Tag: Anneliese Dodds

The speech made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 23 February 2021.

I beg to move,

That this House believes that the last decade of UK economic policy weakened the foundations of this country’s economy and society, leaving the UK particularly vulnerable when the coronavirus crisis hit; further believes that many Government choices and actions during the coronavirus pandemic have exacerbated the problems that pandemic has caused, leading to the UK suffering the worst economic crisis of any major economy; calls on the Government, as the UK emerges out of the pandemic, to address the deep inequalities and injustices in this country and take the UK forward to a stronger, more prosperous future through a new partnership between an active state and enterprising business; further calls on the Government to protect family finances by reversing the planned £20 cut in Universal Credit, reversing the key worker pay freeze and providing councils with the funding they need to prevent huge rises in council tax; and calls on the Government to introduce a new British Recovery Bond to allow people who have accumulated savings during the pandemic to have a proper stake in Britain’s future and to back a new generation of British entrepreneurs by providing start-up loans for 100,000 new businesses.

Next Wednesday is a pivotal moment in this country’s response to the coronavirus pandemic and our emergence from this crisis. When the Chancellor stands up to deliver his Budget, he faces a choice: he could take us back to the short-termist, irresponsible policies that left our economy and our country so dangerously exposed before the crisis hit, or he could learn from the mistakes made over the past 10 years and move forward, to a stronger, more prosperous future. Our economic recovery is at stake and the Chancellor cannot afford to get it wrong. He cannot continue to duck the big decisions, nor to go missing when he is most needed, and he must make the responsible choices that have been so frequently lacking over the past year.

We cannot get away from the fact that our country has been hit harder than most during this crisis, and much harder than it needed to be. That is despite the herculean efforts of our NHS and social care, and other key workers; the incredible national commitment we have seen from those who have volunteered up and down our country; the ingenuity of our scientists; and the hard work and commitment of businesses and workers up and down the land. The UK was not fated to have the highest death toll from covid in Europe, nor to suffer the worst economic crisis of any major economy.

Such grim statistics relate to decisions taken or not taken during the crisis, but also to 10 years when the foundations of our economy and our public services were weakened. The UK entered 2020 as one of the most unequal countries in Europe. Wages had flatlined for 10 long years—the worst decade for pay growth in generations. Yet as pay stagnated, childcare costs spiralled for families across the country. Household finances took such a hit that one in four families had less than £100 of savings in the bank when the crisis hit. At the same time, the public services we all rely on had been stripped back and stockpiles of vital equipment had been run down, providing a worryingly low level of resilience.

All this happened because the party opposite was not willing to take the responsible decisions required to set our country on stronger foundations. Instead, after the global financial crisis, Conservative-led Governments hammered family finances and withdrew funding for public services, in moves that have now been widely criticised not just by Labour, but by the likes of the International Monetary Fund and the OECD.

Sir Edward Leigh (Gainsborough) (Con)

Some of us think that this allegedly Conservative Government are already spending far too much and regulating too much. Will the hon. Lady make the commitment that Mr Blair and Mr Brown made when the Labour party was last in opposition: that whatever happens, a future Labour Government would not spend a greater proportion of national income on the public sector?

Anneliese Dodds

I certainly would not spend public funds in the way this Government often have. I will come on to that in a moment. For me, the question is not the quantum of spend; the question is whether spending has been appropriately directed, whether it has been appropriately managed and whether there has been strong financial control. Sadly, in many aspects of this crisis, those values have not been held to, as I will go on to explain in the rest of my remarks.

The agenda we saw over the past 10 years of cuts in order—in theory—to deliver speedy fiscal consolidation did not even achieve its primary objective. The British people were told they had to tighten their belts so that we could all do our bit to pay down the national debt, yet that debt rose from £1 trillion to £1.8 trillion under Conservative-led Governments before the crisis hit. Ten years of failing to address the structural weaknesses in our economy meant that when covid-19 arrived on our shores, we were dangerously unprepared.

Yet the hits to our health and our economy still did not need to be as severe as they have been. Recent decisions have all too often exacerbated the problems we have faced. The Chancellor has failed repeatedly to understand that the health crisis and the economic crisis are not separable—they cannot be traded off, one against the other. If economic support does not go hand in hand with the imposition of necessary public health restrictions, we cannot get a grip on the virus, nor will economic activity return to normal. If infections are not reduced, not only will restrictions be in place for longer, but people will lack the confidence that is needed to get out and start spending again.

