Budget Resolutions and Economic Situation — House of Commons, 2015-07-13
Topic: Macroeconomics
Wesley Paul William Streeting (Labour, Centre-left): It is a pleasure to speak in the debate and to follow so many hon. Members who made excellent maiden speeches This is a Budget that puts politics above economics, which we have seen reflected on subsequent days in the interventions from those on the Treasury Bench and the very well read interventions from the Whips’ briefings from those on the Government Back Benches I want first to turn to the constant myth we hear about the record of the previous Labour Government. We are told time and again that that Government were somehow profligate, which led to the crash of the economy—[Hon. Members: "Yes!"] Government Members say yes, but it may interest them to know that public spending accounted for about 40% of gross GDP under Thatcher, 38% under Major and 37% under Blair and Brown. In the 10 years of Labour government leading up to the crash, we had cut the deficit and the national debt—[Interruption.] Since Members on the Treasury Bench are so exercised, perhaps they can tell us why, if our spending plans were so bad, they backed them pound for pound until the crash; or whether they accept, as they should, that the mess we find ourselves in was actually the result of the banking crisis, in which the state had to nationalise a huge amount of private debt When has the Conservative party ever been the party to which we turn in the case of weak regulation? Where were the calls from the Conservative Opposition during years of Labour government to tell us that City regulation was insufficient? We did not hear those cries. There was a banking crisis; it was not the result of the previous Government. It is understandable that Government Members want to perpetuate the myth to entrench their political position, but that is about politics rather than economics. Having listened to the Chancellor’s Budget speech and to the speeches of Government Members in the days following it, I know that there is absolutely no way that the Conservative party can claim to be the party of the worker, and it seems that its blue-collar modernisation is already dead in the water We are told that somehow the Conservatives are the champions of high pay. Why is it, then, that when they talk about a national living wage, what they actually mean is an increased minimum wage? And why is it that, come 2020, that so-called living wage will be less than the London living wage that employees are being paid today Why are the Conservatives attacking working people on tax credits? If the Government were serious about lifting people out of poverty through work and pay, they would need to increase the living wage to about £12.65 an hour to account for their cuts to tax credits. When difficult choices are being made, it cannot be right to target people who are doing the right thing by going out to work hard every day—sometimes in several low-paid jobs—or to cut their tax credits and perpetuate the myth that somehow they are being helped by the introduction of a national living wage that is nothing of the sort This Budget and Chancellor are overlooking some of the major issues that need to be addressed if we are serious about a so-called long-term economic plan. The Chancellor is only interested in his own political position, and he is ducking the big question about Britain’s membership of the European Union. If he is serious about Britain’s place in the world and about our future economic prosperity, he should be leading the argument to stay in Europe. Instead, like so many of his Cabinet colleagues, he sits on the fence and perpetuates the myth that some big renegotiation is coming along The Chancellor is also ducking the big issues on infrastructure. He has already cut the power from the electrification of the railways, and he is also ducking renewable energy and more housing, which, by the way, would be the best way to cut the benefit bill. It would be fantastic if we saw a house building programme that cut the amount we are paying, not to those claiming housing benefits but directly to landlords. That programme would be an effective way to reform welfare, but it did not feature in the Budget Another issue is Heathrow, which has huge potential for the London economy and for people in my constituency, who will have the benefit of Crossrail to get to the jobs that will potentially flow from Heathrow. As usual, however, the Government are sitting on the fence because they do not want to tackle the big issues There are a number of other issues with this Budget that I wish to raise in the limited time I have left. It cannot possibly be right that people who are unfit to work, including people receiving treatment for potentially life-threatening illnesses, will be penalised by this Government’s welfare measures. Other hon. Members have already asked about the test for vulnerability, and I hope that that issue will be addressed in the Finance Bill Committee It cannot possibly be right that this Government will cap the aspirations of students from the poorest backgrounds by making sure not only that they graduate with record levels of debt, but that, through the other changes to higher education student finance, it will be the lowest-paid graduates who are hardest hit while the highest-earning graduates, who are still disproportionately from wealthier families, will take longer to repay their debt. Surely that cannot be progressive Finally, there can be no greater evidence of this Government’s shallow commitment to dealing with some of the deep structural problems of our low-pay economy than their pretence that they are tackling child poverty when in fact all they are doing is tinkering with the measures. The hon. Member for Rugby (Mark Pawsey) talked about the flatlining gesture. We may have tepid growth now, but one thing that is certainly flatlining is the progress that was being made to tackle child poverty. It is an absolute scandal that in the days after the Budget, Government Members have continued to justify their child poverty measures. This Budget will make child poverty worse; it does not do what the Chancellor says it does; and there is certainly no evidence whatever in it that the Conservative party is the party of the worker.