Budget Resolutions and Economic Situation

Maria Caulfield Excerpts

Thursday 9th July 2015 Commons Chamber

[Dr Whiteford]

Scotland has already shown the progress we are making towards a high-skill economy. I was interested to hear yesterday’s announcement on improving the apprenticeship scheme in England. I hope the Government will aspire to do what the Scottish Government have already done. The uptake has been phenomenal and we are well on course to reaching 30,000 apprenticeships a year, which is far more proportionately per head of population than the current number in England. The Opportunities for All scheme guarantees a place in education or training for every single young person. It has been a phenomenal success, with more than 90% of our young people going into sustained employment afterwards. Instead of waiting until people have been unemployed for a year before intervening, we are intervening early so that every school leaver gets those opportunities. The approach is much more carrot than stick. The scale of the uptake shows that in Scotland we are committed to having a more successful economy and to growing it to meet the needs of our population.

I want to return to tax credits and not be distracted from them. Today the Resolution Foundation, which has done so much to promote the living wage and highlight the issue of in-work poverty, has said that the living wage would need to be £10 an hour by 2020—not the £9 announced yesterday—to keep pace with the cost of living under the new tax and benefits regime. Let us be clear: we are not going to get out of the poverty trap with this rebranded minimum wage. We need to bring it up to the level of a living wage if we are going to take away the support currently provided through tax credits.

The huge cuts in tax credits will make the gap between the minimum wage and the living wage even greater and it will leave the earnings of low-paid workers even further below the actual cost of living. At present, a family with two children where both parents work and who live in a house with average rent will be below the breadline, and the changes announced yesterday will not change that. Such families will still struggle to keep their heads above water and their children will still grow up disadvantaged.

We need to recognise that bringing up children is expensive—for everyone, in all income groups—but children are not some sort of luxury lifestyle accessory. Having children and encouraging family life is an essential, necessary and natural part of the human life cycle. For some years, however, we have made it really difficult for younger adults to even contemplate starting a family, simply because of the pernicious combination of low pay, job insecurity and exorbitant housing costs.

That brings me to the differential impact of this Budget on women, because, in spite of the progress that has been made, women are still heavily concentrated in low-paid work. We are far more likely to be working part-time or in zero-hours jobs, and we are more likely to be the primary carer of children or, indeed, frail or disabled relatives. Too many women end up in low-paid, part-time work such as cashiering or cleaning simply because they can work their hours around their family responsibilities. While I welcome the increase in the personal allowance, we need to recognise that many of those women working part time in low-paid jobs will not see the full benefit of it. Indeed, the key beneficiaries are, of course, higher-rate tax payers like ourselves, and 80% of the benefit of the increase will fall in the upper half of the income spectrum.

I have a number of questions for the Government about limiting tax credits to two children. I am not sure why they would do this—certainly in Scotland, we have a worryingly low birth rate so we should not be trying to deter people from having more children. I ask Ministers for clarification about the basis on which the number of children eligible for support through tax credits will be determined. Will it be a couple’s first two children together, or will children from a previous relationship be counted in the total? What will happen, for example, if a woman has her first child with a partner who already has two children from previous relationship or if a mother’s third child is the father’s first? As anyone who ever runs a constituency surgery will know, these are not abstract questions, and I hope Ministers will address them this afternoon.

[Maria Caulfield (Lewes) (Con)]

Does the hon. Lady not agree that it is absolutely right for those on benefits to make the same choices as hard-working taxpayers, including choices about how large their families should be?

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[Maria Caulfield (Lewes) (Con)]

I congratulate all those who have made their maiden speeches today, including the hon. Members for St Helens South and Whiston (Marie Rimmer), for Berwickshire, Roxburgh and Selkirk (Calum Kerr), for Caithness, Sutherland and Easter Ross (Dr Monaghan) and for Bradford South (Judith Cummins), as well as my hon. Friend the Member for North Warwickshire (Craig Tracey). They all made excellent speeches.

I welcome the Budget, as it ensures security for working people by putting the public finances in order, and sets out a plan for a more productive and balanced economy. I was particularly pleased to see a number of measures that will make a real difference to my constituents in Lewes. The first was the announcement on transport. The freezing of fuel duty for another year is to be welcomed. My constituency, like many, is rural—many residents are heavily reliant on cars, as the area has little or no public transport. Many businesses are reliant on farm vehicles and heavy goods vehicles.

Any increase in fuel duty would have had a significant impact on the amount of money in the local economy, so the freeze is very welcome, as is the announcement on ring-fencing vehicle excise duty and making the owners of more expensive cars pay more. The money raised will be ring-fenced for the English strategic road network. That is welcome news for my constituents, as more money will be used to repair existing roads and to pay for improvements to roads such as the A27, for which the right hon. Member for Doncaster North (Edward Miliband) pledged that he would cut funding if Labour was elected. The A27 in my constituency is a busy and congested road, and this year alone there have been a number of deaths from accidents. The investment in that road is very welcome.

In addition, investment in rail infrastructure is very welcome indeed. Yesterday, I spoke in a Westminster Hall debate on the issues we face locally in dealing with Southern rail. A number of MPs from Sussex, Surrey and London and from both sides of the House were there to raise issues about trains being consistently late, consistently cancelled and consistently overcrowded. I am sure that many hon. Members who came here by train today, the day of the tube strike, know exactly what I mean.

Our line from the Sussex coast up to London is at capacity. I was pleased to read in the Budget that the Government will extend the scope of the Lewes to Uckfield study, which is taking place this summer, to consider improving the line between London and the south coast and to re-examine the Department for Transport’s feasibility study of the Brighton main line, too. That is a real way to get a second rail main line from the Sussex coast to London. This work cannot come soon enough for the residents of Sussex.

As a nurse, I very much welcome the extra £8 billion to be invested in the NHS to provide a seven-day-a-week service. Owing to the changes made locally by hospital management, which I raised in Health questions this week, patients from areas of my constituency such as Seaford, Polegate and Alfriston now have to travel to Hastings for basic services. The extra £8 billion will go towards more local services and making services available at weekends and evenings, so that local people can obtain the care that they need every day of the week.

Housing is a huge issue in my constituency—not just the availability of housing, but its affordability for those who want to buy or rent. I am pleased that the rent-a-room relief will increase from £4,250 to £7,500 next April. I am also pleased that a level playing field between buy-to-let landlords and homeowners will be created by addressing mortgage tax relief for landlords. In my constituency, family homes are increasingly being bought for student lets and used as houses in multiple occupation. This change will free up family housing for local people in my constituency.

Finally, I welcome the welfare changes announced yesterday. As someone from a working-class background, I am only too aware how much of a struggle life can be on a low income. I am pleased that the Budget supports low-paid workers by increasing the tax threshold from £10,600 to £11,000 now and to £12,500 by 2020. I am also pleased about the announcement on the living wage. We have heard much debate about that this afternoon, but it is definitely welcome.

A report last year by the Scottish Public Health Observatory found that changes to tax and benefits could do more to impact on health inequalities than changes to health care itself. It found that the implementation of a living wage is among one of the most effective interventions to reduce inequality and improve health. According to Public Health England, there is currently a seven-year difference in life expectancy between those who receive benefits and those who do not. Anything we can do to get people off benefits and into work must surely be welcome, and the living wage is one way to do that. Introducing the living wage is a massive step forward.

I welcome the Budget, which moves Britain from being a low-wage, high-tax, high-welfare economy to being a high-wage, low-tax, low-welfare society, and I congratulate the Chancellor on it.