Finance Bill

Luciana Berger Excerpts

Tuesday 6th July 2010 Commons Chamber

[Charlie Elphicke (Dover) (Con)]

I, too, congratulate the hon. Member for Scunthorpe (Nic Dakin) and my hon. Friends the Members for North East Cambridgeshire (Stephen Barclay), for Ipswich (Ben Gummer), and for Weaver Vale (Graham Evans) on their excellent speeches. I also congratulate the hon. Member for North Durham (Mr Jones), who has just departed, who spoke with such eloquence about the need for parliamentary reform. His passion brings a tear to the eye of the Leader of the House; of that I have no doubt whatever.

I am saddened by the need for clause 3, on VAT, to be included in the Bill. It is a great shame that it is necessary to take difficult action in relation to taxes because of the extreme black hole left in the public finances. We now find ourselves in a position where debt is 62% of GDP this year—higher than the 54% in 1976, when the International Monetary Fund was last called in. That is the level of seriousness of the debt that we have. The ratio of debt to GDP is predicted to go to 70% in the next three years, even with the tough action taken by the Government.

I for one am relieved, however, particularly because taxes could have been a lot higher. The black hole could have been filled in other ways. We have taken the difficult decisions on public spending, but we on the Government Benches know that if there had not been a change in government, we would have seen not only a rise in VAT but a possible £20 billion tax increase, with income tax perhaps going to 25p in the pound. That is the size of the black hole that we have been looking at.

I congratulate my right hon. and hon. Friends on the Treasury Bench on taking the firm action required, because I worry about the least well-off. I worry that the rich-poor divide has widened since 1996-97. I worry that since 2004-05 households in child poverty has risen by 300,000. I welcome the fact that it will be frozen for the next two years. I am concerned that the number of children in overcrowded homes has risen from 980,000 in 2006 to 1,080,000 in 2008, according to Communities and Local Government figures. I am concerned that the housing waiting list has risen from 1 million in 2001 to 1.8 million in 2009, according to CLG figures. I am also concerned that disposable income rose by only 1% a year between 2004-05 and 2008—and that was before the current difficulties hit home.

I, for one, welcome the difficult decisions taken on capital gains tax in clause 2. Personally, I think that that is the right thing to do. I have always taken a more Lawsonian approach. A difficult decision has been made, but it is essential that everyone pays their fair share of tax. I regret that we are not keeping a more ameliorated position for those who own business assets, but I think that those who own country estates, oil paintings or buy-to-let empires should pay a fair share of tax.

We know that that is the right approach to take, because the figures from the past few years show that the level of private rented sector property rose from 10% of housing stock in 2000 to 14% in 2008. Meanwhile, the total social housing stock fell from 4.25 million properties to just 4 million in 2009, according to CLG figures. The level of owner occupation fell from 71% in 2003 to 68% in 2008, according to CLG figures. I regard that with concern, because where people need assistance we should have affordable housing there for them. The number of new affordable houses built also fell under the previous Government. Where people have the requisite funds to buy their own home they should be encouraged and helped to do so. So I commend this Budget to the House.

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

If the hon. Gentleman is so concerned about housing, how does he feel about his Government’s decision to cut the Homes and Communities Agency by £60 million? Some £4.5 million of that cut will have an impact on new homes that were supposed to be built in my constituency. How does he feel about the most recent announcements on housing allowance, which mean that people in my constituency are having to make up a shortfall of £50 a month?

[Charlie Elphicke]

I point out to the hon. Lady that the number of affordable houses built in 1995-96 was 74,530, whereas the average for the previous Government’s entire tenure was just 40,000 affordable homes built each year. Why was that? Last year’s figure was 20,000 below what was achieved under the outgoing Conservative Government. As I said, we built 74,000-odd a year, whereas last year the previous Government built 55,000, so I do not think that they have any record to stand on when it comes to affordable housing, except that of a roll of shame. Their record is an absolute disgrace.

What we need is for the UK to grow faster, because the best cure for deprivation is a job. Too many jobs were taken away by the previous Government’s galactic economic incompetence, and we need to have change, so I want to make the case for that. Will the UK grow faster with a larger public sector? Will the UK grow faster with even higher taxes, as were planned by the previous Government? Will the UK grow faster with ever more debt, or would that result only in ever-higher interest rates, a weaker currency, an increased country risk and our country’s credit rating at risk? I think that the right decisions have been taken, because the UK will grow faster with a lower jobs tax.