amendment of the Law

Part of Ways and Means — Budget Resolutions and Economic Situation – in the House of Commons at 1:00 pm on 22 March 2013.

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Photo of Jeremy Corbyn Jeremy Corbyn Labour, Islington North 1:00, 22 March 2013

I am pleased to be able to take part in this debate. My speech will relate largely to my constituency and my city, but overall the Budget will increase inequality in this country, rather than reduce it. It also contains many inconsistencies, such as spending on a carbon capture scheme while at the same time reducing restrictions on emissions and environmental costs in other industries. We need to be careful about that. If we are serious about protecting the environment, it needs to be an international initiative rather than what I suspect the Chancellor is trying to do, which is to reduce restrictions and conditions in this country, as he is doing with corporation tax. That will lead to a race to the bottom with very damaging consequences for our social infrastructure.

According to the latest unemployment count, 3,700 people in my constituency are on jobseeker’s allowance, 1,000 of whom have been on it for more than a year. Nearly 1,000 young people are also looking for work. At the same time there are enormous problems of inequality throughout London and, indeed, society. If Members look at the tax tables helpfully produced by a number of newspapers, they will see that there is no benefit whatsoever in this Budget or the planned tax changes over the next three years for most people on below average, average or even above average incomes, and that those who earn more than £500,000 a year will gain at least £2,000 a month in most cases, while some will gain considerably more depending on their own personal circumstances.

There is no question but that this Budget will lead to greater inequality in our society, not less. At the bottom end, a lot of people are trying to survive on frozen or reduced wages in part-time work or on zero-hours contracts. At the other end of the scale, those on very high salaries or with large levels of unearned income will do extremely well out of the Budget and they are able to place their money somewhere where they pay much less tax on the savings that they manage to muster. We have to do better than that. I look to a future Labour Government to commit themselves to the principle of reducing inequality in our society, partly through taxation and partly through investment and expenditure that will help the poorest people through social spending.

My main concern—I think this is true of all other London Members—is the housing problems and the housing crisis in London. My borough of Islington is one of the smaller London boroughs, but it has at least 13,000 families on the priority needs list. The council, to its absolute credit, is doing a great deal to build new council housing, which is of high quality, innovative, energy efficient and imaginatively designed, often in restricted and small spaces. However, it is nowhere near meeting the demands and needs of large numbers of people in priority need. Therefore, my borough, like every other borough, puts people into the private sector, where rents are not restricted. The benefit cap will make it impossible for tenants to pay those rents and they will be asked to make a contribution themselves.

A local authority report notes that a large number of our schoolchildren—1,000 of them—are affected by the benefit cap and that, in the worst-case scenarios, some families are being asked to find £200 a week to contribute to their private sector rent. If they are on benefits, it is obviously impossible for them to find that money—it is £10,000 a year. The only way they can be accommodated is to move them out of the borough. Those in my borough are always offered a place in Greater London. Nevertheless, that means disruption for children in schools, and the break-up of family and community networks, which is damaging and corrosive to the whole of our society.

Other boroughs far less concerned about human needs than Islington dump people outside London. A good friend of mine who lives in north Kent tells me of the misery and poverty of large numbers of people who have been dumped in seaside towns such as Margate, in very poor quality, private rented accommodation, far away from their communities, and with obvious damaging effects to children and families as a whole.

How do we deal with the housing crisis in London? One way not to deal with it is what the Chancellor suggested this week: a charter for those with great money and resources to be subsidised into yet more purchasing of private sector homes. It is yet another escalator on the house price index, using housing as a form of investment and return on capital, rather than meeting the social needs of people in constituencies such as mine. I ask the Government to think seriously about how the housing benefit cap is being introduced and operated, and about how it acts as an agent for the social cleansing of poor and vulnerable people throughout central London to the London suburbs and further afield. It will not be long before the same process starts to happen in every other constituency in the country. This will not start and end in London; the whole process will go elsewhere.

The Government say, quite rightly, that the housing benefit bill is too big: I agree. The previous Government said it was too big: I agree. Why is it too big? Is it because council rents are so high? No, it is because of the high level of private rents in this country, and the lack of any control or real conditions on the private rented sector. We need legislation to control rents and ensure a fair rent strategy, security of tenure and decent housing for people who desperately need it.