Budget Resolutions

Debate between Nusrat Ghani and Ed Davey

Wednesday 30th October 2024 Commons Chamber

[Ed Davey (Kingston and Surbiton) (LD)]

It is a pleasure to follow the Chair of the Treasury Committee, the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), and I wish her all the best in her new role, especially given her promise to scrutinise this Budget very, very closely. I join her in noting that this is an historic day. This is the first Budget to be presented by a female Chancellor, and I congratulate the right hon. Member for Leeds West and Pudsey (Rachel Reeves). I am sure that she is blazing the trail for the women and girls who are watching our proceedings today.

There can be no doubt about the enormous task facing the Chancellor. After years of chaos and decline under the Conservatives, their appalling economic legacy, set out so clearly in the figures today, is being felt by people across the United Kingdom. People were looking to this Budget for a clean break with those failures of the past few years, and for a sense of hope and urgency and the promise of a fair deal, but I fear that the Budget will not deliver all that. The Conservatives left behind an enormous mess in our NHS, but I am afraid it will not be fixed unless the Government fix social care, too. The cost of living crisis will not be solved by hitting families, pensioners, family farms and struggling small businesses, and our economy will not grow strongly again unless we repair our broken relationship with Europe. Liberal Democrats will continue to stand up for our constituents and press the Government to be far bolder and act much faster on people’s priorities.

Having said that, let me recognise that there were some good things in the Budget. I welcome the Chancellor’s decision to move away from the Conservatives’ broken fiscal rules to allow the capital investment that our country so desperately needs. I was genuinely surprised that there was no recognition from the Leader of the Opposition of the difference between capital and current spending, which is at the heart of this change. I welcome the promise of full compensation for the victims of the contaminated blood scandal and the Horizon scandal, and I hope that that can be delivered quickly.

I also welcome the extra investment in our NHS. Fixing the crisis in our NHS is literally a matter of life and death. It is also essential for growing our economy, by getting people off waiting lists and getting them fit and healthy and back into work. The Conservatives left the health service on its knees. We on the Liberal Democrat Benches have consistently argued for more investment across the NHS—in hospital buildings, extra GPs, cancer nurses, new radiotherapy machines and much more—so I am glad that the Government and the Chancellor have been listening.

However, people have heard bold promises of extra GPs and new hospitals before. The Conservatives made similar promises on the NHS and then broke them, so what we need now is a guarantee that this Government will deliver. I can assure the Chancellor that Liberal Democrats will hold the Government to account on their NHS plans, and I hope that the Budget document sets out in full the answers to some obvious questions. When will the funding be in place for desperately needed hospital projects, and when will those projects be completed? When will the Government be able to guarantee that people can see a GP or an NHS dentist when they need one? When will all cancer patients be able to start treatment within the 62-day target and not have to wait for months? When will people know once more that when they call an ambulance it will be there within minutes, not hours?

Above all, as I have said before, I worry that despite the welcome extra investment announced today, the Government will not be able to fix the NHS because they are ignoring the elephant in the NHS waiting room: the crisis in social care. We all know how bad it is. Hundreds of thousands of people are waiting for care, and many are stranded in hospital beds because the care is not in place for them to leave hospital. That is bad for them, bad for their loved ones and bad for the NHS. I am afraid that today’s announcement on social care just will not touch the sides. It is only a standstill in a crisis. Unless we finally tackle this problem and agree a long-term solution for social care, we will never end the crisis in our health service, so I urge the Government once again to start cross-party talks on care without further delay and to take action now.

Any solution must involve paying care workers properly to fill the 130,000 care worker vacancies, so that elderly and disabled people can get the care they need. The Government’s plan for a fair pay agreement is a step in the right direction, but it is nowhere near enough, so will the Chancellor look at our plans for a special higher minimum wage for carers? And we must not forget the vital role of unpaid family carers—the heroes keeping the entire system afloat. I strongly welcome the Chancellor’s decision to raise the earnings limit for carer’s allowance. It is a good first step, but as she accepted in her speech, on its own it will not end the repayments scandal or fix the system. Will she confirm whether the earnings limit will, in future, be pegged to at least 16 hours a week at the minimum wage? Although I am glad that the review will look again at getting rid of the cliff edge for carer’s allowance and the earnings limit, I hope she and her colleagues will consider a broader review to give family carers the support they deserve.

