Welfare Reform and Work Bill (Seventh sitting)

Debbie Abrahams Excerpts

Tuesday 13th October 2015 Public Bill Committees

[Damian Hinds (East Hampshire) (Con)]

The amendment seeks to delay the Government’s proposed changes to the family element of child tax credit until April 2022. The Government were elected on a mandate to reduce the deficit and restore order to our public finances. As part of the plan to get us into surplus and to continue the progress made in the previous Parliament, the Government have committed to making a further £12 billion of welfare savings.

To set the scene, the most recent statistics show that, in 2011, the level of UK expenditure on family benefits was the second highest out of the 34 countries in the OECD and almost double the average. Child tax credits are there, of course, to provide support to low-income families to help them with the costs of raising children.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the Minister clarify those figures? Are they in terms of percentage of spend to GDP or absolute figures?

[Damian Hinds]

The OECD has done a survey based on percentage of spend to GDP. The hon. Lady has not asked this question but let me clarify further: it takes together family benefits, cash benefits, tax breaks and childcare. Of course, the mix is different in different countries. Nordic countries tend to spend more on direct childcare and Anglophone countries tend to spend less on that but put more into tax breaks. Our country has tended to spend a little bit more on cash benefits and on childcare.

As I said, child tax credits are there to provide support to low-income families to help them with the cost of raising children, but the system has grown unsustainably—a family with three children that earns up to almost £40,000 could still be eligible for some support. The previous Labour Government let public spending on tax credits rocket out of control so that, in 2010, nine out of 10 families with children were eligible for tax credits. That was not targeted support for low-income families.

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[The Chair]

Just before I call Debbie Abrahams, a number of colleagues have been using the word “you”, which of course refers to the Chair, when they really mean the hon. Gentleman or the Government. I say that to all my colleagues, both experienced and inexperienced. It is an easy mistake to make.

[Debbie Abrahams]

It is a pleasure to serve under your chairmanship, Mr Streeter. This is the first opportunity I have had to speak as the shadow Minister for Disabled People, so if you will allow me, I would like to start by paying tribute to my predecessor and friend, the hon. Member for Stretford and Urmston (Kate Green). She did a fantastic job, not just in this Bill Committee but in the past in this role and her mantle is going to be hard to take up.

I want to add my voice to what my hon. Friend the Member for Islington South and Finsbury has said. The tax credit provisions in the Bill are pernicious, and these elements are particularly callous and unjust. We are seeking to try to exempt families with disabled children from their impact.

Those who have spoken to parents and carers with disabled children will know that there are additional costs associated with raising disabled children. Contact A Family’s “Counting the Costs” report found that families with disabled children are more likely to be living in poverty than other families and that it costs three times as much to raise a disabled child. Families with disabled children face considerable additional expenditure on heating, housing, clothing, equipment and other items compared with other families. My youngest daughter was diagnosed with asthma when she was very little. One of the triggers for her was the cold and we had to have our heating on all day and all night when she was little to try and avoid what often happened, which was that she stopped breathing. I have that personal experience and, fortunately, we were able to cope with the financial costs of additional heating, but that is not the case for many families.

Research over many years demonstrates a strong relationship between low income, social exclusion and disability among families who have a disabled child. As the “Every Disabled Child Matters” campaign has said, childhood disability is frequently a trigger event for poverty, as a result of additional costs, family break-up and unemployment following the birth or diagnosis of a disabled child. As I said, disabled children are also at a high risk of poverty as a result of low household incomes. Many parents of disabled children are unable to work because of care responsibilities and the lack of, or the cost of, appropriate childcare. I would be interested in the Minister’s response to the issue of providing appropriate childcare for disabled people because, within the proposed provisions, the Government have not been particularly explicit about how that relates to disabled children.

[Neil Coyle]

I welcome my hon. Friend to her new role. The Minister has already mentioned a commitment to providing 30 hours of childcare, but at no point have the Government provided any information on how it will be assessed and whether parents can genuinely access that level of childcare, in particular the parents of disabled children. Would my hon. Friend welcome the Government clarifying whether childcare is genuinely accessible, particularly for parents of disabled children?

[Debbie Abrahams]

My hon. Friend makes a valid point and I would be grateful if the Minister could address it in his response.

Barriers to work are created by the stress of caring, often with no support. I am thinking again in the context of the £3.6 billion of cuts in social care, which also affect disabled people. When people do not have that support enabling them to work, it can build difficulties into family relationship. It is not clear in the impact assessment whether an assessment has been done on the likely increase in poverty of families with disabled children.

