Income tax (charge)

Rachel Hopkins Excerpts

Tuesday 17th March 2020 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

This is my first Budget as a Member of Parliament. When I registered to speak in the debate more than a week ago, I chose to speak about the topic of levelling up and getting Britain building, because after 10 years of austerity hitting hard in my constituency, it is about time we saw some investment. Although the coronavirus crisis overshadows everything, I am still here to speak up on behalf of my constituents, who have been affected by a decade of decline. As my hon. Friend the Member for Middlesbrough (Andy McDonald) said from the Front Bench, we will get through this crisis, but it highlights the fragility of many of my constituents’ lived experience.

Terminology such as “levelling up” allows the Government to create a picture of improving living standards and opportunities, but it is a fairy tale. Instead, the Budget focuses on levelling up the market at the expense of the social infrastructure that serves people across the country. As working people continue to struggle to make ends meet in insecure employment, the benefit system continues to punish the most vulnerable in society and public services are squeezed, the Budget ensures that fat cats in the City of London and big business continue to profit.

To consider whether the Budget can deliver the levelling up it so boldly claims to, we must judge it in the context of a decade of decline and consider whether it will directly improve the lives of our constituents. The political choice of austerity and cuts in public spending over the past 10 years has contributed to a severe housing crisis, and the distinction between the haves and have-nots is stark.

Inequality has rocketed as young people cannot get on the housing ladder, renters are stuck in unfit homes, families in need cannot get a council house, leaseholders are exploited by the system, and homelessness has reached a disgraceful record high. The Conservatives’ reliance on a deregulated free-market ideology has also allowed weak housing standards, as we see from the many poor homes created under permitted development rights, and emboldened commercial property developers. There must be greater investment in good-quality council housing.

According to Shelter, in 2018-19 only 6,287 new council houses were delivered in England, despite 1.15 million households being on housing waiting lists. In the same year, 24,000 social rented homes were lost through sales and demolitions. Since 2010, the number of new Government-funded social homes being built has dropped by 90%. Instead of building council houses or genuinely affordable homes, the Conservative Government have tried to obscure their cuts by labelling more homes “affordable”—even when they are priced for sale at up to £450,000, which would require someone to be lent a mortgage worth nearly 15 times the average UK salary, or to rent at up to 80% of the market rate. Both are completely unaffordable for most families in Luton.

I know the Government will point to the commitment in the Budget to develop brownfield sites and to lower interest rates by 1% when councils borrow for social house building. However, neither commitment will sufficiently address the crisis. Brownfield land, because of quantity, location and remediation costs, will never come close to meeting housing need on its own. The 1% reduction in borrowing costs comes only one year after the Public Works Loan Board increased borrowing rates by 1%. This is smoke and mirrors. To level up and to end the housing crisis, the Government need to be driving a national, publicly funded housebuilding programme alongside councils and housing associations, not simply leaving it to the market.

Similar disappointment is replicated in the Government’s much anticipated and much needed transport infrastructure investment plan. We have a climate emergency and emergencies require urgent action, so public transport must be at the heart of the climate strategy. Instead of investing in a sustainable integrated public transport system, however, the Government announced a £27 billion investment in roadbuilding and a fuel duty freeze. That is more than the investment for all other modes of transport combined. This is ill-thought-through policy- making, when we consider that over 60% of the UK’s rail routes have yet to be electrified and that many train stations, such as Luton station, are in desperate need of remediation.

The underfunding of public transport is not restricted to rail. A decade of austerity has led to buses suffering a real-terms funding cut of £645 million per year, the withdrawal of 3,300 routes, fares soaring at two and a half times the rate of wages, and bus usage in England outside of London falling by 11.9%. Buses are vital to the economic prosperity and social wellbeing of our communities, but the cuts and restrictions imposed on local councils have led to a franchising system which is run to deliver profit to shareholders, not an excellent service for passengers. The creation of an integrated publicly owned transport system would provide a brilliant opportunity to level up our country by addressing regional inequality. Regionally focused investment in transportation is an important part of an effective industrial strategy to boost productivity.

The Budget, however, does nothing to address regional investment inequality and accepts the outdated status quo of London receiving £410 more investment per passenger than the east of England. Rather than using taxpayer’s money to invest in green affordable public transport to promote regional growth, the Government have subsidised failed rail franchises, which, after their collapse or even now in the wake of the crisis, has exposed the limitations of a profit-driven privatised railway and funded the profits of bus operators. Virgin Trains East Coast, Arriva Northern Rail and the loss of bus routes in my constituency demonstrate the failure of a market-driven transport system.

Bringing transport into public ownership is not radical. We have German, Italian and Dutch state-owned companies running our railways and buses, and the profits are used to subsidise European transport. By pursuing a publicly owned, integrated transport system, we could ensure that every penny invested is focused on improving the standard of the service and working to tackle the climate emergency.

This Budget is not about levelling up the country, but a series of policy proposals designed to distract from the damage inflicted over the past 10 years. Our social infrastructure is crumbling. We have a housing crisis. Our transport system is broken. Regional inequality is growing. The Budget is an extension of austerity and a reminder that it is a political choice. It is political opportunism to protect the financial sector and burden our communities with a decade of cuts. It reaffirms what we already knew: the Conservative Government will time and time again choose to put profit over people.