Budget Resolutions and Economic Situation

Catherine West Excerpts

Thursday 16th March 2023 Commons Chamber

[Catherine West (Hornsey and Wood Green) (Lab)]

I rise to speak in the context of the devastating news that the tax burden is the highest in 75 years. I will make two points: one on families in my constituency and one on the impact on the high street. We have seen zero improvement and the degradation of public services, as emphasised in the speech by my hon. Friend the Member for Easington (Grahame Morris). Public services have not improved. Local authorities have received a 40% funding cut since 2010, and people are complaining of not being able to see GPs or get basic operations done in the NHS.

Despite a big leg-up for millionaires in yesterday’s Budget, there is precious little for working families. Every day I hear devastating stories from families living in overcrowded council homes, or struggling with a 20% increase in privately rented homes or a major spike in mortgage payments. I welcome the relief on energy bills for another three months and prepayment meter charges being brought in line with direct debit payments. For households experiencing deep poverty, that measure will make a difference.

The plight of local families is being felt on the high street, in the closure of shops, bank branches, pubs, cafes and the post office. We are told in Wood Green that due to the collapse in family budgets, WHSmith is folding, and so is our post office. Lack of money in people’s pockets means devastated high streets. Our high streets needed a rescue package yesterday, but there was precious little on offer for small businesses.

Schools are seeing the impact of energy bills. I was at a meeting recently at Stroud Green Primary School, and many Hornsey schools told me that this year, above any other, they see their budgets collapsing. One big difference to family budgets is the introduction of universal school meals for all primary school children being brought in as a one-off emergency measure this financial year in London. That will have a big impact on food scarcity in the local communities.

The sense of strain has made families feel very isolated and unsupported. I welcome the debate we have had around the mental health of children as a result of some of the announcements in the Budget, yet some of them are coming in far too late; they are being announced now, but are to be introduced only in 2026. That is far too late: we need to see things in this academic year, not be waiting several years.

In a powerful debate in Westminster Hall in the last week we heard the shocking statistic that over 200 school- children are lost to suicide every year. This is the impact of the stress and strain on working families. Even before the pandemic, mental health waiting lists were soaring, and I have heard from many constituents, as we have heard from many Members today, about children waiting months or years for the support they need.

Teachers tell me that they are struggling with the increasing number of children who clearly need specialist support. While my borough is subject to extra help for special educational needs from the Department for Education, this must come in at the same time as improvements to the public sector, because sometimes there are not enough therapists or specialists to assist children with special educational needs. Some families have told me they have had to wait up to 18 months for an assessment of their child’s needs, putting huge strain on schools; they do not have the expertise to provide extra support from their budgets, which of course have not really increased since 2010. The Government’s flagship special educational needs and disabilities review is all words but no action, and while I welcome the announcement on building new schools, when will they open their doors? We need to speed up the delivery of some of the announcements made yesterday.

There is the same problem with the Chancellor’s childcare offer. There is no support for this academic year, and the programme will not come in until 2026. And I think the Chancellor might have stolen an idea from Labour on wraparound care, because I am sure I saw my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) going to breakfast clubs and after-school clubs where they do exist. We know from the Foundation Years Information and Research group that early years funding is needed now, not in two years. I hope the Chancellor understands the desperate urgency of this situation.

Sadly, when it comes to support for families and schools, the Budget is littered with disappointments and delays. I hope the Minister will take back to the Department the urgency of the matter. With the mental health crisis and parents struggling, what we really need is a fresh approach as soon as possible.

--- Later in debate ---

[Jonathan Reynolds]

I am grateful to my hon. Friend for his question. He will know that he represents several members of my family, so I have personal knowledge of his constituency, and they think he is a very fine Member of Parliament. Because of my family and my personal heritage of growing up in County Durham and mining communities, I know the issues he talks about, particularly those around profit sharing and the surplus and reserves of the mineworkers’ pension scheme. There is a case to look at there, and I would be more than happy to engage with him on those issues for the benefit of his constituents and those of other Members in the Chamber.

We are seeing people cutting back on all they can, but still being left with too much month at the end of their money. The British public need only ask the following questions. Are they better off after 13 years of this Government? Are they safer? Are the public services they rely on working better than a decade ago? No, no, and no again. At the core of that failure is the hard truth that, over 13 years, the Government have turned the UK into the worst-performing major economy in the world. That failure is at the heart of what is hitting people’s pay packets and public services. As we have heard many times in the debate, the British economy is the only developed economy in the world that has still not recovered to its pre-pandemic size.

[Catherine West]

My hon. Friend is making an excellent speech. Does he agree that without reforming housing—be it the overly pricey private sector, the lack of social homes or the mortgage crisis created by the last Budget—there can be no real growth?

[Jonathan Reynolds]

I am grateful to my hon. Friend for raising those points, because housing is another area that we heard very little about in the Budget yesterday. Perhaps that was because of the mortgage premium that many people in this country are paying as a result of the last Conservative mini-Budget, if we are still able to call it that—the impact certainly was not mini. My hon. Friend makes some very good points about what that means for her constituents.

We have seen the lowest business investment of any G7 nation, and wages are at the same level as they were in 2008. I spend pretty much all my time talking to businesses, and I often genuinely find myself thinking, “With all the brilliant things in this country, how have this Government managed to do so badly?” The big story of the Budget is the same as ever: low growth, high taxes and poor public services. To truly realise the ambition of this country, we have to change course from that. Half measures on childcare, which will take years to come to fruition and just pile more costs on to providers and parents, will not cut it. Saying we want to be a science superpower or a leader on clean energy is not the same as delivering the measures to actually do it, and spending millions of pounds on a handful of very wealthy people getting even bigger pensions will not drive the kind of dynamic labour market we need. The big, bold and radical ambition for this country will come only from a Labour Government.

