Budget Resolutions and Economic Situation — House of Commons, 2015-03-18
Topic: Macroeconomics
Thomas Clarke (Labour, Centre-left): I would like to begin by exploding the austerity myth, the so-called "mess Labour left behind", which is repeated ad nauseam on the Government Benches. The myth is Labour’s excessive public expenditure. The reality is that on the eve of the 2008 international financial crisis, public spending was almost exactly the same as it was in the later years of the chancellorship of the right hon. and learned Member for Rushcliffe (Mr Clarke), when public expenditure stood at 39% of GDP It is absurd to suggest that Labour created a worldwide economic crisis. Indeed, the current Chancellor called for less regulation of the banking sector—the very banks that caused the problems we are still dealing with—in the months preceding the crash. William Keegan, the distinguished economic commentator, wrote recently that "for all the apparent political success the Chancellor and his colleagues have had in making people believe them, the charge simply does not stand up." We have seen something similar in Scotland: reality turned on its head, facts switched into fallacy, rhetoric in place of reality. Last week, the "Government Expenditure and Revenue Scotland" report showed that with the SNP’s fetish for fiscal autonomy, and even including a geographical share of declining oil revenue, the amount of revenue raised in Scotland would be significantly less than the total Scottish expenditure by both the Scottish and UK Governments—a deficit of £6.5 billion. This is more than half of what is spent on the NHS in Scotland each year, and the equivalent of every person in Scotland losing £800. "So what?", they say. Crushing the standard of living for pensioners and further impoverishing the struggling; destroying the life chances of young people and inflicting more hardship on hard-working families; putting at risk the NHS; lowering the educational opportunities for Scots; cuts to tax credits, child benefit and pensions; a harder future with less support and even less hope—all this, we are led to believe, is a price worth paying for the imposition of an ideology. In Holyrood, the obsession is with independence and its painful precursor, fiscal autonomy. With this coalition, as we have seen again today, the ideological obsession continues—personified by the Chancellor, whose Budget aims to cut public expenditure, reduce taxes for the rich and deliver for the few, not the many People are hurting. The Chancellor failed miserably to meet his own deficit target. My constituents are suffering from declining incomes and failing to find work. Hard-working families in my constituency are on average £1,600 a year worse off than they were in 2010. Stagnant wages, with low-paid and insecure work, are the reality for many of the people I represent. Of course they are hurting. Some 1.4 million people in Britain are on zero-hours contracts, with some of them reliant on text messages to tell them how many hours of work they will get that week. The truth is that unemployment has been replaced by underemployment, with the state subsidising businesses profiting from the low wages they pay their workers. As a result, tax receipts are more than £68 billion lower and receipts from national insurance contributions £27.3 billion lower than they were expected to be five years ago. The working poor are increasing in number in our country, and many of them are forced to rely on food banks just to survive. The Trussell Trust told us that in 2009 we had one food bank in Scotland, but today we have 48. I want to live in a society where there is no need for food banks. In my constituency, unemployment is at 3.8% and youth unemployment at 5.3%—both well above the UK average. The average income in my constituency is lower than the UK average, and 3,785 children live in poverty. Government support is not a dispensable luxury; it is a necessity in order to survive, and for some it is simply not enough Great progress was made under the last Labour Government, and we should not underestimate it. More has to be done, and I believe more will be done. My constituents and the rest of the country simply cannot endure another five years under the Tories. I have great faith that on 7 May our country, the United Kingdom, will choose to be governed fairly—and that means a Labour Government