Finance Bill

Debbie Abrahams Excerpts

Wednesday 2nd July 2014 Commons Chamber

[Madam Deputy Speaker]

I am grateful to the hon. Gentleman—[Interruption.] Order. I am grateful to the hon. Gentleman. That is a point of order. He has put the record straight, and the House is grateful to him.

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

On a point of order, Madam Deputy Speaker. Could you advise me, please, with reference to the inaccurate information that was given by the Prime Minister about waiting lists for A and E, and the fact that in 48 out of the past 52 weeks, A and E targets have been missed by this Government—

[Madam Deputy Speaker]

Order. I have already reminded the House that the content of Ministers’ speeches is not a matter for the Chair, and that is not a point of order.

New Clause 1

Oil contractor activities: ring-fence trade etc

‘Schedule (Oil contractors: ring-fence trade etc) contains provision about the corporation tax treatment of oil contractor activities.’—(Mr Gauke.)

Brought up, and read the First time.

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[Mr Gauke]

Again, I am delighted to hear that. My hon. Friend lobbied us and made representations on behalf of his constituents for the inclusion of circuses. As a consequence of the consultation process and listening to the points raised by my hon. Friend and others, I am delighted that circuses will benefit from this tax relief.

[Debbie Abrahams]

It is important to support this area, but would the Exchequer Secretary like to comment on the National Audit Office and Public Accounts Committee’s recent reports criticising the Government and Her Majesty’s Revenue and Customs for not properly monitoring the tax reliefs in this area?

[Mr Gauke]

The Government will respond formally to that, but I believe that well-designed, well-focused and targeted tax relief, which is what we have, can help the economy grow and help particular sectors. Indeed, I am delighted that two examples have just been provided to us. This Government have successfully lowered rates, including corporation tax, which we have debated this afternoon, and, if particular sectors can be supported by a well-targeted tax relief, we should do that. We believe that, overall, our tax system is working to enhance the UK’s competitiveness. This Government have a good record in the creative sector in particular, and I am delighted that, through new clause 5 and new schedule 4, that will continue.

New clause 6 amends the list of excluded activities in the tax-advantaged venture capital schemes—the seed enterprise investment scheme, the enterprise investment scheme and venture capital trust schemes—so that a company whose trade consists substantially of the generation of electricity or heat that attracts renewable obligation certificates or payments under the renewable heat incentive will no longer qualify for investment under those schemes, with limited exceptions.

As in the case with the feed-in-tariff exclusion, community interest companies, community benefit societies, co-operative societies and Northern Irish industrial and provident societies will not be affected by the restrictions. The exceptions for co-ops will also apply to European co-operative societies, in line with the changes being introduced as part of the “taxation of co-operative societies” amendment, which aims to align and update all references to industrial and provident societies across the Taxes Acts. The restriction will also not apply where the electricity is generated by anaerobic digestion or by hydropower, nor where heat is generated, or gas or fuel produced, by anaerobic digestion. The measure will apply in respect of both UK ROC and RHI schemes and overseas equivalents. It will make the tax-advantaged venture capital scheme better targeted and effective in supporting small and growing, higher-risk businesses.

Amendments 5 and 6 make technical changes to clause 73, which will restore sense and fairness to air passenger duty by reforming the destination banding and introducing a simple to understand two-band system. As the House will know, we have devolved the power to set rates on direct long-haul flights from Northern Ireland to the Northern Ireland Assembly, which set the rates at £0 in the Air Passenger Duty (Setting of Rate) Act (Northern Ireland) 2012. As the structure of the tax, including the number and composition of the destination bands, remains a matter for the UK—the Northern Ireland legislation refers to the UK legislation—the Northern Ireland Executive have asked us to make the consequential amendments needed to their legislation so that it aligns with the UK legislation.

Office for Budget Responsibility (Manifesto Audits)

Debbie Abrahams Excerpts

Wednesday 25th June 2014 Commons Chamber

[Nicky Morgan]

It would be a little strange, but the shadow Chancellor and the Opposition have woken up to the need to rebuild their fiscal credibility as the election approaches. Of course they had 13 years to introduce an Office for Budget Responsibility, but no move was made.

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

Will the Minister confirm how much more the Government are borrowing compared with what they planned?

[Nicky Morgan]

A lot less than the Labour party would have done had it been in government—[Interruption.] I thank the shadow Chancellor for the applause; that is very kind.

The creation of the OBR has meant that for the first time we have a truly independent assessment of the state of the nation’s finances. As the Chancellor noted in his Budget this March, it is to its credit that

“we now take it for granted that the figures presented at this Dispatch Box are not fiddled but fair and independent.”—[Official Report, 19 March 2014; Vol. 577, c. 781.]

By giving the OBR power to produce the official forecast, we have managed to remove many of the risks of the past and put the UK’s fiscal policy at the cutting edge of international best practice. The IMF said that

“strong fiscal institutions can enhance the credibility of consolidation plans”

and the shadow Chancellor wrote to Robert Chote affirming:

“Over the last three years, the Office for Budget Responsibility has become an established part of the framework of British economic policy with broad-based and cross-party support.”

I am sure that—it is not often I say this—we all agree wholeheartedly with the shadow Chancellor. It is also worth reminding right hon. and hon. Members that when the OBR was set up four years ago, it was deliberately designed to ensure that it would be independent and could steer clear of political wrangling. That independence and impartiality is crucial.

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

I agree with some bits in the speech the hon. Member for Hereford and South Herefordshire (Jesse Norman) has just made.

[David Mowat]

The last bit!

[Debbie Abrahams]

Certainly not the last bit. Last month’s elections were a wake-up call for all of us, and if we do not heed it, the future of politics will not look good. Far too many people feel completely disfranchised from politics and do not trust politicians. Too many people either stayed at home or cast their vote for a protest party. That is why I fully support the motion for the OBR to independently audit the spending and tax commitments of the main political parties in next year’s general election.

Undertaking that analysis would be a major step forward to help increase openness and transparency in politics. It would enable proper scrutiny and debate on the spending plans of all political parties, and enhance the democratic process. Ultimately, it would contribute to informed decision making, which is surely what we should all want. We are here as public servants to reflect issues in our constituencies and to develop policies that respond to those issues. Communicating our policies is part of our job. That is certainly the form of politics that Opposition Members want to develop.

This proposal is part of a process of addressing the major power imbalances and associated inequalities in our country, and we are absolutely determined to tackle it. We will continue to stand up to powerful vested interests, from media barons to the big energy companies. Information is power, and having information about how the Government or political parties intend to spend public money is very powerful.

[Simon Kirby (Brighton, Kemptown) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

I am sorry, but I do not have time.

