Budget Resolutions and Economic Situation — House of Commons, 2015-03-18
Topic: Macroeconomics
Sheila Gilmore (Labour, Centre-left): In June 2010, we were told that we had to have an emergency Budget. Even at that stage, one of the strange things about that was that many of the measures were so un-emergency that they did not have to come in until the following January. To a large extent, the emergency Budget was a political statement about where the incoming Government wanted to go. Today’s Budget is a political statement as well, from a Government who are trying to convey the impression that they have solved the country’s economic problems and that there will be no need for many more harsh decisions or much more austerity as they want people to think it is safe to vote for them. It is therefore a highly political Budget Not only is this a political Budget but the Chancellor, optimistically I would suggest, seems to be planning not just for the election that is about to happen but for 2020. His predictions for spending show severe cuts in the first part of the next Parliament then a sudden uplift towards the end, just before another general election. Even the OBR says that that is very strange and that this is a "rollercoaster" of spending. It is not justified, I would suggest, by anything other than its politics The people of this country deserve something better than a Budget that will, as the Chancellor hopes, make people feel good when a lot of the underlying issues have not been resolved. Some of those people were badly affected by some of the things we were told were absolutely essential back in 2010 and will find it pretty galling to be told now that things are perhaps better when they are still suffering. At that time, we were told that we would have to cut disability benefits by 20%—people wonder why the disabled in this country are so angry, so upset and so worried. That was the prospectus put before them then One of the main things the Chancellor wanted to talk about today was the tax threshold, but we have to ask over and over again what that means for the low-paid. Between 17% and 20% of people in employment are already earning below the tax threshold and further rises in it do absolutely nothing for them. What is the Government’s proposal to help those low-paid people? There does not appear to be anything and there is a considerable fear that those low-paid earners will end up paying for this constant increase in the tax threshold, perhaps through a VAT increase, which they will have to pay for even though they gain no benefit from it. Even if people fully endorse the argument about the tax threshold, there should be provision for the low-paid as well so that at the very least they are provided for That point and some of the speeches we have heard show the fundamental differences between the Government and the Labour Opposition. Members have said how important it is that people can keep hold of their own money. Tax is basically a bad word for them and they want as little of it as possible. The problem is that that has consequences that are felt in the real world. If taxation is reduced, spending must be reduced unless taxation is being increased somewhere else, which brings us back to the question of VAT. If we want a society in which we provide good quality services and in which people are not anxious about things such as how their parents will be cared for or how they will encounter the care system in their old age, it has to be paid for. If anyone believes that the answer is to cut taxes they should be open and honest and say what impact that will have on services.