Budget Resolutions — House of Commons, 2018-10-29
Topic: Macroeconomics
Christopher Michael Leslie (Labour, Centre-left): I will not, if the hon. Lady does not mind, as many other Members want to get in and I want to be as brief as I can I would like there to have been more on homelessness. We will see whether the measures on universal credit have an effect, but I am not sure they will have enough of an effect. I would like to have seen further education and skills mentioned a lot more, too; it was not in the Budget statement as much as it should have been. Given the way the global economy is changing, we need to have some bold plans, such as to help people to retrain mid-career, as they go into their 40s, 50s and so forth—maybe a 20-week sabbatical or help with relocation costs. Let us have a bit of ambition on some of those things The key line on this Budget is on page 8 of the OBR document, which says that "the referendum vote to leave the EU appears to have weakened the economy." That is quite an understatement by the OBR. The chart on page 9 that a Labour colleague pointed out earlier shows how Britain was towards the top of the G7 nations for growth but now has growth at an anaemic 1.5% or 1.6%, and it is predicted to be at that level for as far as the eye can see. That is a pitiful story; the OBR terms it "an unspectacular trajectory" There are similar ramifications from the referendum result. Business investment is poor. Sterling’s devaluation has hit incomes as well as consumption. Exports are performing badly and are predicted to perform badly as well. The Chancellor is not just facing the referendum shadow that has been cast, but is in political limbo; he does not have a majority and perhaps that explains some of the lack of ambition he has shown in the Budget today. The OBR characterised it as "the familiar Augustinian pattern"— giveaways today but takeaways for tomorrow There are some hidden elements of the Budget that are very difficult, such as capital spending being cut consistently from 2019 onwards, which is on page 17 of the OBR report. Also, the deficit is actually going up and staying at about £20 billion a year. That is how the Chancellor has funded the change in funding for the national health service; in fact in many ways that is the big story of the Budget—the Government not going for a surplus but keeping that borrowing level persistently high However, the characterisation that there is some sort of Brexit dividend to come is what I find most offensive—the notion that as long as we avoid no deal everything is going to be rosy. The Treasury’s own figures have shown that on the Government’s favoured free trade agreement-type scenario our revenues will be £40 billion lower by 2030, with perhaps 6% less growth than we might otherwise have expected. Is this the sort of relationship that Britain deserves with the EU—being in that kind of what I think we should call Mexico or Colombia-style relationship? People call it a Canada-style relationship and everybody thinks, "Ah, maple syrup and maple leaves; this is a wonderful place." But it is a sort of Algerian-style relationship with the EU, and it is not where we should be, because ultimately life outside the single market will cost us all a considerable amount more It is pathetic to think that the Chancellor today could make a judgment on the envelope for public spending going forward when he has not a clue what sort of Brexit relationship we are going to have after March next year. Indeed, the OBR says that "no meaningful basis" for forecasting can be made in its summing up on these issues. The notion of a dividend is blown out of the water by table 4.30, which clearly shows that the cost of the divorce bill and the anticipated extra spending in lieu of EU funding will be much higher than any notional savings from our not having to chip into the EU budget. Particularly when I hear about that ridiculous 50p coin, which of course will lose value literally as it is sitting in our pockets, I realise that the only way we can secure a better future is to let the public decide. That is why we should give them a people’s vote.