Living Standards

Nick Gibb Excerpts

Wednesday 4th September 2013 Commons Chamber

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House believes that the Government is failing to turn things around for the UK’s hard working families; notes that this has been the slowest economic recovery on record, and that the Government is out of touch with the difficulties faced by ordinary families; recognises that average earnings are almost £1,500 a year lower in real terms than they were in 2010; notes in addition that tax and benefit changes since 2010 are costing families an average of £891 in 2013-14 according to the Institute for Fiscal Studies; further notes that the Government is making hard-working families pay more than their share to bring down the deficit while cutting income tax by an average of £100,000 for the 13,000 people with incomes over £1 million; and calls on the Government to ensure that the recovery is strengthened, sustainable and its benefits fairly shared by getting more people into work, bringing forward capital investment, as recommended by the IMF, introducing a compulsory jobs guarantee, backing fair taxes by reintroducing a 10p rate of income tax, paid for by a mansion tax on houses worth over £2 million, taking action on rip-off rail fares and soaring energy bills, standing up for families in the private rented sector, reforming the pensions industry, curbing payday lenders and implementing long-term reforms to banking, infrastructure planning and the skills system.

During the 2010 election campaign, the Conservative party made the rather bold claim that it would strive to

“see an economy where not just our standard of living, but everyone’s quality of life, rises steadily and sustainably”.

Looking back more than three years on, time has served that particular Tory manifesto pledge disastrously, as it has so many others. It is no wonder that people are feeling let down. Today, average earnings are almost £1,500 a year lower than they were when that pledge was made.

Since the end of 2010, the UK has seen the biggest fall in workers’ income of any country in the G7. Prices have risen faster in the UK than in any other major economy. It is another broken promise from this out-of-touch Prime Minister.

[Mr Nick Gibb (Bognor Regis and Littlehampton) (Con)]

Does the shadow Chief Secretary accept Labour’s responsibility for its catastrophic stewardship of the public finances, which left this country with a budget deficit in excess of 11% of GDP?

[Rachel Reeves]

As the hon. Gentleman knows, there was a global financial crisis that hit every country in the world, and all countries are now dealing with the aftermath. As the Office for Budget Responsibility and the Institute for Fiscal Studies have said, budget deficit reduction has now stalled, not because the Government have not cut public services or put up taxes for ordinary people but because unemployment remains too high and economic growth too weak to get the deficit down.

This Prime Minister is ripping up the record books when it comes to overseeing falling wages for ordinary workers. Average wages have been falling behind prices for 37 of the 38 months of David Cameron’s prime ministership. Which month is the odd one out? It is April of this year, when the bankers reaped the rewards of deferring their bonus until George Osborne’s cut to the top rate of tax was implemented. That tax cut resulted in 13,000 people with an income of more than £1 million receiving a tax cut worth on average £107,000. That is four times average earnings in this country.

The rest, ordinary people, will be on average £6,660 worse off by the end of the Parliament. That is enough to have paid for the family weekly shop for more than a year and a half. Although he has said repeatedly, “We’re all in this together” and “Those with the broadest shoulders should bear the greatest burden”, how can families trust this out-of-touch Prime Minister, who has prioritised millionaires over millions of working people?