For example, what is the increase in NHS admissions predicted to be? I have mentioned my daughter who has asthma. The implication is that there will be other families in similar circumstances. Is there any prediction of an increase in family breakdown? We cannot be in a situation where, potentially, the Government are arguing that the measure will balance the books when it is really about cost-shunting from one Department to another. What assessment has been done on that?

We do not believe that disabled people, their families and their carers should be subject to further cuts and therefore seek to exempt households with one or more disabled children from the provisions on both child tax credit and universal credit. The Government and the social security system rightly recognise the additional costs of raising disabled children but the provisions in clauses 11 and 12 seem to be at odds with that. I oppose them absolutely and in their entirety. At the very least, the effect of the provisions should be mitigated for households with a disabled child and I urge all members of the Committee to do the right thing and support the amendments.

[Emily Thornberry]

Might I rise again? It is entirely my mistake but I realise that I spoke just to amendments 83 and 84 and not to new clause 16. Would it be convenient for me to do so now?

National Insurance Contributions (Rate Ceilings) Bill

Debbie Abrahams Excerpts

Tuesday 15th September 2015 Commons Chamber

[Harriett Baldwin]

My remarks will be so short that hon. Members will need to intervene quickly with their points of clarification on this five-clause Bill. The hon. Lady will be aware that in the summer Budget the Chancellor announced that we are asking the Office of Tax Simplification to look at class 2 and class 4 contributions. We are expecting that consultation, which opened on 21 July, to inform the Budget next year. She asks a sensible question and I welcome her curiosity.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Can the Minister clarify what assessment she has made of the number of self-employed people who may apply for an exemption from paying class 2 contributions, especially as at least half of the increase in employment is self-employed people and, on average, self-employment incomes have fallen to less than £10,000?

[Harriett Baldwin]

We are very pleased that we are backing those who want to take a chance, start their own business and become self-employed. In fact, we have taken measures in previous Budgets to simplify the process so that self-employed people can consider making those contributions alongside their self-assessment.

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[Harriett Baldwin]

I thank my hon. Friend for making that excellent point. The Government want to back small businesses, entrepreneurs and those who want the certainty over the next five years that if they employ four people on the new national living wage, they will not have to pay any national insurance because of the employment allowance.

[Debbie Abrahams]

May I press the Minister on the point I made in my earlier intervention, which she did not actually answer? What assessment has she made of the number of self-employed people who earn so little that they could apply for an exemption from class 2 national insurance contributions?

[Harriett Baldwin]

When one starts out in business, it is often the case that one earns a small amount, but it is those fantastic people who start businesses, often at their kitchen table, whom the Government are trying to back with the measures in the Bill, which will give them a certainty that they would not have if Labour were in charge.

Budget Resolutions and Economic Situation

Debbie Abrahams Excerpts

Monday 13th July 2015 Commons Chamber

[Greg Clark]

I can give that reassurance to my hon. Friend. That is the essential difference between the programme of devolution that we are offering and what has been attempted in the past. Every proposal will come from local people. I do not have the power, still less the inclination, to force local people into any arrangements other than those for which they are enthusiastic.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the Secretary of State explain to me and the residents of Greater Manchester how the devolved £6 billion health and social care budget marries with the £7.1 billion that is currently spent in Greater Manchester? What will happen to the residents of Greater Manchester when that money runs out?

[Greg Clark]

The hon. Lady, who is a Greater Manchester Member of Parliament, should talk to her leaders in Greater Manchester who put the proposal to the Government. The proposal was not invented in Whitehall and visited upon Greater Manchester. The leaders of Greater Manchester made the very good point that when there is a strong connection between the needs of the national health service and the social care of residents across Greater Manchester, it makes complete sense for them to be managed together. That was their proposal and, in line with what my hon. Friend the Member for North Wiltshire (Mr Gray) said, we were very pleased to endorse it.

As I said, this is just the start. We want to build on the ingenuity and experience of local councils and civic and business leaders in an area to attract private investment to match the public investment. The city and local growth deals that we implemented in the last Parliament have transformed £7 billion of funds from central Government Departments into £21 billion of local investment. This Budget represents a golden opportunity for local leaders to repeat that success on a grander scale. Furthermore, with measures such as the creation of new enterprise zones, for which an invitation has gone out to places across the country, and the extension of the coastal communities fund, we are determined that this invitation should be extended to all parts of the country.

