Budget Resolutions and Economic Situation

Debate between Yvette Cooper and George Osborne

Tuesday 22nd March 2016 Commons Chamber

[Mr Osborne]

I am coming on to talk about disability benefits, but my right hon. Friend is absolutely right to draw attention to the support we give—close to £50 billion—to disabled people. When we look just at the disability benefits, disability living allowance and personal independence payment, we see that that support has gone up from £13 billion when we came into office to £16 billion today, and it will go up to £18 billion in the future. As my excellent right hon. Friend for Preseli Pembrokeshire (Stephen Crabb), the new Welfare Secretary, made clear yesterday, we continue to give support to disabled people. I will come on to deal with that in detail.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The Chancellor boasted when he opened the debate that this was the first time a Chancellor had opened the final day of a Budget debate. He will know that that is because it is also the first time a Chancellor has had to drop the biggest revenue raiser in his Budget within two days of announcing it. The former Work and Pensions Secretary, who has just resigned and to whom the Chancellor paid great tribute, described the Budget as “deeply unfair” and “drifting” in a wrong direction that will divide the country, not unite it. He said all those words after the Chancellor announced that he was ditching the PIP cuts. Is the former Work and Pensions Secretary deluded?

[Mr Osborne]

I am glad that the right hon. Lady intervened, because I have done a little research and, frankly, I wish that when she was the Chief Secretary to the Treasury we had seen a few more revenue raisers in Budgets, such as savings in welfare and savings in public expenditure. During the period in which she was the Chief Secretary, the deficit went from £76 billion a year to £154 billion a year. The measures that my right hon. Friend and I have been taking over the last six years are to clear up the mess that she and her colleagues in government left.

[Mr Osborne]

Let me make a little more progress, and then I will come back. The proof that these difficult changes are worth while—

[Yvette Cooper]

Will the Chancellor give way?

[Mr Osborne]

I will give way to the right hon. Lady. I have said that when we have made a mistake, we have listened and learned. When is she going to apologise and say that she made mistakes and her colleagues made mistakes during that period in government, which is what we have been clearing up for the last six years?

[Yvette Cooper]

The Chancellor did not address the issue of the unfairness of his Budget, so will he address the issue of the revenue behind his Budget? He has abandoned £4.4 billion in revenue raisers from his Budget. Where is that money going to come from, or will he change the scorecard that he set out?

[Mr Osborne]

I will tell you what is unfair: to saddle the next generation with debts you have no way of paying off. That is what the right hon. Lady did. [Interruption.] That is what she did. I will come on specifically to disability benefits, but let me tell her about fairness and what we have done over the last six years. We have taken action that means 500,000 fewer children are growing up in workless households than when she was at the Treasury, 1 million fewer people are on out-of-work benefits and over 2 million more people are in work than when we came to office. That is the social justice record we on this side of the House are proud of.

I am also proud that the work continues, and in this Budget we are taking further steps to build a stronger society. There is money and reform to improve our nation’s schools. There is action to reduce sugar intake and give our children better healthcare. There is support for the savings of low-income families. There is more help and housing for homeless people. There are personal allowance increases that will lift another 1 million of the low-paid out of income tax altogether, and there is an increased minimum wage ahead of the introduction of the first ever national living wage in just two weeks’ time. Those are all in the Budget we will debate today—all the actions of a compassionate, one nation Conservative Government determined to deliver both social justice and economic security.

--- Later in debate ---

[Mr Osborne]

Let me make some progress. We have taken difficult decisions to control public expenditure and reduce a crippling budget deficit.

[Yvette Cooper]

rose—

[Mr Osborne]

I have given way twice to the right hon. Lady so I will now make progress and explain what we have done to clear up the mess she left. We took more decisions last week in the Budget, but we will also implement these decisions today to ensure that the work of reducing our deficit is done fairly, and that we ask more from the well-off. Look through the measures. They include provisions on dividends, lifetime pension allowances, stamp duty on second properties, banks and hedge funds, and a host of measures to tackle evasion and avoidance. The Institute for Fiscal Studies has been quoted a lot over the past four days in the Budget debates, and its head stated that

“the very highest earners have seen significant tax increases”.

I think that has been a reasonable thing to ask of the most well-off when faced with such a budget deficit, because we are all in this together.

Proposed Public Expenditure Cuts

Debate between Yvette Cooper and George Osborne

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

It is an improvement on the situation under the previous Government, where there was absolutely no contact between the Secretary of State for Work and Pensions and the Chancellor. The two Departments are working very well. Obviously the Treasury is interested in financial management and control: that is a proper part of our function. My right hon. Friend has inspirational plans that he has worked on to reform welfare and get people working, and the two of us are working together with colleagues in the Cabinet to make that happen.

