Budget Statement

Lord Rooker Excerpts

Monday 4th December 2017 Lords Chamber

[Lord Rooker (Lab)]

My Lords, that speech was a remarkable example of the benefits of maths, which I do not propose to follow. This is the first time that I have ever been the last Back-Bench speaker and I thought, “What do I do? Shall I chuck my notes away, listen to the speeches and pick up some good points? Should I keep up to date with the fiasco in Brussels?”. I thought about all that, but I am sticking to the notes that I did at the weekend, so there may be a bit of repetition.

I am certainly not expert in economics, but I can recognise unfairness and failure from across the Chamber. I too have listened to Budgets for more than 40 years, like the noble Lord, Lord Wakeham—the first Budget for both of us was in 1974. I have learned to listen to the bits you are not supposed to hear. When I heard the Budget in 1977, I thought something was not fair about it, so, along with the late Audrey Wise, I did something about it.

In the first 10 minutes of his long speech, I heard the most important point that the current Chancellor had to make. It was about the decision of the OBR to lower the growth forecast. After seven years of failed austerity, this is a catastrophic forecast. I am not surprised that he got it out of the way early and hardly came back to it. It should have been a key factor in the Opposition’s response.

The OBR forecast has not been challenged. The Financial Times leader afterwards said:

“It is hard to overstate the significance of the Office for Budget Responsibility’s bleak forecasts”,


and that growth now is forecast to be,

“a third lower than it estimated two years ago”—

a third lower than just two years ago. I also read that the new projection will lop £50 billion off the size of the economy by election year, 2022.

Adding to concern about this key factor in the Budget is the fact that the OBR has said that, after believing the productivity slow-down was a temporary hangover after the financial crisis, and that it had factored it in, it no longer assumes that recovery is on the way when it looks to the future. The financial crisis started in the United States of America, not the UK. I need to point out that, in 2010, the Conservative Chancellor inherited an economy from new Labour which had had three-quarters of economic growth after the crash. The Conservative Chancellor inherited from new Labour an economy which had three-quarters of economic growth after the crash—I have to repeat that because we do not hear it very often from the Official Opposition. We need not have gone backwards.

The income tax changes in the Budget mean that most goes to those with the most. The low-earning worker will see the paltry change in income tax wiped out by the spiteful freeze on in-work benefits. Working families will be hit. In fact, higher inflation, the effect of the squeeze on in-work benefits and weaker pay growth will see low earners £300 a year worse off from 2022, and in some cases, according to the Resolution Foundation, £4,000 a year worse off, taking into account changes from the 2015 Budget.

It is now estimated that earnings in 2022-23 will be lower than when John Major left No. 10 Downing Street in 1997. The forecast is two decades of lost wage growth and falling living standards. Even in the dark days of Margaret Thatcher’s cuts it was not this bad, and at least she promised to take the country to a better place. There is no promise like that today.

There is simply no precedent for what is going on. The Chancellor thinks there are no unemployed; the Prime Minister thinks nurses use food banks for complex reasons; the only money tree is for the DUP; the just about managing are not—they are struggling; in-work benefits are frozen; in the small print, the Government plan an attack on public sector increments in the health service; children in poverty are on the increase; and there is no real plan to reverse it.

The Budget was so shallow that it did not deal with social care, the defence of the realm, public sector pay or the prospects for the largest manufacturing sector in this country, which is food related. There was nothing radical on university fees, the mention of the NHS was derisory and, indeed, far short of what experts say is required, and there was nothing on planning law and land supply, which is the only route to more homes and sustainable communities. There was nothing whatever. Infrastructure was talked about, but that is all that happens—talk. There are even little examples.

There was nothing on asking well-off pensioners to pay tax on the winter fuel allowance or those still working after the age of 65 to pay national insurance. There was no effort to spread any of the misery around. In fact, there appears to be a degree of spite towards those who need help. Why else freeze in-work benefits? Why continue to freeze public sector pay? We have come a long way from strong and stable; by any measure, it was a shallow Budget with spiteful side-effects on the working poor.

I want to finish with a brief point about immigration, which has been used by the Brexiteers in respect of the economy since 2013. On top of all the misery that is out there, we now have a new climate of fear spreading in this country due to the promised hostile environment for immigrants. It started before Brexit—I will grant you that—when the Prime Minister was at the Home Office. We remember the lorries she ordered up, travelling the streets with signs telling people to go home. The signal has been sent from the top—cut corners and use fear—and it is not only towards illegals, as claimed. There is evidence of elderly people who have been resident in the UK since the 1960s, when they were children, being picked up and bundled off to detention centres with a view to deportation to countries they have not been in since the age of 10. We have reached the knock-on-the-door stage in pursuit of delivering on the Prime Minister’s hostile-environment targets.

I shall give two brief examples. Eleanor Rogers, aged 71, arrived in the UK from Sierra Leone in 1966. She now has no documents and is facing removal to a country she has not lived in for 51 years. Paulette Wilson, aged 61, arrived in the UK in 1968. She worked and brought up a family. Indeed, at one time she worked in the House of Commons Refreshment Department. She was picked up and spent a week in Yarl’s Wood detention centre with a view to being deported to Jamaica, a country she has never visited since she left. This is a direct result of the Prime Minister’s hostile-environment policy, set up some years ago. It is completely and totally unacceptable.

We do not have a strong and stable Government; we have a shallow and spiteful Government. The sooner we have a new broom and direction, the better.