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

That is good news, Madam Deputy Speaker, for someone who is always in a rush.

This is an illusion of a Budget of which even Dynamo would have been proud. Saying that it is going to make work pay defies all the evidence. Illusion No. 1 relates to the performance of the economy. The Government are borrowing £219 billion more than they anticipated in 2010, and there is a debt to GDP ratio of over 80%, when it was only 60% after Labour recapitalised the banks. Why is the economy at this level? Basically, because it was absolutely tanked under the coalition and that is now going to be carried forward under this Government.

In 2014, population-adjusted growth was 1.4% below its pre-recession peak, and in the first quarter of 2015 it was still below it, at 0.67% of the pre-recession peak. This reflects the particular issue that the Government have had with productivity, which is the second worst in the G7. Now that we have a productivity plan, will the Minister identify the specific measures that are going to support small and micro-businesses to access finance and to deal with all aspects of late payments, which are an absolute blight on small businesses? How is he going to harmonise taxation and make the tax system more consistent, particularly for self-employed sole traders?

Since 2008, nearly three quarters of the increase in all employment has been down to the increase in self-employment. According to Office for National Statistics data, self-employment has increased by nearly 40% since then, and is now at a 40-year high. There are many benefits from being self-employed: people get to be their own boss, and can choose when and where to work, but there are issues with taxation. We also know that the average income of someone in self-employment is half that of an average employee. It has fallen by 22% since 2008. Last year, Demos undertook research to establish the reason for the sudden increase in self-employment, and concluded that the level was artificially high because there were no jobs for people to move into, and people often moved backwards and forwards between employment and self-employment. There were no real jobs about. There is also the issue of false self-employment. Many large companies in the construction industry, for instance, sub-contract rather than employing brickies, joiners and plumbers. How will the Government deal with those issues?

Another illusion is that the Budget is fair and will make work pay. We know from an analysis conducted by the independent Institute for Fiscal Studies that the poorest 20% of the population will lose proportionally more of their income from tax and benefit changes than any other income group—between £800 and £1,300 a year—and that 3 million people are set to lose £1,000.

The increase in the national minimum wage is welcome, although it is not a living wage as the Government have tried to suggest. It is something, but it does not begin to compensate for the cuts in tax credits that will be suffered by the low-paid. Let me add to the examples that have already been given by many of my hon. Friends. The income of a lone parent with two children who works for 16 hours a week will increase by £400 a year, but that will be accompanied by a tax credit cut of £860, so that person will be £460 worse off. A couple with one partner working full-time on average income will lose £2,000 in tax credits, and will not benefit from the increase in the national minimum wage. According to data published by the International Monetary Fund last month, raising the income share of the poorest 20% of the population increases growth by 0.38% over five years. What the Government are doing will harm the chances of a sustained recovery.

[Rebecca Pow]

It is interesting to note that we hardly ever hear the word “business” mentioned by Opposition Members. It is businesses that must pay the £7.20 that may rise to £9, and that will cost many of them a great deal, but they agree that it is worth it to give people better living standards. Surely we can discuss some of those issues.

[Debbie Abrahams]

If the hon. Lady had listened to my earlier remarks, she would have heard me talk about small businesses then. I have done a significant amount of work with small businesses.

The Government are trying to persuade the public, and to justify what they are doing to working people. We know that, on the whole, it is working people who will be affected. Half the 13 million people who are living in poverty are in work, and two thirds of children in poverty are in working families. The Government are trying to construct a narrative to justify the tack that they have taken—the “divide and rule” narrative about people being feckless—but it is the working people who will be affected most.

Another thing that the Government regularly do is a source of immense frustration. Although I have consulted the Ministers’ code of conduct and many other sources, I have been unable to identify a responsible use of statistics on their part. The Chancellor, for example, tried to suggest in his Budget speech that we were one of the most generous welfare-spending countries in the world. That is simply not true. It is absolute rubbish. If we compare the UK’s spending as a percentage of GDP with that of developed countries in the European Union —as my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) tried to do earlier—we find that it is ranked 17th out of 32.

[Mrs Drummond]

We are the fastest-growing economy in Europe. We are securing more jobs, we have higher employment, and our businesses are doing well. How can that be squared with what the hon. Lady is saying about the welfare state?

[Debbie Abrahams]

I dealt with that earlier in my speech.

