Government balancing books on the backs of the poor

House of Commons

Hansard                                       Finance Bill                                   1 July 2014 : Column 784

Chi Onwurah (Newcastle upon Tyne Central) (Lab): I shall be brief. The new clause would force the Chancellor to publish a report that made it clear how the Government were balancing the books on the backs of the poor.

Ministers may laugh, but that is why they are afraid to make the information available. The benefits of rising prosperity and productivity are increasingly concentrated on a small group at the top.

At the same time, there is growing evidence that economic inequality is a drag on the economy. Business profits, literally, from being part of a better functioning and more equal society. Businesses can function only when people form a society that is structured around the principles of trust, responsibility and fairness.

From the “The Spirit Level” by Wilkinson and Pickett through “Capital in the Twenty-First Century” by the current economic rock star Thomas Piketty to “The Entrepreneurial State” by Mariana Mazzucato, economists and social scientists are raising their voices against the claims from Government Members that inequality is good for growth. Recent analysis concluded that

“inequality is bad for both the magnitude and sustainability of growth”.

Before Government Members jump in, that is the view not of some left-leaning sociologist but of the International Monetary Fund.

Equally, President Obama’s chief economic adviser has said that reducing inequality is good for growth. In other words, we must not balance the efforts to reduce the deficit unfairly on the poor, as they are less likely to be in a position to reap the benefits of any growth that follows. None the less, that is exactly what the Government are seeking to do.

The new clause would make the impact of the Government’s policies absolutely clear. I know what the impact of their policies is from my Newcastle surgeries. One constituent who is on a low income uses his so-called second bedroom to store his wheelchair and oxygen bottles. The result is rent arrears and constant anxiety. The threat of eviction hangs over his head. He is only hanging on because he believes that the next Labour Government will abolish the hated bedroom tax. And yet, at the other end of the income scale, taxes are being cut. If the rest of the House does not join Labour in voting for the new clause, people will know what to think.

The next Labour Government will reverse the £3 billion tax cut for the top 1% of earners to ensure that the books are balanced in a fairer way. We will cut taxes for 24 million working people on middle and low incomes with a lower 10p starting rate of income tax. At the next election, the Labour party will put an alternative vision to this Government’s classic 1980s trickle-down economics to the British people. Our vision is to build a new kind of economy that works for communities and ordinary people, and that does not put a premium on social and economic inequality.

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