Budget Resolutions

Jim Cunningham Excerpts

Tuesday 30th October 2018 Commons Chamber

[John McDonnell]

My hon. Friend is right. Yesterday we needed serious action to address the bias against high streets, which has led to so many empty shops. Instead we got legislation that will help turn shops into flats.

We then had a huge media presentation about an online tax being introduced: it was said that £400 million will be found from this online tax in a few years’ time. At the weekend the Tax Justice Network said the top five tech companies have avoided £5 billion-worth of tax.

My second concern about the austerity debate is that if we understand and appreciate what people have been forced to go through with austerity, only callous complacency could drive us to inflict those policies on people. Yesterday the Chancellor’s speech, with references to “Labour’s recession,” demonstrated that he is trapped in a time warp of a political propaganda exercise by the Tories of a decade ago. [Interruption.] I thought they would like that one. Let us be clear: the financial crash was the result of greed and speculation, and a lack of regulation that goes right back to the 1980s. Austerity was always a bad idea.

[Mr Jim Cunningham (Coventry South) (Lab)]

Like my right hon. Friend, I heard the Chancellor try to blame the last Labour Government for the recession, but in actual fact the previous Chancellor said a couple of months ago that it was not the Labour Government’s fault; it was the whole system’s fault, starting with Lehman Brothers in America. We should get the facts right.

[John McDonnell]

I always said George Osborne would get it right one day.

The consensus among economists, and the evidence of recent history, is absolutely clear. The worst possible response to a recession is for a Government to cut their own spending. In a recession, the Government should be there to support businesses and households. Instead, at the moment when Government support was most needed to help people back on their feet, Conservative Chancellors chose to impose the most severe spending cuts in generations. They did not have to, and they should not have done.

The Tories were warned that austerity would lead to slower growth and lower wages, and it has. The economic experts the Tories chose to ignore were proved right. Growth since the financial crisis, under Conservative Chancellors, has been the slowest after any recession in modern times. Real weekly average earnings are still lower today than they were in 2010. The Resolution Foundation reports this morning that real wages will not have fully recovered until 2024.

Ten years after the crash, we should be clear about the causes of the financial crisis. The Chancellor seemed confused on that point yesterday. It was not the deficit that caused the crisis; it was the crisis that caused the deficit. It was a crisis—[Interruption.] They don’t like to hear the truth. It was a crisis that resulted from the casino economy that the Tories helped construct right from the 1980s and supported every step of the way.

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[Victoria Prentis]

No, I do not agree, but I was able to take my local PCC’s issues up with the Chief Secretary to the Treasury directly in the last fortnight, and I encourage the hon. Gentleman to go to the Treasury with specifics; I think he will find that Treasury Ministers are listening.

We have £30 million extra to improve security and decency across the prison estate, which I feel very passionately about. We also have a whole new prison, Glen Parva, which was due to be a private finance initiative project, but the Treasury has now agreed to fund it. No specifics on the finances have been given in the Budget because it has to go out to tender and there will be all sorts of legal issues, but that is a very big commitment from the Treasury, and I for one am very proud of it. We need to put decent conditions in place for criminals so we can rehabilitate them before they are put back into society.

I also welcome the £21.5 million to be invested in the wider justice system. I feel very strongly that justice is not free; it does not just happen. The rule of law is not automatic, as we can see from the world we live in: it is a world in which people are poisoned in Salisbury, and in which the Chinese have a definition of the rule of law that does not coincide with the norms of modern international law since the second world war. I feel very strongly that we need to stand up for British justice values, and this does not happen automatically or cheaply.

We have had real difficulties in the prison service.

[Mr Jim Cunningham]

Will the hon. Lady give way?

[Victoria Prentis]

No, I will not; I am sorry, but I need to make progress, and I feel very strongly about this subject. We have had real difficulties in the prison service under successive Governments which we know can only be resolved if we can recruit more staff. The prisons Minister and the Lord Chancellor, whom I am happy to see in his place, are both working extremely hard on staff recruitment, and real progress has been made. We can see that this is making a day-to-day difference on the coalface, if you like, in prisons. People are being treated more appropriately.

However, there are other areas of justice spend that are harder to justify and even to talk about in this place. We have a crisis of judicial recruitment, for example, and it is tied up with the provision of suitable judicial pensions. The quality of court buildings also matters for morale, and it is therefore important for the recruitment of the people that we need to provide justice in a way that we all too often take for granted. The justice system stands or falls as one. What we do for the most lowly magistrates court is just as important as what we do for the Supreme Court. The system must be joined up, and if we are proud of the rule of law and the separation of powers that we talk about so often, we must be careful to fund the system as an entirety.

I am glad that the Lord Chancellor has been here to listen to this. I commend him for what he is doing. I also commend the Chancellor of the Exchequer for what he is doing for the justice system. The subject does not often get talked about in the House, and it was not talked about a great deal yesterday, but the detail in the Red Book has pleased me. Thank you for your patience, Madam Deputy Speaker.

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[Jeremy Lefroy (Stafford) (Con)]

Our country faces some immense challenges and this Budget—from a fine Chancellor, who I hope stays for many more Budgets—does good work in tackling a number of them, but there are several others that I want to address and that some colleagues have touched on.

