Balancing the Public Finances

Debate between Kirsty Blackman and Jeremy Quin

Tuesday 11th July 2017 Westminster Hall

[Kirsty Blackman (Aberdeen North) (SNP)]

It is a pleasure to be in Westminster Hall with you in the Chair, Ms Ryan. I thank the right hon. Member for Forest of Dean (Mr Harper) for bringing this debate to the House. It is an important debate to have. It highlights the fact that a huge number of Conservative Members live on a different planet from the rest of us. In particular, the speech of the hon. Member for Redditch (Rachel Maclean) did not seem to have any link with reality as I and my constituents know it.

Conservative Members are putting out economic soundbites that could easily have been lifted from the Conservative party’s manifesto, but that is not the lived experience of real people. That is not what is happening or what the just-about-managings are facing. They do not feel like their wages have gone up; they do not feel like the reduction in tax credits is at all helpful. I get that the personal allowance has been raised; that is brilliant and I am pleased that it has happened. I also get that the minimum wage has been raised, but it is not to a level that people can live on. That is the problem. It is still a minimum wage and it is not applicable to younger people in the job market. They may have families and housing costs—the same costs that those of us who are over 25 have—yet they are not worth the same wage as others. I am frustrated by the debate because I cannot believe that Members can spill this nonsense.

When the Chancellor gave the spring Budget statement, he reckoned that inflation would be 2.4% in 2017. Actually, in the 12 months to May, it was sitting at 2.9%. The forecast by the Office for Budget Responsibility for earnings growth in 2017 was 2.6%. If inflation continues to grow at 2.9% and wages continue to grow at 2.6%, there will soon be a serious problem, particularly for households that are struggling with increasing levels of household debt. The Bank of England is concerned about the increase in household debt, which is at its highest since 2008. This is a real problem for families, especially when they will see their real wages eroded.

[Jeremy Quin]

Is the hon. Lady proposing higher Government spending, higher inflation and higher interest rates?

[Kirsty Blackman]

I was literally about to come to that. There are three ways for the Government to increase spending on public services: higher taxes, higher borrowing or higher growth. Those are not my words but those of the Chancellor, yet whenever an Opposition hon. Member suggests increasing public spending or simply not reducing it, Conservative Members say, “Oh, you will have to put up taxes.” As the Chancellor said, there are three ways to increase public spending.

Some of the things that Conservative Members said are a concern. My hon. Friend the Member for Glasgow East (David Linden) said that, according to the Resolution Foundation, 2011-21 will be the worst decade for pay growth for 210 years. That is quite some statistic.

It is interesting that the Government talk about how wonderfully they are doing for young people. The Institute for Fiscal Studies said that those born in the 1980s have by their early 30s accumulated half as much wealth as those who were born in the 1970s. The right hon. Member for Forest of Dean mentioned the IFS as a respected think-tank, and it won an award last night. If we are talking about mortgaging our future and concerns for the future, the lack of wealth accumulation compared with previous generations is a real problem, including for millennials. The way the Government are dealing with it is not working.