Budget Resolutions and Economic Situation

Paul Flynn Excerpts

Thursday 21st March 2013 Commons Chamber

[Ed Balls]

The Government inherited a deficit reduction plan from the previous Government, but the Chancellor is wildly off track from our plan, which he used to call irresponsible. He is borrowing pretty much a quarter of a trillion pounds more. He said that he would get the deficit down, but the deficit reduction plan has stalled.

I have urged the Chancellor to change course, as in recent months have the International Monetary Fund, The Economist, the Mayor of London, the Business Secretary and the Home Secretary. They have all cast doubt on his plan. But yesterday we got more of the same. How did he describe the Budget? He described it as a “steady-as-she-goes Budget.” Steady as she goes? What kind of ship does he think he is on: the Titanic; the Mary Celeste?

There were some welcome measures. We have consistently called for a tax break for small firms taking on extra workers. The Government are now set to introduce a similar scheme, three years after the shadow Business Secretary and I urged them to. That is a welcome step forward. The Chancellor has finally joined Twitter, five years after I did. Maybe he will find out that his plan is going to fail five years after I worked it out, although by then he will be on the Opposition side of the House.

Yesterday there was no proper plan to kick-start our economy, no bank bonus tax to fund a youth jobs guarantee, no real action to get lending going to small firms, no proper investment in affordable homes and no return of the 10p starting rate to help millions of people, paid for by a mansions tax. Despite the welcome small change of 1p off a pint of beer—buy 320 pints and get one free, which might even be too much for the Foreign Secretary—and even after the increase in the personal allowance, an important point for the Liberal Democrats, families will still be worse off next year compared with this year because of the Chancellor’s tax and benefit changes.

[Paul Flynn (Newport West) (Lab)]

With all the voodoo economics and fiddles that have now been exposed, is not the Treasury exposed as the most disreputable massage parlour in Britain?

[Ed Balls]

I think it is a little unfair to tease this Chancellor about what goes on late at night in massage parlours. Perhaps he will correct me and tell me that it was not a massage parlour. I will take an intervention if he would like to clarify it; I cannot remember that chapter in the biography.

According to House of Commons Library figures, a one-earner family—[Interruption.] The Chancellor should listen to the reality of his plans and their impact on hard-working families in our country. According to the Library, a one-earner family on £20,000 a year with two children will be £381 a year worse off in 2013 compared with 2010, even with the personal allowance, because that is outweighed by the hit to tax credits for a working family. This is without taking into account the rise in VAT. By 2015, that family on £20,000 will be £600 a year worse off.

It is not just a case of being worse off under the Tories, but worse off under the Liberal Democrats too. In 16 days’ time, as the Chancellor, with the support of the Business Secretary, rams through the granny tax, the strivers tax and the bedroom tax, he is pressing ahead with a £3 billion tax cut for the very richest people in our country. In two weeks’ time, 13,000 millionaires will get an average tax cut of £100,000 each. Millions are paying more while millionaires get a tax cut.