Budget Resolutions

Sam Tarry Excerpts

Tuesday 12th March 2024 Commons Chamber

[Sam Tarry (Ilford South) (Lab)]

I apologise in advance, Mr Deputy Speaker, for my rather croaky voice today. I was vocally cheering on the historic double win on the weekend: the Commons and Lords rugby team’s win over the Dáil and Seanad, and of course, England’s dramatic victory at Twickenham.

Turning to less happy matters, this Budget does absolutely nothing to remedy the economic malaise we have had over the past 14 years. Some £20 billion will have been slashed from vital public services by 2028, paired with tax cuts that overwhelmingly favour the very richest in our society—just another round of austerity from the architects of inequality. It is the worst decline in living standards since the second world war, the worst growth since the great depression, and the worst wage crisis since the battle of Waterloo. What an awful record that is. It is economic incompetence of utterly historic standards.

This malaise did not emerge suddenly and recently; it is not solely the result of the pandemic or the war in Ukraine. It is the cumulative outcome of a decade and a half of misguided economic decisions and governance by successive coalition and then Conservative Governments. When the former Prime Minister, the now Baron Cameron of Chipping Norton, announced the beginning of a new “age of austerity” back in 2009, few of us could have predicted the sheer devastation that the Conservatives were about to unleash on this country. A report from the Progressive Economy Forum reveals that between 2010 and 2019, austerity measures drained a staggering half a trillion pounds from the UK’s public spending coffers.

The impacts of those cuts have been devastating. The introduction of the Welfare Reform Act 2012 increased the number of children living in relative poverty by 600,000 in just seven years. Bizarrely, British children are now 7 cm shorter than their European counterparts, clearly because of the malnutrition, scurvy and rickets that now plague our children’s future—it is utterly unbelievable, but these are facts put out by scientists.

As we all know, food bank usage, even in many Conservative constituencies, has skyrocketed. According to the Trussell Trust, emergency food parcel usage rose from 61,000 in 2010 to 1.9 million in 2020. Rates of increase in life expectancy have nearly halved, and more than 330,000 excess deaths in Great Britain have been attributed to this great age of austerity. That austerity has proved to be not just economically devastating, but, sadly, fatal for hundreds of thousands in this country.

These policies were not just confined to the coalition Government. Between 2015 and 2019, a succession of Conservative Prime Ministers committed themselves full-throatedly to the devastating austerity politics of the last five years. The most egregious was the implementation of the two-child benefit cap in 2016-17. That particularly awful example means that 42% of children living in families with three or more children now live in absolute poverty. The two-child benefit cap has impacted on 1.5 million of our nation’s children.

Despite politicians’ promises of austerity leading to an improved economy, our public finances have clearly not improved. Since 2010, the real economy has grown by only 1.2% a year, and we have the weakest growth among G7 countries. The simple fact—and this needs to be said loud and clear—is that you cannot cut your way to growth in any modern economy. We have witnessed the worst growth in GDP per head since records began. The real average wage for most Britons has remained unchanged since 2007, which is the biggest fall in living standards since records began. Productivity, which is closely linked to levels of investment, has stagnated for the longest period in modern capitalism. Productivity is now lower than in France, Germany and the United States.

A decade of austerity left the UK exceptionally vulnerable to the pandemic. When that hit, the years of pay caps and freezes wreaked havoc on safe health and social care staffing. They hindered recruitment and saw a spike in staff turnover, and as a result both sectors were perilously understaffed even before the pandemic hit. The cuts to social security, benefit freezes and restrictive reforms shattered our agreed safety net in this country. Those soaring poverty levels fuelled higher covid risks, leaving my constituents much more vulnerable to severe health consequences.

Slashing funds gutted the provision of health and safety regulators, which left enforcement in a shambles. Amid the pandemic, inspections and notices hit rock bottom, despite rampant workplace infections. This categorically led to the death of NHS workers on the frontlines. Emerging from the pandemic, public services were left in tatters, as they are still, and they desperately need financial support, but it was not brought forward in the Budget last week. The situation was only worsened further by the former Prime Minister’s acts of economic self-destruction, which plunged the pound to historical lows, allowed mortgage interest rates to skyrocket and put six major pension funds at risk of total annihilation.

