Finance (No. 2) Bill

Baroness Keeley Excerpts

Monday 15th April 2013 Commons Chamber

[David Rutley]

In a spirit of co-operation I suggest that for a change the hon. Gentleman leaves Croydon—[Hon. Members: “ It is Corby.”] Wherever it may be —beginning with a C. The hon. Gentleman should come up to Macclesfield and see what we are doing with apprenticeships and our local college to encourage young people to get into work. It is about human endeavour and getting on with the job, not moaning and groaning as the Opposition are doing.

The Forum of Private Business speak of the Chancellor being “spot-on” with his “basic common sense” decision to freeze fuel duty. I hope Opposition Members at least welcome that. The Association of Convenience Stores welcomes measures that

“will benefit consumers and reduce some of the pressure on local shops.”

[Barbara Keeley (Worsley and Eccles South) (Lab)]

What would the hon. Gentleman say to the convenience stores in my constituency who are going to lose £4 million from our economy in Salford when the bedroom tax hits? That is £4 million less that people will have to spend in convenience stores and local shops. That is the real hit.

[David Rutley]

We have to tackle the deficit that faces this country. We know that welfare payments have spiralled out of control and we recognise that there is huge demand for scarce rooms. We have to address those things. I will give the hon. Lady a chance to say what she would do to tackle the welfare budget, but I have heard nothing. Does she want to stand up and tell us what Opposition policy will be?

[Barbara Keeley]

I will happily respond. We would actually bring some growth to the economy and get some of our young people back to work. We would use a levy on bankers, not in the way that the Government propose in the Bill, but to build houses and to get young people back to work. We would guarantee work for young people who have been unemployed for 12 months or more. Going back a few years—I do not think the hon. Gentleman had been elected at that point—we had the future jobs fund in my constituency and in Salford. That gave hundreds of jobs for young people. Then there was a future and they had hope; now they have nothing.

[David Rutley]

Much as I enjoy going to Salford and the hon. Lady’s constituency, some honesty is required about how growth should be funded in the north-west. I am sure Mr Deputy Speaker has a view on that too, but he cannot express it in the Chamber. Under the previous Government, in the 10-year period to 2010, 100,000 jobs were created in the public sector in the north-west. During the same period, there was a net reduction of 25,000 jobs in the private sector. That is completely unsustainable. What we are trying to do in the north-west and throughout the whole economy is to have a more sustainable approach to job creation, which has led to the creation of more than 1 million jobs in the private sector. That is a far better record than anything from Labour when it was in power.

--- Later in debate ---

[Julie Hilling (Bolton West) (Lab)]

It has felt like a very long four weeks since the Chancellor delivered the Budget, not least because of the terrible tragedy of the death of Jade Lomas-Anderson by a dog attack in my constituency, so when I came to write my speech today, I had to wrack my brains to remember what the Budget was all about. My overwhelming memory is of the Chancellor sitting on the Front Bench looking like a little boy lost, with no idea what to do about the flatlining economy, no idea what to do to stop a triple-dip recession, what to do about the loss of our triple A status, or what to do about the level of borrowing, and no idea how to balance the books. So he delivered a Budget that did none of those things, sitting on his hands, hoping that things will just happen.

Of course, things are just happening. Unemployment in my constituency, Bolton West, is up. One in 10 people in Greater Manchester skip meals so that other family members can eat. Nationally, homelessness and rough sleeping are up by a third. Shelter says that every 15 minutes another family is made homeless. The economy may be flatlining, but people’s income and spending are not. The OBR has said that in 2015 people will be worse off than they were in 2010. Wages are £1,200 lower than in May 2010. This year a family with two children and one earner earning £20,000 a year will be at least £381 worse off, and next year will be £600 worse off. Inflation, of course, is still running at 2.8%. Behind those figures are real people having a desperately hard time—people who are losing their homes, having to choose between heating and eating and relying on food banks to feed themselves and their children.

Tinkering at the edges will not solve the problem, and neither will blaming the poor for the situation they find themselves in. According to the Joseph Rowntree Foundation, 6.1 million people living in poverty are in working households, 6.4 million people lack the paid work they want and 1.4 million part-time workers want full-time work, the highest figure in 20 years, and 100,000 of the so-called new jobs pay no wages whatsoever. The churn of people in poverty or out of work is substantial. While 18% of people are on a low income at any one time, 33%—one in three of us—experience at least one period on a low income in a four-year period, and 11% of people are on a low income for more than half of those four years.

In 2012, 1.6 million people were claiming jobseeker’s allowance at any one time and 4.8 million had claimed it at least once in the previous two years. Those figures show that the Government’s desperate efforts to categorise people as skivers or strivers are a travesty of the truth. Some 2.5 million people, including 1 million young people, are not shirkers or skivers; they are people who need the Government to take action to create jobs. But there was no mention in the Chancellor’s Budget speech of what he would do and there has been no action; he simply hopes that something will happen.

What do we get from the Government parties? We get a tax cut for millionaires, paid for by the poor. What excuse have they given for cutting tax for millionaires? They say that the millionaires were not paying it. If only we could all get a tax cut just because we did not want to pay tax. The Government failed to tell people that they do not actually know how much money the 50% tax rate would raise, because in the first year people brought forward their income and this year people will delay it, but HMRC has said that it could raise £1 billion. If people are avoiding paying tax, surely we need to shut down the avoidance schemes, not cut the tax rate in the hope that they will stop using the schemes now that they have found them. It is a shame that the Government have not shown the same concern for people earning £41,000, who, without any pay rise, will now find themselves in the 40% tax bracket. Hundreds of thousands of hard-pressed families will now be paying more tax, without a thought from the Government.

