Budget Resolutions and Economic Situation

Kate Green Excerpts

Wednesday 18th March 2015 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

I am sure that by now Government Members will recognise that the Chancellor’s Budget has not convinced my colleagues and has not convinced the country, and it will not convince my constituents. There is very little in it to return them to the confidence in the future that everyone I speak to on the doorstep tells me they desperately want. Whatever the Chancellor likes to say, low productivity, low pay, low tax receipts and high spending cuts have characterised his management of the economy until now. We heard this afternoon that such an approach is set to continue if his party returns to government in the next Parliament. Happily, we do not expect that to happen.

The Chancellor has taken a series of quite deliberate fiscal choices that have favoured the better-off, whether it is reducing the top rate of income tax or introducing the marriage tax allowance. The latter benefits only couples who are well off enough to be paying tax at all, and, what is more, only one in five of the couples who will benefit are raising children. Middle-income families have been squeezed repeatedly under this Government. My constituents report a pervasive feeling of insecurity and a deep concern for the future of young people.

Most distressingly of all, the very poorest have been pushed to the very margins of our society. There was a shocking rise in food banks from 60,000 visits in 2010 to nearly 1 million in 2013-14, and there was a 55% rise in homelessness and people sleeping on the streets between 2010 and 2014. I am sure that hon. Members cannot have escaped noticing that, as I have, including on their way home from this place in the evening.

The Chancellor repeated this afternoon the claim, which Government Members often make, that child poverty has fallen under this Government. Let us put the record straight: it has fallen in only one year under this Government—2010-11—which was before a single coalition fiscal policy had taken effect. Since then, it has flatlined at 2.3 million children, and the IFS has predicted that, under the measures the Government have already announced, it will rise by 700,000 children during the next Parliament. The fall in the first year of this Parliament was wholly and solely the result of the 2010 Labour Budget, since when median incomes have stagnated. Government Members used not to like the relative poverty measure for exactly the reason that it was bound up with what happened to middle incomes. I notice that they are not so vocal against the relative poverty measure now. They may now want to look at other measures of poverty, but it is an absolute disgrace that absolute poverty has risen under this Government for the first time since measurement of that element of poverty began, while material deprivation has also risen.

[Mr Bain]

Does my hon. Friend share my astonishment, and that of other Labour colleagues and indeed the whole country, that to try to persuade us people were better off the Chancellor used a metric that deals only with mean incomes—skewed to people at the very top of the income scale—and includes universities, which are not of course households?

[Kate Green]

The use of statistics this afternoon bore absolutely no relationship to the lived experience of my constituents and those of many of my hon. Friends.

As colleagues have said, most recently my hon. Friend the Member for Ogmore (Huw Irranca-Davies), this Government’s total lack of attention to working poverty is crucial: it is right and welcome that more people have moved into work since 2010, but that is not sufficient if they do not earn enough to live on. The increase in the national minimum wage will help a little bit, but the increase is more modest than we were promised last year. Increases in the tax threshold will increasingly give diminishing returns—they omit the poorest, who pay no taxes or whose incomes are already below the tax threshold—and what is more, they help the better-off. I remind Government Members that the better-off include us. The fundamental problem is that people cannot find the hours they need at the pay they need, which not only puts families under pressure, but is a major contributor to the failure to bring down the deficit as planned. The TUC says that we are set to borrow £54 billion more than planned this year, of which two thirds is a direct result of poor wage growth.

As colleagues have said, young people have been especially hard hit, again as a result of conscious policy choices by this Government. Of course older people should never face retirement in poverty—I am proud that Labour Governments halved pensioner poverty—and an ageing population means increasing the spending on this group, but we are significantly under-investing in the next generation. My constituents repeatedly say that to me. Hourly wages and weekly earnings have fallen fastest among young workers. Research by the London School of Economics has shown that typical incomes for those in their 20s were nearly a fifth lower in 2013 than they were five years earlier, and even those in their 30s with good degrees have lost out on their incomes. That not only blights young people’s lives today, but damages their ability to plan, save and look forward to the future. A Government who have made much of rewarding saving and forward planning should be mindful that they are putting a whole generation in a position in which they are simply unable to do so.

Although there were announcements today about helping people who wish to buy a home, an aspiration shared by many of my constituents, it is noticeable that there was absolutely no help whatsoever for the many young families who rent a property and will continue to do so for many years to come. If it is right to provide financial support to young people to buy their first home, will Ministers explain why it is not right to offer the same kind of financial support to those of them who rent?

Nor was there anything to comfort families with children. As the Child Poverty Action Group has pointed out, the cost of raising a child has grown significantly faster than its parents’ incomes under this Government. We heard nothing to help people with the additional costs of raising children, simply a tax break for married couples, many of whom will not be raising kids at the moment.

Finally, we heard today of the truly shocking plans for further cuts if the Conservative party were to form the next Government. Those shocking cuts to public service spending have been accelerated into the early part of the Parliament, no doubt so that a future Conservative Chancellor would be able to say that he was increasing spending as an election approached. We have heard in the past about shocking cuts to social security spending, and those cuts will be even harder on working-age people and families with children because pensioner benefits will be protected.

The Budget has told half the story today, hidden the pain for tomorrow and done nothing to put the country and families in my constituency back on their feet. It is not a Budget about the future: it is the Budget of a failing Government.