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Category: Economy

  • Anneliese Dodds – 2021 Comments on the Budget and Public Services

    Anneliese Dodds – 2021 Comments on the Budget and Public Services

    The comments made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 4 March 2021.

    Yesterday’s Budget is unravelling fast. After a year when our key worker heroes kept the country going, it’s incredible that the Chancellor couldn’t find a penny more for our schools and hospitals. Instead we got a whopping £30.1 billion cut in day-to-day health spending in future years, when the NHS will be struggling with the post-Covid backlog.

    We need to learn the lessons of this pandemic, not go back to the insecurity of the past. But this Chancellor has the wrong priorities and is totally out of touch with what this country needs.

    This Budget was a test of character for Rishi Sunak. He failed it.

  • Keir Starmer – 2021 Comments on the Budget

    Keir Starmer – 2021 Comments on the Budget

    The comments made by Keir Starmer, the Leader of the Opposition, on 3 March 2021.

    Thank you Madam Deputy Speaker.

    After 11 months in this job it’s nice finally to be standing opposite the person actually making decisions in this Government.

    The trouble is, the trouble is, it’s those decisions that have left us with the mess we find today. The worst economic crisis of any major economy in the last 12 months, unemployment at five per cent and as the Chancellor said, forecast to rise to 6.5 per cent, debt at over £2 trillion.

    I’m sure this Budget will look better on Instagram.

    In fact, this week’s PR video cost the taxpayer so much, I was half expecting to see a line in the OBR forecast for it.

    But even the Chancellor’s film crew will struggle to put a positive spin on this. After the decisions of the last year and the decade of neglect, we needed a Budget to fix the foundations of our economy, to reward our key workers, to protect the NHS and to build a more secure and prosperous economy for the future.

    Instead, what we got was a Budget that papered over the cracks, rather than rebuilding the foundations. A Budget that shows the Government doesn’t understand what went wrong in the last decade or what’s needed in the next.

    The Chancellor may think that this is the time for a victory lap but I’m afraid this Budget won’t feel so good for the millions of key workers who are having their pay frozen, for the businesses swamped by debt and the families paying more in council tax and the millions of people who are out of work or worried about losing their job.

    And although the Chancellor spoke for almost an hour, we heard nothing about a long-term plan to fix social care.

    The Chancellor might have forgotten about it, but the Labour Party never will.

    The British people will rightly ask: why has Britain suffered a worse economic crisis than any major economy? The answer is staring us in the face.

    First, the Chancellor’s decisions in the last year.

    This is the Chancellor who blocked a circuit break in September, ignoring the science he told the British people to “live with coronavirus and live without fear.”

    A few weeks later, we were forced into an even longer and more painful lockdown. Whatever spin the Chancellor tries to put on the figures today, as a result of his decisions, we’ve suffered deeper economic damage and much worse outcomes.

    And Madam Deputy Speaker, that is nothing compared with a decade of political choices that meant Britain went into this crisis with an economy built on insecurity and inequality.

    The Chancellor referred to the last 10 years, we’ve got an economy as a result of those 10 years with 3.6 million people in insecure work; where wages stagnated for a decade; over four million children living in poverty and, critically, we went into this crisis with 100,000 unfilled posts in the NHS and where social care was ignored and underfunded for a decade. Members Opposite voted for all of that. Today’s Budget doesn’t even recognise that – let alone rectify it.

    It’s clear that the Chancellor is now betting on a recovery fuelled by a consumer spending blitz.

    In fairness, if my next door neighbour was spending tens of thousands of pounds redecorating their flat, I’d probably do the same.

    But the central problem in our economy is a deep-rooted insecurity and inequality and this Budget isn’t the answer to that. The Chancellor barely mentioned inequality – let alone tried to address it.

    So rather than the big, transformative Budget we needed this Budget simply papers over the cracks. If this had been a Budget for the long-term it would have had a plan.

    A plan to protect our NHS, a plan to fix social care.

    But I can tell you this, a Labour Budget would have had the NHS and care homes front and centre.

    But this Budget is almost silent on those questions.

    If this had been a Budget to rebuild the foundations, it would have fixed our broken social security system.

    Instead, the Chancellor has been dragged – kicking and screaming – to extend the £20 uplift in Universal Credit – but only for a few months.

    Once again deferring the problem. As a result, insecurity and the threat of losing £1,000 a year still hang over six million families.

    They ask what would we do, we would keep the uplift until a new, fairer system can be put in place.

    If this Budget was serious about rebuilding our shattered economy, it would have included a credible plan to tackle unemployment.

    The Chancellor said very little about the Kickstart scheme that’s no doubt because the Kickstart is only helping one in every 100 eligible young people.

    In six months it supported just 2,000 young people, yet youth unemployment is set to reach one million. Like so much of this Budget – the Chancellor’s offer is nowhere near the scale of the task.

    And of course the biggest challenge to this country is the climate emergency.

    The Chancellor just talked up his green credentials, but his Budget stops way short of what was needed or what’s happening in other countries.

    This Budget should have included a major green stimulus – bringing forward billions of pounds of investment to create new jobs and new green infrastructure.

    Instead, the Government is trying to build a new coal mine which we now learn might not even work for British steel. If anything sums up this Government’s commitment to a green recovery and jobs of the future, it’s building a coal mine we can’t even use.

    If the Government was serious about tackling insecurity and those most at risk from Covid, this Budget would have fixed the broken system of statutory sick pay and at the very least filled the glaring holes in isolation payments.

    This isn’t difficult to fix – the Government should just make the £500 isolation payment available to everyone who needs it. That would be money well spent. And a year into the pandemic, it’s a disgrace that it’s not.

    If the Government were serious about fixing the broken housing market, it would have announced plans for a new generation of genuinely affordable council houses.

    Instead, 230,000 council homes have been lost since 2010.

    Yet the Chancellor focused today on returning to subsiding 95 per cent mortgages.

    Now, I know what you’re thinking, I’ve heard that somewhere before. I’ve heard that somewhere before. Maybe it was because the Prime Minister announced it five months ago in his conference speech.

