Budget Resolutions and Economic Situation

Geraint Davies Excerpts

Monday 20th March 2023 Commons Chamber

[Michelle Donelan]

It may have escaped the hon. Member, but we have had a global pandemic and a war in Ukraine.

We are using these firm foundations to build long-term sustainability and healthy growth—growth that will bring security, prosperity and opportunity to British businesses and British people. To get that growth, we are on a trajectory of innovation in every part of our economy. Since the industrial revolution, our country’s willingness to rethink and reimagine has led to the inventions of the telephone, the TV, the world wide web and much more. That is why, under this Government, our tech sector has already become third in the world to reach a value of $1 trillion, behind only the US and China. We are ranked fourth above China, Germany and Japan in the global innovation index, we are second in the global talent index and we have four of the world’s top 10 universities.

I could go on, but we are not a Government who are focused on where we were or where we are; we are a Government who are focused on the future. That is why we have set up the Department for Science, Innovation and Technology with one single mission—making Britain a science and technology superpower. It has been just six weeks since we became the new Department, and we have already published the UK science and technology framework, setting out our vision for science and technology. We have responded to the second largest bank failure in the US, and this Government helped facilitate a deal to save the UK arm of Silicon Valley Bank, protecting thousands of important jobs in the life sciences and tech companies, and safeguarding them in the long-term.

In the Budget, we announced a staggering £2.5 billion of funding for the quantum technologies that we anticipate will revolutionise everything from healthcare to farming. That built on the announcement we made of £370 million of new moneys for things such as technology missions, which will set Britain up to lead on artificial intelligence, quantum technologies, bioengineering and much more. These things matter, because the British public rightly expect Britain to be leading in the technologies of the future and for these technologies to deliver real tangible benefits to their local communities and their families.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Secretary of State will know, because I have told her before, that there are 1,000 jobs across universities in Wales that are about just to end because of the sudden end of EU structural funding. The Government promised that not a penny less would go to Wales for those jobs in 260 projects that are generating green growth in high-tech areas. Will she keep those jobs going by providing bridge funding for the next year?

[Michelle Donelan]

The hon. Member has already raised that with me, and I have already said that I will meet him to discuss it. The Government have of course launched the shared prosperity fund, and we will ensure that spending on research and development outside the south-east is increased by 40% by 2030.

--- Later in debate ---

[Geraint Davies (Swansea West) (Lab/Co-op)]

This is a terrible Budget from a busted-flush Government. We have heard from the other side, “Give them another chance—the new Tory dynamic duo of Rishi and Jezza.” They certainly talk the talk on growth, debt, inflation and the NHS, but do they walk the walk? The answer is no.

We have seen stagnant growth for 13 years, with no real prospect of it being any better than the worst in the G7 in the year to come. Let us compare that with what happened under a Labour Government. In 10 years we saw the economy grow by 40%, and we used the money to double investment in health and education and lift a million children and a million pensioners out of poverty. With that level of growth—that trend growth—we would have been £11,000 better off in terms of average wages. The Prime Minister says “That’s not my fault”, but during much of the time during which we have seen this decay and mismanagement, he was the Chancellor.

What about debt? Since the last Labour Government, debt as a share of the economy has doubled from 45% of the economy to 90%. That is an appalling record, and an indictment of this Government’s failed austerity platform. As for inflation, the Government’s ambition is to halve it from 10% to 5%. According to the forecasts it will be 3%, so it should not be that difficult. People seem to think this will reduce prices. Obviously, if inflation is 10% and then becomes 5%, prices will have gone up by 15%; and if the Government are offering workers at the Driver and Vehicle Licensing Agency in Swansea 2%—in fact, a 13% pay cut—it is no wonder that they are on strike. This Government are busy causing strikes left, right and centre. If the RMT’s original bid of 7%, from before it went on strike, had been accepted, we would not be in the position where now the workers are—deservedly, in fact—getting 14%. We have had this disruption and chaos because of Tory mismanagement, because the Government will not negotiate. They just create strikes.

We are told that we have to live within our means. That is all very well for the Chancellor, who is a millionaire, or indeed for the Prime Minister, who is a billionaire. He has his hedge fund Theleme, which appreciated from £7 billion to £39 billion after the Government decided to buy the Moderna vaccine as recommended by the then Health Secretary, who has since made his money in the jungle.

What about waiting lists? We have waiting lists of 7 million people—are we going to get those down under this Government? We know that the cost of treating someone with low nourishment is something like £7,000 compared with £2,000 for someone who is properly fed, yet in Britain today one in four people are in food poverty. The inequality created by this Government is making the health service worse, not better, and the billion pound that they have put into pension fund tax relief will not make it better. The workers are being blamed, of course, for inciting pay demands, but wage growth is in fact down now, year on year, from 6% to 5.7%, at a time when inflation is well over that.

Who else is going to pay? Of course, homeowners have to pay. They have to help bring down inflation. How? By bringing down the price of houses by 8%. So new homeowners will see mortgage rates double or triple from 2% to 6% at a time when the value of their houses is going down—and they are supposed to be the growth creators of the future. The Bank of England’s base rate has gone from 0.1% in November 2021 to 4% now. The economy has gone out of control under Tory mismanagement.

And what about businesses? The Government talk about businesses, but we now have record insolvencies. They are up 30% since 2020. Material prices and energy prices are going up, borrowing costs are going up and demand is weak, so businesses are struggling.

We have heard about R&D in this debate, and as I have mentioned, in Wales 1,000 university staff at the cutting edge of developing green growth initiatives are being sacked because the promise of us getting “not a penny less” after the withdrawal of the EU structural funding has been broken by this Government. We are talking about losing innovative projects to turn waste plastic into nanocarbon tubes for electric vehicles. We are talking about converting steel slag heaps back into raw materials such as iron ore. We are talking about work with Tata Steel on cladding for homes that stores solar energy as well as absorbing it. On infrastructure, Wales has had just a 1.5% share of rail enhancement for decades for 5% of the population—we are not even getting our 5% for HS2.

There has been profiteering—we have seen the oil companies and the retail companies making profits out of the Ukraine war and the pandemic respectively, and we have seen natural monopolies such as the water companies profiteering. It is not good enough. The Tories are saying, “Trust us again”, even after the inflation, after the debt, after the lack of growth, after one in four have been living in poverty and after a 15% cut in trade. No, no, no! We want a stronger, fairer, greener future, and that will only come with a Labour Government. Let us have an election, put the country out of its misery and build a better future with the Labour party.

[Mr Deputy Speaker (Mr Nigel Evans)]

Could Members who have taken part in today’s debate please make their way to the Chamber, as this will be the 43rd and final contribution from the Back Benches?