Spring Statement

Part of the debate – in the House of Commons at 1:17 pm on 13th March 2019.

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Photo of John Martin McDonnell John Martin McDonnell Shadow Chancellor of the Exchequer 1:17 pm, 13th March 2019

Let me thank the Chancellor for providing me with an early sight of his statement, no matter how heavily redacted. We have just witnessed a display by the Chancellor of this Government’s toxic mix of callous complacency over austerity and their grotesque incompetence over the handling of Brexit. While teachers are having to pay for the materials their pupils need, and working parents are struggling to manage as schools close early and their children are sent home, and as 5,000 of our fellow citizens will be sleeping in the cold and wet on our streets tonight, and young people are being stabbed to death in rising numbers, the Chancellor turns up today with no real end to or reversal of austerity. He threatens us—because this is what he means—saying that austerity can end only if we accept this Government’s bad deal over Brexit.

Let us look at some of the claims this Chancellor has made. He has boasted about the OBR forecast of 1.2% growth this year, but what he has not mentioned is that this has been downgraded from 1.6%. Downgrading forecasts is a pattern under this Chancellor. In November 2016, forecasts for the following year were downgraded from 2.2% to 1.4%. In autumn 2017, forecasts for the following year were downgraded from 1.6% to 1.4%. Economists are warning that what little growth there is in the economy is largely being sustained by consumption, based on high levels of household debt.

On the public finances, the Chancellor boasts about bringing down debt. Let me remind him that when Labour left office—having had to bail out his friends in the City, many of them Tory donors—the nation’s debt stood at £1 trillion. The Government have borrowed for failure and added another three quarters of a trillion to the debt since then. That is more than any Labour Government ever.

The Chancellor boasts about the deficit; he has not eliminated the deficit, as we were promised by 2015. He has simply shifted it on to the shoulders of headteachers, NHS managers, local councillors and police commissioners, and worst of all on to the backs of many of the poorest in our society. The consequences are stark: infant mortality has increased, life expectancy has reduced and yes, our communities are less safe. Police budgets have faced a £2.7 billion cut since 2010. Nothing that the Chancellor said today will make up for the human and economic consequences of those cuts.

The Chancellor talks about a balanced approach; there is nothing balanced about a Government giving over £110 billion of tax cuts to the rich and corporations while 87 people a day die before they receive the care they need. The number of children coming into care has increased every year for nine years. Benefit freezes and the roll-out of universal credit are forcing people into food banks in order to survive. Let me give the Chancellor a quote:

“Sending a message to the poorest and most vulnerable in our society that we do not care”.—[Official Report, 20 October 2015;
Vol. 600, c. 876.]

That was Heidi Allen referring to the cuts to tax credits in 2015.

The number of pensioners now officially living in severe poverty, in the fifth largest economy in the world, has reached 1 million. We have a Government condemned by the UN for inflicting destitution on its own citizens. There is nothing balanced about the Government’s investment across the country. There is nothing balanced about a Government investing more than £4,000 per head for transport in London and only £1,600 per head in the north. There is nothing balanced about the fact that a male child born in Kensington in Liverpool can expect to live 18 years less than a child born in Kensington and Chelsea.

On employment and wages, this is the Government who have broken the historic link between securing a job and lifting yourself out of poverty. The Chancellor has referred to a “remarkable jobs story”; what is remarkable is that this Government have created a large-scale jobs market of low pay, long hours and precarious work. More than 2.5 million people out there are working below 15 hours a week. Some 3.8 million people are in insecure work. The Chancellor talks about pay; average wages are still below the level of 10 years ago. So it is hardly surprising that 4.5 million children are living in poverty, with nearly two thirds of them in households where someone is in work.

The Chancellor has bragged about his record on youth unemployment. Let us be clear: youth unemployment is 7% higher than the national average, it is higher than the OECD average, and it is at appalling levels for some communities. Some 26% of young black people are unemployed and 23% of young people from a Bangladeshi or Pakistani background are unemployed.

The Chancellor has claimed an advance with regard to women’s unemployment. What he does not say is that women make up 73% of those in part-time employment and are disproportionately affected by precarious work. Let me give one example: by 2020, the income of single mothers will have fallen by 18% since 2010. According to the much-respected Women’s Budget Group, women are facing the highest pay gap for full-time employees since 1999. All that on his watch.