In my constituency, more than 20,000 working families with nearly 30,000 children are claiming tax credits. That is two in three families, and three in four children. For them, tax credits mean keeping their heads above water. The changes in tax credits will be devastating for them and will undoubtedly result in an increase in child poverty, with a knock-on effect on those children’s educational attainment, health and life chances. The worsening inequalities are set to become intergenerational.

I must also mention the impact of the £30-a-week cut in additional support for people in the employment and support allowance work-related activity group, which is another punitive measure affecting extremely vulnerable people. The Disability Benefits Consortium believes that the 300,000 disabled people who are already living in poverty will be pushed further into that condition.

Finally, let me say something about housing policy, the inheritance measures and wealth inequalities, especially in the context of land and property. In 2002, it was estimated that 69% of land in the United Kingdom was owned by 0.6% of the population. In the six years to 2011, the number of landholdings had been reduced by 10%, but the size of those holdings had increased by 12%, so even fewer people owned even more land. The inheritance tax measure is but a drop in the ocean when it comes to addressing the concentration of wealth that is held by a tiny elite. Many people who are involved in housing policy emphasise that if we are to solve the housing crisis as well as building more homes, we must tackle the cost and availability of land and the volatility in the market. Given that the average house price in the United Kingdom is more than £180,000, it has been estimated that it will take 22 years for people with low and middle incomes to save up a deposit.

Tax Credits (Working Families)

Debbie Abrahams Excerpts

Tuesday 7th July 2015 Commons Chamber

[The Financial Secretary to the Treasury (Mr David Gauke)]

A fundamental part of this Government’s long-term economic plan is to support working people at every stage of their lives. We have a record we can be proud of: we are providing our children with the best start in life; we are helping millions of people to secure their first job; we are allowing people to keep more of the money they earn; we are helping families get on the property ladder; and we are providing our pensioners security in their old age. We can do that only on the back of a strong, stable and growing economy. This is the Government who have delivered sustained growth—the fastest in the G7 last year. This is the Government who drove income inequality down, reduced pensioner poverty to record low levels and, according to data released earlier this week by the Office for National Statistics, have seen living standards rise by 3.9% on the year. We now need to finish the job. We need to keep our economy secure; to run a surplus; to start paying down our debts; and to put in place the stable future that this country’s citizens voted for.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

How does what the Minister has just said marry up with the International Monetary Fund research showing that taking money from the poorest 20% in society actually stifles growth? IMF figures show that if we invest in the bottom 20%, there would be growth of 0.38%.

[Mr Gauke]

The hon. Lady quotes the IMF, but this is the same IMF that has praised this Government’s record in turning round the economy. The head of the IMF said that she shuddered to think what would have happened had we not got to grips with the deficit. The reality is that if we want to help every part of society, which is what this Government want to do, we need to make sure that we have a strong economy, and that is what this Government are delivering.

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[Mr Gauke]

My hon. Friend is right on both points. It was only because of the difficult decisions that we took that we were able to restore credibility to the UK as an economy and that we were able to make the progress that we made. Labour said that it is committed to closing the deficit. It voted for the Charter for Budget Responsibility, and the shadow Chancellor told us at the weekend that the Government should run a surplus in normal years. It is therefore disappointing that the Opposition have not yet set out how they will do so, because if they continue to oppose finding savings in the welfare budget they will have to explain whether they would borrow more, tax more or cut departmental spending more.

[Debbie Abrahams]

Does the Minister consider it a success that the debt to GDP ratio, according to House of Commons Library figures, is running at more than 80% whereas after recapitalising the banks and the biggest global crash in history it was running at only 60%? Is that a success or not?

[Mr Gauke]

Let me put this as simply as possible. The debt is essentially the accumulation of deficit and for the past five years every measure that the Government took to reduce the deficit was opposed by Labour. Indeed, Labour’s economic argument—its whole case—was that we were going too far, too fast in reducing the deficit and that we should have a looser fiscal policy. A looser fiscal policy means borrowing more. If we borrow more, the debt will rise more quickly. The hon. Lady cannot have it both ways. She can argue that we should have been prepared to borrow more and to allow the debt to rise because that was a price worth paying, but she cannot then turn around and say, “We want the debt to be lower, even though our policies called for higher debt.”

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[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Thank you, Mr Deputy Speaker. In the light of that, I shall not take any interventions.

I congratulate all the Members who made their maiden speeches this afternoon. They have been fantastic and it is a privilege to follow them.

