Paul Farrelly MP - Initial comments on the Budget

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08 Jul 2015
There is much to welcome in this Budget, but also much to worry about.

First the good news, and in particular:

- An extra £8 billion for the NHS: we look forward to seeing more investment from that in Staffordshire, where a £200m deficit looms in three years’ time and our local University Hospital’s A&E Department is under the fiercest pressure in the whole of the country.

- The increase in the minimum wage and aim towards a Living Wage – which is just what Labour had called for to stop the taxpayer subsiding poor employment practice.

- The end of permanent ‘non-dom’ tax status – again, another Labour policy from the general election, but the Government still has to show where the £7.2 billion extra in the Budget from tackling tax avoidance will come from, as words are fine, but its record in practice is poor.

And the bad news, for ordinary families especially:

- £9 billion of the net £12 billion ‘welfare cuts’ are coming from measures including squeezing working tax credits, reducing the incomes of people at the bottom of the pay scale.

- Scrapping university maintenance grants for students from less well-off backgrounds – after getting rid of the cap and tripling tuition fees to £9,000, this marks the dismantling of the deal I fought for over a decade ago to counter the cost disincentives of going on to higher education, and it is a thoroughly regressive measure.

- Penalising families earning £30,000 plus outside London, and who are living in social housing, by putting their rents up to market rates - something I commented on in the Commons during the Budget debate today:

‘Isn’t it true that families, be they living in North Staffordshire or South Yorkshire, with children in social housing are not rich, if one partner earns £25,000 and the other, working part-time, brings in £6, 7 or £8,000?’

‘Won’t the effect of the Budget measure be to reduce the incentive to work, or to give up the other job altogether?’

‘And isn’t it an insult to families like this for the Chancellor to say that their rents are ‘subsidised’ by other working people?’

In the Commons on Monday, and an article in the Guardian newspaper yesterday, I also criticised the Government’s ‘drive by shooting’ of the BBC, forcing it to take on the £650 million plus cost of free TV licences for the over 75s.

At a stroke, George Osborne achieved 5% of his ‘welfare cuts’, with a 15% savaging of the BBC’s budget. During the election, the Conservatives refused to means-test free TV licences, as child benefit now is, and promised to keep them until 2020. By this smash and grab, he has landed the BBC with the responsibility for any future cuts.