Tax Credits
Wes Streeting Excerpts(9 years, 1 month ago)
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Frank Field (Birkenhead) (Lab)
I am immensely grateful, Madam Deputy Speaker. It is a pleasure to follow the right hon. and learned Member for Rushcliffe (Mr Clarke). Like him, I will set the scene, but much more briefly, I hope.
The record shows that even when it was not popular on the Labour Benches, I spoke about the need to reduce the deficit, so I do not come here as a Johnny-come-lately who has suddenly discovered when we are not in government that that is a crucial aspect of economic stability. Similarly, when I pleaded in this place, on both sides of the Chamber, not to build up the tax credit strategy, I never got one Conservative Member to help me to divide the House so that we could show our disapproval of a method which, in the long run, has the consequences that the right hon. and learned Gentleman explained to us—that if we subsidise wages by that means, there is an effect on employers in the long run. Most employers, like individuals, are rational creatures. Why should they increase the wages of the lowest paid when taxpayers will do the job for them? That is the setting.
I make three pleas to the House. Although it would be tremendous news if a large number of Conservative Members, or even if one or two, joined us in the Lobby this evening, we should not raise our hopes too high. When we were in government, it was almost a capital offence to vote with the Opposition on such motions.
Frank Field
No, I shall accept the plea of the Chair for brevity as 50 Members wish to speak.
There has been a cross-Bench appeal today to the Backbench Business Committee, which you used to chair with distinction, Madam Deputy Speaker, for a debate on this. We could soon have that debate and views could be expressed when Members were not voting on a motion from a particular party. We would then see what this House genuinely believes about these changes. For many Government Members this is a crunch point, although I would make the charge that the Government are wearing lightly the pledge that they made so much of before the election, to such good effect on our Benches during the election and immediately afterwards, that theirs was the party of the strivers.
The Chancellor painted the picture of people on very low wages getting up in the morning and passing the drawn curtains of families on welfare. That was a deadly campaign which had its effect. If I were a low-paid worker, I would have paid some attention to a party that was making a specific pledge to protect strivers. That is why I think there is such unease on the Government Back Benches today. Those on the Treasury Bench may now wear that pledge lightly, but a number of Conservative Members fought an election campaign believing that they were going to be the party that protects strivers.
Maybe today is not the right moment for those Conservative Members to feel able to express that view in the Lobby, but I hope that before long we will have such an opportunity, and the Government will see how seriously some of their own Back Benchers took the pledge that they would be on the side of people on very low wages who, often against their own interest, get up and make a contribution—all too often a very valuable contribution—to our society.
In a statement after the election, the same man who made the plea to the country to accept the Conservatives as the party that protects strivers introduced welfare reforms which are the largest-ever cut in provision for any group, let alone for those in work. In a moment I will pick up the point that the right hon. and learned Member for Rushcliffe made about the timing of that. Maybe tonight will not be the point at which Members cross over, but I hope—this is my first plea—that we will soon have a motion that we own as Back Benchers, in which we can in a civilised way express our views about supporting strivers .
I want to return to the point made by the Prime Minister, which the Minister so ably defended today—an almost impossible brief. I compliment him on that, and I compliment him also on the work that he is doing in the other place with the Cross Benchers, trying to persuade people not to vote as they wish to vote. The crucial piece of information that the Government will not provide is this: of the 3.2 million tax credit claimants who will be, on average, £1,300 a year worse off as a result of these changes, how many will still be worse off at the end of this Parliament, when the Government will have to face the electorate, despite all the welcome changes they are introducing on childcare and so on? Before we have that debate, when people will vote with a seriousness of intent that they might not have today—this is my second plea—will the Government please produce those data so that we will have accuracy, rather than having to rely on the snapshot we have from the figures that they have produced?