To deny information to the public is absolutely shameful, and that is where the problem lies. Other parties do not want to change; they want the status quo. They want to preside over a country where there is growing inequality. The average person will have £1,600 a year less in their pocket next year compared with 2010, and the average family has lost £974 since 2010 because of the tax and benefit changes, but bank bonuses have soared and the top-to-bottom pay ratio for FTSE 100 companies stands at 300:1. The Government are presiding over such inequalities.

[Sheila Gilmore]

If we propose policies, as the Leader of the Opposition did last week on the provision of training opportunities for young people, it is clearly important for the public to understand that the policies will cost what we say they will cost, and surely this proposal would help.

[Debbie Abrahams]

Absolutely. That is my major argument. I cannot understand any party not wanting to provide information to enable people to make informed decisions.

[Simon Kirby]

Will the hon. Lady give way?

[Debbie Abrahams]

Go on then. The hon. Gentleman has enticed me to give way.

[Simon Kirby]

Why does the hon. Lady suppose that we did not have an office for budget responsibility during the 13 years of the previous Government to provide the very transparency and credibility that she is now so keen on?

[Debbie Abrahams]

I am very grateful that we have an OBR now, but we should focus on how we use it.

To return to the current and growing inequalities under this Government, recent research on life expectancy has shown that people in Manchester are twice as likely as people in Wokingham to die early, and the figures are getting worse. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) famously said:

“Inequality in health is the worst inequality of all. There is no more serious inequality than knowing that you’ll die sooner because you’re badly off”.

That is what is happening under this Government.

This Government are grossly unfair and unjust: they protect their own self-interest, they are out of touch and they are out of time. Should we be elected in 2015, we have said that we will not borrow more for day-to-day spending. In stark contrast to this Government, our decisions on how we spend resources will be based on fairness, justice and evidence.

We want our spending plans to be independently verified to make sure that they are robust. After all, that is what happens not just in the US, but in Canada, Australia and the Netherlands. I invite those who wish to enhance the democratic process and not to stifle it, as well as those who want a Britain for the many and not for the few, to join us in the Aye Lobby.

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[Chris Williamson (Derby North) (Lab)]

Let me start with the hon. Member for North East Somerset (Jacob Rees-Mogg). He is a very clever man—he went to public school, I believe—but he was being deliberately obtuse. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) pointed out, he suggested that somehow the OBR would have to take account of every possible nuance and potential spending commitment that a shadow Minister might make at an obscure public meeting in a village hall in some obscure little village, perhaps in North East Somerset. Perhaps he has not had time—he is a very busy man—to read the motion tabled by the Labour party, but as my hon. Friend pointed out, we are asking the OBR to audit the manifesto, not inadvertent comments that may have been made off the cuff at an obscure meeting in a village hall in North East Somerset.

The Minister had the temerity—I will put it like that—to suggest that my right hon. Friend the shadow Chancellor was using this proposition as a fig leaf. How dare she! If anybody is responsible for indulging in trying to use a fig leaf, it is the Minister, the Chancellor of the Exchequer and the Government Front-Bench team. They suggested that somehow the OBR could not manage this proposal and that it would be unable to scrutinise things as an independent body. They said, “It is a new organisation, it is very young and it couldn’t quite manage it; let’s get the general election out of the way first.” However, members of the Treasury team know full well that our propositions are properly costed and would be doable. This is about the sort of country and society we want, and perhaps about the ideology and values that underpin Labour, compared with those that underpin the Government.

The truth—this is no coincidence—is that the Chancellor is not here because he is frightened. If I may quote the words of the late Margaret Thatcher, he is

“Afraid? Frightened? Frit? Could not take it? Cannot stand it?”—[Official Report, 19 April 1983; Vol. 41, c. 159.]

That would be especially so if the Labour proposition was actually subject to an independent audit by the OBR. That is the real reason why the Government are opposing the Labour motion.

[Debbie Abrahams]

Is this not also about wanting to maintain the status quo, and is it not revealing what that says about the Government and their political priorities?

[Chris Williamson]

Very much so. For all the great talk about a different approach to politics that the Prime Minister suggested he wanted to herald in, this is the very worst of the old politics.

The hon. Member for South West Devon (Mr Streeter) thought the proposal a bad idea in principle, but the British people deserve better than what they have had, and they certainly deserve better than what they get from the Conservatives. Routinely, what we see from Conservative Members, with their friends in the right-wing media, is a hysterical outpouring of misrepresentation of Labour manifesto proposals.

I remember Labour’s “double whammy” of tax and spend that the Conservatives used in 1992, and the VAT bombshell and all that nonsense, when we had actually gone to some lengths to be straight and honest with the British public and produce a shadow Budget. Yes, it was clear there would have been some tax increases, but they would have been for the richest people in society; eight out of 10 people would have benefited from Labour’s shadow Budget, but that was not what the Conservatives said or what was portrayed by the right-wing media. Had we had the opportunity of an independent audit of that shadow Budget, it would have been clear that the Conservatives were misrepresenting—or not, as the case might be—Labour’s proposals.

I understand why the Government are trying to resist the motion, but I want to see our proposals audited. On housing, for example, instead of giving billions of pounds to private landlords, it would be better value to invest that money in building houses for people. Surely, that would be a better use of money. It would be good for the OBR to scrutinise and audit that.

The Economy and Living Standards

Debbie Abrahams Excerpts

Thursday 12th June 2014 Commons Chamber

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

Before the Chancellor descends further into his self-congratulatory speech and quotes statistics about my constituency to me, will he confirm that the employment rate is still below pre-recession levels and that a third of the jobs in my constituency are below the living wage?

[Mr Osborne]

Well, yes, the employment rate is below what it was before the economy crashed and we had the deepest recession since the 1920s and ’30s, but the good news, as the hon. Lady will have noted, is that there has been a sharp rise in the employment rate in the last year—800,000 new jobs created. The employment rate now is very close to its pre-recession peak, so I would suggest that she should not make too many predictions on that front.

I am absolutely explicit that I want to get the employment rate up. I want to ensure that our schools are providing kids with the right skills, that we are creating more apprenticeships—one of the great success stories of this Government—and that we have more students coming out of our universities with the right graduate qualifications, so that we get our employment rate up even higher and achieve the goal of full employment in this country.

One of the risks that will face any economy—particularly one such as the United Kingdom’s, with a large number of financial services in it—is any risk from financial markets. As we begin to see the slow withdrawal of monetary stimulus here in the UK and in the United States, and with the eurozone heading in the other direction, we might expect to see an increase in market volatility. That is all the more reason why the financial markets in foreign currencies, commodities and fixed income should be fair and effective. Tonight at Mansion House and here in the House of Commons, I want to set out briefly the steps that the Governor of the Bank of England and I are taking.

