Amendment of the Law

Baroness Stuart of Edgbaston Excerpts

Monday 23rd March 2015 Commons Chamber

[Rachel Reeves]

Labour’s jobs guarantee would help 150,000 people get into work in the first year of a Labour Government. I am optimistic that we can transform the lives of young people and the long-term unemployed, unlike this Government, who have left them on benefits. Funded by a repeat of the bank bonus tax they abolished and by restricting pensions tax relief to 20% for people earning more than £150,000 a year, our compulsory jobs guarantee will help young people who have been unemployed for a year and older people out of work for two years. Should that not be our priority, rather than tax cuts for bankers?

The Budget also reforms the rules governing pensions and annuities. The Opposition have long called on the Government to sort out the failing pensions and annuities markets, which result in too many hard-working savers finding their retirement pots eroded by excessive fees and poor-value products. So we welcome more freedom for savers to choose how to access their money and plan their retirement. Just as with last year’s announcement, we find the same failure to ensure that savers and pensioners have the support and protection they need to secure a decent and reliable income and to avoid the rip-offs that are already threatening to create another mis-selling crisis.

Just this weekend, we learned that with fewer than two weeks before the reforms announced in last year’s Budget come into effect, there is still no telephone number for the promised advice service, Pension Wise, leaving hundreds of thousands of savers exposed to scams that could have a devastating effect on their retirement plans. Instead, we have the ridiculous spectacle of the Pensions Minister trying to wash his hands of the responsibility by warning of the rip-offs that will result—without doing a single thing properly to protect people from those risks.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Any decisions about annuities are extremely complex decisions to take. Failing to get the advice lines up and running is not just a fault on the part of this Government, it is negligent. It is negligent to allow people this freedom without providing them with any back-up to help them make the right decision. What is more, there is no thought given to the remedies if the decision they take is wrong.

[Rachel Reeves]

When the Chancellor spoke in the 2014 Budget he said that people would be given “advice”, which was then watered down to “guidance”. Now, with two weeks to go, we know that nobody has received this guidance, yet people will be making irreversible decisions about their retirement income.

This Budget has been more of the same from the same old Tories: more overspends, delays and missed targets on social security; and more big promises for savers and pensioners that are not backed up with the support and the protections we need to make these reforms work.

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[Mr Robin Walker (Worcester) (Con)]

It is a pleasure to follow the right hon. Member for Holborn and St Pancras (Frank Dobson), and I agree with a great deal of what he said about taxation and the importance of clamping down on tax avoidance, although I gently point out that this Government, having closed the tax gap and, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) pointed out, made our tax system more progressive, have a better record than their predecessor.

I welcome the Budget, which is about securing this Government’s legacy of growth, jobs and recovery in the economy. It is about delivering on a plan, and a plan that is working. To see that, we need only look back at where we have come from. After the previous Government left the biggest peacetime deficit in our nation’s long history, the deficit has been halved and we have started to pay down the debt as a percentage of GDP. We are achieving record employment against Labour’s legacy of mass unemployment, and growth against its record-breaking recession. The number of apprenticeships has doubled, youth unemployment has been slashed, businesses are confident to invest and people are beginning to be confident to save once again.

Under the previous Government, many people were afraid to go to the bank in case they could not get their money out. We took over in a crisis and at the end of five years of difficult decisions we will leave the country emerging into the sun. I remember, under the previous Government, walking down streets in Worcester where every third door displayed a repossession notice. Those streets now show none. I remember seeing unemployment in Worcester above the national average—well above 2,500 people. Now it is below a falling national average, more than halved since the general election, and long-term unemployment has fallen for each of the past 11 months in my constituency.

The number of people in work nationally is at its highest ever level and around 80% of the new jobs created have been full time. Opposition Members like to talk about zero-hours contracts and part-time work. Both increased hugely in the latter years of their Government, but they chose to do nothing about them. This Government have acted to ban exclusive use of zero-hours contracts and increased full-time jobs by well over 1 million. Labour Members also talk about a cost of living crisis, and it is true that over a long period wages failed to keep pace with inflation. This was the consequence of our economy being £112 billion smaller on their watch, more people being in competition for fewer jobs as a result of the 2009 crash, and the inflation caused by higher energy costs.

