Autumn Statement Resolutions

Richard Burgon Excerpts

Thursday 23rd November 2023 Commons Chamber

[Richard Burgon (Leeds East) (Lab)]

Listening to the Chancellor yesterday, it was clear that his words were simply at odds with the lives of millions of people up and down the country. The Tories are acting as if the crisis is over, but the reality is that millions of people in this country are going through the deepest social emergency in decades. Beyond the myths and distortions put out by the Downing Street spin machine, the truth of the autumn statement is that growth has been downgraded—even after what has been called the worst period of economic growth in a century. Living standards have had their largest fall since records began 75 years ago. Wages are set to be no higher in 2028 than in 2008, which means two lost decades of wages for workers. Furthermore, even deeper public service cuts are planned for after the next general election, if the Tories win, deepening the austerity that has not only caused harm to key services on which people rely, but severely undermined growth in the economy.

When we have these big set-piece economic events in Parliament, the economy is talked about, but in such a way that is almost entirely divorced from the lives of people. We should remind ourselves that the economy is meant to serve people. How well it is performing should be judged by how well it is delivering for the vast majority of people. By that simple measure, the economy is failing.

We have a deepening social emergency. Some 14 million people are living in poverty, including 4 million children, in what is meant to be the sixth richest economy on Earth. One in seven people face hunger across the UK, according to the Trussell Trust, which is around 10 million people. We have more branches of food banks than we have branches of McDonald’s. Homelessness in our society is on the rise, as rents and mortgages soar, and of course that is just the tip of the iceberg, with many more families living in totally unsuitable, overcrowded and temporary accommodation.

Six million households are in fuel poverty, according to National Energy Action, and so are unable to afford to heat their homes to the temperature that is needed to keep warm and healthy. Sick people are unable to get the treatment they need because of the Government’s neglect of the NHS, creating record waiting lists.

This social emergency is not affecting us all. For some, the past few years have been boom time. Britain’s super-rich boosted their wealth by £31 billion over the past year alone, at a time when living standards have been under a near unprecedented attack for everyone else. This is no one-off; the wealth of British billionaires has increased by more than £430 billion over the past decade. Such vast fortunes are hard to imagine, so to put it another way, they have increased their wealth by £120 million every single day for the past 10 years. This soaring wealth of the billionaire class is the flipside of the weak wages that we see across society. As the share of the economy going to workers has gone down, so the share of the economy going to the super-rich has gone up.

Such soaring inequality is one reason why I have been campaigning for a wealth tax. Such a tax could create a huge social emergency fund to help people during this crisis. It could provide the much-needed funds to help rebuild the public services that have been hit so hard by a decade of austerity, and fund the investment that we need to build the infrastructure for a greener, fairer, high-wage economy. An annual wealth tax of just 1.5% on assets over £10 million would raise around £12 billion a year. It is worth pointing out here that this would apply only to wealth above £10 million. This is a measure that is backed by three out of four people, including more than two thirds of Tory voters.

Other reforms to tackle wealth inequality could also raise billions of pounds more. For example: equalising capital gains tax with income tax rates would raise up to £15 billion a year; tackling the non-dom tax break for the super-rich would raise up to £3 billion a year; and ending fossil fuel subsidies for oil and gas companies could raise £4 billion a year.

I wish to end my comments today on one sector that has been doing very well out of this crisis, and that is the banks. The banks, in my view, must now be made to pay their fair share. Just like the energy companies, the banks have used this crisis to line their pockets with windfall profits. They have done that by charging higher interest rates for loans but not passing the money on to savers—easy money indeed. Therefore, just like the energy companies, the banks should face a windfall tax on such unexpected and frankly unmerited gains. The pre-tax profits of the four big banks—Lloyds, Barclays, HSBC and NatWest—are up 79% so far this year, compared with the same period in 2022.

Spain’s progressive Government offer one example of what a windfall tax could look like. They introduced a 4.8% windfall levy on certain bank incomes above a threshold of €800 million. Replicating that here could raise almost £4 billion this year. But perhaps the simplest move would be to reverse the tax break for banks that the Prime Minister introduced. He slashed the surcharge on bank profits from 8% down to 3%, which has rightly been described by the TUC general secretary, Paul Nowak, as starving our public services of much-needed funds at the worst possible time. Reversing it could provide billions each year, for example, to introduce universal free school meals, to scrap the two-child cap, or to fund a proper pay rise for junior doctors. Let us not forget that the banks were bailed out when they were in trouble during the 2007 global financial crisis. It is now time for them to be taxed fairly, to help bail out our communities who are now in such difficulties.