Anneliese Dodds – 2020 Speech in Response to Chancellor’s Economic Statement

Below is the text of the speech made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, in the House of Commons on 8 July 2020.

Our country has been through a great deal over these past few months. Hundreds of thousands have wrestled with this terrible disease. For many months, people have had to go without being able to embrace their loved ones or even to say goodbye. Tens of thousands have died. Our NHS, social care and other workers had made extraordinary sacrifices. We owe them so much.

The Government have had to take big decisions, too—we acknowledge that—but today should have been the day when our Government chose to build a bridge between what has been done so far and what needs to be done to get our economy moving again. It should have been the day when the millions of British people worried about their jobs and future prospects had a load taken off their shoulders. It should have been the day when we got the UK economy firing again. Today, Britain should have had a back-to-work Budget; but instead we got this summer statement, with many of the big decisions put off until later, as those on the Government Benches know full well.

Labour is a constructive Opposition during this time of crisis. We will not criticise for criticism’s sake. But when the Government fall short we will speak up, and the blunt truth is that we have one of the highest death rates in the world and among the deepest economic damage in the industrialised world from coronavirus. So the very first thing the Chancellor must do is prevent additional economic damage due to the slow public health response of his Government.​
As we have seen throughout this crisis, the failure to match soaring rhetoric with meaningful action has consequences for people across our country. Despite all their talk, the Government have failed to create a fully functioning test, track and isolate system. That has damaged public confidence and, in turn, harmed consumer demand. Despite all their talk, the Government have failed to produce a clear system for local lockdowns. The lack of timely information sharing has led, as we all know, to the imposition of an additional wide-scale lockdown in Leicester.

The Government’s contracts with outsourcing firms amount to almost £3 billion, but we still have not got test, track and isolate working properly in the UK, as it is in many other countries, and the Government still have not got a grip on the low value and limited scope of sick pay, risking people’s ability to self-isolate. Fear is corrosive. Fear is hurting our economy. The Government have got to get this right.

Of course, we welcome the Government’s announcement today of targeted VAT cuts on hospitality and tourism and of vouchers to be used in restaurants. Local businesses desperately need that support, and so many low and middle-income people in particular really need help right now. That is why we have repeatedly called for social security to better meet their needs and prevent people risking losing their homes. If delivered properly, these measures should help.

But the Chancellor himself said, when interviewed on “The Andrew Marr Show”, that the best the Government can do to boost demand is to give consumers and workers the confidence and psychological security that they can go out to work, to shop and to socialise in safety. So please, Chancellor, work with your colleagues so our public health response catches up with that operating in other countries. The Prime Minister asked, what have I been doing about that? My party has been repeatedly suggesting solutions to the public health problems facing our country, and we need to adopt them in the UK before this crisis becomes even more severe.

Now the Government must act not just to deal with unemployment as a symptom, but also with its cause. Research reported this week in the “Telegraph” indicates that British workers have already been the biggest casualty in the global jobs cuts. It showed that while jobs markets in many other countries have already fully recovered, in Britain it could take comparatively much, much longer for vacancy levels to return to normal. The levels of unemployment that this country saw in the past were not just an economic waste; they ruined lives. We are seeing the same impacts again—the same devastated high streets and communities robbed of their pride and purpose.

Of course the re-employment bonus announced by the Chancellor is necessary, not least because his Government refused to put conditions on the use of those funds related to employment. But, first, how can he ensure that that money will not just go to those employers who were already planning to bring people back into work and, secondly, what will he do for those firms that lack the cash flow to be able to operate even with that bonus? Related to that, the Chancellor still needs to abandon his one-size-fits-all approach to ​withdrawing the job retention and self-employed schemes. No one is saying that those schemes should stay as they are indefinitely; the Opposition have never said that, but we have said that the money spent on the job retention scheme must not serve merely to postpone unemployment. The scheme must live up to its name, supporting employment in industries that are viable in the long term. We also need a strategy for the scheme to become more flexible so that it can support those businesses forced to close again because of additional localised lockdowns. There is still time to avoid additional floods of redundancy notices. It is the Government’s duty to help Britain through this and stop employment reaching mass levels again.

We need action to ensure the support needed for key sectors of our economy—for our small and medium-sized enterprises and our manufacturers. While we of course welcome the long-overdue arts and culture package, we still have not heard the Government’s plans for other sectors. Many of us expected to hear them today, but we have not. The Project Birch process has been slow, tortuous and opaque. Large parts of industrial Britain need help to get through this—to keep their employees in jobs and keep their suppliers in jobs. Meanwhile, it appears that there will be no solutions for SMEs who cannot take on additional debt until the autumn. This risks many SMEs going to the wall.

