Autumn Statement Resolutions

Andy McDonald Excerpts

Monday 21st November 2022 Commons Chamber

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

Given that it is my first chance to speak from the Back Benches, I would like to pay tribute to the officials at both of my former Departments for their exemplary work supporting me over the course of the past couple of years. I found them consistently outstanding, and I am very grateful to them for all their support. I know, at the Treasury in particular, just how much work would have gone into the autumn statement, and I pay tribute to them for that.

I also thank my right hon. Friends the Members for Uxbridge and South Ruislip (Boris Johnson) and for South West Norfolk (Elizabeth Truss) for giving me the privilege to serve in their Cabinets. It is a remarkable experience to serve in Government. I know that my right hon. Friend the Chief Secretary to the Treasury, whom I am glad to see in his place, will be experiencing the full weight of the responsibilities that rest on him, and I wish him luck with his new portfolio.

The autumn statement was important as it had stability at its heart. This addressed the fundamental challenge that was levelled at the mini-Budget in September, delivered by my right hon. Friend the Member for Spelthorne (Kwasi Kwarteng). This is clearly at the heart of what went wrong with that mini-Budget. There is obviously a very important debate to be had about the willingness of our financial institutions to conduct dynamic modelling of the impact of both economic reforms—supply-side economic reform and also lower taxes—on economic growth. However, noting that we are where we are, it would clearly have been better for that statement to have been accompanied by a full spending review, and I regret that that did not happen. It would have allowed us to have shown that tax and spending were going to be set in alignment, and we would have been able to set out a plan for lower tax and also a smaller state, which would have been more conducive to economic growth.

[Andy McDonald (Middlesbrough) (Lab)]

I am very grateful to my constituency neighbour for giving way. If that mini-Budget was so disastrous and ill-thought through, why did he support it?

[Mr Clarke]

It is precisely because I do not believe that the mini-Budget was disastrous and ill-thought through. I believe very firmly in the merits of a lower tax, higher-growth economy. Indeed, that is why I sit on the Conservative Benches and he sits on the Labour Benches. It was the lack of alignment with our spending plans, which would have been addressed through a spending review. That would have allowed us to set out the runway—if you like—to the landing zone that the Government were intent on delivering. It was the lack of ability to model the benefit of robust supply-side reform and lower taxation properly that was, I think, at the heart of what went wrong.

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[Mr Clarke]

Indeed, my right hon. Friend, I am afraid, is correct in that. There is no doubt that, while the Bank has a very difficult mandate to discharge, it has been slow in addressing some of the fundamental issues around inflation risk in particular over the year that led up to the mini-Budget.

I will make three major points about the autumn statement shortly, but before doing so, I want to turn to two specific areas where I believe urgent action needs to be taken to benefit the public finances. The first is in regard to the future of the Homes for Ukraine scheme. We owe a debt of gratitude, which I think is recognised across the House, to all those families who have opened their doors to Ukrainian families. However, tens of thousands of sponsorship arrangements that have been established are due to elapse over the weeks ahead, and it is directly in our interests that those arrangements should be renewed. Clearly, quite apart from the benefit to the Ukrainian families themselves of being with host families, there was a massive saving to the Exchequer. If those families end up either in hotels or in homelessness accommodation, the cost will be dramatically higher—more than tenfold higher—than if they had been accommodated in homes. Getting that established as quickly as possible—renewing the sponsorship arrangements—is an urgent priority for the Government.

[Andy McDonald]

I thank my constituency neighbour for giving way. I think he will find that the scheme has been renewed—that is the information that has come through to me. He may want to check that, but that is what I hear.

[Mr Clarke]

It is critical that it is renewed over the foreseeable future, because the reality is that the issue is not going away. If we are to be serious about addressing the fundamental concerns that exist about the duration of the conflict and how it will affect people for many months to come, it is vital that the scheme is renewed long into the future.

The second is the need to resolve the current crisis of illegal immigration. Clearly, it is unacceptable for the country to spend some £5 million a day on hotel costs. It is a multi-dimensional challenge. I welcome the deal that was agreed with France last week, but the Home Office clearly needs to do more to secure lower cost accommodation and to improve the processing times for asylum claims, which are both key drivers of the backlog that has been allowed to accumulate. The Home Office received funding in the spending review in 2021 precisely for that purpose, and addressing that is vital.

We also need to alter the incentives that drive people into the arms of people traffickers. That means making the Rwanda scheme work and doing all that is required over the months ahead to ensure that it is able to be enacted. Both of those problems, if allowed to persist, would represent a risk to the public finances, and I very much hope that we can get an update on them from Ministers.

Those are specific issues, but I now wish to turn to the three broad principles that the autumn statement spans and on which we need to touch today. The first is the balance of tax and spending. Clearly, we are living through hugely challenging times. We have already rightly heard reference from the Front Bench to Putin’s illegal war in Ukraine. The Chancellor was right to say that this is a recession made in Russia and, of course, it comes hard on the heels of the covid pandemic. There are simply no easy choices here, and I recognise that, but faced with the available options I would have preferred to see a much greater emphasis in the statement on spending reductions rather than tax rises.

