Budget Resolutions — House of Commons, 2018-10-29
Topic: Macroeconomics
Angela Eagle (Labour, Centre-left): We have an unusual Halloween Budget. Rarely have our country’s prospects been so fragile and in the balance. Rarely has any Budget come at a time of such domestic political uncertainty, with a weak and faltering Prime Minister who cannot even command her own Cabinet. Rarely has a Budget come at a time of such radical economic uncertainty, caused by the Conservative party’s flailing attempts to agree with itself on what an acceptable Brexit deal might actually look like, let alone to conclude an agreement with the EU27 Perhaps the Chancellor had pencilled in today’s date for the Budget assuming that the outlines of a deal with the EU would have been nailed down by now—after all, there are only five months to go before Brexit is due to happen. Perhaps he had been planning to use the Budget to spend his mythical Brexit dividend in the glowing aftermath of an agreement reached at the October European Council. But all too predictably, he has been undone by the chronic inability of the Prime Minister to make a decision and the kamikaze tendencies of the Brextremists in his own party who wish to take the country over a cliff by engineering a disorderly no deal Brexit That renders today’s Budget contingent on a deal and irrelevant if there is no deal, as the Chancellor himself has admitted. The Chancellor has also been hemmed in by the Prime Minister’s surprise announcement of the end of austerity in her conference speech. We on the Opposition Benches would like this dramatic news to be true, but since the Government have made this announcement three times before and done nothing to bring it about, we are very sceptical. In fact, we think it is more likely that "Nothing has changed" This Budget has come after eight years of massive cuts in public expenditure. It began with the coalition Government’s economic policy focusing on deficit reduction above all other considerations. That deliberate political choice has got the deficit down, but at a huge cost for millions of people in this country. In eight years, it has profoundly changed the nature of our society for the worse. It has turbo-charged inequality, creating massive and accelerating differences between the super-rich and the rest. It has caused untold misery for the millions who have been left to cope alone with life’s misfortunes as the social security system has been eviscerated around them, the social care system has been allowed to disintegrate, and child poverty has soared. That was neither necessary nor inevitable, and it must be abandoned When he embarked on this course in 2010, the then Chancellor George Osborne announced that we were "all in this together". He then made a series of political choices which achieved the opposite of that assertion. He announced that 80% of the deficit reduction would come from cuts to public expenditure and 20% from tax increases. That 80:20 ratio signalled an original intention to hit the vulnerable, but the reality proved to be even worse. He gifted £100 billion of tax cuts to the rich and the corporations, which means that all of the deficit reduction has actually been achieved by deep and damaging cuts to public expenditure—100% of it The Government have torn asunder our social fabric, destroying social justice and fairness because they chose to do so. The result has been the longest wage freeze for 200 years, with real wages not expected to recover their previous value for 17 years. As the TUC rightly points out, 8.2 million working adults are now in poverty, child poverty is soaring, and £45 billion has been cut from vital public services. The Government have used the global financial crisis to destroy the state’s capacity to create opportunity, fairness and security because they chose to let their damaging belief in market fundamentalism rip. And they still believe. No end of speeches about the "just about managing" will change the political reality of the choices the Government have made and what the consequences have been The Government have created a nastier, meaner society where the rich and privileged can operate untouched by scruple, easily able to escape their obligations to pay their fair share of tax. The Government have fashioned an economy where wealth is extracted not created, as obscene levels of executive pay continue to go unchecked. At the same time, they have mandated real-terms cuts in public sector pay for nurses, firefighters and the police, and slashed payments for those who must rely on benefits to survive. The poorer the local authority area, the deeper have been the cuts. Foodbank use has soared, with 1.3 million food parcels handed out last year. Homelessness has risen; insecurity and suffering has grown The Equality Trust recently revealed that the richest 1,000 people in the UK have increased their wealth by £66 billion in the past year alone, and that their total wealth is now a massive £724 billion. That is significantly more than the poorest 40% of people in this country own between them. As the Equality Trust rightly points out, the capture by a tiny number of people of this vast amount of our nation’s wealth is economically illiterate, socially poisonous and politically unsustainable. As Thomas Piketty proves in his book "Capital in the Twenty-First Century", because the return to capital is now greater than economic growth, this obscene concentration of wealth can only be stopped by the application of wealth taxes and the ending of the escape route of tax havens This is now the economically efficient thing to do. It is also the moral thing to do. Without such action, wealth will just continue to concentrate in fewer and fewer hands, and democracy will give way to plutocracy and populism. In fact, there are many alarming signs that the transformation away from free and democratic societies has already begun. Yet today we have seen little more than lip service paid to a small part of this urgent agenda by this disappointing Budget from a Chancellor and a Government that just do not get it.