Budget Resolutions and Economic Situation — Amendment of the Law

Part of the debate – in the House of Commons at 1:12 pm on 17th March 2016.

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Photo of Eilidh Whiteford Eilidh Whiteford Shadow SNP Westminster Group Leader (Social Justice and Welfare) 1:12 pm, 17th March 2016

I will not give way at the moment. No wonder that the Chancellor did not have much to say about the Help to Save scheme yesterday. It is a sham opportunity that is being dangled in front of people who can never hope to insulate themselves properly against financial shocks, whose financial security is increasingly precarious, and who are most exposed to the risks of global economic instability. Some people have already started calling the lifetime ISA the LISA, but out of deference to my hon. Friend Dr Lisa Cameron I will resist that temptation. Instead, we might consider calling it the PIERS— for People Inherently Entitled to Rich Savings.

However, this is a serious point because we all recognise the need to encourage people to save more for later life, and for almost all of us the best way to do that will be through a workplace pension to which an employer can contribute. At best, the lifetime ISA is a fairly gimmicky sideshow, and at worst there is a danger that it could undermine auto-enrolment, which is the key vehicle for incentivising savings and promoting fairer universal pensions. We must shore-up confidence in auto-enrolment and not distract focus from it. The pensions industry and sector has suffered a real crisis of confidence over recent decades because people have not seen adequate rewards from the process and do not believe that that is the best way to protect themselves for the future.

This morning the Resolution Foundation published a graph that shows how the Government’s income tax cuts will benefit people across the income distribution. It shows that the lowest 20% of incomes will gain a miserly £10 on average, while the wealthiest 20% will gain an average of £225 each. For me, that encapsulates in a nutshell this Government’s warped priorities and the unfairness at the heart of this Budget. There is an alternative to austerity, and I am sorry that the Government have chosen not to take it.

Several hon. Members rose