Budget Resolutions

Debate between Steve McCabe and Rushanara Ali

Thursday 7th March 2024 Commons Chamber

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

After 14 years, we needed a sober and serious plan to revive our economy, boost productivity, and encourage entrepreneurship and investment to power serious economic growth. We needed a Budget for growth. Instead, what did we get? We got reckless gimmicks and political trickery.

When the country is crying out for renewal and investment in public services, this Budget puts party before nation. After 14 years of Conservative rule, our economy has been wrecked and vandalised. Before yesterday’s tinkering around the edges, we knew that public debt as a share of national output was at its highest since the 1960s. Debt interest payments are at their highest level since the second world war. The economy is smaller per capita than when the Prime Minister took over after the mini Budget fiasco, when his predecessor and the then Chancellor crashed the economy. This will be the first ever Parliament in which living standards, as a measure of real household disposable income, have fallen.

The Conservatives now expect us to rejoice in their planned expenditure of £9 billion on tax cuts, which will be funded by increased borrowing. This will be dwarfed by the £27 billion of tax rises that came into effect last year, and the further £19 billion that is due to come into effect after the election, because of the choices and the decisions that they have made.

Let us look at the impact of these measures on different groups. Research by the Women’s Budget Group shows that single men will gain, on average, close to £500 more a year than lone mothers from the combined national insurance cuts in the autumn statement and spring Budget. The Institute for Public Policy Research estimates that half the tax cuts will go to the wealthiest households, and just 3% to the poorest.

We also heard the Chancellor boast yesterday of the Conservative party’s intentions to scrap national insurance altogether. Without any plans to fund this, we would see a £46 billion black hole in the country’s finances every year. That is deeply irresponsible. The Conservative party should have learned its lesson, having crashed the economy with the omnishambles of its mini Budget and its £45 billion of unfunded tax cuts, which came at a very high price, particularly in relation to costs and mortgage hikes. And people are still living through that crisis, while the former Prime Minister remains in denial, as she goes off and earns huge amounts of money, dining out on having crashed the economy. This is why my right hon. Friend, the shadow Chancellor, has committed to upholding and strengthening the role of the Office for Budget Responsibility. Only Labour can deliver the economic stability that this country desperately needs and put an end to the Conservative party’s fantasy of unfunded and unsustainable tax cuts.

[Steve McCabe]

I just wonder whether there is any scope for a special “crash the economy” tax, so that we can claw back some of the money that the former Prime Minister has earned from her speaking tour.

[Rushanara Ali]

For a start, the former Prime Minister could certainly donate her earnings to the millions of children now living in poverty—poverty that was worsened by her crashing the economy. The parents of children in my constituency are having to work even more to make ends meet, particularly to pay their mortgages, which in some cases have doubled. That is the consequence of the rot that she and her Chancellor caused by crashing the economy.