Ways and Means — Budget Resolutions and Economic Situation — Amendment of the Law

Part of Bill Presented — National Insurance Contributions (Rate Ceilings) Bill – in the House of Commons at 6:09 pm on 14th July 2015.

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Photo of Geraint Davies Geraint Davies Parliamentary Assembly of the Council of Europe (Substitute Member) 6:09 pm, 14th July 2015

No, I will not. There is a time limit, and it is not really worth the air.

The overall welfare budget is £220 billion, only £2 billion of which is spent on people on the dole. A great amount of it is spent on pensioners, who are protected because they are more likely to vote. The political calculation is that poorer people are less likely to vote, and certainly less likely to vote Tory. This is a cynical Budget.

Oxford University has suggested that the number people going to food banks will increase by 1 million to 2 million. I pointed that out to the Prime Minister, and he said, “Oh well. It doesn’t really matter. We won the election.” When I pointed it out to the Work and Pensions Secretary, he said, “Oh well. What can you do? Lots of people in Canada and Germany use food banks.” The Chancellor said, “Well, you know, we’ve got 1% of the people and 3% of the wealth of the world, and we spend 7% on welfare,” as if we should be ashamed and not proud that we, as a developed country, invest in the most vulnerable people to help them into work.

What sort of future is the Chancellor suggesting? Is he suggesting that we cut our welfare down to the levels of developing countries and provide taps and buckets at the ends of streets? What are the values of this Tory Government? The answer is that their values are squeezing the poor because they will not vote Conservative, and squeezing the state with a fraudulent proposition as a backcloth—that minimum wages can replace tax credits that are focused on poor families. The reality is that, under the last Labour Government, the economy grew by 40% in the 10 years to 2008. The banking crisis caused a problem, but by 2010 there was growth in the economy. Since then, debt as a share of the economy has grown from 55% to 80%, basically because a low-wage, low-productivity, austerity-driven Budget does not work.

The Government have driven down wages at the same time as they are putting up tax thresholds, which is obviously not a way of generating significant tax revenues. Therefore, the business model is bust. We need investment in productivity, skills and infrastructure. Why are we seeing another situation? Why has the train infrastructure in the north of England been removed or delayed? Why are the poorest given loans rather than grants to go to university?

The Budget is not the way forward for a high-skilled, high R and D, high-productivity and high-wage economy to pay its way. It is flawed economically and it is a political stunt. The sooner we get a Labour Government the better.