Budget Resolutions and Economic Situation

John McDonnell Excerpts

Tuesday 21st March 2023 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

Often what will happen between a Budget being announced and its final debate is that the world can move on, so I have two warnings and a plea, if I have time.

The first warning is that we are making the Budget in the middle of a banking crisis and we need to recognise that. It has moved from Silicon Valley Bank to Credit Suisse to First Republic Bank. For those not in the House 15 years ago when we debated the start of the banking crisis, it started with Northern Rock. A lot of the signs that underlined the crisis then are evident now: failure of regulation, mismanagement and speculative gambling all leading to a crisis of confidence among customers and investors. It spreads very quickly, like wildfire. I hope it is not on the scale of 2008, but I just warn the House that it can rapidly get out of hand. Often what will occur is a lull and then it comes back with a vengeance.

The role of this House is to ensure that the Bank of England and the Financial Conduct Authority are not found asleep at the wheel during the crisis. I urge the Bank of England to again undertake stress tests on all the banks and financial institutions within its remit, and a stress test on the overall regulatory system, and to publish those tests. The Financial Services and Markets Bill introduces an element of further deregulation. I urge the Government to pause. Now is not the time to prioritise the deregulation of our financial system. To the Bank of England, I say that this is not the time to increase interest rates, particularly at this moment.

The other warning is on pay. The Government are seeking a settlement to the NHS dispute and the National Union of Rail, Maritime and Transport Workers has already settled with Network Rail, but they should not consider that the issue of pay is in any way going away. That is a complete misreading of the situation. Major disputes are still happening: the Public and Commercial Services Union in the civil service, the junior doctors, the universities with the University and College Union, and education with the National Education Union. In the private sector in my constituency, Unite the union is representing the lowest paid security workers at Heathrow. The Government should not underestimate in any way the strength of feeling that workers have about the pay freezes and cuts of the last 13 years. Pay settlements of 5% or 6% still mean people will be struggling to pay the rent and feed their family. The Government should not fail to understand the anger and resentment at the grotesque levels of inequality in our society.

It is interesting that on the picket lines are young people struggling with low pay. They are unable to get on the housing ladder. In addition, they are burdened with debt from qualifications obtained through higher education. These young people have had enough. I think they will increasingly react to the injustices they see in our society and I warn the Government that that ferocity of concern has not disappeared.

My final plea is to follow up on what my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) said about unpaid carers. They are living in poverty and endure hardship, and many are exhausted because of the lack of social care and financial support. They need an income to reflect the care that they provide—a real living wage—or at least a first step by increasing carer’s allowance to maternity allowance levels. Carers are saying clearly that this Government should stop taking them for granted, given the essential role that they play in our society.