This track record of the decimation of our country has left classrooms falling apart, NHS waiting lists at near record-breaking length, household unsecured debt going up through the roof and our public institutions on their knees. This is the result of only one organisation and one group of people: it is the result of 14 years of uninterrupted Conservative and coalition economic mismanagement. The Institute for Government has warned that our public services are stuck in a “doom loop” of recurring crises, due to more than a decade of short-term policy making and harsh austerity.

This Budget was a missed opportunity for laying a different progressive pathway forward for our economy—one that empowers and properly funds public services, and puts working people and our fragile planet at the very heart of it; one that invests in people and their skills, whether that is at university or for vocational workers; and one that invests in our workplaces and our people. Until we have a Government who are prepared to do that, as well as to stand up for the ordinary people of this country, and have a serious long-term investment plan for infrastructure and a long-term investment plan for sectors in our industries, our country will stagger onwards on a treadmill of economic decline.

[Several hon. Members rose—]

Oral Answers to Questions

Sam Tarry Excerpts

Tuesday 6th February 2024 Commons Chamber

[Laura Trott]

Council tax is a matter for councils, but we put in place a limit, which I do not believe existed under the previous Labour Government. More than that, the most difficult thing for councils and consumers more broadly is the £28 billion-worth of tax rises that Labour is planning in government.

[Sam Tarry (Ilford South) (Lab)]

8. If he will make an assessment of the potential impact of removing the cap on bankers’ bonuses on the financial sector.

[The Chancellor of the Exchequer (Jeremy Hunt)]

Removing the bankers’ bonus cap was a decision made by the independent Prudential Regulation Authority, which has long said that the cap was completely ineffective; it did not limit pay or make banks safer.

[Sam Tarry]

The cap on bankers’ bonuses might have been a great newspaper headline, but it did little to tackle the City’s excesses. Financial institutions quickly changed remuneration packages and structures so that risk takers still receive substantial pay-offs, sometimes even taking them through offshore mechanisms. Does the Chancellor agree that what we need is enhanced regulation to mitigate excessive risk taking in the square mile? That could require, beyond merely capping bonuses, a move toward an alignment of interests focused on the form of bonus payments, share allocations and deferred amounts, and robust clawback mechanisms for those who have behaved maliciously, in order to deter misconduct in the square mile more effectively?

[Jeremy Hunt]

I suspect that when the hon. Gentleman tabled his question, he was not expecting that the biggest supporter of abolishing the bankers’ bonus cap was not the Chancellor but the shadow Chancellor. I hear what he says, and indeed those are some of the reasons we abolished it, because it was not working. If Labour is going to change its mind on that policy, may I ask—just to take a totally random example—when will it change its mind about the planned £28 billion of additional borrowing?

Autumn Statement

Sam Tarry Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Jeremy Hunt]

Because if we want to get to net zero, we are going to have to have more renewable energy and, unfortunately for the hon. Gentleman and for me, there are days when the sun does not shine and the wind does not blow.

[Sam Tarry (Ilford South) (Lab)]

We have the lowest investment in the G7; on the Government’s own figures, it has fallen further and further. Currently, public sector investment is scheduled to fall by £14 billion in real terms over the next five years. Without serious investment in public services, we cannot hope to improve productivity, which the Chancellor spoke about today. We cannot just demand that people go back to work, and work harder and harder to compensate for this. We need £10 billion to match the OECD’s average public investment annual spend as a share of GDP. I would like to hear from the Chancellor why he has not taken the opportunity today to align ourselves with the rest of the G7?

[Jeremy Hunt]

Let me gently remind the hon. Gentleman that business investment has grown by more since 2010 than it grew under the Labour Government; we have the second highest growth in the G7, with ours faster than any country’s except America.

