Amendment of the law

There is no doubt that this year's Budget has proved to be the most difficult Budget for this Government since we came to power, primarily because of the global economic crisis that this country finds itself in, along with a lot of the other westernised developed countries. I for one welcome a lot of the measures in this year's Budget. Indeed, I would like to emphasise one or two of them that I particularly support. They include the extension of the stamp duty holiday on properties sold for less than £175,000 until the end of the year. In contrast to what was said by the hon. Member for St. Albans (Anne Main), who is no longer in her place, that will affect the vast majority of property sales in my constituency and will have a good knock-on effect on future property sales. Likewise, I certainly support the increase of the higher rate of income tax to 50 per cent. for people with salaries of more than £150,000, which comes in next year. I also support the increase in funding for the digital industries, which has the potential to create many jobs, both directly and indirectly, particularly, I hope, in south Yorkshire. Let me look at the social side of some of the policies contained in the Budget. I also welcome the increase in statutory redundancy pay from £350 a week to £385 a week, and the retention of the increase of the winter fuel allowance, which is worth £250 for pensioners over 60 and £400 for pensioners over 80, for another year. That leads me to the first omission of something that I would have liked to see included in this year's Budget—something that I have been pushing for with both the Department for Work and Pensions and the Treasury—which is the abolition of the so-called 25p age addition for pensioners over 80. It is nonsense that pensioners get an increase to their state pension of 25p, which has remained at the same level since 1971, when the Heath Government introduced it. In 1971, someone could buy a dozen eggs or a pound of cheddar cheese with 25p; now they could not even buy a second-class stamp. The Government have introduced some good initiatives for older pensioners, such as the winter fuel allowance. I would like the 25p age addition scrapped, and £25 or £50 to be put on the winter fuel allowance. This is primarily because a third of all pensioners over the age of 80 in this country now pay income tax, so they are effectively paying income tax on that 25p increase. If the increase were added to their winter fuel allowance, however, it would be a capital allowance and they would receive the full benefit of the increase. The net cost to the Treasury of making that change would be £15 million a year, which is peanuts. It costs £35 million to pay the 25p a week. To add £25 a year to the winter fuel allowance for people over 80 would cost £50 million, and that would be £50 million well spent. It would be well received by the pensioners of this country. The next issue that I want to focus on was brought to my attention by a constituent of mine just before Christmas. It concerns the level of taxation on statutory redundancy payments. I should like to quote the e-mail that I received from my constituent, Mr. Nicholas McIvor from Great Houghton, because it hits a number of buttons that have been touched on earlier in the debate. The e-mail is dated 12 November, and it states:""Dear Jeff…I am writing to you as a 'soon to be' unemployed civil servant. I work at the Pension Centre in the Dearne Valley which will close just before Christmas. I will be receiving a Statutory Redundancy Payment but anything above £30,000 is liable to income tax at the highest rate. I understand this tax limit was raised from £5,000 to £10,000 in 1978, to £25,000 in 1981 and to £30,000 in 1988, but it has remained at that level for the past twenty years. I am hoping to use my payment to set up in business and if the Government is looking to stimulate the economy, would it not be better if the £30,000 limit was raised as it seems to be well overdue?"" The reason I say that that hits a number of buttons is that the right hon. Member for Wokingham (Mr. Redwood)—who, unfortunately, is no longer in his place—said that the private sector was bearing the brunt of the redundancies and job losses. That is not the case, and the sooner Conservative Members can get away from the notion of "private sector, good; public sector, bad", the more it will be to their benefit. As far as I am concerned, the people who work in the private sector, the public sector and the third sector—the charitable sector—are all serving UK plc to the best of their ability. That is what we should be more concerned about. We need to continue to invest in jobs in the public sector in order to maintain that sector, because a lot of the small and medium-sized enterprises that are struggling to survive are dependent on their contracts with local councils, with the NHS and with quangos to sustain them. This idea of "private sector, good; public sector, bad" is a false notion that we need to get away from. Incidentally, there is a good news story attached to that e-mail, because within weeks of being made redundant, that gentleman found alternative employment. That proves the success of what the Government are doing through Jobcentre Plus, through the regional Government offices—we have a very good chief officer in the Government office for Yorkshire and the Humber, Felicity Everiss—and through the regional development agency, Yorkshire Forward, whose chief executive is Tom Riordan. They are doing a fantastic job of finding alternative employment or job opportunities for people who are being made redundant, particularly in industries such as the financial sector in West Yorkshire.