We will bring forward enhanced criminal sanctions to punish and deter market abuse, but we will not opt into European rules, instead developing our own tough domestic powers. We will extend the senior managers regime proposed by the Parliamentary Commission on Banking Standards—so ably chaired by my hon. Friend the Member for Chichester (Mr Tyrie)—so that it covers the branches of foreign banks. We will also use the legislation we asked Parliament to pass in the wake of the LIBOR scandal to regulate further benchmarks in areas such as foreign exchange, fixed income and commodities. The new review that the Governor and I are establishing, chaired by the former deputy managing director of the International Monetary Fund, Minouche Shafik—now the deputy governor of the Bank of England—and involving the Treasury and the Financial Conduct Authority, will provide further recommendations.

Let me be absolutely clear: the integrity of the City matters to the economy of Britain. Markets here set the interest rates for people’s mortgages, the exchange rates for our exports and holidays, and the commodity prices for the goods we buy. We are going to deal with abuses, tackle the unacceptable behaviour of the few and ensure that markets are fair for the many who depend on them. We are not going to wait for more financial scandals to hit; instead we are going to act now and get ahead. We will take these steps to build resilience in our financial markets and our economy.

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

I found the reference in the Queen’s Speech to the Government continuing

“to build a stronger economy and a fairer society”

absolutely incredible. It assumes that we already have a stronger economy and a fairer society, and we patently do not. We have had the worst economic recovery in 100 years. After three years where the economy flatlined, the recovery is still very fragile. We need 1.6% growth each quarter to catch up to the growth we had at the end of 2010.

What is growth based on? Once again, we are seeing the start of a housing bubble, driven by the Government’s policies, and an increase in household debt, which was up to £2.9 billion in March this year. The Tories’ 2010 manifesto stated:

“A sustainable recovery must be driven by growth in exports”.

Absolutely. Who would disagree with that? But the Government have not enabled that to happen. The trade figures remain in the red—by £22.4 billion in quarter 4 last year, which is equivalent to 5.4% of GDP. By their own measures, the Government are failing. Related to that, UK productivity is the second lowest in the G7 and 20% lower than the G7 average. That is the widest gap since 1992 and reflects a massive fall in non-financial investment.

Small businesses, which I have been campaigning for and championing since I entered the House three years ago and which employ nearly half the work force, are still feeling the pinch. The Federation of Small Businesses survey shows that access to finance and late payments are still the two biggest issues, with £30.2 billion owed to them in late payments. Although I recognise that the Government have finally responded to the issues that my inquiry into late payments identified last year and taken up some of my recommendations, it is likely that the measures will relate only to the public sector. That is not good enough and does not go far enough. We need to ensure that the Government are standing up to big businesses and doing the right thing. If they do not, we will.

Then, of course, we had the Government’s arrogance about what they would do about public borrowing. They claimed that they would clear the deficit by 2015, but we are not even halfway there yet, and they are still borrowing £190 billion more than they planned.

Associated with the fragile recovery are the effects of unemployment and employment. The unemployment rate is above pre-recession levels, and employment rates are below pre-recession levels. I still have major issues with how the figures are distorted by the inappropriate sanctioning that is a policy in the Department for Work and Pensions.

[Sheila Gilmore (Edinburgh East) (Lab)]

Does my hon. Friend share my concern—it was one of the points I wanted to raise with the Chancellor when I was attempting to intervene on him—that more than 1 million people who are unemployed do not appear on the claimant count of which he is so proud? They represent more than 47% of the total number of the unemployed. There appears to be no knowledge of what is happening with these individuals and why they are finding it so difficult to get jobs. It clearly cannot be benefits dependency, because they are not on benefits.

[Debbie Abrahams]

Absolutely. My hon. Friend highlights another issue with how information on claimants and people not receiving payments is being missed. We should be doing as much as we can to expose those issues.

I mentioned the employment rate still being below pre-recession levels. The jobs that have been created since 2010 tend to be insecure, part time, low paid and on zero-hours contracts. The number of people on short-term contracts has increased twentyfold since 2010 to 1.65 million, 655,000 of them involuntary. Increases in the number of temporary jobs account for more than half the rise in employment. Nearly one in five, or 1.46 million people, work part time because they cannot get full-time work. That is the highest underemployment since 1992. Four out of five new jobs, and one in three of those in Oldham, pay below the living wage.

Another issue is the geographical spread of the so-called recovery. Since 2010, 79% of new jobs have been created in London, with another 10% in nine urban centres outside London.

In the limited time available, I want to talk about the inequalities this Government are presiding over. All those employment and unemployment effects are happening at a time when the Government have made specific policy decisions on increasing the top rate of tax for people with incomes of more £150,000, but average wages are down £1,600 a year. The analysis by the Institute for Fiscal Studies shows that the net effect of tax and benefit changes for an average family is a loss of more than £900 since 2010, while bank bonuses have soared by 83% and top-to-bottom pay ratios in the FTSE 100 stand at 300:1.

We are already seeing the impact in access to food banks: this week’s Oxfam report, “Below the Breadline”, shows that 20,247,042 meals were given to people in food poverty in 2013-14 by the three main food aid providers—a 54% increase on 2012. Another recent Oxfam report, “A Tale of Two Britains”, highlighted the growing gap between rich and poor, with five of the richest families in the UK wealthier than the bottom 20%, or 12.6 million. That follows a raft of other reports—for example, from the Equality Trust.

The gap matters—it really does. It matters because, as overwhelming evidence shows, society as a whole benefits from being fairer and more equal in areas ranging from life expectancy and mental health to educational attainment, social cohesion and social mobility. It is worrying that we are seeing further increases in premature deaths in deprived areas compared with more affluent ones. According to a report published in May, people in Manchester are twice as likely to die early as people in Wokingham, yet as I mentioned in Prime Minister’s questions yesterday, last December the Government scrapped the health inequalities formula that Labour introduced in office to ensure that NHS resources were allocated according to need, and which the analysis proves has been effective.

A fairer, more equal society also benefits our economy. Again, there is overwhelming evidence from a range of sources that inequality causes financial instability, undermines productivity and retards growth.

[Several hon. Members]

rose—

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[Jack Dromey (Birmingham, Erdington) (Lab)]

“What planet does the Chancellor live on?”, said the Stockland Green mother. “Does he begin to understand people like me? My husband has been made redundant three times, and each time the new job is on a lower rate of pay. Do they know, up there, what life is like for us down here?”