The Government are saying that everything will change. We know that many of those who might be better off by the end of this Parliament—one hopes that they will be—might not be in the years towards 2020, but how many will, in fact, still be losing out in 2020, 2019 and 2018, despite the Government’s welcome changes to the national minimum wage? I think that in the long term that has revolutionary implications for how we view welfare, because I agree with the right hon. and learned Member for Rushcliffe that we have lulled ourselves, without fully appreciating it, into using welfare as a way of compensating for the failures of capitalism, and we should not have done so. The pressure should be on employers to raise productivity and pay decent wages.
My third plea will be as brief as my first and second. The Government are holding the line at the moment. When Gordon Brown introduced that ludicrous, vicious little policy of abolishing the 10p tax rate, he did so simply to catch out the then Leader of the Opposition. He threw it in at the very end of his Budget statement so that he could then crow about it, but it would have massively affected some of the poorest people in this country, particularly women workers. The Government were going to hold the line right up until they faced a defeat of the Budget—not a debate like today’s, but the Budget. At that point, all of a sudden the coffers were opened and taxpayers’ money was spat out— almost vomited out—to almost every group bar the 10p group.
I can guarantee that the Government will come forward with “tweaking” measures, as we have already heard them called. I urge Tory Members not to let them get away with tweaking the national insurance or tax thresholds, because many of our constituents who will be worse off as a result of these tax credit changes will not be compensated in any way, let alone fully, if any tweaking is spread over the 30 million of us who work, compared with the 3.2 million who will be made worse off immediately as a result of this move.
I welcome today’s debate and, unlike the right hon. and learned Gentleman, am rather pleased that we on the Opposition side are all together on a subject. If we are to be taken seriously, we have to say where we would like the £4.5 billion to come from if it is not to come from the very group of the electorate that we admire most: the strivers who get up every morning to work for a fraction of what we get as Members of Parliament but who still turn up, and who have been so badly treated by this Government and by this measure.
Wes Streeting (Ilford North) (Lab)
I rise to speak on behalf of the 12,800 working families and the 26,000 children across Ilford who will be affected by these cuts, and I issue the following challenge to Conservative Members. This evening’s vote is crucial for a simple reason: their Whips are busy in the other place telling peers they are railing against the democratic will of this House of Commons, but when we listen to the fantastic and courageous speech of the hon. Member for South Cambridgeshire (Heidi Allen) and see the nods of many of her colleagues, we know that the majority of Members in this House do not support these changes. Peers are absolutely within their rights to put a stop to them in the House of Lords, and we expect nothing less. What a terrible indictment it is of this Chamber that it is the unelected House that is standing up for the interests of ordinary working families up and down this country! What happened to the party of the workers? What happened to the Tories’ failed modernisation project? It is already dead in the water. This is a Prime Minister who speaks from the centre but is a prisoner of the right.
When we have a grand coalition ranging from The Sun newspaper to my good friend the cycling socialist Owen Jones telling us that this is a work penalty that will hit the people who work hard, who get up early and who strive to earn every penny they can, we know there is a problem. This is not a benefit; it is a well-targeted tax rebate. It works better than what the Government are doing with the tax threshold, because that benefits the wealthiest. Tax credits target support effectively to the people who are doing exactly what we ask them to do: they are willing to work hard for low pay and they play by the rules. The least we can do is support them.
This is a terrible measure. It is a shameful measure, and Conservative Members know it. I ask them to show the courage that the hon. Member for South Cambridgeshire (Heidi Allen) showed, not only on the Floor of the House but in the voting Lobby this evening, because it is crucial that Members of the unelected House know that they have a majority of elected Members on their side and on the side of low-paid working people in Britain.
Wes Streeting (Ilford North) (Lab)
On a point of order, Mr Deputy Speaker. I was wondering whether it was disorderly or simply discourteous that in his winding-up speech the Chief Secretary to the Treasury neglected to congratulate the hon. Member for South Cambridgeshire (Heidi Allen) on her maiden speech.
Mr Deputy Speaker (Mr Lindsay Hoyle)
If that was the case, I am sure it was not deliberate. No hon. Member would miss out a maiden speech.
