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Finance (No. 4) Bill

My hon. Friend is absolutely right. The frightening thing is that we have not seen anything yet. The cuts in the public sector jobs are just beginning to bite, but the cuts in the tax credit system and in the housing benefit system are loaded towards the next two or three years. The worst thing happening this year was the terrible cut in tax credits on 6 April, with some of the least well-off people losing £4,000 per year because they cannot get extra hours. We know perfectly well that getting extra hours is extremely difficult. By contrast, our Chancellor lowered the number of hours from 30 to 27 at one point, after the 2008 economic crisis, in order to help people who could not claim working tax credit because they could not get enough hours. We made the reverse decision because we recognised that people were desperate for hours. I met many people who were desperate for any sort of work. The Government's policy is very damaging but, as my hon. Friend pointed out, the vast majority of cuts are still to come. The effect on Wales of the tax credit cuts is that £17 million went last year, £148 million will go next year, £188 million the following year, £219 million the following year and £222 million the year after that. Each year the savings are greater, and with every saving there is a bigger cut in people's income. The same is happening with housing benefit and all the reforms to the universal credit that are coming in. Those cuts represent a tragedy for each individual family, but more importantly for the whole economy—that is money being taken out of the economy. In other words, it is money that people do not have to spend and therefore money that is not circulating. That will have a devastating effect on our high streets where we are already seeing many well known retailers closing shops. We are lucky in Wales that we had a rescuer for Peacocks. My hon. Friend the Member for Pontypridd (Owen Smith) has its headquarters in his patch and it has been taken over. None the less, more than half the stores are closing, including two in my own town. That is just one example. I could list dozens of retailers, as I am sure all hon. Members could, in towns up and down the UK, each of which tells the same story: nobody has any money to spend. It is vital that we consider which way round we should be working in order to get money back into the economy, rather than taking it out. We start with the situation in which money is being dragged out of the economy. What do we do to try and stimulate the economy? We could create jobs. One of the things that Labour suggested is a repeat of the bankers' bonus tax. We could use the money to create jobs for young people and to stimulate the housing industry and other building projects, such as schools or roads. If we did that, we would be repeating a tax which raised a lot more than this Government seem to be prepared to raise from their banker friends. Their present tax proposals would raise a limited amount from the bankers. Believe me, on the doorsteps people say that they still want to see the banks paying their fair share to put right the problems that they put us into in the first place. We are lucky in Wales that we have a Labour Welsh Government. Welsh Government Ministers are implementing policies specifically to create jobs. We have spoken about creating jobs through a bankers' bonus tax. The Welsh Government are creating 4,000 jobs with the limited finances that they have. It is specifically a young person's jobs programme, with an emphasis on the private sector because we recognise that a much greater emphasis on the private sector is needed. We recognise that we are too dependent on the public sector.