Amendment of the Law

Alex Cunningham Excerpts

Thursday 22nd March 2012 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

I am proud to be a socialist, although hopefully not such an old one.

The rich will get richer and the poor will get poorer—the Tory party has very clearly reverted to type, putting the needs of the wealthy first while abandoning the poor, whether they are working or not. Even the Chancellor’s favourite red-top newspaper, which today portrayed him as Wallace, agrees and says that he has put money in “The Wrong Trousers”. Yes, Mr Speaker, women wear trousers! The Prime Minister, himself a man with young children and a working wife, once promised that he would make this country the most family-friendly in Europe, but this week’s Budget will make life even more difficult for ordinary, hard-working families—not that he knows what it means to struggle to feed a family.

Yesterday, I met Terry Fullerton from Holme House prison immediately after the Budget. He pointed out that the tax cut for many of the super rich, such as bankers, celebrities and others, is about the same as the starting salary for a prison officer. It is also several thousand pounds more than the average annual wage in my constituency. That is not fair.

Brendan Cox, director of policy and advocacy at Save the Children, said that some had called it a Robin Hood Budget. He said:

“Robin Hood was known for hitting his target. If help to the poorest was his aim, the Chancellor will be known for missing his.”

The Institute for Fiscal Studies says that an average family will be £530 a year worse off after the Chancellor’s tax and benefit changes. On top of that, the poorest 20% of households will see their incomes fall by about 1.5% in 2012-13, scuppering any chances of meeting coalition targets of reducing child poverty.

[Sheila Gilmore]

Will my hon. Friend comment on the fact that, as detailed in the Budget, the cut in the 50% rate will mean the Exchequer forgoing £3 billion of income, whereas it would cost £500 million to reverse the cut to working tax credits for people about to lose it because they only work 16 hours a week? Which does he think is the better choice?

[Alex Cunningham]

I am sure that my hon. Friend knows exactly what my choice would be—it would be on the part of working families.

I have mentioned the 1.5% cut. It might sound paltry, but even if it represents as little as £1 or less per week, it is still worth a lot for those on a low income who need to feed a family. It will also be the poorest families who are, or will be, hardest hit through the uprating of benefits in line with the consumer prices index rather than the retail prices index, through higher food and fuel costs, through the freezes to child benefit and working tax credit, and through the time-limiting of employment and support allowance.

We must not forget that for low-paid workers inflation is not 3.4%, as it was yesterday, but nearer 10%, because they spend proportionately more on food, fuel and transport. The Government’s raising of the personal tax allowance is welcome but sadly does nothing to help the one third of the adult population, including part-time workers and pensioners, who are too poor to pay income tax, yet still have to face those same challenges.

[Angela Smith]

Does my hon. Friend agree that the threat of £10 billion of further spending cuts to welfare after 2014 will only exacerbate the problems he is describing?

[Alex Cunningham]

I agree with my hon. Friend. I have people streaming through the doors of my surgeries, and e-mailing and phoning my surgeries, saying how worried they are now, let alone about the impact of £10 billion of cuts in the future.

In the borough of Stockton-on-Tees, 23% of children already live in poverty, and the Child Poverty Action Group has highlighted that the jobs shortage in the north-east region, exacerbated by further public sector jobs losses, will lead to even greater rises in child poverty. Quite simply, unless parents can access and remain in work, the economy will struggle to return to sustained growth and child poverty levels will be hard to reduce.

The Government’s changes to tax credit rules mean that 2,500 families with more than 5,000 children in the Tees valley alone, working between 16 and 24 hours a week, will have to work at least 24 hours a week or lose that working tax credit. That is as much as £3,870. What research have the Secretary of State for Work and Pensions and the Government done to find out how many people will be able to find those extra hours? Surely he understands that it is deeply unfair that a family already on a low income will lose vital cash to feed their families because their employer cannot provide them with more hours.

What about women? Some 72% of the Government’s changes to tax and benefits adversely affect women, and with 46% of working women being employed in the public sector in the north-east, they are bearing the brunt of the Government’s enforced public sector job losses. The number of women in work across north-east England has already fallen by 19,000, with unemployment among women increasing at twice the rate of men in recent times. I saw no hope whatever in the Budget that the hundreds of young people in my constituency would get the help to secure long-term employment. The Chancellor spoke of skills, but not how they would be delivered. He certainly did not talk about jobs for those young people.