    No, I don’t think anybody heard that. I remember now, I remember now – it’s what Osborne and Cameron came up with in 2013. And what did that do? What did that do?

    It fuelled a housing bubble, it pushed up prices, and made owning a home more difficult.

    So much for “generation buy.”

    I’ve been saying for weeks that this budget will go back.

    I didn’t expect the Chancellor to lift a failed policy from eight years ago. This Budget fell far short of the transformative change we needed to turbocharge our recovery for the decades to come.

    There was no credible plan to ease the burden of debt hanging over so many businesses. This is estimated at £70bn.

    This Budget asks businesses to start paying this money back whether they’re profitable or not.

    That affects millions of businesses, it will hold back growth because businesses will have to pay back money they never wanted to borrow instead of being able to invest in their futures and create jobs in their local areas.

    It’s both unfair and economically illiterate.

    This Budget also fell far short of what was needed to support the self-employed and freelancers, unless, of course, you’re one of the Chancellor’s photographers.

    After a year of inaction, we’ll look at the details of what the Chancellor announced, but it certainly looks like, from the figure of 600,000 that he mentioned, that millions will still be left out in the cold.

    The Chancellor’s one nominally long-term policy was his references to “levelling up.”

    But what does this actually look like? It’s not the transformative shift in power, wealth and resources we need to rebalance our economy.

    It’s not the bold, long-term plan we need to upskill our economy, to tackle educational attainment or to raise life-expectancy.

    It certainly isn’t a plan to focus government’s resources on preventative services and early years. For the Chancellor “levelling up” seems to mean moving some parts of the Treasury to Darlington, creating a few freeports and re-announcing funding.

    That isn’t levelling up: it’s giving up.

    And instead of putting blind faith in freeports, the Chancellor would be better served making sure the Government’s Brexit deal actually works for Britain’s manufacturers, who now face more red-tape when they were promised less.

    For our financial services – still waiting for the Chancellor to make good on his promises.

    For the small businesses and fishing communities whose goods and produce are now left unsold in warehouses. And for our artists and performers who just want to be able to tour.

    Turning to other parts of the Statement, we’ll wait for the detail about the so-called super-deduction, but it’s unlikely to make up for the last 10 years, when the levels of private investment growth have trailed so many other countries.

    Of course, we welcome the creation of a National Infrastructure Bank. Something we’ve called for, for years.

    Although it would have been better if the Government hadn’t sold off the Green Investment Bank in the first place.

    We also welcome the introduction of green savings bonds. I have to say: What a good idea it is to introduce a new set of recovery bonds.

    The trouble is that the scale of what the Chancellor announced today is nowhere near ambitious enough.

    And the long-overdue commitments to extend furlough, business rate relief and the VAT cut on hospitality are welcome. But there is no excuse for holding the announcement of this support back until today – and, of course, we will look at the detail.

    But Madam Deputy Speaker, there are very few silver linings in this Budget.

    The IMF and the OECD have said now isn’t the time for tax rises. We’re in the middle of a once in 300-year crisis. Our economy is still shut. Our businesses are on life-support.

    So it’s right that corporation tax isn’t rising this year or next.

    Of course, in the long-run corporation tax should go up.

    The decade long corporation tax experiment by this government has failed.

    But no taxes should have been raised in the teeth of this economic crisis.

    So it’s extraordinary that the Chancellor is ploughing ahead with the £2bn council tax rise – affecting households across the country.

    So why is he doing that? Why is he doing that when every economist would tell him not to do it.

    Perhaps we find an answer in this weekend’s Sunday Times: “Rishi’s argument was, ‘Let’s do all this now as far away from the election as possible.’”

    Or the Telegraph on 27 January: “Raising taxes now means they can be reduced ahead of the next election, Sunak tells MPs.”

    Or the Mail in September: “Sunak to hike taxes and lower them before the election.”

    Let me be crystal clear. The proper basis for making tax decisions is the economic cycle, not the electoral cycle.

    Madam Deputy Speaker, behind the spin, the videos and the photo ops, we all know the Chancellor doesn’t believe in an active and enterprising government.

    We know, we know he’s itching to get back to his free market principles and to pull away support as quickly as he can.

    One day these restrictions will end.

    One day we’ll all be able to take our masks off – and so will the Chancellor.

    And then you’ll see who he really is – and this Budget sets it up perfectly.

    Because this is a Budget that didn’t even attempt to rebuild the foundations of our economy.

    Or to secure the country’s long-term prosperity. Instead it did the job the Chancellor always intended: a quick fix.

    Papering over the cracks.

    The Party opposite spent a decade weakening the foundations of our economy. Now they pretend they can rebuild it.

    But the truth is: they won’t confront what went wrong in the past and they have no plan for the future.

  • Rishi Sunak – 2021 Budget

    Rishi Sunak – 2021 Budget

    The text of the 2021 Budget, published on 3 March 2021.

    [in .pdf format]

  • Ed Miliband – 2021 Comments on a Green Recovery

    Ed Miliband – 2021 Comments on a Green Recovery

    The comments made by Ed Miliband, the Shadow Secretary of State for Business, on 1 March 2021.

    We are at a pivotal moment for our country as we look towards recovery. The UK is experiencing an unemployment crisis and a climate emergency that will define the next decade. Rather than go back to business as usual, Labour believes we need bold action now to tackle these crises together and create a better future – by creating secure jobs in the clean industries that should be at the heart of our economy.

    In this Budget it’s crucial we see support to help besieged businesses survive immediate pressures, but we also need stimulus on an ambitious scale to boost businesses’ competitiveness and support their green transition, and to create jobs – especially for young people that have seen opportunities dashed during the pandemic.

    Labour is calling for £30bn planned capital investment to be strategically and rapidly invested in low-carbon sectors. From investing in electric battery development and green steel technologies to secure a long-term future for our manufacturers, to investing in offshore wind to create jobs in coastal communities, Labour would target funding to create opportunities right across the country.

