Finance (No. 2) Bill
Yasmin Qureshi Excerpts(12 years, 2 months ago)
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Catherine McKinnell
It is the hon. Gentleman’s own Chancellor who is quoting selectively from the figures. I thank my hon. Friend for that intervention.
The facts are clear, and beyond the facts is the reality facing households up and down the country. We see people from those households coming into our constituency surgeries week in, week out. We hear stories every day from families who are clearly struggling to make ends meet.
The reality of the Chancellor’s failing plan is bearing out, not just in the statistics but in the reality of people’s day-to-day lives. The cuts to tax credits and child benefit, the granny tax, the mummy tax, the appalling bedroom tax and the huge hike in VAT, which disproportionately impacts on the poorest, hugely outweigh any small benefit from the rise in the personal allowance.
Yasmin Qureshi (Bolton South East) (Lab)
My hon. Friend is making an excellent case about all the various cuts and how they are hitting the most vulnerable in our society. Do you think that the Government should be shedding tears for all those people who will be suffering from all the cuts?
amendment of the law
Yasmin Qureshi Excerpts(12 years, 3 months ago)
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Hilary Benn
My hon. Friend is absolutely right: the reforms will have a damaging economic impact and be bad for families who cannot afford it, although they will try to stay if they can because they value community, friends, neighbours and a sense of place. Ministers know that even if people downsize, there are not enough smaller properties for them to move into. That is why this is a tax: people cannot avoid it because they cannot move.
Yasmin Qureshi (Bolton South East) (Lab)
On the bedroom tax, does my right hon. Friend agree that Nos. 10 and 11 Downing street are social housing? Will the occupants of those homes be moving out in light of the fact that—[Laughter.]
Hilary Benn
My hon. Friend is right on the first point, although I am not entirely sure that the occupants are claiming housing benefit. We wait to be informed.
People with disabilities will be forced to move and the new home will have to be adapted all over again. Divorced dads who are trying to keep in contact with their children will be told that they have to pay the bedroom tax on the spare bedroom where they stay at the weekend, but as we know, some people will have no choice but to move. The final absurdity—the Chief Secretary should be interested in this—is that if people do move to the right sized property in the private rented sector, because of higher rents the housing benefit bill is likely to be bigger than that paid on the social home from which the family was forced out.
Yasmin Qureshi (Bolton South East) (Lab)
They say, “If you tell a big enough lie and repeat it constantly, people will believe it”—and that is what the Tory-led Government have done. We are constantly told that the last Labour Government left the biggest debt in the developed world. That is an odd thing to say when the Chancellor admitted to the Treasury Committee in 2011 that he did not even know that the UK had the lowest debt in the G7.
Of course the UK will have a higher debt and deficit than some other countries, and Government Members often make a comparison with Greece, but Greece has a totally different economy from ours; we are the sixth largest in the world. Of course our debt will be higher than Greece’s, but the real figure to look at—one that relates to economic competence—is the ratio of GDP to national debt.
Let me remind the House—I know Government Members have a collective amnesia about this—that in 1997, when the Labour Government came to power, the national debt was 42% of GDP; after 11 years of the Labour Government and before the global recession of 2008, the ratio of GDP to national debt was 35%. That is a reduction of 11%, and it was not achieved by a Government who were financially incompetent. In fact, that Government achieved an even greater reduction than the Conservatives.
The second claim that we hear is that Labour created the biggest deficit in the developed world by overspending. If that was the case, why did Germany, Japan, the United States and other similar economies have a problem? Why did they have banking crises? Why were they not in deficit? We know the answer. We know that there were global economic problems. We know that the financial crisis began in the United States with the sub-prime mortgages. In fact, it was a former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), who took a bold initiative, saving our banking systems and, subsequently, saving half a million jobs as well.
Those are not just my views. The International Monetary Fund concluded that
“the UK experienced an increase in the deficit as result of a large loss in output/GDP caused by the global banking crisis and not even as result of the bank bailouts, fiscal stimulus and bringing forward of capital spending. It’s basic economics: when output falls the deficit increases.”
The deficit increase was not due to any of the actions taken by the Labour Government. In fact, all those actions made the economy better, and saved more jobs. In contrast, this Government’s policies over the past three years have done nothing to help the economy to grow.
