Budget Resolutions and Economic Situation
Harry Harpham Excerpts(9 years, 4 months ago)
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Harry Harpham (Sheffield, Brightside and Hillsborough) (Lab)
Last week the Chancellor tried to paint himself as a champion of working people. In reality, we got a Budget that does nothing to tackle the underlying problems of low productivity and low wages that over the past five years the Chancellor has failed to address. We had an old-fashioned Tory attack on the incomes of low earners, and a gaping hole where measures to increase productivity should have been. Much has been made of the fact that this was the first Tory Budget for 18 years, but that is only partly true: the Chancellor has been presiding over the economy for half a decade now. During that time, our growth has been among the slowest in the G20 advanced economies, and was revised downwards by the OBR last week from 3% to 2.4%. Our poor growth is a symptom of our poor productivity, and it means depressed wages for far too many of our citizens. It means lower tax returns and higher borrowing. We cannot provide people with financial security unless we provide strong growth.
If we are going to tackle the productivity gap that is holding back growth, we need firm and decisive action from the Government, but that has been lacking over the last five years—and the Budget sees no improvement. The OBR has revised forecast productivity down for the next four years, and the Chancellor is set to fall short of his target of increasing exports to £1 trillion by 2020 by £367 billion. We need real investment in infrastructure, skills and research, and development to boost productivity.
The Chancellor is very good at announcements, but the Government’s record on delivery is poor. Just ask my constituents—they have been waiting nearly two years for the midland main line to London to be electrified, only to be told that work is being halted. So much for the northern powerhouse.
Despite the increase in apprenticeships, too often they are focused on low-end skills and employers are still complaining that they cannot find people with the skills they need. Likewise, the replacement of maintenance grants with loans for students from the poorest backgrounds is a further example of the Government jeopardising productivity. They may say that most students will not be dissuaded from going into higher education, and that may be so, but there are young people for whom it will matter, and the Budget has let them down.
When it comes to low wages, the Chancellor has outdone himself with the barefaced cheek of what he proposes. He stood at the Dispatch Box and, bold as brass, trumpeted his so-called national living wage. It is nothing of the sort. At best, it is a welcome increase to the national minimum wage, but to call it a living wage is an insult to those who will be paid it. Although it will be around £9 an hour by 2020, the Resolution Foundation has calculated that by then the real living wage will be £10 an hour. If that was not bad enough, young people will not even get the imitation living wage. An hour’s work deserves an hour’s pay, and it is wrong to suggest that the efforts of a 24-year-old have less value than those of a 25-year-old.
All of that is before we take the cuts to tax credits into account. Nearly 12,000 families in my constituency receive tax credits, and I have been inundated with letters and emails from families who stand to lose out from the cuts. Tax credits are a lifeline that make low-paid work a viable option for thousands of families in my constituency, but the Chancellor is cutting that lifeline. The so-called living wage will not make up the shortfall, and the end result will be that thousands of poor working families will become even poorer. Families in my constituency will not be fooled by the rhetoric. They know an attack on their livelihoods when they see one.
On housing, the Chancellor shirked his responsibility to start delivering the 200,000 new starter homes that the Tory manifesto promised. In the first half of this year, first-time buyers spent on average £12,500 more for homes than in the same period last year, an increase of 8%. The average deposit they had to put down has gone up by 5%. With the Government’s poor record on house building, it is hardly surprising that for many people the chance of owning their own home is sliding ever further away.
I agree with the Chancellor when he says that we need to tackle low pay and productivity. I only wish that he had announced a Budget that did so.
Tax Credits (Working Families)
Harry Harpham Excerpts(9 years, 4 months ago)
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Harry Harpham (Sheffield, Brightside and Hillsborough) (Lab)
Thousands of families in my constituency will go to bed tonight with a sense of foreboding. They are waiting for an axe to fall that will take a chunk out of their weekly budget, but they do not know where or when it will fall. I do not expect the Government to spell that out chapter and verse before the emergency Budget tomorrow, but my constituents and people across the country deserve better than the Prime Minister’s and the Chancellor’s media-teasing statements about merry-go-rounds.
Tomorrow, the Chancellor will announce a series of deep cuts to working-age benefits. We know that tax credits will, in one way or another, be reduced significantly. For many of my constituents who are in low-income work, it is tax credits that enable them to go to work in the first place. They cover childcare and transport costs, which low wages alone do not meet. They provide the security that this Government’s low-pay, low-productivity recovery has not. The irony is that without tax credits, many people would not be able to afford to work.
This is the heart of the matter: over 60% of the families with children who receive tax credits in my constituency contain someone in work. It is tax credits that make that work pay. A cut to tax credits will put at serious risk the ability of many of my constituents to support themselves. One of my constituents wrote to me just last week with her fears about the cuts. Her family’s situation sums up the vital role that tax credits play:
“My son and his wife are barely surviving with the Tax Credits that they do get. If the Tax Credits get cut, they will end up living in my attic again.”
The Government should be ashamed of creating such a situation.