On infrastructure and housing, the Chancellor has been claiming that he is on the way to delivering record sustained levels of investment. Let us be clear: he is talking about wish lists; he is not talking about what the Conservatives have actually done. The UK ranks close to the bottom of OECD countries for public investment. We are 24th out of 32 countries, according to analysis done by the Trades Union Congress.

The Chancellor describes

“the biggest rail investment programme since Victorian times.”—[Official Report, 27 February 2018;
Vol. 636, c. 667.]

Well, tell that to the people who faced the timetabling chaos of last year. Tell that to the rail passengers who have to deal with the incomparable incompetence of the Secretary of State for Transport.

The Chancellor has been hailing his announcement of a national infrastructure strategy. Let me remind the House that the Government announced a national infrastructure delivery plan for 2016 to 2021, and then announced a national infrastructure and construction pipeline. So, there are plans, pipelines and strategies, yet today he announced another review of the financing mechanisms, but no real action to deliver for our businesses and communities. The Institute for Government described this Government’s decisions on infrastructure as

“inconsistent and subject to constant change.”

The Chancellor made announcements on housing, again. Let us hope he has learned the lessons of the Government’s recent initiatives, which have driven profits of companies such as Persimmon to over £1 billion, with bosses’ bonuses at more than £100 million.

The Chancellor has some cheek to speak about technical and vocational skills: almost a quarter of all funding to further and adult education has been cut since 2010. The number of people starting apprenticeships has fallen by 26%.

On research and development, this Government have slashed capital funding for science across all departments by 50%.

Unlike at the Budget, the Chancellor has at last actually referred to climate change. The review of biodiversity he mentioned might, hopefully, show that the budget of Natural England, the body responsible for biodiversity in England, has more than halved over a decade. A review of carbon offsets might reveal that they do not reduce emissions, and that offsetting schemes such as the clean development mechanism have been beset by gaming and fraud. This from a Government who removed the climate change levy exemption for renewables; scrapped the feed-in tariffs for new small-scale renewable generation; and cancelled the zero-carbon homes policy. Gordon Brown pledged a zero-carbon homes policy standard. We endorsed it and celebrated it; the Tories scrapped it in 2015, just one year before it fully came into force.

Of course, Brexit looms large over everything we discuss. Even today, the Chancellor has tried to use the bribe of a double-deal dividend or the threat of postponing the spending review to cajole MPs into voting for the Government’s deal. What we are seeing is not a double dividend; we are seeing Brexit bankruptcies as a result of the delay in the negotiations. The publication of the tariffs this morning was clearly part of this threatening strategy. It is a calamitous strategy. It is forcing people into intransigent corners rather than bringing them together.

What we need now is for the Chancellor to stand with us today and vote to take no deal off the table; to stand up in Cabinet against those who are trying to force us into a no-deal situation; and then, yes, to come and join us to discuss the options available, including Labour’s deal proposal and yes, if required, taking any deal back to the public.

Outside this Westminster bubble, outside the narrow wealthy circles in which the Chancellor moves, nine years of hard austerity have created nine years of hardship for our constituents. Today, and in recent times, the Chancellor has had the nerve to try to argue to those who have suffered the most at the hands of this Government that their suffering was necessary. If austerity was not ideological, why has money been found for tax cuts for big corporations while vital public services have been starved of funding? Austerity was never a necessity; it was always a political choice. So when the Chancellor stands there and talks about the end of austerity and about a plan for a brighter future, how can anyone who has lived through the past nine years believe him?

This Government have demonstrated a chilling ability to disregard completely the suffering that they have caused. To talk of changing direction after nine years in office is not only impossible to believe, but much too late. It is too late for the thousands who have died while waiting for a decision on their personal independence payments; too late for the families who have lost their homes due to cuts in housing benefit; too late, yes, for the young people who have lost their lives as a result of criminal attack; and too late for those youngsters whose clubs and youth services have been savaged. This is the Chancellor’s legacy; it is this that he will be remembered for. He was the shadow Chief Secretary to George Osborne and designed the austerity programme. History will hold him responsible for that. There are no alibis. He is implicated in every cut, every closure, and every preventable death of someone waiting for hospital treatment or social care. It is time for change. People have had enough, but increasingly they know that they will not get the change that they so desperately need from this tainted Chancellor or from his Government. It is time for change, and it is time for a Labour Government.