Budget Resolutions

Oliver Letwin Excerpts

1st reading: House of Commons
Tuesday 14th March 2017 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

I thank colleagues who have spoken in this debate today. They have torn this Budget apart. I am talking about my hon. Friends the Members for Washington and Sunderland West (Mrs Hodgson), for Lewisham East (Heidi Alexander), for Burnley (Julie Cooper), for Garston and Halewood (Maria Eagle), for Cardiff South and Penarth (Stephen Doughty), for Redcar (Anna Turley), for Gedling (Vernon Coaker), for Wirral West (Margaret Greenwood) and for Sheffield, Brightside and Hillsborough (Gill Furniss), my new hon. Friend, the hon. Member for Stoke-on-Trent Central (Gareth Snell) and many other people.

Last week, the Chancellor painted a rosy picture of the nation’s finances. He claimed that the Conservative party’s stewardship had been nothing short of miraculous. He was relaxed and attempted jokes throughout his speech. The Prime Minister’s shoulders shook with amusement, and many Government Members chuckled away. Some of the more experienced Government Members were watching cautiously, as the nosedive gained velocity. The Chancellor had got it wrong—big time. Within hours, he was attacked by many of his own Back Benchers. He was left hung out to dry by the Prime Minister, and, unsurprisingly, he has faced universal criticism over his plans to raise national insurance to 11% for millions of self-employed people. As Sir Michael Caine in the iconic film “The Italian Job” said, “You were only supposed to blow the doors off.” [Interruption.] It would have been unparliamentary to throw in that word. Well, the debris from the explosion is still descending. To put it purely and simply, the manifesto pledge was broken.

Since last Wednesday, Nos. 10 and 11 have been in a briefing war, with each trying to blame the other for the fine mess. Ostensibly, No.10 suggested that the Chancellor sneaked the national insurance rise into the Budget. Apparently, other shocked Cabinet colleagues have indicated that he failed to mention that it would break their manifesto pledge. As my hon. Friend the Member for Garston and Halewood said, it is worrying that Cabinet members do not know their own manifesto commitments. Perhaps they do not care. Then again, the Government have an insouciant attitude towards their manifesto commitment—[Hon. Members: “Give way!”]. I will come back to that in a minute. The insouciant attitude goes on. First the Government committed to getting rid of the deficit by 2015—a broken promise. Secondly, they said that it would be pushed back to 2019-20—another broken promise. Thirdly, they vowed that the debt would start to come down after 2015—another broken promise.

The Government will have virtually doubled the debt and doubled the time they have taken to get it down, and this is what they call success and fiscal credibility. They seem to think that they can simply press the reset button when it comes to meeting their own fiscal rules, and that no one will notice. It is the flipside of John Maynard Keynes’ approach—namely, “When I change my mind, the facts change with it.”

[Sir Oliver Letwin (West Dorset) (Con)]

Now that the hon. Gentleman has had his bit of fun, would he possibly explain how he proposes that the Labour party would find the money required for social care?

[Peter Dowd]

By fiscal rectitude. When the Government miss a deadline, their modus operandi is to set a new one and brazenly move on. It is the immutable law of Tory economics—make it up as you go along. What happened to the long-term economic plan? Well, it did not last very long. The Prime Minister and the Chancellor have their fingerprints all over every single financial decision that has been made during the past seven years. It is no surprise that they have come under criticism from many in their own party, including the former Member for Witney, and the former Chancellor Lord Lamont who called the national insurance debacle a “rookie error”—otherwise known, in the real world, as gross incompetence. But, regrettably, other people will pay the price for that incompetence.

Turning to Brexit—I will mention it even if the Chancellor does not want to—it is the 10th anniversary of the production of “Freeing Britain to Compete: Equipping the UK for Globalisation”. The publication was a wide-ranging policy document authored by the right hon. Member for Wokingham (John Redwood) and friends. It was endorsed by the then shadow Cabinet, which included the current incumbents of No. 10 and No. 11 Downing Street. The publication was hard to track down as it has been removed from the Conservative party website for good reason, but I found a copy. Its contents were toxic—all the more so in the wake of the subsequent global financial crisis—and remain so. But in the light of Brexit, and the resurgence of the right hon. Member for Wokingham’s influence, it will soon get a second run out.

It is worth apprising the House of a few nuggets in the document’s pages. It includes policies such as the abolition of inheritance tax; charging foreign lorries to use British roads; the potential abolition of the BBC licence fee, which it refers to as a “poll tax”; the watering down of money laundering regulations; and the deregulation of mortgage finance because

“it is the lending institutions rather than the client taking the risk.”

Try telling that to someone whose home has been repossessed.

The publication goes on to say:

“We need to make it more difficult for ministers to regulate”.

Remember that this document was dated August 2007, and was rubber-stamped by the current Prime Minister and the Chancellor at the time that Northern Rock was about to go under. The document continues—listen to this one—to say that the Labour Government

“claims that this regulation is all necessary. They seem to believe that without it banks could steal our money”.

Well, that might not be the case, but, at the peak of the banking crisis, we had liabilities of £1.2 trillion. Many people did believe that the banks were stealing money and queued up outside banks accordingly. The document refers to wanting

“reliably low inflation, taking no risks by turning fiscal rules into flexible friends”—

not that the Chancellor has many of those nowadays. As for Europe, in search of jobs and prosperity the document says:

“An incoming Conservative government should go to Brussels with proposals to deregulate the whole EU”.

No wonder they wanted to bury the evidence—it is the autobiography of the hard-line Brexiteers, and the Tory blueprint for a post-Brexit, deregulated Britain. It is a race to the bottom.

These policies are a telling narrative of the views of the fundamentalist wing of the Conservative party. The Prime Minister is hostage to that right wing, and she is on the hook. The stage directions are coming from Wokingham, Haltemprice and Howden, North Somerset, and Chingford and Woodford Green, with occasional guest appearances by the Foreign Secretary. The forlorn, melancholic Chancellor is briefed against—he is not laughing now—because he may just have a less hard-line approach to Brexit than his colleagues.

These are the dusted-off policies of hard Brexiteers, who will stop at nothing until Britain becomes a low-wage, low-tax, low-regulation economy. They want to turn our country—not their country—into the bargain basement of the western world, and they have the Prime Minister in tow. Parliamentary scrutiny is a hindrance.

Meanwhile, the Prime Minister has put kamikaze pilots in the cockpit. The Chancellor knows this too well, and that is why there is a reported £60 billion set aside as a trauma fund—a failure fund. It is not Brexit-proofing the economy, but proofing the economy from the toxic ideology of the hard Brexiteers.

The Government’s proposal to increase insurance premium tax from 10% to 12% is a regressive measure and a charge on households, and we will not support it. It was a surprise to see it in the autumn statement, coming as it did from a Government who use the high cost of insurance premiums as an excuse for curbs on victims’ rights to claim compensation, and we will oppose that rise. While the Government drive up the price of insurance for millions of families, through other policies they will forgo £73 billion of revenue.

The Budget claims it is for lower and middle earners, the NHS, social care agencies, the self-employed, schools, businesses, pubs, the strivers and the entrepreneurs. It wants to give them the thumbs-up, but, in practice, it is not doing that; on the contrary, it is putting two fingers up to them, and that is something Labour will never do.