Amendment of the Law — House of Commons, 2015-03-23
Topic: Macroeconomics
James Dolan Cunningham (Labour, Centre-left): The Government parties are trying to brainwash us into thinking they have an economic plan, when in actual fact it is an economic puzzle, given some of the measures announced The Government have to be challenged over their allegation that the Labour Government created the economic situation in 2010. I think the Conservatives have forgotten that in opposition they said they would match our Budget pound for pound—in fact, they said we were not spending enough. That does not suggest any economic foresight on the part of the Chancellor when he was shadow Chancellor. Moreover, the previous Governor of the Bank of England, who was an adviser to the then Chancellor and Prime Minister, said it was not the Labour Government’s fault. It actually started in America with Fannie Mae and Lehman Brothers—the bankers—and the housing crash. In other words, the Government have become apologists for the bankers, rather than holding them to account for what they did to this country and the international community in 2008 We should also remind the Government that we kept interest rates down to help young people, in particular, deal with negative equity. We introduced the quantitative easing that the Government are still carrying out today and persuaded George Bush—funnily enough, a Conservative American President—to pump more than $200 billion into the American economy, and when Obama came in a month later, he saved the motor car industry, which helped this country. If we had not bailed out the banks, some Ministers would be losing not just their houses but their pensions. We bailed out the banks partly because we knew that otherwise the ordinary person—the pensioner, the saver, the young person saving for a mortgage—would have gone under, but it also helped to rejuvenate industry As far as we know, the Chancellor needs to make another £30 billion of cuts, but we do not know if that means more cuts to the police. We know there will be benefits cuts, but we do not know where they will come from, and defence cuts, but we do not know whether there will be further cuts to the NHS. I am not scaremongering. Unless the Government tell us exactly where the cuts will be, it will be open to speculation. They have emasculated local government financially—is local government facing further cuts? Is that part of the plan? In Coventry, at least 1,000 jobs will go over the next three years, and the city council has to find £75 million in cuts, which will affect basic services. Today I attended a school where children were trying to save their local library. The council has granted a reprieve, but there is another area where the council might find itself in difficulty—care in the community. There has been bed blocking at the university hospital in Coventry because we do not have enough social workers to discharge people back into their own homes. Labour will certainly put that right People in the public sector have not been appreciated and have had their wage increases held at 1% for the last three or four years. The Government can say what they like about wages rising by about 2%, but purchasing power has dropped by 6%. They say we are back to 2010 wage levels—well, that is one heck of a cut over the past four or five years. We have also had cuts to the legal aid budget, meaning that people cannot get social justice. We have 1.6 million people on low-wage zero-hours contracts, yet the Government have the effrontery to hand back £6 billion in tax cuts to their friends. The Chancellor proposes to cut £12 billion by reducing welfare spending and £13 billion by reducing departmental spending. Where is this coming from? Only £2 billion of cuts have been announced, so where might these cuts come from? I have already indicated some areas where they might fall The NHS is due to have increased funding in line with Simon Stevens’s proposals, which the Government are supposed to be in favour of. Similarly, the education budget is supposed to be protected, as is overseas development assistance. As I just mentioned, the Government have promised £6 billion in personal tax cuts, without bothering to inform us how they will be costed. We should also consider the NATO commitment to spend 2% of GDP on defence, which the Prime Minister recently advocated. If they do not achieve this, will we see more cuts and job losses in the defence industry? The Government have also promised to ring fence universal benefits and the state pension triple lock. So it comes down to this: where do they plan to make the cuts and why will they not open up and tell us?