That goes to the heart of what the shadow Chancellor said earlier about an era of discontent and disconnection. There is discontent because life is hard for most of my constituents. Living standards are squeezed and people are worried about their kids and concerned about vested interests—energy companies, for example—taking advantage of them. They say to me time and again, “Jack, it just ain’t fair.” The disconnection is because there is mistrust of politics and politicians, and incredulity when people are told that recovery is under way. Time and again I hear, “Recovery—what recovery?” My constituents say to me that this Government simply do not understand their lives, because for too many of them, life is hard and there is insecurity in the world of work. I meet constituents on zero-hours contracts and those in the building industry who complain about being undercut. One said, “Jack, they are exploiting the migrants and undercutting us.”

[Debbie Abrahams]

Is not the increase in the number of people on zero-hours contracts an absolute shame? The Chancellor was not even able to provide a figure for that number.

Oral Answers to Questions

Debbie Abrahams Excerpts

Thursday 1st May 2014 Commons Chamber

[Mrs Grant]

As I have said previously, these are sensible measures taken by a responsive Government and they will assist local communities and protect vulnerable people. They are balanced, proportionate and have business in mind too. Nothing more or less would have been appropriate.

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

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Culture, Media and Sport (Sajid Javid)]

It is a pleasure to join you for my first oral questions as Secretary of State, Mr Speaker. The Department continues its work in a large number of areas, including but not limited to extending sporting and cultural opportunities to as many people as possible, promoting the creative industries, encouraging both international and domestic tourism and delivering a transformation of broadband.

[Debbie Abrahams]

I welcome the Secretary of State to his new role. We know of the multiple benefits of sport in all its forms, but particularly of the social and health benefits. However, a recent survey by the Women’s Sport and Fitness Foundation found that more than half of girls are put off physical activity as a result of their experiences in school. I appreciate that measures are already in place to provide support, but what more will the Secretary of State commit to doing to increase women’s participation—or is support for women something that an increasingly male-dominated Cabinet does not like to provide?

[Sajid Javid]

The hon. Lady has asked questions about this issue before and I know she is passionate about it. She has made an important point, and it is a shame that she had to finish with party political point scoring on what is a very important issue. She will be aware that the Government have taken a number of initiatives in this area already, and despite her attempt to make a petty point at the end, I will be happy to meet her if she wants to discuss any ideas she has about what more we can do in this important area.

Finance (No. 2) Bill

Debbie Abrahams Excerpts

Wednesday 9th April 2014 Commons Chamber

[Cathy Jamieson]

I will come on to that point, and on to corporation tax, when I speak in more detail about why we want a review of the bank levy. I hope Government Members understand why we think it is important to have a review and to consider the implications. I started by saying that we are taking a relatively mild-mannered approach, with no demand, as is sometimes made, for something to happen immediately. We are saying, “Let’s look at the figures, let’s look at the implications, let’s look at what can be done in the round, and let’s have the Government do that work and bring it back for further discussion.”

To go back to the hon. Gentleman’s point, the figures compiled by the Labour party suggest that the cut to the 50p tax rate saw an estimated 2,714 bankers who earn more than £800,000 share a £98.5 million windfall—an average tax cut of £36,300 each. I just make that point in relation to the notion that the Treasury will somehow get the yield from that.

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

Would my hon. Friend like to comment on why the gap—which I do not think, from their policies, Government Members understand—between the top and the bottom matters? Overwhelming evidence shows how harmful it is to society that the gap between rich and poor is increasing.

[Cathy Jamieson]

My hon. Friend makes an important point and it is important to recognise it. I made the point that this is not about bashing the bankers per se. The front-line staff who operate call centres and other places have not seen their living standards rise as quickly as they might have wished. Those on the minimum wage or the living wage, who aspire to improved employment opportunities if they were available; those on zero-hours contracts; those who work part time but would prefer to work full time; young people taking any job, even if it is a stop-gap until they find one that suits their qualifications and aspirations—they are the ones who find it most difficult to understand why the banks have not changed their culture. It appears to them that in some instances people were being rewarded not for success but for failure, and that they could not aspire to have their own success in their own jobs rewarded. It is also fair to say that in some ways the financial services sector was slightly better protected from the wage freezes and so on than manufacturing and other sectors in industry. I absolutely understand my hon. Friend’s point.

No Government Members are seeking to intervene at this point, so I can only assume that they heard what my hon. Friend said and agree that this is a very important point in considering how to take things forward. As she suggested, ordinary people, particularly young people, are still dealing with the legacy of the financial chaos caused by the banks, and with the cost of living crisis that has been made worse by the policies of this Government. To return to her point, real wages—I will say it again, even though I know it has been repeated on numerous occasions in the course of these debates—have fallen by £1,600 since 2010. That is a huge amount of money for those on the lowest incomes. That may not have an impact on those who received the average tax cut of £36,300, but it certainly has an impact on ordinary people who are trying to do the best for their families.

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[Cathy Jamieson]

I have no difficulty with the idea of getting young people into any form of education, employment, traineeship and so on, but we have to ensure that that is available to the young people who are out of work for a lengthy period as a priority, because we know that the longer young people are away from the jobs market, the more difficult it is for them to get back in, and I do not see that the hon. Gentleman’s point is in any way incompatible with the idea of bringing forward a report to look in more detail at how this could work and how the funding would be used.

[Debbie Abrahams]

I should like to make a quick point about the evidence that links entry-type jobs to future career progression. That evidence is weak, so my hon. Friend is right to say that a sustained approach needs to be taken. Is she also aware that a Prince’s Trust report on long-term youth unemployment shows that one in five young people who are long-term unemployed feel that they have nothing worth living for? Long-term unemployment has a direct effect on finances, but it also affects how young people view themselves in society. The implications of that are—

[The Temporary Chair (Martin Caton)]

Order. This is an extremely long intervention.

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Our amendments would shed welcome light on bank taxes with a view to ensuring that banks do not benefit from any further unintended cuts. I hope the Minister will regard as fair and reasonable our requests for information and reports, so that we can take a genuine look at what has happened with the bank levy and examine the figures in detail in the House. I hope he will look similarly at the request for the report on the bankers’ bonus tax. I accept that we have asked for these things before, and the Government have not seen fit to agree to them, but it is always worth continuing to make the point calmly and reasonably in the hope that they will understand it and respond. I hope they will see fit to do that this time, because that would show that they are willing to recognise that people in the real world want trust in the banks to be restored, and would ensure that the banks are treated fairly and treat the taxpayer fairly. That is why we want to see that comprehensive review. As always, I look forward to the Minister’s response and I hope he will agree to produce the two reports we have reasonably requested

[Debbie Abrahams]

It is a pleasure to serve under your chairmanship, Mr Bone. It is a pleasure, too, to follow my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson). I shall spend a few minutes building on the economic context that she described. Unfortunately, we have seen too much self-congratulation at the glimmers of economic recovery that the country is finally seeing, after three years of a flatlining economy. We need to look at the full picture. This is the worst recovery in 100 years.