Economic Growth

Sam Tarry Excerpts

Tuesday 14th November 2023 Commons Chamber

[Sam Tarry (Ilford South) (Lab)]

We are now facing the 14th year of Conservative rule. In that time, the Conservatives have presided over the worst growth in GDP per head since records began, a sustained decline in living standards and a huge housing crisis, while our public services are disintegrating.

It is clear that the economic policies of the past decade have totally failed to address the biggest challenges faced in our everyday society. We are in the midst of the worst pay crisis since the Battle of Waterloo. Real income is still below levels of 2010. In fact, our entire economic system is a stagnant, economic disaster zone—as the New Economics Foundation has put it,

“a stitch-up between large, distant institutions and large, distant corporations.”

My constituents in Ilford South feel the full force of this economic malaise every day, whether it be in the shops, navigating the ever-growing prices of basic goods with an ever-shrinking pay packet, or perhaps most acutely in their very homes, where they face ever-rising rents, crumbling houses and the constant threat of no-fault evictions.

The private rented sector is the worst case of this—a highly deregulated mess that has enabled rents to skyrocket as quality declines, with freeholders looking to grab as much ground rent as possible. The English Housing Survey says that almost a quarter of occupied private rented properties, amounting to nearly 1 million properties, fail the decent homes standard.

Private tenants are almost three times as likely to be exposed to damp and mould as social housing tenants. Even if the property tenants reside in is liveable, there is always the looming threat of a section 21 no-fault eviction. Since the Government first promised to end section 21 no-fault evictions, over 70,000 households have been evicted and threatened with homelessness, and in the past few months, section 21 claims have risen by a shocking 38%. Section 21 is now a leading cause of homelessness in this country, but it can also be used as a weapon by unscrupulous landlords to quash any demands from tenants who complain about failure to meet basic standards and conditions.

While it is welcome to see that the Government are finally bringing forward the long-awaited Renters (Reform) Bill, which will end section 21 evictions, it seems to be too little, too late and appears to be indefinitely delayed. How much longer do tenants in my constituency in Ilford have to live with the constant fear of a no-fault eviction hanging over their heads?

The Bills presented in the King’s Speech do nothing to address the cost of renting. The past year has seen the biggest rise in rents since records began, forcing private renters to fork out huge proportions of their income on living costs. Sandra, in my constituency, said to me recently:

“Initially, our monthly rent was at a reasonable level, but we were shocked when our landlord proposed a substantial rent increase of £450 extra per month…As law-abiding citizens who diligently pay our taxes, we find ourselves in a bewildering and unjust situation. It is disheartening to see individuals and families, who were once stable in their homes, being pushed into homelessness or temporary accommodation due to these unreasonable rent increases.”

This will be a familiar story to countless families across London, as many London MPs will know. The average advertised rent in London is now a record £2,501 per month. Record rents are a symptom of the housing crisis and a broken private rented sector. Thankfully, the Mayor of London is urging the Government to act now, because London is one of the few global cities without any form of rent controls. We can learn from international precedents to design an effective system of rent control for London. Our Labour Mayor proposed two-year rent freezes, which could save average renters in London £3,374. I hope that the Minister will consider granting the Mayor of London the powers that his counterparts in Berlin, New York and Scotland have to introduce rent controls.

This is a failing sector that has pushed more and more families into disastrous temporary accommodation. When I speak to my constituents who are trapped in temporary and emergency accommodation, I hear how they have been waiting upwards of 10 years for a social home. As MPs, we have all heard the horror stories. This is a complex issue, with no silver bullet. The long-awaited and yet further delayed Renters (Reform) Bill is a welcome step in the right direction, but it does not go far enough. It does nothing to tackle excessive rent increases and it fails to close loopholes that will allow unscrupulous landlords to continue to exploit tenants. If this Government, and indeed any future Government, are serious about tackling this crisis, they must go further. They should give local leaders the power to issue rent controls and empower tenants with proper rights and guarantees. We need more Becontree estates, once homes fit for heroes, not Battersea power station monuments with luxury flats for the super-rich.

