Stewart McDonald – 2023 Speech on the Budget

The speech made by Stewart McDonald, the SNP MP for Glasgow South, in the House of Commons on 20 March 2023.

Thank you, Madam Deputy Speaker. It is a sign that God is shining on the House to see you back in the Chair—healthy and feisty as ever, I am sure. You will recall that, when I joined the House in May 2015, Conservative Members would regularly cheer the Chancellor and various Front-Bench Ministers when they uttered the words “long-term economic plan”. That was the No. 1 talking point of the Cameron Government, but of course, as we have seen since that Government left office, the Conservative party had no such thing. Indeed, it is somewhat telling that, in last week’s Budget, the Chancellor stood at the Dispatch Box, content to let the applause wash over him because

“the UK will not now enter a technical recession this year.”—[Official Report, 15 March 2023; Vol. 729, c. 833.]

Such is the mess that the Conservative party has created that it is managing to celebrate a slightly lower level of decline for the economy.

The Chancellor’s myopia is what worries me most, because he stood at the Dispatch Box like a sailor patching a leaky tap, not quite matching the moment in the way that one would expect from Britain’s Finance Minister. By stark contrast, the United States steams ahead with almost $400 billion of green subsidies to rewire its economy for the 21st century in the shape of the Inflation Reduction Act. The short-sightedness of this year’s Budget has instead condemned the United Kingdom to another year of falling living standards and slow economic decay. Closer to home, the European Union also announced bold and strategic plans in the shape of the Net Zero Industry Act, which will similarly mobilise billions and billions of euros to reshape the economy of the world’s largest single market so that it can produce at least 40% of the technology it needs in order to achieve its own climate and energy targets. While two of the world’s major economic powers set out plans to meet the moment, this Government instead celebrate—I quote again—that

“the UK will not now enter a technical recession this year.”

Rather than championing a bold economic plan to improve living and working conditions, the Chancellor—clearly unable to meet the moment—settled for tax breaks for research and development, urging us to cheer on his efforts to turn the UK into a life science superpower. While that aim is entirely laudable, and one that every single Member of the House could undoubtedly sign up to, the Chancellor needs to engage with the reality here in this country. As I mentioned earlier, the gulf between ambition and reality was summed up by the Manchester-based Nobel prize winner Andre Geim when he said that the reason that researchers are not staying in the UK or being attracted to the UK is the low living standards here. They can come here and suffer higher costs and lower salaries, or go elsewhere for better opportunities.

That neatly sums up the running theme of this Conservative Government, who seem oblivious to the fact that firms and institutions are made up of human beings—human beings who need modern public services, a healthy public realm, and a Government who can offer them the prospect of a bright future. What the reality looks like has been mentioned in this debate: to quote Torsten Bell from the Resolution Foundation,

“the worst parliament on record for living standards. By a country mile.”

The numbers were laid bare in today’s Financial Times. The Office for Budget Responsibility is predicting that UK households’ real income per person will still be below pre-pandemic levels in 2027-28, meaning hardly any improvement in living standards for the better part of 20 years. Jumana Saleheen, the chief economist at Vanguard Europe, has said that, on three key measures of living standards—household income, gross domestic product per capita, and real wages—

“we’ve seen stagnation over the last 15 years.”

According to the Office for National Statistics, average UK real household income is broadly unchanged since 2007. Paul Johnson, the director of the Institute for Fiscal Studies, has said:

“We are in the middle of a decade in which incomes are barely rising at all, with very feeble growth for two…decades.”

UK wages adjusted for inflation increased by 23% in the eight years to 2008, but fell by 5% in the following eight years, again according to the ONS.

Having the ambition to be a life science superpower is one thing. It is perfectly laudable, and all of us can agree and sign up to it. However, so long as we have living standards in this country that are grossly behind our western European counterparts—we have higher costs, higher prices, lower wages and a public realm that physically just does not work, if we are completely honest—the Government can completely forget being a superpower in anything other than a brain drain. If anything that Ministers have said from the Dispatch Box is to mean anything, they need to fix the living standards problem every household is dealing with.