Budget Resolutions and Economic Situation

Andrew Western Excerpts

Thursday 16th March 2023 Commons Chamber

[Andrew Western (Stretford and Urmston) (Lab)]

I congratulate my hon. Friend the Member for West Lancashire (Ashley Dalton) on her outstanding maiden speech. Having known her before her election to this place, I knew she would quickly make an impact and she certainly did that with her contribution today.

In his Budget speech yesterday, the Chancellor said:

“In November we delivered stability; today it is growth.”—[Official Report, 15 March 2023; Vol. 729, c. 847.]

That is a bold statement, and upon closer inspection one may even say a brazen one: brazen not only because that stability was required because of the Conservative Government’s kamikaze Budget and their crashing of the economy, but more pertinently because on this Chancellor’s watch our economy will not grow, but will shrink, by 0.2% this year. In fact, we only avert technical recession this year because the pain is distributed in such a way that it avoids two successive quarters of output decline—not because this Government have averted economic shrinkage, and not because they have delivered the laser-like focus on growth that our economy needs. Far from it, the evidence tells us that this Government have been asleep at the wheel: while we in the UK see economic contraction this year, every other G7 country is forecast growth. While we in the UK see an economy that is still some 0.8% smaller than before the pandemic, every other G7 economy has grown to be larger than it was before the virus intervened.

Conservative Members tell us to look at the longer-term picture: they say that this was always going to be a difficult year and their action has lessened the blow. That is nonsense, because this claim fails to take into consideration that growth projections for years three to five of the forecast period are revised down, and at the same time our underlying debt is set to increase from 92.4% of GDP this year to 93.7% of GDP next year. This is Tory Britain: they crashed our economy last year, and they have no plan to put it right this year.

But let me turn to what this Budget says about the Conservative approach to basic fairness. The uplift in the annual tax-free allowance on pension contributions, from £40,000 to £60,000, benefits only those whose retirement funds constitute the largest 1% of pension pots in the country. Alongside lifting the lifetime allowance, that amounts to a huge tax break for some of the wealthiest people in the land. That this announcement came on the very same day that the OBR informed us we will have the lowest real living standards since records began speaks volumes about the appalling priorities of this Government.

I have said before in this place that politics is ultimately about choices, and this Tory Government have made the wrong choices yet again. Not once in his speech yesterday did the Chancellor mention the words “fair” or “fairness,” and I cannot say I am surprised. They have form on fairness, and time and again they show us whose side they are really on.

I accept that we need to address the shortage of doctors somehow, particularly as the Government continue to reject Labour’s fully costed proposal to scrap non-dom status and fund the largest workforce expansion in NHS history. So while I welcome the pension changes as they pertain to NHS staff, this should have been a bespoke offer available only to them, and in my view it should initially have been a pilot so that we could assess its future impact. Moreover, although the Government claim to want to help over-50s back to work, their unfair tax break for the wealthiest 1% has created a perverse situation whereby some over-50s may well be able to retire sooner, because their pension pots will have grown large enough for them to do so at a younger age than they had planned. Joined-up government? Don’t make me laugh. We have a Government at sixes and sevens, and a Chancellor without the clarity of purpose that is needed to turn our economy around.

How do we know this? Well, let us recap. The Government want to level up, but we have the lowest investment in the G7. The Prime Minister wants debt to go down, but debt as a share of GDP will be up next year. The Chancellor wants to help with living costs, but we have the worst real living standards since records began. The Health Secretary wants to fix the NHS workforce, but the Prime Minister will not scrap non-dom status to fund it. The Work and Pensions Secretary wants to get over-50s back to work, but the Chancellor has just given a huge tax break to the richest, which means that they may well retire earlier than ever. It is preposterous. You could not make it up.

We have had 13 years of this grotesque contradiction between words and action, this lack of vision, this fundamental mismanagement. The Government have no idea, no clue, and no plan for economic growth. They have crashed our economy, they have undermined our standing in the world, and they have decimated our public services. We are seeing sticking-plaster politics time and again, rather than the long-term solutions that our country needs. Because they are unable or unwilling to unleash the ambition of the British people to realise the fastest growth in the G7, we languish at the bottom of the pile.

The Chancellor said yesterday that this Budget showed that his plan was working, but the reality is that this tired, out-of-touch, failing Government have no credible plan at all. It is time for a change. It is time for a Labour Government. For me, the next general election cannot come soon enough, and given this half-hearted attempt at a Budget for growth, it cannot come soon enough for the Conservative party either.