Budget Resolutions - Amendment of the Law

Part of the debate – in the House of Commons at 6:42 pm on 14th March 2017.

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Photo of Peter Dowd Peter Dowd Shadow Chief Secretary to the Treasury 6:42 pm, 14th March 2017

By fiscal rectitude. When the Government miss a deadline, their modus operandi is to set a new one and brazenly move on. It is the immutable law of Tory economics—make it up as you go along. What happened to the long-term economic plan? Well, it did not last very long. The Prime Minister and the Chancellor have their finger prints all over every single financial decision that has been made during the past seven years. It is no surprise that they have come under criticism from many in their own party, including the former Member for Witney, and the former Chancellor Lord Lamont who called the national insurance debacle a “rookie error”—otherwise known, in the real world, as gross incompetence. But, regrettably, other people will pay the price for that incompetence.

Turning to Brexit—I will mention it even if the Chancellor does not want to—it is the 10th anniversary of the production of “Freeing Britain to Compete: Equipping the UK for Globalisation”. The publication was a wide-ranging policy document authored by John Redwood and friends. It was endorsed by the then shadow Cabinet, which included the current incumbents of No. 10 and No. 11 Downing Street. The publication was hard to track down as it has been removed from the Conservative party website for good reason, but I found a copy. Its contents were toxic—all the more so in the wake of the subsequent global financial crisis—and remain so. But in the light of Brexit, and the resurgence of the right hon. Member for Wokingham’s influence, it will soon get a second run out.

It is worth apprising the House of a few nuggets in the document’s pages. It includes policies such as the abolition of inheritance tax; charging foreign lorries to use British roads; the potential abolition of the BBC licence fee, which it refers to as a “poll tax”; the watering down of money laundering regulations; and the deregulation of mortgage finance because

“it is the lending institutions rather than the client taking the risk.”

Try telling that to someone whose home has been repossessed.

The publication goes on to say:

“We need to make it more difficult for ministers to regulate”.

Remember that this document was dated August 2007, and was rubber-stamped by the current Prime Minister and the Chancellor at the time that Northern Rock was about to go under. The document continues—listen to this one—to say that the Labour Government

“claims that this regulation is all necessary. They seem to believe that without it banks could steal our money”.

Well, that might not be the case, but, at the peak of the banking crisis, we had liabilities of £1.2 trillion. Many people did believe that the banks were stealing money and queued up outside banks accordingly. The document refers to wanting

“reliably low inflation, taking no risks by turning fiscal rules into flexible friends”— not that the Chancellor has many of those nowadays. As for Europe, in search of jobs and prosperity the document says:

“An incoming Conservative government should go to Brussels with proposals to deregulate the whole EU”.

No wonder they wanted to bury the evidence—it is the autobiography of the hard-line Brexiteers, and the Tory blueprint for a post-Brexit, deregulated Britain. It is a race to the bottom.

These policies are a telling narrative of the views of the fundamentalist wing of the Conservative party. The Prime Minister is hostage to that right wing, and she is on the hook. The stage directions are coming from Wokingham, Haltemprice and Howden, North Somerset, and Chingford and Woodford Green, with occasional guest appearances by the Foreign Secretary. The forlorn, melancholic Chancellor is briefed against—he is not laughing now—because he may just have a less hard-line approach to Brexit than his colleagues.

These are the dusted-off policies of hard Brexiteers, who will stop at nothing until Britain becomes a low-wage, low-tax, low-regulation economy. They want to turn our country—not their country—into the bargain basement of the western world, and they have the Prime Minister in tow. Parliamentary scrutiny is a hindrance.

Meanwhile, the Prime Minister has put kamikaze pilots in the cockpit. The Chancellor knows this too well, and that is why there is a reported £60 billion set aside as a trauma fund—a failure fund. It is not Brexit-proofing the economy, but proofing the economy from the toxic ideology of the hard Brexiteers.

The Government’s proposal to increase insurance premium tax from 10% to 12% is a regressive measure and a charge on households, and we will not support it. It was a surprise to see it in the autumn statement, coming as it did from a Government who use the high cost of insurance premiums as an excuse for curbs on victims’ rights to claim compensation, and we will oppose that rise. While the Government drive up the price of insurance for millions of families, through other policies they will forgo £73 billion of revenue.

The Budget claims it is for lower and middle earners, the NHS, social care agencies, the self-employed, schools, businesses, pubs, the strivers and the entrepreneurs. It wants to give them the thumbs-up, but, in practice, it is not doing that; on the contrary, it is putting two fingers up to them, and that is something Labour will never do.