Budget Resolutions and Economic Situation

Stephen Doughty Excerpts

Tuesday 21st March 2023 Commons Chamber

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

This year has been one of profound difficulty and hardship for many of my constituents, and in many areas the Budget will fail to allay their fears.

I want to cover a few issues, starting with small and medium-sized businesses. While the Chancellor could have used last week’s Budget as a means to rebalance the scales in favour of the small businesses that form the backbone of the Welsh and UK economies, many SMEs will feel that instead they have been short-changed and overlooked. My constituency, like many others, is filled with dynamic, vibrant and resilient small businesses, which are integral to this country’s recovery from the pandemic, to the economic growth that appears to have eluded seven Tory Chancellors, and to the long-term prosperity of our country. I recently met many local SMEs with my constituency colleague, the Minister for the Economy of Wales Vaughan Gething, and they raised many issues with me, from energy costs to recruitment and skills and the importance of infrastructure.

However, the Government’s priorities in no way reflect that picture. I agree with the criticism from the Federation of Small Businesses that small business owners,

“will be wondering why the choice has been made to overlook them.”

We have seen £27 billion directed at big business, with small and medium businesses being told that their role is insignificant in comparison. On the Opposition side of the House, we know the value of small business: we would cut business rates for small firms, give grants to go green and tackle late payments from big businesses.

The Chancellor also brushed over the contribution the co-operative sector makes to our economy—here I declare an interest as a Co-operative MP and draw the House’s attention to my past interests. There are currently 7,000 co-operatives in the UK and this critical sector contributes £40 billion to the economy each year. Co-operatives are ambitious, with 61% expressing ambitions to grow compared with 53% of small businesses generally, but co-ops and mutuals are struggling under this Government. The recent crisis at John Lewis, which faces the prospect of having to dilute more than 70 years of a tradition of collective ownership, is a symptom of the Government’s refusal to make sensible changes, such as introducing permanent capital to enable mutuals to access new funding without having to change their status.

The creative industries are absolutely critical in my constituency. They are worth £115.9 billion in gross value added, and make up 6% of the economy, employing 2.3 million people, including many of my constituents. Although we welcome the audio-visual expenditure credits, which are replacing the tax relief, they stand in contrast to the cuts that could be made to the BBC orchestra and singers. Indeed, my constituents have raised with me not only the cuts to those organisations but the impact of energy costs on grassroots music venues—one is closing every week across the UK, but the Chancellor has failed to heed the evidence submitted by the Music Venue Trust and others about the crisis that they are facing.

Steel and green steel, which have been raised by other hon. Members, are absolutely critical in my constituency and crucial for our construction industry and many key infrastructure projects, but the Government have lacked a clear industrial strategy on steel. The Labour party would invest in green steel and have a steel renewal fund. The UK public are with us on that: 70% said in a recent poll that the Government should intervene to provide competitively priced electricity to the UK steel industry.

Pensions have been a core issue. Although the Government have been happy to provide support for the pension pots of the richest 1%, constituents of mine who lost their Allied Steel and Wire pensions, and who were part of the financial assistance scheme, are still being short-changed. Indeed, some are now receiving 40% less than they should because of a lack of index linking and a lack of action. We met the former Pensions Minister, the hon. Member for Hexham (Guy Opperman) back in 2021, but two years on, I have yet to hear what answers he has to the serious questions that those pensioners are raising. There is not a lot of joy in this Budget, and there are some serious questions for the Government.