I beg to move,
That this House
believes that the last decade of UK economic policy weakened the foundations of this country’s economy and society, leaving the UK particularly vulnerable when the coronavirus crisis hit;
further believes that many Government choices and actions during the coronavirus pandemic have exacerbated the problems that pandemic has caused, leading to the UK suffering the worst economic crisis of any major economy;
calls on the Government, as the UK emerges out of the pandemic, to address the deep inequalities and injustices in this country and take the UK forward to a stronger, more prosperous future through a new partnership between an active state and enterprising business;
further calls on the Government to protect family finances by reversing the planned £20 cut in Universal Credit, reversing the key worker pay freeze and providing councils with the funding they need to prevent huge rises in council tax;
and calls on the Government to introduce a new British Recovery Bond to allow people who have accumulated savings during the pandemic to have a proper stake in Britain’s future and to back a new generation of British entrepreneurs by providing start-up loans for 100,000 new businesses.
Next Wednesday is a pivotal moment in this country’s response to the coronavirus pandemic and our emergence from this crisis. When the Chancellor stands up to deliver his Budget, he faces a choice: he could take us back to the short-termist, irresponsible policies that left our economy and our country so dangerously exposed before the crisis hit, or he could learn from the mistakes made over the past 10 years and move forward, to a stronger, more prosperous future. Our economic recovery is at stake and the Chancellor cannot afford to get it wrong. He cannot continue to duck the big decisions, nor to go missing when he is most needed, and he must make the responsible choices that have been so frequently lacking over the past year.
We cannot get away from the fact that our country has been hit harder than most during this crisis, and much harder than it needed to be. That is despite the herculean efforts of our NHS and social care, and other key workers; the incredible national commitment we have seen from those who have volunteered up and down our country; the ingenuity of our scientists; and the hard work and commitment of businesses and workers up and down the land. The UK was not fated to have the highest death toll from covid in Europe, nor to suffer the worst economic crisis of any major economy.
Such grim statistics relate to decisions taken or not taken during the crisis, but also to 10 years when the foundations of our economy and our public services were weakened. The UK entered 2020 as one of the most unequal countries in Europe. Wages had flatlined for 10 long years—the worst decade for pay growth in generations. Yet as pay stagnated, childcare costs spiralled for families across the country. Household finances took such a hit that one in four families had less than £100 of savings in the bank when the crisis hit. At the same time, the public services we all rely on had been stripped back and stockpiles of vital equipment had been run down, providing a worryingly low level of resilience.
All this happened because the party opposite was not willing to take the responsible decisions required to set our country on stronger foundations. Instead, after the global financial crisis, Conservative-led Governments hammered family finances and withdrew funding for public services, in moves that have now been widely criticised not just by Labour, but by the likes of the International Monetary Fund and the OECD.
Some of us think that this allegedly Conservative Government are already spending far too much and regulating too much. Will the hon. Lady make the commitment that Mr Blair and Mr Brown made when the Labour party was last in opposition: that whatever happens, a future Labour Government would not spend a greater proportion of national income on the public sector?
I certainly would not spend public funds in the way this Government often have. I will come on to that in a moment. For me, the question is not the quantum of spend; the question is whether spending has been appropriately directed, whether it has been appropriately managed and whether there has been strong financial control. Sadly, in many aspects of this crisis, those values have not been held to, as I will go on to explain in the rest of my remarks.
The agenda we saw over the past 10 years of cuts in order—in theory—to deliver speedy fiscal consolidation did not even achieve its primary objective. The British people were told they had to tighten their belts so that we could all do our bit to pay down the national debt, yet that debt rose from £1 trillion to £1.8 trillion under Conservative-led Governments before the crisis hit. Ten years of failing to address the structural weaknesses in our economy meant that when covid-19 arrived on our shores, we were dangerously unprepared.
Yet the hits to our health and our economy still did not need to be as severe as they have been. Recent decisions have all too often exacerbated the problems we have faced. The Chancellor has failed repeatedly to understand that the health crisis and the economic crisis are not separable—they cannot be traded off, one against the other. If economic support does not go hand in hand with the imposition of necessary public health restrictions, we cannot get a grip on the virus, nor will economic activity return to normal. If infections are not reduced, not only will restrictions be in place for longer, but people will lack the confidence that is needed to get out and start spending again.
Time and again throughout this crisis, the Chancellor has sought to pull back economic support with the virus still raging. He sought to wrap up the furlough scheme at the earliest possible moment, in the face of all the available evidence and calls from businesses, trade unions and the Labour party alike. As the costs of that approach became clear, there was a last-minute scramble to come up with a replacement scheme that saw four versions of a winter economic plan in the space of six weeks before winter had even begun. And then quite literally at the eleventh hour, he extended furlough in any case.
The same was true of business support to areas under local restrictions. Local leaders were forced to conduct a series of sham negotiations, only to emerge with the same £20 per head payment each for their local area, with no sense of how long that needed to last and no connection to local business need. That pattern is in evidence again. As we stand here today, businesses face yet more looming cliff edges: business rate payments falling due in just over a month’s time, VAT spiking for our hard-hit hospitality sector, and furlough due to end on
The Prime Minister said yesterday that we should be driven by the data, not by dates, but instead of having acted weeks ago to provide the certainty that businesses crave, the Chancellor is determined to wait until the theatre of his Budget next week to make any announcements. That is not driven by the data on business confidence and economic impact. Indeed, today we learned of the 1.7 million people now in unemployment and the prospect of 1 million more losing their jobs in the months to come. Instead, that is an approach driven by politics.
This has combined with a situation where public funds have time and again been wasted and mismanaged. Hundreds of millions have been spent on contracts that have simply not delivered, and funding has often not been targeted where it is needed most, despite the Welsh Labour Government showing how effective targeting funds at small businesses in particular can be. Coronavirus may have closed much of our economy, but this Government’s approach is crashing it. Next Wednesday is a chance to change course, to learn from the mistakes of not just the last 11 months but the last 11 years, and to put us on the path to a more secure and prosperous economy.
In the midst of a jobs crisis, we need urgent action to support people back into work, especially our young people, for whom time out of work can scar future prospects permanently, yet the Government’s much vaunted kickstart scheme is only helping one in every 100 eligible young people, and their restart scheme has not in fact started at all. Instead, the Government must learn the lessons of successful schemes, such as the future jobs fund, which built on the strengths of existing local institutions to deliver sustainable employment.
We need action, not rhetoric, to support the creation of new jobs. There is a tremendous opportunity here to align job creation with our net zero ambitions. Labour has called for the acceleration of £30 billion of green investment in the next 18 months. We have demonstrated how that could support the creation of 400,000 new green jobs. Incredibly, the Chancellor cut £300 million from the planned capital budget in November. His shambolic green homes grant has been so badly delivered that it is actually costing jobs. We urgently need a change of course, so that we can support business to build the new jobs of the future.
We need to stop ordinary families carrying the can for these mistakes. Showing that he has totally failed to heed the warnings of the International Monetary Fund and others, the Chancellor is ploughing ahead with plans for a triple hammer blow to family finances, forcing local authorities to hike council tax, cutting social security by more than £1,000 a year, and freezing pay for key workers. That is not just poor reward for those who have sacrificed so much over the last year; it is economically illiterate, sucking demand out of our economy at a time when we need it most. The Chancellor is instead heavily reliant on spending by those who have been able to build up some savings during the crisis. Not only have more people in our country lost income during this crisis than have been able to save, but in addition the Bank of England has shown that the vast majority of these savings will likely be retained and not spent.
Instead, we need a different approach—one in which we stop leaving people, businesses and whole areas of our country behind. We need to harness the potential of Government working with businesses and trade unions to build a better, more secure future. We must take the strategic decisions that would restore the foundations of our economy and prepare us for the challenges and opportunities of the decade ahead.
First, we need to support families across the UK by scrapping the planned cut to universal credit, reversing the key worker pay freeze and backing councils so that they do not need to impose inflation-busting tax hikes. That will build confidence and build our local economies. We must harness the spirit of unity and solidarity that has defined the British people’s response to this crisis, by allowing those who have been able to save to invest in British recovery bonds, thereby keeping their money safe while taking a stake in our country’s future.
We need to lift the burden of debt from our small businesses by enabling them to pay back covid-related bounce back loans once they are making profits again, rather than continued debt preventing them from investing and taking on new staff. We have to expand the start-up loan scheme to support 100,000 new British businesses over the next five years, backing the entrepreneurial spirit that we need for economic growth.
The economic approach of the Conservative party has been severely tested over the course of a decade and been found to be seriously wanting. Indeed, over the past year it has been tested to destruction. We cannot afford a repeat of those mistakes—a return to policies that have been so weak and provided so little resilience. We need a new approach: a Government who are on people’s side, who understand the value of public services, and who give families and businesses the security that they need in the tough times and offer them hope in the years to come. Next Wednesday is a fork in the road. I urge the Chancellor take the right path to a better, more secure economic future.
I thank Anneliese Dodds for securing this debate, which is an important opportunity to take stock ahead of next week’s Budget. With the leave of the House, Mr Speaker, I shall also close the debate for the Government later.
The hon. Lady, and Members from all parties, will appreciate that I cannot discuss any of the specifics of next week’s Budget, but I can say that although we may not always agree on the way ahead, I believe that we in this House all want the same outcome: a vibrant and prosperous economy that gives people everywhere the opportunities that they deserve.
In responding to the motion, I intend to do three things. First, I shall briefly remind the House of the economic and fiscal situation that we inherited in 2010. [Hon. Members: “Good idea!”] It is a welcome motion for enabling that. Secondly, I shall examine the state of the economy a decade later, noting the difference, for which the credit goes to previous Treasury Ministers—not current Conservative Treasury Ministers—who took difficult decisions in the national interest. Finally, I shall say a little about the Government’s ambitions now, with the obvious caveat that a Budget is imminent.
As Members will recall, the outlook in 2010 was not good. The financial crisis had torn a hole in our country’s future, the economy was shrinking and the deficit was ballooning. As George Osborne said at the time of his speech in the Queen’s Speech: Economy debate in 2010 :
“Getting over the worst economic inheritance any modern government has been bequeathed by its predecessor is not so easy.”
He also noted that the British economy had become
“deeply unbalanced…Unbalanced between different parts of the country…Unbalanced between different sections of society… Unbalanced between different parts of our economy”.
As set out by the most recent Labour Chief Secretary, Liam Byrne—I accept that it was a light-hearted note and that much of the criticism he has received has probably been unfair, but the substance remained—there was no money left.
The coalition Government took power in 2010, at a moment when one thing mattered more than anything else: strong leadership prepared to make the right decision in the national interest. As hon. and right hon. Members will recall, in the years that followed the Government took steps to put this country back on a stable financial footing, because we need a strong economy to fund strong public services. The economy expanded in every year of the decade that followed. In fact, between 2010 and 2019, it grew by a total of 19.2%, which was faster than France, faster than Italy and faster than Japan—a reality not reflected at all in today’s motion. Achieving that success was about many things, not just fiscal discipline. In 2010, for instance, the Government created the Office for Budget Responsibility, which introduced independence, greater transparency and credibility to the economic and fiscal forecasts on which fiscal policy is based. Indeed, 10 years on, the OBR is considered by many of its peers to be the gold standard of independent fiscal institutions.