[Ms Gisela Stuart]

rose—

[Mr Walker]

I shall not give way. I am sorry; I want to keep time for other Members.

However, this Government have presided over falling inflation, which is now at its lowest level on record, more jobs and, in the current year, above-inflation increases not just in the minimum wage, but in average wages and take-home pay. The crucial decision to cut income tax for the lowest paid contrasts starkly with Labour’s decisions while in power to scrap the 10p rate and to push up employers’ national insurance. Instead of driving up the cost of employment and taking more of people’s wages in tax, we have helped businesses to create more jobs and, crucially, let people in the lowest paid jobs—part-time workers and those on the minimum wage—keep more of what they earn.

As the Chancellor set out, families are £900 a year better off than they were in 2010 and the official figures showing this are borne out by independent research, which Opposition Members used to quote when it suited their arguments. The latest figures from the Asda income tracker show average family discretionary spending power at £185 per week—the first time since its records began in January 2009 that that figure has risen above £180, and an increase of £16 per week since the same time a year ago. In April 2010, before the general election, the equivalent was £172.

As a member of the Business, Innovation and Skills Committee I welcome the fact that this Budget delivers further for business by cutting corporation tax to one of the most competitive rates anywhere in the world, incentivising the employment of young people and apprentices through further changes to employers’ national insurance liabilities, and launching the long-awaited reform of business rates. I welcome the extension of small business rates relief and the high street discount, as well as progress with the valuation system review but, as the Committee’s high streets inquiry concluded:

“The short-term tweaking of the Business Rates system is building up problems for the future and, instead, the....system needs fundamental reform.”

I look forward to supporting the case for fundamental reform. We need to look for a system that removes the bias against our high streets and town centres and rewards businesses that invest and expand. Business rates are currently the only area of taxation where there is not only no incentive, but a positive disincentive to take more people on, and this needs to change. I know that the British Retail Consortium and the Federation of Small Businesses have warmly welcomed the commitment to reform, and I hope that both will be extensively consulted on how it can best be delivered.

I also welcome the continuing focus on investing in skills and helping businesses to do so. The Budget saw the launch of apprenticeship vouchers for businesses to manage their own schemes, and businesses such as Worcester Bosch, Yamazaki Mazak, Titania cyber security, Comco and Green Lighting, which I visited during national apprenticeship week, will welcome the Government’s focus on this aspect.

One of the best things about this Budget is its support for saving. As chairman of the all-party group on credit unions, I warmly welcome both the £1,000 tax-free allowance for savings and the administrative changes that will remove a burden from savings organisations, including credit unions. Last week I attended my local hospital to see the launch of a payroll saving scheme from the Castle and Crystal credit union, which expanded into Worcestershire at my invitation. Such schemes will benefit from the Chancellor’s efforts to make saving more attractive.

In an age where saving for the deposit on a first home has become ever more challenging, I particularly welcome the launch of the Help to Buy ISA. My late father pioneered the policy of right to buy which helped thousands of people to own their first home in the 1980s, and I am hopeful that Help to Buy, combined with this innovative savings scheme, can help thousands more to enjoy the security of owning their own home in the 21st century. Help to Buy has already helped 184 families in Worcester and more than 900 in Worcestershire to get on the housing ladder. With the Help to Buy ISA I hope we can make a difference for hundreds more.

I welcome this Budget continuing the increase in the basic state pension. On the doorsteps of Worcester I often hear from pensioners who are very concerned about the fact that they may be paying income tax on a small pension inherited from a deceased partner. The move to increase the income tax threshold to £12,500 in the future will take thousands of those pensioners out of income tax altogether, which will be an extremely positive reform.

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[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

It is great to follow my hon. Friend the Member for Livingston (Graeme Morrice), who has reminded me that when Labour introduced the minimum wage, it was fiercely opposed by the Conservatives, who said it would bring about the end of the universe as we knew it. Also, unless I am much mistaken, that was when we had our last all-night sitting in the House. We kept the debate going until 8 o’clock in the morning, with a full house on the Labour side all waving their Order Papers as we brought in the minimum wage. That was one of our proudest achievements, and one that we should never forget. We should never take any lectures from the Conservatives on that subject.

