Impact of provisions of section 5 on child poverty and equality

Part of Finance (No. 3) Bill – in the House of Commons at 3:15 pm on 8th January 2019.

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Photo of Kevin Foster Kevin Foster Conservative, Torbay 3:15 pm, 8th January 2019

Thank you, Madam Deputy Speaker. Hearing your announcement that Mike Gapes is not in fact a signatory to new clause 1 has, of course, completely changed my view. Clearly that has changed the whole speech I was about to give.

It is useful to be here for this debate on new clauses 1 and 5. I found the speech by Peter Dowd of interest, as always. I know from one of our previous exchanges in the Chamber he will be very disappointed to hear that I am not going to give that promised talk on unpacking the holy trinity today. Even in the two hours available, that is probably not quite something that I can effectively manage. I am, however, going to go through an issue on which Members across the House generally have strong views and about which they are passionate: how we best tackle equality issues so that our policies are effective in ensuring that those who are in poverty have a route out of it.

It was not in pure jest that I made a comment in my intervention on the shadow Minister about spending levels in the United States. People talk about the US not having gone down the austerity route, but instead having had a spur or fiscal stimulus. To spend the same as the US, we would have had to make significant cuts to the public sector to get down to US levels of social spending, and in particular healthcare spending. The US has bizarre outcomes from its healthcare system: it spends more of its GDP on healthcare while achieving worse outcomes. No one in the House would wish to implement that system in this country given that failing of spending more and, bluntly, getting a lot less. It is therefore bizarre for that spending to be cited as a great stimulus. It most certainly was not. The US was still spending far less than us after our programme of austerity to bring the deficit under control.

It is interesting to hear the list of Opposition promises and pledges and to contrast them with the comments of Mr Leslie, who is probably the last credible shadow Chancellor from the Labour party. He made it very clear what he felt about that list of promises. We have just had the festive season, but some people in this Chamber still want to write their letter to Santa. Anyone can sit in opposition pledging the earth, with truly unbelievable amounts of spending on this, that and the other, while saying “It’s alright, someone else is going to pay.” There is always a mythical someone else. No one with any credibility believes that the Opposition’s tax rises would be limited to those earning over £80,000 a year.

We can see the result of the type of policies the Leader of the Opposition has advocated over the past 20 and 30 years when we take a look at Venezuela. To be fair, I suppose relative poverty might be going down in that country, but that is only because the entire country is being completely impoverished. This is where I have always had a slight concern about using relative measures. An argument is often made about numbers dropping in relative measures between 2009 and 2010, but that was because the economy was declining and the whole country was getting poorer. Therefore, the difference in relative poverty between groups was declining. In theory, collapsing the economy would remove relative poverty, but no one feels that that is the way we should go about delivering policy—well, except perhaps those who are fervent advocates of the approach adopted in Venezuela.

The two new clauses ask the Chancellor to review the impact of certain provisions. They do not ask for an independent review; they ask for the Chancellor to review his own policies. Perhaps that reflects how much confidence the Opposition have in the Chancellor. He might be reassured to know that they feel that if the Chancellor reviews the impact of the provisions it will be an excellent analysis that they will want to follow. Again, this is not about creating something truly independent, but about asking the Government to produce a report on Government policies.