Just as now, a key focus for the Government throughout that period was protecting, supporting and creating jobs; here, too, the numbers are impressive. Participation in the labour market reached a record high of 79.8% in the three months to February 2020—three percentage points higher than in 2010. In the same year, the UK had a higher employment rate and a lower unemployment rate than both the OECD and G7 averages. Between the 2010 election and the end of 2019, we saw over 3.8 million more people in employment—equivalent to an average of nearly 1,000 extra people in work every single day—and 85% of that growth was in high-skilled occupations. Importantly, that growth was across the board. The employment rate increased for all regions in the country, as well as for women, for young people and for poorer households. Indeed, prior to the pandemic, the employment rate among women was at a record high of 72.7%, and youth unemployment was down almost half on 2010.
If hon. Members remember just one key statistic, perhaps it should be this: real household disposable income per head—the Treasury’s preferred measure of living standards—was 11.4% higher in 2019 than at the start of 2010, and incomes grew most strongly for households on lower and middle incomes. Remember that this was also the decade when we made significant personal tax cuts and introduced the national living wage, which we have increased every year. Taken together, changes to the national living wage, personal allowance and national insurance contributions mean that an employee working full-time on the national living wage is more than £5,200 better off than in April 2010. This is a track record of which any Government of any political persuasion should be proud.
It was not just households across the country that understood the benefits; the world recognised them too. In 2018, the UK topped the Forbes list of best countries for business for the second year running. A year later, the World Economic Forum acknowledged our strengths in innovation capability, business dynamism, institutions and market size. Businesspeople everywhere felt the same. The UK has the third highest foreign direct investment stock in the world after the US and Hong Kong, and more foreign investment than Germany and France combined. None of this reflects today’s motion; indeed, it reflects strong leadership, fiscal responsibility and a Government prepared to act in the national interest.
Coronavirus has been a great challenge that we, as a country, have had to face together. Every country has had to reckon with the virus’s economic impact, but because of the decisions made by successive Chancellors over the past 10 years, our economy and public services were strong when the pandemic hit. The markets understood that we were a Government who could plan for the future and make decisions when they mattered. As a result, we have been able to respond in the way in which we have. This House has heard about that response numerous times. It is one of the largest and most comprehensive responses in the world, totalling more than £280 billion since March 2020. Millions of jobs and livelihoods have been supported through the furlough scheme and the self-employment income support scheme. We have allocated billions of pounds in loans and grants to businesses across the UK. It is a response that the IMF singled out as
“one of the best examples of coordinated action globally”.
It called the response “aggressive” and “unprecedented”—that is a frequently used word, but I do not apologise for using it again. Indeed, the Resolution Foundation has said that the response
“prevented an unprecedented collapse in GDP from turning into a living standards disaster.”
The fact that we had rebuilt the public finances in recent years, combined with the UK’s strong institutional framework, gave us the wherewithal to borrow to provide the significant economic support that was required. Our decade of economic success made all of that possible.
I know that the Opposition wish to keep talking about the past, which is surprising given that many of those years were spent supporting the economic policies of the previous Leader of the Opposition. I am always more than happy to speak about our record over the past 10 years—I welcome today’s motion as providing an opportunity to do so—but I, like this Government, want to look forward to the future.
Last year’s spending review tells us everything we need to know about this Government and this Chancellor’s direction of travel. There was significant additional funding to help our public services in their continuing fight against the pandemic—we are making record investments in public services, including an historic settlement for the NHS, which provides a cash increase of £33.9 billion a year by 2023-24; we are providing better lifelong learning, such as through the £375 million to deliver the Prime Minister’s lifetime skills guarantee; we are recruiting more police officers to make our streets safer, with more than 6,600 already recruited towards our 20,000 target; we are implementing our 10-point plan to tackle climate change, mobilising £12 billion of Government investment, which will in turn create hundreds of thousands of green jobs across the country, including in carbon capture and storage, electric vehicles and renewable energy; we are investing in technology, innovation and the digital economy, as part of our goal to make the UK a science superpower—this Government are increasing investment in research and development at the fastest speed and greatest scale since records began; and we are investing in the UK’s economic recovery, with more than £100 billion of capital investment next year to spread opportunity, create jobs and drive economic growth.
The motion states that the last decade “weakened the foundations” of the economy, yet we saw nine years of continuous growth, while we reduced the deficit from 10% to below 2%, The motion says that the UK was “particularly vulnerable”, yet we have consistently protected our NHS, with the 2018 NHS settlement being the biggest cash increase in public services since the second world war. The motion says that our actions during the pandemic have “exacerbated the problems”, yet we have vaccinated more than one in three adults, which is far more than any other European country. The motion says that the UK has suffered
“the worst economic crisis of any major economy”,
yet independent bodies such as the IMF have praised the UK’s response, which in turn was possible only because of the economic decisions of the last decade. The motion talks of “inequalities”, yet distributional analysis of the Government’s interventions shows that we protected the poorest working households the most, through schemes such as the furlough. It is because of our economic record that we have been able to place the protection of jobs at the heart of our covid response, with the furlough and the other business support measures.
As the Chancellor said last month:
“Sadly, we have not been and will not be able to save every job and every business, but I am confident that our economic plan is supporting the finances of millions of people and businesses.”—[Official Report,
He was right, and jobs will remain at the heart of his economic plan, as we work together to build back better and level up the whole of the UK.
I thank the Opposition for bringing this motion to the House. I very much agree with the assertion that, this time last year, the UK was not in the best situation to handle the devastation that coronavirus would wreak on our economy. Let me quote this to the Chamber:
“The UK’s resilience has been weakened under sustained Tory cuts. Wages have barely grown in the last decade. The welfare state safety nets have been torn to shreds. Public services have struggled through chronic underinvestment and asset stripping, and some parts of the UK that have still not fully recovered from the 2008 financial crisis are ill-equipped to cope with a further recession. Coronavirus has the potential to have a lasting impact.”—[Official Report,
If the words sound a wee bit familiar, it is because I have said them before—in response to the Chancellor’s Budget plans almost a year ago. I congratulate those on the Labour Benches for finally catching up with what the people in Scotland have long known: we have had 10 years of damaging austerity and five years of Brexit uncertainty crushing investment, and it is likely that the UK would have fallen into recession in 2020 anyway, even before the pandemic began to take hold. Even in the face of the most harmful economic crisis that our generation has seen, the Tories have pressed ahead with a Brexit deal that has delivered near-fatal blows to our export sectors and has cost countless jobs.
The labour market statistics of the Office for National Statistics make grim reading. They state that, in January 2021, 726,000 fewer people were in payroll employment when compared with February 2020, of whom 425,000—58.5%—were under 25. This is both symptom and cause of the precarious and damaging employment practices that have been allowed to run rampant under this UK Tory Government. The Government have not dealt with zero-hour contracts. They have trapped young people in discriminatory and exploitative rates of the minimum wage—a minimum wage I should point out, not the pretendy living wage as the UK Government like to badge it— and they have failed to act on fire and rehire, despite being given options by my hon. Friend Gavin Newlands. Young people deserve better than this. The UK Government must now devolve all powers over employment law to the Scottish Government. We do not forget that Labour blocked devolution of those powers as part of the Smith commission, preferring to leave Scotland at the mercy of the Tories rather than letting the Scottish Government progress a fair work agenda for our people.
I agree with Anneliese Dodds that withdrawing furlough in April is too early. Realistically, if we are to prevent a cliff edge of unemployment when the job retention scheme ends, businesses will require the furlough scheme for at least two months after the current lockdown measures come to an end and perhaps longer if the course of the virus does not go as we all dearly hope—we have been here before. The Chartered Institute of Personnel and Development has called for an extension to the end of June and for much greater certainty from the Chancellor to allow businesses to plan properly. Many people lost their jobs unnecessarily due to the previous insistence from the UK Government that the scheme would end in October, which was followed, of course, by a last-gasp U-turn, by which time it was too late for too many.
The CIPD also points out that there is a clear imperative for a lower limit to the furlough scheme so that the incomes of those on the lowest rates do not fall below the national minimum wage. People have been struggling to make ends meet, and 80% of what was already a very low wage is not enough to live on. We on the SNP Benches have long argued that Scotland should have the powers to provide its own furlough scheme as well as the borrowing powers that would be necessary to save jobs.
Labour’s policy of recovery bonds are all well and good, but it is not exactly groundbreaking. The Resolution Foundation has described it as unnecessarily complicated, but not actually harmful. I am afraid that that is probably the best that can be said about it. Let us not pretend that it will have a huge impact on recovery. Money could be much spent on a further uplift to universal credit and legacy benefits, which would put money directly into the pockets of those who need it most. It could be spent on ending the benefit cap, which the Child Poverty Action Group has reported will already affect 35,000 households in the new year, 77% of which are households with children, followed by the capping of a further 41,000 households after the first few months of 2021 as their grace period expires from January through to March. The money could go towards scrapping the appalling two-child limit, which the British Pregnancy Advisory Service has found recently is driving up the numbers of women opting for an abortion rather than bringing a child into the world. This Government should be ashamed of those statistics and they must end the two-child limit now.
Unemployment is expected to peak later this year, so keeping and extending the £20 uplift would help to alleviate some of the uncertainty that families are facing at this difficult time. The UK Government’s plans to scrap this support will take the basic level of support to its lowest level since 1991. The National Institute of Economic and Social Research figures out this week also demonstrate that destitution levels have risen from 0.7% of all UK households to 1.5% in the space of a year under this Tory Government. So even with an uplift, families are struggling to make ends meet. The UK Government know this, and it would be utterly despicable of them to go ahead and remove that vital support, knowing what we all know.
Research by the Scottish Parliament Information Centre has shown that the single most effective policy in alleviating child poverty would be a generous increase in universal credit, and the Scottish Government are doing their bit through the Scottish child payments. The relationship here is very simple: the more money paid in benefits, the fewer children in poverty. It is time—it is beyond time—for this Government to scrap the two-child limit and bring payments in line with the OECD average.
The Opposition are tinkering around the edges of existing policy here, and it is really not good enough. The Labour motion seems stuck in the past by failing to acknowledge that the active state does not have to stop at the end of Whitehall. Holyrood currently has only very limited borrowing powers, leaving us always at the mercy of Tory decisions. Scotland needs bold, ambitious plans to fund large-scale investment and to stimulate the economy. An overwhelming majority of voters in Scotland now believe that Scotland should have the power to borrow on its own terms, but the Opposition have failed to share in that simple ambition.
The Scottish Government are already delivering policies such as the youth guarantee, which will ensure that everyone aged between 16 and 24 has the opportunity of work, education or training. We are putting money into growing the economy while tackling the deep-seated inequalities we have seen highlighted by the covid-19 pandemic, but without the powers of a normal country, Scotland still cannot do things like extending the furlough scheme. We cannot deliver our own tailor-made support schemes for those who have been excluded from the UK’s support, such as self-employed people and certain women on maternity leave.