Another reason for our financial loss was the fact that we are one of the main financial centres in the world. Given that there was a global banking crisis, of course we were likely to take the hit more than other countries. We should also bear in mind that up to 2008, while Labour was in power, the actual borrowing costs were low. Indeed, they are still low. That is because in the United Kingdom our bonds are strong and are performing well, because people know that the Bank of England is there to step in if there is any problem, and, of course, because over the last 300 years the UK has never defaulted on its debt. The Government try to blame austerity, saying, “We must introduce all these measures because we need to balance the books,” but the truth is that they are using austerity as a justification for downsizing the state, which, in ideological terms, the Conservative-led government have always wanted to do.
Even the Chancellor’s budget deficit programme is not working. Everyone knows that a budget deficit occurs when expenditure exceeds income, but one way of securing income is taxation, direct or indirect. When people are being laid off and are not working, they are paying no taxes. They are having to be supported by a benefits system, which is why—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I am terribly sorry, but the hon. Lady’s time is up.
Paul Uppal (Wolverhampton South West) (Con)
It is not normally my habit to comment on earlier speeches, and I had intended to stick to the main ethos of what I was going to say, but I feel that I must draw something to the attention of the hon. Member for Bolton South East (Yasmin Qureshi). She began by talking about GDP ratios. Let me gently remind her that during the early years of the last Labour Government, they stuck to Conservative spending principles. Does she remember golden economic rules, and the end of boom and bust?
Yasmin Qureshi
Eleven years later, it was the Labour party that reduced the GDP ratio to 35%.
Paul Uppal
No; not 11 years later. [Interruption.] If Labour Members disagree, perhaps they will recall the views of Hamish McRae, the economist who writes for The Independent, who has commented on the issue at length. However, I digress.
The essence of today’s debate concerns housing policy. I am glad that the Government have confirmed that they will make up to £12 billion of guarantees available to support more than £130 billion of mortgages for new-build and existing homes in January for three years. I also welcome the Chancellor’s commitment to realigning the Government’s policy on the private rented sector by increasing the £200 million build to rent fund to more than £1 billion, and providing a £225 million funding boost to support a further 15,000 affordable homes in England by 2015.
Members on both sides of the House have made various points, but it might be wise at this juncture to refer not to politicians, but to housing and property experts. I do not know whether anyone has taken the time to read this week’s edition of Estates Gazette, which is the bible when it comes to real estate and housing issues. According to Richard Threlfall, KPMG’s head of infrastructure, building and construction,
“the Chancellor has thrown the UK house building industry a new lifeline.”
Nick Jopling, executive director of property at Grainger plc and chairman of the Urban Land Institute’s UK Residential Council, added:
“Stimulating the housing market through further mortgage support…will help improve transactions and liquidity in the market, which has for some time been constrained.”
Stewart Baseley, executive chairman of the Home Builders Federation, said:
“A lack of affordable mortgage availability remains the biggest constraint on housing supply”.
He also said:
“Government must be praised for its attempts to stimulate activity”.
Gerry Hughes, senior director at GVA, said:
“We welcome the healthy five fold increase in the Build to Rent fund. This will undoubtedly assist a sector that is struggling severely.”
I will cut my quotations short at this point, but let me emphasise that those are not the views of politicians, but the views of property professionals.
I think that last week’s Budget statement was seminal in many respects, and that the opening line was crucial. The Chancellor said:
“This is a Budget for people who aspire to work hard and get on. It is a Budget for people who realise there are no easy answers to problems built up over many years—just the painstaking work of putting right what went so badly wrong.”—[Official Report, 20 March 2013; Vol. 560, c. 931.]
I believe that blue-collar workers out there, and the general population, understand the challenging economic climate, and agree that we need to tackle the deficit. The Chancellor stated that it had now been cut by one third, not one quarter, and that according to the Office for Budget Responsibility, we are on course to fulfil our fiscal mandate. However, tackling the deficit, although right and necessary, cannot be our only message. We need to reinforce and go further in regard to some of our flagship policies, taking low-paid workers out of tax and freezing fuel duty. Above all, blue-collar workers want to see more money in their wallets at the end of the month, and I believe that we are on course to achieve that. The Budget demonstrates that our priorities—the Government’s priorities—are in the right place.
