Budget Resolutions and Economic Situation

Justin Madders Excerpts

Monday 20th March 2023 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

When we are the only economy in the G7 that is still smaller than it was pre-pandemic, it is not unreasonable to expect greater urgency from the Government when dealing with turning that around, but I came away from last week’s Budget thinking, “Is that it?”

The Opposition recognise that this is not a moment for tweaking the current, failed approach to the economy. When the major tax change announced is a tax cut for the richest 1% that is badged as a plan to help the NHS, we have embarrassing levels of spin that would make even the hardiest spin doctor blush, as well as making real doctors cringe at the thought of being used as a cover for a tax giveaway for the richest. It is a telling sign of how low expectations have got that last week we had the absurd spectacle of the Chancellor standing up at the start of his speech and telling us we would not be going into a recession this year, as if that were some kind of triumph. It does not get much better beyond this year, either: over the entire Parliament, growth is forecast to be just 0.5% a year on average, which is way below historical standards.

What makes all this worse is that we have sky-high inflation right now. As we have heard, real wage growth has been non-existent since 2010, and real wages are projected to be 5% less at the beginning of 2025 than at the start of 2019. Before Conservative Members use the pandemic as an excuse, we must not forget that that is part of an 18-year pay squeeze. The OBR has forecast that real wages will not return to their 2008 level until 2026. That really is a dramatic statistic that shows how badly we have all done under this Government.

If wages had continued to increase at their pre-2008 rate, every single one of us would have been £233 a week better off today, and that gap would grow to £304 a week by 2027. As we have heard, the Resolution Foundation has put a figure of £11,000 a year on what 15 years of wage stagnation has cost every family in this country. That should really give us a warning about the direction we are travelling in. By the end of this decade, average incomes will lag behind those in Poland if we carry on as we are.

We are paying more for worsening public services and earning less in the process. This is hitting the majority of people really hard. There should be an OBR forecast of how many more people are expected to use food banks, but in its absence I will quote our local citizens advice bureau:

“The scale and size of the crisis is unlike anything we’ve seen and it’s affecting people we haven’t helped with crisis support before with this being nearly 50% higher than 2021 and more than double the numbers we helped in 2020.”

The number of people it has helped who are in employment has also doubled since 2020, which tells us everything we need to know about how wages have not kept up with costs and how our economy is stagnating.

Last year, we in Cheshire did think briefly that it would be recognised that areas outside the city regions might need some special attention when it was announced during the September “fiscal event” that Ellesmere Port’s industrial area would be one of 40 investment zones, but last week we mysteriously disappeared from the list of investment zones, with no explanation, no apology, and no refund for the time and money that had been wasted in preparation for something that will not now happen. For us, as for so many areas, last week’s announcement came as a crushing blow. In fact, it has been estimated that local authorities spent some £12.5 million on preparing bids that are now completely redundant. What a waste of resources, when local authorities are already stretched. So far, no official rationale has been offered for the removal of support from us, and there has certainly been no offer of an alternative scheme or support. We are being treated with contempt. It is particularly galling that, when we look at the areas that have been chosen, it looks as if we are being punished because we do not have and do not want an elected Mayor.

Only two weeks ago, during a Westminster Hall debate, three Cheshire Members asked for a meeting with the Parliamentary Secretary, Cabinet Office, the hon. Member for Brentwood and Ongar (Alex Burghart), so that we could try to make progress with our devolution plans. Needless to say, we have not received a response, and now we learn that we are to be consigned to the devolution dustbin because we will not dance to the Government’s tune and give them an elected Mayor. That is not what devolution is about. It is a diktat from the top, and the Government ought to be ashamed of themselves for attempting to bully areas into accepting a Mayor when there is no public appetite for one.

I want to say a few words about access to cash, as I was unable to attend a Westminster Hall debate on the subject earlier today because I was in the Chamber. As we know, millions of adults rely on cash to a great extent in their daily lives, and many of them are vulnerable or disabled. I know from talking to constituents that it is getting harder and harder to put cash into bank accounts. That means that lots of businesses cannot accept cash because the branches in which they used to put the cash have gone. We need to get the banking hubs up and running in every town and city in the country, and to ensure that businesses are required to accept cash.

Let me end by quoting the words of a disabled constituent who, because she is on legacy benefits, has missed out on thousands of pounds of extra help already, but whose situation is becoming steadily worse. She told me:

“I am out of pocket now by well over £400 a month—due to mortgage payments, energy costs, food costs and petrol. I’ve had to sell furniture to cover this cost! Does this government think this is acceptable?... And what happens next month?...How am I supposed to live?”

I do not know what will happen to my constituent next month, or the month after that, or what will happen to the many other constituents in the same position. That uncertainty and anxiety should weigh very heavily on the shoulders of Conservative Members.