Budget Resolutions and Economic Situation

Debate between Kevan Jones and Eilidh Whiteford

Thursday 17th March 2016 Commons Chamber

[Dr Whiteford]

I am grateful to the hon. Gentleman for raising that issue because those figures deserve much greater scrutiny. The rise in the overall budget for disability spending to 2020 is easily explained by the fact that as the baby-boomer generation start to lose their health, and as life expectancy increases but healthy life expectancy does not increase at the same rate, there is more demand for disability support.

I accept that those with the most extreme disabilities need more support—that is definitely the case—but those who are losing out from PIP are probably those who are closest to the labour market, and their PIP, or DLA, enables them to participate in that market and support themselves. Those people have ongoing additional extra costs, whether for aids and adaptations, transport, or because they do not have sight and need support to get to and from their place of work. Such people need and deserve support, so why should they be put on the frontline when many other able-bodied people are not being asked to bear the same level and proportion of that burden? I hope I have addressed the hon. Gentleman’s point, and I am grateful for the opportunity to unpack those top-line figures that sound so generous to disabled people, but mask systematic cuts to the support that individuals who need help can expect to receive.

In response to the Budget yesterday, Citizens Advice Scotland said that

“the confirmation of changes to the Personal Independence Payment will mean that disabled people are set to lose entitlement of up to £3,000 per year to support them to live an independent life.”

Liz Sayce of Disability Rights UK said that the cuts to aids and appliances

“will impact on people’s ability to work, enjoy family life and take part in the communities they live in.”

Before I conclude, let me address the Chancellor’s announcements on savings. In the weeks leading up to the Budget, it was widely reported that he was planning to reform pension tax relief, to rebalance the pension system and make it fairer for basic rate taxpayers and other modest earners. That opportunity was missed yesterday, and instead we got measures that will further widen the gulf between the haves and have-nots, and which lay bare the stark priority that this Government seem to attach to maintaining, and even celebrating, the gross income inequalities that characterise modern British society.

There were some great wheezes for very high earners, not least the increase to the personal allowance. Although everyone can potentially benefit from that, those set to benefit the most are higher rate taxpayers like ourselves. The Resolution Foundation estimates that a third of the benefit of that change will accrue to the top 20% of earners. Meanwhile, a lot of low-paid and part-time workers—most of them women—will not even earn enough this year to take them over the threshold.

Similarly, raising the ISA limit to £20,000 will benefit only those who happen to have a spare twenty grand lying around. To take full advantage of that tax break, someone would need to save more than £1,666 pounds a month, which is a lot more than many people’s take-home pay. The same applies to the new lifetime ISA, because a young person would need to save £333 pounds a month to take full advantage of it. For a 20-year-old working full time on the minimum wage, that represents 38% of their gross salary. It is not realistic. Even among better paid young people, many of those eligible for the scheme are likely to struggle to pay grossly inflated rents in the private sector, and many will be servicing substantial student debts and be unable to take full advantage of the scheme.

[Mr Kevan Jones]

The hon. Lady raises an interesting point, because the assumption is that people have spare money sloshing around to put into a lifetime ISA. Does she agree that even if someone saved the maximum amount every year over the period allowed, they would not be allowed to buy a pension at the end of that, and in many cases—especially in London—they would not even be able to buy a house?

[Dr Whiteford]

The hon. Gentleman makes an important point and highlights the fact that young people’s housing problems are caused by undersupply of affordable housing. With the best will in the world, people on normal wages will never be able to buy a house in an urban area such as London, or in places such as Aberdeen and Edinburgh where the housing market is inflated.