Budget Resolutions

Steve Reed Excerpts

Monday 1st November 2021 Commons Chamber

[Steve Reed (Croydon North) (Lab/Co-op)]

First, I thank the Secretary of State for highlighting Crystal Palace’s glorious victory over Man City—I do so with apologies to my hon. Friend the Member for Manchester Central (Lucy Powell), who is sitting next to me. In their own way, Crystal Palace are attempting to level up the premiership.

Despite that happy news, I am afraid that the grim truth is that after a decade of Conservative rule, Britain is more divided and unequal than at any time in living memory. Many of the trends that led us here go back decades, but this Government have made the situation far worse. To address the problems that caused this, we need to repair the broken foundations of our politics and our society. We must re-establish the link between hard work and fair pay; support families as the essential bedrock of our society; rebuild the fabric of our communities; and remake Britain as a country that works for everyone.

This Government will not do that. Their Budget was supposed to be about levelling up, but it did not even convince their own MPs. The previous Secretary of State, who used to sit opposite me, laid into the Government over soaring taxes. The former Brexit Secretary, the right hon. Member for Haltemprice and Howden (Mr Davis), slammed the Government’s national insurance hikes. Conservative MPs past and present lined up to denounce the Budget in the media. Perhaps most surprisingly of all, the Chancellor himself seemed strangely unconvinced by what he read out to the House last Wednesday. He left the country facing the highest level of personal taxation for 70 years and then pleaded with us, rather unconvincingly, that deep down he is a tax cutter really. The Chancellor sounded for all the world like a hostage forced by the Prime Minister to read out a script on video.

So what does this tell us about the Government’s plans for levelling up? First, the Government are deeply divided between a Chancellor who does not believe his own Budget, and a Prime Minister and, I presume, the Secretary of State, who made him read it out. They are split down the middle between blue wall, low-tax, traditional Tories, including the Chancellor, and the red wall reformers, led by the Prime Minister and the Secretary of State, who are attempting a top-down coup against their own party.

Secondly, the Government are now distancing themselves from their own record, thereby disorientating their party. The Chancellor told us repeatedly that spending was reaching its highest point since his own party started cutting in 2010—as if getting back to where we were more than a decade ago was in any way good enough. The Prime Minister and the Secretary of State are trying to present this as a brand-new Government unconnected to the previous two Conservative Administrations, of which they were senior members. This is not levelling up the country; it is covering up their record.

Thirdly, the Secretary of State does not recognise the contradictions between an economic policy based on crony capitalism and his claims about national renewal. The Conservatives cannot build a fairer country while they are siphoning off billions to their wealthy mates through crony contracts. It is that simple.

Fourthly, the Secretary of State still cannot tell us clearly what he means by levelling up. I was hoping for a clue in his speech this afternoon but, sad to say, we did not hear one. At the Conservative party conference Ministers used at least eight different definitions, and they still cannot tell us how they would measure it. Let me help the Secretary of State: levelling up should mean opening up opportunity to people and communities in every part of the country. But that is not what the Conservative party is about. The Conservatives have broken Britain and they cannot bring it back together.

The pandemic exposed just how badly the Conservatives have broken the link between work and reward. It is the workers on the frontline who care for others, empty the bins or sweep the streets who are the lowest-paid and the most neglected. They kept this country going—they are the heroes we all applauded—yet their standard of living has been falling for a decade.

When the Chancellor announced an end to the public sector pay freeze, he did not provide the funding to put wages up. Pay in the north-east is now £10,000 a year less than in London. Average wages are down 4% in the west midlands, down 5% in Yorkshire and down 6% in the east of England.

Our held-back regions desperately need a radical plan to reindustrialise around the green economy and digital technology, and to bring good new jobs to every part of the country. The shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), has announced bold plans for a green new deal to do precisely that, but the Chancellor did not mention the climate crisis even once in his speech, just days before COP26 was due to start in Glasgow.

This Tory decade has been the weakest for pay growth since the 1930s, yet now the Tories are cutting universal credit for the lowest earners, hiking up taxes on working people and eating up what is left of people’s incomes with rising levels of inflation. As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said, workers are facing an assault on their living standards because of this Government’s economic mismanagement. The Conservatives are now the party of high taxes because for a decade they have been the party of low growth. In the words of the shadow Chancellor:

“Voters won’t be fooled by a smoke-and-mirrors budget that is presented as being on the side of working people but hands a tax cut to banks while hiking up council tax, national insurance and freezing personal allowances.”