The Scottish Government are delivering on capital investment through the Scottish National Investment Bank, the single biggest economic development in the history of the Scottish Parliament and the UK’s first development bank. The bank will provide finance and catalyse private investment to grow the economy through innovation and accelerating the move to net zero emissions and a high-tech, connected, globally competitive and inclusive economy. However, it is hampered by a rule that does not allow the Scottish Government or the investment bank to allocate funds between years. The Treasury must stop standing in the way when Scotland wants to get on with the job.
Scotland has bold ambitions for the future, but the hard reality is that we need more powers to deliver a bigger-scale fiscal stimulus to future-proof our economy. This lack of powers is going to have real-life consequences for the tens of thousands of Scots whose jobs are on the line. Reading the Labour motion, we can see clearly how little the Union has to offer to the people of Scotland. It is little wonder that more and more Scots—now in 21 consecutive polls—are waking up to the reality that only an independent Scotland can provide the fair, just economy that we all need.
I draw the House’s attention to my entry in the Register of Member’s Financial Interests.
The background to today’s debate is that no other Government in the western world have given such trenchant taxpayer support to their citizens. I read, as I am sure my colleagues did, the relaunch speech by the Leader of the Opposition, but it seemed to me that his guiding theme merely followed the defining levelling-up agenda of this Conservative Government.
I have no doubt that many speakers today will look at the last five years of this Government, but I would like to look at the first five years referred to in the motion, from 2010. When the coalition assembled in 2010, one in every three pounds of public expenditure was borrowed, and as a result of that difficult and dangerous financial position, tough decisions were taken about reductions in expenditure. Incidentally, the same fiscal tightening took place in Britain as took place in Obama’s America. As a result of those courageous decisions, six things happened, many of which were down to the skilful stewardship of George Osborne.
First, the UK had the strongest recovery among the G7 countries. More British jobs were created than under any other Government in history. By 2015, we had the fastest income growth among the lowest-paid 20% in the country. We had the most sustained and consistent fall in our deficit among the G7, and we introduced the national living wage. Meanwhile, the NHS performed more operations than ever before and crime fell in every year. The UK was the No. 1 recipient of inward investment in the G20.
Like many of us, but especially me, I am incredibly proud to have served in a Government who, in spite of the economic difficulties, refused to balance the books on the backs of the poorest people in the world and implemented our 0.7% promise on international development. I am proud it was a Conservative Government who finally implemented the promise to the world’s poorest to spend 0.7% of our gross national income on international development. I know that the Government are considering breaking this promise, a manifesto commitment that all of us entered into just over a year ago, but I urge them not to do so. We would be the only G7 country to take this action, while America is increasing its development spending by $15 billion. Although it is £4 billion, which is a great deal of money, it is just 1% of what we have borrowed in the last year. It will result in hundreds of thousands of avoidable deaths, mainly among children, and it will destroy a key and respected aspect of post-Brexit global Britain. I urge the Government, on this point, to think again.
There is no starker contrast of how flawed the UK Government’s economic model has been than when compared with the approach of the Welsh Labour Government. More than a decade of Tory austerity has left the UK completely unprepared to deal with the global pandemic. Despite UK Government cuts and austerity across Wales, our wonderful NHS staff, council workers, emergency services and many more work tirelessly to keep us safe and keep Wales running.
The Welsh Labour Government have provided extra support for local authorities: £500 million to deliver key services such as social care and test, trace, protect; and to make sure that businesses receive vital support grants. In Wales, nine out of 10 people who test positive for coronavirus provide details of their close contacts, and almost 90% are successfully contacted and advised. The Welsh system is working because it is a public service run locally. The Welsh Labour Government have made a special £500 payment to more than 67,000 social care staff working in people’s houses and in care homes, including for domestic and personal assistance. They continued their commitment to free school meals when Wales became the first UK nation to guarantee provision throughout school holidays, and they have now extended this to Easter 2022, feeding over 105,000 children in Wales. At the beginning of the pandemic, the Welsh Labour Government helped homeless people into accommodation, and more than 3,200 people are now in temporary accommodation.
Businesses in Wales have had access to the most generous support package in the UK. The £2 billion economic resilience fund alone has secured 141,000 jobs. At the 2016 Senedd elections, the Welsh Labour manifesto set out six key pledges, and it has delivered on every pledge: an additional £100 million for schools; 100,000 all-age apprenticeships; a cut to business rates for local businesses; a new £80 million treatment fund; doubling the capital limit for older people going into residential care; and 30 hours’ free childcare for 48 weeks for parents of three and four-year-olds. Today, the Welsh Labour Government have announced their strategy to rebuild the post-pandemic Welsh economy, taking the opportunity to look to the future, with a long-term focus on wellbeing, dignity and fairness for people, and supporting workers, businesses and communities to succeed and prosper.
It is a great pleasure to speak in this debate about the Conservative economic track record over the last decade. I would like to focus on just one aspect of that record—jobs. I am very proud that, before covid-19, we had achieved the lowest level of unemployment since the 1970s, helping a 1,000 people, on average, into work every single day. We have known for so long that the surest way to tackle poverty in our country is to offer people the opportunity of work, and for the past decade we have done that. Employment does not just grow our national prosperity; it gives people the dignity of work and of providing for themselves and their families. It is why the Conservatives sought to make sure that work pays by consistently raising the minimum wage and the national living wage.
It is why the Conservatives sought to make sure that work pays by consistently raising the minimum wage and the national living wage.
To create jobs growth and bring people up the earnings ladder, we have to put in place an environment that is conducive to productive economic activity. That means appreciating the power of our businesses and the tax revenues that they generate to pay for our public services; taking tough—often, unpopular—decisions to reduce the deficit in good times, so that we are stronger in bad times; and providing a fiscal environment that encourages enterprise, innovation and ambition.
Put simply, those are the foundations of economic success that have enabled the Conservative Government to boost jobs, grow our economy over nine consecutive years and reduce inequality. That is why when crisis struck the Chancellor sought and acted to protect 12 million jobs with unprecedented financial support.
All of which, of course, contrasts with the fact that every recent Labour Government have left office with a higher unemployment rate than when they started. It turns out that Labour really didn’t work. That is why the electorate have consistently rejected Labour’s hostility to enterprise, unchecked spiralling debt and obsession with tax hikes and nationalisation.
Labour is busy looking backwards for answers in yesterday, so cannot see that, while this crisis has been awful, Britain’s greatest days are ahead of us—with the ingenuity of our scientists, the precision of our engineers, the might of our financial services and the belief that when we talk up our country, push new boundaries and work together, we can, and we will, recover, rebuild and resume our economic growth once again.
I would say that it is a pleasure to follow Gareth Davies, but I am not sure he has fully grasped the reality facing my constituents in Gower and undoubtedly many of his constituents as well. My office has been inundated with queries from people who are so worried about making ends meet, about the security of their homes and about losing their businesses— people who have worked hard for their families, who have worked hard during this crisis and who have worked hard to keep people safe.
Eleven years of ideologically driven Tory austerity has financially crippled so many people. It has driven them further and further into debt and has fuelled a rise in precarious employment. That is where we are. To truly build back better, we need to tackle the huge inequalities facing the country.
As this crisis has shown, it is always those just getting by who are most affected. Women, black, Asian and ethnic minority communities and single parents have been squeezed, many to breaking point. A new research report, “The Single Parent Debt Trap”, published by Gingerbread and StepChange, the UK’s leading debt charity, reveals that single parents are more likely to be living with problem debt, and shows that the covid-19 pandemic has acted as an accelerant for problem debt, exposing more single parents to poverty. They disproportionately experienced debt problems even prior to the covid-19 outbreak. Clearly, the £20 uplift has been vital, but single parents are facing particular difficulty with aspects of universal credit, such as payment of childcare in arrears and unaffordable benefit reductions.
There were more than 50 recommendations in a recent report from the all-party parliamentary group on universal credit, which was produced for Parliament. Have the Government actually considered the report? Do they have any intention of reforming universal credit, so that it is fit for purpose in a post-pandemic Britain? The report draws out how single parents are having to turn to credit, often high-cost credit, for example at the start of the school year, or at other high-cost times, such as Christmas—as a single mother, I remember it well.
What are the Government doing to strengthen the financial resilience of families and to give single parents better credit options, such as affordable credit, no-interest loans and a fairer credit scoring system, so that they can go to work and not turn to loan sharks and high-interest payday loans? There are a lot of fears about what happens to single parents and other groups. What are the Government doing to make sure that the unwinding of protections does not turn out badly, not just for single parents stuck in debt, but for the wider economy?
Let us be clear about this debate: it was Labour who failed to fix the roof while the sun was shining, so that when the financial crisis struck, we lacked the resilience we needed as a nation to do what was necessary. Labour spent a decade pretending that it never happened—that it was a global crisis that did not affect us here and was nothing to do with them. But there was no money left, as that famous letter said. Despite having spent the last few weeks campaigning to regulate the “Buy now, pay later” sector, it is clear that Gordon Brown was the founder of the Klarna approach: he spent now and bought now, expecting the British people to be the ones to pay later.
After 2010, the Conservatives did fix the roof, and we now have the financial resilience we need to do what we have had to do to protect jobs and livelihoods as the coronavirus wave broke across our shores. Labour harp on about those they claim have not benefited from a Conservative Government, both before and during the pandemic. However, it would be remiss of me, representing a constituency with so much deprivation, not to observe that it is this Conservative Government who cut income tax by around £1,200 for the average basic rate taxpayer, by lifting the income tax threshold to £12,500. Labour’s approach, of course, was to abolish the 10p rate of income tax. Income inequality, however we measure it, is lower than it was in 2009-10, and a third fewer children live in a workless household. Although there is more to do to tackle in-work poverty, I find it hard to credit that some see this reduction still as a bad thing.
We introduced a national living wage, which raised incomes in areas of low average incomes such as my constituency, and universal credit to address the challenges of seasonal unemployment, which were such a scourge in seaside resorts, and let us not forget that the top 1% in this country pay a greater share of income tax than they did when Labour was in power.
To be fair to the shadow Chancellor, who I believe is that rare thing, a thoughtful politician, I do not think she would deliberately seek to drive the economy over the cliff. However, I fear that she would be too busy rummaging in the glove box for a Labour road map to see what was fast approaching. In her Mais lecture in January, she quoted Gordon Richardson’s 1978 Mais lecture, in which he said:
“We are now at an historical juncture when the conventional methods of economic policy are being tested.”
In trying to apply that to now, she seemed to miss the irony that it was a criticism of precisely the statist solutions that Labour offered in the 1970s and is reheating now.
Like every Opposition day debate so far in this Parliament, this debate has had an air of unreality about it. It is only thanks to Conservative policies that we are in the position we are in to deal with the crisis we face now.
The motion before the House today is not one to trouble serious observers. Over the 10 years that followed the crash of 2007 to 2009, this Conservative Government rebuilt our broken economy. Before the appalling shock of covid, we enjoyed effectively full employment. Public spending was back within our means and the UK ranked eighth in the World Economic Forum’s ease of doing business ranking for 2020. The widespread understanding that the Conservatives are the party who will look after people’s family, home and job is among the most important reasons why we have won four successive general elections, and it will underpin, I am sure, our success in a fifth.