The Leader of the Opposition often comes to the Dispatch Box and accuses the Government of being “out of touch”. The Budget shows that we are on the side of workers, of families, of people who want to get on and make a better life for themselves. It shows that the Government have their priorities at heart—the right priorities. Our priorities are in the right place when a Budget raises the personal tax allowance to £10,000 from April 2014, which means a tax cut for 24 million people. As a result, some people will pay £700 less in income tax than they did in 2010, and 2.7 million will be taken out of tax altogether. Our priorities are in the right place when fuel duty is being frozen once again, which makes this the longest freeze for over 20 years. Pump prices will be 13p lower than they would have been as a result of Labour’s plans, leaving the average motorist with £170 more in his or her pocket. We are helping the aspirational workers, but we are also helping the entrepreneurs, the risk-takers and the employers. The small business man has faced, and still faces, numerous challenges. Things are not easy, but, as a Government, we can help to make things easier, and help to make those businesses succeed. The fall in fuel duty will help them, too, but more importantly the package of business reforms will make a real difference in the pockets of businesses up and down the backbone of this country.
We will cut the jobs tax for every business by £2,000 in 2014. We are taking people out of tax: 450,000 small businesses—one third of all employers—will pay no jobs tax at all. I hope the Chancellor takes similar steps to increase the allowance in future Budgets. Taking more small businesses out of paying the jobs tax will provide a greater incentive to take on more workers during the continuing long-term rebalancing of our economy.
In talking about entrepreneurs and employers, I would like to commend the Government for cutting corporation tax even further. Under the previous Government, business taxes were at 28%. Now we have the lowest rate in the G7, and next month it will fall to 23%. When it reaches 20% in April 2015, we will have the lowest rate in the G20. This is great news for people who wish to invest and bring jobs to this country.
This is a Budget for aspiration and ambition and for all those who wish to work hard.
Living Standards
Yasmin Qureshi Excerpts(13 years, 3 months ago)
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Mr Gauke
Given that we ask lone parents to work 16 hours a week before they are entitled to working tax credits, I would say that it is not right to have the same threshold for a couple. Asking and incentivising them to work 24 hours a week is perfectly reasonable. Under the universal credit that we are going to introduce shortly, every hour extra worked will be worth while, as there will not be the same threshold. Essentially, we are working within the system that we inherited from the previous Government.
Yasmin Qureshi (Bolton South East) (Lab)
The hon. Gentleman talks about the extra hours, but with more than 2 million people unemployed, where are those extra hours going to come from?
Ian Lavery (Wansbeck) (Lab)
I was amazed to hear the Minister claiming to be putting fairness at the heart of policy, when this Government are viciously attacking the most vulnerable and the lowest paid in the country.
As has continually been said, the forthcoming Budget must include measures for jobs and growth. Without jobs and growth, everything else in the economy fails and the cuts will continue indefinitely. The country is suffering greatly as a result of the coalition Government’s policies. I call on them to reconsider their intended changes to tax credits and child benefit, which will cost ordinary hard-working families up to £4,000 a year.
These proposals will impact heavily in my constituency. For the benefit of the Government Front-Bench team, I should point out that Wansbeck is in the north-east—not near Aberdeen, but in the north-east of England. We are being hit very hard already. Before the general election, the Prime Minister said he would hit the north-east the hardest, and, by goodness, that is one promise he has kept. Some 240 households in Wansbeck will be hit by the measures that are to be introduced, and 465 children in Wansbeck will suffer as a consequence. The situation is dire.
Yasmin Qureshi
I sympathise with my hon. Friend’s constituents. In my constituency, 880 households, which include 2,095 children, will be affected. Does my hon. Friend agree that these measures are disgraceful?
Ian Lavery
I entirely agree.
The dire situation in my constituency is compounded by the following fact. The Office for National Statistics stated last week that 55.4 people are applying for each vacancy advertised at the jobcentre—and there are only 48 unfilled jobs in Wansbeck—although two weeks ago the House of Commons Library said this figure was a little lower, with some 36.5 applicants per vacancy. The notion that there are plenty of job opportunities, and opportunities to take on extra hours at work and part-time employment, is a myth propagated by the Government.
