Capital Gains Tax (Rates)

Emily Thornberry Excerpts

Monday 28th June 2010 Commons Chamber

[Emily Thornberry (Islington South and Finsbury) (Lab)]

The right hon. Gentleman talked about making sure that the most vulnerable did not pay disproportionately. Is he aware that in Islington, 2,154 families are in private accommodation on housing benefit and a third of them will be affected by the new caps on housing benefit? If and when they face eviction, what help will the Government give to stop hundreds, if not thousands, of Islington families being made homeless? If they are made homeless, what help will he give to get them somewhere to live?

[Mr Duncan Smith]

The hon. Lady is looking at things in a rather doom-laden way. The reality is that the changes to housing benefit will assist people into the right level of home. At the moment, through local housing allowance, we are paying vast sums of money to people who would not be able to get the same money if they were in employment. For example, in south-east London, which is similar to the hon. Lady’s area, people on low incomes living in private rented accommodation would still—even with the caps in place—be nowhere near the level of money that somebody on local housing allowance receives. That is not fair on those who are striving and working, but having to struggle to live in a house. Before the hon. Lady carps too much, she should recognise that we have also increased the discretionary payment, trebling it to £60 million. If there are specific difficulties there will be money for local councils to help and assist.

--- Later in debate ---

[Yvette Cooper]

My hon. Friend is right to raise concerns, particularly as many people who receive housing benefit are in work. They work hard, are in low-paid jobs and cannot afford to pay their rent without the extra help that housing benefit brings. So, the Government’s measures will hit people who work hard to support their families and make ends meet. They will find the rug withdrawn from under them.

I am particularly concerned about the combined proposals for lone-parent families, and I ask the Secretary of State to look at them, because he says that lone parents with five and six-year-olds will move on to jobseeker’s allowance and have to look for work. However, his own documents, which were provided at the same time as the Budget, assume that only 10% of those lone parents will leave benefits because of the risk they might be less work ready or need more time to find a suitable job that fits with their caring responsibilities.

Many lone parents need additional support to find work that fits school hours, but as a consequence of these proposals about 90% of them will still be on jobseeker’s allowance one year later, at which point they will suddenly be hit by the right hon. Gentleman’s 10% cut in housing benefit. Lone parents with young children might work really hard to find a job that fits school hours, but suddenly an average of £500 a year will be taken from their incomes because they cannot find work and because, as a result, he wants to cut their housing benefit. That is deeply unfair on families who might work really hard to try to make ends meet. What does he expect people to do? Hundreds of thousands of people will struggle to pay their rent, and parents will have to move house, shift their kids out of school, move long distances and break up communities in order to try to find an affordable home.

[Emily Thornberry]

Given that the Secretary of State seems to think that we are exaggerating the position, does my right hon. Friend agree that it might be a good idea if he spent a morning with me visiting some of the Islington families who will be profoundly affected by those changes to housing benefit?

[Yvette Cooper]

That is a very generous invitation, which I shall pass on to the right hon. Gentleman.

Where are the figures for the analysis of the impact of those proposals on homelessness? Where are the figures for their impact on families who will not be able to pay their rent? Does the right hon. Gentleman have any idea how expensive it is to keep a family in temporary accommodation? That is the problem. That proposal is just like the proposal on unemployment. If the Government do not provide the support up front, it will cost them more later on in terms of dealing with homelessness.

As for supporting families, not even in the worst of the Thatcher years did the Government ever introduce a Budget that hit children so hard. Of the £8 billion that this Budget raises from direct tax and benefit changes, however, £3 billion directly hits children: cutting the child trust fund and the value of child benefit, and overall cuts in child tax credit. That is even before we add the cuts that families face in housing benefit, free school meals, free swimming, the future jobs fund and university places. This is a savage Budget for children. The Government claim that it will be all right because there is not a measured increase in child poverty as a result of this Budget. Of course there is not, because the Treasury model will not measure the impact of changes to VAT or housing benefit, and it will not look ahead any further than 2012-13, before many of the cuts bite.

Look at the people the Secretary of State is hitting hardest—the very youngest children of all. Gone is the baby tax credit, so some mums will now find they cannot afford to stay at home for as long as they want with their little babies. Gone is our plan for a toddler tax credit, gone is the pregnancy grant, and cut is the Sure Start maternity allowance. Has he no idea at all that supporting a family and getting the children out of poverty when the babies are born can save money from the public purse for years to come? Instead, he wants to cut support from the babes in their mothers’ arms. At least Margaret Thatcher had the grace to wait until the children were weaned before snatching their support.