Budget Resolutions — House of Commons, 2018-10-29
Topic: Macroeconomics
Maria Eagle (Labour, Centre-left): Two major issues act as a backdrop to the Chancellor’s Budget. First is the Prime Minister’s pledge that austerity is over, and it is worth remembering what she said: "a decade after the financial crash, people need to know that the austerity it led to is over and that their hard work has paid off." That is unequivocal. We expected to see the end of austerity made real today by the Chancellor, if that is indeed the Government’s policy. Secondly, unless they can be stopped by this House, Tory Brexit plans are likely to impose a massive economic shock on the UK, and the harder the Brexit engineered by our Government, the worse that shock will be We have already lost 2% to 2.5% of expected GDP growth over the past two years, according to the Office for Budget Responsibility, because of the uncertainty created by Brexit and the Government’s incompetence in dealing with it. The Chancellor has dodged dealing with Brexit uncertainties today by completely ignoring them and promising us an emergency Budget in the spring if we crash out of the EU with no deal, as half his Cabinet and the most hard-line Brexit supporting members of his parliamentary party seek to make us do As for the idea of ending austerity, what would such a Budget look like? Not like the Budget we have just heard. To be fair to the Chancellor, he said only that austerity is coming to an end. In other words, it will be going on for years to come. According to the Institute for Fiscal Studies, the narrowest possible definition of a Budget that ensures that austerity is over would require the Chancellor to find an extra £19 billion. The Resolution Foundation suggests that more is needed for austerity to be over, and it has said that the package would cost £31 billion and would have to include cancelling the final year of the four-year benefits freeze The measures we have heard today come nowhere near doing either of those things, so austerity is not over for our public services. Liverpool City Council has already had to make cuts of £444 million since 2010, and it has to find another £41 million by next April. The council has to spend more than it can raise in council tax simply to pay for adult social care alone, and by 2020 it will have lost 58% of its budget—it is one of the worst-hit local authorities in the country. It is welcome that the Chancellor announced £650 million for social care, but Liverpool City Council alone will lose £70 million over the 10 years from 2010 to 2020, and it hardly makes up for the £7 billion cuts to adult social care or for the £5.8 billion funding gap that local authorities are having to cope with nationally What about Merseyside police? It has faced a budget cut of 31% in real terms since 2010, the joint biggest cut faced by any police force in England. It has meant a quarter of all our police officers have gone, 1,119 of them, yet crime is increasing—it has gone up by 29% in the past five years, with a 12% increase in the past year alone. We have 150 organised crime groups active on Merseyside and we have seen a 50% increase in firearms offences, including shootings and killings in my constituency and across our communities in the past two years, as our police are increasingly not being resourced to meet the demands placed upon them My Merseyside colleagues and I have had numerous meetings with Ministers over the past two years about tackling increasing gun crime, something we have repeatedly raised in the House, but we have had nothing practical to show for it from the Government, who are intent only on pursuing more cuts. So I looked in the Red Book, where the Chancellor only promised a review of police spending power and a Home Office statement in December. The Red Book shows Home Office capital departmental expenditure limits and resource DEL declining, so I cannot hold out too much hope for extra money for our police. There are increasing pressures on the police, for example, on funding the police pension deficit, with the chief constable of Merseyside saying that another 300 officers will have to be cut if it has to be funded out of existing resources, which I understand is the plan. Our fire and rescue service faces similar problems, as it has had a 50% cut in real terms and has lost a third of all firefighters. Half of our home safety visits have been cut over this period, and the number of fire engines has been cut from 42 to 24—and the cuts have not finished For these public services, which matter so much for our communities, it does not feel at all as though austerity is ending, nor has anything the Chancellor has said today given them any real hope that that is indeed the case. Austerity is not over, neither is it coming to an end, and the Brexit shock is around the corner. In effect, the Chancellor said that he will have an emergency Budget if there is a no-deal Brexit—half his colleagues actually want that—which makes this Budget’s forecasts even more fantastical than his Budgets usually seem to be. The Government’s own forecasts suggest that in the north-west a no-deal Brexit would cut GDP by 12% over the next 15 years, which would be a disaster. The Merseyside public services I have been describing, already weakened by years of austerity, will not be able to withstand such a massive shock. For that reason, whatever deal the Government come back with from Brussels—if indeed there is one—should be put to the country in a people’s vote, with the best deal, our current deal, also on the ballot paper as a choice in that event.