Budget Resolutions — House of Commons, 2021-11-01
Topic: Macroeconomics
Maria Eagle (Labour, Centre-left): The Chancellor has promised us a post-covid "age of optimism" and claims that the Budget will deliver it by levelling up the life chances and prospects of those in the north, like my constituents, who have been clobbered disproportionately since 2010 by Tory austerity and cuts that have adversely affected their chances to improve their lives and prospects. I wish the reality met that promise, but Ministers in this Government increasingly seem to promise the opposite of what they then actually do. According to the Office for Budget Responsibility, the Government’s choice to pursue a very hard Brexit is on track to cut long-term GDP by 4%, and the covid pandemic will cut the size of our economy by another 2%. That is a 6% permanent cut in the size of our economy. That means less money to deal with the big problems that we face as a nation over the next 10 years —in particular the zero-carbon transition and adapting to the information revolution to create the economy of the future, while tackling inequality and improving living standards for all The Tory years have seen much slower growth in incomes than was the case prior to the Conservative election in 2010. Income growth is one of the ways in which families judge their wellbeing and decide how optimistic they feel about the future. The OBR has forecast that real wages will fall next year with consumer prices index inflation of 4% and expected wages growth at 3.9%—so much for the end of the public sector pay freeze. Workers will feel cheated if the end of the pay freeze still results in real wages falling. They will not feel like they have had a pay rise or that they are living in an age of optimism. In fact, real wages have risen by a meagre 2.4% in total since the 2008 financial crisis, according to the Resolution Foundation. The OBR expects only a 1.5% increase a year, which is pretty low, and much less than the 2.5% a year increase that was the norm before this Government came into office As well as stagnating wages, the Chancellor is delivering huge increases in tax, although he said little about that in his speech, preferring instead to give a homily to his worried Back Benchers, some of whom we have heard from today, about how much he aspires to cut tax. That is another example of Ministers doing the opposite of what they say. He is in fact putting up taxes to their highest level since 1950, when the Attlee Government were rebuilding Britain after the war. So, we have slow growth in incomes and huge increases in tax at the same time as rising inflation caused by big increases in household bills for energy, food and fuel. The Resolution Foundation has calculated that the average household will be £3,000 a year worse off. That is not likely to engender optimism from my constituents What are we getting by way of levelling up? Well, in the Knowsley part of my constituency, the answer is not a lot. Improving educational opportunity is one of the best ways of levelling up. Young people in Knowsley already have to leave the borough to study A-levels. The Chancellor promised that, at the end of this spending-review period, he will put per pupil funding back to the levels they were at in 2010—before his party came into office. That is 11 wasted years, and three more to come before we are back to where we were without the damage having been mended—back to where we were in 2010! That is not a triumphant achievement In Knowsley, my constituents are seeing a cut equivalent to £485 per person, against an English average of £188 per person, with none of Knowsley Council’s bids for the Government’s levelling-up funds having been successful—this is in the second most deprived borough in the country. That is not what I call levelling up.