Budget Resolutions and Economic Situation

Debate between Lord Field of Birkenhead and Chris Leslie

Thursday 9th July 2015 Commons Chamber

[Chris Leslie]

Thank you, Mr Deputy Speaker.

Many parts of the Budget were suggested by Labour in recent months. Abolishing permanent non-dom status—that sounds very familiar to my hon. Friends. Increasing the minimum wage—again, we have repeatedly called for that. We welcome any action on low pay—by the way, the Conservatives opposed the creation of the national minimum wage in the first place—but this so-called national living wage is unravelling as it becomes clear that it is nothing of the sort. It is the rebranding of an increase in the national minimum wage—as I say, Labour created that in the first place—which, with the tax credit changes, will still leave working families worse off.

We will support steps to tackle tax avoidance—again, we have consistently pressed the Government on that—but this Chancellor has a poor record on hitting tax avoidance targets, with the amount of uncollected tax increasing to £34 billion last year and his so-called tax deals continually failing to bring in the revenues he predicted. In yesterday’s Budget, the Conservatives broke their manifesto promise to deliver £5 billion of savings by 2017-18. The Chancellor made that promise at the last general election, and he is now saying that we might perhaps get it by the end of this Parliament. We will file the supposed £5 billion of tax avoidance measures in the “believe it when we see it” category.

[Frank Field (Birkenhead) (Lab)]

May I say how much I welcome my hon. Friend’s statement that Labour welcomes the Government’s announcement yesterday to move towards a living wage? Will he confirm in the Chamber what he has said elsewhere—that we will engage very constructively, looking imaginatively at the Red Book, to try to make this more comprehensive and to extend it to the public sector? Does he accept that the more success we have in developing this idea with the Government, the fewer people will be eligible for means tests, and that our aim is not to change means-tested benefits in line with such increases, but to make sure that people can earn enough not to be eligible for means-testing?

[Chris Leslie]

My right hon. Friend is right that we should be thoughtful about the Government’s proposals. It is sometimes difficult to see through the political fog of the games that the Chancellor is trying to play and the tactics he is trying to use. Oh, the look of innocence on his face! My right hon. Friend is right that it is important to take on questions of welfare reform and work through them methodically. We will not oppose everything just for the sake of it. My right hon. and learned Friend the acting Leader of the Opposition was right to say yesterday that while that might be the temptation, we will look at the proposals and be reasonable about those we can support.

We welcome the steps taken in the Budget to reduce pension tax relief for the highest earners, and of course the rise in the personal allowance threshold, as we support steps to cut taxes and try to get a better settlement for those in work.