Budget Resolutions and Economic Situation

Dawn Butler Excerpts

Wednesday 15th March 2023 Commons Chamber

[Dawn Butler (Brent Central) (Lab)]

It is a pleasure to follow the hon. Member for Cities of London and Westminster (Nickie Aiken), and I actually agree with something that she said about VAT. While I am in a positive mood, I thank the Chancellor for his announcement on prepayment meters, because I have been championing that campaign for the past seven years.

I feel like there is a lot missed in this Budget. At the moment we are facing a profit crisis, while many people are struggling. The Office for Budget Responsibility has stated that real household income is due to fall by 5.7% in the next two years, which is the largest two-year fall since records began. It will be lower than pre-pandemic levels. The Chancellor has missed a huge trick here. I know the devil will be in the detail, but the pension announcement, as far as I can make out, is for the wealthy—those who can afford to put away £60,000 a year. It also seems like the only permanent tax cut in the Budget is for those who are very wealthy. The Chancellor could have stopped all the strikes if he had only made an announcement on public sector workers’ pay today, but he chose not to do that. As we have heard from other Opposition Members, there was also nothing on capital gains tax or income tax. That is very strange.

The UK economy cannot be improved without London’s contribution. London Councils has five key priorities: housing and homelessness; health and care; supporting businesses; helping London deliver net zero; and greater devolution to local government. London’s businesses are struggling in the face of increasing labour and energy costs and sustained high inflation. Will the Chancellor commit to keeping the energy bill relief scheme under review and materially improving the discount for businesses, and will he reform the apprenticeship levy to make it easier and cheaper for employers to recruit and retain talent? As we have heard, many employers are buying equipment rather than investing in people. As the hon. Member for Cities of London and Westminster said, we should reintroduce the VAT retail export scheme too, to make London and other UK destinations more competitive for overseas shoppers. That would add a net gain to the public purse.

Because of the pandemic and the current cost of living crisis, local authorities will have to make savings of at least £100 million next year to balance their budgets. That is not sustainable for local authorities such as mine in Brent. We have a homelessness problem, too. Shelter recently reported that 1 in 58 Londoners are homeless. Will the Chancellor increase the local housing allowance rates, which have been frozen since 2020, to help tackle homelessness, and also increase discretionary housing payment allocations? These are all steps the Chancellor could have taken if he was really interested in investing in growth in our country, because local authorities can only do so much.

Is there money, too, to provide additional investment for the refurbishment of existing housing stock to treat damp and mould and address fire and building safety issues? Last time Labour came into government it had to put a lot of money into making social housing right. It is especially important in London to remove all restrictions on how councils can use right to buy receipts, to sustain affordable housing delivery without placing additional demands on the public purse. These are all things that could be done if we had a bit of imagination from the Government.

London’s devolution settlement is over 20 years old. The Government’s commitment to deepen devolution should apply equally to London as elsewhere, to enable London boroughs and the Mayor of London to tackle the 21st-century problems facing the capital. Will the Chancellor work closely with London Councils and with me as chair of the London parliamentary Labour party to ensure that we broaden the balance of revenue-raising powers available to councils in the longer term, to improve financial resilience and reduce reliance on any single funding stream?

Some Government Members have said today that they are sometimes confused about what we on the Opposition side of the House stand for: I want to reassure them by reaffirming that the Labour party and London Labour members stand for a moral crusade for making our country better. I do hope the Government will take some of my points on board.