Roberta Blackman-Woods
Main Page: Roberta Blackman-Woods (Labour - City of Durham)Department Debates - View all Roberta Blackman-Woods's debates with the HM Treasury
(13 years, 5 months ago)
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Fiona Bruce
No, I am going to continue now, because I have given way so many times that, as has been pointed out, it has interrupted the flow of my speech.
Family breakdown is an incredibly important challenge for the Government. The cost in human terms, especially in terms of children failing to fulfil their potential, is far too high. Although most single parents do a fantastic job in very difficult circumstances, and deserve support as they do so, the evidence is that on average, the children of married parents do better on significant measures such as educational attainment, health, likelihood of getting into trouble with the law, and alcohol and drug abuse.
The crucial thing to understand about British family breakdown is that the key is not only divorce, but the break-up of cohabiting relationships, which are far less stable than marriage. The CSJ report states:
“While marriage accounts for 54 per cent of births, the failure of marriages—ie divorce—accounts for only 20 per cent of break-ups and 14 per cent of the costs of family breakdown, among all families with children under five. Unmarried families account for 80 per cent of the break-ups and 86 per cent of the costs.”
Fiona Bruce
No, because I took interventions from Opposition Members earlier.
The direct costs of family breakdown are variously calculated at between £24 billion and £41.6 billion per annum—a huge amount of money that cannot be ignored, especially in times such as these. When faced with such enormous figures, a provision such as the transferable tax allowance to support marriage, and in turn to support stable families, who in turn form an important element of promoting the stable communities that we all want and that are so very much needed today, is surely worth considering.
I am aware of the argument that the principal cause for those different life outcomes is not marriage but family income, but that analysis is too simplistic. No one is trying to argue that family income is not relevant—it is—but in my view, insufficient recognition has been given in recent years to the importance of family stability in promoting the health and well-being of children.
Fiona Bruce
I will give way—[Hon. Members: “No!”]
Moreover, if we rise to that challenge through the provision of a transferable allowance, as suggested by the new clause, we would do so in a way that makes it easier for one parent to stay at home for the children, which parents value and from which children benefit. That is also a matter of women’s rights, for it is often women who will exercise greater choice and flexibility. Women want that choice.
A 2008 YouGov poll found that 88% of parents think that more should be done to help parents who wish to stay at home and bring up their children in the early years, and 97% of them agree that the Government should do more in this area. Furthermore—this is of huge importance—the relative costs of introducing a transferable allowance are small when compared with the huge costs of family breakdown. I quoted those figures earlier.
Fiona Bruce
The transferable allowance would help to reduce those costs, and would therefore be an investment very well made. The £550 million cost of the partially transferable allowance proposed by the Conservatives prior to the general election represents just 1.3% of the direct costs of family breakdown, as calculated by the Relationships Foundation—[Interruption.] And just 2.16% of the direct costs of family breakdown, as calculated by the same organisation—
Jim Shannon
People’s interpretations of these issues are different; we see things in different ways and have different opinions. I do not necessarily agree with what the hon. Lady has said, but there are issues to be addressed.
Roberta Blackman-Woods
Does the hon. Gentleman accept that there is inconsistency among Conservative Members, in that they want to support marriage while taking away huge amounts of financial support from ordinary families?
Jim Shannon
I do not believe that there is an inconsistency in relation to this matter, although, with respect, I would disagree with certain other proposals relating to the benefit system.
Nia Griffith
I am saying that any fiscal measure is interdependent on other fiscal measures and the Government need to decide how their growth strategy will work and how the VAT rate will fit into that, in addition to any other fiscal measures they wish to take. I am not promoting any one particular measure, but there needs to be some form of stimulus because at the moment we are spiralling downwards and seeing increases in the debt and the deficit, in the benefits bill and in the number of people who are out of work. We would like to see increases in the number of jobs and in the number of businesses that are picking up and we would like to see the deficit come down so that we can get Britain back to work and get people back into jobs. The problem at the moment is that the policies with which we are being presented seem to do precisely the opposite, as was ably explained by my hon. Friend the Member for Coventry North West (Mr Robinson) a moment ago.
We need a proper assessment and we need proper decisions to be made on the basis of it to help our economy to grow.
Roberta Blackman-Woods
I want to support new clause 10. It is very important that the assessment of VAT considers the effects of the rise on both individuals and businesses. We need to consider both categories to understand fully the impact that the rise could have on economic growth. I know from sitting through the last debate that the Conservative and Liberal Democrat parties have no understanding and no idea of the pressures that are being placed on family budgets. This debate seems to be showing that they do not have any understanding of the stresses and strains being put on businesses in constituencies such as mine. In fact, as my hon. Friends have said, the Government seem to have very little understanding of what is happening to businesses across the north of this country.