I am very concerned. Today, I have written to the Prime Minister, the Business Secretary and the Employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), calling for urgent discussions on the future of my area. The attacks on the disabled and the less well-off seem to have abated since the new welfare reforms passed through Parliament, but now the Government are beginning in earnest their attack on hard-working families with children.
The tax and benefit changes will hit women, children and single parents hardest. We must ask why that is the case. Why are the bankers not being attacked? Why do they get a tax cut? Why is there now talk about the rich people getting their 50p tax rate reduced, while at the same time the Government are continuing to attack those who are unable to support themselves? That is obscene, to say the least.
The average family with a child will lose up to £580 per annum. As many as 200,000 couples with children will face losing up to £4,000 in their income. Some 212,000 households and 470,000 children will be affected if people cannot secure extra hours in their workplace. We have got to ask ourselves: where will people get these hours from in their workplace? There is not enough employment in any case—if the Minister wishes to intervene, that would be great. He can tell people in Wansbeck, where there are 50-odd people after each job, how they will get extra hours in part-time employment. The fact of the matter is that they have absolutely no chance, so they are going to lose their money. In a recent Union of Shop, Distributive and Allied Workers survey, 78% of people said that there was absolutely no chance that they would get an extra hour in their workplace, and so they will be losing their tax credits.
Yasmin Qureshi
My hon. Friend rightly says that there are no jobs out there, with more than 2 million unemployed. So people will become unemployed and the state will then have to spend hundreds of pounds on keeping these families on benefits, as opposed to allowing them to work and contribute to the economy.
Ian Lavery
Again, I thank my hon. Friend for her intervention, as I could not have put it better myself.
We are talking about the same hard-working families who were used two or three weeks ago by the Government as shining examples of why people on benefits should lose them. We are talking about the people who are getting out of bed and going to work, even if it is for 14, 15 or perhaps 16 hours a week—these are the shining examples and look what has happened to them. A lot of people believed in what the Government had to say but, unfortunately, that has now gone out the window. These are not necessarily the squeezed middle, but the working poor, and they are very hard-working people. I must point out that £4,000 is a mortgage to lots of people involved in this issue, and people—hard-working families—will lose their homes as a result of these policies being introduced by the Government. Their figures suggest that some people will actually be better off not going to work. Only a few weeks ago, we heard a million and one times, “It doesn’t pay to be on benefits and nor should it.” So they attack the “scroungers” first and look what is happening now. The situation is an absolute disgrace, because under these new proposals someone can be better off on benefits than in work, possibly by as much as £728 per annum, as some have it. How is it that people can be better off on benefits?
The proposal on child benefit is the most bizarre and ridiculous, and it has to change, as I am sure everyone in this Chamber understands—it is that stupid and it involves a huge anomaly. How can it be fair that someone in a family earning £84,000 can keep their benefits, whereas someone in a family earning £43,000 can lose theirs? It is absolutely outrageous. I am sure that that will change—if it does not, God help us all. I hope that this glaring anomaly will be cleared up.
The Government cannot continue their unfair attack on those less well-off in society—it is mainly an attack on women, children and hard-working people. The hard-working people cannot continue to pay the highest price for this too fast, too far Government approach. Hard-working people cannot continue to pay the lion’s share in a failing economy, purely on the basis of ideology. Given an increase in fuel prices, the introduction of unfair welfare reforms, high unemployment—the highest in 17 years—huge energy prices, pay freezes and pension cuts, the burden must be shared. It must not be shared just by women, children and those hardest up who are willing to go to work—the hard-working people, as we have heard a million times. It is time that the coalition Government changed direction. Instead of flying into the abyss, they should look after the hard-working people in this country, and revisit their proposals on child benefit and tax credits.
Banking (Responsibility and Reform)
Yasmin Qureshi Excerpts(13 years, 4 months ago)
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Yasmin Qureshi (Bolton South East) (Lab)
The hon. Member for Bedford (Richard Fuller) said that we must reward the risk takers, but is not the problem and the reason for this debate the fact that the risk takers took too many risks with the world economy and completely destroyed it, and that while destroying the world economy, they got massive bonuses, pay and entitlements to which they were not entitled? That is why we need to look at these risk takers, who he says are the wealth creators.
