Living Standards

Helen Goodman Excerpts

Monday 5th March 2012 Commons Chamber

[Rachel Reeves]

My right hon. Friend is entirely right. This country will be one of the few that does not support families with children across the income distribution. Having children is expensive, and it is right that when people bring up a family, and when they retire, the state is there to provide that bit of extra support when they need it. The Government’s changes go entirely in the wrong direction.

That is a shocking illustration of the Government’s failure to come to grips with the crisis that our country faces—the crisis that is putting families under strain is the crisis in jobs, incomes and living standards. The cost-of-living crisis does not hit the headlines like a banking crisis or a currency crisis perhaps because it is a crisis from which those with the loudest voices can too easily insulate themselves. For the vast majority of people, however, trying to keep going and keep their heads above water is one of the toughest challenges that they have ever faced. Every day is a battle in a long war of attrition.

[Helen Goodman (Bishop Auckland) (Lab)]

Does my hon. Friend agree that those at the top of the income scale do not mention the crisis because they are not facing a crisis? The RBS bonus pool was £785 million.

[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.

--- Later in debate ---

[Mr Gauke]

I am going to make a little more progress.

We cannot ask our poorest and our most vulnerable to carry the burden; it is right and fair for those with the broadest shoulders to carry the heaviest burdens. Those who say that we are not asking the wealthy to pay their fair share are the very same people who are jumping up to oppose reform of child benefit, which will do exactly that.

Under the previous system, about nine out of 10 families with children were eligible to receive tax credits. Under our reforms, the proportion will fall to six out of 10. As is shown by our distributional analysis of the impact of the autumn statement and previous fiscal events, the top 20% of households will make the greatest contribution to reducing the deficit as a percentage of their incomes and benefits in kind from public services.

[Helen Goodman]

Strictly speaking, what the Minister has said is accurate, but he knows as well as we do that the only reason for the positive distributional effect is the measures taken by my right hon. Friend the Member for Edinburgh South West (Mr Darling) before the last general election. Surely the Minister can acknowledge that the measures taken by the coalition Government are massively regressive.

[Mr Gauke]

I am grateful to the hon. Lady for accepting and confirming that all the measures that will be put in place in 2012-13—which we could implement or not implement—are progressive.

--- Later in debate ---

[Stephen Williams]

I thank the hon. Gentleman for his intervention and I think he made the same point to the Minister. The coalition Government have a five-year programme of reform, which includes cutting the deficit as well as long-lasting reform of our entire welfare state, which has evolved over a long period of time. Many of the reforms, whether they are on the universal credit, pensions or other parts of the welfare state, are designed to last for a generation whereas the deficit reduction measures are, of course, short-term measures, painful as they might sometimes be. I acknowledge that for many households and some families what this Government are having to do—not because we choose to do it, but because we have to do it—causes discomfort.

What matters most to all households is putting our public finances and our economy back on track. That gives our country fiscal credibility and allows our Government, businesses and households to borrow and invest at affordable rates.

[Helen Goodman]

The hon. Gentleman clearly has not read the motion, which makes it absolutely clear that our proposals on working tax credits will be matched by an increase in tax take on stamp duty from those people who have houses worth more than £1 million and who are offshoring. That would match the revenue needed for the working tax credit.