As lovely a place as Oldham is—the place where I live and which I represent—it has a very low-wage economy. One in three of the people who work in Oldham earn less than the living wage. That is significantly above the north-west average and the UK average. Associated with that there are high rates of deprivation and child poverty— 27% overall, and in some wards it is nearer one in two. We have talked about food bank use: we used not to have a food bank in Oldham, but we have one now. I undertook a fairness commission report to look at the core issues underpinning that and to set out how we could address them. It was not unique; other boroughs and cities have done a similar analysis. One of the key truths, unfortunately, is that the UK is one of the most unequal countries in the world. In its recent report, the International Monetary Fund, which the Minister did not seem to know anything about, says:

“Widening income inequality is the defining challenge of our time”.

Forty years ago, 5% of income in the UK went to the highest 1% of earners. Today it is 15%. We should spare a thought for our cousins across the water, where the figure is even higher.

This is the IMF’s second report. In the light of the work of Joseph Stiglitz and others, it found that inequalities are a drag on growth and can make growth volatile. This supports work by the OECD, which rejected the trickle-down economics so popular with Thatcherites. That idea supposed that increasing wealth at the top would trickle down to the rest of the food chain, and that policies aimed at reducing inequality would remove incentives and slow growth. Now the evidence is clear: inequalities have slowed growth, not increased it. According to this analysis, raising the income share of the poorest 20% of the population increases growth by as much as 0.38% over five years. By contrast, increasing the income share of the richest 20% by 1% decreases it.

We have a weak, stagnant economy, and the measures proposed will only make it worse. As colleagues have mentioned, over the past five years Institute for Fiscal Studies analysis has shown that the bottom 20%—the people on the lowest income—have been disproportionately affected by both tax and benefit changes. This is compounded by the cuts to public services, skewing resources away from areas of high need, and by the impact of the disastrous housing policy on housing costs. The Government justify this by saying—we can hear the mood music—“We are far too generous with benefits.” A comparative analysis of benefits spending as a proportion of GDP shows that we are 17th among EU countries. We spent 15% of our GDP on social security. That does not support the claim that we are incredibly generous.

One of the other myths that the Government are spreading is that everyone will be fine if they are in work. Again, the evidence does not support that. We have one of the highest under-employment rates in the EU, and about 80% of the increase in employment comes from self-employment. The average income drawn by people who are self-employed is less than £10,000 a year. In Oldham 20,000 working families with nearly 30,000 children are claiming tax credits. That is two in three families and three in four children. For them, tax credits mean the difference between just about keeping their heads above water or not. The Oldham fairness commission that I run has produced strong evidence of the impact of parental income on cognitive development, behaviour and health outcomes, which will have a negative effect on those children’s life chances—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

Greece

Debbie Abrahams Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right to say that countries need to live within their means. As a Government, we have addressed that matter over the past five years, and I shall address it again in a couple of days’ time in the Budget. Mr Varoufakis has now resigned, and I shall be moving on to yet another Greek Finance Minister, but I doubt that the next one will have quite the dress style of the one we have just lost.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Could the Chancellor be more specific about the risks to the UK’s economic security and, in particular, about the measures that he is going to introduce to mitigate those risks?

[Mr Osborne]

The risks stem from the fact that we are the world’s largest financial centre. We are also the global centre for the trading of the euro. We are a very open economy; on most measures, we are the most open and interconnected of all the world’s advanced economies. We are therefore affected by financial conditions in Europe. We saw that a few years ago, but we are in a much stronger place than we have been in the past because we have been paying down our very large deficit, because we have been strengthening our economy, because we have been recapitalising our banking system and making sure our banks are stronger, and because we have a much better system of regulation, in which the Bank of England is in charge of regulating the banks. Those are all steps that we have taken. I do not think anyone will be particularly surprised to hear that when we assemble in a couple of days to hear the Budget, we will hear the further measures needed to reduce that budget deficit and ensure that we fix the roof while the sun is shining.

Productivity

Debbie Abrahams Excerpts

Wednesday 17th June 2015 Commons Chamber

[Bill Esterson (Sefton Central) (Lab)]

I think that business will take a rather different view if Conservative Members take us out of the EU, as some of them are hellbent on doing.

I congratulate the hon. Member for Hertsmere (Oliver Dowden) and my hon. Friend the Member for Sheffield, Brightside and Hillsborough (Harry Harpham) on their excellent maiden speeches, and you, Madam Deputy Speaker, on your election. This is the first time that I have served under your chairmanship.

