Budget Resolutions

Lord Beamish Excerpts

Wednesday 6th March 2024 Commons Chamber

[Sir Peter Bottomley (Worthing West) (Con)]

It is interesting to follow the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry). I was waiting to hear how the experiment with higher taxation is going. I invite the SNP to publish the figures showing how many of the top 10 philanthropists in Scotland five years ago are still paying tax in Scotland, and how the top 10 individual taxpayers in Scotland five years ago are doing now. [Interruption.] It is an example. SNP Members do not like having questions put to them, but there we are.

When the Leader of the Opposition started speaking, it sounded to begin with as though it was his Health spokesman who was speaking. I also reflected on the journey of the Leader of the Opposition over the last few years. In 2017 and 2019—within the memory of the House—he wanted his right hon. Friend the Member for Islington North (Jeremy Corbyn) to be Prime Minister. When there was a vacancy to succeed the right hon. Member for Islington North as the leader of the Labour party, the candidate who was closest to him was the person who is now the Leader of the Opposition. His journey over the last couple of years in changing his views, or his approach, is quite significant.

I think people can believe that the Labour party wants to change. For example, in the other Worthing constituency—I represent two thirds of the town—none of the local councillors was judged suitable to be put on the shortlist for selection as the parliamentary candidate. That shows central power in the hands of the Leader of the Opposition and his national executive. I think most people will have found that surprising. Had I been one of the Labour councillors told I could not apply, I would have been pretty upset.

The reaction I have received from my constituents to the financial statement and the Budget has come down to one particular point. Someone said, “Could there please be a change on the level of pension pot that requires financial advice?” When it was introduced in 2015, the level was £30,000. My constituent, who has a pension pot of £32,500, has been quoted £7,000 for advice on how to realise that relatively small pension pot. I ask Treasury Ministers to consider whether in the Finance Bill they could lift that figure to £40,000 or £50,000, so that people who want to gather up a small part of their defined-benefit pension can use it.

The second reaction that I had from a constituent was that, since Labour took control of Worthing Borough Council, two thirds of the reserves have gone within two years. People are worrying whether the council can remain solvent. If that is a test of what Labour might do in government, it is a pretty good reason to follow the Chancellor and the Prime Minister, and to re-elect us so that we can go on trying to raise the levels of productivity and growth, reform and develop public services, and get more people into work, with higher tax revenues and preferably lower rates of tax.

The Chancellor announced changes to the penalties on child benefit. I go back far enough to remember when most of the value of child benefit came in the child tax allowance. Children cannot work. If I had a dependent pensioner in my household, an income would come with them. Any family who have a child under working age ought to be able to get that kind of support, so that over a family’s lifecycle they receive support when they need it and pay back in when they are more able to work. I hope that we can move to a stage where the child benefit penalty goes completely. There is no philosophical or economic justification for it. It was an error, and I hope that I voted against it when it came in.

[Mr Kevan Jones (North Durham) (Lab)]

You didn’t.

[Sir Peter Bottomley]

I probably did, you know. I am that sort of person.

There are many things on the environmental side that I will not go into due to the limitations on time. I hope that the proposed district heating scheme, which the Government want to be one of their flagship projects, supported by local authorities, can go ahead. There is a problem with the cost of lane rental to put hot pipes under our roads, but we need to give serious attention to how we get major investment so that nearly all our homes come off burning hydrocarbons, whether it is gas or the like, and get on to solar heating or heat pumps—either air or ground source heating. That will require major effort, especially for residential leasehold properties.

The Chancellor announced more money for more free schools. I hope that one of them will be the special educational needs and disabilities school proposed in Worthing, on the new Durrington estate. Nearly one child in five in West Sussex has some kind of statement or need They deserve specialist support. It is good for them, and good for the other children. I hope that we will get an announcement on that very soon. Having said that, I welcome the Government’s plans. Those who say that Labour would take us back to square one are exactly right.

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[Dame Angela Eagle]

I think that the costing of the policy in the forecast ought to be more honest and it should be taken out of the scorecard if it is not to be put into effect.

Taxes are still higher than they have been since the second world war, and the Government have continued to fritter billions on fraud and waste. Only today, we learned that taxpayers have had to pick up the bill for the legal costs of the Secretary of State for Science, Innovation and Technology and for the damages in a libel case. How much has that debacle cost us?

First, the Conservatives gave us the catastrophic mini-Budget with its unfunded tax cuts, which spooked the markets and sent mortgage costs and rents soaring for millions; and now the current Chancellor has decided to fund his election giveaways with the fiscal fiction of huge cuts in planned departmental spending scheduled to last the whole of the next Parliament. There are no detailed plans for how those cuts in spending can be safely delivered, because we are not to have a spending review. Today, the Chancellor confirmed that there will not be a spending review until after the next general election. He pencilled in a so-called increase of nearly 1% for departmental budget spending, but has not compensated for higher than expected inflation or population growth, or any extra cost pressures.

