Jobs and Growth
Debate between Charlie Elphicke and Kerry McCarthy(12 years, 8 months ago)
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Kerry McCarthy (Bristol East) (Lab)
May I say what a pleasure it was to work with the shadow Chancellor and the rest of the shadow Treasury team over the past year? Although I have moved on to pastures new, I am very happy to speak in support of their motion today.
As we have heard, in the past nine months, the UK economy has not grown at all. Forecasts have had to be revised downwards, and the future prospects for growth are bleak, given the scale of Government cuts and the Chancellor’s failure to acknowledge that in fragile economic times a slash-and-burn policy, far from stimulating growth and bringing down the deficit, will cause growth to flatline. It will actually cost us more as a result of decreasing tax receipts, increasing benefit payments, people having less money to spend, and the Government having to borrow £46 billion more than they thought they would.
As the head of the International Monetary Fund, Christine Lagarde, warned that slamming on the brakes too quickly will hurt the recovery and worsen job prospects, yet the Chancellor is failing to heed the warning signs. Economic indicators such as today’s unemployment figures, which are devastating for people in areas such as my constituency, tell the Chancellor that not only is he going too fast, but he is on completely the wrong road. We do need to reduce the deficit, but at a pace that does not harm economic growth. Labour’s plan for growth involves bringing forward long-term investment projects for schools, roads and transport, building 25,000 more affordable homes, and creating 100,000 jobs for young people, funded by a £2-billion tax on bankers’ bonuses. That is what my constituents want a Government to do.
In my constituency, I see the impact of Government policies mounting up in a multitude of individually small but cumulatively large ways. For example, there is the public sector worker who has had a pay freeze, is paying 2.5% more VAT, has had their child care tax credits cut from 80% to 70%, and will soon have to contribute 3% more to their pension. That is not to mention the rise in inflation, how much more it costs to fill a tank with petrol, ever-rising fuel bills, or the extra pounds that the weekly food shopping costs. There are also the local services that people now have to pay for, and that used not to come at a cost.
This week, we have heard a stark warning from the Institute for Fiscal Studies and the Joseph Rowntree Foundation about the impact that the Government’s policies are having on child poverty. I was there, in the previous Parliament, when all the party leaders and MPs from all parties rushed to sign up to the child poverty pledge to commit to abolishing child poverty within a generation. There was a cosy air of cross-party consensus. As one of the MPs who had been working closely with the End Child Poverty coalition, I did not want to say or do anything to derail that, but I was quietly highly sceptical. There were warm words and MPs posing with marker pens as they signed the pledge as part of a photo opportunity, so that they would appear in their local papers.
Kerry McCarthy
No, I do not have time. I was highly sceptical that the pledges would translate into real action if the Conservative party got into Government. Sadly, my scepticism has proved well founded. The IFS warned yesterday that the Government’s tax and benefit changes will push 400,000 children into relative poverty by 2015. The number of children in absolute poverty will rise by 500,000 to 3 million. Instead of us eradicating child poverty by 2020, the Government’s policies mean that 3.3 million children—one in four children in the UK—will be in relative poverty. Labour when in government lifted nearly 1 million children out of poverty; this Government will put another generation of children right back there. It is little wonder that the chief executive of the Child Poverty Action Group described it as a “devastating report”. She said:
“Ministers seem to be in denial that, under current policies, their legacy threatens to be the worst poverty record of any government for a generation.”