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Budget Resolutions

Part of the debate – in the House of Commons at 9:12 pm on 16th March 2020.

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Photo of Paul Blomfield Paul Blomfield Shadow Minister (Exiting the European Union) 9:12 pm, 16th March 2020

Of the many learning points from the current coronavirus crisis, one stands out, which is that, in a crisis, people turn to the Government. Over the past 10 years, the capacity of the state to respond to crises has been deeply weakened by the funding decisions made for our public services, and it is a position that the Budget has left essentially unchanged. Capital spending is welcome, but, as the Institute for Fiscal Studies has pointed out, the revenue position is a completely different picture. Across the public sector as a whole, real-terms spending per person will remain about 8% below 2010 levels in the next financial year. We will pay the price for that, because we are facing this crisis with an NHS that is already stretched to the limit. Its resilience is corroded, and it has too little spare capacity. We had the warning signs—regular winter crises, patient stacked up in corridors—but not enough was done about them.

Beyond the NHS, the crisis in social care, which many Members have referred to, has clearly been deepening—not addressed but made worse by the disproportionate cuts faced by local government. Councils such as Sheffield have lost more than half their funding from central Government over the past 10 years.

On his accession to the job he currently holds, the Prime Minister said:

“And so I am announcing now—on the steps of Downing Street—that we will fix the crisis in social care once and for all, and with a clear plan we have prepared”.

He might have even used the words “oven ready”. Eight months on, it is clear that he never had a plan and his Budget does not have a plan.

I would like to raise a different point now, because while I welcome the measures in the Budget to support small businesses through the coronavirus crisis, they do not go far enough. Steve and Sara contacted me over the weekend. They run the popular Harland Café in my constituency—one of hundreds of cafés, bars and restaurants that employ thousands of people. They were worried then about the future of their business, and that was before the Government’s decision today—not telling them to close, but telling people not to go through their doors, hanging them out to dry without clarity and without the opportunity to draw on business continuity insurance. The Health Secretary was unable to answer the questions on those issues a short while ago, or on the other help that the hospitality sector will need. I do hope that the Economic Secretary to the Treasury, when he winds up, will be able to go further, because businesses such as Steve and Sara’s, and thousands more across the country, are on the line.

At the other end of the spectrum in terms of scale are our universities, which are key to the economy in Sheffield. We can already anticipate the impact of the coronavirus on their income. We have 15,000 international students between our two universities, worth over £210 million a year to the local economy. More than 7,000 are from China. Many of those planning to come this year will not be able to. If we lose, say, half of them, our two universities could lose £50 million in fees. Across the country, a 50% reduction in international students starting in September could produce a loss of £1.9 billion. Nobody has commented on that, so will the Economic Secretary also say what plans the Government have to support our universities?