Budget Resolutions and Economic Situation

Lindsay Hoyle Excerpts

Wednesday 18th March 2015 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

Never has the gap between the Chancellor’s rhetoric and the reality of people’s lives been greater than it was today. This is a Budget that people will not believe from a Government who are not on their side. Because of the Government’s record, because of their instincts, because of their plans for the future and because the Chancellor, most extraordinarily, made no mention of investment in our national health service and our vital public services, this is a Budget that people will not believe from a Government they do not trust.

This Chancellor has failed the working families of Britain. For the first time since the 1920s, people are earning less at the end of a Government than they were at the beginning. [Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Quite rightly, I expected the Chancellor to be heard, and I certainly expect the same courtesy to be extended to the Leader of the Opposition.

[Edward Miliband]

People are £1,600 a year worse off. The next generation has seen wages plummet and tuition fees treble. The Government have built fewer homes than at any time in the past 100 years. It is certainly not a truly national recovery when there are more zero-hours contracts than the populations of Glasgow, Leeds and Cardiff combined. That is the reality of the lives of working people. These are the facts. These are the inconvenient truths of this Chancellor’s record. It is a recovery for the few from a Government of the few.

The Chancellor chose to make a number of references to me today. Let me just tell him that we are not going to take lessons on fairness from the trust fund Chancellor and the Bullingdon club Prime Minister. Not for the first time, this is a Budget from this Chancellor that simply will not be believed.

We support the change on the personal allowance, but on tax he gives with one hand and takes far more away with the other. Nobody believes this Chancellor when he says that he will cut their taxes, because that is not what has happened. Not only are wages down by £1,600, but taxes are up—24 tax rises. As a result of his measures, families are worse off by £1,127 a year, on average, which is equivalent to 8p on the basic rate of income tax. That is the reality behind a Budget that cannot be believed. Everyone knows what is coming if the Government get back in charge: another rise in VAT, the tax the Tories love to raise. Of course, in the finest Tory tradition, the lesson is this: deny it before an election and jack it up afterwards.

On living standards, which the Chancellor made much of in his speech, he knows that, as the official measure from the Office for National Statistics shows, people are clearly worse off under him, so he had a bright idea: invent a new measure of living standards to prove that what people know from their wallets and pockets to be true is somehow not true. People do not need a new measure that pretends they are better off; they need a new Government to make them better off. That is the reality behind a Budget that cannot be believed.

What about low pay, which the Chancellor also talked about in his speech? He poses today as the friend of the low-paid. You could not make it up, Mr Deputy Speaker. [Interruption.]

[Mr Deputy Speaker]

Order. There is too much noise coming from the back row. Mr Shelbrooke, do not think that I cannot see you just because you have moved position. The last thing I need is for you to explode. That would be good neither for you, nor for the Chamber.

[Edward Miliband]

I am bound to ask, whatever happened to the promise of a £7 minimum wage this year? The Chancellor made much of that 18 months ago, but he has broken that promise. The idea of this Chancellor boasting about a 20p rise in the minimum wage, expecting low-paid workers to be grateful: that is the reality behind a Budget that cannot be believed. Of course, the Chancellor does not just claim to be a friend of the low-paid; he now claims to be a friend of the north. [Interruption.]

[Mr Deputy Speaker]

Order. I will not keep saying that I want to hear the Leader of the Opposition; I expect everybody to hear the Leader of the Opposition.

[Edward Miliband]

On the specifics, we are pleased that the Chancellor has adopted our policy of councils being able to keep 100% of business rates, but why not for every council right across the country? Why is he doing it for just one? [Interruption.] Oh, he has done it for two, says the Chief Secretary, helpfully. Is it not great? The Liberal Democrats locked in the boot of the Conservative party.

Let us talk about what the Chancellor has done to the north of England. Let us test whether he is a friend of the north—75% bigger cuts to local government budgets in the north than in the rest of the country. In the north-west, 400,000 working families have seen their tax credits cut. That is more than any other region. In the north-east the Chancellor is spending £1 on transport for every £25 he spends in London. He spent time in his speech praising northern councils. Let us see what northern councils have to say about him. He talked about Leeds. This is what the leader of Leeds council said—[Interruption.] Yes, Labour. The Chancellor was praising northern councils in his statement. Let us see what they have to say. The leader of Leeds council says that the Chancellor “fails to deliver the devolution we need. This Government is no friend of the north.”

