Budget Resolutions

Maria Eagle Excerpts

Monday 1st November 2021 Commons Chamber

[Michael Gove]

The right hon. Lady is right to point out that the Sure Start programme was always intended to help those who were most in need, but it was also intended to provide a universal offer. Inevitably, during the difficult period that we had after the 2008 financial crash, we had to make sure that we targeted resources accordingly, but after a period of retrenchment, we are now entering a period of renewal and reform. The family hubs are targeted not just at those who have children in the first 1,000 days of their life, which reflects superbly on the work of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom); they are there to ensure that we have a comprehensive nought-to-19 offer. They go further than Sure Start children’s centres originally did—that is no criticism of Sure Start children’s centres—providing services that they did not.

[Maria Eagle (Garston and Halewood) (Lab)]

Will the Secretary of State give way?

[Michael Gove]

I will make a bit of progress and then try to take more interventions, if that is okay.

It is also important to recognise that the Budget statement saw a significant increase in public spending overall. It is the case that no Government can be judged purely by how much they spend. How that money is spent is critical. Additional public spending without reform and without a focus on value for money is money wasted. But I do not think that anyone across the House can deny that, with reform and with a focus on value for money, additional public spending, appropriately targeted, can help to transform public services for the better. In this Budget statement, £150 billion more will be spent over the spending review period. That is a 3.8% growth, in real terms, and in the Department for which I am responsible there is a 4.7% increase. Alongside that, there are the biggest increases in capital investment from any Government for 50 years; the biggest block grants ever given, since the dawn of devolution, to the Governments in Scotland, Wales and Northern Ireland; and an increase of 6.6% in the national living wage, which takes it to £9.50 an hour. All Governments can face criticism and all Chancellors can be attacked, but I do not think it credible for anyone in this House to say that the package that the Chancellor unveiled last week is any way not equal to the challenges that we face.

The question for Opposition Members, including those on the Front Bench, is what they would do differently. If they argue that we should spend even more, where would they spend it? Which budgets would they prioritise? If they were to spend more, which budgets would they deprioritise? What would they cut to fund the additional spending? If they would not cut, would they borrow more? If so, how much more? With what impact on our credibility in international markets, on interest rates and on our capacity to fund our debt and deficit? Let us bear in mind that debt is falling and the deficit is being reduced as a result of the Chancellor’s shrewd approach.

If the Opposition were to borrow more, would they tax more? If so, whom would they tax? What credibility can they have on tax when we introduced a specific one-off increase to fund the national health service and social care—and the Labour party voted against it?

Those are all questions that Opposition Front Benchers want to avoid. To what lengths have they gone to avoid it? Well, earlier today I spent a few seconds on Twitter, not tweeting, but studying that social platform. In particular, I studied the tweets of my opposite number, the hon. Member for Croydon North (Steve Reed), who has been tweeting promiscuously and vociferously over the weekend—but what has he been tweeting promiscuously and vociferously about? Has he been tweeting about the spending review? Has he been putting forward alternative plans for local government, alternative propositions on levelling up, a new plan for housing or perhaps a new proposition on communities?

No. The hon. Member has only one tweet about the spending review. In contrast, he has tweeted five times as often about Crystal Palace football club. We are all, I think, in awe of Patrick Vieira’s success in ensuring that Crystal Palace could beat Manchester City 2-0 at the weekend, but however historic and unprecedented that victory is, I think we all have a right to ask whether, if Labour is silent on the spending review—if it has nothing to say by way of criticism or alternative—that is perhaps an indication of the success of the Chancellor in framing a Budget and a spending review right for this country.

--- Later in debate ---

[Michael Gove]

The IFS is often—but not always—right.

[Maria Eagle]

Knowsley, which is one of the boroughs that my constituency covers, has gone from being the fifth most deprived local authority in 2010 to being the second most deprived now. One would have expected a Budget such as this, about levelling up, to focus particularly on giving necessary resources to Knowsley, but despite being a priority 1 area it has been overlooked for the levelling-up fund, having previously been overlooked for the future high streets fund and the towns fund. What does Knowsley have to do, now that it is the second most deprived area, to get some money from the Government so it can try to level up? [Interruption.]

