Budget Resolutions and Economic Situation — House of Commons, 2016-03-17
Topic: Macroeconomics
Daniel Owen Jarvis (Labour, Centre-left): In common with all right hon. and hon. Members, I listened very carefully to the Budget that the Chancellor delivered yesterday. It was his eighth Budget—an opportunity to show that, after six hard years nearly, his plan has worked. Although I welcome the introduction of the sugar tax and his clear commitment to a Britain that will be stronger, safer and better off inside a reformed European Union, the reality is that, yesterday, his record of failure became clear: fiscal rules broken; cuts targeted at the most vulnerable in society; no compelling vision for our country; an ideological Budget for the better-off that seeks to reshape the state on the back of our country’s poorest. This was from a Chancellor who frankly focuses too much on the politics and not enough on the economics I want to speak today about the Chancellor’s fiscal record, his Budget rhetoric and his short-sighted approach to the future of our economy. First, on the fiscal record, the Chancellor stood here in 2010 and said he was going to get a grip on our country’s finances. In his Budget shortly after the general election, he said: "This emergency Budget deals decisively with our country’s record debts."—[Official Report, 22 June 2010; Vol. 512, c. 166.] Despite that bold claim, six years later, public debt is still rising and household debts are growing. The Chancellor also said he would eliminate the deficit, but we learnt yesterday that this year the deficit will be over £70 billion. It has been just a few months since the Chancellor came to Parliament and presented his "long-term economic plan"—what was supposed to be the plan for the next five years. Yet already those plans are being revised, with deeper spending cuts, growth revised down and borrowing and debt as a percentage of GDP revised up. I have had goldfish that have lasted longer than some of the Chancellor’s fiscal rules Secondly, let us look at the Chancellor’s Budget rhetoric. Each year, he stands up and delivers a great line, but if we look at it more closely, we find it is just rhetoric, a mirage. In yesterday’s Budget, the Chancellor said that this was a Budget "for the next generation." The reality? The Children’s Society says that the Budget "fails the next generation", and the Child Poverty Action Group says that the next generation are to be the poorest generation for decades. The Chancellor has now been found out for what he is—someone who when he says "long-term economic plan", really means "short-term political gain" The Chancellor says that he wants to talk about the future and that he wants to build a northern powerhouse, but he is not willing to fund it. He is spending three times more on transport in London than in Yorkshire and the Humber, and we now know that the Department for Business, Innovation and Skills, which is responsible for the northern powerhouse, is closing its Sheffield office, moving to London and taking the 200 jobs along with it. You could not make it up. I do not think that the people of South Yorkshire will think that this is what a northern powerhouse should look like Infrastructure is crucial to our country’s future. Although I welcomed yesterday’s announcement of money to scope the trans-Pennine tunnel, a project that has been championed by my hon. Friends the Members for Penistone and Stocksbridge (Angela Smith) and for Stalybridge and Hyde (Jonathan Reynolds), the reality is that investment is too low. Where it is happening, things are moving too slowly. Figures show that just 114 out of 565 infrastructure projects are in construction. If our economy is going to compete in the "global race" the Prime Minister has talked about, R&D spending will be key to our future success. Despite that, Britain is spending less than France, less than Germany, and less than half of what South Korea spends on R&D Speaking of our future, where were the measures to build more homes? Where were the measures to help the NHS? Where were the policies to boost the earnings of those living on low pay? These are crucial issues that will define our future, yet we got nothing from the Chancellor yesterday On the one issue relating to our future where the Chancellor was decisive, he was completely wrong—our children’s education. Forcing every school to become an academy is an ideologically motivated policy, and there is simply no evidence that standards will be improved. There are already concerns about the rapid expansion of a number of academy chains. This policy is likely further to antagonise the biggest asset in our education system—the teachers. Who is going to pay for the Chancellor’s fiscal failure? It is my constituents in Barnsley and people across the country. As the Resolution Foundation said this morning, it is those in the bottom half of the income distribution who will lose £375 a year by the end of this Parliament. It is the disabled people who will be denied personal independence payments, the single biggest spending cut announced in the Budget, and one made on the same day that taxes are cut for big business. As the charity Sense said yesterday, it was "a bleak day" for disabled people. Parents who use the children’s centres in my constituency of Barnsley Central—centres that are rated outstanding and good by Ofsted—have seen their nursery provision stopped as a result of Government cuts. Women, too, have suffered from the Chancellor’s tax and benefit changes, with 81% of savings coming out of the pockets of women That is the cost of this Chancellor—a Chancellor who puts his own interest before the national interest; a Chancellor who talks about fixing the roof while the sun is shining, but who should be fixing the foundations; and a Chancellor whose economic record is now being exposed as a mirage.