The gross domestic product in quarter 4 of 2013 was 0.7%. That is 1.3% below the pre-recession peak in 2008. We would need to grow 1.6% each quarter up to the general election just to reach where we were at the end of 2010. Since 2010, we have had growth of 3.8%, compared with the US, where growth has been 8.4%. UK productivity is the second lowest in the G7 and 20% lower than the G7 average—the widest gap since 1992. Exports were down 4% in the last quarter of 2013 and the trade deficit in December 2013 stood at £7.7 billion. As we know, the Government will have borrowed £190 billion more than planned in 2015. Public borrowing in 2015 will be £75 billion. We know about the promises in 2010 that the deficit would be cleared.

We have been speaking about the implications of the fragile recovery for employment and unemployment. The Government are keen to mention absolute numbers, but the employment rate is still below pre-recession levels and most of the jobs created since 2010 tend to be insecure, part-time and low paid. The proportion of short-term contracts has increased by 20 times to 1.65 million, of which 655,000 are involuntary. The increase in temporary jobs accounts for more than half of the rise in employment. Nearly one in five—that is, 1.46 million people—work part-time because they cannot get full-time work. That is the highest level of underemployment since 1992. Four out of five new jobs are paid below the living wage. Another key issue is the geographical spread of these new jobs. Since 2010, 79% of them have been in London, with only 10% in the nine urban centres outside London. It is hardly a recovery for the whole country, is it?

My hon. Friend spoke in depth about unemployment. I am concerned that the true levels of unemployment are hidden. We have seen a sudden increase in self-employment, which, as I know from my role on the Work and Pensions Committee, has been pushed in jobcentres. There has been a 4% rise in self-employment in the last quarter, and a huge rise in inappropriate and punitive sanctions attached to social security payments since the benefit sanctions regime was introduced at the end of 2012. Members may not be aware that 5% of jobseeker’s allowance claimants are sanctioned every month for at least a month. Half of them do not even know they can appeal against that, let alone that they have to keep signing on to remain on the unemployment register. Five per cent. of 1.17 million JSA claimants equates to 58,500 people; we can get the picture from that.

A constituent came to see me who was a special needs teacher who had been made redundant in his late 50s. It had been suggested to him that he become a bingo caller, but he had to travel 70 miles to do that. There is real deskilling of a skilled work force, along with graduates undertaking non-graduate-level jobs. My hon. Friend mentioned the 900,000 young people who are long-term unemployed. A recent report talked about a hidden talent pool of young people. A total of 2.46 million—two in five—young people are unemployed, inactive, underemployed, in a voluntary job, in a Government scheme, or a graduate in a non-graduate role. It may be described as hidden talent, but I would call it a waste of talent.

As I have said before, the impact on these young people cannot be measured only in financial terms. The long-term implications for their future are very significant. A recent report by the Prince’s Trust showed that one in 10, or 100,000, unemployed young people believe they have nothing to live for, and that increases to one in five of those who have been long-term—

[Alison McGovern (Wirral South) (Lab)]

My hon. Friend is a respected member of the Work and Pensions Committee, so is she aware, as I am, that the DWP published its own report on the future jobs fund showing that it did tackle some of the crisis of self-respect and self-esteem that she is talking about?

[Debbie Abrahams]

My hon. Friend makes an excellent point. Yes, we need to be very clear about the interventions and programmes that can make a meaningful difference. I am sure that what we are suggesting in place of the youth contract, which is clearly ineffective, would fit the bill.

The report said that one in five young people who were long-term unemployed felt that they had nothing worth living for, and one in three felt suicidal. There is a moral imperative to act, not just an economic one. We cannot continue like this—it is completely unfair on the lives of these young people, in particular.

All this is happening at the same time as the top rate of tax has been cut for people on incomes of more than £150,000. As we have heard, bank bonuses are increasing again. Top-to-bottom pay ratios for the FTSE 100 stand at 300:1. We look at this in the context of the average family really struggling, with wages down by £1,600. The IFS has shown that since 2010 the average family has lost income of £974 a year.

The recent Oxfam report, “A Tale of Two Britains”, highlighted the growing gap between rich and poor, whereby the five richest families in the UK are wealthier than the bottom 20%, equating to 12.6 million people. Rafts of reports from the Equality Trust and others describe this situation. That gap matters, because overwhelming evidence shows that society as a whole benefits from more equality through better life expectancy, mental health, social mobility and educational attainment, and reduced crime—everybody gains. There is international evidence to support the existence of all these benefits.

I launched an Oldham fairness commission last year, to tackle inequality in my constituency. The commissioners are looking at inequalities in education, employment and income. We find it unacceptable that, in this day and age, someone who is white, able bodied and male is more likely to be in work than someone else with the same qualifications, and that a third of the jobs available in Oldham are paid below a living wage. That is not the way in which to achieve a sustainable economic recovery.

Amendment of the Law

Debbie Abrahams Excerpts

Thursday 20th March 2014 Commons Chamber

[Vince Cable]

We are well aware of some of the problems that arise with zero-hours contracts. That is why, as the hon. Gentleman knows, some months ago I commissioned a full consultation on dealing with abuses. What has come out of that consultation suggests that it is actually a very complex story. A lot of workers benefit from being on zero-hours contracts and want them to continue. Many do not and do encounter abuse. I am sure that before the end of this Parliament, Members will have an opportunity to vote on measures designed to deal with those abuses.

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

Will the Secretary of State confirm what his colleague, the Chief Secretary to the Treasury, had difficulty in doing the other day: confirm that the employment rate is still below pre-recession levels?

[Vince Cable]

My understanding is that the employment rate, if the hon. Lady is talking about the total adult population in work, is now at its highest level ever—higher even than in the United States, which is famed for a flexible labour market.

I am surprised that Opposition Members feel that there are issues to pursue. [Interruption.] Somebody muttered “Immigration”. Last year, overwhelmingly the largest number—well over 90%—of jobs went to British workers. I do not know if they have studied those figures.

Budget Resolutions and Economic Situation

Debbie Abrahams Excerpts

Wednesday 19th March 2014 Commons Chamber

[Derek Twigg (Halton) (Lab)]

The Chancellor’s Budget demonstrated clearly just how out of touch this Government are with ordinary people. This Government stand only for the privileged few, not for the millions of people on middle or low incomes who are not feeling any recovery benefit, certainly not in their incomes and standard of living. The cost of living crisis continues, leaving people £1,600 a year worse off under this Tory-led coalition. Of course, from what we have heard today, the Chancellor does not care about that. He does not care that the standard of living has fallen for most people in this country.

