Income Tax (Charge)

Alex Cunningham Excerpts

Thursday 28th October 2021 Commons Chamber

[Edward Miliband]

It is certainly not those with the broadest shoulders who are being affected, and I thought the reason that the Government raised taxes was for social care. It is yet another guarantee from the Prime Minister that is not worth the paper that it is written on.

The IFS tells us this morning that taxes will be £3,000 more per household than when the Prime Minister came to power. As my hon. Friend the Member for Leeds West (Rachel Reeves) said in her excellent speech yesterday, this is about the choices that the Government are making. Also buried in the Red Book is that the Chancellor saw fit to cut taxes on the banks by more than £1 billion because he was so worried about the burden they were facing, just like last year when he made the choice to cut stamp duty for second home owners because he was so worried about them. He was obviously less concerned about the burden of higher energy prices facing millions of British people, because he refused to cut VAT on fuel as he should have done.

In a way, the most shameful part of the Budget is the Chancellor’s refusal to reverse his £1,000 cut to universal credit, which hit 6 million families. For all the smoke and mirrors, this morning we know the truth about universal credit. According to the Resolution Foundation, three quarters of families on universal credit will be worse off, even after the changes to the taper. It says that the taper changes

“will be overshadowed by last month’s £6 billion cut to entitlement: three-quarters of families on UC will lose more from the £20 cut than they gain from the Budget changes. Even if we also take into account the…National Living Wage, the poorest fifth of households will still be an average of £280 a year worse off overall.”

The fact that Conservative Members were wildly cheering a policy yesterday that sees millions of working families far worse off shows, I am afraid, that they do not get it either.

[Alex Cunningham (Stockton North) (Lab)]

When I wander down Stockton High Street, I see the signs of poverty everywhere. I see young people with no hope on their faces and no hope of getting a job. I see people who probably have to shop in the charity shops because it is pretty obvious that they have not been able to buy any new clothes for a while. I see families going discount store to discount store to buy one item because it happens to be a couple of pence cheaper than it is elsewhere. Did my right hon. Friend see anything in the Budget to correct that?

[Edward Miliband]

My hon. Friend puts it incredibly well. That is why the boosterism of the Chancellor saying that it is an age of optimism will ring so hollow for so many people in our country.

You cannot build a new economy when you are hitting working families with a triple whammy of higher national insurance, higher prices and cuts to universal credit. That is more of the same. It is the Conservative economic model—year upon year upon year of stagnation for the British people.

Let me next come to the question of support for business in the Budget—the direct responsibility of the Business Secretary. Our businesses have been heroic during the covid crisis, closing their doors when asked and stepping up when they needed to. But while the economy may have reopened, the crisis is not over for so many of them. They face debts incurred during covid. They face the costs of the supply chain crisis. The Office for Budget Responsibility is very interesting on that, because of course there is a global dimension to it but there is definitely a British dimension too. They face the failure to plan for the changes arising as a result of Brexit—the OBR is very informative on this—and they face the energy price crisis.

Against this backdrop, I say gently to the Business Secretary that, as he will know, many of our businesses feel that the Government are engaged in finger pointing rather than finding solutions, with haulage firms told it is all their fault, when they warned the Government for months about the impending HGV crisis; those in the manufacturing industry—briefed against, not, to be fair, by him but by the Treasury—told that they are running their businesses badly because energy costs are soaring; and exporters tearing their hair out about the red tape of the trade agreement with the EU but told they just need to get their act together. What businesses want most of all, as he will know, is not to have a war with the Government but for their voice to be heard.

To be fair to the Business Secretary, a few weeks ago he did try to act to hear the voice of those facing the most acute short-term challenge—energy-intensive industries facing the energy price crisis. He knows that this is no ordinary situation. Our industries are facing not just the normal differential of price with our competitors but differentials far, far higher. I have met the Steel Council; he has met the Steel Council. He knows how tough it is. We know that he knows how tough it is because, to be fair, he told us two weeks ago how bad things were and said that he was talking to the Treasury. The Treasury was not very polite in return. He is chuckling from a sedentary position; I am on his side on this one. The next day, having obviously decided that he did not like being briefed against, he announced—I had my dealings with the Treasury when I was in government but I do not remember ever quite doing this—that he had made a formal request to the Treasury for support for energy-intensive industries. He was taking a stand.

That was on Monday 12 October, more than two weeks ago. On that day, a source told the BBC, rather encouragingly, that

“everyone in government understands the importance of this situation. We need to solve this quickly.”

