MP for Streatham demands reassurances from government over Budget's impact
The Conservative-Liberal Democrat Budget will have a serious negative impact on the poorest and most vulnerable in society, Mr. Chuka Umunna, MP for Streatham, has warned.
Making a speech in the Budget debate in the House of Commons, Mr. Umunna compared the latest Budget with those of the Thatcher administration's early years in which large cuts to public sector spending were made.
The 1981 Budget, which made sickness and unemployment benefits taxable, was followed by the Brixton Riots in the north of Mr. Umunna's Streatham constituency.
Following the public inquiry into the riots conducted by Lord Scarman, social and economic factors, particularly high unemployment, were cited alongside police racism as a root cause of the disorder.
In his report, Lord Scarman stated that unemployment "was a major factor in the complex pattern of conditions which lies at the root of the disorders in Brixton and elsewhere. In a materialistic society, the relative deprivation it entails is keenly felt, and idleness gives time for resentment and envy to grow."
While between 1981 and 1984 the Thatcher government made cuts to government spending of 4%, in the latest Budget the Conservative-Liberal Democrat administration announced spending cuts of 25% across government departments.
In his speech, Mr. Umunna accused the government of ignoring President Obama's letter to the Prime Minister David Cameron and other G20 leaders imploring them not to withdraw economic stimulus or make cuts too quickly.
He also pressed the government for answers on the issue of youth unemployment. In May, the Liberal Democrat-Conservative coalition announced the abolition of the Future Jobs Fund brought in by the last government to create jobs for young people out of work for six months or more.
Having met with Jobcentre Plus officials, Mr. Umunna learned that statistics on the success of the scheme are not yet available and has called for a full debate on why the fund has been axed before it can be properly evaluated.
Youth unemployment in the Streatham constituency, which is demographically one of the youngest areas in the UK, has increased by 6.5% over the past year. In contrast, youth unemployment fell by 27.3% in Prime Minister Cameron's constituency.
The independent body set up by the new government to review economic policy, the Office of Budget Responsibility, responded to the Budget by revising up its unemployment predictions by 100,000.
The rise in VAT announced by the Chancellor from 17.5% to 20% will disproportionately affect those on low incomes. According to the Office of National Statistics, the richest 10% pay just one in every £25 of their income in VAT while the poorest 10% pay one in every £7.
Chancellor George Osborne also announced a cut in child benefit in real terms, restrictions and cuts to housing benefit and the abolition of both the Health in Pregnancy Grant for new mothers and Child Tax Credits set aside to parents of new-born babies.
Mr. Umunna said: "What were the effects of the approach adopted by Geoffrey Howe in the 1980s? I can describe what they were in my constituency, in which I am proud to say that I have lived all my life.
"In April 1981 my mother was out shopping with my sister and me in the middle of Brixton when the riots broke out. I was too young-just two and half-to be able to remember what happened, but my mother remembers it well, and it was terrifying.
"The real question that I want answered is: what comfort can he give to the people who live in places such as the Tulse Hill Estate in my constituency that they will not have to pay the price? What measures will he take to help them to get back into work?"
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