Budget Resolutions and Economic Situation

Catherine West Excerpts

Thursday 9th July 2015 Commons Chamber

[Chris Leslie]

I have given way quite generously to Government Members and I would like to make some progress, if they do not mind.

The Institute for Fiscal Studies confirms that the introduction of tax credits played an extremely powerful part in the movement in the child poverty figures. The Conservatives cannot call themselves the party of working people, as they now do, when their Budget leaves millions of working people worse off. How exactly does decreasing their work-related assistance help those who become too sick to work and are on employment and support allowance? Does that policy not run the risk of increasing the number of people who are placed in the more expensive ESA support group, as has been the case in recent years, when the Government have overspent by £4.5 billion on their original plans?

What motivation has a council tenant to get a better job and work for promotion if he or she is on the living wage and the Government take that money away immediately? That is the crude nature of the rent rise that they are proposing. Seeking a contribution from higher earners is, of course, important, and it is one solution, but, as the Government’s own analysis pointed out before the election, going about it in the wrong way will result in perverse incentives and penalties for work.

This was more a Budget of tax rises than a Budget of tax cuts. A rise of more than 50% in the rate of insurance premium tax to raise £8 billion over this Parliament will be a tax hit on the insurance for the family home, the family holiday and the family car. The new car tax will be a surprise that raises £1.5 billion by the end of this Parliament, and—much to the Secretary of State’s surprise—the Government have shelved the childcare tax support that was due this summer until 2017, even if the Secretary of State has now brought that forward by a year.

[Catherine West (Hornsey and Wood Green) (Lab)]

Does my hon. Friend agree that these measures will further divide communities in high-value constituencies such as those in London, where there are huge gaps between incomes—people with very low incomes are living in the same constituencies as people with very high incomes—and will increase our sense of massive inequality? One of the problems is the failure to deal with the need for a proper living wage. I have experience of introducing a living wage, and it is very hard work. It takes years to achieve, and it means working with businesses. [Interruption.]

[Chris Leslie]

I do not think that was a very polite reaction from Conservative Members. My hon. Friend worked very hard during her time in local government to try to support the low-paid by introducing a London living wage, and I think it commendable that local authorities and businesses in London, in particular, have tried to make headway with that. Of course, a real living wage now needs to be about £12 to compensate for the reduction in tax credits.

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[Mr Duncan Smith]

I agree with my hon. Friend.

[Catherine West]

That is ancient history.

[Mr Duncan Smith]

It is not ancient history; it was the legacy of a Labour Government who were obsessed with a moving target.

[Catherine West]

I am very pleased that the Secretary of State has given way. It is ancient history for those of us who are here now. This is the right hon. Gentleman’s sixth year in government and the system is becoming more and more unfair. Will the Department for Work and Pensions carry out an equalities impact statement on the changes in the Budget? [Interruption.] I will repeat that, because the right hon. Gentleman is having trouble hearing. Will the Department for Work and Pensions carry out an equalities impact assessment in relation to changes in the Budget, both on employment and support allowance and on the changes to families, to ensure that ethnic minority families are not discriminated against and that the lives of people with disabilities are not being worsened by this evil policy?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Interventions cannot be used to make speeches. We must have short interventions. There are 29 Members who wish to speak. Let us have short interventions, so that Members can get into the debate.

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[Mr Duncan Smith]

My hon. Friend is absolutely right. The other point that has not come up but which my right hon. Friend the Chancellor has made clear is that the amount of money we pay to people outside Britain to pay off our debts is money that we cannot spend on education and health. Getting the deficit down and paying off our debts has to be the best thing we can do for people on low incomes, who need those services.

[Catherine West]

rose—

[Mr Duncan Smith]

No, I have given way twice to the hon. Lady; I am going to make some progress.

We remain relentlessly focused on supporting people to move into work. Universal credit is now rolled out to half of all jobcentres in Britain, and by the new year will be rolled out to all of them and will then be expanding. It will provide people in work with even better help and support, meaning that those on low pay will do better as a result of universal credit, which was a big reform that was opposed by the other side but which we will deliver and make work.

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[James Morris (Halesowen and Rowley Regis) (Con)]

It is a great pleasure to follow the maiden speech by the hon. Member for St Helens South and Whiston (Marie Rimmer); I have a sneaking suspicion that she is going to be quite a formidable presence on the Opposition Benches during the next five years.

Britain has come a long way over the past five years. Tough decisions have been made to get the country’s deficit under control, to reform the welfare system, to make business more competitive, and to create new jobs. Unemployment in my constituency has fallen by more than 50% since 2010. In the black country, part of which I represent, there has been a significant manufacturing revival such that the region has been one of the fastest-growing of any in the United Kingdom over the past two years.

