Charter for Budget Responsibility

William Bain Excerpts

Tuesday 13th January 2015 Commons Chamber

[Mr William Bain (Glasgow North East) (Lab)]

Nothing says more about why we need change in 16 weeks’ time than the Government’s cynical attempt in this debate to divide Parliament and the country by tactical tricks and wheezes as a cover for their failure on the deficit and their inaction on the other big challenges that face our country: wages, productivity, inequality and banking reform.

This is a debate that the Chancellor has been plotting for months as his election battleground, but just last week we saw his attack on the fiscal policies of the Labour party collapse within hours. In 2010, he pledged to eliminate the deficit within five years, but now, having borrowed £200 billion more than he planned, he presents a watered-down charter for budget responsibility in a desperate attempt to ensnare the Opposition on tactics. This is a Chancellor who makes billions of pounds of unfunded tax commitments but refuses to allow the impartial OBR to cost all parties’ election spending promises. Today, his guile has deserted him and his economic failure has rebounded on him. From iron Chancellor to boomerang Chancellor in just five years: Britain surely deserves better than this.

When the OBR slashes its forecasts for receipts from income tax and national insurance contributions as comprehensively as it did in December, we have the proof that the Government are taking the country down the wrong path. In December, the OBR downgraded its forecasts for income tax receipts and national insurance contribution receipts for this and the next four fiscal years by a staggering £39 billion and £53 billion respectively, compared with its forecasts from March 2014. The bulk of that shift was down to much lower than predicted wage growth. That shows that our economy under this Government is simply not generating the scale and number of higher wage, higher skilled jobs that modern Britain needs to succeed in the world. That failure on skills and prosperity is led by a Chancellor who has been the worst for the nation’s pay packets since the 1870s.

[Mr Jim Cunningham (Coventry South) (Lab)]

When we look at the general trend over the past five years, we can see that the Chancellor thought that the problem was confined to Britain. He has consistently made excuses every time his targets have not been met because the Tories cannot face up to the fact that the crisis started internationally, particularly in America, but unless they face up to that, they will never get the economy right. They will tinker with it, but they will not get it right and as a consequence the cost of living has gone up and wage values have gone down by 6%.

[Mr Bain]

My hon. Friend makes an incredibly powerful point. The historic weakness of wage growth under this Government, the disastrous levels of productivity, the growth of insecure work, the failure of the Government to meet their targets on export-led growth and the fact this is a country in which the number of apprenticeships fell, rather than rose, in 2013-14 are not factors that any Chancellor who wants to get the deficit down should ignore. Tackling them will be central to any credible plan to get our deficit down and to move forward the living standards of millions of ordinary people in this country.

The reason for this Government’s failure on wages and tax receipts was explained to me by a constituent I met on her doorstep in Ruchazie last Saturday morning. It is important that the voices and experiences of ordinary people are brought into this debate. Her husband works as a security guard and earns barely above the minimum wage. He does not earn a living wage. She told me that life is tougher for her family than it was five years ago. They are working harder, but they have less to show for it. They do the right thing and get up early and go to work, but they have never felt so insecure. They keep going, but they speak for millions of people in this country who have suffered the same fate. In just 16 weeks, they will have the opportunity for change.

Like the Prime Minister chickening out of televised debates, the Chancellor is ducking out of an independent evaluation of our spending proposals because, like the Prime Minister, he knows that he would be the loser. All the Government have left are weeks of cynical tactics rather than a vision of hope for our country, but political stunts are no substitute for a national strategy for increasing our nation’s productivity, increasing the minimum wage over the next few years, restoring the promise of our young people with a credible plan for skills and rising apprenticeships, and making a plan for a fairer economy with rising living standards. If the Government find that task beyond them, they should get ready to move aside because others are ready to offer hope in place of fear in just 16 weeks’ time.

[Several hon. Members]

rose—