Budget Resolutions and Economic Situation — Amendment of the law

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 1:46 pm on 22nd April 2009.

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Photo of John McFall John McFall Chair, Treasury Committee, Chair, Treasury Committee 1:46 pm, 22nd April 2009

I welcome the commitments made by the Chancellor today to provide funding to open fields that were previously unprofitable. That is good, but I give him advance notice that we will question him about North sea oil when he appears before the Committee next week. I am flagging that up pretty early.

I want to keep focusing on unemployment. A couple of weeks ago, I hosted a meeting in Parliament with Professor David Blanchflower, the departing member of the Monetary Policy Committee. He predicted that unemployment could be 4 million by 2011 or 2012. That is a dismal background, but it illustrates why we need to keep helping people if there is such a background. If that is the case, we will find that the Government are spending money to assist people.

Statistics from the House of Commons Library, sourced about a year ago, showed that every unemployed person would cost the state £10,000. That does not cover welfare benefits or local authority benefits such as free school meals or whatever people get, but if the figure is indeed £10,000, having 4 million unemployed would result in £40 billion a year being spent by the Government. Is it not sensible to try to avert or avoid that unemployment by spending at this particular time?

On the most vulnerable, the Government have produced ambitious targets on child poverty, but today, 30 per cent. of children in the United Kingdom still live in poverty. The Government's commitments on child poverty, while admirable, still have a long way to go to ensure that we eliminate child poverty by 2020. In my constituency, one child in four grows up in poverty, according to the End Child Poverty campaign.

The Joseph Rowntree Foundation estimates that child poverty costs the UK £25 billion each year in extra spending on social services, health, housing, education, crime and so on. The Government's moves to create jobs are important in the light of the fight against child poverty, because long-term parental unemployment is one of the biggest causes of child poverty. We will not be able to reduce it significantly while unemployment is rising. I welcome the Government's commitment in that particular area.

The Government's commitment to investing more money in building homes will directly benefit children living in poverty, because the shortage of affordable housing is one of the biggest barriers to eradicating child poverty. However, measures to meet the Government's housing targets and to protect the homes of children whose parents have lost their jobs are really important steps to reducing the number of children growing up in poverty.

Other vulnerable groups mentioned by the Chancellor—pensioners and those in low-paid work who do not have children—will also benefit from the Budget. I welcome the Chancellor's measures to help pensioners, especially the savings initiative and particularly in the ISA field.