Budget Resolutions and Economic Situation

Tom Brake Excerpts

Wednesday 8th July 2015 Commons Chamber

[Tom Brake (Carshalton and Wallington) (LD)]

I enjoyed the speech from the hon. Member for Islington North (Jeremy Corbyn). I am not making a leadership speech myself tonight, because nominations for the Liberal Democrat leader closed some days ago, but I agree with much of what he said about housing. Before the general election, there was an agreement from all political parties that something very substantial had to be done about that. Figures of 200,000 or 300,000 new homes were proposed, but I am afraid that what we have before us today will achieve nothing on that scale. The sort of people who come and see me, the hon. Gentleman and other Members who have problems with overcrowding or having to stay at home, often with three generations in the same house, will remain with us.

In May 2012, the Prime Minister gave an interview to the Daily Mail in which he complained that he would have governed like a true Conservative had it not been for the Liberal Democrats in coalition. Today, his Chancellor has set out what that means: attacking opportunity and entrenching the divide between the young and the old. This is the first real test of what happens to the Budget when the Liberal Democrat stabilisers are off; it lurches very heavily to the right. The Chancellor said today that the British people trusted his party to finish the job, but let us be clear that this Budget does not live up to the trust that the public placed in him. It does not continue on the path set out by the coalition Government but instead pursues an ideological approach that requires young people and the disabled to pick up the tab.

If we are to be a society of opportunity for everyone, surely we can all agree that investing in future generations is fundamental. That means supporting parents to meet the costs of their children, helping the poorest students get to and succeed at university and, when they look for a job, ensuring that they receive the same support as others. The message from the Chancellor is clear: those who are looking to get ahead and make a start in life are on their own. The Budget seeks at every turn to make it harder for the next generation to succeed, to get into work, to get a good education and to get back on their feet when things go wrong.

Let us consider a child’s path through life under the Government’s proposals. The Conservative party has made a great play of its increase in support to cope with the costs of childcare, enabling working parents to get 30 hours a week of free childcare. The Liberal Democrats support that, yet the decision to reduce the starting point for working tax credit and universal credit withdrawal will all but wipe out the benefits of this policy for those on the lowest incomes with children. What assessment has been made of the impact of those changes on the benefits accrued by low-income working parents from childcare support?

Of all the difficult decisions the Liberal Democrats took in government, it is fair to say that the decision to reform tuition fees was one of the hardest. Yet our decision was based on ensuring that young people wanting to go to university would have clarity about what they would pay back, and that those who earned the lowest incomes would pay back less. The Chancellor’s announcement today on a consultation on freezing the loan repayment threshold for five years would undermine the protections that the Liberal Democrats fought to put into the system.

Martin Lewis, who was asked by the coalition to head the independent taskforce on student finance information, undertook that work based on the principle that the £21,000 threshold would increase with inflation and he has publicly said he was promised that that would be the case. Why are the Government even considering such a change? Can Ministers assure us that, if experts who acted in good faith for the coalition Government are clear in their opposition, any consultation will take that into account?

It is clear that, for children and young people, this Budget is a bust, but it gets even worse when they enter the world of work. We welcome the decision on the living wage. It is right that people should receive through their pay packet the money to support themselves and their families, but we are astonished that that only applies from the age of 25. Why do our young people not deserve the same support? This decision opens the gulf between the minimum wage for younger people and the wages of others. What encouragement is that for those who really want to “work hard and get on in life”?

Even where young people are not deterred, this Budget introduces measures that will make it harder for those in areas of low employment to seek out jobs. The decision to abolish housing benefit for young people will mean that people cannot move to find work. What message does that send out to young jobseekers? The attack on housing benefit will hurt opportunity and young people’s employment prospects. It is not fiscally tough; it is simply wrong. What assessment have the Government made of the impact of these changes on the ability of young people to take up the chance of employment, and what assessment have they made of the risk of a serious increase in homelessness among young people?

The most worrying changes are for those who fall on hard times who do not have the same advantages as many of us. The majority of employment and support allowance claimants in the work-related activity group have mental health conditions. The decision to slash support for that group—who, let us be clear, have been medically assessed as currently unable to work—will destroy their chances of looking for work in the future. It means an annual cut of £1,500 for sick and disabled people who are trying to get their lives back on track. People with conditions that have affected their ability to work, such as depression and bipolar disorder, need support. They face additional costs in order to get their lives back on track. That they are being abandoned shows clearly where the Chancellor’s priorities lie.

This Budget not only hurts young people and the disabled; it also means four more years of pain for public sector workers. They have clearly been very hard hit in the past five years as a result of pay restraint—which the Liberal Democrats supported in coalition—but in the next couple of years the budget deficit will have been addressed and the debt will start to fall, so why are those public sector workers going to suffer the same restraint over the next five years as they have suffered for the previous five years?

If this Budget abandons our young people’s future, it also abandons our planet’s future. In government, Liberal Democrats fought hard to protect our environment, and today the Chancellor has shown just how little the Conservatives care about the future of our planet. By stopping the coalition proposals increasing the proportion of revenue from environmental taxation, the Chancellor has, indeed, got rid of the green crap. He talks about a security budget, but the greatest threat to our national and global security—climate change—is clearly not of concern to a Government who have abandoned the coalition goal of being the greenest Government ever.

Conservative Members may feel that I have been too churlish in what I have said so far. Clearly, we agree with some areas, such as the £8 billion funding commitment for the NHS. We are fully behind that, and I hope that it will help to fund the redevelopment of St Helier hospital in my constituency. We are fully behind the proposal to increase the tax allowance—it was of course Liberal Democrat policy, but before the last general election the Prime Minister said it was unachievable—and I hope that it will indeed hit £12,500 by the end of this Parliament. We also fully support getting another £5 billion through tackling tax avoidance. Finally, 2% for defence was delivered under the previous Government, and I welcome the fact that it will be delivered by this Government as well. I did not want to conclude my remarks without at least stating that there are areas in which we are supportive of what the Conservative Government are proposing.

This Budget is supposed to be for working people—a “We are all in it together” Budget—but instead it is a “You’re on your own” Budget that abandons young people who want to get into work and start a family, but who fall on hard times. That shows just how clearly millions of people will miss the Liberal Democrats.