Budget Resolutions and Economic Situation

Alex Norris Excerpts

Monday 8th March 2021 Commons Chamber

[Alex Norris (Nottingham North) (Lab/Co-op) [V]]

I am grateful for the chance to contribute to this debate. We have heard a lot from the Government and their Back Benchers about their concerns regarding the Budget—concerning facts and figures relating to the nation’s finances, in particular the financial obligations that we have built up over the last year. I believe that they are looking in the wrong place.

What we should be focusing on in debating this Budget is what the Office for Budget Responsibility has said. The good news is that the economy will bounce back quickly—of course it will; there is so much latent demand ready to be released—but the bad news is that, after that rebound, growth will bump along at around 1.7% for the following three years. That is the sort of anaemic growth that we saw during the historically slow recovery from the 2008 crash, particularly in the last decade. It is a damning indictment that the Government’s spending plans are likely just to generate the same impact as the failed austerity model that we were promised was over.

That is particularly the case because the Government have not learned the lessons of repeated years of real-terms cuts to the pay of public sector workers. As we saw from Ministers trying to justify the miserly real-terms pay cut to staff in the NHS, they simply do not grasp the collective impact on our economy of such pay cuts. That cut is wrong because we ought to recognise those workers’ sacrifice over the last year beyond a hand clap, but it also wrong because it starves our economy. Where does the healthcare assistant or the porter spend their money? It is in the local economy.

Taking that further, freezing wages for council staff is wrong. They have done incredible work over the last year and should not be expected to keep going for less pay. And where does the care worker or the leisure centre cleaner spend their money? It is in our local economy. These wage cuts are wrong for the individual and devastating for our economy.

The Conservative party profits by pitting public sector worker against private sector worker, but the reality is that the private sector—and wages in the private sector—benefits massively from having public sector workers with money in their pocket and the confidence to spend it, just as public services benefit massively from having a thriving private sector and all that comes with it.

You do not have to take my word for that, Madam Deputy Speaker; just look at the lessons of the last decade. Squeezing the public sector did not help the private sector, but instead caused the slowest recovery from a recession in our nation’s history, which in turn meant that we could not invest in our public services, leaving us so weak when this pandemic came. I cannot quite believe that the Government are choosing to do the same thing again.

Finally, regarding our councils, Nottingham has lost £270 million of Government investment over the last decade. Vital services that affect our daily life have all been diminished in some way or removed entirely. Our council stepped up during covid; it is simply wrong that the promise even to meet its basic covid costs, never mind to fund it properly, has not been met. We needed a Budget for growth; instead, we have just got more of the same, and it will not do.