Opposition Members have no problem with business or with people who want to work hard, achieve, create jobs and stimulate the economy, but it is important to remember—this is what this debate is about—that, as the Leader of the Opposition said in his party conference speech last year, there are producers and there are predators. As always, those comments were taken out of context, but what he talked about is what the Prime Minister now talks about: responsible capitalism and responsibility in society.
In the light of that, we are having this debate, which is not surprising—in the light of that, we are having this debate. I repeat myself because it is important to know why we are having the debate. As my hon. Friend the Member for Streatham (Mr Umunna) said, this debate on the crisis is timely but, more importantly, the question is: how do we prevent the problem from reoccurring? We should be concentrating on that, instead of the point scoring that we have seen.
We realise that there have been problems with the regulation of the banking and the financial services over the past 20 or 30 years. As my hon. Friend said, the Opposition have accepted responsibility and acknowledged that the Labour Government could have done more to regulate the sector, but as has been pointed out no one in the Conservative party at the time complained or argued that regulation should be tighter—if anything, they asked for even less regulation. Nevertheless, they continue to say, “We didn’t do anything.” We have accepted our mistakes, but Government Members made them as well. Furthermore, as everyone knows, the relaxation of regulation started in the ’80s, when a Conservative Government were in power. It is about time that they apologised for getting this whole thing going.
I do not want to get into a party ding-dong. I want to talk about what we can do to help to create a situation in which businesses and banks can work properly and the country can prosper. The Opposition have argued that the Walker review, which states that, if a banker’s remuneration is more than £1 million, that information should be published, should be implemented as soon as possible. That, coupled with the recommendations of the independent High Pay Commission, should be implemented in full, with investors and pension fund managers required to disclose how they vote on remuneration decisions, so that those paying into pension funds know where their money is going. Additionally, to boost transparency, the Government should publish figures setting out the largest pay ratios.
Another thing that we should be doing is using our influence in the banks in which the taxpayer has a stake to restrain excesses and promote good practices. Where the Government—the state—have discretion, they should intervene, such as with Network Rail recently. We should introduce a framework for fair pay across the economy, including through employee representation on remuneration committees and measures to enable greater shareholder activism. We should repeat the tax on large bank bonuses and use the money to get 100,000 young people into work. In tough times, when there is less money around, fairness matters more than ever. Instead of providing leadership, the Government have been dragging their feet on tackling excessive pay and rewards for failure. They have taken 20 months to come forward with any plans, and they are delaying even those that they are implementing. That is in stark contrast to the autumn statement, which took three times as much from families with children as it did from the bankers.
As we know, Robert Jenkins, a member of the Bank of England’s interim Financial Policy Committee, told the Select Committee on the Treasury:
“Every £1 billion of less bonus would support £20 billion of additional small business lending.”
I urge the Government to act on that, and to support Project Merlin—which we do not think has been as successful as it should have been—to ensure that the banks involved in the scheme lend more. Evidence has shown that investment and credit lending by those banks has decreased by 6% in real terms, whereas investing and giving more credit would be a real step to boost the economy. At the end of the day, some of the banks have been bailed out with public money. They and the Government should be doing more to—
Summer Adjournment
Yasmin Qureshi Excerpts(13 years, 11 months ago)
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Yasmin Qureshi (Bolton South East) (Lab)
I want to talk about the innovative and excellent work done by Fortalice house in my constituency. Before I explain why I believe that its work should interest Back Benchers as well as Ministers, let me give some statistics for domestic violence.
Domestic abuse accounts for almost 25% of recorded violent crime. An average of two women a week are killed by a male partner or former partner, 30% of domestic violence starts during pregnancy, women are assaulted an average of 35 times before seeking help, and every six seconds a woman is assaulted in her home. Those are staggering statistics in a modern, advanced, civilised society such as ours.
Fortalice house, which has existed for three years, accommodates up to 22 women and up to 70 children in fully furnished, self-contained flats with 24-hour supervision. Its ethos involves not just providing physical shelter, but re-educating women and children so that they can change their own patterns of behaviour. Its staff work with women to deal with issues such as alcohol, drugs, living skills, relationships, money and physical health, and to motivate them to take responsibility for their own mental and emotional health. The skills that they teach include managing money and using IT, sewing, and cooking healthy food. As a result of their work, in the last year only 5% of women who went into Fortalice house went back to the perpetrators of violence: it had a 95% success rate. Staff also provide practical help, filling in forms and liaising with different agencies to ensure that the ladies receive the benefits to which they are entitled, which helps them to look after themselves and their children.
