Budget Resolutions

Debate between Karin Smyth and Debbie Abrahams

Tuesday 30th October 2018 Commons Chamber

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I should like to highlight some of the facts and figures that the Chancellor missed yesterday before I move on to discuss some of the taxation and public spending measures. First, a record 8 million working people are now living in poverty. There are also 4 million children living in poverty, two thirds of whom are in working families. That number is going in the wrong direction. There are also 4 million sick and disabled people living in poverty—twice the number of non-disabled people. Our life expectancy is flatlining, and for women it is actually going backwards, but what do this Government do? They increase the state pension age. We also know that infant mortality has increased for the first time in 100 years, and that four in 1,000 babies will not reach their first birthday, compared with 2.8 per 1,000 in Europe.

Many epidemiologists have linked this reversal of the generations of health improvement with the austerity that this Government have wrought on the country as a whole and on people on the lowest incomes in particular. Resolution Foundation analysis published today and yesterday’s Budget book show that people on the lowest incomes will be hit disproportionately hard. The Government have not reduced inequalities. Have Ministers assessed the Budget’s impact on life expectancy? Will it continue to flatline, will it get worse or will it increase? I doubt they are able to say it is on the road to recovery.

On tax, I am pleased that small businesses, particularly those on the high street, will have their business rates reduced—that has been a particular issue for a number of my constituents—but what will that mean for councils’ revenue, and how will they be recompensed? My council has lost nearly half its budget from central Government. The digital services tax sounds great, but the OBR says it will affect around 30 tech giants, which will pay about £15 million each. How will that address the fundamental issue that, for example, in 2016, Google paid £36.4 million in corporation tax on declared UK sales of £1 billion, whereas according to its US accounts those sales were £6 billion?

On public spending, the Chancellor confirmed that the NHS would be given much-needed cash. That is welcome, but a range of think-tanks, from the King’s Fund to the Nuffield Trust, say it actually needs £30 billion by 2020. Again, the additional £2 billion for mental health crisis is welcome, but what about emphasising prevention? What about assessing the Government’s own policies on sanctions, work capability assessments and the personal independence payment process, which make the mental health of many claimants worse?

The £1 billion for social care is important, but it does not address the £2.5 billion funding gap since 2010 and does not help the 1.2 million people who need care but cannot get it. I worry that after the publication of the social care Green Paper, which is being consulted on, a new funding regime involving a social care insurance scheme will be announced. That would have disastrous implications for the NHS, as we see closer integration between the NHS and social care.

I could go on about the derisory figures for education and the fact that my local police force and our emergency services will receive nothing substantial, but I want to talk about homelessness, which is rising but was not mentioned in the Budget. We see rough sleepers on our streets in towns and cities up and down the country, but we hear nothing about the families who live in temporary accommodation or people who sofa-surf, as they are not deemed as having priority need for housing. That is the Government’s biggest shame. It epitomises their neglect of too many citizens and reflects not just their failure to ensure that enough houses are built for us all, with social and affordable homes as part of the mix, but their ill-thought-out social security policies, such as universal credit.

Universal credit has been a disaster from start to finish, and it has now been revealed to be driving homelessness. One shelter says UC is the reason why a third of its residents are in it. UC tenants of the housing association First Choice Homes in Oldham are in more than £2.5 million of rent arrears. Research suggests that nearly one in five people in Oldham struggles to pay a social rent. UC is part of that problem. Policy in Practice estimates that the changes to UC announced in the Budget will not have a significant effect. It says 345,000 more households will still be worse off and 29,000 will be no better off. Disabled people will still be worse off. People in employment will see some improvements, but self-employed people will see none at all.

[Karin Smyth]

My hon. Friend is a well-known expert in this area, which she has spoken up about many times. Does she agree that the Government’s inability to look at people in the round—particularly at their mental ill health, their disability, their poverty and their lack of access to work—drives some of the problems she highlights, including those with universal credit?

[Debbie Abrahams]

My hon. Friend hits the nail on the head. The human misery caused by such an inhumane policy cannot be underestimated.

L contacted my office recently after her UC was suddenly stopped because her son, B, has severe learning difficulties and L, who is the main carer, did not realise that he would have to make a separate claim once he had reached his 19th birthday. When the money stopped, L had nothing—she did not know why it had stopped and nobody contacted her. It was an absolute disaster for her, and she said:

“At times I just want to end it all…it’s just so hard and I get no support or respite.”

L is a candidate for the new mental health crisis fund that the Government have set out—a product of their universal credit policy. On top of this, the investment in UC does not offset other cuts to social security, with welfare spending set to fall in the next couple of years.

Most worrying are the cuts affecting disabled people, which have not been addressed in the Budget. In fact, according to the OBR, disabled people will be worse off. As the United Nations said last year, this Government are presiding over a “human catastrophe”. The Equality and Human Rights Commission estimates that families with a disabled adult and a disabled child will have lost 13% of their income—£5,500 a year—by 2022. This is on top of colossal cuts across other Departments. What about their help from the Chancellor? What about their bright future?

We have done a lot—the former Labour Government did a huge amount to improve life expectancy, and to lift disabled people and children out of poverty—but we need to do more. The inequalities in our society are getting worse, not better. These inequalities are socially reproduced, so they can be changed, and that should give us all hope. But political will is needed to tackle them, and I am afraid that this Government just do not have it in them.