Budget Resolutions

Debate between Kerry McCarthy and Lord Jackson of Peterborough

Thursday 9th March 2017 Commons Chamber

[Mr Jackson]

The hon. Lady is making typically lucid points, but is it not incumbent on her party, given that there is a broad consensus that we need to fund social care better—the Chancellor announced an extra £2 billion —to identify where that money would come from? If she does not want it to be raised through national insurance contributions, where else will it come from?

[Kerry McCarthy]

That leads me very nicely on to my next point, which is that the Chancellor claims the Government have no choice but to raise national insurance contributions. However, he has somehow managed to find £70 billion in tax cuts for the rich and for corporations, including £1 billion for the Government’s pet concern, inheritance tax. I pay tribute to my hon. Friend the Member for Leeds West (Rachel Reeves) for her work on this. From next month, the inheritance tax threshold for a couple will start to rise from the current £650,000 to £1 million. Over the past two years in my Bristol East constituency just 17 homes sold for more than £650,000, and not all of them would have been subject to inheritance tax. My constituents are paying the price for a tax cut that will benefit only 0.04% of the people, many of whom live in the far more affluent constituencies of Cabinet Ministers.

The Chancellor also managed to find funding for the Prime Minister’s grammar school project, despite a dearth of evidence to support the policy. It baffles me why he thinks this is more important than helping the schools we have at the moment, which face a £3 billion shortfall. What good will new grammar schools do for children and teachers at Bristol Met, where half of all pupils are on free school meals but their funding is being cut by 21%, or at Begbrook Primary, which has seen a 16% cut in per pupil funding between 2013-14 and 2019-20? West Town Lane academy has seen a 16% cut and Waycroft academy a 14% cut. I could go on. The Government’s chaotic approach to children’s education is emblematic of a Budget incapable of joined-up thinking or long-term planning. The funding is there when the Government want it to be, but not when people need it to be.

The Government seem incapable of looking beyond the short term and of recognising that cuts have consequences. Ministers are denying 18 to 21-year-olds housing benefit, but if just 140 young people are pushed on to the streets the policy will cost the Government more than it saves. Centrepoint estimates that about 9,000 young people will be put at risk of homelessness by the policy. That is not just short-sighted; it is—if you will permit me to say so, Madam Deputy Speaker—gross stupidity on the part of the Government. It is too high a cost for the sake of making very short-term savings.

I referred to the success of Bristol as a city, but that success comes at the price of a booming housing market that means homes are increasingly out of reach for Bristolians. On average, tenants are having to spend 64% of their disposable income on rent. Our Mayor has created a multi-disciplinary housing delivery team and a city office that has been working hard to try to get more affordable housing built and to find temporary beds for the homeless. They will not be helped by cuts to housing benefit and Ministers’ preoccupation with £1 million houses. I urge the Government to consider our Mayor’s request for the power and support necessary to tackle the housing crisis. It is not enough just to devolve the responsibility; the resources and the money have to go with that if he is to do what he is being asked to do.

On housing, just as on social care, public health, funding cuts and tax increases, the Government’s instinct is to pass the buck to local authorities. Bristol’s funding has fallen by £170 million over the past six years. Over the next five years, we face a £104 million funding gap as costs rise. The further 30% cut to the Department for Communities and Local Government’s budget suggests Ministers are oblivious to the difficult decisions councils are having to make. There is no recognition of the long-term costs of neglecting our infrastructure and key services. A temporary sticking plaster next year will not rescue our social care system or relieve the burden on council services.

The situation will only get worse with Brexit. Bristol City Council received £22 million of EU funding in the 10 years to 2015. The city’s two universities receive over £20 million a year from EU sources. I pay tribute to all the work my hon. Friend the Member for Bristol West (Thangam Debbonaire) is doing with universities on Brexit. The European Investment Bank facilitated initiatives such as Bristol Energy, the council’s energy company. Two thirds of exports from Bristol, Exeter and Plymouth go to the EU, which is far higher than the average for UK cities.

The Chancellor claimed there would be no complacency, but neither is there any strategy. The Government have no clue about what will replace that EU investment or how to guarantee our exports market. Blithely pretending everything will be fine and dandy is not a legitimate plan. Ministers are rushing headlong into a hard Brexit and abandoning the single market, ignoring how trade with the EU is a major driving force for our economy. Turning us into a bargain basement tax haven may be what some Ministers have always wanted, but it is not what Bristol or the country needs.

The Chancellor boasted of infrastructure projects, but my constituents are fed up with broken promises and bad management. We have endured disruption because of the electrification of the Great Western line and the taxpayer has had to cope with the spiralling cost. Now the programme has been delayed indefinitely—at a cost of £330 million. The people of Bristol do not know if they will ever see the benefit, but we have already paid the price.

Time and again, Ministers do not bother to consider the bigger picture. Environmental regulation, for example, is dismissed as red tape. I have given up hoping that some Conservative Members will see the environmental necessity of so-called green crap—apologies again, Madam Deputy Speaker—but I had hoped that some would see the economic potential. The Government have chosen not to engage, or to take a very half-hearted approach, with the EU’s circular economy work, despite its potential to create half a million jobs and support a genuinely forward-thinking industrial strategy that is fit for the future. The Chancellor promised us skilled jobs and meaningful training, so I hope he will go back to his colleagues at the Department for Environment, Food and Rural Affairs and look at how a genuine focus on the green economy can support that and ensure Britain really is world-leading. That would reassure me and my constituents that the Government are capable of working with cities like Bristol to help everyone to achieve their full potential.