Debbie Abrahams
Main Page: Debbie Abrahams (Labour - Oldham East and Saddleworth)
Mrs Eleanor Laing (Epping Forest) (Con)
It is a privilege to support the Gracious Speech. Although I appreciate that it is unfashionable to talk about conviction politics, I suggest to the House that there is nothing wrong with having principles, talking about principles and sticking to principles. The principles underlying the Queen’s Speech are those of freedom, choice and individual responsibility as well as rights. Through those principles, Conservative Governments throughout the ages have brought prosperity to Britain and improved the lives of British people.
The Labour party does not work on principle. It works—[Interruption.] Labour Members are shouting; if they have a principle to tell me about, let them get up and tell me the principle on which they oppose the Queen’s Speech. They work not on principle, but on short-term party political popularity.
Debbie Abrahams
On principle, could the hon. Lady say how the Government’s statement on and commitment to fairness in the Queen’s Speech relates to child poverty, which my hon. Friend the Member for Feltham and Heston (Seema Malhotra) has just been talking about?
Mrs Laing
The hon. Lady makes my point for me. The Queen’s Speech is all about fairness, to which I am coming in a moment. Child poverty has arisen not because of the content of the Queen’s Speech but because of 13 years of economic mismanagement by the last Labour Government.
Catherine McKinnell
That is a spurious statistic. We know that the deficit needs to be paid down, but this Government have made a choice to give a tax cut to those on the highest incomes while leaving other people to pay. It is not just me who thinks that. Conservative voters and, indeed, Conservative party members up and down the country are frustrated by the choices this Government have made.
Debbie Abrahams
Does my hon. Friend agree that it is an absolute disgrace that while there are commitments to fairness in the Queen’s Speech, the 40% lowest-income households will be worse off, with an average of £891 lost by each household?
Catherine McKinnell
My hon. Friend makes a powerful point. Another point to remember is the disproportionate impact that this Government’s tax and benefit changes have had on the lowest earners—and on the middle earners, too.
Let me get back to members of the Conservative party. Linda Pailing, for example, the deputy chair of Harlow Conservative party—I see the hon. Member for Harlow (Robert Halfon) in his place—put it very starkly, targeting her criticism squarely at the Prime Minister. She said:
“The national swing took us down and that is purely to do with what Cameron and his cronies are doing with the national party. The voters are disillusioned with Cameron himself. They don’t like the fact that he didn’t keep the 50p tax. This has really grated and people feel here that he is not working for them, he is working for his friends.”
I could not have put it better myself.
There could have been some acceptance of the Government’s approach—at least among their own supporters—if the 50p tax cut policy had boosted confidence and stimulated economic growth, which is the only thing that could turn the situation round for those feeling the squeeze, yet it has done precisely the opposite. The approach has not only failed to address the lack of confidence in the economy but compounded the lack of confidence in this Government. What kind of right-minded Chancellor or Prime Minister would turn a blind eye to the suffering of the vulnerable and those struggling to make ends meet, slap on a VAT hike and impose a bedroom tax, cuts to tax credits and in-work support while dishing out tax cuts to those who need them least.
Jacob Rees-Mogg (North East Somerset) (Con)
This aspect of the Queen’s Speech—the issue of the cost of living—is essential to the Government’s fortunes, and, in my view, goes to the heart of what they are trying to do. I am in a good deal of agreement with what was said earlier by my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell). It is what brought the coalition together in the first place.
The essence of dealing with the cost of living is, first of all, getting fiscal and monetary policy right, and I have every confidence that we are doing that. Bearing down on the deficit is the key to ensuring that we have low interest rates, and it is low interest rates that allow people to pay their mortgages, remain in their homes, and cope with the financial difficulties that they face. Many hon. Members have raised housing issues, but the key to affordable housing is for people to be able to afford their mortgages, and that is dependent on interest rates. The singular success of this Government lies in ensuring that there is confidence in the fiscal plan laid out by my right hon. Friend the Chancellor, which has ensured that interest rates have remained low and stable.
The hon. Member for Newcastle upon Tyne North (Catherine McKinnell) attacked the change in the highest tax rate payable, but that was, without question, the right thing for the Government to do. It is not a question of tokenism. It is not a question of saying “We will have high rates in order to punish the rich, because we disapprove of their lifestyle.” It is a question of deciding what rate of tax will raise the most revenue for the Exchequer.
Let us look back at the history from 1979 onwards. When the highest rate of income tax was 83% and the highest marginal rate on unearned income was 98%, we saw that the top 1% of taxpayers contributed only 11% of the total income tax revenue. When the rate was cut, the income generated for the Government increased. Exactly the same happened following the further cut introduced by Lord Lawson in 1988.
Debbie Abrahams
Is it not also the case that families with low incomes are more likely to spend their money in the local economy and thus to stimulate it? There is strong evidence to that effect.
Jacob Rees-Mogg
I entirely accept the evidence that people with low incomes are more likely to spend the money that they receive. However, money flows within the economy are not limited to expenditure. The saving of money increases deposits at banks and eases their loan-to-deposit ratios. It therefore ensures that the banks can lend more money both to prospective home owners and to businesses.
There is a view among Labour Members, which was also expressed during the Budget debates, of a very closed financial system, but that is quite wrong. There are flows within the financial system. There is a rule of money, that money must find a home. [Interruption.] It is very welcome to come to my home. If hon. Members would like to send it in that direction, I shall not say no. That is the sort of tax I could do with. However, money does find a home, and that is in generating economic activity.
Richard Graham (Gloucester) (Con)
It is always a pleasure to follow the hon. Member for Ogmore (Huw Irranca-Davies), who reminds us of the quality of rhetoric from Wales.