    The Government’s rhetoric offers simply a green mirage, but without meaningful action and investment it will remain a mirage. We need a proper green stimulus plan not empty words.

  • Anneliese Dodds – 2021 Speech at Bloomberg

    Anneliese Dodds – 2021 Speech at Bloomberg

    The speech made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 1 March 2021.

    This is a critical moment in the crisis.

    We can clearly see our way out. Over 20 million people vaccinated so far, thanks to the extraordinary effort of our NHS and GP staff, scientists, lab technicians, nurses and volunteers.

    As spring is returning, so too is the hope of an end to restrictions.

    But we cannot be complacent. It will still require a huge collective effort to make sure we emerge from this crisis as quickly as possible.

    The open question is how we emerge, and what kind of economy – what kind of country – we emerge into.

    Wednesday’s Budget is a test of character for Rishi Sunak. The choices he makes will be critical in determining that future.

    He can set out a responsible plan that puts us on the path to a better, more secure future.

    A plan to mend the foundations of an economy that for the last decade has simply not been working for too many people in this country.

    A plan to give people the security and prosperity they deserve, to take us forward into a better future beyond the pandemic.

    Or he can stay true to recent form.

    A rolling cycle of chopping and changing, leaving businesses and families scratching their heads and anxious about what’s coming next.

    Headline-grabbing announcements that don’t last a fortnight, let alone the long months of winter.

    Last-minute U-turns that have cost jobs and livelihoods.

    All because the Chancellor has wanted to get out of the business of supporting the economy at the earliest available opportunity, in the face of all the evidence.

    He hasn’t had a plan. He’s just been looking for the escape hatch.

    This Wednesday is his last chance to put that right, and to make amends.

    To learn the mistakes of a year of short-termism – and a decade of his party weakening our economic foundations – and set out a long-term, responsible strategy to take the country forward.

    To do that requires the Chancellor to understand the link between the health crisis and the economic crisis. Something he has signally failed to do so far.

    In the false belief that it was protecting the economy, the Government was too slow to lock down last spring.
    That meant the lockdown lasted longer and was more severe, doing more damage to businesses and jobs.

    Then, in autumn, infection rates were rising again. Labour, heeding the advice of SAGE, proposed a circuit break, to coincide with half term and get the virus under control.

    But the Chancellor reportedly convinced the Prime Minister to overrule SAGE.

    The second lockdown, when it came, lasted four weeks and missed that half term window. Another unnecessarily large hit to our economy.

    In December, the Coronavirus outlook darkened further. Yet instead of acting to protect the economy, the Government pushed the Brexit negotiations to the wire with no heed to the impact this uncertainty caused for business.

    At that point, the Chancellor disappeared. Six weeks without a single appearance in Parliament. No comment when Christmas plans were cancelled. And then just a 90-second video on Twitter 24 hours after the third national lockdown was announced.

    Businesses and workers left in the lurch again.

    Throughout the whole crisis, the Chancellor has failed to make that link between health and our economy.

    He can’t see that targeted, effective funding to support self-isolation would constitute a net gain for our economy, not a net cost.

    If people who have Coronavirus don’t stay at home, transmission increases and the economy is subject to restrictions for longer.

    Yet right now only three in ten people who should self-isolate are doing so.

    A year ago today, the TUC launched a campaign to improve statutory sick pay with the full backing of the trade union movement. A year later it is still just £95.85 a week – just £1.60 more than it was that day. That’s one of the lowest rates in Europe – the Health Secretary himself has admitted he could not live on it – and two million workers are not covered at all. It’s simply not good enough.

    It took months for the Chancellor to come up with a scheme to support some of those affected. When he did, only one worker in eight was automatically eligible.

    Changes made last week, months after the scheme was first launched, are a step in the right direction – but it’s still not clear if it will be enough. And the Chancellor has refused to even contemplate long-term changes to Statutory Sick Pay.

    Where Rishi Sunak has introduced broader economic support, it has not been part of a coherent, long-term plan – but has involved endless chopping and changing.
    The impact of this irresponsible approach can be counted, in lost jobs and lost livelihoods.

    In the run-up to the Chancellor’s summer statement, as the costs to business of the furlough scheme were about to ratchet up, planned redundancies doubled.
    In September, as he proposed the ill-fated Job Support Scheme, redundancies jumped again – by another 40 per cent.

    In the three months from September to November – when the Chancellor was announcing a new version of his Winter Economic Plan every other week, before we finally got a screeching U-turn just hours before the furlough scheme was due to end – redundancies hit almost 400,000, an all-time record.

    Unemployment kept increasing in the UK, while in other countries it was finally stabilising.

    That is the Sunak effect. While he dithers and delays, people right across the country lose their jobs.

    Coronavirus may have closed large parts of our economy. But this Government crashed it.

    We’ve ended up with the worst economic crisis of any major economy. The Chancellor must take responsibility for that.

    And he must learn from it. Because now he is making exactly the same mistakes again.

    1.7 million people are unemployed. 4.7 million are still on furlough. 850,000 businesses are at risk of closure in the next three months.

    And last week the Prime Minister announced that restrictions will still be in place, in some form, until at least 21 June.

    Yet the furlough scheme is due to end on 30 April with no clarity on what happens next.

    Hard-hit businesses face a business rates bill landing on the doormat this month while the door is still closed to customers.

    And VAT is set to spike in just a few weeks’ time for hospitality, culture and tourism businesses that are already teetering on the brink.

    The Chancellor could have set out a plan to address these cliff-edges at the beginning of the year, when it was obvious that new variants of the virus meant we would sadly be living with restrictions for longer.

    At the very latest, he could have set out a plan alongside the Prime Minister’s statement last Monday.

    He could have done what Labour has repeatedly called for, and ensured that economic support went hand in hand with health restrictions.
    But once again, there was no plan from Rishi Sunak.

    He left families and businesses across the country in limbo, all so he could wait for the political theatre of his big Budget moment.

    An irresponsible approach from an out of touch Chancellor.

    Not only is there no plan for the short-term, for the next few months as the vaccine is rolled out.

