Budget Resolutions and Economic Situation

Steve McCabe Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Most Budgets lose a bit of their lustre as the days wear on, but this one started to disintegrate before it was delivered, during its delivery and, spectacularly, afterwards. First there was the great pension reform that never materialised. Then the pound suffered a rocky period as Mr Memory—not!—tried to forget the deficit and the borrowing, and the fact that growth and exports should by now be seeing the sunny uplands as he had predicted. He then managed to knock down the share value of A.G. Barr, Britvic and Tate & Lyle with his clumsily scrabbled together announcement of the sugar tax. What we have learned over eight Budgets is that this guy has run out of excuses and is rapidly running out of friends. He is now correcting previous Budget errors—his errors. We see a cut in capital gains tax, which he increased in 2010, an increase in insurance premiums to pay for his cuts to flood defences, cuts in North sea taxes from the man who ignored advice and increased them in 2011, and a promised cut in business rates for small business, except that local authorities were promised such rates only four months ago, which is another £1.7 billion unaccounted for. The Government say that local authorities will be compensated, but will they be only blue authorities as usual?

What are we left with? We have the abolition of class 2 national insurance contributions, which on the surface will help the self-employed, although we need an assurance that it is not a cunning ploy to make them ineligible for employment and support allowance and another hidden welfare cut. Personal allowances will be raised, which is good for the top half of earners. There are also some new capital projects. The Chancellor is cutting corporation tax, which helps the service sector, but there is no sign of the rebalancing of the economy that he promised. There is nothing for manufacturing on capital allowances, and, of course, 9% of the catapult innovation resources is going to the Midlands and 46% to London. There is not a hint of support for the WASPI campaign. We have seen a legacy of 14% council tax increases, meaning an average of £162 for Birmingham households, to pay for his cuts to the police and social care. That is his plan for Birmingham.

In the fall-out of the Budget, we have been told that there are no new plans to attack the disabled. However, in a little-noted item, the Department for Work and Pensions is to receive £22 million to hire more staff to defeat disabled people’s claims at PIP tribunals. Maybe there will be more cuts for the disabled after all. The Chancellor has failed. He has broken every promise. He is finished.