Working People’s Finances: Government Policy

Debate between Aaron Bell and Bridget Phillipson

Tuesday 21st September 2021 Commons Chamber

[Bridget Phillipson]

First, it is worth considering why the increase to universal credit was put in place. It was because, during the pandemic, the Government had to recognise that universal credit had been set at an inadequate level on which families might survive. On the hon. Lady’s wider point, I have a long list of places where we could find some money, if she is interested: the 1.9 million pieces of personal protective equipment, worth £2.8 billion, procured by the Government that were useless; the stamp duty holiday that was a £1 billion-giveaway to landlords and second homeowners—I could be mistaken, but I do not recall her objecting to that—and the hundreds of millions of pounds about to be wasted on the Prime Minister’s vanity yacht. That is before we get to the Test and Trace system that the National Audit Office said had not worked properly and had had a “minimal impact” on transmissions, literally wasting billions. This is about choices. There is always money for the Government’s projects, their friends and their people, yet when it comes to dealing with some of the poorest families in our community—those who have got us through the pandemic—I am afraid they are told that there is nothing for them.

[Aaron Bell (Newcastle-under-Lyme) (Con)]

rose—

[Bridget Phillipson]

I will make a little more progress but will happily take another intervention in due course. Having gone from no interventions to a flurry of them, I should probably press on.

The scar of poverty is not just about not having material goods, a roof, warm clothes and warm food. It is about a lack of freedom, having nothing to spend on yourself, having choice exercised for you—either by others or by necessity—and finding your voice and your own choice squeezed out. That is what the Government’s changes do, but it does not need to be like that.

Labour has a clear plan for how we would secure a better future for our country and steer a path for our economy in the months ahead. We would not be pretending that a national insurance rise without a plan is the way to fix the NHS, we would not be cutting universal credit in just a few weeks’ time, hitting working families hard, and we would not have spent 18 long months handing out huge amounts of taxpayers’ money through outsourcing and crony contracts while hitting working people for tax again and again. We would not be telling hauliers that they were crying wolf. We would be taking action day and night with employers and trade unions to fix the supply chain disruption that is leading to higher prices and fewer goods. We would not have sat back for the last decade as rent, childcare and rail fares soared.

[Bridget Phillipson]

Yes, absolutely. These are political choices—who we seek to prioritise, what we do from Government and what matters most to us all.

[Aaron Bell]

When the hon. Lady’s boss, the hon. Member for Leeds West (Rachel Reeves), was appointed as shadow Chancellor, she said that not only would all Labour’s policies be fully costed but she would explain how they would be paid for. They need to be paid for on an ongoing basis. It is no use going over incidents from the last 18 months and saying that that would fund the extension to UC forever, that tax credit uplifts would be made permanent and that legacy benefit claimants would also get them, as well as turning the advances we have had into grants, reducing the taper rate and scrapping the benefit cap and the two-child limit. Those are popular policies, but how much would all of that cost and how would Labour pay for it on an ongoing basis? The hon. Lady cannot deny the fiscal reality that we are in a difficult situation because of all the money that the Government have spent on protecting jobs.

[Bridget Phillipson]

The difficulty with the Government’s approach is that they like to pretend that theirs is the only way to do it, with the only option being to hike national insurance on workers and businesses when our recovery is far from clear. Labour would not be putting up national insurance at this point with the recovery far from secure. We have set out in lots of detail the different options available. Just yesterday, my hon. Friend the shadow Chancellor set out further changes that we would make to allow the tax system to become fairer and more progressive. We could say a lot more. It should be shared more evenly across the incomes and across the generations and not through the Government’s approach of hammering working people and their families.

Labour will make more in Britain by giving more public contracts to British companies big and small. We will build a prosperous and resilient economy where every corner of our country can offer decent jobs; where ours is the best country to grow up in and the best country to grow old in. We will use stretching social, environmental and labour clauses in Government contracts to raise standards and to spend and make more in Britain. We will focus on bringing the jobs of the future to Britain by investing in reshoring jobs just as we invest in foreign direct investment. By helping every business access the expertise and support that it needs, we will build a high-skill, high-wage economy, and we will take seriously the challenges that we face outside the EU, fixing the gaping holes in the deal that the Government negotiated.

Let us focus on what the Government can do right now. Earlier this month, the Government felt they just could not wait for next month’s Budget to announce their plan to clobber working people’s incomes through an increase in national insurance, after all that this country has been through. After a pandemic that again and again showed the British people pulling together at their generous, innovative, dedicated best, the Government’s reward was a tax rise on workers and struggling businesses rushed through in less than a week. There is nothing to stop Ministers taking the same decisive action, with the same urgency, to protect the living standards of millions of people. There is nothing to stop them tackling poverty as the scar that it is. I urge the Government to change direction not at their conference, not in October, not at the Budget and not next year but now, as the nights grow cold, the bills mount up and the money runs out. There is no time to spare. The time for action is now.