Budget Resolutions and Economic Situation

Bridget Phillipson Excerpts

Tuesday 9th March 2021 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Last week’s Budget should have been the moment when our country was put back on the path to growth. It was an opportunity to put in place the building blocks of a recovery that benefits every part of our country. It was the chance to give people hope that, despite the challenges we faced over this last year, a better future lies ahead—a future in which all parts of the country share in our prosperity, where our economy is resilient so that everyone, no matter where they are and no matter where they live, can expect a good job, a reliable wage and a roof over their head.

We have heard from a great number of Members this afternoon and this evening—sadly too many for me to mention them all individually, and I hope they will forgive me— but the contributions from those on these Benches made it clear that we needed a Budget that not only addressed the devastating impact of the pandemic, but tackled the burning injustices that have built up over the past decade under successive Conservative Governments.

The sad reality is that the Budget does not even come close to resolving the problems our country faced going into the pandemic. There is no plan for jobs, no plan to rebuild our economy and no industrial strategy. Indeed, as my right hon. Friend the Member for Doncaster North (Edward Miliband) observed, we have a Secretary of State for industrial strategy who does not even believe in industrial strategy. That does not bode well for our recovery as we come out of the pandemic.

The Chair of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Bristol North West (Darren Jones), was right to emphasise that we need to see a focus on growth as part of a transition to net zero. We should have seen that joined-up approach to support growth in every part of our country, with decisions based on genuine need, not narrow, partisan advantage.

It is not even the simple cynicism of saying, “Vote Tory, see local investment.” It is starting to feel a lot like, “Vote Tory, see your money go to richer areas.” Let us take the levelling-up fund, which pits regions and nations against each other for vital funding. We want to see proper funding for every region, but it is crucial that it is done transparently, fairly and with a say for local communities, and this fund fails on all those counts.

In the powerful contributions of my hon. Friend the Member for Barnsley East (Stephanie Peacock) and my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson), they exposed the reality of this. Although a new economic campus for the Treasury in Darlington will bring 750 jobs, we should be clear that almost 7,000 civil service jobs have been lost in the north-east alone since 2010. Madam Deputy Speaker, you will not be surprised to hear that, as a north-east MP, I will always welcome jobs coming to our region, but how will it help with the much-needed task of delivering an investment-led recovery? How will it drive wider private sector growth? How will it rebalance our economy as we emerge from this crisis?

Madam Deputy Speaker, like me, you will have now listened to many Budget speeches from many different Chancellors, and we all know the structure of these things. We sit here expectantly, wondering what the centrepiece will be, wondering what the final flourish will be, waiting for the moment when the Chancellor makes it clear what he thinks is the biggest announcement of the day. Some of us were hoping that perhaps, at long last, the Chancellor would grasp the enormous challenge of social care, which touches on so many lives up and down the country, but, no, once again it was passed over in silence. The Chancellor could not even bring himself to say the words, and in so doing he ignored the economic as well as the moral case for social care reform, as was so eloquently set out this afternoon by my hon. Friend the Member for Leicester West (Liz Kendall).

That sense of disappointment was compounded when the Chancellor revealed that he has not had a new big idea in five years, and that he still believes that freeports will solve all our problems. I know that this is a hobby-horse of his; it has been for a while. In 2016, he claimed that they would deliver 80,000 new jobs in the UK. Those of us who have followed closely his approach to the pandemic have been unsurprised to learn of the rather simplistic economic modelling underpinning these claims, simply taking the total number of existing jobs in free zones in the US and scaling it down for our smaller population and for our smaller labour force.

The truth is that there is little evidence that freeports create new jobs. Instead, they simply risk moving them around, with the additional risk that deprivation is intensified in the areas just beyond the immediate vicinity of the freeport. They do not make companies more productive. They do not increase demand for the goods in the wider economy or increase the tax take for the Treasury. On the contrary, we know that there are real concerns about tax evasion and the risk of smuggling associated with freeports. With Her Majesty’s Revenue and Customs left increasingly overstretched over the past 10 years, I fear that our country is not well-placed to manage these new risks.

We can only build a strong economy if we secure the recovery, and that means action now to secure jobs and to support job creation in the future, and it means clear steps to help businesses through the worst of this crisis. It means ambitious measures that would help build a greener, fairer and more dynamic economy, and on every one of these measures, the Budget falls short.

For the half a million unemployed young people who desperately need hope for a better tomorrow, there is still nothing on offer but the Chancellor’s kickstart scheme, which has only created enough opportunities for just one in 49 eligible young people. Likewise, his much vaunted restart scheme has not even begun and will not begin to meet demand until March 2022, months after unemployment is estimated to peak at 2.2 million. It beggars belief that, in the grips of the worst economic crisis for a generation where our economy has taken the biggest hit of any major economy, this is the best that the Government can muster.

But it is worse than that. At the point at which the furlough scheme is due to end and joblessness peaks, what do the Government plan to do? They plan to cut social security at a time when families will need it the most, sucking demand out of our economy in the process. We can only support job creation if we ensure that businesses remain viable now and into the future. That means helping as many as possible survive through these incredibly challenging circumstances in which they find themselves, not looking on while many good businesses teeter on the edge, unable to deal with the mountain of debt that they have built up over the past year.

The incredible work of our NHS staff and volunteers gives us all hope that soon we will see a semblance of normality return, which is why businesses are so frustrated. They feel that the Government are simply not listening to the immediate pressures they face. While of course Labour wants to see business investing and driving job creation, we also want to see Government playing their full and proper role. That means providing much-needed investment to support our recovery and bringing forward £30 billion of capital spending, not cutting capital spending by £500 million in the next financial year and cutting the green homes grant by £1 billion.

The pattern is clear: on every measure, the Government have fallen short, with no coherent strategy to rebuild and rebalance our economy. Indeed, the only obvious factor linking these policies is a complete lack of ambition, other than to take us back to the failed policies of the last decade—the same approach that weakened the foundations of our economy and left us so exposed when the virus hit. We simply cannot afford another lost decade.

Our country should take a different path: a future in which Government forge a new partnership with businesses and trade unions to get Britain back to work and support the creation of good, secure, clean jobs; a future in which Government take a strategic and fair approach to ensuring opportunity and prosperity in every region and nation of the UK; a future in which our economy is strong and resilient, making our country the best place to grow up in and the best place to grow old in. This is the future that our country deserves, and it is the future for which Labour will fight.