Autumn Statement Resolutions

Debate between Tanmanjeet Singh Dhesi and Alan Brown

Thursday 23rd November 2023 Commons Chamber

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

I want to paint a clear picture of the economic landscape facing families and working people across our nation—a landscape marked by challenges and hardships under the current Government. This reality is not just my opinion but has been highlighted most starkly by the Resolution Foundation. Households are expected to be £1,900 poorer because of the policies implemented by this Tory Government. As the shadow Chancellor, my right hon. Friend the Member for Leeds West (Rachel Reeves), eloquently explained, this is the first Parliament in which real household disposable incomes have fallen. This confirms what people feel in their pocket and see on their bank statements.

Today, as I close this debate on an issue of paramount importance for not only our economy but the lives and livelihoods of millions across our country, I am reminded of two words: thirteen years. The last 13 years have been not just unlucky for some but devastating for millions who are finding it harder to get by and for everyone using public services, which have literally been run into the ground. After 13 years of Conservative Government, this is where we find ourselves.

Globally, in the last 13 years we have seen technology leap from flip-phones to virtual reality, witnessed three World cups and three royal weddings, and seen humanity land a rover on Mars. Perhaps it is easier to explore other planets than it is for this Conservative Government to get our economy growing and improve the living standards of working people. Over the last 13 years, the Conservatives have weakened our national health service, made working people worse off, increased our rates of relative poverty, reduced opportunities and hampered economic growth.

As my hon. Friend the Member for Stretford and Urmston (Andrew Western) rightly said, this statement reveals the scale of Conservative economic failure. Household incomes are set to be 3.5% lower next year in real terms than they were pre-pandemic—the biggest hit to living standards on record, as elucidated by my hon. Friend the Member for Streatham (Bell Ribeiro-Addy). Real wages are set not to rise but instead to fall this year by 0.7% and are almost flat next year. Real average earnings, according to the Resolution Foundation, are not forecast to return to their 2008 peak until 2028, marking a totally unprecedented 20-year pay stagnation—a point hammered home by my hon. Friend the Member for Leeds East (Richard Burgon).

Worse still, the highly respected independent Office for Budget Responsibility confirms that the worst is yet to come for mortgage holders, with rates peaking at far higher than previously expected. The Government’s economic recklessness means a Tory mortgage penalty right across the country now and in the future. My hon. Friend the Member for City of Chester (Samantha Dixon) lamented the dire predicament faced by her constituents. Likewise, in my Slough constituency, families with a mortgage are now expected to find £290 more per month. I ask the Minister quite simply, where are they meant to find that in their already stretched budgets?

This Government’s rhetoric is at odds with their tax-raising reality over this Parliament, as explained at length by my right hon. Friend the Member for Hayes and Harlington (John McDonnell), who spoke with great passion and experience. Sadly, people cannot pay the bills with the boasts and hot air from Conservative Ministers. Let us not forget that in this autumn statement, despite their pledge to cut taxes and reward hard work, the Conservatives have introduced 25 tax rises—yes, 25—hitting working people and business. Are this Government the proud parent of this 13-year-long project? Growth has stagnated and opportunities have dwindled. As the shadow Secretary of State for Business and Trade, my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), remarked, growth has been revised down for next year, the year after that and the year after that as well.

While Ministers try to explain away their failures, let us look at our international standing. The UK economy currently stands in sharp contrast to the dynamism and potential seen in other sectors globally. The UK is set to have the weakest growth among the G7 in 2024, according to the International Monetary Fund. It is as if those on the Government Benches have entered the race but are still stuck in first gear. This failure to get a grip of our economy has serious consequences, including poverty, which my hon. Friend the Member for Liverpool, Wavertree (Paula Barker) described in painstaking detail.

Under the Conservatives, the tax burden has risen by a staggering £4,300 per household. Despite the rhetoric of tax cuts, the reality is that this autumn statement has failed miserably to alleviate the burden placed on people by this Government. Going into the autumn statement, the Conservatives had already put in place tax increases worth the equivalent of a 10p increase in national insurance. Yesterday’s much-hyped 2p cut clearly will not compensate for the Government’s tax increases; neither will it compensate for higher monthly mortgages or for worse public services, which, as my hon. Friend the Member for Warwick and Leamington (Matt Western) highlighted at length, have been decimated. The Conservatives are like a burglar who empties your entire home, but then expects you to be grateful when they give you back your toaster. The public will rightly see through what the Chancellor has presented in this autumn statement.

In an era where innovation should be flourishing, we are instead witnessing a climate of hesitancy and stagnation. Businesses—which are the backbone of the economy—feel this, and Labour rightly understands it. From my personal journey of building and growing a start-up construction business, I know full well the challenges that need to be faced in order to reach success. That experience in the growth economy contrasts starkly with the current economic climate under this Government. Yesterday, for example, the Institution of Civil Engineers highlighted the National Infrastructure Commission’s call to make faster progress on long-term goals for infrastructure. The ICE’s verdict on the Government was that

“for those looking for direction from the chancellor on how the UK will pick up the pace, today’s autumn statement was disappointing.”

It is right to be concerned.

The OBR projects that long-term business investment will continue to fall, with gross fixed capital formation by corporations now significantly lower than under the last Labour Government 13 years ago. That trend is only exacerbated by the autumn statement’s lack of a coherent industrial strategy—indeed, where is the Government’s industrial strategy? Their myopic policies fail to inspire confidence or stability in our business sector.

Some important and powerful contributions have been made in this debate, including that of my hon. Friend the Member for Bradford East (Imran Hussain), who encapsulated exactly why the British people have had enough.

[Alan Brown]

On the topic of construction and the hon. Gentleman’s connected point about industrial strategy, does he agree that instead of spending £30 billion to £40 billion on Sizewell C nuclear power station, that money would be much better invested in renewable energy, accompanied by an industrial strategy to create a proper UK-based supply chain?

[Mr Dhesi]

The Labour party believes that we must see a focus on renewable energies as we transition the economy, which includes investment in the nuclear sector. The hon. Gentleman rightly highlighted the construction industry; from my various conversations with leaders in that industry, I know they have been put in a very difficult position by this Government’s lack of direction, especially with regards to the building of housing. As many hon. Members have rightly highlighted, we have a housing crisis, so where is the Government’s investment to deal with that crisis and ensure that our construction industry grows, thereby providing more jobs for the hard-working British people?