Kilfoyle: Time to reward the faith

Peter Kilfoyle is the Labour MP for Liverpool Walton. He resigned as a defence minister at the start of 2000, preferring to return to the backbenches to be a 'critical friend' to the government.

---

By Peter Kilfoyle MP

During this parliament, much has been done to boost the incomes of those at the lower margins of our society.

I have no problems with an overtly political budget

The minimum wage and the working families tax credit are already helping millions of the low-paid, people concentrated in what have become known as Labour's heartlands.

Child benefit is up and the basic rate of income tax is down - the former benefiting 12 million children, the latter helping 1.8 million workers. Shortly, the Children's Tax Credit will kick in, helping more than five million families.

Not a bad record, it might be said. But how does the chancellor improve upon it? What should he have in his pre-election Budget? Is there not still the paradox of a widening north-south/poor-rich divide?

Well, we need to remember that there are still one million people officially unemployed; there are many pensioners on the margins; and those who, for various reasons, have fallen through - or ignored - the benefit system altogether.

The minimum wage is a fine principle, but is it effective at its current rate?

Pensioners a priority

If I was asked for my Budget wish-list, I would begin with the pensioners. I do accept that there ought to be a mechanism which automatically uprates pensions annually, maintaining their standard of living.

The present chancellor appears to run the Department of Social Security as an extension of the Treasury

After all, that was their lifetime contract with the state. Short-term palliatives are insufficient for their long-term needs.

Secondly, I would wish for a serious reappraisal of the benefits system.

It still remains the case that huge numbers of people do not claim their entitlements. They are put off by the complexity of the application process, and the often arbitrary nature of the outcome.

The emphasis on fraud is itself fraudulent; the real, persistent fraudsters are rarely apprehended - just look at the City of London.

Genuine cases are often made to feel beggars at the feast, or even intimidated by the ruthless targeting within individual benefit agency offices.

Brown's imperious gaze

Of course, the present chancellor appears to run the Department of Social Security as an extension of the Treasury. If he was to cast imperious gaze at the Department of Trade and Industry he might note its failure to galvanise the regions of England in sharing proportionately in the nation's wealth.

I am sure that he has also observed the atrophy of the Department of the Environment, Transport and Regions.

Our faithful core supporters wait patiently for their faith to find its reward

Yet these departments have hitherto been seen as vital to restoring some balance to the regions of England away from the south-east.

He might then look to hastening the removal of the Barnett formula which advantages Scotland and Wales; to scrapping the Area Cost Adjustment, which top-slices local government funding in the north and the west, to subsidise the south-east; and to reappraising the Housing Corporation allocation, which has again redirected money from our heartlands to the south-east.

The list goes on, as our faithful core supporters wait patiently for their faith to find its reward.

Time to reward the faith

Gordon Brown recently gave the impression of a new advocacy of our heartlands, and of regionalisation.

If that is the case, he should equip the Regional Development Agencies with sufficient funding and autonomy to give impetus to true regional development.

His promised billions to health, education and other public services are very welcome.

They would be even more so with the necessary financial incentives to provide sustained employment in the regions which suffered disastrous loss of jobs during the long Tory night.

I have no problems with an overtly political budget. So many of our heartlands suffered under Thatcher and Major, buoyed by the hope that the return of a Labour government would see their insistent support justified.

Now is the time for the chancellor to reassure them that they were right.