Crucially, the Budget comes at a time when we can no longer put off the major decisions on net zero, because our competitors are pulling ahead. The Inflation Reduction Act in the United States and the Net-Zero Industry Act in the EU have radically affected the relative competitiveness of the UK, which is a point that my hon. Friend the Member for Stockton North (Alex Cunningham) made particularly well. When it comes to climate change and the chance to reindustrialise parts of Britain, we are presented with the fierce urgency of now.

This year, we have already had bad news from Ford, which is cutting jobs in Essex. We have had bad news from British Steel, which is cutting jobs in Scunthorpe. We have had bad news from AstraZeneca, which has chosen Ireland over Cheshire. This is the challenge that I wanted the Budget to rise to, because I want to see the Government put up a fight for Britain. After 13 years, I am sick of austerity, poor public services and stagnation. If, like us, people want hope, optimism and change, it should be clear by now that it will not come from doing more of the same.

We all know that the Government have a poor record on crime, but perhaps even we did not expect them to be so brazen as to commit an act of burglary themselves by taking so many of Labour’s ideas for the Budget. Indeed, we have heard many speeches today extol the benefits of childcare reform, keeping the energy price freeze and ending the injustice of prepayment meters. I say to Ministers that they are very welcome, as we are more than happy to share our ideas with a Government who have seemingly run out of their own. But rather than have the half-fat versions of our plans, why not go the whole way and bring the fundamental change that this country needs with a full Labour Government?

At the top of that list is that Labour believes that this country needs an industrial strategy, one that is not about picking winners; an industrial strategy means having a plan to keep Britain competitive in the global race. This Government have a curious mix of big state, top-down targets and a kind of total libertarianism in how to deliver them. For example, it is Government policy to force residential and commercial property to meet higher standards in just four years’ time or be removed from the market; to decarbonise home heating; and to phase out petrol and diesel vehicle sales in just seven years’ time. But the Government are not on track to meet any of those targets because there is no plan to deliver any of them. Just to retain our existing automotive industry we will need 10 battery gigafactories, but we have one. Germany has 10 times that capacity, and every day we fall further behind, more jobs and industries go elsewhere.

Only private investment and public investment pulling in the same direction can deliver the wall of money we need to renew this country. We accept that we cannot possibly equal the awesome fiscal firepower of the United States, but we can make the UK more competitive, we can target funding where it will make a difference and we can make markets deliver what we need. Let us consider a sector such as steel. We know that we must make the transition to green steel or face the likely end of the UK steel industry. Governments from across the world—Sweden, Austria, Canada, Germany—are partnering with their steel sectors to go green. We know that there is market demand for that here in the UK, but we have not got a Government willing to be the partner that industry needs. So Labour’s industrial strategy will work in partnership with industry to keep Britain competitive, not with random pots of money with no return to the taxpayer or endless changes to the corporation tax and investment regime, but with a long-term plan to make Britain investible again.

Labour also believes in a fundamentally different approach to our economy and our politics. We know what every good business leader knows: sustained growth comes from working people, and they are our biggest asset. So where is the employment Bill the Government pledged? Where is the promise, 12 months on, that there will be no more P&O Ferries ever tolerated again in the UK? Basic rights, such as sick pay, holiday pay and protection against unfair dismissal, should be for everyone. That is why we in the Labour party will always be the party of good work and good wages, and where this Government have failed to act, we will act, with our new deal for working people to do just that.

I did welcome one part of the Budget: the trailblazer announcements on devolution to my area in Greater Manchester and to the west midlands. We believe that the country is too centralised, and too often that leads to poor public services and the inefficient use of public money. But why should only two parts of England get the chance to shake themselves free from the dead hand of this Conservative Government? Why can the remaining 90% of the country not have that option too? That is why we will give every community the power it needs to shape its own destiny.

For all the talk of going for growth, at the core of this Budget is the same old Conservative malaise: the lack of ambition and vision that has turned us back into the sick man of Europe. I have sat through 13 years of Conservative Budgets, and as the years go on their claims get thinner and thinner. Last year, when inflation was rising, it was all down to global forces, but this year when it has peaked and it is set to fall, all of a sudden that is down to Conservative genius. Frankly, the British people are not fooled.

Listening to Government Members today, it seems they want to congratulate themselves on a job well done because a Conservative Chancellor got to his feet and this time has not crashed the markets, because we narrowly and technically avoided a recession, and because the growth forecasts are bad but not quite as bad in the short term as last time. Is that what the Conservatives have come to? Is that the measure of success? Have we set a bar so low that we will trip over it as we leave the Chamber today? People are paying more than £1,000 more on their mortgages right now because of recent Conservative actions. Investment and jobs are leaving our shores because of those actions. Our constituents are stuck on waiting lists because of those actions. The lack of action on tackling that is unforgivable.

We believe that Labour has the ambition to match Britain’s potential. We will take this country from the bottom of the G7 to the top. We will have the highest sustained growth of our competitor countries and deliver the public services that people can rely on. We will deliver more doctors and nurses to get waiting lists down; police officers back on the streets; higher wages and better jobs in industries that people will be proud to work in; and a plan to reindustrialise Britain, to give back our hope and our future. That is why it is clear that only a Labour Chancellor can deliver the change that our country so desperately needs.