Amendment of the Law — House of Commons, 2015-03-19
Topic: Macroeconomics
Edward Michael Balls (Labour, Centre-left): I don’t know. That was all Greek to me Let us stop wasting time with the ridiculous Liberal Democrats and return to the Chancellor’s Budget. The Chancellor claimed, first, that working people are better off than they were in 2010. How out of touch can you get? No wonder Conservative Back Benchers were so muted in the House of Commons yesterday. They know, as we know, the reality of people’s lives. Unlike the Chancellor, they hear it on the doorstep. They know that with wage growth stagnant over the past few years, energy bills rising, and 1.8 million zero-hours contracts, when the Chancellor says there is a recovery, most people say, "Where is the recovery for me? It is not a recovery for me, our family and our community." The Chancellor tried to invent a new measure of living standards yesterday. It was a flawed measure because it includes income to universities and charities, but, compared with the first quarter of 2010, in the first quarter of 2015 the Chancellor’s measure has not gone up; it has gone down. Even on his own measure, people are worse off than they were in 2010. We know from the independent Institute for Fiscal Studies and the Resolution Foundation that on more sensible measures confirmed by the IFS two weeks ago, household incomes are down compared with 2010, and wages after inflation are down by more than £1,600 a year since 2010. This is the first Parliament since the early 1920s when the average person in work will be worse off at the end of the Parliament than they were at the beginning. In answer to the famous Reagan question, "Are you better off than you were five years ago?", the answer is a resounding no We welcome the action to help savers and increase thresholds, but where was the action to help working people? Why did the Chancellor not announce an ambition to raise the national minimum wage to £8 an hour? Why did he not commit to expanding free child care for working parents to 25 hours? Why not cut business rates for small companies? Why not ban exploitative zero-hours contracts? Why not repeat the bank bonus tax and have a compulsory starter job for our young people? Why not scrap his absurd married couples allowance, which he barely mentioned yesterday, because it goes to only a third of married couples, and instead use the money to cut the taxes of working people? That is what he should have done. That is what a Labour Budget will deliver The Chancellor’s second claim is that he is rebalancing the economy. We all remember his claim of "a Britain carried aloft by the march of the makers"—[Official Report, 22 March 2011; Vol. 525, c. 966.] but the independent Office for Budget Responsibility said yesterday that growth is still lower than was forecast in 2010. Growth is set to be slower this year and next year than last year. The OBR confirmed that the Chancellor is on course to miss his 2010 target to double exports to £1 trillion—off course by more than £600 billion, and business investment has been revised down this year. The OBR says that "the growth of potential productivity per hour remains below its historical average throughout the forecast" and that "actual hourly productivity growth has again been weaker than expected". The only thing it has revised up is its forecast for net migration Why did the Chancellor not act to deal with the housing crisis by committing to build 200,000 more homes a year by 2020? Why did he not establish a proper British investment bank for small and medium-sized businesses? Why did he not take up our idea, now the subject of consensus across our country, and establish an independent national infrastructure commission to stop long-term decisions being kicked into the long grass? Why did he not go further and devolve powers, including the uplift on business rates, to all areas in our country, rather than just to some? Why did he not commit to securing Britain’s place in a reformed European Union?