Finance Bill (Third sitting)
Wes Streeting Excerpts(9 years, 1 month ago)
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Wes Streeting (Ilford North) (Lab)
How many councillors does the Minister anticipate will benefit from these changes?
Mr Gauke
I think the numbers are difficult to calculate because they will depend on the particular arrangements that councillors wish to pursue and whether they claim or not. We received representations from a large number of councils—particularly county councils—that said the change would be welcomed.
Wes Streeting
I should have said that I am still an elected member of the Redbridge London Borough Council, albeit an unpaid one. The reason I ask is that, although I agree with the Minister’s case about fairness to local councillors, I wonder how he squares that with, for example, the changes the Government made to local government pensions, which meant that such people—in particular, leaders, mayors and cabinet members, who often give up their full-time work—are no longer eligible for the local government pension scheme. Surely these changes, which I do not think will apply to many authorities because many do not reimburse councillors for any journeys, are pretty small beer compared with the previous Government’s changes.
Budget Resolutions and Economic Situation
Wes Streeting Excerpts(9 years, 4 months ago)
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Wes Streeting (Ilford North) (Lab)
It is a pleasure to speak in the debate and to follow so many hon. Members who made excellent maiden speeches.
This is a Budget that puts politics above economics, which we have seen reflected on subsequent days in the interventions from those on the Treasury Bench and the very well read interventions from the Whips’ briefings from those on the Government Back Benches.
I want first to turn to the constant myth we hear about the record of the previous Labour Government. We are told time and again that that Government were somehow profligate, which led to the crash of the economy—[Hon. Members: “Yes!”] Government Members say yes, but it may interest them to know that public spending accounted for about 40% of gross GDP under Thatcher, 38% under Major and 37% under Blair and Brown. In the 10 years of Labour government leading up to the crash, we had cut the deficit and the national debt—[Interruption.] Since Members on the Treasury Bench are so exercised, perhaps they can tell us why, if our spending plans were so bad, they backed them pound for pound until the crash; or whether they accept, as they should, that the mess we find ourselves in was actually the result of the banking crisis, in which the state had to nationalise a huge amount of private debt.
When has the Conservative party ever been the party to which we turn in the case of weak regulation? Where were the calls from the Conservative Opposition during years of Labour government to tell us that City regulation was insufficient? We did not hear those cries. There was a banking crisis; it was not the result of the previous Government. It is understandable that Government Members want to perpetuate the myth to entrench their political position, but that is about politics rather than economics. Having listened to the Chancellor’s Budget speech and to the speeches of Government Members in the days following it, I know that there is absolutely no way that the Conservative party can claim to be the party of the worker, and it seems that its blue-collar modernisation is already dead in the water.
We are told that somehow the Conservatives are the champions of high pay. Why is it, then, that when they talk about a national living wage, what they actually mean is an increased minimum wage? And why is it that, come 2020, that so-called living wage will be less than the London living wage that employees are being paid today?
Why are the Conservatives attacking working people on tax credits? If the Government were serious about lifting people out of poverty through work and pay, they would need to increase the living wage to about £12.65 an hour to account for their cuts to tax credits. When difficult choices are being made, it cannot be right to target people who are doing the right thing by going out to work hard every day—sometimes in several low-paid jobs—or to cut their tax credits and perpetuate the myth that somehow they are being helped by the introduction of a national living wage that is nothing of the sort.
This Budget and Chancellor are overlooking some of the major issues that need to be addressed if we are serious about a so-called long-term economic plan. The Chancellor is only interested in his own political position, and he is ducking the big question about Britain’s membership of the European Union. If he is serious about Britain’s place in the world and about our future economic prosperity, he should be leading the argument to stay in Europe. Instead, like so many of his Cabinet colleagues, he sits on the fence and perpetuates the myth that some big renegotiation is coming along.
