Budget Resolutions

Debate between Angela Eagle and Mark Harper

Wednesday 27th October 2021 Commons Chamber

[Dame Angela Eagle (Wallasey) (Lab)]

As always, it is a pleasure to follow the right hon. Member for Wokingham (John Redwood), who I agreed with for the first time ever yesterday. That is something I enjoyed, however fleetingly.

After listening to the Chancellor today, I think arrogance is up, complacency is up and delusion is up. Certainly, in my constituency of Wallasey and in the country as a whole, the cost of living is up, taxes are up, poverty is up and hardship is up. That is the background against which the Chancellor delivered his speech.

The combined Budget and spending review comes at a pivotal time for the country. That is partially a result of grim circumstance, which is beyond the control of any Government, as we have heard today—the pandemic and the challenge of the transition to net zero—but it is also the result of the Government’s serious mistakes and self-inflicted wounds. The botched Brexit deal has caused chaos at the borders, soaring prices and shortages, and the Government’s deadly complacency about the virus has resulted in one of the biggest economic hits and one of the largest per capita death tolls in the developed world—failure piled upon failure.

The most vulnerable have been hit the hardest, whether they are the young having their opportunities destroyed by school disruption, the old sacrificed in their tens of thousands in our neglected and underfunded social care system or the millions flung into poverty by the Government’s cruel universal credit cut—not compensated for by changes to the taper announced today, which will help only one in three and leave us with the circumstance whereby millionaires pay a marginal tax rate of 45p while those on poor wages who qualify for universal credit and are able to work pay 55%.

[Mr Mark Harper (Forest of Dean) (Con)]

Two brief points. First, it is worth saying that the legacy benefits system that we inherited, before we implemented universal credit, had withdrawal rates for benefits sometimes close to, and sometimes exceeding, 100%. Whatever the hon. Lady says, this is a massive improvement.

Secondly, there is a qualitative moral difference between taking from people money that they have earned and withdrawing benefits that people are given, paid for by other taxpayers. Those are different things, and the hon. Lady should not pretend that they are the same.

[Dame Angela Eagle]

While I agree with the right hon. Gentleman that benefit tapers have been a long-running problem for many Governments to solve, we know that the 63% fall in the Department for Work and Pensions’ costs has come about not because everybody is in work, but because benefits are some of the lowest in the developed world, causing huge hardship and poverty. The right hon. Gentleman needs to recognise that as well.

This is a Government who love power but are bored with the hard work of governing. They disdained to anticipate the problems their ideological obsession with a hard Brexit has created, choosing to believe their own propaganda instead, but the red book shows that, as a result, trade with the EU is sharply down and projected to reduce living standards by 4%, which is twice the OBR estimate of the cost of the covid pandemic. Underlying some of our difficulties are the problems of Brexit and the fact that the Government did not prepare for the trade disruption caused by their hard Brexit deal, which threw fishing, farming and peace in Northern Ireland to the wolves in pursuit of their own peculiar obsessions. They did not prepare for the supply chain problems caused by the shortage of HGV drivers, the vacancies in social care and the staff shortages in the NHS.

This is a Government who have been unwilling to offer short-term temporary relief to those who are suffering the growing cost-of-living crisis, as energy prices have rocketed and as inflation soars towards 5% this winter. Fuel and food prices are rising fast, and people are feeling the pinch. An end to the public sector pay freeze will not compensate unless it offers real increases in wages, which, taking inflation into account, have only just returned to their 2009 level. Let’s face it: whatever it says in the Chancellor’s latest propaganda press release, any pay increase below inflation is actually a pay cut on top of years of hardship, so we will have to await the detail.

A fair recovery would start with a Chancellor who had the humility to be honest about why these blunders have been made. Unfortunately, we do not have such a Chancellor; we have a Jekyll and Hyde Chancellor, with his eyes firmly on his own advancement and with a slick PR operation to match his vaunting ambition—a Chancellor whose persona depends a bit on his audience.

To the country at large, he is that nice Dr Jekyll, brandishing his public spending largesse in a blizzard of pre-Budget leaks, increasing the national living wage and announcing the end of the public sector pay freeze—he is hoping that we will not notice that it was he who froze pay last year, on top of a decade of previous Tory pay freezes that have seen real living standards fall more than at any time since the Napoleonic wars.

But when he is burnishing his leadership credentials with Tory MPs, he becomes the sadistic Mr Hyde, posing as a true low-tax, small-state Thatcherite, waxing lyrical about his

“sacred responsibility to…balance the books”,

because to do otherwise would be “immoral”—he is hoping that they will not notice that he has presided over the largest increase in the size of the state in peacetime and the biggest tax rises in 25 years. That comes the year after he borrowed an eye-watering £350 billion in a single year to pay for his covid response. The fraud, the waste and the graft to Tory donors have been an ever-present feature of the bonanza of state mis-spending that he has presided over. In fact, it has been the very definition of “immoral”.