Living Standards

George Freeman Excerpts

Monday 5th March 2012 Commons Chamber

[Rachel Reeves]

My hon. Friend is right to say that those on the lowest incomes and modest and middle incomes are being hardest hit by the changes to taxes and benefits that the Government have instituted.

[George Freeman (Mid Norfolk) (Con)]

Does the hon. Lady acknowledge that the Government’s proposals to take more than 1.1 million people out of tax, through the personal allowances, represents a tax cut for more than 25 million people? On the motion, will she confirm that the Budget is this month, not next?

[Rachel Reeves]

The changes come into effect next month, but the Budget is in 16 days. [Interruption.] The hon. Member for Taunton Deane (Mr Browne), who is a Liberal Democrat, says that he was going to vote for the motion. Perhaps he was thinking of before the election, when he agreed with progressive policies.

Every day, families are struggling, while the Government demand more from them, and there is no end in sight, no light at the end of the tunnel, just the fear that one day, sooner or later, they will not be able to pay the mortgage, rent or gas bill. We have called this debate because the Government seem unaware of what is happening, unable to understand what people are going through, unwilling to do what it takes to get our economy growing and unemployment falling, and uninterested in taking the trouble to find out what impact their decisions are having.

The choices that the Government are making are hurting but not working. [Interruption.] The hon. Member for Taunton Deane says that we are wrong. It is the Government who are wrong because they are hitting hard-working families harder than anyone else, and giving the banks a tax cut while penalising families and young children trying to do the right thing and stay afloat. The choices that the Government are making are hurting but not working. They are penalising those trying to do the right thing. In response to the crisis in living standards hitting families, the Government are piling on the pressure with badly designed and badly targeted cuts to benefits and tax credits.

--- Later in debate ---

[George Freeman (Mid Norfolk) (Con)]

We are tonight invited by the Opposition to join them in sympathising with the squeezed middle. Of course, that is Labour’s cynical project to identify itself with the people hardest hit by the crisis with which it left us. It seems to be the Opposition’s only policy. In the absence of any serious consideration of the crisis for which they are responsible, they now posture as the only people who feel the public’s pain. That is utterly cynical, and we have seen and heard tonight how little truck the House has with that view.

The truth is that we are all being squeezed, but not for the reasons the Opposition set out. The shadow Chief Secretary, in hysterical tones, accused Government Members of indulging in reckless and heartless cuts. We are being squeezed by the actions of a responsible coalition, which was invited by the country to tackle a national emergency. We need to remember the scale of the crisis we inherited, the effect on living standards, which we are all feeling, and the steps the Government have taken.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my hon. Friend agree that one of the best ways the Government could help to improve living standards is by creating an environment in which private sector businesses can grow, employ more people and, potentially, give them pay rises when they do well?

[George Freeman]

My hon. Friend makes an excellent point. I could not agree more. We need to rebalance the economy and realise that every pound spent here is a pound that has to be earned by businesses and the people who work for them.

The truth is that we inherited £1 trillion of debt—£25,000 for every man, woman and child in the country—and a situation in which £1 out of every £4 of Government expenditure had to be borrowed. We had debt interest payments of £120 million a day, and debt interest would have risen to £76 billion per annum over the Parliament had we not tackled the deficit. Yes, there was an international credit crunch, but it was the actions of the Labour Government that led us into a position of extreme vulnerability. They inherited a golden legacy in 1997 after the previous Conservative Government had had to put the country through a painful and difficult period. It was a golden legacy that, after two years, they set about—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Gentleman has a minute less than the clock is showing before I interrupt him. There is a problem with the clocks.

[George Freeman]

After two years of sticking to the previous Administration’s prudence, the Labour Government set about the biggest spending spree in peacetime history, but because of their cynical promise to the electorate not to increase income tax, they set about a series of other measures: they sold the gold at the bottom of the market; they launched an unprecedented programme of indirect stealth taxes, which we are still feeling today; they bungled the regulation of the Bank of England—apparently planned in the back of a taxi by the former Prime Minister—which led to an explosion of cheap credit and the very crony capitalism that they accuse us of; they created an out-of-control boom that led to the very bust they promised to prevent for ever; and they set about, quite deliberately, a massive public sector expansion without the necessary structural reforms to make it sustainable. Unless we had tackled the deficit, we would have left the country facing the possibility of rising interest rates, triggering a massive and serious depression.

In truth, the squeeze is being felt not just by the middle but by the young and old in this country. Every child has £25,000 of debt and a mountain to climb. Every middle-income family—in more and more of them, every man and woman has to work to pay their way—will face a tidal wave of taxes, a rising cost of living and the ticking time bomb of inflation if we do not keep the deficit under control. Our elderly have been let down by the previous Government, who promised so much and delivered so little. They are now facing an NHS structurally unable to meet the challenges of the ageing population that depends on it.

The coalition Government have set out to tackle this legacy fairly, with great rigor and in a way that is progressive—meaning with the intention of driving social mobility and helping people to break out of Labour’s dependency culture through serious reforms to welfare and education. I want to cite several things that have been done that future generations will look back on kindly: the targeting of child benefit on the most needy; the raising of personal allowances, taking 1 million people out of tax and handing money back to 25 million of our poorest families; the freezing of council tax; the uprating of pensions and the triple lock, which will be worth £15,000 to the average pensioner family; and the protection of cold weather payments. The Labour party should hang its head in shame for coming here and posturing on behalf of the people who are paying the price of their irresponsibility.