Finance (No. 2) Bill (Second sitting)

Sam Tarry Excerpts

Committee stage
Tuesday 16th May 2023 Public Bill Committees

[James Murray (Ealing North) (Lab/Co-op)]

I begin by addressing clause 36, which inserts new sections into the Taxation of Chargeable Gains Act 1992. As we heard from the Minister, the new sections will help to make sure that UK tax cannot be avoided on chargeable gains made on the disposal of a UK business, or on income received in respect of shares or securities held in a UK business, by exchanging securities in a UK company for securities in a non-UK holding company. Under the current legislation, where such an exchange takes place and the individual is a UK-resident non-domicile, they will be able to claim the remittance basis on any chargeable gain made on the disposal of the non-UK company’s securities or on any income received in respect of the offshore company’s securities.

I would be grateful if the Minister could set out the Government’s response to some of the queries about the detail of the Bill that have been raised by the Chartered Institute of Taxation, which has expressed concern that by applying only to individuals in their other guises—for example, when they are acting as trustees—the measure leaves gaps that could be exploited. The Chartered Institute of Taxation believes that there is potentially a straightforward avoidance opportunity here, whereby having shares held by trustees just before the share-for-share exchange could be resolved by extending the measure to cover trustees, rather than just individuals on their own. To tackle this issue, the Chartered Institute of Taxation suggests that individuals acting as trustees, or as partners or members of partnerships or LLPs, be included within the definition of those affected by the change, to ensure that artificial intermediaries are not put in place prior to any exchange.

The second point raised by the Chartered Institute of Taxation, which I would like the Minister to address, relates to the wording of the Bill with respect to the ownership of shares, which it believes may also create an avoidance opportunity. New section 138ZA(1)(d) of the Taxation of Chargeable Gains Act 1992, which clause 36 introduces, refers to the person to whom the shares are issued—the legal owner, as opposed to the beneficial owner. It is well recognised in tax law that the beneficial owner is the real owner for tax purposes, so the Bill should logically refer to beneficial ownership. The Chartered Institute of Taxation is therefore concerned that failure to clarify the beneficial, rather than legal, ownership could leave a possible avoidance opportunity open, and I would be grateful if the Minister could address that point.

More widely, looking beyond the specific detail of the Bill, we believe it is important to consider the context in which the clause operates. It seems clear that the situation that the measure in the clause seeks to address arises only because of the existence of the non-dom tax status and the associated remittance basis. Indeed, the Government’s own policy paper on this matter makes it clear that the measure is expected to affect a very small number of wealthy, UK-resident non-domiciled individuals a year. In practice, the measures we are considering need to be addressed only because the Government refuse to get rid of the £3.2 billion-a-year tax loophole that the Prime Minister has referred to as “that non-dom thing”.

The Minister may recall how she told the House in January that the measures we are debating today would mean that the Chancellor would close the loophole in non-dom legislation, but when we inspect the detail that is before us today, it is clear that this is just a smaller loophole within the much larger and more profound loophole: the continued existence of the non-dom tax status. The policy paper underscores this point and confirms that the measure will raise, on average over the next five years, just one 20th of the £3.2 billion lost through the non-dom tax status every year. I urge the Minister to go beyond the small step today and commit to abolishing the non-dom tax loophole altogether.

Moving on to clause 37 and schedule 5, we understand that this measure is intended to make sure that businesses maintain and provide upon request transfer pricing documentation prepared in accordance with the OECD transfer pricing guidelines. We recognise that accessing high-quality data in a standardised format would enable HMRC to carry out more informed risk assessments, target resources more efficiently and reduce the time taken to establish the facts in compliance interventions. Moreover, having to clearly report transfer pricing information in specific documentation will result in businesses having clearer and more robust transfer pricing positions to inform the filing of their return. This may encourage and incentivise businesses that adopt higher risk transfer pricing positions to change their behaviour.