    There is also no plan for what comes after that.

    The Chancellor should have been doing everything he could to make sure that when lockdown was lifted the economy could be firing on all cylinders again.
    In July last year, I urged him to set out a full Back to Work Budget focused on jobs, jobs, jobs.

    Instead, we got a short economic statement and what the Chancellor reassured me was a ‘Plan for Jobs.’

    His so-called plan had three key elements.

    First, a bonus to every company that kept on a furloughed worker after the end of the scheme. That would have meant over £2.5 billion of public money going to firms who were going to bring staff back anyway. In the end, that didn’t matter because he scrapped the scheme. And we still have no word on its replacement.

    Second, the Kickstart programme was meant to help young unemployed people back into work. Nine months on, just one in every hundred eligible young people have been helped by the scheme. For every job supported by the scheme, 22 have been lost.

    Third, the Green Homes Grant scheme was going to create new jobs retrofitting people’s homes. This has been so badly run that most of the money will never be spent and it’s actually costing jobs.

    With the prospect of a million more people losing their jobs in the months to come, this is simply not good enough.

    And now he’s choosing a course that will actively make the situation worse.
    Families across the country have sacrificed so much throughout this crisis, and yet Rishi Sunak’s reward is to hit them with a triple hammer blow of council tax rises, social security cuts and pay freezes.

    The Chancellor’s message to our key workers – our teachers, our police officers, our armed forces personnel – at the end of one of the hardest years in living memory is to say: you deserve a real-terms pay cut.

    That is spectacularly unjust. It’s also economically illiterate.

    If you take money out of people’s pockets, they’ll tighten their belts and spend less. Our high street shops and small businesses will have fewer customers.
    The economy will take longer to recover, more businesses will fail and more jobs will be lost.

    From the IMF and the World Bank to the OECD, every major international economic organisation is in agreement: now is not the time for tax rises on struggling businesses or families.

    In private, it seems Rishi Sunak is clear about his rationale for this: to get tax rises out of the way now, well ahead of the next election. In other words, a Chancellor who is putting the interests of the Conservative Party ahead of those of the country.

    In public, the Chancellor might couch his decisions in the language of fiscal responsibility, but that’s hard to take from a Government that has wasted and mismanaged billions over the course of this last year.

    £22 billion on a Test and Trace system that for months wasn’t delivering.
    £150 million on PPE that wasn’t safe and so couldn’t be used.

    Almost £2 billion in contracts to businesses with clear links to the Conservative party, with no tender at all.

    £7,000 a day to management consultants while families across the country wondered how they were going to make ends meet.
    We’ll take no lectures from this Government on how to manage public money.

    After a year of last-minute scrambles, of U-turns, waste and mismanagement, what families and businesses need from the Chancellor is a clear plan.
    A plan to protect jobs and businesses through the last stages of the crisis while the vaccine is being rolled out.

    A plan to secure the recovery in those critical first months as we emerge from the crisis and reopen the economy.

    A plan to lay the foundations so we can rebuild our economy, stronger and more prosperous than before.

    To protect jobs and businesses right now, the Chancellor must heed Labour’s call to extend the furlough scheme beyond the end of April, maintaining it for as long as health restrictions are in place and demand remains low. He should make it smarter, so furloughed staff can train for the future; and so abuses are stamped out.

    He should right the wrong of always treating self-employed people as second class citizens, clarifying the future of Self-Employment Income Support Scheme and expanding its scope. He should act urgently to fix the gaps that have seen millions excluded altogether since the crisis began.

    The Chancellor should also extend business rates relief for at least six months, while learning from the Labour Government in Wales and introducing a cap for the biggest essential retailers so that support is targeted to the hardest-hit businesses.

    He should extend the reduced rate of VAT for the hospitality, tourism and culture sectors for at least six months, providing a vital boost to demand as we gradually unlock.

    And he should extend eligibility for the £500 Test and Trace Support Payment, helping to ensure this is absolutely the last lockdown. We cannot afford to go backwards.

    The second part of this long-overdue plan should focus on securing the recovery.

    That means transforming his stuttering and slow employment programmes to deliver a ‘Jobs Promise’ for unemployed young people to get them into work, education or training within six months and to end the scourge of long-term unemployment – simplifying his complicated, failing initiatives to deliver the support that people need now, not in 18 months when the peak of unemployment should be reducing.

    It means accelerating £30bn of planned investment into the next 18 months to support the creation of up to 400,000 new, green jobs. It is incredible that in November, in the midst of an economic crisis, the Chancellor actually chose to cut £300m of planned capital spend.

    And it means taking decisive action now to help those businesses who took out Government-backed loans last year and are likely to struggle with repayments. We need those businesses focused on growing, expanding and hiring – so small businesses should only start paying loans back when they are profitable.

    And crucially, if we are to secure our recovery, the Chancellor must reverse his irresponsible plan to hit households with a triple blow of council tax rises, social security cuts and pay freezes.

    The final part of the plan must be to rebuild the foundations of our economy for a better, more secure future.

    We cannot go back to the way that things were before the crisis, where ten years of Conservative rule had left us one of the most unequal countries in Europe. Where one in four families had less than £100 in savings. Where 3.6 million people were in insecure work.

    Coronavirus has brutally exposed the weaknesses of ten years of Conservative mismanagement of our economy. This crisis has to act as a wake-up call for this Conservative Chancellor to fix them.

    Where he promises to invest, he must follow through. The country can’t afford a repeat of the priority school building programme, with less than half of the planned schools built, and the project running three years late and £300m over budget. Nor still be waiting for new infrastructure nearly seven years on, as people in the North of England are for the long-promised Northern Rail. Nor wondering when their new hospital will be ready, like those in the West Midlands who will need to wait four years longer than planned.

    That is the Conservative track record: of overpromising and under delivering, of always going for the short-term fix rather than taking the difficult decisions for the long term. It is irresponsible at the best of times. In the midst of an economic crisis, it’s unforgiveable.