I welcome the Queen’s Speech because, above all, it focuses on the core issues that will make a real difference to the cost of living for my constituents. Let me quickly highlight four key points. First, the National Insurance Contributions Bill will, through the employment allowance, provide £2,000 and should therefore eliminate entirely national insurance bills for 450,000 small businesses throughout the country, encouraging them, and, above all, small employers in my city, to take on more employees. The hon. Members for Ogmore and for Denton and Reddish (Andrew Gwynne) commented on the absence of jobs, but let us not forget that 750,000 more people are in work today than there were at the time of the last general election. Let us hope that there will be more after the National Insurance Contributions Bill takes effect.
Secondly, the Immigration Bill will ensure the deportation of dangerous foreign-national criminals, with appeals only after they have been deported, and will prevent immigrants from having access to public services to which they are not entitled. As Lord Mandelson said yesterday, Labour’s overseas search parties for immigrants meant that
“the entry to the labour market of many people of non-British origin is hard for people who are finding it very difficult to find jobs”.
The hon. Members for Ogmore and for Denton and Reddish should reflect on those comments.
Thirdly, we are all agreed that the cost of energy has risen significantly and is a hard burden for many poor and older constituents especially, and the Energy Bill will enable all our constituents to have clearer information and get on to the best energy tariff. That will be a significant and necessary achievement to help them combat the rising costs of living.
Fourthly, I turn to pensions; I declare an interest as chair of the all-party group on pensions. I absolutely support the Pensions Bill’s new flat rate from April 2016. Above all, it will reward women who took time out of the workplace to look after their children and will now, rightly, get a full state pension at a much higher rate than the basic state pension today.
Lastly, there is the Care Bill, which will guarantee that none our constituents will have to sell their homes during their lifetimes and puts a cap for the first time on the cost of care. Many of us who have had parents with dementia, for example, realise how difficult that situation can be.
I now give way to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams).
Debbie Abrahams
I want to ask the hon. Gentleman whether he is aware that the employment rate is lower now than in 2008; that relates to a remark he made earlier.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Last week’s Queen’s Speech was delivered at a time when most people’s wages are being frozen or cut and both measures of inflation—the consumer prices index and the retail prices index—are above the Bank of England’s target of 2%. The sad fact is that many people, in work as well as out of work, are struggling. We have heard examples from my colleagues, and I have regularly had people in my surgeries in tears at their plight. Last week, I had somebody who had just had a heart bypass operation and had been made homeless. She had been living on her in-laws’ couch for the past three months. Such is the plight of many people across the country.
With energy prices increasing by 20% since 2010, nearly 8,000 households in my constituency—nearly one in four—live in fuel poverty. Given that there was no change in economic and social policy in the Queen’s Speech, the situation is set to get worse. Nationally, it is estimated that by 2016, 9 million households will be living in fuel poverty. The knock-on effects will be felt particularly by our health service and social carers.
My local Oldham council is doing all that it can to address the problem, through the fair energy campaign. It is getting households to sign up to a collective energy deal, using people power to negotiate with energy companies for the cheapest energy tariff for consumers. That contrasts starkly with what the Government are doing. We know that the Warm Front initiative, which we introduced many years ago, closed in January, and the new scheme that the Government have introduced provides less than half the support that Labour provided. On top of that, the Government have cut the winter fuel payment for older people by £50 for the over-60s and £100 for the over-80s, in the full knowledge that every winter tens of thousands of older people become seriously ill or die as a result of the cold. In 2010-11, there were 25,000 excess winter deaths just as a result of cold, and there are fears that the number will be larger as energy prices rise.
The warm home discount scheme, which is meant to help households at risk of fuel poverty, has been shown to help only a fraction of those intended—25,000 families, instead of the 800,000 it was supposed to help. As some of my constituents have already discovered, the Government’s green deal is another white elephant because the interest payments alone are set to exceed the cost of the energy efficiency measures they are meant to support.
I wish to raise a couple of other points in the few minutes remaining, the first of which is food banks. A number of colleagues have already mentioned increased demand for food banks, and the Trussell Trust recently reported that demand has exceeded its estimations by 170% since last year. My constituency of Oldham has had a food bank for the first time in its history. In the past three months, demand exceeded that of all the previous year, and it is set to get worse. Figures I have just received indicate that the number of people accessing food banks has increased by nearly 100 times in the past two years. When I visited my food bank recently, I was told that it is desperately in need of people to contribute, and that is the sort of thing we have to contend with in different ways.
Debbie Abrahams
I am sorry but I cannot.
A week or so ago I took up Oxfam’s Live Below the Line challenge, living on £1 of food a day. From my experience, that makes it incredibly tough not only to get the necessary nutrition, but to get food that will sustain someone for the day—I certainly will not be eating baked beans for a while.
With the benefit changes introduced last month the situation is expected to get much worse. In addition to the bedroom tax, the abolition of crisis loans for living expenses and other so-called reforms of social security are driven by the Government’s ideologically led cuts. Ministers are fond of making unsubstantiated and misleading claims about the effects of their so-called welfare reforms or the level of health spending, but they are far more reticent about data that reveal the cumulative effect of their changes to tax, tax credits and benefits, and which mean—as I mentioned earlier—that the 40% lowest-income households are worse off. The average household is estimated to lose £891 per year, with millionaires gaining an average of £100,000. There is nothing fair about that.
The Queen’s Speech mentions the need to ensure that every child has the best start in life, but how can increasing absolute child poverty by 55% between 2010 and 2020, and relative child poverty by 34%, be said in any way to give children the best start in life? More than 1.1 million children are set to be living in poverty by 2020, which is completely unfair—
