Budget Resolutions

Matt Western Excerpts

Wednesday 11th March 2020 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

Whether or not Harold Macmillan actually said, “Events, dear boy,” it is events that define the times, and it is how Governments and politicians respond to them. We face huge uncertainty. Brexit is now being compounded by the coronavirus, the US-China trade war and the global economic headwinds. The growth forecasts do not look good. The Bank of England now predicts just 0.8% growth for this year and up to 1.4% for 2024. The impact of Brexit will be significant, particularly if we follow a Canada-style trade deal, which will, we are told, mean a fall of 8.6% in our GDP. Already, the OBR is quoting Brexit as having an impact of 2% on our economy. As Hillary Clinton said, it is the greatest act of self-harm.

Whether it is Brexit or the coronavirus, I appreciate that the Chancellor has had a tough challenge and I commend him for doing what he has done in such a short period of time. There has been much debate about what happened in 2008, but we can compare and contrast the reaction of the US Government under Obama, with the American Recovery and Reinvestment Act 2009, which pumped in $760 billion of fiscal support to the economy, to what we did here in the UK from 2010 onwards. We can see an uptick in the US economy almost immediately—within a couple of years—as it returned to pre-crisis growth. In the UK, it took four or five years to achieve the same level.

We have lived through a lost decade during which, as we heard earlier, we managed to double the national debt. This period of austerity—I always consider it to be a benign word—has been felt throughout our society, but particularly by the most vulnerable, with the closure of 500 Sure Start children’s centres, including 26 in Warwickshire, and our schools and colleges seeing a real-terms cut of £7.7 billion, equating to a 7.8% decrease in per pupil funding in my constituency. While I welcome what the Chancellor was saying about capital investment in further education, it is capital, and we need more investment and more revenue spending in this super-important sector, which is critical to our economic future.

Compare and contrast the impact of welfare cuts in this country—we have seen a £39 billion reduction in social security spending this year. The consequences of that have led not just to many people living in extreme hardship but, as was reported last week, to 69 people committing suicide in response to the circumstances that they faced. Errol Graham is the saddest case, dying from a lack of food.

By contrast, according to analysis by the Council of Economic Advisers, the American Recovery and Reinvestment Act, which I mentioned earlier, prevented millions of Americans from falling into poverty, and more than 5 million in just 2010 alone. Here, we have 14 million people living in poverty and record numbers of children in poverty, with 500,000 additional children in poverty since 2010.

Turning to health and social care, the Chancellor made only passing mention of social care, but it is critical to our national health service. A quarter of the workforce is on the minimum wage and there are 100,000 vacancies, but no promise to remove the restrictions on non-UK residents being able to work in that sector. Without them, the NHS is going to be under ever greater pressure. We have 44,000 vacancies for nurses and 100,000 other staff vacancies, and we have lost 17,000 beds, as we know.

I appreciate that the Chancellor is talking about a further 50,000 nurses, but as has been debated frequently, how many are actually new and how many are already within the system? The talk of refurbishing hospitals and of potentially new hospitals is very welcome, but this is absolutely about the revenues that we need to invest in that sector. If the frontline workers—health workers and social care workers—many of whom are on zero-hours contracts or the minimum wage, are eligible for the state sickness payment, they will receive only £94.25 a week. Whether they should go to work or stay at home is a choice for them in the circumstances surrounding coronavirus. This is a desperate situation and it is critical for the provision of our health service and social care.

Likewise, our local authorities are again at the coalface. I heard very little mention of the reality that we face in our local authorities, but much of the increase in council tax is being borne by our local residents, in terms of tax demand. There was no mention of the withdrawal of the central Government grant. Of course, local authorities are increasingly dependent on business rates. The Chancellor or the Government announced a 12-month holiday and I would like to know how local authorities will be compensated. Elsewhere, we are seeing a proposed increase in police numbers, but that will just replace what we had, and during the last 10 years, we have seen a 152% increase in violent crime.

On the housing crisis, the Chancellor talked about a £12 billion multi-year investment in affordable housing, but there was no real mention of council housing, which we are desperate for. We have lost 200,000 council homes since 2010. In the past few years, we have seen only eight social-rented council homes built in my constituency of Warwick and Leamington, yet rough sleeping has doubled since 2010.

There was brief mention of the environment and energy generation, and I urge the Government to put more investment in and support for—through fiscal levers—the development of onshore energy generation. That is cheapest and it will help to drive down energy bills. We lack ambition and we need to see more emphasis on that—likewise in solar. In fact, the environment barely got a mention, despite the considerable floods that we have had in recent weeks. There is a huge opportunity to revisit the code for sustainable homes and what that can do not just for the environment, but for our house-building industry.

On business, I welcome many of the initiatives that the Chancellor introduced, particularly for small and medium-sized enterprises, including the business rates holiday. However, they face a huge Brexit challenge as well, and our high streets, shops and so on face a huge challenge because of the presence of the internet and the pressures of the coronavirus, as well as Brexit.

The past 10 years have been a lost decade. We have seen the debt double from £950 billion to £2 trillion and a reduction in the state, masquerading as austerity. At the same time, we have seen inequality rise, 500,000 more children in poverty and life expectancy fall for the first time. In my constituency, there is a gap in life expectancy of 18 years between the wealthiest and the most disadvantaged. While I welcome many of the proposals from the Chancellor, there is still much to do. I hope there will be more debate to come.