It might have been the Prime Minister, who was on holiday at the time, or somebody else. That created a real expectation that this Budget would take action on this pressing issue that the Business Secretary has been publicly championing. So where is the help for our glass industry, our steel industry, our chemicals industry and our ceramics industry? These are some of the most important jobs in our country, valued in communities across all regions and nations of the UK. Does this not speak volumes about the Treasury’s—and, I am afraid, the Government’s—wanton disregard for some of the most foundational industries in our country?

--- Later in debate ---

[Edward Miliband]

It is completely consistent, yes.

Let me turn from industry to retrofit and insulation. Of all the things that were missing from the Budget and that I thought the Treasury would have been persuaded about, the one that is as close as we can get to a fiscal, economic, climate no-brainer is a proper 10-year retrofit and insulation plan. If we invest, we cut bills and carbon emissions, make ourselves less exposed to the international gas market, and create tens of thousands of jobs. I do not get why it has not happened. All we get are piecemeal schemes and no proper plan. I will not even go into the fiasco of the green homes grant—emissions from buildings are higher than they were in 2015.

[Alex Cunningham]

My right hon. Friend will recollect our discussions about the tremendous success of the warm zones project at the turn of the century. We went door to door, day in, day out, to install thousands of measures that saved consumers a tremendous amount as well as reducing emissions. Does he agree that we need that systematic approach if we are going to crack the problem?

[Edward Miliband]

I completely agree. I actually take a crumb of comfort from the Business Secretary, when he defends the sorry saga of the green homes grant, pointing to some of the money given to local authorities and what they did. That is what we need at scale—locally led, house by house, street by street. We are miles behind other countries.

On green investment, a philosophical difference is emerging. I worry that the Government will increasingly leave individuals and industries on their own to face the costs. I do not think that is true of the whole of Government, but the Treasury remains a fundamental block to the green investment that we need. There was a whole saga about its net zero review and the fact that it emphasises short-term costs rather than long-term gains. Frankly, that is a big problem for our country.

--- Later in debate ---

[Kwasi Kwarteng]

All I would say to the right hon. Gentleman is watch this space and let’s see what happens.

[Alex Cunningham]

Jam tomorrow.

[Kwasi Kwarteng]

The hon. Gentleman chunters from a sedentary position. I have visited his constituency—I have seen Teesside—and the picture of gloom, misery and devastation he paints is a total rejection of the optimism, dynamism and enthusiasm I see in Teesside. His negative attitude shows precisely why my friend the Mayor of the Tees Valley got 73% of the vote in the last election. [Interruption.] I am being told I am speaking loudly, but I am outraged that the hon. Gentleman should characterise his constituency in such poor and uninspiring terms; it is a disgrace.

[Alex Cunningham]

rose—

[Kwasi Kwarteng]

As well as supporting the Budget—

[Alex Cunningham]

The right hon. Gentleman makes an attack then will not give way.

[Kwasi Kwarteng]

I give way to the hon. Gentleman.

[Alex Cunningham]

I am grateful to the right hon. Gentleman for giving way. He talks absolute nonsense: I have spent 11 years championing energy-intensive industries in my constituency, trying to ensure people keep their jobs. He knows that, because I have met him and talked about it time and again, and what do I see? I see very little action. It is about time he got on the right horse, got down to Ofgem and started talking seriously about how we can put things right for energy-intensive industries in my constituency.

[Kwasi Kwarteng]

I was not making a personal attack on the hon. Gentleman’s role. If he had listened to what I said, he would know I was not commenting on his record as an MP; I was simply saying that the tone and negativity he expressed in that particular intervention in this debate did a disservice to his constituents. I was making a specific point.

--- Later in debate ---

[Alex Cunningham (Stockton North) (Lab)]

I am in the same place as my right hon. Friend the Member for Doncaster North (Edward Miliband): we do not know what planet the Chancellor is living on. But we do know that he urgently needs to get back in touch with reality. In yesterday’s Budget, he kept referring to the biggest investment changes in a decade and spoke of an “age of optimism”; I remind him that the only reason his investments look even remotely positive is that the past decade was defined by the devastating cuts and under-investment from Conservative Governments who have driven public services into the ground. Even if he was talking about new money, particularly for public services, it would replace only a fraction of the huge cuts over the past 11 years.

The truth is that this Budget is an underwhelming and uninspired response to the anxiety inducing cost-of-living crisis that our constituents face. Tax cuts for champagne and domestic flights will not go far to offset the difficulties of the long hard winter ahead. Over the next five years, real household disposable income is expected to grow by only 0.8% per year—far below the historical average. It is worth repeating what Paul Johnson, the director of the IFS, said:

“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.

