorporated, for example (I was concerned that a NIT would not be incorporated). However, I still have some objections to some aspects of the budget (and I therefore oppose the budget at large as these drawbacks are simply unacceptable).

“Firstly, the “graduate tax” is a disgrace. People shouldn’t be paying a tax for having previously gotten a higher education. Furthermore, the Government even admits that they lack an adequate infrastructure to collect this! Under what pretense would one introduce something as a staple to their budget proposal without having the means to implement it? It’s frankly absurd.”