Income Tax (Charge)

Debate between Kerry McCarthy and Alex Cunningham

Thursday 28th October 2021 Commons Chamber

[Alex Cunningham (Stockton North) (Lab)]

I am in the same place as my right hon. Friend the Member for Doncaster North (Edward Miliband): we do not know what planet the Chancellor is living on. But we do know that he urgently needs to get back in touch with reality. In yesterday’s Budget, he kept referring to the biggest investment changes in a decade and spoke of an “age of optimism”; I remind him that the only reason his investments look even remotely positive is that the past decade was defined by the devastating cuts and under-investment from Conservative Governments who have driven public services into the ground. Even if he was talking about new money, particularly for public services, it would replace only a fraction of the huge cuts over the past 11 years.

The truth is that this Budget is an underwhelming and uninspired response to the anxiety inducing cost-of-living crisis that our constituents face. Tax cuts for champagne and domestic flights will not go far to offset the difficulties of the long hard winter ahead. Over the next five years, real household disposable income is expected to grow by only 0.8% per year—far below the historical average. It is worth repeating what Paul Johnson, the director of the IFS, said:

“This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade”.

The rising cost of living is biting hard in my constituency and the Budget does nothing for those hit the hardest. Figures published yesterday by the financial management company Aryza showed that the average personal debt in Teesside stands at £19,345—the second highest average in England—yet a recent report from the North East Child Poverty Commission revealed that in the north-east, spending to support people in financial crisis fell by 78% in the decade from 2010 to 2020, and the number of local welfare assistance awards made in the region fell from more than 16,000 to just over 12,000.

I have seen local Conservatives spin the Budget as one that is good for the Tees valley, but that simply is not true. Once again, the Tees freeport has been trumpeted, but the actual forecasted benefits are extremely limited. As my hon. Friend the Member for Bristol East (Kerry McCarthy) mentioned, the OBR’s October fiscal outlook notes that

“given historical and international evidence, we have assumed that the main effect of the freeports will be to alter the location rather than the volume of economic activity, so the costs have been estimated on the basis of activity being displaced from elsewhere.”

We have been promised tens of thousands of jobs, but now it appears that the Government’s own Office for Budget Responsibility suggests that that is nonsense.

[Kerry McCarthy]

That point about freeports ties in with the Government’s approach, which seems to me to be that they want announcements that get them photo opportunities and good press releases, and the MP who managed to get the freeport can then put that on their leaflets. But freeports contribute nothing at all to the overall picture; they just take from one area and give to another, which is no way to run the economy and to try to stimulate economic growth. We need a strategy by which everyone is helped to level up.

[Alex Cunningham]

My hon. Friend is totally correct: the Government rely on picture opportunities and short slogans to run our country. That is not the way forward.

We have had promises of jobs in the future that simply do not materialise. We do not want other people’s jobs: we want real, new jobs, not recycled ones. If it was all as grand at the Tories tell us, we would not still have around 10,000 more people unemployed across the Tees valley than there were in March 2020 and an unemployment rate 50% higher than the national average.

There was some good news in the Budget for the Stockton borough, but for me it was tarnished. I would not deny leafy Eaglescliffe and Yarm their success in being awarded levelling-up funding, but it was disappointing to see Billingham miss out once again, especially as it is in much greater need of levelling up. It just goes to show that the Tories like to talk a good game on levelling up—it is further proof that it is just an empty slogan.

As was mentioned earlier, the Budget contained nothing to address the high costs for energy-intensive industries, even though just weeks ago the country was on the brink of being plunged into a CO₂ supply crisis when CF Fertilisers in my constituency had to cease ammonia production because it was not economical. Energy-intensive industries, like many in my constituency, face a triple whammy of unsustainable costs. The sectors have been left reeling by the combination of sky-high gas, electricity and carbon prices that is damaging their ability to compete in international markets and risks domestic supply chains. While I, of course, welcome the announcement that a deal between CF and its CO₂ customers will see production at its Billingham plant continue until January of next year at least, industries such as these need longer-term support, including urgent reforms to the short-haul gas tariffs and progress at pace on carbon capture, use and storage.

There was not much at all on energy in the Budget. Companies such as Kellas in my constituency, which I visited a couple of weeks ago, would have hoped for clarity on hydrogen production and the potential balance between blue, green and pink varieties.

Once again, we saw nothing of the support that we need to tackle the health inequalities in my area. Stockton-on-Tees is often used as a case study to highlight health inequalities in the UK. Men who live in the town centre ward are expected to live 18 years fewer than their peers just a couple of miles down the road. In every Budget speech that I have made for the past 11 years, I have called on the Government to fund the new hospital that Stockton desperately needs. I am, however, pleased that my neighbour, the hon. Member for Stockton South (Matt Vickers), seems to have joined my campaign around North Tees Hospital and has secured today’s Adjournment debate to talk about that very topic. I look forward to hearing more from the Minister later on today. I have also tried to enlist support for a new hospital from other north-of-Tees MPs, and I sincerely hope that they will lend their voices to the campaign, which would benefit all of our constituents hugely. They will have found it just as galling as I do that just a fraction of the billions of pounds wasted on a failing test and trace system could have built us a new hospital.

This Government have not spent public money wisely, and they cannot be trusted with the public purse. The Tees Valley needs systematic and long-term investment that is controlled at a local level by local people and local councils, that will make sure that families have enough to live on, and that will free our children from poverty. We also need a plan that will stop firms such as Cleveland Bridge and Engineering Company and local steel firms going bust. We need to save and retain existing jobs as we await the promises of the future to be fulfilled. Once again, the Tories have failed to deliver anything like that. The Chancellor’s small-fry solutions will do little to help working families in our areas who are facing hikes in their Bills and lower take-home pay as we head into that long, hard winter.

Yesterday, the Chancellor said that it was a tall order to complete the spending review, and that the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) was just the man for the job. Sadly, he and the Chancellor have given the people of my constituency and the entire country short shrift.