The Chancellor delivered a Budget last week which exposed the extent to which Theresa May’s Tory government is mired in its own divisions, unable to articulate a vision for the country, negotiate Brexit effectively, deliver a strong economy or invest in our public services.
Before delivering his announcements, the Chancellor set out an extraordinarily weak context – our economy is flat lining, and wages stagnating, underpinned by poor productivity. Theresa May fought the general election in June based on the promise of a strong economy. She has abjectly failed to deliver it.
The Budget announcements themselves were piecemeal, reflecting for the most part a scatter gun approach to the issues on which the government is under pressure in a desperate bid to hang on to power whatever the cost to the country. Brexit is all consuming, and the most shocking announcement of all in a Budget which comes after five terror attacks, the Grenfell Tower fire and with our schools and NHS in crisis, is that the Chancellor chose to commit more funds to the cost of Brexit than to our NHS – a far cry from the Leave campaign commitment that Brexit would deliver £350m a week more for the NHS. This Budget is also notable as much for what is absent from it, as the announcements it contained.
No comprehensive action to make tax fair: Tax avoidance and evasion means that there is less money to spend on the public services we rely on like our NHS and social care. The Paradise Papers show that tax avoidance is happening on a huge scale. Tax avoidance is completely unacceptable, and the government must act to address it. But the Chancellor did not commit to public registers of the beneficial owners of companies registered in tax havens – the measure which would make the single biggest different on this issue, choosing to announce only minor measures which tinker around the edges of the problem.
We also need steps to address the unfair increase in business rates that has hit thousands of small businesses in my constituency, while many internet retailers have seen their bills drop. Again there were small changes, but not the comprehensive rethink that is needed.
Far too little far too late on housing and infrastructure: Since the Lib Dem-Tory coalition government took power the number of new social homes funded by government grant has dropped by a staggering 97%. The main headline announcement of the budget was the abolition of stamp duty for new homes up to £300,000, but this is another demand side measure which will only drive house prices higher. There was a small change to council borrowing for housing, but not enough even to reverse the cuts to council housing budgets since 2015. There was no action to abolish the flawed Lib-Dem Tory viability assessments, and the issue of setting clear timescales for landowners to deliver on approved planning and applications, and calling time on land banking was kicked into the long grass with yet another review.
We also need investment in infrastructure to support growing communities and create skilled jobs, we need a housing strategy which is linked to the industrial strategy so that jobs are being created across the country and the demand for new homes more evenly spread – and we needed the Chancellor to commit to investment in renewable energy, public transport, internet broadband and home insulation. On all of these fronts the Tories failed to act.
No fair funding for our schools, police, and Councils, and sticking plaster funding for our NHS: The Lib Dem-Tory Coalition and Tory government cuts have hit our local schools, NHS services and local councils harder than almost anywhere in the country. Despite pledges to the contrary every school in my constituency has suffered devastating cuts, our hospitals and GPs are underfunded and our local councils have lost more than 50% of their central government grant. In this context, it is extraordinary that the Chancellor announced only sticking plaster funding for the NHS. The pressures on the NHS cannot be solved without tackling the crisis in our social care system, yet the Chancellor didn’t mention social care once in his Budget speech, and there is no additional funding for this, or for other vital Council services like libraries, parks or children’s centres. Our schools are key to improving productivity in our weak economy, yet the Chancellor announced only a small amount of funding for new maths schools and maths teachers, rather than addressing the cuts and rising costs facing our schools, which is one of the biggest factors influencing teachers, including maths teachers, leaving the profession. And in a year which has seen unprecedented pressures on the police, a series of horrific terror attacks and while police stations are being closed in London, there is no new funding for police.
A U-turn on Universal Credit but no major rethink: I am pleased that Labour’s campaigning on the disastrous approach the government was taking to Universal Credit resulted in a U-turn in the Budget. The changes are undoubtedly welcome, but they are too little, far too late. The changes don’t address the fundamental problem that the government expects people in very difficult circumstances to live off thin air, or enter into debt in order to put food on the table. Research by Southwark and Croydon councils, who piloted Universal Credit, show the huge numbers of people driven into debt by Universal Credit - 12% of tenants in Southwark alone accumulated £5.3m of rent arrears during the pilot, with hugely negative impacts on them and their families. The government must act to redesign the Universal Credit system to avoid its unacceptable consequences and long delays immediately.
No commitment to scrap the public sector pay cap: I’m proud of the hard work of the thousands of nurses, teachers, police and other public servants in our hospitals, schools and councils. They have seen their pay cut in real terms every year since the Lib-Dem Tory coalition was elected. They deserve a pay rise and this should be fully funded by the government so that a pay rise for some doesn’t result in more cuts or redundancies for others. Although there were some warm words for our hospital staff, the Chancellor failed to commit to funding for other hard working public servants, and this continued austerity is making life far too difficult for the people we rely on the most.
A bad budget for the environment: Climate change is the single biggest issue we face globally, and it should be the prism for all public sector decision making. Instead, the Chancellor chose to invest in the extraction of further fossil fuels from the North Sea, freeze fuel duty and air passenger duty; and failed to establish a credible national strategy for air quality, merely making a small amount of funding available to local councils who don’t have responsibility for some of the biggest air pollutants including motorways, airports, and power stations.
I see the impacts of this government’s policies every week in my constituency. The government is driving more families into poverty, failing to tackle the housing crisis and placing our public services under intolerable pressure. It is also presiding over a Brexit process which carries a great risk of hugely damaging long term consequences for the UK. We need a Labour government to invest in our economy and public services and deliver a new vision for this country based on our values of fairness, social justice and internationalism, and place our national interest at the heart of the Brexit negotiations; and that is what I will continue to campaign for.