Income tax (charge)

Afzal Khan Excerpts

Monday 16th March 2020 Commons Chamber

[Afzal Khan (Manchester, Gorton) (Lab)]

It is a pleasure to follow the hon. Member for Don Valley (Nick Fletcher). He delivered an excellent maiden speech, and I look forward to listening to many more speeches by him.

This Budget has been dominated by the coronavirus crisis we are currently facing, and rightly so. Coronavirus represents an unprecedented challenge for the UK, and now more than ever, we need to strengthen the safety net available to the most vulnerable in our society. As a coronavirus pandemic unfolds, more and more people will be in need of this social safety net than ever before, especially those who are not eligible for sick pay or who have unstable jobs. For many of these people, the initial five-week wait for their first universal credit payment could cause real hardship. Indeed, it is well documented that that wait is already pushing vulnerable people to food banks, trapping many in years of debt, and making outstanding issues with housing, ill-health, disability and domestic abuse significantly worse.

Like many colleagues, I welcome the Government’s £500 million hardship fund to help local authorities deal with the coronavirus outbreak, but I remain concerned that thanks to a decade of austerity and cuts, local authorities lack the capacity or resources effectively to distribute that funding. The coronavirus outbreak exposes a deeper crisis faced by the UK—the crisis in our public services, which the Budget sadly failed to address. Over the past 10 years, consecutive Conservative Budgets have created and curated a social emergency. As a result, our social security system is punitive, complex and as mean as it has ever been.

In numerical terms, the emergency we face is truly shocking: today, 4.5 million children are growing up in poverty; this morning 281,000 people woke up without a roof over their head; and one in every 50 households is forced to use foodbanks in order to eat. Last week’s Budget was lauded as the most generous in decades, but in reality it does nothing to relieve the hardships inflicted on my community by 10 years of austerity, universal credit, the bedroom tax and the benefits freeze.

The Chancellor has let down my constituents by taking no significant action to tackle the inbuilt injustices that plague universal credit. Last week’s Budget said nothing about abolishing the two-child limit, the five-week delay to universal credit payments, or the benefit cap, even though each of these actions would have an immediate positive effect on my constituents, including the 52% of children living in poverty in Manchester, Gorton. Why will the Government not commit to any of those measures?

On a more positive note, the Budget took some important steps on the road to tackling the housing crisis we face in the UK, including in Manchester, Gorton. I welcome the Government’s announcement of more money to support rough sleepers, their commitment to the affordable homes programme, and the lowering of borrowing rates for councils to build social homes. But this by no means goes far enough.

Local housing allowance rates are a scandal. Some 1.4 million households in the UK claim LHA to help meet some or all of their housing costs, but the impact of cuts and a four-year freeze means that in 97% of England that help does not cover even the cheapest third of rents. In Manchester, the average monthly rent has increased by 38% in the past five years alone. The skyrocketing cost of private rents, and the freeze on LHA, has made it near impossible for many people in my constituency to find an affordable home. On top of that, my constituency has seen a significant increase in the number of LHA claimants who are refused rented accommodation by private landlords or letting agents. That is blatantly discriminatory, and I hope the Government act to stop that practice before more vulnerable people are pushed into homelessness.

I was pleased back in January when the Government announced that LHA was to be unfrozen, but that will not even come close to covering the vast shortfalls that people face when paying their rent. The Budget was a missed opportunity to raise LHA rates in line with the private rental market, and prevent more people from falling into homelessness. Although I welcome the £12.2 billion funding allocated to the affordable homes programme, I am concerned about the Chancellor’s definition of “affordable”. My definition of affordable housing, and that of my constituents, seems to be at odds with the Government’s. As they say, the devil will be in the detail. I look forward to gaining clarity about how much of that fund will be spent on delivering genuinely affordable social housing.

My constituency and communities up and down the country have experienced 10 years of immense suffering thanks to rampant austerity. With our economy now unstable and more vulnerable than ever, it has never been more important to invest in people and in the social safety net that protects them.

[Several hon. Members rose—]