The Economy

Part of Business of the House – in the House of Commons at 2:43 pm on 4th June 2015.

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Photo of Fiona Mactaggart Fiona Mactaggart Labour, Slough 2:43 pm, 4th June 2015

It is a pleasure to follow Lucy Frazer. One of the few things I like about this new Parliament is the sight of more women on all the Benches around us.

As my right hon. Friend Edward Miliband reminded us, the Queen promised last Wednesday that the Government would adopt a one-nation approach, yet in practice this Government’s approach to the economy has divided our nation. What brings a nation together? A sense of fair play, underpinned, in my view, by universal human rights, and a sense that everyone can depend on good public services when they need them. We can be united by confidence in a fair tax system and spending that is efficient, where our money is not wasted. When I was a member of the Public Accounts Committee, I was constantly struck by how many voters watched our hearings, praising my right hon. Friend Margaret Hodge for her determined defence of the taxpayer’s pound. Their enthusiasm showed that when we in Parliament stop the Government wasting citizens’ hard-earned money, they are not in the least turned off by politics.

But politicians must be scrupulously honest about what we do. The plan to make it illegal to increase taxes looks like a rhetorical device. What is the penalty going to be? Will the Chancellor go to jail if, for example, he increases VAT on books to equalise the treatment of electronic reading material and printed books? The trumpeted plans to exempt the lowest paid from any form of income tax are an example of a policy that divides rather than unites. It has been dressed up as help to the low paid, but every study shows that the majority of the benefit goes to families in the top half of earners, whose tax bill as a share of their income will fall further than that of the poorer half of the community.

My objection to this policy is that it divides society, separating us into givers and takers—those who pay into the system and those who take out—breeding a culture of blame and suspicion. Of course, we all pay tax. We all pay VAT when we buy things, but the greatest proportion of tax, and often the most resented, is income tax. It is fairer than other taxes, all of which take up more of the household budgets of the poorest people than of those who are wealthier. Paying tax, as we too often fail to remind citizens, is a symptom of social solidarity. It is our subscription to civilised society where we can all enjoy public parks, send our children to schools where they have an equal chance to learn, and have a health service we can rely on when we are ill. One of the defining characteristics of Britain is a strong sense of fair play, but if no one explains the unfair consequences of plans to change tax thresholds, the one-nation label that the Government claim will camouflage this unfairness.

I represent a successful town. It attracts inward investment to the United Kingdom. It is an immigrant town. Slough residents are aspirational, work hard and generate wealth. It is the third most productive town in the United Kingdom, contributing approximately £8 billion to the national economy—double the UK average. However, that growth generates losers as well as winners. In our local housing market, rising prices push up GDP figures while the rest of the economy drags, and as a result home owners see their assets grow while everyone else spends unsustainable proportions of their income on rent or on struggling to buy.

The plans to sell off housing association properties at a discount—properties that are already occupied by secure tenants—is a gross example of taking assets available to the many people who have housing need, destroying the legacy of philanthropists and mutual aid societies who created those housing associations, and giving those assets to a few sitting tenants who can raise a mortgage. That is the Conservative way—to take from the many and give to the few.

GDP does not tell us how the benefits of growth are distributed—who wins within the population and who loses. Some people get no financial benefit at all. It is estimated that unpaid childcare contributes nearly three quarters of GDP. Carers of ill and disabled relatives save more than the entire spend of the national health service. Yet UK workers who are employed and paid now receive only half of GDP, whereas in 1976 the figure was two thirds. That rate of decline is unmatched by any developed economy or any other industrialised economy. The employees’ share of the economic pie is now the lowest ever recorded and it will keep decreasing because of this Government’s plans to cut in-work benefits. Other countries, most notably Scandinavian countries, have worker representatives on company boards so that meaningful discussions about sharing corporate wealth can take place. Sharing wealth equitably should be part of corporate social responsibility, and those eschewing it should not be given taxpayer-funded contracts.

I urge the Government to match their one-nation rhetoric with action. If they do, we could have an economy where hard work is well rewarded, whether it is work by a mum bringing up babies or a banker borrowing and lending. If everyone is confident that their aspiration will be rewarded, they will do as my constituents do: invest in their skills, work hard and grow our whole nation’s economy.