Budget Resolutions

Debate between Duncan Baker and Bridget Phillipson

Tuesday 2nd November 2021 Commons Chamber

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

It is a privilege to respond for the Opposition as we conclude our debate on last week’s Budget.

Politics is about priorities, and that has been made crystal clear in not only today’s debate but the Chancellor’s Budget. The economic recovery is far from secure; the cost of living is soaring; supply-chain chaos is putting businesses under strain; and the big challenges that face our country and, indeed, our planet need leadership.

I thank all my right hon. and hon. Friends on the Opposition Benches, who have spoken with such passion on behalf of their communities and their constituents in challenging this inadequate Budget. I thank my hon. Friends the Members for Bootle (Peter Dowd), for Bradford East (Imran Hussain), for Battersea (Marsha De Cordova), for Norwich South (Clive Lewis) and for Makerfield (Yvonne Fovargue). I thank my right hon. Friend the Member for Hayes and Harlington (John McDonnell), my hon. Friend the Member for Harrow West (Gareth Thomas) and my right hon. Friend the Member for Walsall South (Valerie Vaz). I thank my hon. Friends the Members for Brighton, Kemptown (Lloyd Russell-Moyle), for Nottingham East (Nadia Whittome), for Sheffield, Hallam (Olivia Blake), for Newcastle upon Tyne Central (Chi Onwurah), for Kingston upon Hull West and Hessle (Emma Hardy), for Ilford South (Sam Tarry), for Worsley and Eccles South (Barbara Keeley), for Liverpool, West Derby (Ian Byrne), for Bedford (Mohammad Yasin), for Bolton South East (Yasmin Qureshi), for Leeds East (Richard Burgon), for Leeds North West (Alex Sobel), for Newport West (Ruth Jones), for Wirral West (Margaret Greenwood), for Jarrow (Kate Osborne) and for Luton South (Rachel Hopkins). Sadly, it was a little bit quieter on the Government Benches today and they ran out of Members who were willing to defend their out-of-touch, high-tax, low-growth Budget.

Let me start with the verdict of Paul Johnson of the Institute for Fiscal Studies on the outlook for living standards. He said:

“This is actually awful… High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.

As we have come to expect from this Government, Ministers fail to accept any responsibility, working harder on their excuses than on solutions. It now costs £15 more than it did last year to fill an average car with a full tank of petrol; heating bills have already gone up by £140, with more rises to come; and the cost of a typical family food shop is set to increase by more than £180 next year—assuming that people can find everything they want on the shelves. Almost everything is more expensive, yet the Budget has only made matters worse.

The Resolution Foundation has highlighted how, by 2026, taxes will reach an additional £3,000 per household compared with when the Prime Minister took office. The Chancellor could have cut instead VAT on domestic heating bills to zero for the next six months, as we urged. Labour’s retrofitting plan would have helped to bring 19 million homes up to standard, cutting heating bills by an average of £400 a year. These are practical ideas to support pensioners and families through the long winter months ahead.

We all know that Ministers are making the cost-of-living crisis even worse for 6 million people with their cut to universal credit. It is appalling to remove £20 a week from people who already have so little, yet it is also so revealing. We welcome the change to the taper rate, but let us be clear: while the Government give with one hand, they take far more with the other. Six million households were hit by the cut, yet fewer than a third of them will get anything from the change. The Budget does nothing to help millions of hard-pressed families who are working hard on modest incomes and face a cost-of-living crisis this winter, and there is nothing for pensioners who are worried about skyrocketing gas and electricity bills.

The reason why the Conservatives are increasingly a high-tax party is that they have been a low-growth Government, and that will continue. The Budget confirmed anaemic medium-term growth forecasts, with growth falling to an average of 1.5% in the final three years of the forecast. There is no plan for growth—not now, not next year and not for the past 11 years.

The Government have again missed another target on research and development spending, which is central to boosting our economy. As the OBR reported, the measures announced at the Budget make no material difference to the path of business investment. Real wages are on course to be lower in 2026 than they were even before the global financial crisis.

This Budget needed to support British businesses, as they will power our economic recovery, and this Government were elected on a manifesto committed to fundamental reform of business rates. In fact, the last four Tory manifestos have promised action on business rates, and every time they have failed to deliver. The Treasury started the review last summer and it has failed even on its own terms. Businesses were promised real change, not tinkering at the margins. The challenge facing our high streets is real and it will not disappear. In fact, it was the new Chief Secretary to the Treasury who once wrote in 2018 that he was also very frustrated by the then Conservative Chancellor’s failure to abolish business rates. He wrote:

“We need to do better, and this means the Chancellor has to up his game. Too often since his appointment, he has shown a tin ear to the concerns of precisely the sorts of people the Conservative Party ought to be championing.”

He said that the Chancellor had a duty to listen and to act. That is absolutely right. We have a new Chancellor, but the same old problem. Perhaps the right hon. Gentleman should have a word with his boss to try to sort this out. Labour will do what this Chancellor and his predecessors have failed to do: we will replace business rates with a fairer alternative fit for the 21st century, levelling the playing field with the online competitors.

Also buried in the Budget documents is a stealth raid on self-employed people, meaning that they will have to pay an extra £1.7 billion over the next five years. Let us never again hear the Tories claim to be the party of business. When the Prime Minister said, “Eff business,” I thought that it was a quip; now I know that it is Government policy. Today’s Labour party will work with businesses. This Government want to blame them. This Government are falling well short of what is needed to address the key challenges facing the country. The Chancellor spent more of his Budget talking about cider than the climate. As the OBR has revealed, stalling action in this crucial decade could double the overall cost to our economy. The insufficient action from the Government is unfathomable.

[Duncan Baker (North Norfolk) (Con)]

I have heard some of the contributions from the Opposition this afternoon. I just wonder what planet they are on. We were told that we would have a recession that was deeper than that of the second world war. Instead we have an economy that is rebounding the fastest in the G20. Can the hon. Lady explain how the economy is actually giving us a recovery better than any economist ever predicted?

[Bridget Phillipson]

Let me say to the hon. Gentleman that sometimes when the Whips come calling and they have a piece of paper that they would like you to read out in the Chamber, just say no. We have had far, far further to climb because of the massive hit to our economy—the worst of any advanced nation. Much of that, sad to say, comes down to the Chancellor’s resistance to adopting the measures that were necessary back last autumn to control the virus.

Labour has set out our climate investment pledge not only to get us on track with our commitment, but to avoid greater costs in the future and to ensure that we can seize opportunities, too. That means developing our domestic hydrogen sector, greening our steel industry, building the cycle lanes and infrastructure, creating new jobs to retrofit homes, ensuring that electric vehicles and their batteries are manufactured here, and that all our families can enjoy the local environment, clean air and open space. We are ambitious for Britain to lead the world with the jobs and technologies of the future, creating prosperity and opportunity in every corner of our country. Under Labour, we will work with business and trade unions to make this a reality.