Oral Answers to Questions

Debate between William Bain and Jane Ellison

Tuesday 22nd October 2013 Commons Chamber

[Jane Ellison]

Stopping children and young people smoking is a priority for us all; all Members care deeply about the health of their constituents. I can certainly assure my hon. Friend that we are looking at that very seriously and assessing all the new information available, not just from this country but from around the world.

[Mr William Bain (Glasgow North East) (Lab)]

The vast weight of not only expert opinion but of public opinion says that standardised packaging cuts the risk of people taking up smoking. When will the Government act on that and ignore what is coming from the vested interests—the lobbyists and the big tobacco companies—as an excuse for doing nothing?

[Jane Ellison]

I can only repeat what I have said: I am a new Minister and I am looking at this very carefully. There are interesting new pieces of information coming through all the time to assist us in making public policy in this area. It is under very active consideration.

Budget Resolutions and Economic Situation

Debate between William Bain and Jane Ellison

Friday 22nd March 2013 Commons Chamber

[Mr Bain]

I will give way in a moment.

With the OBR having confirmed on Wednesday that people will be worse off in 2015 than they were in 2010, the Conservative party will also be unable to revive the 1959 election slogan: “Life’s Better Under the Conservatives”.

I have spoken in pervious Budget debates about the absurd economic theories that have underpinned the Government’s fiscal policies since 2010. As Mark Blyth writes in his recently published work on austerity:

“Austerity is a zombie economic idea because it has been disproven time and again, but it just keeps on coming.”

The central idea behind the Government’s economic policy is that a short-term sacrifice by the British people would produce long-term benefits in growth and a massive reduction in national debt.

There have been plenty of sacrifices demanded by the Chancellor: the average £10.47 a week in reduced support for child care for ordinary families since 2011; the higher VAT, which is costing ordinary families four times more in this Parliament than they will get back through the rise in the personal allowance to £10,000 from next year; the 1% cap on most benefits and tax credits being introduced in weeks, hurting 5.l million working-age households by as much as £5 a week on average; and, most cruelly of all, the vicious bedroom tax. The cumulative loss to ordinary families’ living standards in Scotland resulting from the tax, benefits and wages policies pursued by the Government has been quantified by Landman Economics for the TUC as £28.63 a week, or £1,488 a year, by 2015. What has it all been for? Where is the growth? When will our debts begin to fall during this Parliament? When will living standards begin to rise again for ordinary people?

Since the spending review in 2010, we have seen the third lowest growth in the G20, the fifth worst industrial production in the European Union and the fourth biggest slump in real wages in the EU. The judgment of the Office for Budget Responsibility on the Budget has been brutal—growth downgraded this year and next, by 0.8% of GDP, even since last December’s autumn statement; this Budget adding nothing to growth all the way through to 2018; borrowing £245 billion more than promised in 2010; and the national debt doubled by 2018 if we continue with the Chancellor’s failing plan.

Four years into a recovery, unemployment is stuck at 2.5 million—and is predicted by the OBR to peak at 2.63 million next year—and there are 3.2 million people underemployed in this country, desperate for more hours at work to pay the bills but unable to get them under a flatlining economy.

The Budget should have attempted to secure two aims: first, to boost economic demand to stimulate higher growth in the short term; and, secondly, to begin the process of rebalancing the economy by ending the culture of short-termism and making the fundamental reforms we need in our banking system.

In Scotland, retail sales are falling in a sector that comprises more than three quarters of economic output. Real wages have slumped by 3.2% since autumn 2010. Median wages are more than £3,000 a year lower in real terms since 2009. This week’s OBR projections mean a further loss of £200 a year in wages—four times more than any benefit from the increase in the personal tax allowance next year. The Chancellor should have eased that burden by cutting VAT to 17.5% in the Budget and putting back some of the £480 a year on average that he removed from average families in the June 2010 Budget. He should have done far more on child care costs.

[Jane Ellison]

This is a simple question. The hon. Gentleman has outlined what he would like to have seen in the Budget. Assuming fiscal neutrality, how would he have paid for it?

[Mr Bain]

The shadow Chancellor has said that we would follow a different path. Continuing with the fiscal policy that the Government are pursuing will lead to a doubling of the national debt and a downgrading in growth this year and next. We need to do something different, as I hope the hon. Lady will accept when she makes her contribution.

As I was saying, HMRC has shown that in the year to last December, the amount of additional support, through the tax and benefit system provided to ordinary Scottish families with their child care costs, amounted to a miserly 1p a day extra. For this year, next year and the year after, the message from the Chancellor in the Budget was, “Not a penny more.”

Under the plans unveiled on Tuesday, households require all earners to be working and paying income tax to benefit either from the child care tax relief or the additional resource through universal credit, which will have to be found from elsewhere in the welfare budget. We see the gross unfairness of a two-earner couple with children, working part time on a combined income of £19,000 a year, receiving nothing under the plans, whereas a household with two earners on a combined income of £299,000 a year receives a tax break of £2,400 a year if they have two children. How on earth can that be fair?

The Chancellor should have brought forward more capital investment in the Budget. He should have announced a major social and affordable house building plan to begin this year. All he announced was a plan to reallocate capital spending from 2015, which will be of no help to the struggling construction sector now. He should have taken the opportunity to scrap the bedroom tax affecting nearly 90,000 households in Scotland.

The Chancellor has spent the past few months searching for escape velocity for the UK economy. Wednesday was the day when he finally crashed to earth. He will not change course because he puts his pride before this nation’s economic fall. He would rather that the living standards of millions were diminished than admit the scale of his mistake or take action to put it right. Only with a new policy to promote growth and boost investment will we generate the tax revenues to cut our debt. After this Budget, that can come only with the election of a new Government to replace this disastrous coalition.