Living Standards

Debate between John Howell and Iain Duncan Smith

Wednesday 30th November 2011 Commons Chamber

[Mr Duncan Smith]

I agree with my hon. Friend. The reality is that we are raising people out of tax, while what the Labour Government did by getting rid of the 10p starting rate was to drop more people into higher rates of tax. It was really dismissive, very regressive and attacked the poorest.

[John Howell (Henley) (Con)]

Is my right hon. Friend as surprised as I am that there has been little or no mention from the Opposition of the benefit to living standards that comes from keeping interest rates low?

[Mr Duncan Smith]

I was going to come on to that. Had interest rates gone up and had we been paying more for our borrowing, we would all—including those paying mortgages—be poorer.

This debate about living standards is important. Of course, those standards are very tight, and I make no bones about the challenge that we face, but let us not forget where we came from. Let me take the House back to 2007, when personal debt had rocketed to about £1.3 trillion and we had the highest structural deficit in the whole of the G7. That was before the recession began. That is a completely unsustainable picture, and it required very painful readjustment. As my colleagues know, the problem was that we entered the recession ill prepared for the consequences. When Labour Members ratcheted up spending by a massive degree, they simply postponed the inevitable. After all, the IFS forecast for the period 2008-2011 was that living standards would fall by 1.6%. This was a case of a fall in living standards postponed, with pain pushed on to future generations. People do not have to take my word for it—the IFS said:

“Much of the impact of the…recession on UK living standards was not felt until after the economy had stopped contracting, but that…pain was most definitely delayed rather than avoided”.

Oral Answers to Questions

Debate between John Howell and Iain Duncan Smith

Monday 14th February 2011 Commons Chamber

[Mr Duncan Smith]

My right hon. Friend the Minister of State is doing that just now. The Work programme will be tailored to people’s needs and not implemented flatly. If people have a problem, the programme will deal with them. Jobcentres will be given more flexibility to ensure that they match employment to the person as necessary. My hon. Friend should therefore welcome the changes that we are making.

[John Howell (Henley) (Con)]

7. What steps he is taking to reduce levels of pensioner poverty.

Capital Gains Tax (Rates)

Debate between John Howell and Iain Duncan Smith

Monday 28th June 2010 Commons Chamber

[Mr Duncan Smith]

I am going to continue.

We have to seize the long-term prospectus for reform, and I shall introduce radical, long overdue changes to the welfare system, reforming the working-age benefit and tax credit system with measures consistent with our core principles: protecting the most vulnerable; improving incentives to work and providing the best route out of poverty; and tackling the pathways into poverty, welfare dependency, family breakdown and debt. That is crucial if we are to tackle income inequality, which is at its highest since records began in this country.

[John Howell (Henley) (Con)]

A vulnerable group that my right hon. Friend has not yet mentioned is pensioners. Will he say something about what we intend to do to protect pensioners’ incomes?

[Mr Duncan Smith]

I was going to come on to that, but I shall deal with it now.

As my hon. Friend knows, the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb), fully supports all of this, and has made an announcement. [Interruption.] We are a coalition, and we are together. He has announced some radical proposals on pensions, and I am enormously proud to be the first Secretary of State for Work and Pensions to say that we have relinked pensions and earnings. Moreover, even in these difficult times, we will triple-lock that pension, so that it will rise in line with earnings or prices, whichever is highest, or by 2.5%. [Interruption.] I heard the hon. Member for Wallasey (Ms Eagle) chuntering about the consumer prices index, but earnings will rise in due course well above that, so she does not know what she is talking about. [Interruption.] Okay: she had 13 years to do that, but she did not do it. She should go and look pensioners in the eye, and tell them why the previous Government did not do so, when they had the opportunity.

The coalition is proud to make sure that we will reform the system that we have inherited. We will reduce the deficit, and we will improve the lot of the poorest in society. We will look back on this and say, “What a shameful 13 years the other side had.”