In recent years there have been significant developments in the field of international taxation. More than six years ago, the OECD presented a package of measures in response to the G20-OECD base erosion and profit shifting action plan, including a requirement to develop rules regarding transfer pricing documentation. The action 13 final report recognised the importance of having the right information at the right time to identify and resolve transfer pricing risks. This led to the introduction of guidance on a standardised approach to transfer pricing documentation.

The standardised approach consists of three things: a master file containing standardised information relevant for all multinational enterprise group members; a local file referring specifically to material transactions of the local taxpayer; and a country-by-country report for the largest multinational enterprise groups containing aggregate data on the global allocation of income, profit, taxes paid, economic activity and so on among the tax jurisdictions in which it operates.

We understand from the policy paper on this measure that the UK did not originally introduce specific requirements regarding the master file and local file because the Government felt that the UK already had broad record-keeping requirements. They seem to have changed their mind on this, which has led to this Bill. It seems that the status quo had created uncertainty for UK businesses regarding the appropriate transfer pricing documentation that they needed to keep. That led to an inconsistency of approach. Although this measure relates to the standardised approach for transfer pricing documentation, I would like to ask the Minister to update the Committee on the status of country-by-country reporting.

The policy paper refers to the fact that the UK implemented the country-by-country minimum standard. However, as we know, the Government have long been hesitant to go beyond that minimum and provide public country-by-country reporting. Indeed, nearly three years ago my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) made it clear to one of the Minister’s predecessors that for years the Opposition has been urging the Government to commit to country-by-country reporting on a public basis. Will the Minister give us her view on public country-by-country reporting and explain what is preventing the Government from implementing it?

Finally, clause 38 introduces a measure to limit access to double taxation relief in certain circumstances. Specifically, we understand that it will prevent new claims for double taxation relief credit, calculated by the foreign nominal rate of tax, which could arise in relation to overseas dividends received by UK companies in periods prior to the introduction of the distribution exemption in 2009. We recognise that this measure is intended to preserve the balance between double taxation relief claims and the need to impose reasonable time limits in respect of such claims, so we will not be opposing this clause.

[Sam Tarry (Ilford South) (Lab)]

It is an honour to speak under your chairmanship, Ms McVey. On the points made by my hon. Friend in relation to clause 36, it is important for the record that we understand the Government’s thinking around non-doms. Although work has been done to close the particular loophole that was mentioned, as my hon. Friend has just said it is quite apparent that that work is tiny compared to the scale of the problem. It is worth exploring the breadth of the problem.

Let us be clear. Non-doms receive around £10.9 billion in offshore income. That is capital gains that they are not required to report on to HMRC or pay tax on in the UK each year. For a non-dom using that remittance basis scheme, that amounts to a tax break of on average £420,000. Those unreported capital gains represent a huge untapped pool of tax. There are so many issues facing the country, and that money could be used appropriately to lift many people out of poverty.

Members on Government Benches have expressed on many occasions concerns about abolishing non-dom status and a potential flight or mass exodus from the UK. However, recent interesting research by the University of Warwick found that only 0.3% of those affected would leave the country. That is fewer than 100 people in total, most of whom are paying hardly any tax under the current regime. My question to the Minister is: why is there so little breadth in what has been brought forward? This was an opportunity to completely abolish non-dom status, or, if the Government are not prepared to do that, certainly to apply minds in the Treasury to a far wider range of areas, which would have brought much-needed money into our coffers. It is a problem that the Government are really a bit lax when it comes to tax.

--- Later in debate ---

[Victoria Atkins]

I completely agree: there is a ripple effect from those individuals. Conservative Members understand the concern that such people should pay their taxes fairly and contribute to our economy, which is precisely why it is a Conservative Government who act on loopholes when they emerge and are drawn to our attention, as we have done in the Bill but also in 2017. There is a delicate balancing act to ensure that we remain internationally competitive.

