Tax Credits
Jim Dowd Excerpts(9 years, 2 months ago)
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Jim Dowd (Lewisham West and Penge) (Lab)
I say to the hon. Members for Plymouth, Moor View (Johnny Mercer) and for South Cambridgeshire (Heidi Allen) that it is never easy to make a speech with which most of those on the same Benches disagree. I have been in that position myself, so I commend them on their fortitude.
I want to talk about the effect these proposals would have on my constituency. Paradoxically, 60% of my constituency is in Lewisham, one of the poorest boroughs in London, and 40% is in Bromley, one of the richest. Lewisham is not the richest, but it is not the poorest either—that honour, if an honour it be, resides elsewhere—but it does have the highest proportion of any of the 32 London boroughs of people above the benefits level but below average earnings. They are the working poor, and they will be the hardest hit, should these proposals go forward. Lewisham also has the highest proportion of people working outside their borough, so travel costs are a factor for those attempting to work their way out of dependency.
I do not accept the false dichotomy, which some people presented, between strivers and shirkers, but the people who will suffer the most under these proposals would fall into any category definition of “strivers”. Almost 25% of families in my constituency receive tax credits; 8,600 families will be affected, while 5,500 in-work families will lose up to £1,300 from next April, according to the Library. The total loss to some of the most vulnerable people in the constituency will be something over £7 million. Strangely enough, my constituency is better off than the other Lewisham constituencies. Those of my hon. Friends the Members for Lewisham East (Heidi Alexander) and for Lewisham, Deptford (Vicky Foxcroft) have far higher numbers than mine, so the effect across the borough as a whole can be imagined.
The Government argue that the increase in the minimum wage, which they try to describe as a living wage though it is nothing of the sort, to £9 an hour by 2020 will offset the cuts. It will do nothing of the kind. The most pernicious element of these proposals is the decision to take money away from people from next April while not paying the so-called compensation until four years later. As others have said, it is not just the nature of the proposals but their vicious timing that will do such damage to so many people.
The Government say, “Let us enable people to keep more of their own money, rather than taking it off them and then giving it back”. As a general proposition, I think that is fairly sound, and it is arguably a more efficient way of running the economy, but it ignores the nature and efficacy of a progressive tax system: the Government raise taxes from those who can afford it to pay for infrastructure and other schemes, but also to ensure a minimum standard of living across the country through a benefits system that is an integral part of the welfare state—although I accept that a balance will always need to be struck between taxation and expenditure.
Some Government Members, such as the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), who is no longer in his seat, and others, almost made it sound like the tax credits system was such a liability that it should be abolished altogether. That was their import, but they are wrong. The tax credits system is not there to subsidise poor employers—we are united across the House on that point; it is a crucial taper between the world of benefits reliance and the world of work. Without it, the option would not be for people to be in better-paid employment, but to be in unemployment. That would be the reality.
There is a case for reform of the system, and my right hon. Friend the Member for Birkenhead (Frank Field) along with many others has done a great deal of work in this area. While new claimants can be treated separately, there must be transitional protections for some of the hardest-working and most vulnerable families in the country.
Amendment of the Law
Jim Dowd Excerpts(12 years, 8 months ago)
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Mr Vaizey
First, that is why we are spending the money that we are, and secondly, we are working in partnership with the Scottish Government, so the right hon. Lady should have a word with them if she wants to put her constituency at the forefront of broadband roll-out in Scotland.
We will have provided universal coverage by 2015 without Labour’s telephone tax, which in any event would not have raised sufficient money to do the job. Not only do we have the most ambitious rural broadband programme, but the Chancellor announced in the Budget new measures to upgrade the coverage in our cities. The UK’s four capitals, Manchester, Birmingham, Bristol, Newcastle, Leeds and Bradford will share a £100 million pot to ensure that they are among the best-connected cities in the world.
Jim Dowd (Lewisham West and Penge) (Lab)
On that subject, will the Minister have a word with the London borough of Bromley—it is allegedly in London, although it is not—which is obstructing the implementation of superfast broadband simply because it is an out-of-London, Tory-controlled borough that does not know any better? Will he exhort it to wake up to the idea of tomorrow rather than living in yesterday as it always does?