This Government have a clear, bold plan to build back better. Our £280 billion to the crisis was deliverable only because of the tough choices that Conservative Chancellors made in the last decade to fix the roof while the sun was shining. We have made decisive interventions that have preserved much of the muscle power of the British economy during this period of suspended animation, and as my right hon. Friend the Chief Secretary to the Treasury said in his opening remarks, we have been praised by the IMF for the nature of the interventions that we have made.
Even before next week’s Budget, we have the Chancellor’s £30 billion plan for jobs, the £12 billion green industrial revolution and £8.6 billion of accelerated infrastructure spending. This stimulus is hugely exciting areas such as the Tees valley, which had the chance to leverage great amounts of private sector investment off the back of Government commitments of this nature.
Not all the decisions that lie ahead will be easy; there is no point in sugaring the pill. Our public finances are gravely damaged. Some of the damage will of course be repaired when the free market is allowed to operate normally again. However, we need to be realistic. Nothing we said during the course of the 2010s about the danger of running unsustainable levels of public debt has changed. The fact that borrowing costs are historically low is to be welcomed, but we should regard it as a stroke of great good fortune that it coincides with our hour of need, rather than an ongoing inevitability. I challenge anyone in the Chamber to tell me with certainty what the world will look like in the 2030s or 2040s, or what borrowing costs will be.
I believe it would be nothing short of immoral to mortgage our children’s and grandchildren’s futures to chance. For debt to exceed 100% of GDP for the first time since 1963 is simply not sustainable, so I would support and indeed urge some measures of fiscal consolidation in next week’s Budget. These should be targeted at hard-pressed families, and key drivers of employer behaviour such as national insurance should be protected, but I can well see the sense of looking at other options to raise revenue in the medium term, including increasing corporation tax.
Companies are realistic about the economic landscape. They care more about policy certainty and the general prosperity of the economy than about a moderate rise in corporation tax. So I hope the Chancellor will be prudent as well as bold and emphasise the need for discipline and sound money next week as part of our recovery.
Thank you, Mr Deputy Speaker. The story of the Conservative party approach to economic management over the last 10 years has been a tale of two rather unequal halves. For the many it has been a story of a brutal squeeze on living standards and the rise in precarious living, at home and in the workplace, and for this vast majority it has been about the desecration of our public services and a dramatic decline in the municipal offer to our citizens. For the few, the last decade represented business as usual, the distant memory of the global financial crash a momentary blip for the capital as it ploughed on, unfazed by the destruction it wreaked upon us all.
The machine that was assembled to discredit all that was good about the last Labour Government’s domestic agenda was slick and well oiled, and the opposition to this machine, on the contrary, tired and beleaguered. There existed a space for the great lie that was to come: that public spending was the problem and it was public spending that had to be brought back under control, not those in the City who had gambled with our futures. As soon as Fred Goodwin had become public enemy No. 1, this machine had moved on to Gordon Brown, because that was required to sell to the population austerity as a political necessity rather than the political choice it represented.
What do we have to show for this lost decade of political choices? For starters, there is the spectre of underemployment, low wages, low productivity and an economy imbalanced industrially and geographically on a scale never seen before. The indignity faced not just by those on welfare but by those in work at the hands of unscrupulous bosses and immoral methods of employment has been testament to this. Yes, the Government have always boasted low unemployment figures, but those who work in the real economy, not the City, know their stories are not told by the figures. I say “lost decade” because it has been the human cost of austerity that has come to define it. I fear that, when the taps at the Treasury are turned off, and they will be, the worst for our people, beyond the current public health emergency, is still yet to come. Austerity has by every measure left our economy and workers grossly exposed to the economic chaos caused by the pandemic and our public services less resilient to respond to a crisis of such gravity.
The demands of our people are simple: to live well, to be happy, to be secure. These are not luxuries, but fundamental rights and so should be afforded to all people in all their diversity across every region and nation. That is what we should build our economic strategy around. If the last decade is anything to go by, our people could be waiting some time.
My constituents have not forgotten what befell the UK economy the last time Labour was in power. The party which has left unemployment higher than it found it every single time it has been in office, and which left a note joking about the fact that there was no money left, might have approached this subject with a degree of humility.
The motion before the House invites us to reflect on the last 10 years of Conservative-led economic management. We should start with the situation that the Conservatives inherited in 2010 after 13 unlucky years of Labour misrule. The deficit was higher than at any time since records began in 1948, £1 in every £4 that Labour spent in its last year in power was borrowed, and unemployment was up by nearly half a million. Labour Members now say that it was all because of the global financial crisis, for which they should not be blamed, but that ignores two key facts. First, that Britain suffered one of the worst banking crises in the world was a direct consequence of the spectacular failure of Labour’s system of financial regulation. Secondly, the UK entered that crisis running a deficit. We were borrowing too much even before that crisis hit.
Restoring order to the national finances was the defining economic mission of the decade leading up to the covid crisis. By the time that covid hit, the deficit had been reduced by over 80%, putting our public finances back on a sustainable path. The unemployment rate was halved and employment reached record highs. Conservatives doubled the personal allowance and have taken 1.75 million people out of income tax. The lowest paid have received a £4,000 pay rise through the national living wage. Income inequality is lower now than it was in 2010. The highest earners are now paying a greater share of tax than at any time during the last Labour Government. All this meant that we entered the pandemic in a position of strength. This shows how vital it is to take the difficult decisions when times are relatively normal, so that we are able to take extraordinary measures when times get hard.
Labour has spent 11 years opposing every single one of the steps that we have taken to fix its mess. In 2019, having learned nothing from its mistakes, it suffered its worst defeat in a generation. The counterfactual, had Labour succeeded in that election, hardly bears thinking about. Labour’s last shadow Chancellor was actively preparing for a run on the pound if he ever got into office. His goal was to “overthrow capitalism”. That was the economic agenda that the Leader of the Opposition and the present shadow Chancellor both urged the British people to vote for. As we enter what I hope to be the countdown to the permanent reopening of our country, we should learn the real economic lessons of covid—that we have to take the difficult, responsible decisions to be ready for when the storm rolls in, and that we will all do better to be united and weathering storms such as covid together.
Covid has invaded every aspect of our lives. It has taken loved ones before their time, separated communities from one another and placed our NHS under unimaginable stresses. On
This is the landscape in which we find this debate. The UK has suffered much and needs a compassionate, competent Government to act as its lodestar to a more secure future, but we find instead a Government who have presided over 10 years of economic mismanagement, which is typified by the approach to local government funding. Despite the Chancellor having served as local government Minister, he seems to have a complete blind spot when it comes to local government. Local authorities will play a vital role in supporting social and economic recovery as we emerge from the pandemic, yet they continue to face ongoing funding pressures under this Government.
Enfield, my local council, has done its utmost to protect frontline services and its communities during the pandemic, but it has had to do that with one hand tied behind its back. The Government have imposed cuts of over £170 million on Enfield over the past 10 years, making a tough job of protecting our communities even harder. Local authorities are the bedrock of our public services and they will be essential in supporting a green recovery, helping local people to regain skills, getting them into jobs and supporting our hardest-hit families.
That is why the Government’s council tax bombshell will blow apart families’ finances and undermine the long-term sustainability of the services that we will all rely on. This is a regressive tax increase, as it will hurt most those with the least. It will see areas with the lowest tax bases struggle to recoup lost Government central funding. Once again, we do not see a levelling-up agenda, but a “decay down” programme. In Enfield, many will see a tax hike of £100 thanks to this Government—that is £100 that can no longer be spent in local businesses to protect our local employees through this horrific time. It is short-termism writ large. The Budget in the coming weeks needs to be forward-looking, but I fear we will see yet more of the same old story of Tories abandoning communities in their greatest need.
Another Opposition day debate, and another chance to remind the Labour party exactly why it is in opposition. The British people do not trust them on the economy. They do not trust them on the NHS, immigration, defence, Brexit and law and order, and the last four general elections have proved that.
We have an incredible record since 2010, with record employment before covid, the national minimum wage reaching new highs, and income tax payers £1,200 a year better off. There are fewer children in workless households and fewer families in poverty. The list goes on and on.
Locally, for residents in Ashfield and Eastwood, it gets better. Since being elected, I have managed to secure £6.2 million through the future high streets fund and another £1.5 million from the accelerated towns fund. We now have funding to get us through to the second round of the Restoring Your Railway fund, which could see train passenger services return to Selston for the first time since the 1960s. On top of that, I am currently working on a multimillion pound bid with Broxtowe Borough Council to ensure that the forgotten town of Eastwood finally gets its fair share of investment.
That is in sharp contrast to Labour’s record in Ashfield, and I will tell the House why. In 2005, King’s Mill Hospital in Ashfield was given away by the then Labour Government on a disastrous PFI deal. The hospital was rebuilt and should have cost about £300 million, but thanks to the financial incompetence of the Labour Government, the PFI now costs £1 million a week and the total cost of the hospital could be £2.5 billion. You do not need a degree in hindsight to know that was a bad deal from the start, but if the shadow Chancellor can guarantee that Labour’s British recovery bonds will provide a £2.5 billion return on a £300 million investment, let me know, as I am sure my residents will snap them up.
Labour’s incompetence is staggering, and I half-expect to see the shadow Chancellor and other shadow Front Benchers go to market one day and return with five magic beans, because their economic policies are like fairy tales. They make great bedtime reading for anyone under five, but no one else believes them.
Three years ago, while still a Labour councillor, I was asked in a Labour group meeting if I had read up on the economics of Karl Marx. I said, “No.” I was then told to join the Tory party. I took their advice, and now I am their MP. That’ll teach them.
Finally, socialism is a nice idea, but it is just like Labour’s Front Bench: it has never worked, it never will, and no one takes it seriously.
I am afraid I am worried that the Minister showed in his opening remarks that he is living in some parallel universe with no understanding of what millions of people are going through. However, in the run-up to next week’s Budget, I put on record not just the moral imperative to protect our citizens from poverty and destitution through our security system, but the health and economic imperatives, too.
Yesterday, the all-party parliamentary group on health in all policies published our report investigating the health effects of the Welfare Reform and Work Act 2016. Even before covid, there was a poverty crisis driven by savage social security cuts spanning nearly a decade. Our children—the very children the Government are now saying we need to protect—have been disproportionately affected, as have our disabled people.
The overwhelming evidence shows that the immediate consequence of this epidemic is epidemic levels of mental ill health. For our children, we know that for every 1% increase in child poverty, an extra six babies out of 100,000 will not see their first birthdays. For those children who survive this poverty, their educational attainment and even their behaviour and future longevity will have been affected. Longer term, as Professor Sir Michael Marmot spelt out last year, we will see the UK’s already flatlining life expectancy, which is declining in our poorest areas, decline even further—one of the worst in any advanced economies.
As Professor Marmot also said, the UK’s high and unequal covid death toll can be related to the poverty and inequality across the UK driven by 10 years of severe austerity, including cuts to social security. Since 2010, £34 billion has been taken out of social security support for working-age people. Even with the £20 a week universal credit uplift, the Institute for Fiscal Studies has calculated that the UK has the least generous out-of-work support in the OECD. The welfare budget may have made savings, but that has resulted in our NHS, schools and local councils having to pick up the pieces as a result of the devastating health impacts and human costs.
