Budget Resolutions and Economic Situation

Debate between Geraint Davies and Russell Brown

Wednesday 19th March 2014 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

It is a pleasure to follow the hon. Member for South Northamptonshire (Andrea Leadsom). She concentrated on banking, but my contribution will be somewhat more mundane, because I regret to say that far too many of my constituents have probably never even seen the inside of a bank, let alone know about the workings of a bank.

We again heard today about a drop in unemployment figures. That really has to be welcomed, but I remind the House, as I have done over a period of time, that some parts of the country are not seeing the recovery that others are experiencing. I listened intently to the Chancellor’s fantasy figures and tried to picture in my mind his portrayal of this rapidly improving economic situation across the country. I tried desperately to engage with that, and probably to be as imaginative as the Chancellor himself in entering his world, but I can tell him that far too many individuals and their families, many of them hard-working indeed, have simply not been given a chance to enter that imaginary world.

There can be no doubt—I would be the first to admit it—that thankfully, after some three years, there is a return to growth. However, the Chancellor needs to recognise that in my local authority area an increasing number of people are claiming jobseeker’s allowance. This month, yet again, we saw a further rise in unemployment on the back of last month’s rise. The figure now stands at 2,740—an increase of a further 0.1%. In May 2010, 75 young people were claiming jobseeker’s allowance for more than 12 months; that figure has almost doubled to 145. In February, youth unemployment rose to 740—an increase of 0.3% on the previous of month to 6.7%, which is 1% above the Scottish average and 1.5% above the UK average. In May 2010, the number of adults claiming jobseeker’s allowance for more than 12 months stood at 460; last month, the figure rose to over 800.

That is a tragedy for each and every one of those people. If they took time today to listen to the Budget statement, it will only have confirmed what they have probably suspected for a very long time—that the Chancellor has lost touch with those at the bottom end and does not understand the battle and the sheer struggle that still goes on for many people right across the country.

[Geraint Davies (Swansea West) (Lab/Co-op)]

My hon. Friend might be interested to know that in Swansea, 65% of people on JSA have been sanctioned. These are people on less than £72 a week. It is not that the Chancellor has lost touch with them; he is crushing them under his boot.

[Mr Brown]

My hon. Friend is right. If I have time, I want to mention an experience I had with a young couple who came to my surgery last Friday.

Earlier today, I met a representative of the Prison Officers Association from my area who was down in London taking part in a rally that had been timed to coincide with the Chancellor’s Budget speech. He explained to me that morale in the prison service is at an all-time low because of increases in serious violent attacks on prison staff, a five-year pay freeze and continuing demand for front-line staffing cuts, and an increase in pension contributions that is driving down the take-home pay of hard-working public servants. I suspect that it is not a job that many of us would relish doing. That driving down of take-home pay is coupled with working in an environment that is physical and, all too often, dangerous. These public servants are now being asked to work up to the age of 68. It is little wonder that they are angry and have taken to the streets today.

The Resolution Foundation’s report “Low Pay Britain 2013” shows that 4.8 million workers—20% of all employees—earn below the living wage, which is a massive leap from the 3.4 million in 2009 at the height of the recession. The growth of poverty has an uneven impact on particular sections of the population, and the tragedy is that young workers have been hit particularly hard: one in three 16 to 30-year-olds—2.4 million—are on low pay and are low skilled. These young people deserve better than this. Decent adults they are and will be, but they need greater chances in life. Living standards are down for far too many people, and as colleagues have said, that has been compounded by the 24 tax rises, households £1,600 a year worse off, and a reduction in tax credits.

On the positive side, I applaud the decision to reduce bingo duty to 10%. I am sure that the industry will be very much relieved at that. Like hon. Members on both sides of the House, I have visited my local bingo club, but there were fewer customers than I had ever seen before. The simple reason behind that is that people’s incomes have reduced so significantly that they simply do not have the wherewithal to spend time at the bingo hall in the way that they did for many years.

I also applaud the steps being taken to support pensioners through the relief measures in respect of savings, but again I have to say that many pensioners have no savings at all, and struggle to get by from week to week or month to month. These may be pensioner couples where one of them has been a carer for a son, daughter or elderly parent. They have struggled to get through their working life and they are now struggling in their old age.

I suspect that many energy-intensive industries will be delighted to hear of the extension of the existing compensation scheme. I have one in my constituency that has been pursuing me for answers to various questions that it had. Perhaps now that the Budget is over, I will be able to get those answers without any pre-Budget leak.

I am critical of the youth unemployment levels in my local authority area, and with some justification, but I welcome today’s announcement on apprenticeships, providing that genuine opportunities will be there for young people. I came across a young woman on a Government employment scheme working 32 hours in a retail business. When the scheme ended, the company said that she could remain with them, but that did not mean 32 hours’ work, but eight hours spread over a Saturday and Sunday. She is now out looking for a second job, and—who can tell?—perhaps a third job. It is a throwback to where we were in the early and mid-’90s.

I welcome the decision not to increase fuel duty, but as I have said on many occasions in the House, under the previous Government we saw nine years and 11 potential increases that were either suspended or not introduced at all.

The decision on the personal tax allowance will be welcome, but—here I disagree with my hon. Friend the Member for Glasgow South (Mr Harris)—many people are not even in the tax bracket, so they will see no benefit from the increase from £10,000 to £10,500.