[Michael Gove]

The hon. Lady has made an important point. There are specific and long-standing issues in Knowsley and other parts of Merseyside that we need to address as part of levelling up. However, I think she does herself down slightly, because I understand that thanks to her advocacy in her constituency two levelling-up bids succeeded, and although they do not affect Knowsley, they do affect Liverpool. Some £20 million has gone towards helping Liverpool City Council with regeneration, and £37 million has gone towards recovery. Those sums are not insignificant.

Nevertheless, I take the hon. Lady’s point about Knowsley. I think it important to remind her, and indeed the House, that the £1.7 billion in the levelling-up fund which was allocated by my right hon. Friend the Chancellor is just one third of the total sum allocated over the course of the spending review, and I look forward to working with her and with other colleagues to make sure that the remaining funds can be allocated effectively.

--- Later in debate ---

[Maria Eagle (Garston and Halewood) (Lab)]

The Chancellor has promised us a post-covid “age of optimism” and claims that the Budget will deliver it by levelling up the life chances and prospects of those in the north, like my constituents, who have been clobbered disproportionately since 2010 by Tory austerity and cuts that have adversely affected their chances to improve their lives and prospects. I wish the reality met that promise, but Ministers in this Government increasingly seem to promise the opposite of what they then actually do.

According to the Office for Budget Responsibility, the Government’s choice to pursue a very hard Brexit is on track to cut long-term GDP by 4%, and the covid pandemic will cut the size of our economy by another 2%. That is a 6% permanent cut in the size of our economy. That means less money to deal with the big problems that we face as a nation over the next 10 years —in particular the zero-carbon transition and adapting to the information revolution to create the economy of the future, while tackling inequality and improving living standards for all.

The Tory years have seen much slower growth in incomes than was the case prior to the Conservative election in 2010. Income growth is one of the ways in which families judge their wellbeing and decide how optimistic they feel about the future. The OBR has forecast that real wages will fall next year with consumer prices index inflation of 4% and expected wages growth at 3.9%—so much for the end of the public sector pay freeze. Workers will feel cheated if the end of the pay freeze still results in real wages falling. They will not feel like they have had a pay rise or that they are living in an age of optimism. In fact, real wages have risen by a meagre 2.4% in total since the 2008 financial crisis, according to the Resolution Foundation. The OBR expects only a 1.5% increase a year, which is pretty low, and much less than the 2.5% a year increase that was the norm before this Government came into office.

As well as stagnating wages, the Chancellor is delivering huge increases in tax, although he said little about that in his speech, preferring instead to give a homily to his worried Back Benchers, some of whom we have heard from today, about how much he aspires to cut tax. That is another example of Ministers doing the opposite of what they say. He is in fact putting up taxes to their highest level since 1950, when the Attlee Government were rebuilding Britain after the war. So, we have slow growth in incomes and huge increases in tax at the same time as rising inflation caused by big increases in household bills for energy, food and fuel. The Resolution Foundation has calculated that the average household will be £3,000 a year worse off. That is not likely to engender optimism from my constituents.

What are we getting by way of levelling up? Well, in the Knowsley part of my constituency, the answer is not a lot. Improving educational opportunity is one of the best ways of levelling up. Young people in Knowsley already have to leave the borough to study A-levels. The Chancellor promised that, at the end of this spending-review period, he will put per pupil funding back to the levels they were at in 2010—before his party came into office. That is 11 wasted years, and three more to come before we are back to where we were without the damage having been mended—back to where we were in 2010! That is not a triumphant achievement.

In Knowsley, my constituents are seeing a cut equivalent to £485 per person, against an English average of £188 per person, with none of Knowsley Council’s bids for the Government’s levelling-up funds having been successful—this is in the second most deprived borough in the country. That is not what I call levelling up.