Budget Resolutions

Nia Griffith Excerpts

Tuesday 12th March 2024 Commons Chamber

[Dame Nia Griffith (Llanelli) (Lab)]

At last week’s Budget, the Chancellor stood at the Dispatch Box like a smiling, villainous fairy tale character holding out a shiny apple glistening with national insurance cuts, while all the while knowing that inside it was a deadly poison: the fact that we will all pay 10p more tax for every 5p we get back. The Chancellor is supposedly giving back, but people across the UK are suffering from the highest tax burden in 70 years, with the stealthy drip-feed of the poison of freezing tax thresholds.

The freezing of the basic threshold has brought 3.7 million more people into paying tax, and more taxpayers are squeezed by now having to pay the higher rate of tax, as more of their income is in that bracket, often because of a pay rise that has not even kept pace with inflation, so there is a double whammy of more tax and less purchasing power. The freezing of the tax thresholds affects many pensioners too. They do not need much of a workplace pension topping up their state pension before they are in that tax threshold country again. Of course, freezing the tax threshold hits those on the lowest income in particular.

And all this while we have had rampant inflation. Although inflation may now be calming down, prices are still rising, with higher food bills and higher energy bills—the Government’s failure to roll out renewables more quickly has made that all the worse—and higher mortgages and rents.

This Government have also devolved economic woes, including through cuts to council tax budgets in England. The Welsh Government settlement is some £3 billion less than if it had grown with GDP since 2010, meaning that they have to pass on cuts to Welsh councils. Across the UK, people are being asked to pay higher council tax for fewer services. We have had the biggest fall in living standards in our history. People in Llanelli and across the UK are worse off under this Conservative Government.

This Conservative Government have been squeezing household incomes for 14 years. Back in 2011, the Tories increased VAT to 20%, putting up household bills. They have cut and cut and cut the benefits paid to the least well-off in society—many of whom are, of course, in work—leaving many without enough to live on. Back in 2011, the Government started using the retail prices index instead of the consumer prices index to calculate benefits, which worked out as a cut. Then, there were cuts to health and pregnancy grants, Sure Start maternity grants and the baby element of child tax credits, leaving the parents of newborn babies with less money to fend for them. Then, in 2013 we had the bedroom tax, which was a cut in housing benefit that had originally been calculated as what people needed simply to cover the cost of rent. By 2022, the Joseph Rowntree Foundation reported that in eight out of 10 benefit changes between 2013 and 2022, unemployment benefit had lost value, either through freezes or increases that were worth less than inflation. Then along came rampant inflation. People are even poorer, and even more are now having to turn to food banks.

In all of that, we lost the child trust fund. Anyone turning 18 used to be able to claim money that had been put by for them by the state and their family. In 2011, however, the Tories cut it, meaning that 18-year-olds do not have that to look forward to. England lost the educational maintenance allowance as well, but in Wales we managed to keep it for the very poorest pupils.

We desperately need growth in the economy. This has been a complete Tory failure. At 22 Budgets, Tory Chancellors have promised growth, but they have failed. There have been seven consecutive quarters of falling GDP per capita and now officially we are in a recession. With cuts back in 2011, the Conservative-Lib Dem coalition choked off growth with swingeing austerity, and the incompetence continued with that disastrous mini-Budget in autumn 2022, leaving people facing years and years of increased mortgage payments. There has also been the failure to give business and industry the confidence they need to invest, including in renewables and to reform the energy market.

People in Llanelli and up and down the country are desperate for change and desperate for hope of a better life. That is why we need a Labour Government, who will slash energy bills for households and industry, invest in the new green technologies of the future, and invest £3 billion to ensure that we develop primary green steelmaking here in the UK. And the sooner, the better.