The Chancellor is also ducking the big issues on infrastructure. He has already cut the power from the electrification of the railways, and he is also ducking renewable energy and more housing, which, by the way, would be the best way to cut the benefit bill. It would be fantastic if we saw a house building programme that cut the amount we are paying, not to those claiming housing benefits but directly to landlords. That programme would be an effective way to reform welfare, but it did not feature in the Budget.
Another issue is Heathrow, which has huge potential for the London economy and for people in my constituency, who will have the benefit of Crossrail to get to the jobs that will potentially flow from Heathrow. As usual, however, the Government are sitting on the fence because they do not want to tackle the big issues.
There are a number of other issues with this Budget that I wish to raise in the limited time I have left. It cannot possibly be right that people who are unfit to work, including people receiving treatment for potentially life-threatening illnesses, will be penalised by this Government’s welfare measures. Other hon. Members have already asked about the test for vulnerability, and I hope that that issue will be addressed in the Finance Bill Committee.
It cannot possibly be right that this Government will cap the aspirations of students from the poorest backgrounds by making sure not only that they graduate with record levels of debt, but that, through the other changes to higher education student finance, it will be the lowest-paid graduates who are hardest hit while the highest-earning graduates, who are still disproportionately from wealthier families, will take longer to repay their debt. Surely that cannot be progressive.
Finally, there can be no greater evidence of this Government’s shallow commitment to dealing with some of the deep structural problems of our low-pay economy than their pretence that they are tackling child poverty when in fact all they are doing is tinkering with the measures. The hon. Member for Rugby (Mark Pawsey) talked about the flatlining gesture. We may have tepid growth now, but one thing that is certainly flatlining is the progress that was being made to tackle child poverty. It is an absolute scandal that in the days after the Budget, Government Members have continued to justify their child poverty measures. This Budget will make child poverty worse; it does not do what the Chancellor says it does; and there is certainly no evidence whatever in it that the Conservative party is the party of the worker.
Tax Credits (Working Families)
Wes Streeting Excerpts(9 years, 4 months ago)
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Mr Gauke
Cutting corporation tax rates for small businesses, introducing the employment allowance, helping under-21s and apprentices whose employers no longer have to face national insurance contributions, reducing the regulatory burden, restoring the economy to health and ultimately improving access to finance is what helps small businesses, and that is a record that we are proud of.
Wes Streeting (Ilford North) (Lab)
On two occasions in this House, the Secretary of State for Work and Pensions has been challenged on his argument that we can cut tax credits because we can increase the minimum wage or encourage employers to pay the living wage. The problem with that argument is that unless employers are encouraged or coerced to do that overnight, which would hurt small businesses disproportionately, it will hit families with children on tax credits the hardest. Is the Minister saying that the Government will not cut tax credits without compelling employers to pay the minimum wage? If he is not, the lectures he is giving us on hard choices are nothing compared with the hard choices facing those families.
Mr Gauke
He did it very skilfully, but unsuccessfully, I fear. If we want to help small businesses, we need to put in place a pro-enterprise environment and if he wants to see a Government who have done that, he should look at the record of the Government over the past five years.
Greece
Wes Streeting Excerpts(9 years, 4 months ago)
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Mr Osborne
I agree with my hon. Friend that countries need to pay their way in the world. Britain had a budget deficit of more than 10% when the Conservative Prime Minister came to office five years ago. As a result of the action we have taken—universally opposed by the forces opposite—we have made the UK much more secure to deal with these sorts of shocks, but the job is not finished and I am sure my hon. Friend will be in his place on Budget day as we set out the steps we are going to take to finish it.
Wes Streeting (Ilford North) (Lab)
Given the seriousness of the situation and the impact that a Greek exit from the euro would have not just on the eurozone economies but on ours, too, is not the Chancellor slightly embarrassed by the unnecessarily partisan tone he is taking in some of his replies? Will he say a bit more about the protections he is considering in order the limit the exposure of British businesses and people with interests, including family interests, in Greece?
Mr Osborne
I would not regard it as partisan to point out that we need to reduce our budget deficit, make sure our banking system is properly capitalised and have a more competitive economy. If the hon. Gentleman takes that as a partisan comment, that is more of a reflection on his party than on mine.