Government Members talk about the difficulties in oil and gas as though they are the only reason for the low productivity in our economy, but they are not the only cause. Since the crash, we have seen weak investment in new equipment; a lack of bank lending, despite the attempts of the Treasury to boost it—or perhaps because of those failed attempts; problems in infrastructure; and challenges and difficulties in respect of skills. All those factors have played a part in the low productivity and weak recovery that we have seen, alongside a fall in living standards, since the crash.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Another issue for small businesses is late payments. Businesses spend hundreds of thousands of hours a year chasing late payments, but the Government did little about it in the last Parliament. I hope that they improve their record in this Parliament.

[Bill Esterson]

That is an excellent point. The uncertainty for business, which has contributed to a lack of investment and the other problems that I have touched on, is not helped by the treatment of small and medium-sized businesses by some larger businesses in the supply chain.

Royal Bank of Scotland

Debbie Abrahams Excerpts

Thursday 11th June 2015 Commons Chamber

[Harriett Baldwin]

I thank my hon. Friend for a good question that reminds us not only of the failure of the banking regulatory system under the previous Government, but of the rewards for failure. Labour allowed Fred Goodwin to walk away with an enormous pension and a knighthood.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I welcome the hon. Lady to her new role, but gently remind her that the current debt to GDP ratio is 80%, which is 20% higher than it was after a global economic crisis and our recapitalisation of the banks. On the current RBS share price, there would be a loss to taxpayers of £13 billion, if all the shares were sold today. Is this not incredibly insensitive to the millions of disabled people waiting for personal independence payments and to the carers who have seen £3.5 billion cut from social care and who are really struggling in this, carers week, and will she confirm that the Government will sell RBS only at a profit to the taxpayer?

[Harriett Baldwin]

The hon. Lady’s question started off very well by acknowledging the risks of high public debt. It is incredibly important for those people whom she rightly draws our attention to that we have a strong and healthy economy, and a strong and healthy financial sector is part of the solution. I am not sure, however, whether she is arguing that we should borrow more for longer by holding on to the shares for longer.

The Economy

Debbie Abrahams Excerpts

Thursday 4th June 2015 Commons Chamber

[Mr Osborne]

I will give way in a moment, but let me first make some progress.

Of course, this is the day we vote on the Queen’s Speech, deciding whether the legislative programme it proposes should proceed into law. We were told four weeks ago by the pollsters and pundits that this day would be one of great constitutional drama. Would the party leader who managed to cobble together enough votes in a hung Parliament manage to survive the test of the vote tonight? As always, we are taking nothing for granted, but I am reasonably confident that we will have the votes tonight, because what the pollsters and pundits did not reckon on was the good sense of the British people, who did not want to put at risk everything that has been achieved over the past five years and who want to continue with a long-term economic plan that is working for this country.

Let me say—I mean this sincerely—that it is very good to see the former leader of the Labour party here today. I think that he earns everyone’s respect by coming to the House so soon after the election defeat, and I understand that he wants to take part in the debate. Despite the fierce arguments of the general election, I do not think that anyone ever doubted his personal integrity or the conviction with which he made his arguments. It is good to see him back in the Chamber.

Let me also put on the record my thanks to the former Chief Secretary to the Treasury, the former Member for Inverness, Nairn, Badenoch and Strathspey, who lost his seat at the election, with whom I worked incredibly closely. He gave great public service to this country. Of course, that is not to say that I am sorry to have a Conservative Chief Secretary. It is fantastic to have my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) in that role, along with the new members of the Treasury team.

The measures set out in the Queen’s Speech represent the next stages of our long-term economic plan, because we on the Government side of the House know that the job of repairing the British economy is not yet done, and that the work of preparing our country for the future has only just started.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Does support for hard-working people include sanctioning those who are in work but on low wages and in receipt of tax credits?

[Mr Osborne]

If the hon. Lady is talking about benefit sanctions, I think that it is perfectly reasonable to ask people who are capable of work to turn up to job interviews and to make sure that they are doing everything possible to look for work. We support them while they are doing that, but the taxpayers of this country expect them to search for work.

The economic situation at the beginning of this Parliament is vastly better than the one we inherited at the start of the last Parliament. Back then, debt was soaring; today, it is projected this year to fall as a share of our national income. Back then, millions were looking for work; today, 2 million new jobs have been created. Back then, we were in the grip of an economic crisis; this week, the latest forecast is that the UK will be the fastest growing of any of the G7 economies—not just in 2014, but now in 2015 as well. That we have come so far in five years is a testament to the effort of the working people of Britain.

