Budget Resolutions and Economic Situation
Debate between Jeremy Corbyn and Callum McCaig
Jeremy Corbyn
No, I will not give way a second time.
First, the Chancellor does nothing to address the housing shortage—not the lack of council housing being built, not the lack of sufficient housing association properties being built, and not the lack of sufficient places being built for reasonable sale. The Chancellor’s solution is to force councils into right to buy, with a discount of up to £100,000—£100,000!—so that the councils are forced to sell off what is called high-value property because such property should not be owned by local authorities. The council in my borough is, to its credit, building homes. It has just completed a development of 25 new flats, but if the Chancellor’s proposals go ahead, we will have the ludicrous situation whereby nobody on the borough’s housing waiting list—nobody in housing stress—will get one because they will be sold on the open market to anyone who is able to buy them. What does that say to those people in desperate housing need who want to maintain communities in London or any other part of the country?
There is also the sale of housing association properties. Housing associations are quasi-independent, and their properties are not the Government’s to sell. I am concerned about the financial model of housing associations, which has gone down and down from having almost 100% public investment in the construction of new properties at the time of their foundation, so that they have effectively become building companies using private finance. There is no problem in borrowing private finance to build, but there is a problem if the rent model or building for sale at the end of the process does nothing to address the housing needs of the most desperate people in this country. What we are doing by stealth is privatising housing associations by forcing them to sell off their properties.
What happens to young people who cannot afford to buy—who have no bank of Mum and Dad—and who cannot afford to rent? Where do they end up living? Why is the age at which people here are able to leave home and live independently the highest in Europe, and why is it getting higher and higher? This Budget offers nothing to those people in housing stress.
The Chancellor is very keen on regulating local authorities, by increasing the rents for those on higher earnings and decreasing them for others, with no remarks about compensating the housing revenue account for the income lost, but he says nothing about regulating the private rented sector and tackling the astronomical rents being charged in some parts of London. In my constituency, it costs at least £350 a week to rent a two-bedroom flat; a house costs between £500 and £1,000 to rent. It is completely off the scale in terms of what most people can even begin to think about being able to afford.
Levels of tax evasion in Britain are high, and I am pleased that the Chancellor is prepared to address the issue, but why have the 15-year rule for non-doms? Why not abolish the non-dom status altogether? Why not, as part of the EU negotiations, consider the tax-evading loopholes that exist all over Europe? We have islands around our shores where tax rates are remarkably low. Switzerland manages to charge remarkably low rates of corporation tax, as do Luxembourg, Liechtenstein and Monaco. Should we not be looking to close all those loopholes? Instead, the Chancellor proposes yet another cut in corporation tax and says that the way forward is to continue the race to the bottom in lowering corporation tax.
The Budget reflects the long journey from the Prime Minister’s hug a husky days and the promise of being the greenest Government ever to the sale of the Green Investment Bank to the private sector—with what sort of requirements for its future performance, I know not, because nothing is made clear in the Red Book—and the cancellation of at least two major rail electrification projects, which were trumpeted before the election and used as part of an election-winning strategy to show that the Conservatives had really got it on railways and really wanted the railways to expand. Instead, they have cancelled the electrification of the midland main line and the Manchester to Leeds line. Is the western region electrification safe? There are many other projects one begins to worry about because of those announcements.
At the same time, the Government are investing a huge amount of money in road building. It is as if the whole transport strategy has been turned on its head, so that instead of going for the more environmentally sustainable rail transport, particularly for freight, we are once again on a road-building binge in a country that is already polluted and has too many vehicles on the roads. Surely we should be trying to rebalance our economy in favour of sustainable transport. I am not saying that we have to get rid of all cars—obviously not—but our transport policies have to be more sustainable.
Callum McCaig (Aberdeen South) (SNP)
On the subject of the Budget’s green credentials, the Red Book also sets out that renewable energy will be subject to the climate change levy. Does the hon. Gentleman agree that that is utterly perverse from the point of view of reducing carbon emissions?
Jeremy Corbyn
Well, indeed. I hope there will be sufficient opportunity to question the Chancellor on the whole environmental strategy behind this Budget, because I really wonder if there is one at all. We live in an era when climate change is a serious problem around the world. Air pollution is a very serious problem, particularly in India and China, but it is also a growing problem in London and other cities. Surely we need to think hard about the health effects and the role that a financial strategy can play in improving our environmental standards.
Asked how all this would be paid for, I turn to pages 28, 29 and 30 of the Red Book, where we see all the public assets that are to be offered up, totalling £30 billion in this financial year—the largest ever sale of public assets in the history of this country, and almost double what Margaret Thatcher achieved at the height of her privatisation mania. [Interruption.] Conservative Members say, “More.” Of course they do, because the only economics they can think of is getting rid of public assets to fund tax cuts for corporations and to pay for the inheritance tax cut that will largely benefit the wealthiest in our society.