There were one or two promises of jam tomorrow, such as help with child care in two years’ time, a single-tier pension in 2016 and capped care costs in 2016. I was interested to read Age UK’s briefing after the Budget. It welcomed the earlier implementation of the care costs cap and the higher upper means-tested threshold from April 2016, but it said that that would do nothing to help the 800,000 older people who need help with everyday tasks but receive no formal state support. Since the Government came to power, £700 million in real terms has been cut from social care funding.

Age UK also stated:

“The Chancellor may have confused”—

people—

“in his speech by referring to raising ‘the threshold of the means test on residential care from just over £23,000 to £118,000’. He was in fact referring to the upper means test threshold and older people will have to make contributions based on a sliding scale towards the cost of their social care if they have assets between the two amounts.”

It went on to say that the Budget offered no proposals to improve pensions for current pensioners or to reduce pensioner poverty, which currently stands at 1.7 million people. It was also disappointed that the Government are not doing nearly enough to help tens of thousands of older people whose income, health and well-being are being affected by the cold weather.

[Barbara Keeley]

My hon. Friend is making some great points about social care. Before she moves on, would she like to comment on the fact that, according to Carers UK, 1 million people in this country have given up work or cut the hours they work because of their caring responsibilities, which can have a real impact on the economy? She has laid out that social care has been cut and that that means a real struggle for many older people, with 800,000 people not even having enough care, but it is also a real hit for the economy. Some carers might still be struggling to keep employed, but does she agree that, as services disappear, life is getting much harder for them, too.

[Julie Hilling]

I absolutely agree. On Saturday, I met a couple; the husband was the carer, looking after his wife. They, of course, are about to be hit by the bedroom tax as well. He said to me on the street, “I’d love to be working. I gave up my job to look after my wife.” If he had not done that, the cost to the economy of residential care would have been far higher than the benefits that that couple are getting. We have to do much more for carers rather than keeping on punishing them as the Government seem to.

I go back to Age UK’s response to the Budget. It had much more to say, but on the question of whether the Chancellor had delivered for older people, its answer seemed to be a resounding no.

The Government did reduce tax on beer by 1p, which, of course, is welcome for the pub industry, although it probably would have preferred action on the tie, which the Government appear to have shelved. The Government’s increase in VAT actually put 5p on a pint, and I hope it will take a long time for beer drinkers to sup the 300-odd pints before they get their free one.

It is also good that the Government cancelled the planned rise in fuel duty, but again the VAT increase wiped out any benefit that that may bring. I get annoyed when Government Members talk about how much they have “saved” the motorist, given that fuel has gone up by at least 10% on their watch. They also ignore the truth that the previous Labour Government cancelled or postponed planned fuel duty rises on 13 occasions, depending on the cost of fuel at the time. They also cancelled any rises at the height of the global financial crash—note that it was a “global” financial crash, not one made in Downing street where recessions now appear to be made.

However, tinkering at the edges will not give my constituents a job or increase their incomes. The Government made great claims about their proposals to help people buy a home and the Prime Minister claimed last year that their NewBuy scheme would assist 100,000 people to buy their own homes. What happened? Instead of 100,000 people, just 1,500 people benefited.

What about this year’s proposals? Instead of welcoming them, experts believe that they will simply lead to house price inflation. The Government cannot say whether people will be able to use the scheme to buy a second home. Someone in social housing with a so-called spare room will pay the bedroom tax, but the state will help someone who wants a spare house to buy one—not a cheap one either, but one costing up to £600,000. I do not see too many people on the minimum wage being able to service that sort of loan, even with the paltry increase announced today.

Why do the Government not get on and build homes? House building would do more for the economy than any of the gimmicks that they announced in their so-called Budget. Even their grandly announced increase in infrastructure spending of £2.5 billion does nothing to restore the cut of £7.7 billion to infrastructure spending that they have made over the past three years. Let us hope that they make progress this time by building something rather than making announcements that never seem to come to fruition.

The people of Bolton West are struggling. Many are more than struggling; they are finding it hard to survive day to day. The Government blame them and are hellbent on making the situation worse. They say that they have to cut the welfare budget but neglect to say that the majority of that budget is made up of pensions and in-work benefits. That does not fit the picture that they try to portray of the skivers who are ruining the economy. They forget to say that jobseeker’s allowance accounts for less than 5% of the budget and to tell us that cutting benefit not only forces people to food banks but harms the economy. They forget to tell us that the private rented sector is far more costly than social housing. They will do nothing to introduce fair rents and nothing to curb the cost of private rented accommodation—they simply cap benefits in the hope that that might just bring down those rents.

I am no economist, but even I know that if we cut jobs and benefits, we get into a downward spiral of more business failure, more people out of work and less money in the economy—on and on downwards. The only way to reverse that spiral is to invest in jobs and pay a living wage, to build houses for people to live in, and to take action to rebuild our economy. Instead, what do we get? A double-dip—thank heavens for the Olympics, because otherwise it would have been a triple-dip—recession, a doubling of debt, and a deficit that is not reducing. Instead of blaming the poor and giving a tax cut to millionaires, this Government—instead of sitting on their hands—should take action and not give us the non-Budget that they have given us this time.