Mr Vaizey
Without adopting the hon. Gentleman’s language—I would certainly never describe Bromley or its council as out of touch or living in the past—I accept that he makes an important point that is worth labouring. It is vital that local authorities work with broadband providers to ensure the roll-out of broadband, and we are providing the money and working with local councils. We understand why planning regulations are in place, but if they are used in a way that restricts broadband roll-out, councils will be denying their residents the opportunity to access a very important service. It is vital that local councils take a proactive approach and ask not how to apply the planning rules but how to make it as easy as possible to get broadband to as many of their residents as possible.
Mr Vaizey
They cannot make their minds up. On the one hand, the success of the UK’s creative industries is drivel; on the other, the success of Adele and her biggest-selling digital album in history is down to the Labour party. I would not claim that, but I would claim instead that we are putting in place the infrastructure for broadband investment to support high-tech innovation in this country. Through a series of initiatives, such as catapult centres, investment from the Technology Strategy Board, research and development tax credits and the patent box tax credit, we continue to support investment in our technology industries. Specifically through our tax break for video games, animation and high-end television production, we will support our creative industries and spur them on to greater success. I have already heard from some of the UK’s most successful animation companies. They are now planning to increase investment in their businesses, recruit more staff and make more programmes here in the UK. [Interruption.] Mr Deputy Speaker, there is a Labour Member standing next to you shouting at me. Could you encourage him to make a formal intervention at some point?
American studios are lining up to work with our talented production staff and amazing studios. British developers will be able to take advantage of the 8% growth in the worldwide video games industry.
Jim Dowd
I am not sure whether my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop)—to whom the Minister refers—wants to intervene, but if so, I am taking his slot. I do not want to make a partisan point, because although our understanding of the importance of the creative industries to this country and this economy, starting under the last Government, is well established, I congratulate the current Government on continuing that process, with the patent box and all the benefits that it will create. However, will the Minister prevail upon the Secretary of State for Business, Innovation and Skills and his colleagues to understand just how important creativeness and ingenuity are to this economy? In the light of the Hargreaves review and the role played by the Intellectual Property Office, it is not just product being made available free to consumers that is important, but ensuring that those who create and innovate get the best deal possible. That is a supreme role for this Government to perform.
Mr Vaizey
I thank the hon. Gentleman for that intervention—I hesitate to say that it is good to hear from somebody who knows what they are talking about, in case he makes a hostile intervention in a minute. I absolutely hear the point he makes. The protection of intellectual property is paramount. We need to bring the intellectual property regime up to date, but I for one do not want to rob Peter to pay Paul. It is absolutely right that content creators are paid for what they create.
Let me say something at which the whole House will rejoice: I am coming to the end of my remarks. However, if all those who said that they wanted to make an intervention still want to, they have a small window, as I perorate towards my conclusions.
Simon Danczuk (Rochdale) (Lab)
Much has been said over the past few days about how the Budget will adversely affect pensioners, those on middle incomes and the less well off. There is no doubt that the vast majority of people living in Rochdale will be worse off, rather than better off, as a result of the Budget. But it is not just individuals who will be worse off; there is no doubt that businesses, especially small businesses, could have received much more assistance from the Chancellor. I want to concentrate on that subject this evening.
We are all aware that small and medium-sized enterprises create the most jobs in our economy. Given the present record levels of unemployment, I would have hoped that the Chancellor would do more to help small businesses, rather than just the larger corporations. The Government’s actions to stimulate the economy so far have failed, and if the Office for Budget Responsibility is to be believed, little in this Budget will improve growth. It is predicting growth of 0.8% this year, as opposed to its initial prediction of 2.5%. The cut in corporation tax might well encourage additional investment by larger corporations, but it will do little, if anything, to help SMEs to grow their businesses and create jobs.
I accept that there is some potentially good news in the Budget. Tax simplification for small businesses could work, enterprise loans for young people sound promising, and the expansion of UK export finance is a good thing in principle.
