Budget Resolutions

Alison Thewliss Excerpts

Monday 11th March 2024 Commons Chamber

[Sir John Hayes (South Holland and The Deepings) (Con)]

The endemic problems facing Britain in the 2020s are often compared to those of 50 years ago. As was the case in the 1970s, ours is a time of great economic uncertainty at home and abroad. Now as then, faith has been lost in the dominant, prevailing economic model. In the 1970s, rising inflation, industrial strife and stop-go economic cycles led many to question Keynesian economic thinking. The Blairite model of welfare capitalism, which embraces the false promise of globalisation and is personified these days by the hon. Member for Ilford North (Wes Streeting) and others, lost all credibility after the financial crisis of 2008.

In fact, there are many key differences between the economic context of the ’70s and that of today. The Britain of the 1970s was beset by an atmosphere of constant crisis; there was the three-day week and the winter of discontent. The number of days lost to industrial action in the last couple of years bears no relation to the dark days of blackouts and rubbish piled up on the streets. However, although our problems are superficially less severe, socioeconomic problems run deep.

The 1960s and ’70s were a time of great social mobility and rising living standards, but the harsh reality is that living standards have stalled since the 2008 financial crisis. The Resolution Foundation estimates that real wages will be just 2.4% higher in 2024 than in 2008. That compares with a 36% increase in the 16 years before that. Perhaps most troubling of all, although the ’70s saw a rise in new economic thinking that, for a time, reversed what many had seen as irreversible decline, much of our politics today is stuck in the New Labour paradigm, offering the same policy formula that was discredited the best part of 20 years ago. There is no better example of that than mass migration, which began under Mr Blair and has continued ever since.

Fifty years ago, serious thought was given to how Britain could lift itself from its economic malaise. Many of our economic ills were correctly diagnosed and successfully dealt with, but though every election since 2010—and most notably, the Brexit referendum—demonstrated the public appetite for a radically new approach, it often seems that the liberal political establishment cannot see what the people it represents know so well. The malaise goes far deeper, and the relief offered by the usual Treasury medicine of looser fiscal policy is just not enough. Nor is the assumption, from shadowy bodies such as the Office for Budget Responsibility and the Migration Advisory Committee, that any growth is good growth. It was welcome that the Chancellor recognised that when he spoke about per-capita growth, rather than growth as a whole, in his Budget speech.

As W.H. Auden might have put it, our times are an age of anxiety. Deeply ingrained and destructive uncertainty prevents many people from coming close to reaching their potential, or from even thinking beyond their day-to-day existence. A growing proportion of people on low incomes live in the least secure private rented sector, are employed in unskilled work on unfair terms, and pay for electricity and gas on prepay meters. As an adviser at the Citizens Advice Bureau told one journalist, each of these problems compounds the other:

“Your income’s not stable, your work’s not stable, your housing’s not stable. Everything’s built on sand.”

Surely we know that a foundation of certainty is necessary to build social solidarity.

Additionally, heartless banks have abandoned communities, so many people find themselves driven into the arms of payday loan companies with exorbitant interest rates, or even loan sharks. The consequent economic insecurity results in many dropping out of the economy altogether. An extraordinary 5.2 million people claim some form of out-of-work benefit. Although the impact of covid has increased that figure, growth in the disparity between officially registered unemployment and actual levels of economic inactivity is a long-term trend. The inevitable result has been the breakdown of families in hollowed-out communities, which is why the Chancellor’s changes to the taxation of child benefit should be welcomed across the House. All the evidence demonstrates that married parents are much more likely to stay together than cohabiting ones. Children raised in unstable families suffer from worse health, are more likely to be excluded from school, and are more likely to join a gang or end up not in education, employment or training.

[Alison Thewliss (Glasgow Central) (SNP)]

The right hon. Gentleman is all for families staying together. What impact does he think raising the minimum visa thresholds will have?

[Sir John Hayes]

It is vital that we support stable families, and I acknowledge that stable families come in different forms. I am simply quoting the facts. Stable marriages give children the best chances, and the Government are right to emphasise families. They should now emphasise marriage, too, to a greater degree. To be fair, the Chancellor said that the Government will review the policy further, with a view to making additional changes along the lines that I have described.

Over time, fewer people have chosen to become members of clubs or groups, to volunteer, to attend a church or to engage in any form of community activity. Unsurprisingly, there is a strong link between the strength of social fabric and inequality. Areas with the strongest communities tend to be very rural places, such as my constituency in Lincolnshire, or areas in London’s wealthy commuter belt, in the south of England, or the wealthier parts of Scotland. A macroeconomic solution to our problems must be accompanied by an equally strong macro-societal approach, focusing on the root causes of social breakdown and inequality, for state support is a sticking plaster, not a cure.

Whereas the success of supply reforms enabled the Thatcher Government of the 1980s to reduce Government spending to less than 35% of GDP by 1990, sluggish economic growth since the financial crisis has meant that the Government’s share of GDP is now more than 45%. Overall, Government spending is higher than at any time since the second world war. Critically, the Chancellor recognised that by beginning the process of cutting tax. We need to give people back more of the money they earn. When we do so, we will build social responsibility over time and enjoy greater social solidarity. That is why I warmly welcome, too, the Chancellor’s focus on skills. Apprenticeships and technical education must be at the heart of our post-18 education system, as I have argued throughout my time in Parliament, and they must be fully integrated into an economic strategy that supports the creation of highly skilled work.

