Budget Resolutions and Economic Situation

Natascha Engel Excerpts

Monday 13th July 2015 Commons Chamber

[Catherine West]

Let me deal with aspects of the question of expenditure in turn. First, the employment training levy is being levied on small businesses by your Government. It is not a Labour proposal, but I support it because it is about investing in the workplace. Secondly, the position on student maintenance grants amounts to cost shunting—taking the costs from the university and putting them on to the individual. I referred to a case of a student owing £56,000, so instead of it sitting on the balance books of the Chancellor, it is sitting on those of the individual, which is a bad thing. Thirdly, we spent £60 billion on housing benefit over the last Parliament. We should have invested more of that in new build housing. We should not forget that council housing is not a cost. It is a net contributor to the economy because the rent is so low that housing benefit is not payable on many council properties. Housing benefit is mainly payable in the private rented sector. By investing in social homes, we will be saving the housing benefit bill in the longer term. Finally, on childcare, your own pledge by your own Government is 30 hours per week—

[Madam Deputy Speaker (Natascha Engel)]

Order. The hon. Lady must speak through the Chair, so she should be referring to the hon. Gentleman in the third person.

[Catherine West]

How did I forget that? Through you, Madam Deputy Speaker, I am saying that the Government have pledged to provide 30 hours a week childcare, which is an excellent pledge, but it is not a Labour proposal. In fact, Labour proposed something more modest and more affordable. I am thus a little worried that the hon. Member for Bedford (Richard Fuller) thinks that we are over-spending, when this is a pledge of his own Government. I wonder whether it will happen, though; I worry about the feasibility. If we go through all those elements, we find that they are not really about cost; they are about feasibility and getting the job done.

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[Several hon. Members]

rose—

[Madam Deputy Speaker (Natascha Engel)]

Order. I shall change the time limit on speeches to seven minutes—Members have kept their speeches nice and short.

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[Several hon. Members]

rose—

[Madam Deputy Speaker (Natascha Engel)]

Order. Before I call the next speaker, may I say that since I raised the limit everybody has taken the maximum number of interventions and therefore we are getting a bit pressed for time again? We will leave the limit at seven minutes, but may I just ask everyone to keep interventions to a minimum and make them short? If we do that, we might get there.

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[Several hon. Members]

rose—

[Madam Deputy Speaker (Natascha Engel)]

Order. I apologise to those Members who are still to speak, but we have had the maximum number of interventions and the maximum time for speeches, so the time limit will now have to drop to six minutes.

[Richard Burgon (Leeds East) (Lab)]

When I think of this Budget, I think of my constituents who will be hard hit by the measures it sets out; measures that were cheered to the rafters by the Conservative party, led in fist-pumping style by the right hon. Member for Chingford and Woodford Green, known to my more polite constituents as Iain Duncan Smith.

This Budget is bad for the economy and bad for the poorest, whether working or not, in my constituency and in our society. It takes money from the poorest in society and hands it to the wealthiest. Do not just take my word for it; criticism and concern has ranged from the TUC and major trade unions to Citizens Advice, the Joseph Rowntree Foundation and Barnardo’s, and from the Institute for Fiscal Studies to the Local Government Association and the Federation of Small Businesses. For example, Paul Johnson of the IFS has said:

“In general the more important tax credits are to someone’s income at present the less likely they are to be compensated by the higher minimum wage”—

note that he refers to the minimum wage, not the living wage—

“But the key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients. That is just arithmetically impossible.”

This Budget negatively affects a majority of the population. The IFS says that 13 million people will lose out through the freeze in benefits and tax credits. This Budget is bad for people in my constituency of Leeds East, where the cuts to tax credits will hit an overwhelming majority of families. In Leeds East there are 9,600 families with children claiming tax credits, 6,100 of whom are working families, with 12,600 children affected. The scale of the impact in my constituency and constituencies like it across the country should make Conservative Members ashamed. Sixty-seven per cent.—two thirds—of families in Leeds East receive tax credits, while 75%—three quarters—of children are in families receiving tax credits. This is an attack on the incomes of the poorest while helping the wealthiest.

Freezing benefits for four years and cutting tax credits will reduce real incomes. The Joseph Rowntree Foundation makes it clear:

“For those out of work, especially childless adults, it will further widen the distance between their incomes and what is needed to achieve an even basic standard of living. This is of course deliberate, in that the aim of the Government is to sharpen work incentives for those not currently in work.”

Citizens Advice says that

“a government serious about making significant savings to the welfare bill needs to tackle problems at the source including insecure work and failures in the housing and childcare markets...Cuts to welfare including freezing benefits for four years, lowering income disregards and work allowances, and cutting tax credits will all have a very serious impact on many people’s ability to meet day to day costs.”

I have to mention George Osborne, the Chancellor—

[Madam Deputy Speaker (Natascha Engel)]

Order. I say this in the spirit of helpfulness. We name Members not by their names but by their constituencies. This is the second time that the hon. Gentleman has done it, so I ask him to use the constituency or job title—“the Chancellor” will do.

[Richard Burgon]

The Chancellor’s so-called living wage is a con. He claims to be giving Britain a pay rise but his living wage premium is actually a new minimum wage undercutting the rate proposed by the Living Wage Foundation.

Quote after quote that I now do not have time to go into sets out the reality of the Government’s Budget. Many measures, as other Members have mentioned, are an attack on the hopes of young people. They include excluding under-25s from the so-called living wage, preventing young people from living independent lives by cutting their access to housing support, and abolishing student maintenance grants for the poorest and raising university fees. What we needed to hear in the Government’s Budget was a call for investment to publicly deliver affordable social housing, access to well-funded further and higher education, and new jobs and apprenticeships with better pay that would allow people to live decent and stable lives.

People in my constituency and areas like it across the country are not a priority for this ultra-Thatcherite Government. They talk about a northern powerhouse, but we need only look at what is happening with trans-Pennine electrification. They are cutting funding for infrastructure in Leeds and in the north. They talk about devolution, but I and many others fear that the real aim is to devolve the blame for the national Government’s austerity economics. We must not give up fighting against what is being done to my constituency and areas like it by this Government, who are all about siding with the rich and the powerful. I look forward to carrying on fighting, alongside Labour colleagues, campaign groups and trade unions, against this Government’s cruel plans and for a better society.

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[Several hon. Members]

rose—

[Madam Deputy Speaker (Natascha Engel)]

Order. I am sorry to say that I must drop the time limit on speeches to five minutes to get all the speakers in.