I reiterate that the health impacts of this social security-mediated poverty were covid-driven. This week’s National Institute of Economic and Social Research report shows the doubling of households living in destitution to nearly half a million and emphasises the inadequacy of social security support. It adds to the call that many of us have been making: we need a new social contract with the British people fit for the 21st century—a new Beveridge.
Employment in the UK has always been a critical barometer of success, and I am proud that between 2010 and 2019, under a Conservative Government, an additional 3.8 million people have been employed. That equates to an additional 1,000 employed each day. And then the pandemic hit. Over the past 12 months, the world has experienced its largest economic shock in decades. The critical question for the Chancellor was how to minimise the impact on our economy, and he stepped up.
My constituency of Ynys Môn is beautiful, and, as a result, it has become a tourist paradise. In the past 20 years, under a Welsh Labour Government, we have experienced under-investment and the loss of major local employers, and we have become increasingly dependent on tourism. Tourism is not just about our hotels and B&Bs, like the Valley Hotel. It is not just about our caravan parks and static sites, like Pant y Saer. It is part of the fabric of our economy, from eateries like the Pilot House Café in Penmon and craft shops like Oriel Amlwch to our suppliers. Businesses like ET Jones Sons and Daughter—a family-run craft butcher in Bodedern—and Seapig, whose owner Cara White crafts beautiful jewellery from sea glass, all rely on tourists visiting the island to keep them afloat.
Our tourist season should have started at around the time the whole country went into lockdown last year. Suddenly, there were no tourists. Business forecasts lay in tatters. The island was staring into the jaws of disaster. The Chancellor’s innovative schemes to support the whole UK economy offered a lifeline to thousands of people across Ynys Môn, with more than £7 million in coronavirus business interruption loan scheme loans, just under £37 million in bounce back loans, 3,400 employees furloughed, 2,000 claims made under the self-employment income support scheme, and nearly £1 million claimed on the eat out to help out scheme.
This Government are focused on supporting business and the economy. Their swift and decisive practical support has kept the UK going over the past year—not handouts as compensation for jobs lost, but hands up to help businesses ride the storm and come out the other side still intact. That is why the UK needs this Conservative Government—because when the going gets tough, we step up.
It is a pleasure to take part in this debate on the Government’s management of the economy and Conservative economic failure over the past decade. Ten years on from the rose garden press conference, I took another look at the coalition agreement—the ultimate Faustian pact—and I noticed this in the small print:
“The deficit reduction programme takes precedence over any of the other measures in this agreement”.
It is there in black and white—the Conservative Government had one goal and one goal only: to cut public spending.
The Chancellor told us at the time that it was to reduce the deficit, but we see now that it was to reduce the size of the state for ideological reasons. We have seen cuts to police numbers, roads, libraries, youth clubs, courts, housing, schools and council budgets, including in Slough. And who suffered most under austerity? The poorest and the most vulnerable—those most in need of a helping hand. If you seek a monument to those 10 years of Tory economics, visit a food bank. In Slough alone, 6,500 food packages were given to those in crisis—a 37% increase on the year before.
Then came the coronavirus. The pandemic has revealed something brilliant about our character. We volunteered, donated and looked out for our neighbours. We did not need David Cameron’s big society to be telling us what to do; it already existed. It is in our neighbourhoods, our community groups, our churches, mosques, gurdwaras, mandirs, synagogues and temples, in our trade unions and in our families. But the pandemic has also revealed something rotten within our system. It has revealed the fragility of our public services after years of neglect. It has revealed stark inequalities. It has shown Britain to be a country divided by class, race and wealth. Many millions are confined to small flats or overcrowded houses, seeing their incomes disappear, running up debts, defaulting on rents, and turning to food banks with no Government help.
The greatest lesson from the pandemic is that we need a fresh start—the kind of fresh start outlined by my right hon. and learned Friend the Leader of the Opposition just last week. When we beat the virus we must win the recovery, not simply return to the same old policies that weakened our economy in the first place. The past 10 years were a disaster for millions of people, and people cannot afford for the next 10 years to be even worse. Yes, we must build back better, but we must build back fairer too.
I was going to describe today’s topic as mind-bending, but after listening to some of the drivel from Labour Members, I think the correct word is probably “psychotropic”. The only way that this could be any more surreal is if they get Liam Byrne to close with a lecture on fiscal discipline.
As we have a short amount of time to speak, I will focus on recent events. Last week, the Leader of the Opposition gave a speech that was trailed as being the equivalent of the 1945 Beveridge report, so imagine everybody’s disappointment when he rocked up to the podium with Sir Keir’s new clothes—pound shop knockoffs of Government policies that he had been deriding the week before that somehow managed to be both dear and nasty. We can imagine the essay crisis moments at Labour HQ as he tried to concoct this diet Beveridge only to have the shadow Chancellor slip him a copy of the Treasury spending plans and say, “Change a few words and no one will notice.” The absolute brass neck of it is absolutely gobsmacking. But of course people in the real world know exactly what is going on. We only needed to watch the response on ITV when the right hon. and learned Gentleman gave his Oscar-worthy performance and see the constituents of my hon. Friend James Grundy give their judgment on his performance with a look so pained it would have made Torquemada wince.
People in the real world get that this is a Government who are actually making some tough decisions. They understand that paying down 80% of Labour’s £150 billion deficit enabled us to pay 80% of people’s wages. They understand that this is a Government who lifted 1.74 million people out of income tax altogether. While Labour eliminated the 10p tax rate, we increased employment and the living wage, whereas no Labour Government have left power with more people in work than when they came to power. The simple fact of the matter is that Opposition Front Benchers are so feckless and covered in torpor that they have no creative response to this crisis except to throw rocks at the Government as they try to deal with an emerging national crisis. They are like the French intellectual sat in a coffee shop watching the revolutionary crowds go by and saying to one another, “We must find out where our people are going so we can lead them.” Well, let me tell them: they are not going in your direction.
I wonder who is really living in a surreal world when I hear some of the contributions from the Government Benches. Perhaps Conservative Members should have a look at the levels of national debt and some of the dreadfully incompetent decisions that are making matters worse, and walk a mile—or a short distance—in the steps of ordinary people and have a dose of reality.
Covid-19 has highlighted the fundamental weaknesses in the UK economy. Clearly, we have suffered some of the worst death rates in the world, coupled with a fall in economic activity suffered by no other major developed economy. Those weaknesses in our economy have been created over the last decade. Compounding the problem is the fact that the governing party has systematically undermined our vital public services.
I am well aware, because I served on the Bill Committee, that the NHS went through a costly and unnecessary reorganisation that has squandered billions of pounds and opened up our health service to privatisation. The problems are so acute that now, after only eight years, the Government have published a White Paper for a new health and social care Bill. I find it difficult to understand when I see the Prime Minister and his Ministers applauding our key workers—surely it is reasonable to ask where they have been during the last decade of public sector pay freezes. On the eve of the pandemic, falling real-terms wages in the NHS contributed to a workforce crisis. Year on year, taking account of inflation, wages have fallen for 10 years.
Nowhere has been more hard-pressed in the last decade than local government. We now have the Government’s council tax bombshell, which is only weeks away. Instead of helping hard-pressed families in areas like mine, a succession of Governments led by the Conservatives have passed on the financial burden for maintaining local services to local taxpayers through higher council tax. At a time when local authorities such as Durham have had £260 million cut from their budgets, we should applaud them and congratulate them on their work with their public health teams to reduce covid transmission.
We should look at the realities of universal credit and what happens, year on year, when Ministers quietly cut the strings of our social security safety net. Sadly and unnecessarily, the Prime Minister maligned my hon. Friend Richard Burgon yesterday during the statement for his trade union affiliations. Like my hon. Friend, I am proud of my trade union affiliations and the role trade unions have played in defending the living standards of working people.
A decade is a long time. Memories fade—or they do for Members on the Labour Front Bench who would like to rewrite history. My memory is very clear. I clearly remember the desperate state in which the Labour Government left our national finances, and that they told us exactly what they had done at the time. In their own jaunty words:
“I’m afraid there is no money.”
When the Labour party took office in 1997, the deficit stood at around £13 billion. When it left, it was £153 billion. It took the Conservative-led Government almost 10 years to reduce that deficit by 80%, while growing the economy, creating millions of jobs, cutting taxes for 32 million people, increasing the living wage and improving the lives and life chances of millions of people throughout our country. Labour opposed every effort to do that.
Thank goodness we cleaned up Labour’s economic mess. Think of the mess we would be in now if our public finances had been in the hands of the Labour party for the past decade. Think of the mess if current Labour Front Benchers had had their way and Jeremy Corbyn was in charge, alongside his overturning-capitalism, little-red-book-waving shadow Chancellor.
That we have had, and have now, a Conservative Government means that we have had the resources to support the NHS through the pandemic and the economic resilience to provide more than £280 billion of economic support for lives and livelihoods and to invest billions of pounds in sustainable public services—our schools, our police and our infrastructure.
The Chancellor will set out new measures in the Budget to support our country and its post-pandemic growth, but many of the foundations are already in place, including a world-beating business start-up ecosystem and a vision to build back better. What has the Labour party offered as its vision for the future? Two policies: one a Conservative policy from 2012 and the other pinched off the centre-right think-tank the Centre for Policy Studies.
My mum grew up in Limehouse. Her MP was Clement Attlee. The Leader of the Opposition is no Clement Attlee, and his party has nothing to offer this country but the same record of economic failure that it had over a decade ago. Attlee himself said:
“In a life-and-death struggle we cannot afford to have our destinies in the hands of failures”—[Official Report,
I agree with him. We cannot afford to leave our destinies in the hands of those with such a dismal record of economic failure: the Labour party.
I thank my hon. Friend Anneliese Dodds for bringing about this debate and giving us an opportunity to reflect on what has not been working in economic management, on the erosion of public services and on the unsustainable damage that we have been causing to the environment over the last decade, and to find new social democratic approaches that transform the economy for the benefit of everybody. The last 12 months have shown us that the state has to be one that protects what is important; the market cannot do that. This time has also shown us what it is possible to achieve when the will exists to do so.
Members have set out how threadbare public services had become, and how close to the financial edge many people had been living—through the gig economy, and through the punitive and pointless gouging of the welfare state. Existing inequalities have been exposed. Generational injustices have been exposed, with students facing tens of thousands of pounds of debt for Zoom degrees. Caring burdens have fallen to women, and we will see that working through into workplace equality over the months and years to come.
Similar divergences in fortune are happening in parallel before our eyes in business. Small businesses and the self-employed—the red blood cells of our economy—are facing unimaginable challenges, cash and debt crises, while online organisations and other monoliths are posting massive, eye-watering profits that are largely untaxed. I repeat the SDLP’s view that one-off windfall taxes should be applied to those businesses that have benefited so much from the pandemic.
Solutions exist, but we cannot afford to repeat the mistakes of the past. We cannot wander back into the distorted thinking of short-term management of sovereign debt over absolutely every other policy outcome. This Government have to learn—and I fear, from previous contributions, that they have not—the lessons of the 2008 crisis and of every other recession of the last 100 years. Sharp spending falls will choke the ability of families to spend, and that will have knock-on effects on businesses, jobs, growth and tax revenue for public services.
