Budget Resolutions and Economic Situation — House of Commons, 2015-07-13
Topic: Macroeconomics
Peter Christopher Dowd (Labour, Centre-left): The Budget statement, although difficult to hear at the time, was a hocus pocus concoction with built-in excuses should things go wrong: "Things will be better tomorrow, but then again they might not be"—it was a sort of mañana Budget. Having told us that growth was strong, the Chancellor attempted to make a subliminal and conflated link with the Greek crisis, and the possible implications if we do not allow him to get on and finish the job he started. Of course that was just the warm up excuse, because he then went on to say that—notwithstanding what a fantastic job he claims to be doing—we cannot be complacent To reinforce his potential alibi, and in case things went wrong, he reminded the House that the economies of the United States and China have slowed. Like an astrologer or a Mystic Meg character, he told us that the global risks are in the ascendant. He then wagged his finger at Europe, reminding it in a vague and imprecise way that it must not allow our future prosperity to be put in danger. Of course he forgot to remind us that Europe is way ahead in productivity, and that the French and Germans, among others, look on a little bemused—the French no doubt gave a bit of a Gallic shrug. The Chancellor also told us that this year the share of the national debt is falling after five years. I recall that he said—indeed, he boasted—that he would do much better than that on both the deficit and the debt, but he has not This was a back to the future Budget. If there is any doubt about that, we simply need to look at the self-satisfaction with which the Chancellor announced the sales of public assets, including some quasi-private assets in the form of housing association stock. It is the biggest sell-off since the 1980s says the Chancellor, but it is the old Conservative two-step shuffle of "Miss your targets, have a back-up plan, get the money from elsewhere—preferably somebody else’s money." It is consistent, if not wholly imaginative. The Chancellor’s ambitions are not matched by the practical proposals that he has put in place to achieve them. Transport infrastructure proposals are currently in a mess. Many Conservative Members thought that they were going to get rail or road upgrades—or perhaps both—but they will have to wait a little longer until the mess is sorted out The Chancellor said that he wanted to make the NHS a priority in the Budget, but in short order he proceeded to tell the very people who make it run effectively and efficiently that they will be on a pay go-slow—in fact, they will have to be even more effective and efficient over the next four years because they will get just a 1% pay rise each year. That has become a habit. Local government—an area that I know reasonably well—has had to bear an unfair and disproportionate burden of cuts to budgets. Within the cuts to local government, some councils—including my own Sefton council—have had to bear even more significant and disproportionate reductions in central support If the funding of the NHS is taken in isolation from the funding of social care, that will create problems because they are different sides of the same coin. This is where local government comes into its own as it is the most efficient of public services. I hope that the new Secretary of State for Communities and Local Government will spend time ensuring that the devolution process for local government moves ahead positively and effectively, and at a pace consistent with good and effective governance, whatever those governance arrangements turn out to be. A slight glimmer of hope is the flexibility that devolution may bring to local government, and the ability to enable local growth that is unhindered by political and economic centralisation that, in my view, has hindered growth Let me make one salient point about the Chancellor’s claim that 1% of the world’s population generates 4% of the world’s income yet pays out 7% of the world’s welfare spending. In reality, a significant proportion of that is pensions that people have paid into and to which they are entitled. The Government’s jiggery-pokery on the issue must be challenged, day in, day out