    And yet it is precisely where we seem to be again. Take housing. We know that young people in this country face a seemingly insurmountable challenge in getting their first home. Home ownership has fallen on the Conservatives’ watch. Six years ago they promised 200,000 starter homes, and not a single one was ever built.

    The Chancellor’s plans this weekend will do little to help more than a tiny proportion of ‘Generation Rent’- and look set to raise house prices even further beyond the reach of the rest.

    Instead, we need to see investment working for every part of our country.

    An expansion of the Start Up Loans scheme getting 100,000 new businesses up and running in the next five years.

    The new National Infrastructure Bank – re-announced this weekend to great fanfare – needs to have a mandate that ensures it backs projects that will make a real difference to communities, with savers given a stake in the recovery through British Recovery Bonds.

    An end to the plan to sell off our high streets to the highest bidder, with local councils instead giving the powers to bring empty shops back to life and make town centres the beating hearts of our communities again.

    The Chancellor may have finally heeded Labour this weekend and announced new short-term funding for our high streets, but that will be totally undermined if planning reforms come into effect this summer and our town centres are gutted as a result.

    We need an approach to investment that brings local people together, offering them opportunities and better prospects – not pitting town against town and region against region in a scramble for funding handed down from on high by Conservative ministers.

    This is a moment for the Chancellor to set out a responsible plan for our country’s future.

    Over the last year he has compounded a decade of Conservative economic mismanagement with twelve months of irresponsible decision making – leading to the worst economic crisis of any major economy.

    On Wednesday he can face up to those failures, learn from them and put the country back on the right path.

    I’m clear on what we need.

    A plan to protect jobs and businesses while the vaccine is being rolled out.

    A plan to secure the recovery as we emerge from the crisis.

    A plan to rebuild the foundations of our economy so that we can look ahead to a better, more secure future.

    That’s what a Labour Budget would deliver.

    It’s what the people of Britain deserve.

    And it’s how we should all judge the Chancellor.

    Thank you.

  • Paul Maynard – 2021 Speech on the Government’s Management of the Economy

    Paul Maynard – 2021 Speech on the Government’s Management of the Economy

    The speech made by Paul Maynard, the Conservative MP for Blackpool North and Cleveleys, in the House of Commons on 23 February 2021.

    Let us be clear about this debate: it was Labour who failed to fix the roof while the sun was shining, so that when the financial crisis struck, we lacked the resilience we needed as a nation to do what was necessary. Labour spent a decade pretending that it never happened—that it was a global crisis that did not affect us here and was nothing to do with them. But there was no money left, as that famous letter said. Despite having spent the last few weeks campaigning to regulate the “Buy now, pay later” sector, it is clear that Gordon Brown was the founder of the Klarna approach: he spent now and bought now, expecting the British people to be the ones to pay later.

    After 2010, the Conservatives did fix the roof, and we now have the financial resilience we need to do what we have had to do to protect jobs and livelihoods as the coronavirus wave broke across our shores. Labour harp on about those they claim have not benefited from a Conservative Government, both before and during the pandemic. However, it would be remiss of me, representing a constituency with so much deprivation, not to observe that it is this Conservative Government who cut income tax by around £1,200 for the average basic rate taxpayer, by lifting the income tax threshold to £12,500. Labour’s approach, of course, was to abolish the 10p rate of income tax. Income inequality, however we measure it, is lower than it was in 2009-10, and a third fewer children live in a workless household. Although there is more to do to tackle in-work poverty, I find it hard to credit that some see this reduction still as a bad thing.

    We introduced a national living wage, which raised incomes in areas of low average incomes such as my constituency, and universal credit to address the challenges of seasonal unemployment, which were such a scourge in seaside resorts, and let us not forget that the top 1% in this country pay a greater share of income tax than they did when Labour was in power.

    To be fair to the shadow Chancellor, who I believe is that rare thing, a thoughtful politician, I do not think she would deliberately seek to drive the economy over the cliff. However, I fear that she would be too busy rummaging in the glove box for a Labour road map to see what was fast approaching. In her Mais lecture in January, she quoted Gordon Richardson’s 1978 Mais lecture, in which he said:

    “We are now at an historical juncture when the conventional methods of economic policy are being tested.”

    In trying to apply that to now, she seemed to miss the irony that it was a criticism of precisely the statist solutions that Labour offered in the 1970s and is reheating now.

    Like every Opposition day debate so far in this Parliament, this debate has had an air of unreality about it. It is only thanks to Conservative policies that we are in the position we are in to deal with the crisis we face now.

  • Christina Rees – 2021 Speech on the Government’s Management of the Economy

    Christina Rees – 2021 Speech on the Government’s Management of the Economy

    The speech made by Christina Rees, the Labour MP for Neath, in the House of Commons on 23 February 2021.

    There is no starker contrast of how flawed the UK Government’s economic model has been than when compared with the approach of the Welsh Labour Government. More than a decade of Tory austerity has left the UK completely unprepared to deal with the global pandemic. Despite UK Government cuts and austerity across Wales, our wonderful NHS staff, council workers, emergency services and many more work tirelessly to keep us safe and keep Wales running.

    The Welsh Labour Government have provided extra support for local authorities: £500 million to deliver key services such as social care and test, trace, protect; and to make sure that businesses receive vital support grants. In Wales, nine out of 10 people who test positive for coronavirus provide details of their close contacts, and almost 90% are successfully contacted and advised. The Welsh system is working because it is a public service run locally. The Welsh Labour Government have made a special £500 payment to more than 67,000 social care staff working in people’s houses and in care homes, including for domestic and personal assistance. They continued their commitment to free school meals when Wales became the first UK nation to guarantee provision throughout school holidays, and they have now extended this to Easter 2022, feeding over 105,000 children in Wales. At the beginning of the pandemic, the Welsh Labour Government helped homeless people into accommodation, and more than 3,200 people are now in temporary accommodation.

