Oral Answers to Questions

Baroness Harman Excerpts

Tuesday 8th January 2013 Commons Chamber

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

If the Deputy Prime Minister votes for the Welfare Benefits Up-rating Bill tonight, he will be voting to make millions of low-income families worse off. Will he confirm that two thirds of the people who will be hit by the Bill are not lying in bed with the curtains drawn—which, anyway, is no way to speak about unemployed people—but are actually in work?

[The Deputy Prime Minister]

It is obvious that a measure that deals with both out-of-work benefits and tax credits affects people both in and out of work. The challenge for the right hon. and learned Lady and her colleagues is to explain to this House and the British public, first, why she could support a 1% limit on the pay increases for doctors, nurses and teachers in the public sector, but not take exactly the same approach in this area, and secondly, where she is going to find the £5 billion that this measure will save over the next three years. Would she take it from the NHS? I know that Labour’s health spokesperson thinks that increasing spending on the NHS is irresponsible. We do not. Would she take it from schools? Would she take it from social care? Those are the kinds of answers that this House deserves from the Labour party before the vote takes place tonight.

[Ms Harman]

Even the right hon. Gentleman should be able to work out that 1% if someone is earning more than £100,000 a year is a great deal more than 1% if someone is struggling on a low income. His Government are failing on the economy—that is why they are borrowing £212 billion more than they had planned.

On fairness, will the right hon. Gentleman admit that tonight’s vote will mean that, while someone earning more than £1 million a year will be better off by £2,000 a week because of their tax cut, a working couple on tax credit will be worse off because their increase of 38p a week will be wiped out by inflation? The Government have failed on compassion as well as on competence, so why will he not vote with us against the Bill tonight?

[The Deputy Prime Minister]

The biggest tax measure, which will benefit more than 20 million basic rate taxpayers, is about to take place in April. A two-earner household on the basic rate of tax will be £1,200 better off because we are increasing the tax allowance by the largest amount ever. I would have thought that the right hon. and learned Lady would welcome that. It means that someone on the minimum pay will have had their income tax slashed by half.

On the upper rate of tax, the right hon. and learned Lady’s party makes great play of the 50p rate. It is worth putting it on the record that the 50p upper rate of tax existed for only 36 days of the 13 years that her Government were in office. I know that they had a deathbed conversion to the 50p rate, but they pretend that they were believers all along. Actually, the upper rate of tax under Labour was 40p. Under this Government, it will be 45p. Justify that!