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[Mr Osborne]

I absolutely will do that. I remember my visit with my hon. Friend to his constituency to meet some of the small businesses on the high street who depend on the people in this House delivering economic security and stability for this country, and that is what we are determined to do.

The global economy is full of risks at present. We should be redoubling our efforts to prepare Britain for whatever the world throws at us in the coming years, not easing off. The time to fix the roof is when the sun is shining. So in the Budget and in the spending review that follows, we will take the necessary steps to eliminate the deficit and run the surplus required in good times to bring debt sustainably down. That is what we promised in the election, and it is what we aim to deliver in government. I am not going to pretend to the House that these will be easy decisions, but nor will I pretend to the public that we can avoid taking them—we cannot. We have a structural budget deficit—we spend more than we collect in taxes—and that is not going to be fixed by economic growth alone. We have to bring spending down so that our country lives within its means.

As with any challenge, the sooner you get on with it, the better, and that is what we do today. Over the past five years we have brought a culture of good housekeeping to Whitehall. In every year of the previous Parliament—

[Debbie Abrahams]

rose—

[Mr Osborne]

I will make a little progress, if the hon. Lady does not mind. As I say, lots of Members want to get in on this debate later.

In every year of the previous Parliament, Government Departments kept their spending not just within budget but well under budget. Outside key protected areas like the national health service, those budgets have been reduced year on year to more sustainable levels. At the start of this Parliament, it is important that we continue to control spending in the same vein. Two weeks ago, my right hon. Friend the new Chief Secretary asked Government Departments to seek further savings beyond the £13 billion of savings that they are already delivering this year. I can report today that together we have got straight back to the task in hand. We have found a further £4.5 billion of savings that we can make to the Government budget this year, including sensible asset sales. Some £3 billion of these extra savings come from finding more efficiency in Whitehall Departments and from the good housekeeping of coming in under budget. The breakdown per Department is being published by the Treasury today.

There is another component to this: I am today announcing that the Government will begin selling the remaining 30% shareholding we have in Royal Mail. It is the right thing to do for Royal Mail, for the businesses and families who depend on it, and, crucially, for the taxpayer. That business is now thriving after we gave it access to investment from the private sector in the last Parliament. There is no reason we should continue to hold a minority stake. That stake is worth about £1.5 billion at current market prices.

Of course, share prices fluctuate and the final value will depend on market conditions at the point of sale. We will sell our stake only when we can be sure that we are getting value for money, but let us be clear: holding over £1 billion of Royal Mail shares in public hands is not a sensible use of taxpayers’ money. By selling it, we help that important national business to prosper and invest in the future, while we use the money we get to pay down the national debt and pay less interest on that debt as a result. It is a double win for the taxpayer, for we on this side never forget that it is not our money or the Government’s money; it is the money that people work for and pay in taxes, and entrust to us to spend wisely.

Finance (No. 2) Bill

Debbie Abrahams Excerpts

Wednesday 25th March 2015 Commons Chamber

[Chris Leslie]

The hon. Gentleman must wait for our manifesto in which we shall reveal all those details.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Is my hon. Friend as concerned as I am that there is so little distributional analysis in the Finance Bill, given the past five years in which the poorest in society fared the worst and our concerns about an increase in VAT looming in the not-too-distant future if the Government get back in?

[Chris Leslie]

My hon. Friend’s point about distributional analysis is a good one. We know that those on lower and middle incomes have been hit particularly hard: people on the lowest incomes do not benefit from many of the changes that the Government have made, and we must consider what data we need.

My point about parliamentary procedure is not just about the political dates of Budgets and so forth; it is also about the time that officials and civil servants have to draft some of the provisions and proposals. I do not understand why it has to be so last minute and by the seat of their pants. It is one thing to exclude one’s political opponents from the reveal moment of the Budget, but surely it would be good to ensure that proper internal arrangement are in place in the Treasury for drafting these arrangements.

The Institute of Chartered Accountants in England and Wales has its concerns:

“we do not think that Parliamentary consideration amounting to only one day is in any way sufficient to consider and pass another significant Finance Bill that runs to 349 pages and contains a considerable amount of controversial legislation.”