The work of Fortalice house is, by nature, people-intensive, and funding cuts of more than 18% will have a severe impact on its ability to deliver the excellent services that it currently provides. Domestic violence is an issue in Bolton, where, between April 2010 and March 2011, there were 8,160 incidents of domestic violence, more than in any other area in Greater Manchester. Twenty per cent. of recorded crime in Bolton is domestic violence, and 50% is alcohol-related. I know that there are budgetary constraints, but I urge Home Office Ministers to recognise that some of the work that is being done is so vital and crucial that it must be supported. I ask the Home Office to consider not just funding Fortalice house so that it can continue its work, but enabling that work to be extended to other domestic violence refuge centres throughout the country. Ultimately more money will be saved, because prevention is always better than cure.
Finally, I invite Ministers to come and see for themselves the excellent work being done at Fortalice house, and ask them again to consider providing resources so that domestic violence refuges—
Finance Bill
Yasmin Qureshi Excerpts(14 years ago)
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Fiona Bruce
I will give way—[Hon. Members: “No!”]
Moreover, if we rise to that challenge through the provision of a transferable allowance, as suggested by the new clause, we would do so in a way that makes it easier for one parent to stay at home for the children, which parents value and from which children benefit. That is also a matter of women’s rights, for it is often women who will exercise greater choice and flexibility. Women want that choice.
A 2008 YouGov poll found that 88% of parents think that more should be done to help parents who wish to stay at home and bring up their children in the early years, and 97% of them agree that the Government should do more in this area. Furthermore—this is of huge importance—the relative costs of introducing a transferable allowance are small when compared with the huge costs of family breakdown. I quoted those figures earlier.
Yasmin Qureshi
No one is saying that there is anything wrong with marriage. Of course, one should encourage it. My parents were married, and I am married. No one is objecting to people getting married or saying that we should be telling people to get married. However, a fundamental problem with the new clause is that it effectively discriminates against one set of people. Why should a man and a woman who live together and have children be less well off or be discriminated against, compared with a married couple? Why would we wish to create discrimination between those groups of people?
Jim Shannon
People’s interpretations of these issues are different; we see things in different ways and have different opinions. I do not necessarily agree with what the hon. Lady has said, but there are issues to be addressed.
Savings Accounts and Health in Pregnancy Grant Bill
Yasmin Qureshi Excerpts(14 years, 8 months ago)
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Yasmin Qureshi (Bolton South East) (Lab)
Does the Minister know how much folic acid costs?
Yasmin Qureshi (Bolton South East) (Lab)
I know that time is short, so I intend to be quite brief, although I apologise in advance for not allowing any interventions, as a number of colleagues still wish to speak.
I endorse and echo the sentiments expressed by my right hon. and hon. Friends, who have explained in detail why the child trust fund and the health in pregnancy grant are important and why we need to retain them. I want to deal with the three reasons given by the Government for why they have brought forward this piece of legislation. The first reason is that they have to make these cuts and that the Bill is the only way to do so, because of financial difficulties. Paul Krugman, who was mentioned by my hon. Friend the Member for Scunthorpe (Nic Dakin), recently said that the Government’s cuts are ideologically driven, not driven by economic necessity. Therefore, economics has nothing to do with the reason for making the cuts in this Bill.
Secondly, we are told that the schemes are being cut because they are universal benefits, benefitting the rich and poor alike. However, if that is the argument, why should the Bill not be amended to say that such benefits should be means-tested, so that those who need them can keep them? That would make the Government’s case more logical. I suggest that the Government are using the argument about this being a universal benefit, even though they do not do so in regard to the winter fuel allowance—I want to put on record that I am not against the winter fuel allowance being universally available—because it is well known that people of pension age are the most likely to vote, while those who receive income support have the lowest tendency to vote. Perhaps there is an element of self-interest there. That would explain why the Government think it is fine to abolish one universal benefit, the child trust fund, but wrong to abolish the winter fuel allowance.