The Conservative cost of living crisis has hit family carers particularly hard, but they are not alone. Practically no one has been left untouched by rising bills, higher mortgage payments and soaring food prices. Our small businesses and the self-employed have experienced a crisis of their own, having had to deal with the pandemic and now spiking energy prices and other input costs. The Conservatives only added to that pain by hitting struggling families with stealth tax rises, by betraying pensioners when they broke the triple lock, and by raising national insurance for our small businesses.

I welcome the increase in the national minimum wage as it addresses the cost of living, although I urge the Chancellor to extend this higher wage to apprentices, too. However, it is concerning to see the Chancellor repeat a number of the Conservatives’ past mistakes. Raising employers’ national insurance is a tax on jobs and people. The OBR report published today shows that the Budget will reduce real household incomes and worsen the health and care crisis by hitting thousands of small care providers. Hitting family homes with changes to inheritance tax will not help, and cutting winter fuel payments will leave millions of vulnerable pensioners worried sick this winter.

Instead of adopting Liberal Democrat proposals to raise the money we need, such as by reversing Conservative tax cuts for the big banks or by asking the social media giants to pay a bit more, the Chancellor has chosen unfair tax hikes that will hurt small and medium-sized businesses, which are the engines of our economy. They have already paid too high a price for Conservative economic failures, and forcing them to pay even more simply is not right.

Another Conservative mess that I fear this Budget will not begin to clean up is the crisis in local council funding. Year after year, the previous Government slashed funding while asking councils to do more and more. The result has been nothing short of a disaster. Spiralling social care costs are a huge part of this, which is yet another reason why reform is so vital.

There is another black hole in council budgets due to the broken system for special educational needs and disabilities. The extra £1 billion announced by the Chancellor is therefore welcome, and I pay tribute to my colleagues, not least my hon. Friend the Member for Twickenham (Munira Wilson), who have campaigned so hard on this. However, I fear that the crisis in SEND budgets left by the Conservatives is much bigger.

Last week, the National Audit Office laid bare the sheer scale of the problem, with half of children waiting more than the 20-week limit for an education, health and care plan, and with 43% of councils at risk of bankruptcy. The severity of the crisis left by the Conservatives speaks for itself, so we need to act with even greater urgency to tackle it. We will press the Government to give the House a clear timeline for reform, because neither children, parents nor councils can wait any longer.

The Chancellor has said that her main objective is economic growth, and she is right. We all agree that we need to get our economy growing strongly again to create jobs and opportunities for everyone, and to raise the money that our public services need, but we need a real plan to do that and not just stop things getting worse or return to business as usual. We need to build the economy of the future—one that is genuinely innovative, prosperous and fair.

Part of that is about fixing the health and care crisis, which will be crucial, as will managing the public finances responsibly and giving businesses the certainty and stability they need to invest in our economy. We must also invest in cheap, clean, renewable power to drive a strong recovery, to bring down energy bills and to create secure, well-paid jobs. I welcome the steps that the Government have taken so far, but we must do more to back small businesses. They are the beating heart of our local economies, so I urge the Chancellor to go beyond today’s announcement on business rates by making an historic change to overhaul the broken business rates system that is destroying our high streets and town centres. Tinkering around the edges is simply not good enough any longer.

One final crucial ingredient of growth is fixing our broken relationship with Europe. Removing the Conservatives’ trade barriers would be a massive boost for British jobs, British business and the British economy. By ruling out important steps such as a youth mobility scheme or key long-term goals such as membership of the single market, the Government are trying to grow our economy with one arm tied behind their back.

In July, the British people kicked out of office one of the most damaging Governments in our country’s history. On the Conservatives’ watch, we saw living standards fall, the economy stagnate and public services decline. Although no Government would have an easy time turning that around, people were looking to this Budget for hope and a genuinely new direction. They were looking for urgent action to fix the health and care crisis, for a break from the previous Government’s tax mistakes, for a plan to grow our economy and to rescue local councils that are on the brink, and for a fair deal.

Yes, the Chancellor had to make big, difficult decisions, but I fear that she has got too many of them wrong. We needed a different Budget to repair the damage done to our country and to give people the fair deal they deserve. For our constituents, Liberal Democrat Members will push the Government to do far more for our economy, for the NHS and for care—those are the things that the Liberal Democrats will always champion.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Chair of the Business and Trade Committee, which is my old Select Committee.