A real living wage is overdue. The rhetoric does not match the reality; work is no longer a way out of poverty. The universal credit uplift should be maintained. Short-term savings in public spending will be dwarfed by the long-term costs of managing intergenerational poverty. Even before covid, in economic terms Northern Ireland was at the top of all the bad economic charts and at the bottom of all the good ones, and the parties at home absolutely have to come together to create political stability and support the economy at home.
The last 12 months have shown that people can come together with solidarity, passion and innovation. This is our generation’s rethink opportunity. We need to build an economy that works for more people that is based on wellbeing, not just on GDP.
Thank you, Mr Deputy Speaker, and many apologies for the tech troubles earlier.
This pandemic has revealed the impact of a decade of cuts and deepening inequality. It is not just Government failures this year that have left us with the worst death toll and worst economic recession in Europe. The last 10 years of Tory austerity have paved the way to disaster. It was because of austerity that we went into the pandemic with insufficient hospital beds; it was because of austerity that care workers across the country—I sounded the alarm on this last year—were left without adequate personal protective equipment; and it was because of austerity that the social security net that had been built over many years was destroyed.
After covid, we cannot go back to life before. We cannot go back to an exploited workforce, to families hardly surviving on universal credit or to tenants being evicted at the whim of their landlords. From the rubble of war, the 1945 Labour Government built a new settlement; we built the NHS and the welfare state.
Just as the national health service was built from ruins, our society today is crying out for a national care service. We need the green new deal to bring hundreds of thousands of well-paid green jobs to every city, region and town in our country; tenants need a long-term ban on evictions; and the key workers whom Ministers applauded last year deserve nothing less than a pay rise.
If this is not the time to demand courage and ambition, when is? People who lived through the war and rebuilt this country afterwards deserve better than to die alone. My generation deserves better than to be robbed of secure housing, secure jobs and proper mental health support. Austerity was never necessary. People who did nothing to bring about the financial crash were made to pay for it. Our Prime Minister promised no return to austerity and we have to hold him to it.
It is a bit rich of Labour Members to talk of economic failure ascribed to anyone but themselves. To them, it is never their fault—they never did wrong. They think that voters just didn’t get it quite right, but for most, the reality of the decade of Labour economic incompetence before this decade of Conservative economic repair is plain to see.
Nowhere is that more true than in Stoke-on-Trent, where the decade of Conservative competence has seen a renaissance of our local economy. Prior to covid, Stoke-on-Trent was one of the fastest growing economies nationally. After decades of Labour’s neglect and failed representation, Royal Doulton, Spode, Tams, Sadler, Beswick and Kiln Craft—the list goes on—were all victims of Labour’s tax and waste policies. Our communities were left dependent, with no hope of a better future or of ever getting out of the downward cycle. Thankfully, things are now very different. We are starting to see our city prosper again, with people aspiring to achieve more. Duchess China 1888, for example, has been rescued and revived, thanks to Heraldic Pottery, enabled by a decade of Conservative policies.
It was Gordon Brown who clobbered the ceramics industry with the climate change levy. Thankfully, George Osborne reformed that levy. It was Conservative competence that restored our international financial credibility, so that even this extraordinary covid crisis can be carefully navigated. Thank goodness we have this competent Conservative Government and not the Front Benchers opposite, let alone the Marxist leadership they wanted in Downing Street just over a year ago.
In the Conservative decade pre-covid, UK manufacturing as a percentage of total gross value added increased for the first time since Major’s Government. In Labour’s 13 years of incompetence, it nearly halved. In the last decade of Conservative Government since 2010, we have seen the longest unbroken run of manufacturing growth for over 50 years.
I am passionate about the manufacturing renaissance in my home city, which is supporting the prosperity of people in Stoke-on-Trent and growing opportunities and new industries such as advanced manufacturing, digital and green technologies. That is vital. This Government are focused on levelling up opportunities across the whole country to ensure we build back better and emerge stronger from the pandemic. We must keep going with policies that deliver more prosperity, increase skilled employment and pay better wages. Stoke-on-Trent is finally on the up, and not even covid will be able to keep us down for much longer. Only the Labour party would keep us down. We must not go back to where it left us.
Since 2010, successive Tory Governments have run a failed experiment with market fundamentalist economic dogma in the UK. They cynically blamed the global financial crisis in 2008 on the last Labour Government’s spending on health and education, and used it as an excuse to shrink the size and capacity of the state. They made an absurd fetish of the deficit, which they elevated above all other considerations as the only imbalance that had to be eliminated.
Oddly, since the Conservatives borrowed an eye-watering £400 billion last year to finance the response to covid-19, they seem to have stopped worrying about the deficit. All of a sudden, they now argue that the country can carry such debt burdens, when to do so was apparently utterly ruinous only 12 years ago. Their decision to introduce huge cuts in spending since 2010 is now exposed for what it really was: a cynical, ideological choice, not an economic necessity.
The Conservative party took office with a programme of cuts that hit the poorest and most vulnerable hardest, at the same time as it introduced huge tax cuts for top earners. We can now see that cutting the size and effectiveness of the state was folly, causing poverty and destitution to soar. It was a social catastrophe; it weakened this country and left us woefully ill-prepared for the challenges that we are now facing; and it made us far more vulnerable than we need have been.
As this country grapples with a global health pandemic and the effects of Brexit combined, the extent of the damage that the Conservatives’ ideological obsessions have caused is plain to see. They have delivered a terrible double whammy: the worst economic crisis in any developed economy and one of the highest per capita death rates in the world.
Local authority funding has been halved in the past decade, with a higher percentage of resource taken from poorer areas. That has hampered our response to the pandemic, not least because of the huge cuts that the Government made to public health budgets. They weakened the NHS by ruinous reorganisation, fragmentation and enforced competition. Staff shortages and cuts to intensive care unit beds made our death rate worse. Public services have been hollowed out to make way for expensive outsourcing to cronies and Tory donors. The lack of adequate sick pay is setting back the fight against the virus and causing more avoidable transmission and deaths.
Lives have been needlessly lost, life chances are being squandered and people are suffering, so we must make a different choice. We must choose not the smallest state but an active and empowering state; we must renew our public services, not starve them of resources; and as we seek to recover from this crisis, the state must work in partnership with business to lay the foundations of our future success and prosperity.
The last 10 years did not weaken the foundations of the economy; they did the exact opposite. We took the painful decisions to repair public finances during a decade in which the Government also managed to provide uninterrupted economic growth.
I am not the first person in this debate to mention the fact that the Government fixed the roof of public finances. They reduced Labour’s deficit by more than 80%. Why? So that we would be able to respond with hugely increased funding in a real crisis. Labour never fixes the roof. It is because of the responsible decisions of Conservative Governments that the UK has the financial firepower to support the whole economy—the economy in Scotland, Wales, Northern Ireland and England—throughout the pandemic, by spending more than £280 billion in support, and counting.
Conservatives fix the roof of public finances while at the same time reducing inequality in our society. Labour’s claims to the contrary are wrong. All measures of inequality, whether they measure original, gross or disposable income, have narrowed under the Conservative stewardship of the economy. Labour talk the talk, but the Conservative party has delivered for the low-paid. In fact, the Conservative stewardship of the economy has led to the lowest-paid people being up to £5,200 better off, in real terms, than they were in 2010—and that came after 13 years of Labour Government.
The approach to fairness that I have outlined needs to continue. The motion calls for a further pay rise for public sector workers—the heartland of Labour’s union bosses—and we would all love to be in a position to deliver that, but we need to recognise that as a result of the pandemic, private sector wages have fallen by almost 1%, while at the same time last year public sector wages rose by almost 4%. Unlike the private sector, wherein people have lost jobs, been furloughed and had insecure employment and reduced working hours, the public sector has been largely protected.
In the circumstances, is it fair to tax the private sector even more to pay for further public sector pay increases? It might be popular, but it would not be fair or in the long-term interests of the country. Let us get the economy growing, with private sector pay increasing, so that we can afford to pay the public sector more as well. The Conservative Government can be trusted to steward the economy for the long term; Labour simply cannot.
The last decade has seen huge changes to our economy and the way we work, most notably the advent of the gig economy, characterised by short-term contracts or freelance work instead of permanent jobs. It is a work force dominated by women and workers from black and minority communities. That type of economy works well for people who can choose where, when and how they work, but it does not work for everyone—those who have no choice but to take whatever low-paid, insecure work they can get.
This pandemic has revealed and exacerbated deep structural inequalities in Britain today, and it has also created winners and losers. Public Health England found that black and minority ethnic communities were more likely to live in overcrowded houses in deprived areas and have jobs that exposed them to high risks of contracting the virus—a cocktail of conditions that had left them more vulnerable to unemployment and the risk of death.
We must take the opportunity to reflect on the lessons of the pandemic. Time and time again the Government have promised to reform the gig economy, but their flagship employment Bill is nowhere to be seen. We need to ensure that that Bill enshrines strong protections for gig economy workers, so that as we start to recover and rebuild the foundations of our economy and Britain, we build a Britain that will benefit everybody.
Thank you, Mr Deputy Speaker, for the opportunity to contribute today.
I start by scratching my head, as I often do when looking at the motions for Opposition day debates. They always have a limited and distant relationship with the truth and what is happening on the ground, but this one is a particularly telling example of that problem. Let us look at the words in the first sentence of the motion—
“that the last decade of UK economic policy” undermined
“the foundations” of our country. Even having that discussion is almost ridiculous. But we seem to have to have that debate, because those in the Labour party consistently fail to understand the repair that has gone on since the challenges and the problems that they left us in 2010. I have noted, over the last 10 years, both as a Member of Parliament since 2017 and, before that, as somebody who was interested in politics, the lack of alternative policies and programmes of any credibility or coherence; so the suggestion that there is now some kind of brilliant answer on the other side of the debate is the epitome of chutzpah, and I do not find it credible in the slightest.
Colleagues have spoken earlier of many of the things that have been achieved over the last 10 years, in extremely difficult circumstances—the highest rate of employment for many decades; a consistently growing economy, whose growth was at the higher end of that of some of our western neighbours; a massive reduction in the deficit caused by the bad decisions taken in 2008, 2009 and before; tax cuts to both business and people; and, for the first time, before the coronavirus pandemic hit, a debt-to-GDP ratio that was starting to come down—the fact that we do not leave more debt to our children and grandchildren.
The most interesting part of the debate so far came in the intervention by Anneliese Dodds, who I have the greatest of respect and time for, on my right hon. Friend Sir Edward Leigh. He asked the Labour party to consider some basic tenets of fiscal responsibility and credibility, for the first time in a decade and a half. The hon. Lady said—I had to go back to check it on Parliamentlive—“the quantum is not important. How much we spend is not important”—in the same way as the deficits are not important, or the debt, or fiscal restraint, or paying our own way?
I am sorry; the hon. Lady had many minutes to explain that, but I do not have the same time as she does.
The only thing that is important for the Labour party is spending—spending more, whatever the type, whatever the situation, whatever the issue. Be it in times of economic surplus, like under Blair and Brown, spend more—a £15 to £25 billion deficit. In times of economic hardship, like in 2008, 2009, spend more. In times of economic recovery in 2010, like in Ed Balls’ Bloomberg speech, fiscal stimulus, spend more. Then the, quite frankly, Lilliputian Corbynite economics of spend, spend, spend. This is the problem with the Labour party: they fail to understand the basic tenets of the economic problems and opportunities that we have. For that, they will be on those Benches, calling Opposition debates, for much longer.