[Sam Tarry]

It is important that we are clear that non-dom status is mostly used by British citizens who were born in this country but have decided to not pay their taxes in this country, even though they live here for the majority of the year—[Interruption.] It is true. It is a hangover from the colonial era, when people used to have sugar plantations. Look at the history of non-dom status; it is hundreds of years old. It has not just been cooked up by the Treasury in the last five minutes, has it? It was a way of allowing people to own different things around the world—sugar plantations in the Caribbean are one example—and have that money come back to the UK without paying the taxes. It was a perk, essentially, for those people.

If Conservative Members do not believe me, they should go and look at the history. They are in government. They should know these sorts of things. The fact is that non-dom status is used as a tax dodge. The point is about fairness. Of course we want to encourage the brightest, most talented people to come to this country, make a life here and contribute, be that in life sciences, tech companies, the NHS or whatever, but I strongly suggest to the Minister that she should have a firm conversation with the Home Secretary about putting in place a progressive migration policy, because that is the problem here.

This is about taxation and people paying their fair share. Some 77,000 people—British residents, living most of the time in this country—use the non-dom scheme to not pay taxes—

[The Chair]

Order. I remind Members that interventions should be brief.

Oral Answers to Questions

Sam Tarry Excerpts

Tuesday 9th May 2023 Commons Chamber

[Sam Tarry (Ilford South) (Lab)]

We are clearly falling pretty short of where we need to be if we are to tackle net zero. Recent research by E3G and the World Wide Fund for Nature into clean investment showed that the gap is currently between £81 billion and £111 billion between now and 2030. That is equivalent to a quarter of the investment required in that crucial economic sector and every other sector of the economy. Public investment clearly needs to be a key driver in reaching net zero, so I wonder whether Ministers would consider increasing the capacity of the UK Infrastructure Bank on that.

[The Economic Secretary to the Treasury (Andrew Griffith)]

The Government are leading the way with the recently published green finance strategy, but that stands as part of a broader piece of work, unleashing productive finance into all parts of the economy and in particular funding the transition, which is capital intensive.

NHS Workforce

Sam Tarry Excerpts

Tuesday 6th December 2022 Commons Chamber

[Victoria Atkins]

I have not seen it myself but, from descriptions I have heard, I am not quite sure that is what he was trying to—[Interruption.] Members ask why I have not watched it. I was actually getting ready for a birthday party for my 10-year-old. We are allowed lives outside this place.

For those who have commented on workforce figures over the past decade, between May 2010 and August 2022, 36,000 more hospital doctors and 38,000 more nurses and health visitors were recruited. We are also asking the NHS, like all public services, to tackle productivity and inefficiency. My hon. Friend the Member for Peterborough (Paul Bristow) emphasised the importance of that and brought his experience to the debate.

To help colleagues, the initial findings by Patricia Hewitt, the former Labour Health Secretary, will be delivered to the Department within three weeks, which shows the pace of work that Ms Hewitt and others are taking on this important project. In addition, we are boosting NHS funding by £3.3 billion next year and by another £3.3 billion the year after that, helping to ensure that the NHS can take rapid action to improve urgent and emergency care and to get elective performance back to pre-pandemic levels.

[Sam Tarry]

Will the Minister give way?

[Victoria Atkins]

I will just make a little progress, if I may. Amanda Pritchard, the chief executive of the NHS, has said that this should

“provide sufficient funding for the NHS to fulfil its key priorities”

and shows that the Government are serious about their commitment to prioritise the NHS.

The hon. Member for Coventry North East (Colleen Fletcher) and my hon. Friend the Member for Peterborough emphasised the role that pharmacies can play, and I hope we can discuss ways that different services can be delivered differently over the NHS in the coming months and years. My hon. Friend the Member for Winchester (Steve Brine), who chairs the Health and Social Care Committee, made the sound point that prevention is part of productivity.