The era of cheap money and unsustainable profits has done great damage to our economic base. British pension funds and insurance companies once owned 52% of the FTSE; now, they own just 4%. Far too much of the savings generated by hard-working British people are invested abroad or go towards unproductive ends. As such, the measures introduced by the Chancellor are welcome, but they can only be seen as the beginning of the long-overdue process of supporting productive investment in UK businesses. Economic and macro-societal policy should be designed to ensure that business practice works in harmony with the best aspects of human nature, not against them. It should tie economic profit to ethical and social purposes. Risk must be closely linked to profit, and the Government must do more to incentivise mutual ownership and profit-sharing models.

A co-operative economic order would reinforce social solidarity. An economy must work for everyone, not just a handful of people at the top, which is why, rather than glamorising faceless global conglomerates, we must back British business, particularly the self-employed, as the Chancellor did in the Budget, and small and medium-sized enterprises. We need a more introspective economy, shorter supply lines, more domestic manufacturing and British jobs for British workers. It is through fraternal economics, in which the nobility of labour is recognised and rewarded, and which reinforces our reciprocal communal obligations, that, by contrast with the flimsy ephemera of globalisation, we can seed substantial economic resilience and spawn social renewal.

--- Later in debate ---

[Alison Thewliss (Glasgow Central) (SNP)]

I will touch first on arts funding. As a Member of Parliament who has a number of arts institutions based in my Glasgow Central constituency, I gently welcome the theatre, orchestra, museums and galleries exhibition tax relief. The Royal Scottish National Orchestra has said that the relief

“ensures the RSNO remains committed to serving Scotland’s communities, concert halls and schools.”

However, that comes in a wider context, as the Musicians’ Union has pointed out, of cuts to the arts over many years. It has talked about the impact of a decade of austerity. General secretary Naomi Pohl said that she fears “frankly, we are stuffed” if a Labour Government do not put money into the arts. There needs to be some change to ensure that our music and arts venues can continue.

The RSNO has done a huge amount to diversify what it does. It is involved in making music for motion pictures, as well as filling concert halls in the city of Glasgow and other places besides. It has asked that the UK Government consider proposals to exempt employers in the cultural sector from national insurance, which would encourage companies to bring workers often used on a freelance basis into employment. That is particularly important given how many freelancers, particularly female freelancers, were excluded from support during covid. I leave that for Ministers to consider. Will Ministers go further on VAT to encourage people back out to enjoy cultural events and bring life back to our cities and town centres? Music tickets having 20% VAT on them is a real inhibitor to that.

This Budget should have been a moment to bridge the funding gap for our public services, which they so desperately need. Instead, the Budget appears more concerned with setting traps for a future Labour Government. The Conservative party is once again bringing its own naked political interests into government, and we are all left paying the cost. It is money for Canary Wharf, not the Calton, or Cowcaddens or Kinning Park. The concerns raised by organisations such as the Child Poverty Action Group should not be ignored. The stark reality is that there is little in the Budget to address the crisis conditions being experienced by children and families living in poverty. The Chancellor’s claim that the Government do not pass their bills on to the next generation rings particularly hollow when 4.2 million children live in poverty in the UK today. Who does he think will be this next generation?

The decisions taken in this Budget risk leaving a legacy of millions of young people living with the scars and the real harms of growing up in poverty: hunger, poorer educational outcomes, the health risks associated with cold and damp homes, and stagnant economic growth leading to fewer opportunities. The Glasgow Centre for Population Health has commented particularly movingly on this lost 10 years of austerity and its impact on public health. It says that it could take another 10 years just to get us back to where we were in 2011. Opportunities have been lost for so many people as a result.

I call on the Government yet again, as I do at every Budget, to scrap the two-child limit on universal credit. At the moment, 222,000 families are affected by the policy, which is life limiting and damaging. It is making it more difficult for larger families to put food on the table, and it is driving them to almost impossible choices. The Government must scrap it. Equally shameful is that the Labour party will not scrap it, either. Those young people are being condemned to a life lived in poverty. That is not good enough, and the Government should do better. They could bring in the equivalent of the Scottish child payment, which is now £26.70 per child per week for eligible families. It is helping to keep those families out of the food banks and protecting the life chances of those children. They could increase the healthy start benefits to the level of best start foods, so that families do not have to go to food banks to get infant formula, as they could afford those things if they require them.

There is a serious gendered impact of the Government’s policies. The Women’s Budget Group has highlighted the regressive nature of cuts to national insurance. The cuts disproportionately affect lone mothers and couples with children. Single men will receive around £500 more than a lone mother, and couples without children will receive more than £1,200 more per year than families. Half the benefits go to the wealthiest households, and only 3% to the poorest. Yet again, the Government’s cutting taxes for Tory voters on the back of the people who can afford it the very least is warped.

There needs to be a lot more support for public services and infrastructure, greater cost of living measures and a just transition. The OBR points out that there is

“no real growth in departmental spending per person over the next five years.”

This Tory Government are committed to that, and Labour is committed to copying and pasting that policy. Scotland deserves better than this broke, broken Westminster Government. We want better than a UK that has been declared the world’s second most miserable country, behind Uzbekistan, with 35% of respondents distressed or struggling at the worst. In Scotland we think of what we could have: Ireland with its budget surplus, and Norway with its oil fund. Scotland deserves much better than this. We deserve independence.

[Mr Deputy Speaker (Mr Nigel Evans)]

Unsurprisingly, Jim Shannon is the last Back-Bench contributor. We have a bit more time, so I am not putting on a time limit; I know the hon. Member will not abuse my generosity. Could any Member who has participated in the debate start to make their way to the Chamber for the wind-ups?