The rising cost of living is biting hard in my constituency and the Budget does nothing for those hit the hardest. Figures published yesterday by the financial management company Aryza showed that the average personal debt in Teesside stands at £19,345—the second highest average in England—yet a recent report from the North East Child Poverty Commission revealed that in the north-east, spending to support people in financial crisis fell by 78% in the decade from 2010 to 2020, and the number of local welfare assistance awards made in the region fell from more than 16,000 to just over 12,000.

I have seen local Conservatives spin the Budget as one that is good for the Tees valley, but that simply is not true. Once again, the Tees freeport has been trumpeted, but the actual forecasted benefits are extremely limited. As my hon. Friend the Member for Bristol East (Kerry McCarthy) mentioned, the OBR’s October fiscal outlook notes that

“given historical and international evidence, we have assumed that the main effect of the freeports will be to alter the location rather than the volume of economic activity, so the costs have been estimated on the basis of activity being displaced from elsewhere.”

We have been promised tens of thousands of jobs, but now it appears that the Government’s own Office for Budget Responsibility suggests that that is nonsense.

[Kerry McCarthy]

That point about freeports ties in with the Government’s approach, which seems to me to be that they want announcements that get them photo opportunities and good press releases, and the MP who managed to get the freeport can then put that on their leaflets. But freeports contribute nothing at all to the overall picture; they just take from one area and give to another, which is no way to run the economy and to try to stimulate economic growth. We need a strategy by which everyone is helped to level up.

[Alex Cunningham]

My hon. Friend is totally correct: the Government rely on picture opportunities and short slogans to run our country. That is not the way forward.

We have had promises of jobs in the future that simply do not materialise. We do not want other people’s jobs: we want real, new jobs, not recycled ones. If it was all as grand at the Tories tell us, we would not still have around 10,000 more people unemployed across the Tees valley than there were in March 2020 and an unemployment rate 50% higher than the national average.

There was some good news in the Budget for the Stockton borough, but for me it was tarnished. I would not deny leafy Eaglescliffe and Yarm their success in being awarded levelling-up funding, but it was disappointing to see Billingham miss out once again, especially as it is in much greater need of levelling up. It just goes to show that the Tories like to talk a good game on levelling up—it is further proof that it is just an empty slogan.

As was mentioned earlier, the Budget contained nothing to address the high costs for energy-intensive industries, even though just weeks ago the country was on the brink of being plunged into a CO₂ supply crisis when CF Fertilisers in my constituency had to cease ammonia production because it was not economical. Energy-intensive industries, like many in my constituency, face a triple whammy of unsustainable costs. The sectors have been left reeling by the combination of sky-high gas, electricity and carbon prices that is damaging their ability to compete in international markets and risks domestic supply chains. While I, of course, welcome the announcement that a deal between CF and its CO₂ customers will see production at its Billingham plant continue until January of next year at least, industries such as these need longer-term support, including urgent reforms to the short-haul gas tariffs and progress at pace on carbon capture, use and storage.

There was not much at all on energy in the Budget. Companies such as Kellas in my constituency, which I visited a couple of weeks ago, would have hoped for clarity on hydrogen production and the potential balance between blue, green and pink varieties.

Once again, we saw nothing of the support that we need to tackle the health inequalities in my area. Stockton-on-Tees is often used as a case study to highlight health inequalities in the UK. Men who live in the town centre ward are expected to live 18 years fewer than their peers just a couple of miles down the road. In every Budget speech that I have made for the past 11 years, I have called on the Government to fund the new hospital that Stockton desperately needs. I am, however, pleased that my neighbour, the hon. Member for Stockton South (Matt Vickers), seems to have joined my campaign around North Tees Hospital and has secured today’s Adjournment debate to talk about that very topic. I look forward to hearing more from the Minister later on today. I have also tried to enlist support for a new hospital from other north-of-Tees MPs, and I sincerely hope that they will lend their voices to the campaign, which would benefit all of our constituents hugely. They will have found it just as galling as I do that just a fraction of the billions of pounds wasted on a failing test and trace system could have built us a new hospital.

This Government have not spent public money wisely, and they cannot be trusted with the public purse. The Tees Valley needs systematic and long-term investment that is controlled at a local level by local people and local councils, that will make sure that families have enough to live on, and that will free our children from poverty. We also need a plan that will stop firms such as Cleveland Bridge and Engineering Company and local steel firms going bust. We need to save and retain existing jobs as we await the promises of the future to be fulfilled. Once again, the Tories have failed to deliver anything like that. The Chancellor’s small-fry solutions will do little to help working families in our areas who are facing hikes in their Bills and lower take-home pay as we head into that long, hard winter.

Yesterday, the Chancellor said that it was a tall order to complete the spending review, and that the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) was just the man for the job. Sadly, he and the Chancellor have given the people of my constituency and the entire country short shrift.