Budget Resolutions and Economic Situation — Amendment of the Law

Part of the debate – in the House of Commons at 9:27 pm on 25th March 2013.

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Photo of Kate Green Kate Green Shadow Minister (Equalities) 9:27 pm, 25th March 2013

Not everything in the Budget is unwelcome, but the cumulative effect of this Budget and previous Budgets and spending reviews is dire. I am fearful that in some respects we will never escape their effects—family lives have been blighted and futures lost as a result.

I was startled at the total lack of ambition and vision for the economy expressed in the Budget. There were one or two welcome announcements—the employer national insurance break is welcome—but where is the strategy for improving the quality of jobs that is so necessary to improve our productivity and competitiveness? The rise in private sector employment that Ministers trumpet is, to a degree, illusory. It represents, in part, the fact that the working-age population has grown, so it is hardly surprising that more people are in work. It represents to a degree a re-characterisation of public sector jobs into the private sector. It is a reflection of wage cuts and freezes that mean that people are in work, but worse off, and that 80% of the increase in jobs is in involuntary part-time work.

As Anne Marie Morris said, business rates remain a serious burden. They have risen by 13% in the north-west in the past three years. There was deep disappointment in my region at the decision last year to delay the revaluation, and disappointment last week that there was nothing in the Budget to help in the meantime or to take the opportunity to use the period of the freeze to review totally the purpose and structure of the business rate.

As I said in an intervention, business will also be hit by the impact of welfare reform on household budgets. Work by the Centre for Local Economic Strategies has shown that for every £1 cut in social welfare reform, 63p is being lost to Stretford’s town centre economy, as people cut back on shopping, socialising and the use of taxis and local transport, while the loss to the local economy across the whole of Greater Manchester is estimated at £400 million. The business announcements in last week’s Budget will not put that money back into our local economy, and I am concerned by the warning of further restrictions on annually managed expenditure in the June spending review.

I am glad that the Government recognise the pressures on those trying to buy their own home, and I recognise that home ownership is the aspiration of many of my constituents, but the Government refuse to recognise that renting is a valid and, indeed, necessary option for many families. The support being offered to renters is minimal and the policies divisive. If it is right to offer a public subsidy to enable a young person to get a mortgage to buy their first home, why is it wrong to give a proper subsidy, via housing benefits, to another young person aged under 35 to rent a home of their own? Let us remember that both young people could be in work.

If it is right to provide a public subsidy to a young couple wanting to buy a new and perhaps larger home for a growing family, why is it wrong to subsidise the same family if they want to remain in social rented accommodation and also need more space as kids grow and develop? As my hon. Friend Mr McKenzie said, Government support to buy a home or get a mortgage will be of no use to those of my constituents who are either not working or in short-term insecure employment, which means that they are not attractive to mortgage lenders and have no choice but to rent.

Failure to support working families on the lowest incomes and those on out-of-work benefits feeds across to other policy areas. The child care announcements will benefit many better-off families, but as the Resolution Foundation pointed out, only 40% of those on universal credit will benefit from the maximum 85% rate, while those looking for work will not get any help at all when engaged in a job search. The same is true of the increase in the personal tax threshold, which is of no help to those on very low wages whose earnings are too low for them even to pay tax. The poor and the working poor have therefore once again totally missed out in the Budget, and as a result deprived families and communities will become more deprived.