Budget Resolutions — House of Commons, 2021-11-02
Topic: Government Operations
John Martin McDonnell (Labour, Centre-left): I would like to comment on some of the points made in the debate so far. We all support levelling up—in fact, it was a Labour party policy announced in 2016—but let us talk about levelling back, because £100 billion of central Government funding has been taken from local government since 2010. With this Budget telling local councils that they can have spending power but not the resources to back it up, we know what will happen. Local councillors of all political hues will be blamed for either the cuts forced on them, or the council tax increases. It is predicted now that council taxes will increase by at least £400 by 2026 What we need now is what we have been promised for a decade: reform of local government finance that provides an independent, adequate resource for local authorities. That includes the reform of business rates. On capital investment, it is now estimated that it would take £30 billion of investment a year to level up the regions to the investment levels of London and the south-east. In this Budget, there is nowhere near the amount needed to tackle that issue I say this to anyone entering government: whatever the quantum, the system of distribution must be seen to be fair. To have a Chancellor stand up and list the towns and areas that will be showered with his or her beneficence is not good enough. What we need is a system that is open, fair and transparent. In the distribution of resources across the UK to Scotland and Wales and so on, there is a Barnett formula. We should introduce a Barnett formula for this that is open and transparent, otherwise, there will be accusations of pork-barrel politics that will stain all our politics, not just this current Government’s On pay, let me be clear: for most of my constituents, pay has been frozen for 10 years. The Government are telling people that the freeze is now ended, but not allocating the resources. Do not insult people’s intelligence —they know that is a con. In the Government’s pay remit to Departments, we must make it clear to those Departments that all pay rises must at least match inflation, that there should be an element of catch-up because of the freeze and the pay cuts over the past 10 years, and that those Departments will be given the resources to enable that to happen On the minimum wage, can we just stop the Orwellian language? This is not a living wage. That is a con. If we are to have at least some semblance of a living wage, why do we not just allocate its distribution to those who assess the real living wage? We also need a transition to better wage levels in this country. Two thirds of children living in poverty—my hon. Friend the Member for Makerfield (Yvonne Fovargue) spoke about this—are in families where someone is in work. What does that say about wages We promised to introduce a £10 an hour minimum wage two years ago. Because that has not happened, people have lost out on £2,500 each. That is a lot of money that could have lifted people out of poverty. I want to see the living wage now at £10 an hour, and I want to see it progress towards £15 an hour by the next general election at least On universal credit, let us be clear that the taper, which my hon. Friend spoke about, still means a tax rate of 55p in the pound. That is more than the Prime Minister pays, and 70% do not benefit now from the improvement to the taper. Yes, we need to restore the £20, but why do we not think about what Barbara Castle put forward: ensuring that benefits are linked to earnings so that we all share in the growth of the economy We all agree that we are at one minute to midnight on climate change, but in this Budget I was hoping we would see a radical response to that—just the basics. No: I think at the last estimate, the Chancellor was introducing at least £54 billion of tax reliefs. Why do we not at least ensure that none of those tax reliefs go to companies promoting the use of fossil fuel, or that none of those tax reductions are linked to operations that increase emissions? In this instance, of course, I refer to the shocking announcement about the support that domestic flights will now get It was mooted at one point that we would see some radical changes in this Budget with regard to pensions tax relief. I hoped, and it is not too late, that when it came to the Finance Bill there would be a link between pension tax reliefs and ensuring that pension funds provide us with their strategies for removing their investments from fossil fuel—over a two-year prospect would be realisable Finally, let me say something on taxation. I was hoping we would see something at beyond just words about fair taxation. Fair taxation means not cutting tax on the bankers who caused the crisis of 2008, and it means fairer taxation of wealth—that is capital gains—and of the wealthiest. It is time that the City started pulling its weight. That is why the financial transaction tax, newly designed over the last month by the Robin Hood campaigners, could be a realistic way for the City to make a better contribution to our economy overall. I also expected significantly more in this Budget, after the Pandora papers, about tackling tax avoidance in British overseas territories funnelled through the City of London, along with the money laundering that is taking place on a criminal scale The Chancellor said that this was a Budget for an era of optimism. I warn him that it will create crushing disappointment, which will tarnish our whole politics. That crushing disappointment will come out elsewhere—on picket lines and in demonstrations and occupations—as people’s anger is fed by the disillusionment caused by this Budget.