    Businesses in Wales have had access to the most generous support package in the UK. The £2 billion economic resilience fund alone has secured 141,000 jobs. At the 2016 Senedd elections, the Welsh Labour manifesto set out six key pledges, and it has delivered on every pledge: an additional £100 million for schools; 100,000 all-age apprenticeships; a cut to business rates for local businesses; a new £80 million treatment fund; doubling the capital limit for older people going into residential care; and 30 hours’ free childcare for 48 weeks for parents of three and four-year-olds. Today, the Welsh Labour Government have announced their strategy to rebuild the post-pandemic Welsh economy, taking the opportunity to look to the future, with a long-term focus on wellbeing, dignity and fairness for people, and supporting workers, businesses and communities to succeed and prosper.

  • Andrew Mitchell – 2021 Speech on the Government’s Management of the Economy

    Andrew Mitchell – 2021 Speech on the Government’s Management of the Economy

    The speech made by Andrew Mitchell, the Conservative MP for Sutton Coldfield, in the House of Commons on 23 February 2021.

    I draw the House’s attention to my entry in the Register of Member’s Financial Interests.

    The background to today’s debate is that no other Government in the western world have given such trenchant taxpayer support to their citizens. I read, as I am sure my colleagues did, the relaunch speech by the Leader of the Opposition, but it seemed to me that his guiding theme merely followed the defining levelling-up agenda of this Conservative Government.

    I have no doubt that many speakers today will look at the last five years of this Government, but I would like to look at the first five years referred to in the motion, from 2010. When the coalition assembled in 2010, one in every three pounds of public expenditure was borrowed, and as a result of that difficult and dangerous financial position, tough decisions were taken about reductions in expenditure. Incidentally, the same fiscal tightening took place in Britain as took place in Obama’s America. As a result of those courageous decisions, six things happened, many of which were down to the skilful stewardship of George Osborne.

    First, the UK had the strongest recovery among the G7 countries. More British jobs were created than under any other Government in history. By 2015, we had the fastest income growth among the lowest-paid 20% in the country. We had the most sustained and consistent fall in our deficit among the G7, and we introduced the national living wage. Meanwhile, the NHS performed more operations than ever before and crime fell in every year. The UK was the No. 1 recipient of inward investment in the G20.

    Like many of us, but especially me, I am incredibly proud to have served in a Government who, in spite of the economic difficulties, refused to balance the books on the backs of the poorest people in the world and implemented our 0.7% promise on international development. I am proud it was a Conservative Government who finally implemented the promise to the world’s poorest to spend 0.7% of our gross national income on international development. I know that the Government are considering breaking this promise, a manifesto commitment that all of us entered into just over a year ago, but I urge them not to do so. We would be the only G7 country to take this action, while America is increasing its development spending by $15 million. Although it is £4 billion, which is a great deal of money, it is just 1% of what we have borrowed in the last year. It will result in hundreds of thousands of avoidable deaths, mainly among children, and it will destroy a key and respected aspect of post-Brexit global Britain. I urge the Government, on this point, to think again.

  • Alison Thewliss – 2021 Speech on the Government’s Management of the Economy

    Alison Thewliss – 2021 Speech on the Government’s Management of the Economy

    The speech made by Alison Thewliss, the Economic Spokesperson for the SNP, in the House of Commons on 23 February 2021.

    I thank the Opposition for bringing this motion to the House. I very much agree with the assertion that, this time last year, the UK was not in the best situation to handle the devastation that coronavirus would wreak on our economy. Let me quote this to the Chamber:

    “The UK’s resilience has been weakened under sustained Tory cuts. Wages have barely grown in the last decade. The welfare state safety nets have been torn to shreds. Public services have struggled through chronic underinvestment and asset stripping, and some parts of the UK that have still not fully recovered from the 2008 financial crisis are ill-equipped to cope with a further recession. Coronavirus has the potential to have a lasting impact.”—[Official Report, 12 March 2020; Vol. 673, c. 486.]

    If the words sound a wee bit familiar, it is because I have said them before—in response to the Chancellor’s Budget plans almost a year ago. I congratulate those on the Labour Benches for finally catching up with what the people in Scotland have long known: we have had 10 years of damaging austerity and five years of Brexit uncertainty crushing investment, and it is likely that the UK would have fallen into recession in 2020 anyway, even before the pandemic began to take hold. Even in the face of the most harmful economic crisis that our generation has seen, the Tories have pressed ahead with a Brexit deal that has delivered near-fatal blows to our export sectors and has cost countless jobs.

    The labour market statistics of the Office for National Statistics make grim reading. They state that, in January 2021, 726,000 fewer people were in payroll employment when compared with February 2020, of whom 425,000—58.5%—were under 25. This is both symptom and cause of the precarious and damaging employment practices that have been allowed to run rampant under this UK Tory Government. The Government have not dealt with zero-hour contracts. They have trapped young people in discriminatory and exploitative rates of the minimum wage—a minimum wage I should point out, not the pretendy living wage as the UK Government like to badge it— and they have failed to act on fire and rehire, despite being given options by my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). Young people deserve better than this. The UK Government must now devolve all powers over employment law to the Scottish Government. We do not forget that Labour blocked devolution of those powers as part of the Smith commission, preferring to leave Scotland at the mercy of the Tories rather than letting the Scottish Government progress a fair work agenda for our people.

    I agree with the hon. Member for Oxford East (Anneliese Dodds) that withdrawing furlough in April is too early. Realistically, if we are to prevent a cliff edge of unemployment when the job retention scheme ends, businesses will require the furlough scheme for at least two months after the current lockdown measures come to an end and perhaps longer if the course of the virus does not go as we all dearly hope—we have been here before. The Chartered Institute of Personnel and Development has called for an extension to the end of June and for much greater certainty from the Chancellor to allow businesses to plan properly. Many people lost their jobs unnecessarily due to the previous insistence from the UK Government that the scheme would end in October, which was followed, of course, by a last-gasp U-turn, by which time it was too late for too many.

    The CIPD also points out that there is a clear imperative for a lower limit to the furlough scheme so that the incomes of those on the lowest rates do not fall below the national minimum wage. People have been struggling to make ends meet, and 80% of what was already a very low wage is not enough to live on. We on the SNP Benches have long argued that Scotland should have the powers to provide its own furlough scheme as well as the borrowing powers that would be necessary to save jobs.

