Budget Resolutions and Economic Situation

John McDonnell Excerpts

Monday 8th March 2021 Commons Chamber

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

This is a shameful Budget. On International Women’s Day, whether you are a mother in a food bank queue in Britain struggling to feed your children or a mother of a child in Yemen, this heartless Chancellor is turning his back on your suffering. It is shameful because of the hypocrisy of standing on doorsteps clapping nurses and now slapping them in the face by cutting the pay of our NHS heroes and heroines. It is especially shameful because at the head of this Government who are insulting our NHS workers is a Prime Minister whose life they saved. The ultimate irony is that the Prime Minister is riding high in the polls on the backs of the hard work and dedication of the NHS staff who are rolling out the vaccination programme so successfully.

Anyone voting for this Budget will bear a mark of shame for throwing another 500,000 people into poverty when the Government cut the £20 a week in universal credit from the poorest families in our community, a mark of shame for yet again failing to provide even that meagre uplift to disabled people living in poverty on legacy benefits, and a mark of shame for failing to tackle the low level of sick pay that is forcing many workers to put their health at risk by returning to work. I have tabled an amendment to the Budget resolutions calling for a distributional analysis of the Chancellor’s proposals to freeze the tax thresholds. The Chancellor said:

“Nobody’s take-home pay will be less than it is now as a result of this policy”.—[Official Report, 3 March 2021; Vol. 690, c. 256.]

The tax threshold freeze is a real-terms pay cut for millions of workers. The OBR estimates that this will mean 1.3 million more people paying income tax. Their take-home pay will be less. In 2019 the Conservative manifesto, like the Labour manifesto, pledged no rises in income tax, VAT or national insurance for basic rate taxpayers. This Budget breaks the pledge on which over 550 Members of this House were elected. Many low-paid workers are in rent arrears, in household debt or taking mortgage holidays, accruing more debt interest. We should not be legislating to cut their take-home pay.

I have seen it reported that in this Budget the Chancellor is stealing my policies. No, he is not. His Budget plagiarises the rhetoric but not the substance, with promises of corporation tax rises, but delayed and overridden by tax giveaways—tokenistic gestures to levelling up but contaminated by pork barrel politics. Taken alongside the fast-track award of crony contracts to Tory friends and donors, it is hardly surprising that many now refer to this Government as corrupt. The decisions to freeze fuel duties and to dig a new coal mine, and the pathetic scale of environmental policies, do not just pay lip service to the climate crisis we face but put future generations at risk. By any measure, this is a Budget to be ashamed of.