Finance Bill

Debate between Geraint Davies and Russell Brown

Monday 1st July 2013 Commons Chamber

[Geraint Davies]

A moment ago I talked about Arab oil sheiks and now I am going to talk about Welsh milk shakes. On a serious note, what the Labour party has said is that when we take over in 2015, should the people of Britain give us their confidence, as I hope they will, we will inherit—this is self-evidently true—the current Government’s spending plans for 2015-16, so we will carry them out. As we make progress, I hope that the focus will switch to growth more than cuts, as it did after we inherited the Conservative party’s spending plans when we took over in 1997. We ran with those plans for a year and then we had consistent growth. The economy grew by 40% from 1997 to 2008 before the financial tsunami caused by sub-prime debt. I imagine that we will do the same in 2015. We offer no apology that we will have fiscal discipline alongside a focus on growth and that we will get people into jobs to pay down the debt. We will also change the composition of cuts to the rich and poor in certain areas.

[Mr Russell Brown]

My hon. Friend and I arrived in this House in 1997. In government, Labour confined itself to the overall spending of the previous Government, but we had different priorities which we put in place. It is not as if we came to power in a golden era. There was a debt and servicing it cost the equivalent of what was being spent on transport and defence put together. There was no golden inheritance. We had difficult choices to make as well.

[Geraint Davies]

I am glad that my hon. Friend brings that point up in this debate about the mansion tax. In 1997, we had the same old Tory economics, which we are seeing again because history is repeating itself. There was massive unemployment and that was being paid for by cutting services for the poorest. There was a huge debt that the Labour party paid down. The interest on that debt was excessive. We all remember Black Wednesday. We made the Bank of England independent to keep interest rates low.

The Opposition are serious about keeping interest rates low and having fiscal discipline, but our priority is economic growth. That is what any sensible business would suggest. A business man in Swansea said to me the other day, “If I was running at a loss, the last thing I would do is sack my workers and sell my tools, because I would not have a business. I would tighten up and focus on new product development and sales.” That is the balance that we want. We want a mansion tax and a 10p rate, because if we can recover some money from the richest and redistribute it to make it more worth while for everybody to work, that has to be a good thing.

The right hon. Member for Wokingham (Mr Redwood) brought out his violin and gave the heart-breaking story of the poor people who have a two-bedroom flat in Chelsea worth £2 million. He said, “Isn’t that awful. Surely you wouldn’t do that.” That is in sharp contrast to what Tory Members say about the person in the two-bedroom council flat who will be punished because their children grow up, get on their bike and get a job, as Norman Tebbit said, and vacate their bedroom. They say that there is nothing wrong with the forced evacuation of such people from London to a one-bedroom flat in a lower cost area; but they say that it is wrong that somebody who is living in a £2 million two-bedroom flat should have to rebalance their asset portfolio to generate revenues to pay the mansion tax. If someone has a £2 million Chelsea flat, it is possible for them to rent it out at enormous rents, live somewhere else in the countryside that is many times bigger, pay the mansion tax and make a handsome profit. That is not a heart-rending problem compared with the bedroom tax. However, it appears that Tory Members are more concerned about people who own £2 million properties than people in council flats.

A woman from my neck of the woods in Swansea came to see me two weeks ago and said that she had been on the waiting list for 11 years, asking to be moved from her two-bedroom flat to a one-bedroom flat, but the council does not have any one-bedroom flats. Why is that? It is because the local council has rightly been building for families in need with children. Suddenly we have the bedroom tax, which makes no economic or social sense, but there is no admission of that from the Government.

We have made the sensible suggestion, which has been thought through by the Liberal Democrats, that we should make the council tax more progressive.

We are all aware that house prices have gone up and down in different areas at different rates. In London, there is a skewed situation, because there is very quick house price inflation compared with elsewhere. People are making enormous capital appreciations. In essence, the financial disaster was caused by the bankers and sub-prime debt. That is likely to be repeated as we approach the general election because the Chancellor and his assistant, the Exchequer Secretary, have suggested triggering more sub-prime debt by covering people’s deposits. On the one hand, they are telling the banks to run a tight ship and to have enough capital reserves to cover their lending, because they do not want them to go bust again. On the other hand, they are saying that they will subsidise the purchasing of new houses. That is likely to happen in London, because people know that there is price inflation and will take a punt with a lower deposit and at a lower risk, hoping that they will recover their money through an escalation in house prices.

The very high-value property in London is being gobbled up by foreign speculation. The expensive property is being bought by people who want to get their money out of places such as Russia and by people who have huge accumulations of money from trade or oil surpluses. There are many cases of blocks of flats in London being bought outright. Nobody is living in them because the people who buy them know that they will make so much money through appreciation that they cannot even be bothered to rent them out. It is unbelievable.

We are asking, at a time of difficult choices and austerity, for a percentage of those transactions by multi-millionaires to be redistributed to make life easier for people who work in communities across Britain, not just in London. I accept that most of these properties are in London. For example, the constituency of the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) does not contain a £2 million house.

Housing Benefit (Under-occupancy Penalty)

Debate between Geraint Davies and Russell Brown

Wednesday 27th February 2013 Commons Chamber

[Geraint Davies]

rose—

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

rose—

[Geraint Davies]

Instead of having a policy of evicting people because their children have grown up, would it not be better to offer cash incentives to move to smaller housing? When I was chairman of the housing department and leader of Croydon council we offered people cash benefits rather than by evict them because their children had grown up. [Interruption.]