Davis accused of leadership bid with attack on welfare spending
DAVID DAVIS was yesterday accused of making a pitch for Theresa May’s job as he urged Ministers to boost welfare spending, overhaul student loans and scrap the Help to Buy housing policy.
The East Yorkshire MP has been touted in recent weeks by Eurosceptics as a potential ‘interim’ Prime Minister to take over from Mrs May and steer Britain towards a harder Brexit.
And the former Brexit Secretary used the opportunity to reply to Monday’s Budget in the House of Commons to set out a vision of British economic and financial policy which strayed significantly from Mrs May’s manifesto, leading to accusations he was making a “leadership speech”.
The Haltemprice and Howden MP welcomed extra cash for Universal Credit in the Budget, but said the welfare reform must be “properly funded” and called for extra money in future to help single parents and others.
He declared student loans, which increased massively during the Conservative-Liberal Democrat coalition, had “failed” and advised Ministers to pursue a “proper graduate contribution system” and move away from loans altogether.
He said it would have a “liberating psychological impact” on young people.
On housing, the Tory MP said as a “party of aspiration” they “must do better” by ensuring home ownership is available to a “whole new generation” and suggested using landowner gains to help make properties more affordable.
As Mr Davis neared the end of his speech, Labour former minister Kevan Jones expressed his frustration at his refusal to take interventions and said in a point of order: “I don’t want to interrupt (Mr Davis) in his leadership speech, but the point is this is supposed to be a debate.”
Earlier at Prime Minister’s Questions, Mrs May and Jeremy Corbyn clashed over the Budget, with the Labour leader accusing the PM of breaking her “promise” to end austerity.
But Mrs May mocked Labour’s apparent confusion over changes to personal tax allowances which will give cuts to the lowest paid but a bigger windfall for higher earners, after John McDonnell indicated the party would not oppose them.
Criticised by Mr Corbyn for choosing a “tax cut for higher earners” rather than ending a benefit freeze, Mrs May replied: “On Monday, he said cutting taxes for 32m people was frittering money away on ideological tax cuts. Yesterday, the Shadow Chancellor said Labour would support the tax cuts.”
The PM added: “We are ending austerity, we are bringing debt down, we are putting more money into our public services.”
But Mr Corbyn told the Prime Minister that councils, schools, police, prisons, public sector workers and benefit claimants would face years of austerity, as they received little or no help in the Budget.
“Will she apologise for her broken promise that she was going to end austerity, because she has failed to do that?” he said.
Centrist figures in Labour have criticised Mr McDonnell for backing perks for the wealthy while there are “people dying on British streets”.
A senior Labour spokesman said the party will vote against the Budget as a whole, but will not attempt to force a vote on the personal allowance changes – effectively abstaining.
The spokesman said Labour welcomed tax reductions “however modest” for low and middleincome earners, even though it believes that extending the benefit to the highest earners was “the wrong thing to do”.
Labour is committed to protecting earners outside the top five per cent from tax rises, but those above this level could expect to see the benefits from Mr Hammond’s changes “clawed back and more” if Mr Corbyn took power, as part of a wider increase in their taxes.
Senior Labour MPs defended the party’s approach over the income tax cuts.
Shadow Foreign Secretary Emily Thornberry told BBC Radio 4’s “We are going to be given a choice, it is going to be one package and we are going to be asked to vote on whether or not people on lower incomes should get their tax threshold risen and the higher rate as well.
“We have been given one package and the difficulty is we can’t make a choice in relation to that when it comes to the vote.”
Meanwhile, critics of the Government have claimed an increase in the national insurance rate band will effectively wipe out much of the benefit of income tax allowance reforms for higher earners.
Asked about the decision to increase NI thresholds in line with income tax allowances, Mrs May’s official spokesman said: “It has been Government policy to do this since 2010. It’s clearly spelt out in the Budget document, which tells people what the new tax and national insurance system looks like.
“It’s a sensible tax policy to keep these thresholds aligned where we can.
“If we didn’t we would face a scenario where some on higher incomes would pay less tax than others on lower incomes.”
Mrs May and Mr Hammond were yesterday facing more than 100 business leaders and major investors as they seek to win support for the Budget plans.