Overall, the NHS resource budget in England is expected to increase to £165.9 billion in 2024-25, up from £123.7 billion in 2019-20. Our determination to deal with the covid backlogs has seen the NHS already hit its first milestone in terms of waits of over two years, and it will go further, eliminating waits of over 18 months by April next year, over 15 months by March 2024, and over 12 months by March 2025. My right hon. Friend the Secretary of State compared that with the figures in Labour-run Wales, and noted that a fifth of the population there is waiting for care and remarked on the curious anomaly that Wales stopped publishing its workforce vacancy rates in 2011.

[Sam Tarry]

Will the Minister give way?

[Victoria Atkins]

I will, but then I must make progress.

[Sam Tarry]

The Minister talks about waiting lists dropping. I would like to hear an explanation as to how, in one 24-hour period last week, in the whole of the UK, there was one paediatric intensive care unit bed. What is her explanation for that?

[Victoria Atkins]

The hon. Gentleman raises a serious point. I do not have the answer to hand, but I will ensure that the relevant Health Minister writes to him, because I understand why he raises it.

There has been a great deal of discussion about nurses’ pay, and we are extremely regretful and very much hoping that accommodations and agreements can be found. To put into context recent pay rises, more than 1 million staff including nurses have benefited from a pay rise of at least £1,400 backdated to April this year. That is on top of the 3% pay rise they received last year. My hon. Friend the Member for Winchester asked an interesting question: does Labour support or oppose the independent pay review bodies, which set the recommendations that have been accepted?

Economic Responsibility and a Plan for Growth

Sam Tarry Excerpts

Wednesday 19th October 2022 Commons Chamber

[Sam Tarry (Ilford South) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Reading East (Matt Rodda).

Last month, the Government engaged in one of the worst acts of economic self-destruction in living memory. Overnight they plunged the pound to historic lows, mortgage interest rates skyrocketed out of control and six major pension funds faced total collapse. In just five weeks, they have imploded the economy, destroyed our global reputation further and thrown countless more families into debt and destitution. One former US Treasury Secretary even described it as one of the worst macroeconomic decisions ever taken, suggesting that

“The U.K. is behaving a bit like an emerging market turning itself into a submerging market.”

Research by the New Economics Foundation found that the trickle-down Budget pushed the income of the poorest 10% a further £900 under the cost of basic living supplies, while boosting the incomes of the richest by £5,000 above cost; a move totally divorced from reality. Now, with the damage already done, they have announced an embarrassing set of U-turns. They are already signalling a return to the savage and failed policies of austerity, which will decimate our infrastructure and public services, and make working people poorer the length and breadth of Britain.

Despite all that, the Prime Minister and the former Chancellor were right about one thing: the economic policies of the past decade have utterly failed to address the biggest challenges faced in our society. Indeed, successive Tory Governments have overseen the worst growth in GDP per head since records began. According to figures by the ONS, the UK is the only G7 economy yet to recover to above its pre-pandemic levels. That is 12 years of stagnant wages that have resulted in what the TUC referred to as the worst pay crisis “since Napoleonic times,” with real incomes still well below 2010 levels at the time of the outgoing Labour Government.

UK inflation is on course to rise to its highest peak in half a century and 45 million people are about to be plunged into full poverty. Many will struggle to put food on the table and keep the lights on this winter. Low-income households will see the gap between income and the cost of living increase by 40% next April, with three in four households unable to cover rising costs. People in Ilford have borne the brunt of this economic crisis. My inbox this week was full of desperate cries for help from constituents who have no idea how they are going to make it through another grim winter, with so many forced into debt and further below the poverty line.

The Chancellor’s attempt to mend the damage done by his predecessor is nothing more than a return to the age of austerity that damaged our economy so deeply, instead of the strategic long-term investment that is so badly needed in the UK. Yet again, a Tory Chancellor has warned that “more difficult decisions” are yet to come to cope with the economic crisis that his own party has inflicted on the country. His new advisory panel is entirely made up of members of the financial sector, including former Chancellor George Osborne’s chief of staff, now a member of Blackrock, the designers of the LDI—liability driven investment—schemes that very nearly imploded the economy two weeks ago, as well as a representative from J.P. Morgan. That is hardly reflective of the needs and wants of the wider public. Where are the representatives of the rest of the economy, the TUC or the low-paid workers set to be hit the hardest?

