Spring Budget 2024

Baroness Bennett of Manor Castle Excerpts

Monday 18th March 2024 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, in introducing this debate and Bill, the Minister spoke—several times, I think—of a long-term plan. In the current political climate, that might be taken as a definition of optimism. Yet perhaps the Minister is right that what we are talking about is a long-term plan, because what we have heard and expect to hear from the Labour Benches is that they are broadly planning to follow the Tory economic plan. They will allow the rich to keep getting richer and to keep their ill-gotten gains, as my noble friend Lady Jones of Moulsecoomb so clearly and passionately set out. There are things that the Labour Party has said it will follow the Government on. It has pledged that it will not introduce a wealth tax if it forms the next Government, so it will not see the broadest shoulders bearing their fair share of the weight of repairing so many things that need to be repaired, as many noble Lords have said.

The Labour Party has said that it is not going to address the issues raised by the noble Lord, Lord Macpherson of Earl’s Court, about the inequality of taxation between wages and unearned income, something that has simply got worse and worse over the years to the benefit of the rentier class. Labour has also said it that does not plan to think about redistribution; instead, just like the Government, it is focused on growth. It does not acknowledge that borrowing to invest is sound economics. I find this, frankly, astonishing; the most recent Labour comments state that it intends to pay for its plans—for the NHS and school breakfasts —through savings to public spending. This is despite the state of our public services and our public infrastructure, as so many speakers reflected on. The noble Lord, Lord Lee, brought up potholes, which is in the traditional range of the Lib Dems, so I am going to refer to our public services being like ships holed below the waterline.

I have recently been reflecting a great deal on the NHS. Its treatment over recent decades is one of the great political failures in the UK. We have also seen, since Margaret Thatcher, an enormous failure from British politics to remember what the economy is for. It is there to serve people, to deliver a decent, healthy and economically and environmentally sustainable society. At the weekend, we had reports from head teachers from schools in the north-west about families that cannot afford a bed for their children to sleep in—that cannot afford cleaning products for the bathroom. We are talking big macroeconomic stuff, we are talking economic theory, we are talking figures—but we are doing that in a society where children do not have a bed to sleep in.

The noble Lord, Lord Lee, was just talking about the problems in our financial sector. The Labour Party has pledged to unashamedly champion the UK financial services sector, despite the fact that it is obvious we have too much finance—an unbalanced economy—and, of course, we are the global fraud capital. More finance means more fraud. That is a simple fact.

I am afraid even when it comes to the climate emergency, I find now, as opposed to a couple of years ago, considerable similarities between the plans of the Labour Party and those of the Government. The Labour Party had a green investment plan—£28 billion per year; you might remember it. It is not there any more. Yet a recent London School of Economics study from a group of leading economists said that the UK should invest £26 billion per year—a similar figure—to revive prosperity. It said that investment in energy infrastructure, transport and the natural environment would have a rapid boosting effect, with public investment at that level generating double the returns for the private sector.

That is the big-picture stuff, but what about something that really deserves more attention? That is fuel duty. I do not know where the sudden burst of optimism came from in the OBR after the last fiscal event, when it based its forecasts on the assumption that fuel duty would be raised despite the fact it has not been raised since a freeze was introduced as a temporary measure in 2011. That and the 5p cut in fuel duty have cost the Treasury £90 billion since 2021. Figures just out today point out that, with the rise in electric cars, 2025 will see the absolute level of fuel-duty returns to the Government fall. In 2011, fuel duty was 4.5% of gross receipts. In 2023, it was down to 2.4%—and all that for the grand saving for the median driver of £13 per month.

What could we be doing instead? One of the answers—beyond local buses, which desperately need investment—is railways. My noble friend Lady Jones and I have asked many Written Questions to the Government about railway upgrades that would allow hundreds of thousands of people to get off the roads and on to rail. I have a question for the Minister, who is currently not in her place: given that there were no announcements in the Budget about railways, am I wrong to suggest there will be no significant progress with the Restoring Your Railway Fund and other rail programmes before the general election? Practical examples include a rail capacity upgrade at Haughley and Ely junctions, where Adrian Ramsay and the Suffolk Chamber of Commerce have been calling for progress. The Government said that they are committed to these upgrades, but where is the money? Another area worth probing is the Stonehouse Bristol Road station, which will unlock a direct connection between Stroud and Bristol. The Green-led Stroud District Council submitted a strategic outline business case in autumn 2022, yet it has been stonewalled when asking for updates from Ministers. It hopes they will arrive in due course.

I declare my position as a vice-president of the Local Government Association. The household support fund was due to lapse on 30 March this year, but 190 council leaders wrote to the Government begging for this essential fund to continue for a year so that they could plan. What did we get? It was better than nothing: we got six months, so in six months the councils will have to come back with the begging bowl again. It is not exactly a long-term plan.