Amendment of the Law

Jack Dromey Excerpts

Thursday 22nd March 2012 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

Just about the only announcement that was not flagged up in advance of the Budget yesterday was the £3 billion granny tax grab, which means that those men and women in my constituency who built Birmingham and Britain, who are coming up to retirement next year, will face a cut in what they had hoped and planned for of £314.

There are many laughable examples from the historical lexicon of the politically disingenuous—for example, the spokesman in the dying days of the Nixon Administration who said at the height of Watergate that “all statements heretofore issued are now considered to be inoperative”—but to describe this granny tax grab as “simplification” takes some beating. There is one thing that the Business Secretary and I have in common: we are both follicly challenged. Neither of us detains hairdressers for too long. Following yesterday’s Budget announcement, the next time I go to Imad’s, the barbers on Slade road, I will ask for my hair not to be cut, but to be “simplified”.

Why has this happened? Quite simply, it is a granny tax grab to fund a £40,000 tax cut for 14,000 millionaires.

[Sir Peter Bottomley]

The Labour Government were in power for about 150 months. For fewer than two of those 150 months they had the 50p tax rate. Why?

[Jack Dromey]

I will contrast the record of our Government with the record of the hon. Gentleman’s Government, any time. After 13 years of a Labour Government, Britain was a stronger, fairer, better country. We have now been given a Bullingdon Budget whose first priority is millionaires, by a Cabinet who are oblivious to the consequences.

[Jacob Rees-Mogg (North East Somerset) (Con)]

rose—

[Jack Dromey]

I give way to the hon. Member for Downton Abbey.

[Jacob Rees-Mogg]

I am extremely grateful for that substantial promotion in my class standing. Will the hon. Gentleman explain why, when tax rates were cut in 1979 and again by Nigel Lawson, that led to more revenue coming in? This point has been ignored by the Labour party.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Just before the hon. Member for Birmingham, Erdington (Jack Dromey) resumes his speech, I want to make sure that he meant North East Somerset.

[Jack Dromey]

I stand corrected, Mr Deputy Speaker.

This Government are oblivious to the consequences of their actions. I am proud to represent Birmingham, Erdington. It is a constituency that is rich in talent but it is one of the 12 poorest in Britain. I see what too many Conservative Members shut their eyes to, which is the pain being felt in such constituencies as a consequence of the Government’s actions. Let us take as an example the hard-working Castle Vale family who have two wonderful children and earn just over £20,000. They face a £253 cut to their tax credits in April. Let us consider the one in four young people in Kingstanding who are unemployed. They are desperate for a job, but the Budget offers them no hope. Alongside the victims of the shameful changes to housing benefit and the changes in the Welfare Reform Act 2012, there are 1,333 households in my constituency who are now facing the iniquitous consequences of the bedroom tax.

Grotesque unfairness runs through everything that this Government do. For example, let us contrast how Birmingham and Wokingham have been treated. High-need, high-unemployment Birmingham has had £313 million of cuts to its local budget over the past two years, resulting in every citizen in Birmingham losing £164. In leafy Wokingham, the figure is £19. Whether we are talking about police budgets, fire budgets or the voluntary sector, why have the Government got it in for cities such as Birmingham? They should be standing by such cities; at a time of rising unemployment, they need more help, not less.

Now we are to have regional pay. I declare an interest, in that I have led many national bargaining arrangements in the national health service, in local government and in the Ministry of Defence. I worked with some Conservative Members when they performed various ministerial duties in that regard. For example, I was chair of the MOD unions at a time when a Conservative Minister was chair for the Government side. Anyone who has experience of national bargaining knows that it is efficient, that it is increasingly flexible in its approach and, crucially, that it is fair. The Government’s proposal will say to nurses, teachers, doctors, firefighters and home carers in Birmingham that they are worth less than their counterparts in Surrey.

[Angie Bray]

Does the hon. Gentleman’s dislike of regional variations mean that he does not support his own party’s take on the possibility of regional benefits?

--- Later in debate ---

[Jack Dromey]

We would never introduce the kind of unfair flexibility—if I can call it that—that the Government are now promoting. The simple reality is that hard-hit areas will be hit even harder in the next stages, be they in Wales, the north-east, the north-west, Birmingham or Northern Ireland.

In the time remaining to me, let me deal with something that commanded but a passing reference in yesterday’s Budget—housing. We have the biggest housing crisis in a generation. Millions of people in Britain are in need of a decent home at a price that they can afford. About 2.8 million people are on council waiting lists, 30,000 of them in the city of Birmingham. Owing to the combination of this Government’s economic mismanagement and the failure of their housing policies, this crisis gets worse by the day.

House building was down by 11% over the first 18 months of this Government in comparison with the last 18 months of the Labour Government. It was the vainglorious boast of the Housing Minister who gives hubris a bad name that he would beat Labour “hands down” year on year, but that is not what is now happening. Homelessness is up, with families presenting themselves as homeless up by 14%. Rough sleeping is up 23%, yet it fell by 70% under the Labour Government. We have a mortgage market where millions struggle to get a mortgage. Scottish Widows estimates the average age of unassisted first-time buyers to be going up from 37 to 40 to 44. We have a private rented sector growing rapidly which is characterised by soaring rents and, all too often, abuse of tenants.

What, then, of the “housing revolution” announced by the Government in November last year? All I would say is that if we had a house for every press statement issued before and after that time, we would not have a housing crisis. The Prime Minister and the Deputy Prime Minister donned wellies and went to a building site to say that all would be well. What came out the following day, however, was that as a consequence of the £4 billion cut instituted by the Chancellor in October 2010, affordable house building had collapsed by 99% throughout England.

What of the new homes bonus? It is both inefficient and unfair, while our planning system is being thrown into chaos by the Government.

[Richard Fuller]

The hon. Gentleman is talking about the building of affordable homes. Does he not regard it as appalling that, under the last Labour Government, the building of social houses went down by 25%?

[Jack Dromey]

Under our Government, there were 2 million new homes, 1 million more mortgage holders and half a million more affordable homes, and 1.6 million homes were renovated under our decent homes programme. Has housing been at centre stage as much as it should have been under successive Governments for 25 years? No, but I will compare our record any time with the failure of this Government.

In conclusion, housing matters. Housing matters to the economy. Housing matters to health, as evidence of the damage done by poor or overcrowded housing confirms. Housing matters to educational attainment. Kids are held back at school because they live in damp or overcrowded housing. That is why urgent action on housing matters. That is what we did in 2008, after the bankers’ collapse, with our kick-start programme, which had 110,000 homes built, creating 70,000 jobs and 3,000 apprenticeships. That is why we are absolutely right to say that we need a repeat of the bank bonus tax to build tens of thousands of homes, to create jobs for unemployed building workers and to create apprenticeships and hope for the young people of my constituency. I see the consequences of the Government’s actions every day, and I know what my constituency wants. It wants to put people back to work to build that which the community so badly needs—homes.