We simply cannot ignore the fact that the OBR says that the tax burden will now rise to its highest sustained level since the second world war, hitting 37.1% of GDP by 2027-28. Faced with that, I would have curbed our capital spending in particular more sharply. Most Departments have pronounced covid-related underspends and for many projects, such as HS2, the business case no longer looks as robust as it once did, after the pandemic. On current spending, I would not have increased spending on out-of-work benefits in line with inflation at a time when wages clearly will not rise in the same way, and I believe that there is a strong need to drive NHS efficiencies. At a time when we spend the equivalent of the GDP of Greece on our health service, we need to make sure that there is a robust plan to get maximum value for the taxpayer. While many NHS trusts perform fantastically, including mine in South Tees, we need to make sure that we measure outputs rather than simply inputs in the health service.

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[Andy McDonald (Middlesbrough) (Lab)]

It is interesting to follow the right hon. Member for Gainsborough (Sir Edward Leigh); I look forward to a conversation with him after Mass about how his speech accords with Catholic social teaching.

The Chancellor told us last week that,

“to be British is to be compassionate.”—[Official Report, 17 November 2022; Vol. 722, c. 844.]

We as MPs are privileged to see compassion at work in our constituencies day in, day out—and my God, it is needed more than ever. What a demonstration of the compassion and care of the British people we have witnessed this past week, with the incredible Kevin Sinfield completing his back-to-back ultramarathons in aid of those suffering with the devastating motor neurone disease, and the outpouring of moral and financial support from the great British public.

On Friday, I visited the Genesis Project in Middlesbrough and met the wonderful deacon there, the Reverend Kath Dean, working out of St Oswald’s Church in Grove Hill. She is doing sterling work with an army of volunteers, many of them in the most difficult circumstances themselves, providing food, clothing, care and love to the hundreds and hundreds of people who are on their knees.

Take Pauline, for example. Pauline is a 94-year-old volunteer, but when she goes home, she warms herself sitting under blankets and reads by battery lights rather than turning on the heating and electricity. She was 11 years old at the outbreak of war, and she feels as though she has been transported back to those dark days in the air-raid shelters.

Another worker at the project—I will call her Gill—is there helping people, equipping them with warm clothing and bedding as the winter approaches. Gill has two children living with her, a teenage son who I will call Adam, and a little daughter who I will call Katie, aged 11—the same age that Pauline was in 1939. At the end of the school day, those children have to return to their damp, mouldy rented house. Katie has asthma and there is a huge fungus growing from her bedroom ceiling, so she is forced to share one bedroom with her mum and teenage brother.

Worse still, the house is infested with rats. Late last Thursday night, Gill had the nightmare of encountering a rat on the staircase. She showed me the photograph of a dead rat inside her own home, along with a mass of rat droppings. She and her family are scheduled to be rehoused later this week, but they will have to destroy their belongings and furniture, as everything is impregnated with rat urine. Their situation brings to mind the ugly, tragic death of Awaab Ishak in Rochdale in not dissimilar circumstances. The only solace I have is that we have succeeded in having the family moved to a hotel until alternative accommodation is available.

How does it come to this in the UK, in 2022? After 12 years of Tory rule and their cruel and unnecessary programme of continuous austerity, how do they and their latest leadership team dare to associate themselves with the compassion of the British people? This outrage was not caused by Putin or covid; it was the product of incompetence, appalling instincts and motivations, the failure to resource local authorities properly and the ongoing failure to address the housing and cost of living crises.

We have been slipping into this economic decline, which for too many is a living hell, for 12 long, miserable years. The root cause is the rotten and corrupting philosophy of neoliberalism that the Conservatives have promoted, some very proudly, for decades since Thatcher and Reagan: the obsession with cutting public services, privatising and outsourcing to the max to extract as much profit as possible; the exploitation of working people; deregulation; attacking and undermining trade unions; permitting bad employers like the winner of the worst boss in the world award, Peter Hebblethwaite, the lawbreaking CEO of P&O, to undercut good employers; and grinding down wages. The obsession with sacrificing decent working conditions, dignity and respect for all at the altar of private excess profit, where billionaires abound and prosper while grotesque inequality bites deeper and deeper into the lived experience of millions of our fellow citizens: that is what has caused this mess.

As we saw in last week’s autumn statement, there is no desire and no will on the part of the Tory party fundamentally to change the status quo, to stand by and with working people, to create a new deal for them and to create a new social contract for all, which is what is needed if the Government of our country are to match the life-affirming compassion of our sisters and brothers, UK-born or otherwise, in every village, town and city the length and breadth of this country. For that to happen, we need a Labour Government—one that is dedicated to the people, not to private, exploitative profit, and is dedicated to social justice, ending in-work poverty and dignity for all. We need that Labour Government now, as a matter of supreme urgency.