At the heart of this Budget is a recognition that we need to continue the work to rebalance the British economy away from London and the south-east, to make sure that we have a productive and balanced economy in the midlands, the west midlands and the north. Devolution of power, funding and decision making is absolutely fundamental if the regions of the United Kingdom, including the black country, are to reach their potential.

We need to encourage more jobs and investment in the black country, where we have a huge number of brownfield sites that can be used for development. One need only think of the industrial heritage of the black country to know that huge swathes of its land can be used for the development of industrial sites and for housing. I urge the black country’s local enterprise partnership and local authorities to identify appropriate brownfield sites for economic development to bring new jobs, taking advantage of the powers and responsibilities that the Government are offering to develop those sites. We should not go down the route of a recent idea by Dudley council to develop a huge industrial site on green-belt land just outside Halesowen. That is a very bad idea. I am the first to want to get jobs and investment into the black country, but the policy of Dudley’s LEP and local authority should be to focus first on brownfield in developing new jobs and opportunities.

At the heart of the plan to make Britain a more productive economy is further investment in skills to make sure that our young people are equipped to take advantage of the opportunities out there. That is why I welcome the Chancellor’s announcement in the Budget of a levy on larger companies to encourage further investment in quality apprenticeships. There have been 4,000 new apprenticeship starts in my constituency since 2010, but we need more and we need them to be better matched with the available opportunities in the local economy. That will build on the success of the Government’s city deal in the previous Parliament, which saw a significant level of investment, with about £1 million coming into the area for the development of a science and technology apprenticeship centre at Halesowen College.

Those are precisely the sorts of high-quality opportunities that we need in our local economy to encourage a greater focus on science and engineering—for example, to support the supply chain of Jaguar Land Rover. At the heart of this Budget, and absolutely fundamental to the future of the country and of the regions of Britain, is the continuation of the work that we started over the past five years to tackle the productivity problem by investing in high-quality skills so that people can take advantage of these opportunities.

While the Budget recognises the need to rebalance the economy and to make our businesses more competitive by cutting business taxes and creating more jobs, there is also—this has not been mentioned so far—the welcome commitment to further substantial real-terms increases in our national health service over the next five years. The Budget is clear in its commitment that this Government will support Sir Simon Stevens’s five-year plan for the NHS to continue the work of making it one of the best health services in the world. This Government, through this Budget, are committed to those real-terms increases over the next five years.

As the Financial Secretary to the Treasury is on the Front Bench, I want to make the case—which fits into the narrative of the new Government on one nation Conservatism, supporting people and making a more resilient and productive economy—that some of the new money being allocated to the NHS should be focused on improving mental health care. I was chairman of the all-party group on mental health in the previous Parliament. The argument is strong, given that mental health will become the most important health challenge that we face over the next 20 to 25 years. I am pleased that the Conservative party manifesto had specific pledges on mental health in the NHS, focusing on extending the range of availability of psychological therapies across the country, that are now being translated into action in government. The previous Labour Government introduced the IAPT—improving access to psychological therapies—programme, and the coalition Government invested £500 million in developing it. Now we need to take it further to give it to anybody who needs it.

[Catherine West]

I support the hon. Gentleman’s comments about mental health. I hope that some of the extra funding could go towards reducing the long waiting lists for IAPT, particularly where people are on benefits such as employment and support allowance and want to get off them and back into work. I hope we can work at a cross-party level to reduce the waiting lists for those crucial counselling therapies.

[James Morris]

I thank the hon. Lady; she makes a very good point. The Conservative party manifesto had a commitment to extend the range and availability of psychological therapies. The Department for Work and Pensions has been running pilots on specific forms of back-to-work support for people suffering from mental health problems—for example, individual placement and support.

We need to invest further in child and adolescent mental health services because—this is why I raise the issue in the context of the Budget—it makes economic sense to do so. It fits into the thrust of the Budget, which is that we need to build a more resilient and productive economy. We have a commitment to invest in perinatal mental health. If we get the investment in mental health care right, it will lead to huge economic benefits for Britain, a more productive society, stronger families and more resilient individuals—people capable of stepping up to the plate and taking advantage of the opportunities out there.

I urge Ministers to be sympathetic to the cause of mental health in the national health service as they consider further investment in our public health system, and to continue the work of achieving the Conservative manifesto commitment to greater parity of esteem between mental and physical health in the NHS.

A more productive economy, a more competitive business environment with lower taxes and a focus on high-quality skills and further job creation in a highly competitive global economy, combined with investment in our health service and in meeting the key health challenges of the future, such as mental health care and building more individual resilience—all that is the true measure of a one nation Conservative Government. We are creating an economy that can generate millions more jobs, building on the jobs that we have already created in the last five years, and a more entrepreneurial society, in which people are prepared to take risks and invest for the future. We are building not only a more competitive economy, but a more compassionate society.