The real story—not the story the Chancellor wants to tell—is that of constituencies like mine, where this Government have failed and where many people are struggling to pay their bills and have to choose whether to heat their homes or to eat, while bankers get big bonuses and the richest people earning more than £150,000 get a tax cut. I am pleased that Labour will reverse that cut. We should not forget the 24 Tory tax rises, with the VAT rise alone costing families with children an average of £1,350 over the past three years.

This Government are out of touch with the lives of ordinary working people. No. 10 is being run by old Etonians and a public school cabal. They are not in touch with the lives of people in this country. The Government have never stood up to the energy companies. My party is absolutely right to pledge to freeze energy bills until 2017 and reform the energy market to stop the customer being ripped off. Today’s response to the problem of energy bills was pitiful. I shall return to that issue and the industry shortly.

The real story is that of hundreds of my constituents having to rely on food banks as their source of food on a weekly basis. The number of users has grown massively since this Government came into being. The story is also about many in my constituency having to use payday lenders: Halton has the third highest concentration of payday lenders in the UK. Loan sharks have also been a plague in my constituency, preying on poor and vulnerable people on a regular basis.

The story is also one of still high unemployment in Halton, which has one of the highest levels of long-term youth unemployment in England. My surgery is visited regularly by individual claimants and by the families and parents of individual young people who are desperate for help to find their youngsters some work because they cannot get a job. That is why I support our compulsory jobs guarantee, paid for by a tax on bank bonuses.

Under this Government, despite what the hon. Member for Fareham (Mr Hoban) has said, many of the jobs that have become available are part time and low paid, and many are on zero-hours contracts. One of the things that people want is continuity of employment, but one of the big problems under this Government is that people cannot rely on having a job for a very long time, so they cannot plan their income or expenditure properly or save up to buy a house or do things that most families do. It is just not possible with the type of employment available today.

I have been particularly vocal in this House about support for small and medium-sized enterprises, which I believe are the lifeblood of our future economic growth. Many are still finding it a struggle to get money from the banks, but the Government have not done a lot about it. I support my party’s proposal to cut business rates for small firms.

The Chancellor mentioned support for the energy-intensive manufacturing industry. To date, this has been a major failure. I have been lobbied rigorously by companies in my constituency about the Government’s failure, and I have also lobbied the Government regularly. I will look at the detail of what the Government have announced today, but the fact is that until today they have failed this industry. The chemical industry is a particularly important one in my constituency, providing many people with well-paid jobs. The Government need to do more.

The Chancellor referred to housing. Of course we all want people to be able to afford to buy a house if they want to or to have access to social housing, but the recovery is relying heavily on housing—there is a housing boom—and on lending. That is a real concern, which was mentioned today by the Governor of the Bank of England in, I think, the Financial Times. The issue is that the boom cannot be unsustainable, so we have to be very careful. I am really concerned about the unsustainability of the recovery. We can and should of course help more people to get on the housing ladder, but a housing boom will make that even more difficult, particularly for young first-time buyers.

What are the Government doing about social housing? Many constituents come to see me because they need access to social housing, but there is a real shortage. The Government do not have any real proposals to get people social housing, which is what people in my constituency want. That important matter was omitted from the Budget .

The Chancellor’s policy of cuts is destroying local government. In Halton, total revenue grant funding has been cut by £28 million, or 28%, since 2010, and its capital grant funding has been cut by £14 million. Local government is suffering badly, and that is affecting services for local people.

The Chancellor commented on the Mersey gateway, a project which started under Labour and which has received all-party support. Some colleagues and I have had a meeting with him on a cross-party basis, but he did not say what he would do to ensure that people who live in Halton—they currently do not have to pay to use their local road across the existing bridge, the A533—will not have to pay a toll in future. The plan is for them to pay a toll on the existing bridge and the new one. The Chancellor has said that he will look at that and see what he can do, but I have not heard back from him, even though he referred to the Mersey gateway today. Given that he announced that the A14 in affluent Cambridgeshire will not be tolled, it is wrong for people who currently use their local road for free in Halton—the 27th most deprived borough in the country—to have to pay for it in future. I do not know of any other such example in this country.

The Chancellor said little about the NHS, but there has of course been a real-terms cut. What about the number of hospital trusts that are running a deficit? Even my own has a £2.9 million deficit. He said nothing about that, although the NHS is in crisis and £3 billion has been wasted on a reorganisation.

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

In view of the income given to earners on higher tax rates, does my hon. Friend not think it is absolutely shocking that nurses have been devastated by the fact that many will not receive the 1% pay rise?

[Derek Twigg]

My hon. Friend makes a very important point. Whose side are this Government on? They are on the side of the rich, not the people who actually run our health service—the nurses, care workers and so on—

Oral Answers to Questions

Debbie Abrahams Excerpts

Tuesday 11th March 2014 Commons Chamber

[Danny Alexander]

The most recent set of figures for the quarter show that long-term unemployment has come down, including in the right hon. Gentleman’s constituency. I note, too, that the shadow housing Minister’s flagship programme to build more houses has been cut away by the shadow Chancellor, or is that yet another way they plan to spend their mythical bonus tax?

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

Will the Chief Secretary confirm that the employment rate is actually below pre-recession levels?

[Danny Alexander]

The employment rate, the number of people in employment, is higher than it has ever been. The employment rate is getting near to its record high again.

Fairness and Inequality

Debbie Abrahams Excerpts

Tuesday 11th February 2014 Commons Chamber

[Stephen Crabb]

I applaud the hon. Lady for her attempt to rescue the reputation of the former Chancellor of the Exchequer and Prime Minister. The truth is that the trajectory of public spending was already far too high, even before the banking collapse. There was a structural deficit that placed at risk the stability of the UK finances even before the banking collapse.

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

Does the Minister not accept that official statistics show that the debt-to-GDP ratio was lower in 2008 than when we came into power in 1997? Those are the official figures.

[Stephen Crabb]

I am not sure that I recognise the figures that the hon. Lady gives.

--- Later in debate ---

[Stephen Crabb]

I hear what the hon. Gentleman says, but the reasons that drive people to use food banks are complex and it is a mistake to try to single out any one cause. When I speak with food banks in Wales, they do not tell me that it is the benefit changes that are responsible in most cases. Household debt is a far more important factor.

[Debbie Abrahams]

I thank the Minister for giving way again; he is being very generous with his time. Citizens Advice has analysed why people are going to food banks and found that inappropriate sanctions as a result of welfare reforms and low pay are the key contributors.