I know from my constituency postbag and I hear from my local citizens advice bureau that more and more people are looking for advice not only because they are concerned that they might lose their jobs, which is affecting a large number of people in my constituency and the neighbouring areas, but because those who are in work are experiencing increasing rises in food, energy and petrol prices while facing a cut in wages in order to keep themselves in employment. If we add those factors together, we can see that consumers are concerned about the future, which is affecting what they purchase on the high street. That has a huge impact on all our constituencies and we have heard tonight of many examples of businesses in the retail sector that are falling daily.
Mr Kevan Jones
Does my hon. Friend agree that a vivid example of that can be seen when one walks through the centre of the fine city of Durham? An increasing number of shops are closed with no trade taking place at all.
Roberta Blackman-Woods
I am grateful to my hon. Friend for making that point and I shall come to the city of Durham in just a moment or two.
The situation that I am describing, with reducing consumer confidence and increasing stresses on business, would definitely be helped by a reduction in VAT, even if it were temporary.
Hywel Williams (Arfon) (PC)
May I congratulate the hon. Lady on making such a fine and powerful case in favour of the new clauses tabled by my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards)? Given the case that she is making, why do we need yet another review?
Roberta Blackman-Woods
That is an interesting point, but as my right hon. Friend the Member for Delyn (Mr Hanson) said earlier from the Front Bench, we would like to see a time scale and an end point.
As I was saying, we need a full assessment about whether a reduction in VAT would really help to turn around areas such as the one I represent. I also want to know exactly what the impact is on growth, and I will come to that in a moment or two. I want to take up the point that my hon. Friend the Member for North Durham (Mr Jones) made point about retail, but my argument is that almost every single sector in Durham is being affected by the rise in VAT that was brought in by the parties in government. We are a constituency that has a large public sector not because it is crowding out the private sector, which is the mantra we always hear from the Government parties, but because it is an administrative centre and so has a large number of public sector jobs. However, the public sector is being hit by public expenditure cuts as well as by the rise in VAT.
Bill Esterson
The situation that my hon. Friend describes is also typical of my constituency, where we have a very high level of people working in the public sector who are threatened with job losses from the parties in government. We also have a large number of small businesses that depend on those public sector workers for their custom. Those businesss are finding, as other Members have mentioned, that the VAT rise makes it very difficult for them to keep prices at the same level, and that has made it very difficult for them to trade effectively.
Roberta Blackman-Woods
My hon. Friend makes an excellent point, which clearly demonstrates a major problem in the economic strategy of the parties in government, which show no understanding of the links between spending in the public sector and private sector businesses. That is a very great shame and is to the detriment of business in many areas.
My hon. Friend the Member for North Durham has talked about the great impact on retail businesses in my constituency, and I am concerned about the ability of some businesses in the city centre to keep going. I have been talking to the head of one of the construction businesses in my constituency, which has been a very vibrant business in the past, and he told me that it is not only flatlining but might be about to go bust. That is extraordinary because it is a major company, but jobs in the construction sector are drying up. Other hon. Members have made this important point, which shows the lack of growth strategy from the parties in government. I would like there to be some consideration about whether a reduction in VAT could help to push down inflation and could lead to a boost in job creation, particularly in areas such as mine.
Mrs Moon
Does my hon. Friend accept that part of the problem is that some of the smaller construction companies do not feel able to take on a young apprentice and help them to train, thereby giving them that initial start in business that might help them to see a future? Instead, those people cannot find work and feel that there is no hope, and that desperation is placing a huge depression over many of our communities.
Roberta Blackman-Woods
My hon. Friend makes an excellent point. As a result of the insecurity that a number of businesses face, they are more reluctant than they were to give young people—and older workers—apprenticeships.
Roger Williams
The hon. Lady makes an important point about the construction industry, but does she agree that some of the problems in that industry were due to the previous Government’s abolition of the industrial buildings tax allowance, and indeed the agricultural buildings tax allowance, which led to a contraction in the construction industry?
Roberta Blackman-Woods
The previous Government’s investment in the economy led in my constituency to a huge growth in construction jobs for those working on not only fine public-sector projects such as our new hospital and our new school, but new housing. That has just disappeared. The really serious point that I am making is that there is no growth strategy from the Government parties to ensure growth in construction jobs in my constituency—in fact, quite the opposite. We know from national figures that there is an effect on the construction sector right across the country.
Ian Paisley
Does the hon. Lady agree that there are a number of cash-flow issues that affect the entire business sector, and particularly the construction industry? There is a lack of cash flow from banks to business; from business to business, which means that debts are not paid; and of course from business to consumer, and from consumer back to business. Does she agree that the measures that are being proposed are among a cocktail of measures that need to be introduced if we are to start to address the nation’s economic crisis?
Roberta Blackman-Woods
The hon. Gentleman makes an interesting point. He describes very well the downward spiral that businesses can get into unless there is a clear strategy in place to counter the deflationary measures in the economy, and we are simply not seeing that from the Government parties.
