Amendment of the Law

Debate between Rachel Reeves and Jim Cunningham

Monday 23rd March 2015 Commons Chamber

[Rachel Reeves]

We introduced a cap on charges for stakeholder pensions and the automatic enrolment brought in policies for which Labour had already legislated. We are proud of automatic enrolment, but we disagree with the changes that this Government introduced, which mean fewer people are benefiting from automatic enrolment —1.5 million fewer, two thirds of them women. That is a real lost opportunity to ensure that those people who should be saving are actually saving.

What this Secretary of State and the Government he speaks for simply do not understand is that their failure to make work pay and to deliver a recovery that raises living standards for all is the root cause of their failure to control social security spending and balance the books as they promised. They have spent £25 billion more than they planned and their receipts from income tax and national insurance have, as has been pointed out, fallen short of forecasts by a staggering £97 billion over the life of this Parliament.

It is because of that failure that, in order to deliver his objective of a large surplus in the next Parliament, the Chancellor has now committed to even deeper spending cuts over the next three years than we have seen over the past five years. The Office for Budget Responsibility confirms that these plans will mean

“a much sharper squeeze on real spending in 2016-17 and 2017-18 than anything seen over the past five years”,

and

“a sharp acceleration in the pace of implied real cuts to day-to-day spending on public services”.

My right hon. Friend the Member for Morley and Outwood (Ed Balls)and my hon. Friend the Member for Nottingham East (Chris Leslie) have highlighted the threat this poses to police, defence and social care. Is it not the truth that the Chancellor’s extreme fiscal plan can be delivered only by putting our NHS at risk or imposing yet another Tory rise in VAT? Although it is hard to see how this Government can make the extra £12 billion-worth of cuts to social security spending when they have failed to deliver any savings in social security so far, these cuts could not be delivered without inflicting unimaginable hardship on low-paid workers, children in poverty, disabled people or carers.

So for this Government, this empty Budget will be a fitting epitaph. What of this Secretary of State who wanted to take his place in history as the compassionate Conservative who reformed welfare? His time is up and his record is clear: major reforms undelivered or descending into costly chaos; food banks in every town and child poverty back on the rise; more and more spending on in-work benefits as more and more working people find their wages do not cover the rent. No wonder the OBR says that the Government are guilty of “optimism bias”.

[Mr Jim Cunningham]

One important factor in looking at low pay, child poverty and similar issues is that many people’s employment rights are eroded. We need only to look at City Link in Coventry to see that more than 1,000 people could not even get any redundancy pay because of the erosion of employment laws under this Government. That only adds to the poverty.

[Rachel Reeves]

I thank my hon. Friend for that intervention. Of course, this Government have made it harder for people to access justice, too, through the cuts they have made there.

We have had five years of Tory welfare waste—and it is high time we put it behind us. The Secretary of State wanted universal credit to be his legacy, but it is being paid to less than 4% of those who were supposed to be receiving it a year ago. Instead, this Secretary of State will be remembered for the hundreds of thousands of disabled people hit by the bedroom tax; for the 1 million people forced to resort to a food bank to feed their families last year; for the 3 million low-paid working families who have been hit by this Government’s cuts to tax credits. We cannot afford another five years of this Tory Government.

This could have been a Budget to make work pay, with a plan to raise the national minimum wage to £8 an hour and measures to promote and incentivise the living wage. This could have been a Budget for mums and dads who want to work and earn more, with 25 hours a week of free child care for all working parents of three and four-year-olds and guaranteed wrap-around care for those with children at primary school. This could have been a Budget that gave relief to working families on low incomes, by scrapping the ill-conceived and unfair married couples tax allowance and using the money to introduce a 10p starting rate of income tax instead. This could have been a Budget to create more of the productive, well-paid jobs we need by backing entrepreneurs, small businesses and the growth industries of the future, with a cut to business rates, a proper British investment bank, and new powers devolved to every city and county region across the country.

This could have been a Budget to secure our NHS for the future, with a tax on properties worth more than £2 million to pay for the thousands more doctors, nurses, midwives and home care workers that our health service desperately needs. This could have been a Budget that began to right the wrongs of the past five years, by tackling the tax loopholes and reversing the tax giveaways that have benefited a few and by cancelling the cruel and unfair bedroom tax that is hitting disabled people so hard. All that is not just the Budget that this could have been; it is the Labour Budget that we can have and the Labour Budget that we will have if we elect a Labour Government in just 45 days’ time.

amendment of the law

Debate between Rachel Reeves and Jim Cunningham

Tuesday 25th March 2014 Commons Chamber

[Rachel Reeves]

The compulsory jobs guarantee, which will last for the full five years of the next Parliament, will be based on what we have seen with the jobs growth Wales programme, whereby 80% of the jobs are in the private sector. A couple of weeks ago, the shadow Minister for employment—my right hon. Friend the Member for East Ham (Stephen Timms)—and I visited a software company in Cardiff that had taken on 12 people through jobs growth Wales. It had made a huge difference to those young people, giving them hope and opportunity. The Government carp at our policies to get young people back to work, yet under them long-term youth unemployment has more than doubled. That is the Secretary of State’s record under this Government.

If the Chancellor really wanted this to be a Budget for savers, he would cap fees and charges on pensions and require insurance companies to provide free independent brokerage, as Labour has called for. Why did the Chancellor not do those things? It is because he is strong when it comes to standing up for the rich, but weak when it comes to standing up for the poor.

