Budget Resolutions and Economic Situation — Amendment of the Law

Part of Provisional Collection of Taxes – in the House of Commons at 5:41 pm on 20 March 2013.

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Photo of Angela Smith Angela Smith Shadow Deputy Leader of the House of Commons 5:41, 20 March 2013

No! [Interruption.] I have given way twice and I am not giving way again. I do apologise.

The Chancellor should also dramatically reverse the cut he made to the last Labour Government’s capital spending plans, given that spending is now £12.8 billion lower, year on year, than Labour planned. At a time when the economy is barely moving forward, we need the Government to invest. We need to get the builders back to work, to create the homes to give first-time buyers the future they are looking for. In the process, we need to strengthen our economy. For every 100,000 homes built, 1% is added to our gross domestic product, but this is about more than that. There are millions on council waiting lists, there are first-time buyers who cannot get on to the housing ladder, and homelessness has rocketed. Building houses is good not only for the economy but for society, too. Before it is too late, we need to prevent another lost generation from being scarred by unemployment, by guaranteeing every young person who has been out of work for a year or more a job, funded by the tax on bank bonuses that I mentioned earlier.

It is never too late for this Chancellor to change course. Consumers need to be given confidence to spend again; companies need the confidence to invest again; banks need to lend again to small companies that desperately need finance to invest. The country is in desperate need of infrastructure investment. High Speed 2 is welcome, but we are not going to get HS2 for some time yet. We need that infrastructure now. There are many other road and other transport schemes, and how many primary schools do we need? We know that in every part of the country, pressure on places is increasing; we need to get those schools built. By doing that, we could help to kick-start the economy. The Government need to increase their tax receipts to pay for quality, efficiently produced public goods and services.

Unfortunately, this Chancellor seems to be stuck in a rut—a self-defeating ideological rut of austerity piled on austerity. It is a rut that could, I believe, mean many years of sub-normal growth, with the economy settling at a level much lower than its potential would allow. For ordinary people, that will mean living with high unemployment, falling living standards and the continual deterioration of many of the public services on which our constituents depend. The Chancellor should change course now—decisively and with confidence—before the damage being inflicted on the UK economy becomes even more deeply entrenched and damages us permanently.