Budget Resolutions and Economic Situation
Debate between John Healey and Paul Farrelly
Paul Farrelly (Newcastle-under-Lyme) (Lab)
Perhaps I can anticipate something that my right hon. Friend will not welcome in this Budget. Does he agree that, be it in south Yorkshire or north Staffordshire, if one member of a family with children is earning £25,000 and their partner is earning, part-time, £6,000, £7,000 or £8,000, that family is not rich, and if they are living in affordable housing the incentive is for one partner to reduce their hours or even give up work entirely? Does he agree that it is not right—it is an insult—for the Chancellor to say that their rents are being subsidised by other working people?
John Healey
My hon. Friend is absolutely right and anticipates my point. What he says signals serious trouble for many people resulting from this Budget.
Just as there are alternatives at the macro level, there are alternatives at the policy level. The Chancellor wants £12 billion in social security cuts. It is the Tories’ choice to hit working and low-income families, when the Chancellor could have cut back even further on the tax reliefs for buy-to-let landlords, which at present cost the taxpayer about £11 billion a year. He could have chosen not to sell the public’s interest in RBS while it still means a £13 billion loss to the taxpayer. The Budget promises pain for many people who can do little to deal with the financial shortfall they will suffer. They are trapped by low wages and high rents. Many are only just coping now, and this is a Budget that will strike fear and desperation into their lives.
I got an email yesterday from Mrs Smith—let us call her Mrs Smith—of Rawmarsh. She says that she is “very worried” about the cuts to tax credits going ahead:
“I struggle as it is. I’m married with three children. I work long hours, and don’t see my family much as it is. I can’t afford to do my nursing as I can’t cut my hours down. I haven’t even taken my children on holiday in eight years”.
This welfare policy fails the head test as well as the heart test. Many of the cuts will punish poor families but not bring down the benefits bill because the Government are not getting to grips with the root causes of those welfare costs. We need a long-term plan now to control housing benefit costs, and we need to switch public spending from paying benefits to building homes on a big scale. In that way, we can build more affordable homes and make the Exchequer a profit in the long term through lower housing benefit bills.
This is a Budget with no compassion and little credibility, a Budget that risks repeating many of the mistakes of the last five years. Over the next five years, it will be our Labour task to prove that there is an alternative, not just as a protest, but as a programme for a different Labour Government from 2020.