    Labour’s policy of recovery bonds are all well and good, but it is not exactly groundbreaking. The Resolution Foundation has described it as unnecessarily complicated, but not actually harmful. I am afraid that that is probably the best that can be said about it. Let us not pretend that it will have a huge impact on recovery. Money could be much spent on a further uplift to universal credit and legacy benefits, which would put money directly into the pockets of those who need it most. It could be spent on ending the benefit cap, which the Child Poverty Action Group has reported will already affect 35,000 households in the new year, 77% of which are households with children, followed by the capping of a further 41,000 households after the first few months of 2021 as their grace period expires from January through to March. The money could go towards scrapping the appalling two-child limit, which the British Pregnancy Advisory Service has found recently is driving up the numbers of women opting for an abortion rather than bringing a child into the world. This Government should be ashamed of those statistics and they must end the two-child limit now.

    Unemployment is expected to peak later this year, so keeping and extending the £20 uplift would help to alleviate some of the uncertainty that families are facing at this difficult time. The UK Government’s plans to scrap this support will take the basic level of support to its lowest level since 1991. The National Institute of Economic and Social Research figures out this week also demonstrate that destitution levels have risen from 0.7% of all UK households to 1.5% in the space of a year under this Tory Government. So even with an uplift, families are struggling to make ends meet. The UK Government know this, and it would be utterly despicable of them to go ahead and remove that vital support, knowing what we all know.

    Research by the Scottish Parliament Information Centre has shown that the single most effective policy in alleviating child poverty would be a generous increase in universal credit, and the Scottish Government are doing their bit through the Scottish child payments. The relationship here is very simple: the more money paid in benefits, the fewer children in poverty. It is time—it is beyond time—for this Government to scrap the two-child limit and bring payments in line with the OECD average.

    The Opposition are tinkering around the edges of existing policy here, and it is really not good enough. The Labour motion seems stuck in the past by failing to acknowledge that the active state does not have to stop at the end of Whitehall. Holyrood currently has only very limited borrowing powers, leaving us always at the mercy of Tory decisions. Scotland needs bold, ambitious plans to fund large-scale investment and to stimulate the economy. An overwhelming majority of voters in Scotland now believe that Scotland should have the power to borrow on its own terms, but the Opposition have failed to share in that simple ambition.

    The Scottish Government are already delivering policies such as the youth guarantee, which will ensure that everyone aged between 16 and 24 has the opportunity of work, education or training. We are putting money into growing the economy while tackling the deep-seated inequalities we have seen highlighted by the covid-19 pandemic, but without the powers of a normal country, Scotland still cannot do things like extending the furlough scheme. We cannot deliver our own tailor-made support schemes for those who have been excluded from the UK’s support, such as self-employed people and certain women on maternity leave.

    The Scottish Government are delivering on capital investment through the Scottish National Investment Bank, the single biggest economic development in the history of the Scottish Parliament and the UK’s first development bank. The bank will provide finance and catalyse private investment to grow the economy through innovation and accelerating the move to net zero emissions and a high-tech, connected, globally competitive and inclusive economy. However, it is hampered by a rule that does not allow the Scottish Government or the investment bank to allocate funds between years. The Treasury must stop standing in the way when Scotland wants to get on with the job.

    Scotland has bold ambitions for the future, but the hard reality is that we need more powers to deliver a bigger-scale fiscal stimulus to future-proof our economy. This lack of powers is going to have real-life consequences for the tens of thousands of Scots whose jobs are on the line. Reading the Labour motion, we can see clearly how little the Union has to offer to the people of Scotland. It is little wonder that more and more Scots—now in 21 consecutive polls—are waking up to the reality that only an independent Scotland can provide the fair, just economy that we all need.

  • Steve Barclay – 2021 Speech on the Government’s Management of the Economy

    Steve Barclay – 2021 Speech on the Government’s Management of the Economy

    The speech made by Steve Barclay, the Chief Secretary to the Treasury, in the House of Commons on 23 February 2021.

    I thank the hon. Member for Oxford East (Anneliese Dodds) for securing this debate, which is an important opportunity to take stock ahead of next week’s Budget. With the leave of the House, Mr Speaker, I shall also close the debate for the Government later.

    The hon. Lady, and Members from all parties, will appreciate that I cannot discuss any of the specifics of next week’s Budget, but I can say that although we may not always agree on the way ahead, I believe that we in this House all want the same outcome: a vibrant and prosperous economy that gives people everywhere the opportunities that they deserve.

    In responding to the motion, I intend to do three things. First, I shall briefly remind the House of the economic and fiscal situation that we inherited in 2010. [Hon. Members: “Good idea!”] It is a welcome motion for enabling that. Secondly, I shall examine the state of the economy a decade later, noting the difference, for which the credit goes to previous Treasury Ministers—not current Conservative Treasury Ministers—who took difficult decisions in the national interest. Finally, I shall say a little about the Government’s ambitions now, with the obvious caveat that a Budget is imminent.

    As Members will recall, the outlook in 2010 was not good. The financial crisis had torn a hole in our country’s future, the economy was shrinking and the deficit was ballooning. As George Osborne said at the time of his speech in the Queen’s Speech: Economy debate in 2010 :

    “Getting over the worst economic inheritance any modern government has been bequeathed by its predecessor is not so easy.”

    He also noted that the British economy had become

    “deeply unbalanced…Unbalanced between different parts of the country…Unbalanced between different sections of society… Unbalanced between different parts of our economy”.

    As set out by the most recent Labour Chief Secretary, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne)—I accept that it was a light-hearted note and that much of the criticism he has received has probably been unfair, but the substance remained—there was no money left.

