Social Security
Debate between Judith Cummins and Meg Hillier(3 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Dame Meg Hillier
I could speak forever about the challenges that the last Government left. I have spoken about the NHS, but let us take the dire state of our train services. The previous Government refused to engage and stop the strikes, which meant that anybody travelling had no certainty about whether they could get to everything from work to a family funeral. Lives were put in havoc, so it is absolutely right that we begin to set right the chaos that the last Government left. Yes, there is a cost to that, so the challenge for my right hon. Friend the Member for Leeds West and Pudsey and this Government is how we address that, making decisions that will build up the future of Britain in the way that we all want to see.
We also need to address the issue of taxation. The biggest challenge in our taxation system is that those who face the greatest financial challenges often face the biggest challenges of all, because the greatest cliff edges in our taxation and benefits system affect not those who are starting to earn and accumulate wealth, but those who are most financially challenged. For those at the margin, we keep coming across examples—this is not the only one—where the marginal costs of a slight improvement in income can drastically outweigh that improvement, whether that is tax thresholds being frozen or the issues we have seen with child benefit. There are many more examples, and the debate we are having today is one of those. The solution is not to duck or defer the need for tough choices, so, for the record, I will be voting with the Government. Equally for the record, though, I want this Government to commit to tackling those cliff edges, because that is what progressive policy—including taxation policy—looks like.
Like many Members of this House, I know from bitter experience that rushed laws tend to be bad laws, so I do not expect some Houdini-like solution to be announced from the Front Bench by my right hon. Friend the Member for Leicester West (Liz Kendall) in her closing speech. Instead, I expect and trust that she will consider removing those chains of poverty as a key mission for this Government in a thoughtful, carefully planned way; one that is tied up with the next Budget but goes way beyond it.
I also know, as will many Members, that there are technical challenges in making changes. Look at what has happened with child benefit: the limits on income are dragging many people into tax returns, where households of the same income did or did not receive child benefit depending on who was earning the money. That is a lesson in why changes need to be made in a sustainable way and according to a plan. My right hon. Friend on the Front Bench and her colleagues have a plan, but the winter fuel allowance, which we are discussing now, is a prime example of the problems that those cliff edges create. Addressing those problems in isolation, however, will leave in place all the other cliff edges; we need to look at challenging poverty in the round.
I was honoured to be chosen yesterday to be Chair of the Treasury Committee. I do not yet have Committee members—they are yet to be elected, as is the Chair of the Work and Pensions Committee—so I cannot speak for a Committee that does not yet exist on a cross-party basis, but I will be urging the Committee to consider this wider challenge of cliff edges as a matter of urgency. I look forward to working with Ministers to find some practical steps forward.
We have to make tough choices as a Government in-year, because one of the challenges is that the hole in the public finances is not just about the hole today. In previous Budgets, decisions were made to defer spending to later years, so the real challenge is now. Too often I have seen calls for efficiency savings and cuts in-year that end up being deferred. If we look at what happened to the defence equipment plan under the Conservative Government in 2010, we see that there was a desire to balance the books. In doing so, the Ministry of Defence deferred spending—moved it to the right—which left us with aircraft carriers without aircraft and a raft of other problems. Deferring decisions and spending does not solve things, and this Government and this Cabinet are making the tough choices to make those difficult decisions in-year, because that is financially literate and the right thing to do.
