Budget Resolutions — House of Commons, 2020-03-12
Topic: Macroeconomics
Patrick Bosco McFadden (Labour, Centre-left): It is a pleasure to follow the hon. Member for West Worcestershire (Harriett Baldwin) This Budget is the Government’s attempt to make a turn in the road. Gone are the logic, the rhetoric and the assumptions that have driven UK spending policy for the past decade. If nothing else, it is testament to the Conservative party’s capacity for reinvention and its hunger for power. For the avoidance of doubt, that is not an insult In truth, the Chancellor had little choice but to change course, because the backdrop to the Budget was a flat economy and an anaemic forecast for future growth—that is even before the impact of the coronavirus. Growth estimates are down this year to just a little over 1%, and to around 7% over the next five years. Growth that weak is not levelling up but levelling down. Such weak economic growth leaves the Government no alternative but to fund their spending plans largely by borrowing money in a way that the Conservative party has for years derided as irresponsible and reckless. Add to that the impact of the Brexit path the Government have chosen, which is the defining decision that now dare not speak its name. If the line has gone out from No. 10 not to talk about it, the OBR did not get the memo because it is there in black and white. The OBR estimates a potential loss of 4% of GDP over the next 15 years—lost output, lost income and lost tax revenue The Secretary of State for Business, Energy and Industrial Strategy claims this is the most business-friendly Government ever. In truth, this is the first Government in living memory to relegate economic prosperity to behind issues of sovereignty. That is not a claim from me; it is a policy set out by the Prime Minister and his chief Brexit negotiator In more ways than one, this Budget is just starting to fill a hole the Government have dug for themselves. If low interest rates allow them to borrow for investment, it was also true some years ago when they derided such suggestions. Of course, new investment in infrastructure is welcome and long overdue, certainly in places like the Black Country. We have too many derelict factory buildings, too much unused development land and too much unremediated land, all of it standing as a physical reminder of the lack of investment over the Tory years, but simply calling themselves a new Government cannot disguise the fact that they are amending an investment shortage that they decided on in the first place. As I said, they are just starting to fill a hole they dug themselves Carbon capture and storage has been announced and abandoned almost as many times as the A303 project at Stonehenge, but neither has been announced quite so often as the potholes fund—the Albert Hall should have been well and truly filled by now with those announcements We have heard a lot of this before, and it could and should have started years ago, but it would be complacent of my party to rest on those criticisms alone because this is a shift in fiscal strategy—there is no doubt about that—and responding to it will require more than reaching for the same slogans as before. There has been much talk in recent months about what constitutes a good Opposition. The first step is to oppose the Government and Conservative party we actually have in front of us, rather than the ones we wish were in front of us. When our opponent has adapted, we have to adapt, too. That is something we must do Infrastructure investment is definitely needed, but addressing regional inequality is about people and their life chances. Where they were born, where they live and what kind of family they come from, those things should not limit people’s opportunities and chances to make the most of their life Alongside the bricks and mortar, we need: a deep-seated effort to tackle educational inequality; good quality, affordable childcare to make sure parents can take up jobs; an early-years effort to tackle the appalling development gap that afflicts some children, even by the time they start school; second-chance skill training to equip people for a new labour market and to give them the tools they need to reach their full potential; and the support for social mobility needed to break through the charmed circles that still characterise too many of the professions and too many of the best jobs in this country. If there really is to be levelling up, it is about a lot more than tarmac and concrete; it is about people’s lives and the chances they have. We are still in the early stages of the coronavirus response, and no one can be sure about its health and economic impacts. There is broad cross-party support for the measures announced by the Chancellor yesterday, although we will continue to press for there being no penalty for those who choose to do the right thing, whether they are self-employed, on a non-permanent contract or anything else of that nature That takes us so far, but this is a global pandemic and is now being defined as such. Where is the global leadership in tackling this? Where is the co-ordinated economic response? Where is the concerted effort from world leaders to act together to face a virus that respects no borders? It is hard to escape the conclusion that, had this virus erupted a decade ago, there would have been a will to have a much more international response. With this generation of leaders, with nationalism on the rise and with international institutions and actions having been so disparaged and derided, that will has so far not been there It is not too late. We could lead in calling for that effort. If we do not, we will have to hope that the retreat into national responses does not cost us dearly.