Budget Resolutions and Economic Situation

Seema Malhotra Excerpts

Thursday 21st March 2013 Commons Chamber

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

This Budget comes at an unprecedented moment in our economic history, when families and businesses are looking to the Government for a change of direction and bold action to kick-start our flatlining economy. It is a time for urgency, as after three years of this Chancellor the economy is still 3% smaller than it was five years ago. However, all we got was more of the same. Unemployment in Feltham and Heston has risen by nearly l0% in the past six months; the number of young people out of work is at its highest level since March last year. During the Budget debate last year, I spoke of how there were six people chasing every job in Feltham and Heston. A year later, I am deeply concerned and saddened that I am saying the same thing again. There has been no change from this Government. This is the third successive year of less than 1% growth and the Budget is a gamble, not a plan.

Some measures are welcome. Local businesses will welcome the fuel duty freeze as well as measures to help them take on extra workers, for which Labour has been calling for some time. This is a jam tomorrow Budget, however, not one that takes action now. As John Longworth, director general of the British Chambers of Commerce commented yesterday, many of the Chancellor’s measures might come too late. Britain needs urgency, scale and delivery today. In the last quarter, net lending to businesses fell by £4.5 billion, and in the past two years, under this Chancellor, it has fallen by £28.1 billion. The reality behind those figures is that thousands of entrepreneurs and small businesses—our country’s wealth creators—are unable to access the finance they need to grow and to take on new employees. The Budget shows no signs of changing that. As the female entrepreneur Laura Tenison said on “Newsnight” last night, “I am trying to create jobs, but the Government isn’t helping.”

One nation Labour is the party for small business and enterprise. We had a regional development agenda and a legacy of which we could be proud which was dismantled by this Government and replaced with confusion. The Chancellor said yesterday that the Budget confronts our problems head on. The problem is that his judgment is the problem. A Treasury team of five men and no women has produced a Budget that did not even mention women and business. Research shows that if we had the same levels of female entrepreneurship as the US, £42 billion would be added to the economy. With more than 1 million women out of work across the UK, the Budget missed an opportunity to support female entrepreneurship. I should not have held my breath. The Government’s previous three Budgets have shown policies that have hit women the hardest. Women are paying three times as much to bring the deficit down—decisions that were made by a Cabinet with three times more men than women.

Hundreds of families in Hounslow have recently called on the Government to help mums, not millionaires. The Chancellor has ignored those calls and will go ahead with a £180 tax on new mums on the same day as millionaires will get a £100,000 tax cut. The House of Commons Library has also shown that low-paid new mums are set to lose £1,300 by the end of the first year of a child’s life, through the cuts to pregnancy support and tax credits and real-term cuts to maternity pay.

The record on housing is no better. Affordable home statistics in London have fallen off a cliff. Figures published by the Greater London authority show that 425 affordable homes were started in the first six months of the current financial year, compared with 4,659 in the previous year and more than 18,000 in 2010-11.

[Sheila Gilmore]

Does my hon. Friend agree—this is the point that I would have made to the hon. Member for Henley (John Howell), by the way—that it is a misnomer to call such homes affordable when the rents will be up to 80% of market rent? The subsidy on each of the 15,000 houses that were referred to will be £15,000, which is why the rents have to be so high. The houses will not be affordable and, what is more, they will put up the housing benefit bill.

[Seema Malhotra]

My hon. Friend makes her point extremely well. The £225 million proposed in the Budget to support “affordable” homes building is a fraction of the £4 billion that Labour would have invested.

The Government proposed change but this is more of the same. The policies of this Government have failed on jobs, on growth, on the deficit and in the lives of ordinary people. The Budget will do nothing for the 13,000 on the waiting list for a home in my constituency.

[Andrew Griffiths]

Will the hon. Lady give way?

[Seema Malhotra]

I am sorry, but I will not.

The Budget will do nothing for the 74-year-old woman waiting a week for a blood transfusion because of staffing cuts in the local hospital. The Budget will do nothing for the family I met recently who live in one room: two teenage brothers sharing a bed; a mother and father who put mattresses down on the floor; the father who goes to work at 4 in the morning until 2 in the afternoon; the mother goes to work at 11 am and comes back at 11 pm. They are not shirkers, they are hard workers and they will not be helped by the Budget.

The legacy of the past three years in my constituency is rising unemployment, Sure Start centres under threat, longer waiting times in local hospitals and police numbers being cut. Families are suffering for the decisions that the Government have made and are wondering where they will live as the bedroom tax kicks in and makes their homes unaffordable. It is not too late for the Chancellor to change his mind, change course and get a plan for jobs and growth that will deliver for Britain’s families and businesses.

--- Later in debate ---

[Seema Malhotra]

Does my hon. Friend agree that that is yet another example of delaying giving people the resources and support they need, which in turn will delay the recovery and people’s ability to go back to work?

[Barbara Keeley]

I very much agree, particularly in the case of child care support. Families with a couple of children will now have to wait two and a half years before they can get help with child care, which is very expensive. That delay is bad enough, but, worse still, the proposed child care scheme will give a tax break to families earning up to £300,000 a year but offer no help to families on tax credits, whose incomes are already squeezed. Once again, the coalition Government are giving more help to higher earners and less to those on low and modest incomes, the people with the greatest need of child care support.

The Government propose to set the cap for social care at £72,000. Although we welcome the fact that a cap is finally being set, having waited more than a year for the announcement, we must remember that the Dilnot commission recommended a cap of £35,000. Setting the cap at that level would have offered the best protection to people on lower and middle incomes. It is very disappointing, to say the least, that the Government have ignored the advice of the experts whom they put together in the commission, and set the cap at a much higher level while also—this point tends to be ignored—making people pay accommodation costs of £12,000 a year, the very top end of what Dilnot recommended. People who need care when they are elderly, frail or ill will continue to face the shock of large care bills. Examples I have seen of the cap being set at such a high level show that the reality is that often, people will have to pay for their care for four or five years before getting any state help. Many fewer people will be helped by the Government’s proposals.

The final hit on my constituency, which I was disturbed to hear about, is the damage that will be caused to the value of homes as a result of exploration for shale gas. The Government have already caused confusion and uncertainty through their drastic overhaul of the planning system, yet the Red Book states:

“As the shale gas industry develops the Government will ensure an effective planning system is in place”.

That does not inspire confidence, because exploration for shale gas is going ahead in my constituency and, worryingly, it appears we do not have an effective planning system in place to deal with that. Drilling and fracking operations have been known to bring down house prices in an area by as much as 20%. People of course do not want to live in areas where fracking is planned, particularly after the disturbing events that took place when exploration first went ahead in other parts of the north-west. Exploration for shale gas could have a long-lasting adverse impact on the quality of life of people in my constituency. I am strongly opposed to it.

Mr Deputy Speaker, you know the geography of my constituency, so you will know that it is ringed by motorways; I am sure they are very useful in getting you home in the evening. A final aspect of the damage that the Budget will do to my constituency is that it goes ahead with an ill-advised widening of the M60 motorway, which will bring absolute chaos to 800 households in my constituency. When the motorway was built through my constituency, it was called the Stretford bypass. Now, the plan is to widen it by using the hard shoulders. “Hard shoulder running” will bring the M60—and you, Mr Deputy Speaker, if you are motoring—right next to the homes, windows and gardens of my constituents. Those 800 homes will be blighted by that ill-advised scheme, which I will continue to oppose to the best of my ability.

The Budget is a huge disappointment and will be seen as such in my constituency, because it is a massive missed opportunity and is damaging in so many different ways.