Budget Statement — House of Lords, 2017-12-04
Topic: Macroeconomics
Denis Tunnicliffe (Labour, Centre-left): My Lords, in opening this debate for the Opposition, I am somewhat in awe of the speakers list, in terms of both its length and, principally, its quality. I will therefore try to be brief. I look on this Budget as a confessional. Economic growth is the lowest it has been since the Tories came into office, and the Budget confirms that failure: growth is revised down in every year of the forecast. The Government have promised to eliminate the deficit by 2015, 2016, 2017 and 2020, and now I believe they say the mid-2020s, yet the answer—continuing austerity—remains the same. The long-term economic plan has been and continues to be a shambles The investment promise is inadequate. Labour would bring forward investment in infrastructure in every region and nation to create a high-wage, high-productivity society. Real wages are lower than they were in 2010. The Budget confirms a further hit to living standards in 2017. The national living wage will not be the £9 per hour that was promised when it was introduced; in March it was revised down to £8.75, and it has now been revised down to £8.56. By 2020, average full-time workers on the national living wage will be £900 per annum poorer. If Labour’s promise of £10 per hour had been introduced, they would be £3,000 per annum richer What is the overall growth effect of the Budget? This can be found in the OBR’s Economic and Fiscal Outlook, somewhat obscurely, in paragraph 1.19: "The short-term fiscal loosening announced in this Budget boosts growth by 0.1 percentage points in 2018 and 2019, but its withdrawal then reduces it by the same amounts in the following two years" Plus 0.1 plus 0.1 minus 0.1 minus 0.1 equals zero. When have a Government, with an economy as in the doldrums as this one is, ever turned down an opportunity to stimulate it? So growth is low, deficit reduction has failed, investment is inadequate, real wages are static and the national living wage is down I turn now not so much to the Budget as to what is not in it. I would call it a hope-free Budget, looking at it from the point of view of the poor, the aspirant, the sick and the old. First I want to look at it from the point of view of the poor. I think few of us in this House really understand what it is like to be poor. I came from a modest background where my household income was certainly in the bottom quintile and probably in the bottom decile. However, they were different times: I lived in a council house where the tenancy was secure and rents were reasonable, and my father was a hospital worker but he knew he had a job and he had stability. Yes, there were things that we did not have, but we did not have fear. I put it to the House that today’s poor have fear in a way that probably very few here can understand. So what have this Government done? By introducing universal credit, they have taken £3 billion per annum from the poor, and this Budget produces a miserly £300 million a year to try to ameliorate the impact. People will not particularly believe me because I am standing here at the Labour Front Bench, but today the Joseph Rowntree Foundation published a report whose key finding is: "Over the last 20 years the UK has seen very significant falls in poverty among children and pensioners. Twenty years ago a third of children lived in poverty; this fell to 27% in 2011/12. In 1994/95, 28% of pensioners lived in poverty, falling to 13% in 2011/12. This progress is now at risk of reversing: poverty rates for both groups have started to rise again, to 16% for pensioners and 30% for children" Is there any relief in this Budget for the poor? No Let us turn to what I call the aspirant group. What makes society work is social mobility. In my day it was surprisingly more available than people tend to think, and I was lucky to enjoy social mobility. To be fair to previous Governments, this was recognised and a Social Mobility Commission set up, chaired by Alan Milburn. Now, all the commissioners have resigned. I quote from his resignation letter: "For almost a decade, I have been proud to serve under Labour, Coalition and Conservative governments in various social mobility roles. I remain deeply committed to the issue, but I have little hope of the current government making the progress I believe is necessary to bring about a fairer Britain" Does the Budget bring any hope of improved social mobility? No I turn to the sick. Yes, there was money in the Budget, but because of demographic and other effects, it was effectively delivering a cut. I must commend NHS England on its openness in decision-making. It places on the web its board papers and minutes. Therefore, I was able to look at the paper that the board produced for the meeting immediately after the Budget, which took account of the Budget. Under the heading: "Be realistic about what can be expected from the remaining available funds", it states: "For example, new advisory NICE guidelines can only expect to be implemented locally across the NHS if in future they are accompanied by a clear and agreed affordability and workforce assessment at the time they are drawn up" That is distinctly different from the present situation, where NICE guidelines are based not on affordability but on whether they are effective and give value. That paragraph continues, "and even assuming this year’s unprecedented elective demand management success continues, our current forecast is that—without offsetting reductions in other areas of care—NHS constitution waiting times standards, in the round, will not be fully funded and met next year" Press reports indicate that the paper was fully endorsed by the board. The NHS has been honest, but this does not contain hope. Is there any comfort for the NHS in the Budget? No Finally, I turn to the old—perhaps we have more empathy with this subject. Let us face it: we all have to think about the last few years of life. Sadly, we live in a society where, throughout our nation, we are likely to feel most insecure in our last few years, because adult social care has been steadily ignored. There is a particular crisis in the care home sector. In July this year, Andrea Sutcliffe, chief inspector of adult social care in the CQC, said: "Last October, CQC gave a stark warning that adult social care was approaching a tipping point. This was driven by more people with increasingly complex conditions needing care but in a challenging economic climate, facing greater difficulties in accessing the care they need While this report focuses on our assessment of quality and not on the wider context, with the deterioration we are seeing in services rated as Good together with the struggle to improve for those with Inadequate and Requires Improvement ratings, the danger of adult social care approaching its tipping point has not disappeared. If it tips, it will mean even more poor care, less choice and more unmet need for people" That is the CQC’s view of the world Interestingly, on 30 November, the Competition and Markets Authority reported on care homes. It said: "Our assessment based on larger providers is that self-pay fees are now, on average, 41% higher than those paid by LAs in the same homes. This represents an average differential of £236 a week (over £12,000 a year)" It then discusses what will be the effect of that on the market. It argues that the effect is absolutely obvious: care homes will be built where there is a big market for self-pay, not built to meet the needs of local authorities. The area is approaching crisis. It goes on to say: "Our assessment is that if local authorities were to pay the full cost of care for all residents they fund, the additional cost to them of these higher fees would be £900 million to £1.1 billion a year" Is there any hope in this sector? No. The care home sector is in crisis, and adult social care is in crisis. For the poor, the aspirant, the sick and the old, this is a no-hope budget.