[Stephen Crabb]

The hon. Lady talks about inappropriate sanctions on benefits. I recall hearing one of her Front-Bench colleagues say only a few weeks ago that the Labour party would be even tougher on benefits than this Government have been. I think that she needs to get some consistency with her Front Benchers on whether they support sanctions.

The best way to reduce economic inequality is to have a growing economy and to ensure that people are in work. Today, more people in Wales have gone out to work than at any time before, with economic inactivity at its lowest level since records began. However, the tragedy is that there are still 200,000 people in our country who have never worked a day in their lives. I hope that the hon. Member for Carmarthen East and Dinefwr agrees wholeheartedly that that represents an enormous waste of talent, potential and skill and that a small nation such as ours cannot afford to lose that potential. I hope that he shares my ambition for welfare reform to see those people who have been locked in worklessness brought back into the labour market to achieve their full economic and social contribution.

--- Later in debate ---

[Guto Bebb]

I would reject that argument. We talk about VAT, we often forget the exemptions. If somebody is buying a new Ferrari, I have no problem with their paying £50,000 in VAT. If somebody buys their food in a supermarket, they pay 0% in VAT. If VAT were 20% on every single item, it would be a regressive tax. For those who spend a significant proportion of their income on food, or on household fuel, which is taxed at 5% rather than 20%, the VAT issue is not as clear cut as Opposition Members try to make it.

[Debbie Abrahams]

Will the hon. Gentleman give way?

[Guto Bebb]

Not at the moment.

When we talk about inequality, it is important to recognise that the Government’s work on pensioner benefits has significantly reduced pensioner poverty. We should also recognise that in a country such as Wales, with such a high dependence on self-employment, the Government’s moves to introduce a single-tier state pension will make a huge difference for those who are self-employed and will result in less inequality when people reach retirement.

The hon. Member for Carmarthen East and Dinefwr, who has now, unfortunately, left his seat, said that there was a need for more investment in a Welsh context. Let me be very specific about the situation in Wales. Since 2000 and 2001, the Welsh Government, supported by European structural funding, has invested billions of pounds in so-called initiatives to deal with Wales’s lack of economic progress. When people talk about the need for public sector investment to create wealth and employment opportunities, it is important to consider the case study of how European funding, spent under the guidance of the Welsh Labour Government—and under the Welsh Labour and Plaid Government for four years—was used through so-called interventions that were meant to create employment opportunities and ensure that we had a more equal society. That has failed dramatically and for the entire period of intervention by the Welsh Government and the EU, west Wales and the valleys have gone backwards rather than prospering.

--- Later in debate ---

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

I was not sure whether the hon. Member for North East Somerset (Jacob Rees-Mogg) agreed or disagreed that inequalities are bad. I certainly believe—and I can present evidence—that inequalities between rich and poor are bad not just for the people who experience them, but for society as a whole. A large swathe of international academic evidence shows—most poignantly in “The Spirit Level”, published a few years ago—that the gap between rich and poor is bad for everyone in society. Inequalities affect life expectancy, mental health, social mobility, educational attainment and the extent of crime. So I start from the premise that inequalities are bad.

In my previous life in public health, I worked on socio-economic inequalities and their impact on health inequalities, which is what I want to discuss today. Again, I was not clear from what the hon. Gentleman said, but he talked about the separate position of the state and the responsibility of individuals within society. I believe—again, I think there is evidence to support this—that the Government set the tone for the culture of a society, in both their explicit and implicit policies, and how we divvy up spending reflects those policies.

As I said, considerable evidence shows that the systematic, socially produced differential distribution of resources and power—I mean income, wealth, knowledge, status and connections—is the key determinant of health inequalities. Mortality and morbidity increase as people’s social position declines. My constituency contains an affluent part, in Saddleworth, although there are pockets of deprivation, as in every community, and a poorer part, in Oldham East, and that differential is reflected in a 10-year difference in life expectancy, which is a situation that can be replicated across the country.

That social pattern of disease is universal. It is produced by social processes influenced by Government policies, both written and unwritten, rather than by biological differences. There is no law of nature that decrees that children born to poor families will die at twice the rate of children born to rich families. We should, however, take some comfort from the fact that those inequalities are socially produced and, as such, neither fixed nor inevitable. That means that we have some hope of doing something about them.

I am very concerned about the direction of Government policy, which, although largely driven by the Tory party, is to a large extent supported by the Liberal Democrats. The Health and Social Care Act 2012, for instance, completed its passage because it was propped up by them. One of the key objectives of the original policy was to reduce health inequalities, but there is absolutely no evidence that this privatisation Act will do anything of the kind. The Government have tried to suggest that increasing competition in the NHS will improve quality and reduce the number of inequalities, but I recently organised an inquiry in my capacity as chair of the parliamentary Labour party’s health committee, and eminent academics were saying exactly the opposite. One was

“shocked to see the move to wholesale competition and Any Qualified Provider as a primary driver in NHS reforms on the basis of”

very few observational studies conducted by the London School of Economics and others. Another said that

“clearly different drivers are motivating the private healthcare sector”.

In the US, there is both under and overtreatment, and huge disparities in health care. We know that the Government are already putting out to tender seven out of 10 contracts.

Before the Health and Social Care Bill became an Act, directors of public health and public health academics wrote that it would exacerbate inequality rather than reduce it, but the Government pressed on, and they continue to press on. The implications of the EU-US trade negotiations are of particular concern, because the Government have still not committed themselves to exempting the NHS from the free trade agreement. We will challenge them vigorously on that.

The recent debacle over NHS resources allocations is another example of the Government’s total lack of commitment to reducing health inequality. We saw the writing on the wall back in 2012, when the former Secretary of State for Health—the present Leader of the House, the right hon. Member for South Cambridgeshire (Mr Lansley)—reduced the health inequalities weighting from 15% to 10%, which would have a direct impact on areas where health was particularly poor. Following last year’s consultation about how NHS resources should be allocated, the Government were prompted to withdraw their previous policy and include an element that took account of deprivation in order to avoid another furore, but there are still major problems in connection with the allocation. A recent analysis undertaken by academics shows that the Labour Government’s health inequalities weighting saved lives: three lives per 100,000 in the population. I am extremely concerned about the new formula, and about its failure to take inequalities into account.

However, health policy is not the only problem. Other Members have already mentioned the Government’s economic policies. Although the personal allowance has been increased, the cut in tax credits means that 40% of the worst-off members of the population will be about £1,500 worse off. Those policies are doing nothing to reduce the economic inequalities that ultimately lead to health inequalities.

The Government are reducing access to education by trebling tuition fees and by scrapping education maintenance allowance, which was a key funding mechanism to enable young people from deprived areas to buy books and travel to college. They have now been denied that.

