Budget Resolutions and Economic Situation

Debate between Catherine McKinnell and Robert Jenrick

Tuesday 22nd March 2016 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

We learned many things from last week’s Budget, and we have learned perhaps even more from the fallout since. However, the overriding message we seem to be getting is that, six years into his job, the Chancellor cannot keep a promise and does not seem to learn from his past shambolic Budget mistakes. He promised to balance the books by last year, to get debt falling as a percentage of GDP each year and to keep welfare spending within his welfare cap, but on virtually all of his own fiscal targets, as the independent Office for Budget Responsibility confirmed last week, he has failed to deliver.

Of course, this Government’s shortcomings go much further than the Chancellor’s own meaningless targets. A mere six months ago, the Prime Minister told his party conference that he would govern according to “one nation, modern, compassionate” Conservatism. This is the same Prime Minister who last week cheered on a Budget that cut capital gains tax, raised the threshold for the 40p rate, further cut corporation tax, and would see the poorest losing about £1,500 a year in the next few years while some of the richest gain £200. To top it off, the Chancellor pledged to slash disability benefits by up to £1.3 billion a year, which the OBR estimated would lead to some 370,000 disabled people losing an average of £3,500 a year.

[Robert Jenrick]

I want to give some context on the important point about capital gains tax that is being made by the Opposition. Jim Callaghan created capital gains tax when he was Chancellor in 1965, but it has always been lower under Labour Chancellors than under Conservative Chancellors. Even after this change, capital gains tax will be 2% higher under this Chancellor than it was under Alistair Darling, and indeed Gordon Brown in the previous Labour Government.

[Catherine McKinnell]

I do not understand the hon. Gentleman’s point. He is digressing on details of capital gains tax when the point I am clearly making is about the context in which the cut has been made, where the burden of this Budget very much falls on the poorest and the most vulnerable in our society. If that is compassionate Conservatism, bring the nasty party back!

I am pleased and relieved that the Government have backed down on this issue within less than a week. However, I am angry that those people who rely on the personal independence payment, including 1,100 people in Newcastle upon Tyne North, have endured days and weeks of huge anxiety about how they would cope if this level of support was cut. It is unforgivable. I remain equally concerned about how the existing reforms to PIP are quite clearly failing disabled people. Constituents continue to get in touch with me following my recent question to the Prime Minister because they have been told that they are no longer eligible for a Motability vehicle despite its clearly being the only means by which they can leave the house, or indeed get to work. The new PIP assessment is fundamentally flawed. I strongly urge the Work and Pensions Secretary and the Chief Secretary to the Treasury to revisit this issue with fresh eyes and look at reforming the current PIP changes before they embark on any further welfare reform.

Despite the Chancellor’s so-called

“revolution in the way we govern England”,

with the pledge last May to give local areas greater control over local transport, housing, skills and healthcare, it appears that he does not place the same faith in local communities when it comes to our schools. Last week’s Budget confirmed that, far from handing control to local communities, the Government are about to embark on the greatest ever centralisation of our schools system, which will see an end to the role, now a century old, of democratically accountable local authorities as the stewards of our children’s education. My Front-Bench colleagues have already highlighted the glaring black hole in the finances of this plan—£560 million—which raises questions about the extent to which the schools budget will be raided to make up the shortfall.