Budget Resolutions

Mike Gapes Excerpts

Thursday 9th March 2017 Commons Chamber

[Wes Streeting]

The right hon. Gentleman makes a powerful and important point. Unless we get to grips with that, not only will those people suffer as they fall below the line and can no longer keep their heads above water, but the economy itself will suffer. Even the sluggish growth over which the Government have presided since they took office has been driven by an increase in household debt. What happens to those families, and what happens to the economy, when the money dries up—when there can be no more lending, or when families can no longer service their debt? Of course, it is not just national insurance or, indeed, income tax that the poorest pay. Other forms of taxation have a disproportionate and regrettable impact on them: VAT, council tax, and other unprogressive tax measures are causing them to become the very worst off.

If that were not bad enough in itself, it was explicitly ruled out in the Conservative manifesto, not just once but four times. It is a bit rich for the Chancellor to come to the House and talk about the small print produced by companies, and for his Ministers to tidy up the mess the next day at the Dispatch Box by talking about the small print in the National Insurance Contributions Bill. This is a broken promise, plain and simple. Not only was it in the manifesto; it was a central line of Tory attack. The Tories were wrong to warn at the last election that a Labour Government would somehow cause chaos and instability. Look at the mess they are presiding over now, and look at what they have done to the country in the short time since that election!

[Mike Gapes (Ilford South) (Lab/Co-op)]

My hon. Friend has referred to the Conservative manifesto. That was the same manifesto that committed the Government to staying in the single market. The lesson, surely, is that Conservative manifestos are worth nothing, not even the paper they are written on.

--- Later in debate ---

[Wes Streeting]

I entirely agree. I am not sure how many experienced, wise leaders of the NHS and local councils could come forward and warn the Government about not just an impending crisis, but a crisis that is affecting hospitals and care services in each of our constituencies today. What more will it take for the Government to show the courage, and find the money, to fund social care? Imagine what a cross-party commission led by the likes of my hon. Friend the Member for Leicester West (Liz Kendall), the right hon. Member for North Norfolk (Norman Lamb) or the hon. Member for Totnes (Dr Wollaston) could do to build a health and social care model for the 21st century.

Was it not a travesty that, as schools in our constituencies faced cuts in their budgets, the Chancellor chose to arrive yesterday with a funding package that would benefit a small number of pupils at a few selective schools? What do Ministers have to say to headteachers and parents in my constituency, or to the pupils who attend the vast majority of schools in my constituency, about the fact that they face on average a funding cut of £188 per pupil per year? I do not need an opinion poll to tell me that there are a few things that people, whether they vote Labour or Conservative, expect the Government to do, and among them are to make sure that we have decent hospitals and well-funded schools. It is a scandal that so much of the educational progress made in my city and across the country, led by the last Labour Government and following on since then, is being put at risk because of swingeing budget cuts to schools. What sort of Government choose to cut education for the next generation while also cutting the tax bill for the very wealthiest?

The flimsiness of the Budget Red Book—for once it did not take long to get through—betrays the fragility of our economy. In the long list of supposed good news the Chancellor arrived with yesterday, a few facts were missing. This was the ninth Budget by a Conservative Chancellor since 2010, and what do we have to show for it? We have the only developed economy that has a growing economy but falling real wages; rising costs of living, but wages still at pre-crash levels; a widening productivity gap holding back growth and depressing wages; a weaker currency fuelling inflation that households and businesses can ill afford; a failure to meet the Tories’ own targets for debt and deficit reduction because they have never understood the need to balance spending cuts with investment for growth; and a failure to meet their own welfare cap because of their failure to tackle unemployment, under-employment, casualisation of the labour market and exploitation by unscrupulous employers, which leaves a welfare system that lacks the confidence of the majority of the public but also fails the people who need it most. That is the very worst of all worlds, and even now, in the wake of a Brexit vote driven in large part by the votes of people who have been left behind, we have a Government willing to preside over rising child poverty, public services at breaking point, and an economy ill equipped for the challenges that lie ahead.