Let me finally say something about the tax gap and people who do not pay their taxes. Later this week, figures will be produced—independent figures, not produced by me—which will show the latest situation on the tax gap that we have inherited: in other words, the gap between what should be collected in tax and what is collected in tax at the moment. Judging by previous figures I have seen, I think that the House will be pretty staggered by this number. [Interruption.] Labour Members seem to forget that their people were in power for 13 years. We have inherited this situation, and we will be taking steps to reduce tax avoidance, including tax avoidance by the richest people in our society, so that everyone makes a contribution.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

The shadow Chancellor and the shadow Chief Secretary are not in Westminster today, Mr Speaker, and you will be aware that I had asked a similar urgent question of the Secretary of State for Work and Pensions, so it is good that the Chancellor is replying, although very unfortunate that the Secretary of State for Work and Pensions has chosen not to come to respond.

On Thursday, the Chancellor told the BBC that the Government were cutting an additional £4 billion from out-of-work benefits. The BBC website says:

“The government is planning to reduce the annual welfare bill by a further £4bn, Chancellor George Osborne has told the BBC.”

Today, he has refused to tell the House what he told the BBC. Did the BBC correspondents just get it wrong? Did they mishear what he said? Will he now come clean and tell us what he has in fact got agreed and planned for the additional cuts that he wants to make to the welfare bills for the spending review? Will he tell us whether the Secretary of State for Work and Pensions has agreed to £4 billion of additional cuts? Will he admit that the timing of this interview had nothing to do with reaching agreement on the spending review with the Work and Pensions Secretary and everything to do with getting Andy Coulson off the BBC headlines for the day?

In June, the Chancellor wrote to the Secretary of State:

“I am pleased that you, the prime minister, and I have agreed to press ahead with reforms to the ESA as part of the spending review that deliver net savings of at least £2.5bn by 2014/15.”

His Chief Secretary said yesterday that this was not agreed; well, is it agreed or isn’t it?

The Chancellor is not being straight with the House—[Interruption.]

[Yvette Cooper]

I certainly accept your point, Mr Speaker. I am sure that no Minister would want not to be straight with the House, and I am sure that the Chancellor will be. I withdraw any suggestion that he was not, because I am sure that he will be.

Will the Chancellor confirm, therefore, that saving an additional £4 billion from getting people into work will require new jobs for 800,000 people, at a time when his own Office for Budget Responsibility says that far from creating an extra 800,000 jobs, his Budget will cut 100,000 jobs from the economy in each and every year?

The Chancellor has also said that he plans to target the workshy and those who are fit for work. Will he confirm, however, that savings from getting those who are fit for work off sickness benefits are already built into the Treasury figures, and that cutting an extra £2.5 billion from employment support allowance would hit only those who have been through the new, tougher test and who even his Ministers agree are genuinely too sick or too disabled to work? Is it not the truth that he is planning to cut the level of support for some of the most vulnerable people in society? Will he confirm that someone who is on employment support allowance, and has been through the test, is already facing a £285 cut in the value of their ESA and an average £650 cut in their housing benefit as a result of his plans?

The Chancellor claims to support jobs and to be progressive, but he is doing the opposite. The truth is that his plans hit the poorest harder than the rich, women harder than men and children and pensioners worst of all. Now he has shown that he is targeting those who are most sick and disabled in society. Is it not the truth that he has decided to hit those who he knows will find it harder to fight back? This is not progressive; it is a nasty attack, and he should withdraw it now.

[Mr Osborne]

First of all, I note that there has still not been a word of apology about leaving this country with the worst public finances in its history. Nor, by the way, has there been an apology for the complete failure, by the right hon. Lady and her predecessors as Secretary of State, to reform the welfare system, despite all those promises.

In the Budget speech, I made it very clear that we were looking for additional savings from welfare. If the Labour party wants to propose some ideas to make up its £44 billion part of the savings package, perhaps it will contribute to this debate. Sadly, at the moment, we have had absolutely no ideas from it. It opposed the VAT rise; the pay freeze; the in-year savings; the housing benefit reforms; the tax credit reforms; the switch to the consumer prices index for benefits; and the abolition of child trust funds. It opposed all those things. They are £33 billion worth of cuts.

Where are the Labour party’s numbers? Where are its ideas? If it wants to engage with us in a real debate about how we reform welfare, protect the most vulnerable and help people who can work into work, we will be all ears. But at the moment there is a deafening silence from the Labour party.

The right hon. Lady talks about my right hon. Friend the Secretary of State for Work and Pensions not being here. He happens to be at a conference in Europe about international labour market reforms. The shadow Chancellor is not here, and nor is a single one of the Labour party leadership contenders. That is because instead of talking about the national interest, they are courting the votes of vested interests.