Time and again throughout this crisis, the Chancellor has sought to pull back economic support with the virus still raging. He sought to wrap up the furlough scheme at the earliest possible moment, in the face of all the available evidence and calls from businesses, trade unions and the Labour party alike. As the costs of that approach became clear, there was a last-minute scramble to come up with a replacement scheme that saw four versions of a winter economic plan in the space of six weeks before winter had even begun. And then quite literally at the eleventh hour, he extended furlough in any case.

The same was true of business support to areas under local restrictions. Local leaders were forced to conduct a series of sham negotiations, only to emerge with the same £20 per head payment each for their local area, with no sense of how long that needed to last and no connection to local business need. That pattern is in evidence again. As we stand here today, businesses face yet more looming cliff edges: business rate payments falling due in just over a month’s time, VAT spiking for our hard-hit hospitality sector, and furlough due to end on 30 April.

The Prime Minister said yesterday that we should be driven by the data, not by dates, but instead of having acted weeks ago to provide the certainty that businesses crave, the Chancellor is determined to wait until the theatre of his Budget next week to make any announcements. That is not driven by the data on business confidence and economic impact. Indeed, today we learned of the 1.7 million people now in unemployment and the prospect of 1 million more losing their jobs in the months to come. Instead, that is an approach driven by politics.

This has combined with a situation where public funds have time and again been wasted and mismanaged. Hundreds of millions have been spent on contracts that have simply not delivered, and funding has often not been targeted where it is needed most, despite the Welsh Labour Government showing how effective targeting funds at small businesses in particular can be. Coronavirus may have closed much of our economy, but this Government’s approach is crashing it. Next Wednesday is a chance to change course, to learn from the mistakes of not just the last 11 months but the last 11 years, and to put us on the path to a more secure and prosperous economy.

In the midst of a jobs crisis, we need urgent action to support people back into work, especially our young people, for whom time out of work can scar future prospects permanently, yet the Government’s much vaunted kickstart scheme is only helping one in every 100 eligible young people, and their restart scheme has not in fact started at all. Instead, the Government must learn the lessons of successful schemes, such as the future jobs fund, which built on the strengths of existing local institutions to deliver sustainable employment.

We need action, not rhetoric, to support the creation of new jobs. There is a tremendous opportunity here to align job creation with our net zero ambitions. Labour has called for the acceleration of £30 billion of green investment in the next 18 months. We have demonstrated how that could support the creation of 400,000 new green jobs. Incredibly, the Chancellor cut £300 million from the planned capital budget in November. His shambolic green homes grant has been so badly delivered that it is actually costing jobs. We urgently need a change of course, so that we can support business to build the new jobs of the future.

We need to stop ordinary families carrying the can for these mistakes. Showing that he has totally failed to heed the warnings of the International Monetary Fund and others, the Chancellor is ploughing ahead with plans for a triple hammer blow to family finances, forcing local authorities to hike council tax, cutting social security by more than £1,000 a year, and freezing pay for key workers. That is not just poor reward for those who have sacrificed so much over the last year; it is economically illiterate, sucking demand out of our economy at a time when we need it most. The Chancellor is instead heavily reliant on spending by those who have been able to build up some savings during the crisis. Not only have more people in our country lost income during this crisis than have been able to save, but in addition the Bank of England has shown that the vast majority of these savings will likely be retained and not spent.

Instead, we need a different approach—one in which we stop leaving people, businesses and whole areas of our country behind. We need to harness the potential of Government working with businesses and trade unions to build a better, more secure future. We must take the strategic decisions that would restore the foundations of our economy and prepare us for the challenges and opportunities of the decade ahead.

First, we need to support families across the UK by scrapping the planned cut to universal credit, reversing the key worker pay freeze and backing councils so that they do not need to impose inflation-busting tax hikes. That will build confidence and build our local economies. We must harness the spirit of unity and solidarity that has defined the British people’s response to this crisis, by allowing those who have been able to save to invest in British recovery bonds, thereby keeping their money safe while taking a stake in our country’s future.

We need to lift the burden of debt from our small businesses by enabling them to pay back covid-related bounce back loans once they are making profits again, rather than continued debt preventing them from investing and taking on new staff. We have to expand the start-up loan scheme to support 100,000 new British businesses over the next five years, backing the entrepreneurial spirit that we need for economic growth.

The economic approach of the Conservative party has been severely tested over the course of a decade and been found to be seriously wanting. Indeed, over the past year it has been tested to destruction. We cannot afford a repeat of those mistakes—a return to policies that have been so weak and provided so little resilience. We need a new approach: a Government who are on people’s side, who understand the value of public services, and who give families and businesses the security that they need in the tough times and offer them hope in the years to come. Next Wednesday is a fork in the road. I urge the Chancellor take the right path to a better, more secure economic future.