It has been said that the child trust fund has not led to an increase in the savings culture in our society, and that it was intended for children to use when they reached 18 and were grown up. We know that the savings culture has gone from our society over the past 20 or 30 years and that people are saving less and less. However, many people in their early 20s to mid-30s find that having children is an encouragement to save, and that is bringing saving back into our society. To suggest that the argument about the savings culture does not apply because a child does not benefit from the trust fund until they are 18 is also wrong.
The child trust fund continues to be among the most successful Government savings schemes ever. Two million people are now contributing to 4.5 million accounts, resulting in more than £2 billion of assets under management and attracting more than £22 million a month in regular contributions. As my hon. Friend the Member for Walthamstow (Stella Creasy) pointed out, the majority of this activity is undertaken by families with an income of less than £50,000. We have seen that the number of people saving has increased, and the Government should be thinking about how to make that very successful programme even better. We should be trying to find ways of extending and improving the system, not abolishing it.
I shall turn now to the health in pregnancy grant. If someone is well-off, so be it: becoming pregnant probably causes no inconvenience or difficulty for them. Having a child results in many extra expenditures, however, and the Government should surely be able to afford giving even a little extra money to those on very low incomes. They have told us that they have introduced a levy on bankers’ bonuses, but if this is all about finance, why can they not increase the levy just a little more? I am part of a group called the Robin Hood tax alliance, which contends that if we were to tax the bankers a bit more, we could easily get £45 billion. That would be more than enough to pay for the child trust fund and the health in pregnancy grant. The money is there in the system; it is just a question of whether there is any will on the part of the Government to use it in the right way.
The argument that we have to make these cuts just does not wash. This is really sad, and I am surprised at Members on the Government Benches. I thought that there were more compassionate Conservatives out there who would think that these benefits could be retained. If they really do not want to provide them on a universal basis, they could at least target them at people on lower incomes.
Equitable Life (Payments) Bill
Yasmin Qureshi Excerpts(14 years, 9 months ago)
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Yasmin Qureshi (Bolton South East) (Lab)
I congratulate the hon. Member for Congleton (Fiona Bruce) on making her maiden speech. As a fellow north-west MP, I am sure that we will work well in future for the betterment of the north-west region.
Mindful of what you said earlier, Mr Deputy Speaker, I will keep my speech short. I shall not go into the history of Equitable Life, because everyone in the Chamber is aware of the history, nor shall I go into the merits or demerits of Sir John Chadwick’s report or the ombudsman’s report. I want to talk about my constituent, Mr Barri Sharrat, who was made redundant by his company and whose pension was moved to an Equitable Life policy, which was to be his main source of income on retiring. Mr Sharrat put his trust and faith, along with years of savings, into the hands of Equitable Life to build a secure retirement. I want Mr Sharrat and millions like him to be compensated.
I agree with the ombudsman’s view that people should be put in a position similar to that which they would have been in had Equitable Life not collapsed. I welcome the Bill and would urge the Government not to short-change the people on a promise that they made before the general election. However, I am afraid that the argument about money just does not carry any weight, because before the general election there were many debates about the country’s finances. Therefore, the level of debt was well known to everyone. Knowing that information, Members who are now in government made a promise that they would honour the ombudsman’s recommendation. I would ask them to continue to honour that promise, and then all those present who have taken a sanctimonious approach to the issue can be properly sanctimonious about it.
I urge the Government to make the Bill fair and effective. To make the legislation effective, they should put the independence of the compensation scheme on a statutory basis. There should be an independent appeal process, and a timetable—a short one—for making payments should be set out. The criteria by which compensation is to be paid should be made clear and simple. Again, I urge the Government to accept the ombudsman’s recommendation that people should be put into the position that they would have been in had Equitable Life not gone bust.
Mel Stride
I just wanted to say that it is my understanding that the ombudsman’s report contains the recommendation that the public finances should be taken into account when coming up with the final compensation to be paid.
Yasmin Qureshi
The public finances may be taken into account, but it is my understanding that the Bill proposes to go along with Sir John Chadwick’s proposal, which was not a very good one. As my hon. Friend the Member for Ochil and South Perthshire (Gordon Banks) said, the compensation does not have paid in the next few months or even the next year; it can be spaced out over five years or perhaps even 10 years, so that people can be given the compensation that they deserve. As has been said, the ombudsman has made a recommendation, but it is for us here in Parliament to do right by our constituents, and that means going back and giving the appropriate level of compensation.