Heidi Allen
Main Page: Heidi Allen (Liberal Democrat - South Cambridgeshire)
Mr Andrew Mitchell (Sutton Coldfield) (Con)
I draw the House’s attention to my outside interests, laid out in the Register of Members’ Financial Interests.
It is a pleasure to follow the hon. Member for Islwyn (Chris Evans), who made at least one point with which I strongly agree.
There are many ways of judging a Budget, and this Budget seems to me to have much to commend it, not least thanks to the hard work of the Governments since 2010 in ensuring that, today, we raise more income than we spend on our current account. I choose to judge the Budget by the extent to which it addresses the deep divisions in Britain today. I speak not only of Brexit, which hangs over everything, but the divisions between those who gain from globalisation and those who do not and who fear it.
I am especially concerned about intergenerational unfairness, which in Britain is exemplified in the ownership, renting and part-ownership of homes, which the Budget does something about. We see it also in the heavy burden on the younger generation of university fees, and of paying for the burgeoning elderly population. The younger generation increasingly do not see the benefits of free enterprise, a strong private sector and capitalism, because we Conservatives are not standing up properly for those things, so I was pleased to see the Chancellor do that to some extent today. Capitalism and free enterprise are not only about delivering white goods at the best possible price for those on average incomes. They are about protecting our freedoms and liberties.
The economic position in the west midlands is generally improving. When I was first the Member of Parliament for the royal town of Sutton Coldfield, the west midlands had the worst unemployment in the country; now, we have the fastest growing economy, and real progress is being made on new businesses and unemployment, particularly youth unemployment, which was extremely bad. That is in part because we have a strong and activist Birmingham chamber of commerce and a brilliant new Mayor, Andy Street, who is reinvigorating the system. However, the midlands engine, which I believe punches below its weight, needs stronger leadership and a bit more oomph.
The second matter I want to discuss has been mentioned by many hon. Members—universal credit. Everyone agrees that the reform is right in principle, but with experience of benefit reform in my time as a junior Social Security Minister between 1995 and 1997, I warn Ministers that they ignore the wisdom of the right hon. Member for Birkenhead (Frank Field) at their peril. The cardinal rule governing benefit changes is not to use the change to take money away—to reduce the income of those on benefits and at the bottom of society. A Government can get away with a standstill position for the future or constrain increases, but they cannot reduce funding for what is already dependency income. Whenever the Treasury breaks that golden rule, ironically, it costs more. Some steps have been taken today in that respect, but we are not out of the woods yet. This important reform has some considerable way to go before the House can bless it.
Heidi Allen (South Cambridgeshire) (Con)
I have been dissecting today’s announcements. Would my right hon. Friend be interested to know that a single parent not in receipt of housing benefit will see their work allowance improve from £397 to £492, but it will still not be where it should have been on pre-2015 figures, which is £734? That remains a massive gap. I do not think we have heard enough of the detail today.
Mr Mitchell
My hon. Friend eloquently makes the point that a Government can have a standstill for future income when they reform benefits, but they cannot take benefits from some of the very poorest people in the way that, I fear, we were trying to do.
My third topic is that of tax fairness. We are in a period of high income tax, as my right hon. Friend the Member for Chelsea and Fulham (Greg Hands) made clear. Some people have taxation at 60% on their income. It is worth remembering that throughout the period of Conservative-led Government, since 2010, people in income tax have paid more every year than in any year in which Labour was in power. However, points have been well made, including by the hon. Member for Islwyn, about the way the giants of the tech world are avoiding their fair dues. For example, Amazon, on £2 billion of sales, pays only £4.6 million tax, Google, on £5.7 billion of sales, pays only £15 million tax, and Facebook on £5.1 billion of sales pays only £840 million through the “double Irish” or the “double Dutch” tax avoidance schemes. That is quite wrong, and I am glad the Government are going to start to rectify that. It would be better if it were rectified through OECD agreement across the piece, which was of course the subject of the British G8 conference, at which taxation reform and transparency and the importance of paying tax where revenue is earned were strongly supported. There was strong British leadership on that subject, and we need more of it. Also, the effect of digital platforms on town centres is important in areas such as mine. Royal Sutton Coldfield is suffering grievously from the rapid changes in Britain’s high streets, so the measures announced today are welcome.
The fourth and final area I wanted to mention today is the spending on mental health, which is very welcome indeed. We must ensure that this is genuinely incremental spending that buys new and expanded services. On 25 November 2015, George Osborne, in his spending review, mentioned the work that the right hon. Member for North Norfolk (Norman Lamb), Alastair Campbell and I were doing as part of the all-party group on mental health services. He pledged that for young people, particularly girls, there would be an increase of £600 million. That was very welcome, but the money, to our great sorrow and irritation, went mainly to pay off overspends in the system and very little genuinely made its way to the frontline as we had hoped. I hope that the Treasury will keep a very close eye on how this new money is spent to ensure it goes straight to the frontline.
