Income Tax (Charge)

Jessica Morden Excerpts

Thursday 28th October 2021 Commons Chamber

[Jessica Morden (Newport East) (Lab)]

It is right that we view this week’s Budget in two contexts: that of the pandemic, which is still very much with us, given the high case rates across the UK; and that of the political decisions that have been made by this Government over the past 19 months.

Time and again, the political choices that have been made by the Conservative party have been economically and morally adrift. As my hon. Friend the Member for Leeds West (Rachel Reeves) rightly said yesterday,

“we have a Government who are a byword for waste, cronyism and vanity projects.”—[Official Report, 27 October 2021; Vol. 702, c. 290.]

We should not forget that it was this Government who awarded hundreds of millions of pounds in personal protective equipment contracts to a pest control firm and to a Florida jewellery firm that had no experience of public contracts, as well as £150 million to a company that produced 50 million face masks that the NHS could not use over safety fears.

All too often, the decisions were made before financial and company due diligence was applied. Seventy-one contracts, with a total value of £1.5 billion, were awarded to suppliers before the financial and company due diligence processes were completed. Some £2 billion of contracts were awarded to businesses with direct links to friends or donors of the Tory party. The Public Accounts Committee highlighted this yesterday in its report on Test and Trace, which showed that £37 billion was spent. It said that “eye watering…sums” of taxpayers’ money were spent that failed to achieve the ambition of the project. That is the context of this Budget. That taxpayers’ money could have been spend much more wisely elsewhere. The Government would have done well to have looked at the Welsh Government’s actions in the pandemic for a good demonstration of political choices, under the sensible, steady and evidence-based leadership of Mark Drakeford.

My constituents have not been shielded from the Tory Government’s cut to universal credit this month; 8,630 households in Newport East have lost out as a result of the Government’s decision to remove the £20 uplift, which has made such a difference during the pandemic. The cut, coupled with the rise in national insurance, which will disproportionately impact those on the lowest incomes, falls in the middle of a cost of living crisis that this Budget does so little to address. The reduction in the taper rate is modest, and the Resolution Foundation highlights that about 75% of the 4.4 million households on universal credit will still be worse off as a result of decisions to take away the £20 a week uplift. This is made worse by the fact that the prices of so many everyday essentials, from food and fuel to gas and electric bills, have skyrocketed. No support was announced in the Budget for soaring household energy bills—and 3p off a pint in two years’ time may be welcome, but it is no help for families today.

I very much praise the work of Newport and Monmouthshire citizens advice, which has highlighted that the country faces a perfect storm of household debt, with an estimated 2 million households across the country already behind on paying their energy bills. This Budget presented the Government with an opportunity to take action on the issue. Indeed, the Opposition called on Ministers over recent months to remove VAT from domestic gas and electricity bills—a policy that I know some Government Members would have supported—but that was rejected.

On the theme of missed opportunities, with COP26 beginning on Sunday, there was little in the Budget to suggest that the Government are willing to invest in tackling the climate crisis. Climate action must start at home, and Britain’s credibility as holders of the COP presidency rests on the example that we set. There was little in the Chancellor’s speech to suggest that the Government will invest in delivering the benefits of the green transition to households and to industry, and certainly nothing to match Labour’s ambitions and the achievable demand for an investment of £28 billion every year until 2030 to tackle the climate crisis.

Crucially, as other hon. Members have said, there was nothing in the Budget this week for steel, an industry that would be a beneficiary of and contributor to the creation of a net zero economy. My right hon. Friend the Member for Doncaster North (Edward Miliband) set out that case brilliantly. Steel should be at the heart of the green recovery from the pandemic, and I say that as the Member representing Tata’s Llanwern site and Liberty Steel in Newport. UK Steel has rightly said that this Budget is a “triumph of complacency” and “a missed opportunity” ahead of COP26. Indeed, in the Chancellor’s statement, there was no hint of action on the sky-high industrial energy costs.

We heard a hugely weak response from the Secretary of State earlier in the debate that will deeply disappoint the industry, when he said that he is “in active conversations” and “watch this space”. We have been talking about this for many years. It is a really big burden on our industry that holds back British steel manufacturers against continental competitors. There was also no allocation of funding to the clean steel fund or wider decarbonisation support for the sector. The steel industry has highlighted that, of the 10 points in the Prime Minister’s plan for the green industrial revolution, eight relate to industries or goods that depend on steel or support the decarbonisation of steel. Either the Chancellor has forgotten that or the Government’s industrial strategy was not worth the paper that it was written on in the first place.

The Prime Minister has said:

“It would be crazy if we were not to use this post-Brexit moment to use the flexibility we have to buy British steel.”

It is one of the very few times that I can kind of agree with him. But this Budget was not the vote of confidence in our industry that it needs and deserves. That will need to come, especially if the Government are serious about converting their rhetoric around levelling up into action for an industry that is so well placed to be at the heart of that agenda. The fact that the UK currently imports 60% of the steel that it requires remains an environmental and economic own goal. We have a highly skilled and passionate steel workforce here in the UK, including in Newport East, who are ready to play their part in a green industrial revolution if the Government will just let them.

Yesterday, the Government boasted of recruiting new or extra police officers, but, as the chair of the Police Federation has highlighted, the new recruits, while welcome—I very much welcome those joining Gwent police—are only a partial replacement for the 21,000 officers and thousands of police staff lost over the last decade. Forces such as Gwent, which faced a 40% cut to its budget from 2010 to 2020, deserve a fairer funding settlement from the Government to deal with the many challenges they face, from rising antisocial behaviour in our communities to new and emerging forms of organised, violent and cyber-crime. From speaking to constituents, councillors and local community groups in Newport East, I know that tackling crime is a pressing priority for them. They want our police to be properly resourced to protect us. Sadly, there was nothing in the Chancellor’s statement to suggest that the Government are serious about giving the police the support that they need and deserve.

On public sector pay, as Unison has pointed out, there is no guarantee that it will rise above inflation. Wage rises below the cost of living, when taxes are going up and universal credit is cut, are, in effect, a pay cut.

Finally, of the 10 Welsh projects earmarked to benefit from the first tranche of levelling-up funding, half fall within marginal Conservative-held seats, although I congratulate my hon. Friend the Member for Pontypridd (Alex Davies-Jones) on her allocation. There are just three beneficiaries in south Wales and none in the entire Gwent region, which means that the excellent cross-party bid for the regeneration of the leisure centre and town centre in Caldicot in my constituency apparently fell on deaf ears, which is disappointing. The Chancellor talked about beer barrel politics yesterday but this actually seems to be a classic case of pork barrel politics from the Treasury.

On that theme, yesterday the Government announced Restoring Your Railway funding for a bidder from north Wales. I ask that the Government now make progress on other bids in the Restoring Your Railway funding pipeline, including the excellent application for a walkway station for Magor in my constituency, which has enormous local support in the community and would bring economic and environmental benefits to the area. I look forward to pursuing this yet again with Ministers in the light of yesterday’s announcement for north Wales.

Finally, my hon. Friend the Member for Stockton North (Alex Cunningham) was quite right to say that this Budget was underwhelming and uninspired.