Budget Resolutions

Tulip Siddiq Excerpts

Tuesday 12th March 2024 Commons Chamber

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

This Budget was the last gasp of a dying, desperate Government. It did nothing to address 14 years of Conservative economic failure and, as always with this Government, it is working people who pay the price.

Many Opposition Members have made powerful contributions to today’s debate, and I apologise for not being able to mention every single one. However, I pay tribute to my hon. Friend the Member for Huddersfield (Mr Sheerman), who said it was his last ever Budget speech today.

The British people are struggling with the highest tax burden in 70 years, and they still face further tax rises over the next five years—a point that was powerfully made by my hon. Friends the Members for Tamworth (Sarah Edwards) and for Newport West (Ruth Jones). Food prices are still 25% higher than they were two years ago. Rents are up by 10%, and a typical family will pay an extra £240 a month when remortgaging this year. Nothing the Chancellor said in last week’s Budget changes that. As much as he tries, he cannot hide from his Government’s record: 14 years of low investment, stagnant wages and poor productivity, the country in recession, wrecked public finances and an economy crippled by debt. The Chancellor tried to wash away the realities last week, but families in our constituencies cannot do the same. People feel worse off under the Conservatives because they are worse off.

As my hon. Friend the Member for Liverpool, Walton (Dan Carden) focused on, the Office for Budget Responsibility—not us—has now confirmed that this will be the worst Parliament on record for living standards. Let me repeat that, because it is worth repeating: this will be the worst Parliament on record for living standards. It is the only Parliament on record in which living standards have fallen. Real pay has gone up by just £17 a week over almost a decade and a half of this Conservative Government. When the Labour party was last in power, wages rose by £183 a week over 13 years. After 14 years of Conservative rule, people have less money in their pockets.

As my hon. Friend the Member for Bedford (Mohammad Yasin) touched on, the latest ONS figures show seven consecutive quarters of falling GDP per capita from the start of 2022. This is the longest period of economic stagnation in this country since the 1950s, and now, under this Prime Minister and this Chancellor, the country has fallen into recession. Government debt has almost tripled under the Conservatives from £1 trillion to just under £2.6 trillion.

Did last week’s Budget give the British people or British businesses any hope that the Government could turn things around? Absolutely not. Household disposable income is set to fall by £200 per person over the course of this Parliament. Real GDP per capita is expected to be lower at the end of this year than it was at the start of this Parliament, and borrowing has been revised up in the next five years of the forecast period. The Institute of Directors described the Chancellor’s efforts as an “unremarkable Budget for business”, and the British Retail Consortium has said that it

“will do nothing to turbo charge investment and growth in communities”.

This was a failed Budget from a failing Government.

[Sarah Edwards]

Does my hon. Friend agree that this Conservative Budget has confirmed that the next Government will receive the worst economic inheritance since the second world war? Does she agree that the Tories should listen to our constituents, call a general election now and stop taking a wrecking ball to the economy on their way out the door? [Interruption.]

[Tulip Siddiq]

I thank my hon. Friend for her intervention. Those on the Conservative Benches do not want to hear it, but if they have so much confidence in their record, why do they not do as she asks, call a general election and put a test to the public?

Unable to defend his own Government’s records and unable to offer any plan to get the country out of the economic mess that his party created, this Chancellor has resorted to undeliverable promises. When we thought things could not get any worse, the Chancellor bizarrely ended his Budget last week with a £46 billion unfunded tax plan to abolish national insurance. This would leave a gaping hole in the public finances, put family finances at risk and create huge uncertainty for our pensioners. This is even bigger than the unfunded tax cuts announced in the Conservatives’ mini-Budget that added hundreds of pounds to people’s mortgages, as my hon. Friend the Member for West Ham (Ms Brown) powerfully pointed out. I will be listening intently to the Minister’s response today, and I hope that he will set out how his Government would fill that gaping hole in the public finances to avoid rerunning the disastrous experiment that crashed the economy just 18 months ago.

[Fleur Anderson]

Does my hon. Friend agree that it is absurd that throughout today’s event the Government have been unable to confirm how they will pay for their unfunded £46 billion plan to abolish national insurance contributions? Where is the money coming from?

