Budget Resolutions
Debate between Andrew Murrison and Chris Leslie
Chris Leslie (Nottingham East) (Lab/Co-op)
It is always good to try to find an area of the Budget on which we can show that there is some common ground, so I want to say at the outset how much I am pleased that the Chancellor focused on the midlands engine. I will talk about that on another occasion.
I want to mention a couple of facts that particularly stand out. There is a shocking 20% cut in local authority spending from £8.2 billion in 2016-17 to £6.5 billion in the following year. A 20% drop in council funding in one year is incredibly difficult for local authorities to cope with, given the services that depend on that money. The other point, which was mentioned by my hon. Friend the Member for Leeds West (Rachel Reeves) —I very much associate myself with her analysis of the Budget statement—is the incongruence between the £1 billion given to free schools for capital spending, and the £260 million—only a quarter of that amount—provided for the thousands of other schools that our constituents and children use. I think that is typical of the Government’s priorities.
In the short time that I have, however, I want to talk about the two key issues that stand out for me in the Budget speech. One is the issue of the self-employed, and I will come on to that later. The other is the looming hurricane on the horizon, and the fact that the Government have decided not to veer around it, but to head straight towards it by failing to try to negotiate on our ability to stay in the single market. For a Chancellor of the Exchequer, at this point of the economic cycle, to fail even to mention Brexit—our imminent exit from the European Union—is incredible. For our potential exit from the single market not to be part of the core analysis of the economic outlook, let alone for him not to be finding ways to bolster our economy so that we are prepared for the storm, is a real betrayal of the interests of our economy and our constituents.
Dr Andrew Murrison (South West Wiltshire) (Con)
The hon. Gentleman clearly has not read the report on the Budget, because its very first sentence, on page 1, starts:
“As the UK begins the formal process of exiting the European Union”.
He can hardly argue that the Treasury Bench has not taken into account our departure from the EU, can he?
Chris Leslie
Why did the Chancellor not mention it in his speech? It is true, as somebody said recently, that this is a “mono-purpose” Government, and that everything has been blown out of the water because of Brexit. Why be so coy about it? They are pretending that it is not an issue, saying, “It’s fine. We’ll cope. Don’t worry, there’s nothing to see here.” But Brexit will be at the front and centre of our considerations.
Let us look at what has happened since sterling has been devalued so significantly. Consumer spending, which has propped up our economy so much in recent months, has started to feel the squeeze. Retail sales are already starting to head down. If we do not have consumers with such spending power—if living standards are squeezed, and wages do not keep pace with that—we should not be surprised if our economy starts to shudder. The OBR says on page 6 of its report that we will see a squeeze on GDP growth in the year ahead.
We know that we have a productivity problem, and at least the Chancellor acknowledged that, but unless we can find some way to catch up with the Germans and the French and to narrow the productivity gap—they produce in four days what our employees in this country take five days to produce—we will not generate the wages we need to ensure that there is growth and prosperity.
The uncertainty hanging over businesses that export and depend on trade for their income is immense. That is not just about market access, because services account for 80% of our economy, and whatever free trade agreements Ministers manage to get—they had jolly well better get a free trade agreement—such agreements tend not to deal with service sector trading issues. The National Institute of Economic and Social Research predicts that there may be a 61% fall in our trade in services, even with a free trade agreement. Ministers have got their work cut out, and I think it is astonishing that the Chancellor did not mention Brexit. That is the big issue in the Budget.