Budget Resolutions — House of Commons, 2021-11-01
Topic: Macroeconomics
Margaret Eve Hodge (Labour, Centre-left): The Budget is the most anticipated fiscal event in our calendar. The Chancellor has limited opportunities to make his mark, so his Budget choices are not just pivotal for the economy and for living standards, but they inform our assessment of his strategy, our trust in his judgment and our verdict on his competence. Last week’s tragedy was that there was no strategy. The Chancellor squandered the opportunity to tackle the challenges Britain faces In all my years, I have never heard such an incoherent and botched statement. It was a Budget that ignored economics and focused on politics, proclaimed a moral mission for small government and delivered the biggest public spending programme since the 1980s, ignored the impact of Brexit, encouraged air travel rather than leading us to net zero, and prioritised cheap champagne over affordable childcare Our Alice-through-the-looking-glass Chancellor described his plan as heralding "a new age of optimism,"—[Official Report, 27 October 2021; Vol. 702, c. 274.] but the reality for exhausted working families emerging from lockdown is quite different, with prices rising and inflation spiralling, taxes climbing to their highest level since the 1950s, wage growth stagnating and at its weakest since the 1930s, and the Government’s record on economic growth just dire. Labour in government maintained annual growth rates of 2.3%. This Government are averaging 1.8%, with the OBR predicting a pitiful 1.3% in 2024, the supposed year of the next election A long-term vision for growth should be at the heart of the Chancellor’s plans, supporting businesses to invest, providing money for education and focusing on research, but he prioritised none of those. Instead, there was a mere 2% rise in the education budget, while the prison budget increases by 4%. There was a hefty £3 billion cut to drink duties but a miserable £300 million investment in the crucial early years in a child’s life. Labour spent £1.8 billion on Sure Start in 2009—that is £2.6 billion in today’s money—yet this Government commit a pathetic £300 million to the early years, with £82 million supporting an untested pet project of who? Another Tory donor. We know from evidence that Sure Start worked, but it has been systematically decimated since 2010 The Chancellor has reneged further on his commitment to research and cut £2 billion from the promised increase. Instead, he talked up the discredited R&D tax credit scheme. I know from the Public Accounts Committee that, in the decade to 2015, Government expenditure on R&D tax credits increased tenfold, while company investment in R&D stayed about the same. Now the Chancellor will pour more money into those wasteful tax credits while tax-avoiding corporations such as Amazon are laughing all the way to the bank The political choices that the Chancellor made last week prove beyond question that he and the Prime Minister are the same old Tories. They are creating further inequality in our already unequal society, punishing the weakest and rewarding those with the broadest shoulders. Only a Conservative Government would slash universal credit for the poorest by £4 billion while, in the same breath, giving bankers a £4 billion tax cut. Only a Conservative Government would use hikes in regressive taxes, such as council tax and national insurance, to fund health and social care. Only a Conservative Government would leave capital gains and dividends taxed at a lower rate than income tax. While public expenditure has rocketed to an all-time high, public waste has gone stratospheric, with £37 billion squandered on a Test and Trace fiasco that was more about providing jobs for chums and cash for consultants than fighting the pandemic This Budget and spending review represent an appalling opportunity missed. The Chancellor has failed to take advantage of the stronger than expected bounce back and better than expected tax receipts. We should have seen serious investment in education, capital and research. Instead, the Chancellor peppered his statement with a series of crude political gimmicks, from a Beatles museum in Liverpool to more British-registered ships on the high seas. The shine has come off this Chancellor—a failed Budget by a failing politician. Britain deserves better.