Budget Resolutions and Economic Situation — House of Commons, 2015-03-18
Topic: Macroeconomics
Michael Connarty (Labour, Centre-left): The Budget statement was very interesting, because it was an attempt to rewrite the Chancellor’s last five years. It is strange that the Chancellor forgets where he started, what he promised, and what he tried to do. He came into office five years ago with austerity max. That was his solution. He was going to drive out the deficit by slashing public sector expenditure—and he was applauded to the rooftops by Conservative Back Benchers. Within a year, the economy had stalled, we lost our triple A credit rating and the Chancellor panicked. What did he do? Strangely, he stole Labour’s plan B. He realised that he had to bring something other than austerity and cuts into the economy, because of the damage that they were doing. That is a lesson that the eurozone could learn, because it is doing the same thing across Europe now, with its obsession with austerity and cuts The Chancellor brought in some other measures. For example, he started to tax. For the past five-year period, 18% of his deficit cutting has been done by raising taxation and 82% by cuts. That is still the wrong balance, but at least it gave him some income with which to start to give incentives to the business community and to consumers to try to raise the economy The Chancellor got to a position where he had halfway run his race. If someone said to me, "I’m going to run a mile," but then wanted a medal because they had run half a mile, I do not think they would get a medal. Yet he stood up today wanting applause from everyone on the Back Benches—he got it from his own side—for having failed to reach his own target! It is an amazing situation in politics, where someone sets out to do something, fails to do it and then tells us what a wonderful job he has done. The reason, of course, is that he is trying to put a gloss on his failure. A lot of the things that have happened in the economy have not been because of the Government; they have been despite the Government It is very important to look at where the Chancellor got his money from. He got it by taxing the low and middle-income people in this country. How can anyone expect the people of the UK to applaud the Government when it is the people who have felt the pain? The Government will never be able to justify to the vast majority of my constituents—and, I think, the people of the UK—cutting tax by 5% for those earning more than £150,000 a year. We get people saying that that is worth £40,000 to a millionaire, but the main thing is that it was unfair, it was unnecessary and it was playing to an ideology, not to practical economics. Why the Chancellor should think for a minute that he should get any applause for that, I do not know. He will get none in my constituency, even from the very hard-working people earning decent wages, for example in the oil and gas industry The Government have been telling us a mythology today. They expect people to believe it, but I have been listening to the commentators outside the Chamber and they are not buying it. This has been a feeble Budget, with little bits here and little bits there. How does one spend £6 billion, yet do very little to incentivise the people of this country? Just follow the Chancellor’s words. There is nothing there, as far as I can see, to help people The Budget, as far as I am concerned, is based on another mythology: the mythology of the unemployment level. They keep saying, "The unemployment level in your constituency, or in this constituency, has fallen." If that was true, it would be fine. But it is not true. The unemployment claimant level has fallen. What has happened is that large numbers of people in the support system have been put on employment and support allowance and are not counted towards the claimant count. Massive numbers of my constituents tell me about the sanctioned people in my constituency. My hon. Friend the Member for Bolton West (Julie Hilling) elucidated that so well, with the number of examples she gave The example that struck me most was the person who, in the past couple of months, died of starvation. He was a person with a mental health problem, who had been sanctioned because he had not turned up for various signing on regimes. He had £3.66 in his pocket. The care worker who found him said that even murderers do not starve to death in this country, but people who cannot help themselves are sanctioned for three months. That is three months without any form of income. There are no other places to go. The supply of loans that used to exist have dried up. People live in absolute dire poverty I found a woman with three children who, because of a break-up in her relationship, went from summer to Christmas without any money from the local Department for Work and Pensions. She lived on her family allowance and by borrowing from everyone she could find to keep her alive. Eventually, she came to my surgery in tears, absolutely howling, looking at a Christmas with no money in her pocket and no one else to borrow from. That is the reality of this so-called unemployment fall. A massive number of people—the figure I have heard is as many as 1 million—have been sanctioned off benefits and are living below the breadline. That is not because they are not seeking employment, but because they despair. They give up. They try again, they try again. They are told, "That is not enough, fill your book in." They keep trying, but are always told, "That is not enough." That is not the economy that I particularly want to see The Chancellor said that he is going to do something for people on low wages. That is another joke. Government Members sneer and laugh when people talk and shout about zero-hours contracts or part-time employment, but that is the reality. I watch and wonder sometimes if they have any moral fibre in them. The reality for my constituents—I have taken up these cases—is exemplified by Burton’s Biscuits, which said, "We don’t have zero-hours contracts. We guarantee 150 hours a year." No one can live on that The problem with what the Chancellor is trying to sell is that we are not buying it. It is a hard life out there for ordinary families, and what we need is a Budget from a Labour Government that says, "You build the economy up from below. You do not trickle down from above." Every statistic shows that we have failed to grow because we still rely on trickle-down economics. We need a Labour Government with a better plan for our people—one that puts the people and my constituents at the bottom level first, so that they can work their way up, not a plan that gives to millionaires in the hope that they will trickle it down.