Budget Resolutions — House of Commons, 2021-11-01
Topic: Macroeconomics
Patricia Gibson (Scottish National Party, Centre-left): When the UK Chancellor of the Exchequer delivered his Budget speech last week, he said that his Budget would deliver a stronger UK "fit for a new age of optimism".—[Official Report, 27 October 2021; Vol. 702, c. 274.] However, his Budget is a source of optimism for only a few people and certainly for very few people in my North Ayrshire and Arran constituency The International Monetary Fund forecast that the UK will suffer the worst economic damage from covid-19 of any G20 country, while ordinary citizens are left short-changed. My constituents and millions of others will face a squeeze in living standards over the coming year. Middle-income earners will see their take-home pay fall by about 1%. The tax burden is now at its greatest since the 1950s, with national insurance contributions being raised and personal income tax allowances frozen, cutting people’s disposable incomes while inflation is set to rise above 4% by April. There is no levelling up there While the Chancellor cut taxes on bank profits, he failed to introduce measures to help households already struggling with rising food and fuel prices. Paul Johnson, director of the Institute for Fiscal Studies, said: "This is actually awful. Yet more years of real incomes barely growing. High inflation, rising taxes, poor growth keeping living standards virtually stagnant for another half a decade" The Budget fails to deliver equality or fairness and fails to improve the lives of many people in Scotland. Indeed, anti-poverty charity Z2K has said that this Budget has "absolutely nothing for the 3 million plus whose disability, illness or caring responsibilities mean they can’t work" Where is the levelling up for them With nearly one in five pensioners living in poverty—the highest rate since 2008—more than 2 million older people are struggling financially. Yet the Tories think that now is the time to end the pensions triple lock, which has been abandoned. Many pensioners will be £520 worse off next year—no levelling up for them either By refusing to use the Budget to reinstate the £20-a-week universal credit lifeline that was recently cut, the Chancellor has failed to protect its recipients—two thirds of whom are in work—from falling living standards. As for the national living wage increase, the new £9.50 rate does not apply to employees who are under 23 years old, and workers on the national living wage who are in receipt of universal credit will lose more than half of any wage rise through a sharp reduction in their benefits. Of course, it is not even a national living wage; it is not a real living wage; it is a wee pretendy living wage Hard-pressed Scottish businesses also wonder where the Chancellor’s optimism is coming from. With post-Brexit supply chain costs and disruption, labour shortages, price rises and soaring energy bills, it is difficult to see what is ahead for them. Despite the Chancellor’s announcing an increased Scottish block grant, the reality is that the Scottish Parliament will receive less grant funding in each of the next five years than in this one, despite the continuing challenges posed by covid and the economic recovery No one doubts that the Chancellor has a difficult job to do. For the majority, however, he is clearly not going about it in the right way. One in three children in my constituency of North Ayrshire and Arran live in poverty. For them and their families, talk of levelling up feels insensitive and hollow. The ambition for Scotland to govern herself is therefore growing by the day.