[Tulip Siddiq]

rose—

[Alan Brown]

I thank the hon. Lady for giving way. I asked earlier about what the Institute for Fiscal Studies has called a conspiracy of silence from both Labour and the Conservatives. Is Labour sticking with the baked-in £20 billion of future departmental cuts that are in the Budget, and if not, how is Labour going to pay for that?

[Tulip Siddiq]

rose—

[Mr Deputy Speaker (Sir Roger Gale)]

Order. I fully appreciate the orchestration, but it would be quite a good idea if one intervention was responded to before the next one was made.

[Tulip Siddiq]

Apologies, Mr Deputy Speaker. I will answer both interventions by saying that I know those on the Conservative Benches do not want to hear it, but if you make a pledge without the plan, you have to clarify where the money is coming from—[Laughter.] It is not a laughing matter. It is causing havoc in people’s finances.

Then again, nothing would surprise me from this clown show of a Government. Less than a week after committing to a British ISA, the Chancellor has apparently U-turned and ditched the plan until after the election, because he has apparently just noticed that he has no idea how he is going to pay for it. Another U-turn, another uncosted announcement, another promise without a plan from this clueless Conservative Government.

Turning to the other tax cuts in the Budget, Labour has consistently said that we want to reduce the tax burden on working people. That is why, when the current Prime Minister wanted to increase national insurance two years ago, we opposed it. Let us be under no illusions: we support the measures announced last week to bring national insurance down by an additional 2%, but that does not change the fact that this Government have raised the tax burden to record levels and taxes are continuing to rise. Under the Chancellor’s plan, households will be £870 worse off on average. His decision to freeze tax thresholds will create 3.7 million taxpayers by 2028-29.

As my hon. Friend the Member for Nottingham South (Lilian Greenwood) pointed out, OBR figures show that, as a result of last week’s announcements, for every 10p extra that working people pay in tax under the Conservatives, they will get only 5p back. And the Government expect the British public to thank them for it! However the Chancellor tries to spin it, his Budget means that Britain will go into the next general election with taxes at their highest level since 1949.

Although we will always call out the Conservatives for pickpocketing the British taxpayer, we welcome their recent pickpocketing of Labour policies. Labour has long argued that people who make Britain their home should pay their taxes here. Bizarrely, however, the Prime Minister said that scrapping the non-dom status would somehow cost Britain money. Even more bizarrely, the Chancellor previously tried to argue that the non-dom status supports jobs and that reforming it would cause long-term damage to growth.

I hope the Economic Secretary to the Treasury will explain what caused this road to Damascus moment. Is he personally responsible for finally getting his party to listen to us about the importance of closing the non-dom loophole, which the OBR estimates will raise £3 billion a year? As my right hon. Friend the Member for Walsall South (Valerie Vaz) and my hon. Friend the Member for Wakefield (Simon Lightwood) said, Labour first called for the loophole to be closed two years ago, meaning that the Government have cost the country £6 billion that could have been spent on precious public services.

I do not deny that the Conservative party has come a long way since their opposition to our windfall tax on oil and gas producers but, even after yesterday’s announcement of a one-year extension, the Chancellor is leaving loopholes that mean the energy giants will still pay billions less in tax. Surely the Government have learned by now that they would save themselves a lot of time, and the country a lot of money, if they adopted Labour’s policies in full.

This exhausted and directionless Conservative Government are out of ideas and out of time. All they had to offer last week were unfunded promises and an ever growing tax burden on working people. In contrast, our offer to the country will be carefully costed and fully funded, and it will always put working people first. The Conservatives have failed on growth, failed on living standards and delivered only stagnation and chaos.

Labour’s economic plan will build on the pillars of stability, investment and reform: stability brought about by iron discipline and guarded by strong fiscal rules and robust economic institutions. [Interruption.] Conservative Members love chuntering, but they would hear our plan if they listened properly. Investment—we will work with the private sector so that we can lead the industries of the future and make work pay. Reform—starting with our planning system, we will take on vested interests to get Britain building again.

Britain deserves better, Britain deserves change and the British people deserve an election.