Budget Statement

Lord Scriven Excerpts

Tuesday 21st July 2015 Lords Chamber

[Lord Scriven (LD)]

My Lords, the Minister said at the beginning of the debate that this was a fair and balanced Budget, but I hope to show over the next few minutes why it is not. This is the first Budget without the coalition of the Liberal Democrats in government, so the Tories have been able to deliver their own Budget. It has come at a time when finances are improving and stability is beginning to return. At that point, one has to make a choice: do you have a fair and balanced Budget or do you penalise the poorest and the most vulnerable in our country who have made some of the hardest sacrifices over the past few years?

I can only draw on my own experience. I am from the north. I was born in the north, and it is where I was educated and have spent most of my life. Those who heard my maiden speech know that I come from a very humble background. I am the son of a refuse collector and a hospital cleaner. Many of my friends in Huddersfield where I went to school are the very people the Government say they are trying to help. They are people on low wages who get up every morning to do the best for their families and they make sure that they have the dignity of work. This Budget will hit them the hardest. I am probably relatively young for this place, and I must suppose that young people are going to be severely hit by the Budget.

Let us start with the north. First, this is not a Budget for the whole of the north. For example, if I lived in Cumbria, I would wonder where exactly my part of this Budget was. The Government have been microscopic in how they look at the north. I find it quite amusing that the Minister talks about transport for the north and the Oyster card. What is the point of having the Oyster card when you are being put on train pacers which are the equivalent of sheds on wheels because investment has been withdrawn? Where is that investment for the Midland Mainline? Where is that investment for the TransPennine routes? The best way to deal with productivity is to link those powerhouses of the north together, yet it is on pause. Will the Minister tell us when the pause ends? Or will Crossrail 2 take precedence over the powerhouse of the north?

I want to come on to welfare and social justice, and the new living wage. Actually, it is not a new living wage; as the OBR would say, it is a minimum wage premium. The living wage, through the Living Wage Foundation is £7.85 per hour outside London and £9.15 in London. Yesterday, IKEA said that by 2016 it would pay that real living wage.

This is a smokescreen; it is not a living wage. The reason why it has been brought out—incidentally, nobody under 25 will get it—is to hide the serious reduction the lowest paid will face through the benefit changes and, particularly, the tax credit changes that the Government are making. The Institute for Fiscal Studies stated clearly that the,

“more important tax credits are to someone’s income … the less likely they are to be compensated by the higher minimum wage”.

Why is that? The Social Mobility and Child Poverty Commission says that the cuts to tax credits will hit 45% of working families. It says that the vast majority of them—72% of those with the greatest losses—will earn less than £20,000 a year. It is estimated that 3 million people will lose £1,350 a year due to the changes. Those on earnings between £10,000 and £20,000 —some 754,000 families—will lose more than £2,000 per annum. Those earning between £20,000 and £30,000 will lose about £2,800 per annum—about 51,600 families.

We have seen what is happening in this Budget. The poorest have to have the broadest shoulders. The key fact is that the increase in the minimum wage cannot provide full compensation for the majority of losses that will be experienced. As the IFS said, it is “arithmetically impossible” for that change to be made. Why have the Government chosen to give tax breaks to dead millionaires when that will affect only 6% of all estates that will have to pay that amount of inheritance tax? It is not fair and it is not balanced.

The first step for many young people in terms of their education after leaving school is further education—the first step towards skills and productivity. This Budget takes £400 million away from further education. It is all right talking about apprenticeships but for some of the colleges or the areas where young people will go to get technical skills, £400 million has been taken away. As I said, the living wage does not even apply to the under-25s, and I do not understand the changes in housing benefit.

There are scores of young people under 21 in this country who run away from home for the sake of getting housing benefit. Let me give one statistic of young people who are lesbian and gay who leave home because they have come out—69% say that it is because they have had problems about their sexuality at home. Does anyone think that when they leave home in those circumstances they will say to an official that they are gay or lesbian so that they will be seen as an at-risk category? Of course they will not. They will be made homeless.

Is this a Budget for aspiration? No. It is Budget for financial desperation for many. Is it a Budget for the northern powerhouse? No. It is a Budget for the northern poor house, I would suggest. Finally, is it a Budget that lets young people dream and hope? No, it is more of a Budget for young people to fear, with some of the opportunities that they want taken away from them.