Budget Resolutions and Economic Situation — House of Commons, 2015-03-18
Topic: Macroeconomics
Willie Bain (Labour, Centre-left): I gently point out to the hon. Gentleman that the emergency Budget and the spending review adopted in autumn 2010 led to three years of hardly any growth at all in the economy, a dramatic fall in tax revenues, the deficit having not fallen or been wiped out as the Chancellor had promised, and debts doubling over the course of this Parliament. That was the reason the economy has underperformed and why this Government are going to leave to their successor the highest deficit in the developed western world. The fiscal policies that this Government have adopted could not have been more wrong We need a different plan for public spending and for more balanced economic growth, not the one the Chancellor has offered today. We need a plan for a fairer tax system, with tougher action against those who do not pay their fair share of tax or indeed do not pay any tax at all. It was very troubling to read in the OBR’s fiscal outlook this afternoon that it has doubts about the £5 billion that the Government have suggested they will pull in from the tax evasion measures set out today. For example, the OBR said that some of the specific measures were "unlikely" to generate the extra revenues that were scored in the Red Book The test for this Government in their Finance Bill next week is whether they will be prepared to bring in legal penalties for those who evade or avoid taxes so that we can fill the gap of £34 billion of tax that should be collected by the Exchequer and has been foregone under this Government. That is what hard-working taxpayers will want to see in the Finance Bill next week. Despite the Chancellor’s modest U-turn today, he still intends by 2018 to force through the biggest fall in core public service expenditure since 1938. The cynicism of this Budget is that, by bringing in deeper cuts between 2016 and 2018 and then partially reversing them in 2019 and 2020, we can see that it is the electoral cycle that has motivated the Chancellor more than the cycle of what is good for jobs and stable growth in this country Labour has a different and a better plan. It is one that does not jeopardise investment in infrastructure. If we balance the current budget in the next Parliament, then, as the National Institute of Economic and Social Research has said, we would have more growth, more jobs and faster rises in wages—a better plan for Britain I welcome what the Chancellor did for the oil industry. With receipts forecast to fall to £700 million in the next fiscal year, there is an even stronger case for an oil resilience fund, which would do a great deal to secure investment and jobs in the offshore sector in Scotland We should have had a Budget that raised the minimum wage to beyond £8 an hour. We should have taken steps to encourage the living wage to be paid to as many people as possible in this country. We should have had a higher rate of income tax for those earning more than £150,000 a year. We should have had the opportunity to begin the job of change, but change is coming. A Labour Government are coming, and I believe that the British people will begin that job of change by voting, in just seven weeks’ time, for a Labour Government and for a more equal and prosperous society.