Spring Statement Affordability Test

Baroness Kramer Excerpts

Wednesday 23rd March 2022 Lords Chamber

[Baroness Penn (Con)]

I am afraid I disagree with the noble Lord. The measures announced today were not modest; they were significant measures in terms of putting money back into people’s pockets to help them with the cost of living. We have taken significant action before today in the energy support package, in the changes to universal credit, in increasing the national living wage, which is rising by 6.6% in April—worth £1,000 to people on the national living wage who are earning full-time. So I am afraid to say I disagree with the noble Lord. I also disagree with the policy that he advocates of cancelling the health and social care levy to pay for our NHS. I listened carefully to his honourable friend Rachel Reeves’s response to the Statement today, and I did not hear her advocate for any changes to benefit levels.

[Baroness Kramer (LD)]

My Lords, this is the third voice, joining the noble Lords, Lord Forsyth and Lord Tunnicliffe. Will the Minister understand that this House is ringing the crisis bell, because it is going to be a crisis for a very large number of people trying to live through this coming year? The OBR forecasts inflation at 9% by the end of the year, and if the Minister takes into account every argument that she has made and every measure produced by the Chancellor, the OBR still says that we will experience

“the largest fall in a single financial year”

in real household disposable incomes

“since ONS records began in 1956-57”.

Is it not extraordinary that, in order to finance a tax cut in 2024, the Chancellor is raising national insurance contributions today? Let us not have shilly-shallying over hypothecation. In fact, he could cancel today’s national insurance contribution rise, use windfall taxes to fill in for the two-year period and come out no worse in 2024. Why does he not do it?

[Baroness Penn (Con)]

My Lords, the Government make no apology for the health and social care levy. It is the number one priority of people in this country that their health service is back on track, and we need hypothecated funding to pay for it. The increase in national insurance thresholds means that, even when we take into account that levy, something like 60% of people will still be better off. That is money in their pockets to help them face the cost-of-living crisis that the Government recognise that people are facing this year.