Families are the fundamental building blocks of our society. Any Government who want to level up the country should support families to nurture the young and cherish the old, but under this Government half a million more children now live in poverty, with the most dramatic increase in the north-east of England. The Government have provided only a fraction of the funding that their own adviser told them kids need to catch up on the education they missed during the pandemic. We cannot level up the country by denying children the chance to learn. If kids do not have the foundation of a good education to build on, their life chances are stunted right from the start. No parent can accept that.

Older people are suffering, too. The Prime Minister ignored the social care crisis for two years, then introduced a punitive tax on jobs that will provide next to nothing for social care for at least three years. By relying on council tax rises to plug some of the gap, the Government create further divides, because council tax raises more money in richer areas than in poorer areas, creating a postcode lottery on care.

With all these new Tory taxes, the Resolution Foundation tells us that families will end up paying £3,000 more tax a year by the middle of this decade than when the Prime Minister took office. Families’ disposable incomes will be lower and the public services on which they rely will be cut harder, while a landlord with a portfolio of properties, a shareholder or a banker will pay nothing more. We cannot level up the country by clobbering hard-working families while letting the rich get away without paying their fair share.

Communities are a vital building block of our country. They give us a sense of belonging. They are a rich network of relationships, associations and shared values, but the Conservatives have spent 11 years undermining them. We have already lost 10,000 shops, 6,000 pubs, 1,200 libraries, 800 youth centres and a similar number of Sure Start centres under this Government, and they are now refusing to protect our high streets by levelling the playing field on tax between independent high street shops and the online giants, which pay far less. Because the costs of social care outstrip any increase in council funding, not least because of rising demand, communities now face yet more cuts to youth services, mental health services, street cleaning, bin collections, park maintenance, social housing and the voluntary sector. We cannot level up communities if we strip out the fabric that binds them together.

[Sara Britcliffe (Hyndburn) (Con)]

Does the hon. Gentleman agree that it is brilliant then that the Conservative-run Lancashire County Council has reopened all of the libraries that the Labour Administration closed and is continuing to invest in our libraries?

[Steve Reed]

I hope the Conservative council will also be opening all the Sure Start centres that were closed because of the actions of the Government.

The truth is that if we look at what the Government are doing with the towns fund, for instance, which is something that Conservative Members like to talk about, we can see that it operates in the same way as a burglar, who first strips a house bare and then expects gratitude for returning the toaster. Blackpool, Darlington and Hartlepool are all getting back barely a quarter of the funding that the Conservatives took away in the first place, but Conservative MPs have nothing whatever to say about the way that their communities have been stripped bare by this Government.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

The hon. Gentleman has now been speaking for 10 minutes and I am yet to hear anything about what the Labour party would do if it were in Government and we were not. What would the hon. Gentleman cut that we are not cutting and what would he invest in that we are not investing in?

[Steve Reed]

I am looking forward to telling the hon. Gentleman that later on in my speech if he could just restrain his enthusiasm for one moment.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

The hon. Gentleman refers to the towns fund. He will obviously celebrate the fact that Kidsgrove got £17.6 million. That means that £2.75 million can go towards refurbishing the sports centre for when it reopens in spring 2022. That sports centre had been closed by the then Labour-run borough council because it did not want to spend a single pound on it.

[Steve Reed]

I am delighted that areas are getting back some of the money that the Conservative Government took away from them in the first place, but perhaps if Conservative MPs had held the Government to account a little bit harder over the past 11 years, that money would not have been stripped away from these communities in the first place.

Let us look at other pots of money that the Government are so happy to keep announcing and re-announcing. Local groups have still not been told whether they will get funding through the community renewal fund. Mid-project reviews are supposed to start this month, but many of those projects have not even started yet. Government delays mean that the jobs and investment linked to those projects are now at risk of collapse. The Secretary of State had told us in his usual courteous manner that there would be an announcement last week, but, sadly, we are still waiting. If possible, we would like to know what on earth is going on.

