Budget Resolutions
Debate between Nusrat Ghani and Chris Evans
Chris Evans (Caerphilly) (Lab/Co-op)
It is a pleasure to follow the hon. Member for West Worcestershire (Dame Harriett Baldwin). I well remember one of her very early speeches when we both came to this place, in which she gave a lecture to this House about the benefits of the Laffer curve. Having also listened to the right hon. Member for Gainsborough (Sir Edward Leigh), I am pleased to report that although Milton Friedman, Keith Joseph and Mrs Thatcher may be long gone, their ideas will live on as long as those two Members sit on the Conservative Benches.
I pay tribute to my hon. Friend the Member for Gower (Tonia Antoniazzi) for a great speech standing up for her farmers in her rural constituency. I think she faces, as Chair of the Northern Ireland Affairs Committee, the same problems that we face in Wales. We in Wales are too heavily dependent on the public sector and there is a lack of entrepreneurship, which are similar problems to those faced in Northern Ireland, but I can think of no greater champion to stand up for Northern Ireland than my hon. Friend.
Things have changed since the last time I spoke in this House. I was the Member for Islwyn, and I am now the Member for Caerphilly. If you, Madam Deputy Speaker, and the House will indulge me for a moment, I want to pay tribute to my predecessor as the Member of Parliament for Caerphilly, Wayne David, who was a doughty champion for his constituency. He absolutely loved this place, and he was one of our great Welsh parliamentarians.
I am sure Wayne David would join me in welcoming today the first speech by a Labour Chancellor for 14 years, and the very first by a female Labour Chancellor at that. For those of us who came in in 2010, it was a long haul in opposition, and I am delighted to be standing here today on the Government Benches.
“Britain has lived for too long on borrowed time, borrowed money, borrowed ideas. We live in too troubled a world to be able to promise that in a matter of months, or even in a couple of years, that we shall enter the promised land. The route is long and hard.”
Those words were spoken by Prime Minister James Callaghan at the Labour party conference in Blackpool almost 50 years ago, in 1976. His analysis laid the blame for Britain’s problems at the door of high Government debt, high taxation and low productivity.
The economic ills we suffer today have come upon us over several decades. They will not go away in days, weeks or months, but they must go away. Great as our tax burden is, it has not kept pace with public spending. For decades, we have piled deficit upon deficit, mortgaging our future and our children’s future for the political gain of the present. To continue this long trend is to guarantee moving towards tremendous social, cultural, political and economic upheavals. We face handing over a toxic legacy to our children and our children’s children. That is how serious the current crisis we face is. Our challenge, in this place in this time, is breaking the cycles that mean those words of Callaghan still reflect acutely on the situation we face today.
We need to get away from two myths that are peddled about the British economy. First, there are those who believe that sweeping tax cuts will, as we have heard from Opposition Members, turbocharge the economy without any adverse effect on public services. They cite the 1980s as a global age, but taxes could be cut when the Government were able to rely on North sea oil money and the privatisation of industries. In 2024, that is not an option. A tax cut would only come at the price of cutting public services. It is a lesson we should have learned from the infamous fiscal event of September 2022. The experience of most people we speak to, whether they are trying to book a medical appointment or simply renew a passport, is poor. That position is intolerable.
The second myth is that, if we chuck enough money at a problem, somehow that will solve it. As someone who served on the Public Accounts Committee for five years under my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier), who is now the Chairman of the Treasury Committee, I find that a laughable idea. Take the Ajax programme, which was meant to provide a new armoured vehicle for our Army. It was initially meant to be delivered in 2017, but it is now 2024, and it is still not complete. Meanwhile, north of £3 billion of public money has been wasted. Both soldiers and the public purse have suffered the consequences of a wasteful mess that created unsuitable, unsafe and largely unusable vehicles. The National Audit Office called it “flawed from the start”, and noted that it was suffering from problems that plague other defence programmes. The programme is even yet to be delivered, and it faces the threat of being obsolete, despite the mammoth cost to the taxpayer. We cannot allow a system in which regular mistakes are the norm, and are simply part of the culture. We cannot have civil servants shrugging their shoulders and saying, “That’s the way it is.” They are spending public money.
An estimated £7.3 billion was lost to fraud related to covid-19 schemes from 2020 to 2022, according to the National Audit Office. Some £2.9 billion was spent on personal protective equipment that was deemed unusable for frontline services. I welcome the Chancellor’s announcement about the covid corruption commissioner, but the fraud should not have happened in the first place.
Most recently, hundreds of millions of pounds went down the drain for the failed Rwanda scheme. Whatever we think about such schemes, what message does that give to those who are working hard to pay into the system every month, and who are asked for more and more of their hard-earned money in taxes? Ronald Reagan—yes, I am quoting somebody from the right wing—once said:
“Government is not the solution to our problem; government is the problem.”
I believe that bad government is the real problem. The Government cannot do everything, but they can do some things well—the rise in the minimum wage announced today is one such example. However, we cannot go on this way; there is no future in giving Departments more and more money if it is only going to be wasted. If there is a black hole in a Department’s budget, the system created that, and more money will not change wasteful practices. There needs to be fundamental reform in the way we manage major projects.
The Chancellor announced some productive measures today, but if we do not stop money leaking out of Government through wastefulness and mistakes, we are failing the taxpayer. We must be strict with ourselves when it comes to projects and Government spending. We need the chair of the Office for Value for Money, announced in July, to report annually to the House. They must be tasked with several questions about each project: is it on time, and is it delivering value for money? If not, if necessary we have to be ruthless. We either take the decision to carry on with projects that are doomed to lose money, or we take a step back—do less but do it better, and start creating more things that we can export abroad.
As the Chancellor recognised in her speech, we cannot borrow indefinitely, and we cannot keep asking hard-working people for more and more, while Governments make costly errors and ask the taxpayer to pick up the bill. Investment to rebuild is necessary, and the Government are right to protect the most vulnerable from shouldering an increased burden. However, it is time for a root and branch reform of the civil service, with a realistic economic policy that considers the state of the public finances as they are, not as we wish or hope they were. I am hopeful that the Budget has done that today.
If we do not act now, in 50 years’ time will future generations be speaking of the same ailments? If they are, it means simply that we have failed and have effected no real change in our time in this place. Callaghan raised these problems 50 years ago. It is our duty to ensure that we do not spend another 50 years stuck in that same place.