[Mr Kevan Jones]

Departmental spending is not just flatlining at 1%; if my hon. Friend looks at capital on page 27 of the Red Book, she will see that most Departments are staying still or, in some cases—such as the Home Office, Education and Defence—having their budgets cut by 2024-25.

[Dame Angela Eagle]

My right hon. Friend must be able to read my mind, because that was exactly the point I was coming on to make: in real terms, there are cuts of up to 18% in unprotected Departments, going all the way through to the end of the next Parliament. That has been described by David Gauke, the Tory ex-Treasury Minister as the height of “fiscal irresponsibility”.

The legacy of this Government is burgeoning Government debt, up from 64.7% of GDP when Labour left office in 2010 to 95% now. The Chancellor will barely meet his own self-imposed fiscal rules by the tiniest of margins. Meanwhile, his neglect means that NHS waiting lists have soared, with 7.8 million treatments outstanding, and despite publishing 11 plans for growth since 2010, the trend growth rate is down from 2.3% in the 2000s to 0.8% this year. There is no regional plan, no working industrial strategy and no sign of levelling up—regional disparities are widening, not closing—and GDP is now £400 billion less than expected from the 2010 OBR growth rate forecast. Wages have stagnated, and the Government have delivered deepening levels of poverty, caused by low wages and real-terms benefits cuts, which have reduced the incomes of the poorest 20% and seen the number of people relying on food banks go from 60,000 to nearly 3 million. We have seen the last desperate throw of the dice from a failing, discredited Government, who have long since run out of ideas and are finally running out of road.

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[Ed Davey (Kingston and Surbiton) (LD)]

What we heard from the Chancellor was a Budget that reeks of desperation and deceit from a Government who know that they have lost the trust of the British people. It is a bottom-of-the-barrel Budget, with nothing to make families truly better off after the catastrophic fall in living standards under the Conservatives, and no plan for long-term economic growth, no real extra support for the NHS and our public services, and no end in sight for the years of unfair tax hikes—just a last ditch attempt from the Conservative party to cling on to power.

People have had enough of this Government’s empty promises. What they want is a general election to get this out-of-touch Government out of Downing Street. They are sick and tired of a Government who promised in last year’s Budget to grow the economy only to plunge it into recession, who promised to bring down NHS waiting lists only to let them continue to go up and up, and who promised to cut tax but have instead hit families with years of unfair stealth tax rises.

Never before have I seen a Government deliver weaker public services, higher taxes and zero growth all at the same time, and all in the middle of a cost of living crisis. I fear that, by designing his economic policy to give a short-term sugar rush to Conservative Back Benchers, the Chancellor is condemning millions of families to high mortgage rates for much, much longer. The House need not take my word for it; just look at the OBR, which forecast mortgage rates staying at 4% or more for the next five years at least. That is a disaster for homeowners across the United Kingdom.

Let us look at taxes. The Chancellor seems desperate to convince people that he is letting them keep more of their own money, but he is fooling no one. Everyone can see his supposed tax cut for what it really is: a badly executed conjuring trick, giving with one hand but taking away twice as much with the other. Since last April, a typical household has already paid £1,500 extra because of his stealth tax on income tax thresholds. That is money that they are simply not going to get back. Even after today’s announcements, that same family will pay an additional £366 in tax next year because the Chancellor has frozen their tax-free allowance. On top of that, they have soaring mortgage payments, food prices and energy bills to worry about. This tax cut had already been wiped out by the time the ink dried on the Chancellor’s speech.

People were also looking for investment in our public services, especially our NHS. Across our country, I see more and more frustration that nothing seems to work anymore under this Government. People cannot get a hospital appointment in time, they cannot see their GP in time, and they cannot get an ambulance on time. In Hampshire, the local NHS is so stretched that there is a proposal to close the A&E at the Royal Hampshire County Hospital. In Manchester, Stepping Hill Hospital has had an entire out-patient ward closed for months because it is unsafe for patients and staff. In south London, St Helier Hospital has been left to crumble, with no sign of the investment promised by the Government, and A&E and maternity services are at risk of closure. When the Chancellor makes cruel cuts to vital services, it does not just affect numbers on a spreadsheet; it affects people’s lives. Either he does not get that, or he just does not care.

[Mr Kevan Jones]

I hear what the right hon. Gentleman says about investment, but from 2010 to 2015 he was part of the coalition that savagely cut services in the north-east, including expenditure in local government and health. The consequences are now having to be addressed because that austerity has continued. Does he take any responsibility for his role in our crumbling infrastructure?

[Ed Davey]

First, I say quite gently to the right hon. Gentleman that the spending plans proposed by the Labour party going into the 2010 election were worse than what actually happened. Moreover, when in government, we fought the Conservatives on maintaining education spending, which we did maintain. They then cut it after 2015.