The charge today is that the concerted economic failure of the past decade has “weakened the foundations” of our economy, leading to the country
“suffering the worst economic crisis of any major economy”.
The simple truth—I talk as someone who walks the steps of an ordinary person—is that, under successive Conservative Governments, we have seen nine consecutive years of economic growth. We have seen tax cuts for families, tax cuts for businesses, a reduction in inequality and a record low proportion of low-paying jobs. We have been helping people to keep more of what they earn and driving up median household income. The conclusive evidence for all of that is that we have seen record numbers of people in work—an additional 3.4 million up until 2019. Thanks to the decisions taken by Conservative Governments over the last 10 years, we have been able to withstand the blow that this pandemic has inflicted on our economy.
We have seen an unprecedented set of economic measures and financial support at a time of national crisis. We have delivered one of the most comprehensive economic responses in the world to support jobs, businesses and livelihoods during this time. This is a Government who have not been blown off course by the pandemic—who have helped those most in need at a time of crisis, while paving the way for an even more prosperous future. This is a Government who are focused on building back better and levelling up, and who have a key eye on jobs, focusing on reskilling and retraining at a scale and pace probably only seen following the second world war, ensuring people can get the education and training they need to get great jobs—creating that firm and solid link and pipeline of opportunity for those seeking work—with a keen eye on trade and all that it can do to boost our productivity and improve our international competitiveness, and, of course, not forgetting their ambitious investment in research and innovation.
It makes no sense to talk of 10 years ago, but if we want to, let us talk about the fact that every Labour Government have left unemployment higher than when they started. By 2019, we cut unemployment to the lowest level since 1974. It is thanks to the Conservatives that we reduced the deficit by more than 80%. When we handed over the deficit to Labour, it was £13.1 billion. Under Labour, it did not triple or quadruple—it went up more than 10 times, to £153 billion, by 2009.
It is thanks to the sound financial management of this Government that we could afford the unprecedented support we have put in place to protect people’s livelihoods. That is why we can build back better out of this pandemic on solid foundations. We can see that already with the speed and pace of the vaccine roll-out—a vaccine that is accessible due to the incredible foresight in the procurement by this Government. We probably have one of the first robust and defined road maps out of this pandemic because of this—
Tory economic incompetence is a rich seam to mine and it is a challenge to do justice to the millions of marginalised workers and families up and down these islands who pay the price of Tory policies. The Chancellor borrowed £55.2 billion in May 2020, nine times more than in the previous May, and the highest monthly borrowing since records began. Indeed, we need to go back 50 years to find UK gross borrowing exceeding the size of the whole UK economy as it now does—and this is a Government who are trying to tell us that they have this under control? National debt of £2.1 trillion might not worry the millionaires in the Tory Cabinet, but the rest of us are horrified.
The Chancellor said last June that the best way to restore public finances is to open the economy and get people back to work. Well, we now know what an ill-fated risk calculation that was, to the UK’s great public health and economic cost, brought to bear on the population by a Chancellor seemingly more invested in his personal brand than judicious ministerial responsibility.
The Labour party will need to be careful with its criticisms, though. It inherited falling debt and a surplus in ’97, and took only two years to revert that into rising debt. The current tenant of No. 11 Downing Street is the latest in a long line from both UK parties seemingly more chancer than Chancellor. And let us not forget that, in 2010, Labour was planning devastating austerity cuts that it was very clear were going to be tougher and deeper than Margaret Thatcher’s in the 1980s. In this, UK politics is revealed as the worst ever Hobson’s choice.
Today’s Chancellor, mirroring Alistair Darling when he shored up the banks, presents himself as something of a benevolent genius for wheeling out the furlough scheme, conveniently forgetting that it represents a very standard fiscal intervention by any Government in a developed economy in times of crisis, and of course it is future generations, not he, who will be paying down the bill. The UK Chancellor, like most before him in my 48 years, is neither genius nor generous, and there are 3 million excluded who will testify to that, not to mention our pensioners, who, by 2016 figures, endure the worst state pensions in the developed world.
We must then consider the shameful UK economic growth of 2% over the last 10 years of this Government, which compares with figures of 6% in the US, 9% in the EU and Japan, and 7% in the G7. We see clearly the chickens of historical UK underinvestment in science, engineering and manufacturing coming home to roost—the legacy of Thatcher alive and well—and that is before the long-term negative effects of Brexit flow through. Since devolution, the UK’s growth in output languishes at 23.8%, while Scotland’s has risen by 33.7%, outpacing the outmoded UK and doing so despite the dead hand of the UK Treasury holding us back. It will not do so for much longer, for at independence, Scotland will retake our place on the international global stage and forge ahead with our independent, progressive and inclusive economic future.
Before I call Ben Everitt, may I just ask the remaining MPs participating remotely to look at the clock on the left or right hand side of their monitors, wherever it may be? If they cannot see that, please could they use an alternative device, because they will be cut off after three minutes.
It is a pleasure to follow Dave Doogan, because he gave us SNP bingo, with “Brexit”, “Thatcher” and of course ending with “independence”. However, that is not quite why I rise to speak, as flabbergasted as I am.
I am very, very flabbergasted: flabber, gasted, gone! The title of this debate demonstrates an astounding lack of political self-awareness on the Opposition Benches. I have never seen anything so lacking in political awareness since the Leader of the Opposition relaunched his opposition last week by announcing his favourite Government policies. But the Opposition ask us to reminisce and look into history, so let us do so. I assure you, Mr Deputy Speaker, that I was not old enough to vote in 1997, but I was politically aware enough to see what was going on. Labour came into power off the back of many things, not least by promising to follow Conservative fiscal policies for the first three years of their term. The records show that, because they followed those tax and spend policies, the economy did indeed grow, but then it all went wrong. We should have seen it coming, not least when the then Chancellor, who later became the Prime Minister, sold off the gold, after announcing to the markets that he was about to sell off all the gold—well not all the gold, but most of it.
Then let us come to the Labour party’s record on the private finance initiative: £3 trillion-worth of debt saddling our public sector—our hospitals and schools. The very public sector that is getting us out of the mess were are in now was saddled with huge debts taking up all of its money. I mentioned that the Opposition lacked self-awareness, but in 2010 there was a glimpse of political awareness of what they had done, because they left a note saying “there is no money” left.
What happened in that decade after Labour destroyed our economy? We had nine years, under Conservatives, of consecutive economic growth. We got the deficit down from 10% to 2%, and we had record employment and historically low unemployment. The contrast could not be greater. Labour took their eye off the ball and we had a banking crisis, whereas the Conservatives rebuilt the economy, giving jobs for working people and hard-working families.
It is telling that the Chancellor has chosen not to respond to this economic debate about the last 10 years and the response required as we emerge from coronavirus. I suspect that that is not because he is publicity shy—everything we have seen of him suggests that that is not the case. I suspect he does not want to be associated with the Tory policies of the past.
It is important that we understand and learn the lessons of history, and it is important, in order to do that, that we get the history right. The Chief Secretary to the Treasury said in his opening speech that the coalition Government in 2010 inherited an economy that was “shrinking” and a deficit that was “ballooning”—that is false. In fact, the UK economy grew by 1.7% in the first two quarters of 2010, and was on target to grow at over 3.5% in that year before George Osborne’s austerity Budget took demand out of the economy and set us on a path that meant it would be 2013, almost three years later, before we got two quarters of growth as large again.
That decision to choke off the recovery—to scrap the school and college building programmes, NHS spending and council care services spending—was not only economically insane, and I suspect will not be repeated, but was done entirely for political reasons. George Osborne wanted to be able to lay the blame for the cuts that followed at the door of the previous Government, and was willing to sacrifice months off the recovery in order to do so.
As we hear the Tories in this debate talking about the deficits they inherited, we might think that we do not have a deficit now, but of course we have the biggest deficit the country has ever had. I support the fact that the Government have not attempted to prevent us from having a deficit. While we are addressing the pandemic, it would have been ludicrous to do so, just as it would be ludicrous to pretend that what was done during the economic crisis of 2008 could be done without a deficit being inherited. Of course, if we had a general election now, this Government would be handing over a monumental deficit, but the Conservatives inherited a country that had had a global event but was already on the path to recovery.
The Chief Secretary to the Treasury also said that the Government inherited a country that was “unbalanced” between different parts of the country. What on earth have we seen since? There have been hugely disproportionate cuts to local government spending in more deprived areas, and the scrapping of Sure Start, which was so important in working-class communities. Let us remember that all these decisions were taken at the same time that they were handing huge tax cuts, in corporation tax and higher-rate income tax, to the very wealthiest in our country. We certainly were not all in it together. That is the economic context of the past 10 years. This Government have to make sure that they do not repeat the failings and mistakes of the past.
I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
Today we have seen once again Opposition Members playing the blame game: trying to point the finger at the Government for everything and anything, including for a crisis that has come to us from well beyond our shores. I did find it odd when I read the subject of today’s Opposition day debate, given the legacy of the previous Labour Government. Our record in office has been tested by the electorate three times in the past 10 years, and each time the public have chosen to elect a Conservative Government over Labour’s woeful opposition. The reason I believe the Conservatives have been the public’s choice in each of those elections is that we chose to offer hope and aspiration. That is still true today, with an optimistic Government speaking about the immense challenges we still face, but ones that the British people will rise to, versus an Opposition who are focused on doing down our efforts to protect the economy and save as many jobs as we can.
We can see the same thing playing out locally in Teesside in our upcoming mayoral elections. In 2015, Redcar lost its steelworks with the closure of SSI, but rather than accepting our fate as a once great region that built the world, we rose to the challenge of transforming the site, taking public control of 4,500 acres, beginning our regeneration of it and being backed by more than £200 million of Government investment so far. This regeneration is being spearheaded by our Conservative Mayor, Ben Houchen, with ambitious plans for the Teeswork site to build a new greener Teesside that champions carbon capture and storage, wind power and hydrogen. Key to all of this is our goal of a free port in Teesside, with an ambitious plan to bring in more than 18,000 jobs over the next five years. Meanwhile, Labour locally offers only negativity, doing down the opportunity presented to us and talking down Teesside and the plans that we have.
Let me speak directly to today’s motion. I thank the Labour party for this opportunity to remind ourselves how grateful we are to successive Conservative Governments who have fixed the roof while the sun was shining. Never could we have been in a better position to deal with a crisis of this magnitude—if, of course, it is at all possible to be prepared for such a crisis. Since 2010, after nine years of consecutive growth, our economy has grown by 19%, which is faster than Italy, France and Japan. That is an entire decade of uninterrupted growth. We had to turn this country around from where Labour had left it, with no money in the Treasury and a deficit running out of control. The Conservative management of the economy has meant that we were able not only to rebalance the books, but to create record high employment across the country to support the public services on which we so heavily rely at this time.
The reality is that those very successes were built on the strong foundations on which we relied when the pandemic hit. Without solid finances, we would not have been able to put in place some of the most generous support schemes in the world, including for businesses and the self-employed, and millions would have suffered unnecessarily. I am proud to stand behind this Government’s record of fixing the roof while the sun was shining.
