Energy (oil and gas) profits levy

Beth Winter Excerpts

Tuesday 22nd November 2022 Commons Chamber

[Beth Winter (Cynon Valley) (Lab)]

It is a pleasure to follow the hon. Member for Ceredigion (Ben Lake), who outlined the acute problems facing Wales and who, like me, is a vociferous campaigner for better needs-based funding for Wales.

Both the Prime Minister and the Chancellor have been at pains to state their intention to deliver stability following the Tory mini-Budget that crashed the economy, but it is worth asking what kind of stability they are talking about. Stability for whom? Some 14 million people in the United Kingdom currently live in poverty, and the Chancellor has delivered an autumn statement that will force millions more into poverty, all in the name of stability.

Inaction on pay and public service funding and stealth taxation on low and middle incomes in this statement have made people’s lives more unstable, precarious and difficult. That is certainly the case for people and communities in my Cynon Valley constituency. The Welsh Finance Minister, Rebecca Evans, was clear that inflation has eroded the Welsh Government’s budget.

I listened earlier to the hon. Member for Clwyd South (Simon Baynes) commenting on health issues in Wales, and others have also spoken about health problems. The fact of the matter is that the settlement over the spending review period is worth less in real terms in Wales than it was at the time of spending review last year and includes a £1.1 billion shortfall compared with when we were a member of the European Union.

We need to see the Welsh budget increased in line with inflation, but that has not happened. The Welsh Local Government Association is clear that cuts will have devastating consequences for communities. The leader of the WLGA, Andrew Morgan, who is also the council leader for my constituency, stated that

“instead of avoiding disaster, this Autumn Statement is headed straight for the danger.”

My constituency faces a deficit of around £47 million next year. There is nowhere else to cut. People are frightened—they are at their wits’ end.

Moving to incomes, the historic fall in real incomes is due to concrete decisions taken by the Chancellor and his predecessors. The Tories are driving down pay and, to justify it, many are making false claims of a wage-price spiral. But pay is not driving inflation; it is lagging behind. The reality is that a Tory low pay agenda has existed since 2010: pay freeze after pay freeze, devaluing and demeaning our key workers. With no dedicated announcement on public sector pay, key workers now face further real-terms reductions in pay.

My right hon. Friend the Member for Hayes and Harlington (John McDonnell) outlined the difficult situation facing our key workers. To add to that, the Resolution Foundation has said that real wages should be around £15,000 higher based on past trends, and the TUC says that real earnings will not return to 2008 levels until 2027. I am repeating what my right hon. Friend said earlier, but it needs emphasising, because people are experiencing pay cuts—two decades of lost pay. It is those pay decisions that are driving industrial action, which is a last resort for workers. That is delivering instability and economic destruction.

The statement announced a range of new tax increases, but the impact again falls disproportionately on those least able to bear it. The TUC said that the hit from the 20% income tax threshold will earn the Treasury £6 billion a year compared with less than £1 billion from lowering the threshold for paying the top rate. As with austerity, that punishes those on low and middle incomes to fill a self-imposed and questionable “fiscal black hole.”

However, there is an alternative. Member after Member on the Government Benches have said that the Labour Members are not offering other solutions, but there are plenty of other solutions. We need the wealthiest individuals and biggest corporations to pay their fair share. The Budget introduced only meagre measures to levy funds from sources of wealth, and vast untaxed wealth is still being accumulated. There are numerous measures we could pursue, including abolishing non-dom status, equalising capital gains tax with income tax rates, and introducing a financial transactions tax, a one-off tax or even a new wealth tax. Hundreds of billions of pounds could and should be raised by taxing wealth and the rich in this country, and we should end the tax giveaway for the oil and gas giants’ fossil-fuel exploration.

Those measures would redistribute some of the wealth of the few to secure a better future for the many, while boosting growth. Putting more money in people’s pockets will increase spending in the local economy and boost growth, and that is why I will continue to back our trade unions. Investing in public services will ensure that people’s needs are met, and that is why I back our local authorities and the demands for better settlements for public services.

The autumn statement does not deal with the household cost of living crisis, the public service funding crisis or the climate crisis. It sets the wrong priorities, and all in the name of stability. Until a Budget robustly redistributes the money from the few to the many and gets the economy moving, the same problems and the instability we face will continue and worsen.

To conclude, I and many on the Labour Benches will continue to support the trade union-led campaigns to lift incomes, and I will stand shoulder to shoulder with them, with local councils and with communities for higher pay for everyone in our society and fairer taxation of the rich and powerful. Diolch yn fawr.

[Mr Deputy Speaker (Mr Nigel Evans)]

We come now to the wind-ups. I call the shadow Minister.