Budget Resolutions

Debate between Stephen Pound and Jim Cunningham

1st reading: House of Commons
Tuesday 14th March 2017 Commons Chamber

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

I start by congratulating my new hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell). His speech was interesting and very hopeful, given the economic situation that the people of Stoke-on-Trent, like the rest of the country, are suffering from. I am sure their new Member will do his adopted city proud, as I try to do for Coventry.

Let us look at the Budget in the context of the austerity measures that the Government have pursued. They will have lasted far longer than the time from the start of the second world war to the end of rationing, and we wonder why people like Donald Trump get elected—it is because austerity has gone on far too long in America, like in this country and in Europe. I would have expected the Budget to have offered at least some sort of hope to the British people, but all we had was a further dose of austerity.

The Government told us that the deficit would be eliminated by the end of the last Parliament—another promise that they have broken. In fact, the Chancellor is now extending the deficit. Taxes are increasing while real wages are falling. The TUC’s analysis has found that the UK ranks 103rd out of 112 countries for pay growth. Some 6 million people earn less than the living wage and 4 million children are in poverty. The Government have not really addressed those issues.

When Labour left office, Britain retained its triple A rating, we had low interest rates to help poorer families, and 85,000 more nurses and 32,000 more doctors had been trained. The current Government, and the coalition before them, have been living off the benefits of that.

Another broken manifesto promise by the Government is on national insurance contributions. That was touched on earlier, so I will not elaborate too much on it, but it will affect self-employed people, particularly those in lower pay brackets such as taxi drivers and people working in pubs. The rich will not necessarily be better off as a result, but the change will hit hard-working people.

In the case of welfare, there has been no reversal of the personal independence payment cuts and the changes to employment and support allowance, which will hit disabled people hard. There have been demonstrations about that, and I am sure that my colleagues will have been lobbied about it at their surgeries. Yet the Government have started a process that will allow some people to pass on property free from inheritance tax.

[Stephen Pound (Ealing North) (Lab)]

Not only do we get lobbied in our surgeries but we get lobbied at home—my son, a self-employed electrician, was speaking to me about this the other day. Not only is he being hammered for NICs, but he is having to do quarterly tax returns—he is tempted to vote Labour! That is the unfortunate side effect, from the Government’s point of view. Does my hon. Friend accept that the Conservatives are no longer the party of the self-employed—the party of white van man and woman? They are the party of themselves, and of the wealthy, the rich and those who are not bothered by what have been described as “pitiful” sums of money.

[Mr Cunningham]

Simply put, the Conservative party was never on the side of the working man, so nothing has changed there. I am quite surprised at times that some people vote for the Conservatives.

Healthcare has been touched on in today’s debate. The funding for social care is welcome, but it is too little, too late. It is putting a plaster over a big wound, and it will not solve the long-term issues. Funding for the national health service is needed, but the funding that has been announced will not help in the longer term; more investment is needed. Council tax increases will raise money in the short term, but they will not solve the problem in the longer term. In Coventry, the increase in council tax will generate about £443 million, but the national living wage increases will cost about £600 million. The Government have abdicated their responsibility for social care and they are shifting the burden on to local authorities and local people, rather than paying for it from general taxation.

Turning to pensions, we were lobbied last week by what we call the WASPI women, but there is nothing in the Budget to address the problems that they face. Women’s issues have certainly been mentioned in this debate, and in many debates in this House over a long period of time. Yet again, however, the Government have done nothing to address the issues that really affect the WASPI women. I will not go into the detail of the hardship that they experience, because it is well known to the House, but the Government have done nothing to address it. The Government boast that there are more women in work. That might be true, but they forget to mention that a lot of women—many of them in lower-paid, manual jobs—will have to work for longer.

The business rate changes will hit small businesses on the high street the hardest. The £1,000 relief for pubs is not a lot in the great scheme of things. It is only a gesture, and it will not help in a meaningful way.

Let us look at education. Instead of funding free schools, money should be invested in our existing schools. Schools are being asked to find £3 billion of cuts, and resources are already stretched to breaking point. Local authorities in Coventry have always taken the decision to fund schools well, but the national funding formula will leave pupils with less funding, even though the Government say that no pupil will be worse off. Will they guarantee money to ensure that the national funding formula does not leave Coventry schools with a shortfall?

The Institute for Fiscal Studies warns that, by 2020, school funding per pupil will have been cut, in real terms, by 6.5%. Funding for 16-to-18 education will be on a level similar, in real terms, to that of 30 years ago. The Chancellor has ignored the funding crisis in the Budget. The cost of employing staff is growing because of increases in employers’ contributions to national insurance and pensions, plus pay increases, but there has been no additional funding for that from the Government.

Women will still have to prove that their third or subsequent child was the product of rape to get child benefit. Once again, we see women being discriminated against by the Government. Women are still disproportionally affected by austerity, and the £20 million fund for violence against women is not enough to offset the cuts that they have faced since 2010. That fund is likely to be a repeat of the £20 million announced last November; it may well not be new money.

In the midlands, although the £392 million of funding through the local growth fund is welcome, it is not sufficient if we have any real intention of developing the west midlands economy. Listen to this: Coventry and Warwickshire will get only £42.4 million, which is not a lot when we consider the area. There will be £20 million for the midlands skills challenge to improve employment prospects for people in the area, £4 million to support the midlands engine partnership, £12 million for commercial and housing developments and broadband infrastructure, and £11 million to support skills and apprenticeships in Coventry and Warwickshire. That will not solve the problems that the country faces.

Although investment is welcome, there is also a housing crisis that needs tackling. London has been awarded nearly 10 times as much for housing. Since 2010, there has been a 40% cut in Government funding to local councils, and small businesses and high streets will be hit hard by business rates rises, but that has not been addressed in the midlands engine strategy. By 2020, the Conservative Government will have cut £655 million from Coventry City Council’s budget, and the midlands engine strategy will not cover that shortfall. Social care and our NHS desperately need funding, and Coventry and Warwickshire local authorities expect a deficit of £33 million by 2020-21 in social care. The midlands engine proposal is superficially attractive, but it will not address the long-term issues in the west midlands.