Wednesday 30 March 2022
National Insurance payments
The petition of residents of the constituency of Glasgow East,
Notes that Her Majesty’s Government proposes a rise in national insurance payments for all to offset costs related to reforms of health and social care policy in England; and declares that these measures will be deeply regressive to low income and young earners.
The petitioners therefore request that the House of Commons urge the Government to abandon proposals to raise national insurance payments with immediate effect.
And the petitioners remain, etc.—[Presented by David Linden, Official Report, 28 February 2022; Vol. 709, c. 875.]
Petitions in the same terms were presented by the hon. Member for Leeds East Richard Burgon:.
Observations from The Financial Secretary to the Treasury (Lucy Frazer):
It is right that health and social care has a new, completely dedicated, and sustainable source of revenue not just today but into the future as well. Every penny collected from the health and social care levy goes direct to the NHS and social care. The Government are committed to responsible management of the public finances. That is why the Government have taken the tough, but responsible decision to increase taxes. Funding is required now to reduce the covid backlog.
The levy is progressive. Over half of the levy revenue comes from just the highest 15% of earners, so a reversal would not significantly benefit lowest and middle earners. To help ensure fairness and parity, the Government will extend the levy to those working over state pension age from April 2023. The rates of dividend tax will also increase by 1.25 per cent from April 2022 ensuring that business owners and investors will be making a contribution in line with that made by employees and the self-employed on their earnings.
Further, at Spring Statement 2022, the Government announced that the national insurance primary threshold and lower profits limit—the point at which employees and self-employed respectively start paying national insurance contributions (NICs)—will increase to £12,570 from July 2022.
This is a tax cut worth over £330 for a typical employee in the year from July; the equivalent saving for a typical self-employed person would be worth over £250. Around 70% of workers who pay NICs will pay less NICs, even accounting for the introduction of the levy. An additional 2.2 million people will be taken out of paying class 1 and class 4 NICs and the health and social care levy entirely, on top of the 6.1 million people who already do not pay these NICs.
This measure is in addition to the PT-LPL increase introduced by the Government in April 2020 that increased the point at which employees and the self-employed start paying the main rate of national insurance contributions, by over £850 to £9,500. The Government have also increased the income tax personal allowance by over 40 per cent in real terms since 2010, ensuring some of the lowest earners do not pay income tax (22-23).
Specifically on the issue of a wealth tax, the UK does not have a wealth tax, but it does have several different taxes on assets and wealth. The UK taxes assets and wealth across many different transactions, including the acquisition, holding, transfer and the disposal of asset, as well as taxing the income derived from holding assets. Notably, the Wealth Tax Commission which has no connection or link to the Government, found in 2020 that if considering inheritance tax, capital gains tax, stamp duty and stamp duty land tax, the UK is among the top of the G7 countries for wealth taxes as a percentage of wealth.
VAT and fuel duty on petrol and diesel
The petition of residents of the constituency of North Ayrshire and Arran,
Declares that there is an urgent need to address the ongoing spiralling fuel prices across Scotland and the UK, with the cost of petrol and diesel in the UK hitting an all-time high as the average cost of filling up a typical family car has broken through the £90 barrier for the first time ever; is concerned that motoring organisations have warned of “unbelievable financial pain” as fuel prices climb at unprecedented rates with oil prices reaching over $130 a barrel; is mindful that these rising costs will quickly feed into the cost of living as hauliers pass on extra costs to customers and there is genuine concern that inflation could reach 10% this year resulting in the biggest squeeze on living standards since the 1970s; understand that whilst fuel duty has remained at 57.95 pence a litre for the last 1 years, motorists pay an additional 20% VAT of 12p on that fuel duty effectively paying a tax on a tax of every litre of fuel bought before the cost of extractions, purchase, shipment and forecourt sales are added, which also incur VAT; appreciates that the Treasury is raking in billions as VAT on fuel costs at forecourts rockets and other prices rise, accelerating rising inflation.
The petitioners therefore request that the UK Government immediately and urgently reduces VAT on fuel and/or fuel duty to ease the pressure on households, businesses and essential road users and to help keep inflation in the single figures.
And the petitioners remain, etc.—[Presented by Patricia Gibson, Official Report, 22 March 2022; Vol. 711, c. 307.]
Observations from The Exchequer Secretary to the Treasury (Helen Whately):
The Government thank Patricia Gibson MP for submitting the petition, on behalf of her constituents in North Ayrshire and Arran, that—in the context of increasing fuel prices—requests an immediate reduction to fuel duty or VAT on fuel.
The Government recognise that fuel prices have reached their highest ever levels in the recent weeks. That is why the Chancellor announced at Spring Statement 2022 a temporary 12-month cut to duty on petrol and diesel of 5p per litre.
This is the largest cash-terms cut across all fuel duty rates at once, ever, and is only the second time in 20 years that main rates of petrol and diesel have been cut. This cut represents savings for households and businesses worth around £2.4 billion in 2022-23.
Barnet Police Station
The petition of residents of the constituency of Chipping Barnet,
Declares that petitioners strongly object to the Mayor of London's decision to close Barnet Police Station and his subsequent plans to sell off the building.
The petitioners therefore request that the House of Commons urge the Government to press the Mayor of London to drop his plans to permanently close Barnet Police Station and to work to re-open it as soon as possible.
And the petitioners remain, etc.—[Presented by Theresa Villiers, Official Report, 10 March 2022; Vol. 710, c. 578.]
Observations from The Minister for Crime and Policing (Kit Malthouse):
The Government remain of the view that it is the responsibility of locally elected Police and Crime Commissioners (PCCs), Mayors with PCC functions, and Chief Constables to take decisions about police resourcing and estates.
The Government understand the importance of accessibility to the police. Police stations remain one of many important methods where incidents can be reported by the public.
Chief Constables, PCCs and Mayors with PCC functions should take this into account and, where possible, stations should remain open in line with local needs.