    The coalition Government took power in 2010, at a moment when one thing mattered more than anything else: strong leadership prepared to make the right decision in the national interest. As hon. and right hon. Members will recall, in the years that followed the Government took steps to put this country back on a stable financial footing, because we need a strong economy to fund strong public services. The economy expanded in every year of the decade that followed. In fact, between 2010 and 2019, it grew by a total of 19.2%, which was faster than France, faster than Italy and faster than Japan—a reality not reflected at all in today’s motion. Achieving that success was about many things, not just fiscal discipline. In 2010, for instance, the Government created the Office for Budget Responsibility, which introduced independence, greater transparency and credibility to the economic and fiscal forecasts on which fiscal policy is based. Indeed, 10 years on, the OBR is considered by many of its peers to be the gold standard of independent fiscal institutions.

    Just as now, a key focus for the Government throughout that period was protecting, supporting and creating jobs; here, too, the numbers are impressive. Participation in the labour market reached a record high of 79.8% in the three months to February 2020—three percentage points higher than in 2010. In the same year, the UK had a higher employment rate and a lower unemployment rate than both the OECD and G7 averages. Between the 2010 election and the end of 2019, we saw over 3.8 million more people in employment—equivalent to an average of nearly 1,000 extra people in work every single day—and 85% of that growth was in high-skilled occupations. Importantly, that growth was across the board. The employment rate increased for all regions in the country, as well as for women, for young people and for poorer households. Indeed, prior to the pandemic, the employment rate among women was at a record high of 72.7%, and youth unemployment was down almost half on 2010.

    If hon. Members remember just one key statistic, perhaps it should be this: real household disposable income per head—the Treasury’s preferred measure of living standards—was 11.4% higher in 2019 than at the start of 2010, and incomes grew most strongly for households on lower and middle incomes. Remember that this was also the decade when we made significant personal tax cuts and introduced the national living wage, which we have increased every year. Taken together, changes to the national living wage, personal allowance and national insurance contributions mean that an employee working full-time on the national living wage is more than £5,200 better off than in April 2010. This is a track record of which any Government of any political persuasion should be proud.

    It was not just households across the country that understood the benefits; the world recognised them too. In 2018, the UK topped the Forbes list of best countries for business for the second year running. A year later, the World Economic Forum acknowledged our strengths in innovation capability, business dynamism, institutions and market size. Businesspeople everywhere felt the same. The UK has the third highest foreign direct investment stock in the world after the US and Hong Kong, and more foreign investment than Germany and France combined. None of this reflects today’s motion; indeed, it reflects strong leadership, fiscal responsibility and a Government prepared to act in the national interest.

    Coronavirus has been a great challenge that we, as a country, have had to face together. Every country has had to reckon with the virus’s economic impact, but because of the decisions made by successive Chancellors over the past 10 years, our economy and public services were strong when the pandemic hit. The markets understood that we were a Government who could plan for the future and make decisions when they mattered. As a result, we have been able to respond in the way in which we have. This House has heard about that response numerous times. It is one of the largest and most comprehensive responses in the world, totalling more than £280 billion since March 2020. Millions of jobs and livelihoods have been supported through the furlough scheme and the self-employment income support scheme. We have allocated billions of pounds in loans and grants to businesses across the UK. It is a response that the IMF singled out as

    “one of the best examples of coordinated action globally”.

    It called the response “aggressive” and “unprecedented”—that is a frequently used word, but I do not apologise for using it again. Indeed, the Resolution Foundation has said that the response

    “prevented an unprecedented collapse in GDP from turning into a living standards disaster.”

    The fact that we had rebuilt the public finances in recent years, combined with the UK’s strong institutional framework, gave us the wherewithal to borrow to provide the significant economic support that was required. Our decade of economic success made all of that possible.

    I know that the Opposition wish to keep talking about the past, which is surprising given that many of those years were spent supporting the economic policies of the previous Leader of the Opposition. I am always more than happy to speak about our record over the past 10 years—I welcome today’s motion as providing an opportunity to do so—but I, like this Government, want to look forward to the future.

    Last year’s spending review tells us everything we need to know about this Government and this Chancellor’s direction of travel. There was significant additional funding to help our public services in their continuing fight against the pandemic—we are making record investments in public services, including an historic settlement for the NHS, which provides a cash increase of £33.9 billion a year by 2023-24; we are providing better lifelong learning, such as through the £375 million to deliver the Prime Minister’s lifetime skills guarantee; we are recruiting more police officers to make our streets safer, with more than 6,600 already recruited towards our 20,000 target; we are implementing our 10-point plan to tackle climate change, mobilising £12 billion of Government investment, which will in turn create hundreds of thousands of green jobs across the country, including in carbon capture and storage, electric vehicles and renewable energy; we are investing in technology, innovation and the digital economy, as part of our goal to make the UK a science superpower—this Government are increasing investment in research and development at the fastest speed and greatest scale since records began; and we are investing in the UK’s economic recovery, with more than £100 billion of capital investment next year to spread opportunity, create jobs and drive economic growth.

    The motion states that the last decade “weakened the foundations” of the economy, yet we saw nine years of continuous growth, while we reduced the deficit from 10% to below 2%, The motion says that the UK was “particularly vulnerable”, yet we have consistently protected our NHS, with the 2018 NHS settlement being the biggest cash increase in public services since the second world war. The motion says that our actions during the pandemic have “exacerbated the problems”, yet we have vaccinated more than one in three adults, which is far more than any other European country. The motion says that the UK has suffered

    “the worst economic crisis of any major economy”,

    yet independent bodies such as the IMF have praised the UK’s response, which in turn was possible only because of the economic decisions of the last decade. The motion talks of “inequalities”, yet distributional analysis of the Government’s interventions shows that we protected the poorest working households the most, through schemes such as the furlough. It is because of our economic record that we have been able to place the protection of jobs at the heart of our covid response, with the furlough and the other business support measures.

    As the Chancellor said last month:

    “Sadly, we have not been and will not be able to save every job and every business, but I am confident that our economic plan is supporting the finances of millions of people and businesses.”—[Official Report, 11 January 2021; Vol. 687, c. 23.]

    He was right, and jobs will remain at the heart of his economic plan, as we work together to build back better and level up the whole of the UK.