Budget Statement

Lord Lennie Excerpts

Monday 4th December 2017 Lords Chamber

[Lord Lennie (Lab)]

My Lords, it is a pleasure to follow the noble Lord, Lord Carrington of Fulham. I shall not agree with much of what he said, although I was interested in his analysis of London. I intended to restrict my contribution to the debate to the effects of the Budget on the north-east of England. However, since the Budget, much has happened that makes that self-imposed restriction almost impossible. On top of a Budget which, by popular judgment, set low expectations and lived down to them, we have since seen an industrial strategy published and the resignations of all of the commissioners on the Social Mobility Commission, all of which impacts on north-east communities, as elsewhere.

The north-east voted to leave the European Union. The vote was in large part based on a resentment by those who have not of those who have, and a lack of government action to change that. If you are born poor, the likelihood is that you will die poor. The Prime Minister’s early claims that the Government would prioritise a narrowing of the gap between rich and poor turned out to be only rhetoric, not reality. It is deeply corrosive and has led to political polarisation. Many former industrial areas are hollowed out. No digital replacements have come. There is a cynicism that says that, “Things cannot get much worse for me and my family, so why should I vote to stay in the EU?”. The Budget has reinforced this view. Nothing really changed. Austerity will continue, with the prediction of 20 years to come with no increases in real earnings. Growth forecasts have been slashed, reinforcing this deeply worrying prospect. The economic cake shrinks. Housing has experienced demand-side attention with the action on stamp duty, but everyone knew that the supply-side issue was the problem, with too few affordable houses and planning issues not addressed. The stamp duty issue will simply increase prices.

In the north-east, infrastructure investment is what is needed. Superfast broadband is just not available in many rural and seaside communities, meaning that they fall further behind the larger towns and cities as places to grow or start businesses. What of those successful large enterprises, such as Nissan? The mid-term prospects are unclear. If the Government cannot reassure people about the prospects of staying in the European Union customs union, it makes investment in future models at the Sunderland plant uncertain.

The steelworks in Redcar remain mothballed and unused. We have an “us and them” society, social resentment, political polarisation and deep corrosion unattended to by government. There was some marginal welcome news for the north-east in the Budget, with the announcement that the replacement rolling stock for the Tyne and Wear metro is to be paid for by central government rather than locally. There is to be a bit of cash for commuter transport in the Tees Valley and the welcome “north of the Tyne” mayoral deal on devolution, which will see a small increase in central government funding, but not enough to compensate for the loss to local authority budgets in recent years. However, these are small beer when set against the giant thirst of the north-east. Set between Scotland and the M62 corridor, both with infrastructure projects to make them more competitive, the north-east must scrap to be remembered by this Government. It has a workforce keen to learn and prosper but I fear that it will suffer in the way that has been identified, with workers being replaced by robots and moving to low-paid, part-time occupations, widening the gap between the rich and the poor. Nothing in the recent past shows that the Government are overly concerned about this prospect. However, a rising tide raising all boats is no longer a maxim that can be relied upon.