Tomorrow, the Chancellor will no doubt try to justify his cuts by telling us that tax credits are letting employers off the hook, making it easier for them to pay poor wages and leaving taxpayers to make up the shortfall. I say that he is looking at things the wrong way round. Instead of cutting family incomes and hoping that employers will suddenly step in, he should be asking why those employers are underpaying their staff in the first place.
We need a substantially higher minimum wage, and I hope that tomorrow we will see positive action from the Chancellor to get more employers paying the living wage. If he wants to reduce the amount the Treasury spends on tax credits, he should not cut them, which only punishes those on low incomes, but set out a Budget that boosts low incomes, thereby taking people out of a reliance on tax credits and other in-work benefits.
Given the recent speculation in the media about the possible reduction of child tax credits back to their real-terms 2003-04 level, it is worth looking briefly at the impact that such a change would have. It would affect 3.7 million low-income families, costing them £1,400 per year on average. More than two thirds of those who would be hit would be in work, and almost two thirds would come from the poorest 30% of households. Most shockingly, the Institute for Fiscal Studies has estimated that if the cut were introduced, 300,000 children would be pushed into living in poverty.
Productivity
Harry Harpham Excerpts(9 years, 5 months ago)
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Harry Harpham (Sheffield, Brightside and Hillsborough) (Lab)
May I congratulate the hon. Member for Hertsmere (Oliver Dowden) and say what a pleasure it is to follow him?
As the new Member for Sheffield, Brightside and Hillsborough, I stand here with a good deal of trepidation, knowing the tireless and dedicated service that my predecessor, David Blunkett, devoted to his constituents. From both the Front and Back Benches, David fought unceasingly to improve the lives of ordinary people. David is Sheffield through and through. He was born in the constituency he would go on to represent, became a councillor at the age of 22, and led the city through the turbulent years of the 1980s. He was elected to the Commons in 1987, moved swiftly into the shadow Cabinet, and finally became a Cabinet Minister in 1997. He fought ferociously for his point of view in Cabinet, and although he may not always have got his way, as a lifelong Sheffield Wednesday supporter he was well accustomed to taking the rough with the smooth.
David carried the views of his constituents into Cabinet, and despite his heavy workload as Secretary of State for Education and Employment in Labour’s first term, and as Home Secretary dealing with the aftermath of the Oldham riots and the 9/11 terrorist atrocities in New York, he made a point of continuing to attend his constituency advice surgeries in person. He was relentless in his desire to drive up educational standards and improve the educational opportunities of all. Throughout his career, David was dedicated to the idea that for democracy to be worth the name, it should be a truly collaborative endeavour, and that politicians should reach out to the disaffected and the disfranchised. I pay tribute to the work of a man who has made an indelible mark on British politics.
Sheffield Brightside and Hillsborough covers the north-east of the city and is dominated by the low-rise housing that was originally built for those working in the steel industry centred in the nearby Don valley. These days, employment patterns are more diverse, and many of my constituents work in the retail sector and in health and social care. There is an iron age hill fort at the eastern end of the constituency on Wincobank hill. This was built by the Brigantes tribe to keep out the Roman legions, so clearly our ancestors were against further integration with Europe. Perhaps if they had had the Prime Minister renegotiate the terms, they might have thought differently.
Despite the fort, we are a diverse constituency, but we are a community that faces some stiff challenges. My constituency is ranked 19th highest in the country for the proportion of people claiming jobseeker’s allowance—6.4%, a rate well over double the national average—and the number of children living in poverty is double that found across the UK as a whole. Much of the so-called economic recovery in our area has come in the form of low-paid, zero-hours contract work, leaving families unable to budget from one week to the next. Despite the Chancellor’s crowing, far too many of my constituents are still struggling to make ends meet. There are 6,000 households in my constituency living in fuel poverty, 14% of the total in the whole of the Yorkshire and the Humber region. That is one of the issues I will take up vigorously over the coming weeks and months.
Although I welcome the Government’s commitment to full employment and the creation of more apprenticeships, this by itself is not enough. We need not just more jobs, but better jobs. Our poor productivity is holding back our economy and holding down living standards. I am deeply concerned that the Government have no clear plan for boosting output. What we need is the investment in infrastructure and a properly thought out skills agenda that will not only lead to more stable, meaningful jobs but address the pressing problem of productivity that Britain is facing. Unless Ministers act on this, not only will UK businesses fall behind their international competitors, but working people will not see the improvement in their standard of living that Government rhetoric leads them to expect.
In Sheffield, budget cuts have left the public services that so many of my constituents depend on struggling to cope. In spite of the innovative and dedicated efforts of the council, local NHS services and ordinary men and women in my constituency, people are turning to support that more and more simply is not there.
I am originally from Nottinghamshire. At 15, I left school on a Friday and started down the pit on the Monday morning. I had no qualifications to speak of. It was moving to Sheffield that gave me a second chance at education. It is the city where knowledge that everyone’s chances can be improved has been found in the past, and where I will do my best to make sure that it can be found in our future.
I got into politics because I know the good that can be done by public servants working in the interest of the communities they serve. From the Opposition green Benches, I will do what I can to protect those services from ideological attacks that would reduce them to a shadow and leave those they serve paying the price.