Amendment of the Law

Andrew Gwynne Excerpts

Wednesday 21st March 2012 Commons Chamber

[Diana Johnson]

My right hon. Friend makes a very good point and indicates, again, that this is not a Budget for growth—the very opposite, it seems.

The latest official statistics show that there are 5,447 jobseeker’s allowance claimants in Hull chasing 177 vacancies. That is 30.8 people after each job, which is the 10th worst rate in the country. The overall claimant count across Hull was up by 12.4% in the latest period. Kingston upon Hull North’s long-term youth unemployment among 18 to 24-year-olds has gone up by 155% in the year to February, which is shocking. Hull needs a determined focus on specialist vocational education and training, to equip our youngsters to get the jobs in green industry that could be important to the economy of Hull and the region.

Engineering qualifications are very important, and I was disappointed that the Secretary of State scrapped the diplomas scheme, particularly for engineering diplomas. As I asked the hon. Member for City of Chester (Stephen Mosley), why is information and communications technology not part of the English baccalaureate to show how important ICT skills are for our future?

The Government have talked a lot about rebalancing the economy, but people in the north who are seeking work—the north’s jobless—are being told to move to the south for work, and those in the south who are looking for affordable homes are being told to move to the north. Is that rebalancing the economy? The Government have to think again. They should ensure that there are enough jobs and homes in each region to make the whole country work together effectively.

I wish to focus on some of the key announcements in today’s Budget, starting with the raising of the personal allowance to £9,000 next April. Citizens Advice has already put out a quote on the matter, stating:

“Raising the personal tax allowance is an empty gesture to struggling families on low wages.”

That blows a hole in the argument that the Liberal Democrats try to put forward about the Budget promoting fairness.

Like cuts to income tax rates, raising the personal allowance could be part of a plan to boost demand and growth, provided that it was part of a group of measures such as those outlined in Labour’s five-point plan. In a time of scarcity, the Government’s plan, costing about £3.3 billion, is an inefficient way of helping the poorest in our society. It is clear that middle and upper earners will benefit most from the change. I understand that they will get about an additional £175 each year.

We must consider that against the losses that individuals and families will experience. For instance, the average family is due to lose £530 from 1 April because of the changes to VAT and benefits, including child benefit freezes. This April’s changes to the working tax credit requiring couples working part time to do a 24-hour week rather than a 16-hour week, at a time when a lot of people’s hours are being cut and jobs are disappearing, will affect 212,000 families across the country, including nearly 450 in my constituency. They will lose nearly £4,000 a year, and they are families that are struggling just to get by. What help was announced for those families? There was nothing. If the Government were serious about fairness, they could have done something about that.

Research by the Child Poverty Action Group shows that two thirds of the families who are about to lose tax credits are already in poverty, so I dread to think what will happen to them now. They are punished for doing the right thing and for trying to hold down a job at a time when it is so difficult to get a job or to get further hours of work.

To make matters worse, the coalition is now moving ahead with regional pay in the public sector, with the Liberal Democrats’ support. That is not surprising, because the Liberal Democrats have often advocated a regional minimum wage. Regional pay is more evidence-free policy making by this Government, based on free market dogma. There is no real evidence that national public sector pay crowds out the local private sector. Indeed, public sector workers, living and spending locally, are a vital part of supporting the private sector in Hull’s local economy. We already have London weighting to help workers with the extra costs of living in the south, so there is no reason for different pay rates between the regions.

Local or regional public sector pay could drive down wages in some of the poorest areas, taking billions more out of local economies and accelerating the growing north-south divide. So much for rebalancing the economy.

[Andrew Gwynne (Denton and Reddish) (Lab)]

My hon. Friend is making a pertinent point, but in some parts of the public sector will not the opposite be the case, so that, for example, hospitals, desperate to recruit the best clinicians, will end up paying more to compete with hospitals in London and the south?

[Diana Johnson]

Absolutely. My hon. Friend makes an important point. We know that the NHS is in for a torrid time in the months and years ahead, and he has identified another problem that it has to tackle.

The combination of regional pay and the unfairness in the Budget contradicts the coalition’s rhetoric about making work pay and rebalancing the economy, sucking even more money out of areas such as Hull and the north in favour of the wealthier areas, mostly in London and the south-east.

I am also worried that regional pay could mean that some of the brightest and best, for example, teachers—we need the brightest and best teachers in areas such as Hull—will not come to Hull if the pay is not the same as in some other parts of the country.

Let me comment on the Liberal Democrats’ spin to the effect that this is a Robin Hood Budget. It joins the long list of broken Liberal Democrat promises. We had the abolition of tuition fees, which were then tripled, and education maintenance allowance was axed. The Liberal Democrats promised 3,000 more police but we are getting 16,000 fewer. They promised opposition to VAT, but we how have higher VAT. They seem to have dropped the armed forces pay increase and many more of the opportunist promises they made before 2010, when they had full knowledge of the deficit that would face them. The tycoon tax is just the latest Lib Dem slogan. Increased stamp duty is all very well, but it hits only the minority who sell the property in any year. It needs to be matched by a clampdown on general stamp duty avoidance.

The other major announcement is to cut the top rate of tax. [Interruption.] The Liberal Democrats have no defence on that.