Spending Round 2019

Lord Ashton of Hyde Excerpts

Wednesday 25th September 2019 Lords Chamber

[Lord Liddle]

I would include compulsory social insurance or hypothecated taxes as part of the general remark that I made. However, we are going to have to find new ways of funding our welfare state because of the demographic challenge. This is going to be difficult if Brexit goes ahead because, even if we avoid no deal, which we have legislated against, the kind of medium-term deal that Boris Johnson has in mind—the Canada-plus, free trade agreement—is not the smooth Brexit that the economic forecasts of the OBR have relied upon. It is a much tougher, harder Brexit than the customs union and regulatory alignment that Mrs May was aiming for. It will have more serious economic consequences for the country, and I worry about that a great deal.

Of course, you could not possibly justify, as a result of Brexit, a temporary increase in the government deficit, but you can only do that for a time. We saw in the 1970s that there had to be an adjustment for the higher price of oil, and we saw after the 2008 financial crisis that there had to be an adjustment for the fact that the deficit had risen as a result of the cost of saving the financial system.

If that will be the case, who will bear the pain? The people who cannot afford to bear the pain, and the people whom this document completely neglects, are poor working families. There is nothing in this document to relieve the burden that they have faced in the last 10 years. This is a gross generational unfairness: I get a nice real-terms increase in my pension every year, but what do the young mother and her children get? They get their benefits frozen as a direct result of the Government’s policy.

Most of these people are not people who do not work. They are not, to use that horrible language, scroungers; they are people who work the living daylights out of themselves, sometimes with two or three jobs, in order to meet the family budget. This squeeze on working families is having a dreadful impact. The Resolution Foundation, one of the best independent think tanks of the past few years, suggests that we will have something like 1.5 million children in poverty— 37% of all children—if we continue on our present policy path on tax credits, universal credit and the rate of benefits. That is unacceptable. Even in the period that we are talking about, there is a 4.1% increase in departmental expenditure in the coming year but further cuts in benefits are going on. It cannot continue. I notice in Cumbria the dreadful impact that is having on the ground. We have a great increase in demand for our children’s services, from parents who cannot cope with bringing up their children themselves, and the costs of our children’s services are rising dramatically. This will become as big a challenge as social care unless we address it.

The big question is: is this a turning point? I hope that the noble Lord, Lord Duncan, from his new position will be able to say positively that the policies of the past nine years have been abandoned.

[Lord Ashton of Hyde (Con)]

My Lords, to make sure that there is time available and that people are here to question the Leader of the House, we propose in agreement with the usual channels to take two more speakers in this debate and then take the Prime Minister’s Statement, followed by the Iran Statement, and then conclude the remainder of this debate.