Budget Resolutions and Economic Situation

Lilian Greenwood Excerpts

Tuesday 22nd June 2010 Commons Chamber

[Chris Leslie]

I am answering the hon. Gentleman’s question. There are significant revenue-generating measures, particularly in respect of the wealthiest in society, that should have been taken. The fact is that he will vote to take £12 billion in VAT—three letters that will be tattooed for ever on to the face of his constituency—annually from people, including his constituents, yet the Government have only managed to take £1 billion in revenue from the banking levy. That ratio says it all.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend agree that increasing VAT will also have a significant impact on places such as Nottingham, where large numbers of people are employed in the retail sector, and that it will affect retail jobs? Is he aware that the Centre for Retail Research estimated that increasing VAT to 20% would lead to a reduction of 47,000 retail jobs and 10,000 stores closing?

[Chris Leslie]

I sincerely hope that that does not happen, but I worry that my hon. Friend may well indeed be right. The Government have tried their best to stagger the arrangement by delaying the introduction of the VAT rise, but they had better hope that the recovery is well under way by the time that the increase comes in—I think, in January—because, if there are still difficulties in our economy and they wallop up VAT by such a large amount, we risk a double-dip recession, which would particularly hit those who are in greatest need.

I want to talk about the most pernicious parts of the Budget which affect child poverty and even infant mortality: for instance, the scrapping of the health in pregnancy grant—just stating its name makes me incredulous that the Government have chosen it—in this financial year, from January onwards, coupled with the restriction of the Sure Start maternity grant to the first child from April 2011. I shall be very interested to see whether Government Members will walk through the Lobby with their heads held high to vote on those measures in respect of pregnant women in the greatest need. Coupled with the freezing of child benefit for three years, the shunting of lone parents off income support from next year—something that is also hidden away in the Budget—the abolition of the child trust fund and a couple of other things that the Chancellor spoke about very quickly in his statement, such as reversing the child tax credit supplement for one and two-year-olds and removing the baby element of the child tax credit from next year, which will cost young new families across the country £295 million, that is a phenomenal tax essentially on those who are in greatest need. Taken together, that seems to be one of the most despicable series of changes in the Budget.