The first challenge to which the Chancellor and the Prime Minister have risen is the need to fund healthcare properly. A number of Members across the House have regularly made the case for an increase of about £20 billion a year to bring our spending in line with German or French levels, and this is happening. But I agree with the point made yesterday by the hon. Member for Bassetlaw (John Mann)—that is, that we need to pay for this. It should not just come from additional borrowing, and we should continue to look at using hypothecated or other forms of revenue, particularly when it comes to social care.

A second challenge that the Chancellor has met—as, indeed, have employers up and down the country—is the need to increase and maintain employment, and to reduce unemployment to the lowest level in decades. The unemployment rate has fallen from 8% to 4%. In many constituencies, including mine, it has fallen much further than that, but every person out of work is still one too many. It is also welcome that on the whole jobs are gradually becoming better paid.

The third area in which the challenge is being met is defence and our global role, particularly in international development. The UK is one of the only major countries in the world—if not the only one—to maintain both the 2% defence commitment under NATO and the 0.7% official development assistance, and I welcome that. In difficult times, we can be proud that the UK will meet our international commitments as well as the commitments to our own people on safety and security.

Now, what about the challenges? The big and immediate one is clearly exiting the EU. It is absolutely essential that we reach a deal. I am a member of the Exiting the European Union Committee, and the more I hear of the consequences of no deal, the more apparent it is just how damaging it would be to the EU and to the UK. The Chancellor recognises this, and I sincerely hope that he does not have to come to the House with his alternative Budget. But this is not just about exiting the EU; it is about the future of the economy.

My hon. Friends the Members for Mid Norfolk (George Freeman) and for The Cotswolds (Sir Geoffrey Clifton-Brown) have mentioned the challenges we face and the future opportunities. The right hon. Member for Birmingham, Hodge Hill (Liam Byrne) and I recently produced a book on the future of work, looking at countries around the world that are meeting these challenges, including South Korea, Singapore and Argentina. Lots of people across the country are trying to meet these challenges, but they also exist globally.

It is an honour to follow the hon. Member for Makerfield (Yvonne Fovargue), who was right about funding for 16 to 18-year-olds. The years from 16 to 18 are a critical time, and funding dropping off at that stage poses some severe challenges to colleges and schools.

[Mr Jim Cunningham]

Like me, the hon. Gentleman is a west midlands MP, and knows that the west midlands economy is very important to the country. I am not sure whether the Government have clarified whether there will be more money for further education. Further education is the backbone of things such as apprenticeships, and we need more apprenticeships. Does the hon. Gentleman agree that we should be focusing on this important area?

[Jeremy Lefroy]

Indeed, and I think I just mentioned that. In my constituency, Newcastle-under-Lyme College and Stafford College do excellent work, as does South Staffordshire College, but they are underfunded, particularly at that level.

A further challenge is balancing the Budget. The OBR report refers to the Chancellor in terms of St Augustine, as it describes the Budget as Augustinian—“make me chaste, but not yet.” I believe that it is nearly 20 years since the UK has run a Budget surplus, and we are now pushing that back by a further two years. This is not the way to go. We have to look carefully at how we can return to a balanced Budget or a surplus, which can only come from growth, more efficiency or allowing tax rates to rise—we have some of the lowest revenues as a percentage of GDP in the G7—but that has not happened this time. If we are to maintain a sound fiscal policy, it will have to happen soon. The country needs to build up assets in better times to meet the challenges of hard times, and one of those assets is a surplus Budget and a reducing deficit.

Local government finance has been mentioned today. This is a great challenge because I believe, as do pretty much all colleagues in this House, in the importance of devolution and making decisions locally. However, the Government are placing more and more pressures on local government, without giving it the means to deal with them. Local authorities, including Staffordshire, have done excellent work to reduce spending while maintaining services over the last eight years. That cannot go on. Local government has reached the bottom. I welcome the additional money, but we need to see more, particularly in terms of loosening up the requirements for referendums.

The right hon. Member for Enfield North (Joan Ryan) rightly said that the Office for Budget Responsibility report talked about the low savings rate and rising personal debt. That incredibly important area has not been focused on, and I am extremely concerned about it. We need to help households rebuild their balance sheets. People cannot always look to Government to support them in times of difficulty. Personal assets are vital, and I urge the Chancellor to look at ways of encouraging saving, difficult though that is—including efficient lifetime savings accounts that people can draw on in times of difficulty, financial education in schools and further support for credit unions.

We have the biggest current account deficit in the G7—from memory, it is about 3.8%. That is down from 5.1%, but it is still too much. We are too dependent on resources from other countries, and we need to build up our network of foreign assets, from which we receive income. At the same time, we need to reduce our balance of trade deficit.

Finally, we have the challenge of supporting people on the lowest incomes who are long-term sick or disabled. At a time when many people in this country are seeing their incomes continue to rise and are living in prosperity, which I welcome, we need to meet the needs of those who suffer from disability, sickness or low income. I welcome the changes to universal credit, but it still does not work for everyone. I welcome the additional money, but we have to make sure that nobody loses out in the transfer to universal credit, most particularly disabled people. Others, including my hon. Friend the Member for South Cambridgeshire (Heidi Allen) and the right hon. Member for Birkenhead (Frank Field) yesterday, have spoken about how that could be done.

This Budget is a chance to tackle long-term challenges in difficult circumstances, with the coming exit from the EU. The Chancellor has seized the chance to address some of those areas, on which I congratulate him. I believe that, but for this challenge of exiting the EU, he would have tackled other areas, too, but the challenges that remain cannot be put off for ever.