Budget Statement

Lord Bishop of Bristol Excerpts

Thursday 21st March 2013 Lords Chamber

[The Lord Bishop of Bristol]

My Lords, I recognise the limited amount of wiggle room that the Chancellor of the Exchequer has in the current economic climate, so much of what he proposed yesterday has to be cautiously welcomed. Arguments will continue over whether austerity has yet again trumped stimuli to growth, and will no doubt continue to smoulder for a time to come. I do not myself propose to pitch in on that topic, but I should like to make a few brief comments on one or two aspects of the Budget Statement.

First, and positively, from these Benches—understandably empty today of all days—we welcome the Government’s decision to keep their promises to the world’s poorest by committing 0.7% of our national income to overseas aid. From my own point of view, this is particularly bold in the context of the growth expectations, which have been revised downwards. I hope that this is something that we can all be proud of. Poverty is of course a relative concept but, together with many of my episcopal colleagues, because of our diocesan partnership links, I have travelled to some of the world’s poorest places. I can tell noble Lords that when you stare into the empty eyes of those who are starving to death, the argument that “Charity begins at home” wears a little thin. Through the Government’s commitment to the poor, many millions will benefit.

We are getting better at ensuring that the aid given is kept away from the grabbing hands of corrupt politicians. The distribution of such funding needs to be monitored and held in a framework of accountability. Of course, even though in my own mind this should not be a principal driver of aid, there is a very real sense in a global economy that such aid has an element of investment about it, for today’s aid may well be the foundation of tomorrow’s trade.

Aid is important but, as noble Lords know well, it is only part of the solution. The Government could be doing more to help poor countries to collect more of the tax that they are owed, by requiring multinationals to reveal the tax avoidance schemes that they are using in the developing world. Christian Aid estimates that poor nations currently lose $160 billion a year as a result of tax-dodging by multinationals—far more than they receive in aid from all rich countries. The pronouncements by the Prime Minister and the Chancellor on tax avoidance have so far been commendable. Now we look forward to the Government leading ambitious global action against tax avoidance at the G8 conference in June. That would show that the UK is serious about an international agreement to fight tax avoidance that hurts the poor.

I welcome the plans to invest an additional £750 million into subsidising childcare costs, in a country that has some of the highest childcare costs in the world. However, I want to note the concerns of Barnardo’s, the Child Poverty Action Group and the Children’s Society, which are worried that these changes will fail to help the families most in need of support. The Government’s scheme will assist those on high incomes, potentially up to a joint income of just under £300,000, but will do nothing to help parents working part-time on the minimum wage. In these times of austerity, it feels unjust not to be targeting help at those who are trying to work their way out of poverty.

I am also concerned about the proposal to set a firm limit on certain areas of welfare expenditure as part of controlling annually managed expenditure. Page 26 of the Treasury’s budget report seems very thin on detail, promising an update in June’s spending round. Assuming that these limits are binding, that is likely to put further pressure on millions of low-income families who are already being disproportionately affected by welfare cuts.

There are very good reasons why there is flexibility in this part of the Government’s balance sheet. The need for welfare expenditure varies with the economic cycle and, as the Chancellor has discovered for himself, it is not always easy to predict the future state of the economy. However, I hope that this announcement does not mean, for example, that every increase in unemployment will lead to a corresponding reduction in benefit rates. While I do not wish to overreact to an announcement that is clearly work in progress, I seek the Government’s reassurance that this will not mean further cuts in the real value of benefits and tax credits.

I sincerely welcome this Government’s commitment to overseas aid, and I hope that this bold act of generosity will be extended to ensure greater awareness of the needs of low-income families living in this country.