The comments made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 14 February 2021.

Labour would rebuild Britain by backing businesses and supporting families through the crisis and then putting Britain on the path to growth.

The Chancellor simply offers a return to the same, old policies that left the foundations of Britain’s economy weakened before the crisis. His economically illiterate plans to demand repayments next month risk crushing British business and our recovery under a mountain of debt. He would leave taxpayers on the hook for billions and other firms cash-strapped for years – leading to less investment and fewer jobs.

Instead of pushing business to the brink, Labour’s plans would protect small firms and give larger ones flexible options to manage debt. We would help businesses get back on their feet, secure our economy and get Britain on the road to recovery.

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

The UK is in the middle of the worst economic crisis of any major economy. Now is not the time to be hiking taxes on families across the country, yet Rishi Sunak is ploughing ahead with a triple hammer blow of council tax hikes, public sector pay freezes and cuts to Universal Credit.

We will consider any longer-term changes to the tax system carefully, bearing in mind that the UK is way off meeting its carbon-cutting targets. Any change must be fair, and go hand in hand with action to shore up family finances and improve living standards after over a decade of irresponsible decisions by the Conservatives.

The comments made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 1 February 2021.

These figures confirm what we already know: the pandemic, and the Government’s handling of it, is worsening regional inequality.

We need a responsible approach to secure our economy and bring jobs to every village, town and city.

Instead, the Chancellor is hitting families with a triple hammer blow of cuts to Universal Credit, a massive hike in council tax and a pay freeze for millions of key workers. It’s economically illiterate.

The comments made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 26 January 2021.

The UK had the worst recession of any major economy when the crisis hit – and now we know it had the weakest growth of any major economy through 2020 as well. Given these awful figures, the Chancellor should be supporting families through this crisis. Instead, he’s hitting them with a triple hammer blow to their pockets of pay freezes, council tax hikes and social security cuts. This economically illiterate approach will harm our recovery and lead to long-term scarring.

The speech made by Anneliese Dodds, the Shadow Chancellor of the Exchequer, on 21 January 2021.

It is such a pleasure to be addressing now the Department of Government – a Department which I worked in both as a student and a postdoc fellow, many years ago. It has been wonderful to see the Department continue from strength to strength.

There is so much can we discuss, on the subject of rebuilding the UK for a more secure future- and I’m really looking forward to the conversation with Martin and the Q and A. But to start us off now, I would like to provide some remarks on the relationship between our economy and public health.

As we are all sadly aware, the UK is currently experiencing the highest death rate from coronavirus in the world, as well as the highest total number of deaths in Europe. In tandem, we have suffered the worst recession of any major economy. These two facts are not unrelated- but interconnected.

At the heart of the Conservative government’s mishandling of this crisis over the last ten months has been an insistence that you can treat the health of a nation and its economy as distinct entities, to be traded off against one another. You either “choose health”, and lock down the economy completely in a bid to prevent the virus from spreading. Or you “choose jobs”, easing restrictions as rapidly as you are able to get people back to work. This narrative is not only untrue; it is self-defeating. By setting up a false choice between health and the economy, our government has chosen neither- and rather than choosing jobs, we have seen record redundancies.

Slowness to lock down last March meant a higher death toll before public health measures were imposed. But it also meant that when the lockdown did come, it lasted longer and caused greater economic damage. We’ve since seen that pattern repeated twice over.

The Chancellor’s desperation to reopen the economy as quickly as possible, and extricate the Treasury from its various support schemes, has been swept away by successive waves of the pandemic. We’ve been forced into a short-lived tier system, another set of nationwide restrictions, the cancellation of Christmas plans and now back into a third lockdown.

This stop-start approach has done untold harm to jobs and businesses. We’ve seen unanticipated continuation and then repeated tinkering with economic support packages, with the furlough scheme extended a matter of hours before it was due to expire, and after a replacement scheme was already on the books. Employers and employees cannot plan on that basis.

This hammers confidence – both in the ability to get a grip on the health crisis, and in the overall state of the economy. We saw this in the run-up to the first lockdown: even before the government ordered people indoors and businesses to close, substantial ‘voluntary social distancing’ had already started to take place. As the IMF has argued, when people fear that the virus is getting out of hand they reduce social contact and economic activity along with it. The Bank of England notes that this can lead to recession even in the absence of legally enforced measures.

