Budget Resolutions and Economic Situation — House of Commons, 2016-03-22
Topic: Macroeconomics
Angela Eagle (Labour, Centre-left): Today we have heard contributions from 30 Opposition Members and only 14 Government Members—the Government ran out of contributors quite a while ago The Chancellor has had to be dragged back to the Chamber today to explain what on earth has happened to his Budget which, after all, is still only six days old and already contains three U-turns. He put in a bravura performance, but there was not a windmill that he did not tilt at or a straw man that he did not set up. Even then, he had the gall to claim that he supports the vulnerable. At the end of all that sound and fury, however, his Budget was still a mess, and the idea of one nation Conservatism is still a national joke What we actually got was a botched Budget that has disastrously unravelled in just a few short days. It was a Budget created by a Chancellor far more concerned with advancing his own interests than advancing the national interest. We all knew that this was a Budget that had to be seen through the lens of the Chancellor’s own long-cherished ambition to become leader of the Tory party and Prime Minister, and that the chief interest the Chancellor was promoting was his own. In an effort to curry favour with his own side, he announced increases in tax thresholds and cuts to capital gains tax, and he decided that cuts to disability benefits would pay for them The Chancellor has presented a catastrophic Budget—omnishambles does not do it justice. The Prime Minister had ordered him to produce a "safety first" budget; instead, he has succeeded in producing a Budget that has torn the Cabinet apart. Despite his performance today, we see a Chancellor at bay, on the run from attacks in his own party. He has completely lost control of his own Budget. He is now so weakened that he is accepting amendments on the tampon tax and solar panels because he knows he would lose the votes, and he dare not let that happen. He has had to reappear in the Chamber today to explain where it all went wrong It took less than 24 hours for the Chancellor’s triumph of Wednesday to turn into chaos at the weekend. We have seen a Government in complete and utter disarray and a Chancellor who has only succeeded in shredding his own reputation. Today, we see the utter collapse of his authority. His popularity has halved since the election, and two thirds of people who voted Conservative last May do not think that he is up to the job of being Prime Minister The Chancellor’s Budget was rightly savaged as deeply unfair by his then Secretary of State for Work and Pensions, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith). Back Benchers’ outrage grew as they realised that the huge cuts to disability support were being used to fund a tax giveaway for the well-off. We then had Panic Friday, as the Prime Minister realised that his party was in revolt and ordered a hasty retreat on the Chancellor’s biggest revenue raiser in the Red Book. Then came a dramatic Cabinet resignation by the Work and Pensions Secretary, who had reached the end of his tether. On Manic Monday, the cowardly Chancellor went missing, sending out his hapless junior to cover for him The former Work and Pensions Secretary made clear his opposition in his devastating resignation letter, in which he said that cuts to disability benefits were "not defensible in the way they were placed within a Budget that benefits higher earning taxpayers." That was this Chancellor’s choice. The former Work and Pensions Secretary called the disability cuts that the Chancellor presented last week "morally indefensible". The former Work and Pensions Secretary has questioned the entire moral basis of the last six years of Conservative government, and weak assertions from Conservative Members that they are really, really compassionate are revealed for what they really, really are: hollow nonsense. The former Work and Pensions Secretary was also clear that he thought that the Chancellor’s welfare cap was unsustainable, and he questioned the motives of his erstwhile Cabinet colleagues, slamming the Chancellor’s indefensible Budget. He said "they’re losing sight of the direction of the travel that they should be in" and "it is in danger of drifting in a direction that divides society rather than unites it. And that I think is unfair." It is still unclear in what form this Budget statement will survive, but it now contains an abandoned £4.4 billion of disability benefit cuts and an unspecified £3.5 billion cut in public expenditure. This is a Budget that continues to disintegrate before our very eyes. The Chancellor has given us a Budget that is an economic failure, a moral failure and a political failure. The OBR forecast accompanying the Budget formed a sharply deteriorating backdrop, caused mainly by his own failures at home. Productivity has been revised down and down. Growth has been revised down and down. Earnings have been revised down and are still lower in real terms than they were when the Chancellor took office. It is the same for business investment, which was downgraded by two thirds this year alone. That is not the forecast that most concerns the Chancellor, however. I do not know if you are a betting man, Mr Speaker, but over the weekend the odds on the Chancellor moving next door to No. 10 have slipped from a healthy 2:1 to a distant 4:1. He is on the slide—and fast This is a Chancellor who has an astonishing record of missing his own targets. He promised to protect our triple A credit rating—he has failed. He said he would eliminate the deficit by 2015—he has failed. In his 2012 Budget, he set out a target to double UK exports to £1 trillion by 2020—he has failed, admitting he will miss it by £357 billion. In his last Budget, the Chancellor established three targets he wished to be judged by in this Parliament. First, he promised to keep social security spending below an arbitrary cap he imposed on himself. He has, by his own admission, failed, and he will fail every year of this Parliament, and that was even before he was forced to row back on the cuts to PIP Secondly, the Chancellor promised to reduce debt as a percentage of GDP in every year. He will fail, by the end of the month, to meet his target, and he only met it last year by flogging off public assets, such as bits of Royal Mail. Thirdly, he has promised to have an overall surplus by 2020, and that rule is now dangling by the thinnest of threads. The Red Book shows that he only hangs on to meeting his economically pointless surplus rule by a series of tricks the Joker would have been proud of, and a promise to cut borrowing by an unprecedented £32 billion in a pre-election year. These are fiscal gymnastics that would embarrass the dodgiest accountant. It does not take a genius to see that this amounts to an economic plan that has lost all credibility in the country, just as he is losing credibility in his own party This Budget is also a moral failure. It is a Budget with unfairness at its very heart, from a Chancellor who is making the wrong decisions for our country. Since 2010, over 1 million people have been forced to go to food banks, and over 1 million benefit claimants have been sanctioned, often for utterly trivial reasons. Dying people have been found fit to work—one woman in a coma was found fit to work—and people have committed suicide. Homelessness has soared, and the bedroom tax has caused untold misery. The Chancellor has talked about workers and shirkers, stigmatising all benefit claimants, including those with disabilities, and that has led to a discernible increase in hate crimes against them. I hope the Chancellor is proud of that record, but it is clear that this is not and can never be called compassionate Conservatism This is a Budget that planned to eliminate the deficit on the backs of the poor and some of the most vulnerable in our society. None of this is morally justifiable. Never again will this Government be able to claim, "We’re all in this together". Never again will they be able to don the mantle of compassionate Conservativism with any shred of credibility. This is a political failure of a Budget, as well as a moral failure and an economic failure. This is a Chancellor who has mishandled tax credit cuts, who has pushed and lost on Sunday trading and who has now mishandled disability benefit cuts, too. He is a Chancellor who has lost control of his Budget and lost control of his leadership hopes. This is an omnishambles Chancellor who has produced an immoral Budget, which is disintegrating before our eyes. That is why we will vote against it tonight.