The Chancellor has unsurprisingly already told us that cuts to vital services are seemingly inevitable. Again, it looks like working people up and down the country are going to be asked to tighten their belts even further. Why do these “tough decisions” always seem to fall on working class people, when so many at the top have never had things so good? Indeed, energy giants are set to make up to £170 billion in excess profits during this crisis, while ordinary households struggle to pay the bills, and we may well be heading towards rolling blackouts. CEOs are now collecting an average of 109 times the pay of ordinary workers, with chief execs of the UK’s 100 biggest companies seeing their pay increase by a staggering 39%, well above pre-pandemic levels. Isn’t it about time that the very richest and their oligarch allies, who got us in this mess in the first place, shoulder some of the burden?

Getting more cash in the hands of everyday people would lead to exactly the kind of high growth that the Government claim to want, with far better health and education outcomes as a result. Wages must rise, at the very least, in line with inflation across the board, and those bearing the brunt of the cost of living crisis need a pandemic-style bail-out for their energy bills. The IMF has suggested that it would cost about £30 billion to compensate the poorest 40% of households for price rises this year—still a fraction of furlough costs and £10 billion less then Shell and BP made in profit last year alone.

The energy giants will continue to raise their mark-ups as long as they are allowed to do so, and they cannot be trusted to keep bills at affordable levels. It is high time that they are replaced by a single publicly owned energy company, run by workers and held to account by consumers. We need a genuinely transformative green new deal, working hand in hand with a coherent, progressive industrial strategy to rebalance the economy away from the City of London and create millions of high-skilled, well-paid, unionised jobs—forging a greener, more just society and putting Britain at the heart of the fight internationally against climate change.

Economic Update

Sam Tarry Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

As I have said—I am happy to repeat it—all these decisions will be taken through the prism of the impact on the most vulnerable people in society.

[Sam Tarry (Ilford South) (Lab)]

Many constituents in Ilford South will be very glad that the last Labour Prime Minister had the foresight to make the Bank of England independent, given the mini-Budget a few weeks ago almost tanked six pension funds in the UK. What I would like to know from our new Chancellor today is what he is going to do—at least one more is still at risk—to reassure pensioners in Ilford South, and the millions of people across the country who are not only angry but frightened, that he will do something concrete to shore up pension funds not just over the next few weeks but over the next few years.

[Jeremy Hunt]

We have had very decisive action from the Bank of England to do exactly that, and I hope the hon. Gentleman is encouraged by what the Governor of the Bank of England said today about his belief that he has largely solved those issues.

Financial Statement

Sam Tarry Excerpts

Wednesday 23rd March 2022 Commons Chamber

[Rishi Sunak]

We do value carers. There are fewer people in poverty today than when we first came into office—1.7 million people fewer in absolute poverty than in 2010, after housing costs. Also, today we have topped up the household support fund, in order to provide support to the most vulnerable who need help.

[Sam Tarry (Ilford South) (Lab)]

This week it was revealed that 75% of people in my constituency are struggling to pay for basic groceries. The OBR’s analysis following today’s statement has said that we face the largest fall in disposable incomes since the 1950s. Will the Chancellor visit my constituency, sit down with the people who use the local food bank, many of whom are in work, and see just how little the policies announced today will do to support them, to get them into work, and to allow them to live with dignity in their community?

[Rishi Sunak]

The hon. Gentleman is simply wrong. Those in work, particularly on low incomes, will benefit disproportionately from the policies that have been announced today. I have given plenty of examples already, but a single mother with two children who is renting, on universal credit, and working full time, earning the national living wage, will be £1,600 better off as a result of all the policies we have announced on taxes and welfare. We are supporting exactly the people the hon. Gentleman talks about.