The Chancellor of the Exchequer undoubtedly has some laudable aims: he wants to support growth, have an economy that works for everyone, support infrastructure investment and improve productivity, but when he sat down after making his statement, I thought, “Is that it?” I share those objectives, because I want to support growth and aspiration, tackle poverty and improve public services, but his statement contained no strategy for how to achieve them. I believe that my right hon. Friend John McDonnell and the Labour party have a definitive plan to do that, rather than the smoke and mirrors we saw today from the Chancellor.
For example, the first item was supporting growth. I think that this year’s “golden pasty” for the quickest unravelling of a policy set out in the Budget will go to the rise in national insurance contributions—it might even be called the golden caravan, because that was also a policy that unravelled several years ago.
The Chancellor today announced a 2% to 5% increase in national insurance contributions for 5 million people. How does that support growth? Those 5 million people, including 3,000 in my constituency—7% of the workforce in my area of north Wales—are the hairdressers, window cleaners, builders, plumbers, electricians, small shopkeepers, gardeners and market traders who are taking risks, being entrepreneurial and not necessarily having the holidays that those in the employment of major companies would have. They are taking risks with their own capital and are not earning when they fall ill. Yet, in supporting business growth, the Chancellor has put an additional tax on those individuals, amounting to about £20 a month for someone earning £20,000, £30 a month for someone earning £27,000, £45 a month for those with a £35,000 income and £55 a month for those with a £42,000 income.
The golden pasty award relates to the Conservative party’s manifesto commitment not to raise national insurance contributions. People in my constituency will have put a cross next to the Conservative candidate’s name on the basis of no tax rises and no national insurance rises. If a Conservative Government have broken that promise, how can we trust them on anything else? The Financial Secretary to the Treasury has said that the changes were not to class 1 but to class 4 contributions, so it did not matter because that was not a manifesto commitment. I would like to see her explain that to the small businesses in the small towns in my constituency when I go back there this weekend.
I welcome the £435 million movement on rates, but it does not go far enough to deal with the impact on businesses in my constituency. For example, the Government have offered £1,000 to local pubs in constituencies such as mine. I was contacted last week by a pub whose rates on
The Chancellor talked about investment in infrastructure. I want a growth deal for north Wales. In fact, the north Wales growth deal is mentioned in paragraph 4.29 of the Red Book, which says:
“The government…looks forward to…a North Wales Growth Deal.”
Exactly one year ago this month, the Secretary of State for Wales came to north Wales and said, “I want to push forward with a growth deal for north Wales. I want north Wales to come up with proposals for a growth deal.” Well, north Wales has come up with and submitted proposals for a growth deal.
North Wales sees the benefit to job creation of infrastructure investment in roads, transport and broadband. It wants the partnership between the state at local council, Welsh Government and UK Government level to make that growth deal happen, yet there is nothing in the Budget to support a growth deal but warm words. Why does this matter? It matters because the Government have promised in the Red Book a £200 million uplift to expenditure in Wales over the next four years. Let me put that into context. Inflation is currently running at 1.8%. The actual cost of that £200 million is something in the region of 1.3% of the total Welsh budget. Even with the Government’s figures on inflation—at 1.8% now, rising to 2.4% by 2017—the level of investment increase in the Welsh Government is below the rate of inflation. It will not meet the needs of our community. That matters because I want investment in infrastructure.
Before I came to London last Monday morning, I went to see a local £30 million investment by the Welsh Government and Flintshire County Council in a brand-new secondary school under the Building Schools for the Future programme, which is not now operational in England, but is operational under Labour’s Welsh Government. That £30 million is investment in schoolchildren and parents, but, conversely, it is actually investment in Galliford Try, a private sector building company, and in the people who make and paint schools. It is investment in carpets, computer technology and construction, all of which are done by the private sector. We can therefore boost local employment by public spending on infrastructure, as in the example of that school.
The £200 million is welcome, but let me finish by saying one thing: we will not be spending any of it on grammar schools in Wales, because the Labour Government believe in equality of opportunity and will invest that money in secondary education, supporting every pupil, rather than those who just happened to pass an exam at the age of 11.