Let us look now at the economy. Perhaps the most out-of-touch claim by the Chancellor is that the economy is “turning a corner.” The only corner the economy is turning under this Government is from stagnation to recession. They have left our economy smaller than it was in 2022, when the Prime Minister took office. The best growth rate they have achieved in the past three quarters of 2023 is 0%. GDP per capita—people’s share in our country’s wealth—has been falling for nearly two years in a row. That is the longest stretch on record, and it has left the average household £1,500 poorer. There is worse to come. Nearly 5 million mortgage holders will soon see their repayments skyrocket by an average of £240 a month because of the high interest rates.

That is the Government’s real track record: a recession made in Downing Street with no hint of a chance to turn things around. The Chancellor could have stood up today and given people a fair deal. He could have cancelled the unfair tax hike that he has planned for April, and raised the tax-free personal allowance. He could have properly funded the NHS, to bring down waiting lists and let more people return to work, helping to grow our economy. He could have championed unpaid carers and raised the carer’s allowance. He could have supported people with the cost of living and those struggling with their mortgage payments by reversing his tax cuts for the big banks. He could have presented a serious plan for economic growth by launching an industrial strategy, reforming business rates and standing up for our small businesses. Instead, he went for one last roll of the dice in a desperate attempt to cling on to power.

I think people have already made up their minds. The Government must do the right thing and call a general election right now before they do even more damage to our wonderful country.

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[Mr Kevan Jones (North Durham) (Lab)]

In his Budget statement, the Chancellor said: “In recent times…the UK economy…has dealt with a financial crisis, a pandemic and an energy shock caused by war in Europe”. Like Government Members today, he conveniently airbrushed out of history two of the Conservative Government’s self-inflected wounds. One of them is Brexit; page 38 of the OBR’s report states that trade with Europe is down 15%, costing the economy 4%, and that the long-term effects will not be known for 15 years.

The other issue airbrushed conveniently out of history—I am surprised that the Chancellor forgot this, because it is how he got his job in the first place—was the mini-Budget by the right hon. Member for South West Norfolk (Elizabeth Truss). We are still paying for that through people’s mortgages. Although she has gone off to pastures new, surrounded by an audience of conspiracy theorists and right-wing extremists, the core of what she argued is still on display. It is about a small state, and a society in which the Government will not invest in our public services. We have had 14 years of that. In the north-east, real-terms median wages are 7% below what they were in 2008. In my constituency, 24.7% of children live in relative poverty. It is absolutely disgraceful and makes me angry that in the sixth most prosperous country in the world, life expectancy in County Durham has been going down in the last 10 years, while suicide rates are at a record high in the north-east. That has not happened by accident.

The Government made a great pledge to have more police officers on the beat, but we have 135 fewer than in 2010, even with the recent increases and extra expense. As for the joke of levelling up, which is the equivalent of pork barrel politics at its worst, it is not joined up across the country, but mainly focuses on the distribution of capital sums to places where the party in power can get political capital out of it. We have had one successful bid in County Durham, which happened to be in Bishop Auckland. It has got us half a bypass. Today, the Chancellor announced that there will be a new £100 million devolution deal for the north-east. In the last 14 years, Durham County Council alone has had to cut £260 million from its budget. Every single council in the north-east has lost upwards of 30% of its budget, so the money will not replace what has been lost.

We see from today’s Budget and the Red Book that there is stagnation, or even cuts, in every single non-mainline Department. For example, the budget for defence—both capital and revenue—goes down next year. In education, the budget flatlines. The 1% increase that the Chancellor announced today is basically a cut to our public services. That is not an accident; it is a fact of life, and it is because the Chancellor and the Prime Minister are so scared of the right-wing faction of their party. It is about squeezing the state and making sure that the Conservatives give away tax cuts, even though they have created their own problems through their wasteful economic mismanagement over the last 14 years. It will lead to dire cuts.

I feel strongly about local government, because it is quite clear that councils will fall over. The Government say that councils are falling over because they are being wasteful, and because some of them have done some very dodgy things in property, even though they were encouraged to by the Government during their time in power. People ask why 6% of Durham County Council’s budget is now spent on looked-after children and older people’s care. It is because austerity resulted in cuts in children’s services and the closure of Sure Start centres. It does not take a genius to work out that if we take away support for families, we get more children coming into the care system. That puts huge pressure on budgets; at the same time, the Government are offloading their responsibilities on to local council tax payers.

Let me finish by raising two issues that I feel very strongly about. The Budget is about kicking the can down the road, and frankly, the Government are a disgrace. Many people will know that I have been involved in the campaign to get justice for sub-postmasters for many years. I give credit to the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake), who has been a very good Minister and has tried to get the compensation out there. However, page 77 of the OBR’s report shows that the Budget puts no extra money into the new schemes. I agree with my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson): it is scandalous that no money has been allocated for the contaminated blood victims. That is cynical, and it is about kicking this issue into the general election and hoping that somebody else will deal with it. The Government have a moral duty to both groups of people, and need to put money aside for them.

This Budget is a missed opportunity, and it is more of the same. People in this country need to wake up and recognise that we cannot have well-delivered local services and well-structured, supportive communities under this Government. Until we get an election and people wake up to the facts, we will have more of what we have had over the last 14 years. The only way things will change is under a Labour Government.