Mr Robinson
Does my hon. Friend agree, having listened to the minor carps of Liberal Members, that the essential difference between our policy and theirs seems to be on the issue of aggregate demand in the economy? All that the Government have done is reduce it by cancelling overnight Building Schools for the Future. That has halved the demand for construction in my constituency, and denied two crucial schools new buildings that they desperately need.
Roberta Blackman-Woods
My hon. Friend makes an excellent point, and reduced demand, not just from sectors but from individuals, appears to be very damaging for communities such as mine.
I want to talk about tourism in my constituency. Tourism was mentioned earlier; we know that VAT rises have really had an impact on the tourism industry, and cities such as mine are suffering because of that. People do not have as much disposable income as they did, so they are not spending as much on leisure, and that has an impact on tourism.
Mr Kevan Jones
It took the Minister with responsibility for tourism a year to visit the north-east; he finally turned up in the north-east last week. Is my hon. Friend as concerned as I am not just about the effect of VAT on tourism in Durham, but about the fact that the Minister had no answers whatever when it came to the issue of replacing One North East’s marketing campaign to promote tourism? He basically said to local businesses that they had to get on with it themselves.
Roberta Blackman-Woods
I am not sure that I am surprised that that was the answer from the Minister with responsibility for tourism. I shall come on to the regional development agency in a moment or two.
Stewart Hosie (Dundee East) (SNP)
For the past 10 minutes, the hon. Lady has been making a very good speech. She has said that virtually every sector in her constituency is under pressure. She was worried that businesses might not even be able to keep going. She spoke about a construction company that is under huge pressure. She described the inflationary impact of the VAT rise. She spoke about the downward spiral for businesses, and the impact of the VAT rise on tourism. Would she please explain, then, why she will not vote tonight for a temporary decrease? Has Labour changed its position? Does the shadow Chancellor not know what he is doing? Is he having a fight with his party’s leader, or is this just the normal Labour shambles?
Roberta Blackman-Woods
I can only suppose that the hon. Gentleman was not listening to the answer that I gave earlier to his colleague, who made the same point.
Roberta Blackman-Woods
I had better make progress as others want to speak. I have been quite generous in giving way.
In conclusion, I shall deal with the issue of growth and why it is so necessary for us to monitor the impact of the rise in VAT on the economy, on families and on the whole country. I make a plea for the Government to look particularly at how that is impacting on growth in the north. It was reckless of the Government to get rid of a regional development agency in the north-east that had a very good plan in place for promoting growth and identifying sectors of the economy that would benefit from public sector investment that would lever in private sector investment. We have no growth strategy in place from the Government, and that is having a huge impact. I would like that to be examined alongside the impact of the VAT increase.
Toby Perkins
This is not the first time that I have been involved in passionate debate at 12.50 am, but under normal circumstances it has taken place in a rather less rarefied environment than we are currently enjoying. I shall speak to new clause 10 and the need to assess the impact of VAT on a range of things. We should remember that the Bill follows the Budget for growth, as it was described at the time. One has to ask whether that has been investigated by the Advertising Standards Authority, because since the Budget for growth we have seen growth continuing to flatline.
We saw three months of negative growth at the back end of 2010, which was blamed on the wrong kind of snow. In early 2011, we were expecting a huge boom, with all the people who had been unable to get out to the shops in December rushing out in January and getting the economy moving, but of course it did not happen. The Chancellor’s Budget for growth was a damp squib.
At every level the Chancellor has demonstrated that he just does not get it. He does not get the challenges facing working people or the challenges facing business. He does not understand the cause of the banking crisis and the collapse of the banking model. He does not understand the need for growth and how the Government can stimulate it. Most importantly, he does not understand that the public and the private sector need to co-exist and depend on each other in a constructive economy.
There is no taxation that does not have knock-on effects. The knock-on effects of VAT are phenomenal. The Institute of Economic Affairs described the VAT increase as “bad economics”. If people do not choose to listen to the Institute of Economic Affairs, perhaps they want to listen instead to the economic genius who was advising Norman Lamont when we were led into black Monday. In January this year, the Prime Minister said about VAT:
“If you look at the effect as compared with people’s income then, yes, it is regressive.”
That was at least consistent—it was exactly what he had said in opposition. But what about the Deputy Prime Minister? We all remember him. Back in the old days, when he was still pretending to be a progressive, we remember him with his giant Tory tax bombshell. We have been told tonight that those signs did not mean that he was against a VAT rise, or that the Liberal Democrats would not introduce such a tax bombshell; he was simply warning us that it was coming and that we should beware. A lot of Liberal Democrat leaflets were delivered in Chesterfield, and I thought at the time that they were describing the impact of the VAT increase as a bad thing, but today those of us who have never visited Planet Clegg have been put straight. The impact of VAT on the cost of living is significant, and increasing the cost of living has a dramatic impact on people’s capacity to spend money and support the economic growth that we need.