[Nia Griffith]

Will my hon. Friend join me in congratulating the Welsh Government on protecting education maintenance allowance for the poorest families, for the reasons that she has outlined?

[Debbie Abrahams]

I will indeed. I also want to pay tribute to Oldham college, which has introduced its own system to ensure that people from the poorest backgrounds can still attend college without being financially penalised.

The Government are restricting access to justice through their legal aid changes. Inequalities are also being created through job insecurity resulting from zero-hours contracts. The swathe of policies that the Government have introduced have done nothing to reduce inequalities. On the Government’s so-called welfare reforms, I absolutely detest the divide and rule narrative that has been deliberately introduced in an attempt to vilify people receiving social security as the new undeserving poor. The pejorative language of “shirkers” and “scroungers” has been really disingenuous, and the Government are distorting statistics to try to prop up their welfare reforms. That is absolutely shameful.

Collectively, the impact of public spending cuts is significantly greater in deprived areas. Academic studies also show the relationship between public spending and, for example, life expectancy at birth. The immediate impact of these socio-economic inequalities on health inequalities is already showing. Following the 2008 recession, there was an increase in male suicides, with an additional 437 suicides registered in the UK in 2011, roughly mirroring the increase in unemployment. It will take time for health conditions such as cancer and heart disease to develop. There is always a time lag between such conditions and their immediate precursors. We also know that the protective, positive factors that can mitigate these negatives are being eroded.

[Mr MacNeil]

The hon. Lady is making a clear, thoughtful speech. She has touched on regulation, and on positive factors. Does she agree that one of the malign aspects of state regulation is the excessive regulation of trade unions, especially when the OECD has shown that strong trade unions can help to reduce inequalities? Does she also agree that this is one area in which the UK has definitely gone too far?

[Debbie Abrahams]

I am a trade unionist and I fully support trade unions.

On the current policy trajectory, the social pattern of health inequalities will continue. For example, the gap in life expectancy is set to increase, rather than decrease. In England, there is now a nine-year difference for men and a seven year difference for women. The Government’s indifference to inequality reflects their belief in the dated theory that reducing inequality reduces incentives and slows growth. That theory has had a number of iterations, but the converse has been shown to be the case. For example, Stiglitz produced evidence last year to show that inequality caused financial instability, undermined productivity and retarded growth.

The previous Labour Government did not get everything right, but I am proud that we achieved our targets on health inequalities. Our key successes were in achieving our objectives, first, to reduce health inequalities by 10% as measured by life expectancy at birth for men in spearhead areas, and, secondly, to narrow the gap in infant mortality by at least 10% between routine and manual socio-economic groups and the England average. That was quite a feat, and it has not been acknowledged by this Government. I am sure that the Minister will take an opportunity to mention it in his closing remarks. We did not get it right, but we are definitely moving in the right direction with the policy initiatives we have announced: strengthening the minimum wage; increasing support on child care; freezing energy bills; repealing the bedroom tax; providing support on business rates; and improving the quality of jobs.

[Mark Durkan (Foyle) (SDLP)]

Reflecting on not just the previous Administration, but the previous Parliament, does the hon. Lady agree that one of their collective achievements was the Child Poverty Act 2010, which was supported by all parties? The Welfare Reform Act 2012 was used to gut the key component of that Act by removing the key element of targets and annual reports. That was not done properly, by its inclusion in the original Bill, but by a Government-sponsored amendment in the Lords, which came back here and was not even voted on.

[Debbie Abrahams]

I share the hon. Gentleman’s concern about the increase in child poverty. The Labour Government made some strides in reducing that. As he will know, the Institute for Fiscal Studies estimates that child poverty will increase by 1.1 million by 2020 because of this Government’s policies.

Let me finish on a quote from my right hon. Friend the Member for Holborn and St Pancras (Frank Dobson), a former Health Secretary:

“Inequality in health is the worst inequality of all. There is no more serious inequality than knowing that you'll die sooner because you’re badly off”.

I hope that focuses all our minds.

--- Later in debate ---

[Richard Fuller]

I am grateful to the hon. Gentleman for that helpful intervention. Let us assess the ability of Government today to fulfil that positive role. One of the most important aspects of fairness is the future that we bequeath to our children and grandchildren. It is a natural aspect of human behaviour to want to give the best start in life to our children and grandchildren. One of the worst aspects of the context in which we are operating today, as a Government and as a Parliament, is that under the previous Government, we built up the most significant amount of debt to pass on to our children and grandchildren. One of the most important aspects of what the Opposition call the cost of living crisis—my constituents think of it as trying to meet the family budget—is the debt that was left by the previous Government for this Government to deal with.

The Opposition like to talk about the level of Government debt at that time, but a Chancellor of the Exchequer is custodian not just of part of the economy but of the entire economy, and, before he makes a decision, he has to look at the strength of the economy. It is an incontrovertible fact that the level of indebtedness of this country in 1995—Government debt, household debt and corporate debt—was about two times the size of the economy, and when the Labour party left office, it was five times the size of the economy. We do not need to have a credit card to know that we have to pay off all that debt, and not just part of it.

[Debbie Abrahams]

Will the hon. Gentleman explain the decisions that were made in the Health and Social Care Act 2012, which had nothing to do with the debt? We recognise the economic context, although we could quibble about the causes and whether we reduced the level of debt. I believe that we reduced it while we were in power. None the less, the specific policies of the Act had nothing to do with that debt. They were choices that the Government would have driven through regardless of the economic context.

[Richard Fuller]

The hon. Lady is repeating the point that she made in her speech. I am sure that the Minister will want to address it now or later. Earlier on, she missed this major contextual factor, which is somehow the Government must be able to manage the economy while dealing with a substantial overhang of debt, and individual families are doing that as well. That is a root and crucial part of how we can achieve a more equal society. We cannot achieve an equal society if we permit Government to pass on massive debts to future generations without any liability themselves.

Oral Answers to Questions

Debbie Abrahams Excerpts

Tuesday 28th January 2014 Commons Chamber

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

16. The Institute for Fiscal Studies estimates that an extra 1.1 million children will be living in poverty by 2020 as a direct result of this Government’s economic policies. Today, research from Demos shows that children living in poverty are also less likely to do well at school. What will the Government do to prevent the multiple and lifelong effects of children living in poverty?

[Nicky Morgan]

On poverty projections, in October 2012 the IFS suggested that the number of children in relative poverty would fall by 100,000 in 2010-11, but in fact it fell by 300,000. If the hon. Lady wishes to talk about educational attainment, I am sure she will join me in welcoming the news yesterday that thanks to strong reforms of the education sector by the Secretary of State for Education, more schools are now offering better education than under the previous Government.