Budget Resolutions

Debate between Steve Reed and Sara Britcliffe

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.