Budget Resolutions and Economic Situation — House of Commons, 2016-03-17
Topic: Macroeconomics
Ian Blackford (Scottish National Party, Centre-left): Indeed it does. This Government have missed an opportunity to create hope for a better future, with investment in our economy and people When the OBR tells the Chancellor that growth forecasts are below expectations, he finds room for tax cuts and balances the books with further spending cuts. He said yesterday, "nor as a nation are we powerless. We have a choice." No kidding! He is choosing to punish the poor again with the choices he is making. He also said that "productivity growth across the west is too low".—[Official Report, 16 March 2016; Vol. 607, c. 951.] He made no analysis of why that is, and he did not reflect on why productivity in the UK, which we were told was central to the long-term economic plan, has been flatlining for so long There is no long-term economic plan. It is a myth and a meaningless soundbite from a Chancellor who does not have a plan to deliver sustainable economic growth. His only plan is to move out of No. 11 and into No. 10 Downing Street as soon as possible. Without a plan to drive productivity, we cannot drive sustainable economic growth Let us look at what the Chancellor is changing in the pensions world. We need predictability and a high degree of certainty if we are to encourage savings in this country and make sure that people have security and dignity in their old age, but the Chancellor carries on fiddling with the arrangements and undermines confidence in pension savings. The Chancellor’s abandonment of radical reform of tax relief in the Budget was a missed opportunity to rebalance the system and instil fairness at the heart of pension savings. The current pension tax relief regime is regressive, because it benefits higher-rate taxpayers exponentially, while modest earners miss out. The Financial Times last week ran a story with the headline: "How to double your money instantly using pension tax breaks", adding: "Welfare for the wealthy has rarely been so generous in the UK" That is the reality from this Conservative Government. The SNP support the offering of incentives through tax relief, but we want that to be done in a way that supports equity and fairness It is wholly remarkable and unacceptable, when we are told that welfare must be cut—when the poor have to pay the price—that pension tax relief, which is skewed towards helping higher tax-rate pensioners, is left untouched. Just where are the Government’s priorities? We are incentivising the wealthy and squeezing the poor; that is the Chancellor’s Britain The Chancellor has sat on his hands on tax relief in the week in which the Select Committee on Work and Pensions has published its report on the communication of state pension age changes. It is worth highlighting that the report’s conclusions and recommendations state: "We recommend that, if the Government is subsequently able to allocate further funding, it should commission an independent assessment of the merits of the following options: slowing the increase in the state pension age to 66; revising the timetable for increases in the state pension age to reach 65 by April 2019 and 66 by April 2021…and a transitional pension benefit." Why has the Chancellor not reflected on that in the Budget, and why is he refusing to do something about frozen pensions? I tabled an early-day motion asking that we look at the issue of frozen pensions, because 550,000 foreign pensioners have paid into Britain, but their frozen pensions mean that they cannot benefit fully from that. The Government have to answer this charge. We are going into a European referendum. If the Brexiters win the day, an additional 400,000 British citizens will lose the automatic uprating of their pensions. That is something that the House must address Why does the Chancellor not look at redirecting some of his funds from pension tax relief to benefit the women born in the 1950s who are suffering inequality? This is a Budget that could do far better than it has done.