Budget Resolutions and Economic Situation

Mary Glindon Excerpts

Friday 22nd March 2013 Commons Chamber

[Mrs Mary Glindon (North Tyneside) (Lab)]

It is a great honour to follow my hon. Friend the Member for Easington (Grahame M. Morris), who so ably told us of the dire effects that this Budget will have not only on his constituency, but on our native north-east.

Last year the Chancellor told us that his Budget was one that supported working families and those looking for work, unashamedly backed business and was on the side of aspiration. However, a year later it proved to be a Budget that led to the stalling of the economy, the downgrading of the country’s credit rating and more U-turns than can be counted on one hand or perhaps even two hands.

This year, as borrowing is set to be £245 billion more than planned and the OBR has stated that people will be worse off in 2015 than they were in 2010, when the Government took office, the Chancellor has trotted out the same lines about aspiration and setting free the aspirations of the nation. I find myself repeating the same lines about how this Budget will adversely affect my most vulnerable constituents, who through no fault of their own have to depend on welfare benefits in one way or another. Last year the Chancellor said that he expected to make further spending cuts of £10 billion by 2016. This year he has raised the amount to £11.5 billion, and as spending on schools and health is to be protected, the welfare budget is bound to be hit.

For the first time, the Chancellor has decided to limit annually managed expenditure, which includes the welfare budget, as well as debt interest and payments to the EU. His main claim for limiting AME is that in order to spend more on the services that we value, including the health service and our armed services, he must cut the growth in spending on the welfare budget. Of course, this stands in stark contrast to the increased tax cuts of £3 billion for the most wealthy in our society.

What will these cuts to welfare involve? We know that all will be revealed in June, but what more can be taken away from the poorest in the country, both the working poor and those who have to rely entirely on benefits? There is speculation that these cuts could realise suggestions flaunted by the Prime Minister in his welfare speech made last summer—things such as paying benefit in kind instead of cash, reducing benefits for the long-term unemployed, and the abolition of housing benefit for the under-25s. But I ask: what do the Government care for the unemployed? Only this week, they pushed the contemptible Jobseekers (Back to Work Schemes) Bill through the Commons. My constituents from all walks of life are firmly against it, and have contacted me with their serous concerns about the Government’s actions. However, a Government who will stoop so low as to take rightful benefits from claimants and force jobseekers into workfare are unlikely to have any conscience when it comes to making deeper cuts and causing further hardship to the worst-off in society.

Moreover, as millions of the poorest workers look forward to being taken out of income tax, they also have to look forward to increased rents because of the bedroom tax, and they will find that they now have to pay more council tax because of changes to local government finance. In reality, they will feel that the Government have robbed Peter to pay Paul. Many low-paid workers are in the public sector, and after a two-year pay freeze will see their pay rise by only 1%. No doubt many of those hard-working people will have aspirations to own their own homes, but poverty pay and loss of tax credits and child benefits will mean that, despite the Chancellor’s Help to Buy scheme, a home of their own remains out of reach.

The Chancellor said that the Budget does not duck our nation’s problems, but I think it compounds them. It is not a Budget for an aspiration nation; it is a Budget that will bring mixed fortunes for people across the United Kingdom. It will not bring the growth needed to see everyone prosper, to see everyone get jobs. The low-paid worker strives hard every day, but their aspirations are often crushed by the need simply to make ends meet, and this Budget will not change that. At the Conservative party conference, the Chancellor said:

“We are still all in this together.”

His Budget plan does not reflect his words, and it leaves me worried about the economic future of many of my constituents.