Until now, the Chancellor has described a targeted, sectoral approach as the Treasury “picking winners”, but the necessary public health measures have created losers. As the Chancellor himself said just now, the Government required many businesses to shut down to prevent the spread of this disease. Supporting businesses that are viable in the long run but currently starved of cash flow is not a matter of “picking winners”: it is about protecting our country’s economic capacity for the future. Failure to do so—to make the job retention and self-employed schemes more targeted and focused and to support viable businesses—is driving up unemployment in this country. The claimant count is on course to top 3 million people in June—the highest number since the previous record in 1986. This is the Chancellor’s record, and one that cannot and must not be worsened.

Where unemployment arises as a symptom of economic damage, more must be done to help. Labour repeatedly called for the Government to match the ambitions of Labour’s future jobs fund and Welsh Labour’s Jobs Growth Wales programme, and finally the Government have come forward with a scheme apparently modelled on them—the kick-start scheme. The Conservatives cancelled the future jobs fund, of course, and it has taken almost 10 years for them to catch up. As with their belated adoption of our call for “jobs, jobs, jobs”, perhaps this gives a new meaning to the phrase “Project Speed”. We now need to make sure that the kick-start scheme provides genuinely additional opportunities for young unemployed people. The Government must also recognise the specific challenges faced by older jobseekers, many of whom are becoming unemployed for the first time, and those based in especially hard-hit places. Reimposing sanctions now is punitive and counter- productive when jobseekers need support.

We must be ambitious for the future of our country’s economy. Our ambition should not just be to build our way out of this but to do so in a greener and cleaner way. For this, we need more than the reheated announcements ​by the Prime Minister last week. Of course the investment announced was welcome, not least because much of it was already committed to by the Government. However, core elements are missing. For example, £50 million to support retrofitting in social homes is just a seventh of what the Conservatives said they would be spending every year. The muddled confusions over stamp duty over the past 48 hours reflect a broader lack of strategy when it comes to house building, particularly for genuinely affordable and social homes. Overall, the UK’s green investment package barely touches the sides of other countries’ commitments. Even with what was announced today, it only equates to just over the value of Germany’s investment in one green technology alone—hydrogen. The Committee on Climate Change has indicated how far behind the UK is in the race to decarbonise. Failure to heed its recommendations is not only damaging to our planet, but it also cuts us out of leading the development of the key technologies of the future. The Conservatives are still refusing to impose conditions on investment to ensure that it contributes to the goal of net zero and that it supports local jobs, uses local firms, leads to sustainable skilled employment in local areas and prevents the use of tax havens and other forms of asset stripping.

If the Chancellor really wants to “build back better”, he must prevent a rerun of the past. From 2010 onwards, we have seen how families’ resilience has been eroded. We entered this crisis with a quarter of families lacking even £100 in savings. In a typical classroom of 30, nine children are growing up in poverty, and our economy is the most regionally unequal in Europe. Our local authorities continue to be cut to the bone, with many standing on the brink of bankruptcy as we speak, and rather than the promise that our NHS and social care services would get whatever they needed this winter—to weather a potential second wave—those words were conspicuously absent from the Chancellor’s speech just now.

Politicians in this House have gone out on our doorsteps to clap key workers, while the lowest paid have struggled to keep a roof over their heads. We must have a new settlement for the future: an end to poverty pay for our social care workers and those who clean our hospitals and deliver our groceries. We want a recognition of the value of the work of those who have been taken for granted for far too long.

There were some initial press reports that the Government were due to announce generalised tax increases or cuts to services this autumn, which were contradicted by the Prime Minister, who rejected whatever had apparently been briefed out by the Treasury—that has happened quite a few times. I say to the Government that, if they do increase taxes during the recovery and cut back on the public services that we all rely on, it will damage demand and inhibit our recovery. Labour is not calling for tax rises. We are calling for growth.

The Tory manifesto committed to no rises in income tax, national insurance or VAT, and therefore it is for the Conservatives to set out how any additional spending will be paid for. It is the Chancellor’s job to ensure that the economy bounces back from this crisis, so that there is money in the coffers to protect the public finances.

Last week, the Chancellor’s colleague, the Prime Minister, tried to claim the mantle of FDR—as we all know. Perhaps now we know why he went for Roosevelt. It is because this week the Prime Minister blamed carers for the failings in the system that his Government had ​underfunded for the past decades. Now we know why he went for Roosevelt. It is because the last thing that his Government would have wanted was the sign on the desk of Harry Truman, the successor to Roosevelt, which said, “The buck stops here.” If this Government had a sign, it would probably say, “The buck stops anywhere but here”. But they cannot escape their responsibilities: to govern is to choose. It is to choose to finally sort out test, track and isolate, to prevent unnecessary additional unemployment and to build the green jobs of the future. This is a moment when our country needs its Government to help Britain through.