Jim Dowd (Lewisham West and Penge) (Lab)
I congratulate the hon. Member for Wirral West (Esther McVey) on reading out her speech. I am not sure whether she got it from the Whips or those on the Government Front Bench, but it is patently obvious that it was completely—
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. The hon. Gentleman cannot be made to give way, so the hon. Lady must resume her seat. It is up to him.
Esther McVey
I appreciate the hon. Gentleman giving way. As the Wirral is somewhere I have lived all my life, and as this is something I have given great thought to and know inside out, and it comes from the heart, I know that it is a part of the country where we need to succeed, and these are the sorts of tax incentives and the sort of Budget that we need in order to be able to do that.
Jim Dowd
Yes, indeed, and as for the next bit, I do not know. None the less, I will go on to make a few points.
All Budget statements are a spectacle. When I first came to the House, people used to dress up for the Budget and it used to be more of a spectacle. Some used to put on national dress and dress in top hat and tails and all the rest of it. They do not do that any more, and perhaps it is just as well, but what has replaced it is an altogether more depressing sight, because the Budget statement has become something of a pantomime—this does not just apply to this Government and this Budget, because it has become like this over time—with the Chancellor and his acolytes sitting on the Front Bench and making a few statements and the simpletons behind them simply responding, cheering and making completely idiotic noises, whether or not they know what the Front Benchers are saying. As I said, I do not limit my criticisms to this Government because it has happened over a number of years, although I think they are the worst example of it. I do not exempt Members on the Opposition side of the Chamber, because when our Front Benchers get up there are Pavlovian responses from this side as well.
What we really need to do is look at what the Budget means today, tomorrow and, more particularly, for the next few years. All Budgets are a mixture of imperative and choice, and this Budget is no different, but what is most striking about it is the choices it makes. The Tory party has never been an egalitarian party; it has always been an elitist party. It is not just that the Government are a Government of the rich, by the rich and for the rich; what is more telling is just how right wing the Liberal Democrats are, given the opportunity—I exempt the right hon. Member for Bath (Mr Foster) because he is a decent sort of chap living in a world of his own creation. None the less we cannot get away from the fact that, were it not for the support of the Liberal Democrats, the Government would not get this Budget through tonight, they would not have got their reforms—or deforms—to the national health service through and they could not get through their reforms in the Legal Aid, Sentencing and Punishment of Offenders Bill. They would not be able to do anything.
Opposition Front Benchers—I criticise them for this—are a bit addicted to terminology and cliché. We are apparently told to refer to the “Tory-led Government”, but I will not do so because I do not think that that shares the responsibility anywhere near widely enough. This is a Tory-Liberal Government, and were it not for the support of the Liberal party they could not carry through the sort of distortion they have made with this Budget. The Tories are trying to pretend that they are leopards who have changed their spots. Not only that, but they are pretending that they have traded in their spots for presentable and attractive stripes and become vegetarian. I do not believe a bloody word of it. They are what they always have been, which is a party of the privileged with a role to demonstrate to those beneath it that they know their place.
The idea that the Tories are going to simplify the tax system by taking from pensioners has resonance only if we believe that they are taking equally from everybody. To the Liberals who talk about a Robin Hood Budget, I say, “Wake up. Get real.” Robin Hood, incidentally, was a myth, remains a myth and—although I do not wish to upset any colleagues and friends from Nottingham who are here this evening—originally came from Wakefield. The idea of his taking from the rich to give to the poor is, rather like this Government, complete and utter baloney.
I have two points to make in the odd few seconds that I have left. One is on child benefit, and the other is on stamp duty. If the Government had been serious about reforming stamp duty, they would have reformed the whole thing. I am not against people on £2 million paying 7%, and I am not against companies that use their machinery for purchases paying 15%, but the measure is very unfair on those at the bottom of the scale, who have to pay 1% or 3% on the whole cost of valuation. If the Government had been serious about reforming stamp duty, they would have addressed that.
On child benefit, the Government have introduced means testing. They can means-test universal benefits, that is right, but what is next? Winter fuel allowance? Freedom passes? If they undermine universal benefit, they undermine many things that benefit millions of people throughout the country. This Budget, like this Government, is a complete and utter fraud.