Budget Resolutions and Economic Situation

Bell Ribeiro-Addy Excerpts

Monday 20th March 2023 Commons Chamber

[Bell Ribeiro-Addy (Streatham) (Lab)]

Just because, unlike the previous Budget, this one has not unravelled in about 20 minutes and led to panic selling in financial markets, the Government should not think that they have vastly redeemed themselves. We now know that the Chancellor’s flagship childcare policies will see nurseries going out of business. The fuel duty levy freeze makes a mockery of any commitment to net zero emissions targets. The removal of the cap on pension pots will affect hardly any consultant doctors at all. Instead, it is a general giveaway to very high earners, and one that protects them from inheritance tax to boot. Most egregiously of all there is a £29 billion handout to businesses, the same businesses that are already swimming in profits because of price gouging and profiteering. We know that this policy will not boost investment, because it has been tried before and failed.

All that has a context. The context is the worst fall in living standards in living memory and a wave of industrial disputes that the Government provoked. The response from Ministers is to claim there is no money left or that paying public sector workers would be inflationary, but it is the price gouging and profiteering by firms that is inflationary. That is not just something you hear me say on a picket line, Mr Deputy Speaker; the Bank for International Settlements research says it, too. This is the central bank for central banks, and no one has ever been stupid enough to claim that it is a left-wing or radical body.

The Chancellor’s policy choice was very simple: to reward those who are responsible for inflation with a multibillion pound handout of taxpayers’ money, and to punish those struggling with that inflation with derisory and insulting pay offers. The Chancellor decided that there was £29 billion left for the profiteers, but, remarkably, that there was no money left for inflation-matching pay rises. The sheroes and heroes of the pandemic are meant to get by on claps. He is a Robin Hood in reverse, stealing from the poor and low-paid, and giving to fat cats, their shareholders and the rich.

This is simply repeating the austerity policy that has hobbled the economy ever since 2010. The Resolution Foundation says that the policy has left British workers £11,000 worse off on average. The Office for Budget Responsibility is very clear about the damage the Budget will do to living standards. It says there will be a record fall in living standards over the two years to the end of March 2024 and that real household disposable income per person is on course to fall by 5.7% over the next two years—the biggest two-year drop since records began in 1956.

There was also nothing in the Budget to address the crisis in public services. In fact, spending on public services as a proportion of GDP is expected to decline in each of the next five years. In a stagnating economy, that means real hardship for millions. There are only even more cuts for local authority services, too.

Government Members may be interested to know that I believe we have seen exponential growth in two areas: privatisation and deregulation. That is warmed-over Thatcherite nonsense. If they believe that Thatcherism worked, they are as deluded as some Members have pointed out today. We are going to see life expectancy falling, poverty growing, child hunger rising and an increase in the number of food banks. This Budget will only ensure that those inequalities continue to grow.