The challenge for policymakers during a pandemic is to work out when and how to intervene – not whether. There are clearly an array of defences that can be adopted- with James Reason’s ‘swiss cheese’ model providing an effective visualisation of the layers of different measures required: measures to prevent the disease from entering communities, to identify where it is, to isolate it, and to reduce its transmissibility.

Social distancing is obviously only one defensive measure- and one which affects different groups in very different ways. Young workers in insecure jobs in ‘non-essential’ sectors suffer much more than those who are retired. And if uncoordinated and voluntary social distancing still does not get the virus under control, especially in the absence of effective test, trace and isolate measures, and the ‘R’ rate remains above 1, then we have seen how a severe nationwide lockdown becomes inevitable. Indeed the UK has gone through this cycle no less than three times.

There has to be another way. And this is to accept that, while it has obviously been hugely disruptive, managed social distancing has unfortunately been necessary. It has reduced the transmission of the virus and kept it under control – preventing the NHS from being overwhelmed – and avoided the stop-start nature of repeated lockdowns that causes so much economic harm.

But to be properly effective, managed social distancing must go hand-in-hand with an economic support package that lets businesses and workers know where they stand. It also requires a properly functioning Test, Trace and Isolate system. Instead, we’ve seen government spend £22 billion on a privately outsourced Test and Trace programme which has bypassed local authority expertise and failed to deliver. And we have an ‘Isolate’ system that is simply not fit for purpose.

Done properly, managed social distancing and self-isolation both have positive economic impacts: they prevent people from spreading the virus and make wholesale national lockdowns less likely.

Managed social distancing requires government intervention to work: a set of rules for everyone to observe, and economic support for affected businesses and workers while those rules are in place. The same is true of self-isolation: people need clarity over when and how to self-isolate, and they must be enabled to do so without falling into debt.

Here, very sadly, the UK has been failing. Evidence from SAGE shows that many people are not self-isolating, because of the potentially catastrophic economic effects for them personally.

A paper published last week suggested just three in ten people with symptoms are self-isolating – with financial hardship, low socioeconomic status and an inability to work from home all linked to barriers. Gig economy workers are reportedly avoiding getting tested for fear of the lost income that accompanies self-isolation.

Statutory Sick Pay is just £95 a week, and the Health Secretary has conceded he would not be able to live on it. Despite repeated questioning, the government has failed to commission or publish evidence about the deterrent impact of failing to improve Statutory Sick Pay.

Instead, a £500 Test and Trace Support Payment was introduced – automatic for those claiming qualifying benefits, but discretionary for those who aren’t. Only one in eight workers is automatically eligible, with others reliant on the discretion of their local authority. This results in a postcode lottery: Camden Council has approved 75% of applications for its discretionary payments, while Sandwell has approved just 16%.

Many councils are running out of money for discretionary payments, leading to a ‘first come, first served’ scenario. The government has said funds need to last until January 31st, as if the pandemic will somehow respect that arbitrary date.

The arrival of effective vaccines has been wonderful to see; but even if the current timetable is accelerated, as it needs to be, the rollout of these vaccines will take time. In addition, we must be prepared for scenarios where new variants of coronavirus require new vaccines, and so we may – sadly – be living with this virus for a while yet.

All of which means we have to get an integrated health and economic response right. That requires three core elements.

First, an economic support package that goes hand in hand with public health restrictions, enabling managed social distancing to protect the NHS and secure the economy. That package needs to be clearly communicated so businesses and workers know exactly what to expect in the months ahead.

Second, much clearer communications around the Test and Trace Support Payment: both for those who are automatically eligible but also, crucially, a single, clear set of guidelines for the discretionary element to end the postcode lottery.

Third, government must commit to giving local authorities the resources they need to make those discretionary payments. If someone needs support, they should be able to access it – no matter where they live, no matter when they develop symptoms. Councils have already had to spend £750,000 of their own finances to do the right thing – and this when their budgets are stretched to breaking point.

The Chancellor has called this crisis wrong time and again. From a succession of winter economic plans that had to be continually revised because each iteration sought to give the bare minimum in economic support and then was overtaken by events; to disappearing altogether over Christmas only to return earlier this month with almost nothing new to say and precious little clarity for businesses as to what they can expect in the months to come. Much of this seems to stem from a belief that the economy is only well-served by a total lifting of restrictions and a removal of all economic support as soon as possible. But with the virus sadly still with us and continuing to impact on demand, he needs to think again.

If we are to secure the economy, protect the NHS and rebuild Britain then we need, instead a responsible approach to economic policymaking: one that sees the economic response as embedded in the public health response and vice versa, rather than the two elements working against each other.