Budget Resolutions

Mike Wood Excerpts

Wednesday 30th October 2024 Commons Chamber

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

I do not know whether you, like me, are a fan of “Yes Minister”, Madam Deputy Speaker, but if you are, you may remember the first ever episode of what was supposed to be a sitcom. In the episode called “Open Government”, Sir Humphrey started by explaining to Bernard, “Dispose of the difficult stuff in the title. It will do far less harm in the title than in the actual report.”

That seems to be a lesson that the Chancellor of the Exchequer has taken to heart. While we see any number of posters, slogans, signs and reports with “growth” in the title—it even popped up once or twice in the Chancellor’s speech—there is virtually nothing in today’s Budget statement, or in the hundreds of pages of documentation that the Treasury has published today, that will actually lead to growth in our economy, and there was almost nothing in the King’s Speech that could deliver the meaningful growth that the economy clearly needs.

With every hour that passes, it becomes clearer that the Chancellor’s promises have not been delivered, and that there is a very wide gap between what was promised and the hopes that were raised before the election and what we have seen both in the legislative programme and in the first Budget in 14 years—as has been said—to be presented by this Chancellor of the Exchequer. The problem is not the black hole that the Chancellor claims to have found, but whose existence the OBR’s “Economic and fiscal outlook” report does not support; the problem is not that hole, but the enormous gap—the chasm—between what the Chancellor and the Prime Minister promised in opposition and before the election, and what they are now delivering for our constituents. With every hour that goes by, people are seeing that they were sold a false prospectus on that growth. The OBR’s report makes it absolutely clear that while it expects a temporary boost to GDP in the short term, there will probably be some crowding out of private activity in the medium term. That is why the OBR forecasts that the measures in the Budget will not raise growth but will cut growth, in 2026, 2027, 2028 and 2029. This is an anti-growth Budget.

We were looking to the Chancellor to announce measures to support growth locally in our constituencies. Where is the certainty when it comes to the levelling-up funds that our communities were promised? Where is the certainty when it comes to the long-term plan for towns that our communities were promised—the plan that, in my previous constituency before the election, I worked so hard with local stakeholders, local councils and the combined authority to help to secure? The new boundaries mean that those projects are no longer in my constituency but in those of Labour Members of Parliament. Although it has been pointed out repeatedly that people voted for change, the people of Brierley Hill did not vote to lose a next-generation vehicle technology centre that would deliver the new skills that the community needs. The people of Dudley did not vote to lose £20 million of long-term investment from the towns fund, which would make such a difference to the community.

[Graham Stuart (Beverley and Holderness) (Con)]

My hon. Friend is giving a powerful speech on this Budget of broken promises. People in Dudley and elsewhere did not vote for this Labour Government to put up taxes on working people, yet the OBR has said today that 76% of the cost of the rise in national insurance contributions will come out of ordinary working people’s wages. Does he agree that they are rightly angry about that and will get angrier still when they understand the implications?

--- Later in debate ---

[Mike Wood]

My right hon. Friend is absolutely spot on. We do not need to take his word for it, definitive though it is. The Chancellor herself was clear that many of the tax rises that she has introduced today are taxes on jobs and can only find their way out of people’s pay packets.

People were sold a false prospectus on our national finances. Before the election, the then shadow Chancellor promised that Labour would be the party of “fiscal responsibility” and that she would have “iron discipline”. Well, at least Gordon Brown was faithful to prudence for a full term. It looks as though fiscal responsibility has been jilted at the altar by the Chancellor within her first few months. Page 6 of the OBR outlook makes it clear that the measures in this Budget will increase borrowing by £150 billion over the course of this Parliament.

[Nesil Caliskan]

If the hon. Gentleman thinks that taxes on businesses should not increase, where should the tax burden lie? If he does not think that borrowing should increase, what would he cut from the Budget?

[Mike Wood]

We have yet to see the departmental allocations. It is clear in the OBR’s projections that there are massive increases in borrowing, but even the savage tax rises that have been set out today are dwarfed by the increases in spending. The choices that the Chancellor has made are not to do with any black hole; they have been made because of her priorities, which were set out before the election. People were told that taxes would not have to rise under a Labour Government, but they are now seeing the reality. The current budget deficit will increase by £9.3 billion a year.

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

I notice that the hon. Member still has numerous pieces of paper in front of him, so I hope that he is coming to this point. The Chancellor stood up today and made choices for the future of the country. We can agree or disagree with the choices that have been made, but I am not hearing from any Conservative Members what alternative choices they would make.

[Mike Wood]

The Chancellor and the Prime Minister made it very clear to voters that nothing in Labour’s plans would require tax rises, other than very specific tax rises that they had indicated. They said that they were not looking to raise taxes on businesses, working people and farmers, which was dismissed as “a lie” in the television debate. We now see that the claims made during the election campaign were untrue only inasmuch as the Leader of the Opposition and shadow Chancellor hugely underestimated how much the Labour Government would hike people’s taxes. Again, a false prospectus was sold.

Page 11 of the OBR’s outlook sets out that earnings growth will halve over the course of this Parliament. This is a betrayal of working people. It is the tax on jobs that the Chancellor was so keen to attack while in opposition. The increase in business rates will add £6,000 to the bills for a typical pub at a time when so many are only just managing. Per worker, the increases in national insurance contributions for businesses will add—

[Tom Hayes (Bournemouth East) (Lab)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Mike Wood]

I am getting glances from Madam Deputy Speaker to suggest that I ought to be winding up.

The costs are proportionately much higher for those who employ part-time workers on modest incomes. As my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin) has said, we are seeing French labour laws and German taxes, and I fear that will lead to Spanish unemployment rates. This Budget is damaging for growth, for national finances, for small businesses and working people and for farming in our rural communities. It is smoke and mirrors. It is the fiscal equivalent of the people on Westminster bridge who invite tourists to put money on “find the lady”. It is a Budget that is hidden behind semantics, sophistry and small print. It is bad for the country and the sooner that it can be reversed, the better.