Budget Resolutions and Economic Situation

Tristram Hunt Excerpts

Tuesday 22nd March 2016 Commons Chamber

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

I think we can all agree that this has been a pretty disastrous Budget, and that was the case even before the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) revealed the Government’s extraordinary mendacity in their pursuit of policies for political purposes rather than for the national economic interest. What is worse, as my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) said, they are hammering the working-age poor because they do not vote Conservative.

Even on the Chancellor’s own terms, it is a shocking state of affairs. He has breached two of his three fiscal rules. Indeed, this Budget might end the period of fiscal rules that we have enjoyed for the past two decades. He has failed to meet his commitments to get debt falling as a share of GDP each year and he has failed to cap welfare spending. He tried to sweeten that with a spoonful of sucrose replacement, but we all saw through it.

The Chancellor is on track to meet only his third target, because he is deploying all sorts of fiscal shenanigans. He is rescheduling capital investment and shifting a one-off boost to corporation tax receipts. We also have to find £3.5 billion in unprotected spending.

The Chancellor is now set to borrow £38 billion more over the course of this Parliament than he planned just four months ago. Worst of all, this Parliament of productivity has stalled at the first outing. The OBR is clear on the collapse of productivity, even over the past six months.

Where I do agree with the Government is on the risk posed to our economy by fears of Brexit. The latest evidence from the CBI spells out the immediate costs to the British economy. Why, at a time of such fragile economic growth, would we knowingly want to turn our back on one of the most successful single markets in the world?

The key issue that we look at today is the morality of this Budget. To balance the books, the Prime Minister has chosen to focus on the weakest and most vulnerable in society. As the IFS has reported, the Government’s tax and benefit changes have

“resulted in significant losses for those of working age in the bottom half of the income distribution.”

Then came the hit on the disabled, with the assault on PIP, now thankfully reversed. But who gained from all that? Well, it was those paying capital gains tax. Half went to 35,000 individuals with incomes of £100,000 a year or more. It is a totally shocking result. According to the Resolution Foundation, the poorest 30% of households are set to lose around £565 by 2020, while the richest 30% of households are set to gain around £280. That is the morality of the Conservative party, and that is why we will be voting against the Budget tonight.