For the interests—[Interruption.]

[Mr Deputy Speaker]

Order. This is getting seriously out of hand. [Interruption.] Just a moment. He can shout all day. I have already looked at Mr Hands. He may hide behind Sir Tony, but we all know where he is. His voice carries and I know where he is sat. Sir Tony may move, but I recognise the voice. [Interruption.] I do not need any more help. All I will say to those on the Government Benches is let us listen. Let us get to the end because, as I said earlier, our constituents want to hear what both sides wish to say.

[Edward Miliband]

Joe Anderson, the mayor of Liverpool, said that the Chancellor has “bludgeoned Liverpool. We’ve had 58% of our funding taken away. Even Dick Turpin had the decency to wear a mask when he robbed people.” That is what he thinks of the Chancellor. [Interruption.] Hon. Members ask why I do not quote Conservative leaders. In the interests of balance, I would have liked to quote a Conservative leader of a northern city, but there are none, and with these two—the Prime Minister and the Chancellor—in charge, there never will be.

The Chancellor spoke about tax avoidance in his statement, but the gap between what is owed and what is collected is up, not down, and no wonder. He has not acted on tax havens, despite the Prime Minister’s promises. He did not act on HSBC. In fact, he appointed the chairman as a Minister. What about hedge funds? Those were strangely absent from the Chancellor’s statement. Where was the action on stamp duty avoidance? It is costing well over £l billion a year. Of course the Government cannot act on hedge funds because they bankroll the Tory party. The Chancellor cannot act because they own him, lock, stock and barrel. The Conservative party is now just the political wing of the tax avoidance industry.

The biggest sleight of hand of all is on the deficit. The Chancellor was rewriting history today. Five years ago, the Prime Minister said: “We will balance the books in five years”—no ifs, no buts, no maybes, just like the immigration pledge. Today, the Chancellor comes along to boast that he has halved the deficit, but that is not what the Prime Minister used to say about halving the deficit. He said that would be “completely inadequate”. Let me get this straight—it has gone from completely inadequate to a great triumph. I do not think that will wash with people. The only thing long-term about the Chancellor’s plan is that it will take nearly twice as long to balance the books. And it cannot be believed—[Interruption.]

[Mr Deputy Speaker]

Order. Mr Ellis, as I said earlier, a little more control, please.

[Edward Miliband]

It cannot be believed, because we have heard it all before—five years of promising a recovery for all, five years of delivering a recovery for the few, and now the Chancellor asks us to believe it all over again. The most unbelievable thing of all is the Government’s claim that we are “all in it together”. They say yes to the bedroom tax, no to the mansion tax. Food banks are on the rise, bank bonuses are in the billions. Taxes are up for working families, taxes are cut for millionaires. The best thing one can say about the Chancellor and the Prime Minister is that when the removal vans turn up, they will be in it together.

The Chancellor’s failure on living standards, on tax and on the deficit are all linked. That is because our economy is too unproductive, too unbalanced and too insecure. There are some things that he did not mention in his statement today. Our productivity gap with the rest of the G7 is now the worst for a quarter of a century—on his watch. He talked again today about rebalancing, but the rebalancing that he promised has not happened. The Chancellor’s target for exports is set to be missed by over £300 billion. On this Budget’s figures, he has overseen the slowest recovery for 100 years. That is the reality behind the Budget that cannot be believed.

For all the window dressing today, the Government cannot tackle insecurity at work, because they think that is how we compete. They cannot make work pay, because they believe low pay is the way that we succeed. They cannot build an economy for working families, because they think wealth flows from the top. Not for the first time, the chairman of the Conservative party perfectly summed up Tory philosophy in his celebrated handbook, “Stinking Rich 3”. I am not sure what happened to “Stinking Rich 1 and 2”.

The Chancellor announced a number of measures on savings and it is important that we look at the detail of these changes. We want people to have more flexibility, including on annuities. He talked about advice in the annuity market. It is incredibly important that advice is available quickly because there are rip-off merchants ready to pounce. We know that it has happened before—[Interruption.]

[Mr Deputy Speaker]

Order. Mr Williamson, you are this side of Mr Miliband. I can see you very easily.

[Edward Miliband]

This is a serious issue. We know that it has happened before. It happened in the 1980s—a dreadful mis-selling scandal—and the Chancellor needs to get proper regulation in place on these issues. We will look at the changes that he spoke about.

