Amendment of the Law

Michael Connarty Excerpts

Monday 26th March 2012 Commons Chamber

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

We had a culture-themed—if not cultured—introduction to the debate, and this is a remake Budget. It is certainly not “Chariots of Fire”, more “Upstairs Downstairs”. Upstairs, a £3 billion handout and the tax level down to 45% from 50% for those earning more than £150,000 per annum. That is £10,000 for 300,000 people and £40,000 for 14,000 millionaires. What does that buy? I refer Members to the fees for the Conservative party donor club. It is £10,000 for basic entry, but for £50,000 people can get a seat at the captain’s table. They get to meet the Prime Minister himself. I do not know why people were being asked for £250,000, because those figures were in the statement from Tory party headquarters.

Downstairs, there is the highest unemployment for 17 years. As for the working poor—they are what downstairs is all about—many, many people will lose more in benefits than is offset by the rise in the basic tax allowance. Then there are the changes in housing benefit such as the bedroom tax—a cut of up to 25% for having more than one bedroom. I know a widow who has been waiting eight years for a smaller house near her family. She has two extra bedrooms and so faces a 25% cut in her housing benefit because of this Government.

Then there are tax credits. I was on the Committee that debated the Tax Credits Up-rating Regulations 2012 on 8 March. Section 4 provides that if an income falls by £2,500, no increase in tax credits will be paid. So if someone is on short time or their company has problems and they lose £2,500, they will get nothing extra. That means poverty for many people and will leave them unable to feed themselves and their children. There is also a general tax credit cut of £3,700 for most people and child benefit cuts for middle-income families. There is also the threat of regional pay for public servants.

That is all in this Budget package. Not content with attacking working people, the Government have also introduced the gran and grandad tax—not just granny tax—through cutting £3 billion of support in tax allowances for over-65-year-old citizens. That is what they are—citizens who have paid into this country for all that time. I am talking about 370,000 Scottish pensioners. It will not just be a Tory wipe-out at the next election; it will be a Liberal Democrat and Tory wipe-out in Scotland next time round.

And of course there was a sleight of hand. There have been £500 million in NHS efficiency savings. Is that going back into the NHS to pay for increased services? No. It has been taken by the Treasury. That will mean a £50 million cut in the Scottish budget because of the Barnett formula and the £500 million reduction in spending on the NHS in England.

These attacks are not justified by any benefits to the economy. The Government admitted that they will have to borrow £150 billion more because of the rising level of unemployment and the failure of the economy to grow. On the Budget prescriptions, credit easing has been running for six months and not one single business has taken up the credit easing that is now the Budget’s panacea for businesses.

What about operation Merlin? Some £10 billion less than was borrowed before has actually been borrowed in the last year by small businesses. I have found in my constituency that banks are foreclosing on deals they have already made with small business to get some of their debts back.

The Budget will not stop the crash. The Office for Budget Responsibility says that business investment will fall by 6.8% this year and by a further 2.5% next year. This might, in fact, be a remake of “Titanic” rather than just “Upstairs Downstairs”.