[Janet Daby (Lewisham East) (Lab)]

I heard nothing whatever in the Budget about the increase in the use of food banks across this nation. In my own constituency, food bank use has trebled in recent years.

[Steve Reed]

My hon. Friend makes an important point. One of the things that the Government have done over the last 11 years is dramatically increase levels of poverty across the country. They have not been levelling the country up at all, and now they are trying to cover up their track record since they came into Government back in 2010.

To make the situation worse, the Government’s plans to change the local government funding formula—what they call, in an Orwellian way, “the fair funding formula”—will divide communities even further. Analysis by the Local Government Association found that millions of pounds would be redirected away from poorer towns in the north of England to wealthier southern shires, and that 37 of the Conservative MPs newly elected in 2019 would see millions of pounds cut from their towns, including Workington, Sedgefield, Stoke-on-Trent, Redcar, West Bromwich, Bishop Auckland, Grimsby and Leigh. That is not levelling up Britain; it is pulling Britain apart.

Whether it is work, families or communities, this Conservative Government have made our country more unequal. They have ushered in an age of insecurity, where public services have been decimated, wages have fallen in real terms, jobs are more precarious than ever before, our high streets are struggling to survive, and British people are forced to pay the highest housing costs in Europe for some of the worst quality housing. These levels of inequality are not just morally wrong; they make our country weaker. We all pay the price of inequality, with higher levels of crime, family breakdown and mental ill health, and we pay the price a second time by denying people the opportunity to reach their full potential for themselves, their families and their communities. Levelling up must mean opening up opportunity, not closing it down in the way that this Government have done for the last 11 years.

The Secretary of State will find that he cannot fix regional inequalities because the biggest obstacle in his way is his own party’s marriage to an economic model that is based on crony contracts and waste, and that starves whole regions of capital investment. We need new institutions in our regions—such as regional banks to direct investment where it is needed most—if we want the economy to work in the interests of working people in every part of the country.

[David Simmonds (Ruislip, Northwood and Pinner) (Con)]

The hon. Gentleman makes some interesting debating points, but will he share with the House his view why, despite this bad news that he has shared with us, the Conservatives remain overwhelmingly the largest party in local government and made significant gains in the recent local elections, especially in areas that traditionally favoured the Labour party?

[Steve Reed]

Given the Government’s announcement of their intentions to level up the country, the interesting thing will be whether those people feel that they have been levelled up at the next general election and the next set of local elections. That is the only test of what this Government are announcing that will really matter.

The Conservatives have broken the link between work and reward with a decade of stagnant wages and a tax raid on working people; they have undermined families by pushing half a million more children into poverty and refusing to invest properly in kids’ catch-up; they have ripped the fabric out of our communities instead of harnessing the innovation, creativity and compassion that they have to offer; and they have weakened our country with an economic model that has deepened the divides between regions and within communities. That is the polar opposite of levelling up.

[Mr Richard Holden (North West Durham) (Con)]

I am listening to the hon. Gentleman’s speech and I am really interested in what he has to say, but I cannot determine from what he has said so far whether he thinks that the Government are spending too much or too little. Perhaps he could be clear with the House and let us know.

[Steve Reed]

What the shadow Chancellor, my hon. Friend the Member for Leeds West, said—and I agree—was, wouldn’t it be nice if the Government asked everyone to bear their fair share of the tax burden, rather than, as this Government do, always going first and foremost to working families and clobbering them, but letting people who own assets, such as bankers and landlords, off the hook, absolutely scot-free? That is not fair. We want to see fair models of taxation.

What we need to do now is to remake our politics by tackling the power inequalities that allowed all this to happen in the first place. Labour would open up power across the country with a radical model of devolution that gets power out of Whitehall. We would give people a voice and the power to use it in the workplace, in their community and over the public services that they use. Instead of undermining work, we will respect the hard work and sacrifice that people make for their families, re-establish the link between hard work and fair pay, and invest fairly across the whole country. We will establish clear measures for levelling up to hold the Government to account for what they do or do not deliver.

This Budget is not about levelling up; it is about covering up the damage that the Government have done in the past 11 years. By deepening the divides across this country, the Government have closed down opportunity and made Britain weaker. Only Labour will bring Britain together, so that every British person, wherever they live, can reach their true potential—for themselves, their family, their community, and this country that we love.