The glaring omission from this Budget statement was the national health service and public spending. It was an extraordinary admission. Where was that discussion of the national health service and investment in public services? It is time that we looked at the reality of this Government’s spending plans, because this is the Budget that cannot be believed. The Chancellor does not want us to know it, but he had an extreme spending plan yesterday and he has an extreme spending plan today. It is here in the Red Book in black and white. Page 69 shows his plan for extreme cuts in the next Parliament. Table 2.4 of the Red Book shows that he is trying to hide big cuts between 2015-16 and 2018, so let me tell the House what the Chancellor tried to hide. His plans are for at least as many cuts in the next Parliament as in this one, and the pace of cuts in the next few years will be faster than the cuts in the past few years.

Here is the thing, and it is important that the country knows it: the Chancellor came along today to try to suggest that the pain was over, but if the Conservatives get back, it is not. Their failure on the deficit means that they are planning massive cuts—billions of pounds of cuts—in the next Parliament.

You might ask, Mr Deputy Speaker, what is the evidence for it. There is a lot of evidence. Let us start with what the Prime Minister said in his education speech. He said they were going to cut early years, they were going to cut schools, and they were going to cut colleges: cuts in education spending. Short-changing education today means we cannot build a recovery for all tomorrow.

The position is most worrying of all on the national health service. The massive cuts that the Government have announced—all their Members will have to go and justify this to their constituents—mean that colossal cuts will be planned, and I emphasise “planned”, in defence, in policing, and in local government. But they will not be able to deliver those cuts, so they will end up cutting the national health service. That is the secret plan that dare not speak its name today. The Chancellor did not tell us—[Interruption.] You can tell they are really worried about it. The Chancellor did not tell us that his plans also continue massive cuts to social care. [Interruption.]

[Mr Deputy Speaker]

Order. The defence Minister and I do not want to fall out. If there are some letters to sign on her desk, that might be better if she cannot keep quiet.

[Edward Miliband]

They did not tell us that their plans involve massive cuts to social care as well. We have already, in this Parliament, seen hundreds of thousands fewer elderly people being cared for. What is the lesson? If you devastate social care, you betray the elderly and pile unsustainable pressure on our national health service—and these two are coming along and promising more of the same. That is why they cannot be trusted on the national health service.

Building a truly national recovery needs a new Government. We will not sit by when people are on zero-hours contracts month after month, year after year. Instead we will legislate for a new principle that if someone does regular hours they get a regular contract. The Chancellor talked about the minimum wage. Let us talk about what has happened on the minimum wage. [Interruption.]

[Mr Deputy Speaker]

Order. Mr Williamson, be helpful to the Chamber, or I will be unhelpful to you, and I do not want to get to that stage. Let us hear Ed Miliband.

[Edward Miliband]

The minimum wage has gone up by just 70p in this Parliament. A Labour Government will raise it by more than double that to a minimum wage of more than £8 an hour. And we will have a real industrial policy.

The Chancellor has been a particularly malign influence in this Government on climate change. The Prime Minister used to claim that he believed in climate change. I have to say that it is extraordinary, even by his standards, to put a wind turbine on your roof and then want a moratorium on wind turbines. I know he is a stranger to consistency, but even by his standards that is going some. We will end the dabbling with climate change denial and have a proper green investment bank.

A Labour Government will support the young, not make them pay the price of hard times. We will ensure that every major Government contract will guarantee apprenticeships. We will cut tuition fees to £6,000 to reduce the burden of debt on young people—and let the Deputy Prime Minister defend his broken promises on the doorstep.

All of this will be underpinned by a balanced plan that cuts the deficit every year, protects education and health, and has fairer taxes—yes, I do believe in a progressive tax system—by reversing the Chancellor’s millionaires’ tax cut, introducing a mansion tax to fund the NHS, and abolishing the vindictive, unfair bedroom tax that he imposed. That is what a Labour Budget would do, from a Labour Government who know that Britain succeeds only when working families succeed.

Now we know the choice at the election. We have seen five years of falling living standards, young people paying the price of hard times, and the NHS going backwards. This Budget did not solve the problems facing working families; it confirmed them. Britain needs a better plan—a plan for working families. Britain needs a Labour Government.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

I suggest to the House that I do not put a time limit on, but I expect Members to take up to 10 minutes and no longer, and then we shall get everybody in. I call Andrew Tyrie.