The £20 billion increase in spending on the NHS is enormously welcomed by all of us, but I remind the House of the autobiography of Tony Blair, in which he singles out the fact that the extra money new Labour put into the public services did not lead to the reforms they wanted when they put the money in. He refers to the marks on his back from the difficulties of public sector reform. We must be sure that we really get the gains for our constituents that this enormous amount of extra money should bring, and address the ongoing issues relating to how public services are funded.
The burden of funding the NHS in the future, which above all will go to helping and caring for the elder generation, must not only fall on the income tax of working people to pay for asset-rich retired people. In spite of the very significant political problems of confronting this issue, we must ensure we do not make the intergenerational unfairness, which is so keenly felt by many of our younger constituents, worse by funding the NHS in the future in that way.
Heidi Allen (South Cambridgeshire) (Con)
I should like to refer to several of the announcements before moving on to the welfare changes, for which I have been campaigning very hard. The Government’s prioritisation of NHS funding, especially for mental health, is very welcome. My local authorities will be relieved to hear that they will be able to apply for grants, but a long-term plan in the spending review next year cannot come soon enough. Cambridgeshire is one of the lowest funded counties in the country, and the social care and looked-after children’s services are at breaking point. We have applied again to be a pilot area for business rate retention, and I encourage Ministers to let us have this in the meantime.
Schools funding must also be addressed, because we still do not have fair funding in Cambridgeshire and we remain extremely poorly funded compared with other areas. I must confess that the offer of £400 million for those “little extras” did not sit well with me. We need textbooks and teaching assistants. We need the basics, never mind the little extras. If additional funding cannot be found, we must be braver and redistribute funds from areas that have been significantly better funded in the past. Even if the most perfect funding formula were introduced today, it would not deal with the decades of underfunding.
More positively, the £1.6 billion investment in technology will be essential to help us to navigate a potentially turbulent post-Brexit economy, because I do not share the optimism of others about a Brexit deal dividend. I can think of 101 things that I would rather spend £2 billion on, but I am pleased that we as a nation will lead the way by bringing in a digital services tax at long last. The fuel duty freeze and business rates relief for the high street will be welcomed, as will stamp duty relief for first-time buyers of shared ownership homes.
Turning to the area that I have campaigned hard on, numerous hon. Friends have shared my concerns about universal credit, its operations and its funding, and I urge colleagues to get into the detail of today’s announcement. The Red Book talks about
“an extensive package of extra support for claimants as they make the transition to”
UC. I believe that the Chancellor suggested £1 billion, but I need to know what form that support will take. Is it transitional financial protection, or is it an extension of universal support for claimants who are transitioning? The Red Book also mentions an additional fortnight’s worth of JSA, ESA and income support for those moving on to universal credit from July 2020. Is that for natural or managed migration claimants? The Government also propose to extend the payback period for advanced payment loans from 12 months to 16 months and to maximise the payback rate at 30% from 40%.
Some work allowances have been restored, but some still fall well short of what we had pre-2015. Investment of £1.7 billion cannot possibly undo the damage of a £3 billion cut. Claimants also in receipt of housing benefit will see slightly better work allowances than in 2015 but, given the benefit freeze, that is pretty much parity after four years. A single parent not claiming housing benefit, for example, will see their work allowance increase to £492 a month from £409, but that is still far short of the £734 it was pre-2015. Again, with no housing benefit, a single claimant with health conditions or a disability will see their work allowance increase from £409 to £492, but that is still far short of the original £647. Although the announcements are all welcome individually, they will only fix the symptoms, not the cause. We need to be honest and really sort out universal credit by restoring all work allowances for families with children or disabilities. We must also deal with the five-week initial wait—that is what will keep families out of food banks—and the advance loan payment should, as I have said before, instead become the actual first payment.
I do not wish to be ungrateful—I really do not—because the Trussell Trust and the Joseph Rowntree Foundation have both welcomed today’s announcements. The improvements are of course welcome, but such is the scale of the challenges we still need to overcome to get universal credit right, both now and as we migrate legacy claimants across, there is still much more to do. My colleagues and I will need to hear more evidence that the Department for Work and Pensions and the Treasury are listening before we will have confidence to vote for the regulations later this autumn. I of course welcome today’s investment in universal credit—I feel like a churlish teenager asking for more—and many of us have worked hard to achieve it. The Chancellor has listened and I am grateful, but I fear that it will still not be enough to keep universal credit out of the headlines, nor every family out of poverty.