An article in today’s Financial Times quoted Heather Self of the law firm Pinsent Masons. She said that the decision to rush through the Finance Bill was

“an abrogation of the parliamentary process…Legislation this complicated should not be going through without parliamentary scrutiny”.

My hon. Friend the Member for Edmonton was right when he talked about Tolley tax handbooks—I know his walls are adorned with the tax code in fine, leather-bound tomes. He will know that when the coalition came to office, there were 17,795 pages in that tax handbook, but by the end of this Parliament that has risen to 21,414 pages. The Minister says that is not a good barometer. I suppose it is good for publishers and perhaps makes my hon. Friend’s library a little more expansive and extensive, but I suspect it makes things more difficult for people to understand and follow. I think that our constituents deserve better and want proper scrutiny of the Finance Bill, and we will try our best to do that. The House should bear in mind the fact that the Bill appeared in the Vote Office yesterday, so it is difficult even for my diligent hon. Friends properly to absorb and assimilate all the provisions and to do justice to the Bill. Nevertheless we will give it a go and try our level best.

Ultimately, the Finance Bill could not disguise the coalition’s failures of the past five years. There is a slow recovery, but it is not being felt far and wide. By the standards and tests that the Government set when they came to office and made their promises in 2010, the Conservatives and Liberal Democrats have failed, particularly on the public finances. They have failed to eliminate the deficit, which should have gone by now. In fact, in the autumn statement 2010 the Chancellor trumpeted that he would bring forward to 2014-15 the year by which the current structural deficit would be eradicated, yet we find ourselves with a £90 billion current budget deficit, which fell by only 5% on the previous year—not exactly the rate we were promised.

There are many other structural issues in the economy. I do not know whether my hon. Friends remember the Chancellor’s promise about the march of the makers, but I am afraid that this country’s exports have not lived up to the £1 trillion target set for 2020; we are already a mere £300 billion off course in achieving that. Before the last election the Chancellor set the litmus test of cherishing our triple A rating, but of course that was downgraded.

One thing in the Finance Bill that supports the Government’s fiscal strategy was the revelation of how extreme the cuts will be to public services over the next three years—twice as deep over the next three years as we have seen for the past five years. In the words of the Office for Budget Responsibility, the “rollercoaster” is about to go over the precipice, and public finances, social care, the police, defence and many other public services will be pushed over the edge of that cliff should the coalition parties Government have a further five years in office.

It is no wonder that when people look at the impact of deep and extreme cuts to what Government Ministers term “non-protected Departments”, and see how deep they will be, they say, “Well that isn’t going to happen; it’s impossible to countenance that they would end up taking 30%, 40% or 50% from some of those Departments.” It is no wonder that people then believe there must be another plan, either for raising taxes or for cutting other services that some assume ought to be protected, in particular the national health service.

We had the debate on VAT, but I find it difficult to take the Prime Minister’s words seriously. These days, he has a habit of shooting from the hip—about whether he is retiring or what his views are for the day—so I am not sure that people will necessarily say, “Oh well, the Prime Minister said he’s not going to do it. That’s that then.” That is sort of what he said before the last general election about having absolutely no plans to raise VAT, but it was only a matter of weeks before he got round to doing it.

Fiscal Responsibility and Fairness

Debbie Abrahams Excerpts

Thursday 19th March 2015 Commons Chamber

[Danny Alexander]

I agree with my right hon. Friend. The plan I have set out today ensures that we would borrow less than Labour and cut less than the Conservatives, ensuring a fair path for the public finances, which is necessary to deliver in full on our plans to dual the A1—plans that he has championed relentlessly during his time in the House. I am pleased it has been a Liberal Democrat Chief Secretary who has enabled that scheme to be funded.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

This is clearly the Chief Secretary to the Treasury presenting an alternative Liberal Democrat Budget. He obviously did not hear your statement at the beginning, Mr Speaker. To press him on the point my hon. Friend the Member for Nottingham East (Chris Leslie) raised, how will he be voting on Monday, and if he is going to vote for his own alternative Budget, will he be resigning as Chief Secretary to the Treasury?

[Danny Alexander]

With the greatest respect, I think it was the hon. Lady who was not listening. I made it clear that the policy measures in the Budget were ones that I helped put together, on an equal basis with the Chancellor, and I will be voting in favour of all the Budget resolutions, as I think Labour should. If it wants to oppose income tax cuts for working people and measures to support first-time buyers and savers and motorists, it should tell the British electorate.