Budget Resolutions — House of Commons, 2017-11-22
Topic: Macroeconomics
Elizabeth Louise Kendall (Labour, Centre-left): It is a pleasure, as always, to follow the hon. Member for North East Somerset (Mr Rees-Mogg). The challenge facing any Government, and any Budget, is to boost our strengths, tackle our weaknesses and prepare the country for the future. I am afraid that the Government have failed to rise to these challenges, and not just in this inadequate Budget, but through their damaging approach to Brexit. I want to take each of those points in turn First, on our economic strengths, we are rightly proud of our world-leading car manufacturers, pharmaceutical and aerospace companies, creative industries, universities and financial services. We want and need those to expand and thrive, create more good-quality jobs and help us fund our vital public services, yet they all face huge uncertainties because of the Government’s determination to pull us out of the single market and the customs union, and not just because of their acceptance that we might leave the EU with no deal and have to fall back on World Trade Organisation rules, but because of the active desire of some Government Members to do so. The risk of new tariffs and custom barriers, of financial services losing their passporting rights, and of restrictions on our trading with the largest market of 500 million consumers on our doorstep is a major cause of the lower than expected levels of business investment, productivity and growth that we heard in the Budget statement. The Government cannot escape that, no matter how much they want to sweep it under the carpet It is not only that the Government’s approach to Brexit is risking our economic strengths; they are also failing to address our underlying economic weaknesses. To be clear: many of these weaknesses existed before Brexit and, indeed, before the financial crisis, but I fear that the Government’s approach to Brexit will make them far worse. The fundamental problem is that the British economy is no longer delivering rising earnings for the majority of the population. We are in the longest period of wage stagnation for 150 years. I hugely welcome the high levels of employment, but many of the jobs are insecure and low paid, and child poverty is rising Britain has one of the most geographically unbalanced economies in Europe, with 40% of our economic output coming from London and the south-east. Indeed, those are the only two regions in the country that have seen their economies get back to pre-crisis levels. We are also one of the most unequal economies, not only in income inequality but in wealth inequality which, as the International Monetary Fund says, really matters, because more unequal countries have shorter and weaker periods of growth. For far too long, our economy has been plagued by short-termism, poor productivity and low levels of public and private investment. I am afraid nothing the Chancellor said today indicates that the Government understand the sheer scale of the problem or have a plan to reform our economy—to reform capitalism so that it works for the majority of people in every single part of the country That brings me to my final point about preparing the country for the future. We face big challenges alongside that of Brexit: deeper globalisation as emerging economies to the east and south increasingly compete on high-value products and services, not just on basic manufacturing; our ageing population and the implications for pensions, the NHS and social care; technological change, which is opening up huge opportunities for some but risks leaving behind those without the skills they need; and the continuing need to tackle climate change I am glad that the Chancellor announced measures to encourage more young people to take A-level maths, along with investment in artificial intelligence and driverless cars, but where was the plan to transform skills in this country? Where was the plan to invest in early years so that every child starts school ready to learn? When children from the poorest parts of my constituency start school 20 months behind where they should be, they play catch-up for the rest of their lives. Where was the plan to help the 5 million adults without basic skills who will never cope with the changes brought by technology and globalisation The Chancellor said that there will be £2.8 billion extra for the NHS over the next three years. That is pathetically inadequate! It is less than the £3 billion being spent on preparing for Brexit. There was nothing in the Budget for social care, to give older and disabled people and their families, who are desperately struggling to cope, the help and support that they need All that brings me back to Brexit. The single most important thing we learned from the Budget is that there will be slower growth every year for five years. That means there will be £65 billion less than we thought just a year ago to spend on transforming this country and the life chances of the people we represent. On any economic test, the forecasts are a disaster, and the Government have only themselves to blame.