I have tried to concentrate on poverty and the substantial increase in the number of families and individuals who are now facing the toughest of times. We desperately need economic policies that will deliver the jobs and growth that our people need. We do not want to see more and more people forced out of work in the coming months. We do not want to see pensioners penalised by having their personal tax allowance frozen. We do not want to see any growth in the number of soup kitchens and food banks springing up across the country, including at the New Life family centre in my constituency. We do not want to see women bear the brunt of the unfair cuts and rules being imposed on them. The Budget, read out to much cheering from the Tories and their Lib Dem allies yesterday, will not help to deliver any fairness whatever in our society; nor will it provide the platform on which to grow our economy.

--- Later in debate ---

[Stephen Gilbert]

It is a bit rich when the Labour party talks about benefits to higher rate taxpayers, given that it abolished the 10p rate of tax, making 5 million of the lowest paid pay more tax. The coalition Government are taking the lowest paid out of tax, and that is a better direction of travel for the people whom I represent—and, I am sure, those whom the hon. Lady represents as well.

I am also keen to welcome the measures in the Budget to drive business growth—the cutting of red tape on small and medium-sized firms; the introduction of cash accounting; the enterprise management incentive scheme; and the fact that the Government are making available £20 billion-worth of additional funding to ensure that businesses across our country, from which will come the growth that will get us out of our financial difficulties, have the money to invest, expand and grow.

[Alex Cunningham]

The hon. Gentleman has talked about investment. If the 50p tax rate had been retained, there would be more money for investment. The Chancellor said that the rate was making little impact on the amount of money coming into the Exchequer. If it was making so little money, could he not have just done away with it altogether—or is it actually a real source of income for the Government and the Exchequer?

[Stephen Gilbert]

Again, there is an obsession for a policy that Labour implemented only during the last 37 days of its Government. If it was so keen on the 50p rate, why did that not last for 13 years under Labour, rather than 37 days? This is nonsense from the Labour party.

Some of the measures to improve finance for small and medium-sized enterprises will build on some of the other mechanisms that the Government have introduced in Cornwall to try to drive the Cornish economy. I am thinking of the enterprise zone at Newquay airport, the Cornwall and Isles of Scilly local enterprise partnership, the fact that Cornwall will be the first county—not just in the United Kingdom, but across Europe—to have access to superfast broadband across its entire length, and the commitment to renewable energy generation as a way of driving some of the job creation of the future.

I also welcome the measures on housing growth that the Chancellor announced. Government and Opposition Members recognise that there is a serious housing crisis in the country. We need to get on and build our way out of it to ensure that we meet the aspirations of those, many from my generation, who simply want to start their lives with their partners, but are unable to do so because they do not have access to stable, decent and affordable accommodation.

In my remaining time, however, I would like to put a few concerns on the record. The first is about alcohol taxation. Duty on beer has gone up by 42% in the past four years. As my hon. Friend the Member for Burton (Andrew Griffiths), who is not in his seat, said earlier, the community pub is at the heart of many areas, including many of Cornwall’s villages. Community pubs serve a useful function, employing 300,000 young people across the country. When the Government bring forward their alcohol strategy, I hope to see some redress from the burden that beer taxation has taken on in recent years.

I am also concerned that air passenger duty has gone up by 360% over seven years. When I talk to the manager of Newquay airport, he tells me that that is having an impact on its ability to continue to drive custom.

I share the concern of my hon. Friend the Member for Stone (Mr Cash) about fuel taxation in rural areas. An innovative scheme is being trialled in the Isles of Scilly and other places, but the Government need to consider again whether the balance is right.

I have two final points. I disagree with my hon. Friend the Member for Sevenoaks (Michael Fallon), who thinks that the introduction of regional pay will be a welcome move. Far from it—it runs the risk of institutionalising some of the inequalities in regions, such as Cornwall, with above-average housing costs and below-average wages. I have deep concerns about this proposal, as do my hon. Friends on the Liberal Democrat Benches.

Finally, I turn to an issue that is exercising my countrymen in Cornwall. There is some ambiguity about whether the increase to 20% in VAT on hot food will include pasties that are served from bakeries. The Minister will no doubt be aware that the pasty is not only a staple, hearty meal but, in effect, employs thousands of people and brings millions of pounds into the Cornish economy. Will he give some clarity on whether we can avoid a pasty tax?