Spending Round 2019 — House of Lords, 2019-09-25
Topic: Macroeconomics
Denis Tunnicliffe (Labour, Centre-left): My Lords, I welcome the noble Lord, Lord Duncan of Springbank, to his role—I am not sure how long he is going to occupy it. I join in his remarks about the noble Lord, Lord Young of Cookham, who filled the role for some months in an entertaining and very meaningful way. In this House, we do not have much of an impact on Treasury matters, but with his help we have had the odd little success and variation. That is the end of my nice words Before turning to the subject of this debate, it would be remiss of me not to acknowledge the circumstances in which it is taking place. The Supreme Court judgment issued yesterday morning was clear: the Prime Minister’s advice to Her Majesty the Queen was unlawful. Those are words I never thought I would say out loud, and I am sure that many noble Lords across the House share my deep discomfort with the present situation. The attempt to prorogue Parliament was the latest in a long line of questionable decisions by the current occupants of Downing Street. It was a decision that the Labour Party opposed. The Prime Minister’s intention, to run down the clock and prevent Parliament taking action on Brexit, was clear to all. I am pleased that my noble friend the Leader of the Opposition and the leader of the Liberal Democrats declined to participate in the late-night prorogation ceremony. Their decision has been vindicated. In their determination to get their own way and try and force Brexit on 31 October or secure an early election, the Government tore up all the rulebooks So we find ourselves here today, opining on an unconventional one-year spending round that had been intended as the starting gun for a general election campaign. It is important to emphasise that, ordinarily, such an exercise is very important and provides central government departments with their allocations across multiple years. Doing this provides certainty for the public and those that serve us. It would normally be backed up with a revised economic forecast from the Office for Budget Responsibility. However, by dispensing with standard practice, the Chancellor has failed to provide the investment that our public services so badly need or to give departments any long-term security after years of cuts Despite claims that austerity is over, the truth is that this spending round is nothing more than a sticking plaster intended to mask years of mismanagement of our public services. Nowhere is this truer than in the case of the NHS and social care. More than half the funds given to the NHS had already been announced. Councils face a social care spending gap of £2.6 billion this year alone, and the additional funds come nowhere near reversing the £7 billion of cuts since 2010. Overall, the £13.8 billion announced earlier this month is less than a third of the £47 billion of cuts this Government have voted through since 2010. There was nothing for social security, despite there being yet more cuts to come. There was no meaningful help for low-income families. Indeed, the Joseph Rowntree Foundation argues that, despite the spin: "Austerity isn’t over for the 14 million locked in poverty" The Women’s Budget Group claimed that this spending round, "wasn’t enough to make up for the damage by 10 years of austerity, which has hit women, particularly lone parents, disabled and BME women the hardest" As my right honourable friend the shadow Chancellor said when responding to the Commons Statement earlier this year, this Government should, "not insult the intelligence of the British people".—[Official Report, Commons, 4/9/19; col. 189.] They know that this was a stunt, and this is backed up by expert opinion, which quickly expressed concern that the promised funds may never materialise Changing economic conditions have substantially reduced the headroom available to the Chancellor, perhaps by £10 billion. As a result, the Institute for Fiscal Studies does not believe the commitment will fit within the Government’s fiscal framework once the OBR has produced and published its updated economic forecasts. The Resolution Foundation argued that the settlement is neither, "consistent with the government’s fiscal rules nor well timed given the uncertainty about the nature of the UK’s imminent exit from the European Union" It is true that the Chancellor has announced his intention to review the fiscal framework with a view to easing constraints on borrowing, but this should have been done alongside a full spending review. Instead, we are left with the possibility that this flimsy document will, like the recent Prorogation order, simply be torn up at a later stage While we are critical of the Government’s approach to this spending round, we are by no means opposed to a fresh approach. We are clear that the best route to sustainable economic growth is to invest in our economy and public services. Our fiscal credibility rule means that a Labour Government will not borrow for day-to-day spending but will take advantage of low interest rates to support vital long-term infrastructure projects. Labour would provide much-needed capital funds to the NHS. We have already pledged an additional £8 billion for social care and to create a new national care service. Our national transformation fund and regional investment banks will work to support jobs while tackling the climate change emergency. They will help meet Labour’s commitment to reach zero emissions on an accelerated timetable by 2030. We will introduce a national education service to provide free and high-quality education to people of all ages, from cradle to grave. We will invest in infrastructure across the country, including drastically improving transport links across northern England through a Crossrail for the north That is the level of ambition this country needs. Such a programme would truly mark the end of austerity. It is, unsurprisingly, a level of adventure that is severely lacking from this Government. Nowhere is that clearer than in this spending round.