[Mr Jim Cunningham (Coventry South) (Lab)]

Does my hon. Friend agree that one of the biggest indictments of this Government and the Budget is the way in which they have adjusted taxation such that women will fund the bulk of the £14 billion the Government have to save? Women will have to save £11 billion—that is an indictment of this Government.

[Rachel Reeves]

My hon. Friend makes an important point: women are disproportionately hit by the changes introduced by this Government and are struggling with the rising cost of living more than anybody in this country. Moreover, the increasing costs of child care under this Government are making it harder for working parents, particularly working mums, to go back to work and make the contribution we need to the economy.

Four years ago, this Government said that debt would fall and that living standards would rise, yet the reverse has happened. They have broken their promise to balance the books by 2015 and they are set to borrow £190 billion more than they had planned. National debt is rising this year and it will rise next year and the year after that. There is more borrowing, more debt and more welfare spending under this Government.

National Minimum Wage

Debate between Rachel Reeves and Jim Cunningham

Wednesday 15th January 2014 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend for that intervention. Trade unions, including the Union of Construction, Allied Trades and Technicians, of which he is a member, did a huge amount of campaigning for the introduction of the minimum wage and campaign today to ensure that more people are paid a living wage. I will say a little more about what we are willing do in government to ensure that more people are paid a living wage above the national minimum.

[Mr Jim Cunningham (Coventry South) (Lab)]

The freeze in council tax, which was mentioned earlier, looks good on the surface, but councils are not being compensated for it, and they are stacking up a problem for two or three years down the road, when there will be massive cuts to services.

[Rachel Reeves]

My hon. Friend is absolutely right. Many councils, including mine in Leeds and his in Coventry, have been hard hit by the cuts to the local authority grant, which are affecting some of the services that the most vulnerable people rely on.

Income Tax

Debate between Rachel Reeves and Jim Cunningham

Wednesday 28th November 2012 Commons Chamber

[Rachel Reeves]

I thank my hon. Friend, who is the shadow pensions Minister, for his intervention. I am sure he could add many other examples of pensioners being hard hit by the Government. The change in annuity rates is one example as the economy continues to flatline.

The rest of the taxpaying public look with disbelief on what the Government are doing, including the families with children, who are, on average, £450 a year worse off because of last year’s VAT rise, and another £511 a year worse off this year because of further cuts, freezes and reductions to benefits and tax credits; the couples with children who cannot increase their hours to the higher threshold introduced by the Government and who will have working tax credits withdrawn, which, in many cases will drop them below the poverty line; the families with incomes above £26,000, who are now losing all their child tax credit, contrary to the Prime Minister’s promises before the general election; and those on modest earnings with children at school, who will suffer cuts to services equivalent to 13% of their incomes.

The deterioration of the economic outlook on this Chancellor’s watch has led to the OBR revising projections on real disposable income per household down by £800 last year, by £1,100 this year and by £1,700 next year.

[Mr Jim Cunningham (Coventry South) (Lab)]

On tax credits, what does my hon. Friend think about a case I heard about two or three days ago, in which the application for tax credits was not even opened for three months?

[Rachel Reeves]

Given the cuts to departmental budgets, it is not surprising that some applications are not being processed and that, as a result, families are missing out on the tax credits to which they entitled, pushing them further into hardship.

How will households throughout the country feel next year, when those earning more than £1 million get a tax cut of £107,000? What is the Government’s message to people who work hard and want to get on in life? We remember when the Conservatives liked to think of themselves as the party of aspiration. Baroness Thatcher liked to claim she stood up for people who wanted to work their way up, and yet, under this Government, people who get a pay rise or promotion lose their child benefit. Imagine that! A person who earns £49,000 a year and has three children will lose thousands of pounds in child benefit if they take a pay rise or promotion. What a terrible position to put people in.

The truth about the Government is this: pensioners pay more, low-paid parents pay more, and a family working hard to get on in life and provide for their children pay more, but millionaires pay less. That tells us everything we need to know about the Government and their values. For many, 2012 will be remembered as the year the Chancellor’s drastic cuts began to hit home, but for the richest, 2013 will be remembered as the year they received their tax give-away from this Robin-Hood-in-reverse Chancellor.

Last week, the Prime Minister compared the economic situation we face to war. It is true that we are facing a period of national upheaval, but that is why it is crucial that the Government are a uniting force, not a dividing one. Is this really the time for a tax cut for the richest? During the second world war, the public queued to get their copy of the Beveridge report, because it set out the beginnings of a welfare state in which everyone had a stake. In the period of reconstruction after the war, that spirit and sense of national mission led to the creation of the national health service.

The Government do not understand the need for one nation politics, or the need to take people with them and share the burden of sacrifice fairly. Instead, they will be remembered as a Government who divided. Indeed, of the richest who are receiving the tax give-away, 85% are men, but around 70% of the revenue raised from direct tax and benefit changes will come from women. Fifty-two per cent. of those benefiting from the millionaires’ tax give-away are based in London and the south-east, but long-term unemployment is rising in the north. The poor are expected to work harder, because otherwise they will be made poorer, but the rich will work harder only if they are made richer. There is one rule for the very richest and another for everybody else. It is the same old out-of-touch Tories.

When the Chancellor came to the House to deliver his 2011 Budget, he said that

“now would not be the right time to remove it when we are asking others in our society on much lower incomes to make sacrifices”.—[Official Report, 23 March 2011; Vol. 525, c. 957.]

He was right then, and he is wrong now. He revealed his true colours in this year’s Budget.