Finance (No. 2) Bill

Debate between Guy Opperman and Shabana Mahmood

Tuesday 1st April 2014 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

We have had an interesting debate today, which has made stark the difference between the Opposition’s priorities and those of Government Members. The Finance Bill is thick and heavy, but it is pretty light on content that is relevant to the working person on a modest income.

My hon. Friends have made some powerful and persuasive speeches highlighting precisely that point. My hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) spoke with passion about how her region was suffering as a result of the Government’s polices, and drew attention to the imbalance in the recovery that they have delivered. My hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) spoke in particular about business rates and the success of the jobs growth programme being run by the Welsh Labour Government, whom this Government like to bash at any opportunity, but who are having some real success on jobs in Wales.

My hon. Friend the Member for Bolton West (Julie Hilling) made a particularly powerful point. She reminded the House that the Chancellor said that this is a Budget for makers, doers and savers, but she said that it has nothing in it for those who are making do.

My hon. Friend also reminded us of the tragedy of zero-hours contracts. She gave a powerful example of a constituent who was sanctioned under DWP rules for leaving a job that gave him zero hours of work. It was a tragedy for the individual concerned, but it also shows how iniquitous the rules are in practice.

[Guy Opperman]

Is there anything the hon. Lady welcomes in the Budget, whether the raising of the income tax threshold, the extension of apprenticeships, the support for the high street or the work done to support manufacturing? Does she not welcome any of those things amidst this sea of opposition?

[Shabana Mahmood]

I very much welcome the Government’s U-turn on investment allowances, which we warned were a mistake in 2010. It is really good that the Chancellor has finally decided at the tail end of this Parliament to put right that bad decision.

My hon. Friend the Member for Glasgow North East (Mr Bain) reminded the House of two anniversaries: 15 years ago today the national minimum wage came into effect; and a year ago today the Government introduced the bedroom tax. That is a clear example of the big differences in the values and priorities of those on the Opposition and on the Government side. My hon. Friend the Member for North Durham (Mr Jones) spoke for some time, although not at his usual length, about the things that are missing from the Bill. He focused on the detail of the pension changes, which we will scrutinise, especially in relation to social care costs, which he was right to highlight.

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) spoke of how some savers will benefit as a result of the Government’s measures, but for many people saving is a luxury that is far out of reach. My hon. Friend the Member for Gateshead (Ian Mearns) reminded the House of the imbalance of the recovery and how the north-east continues to suffer. He also made a point that no one made today in relation to the local government cuts, which are only just starting to bite and will further embed the regional imbalance in our country.

People are looking to this Government to take action to help them in the here and now. I am talking about the people who elected us to make decisions on their behalf. Those people are, on average, £1,600 a year worse off since this Government came to power. They will be worse off in 2015 than they were in 2010. Even if we take into account the combined effect of tax and benefit changes, they will still be £900 a year worse off. For those Government Members who are not sure what that really means, I will explain that £1,600 is about half the cost of the uniform required for membership of the Bullingdon club. For residents of inner-city Birmingham, which I represent, it is about three months’ rent.

Those people are working harder and harder for less and less, and they are looking for help in the here and now to make sure that at the end of the working week or month they have earned enough money to pay the rent, put food on the table and clothe their family. But this Finance Bill contains no such help. The fact that people are worse off and have to spend more on everyday essentials seems not to exist, according to the Bill. It is as if all Government Front Benchers have been caught in some kind of existential trance: if they cannot see or feel the cost of living crisis, it cannot exist; even if it exists, it cannot be communicated to others; and even if it can be communicated, it simply cannot be understood.

The people who are £1,600 a year a worse off need help in the here and now. This Bill could have done that; it does not. This Government could have done that; they did not. Where was the action to help working parents and families? We know that nursery costs have gone up by 30% since 2010. A parent working full time on the living wage with one child in nursery care will not see a penny of income until the beginning of the third week of the month. That is truly shocking. What do the Government offer? They offer help after the next general election, but nothing in this Bill. Why did they not take the opportunity in part 2 of the Bill to raise more money from the bank levy to fund an expansion of free child care for working parents of three and four-year olds from the current 15 hours to 25 hours? That would be real help. We will scrutinise the detail of the relevant clauses in Committee.

In opening, my hon. Friend the shadow Chief Secretary to the Treasury referred to an article from The Daily Telegraph, which is not often helpful to the Opposition. However, it has recently reported concerns that the Government’s planned changes to the bank levy might amount to a tax cut for the banks. The Government are not shouting that from the rooftops, but there are suggestions that some banks will pay £300 million less. We will need to see the detail and to press the Minister on that point in Committee.

It is a real embarrassment for the Exchequer Secretary that his projections on how much the bank levy would raise were so far off. Earlier, he ducked the opportunity to explain that; I would happily give way to him now if he were willing to explain, but he does not want to. No matter—we will return to the matter at length when we are locked together in a Committee room debating these issues.

On Government changes that might end up helping the banks pay less, I should also mention the small matter of the schedule 19 charge. In fairly impenetrable and hidden-away language, the Government seem to have given a £145 million tax cut for investment managers, whose industry is, frankly, doing rather well at the moment. It could have been asked to forgo that tax cut, given that the poorest and most vulnerable in our society continue to suffer. That shows the Government’s priorities.