Budget Statement

Lord Hain Excerpts

Friday 12th March 2021 Lords Chamber

[Lord Hain (Lab) [V]]

My Lords, I welcome all our new noble Lords joining us for their maiden speeches today.

The Chancellor responded to an unprecedented threat in 2020 by giving the economy an unparalleled fiscal boost—twice as big as the package with which Alistair Darling successfully tackled the 2008 global financial crisis. Rishi Sunak now insists that

“it would be irresponsible to withdraw support too soon”.—[Official Report, Commons, 3/3/21; col. 255.]

But the Office for Budget Responsibility’s central forecast shows that that is exactly the risk he is planning to run by withdrawing half the 2020 fiscal support this year and nearly 90% of it by 2022. He is pulling the plug on the economy prematurely and cutting fiscal support for recovery twice as fast as George Osborne did so draconically in 2010, launching 10 years of disastrous Tory austerity and low to nil growth.

The furlough scheme, the self-employment grants, the 5% VAT rate for hospitality and tourism and the universal credit uplift all end in September. The Chancellor even plans to start withdrawing the furlough scheme and the business rates holiday for hospitality businesses on 1 July, only nine days after Covid restrictions are due to end no earlier than 21 June. He cannot possibly be confident that recovery will be firmly established so soon. His Budget cheats the challenge and fakes the change, most notably by including more than £16 billion of public spending cuts relative to his March 2020 pre-Covid spending plans.

The Chancellor is trying to find an early exit from his fiscal dilemma. By rushing his fences he risks removing support for the economy and derailing recovery just when the vaccine offers a way out of the virus, piling even more pressure on massively underfunded health and care services.