European Union (Finance) Bill
Wes Streeting Excerpts(9 years, 5 months ago)
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Mr Gauke
I thank my hon. Friend for his excellent intervention. The answer to his question lies at the heart of our response to new clause 1. He raises an important point.
New clause 1 requires the Government to write to the Commission to review the basis of appropriations for the EU budget to see whether “alternative arrangements” would provide better value for money. Although the link between appropriations and value for money is an important one, it is not of the first order. The Government’s first priority is to control spending directly, not through the system of appropriations. Cutting low-value expenditure is the first and most important way of improving the quality of EU spending.
In delivering an historic real-terms cut to the budget, the Government took a decisive step. Within a smaller budget, we also made sure that expenditure was reoriented towards areas that provide higher value for money. Spending on the common agricultural policy will fall considerably as a proportion of the total budget, while spending on research and development and other pro-growth investment will increase. So it is possible to operate within the system of appropriations, if appropriate control is in place.
The new clause none the less raises the question of whether the system of payments and commitments is appropriate for delivering value for money. It is a question that we must ask. It is true that it is an unusual budgeting system and it is not the way in which the UK Government budget. If the EU were starting from scratch, we would not advocate using that system. Yet I do not think anything would be gained by requesting a review of the system—for one simple and compelling reason. The proposed review in new clause 1 has already been set in motion by the new Budget Commissioner, Vice-President Georgieva, through her recent “budget for results” initiative. We obviously cannot say what the review will include, but its terms of reference are widely drawn, providing ample space to review the current budget system, including the system of appropriations, and to explore possible alternative approaches that would offer better value for money and improved financial management.
The UK has publicly welcomed that initiative and has shared its expertise. The Chancellor has made it clear to other Finance Ministers during ECOFIN meetings that that is the UK’s position. The initiative will involve member states, the European Parliament and the European Court of Auditors.
Wes Streeting (Ilford North) (Lab)
I am grateful for that update, but perhaps the Minister will tell us what the Government are going to do proactively in terms of their own priorities to deliver the value for money that he talks about, beyond the generalities that we have heard all morning about better value for money, better spending and better priorities. Can we have some specifics? How will the Government exert real influence on that important review?
Oral Answers to Questions
Wes Streeting Excerpts(9 years, 5 months ago)
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Harriett Baldwin
I can give my right hon. Friend the assurance that the Government want people who work hard and want to buy their own home to enjoy the security of owning their own home. The equity loan scheme will last until 2020, which should support another 120,000 households in Basingstoke and elsewhere to get on to, and up, the housing ladder. In addition, as my right hon. Friend the Chancellor announced in his recent Budget, the Help to Buy ISA is expected to help over 1 million first-time buyers save for a deposit.
Wes Streeting (Ilford North) (Lab)
The Government’s policies were not popular in every part of the country, in particular in my constituency. May I therefore ask the Minister, as this has been a week for U-turns, to listen to the National Housing Federation, the CBI and the Institute for Fiscal Studies and revisit right to buy for housing association stock, which will lead to a decrease in the availability of affordable homes for rent, and to deal instead with the fundamental problem of housing supply?
Harriett Baldwin
I welcome the hon. Gentleman to the House. This Government are firmly on the side of those people who want the right to buy their own properties, and that includes extending the right to buy to housing association properties. Perhaps he will agree with the right hon. Member for Birkenhead (Frank Field), who published a report with the Institute for Public Policy Research in recent years calling on his party to do exactly the same thing.
Mr Osborne
I agree. That is why I was recently in both Derby and Birmingham after the election stressing that there is a massive potential for the midlands to be this engine of growth, and I am sure Lichfield will be a key part of that engine.
Wes Streeting (Ilford North) (Lab)
T9. I am sure the Chancellor agrees that pro-business parties are pro-European parties, so when will he come off the fence and confirm that he will be leading the charge for Britain to stay in Europe?