It should not take dragging a former—Conservative—Prime Minister out of retirement to tell this Government that the way they are handling the single biggest issue facing our country, the departure from the EU, and the path they have set us on is putting the economy at risk. What John Major said was very straightforward:

“There is a choice to be made, a price to be paid; we cannot move to a radical enterprise economy without moving away from a welfare state. Such a direction of policy, once understood by the public, would never command support. It would make all previous rows over social policy seem a minor distraction.”

Sir John Major could have been reading from the Labour party script on this issue. There we have it: a former Conservative Prime Minister holding up the truth that we on the Labour Benches know, which is that unless the Government negotiate a smooth and sensible exit from the EU, they will consign this country to being a small tax haven off the north-west coast of Europe, unable to meet the needs of their people and unable to make sure that prosperity is shared.

Of course, it is not just John Major who has concerns: the former Chancellor, the right hon. Member for Tatton (Mr Osborne), told the House that this Government have chosen not to make the economy the priority. When so much of this country’s economic success relies on trade abroad, when we have the largest single market in the world on our doorstep, and when being a member of the customs union gives us access to more trade agreements than are enjoyed by any leading economy in the world, for a Government to decide not to make the economy the priority is reckless and irresponsible.

[Mike Gapes]

My hon. Friend is making a very powerful speech. He mentioned the former Chancellor’s remarks, and the Government’s position is clearly that immigration is the priority. The Government’s target of a reduction to 100,000 seems a bit strange, however, given that the forecasts in the Red Book are based on the assumption that 185,000 migrants will come into this country in 2021; that is the Office for Budget Responsibility statistic on which the forecasts are based. How can the Government reconcile the 100,000 and the 185,000 figures, and surely the economy will be in a worse position based on those facts?

[Wes Streeting]

I agree with my hon. Friend. I have lost count of the number of times I have heard calls for a real debate on immigration, but a real debate requires an argument. There are undoubtedly real sensitivities and concerns about immigration in communities across the country, not least when people feel that their own wages have been depressed because employers are able to bring in cheaper labour from abroad to undercut the pay, terms and conditions of local workers. For me, that is an issue of social injustice that Governments need to tackle. However, we have an ageing population and a shrinking working-age population, and we can barely afford the pensions bill. We need a greater working-age population to come to this country, do their work and pay their taxes. Any politician who says that immigration is a price that this country cannot afford must also come to the House and tell us how they plan to pay for the public services on which every citizen in this country relies.

We must grasp the reality of the immigration debate. If we continue to fail to address the genuine and well-founded concerns about immigration while pandering to the myths about it, we will set this country on a course that will make us poorer, and that would be the worst possible response to the EU referendum. If people went to the ballot box and voted to leave the European Union because they felt left behind by globalisation in a world that was changing around them, imagine the betrayal they would feel if, having been sold the promise of a brighter future, they found that jobs were drying up, the economy had been left behind and the public services on which they relied were being decimated. That is the real risk of a botched Brexit.

In the context of a rapidly changing global economy in which jobs are changing, huge digitalisation is taking place and a new industrial revolution is sweeping the country at a pace and scale that we have never seen before, the purpose of the Labour party has never been more relevant or more urgently needed. More than 100 years ago, the party was founded to champion the interests of labour over the interests of capital. In a future of deregulation and a loss of jobs because they no longer exist in huge sectors of the economy, it is the job of the Labour party to protect the interests of labour.

When we look at what this Budget does to the self-employed, the strivers and the people across the private sector who make up the backbone of the economy and at what it does to public services, and when we look at how the Government are botching Brexit, we can see that it is long past time for the Labour party to take this lot apart. People across the country are counting on us to be an effective Opposition and an alternative Government. That is the job that we must face up to, and we need to start doing it sooner rather than later.