Today, I want to talk about the dog that did not bark—the thing that was not mentioned in the Budget. According to the latest news from Asda Mumdex, 70% of women think that it is the most important factor affecting their lives. It is called the NHS. I am not sure whether its omission from the Budget was the logical extension of the Government’s trying to take politics out of the NHS, which the right hon. Member for South Cambridgeshire (Mr Lansley) tried to do with dubious success. However, to try to do that now would be to deny the fact that the NHS is deeply political because it is a service that is dependent on an annual decision on what percentage of the tax take we should spend on it.

I do not know whether the Conservatives want to take politics out of the NHS by moving to an insurance model, for example, but if they do, I would have to warn them about making comparisons with what is happening in the United States of America. The US spends 16.9% of its GDP on health but produces only 3.1 hospital beds per 1,000 of population, whereas we spend 9.3% of our GDP on health and produce three hospital beds per 1,000 people. So ours is an extremely efficient system. My constituency has some of the best in NHS provision, as well as the second largest number of doctors and life sciences professionals in the country. If something cannot be done in Edgbaston, in the University Hospitals Birmingham NHS Foundation Trust, then it cannot be done.

I have set up an NHS tracker service for my constituents, and in the past month, 400 of them have come forward with responses which show that 17% said that either they or a member of their immediate family had been to accident and emergency in the previous month, of whom only 78% were seen in under four hours, with 16% waiting longer to be seen. Also, 67% of the respondents said that either they or a family member had seen a GP in the previous month, with 34% being seen on the same day and 24% being seen in one or two days. However, 11% had to wait more than a week to be seen, and 8% waited more than two weeks. This tells us that the service is being stretched to the limit.

We also know that the Government have tried to delay a number of decisions until after 7 May. For example, when Monitor tried to arrange the tariffs for specialised hospitals, the University Hospitals Birmingham NHS Foundation Trust faced a potential deficit of £60 million because of the funding structure, but when a number of hospitals objected, all that happened was that Monitor delayed the decisions. We will now have to wait until the end of May or early June and hope that the problem will go away.

The problem will not go away, however, because the botched £3 billion reorganisation that the Tories and the Lib Dems saw through not only cost us a lot of money but created unnecessary structures. We now have about 440 new bodies and administrative layers. They have not improved patient care, but they have diluted accountability and made it even more difficult to find out who is actually in charge.

In addition, there has been an increased reliance on agency staff in our hospitals, and people have been made redundant only to be rehired. We have ended up with a Tory Government who are trying to make us believe that the NHS is fine and things are working, but even in the best areas, such as mine, things are about to be stretched beyond their limits. The dismantling of some of the state structures that has taken place over the past few years will become worse if there is another Tory Government. In three areas—local government, education and the health service—state structures have been dismantled in a way that makes some services simply undeliverable.

So what I want in my patch in the NHS is: a return of the 48-hour GP guarantee; a stop to the closures of the walk-in centres, because the ones we have are being used; and a better use of our pharmacists. Above all, I do not just want an extra 20,000 nurses and 8,000 extra doctors to be recruited—I want more of them to be trained. Although the Chancellor forgot to mention the NHS, it is still extremely important. However, it is currently not funded and structured in a way that is sustainable, and that is one of the most important omissions of this Budget.

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[Liz McInnes (Heywood and Middleton) (Lab)]

Last week, we had the Budget announcement and the eclipse. One plunged the nation into darkness and the other one was a rare and important astronomical event. [Interruption.] I got one laugh, thank you.

The Chancellor claimed that Britain was walking tall again, giving the impression that our economy was booming, that well-paid jobs were being created, and that voters were better off now than they has in 2010. But are voters really better off, because that is not what they are telling me in Heywood and Middleton?

Many of my constituents work in the public sector where they have seen their pay frozen since 2010 or have been subjected to below-inflation pay rises. Some NHS workers have seen their pay fall by as much as 30% through the withdrawal of recruitment and retention premiums and reductions in out-of-hours pay on top of flatlining basic wages, not to mention additional pension contributions.

[Ms Gisela Stuart]

At the same time as people on regular employment contracts are undermined, our hospitals are spending extraordinary sums on agency payments, destabilising the labour market even more.