Amendment of the Law

Yvonne Fovargue Excerpts

Monday 23rd March 2015 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab)]

This Budget was summed up by the chief executive of Citizens Advice as a disappointment because

“People on the lowest income and those without savings benefit least”.

“But what about the increase in the personal allowance?”, I may hear those on the Government Benches say. There are two issues with that for the lowest-paid. First, there is the relationship with the benefits system. The lowest earners claiming housing benefit and council tax benefit lose 79p in every £1 that they gain through the increase in the personal allowance. Secondly, once they are out of tax, they are out of tax—they cannot gain any more for being even more out of tax. Raising the threshold at which national insurance is paid would be much more targeted at low-paid workers and enable them to keep much more of their income, and I am disappointed that that was not in the Budget.

Let us move on to the unexplained £12 billion saving in the social security budget. From where—or rather from whom—will this come? Will it be low-paid families who are claiming in-work benefits? They have already been hard hit by this Government. Will it be people with disabilities? They have already been hard hit by this Government. Will it be children in poverty or young people? They have already been hard hit by this Government. I suggest that people have a look at Real Life Reform’s reports to see the real stories of those who have been hit by this Government’s welfare changes. Those people are certainly not feeling any optimism. In fact, one of its most recent reports says that at least 75% of them were feeling “not at all” or “not very” optimistic about their chances for the future. Will this £12 billion saving be clarified before the election so that people know exactly what they are voting for and exactly who they are voting for to be hard hit even further?

“Northern powerhouse” is easy to say, and I would love us to have one, but what is actually being delivered to councils in the north by this Tory-Liberal Democrat coalition is cuts of 75% more than in the rest of the country. Simply devolving responsibility and cutting budgets will not empower anybody.

It is good that savings are not double-taxed, but I regret the level being set at £1,000 of interest. Most of my constituents can only dream of £1,000 in total savings. The Chancellor’s figures are predicated on an unprecedented rise in household debt. Surely we should be looking at ways of preventing that. It seems that debt for the country is bad, but debt for the individual is welcomed. We should at least be looking to provide help for those who fall into unmanageable debt. It is worth remembering that an extra 0.5% of interest on a rising mortgage rate will put a further 600,000 people at risk of losing their homes. Where is the help for low-income savers to build a small pot for a rainy day, keeping them out of the clutches of the payday lenders and rent-to-own companies like BrightHouse?

Talking of exploitation, what extra protection are the Government putting in place to prevent the most vulnerable from being ripped off by companies offering to help unlock their pension pot? This is Money spent one hour and £100 to set up a fake website that popped up on Google alongside the Government’s own site when a search was done for Pension Wise. We already know that this happens in many other areas. For example, there are many sites offering to help people get the European health card for a fee of £49, even though it is free. Con artists are already looking at this as a great opportunity to make a fast buck. What is being done to protect people who are googling for information on who can help? The helpline is not yet up and running, so what is being done to help those people now?

The Budget has been called a “rollercoaster” by the Office for Budget Responsibility, but I would rather describe it as a game of snakes and ladders. Unfortunately, the ladders appear to be targeted at the rich, while the snakes are for the poorest and most vulnerable. Let us stop playing games with people’s lives and make the next Budget a Labour Budget, with a strong economic foundation that delivers a fairer recovery for all.