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Cost of Living

Part of Opposition Day — [15th Allotted Day] – in the House of Commons at 4:17 pm on 24th June 2008.

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Photo of Yvette Cooper Yvette Cooper The Chief Secretary to the Treasury 4:17 pm, 24th June 2008

I should point out to the hon. Gentleman that his own party's research document has recognised that in real terms, since 2001-02—even in advance of some of the most recent changes that we have set out—families with children are better off than they were in 1997, or in 2001-02. They are seeing real improvements in their income and their support. For example, lone parents are £12 a week better off and couples with children where one parent works full time can be more than £700 a year better off. That is why we are also providing people with additional support through tax credits. I should point out to the hon. Gentleman that this extra support being provided through tax credits, and by increasing child benefit in the next year and the winter fuel payment this year, is funded by the increase in alcohol duty that Conservative Members have opposed. They are opposing our measures to provide additional support to families at a time when people are under pressure, particularly from their winter fuel bills.

It is worth reflecting, as my hon. Friend Rob Marris suggested, on what the Conservatives' remedy might be. They have said that they would not put up alcohol duty and would have lower borrowing—not that they can point to any kind of historical record to support their position. We must remember that this is a party that has never proposed lower borrowing. Instead, it has repeatedly proposed spending increases and tax cuts at the same time—that would push borrowing up. Over the past 12 months alone, the Conservatives have called for £10 billion of extra spending on unfunded tax cuts. At the previous election, just at the time they now say they would have cut borrowing, they were actually calling for billions of pounds in extra borrowing—the independent Institute for Fiscal Studies costed their tax and benefit plans alone at an extra £5 billion. In 2005, they were also planning billions of pounds of extra spending on top of that, on things such as the pupil passport and the patients passport for private care, not to mention defence, the right to buy, tuition fees and offshore processing centres for asylum seekers.

At the 2001 election it was the same story: a £3 billion unfunded tax cut on savings, which would help those on the highest incomes, but billions of pounds more spending on asylum seekers' reception centres, defence and other areas. The Conservatives would not have cut borrowing; instead, they promised again and again to dig themselves a massive black hole for the public finances. So much for telling us to fix the roof; they promised to dig up the foundations.

This Government did invest in fixing the roof. Not only did we mend the hospital roofs, the school roofs and the council house roofs that the Conservative party neglected and abandoned, but we invested in the infrastructure and skills that the British economy needs. We have been operating within our fiscal rules to bring down debt substantially and to cut the bills of the economic failure and high unemployment that we inherited from the Conservatives. That is why we have the flexibility to support the economy right now.

Britain, like other countries, is facing a difficult time as a result of world economic problems. Families across Britain are facing the pinch. They are facing higher prices as a result of increasing world food and fuel prices, but these world economic problems need a serious response—with substance, not just showmanship, and with serious policies not just spin—to help households and businesses through the more difficult times. That is why the House should reject the posturing of the Conservative party and back the Government amendment.

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