The aftermath of the 2008 crisis saw not only weak levels of growth, but a fundamental shift in the character of our labour market. As the economy contracted and people lost their jobs, we saw low-pay zero-hour contracts in sectors where workers had far weaker trade union representation. Labour borrowing or spending did not cause the international crisis and the economic crash. No, the only organisations that could achieve that were the big banks that took huge risks in an unregulated global banking market, They did not think about the impact that such risks would have on our communities; they just thought about their profits and bonuses.
This false rhetoric about what happened has damaged towns, cities and many communities, leaving councillors with impossible decisions on what services to cut. I find it a bit insulting when I hear Members say, as some have done today, that those in the public sector have been protected from job losses. After 10 years of harsh service cuts, huge workloads and many vacancies—in nursing, for example, there are 40,000 current vacancies —a huge strain has been imposed on the hard-working public sector who do deserve a pay rise. It is no surprise that the gap between the super-rich and the poorest continues to grow.
Things are certainly not all rosy in the private sector. In 2008, 143,000 people were on zero-hour contracts. By 2016, that figure had reached nearly 1 million, and it has stayed at about that level ever since. Not only did the 2008 crisis force down wages, the insecure working conditions that it created made it harder to negotiate higher pay. Now, 13 years after the last economic crisis, total pay, adjusted for inflation, has finally returned to 2008 levels.
Today, some of the people most likely not to have been furloughed are those on low pay, or on zero-hour contracts. I was shocked to read in the latest Office for National Statistics labour market report that the net impact on recent job losses could see an increase in average pay of 1.5%. That is purely because the people on the lowest wages are the ones most likely to lose their jobs. When they do not lose their jobs, many are afraid to go off sick for fear that they will not have their hours renewed, or because statutory sick pay simply will not cover their rent and bills, or because they will not be entitled to statutory sick pay. Low pay and insecurity in our economy has created a perfect storm for transmitting the virus and the Government are failing to learn the lessons. There is a real human price to their ideology—whether it be children in poverty, food bank queues or homelessness.
It is a privilege to follow Olivia Blake if only to highlight how she is wrong about 10 years of Conservative management of the economy. There has been much talk about how Liam Byrne left that infamous note that said how sorry he was that there was no money left. Not content with doing that damage to the Treasury, he is now wanting to do that to the west midlands, too.
What we see from the Labour party and definitely from the Front Bench is a collective amnesia. Let us not forget that, in 2010 and in 2015, Labour, too, was campaigning on a platform of tackling the deficit and delivering its own austerity, so I guess that all cuts are bad unless they are Labour cuts. We have seen the shadow Chancellor today again inadvertently mislead by confusing the deficit with the debt. The deficit, which we campaigned on and have spoken about for over 10 years, has come down massively; that is what we campaigned on, not tackling the debt issue.
After nine years of economic growth, pre-covid we saw the highest level of recorded employment, an increase in the national insurance threshold giving 41 million people a tax cut, and an income tax cut for 32 million. When that is combined with the national insurance threshold change, it means that a typical basic rate taxpayer is now over £1,200 a year better off, which in turn means more money into the local economy. The number of workless households is down by a third, income inequality is down, there are 1.5 million more businesses in the economy, and there is the pension triple lock.
I know you are thinking, Mr Deputy Speaker, that these are the greatest hits of the last decade. However, that is not the case: this is just the first album, with the second album still to come. So what do we have? We have £14 billion extra for schools in the next three years, hundreds of billions of pounds being put into infrastructure investment, over £30 billion extra for the NHS, £1 billion for the future high streets fund, £3.6 billion for the towns fund, and £4 billion for the levelling up fund.
Thanks to the long-term economic plan of former Chancellors we have been able to repair the roof while the sun was shining, which means we have been in a stronger position to deal with this crisis and have been able to swiftly put into action measures for our recovery. We have been able to invest in the furlough scheme, invest in business support grants, and put more money into the NHS.
Anneliese Dodds, on the Opposition Front Bench, spoke about the limits on council tax, but no one is forcing anyone to put council tax bills up. If councils do not want to do that—and I urge my own local council to take heed—we are not forcing them to do so. So I say to the hard-working families of Radcliffe, Whitefield and Prestwich that if their council tax bills go up, they have only one party to blame, and that is their local Labour council.
There are many things we should be proud of; instead we have an Opposition who, after 10 years of collective amnesia—
I would like to take this opportunity to thank the Opposition for arranging today’s debate, but it is clear that, while we agree that the Conservative track record is poor from the Welsh perspective, the Labour party is also culpable of economic mismanagement. In fact, Wales’s situation demonstrates that the issue lies not necessarily with which party is in power in Westminster, but with the structural failures and systemic inequalities that define this disunited and unequal Union.
The UK is the most geographically unequal of the OECD nations, and while Unionists bemoan the financial challenges of independence, for the Celtic nations, they should remember that only three out of the UK’s 12 economic regions are net contributors to the UK budget, and needless to say we all know where those three regions of England are.
The Conservatives certainly bear a weight of responsibility; their chronic austerity programme hampered our economy and public finances, meaning that in Wales our budget only recovered to pre-austerity levels this year, although the day-to-day budget per person remains below pre-austerity levels. Meanwhile, while Plaid Cymru cautiously welcomes the Conservatives’ levelling-up rhetoric, we have learned that, in reality, it means little more than the UK Government throwing taxpayers’ money sporadically at new Conservative constituencies, rather than a coherent vision reflecting local labour and industrial market dynamics—a coherent vision we so desperately need.
Yet Labour, in power in Wales for over 20 years, cannot pretend in Westminster that it is really any different or any better, especially given its lacklustre record in Wales. We must not forget that Labour voted with the Conservative Westminster Government to impose austerity, that Labour worked with the Conservatives to rejects Plaid Cymru’s calls for a full Barnett consequential from HS2, meaning that Wales is losing out on £5 billion of funding from a railway that runs through England, and that Labour supported a shoddy Tory Brexit deal, which has suffocated trade for sectors including the shellfish industry in the community where I live, undermined our ports and imposed burdens on businesses.
Next week, Plaid Cymru wants to work constructively with the UK Government to deliver a real levelling-up agenda and a green recovery that deals effectively with the productivity crisis. That is why I urge the Chancellor not to depress demand and hamper our economic recovery with premature tax rises. Instead, I hope that next week will bring measures incentivising business investment, extensions of support to businesses and workers and support to address long-term unemployment. For our recovery to be truly sustainable, and given Westminster’s poor record of delivery, only more powers for Wales, including the removal of the borrowing cap on the Welsh Government, will allow Wales to realise our economic potential, overcome the UK’s divisions and deliver a flourishing economic recovery.
Today’s debate is a great opportunity to shine a spotlight on how it is only through the Conservatives’ careful stewarding of our public finances that we have been in a position to deliver phenomenal levels of support to people during the pandemic. As a former business owner and an employer, I know only too well the need for economic certainty, economic stability and the right level of taxation to encourage investment. We should never forget that it is businesses that grow our economy and create jobs, and it is thanks to a Conservative Government that I was able to do that.
In December 2019, just over 14 months ago, the people of Darlington and, indeed, the UK rejected Labour’s economic mismanagement in favour of a Conservative Government with ambitious plans to level up places like Darlington across the north. Since I was elected in 2019, this Conservative Government have provided phenomenal investment in Darlington, including £105 million for the redevelopment of Bank Top station, £23.3 million from the towns fund, £9.7 million for County Durham police, £4 million for main line improvements, £3.6 million to get Darlington building, £629,000 of funding for Darlington College and millions of pounds in covid support schemes and relief funds for Darlington Borough Council.
This debate is another lacklustre attempt by Labour to create headlines and weave a fantasy that it is the party of sound economic management. The truth is that I have seen at first hand how the Conservative Government over the last 10 years have delivered economic security for thousands, reduced the cost of living and created a fairer and more equal society. Over the last decade, successive Conservative Governments have overseen a period of economic stability that has seen the deficit reduced by 80%, an additional 3.4 million people in regular employment, a rise in the national living wage by 2.2%, an increase in the national insurance threshold, an income tax cut for 32 million people and a reduction in the number of children living in workless households by a third.
This Conservative Government have ambitious plans for record investment in our NHS, railways, roads, education system and left-behind communities. In the Tees Valley, we are hopeful that building back even better and levelling up will include a free port and Treasury jobs being relocated to our region. The last year has shown that when push comes to shove, it is the Conservatives who provide the support when we are down and the incentives to grow when it is time to get back up.
During this pandemic, we have seen the way in which business and the state are utterly interdependent, and yet for a decade the Conservatives have failed to recognise the potential and the desperate need for the Government and enterprise to work in partnership to drive growth, create jobs and wealth and foster the more long-termist, resilient and inclusive economy that our country so badly needs.
Take research and development. Our Government are failing to match the OECD average of investing 2% of GDP in R&D and are nowhere near their own target of investing 3%. In relative terms, the Governments of Germany and Japan invest twice as much in R&D, and in so doing, they unlock double the amount of private investment.
Take also the abject failure of the Government to buy British. Consecutive Governments have hidden disingenuously behind EU state aid and procurement rules, while other EU countries have got ahead. Today, the Leader of the Opposition has rightly called on the UK Government to buy more of the food they purchase from British farmers. Likewise, in my Aberavon constituency, we wonder why Whitehall Departments are still buying millions of pounds-worth of steel from other countries.
Recently, we have witnessed the results of a decade of Conservative failure. UK manufacturing has dropped below 9% of GDP, compared with around 30% in the 1970s. This is hurting communities and making us even more reliant on imports during the pandemic, not least on expensive PPE import deals, in some cases brokered by Conservative cronies who utterly failed to deliver. Our economy has become less resilient and less secure, which has had an adverse effect on national security and health. We have 57 critical national infrastructure supply chains that depend on China. The short-termist nature of our economy has meant that we have become the European capital for hostile foreign takeovers, which are rarely in the national interest, or in the interests of local communities.
The Government should welcome the shadow Chancellor’s excellent proposals for 100,000 new start-up loans for SMEs, to incentivise young businesses. We need to spread growth beyond London and the south-east. We need to incentivise long-term investment in business and workers over a get-rich-quick mentality, and we must recognise the key role that trade unions play in driving up productivity. We need to give everyone a chance to have a stake in our economy. It is time for the state, employers and workers to join forces as partners for a new kind of growth and to build a United Kingdom of purpose, patriotism and resilience.
It is a pleasure to speak today and to follow Stephen Kinnock. When I look around me, I see that the Government’s handling of the pandemic has left us with the worst economic recession of the G7 and that their botched trade deal with the EU has caused unnecessary avoidable damage.
I am slightly disappointed with this debate. At a time when this country faces an enormous challenge to its future, when my constituents are crying out for an economic plan that will save their jobs or allow the company that they have invested years and their family’s future in to survive, and when taxi drivers, hairdressers and florists who have not been able to earn for most of the past year are desperate for some hope that the Government will help them, I am disappointed that the Labour party wants to talk about the past. It is a past that we cannot change. Surely Labour Members must appreciate that when they look back to the times when their own economic policies were less than universally successful. So please let us park the political tribalism and avoid point scoring. Let us look at where the country is and what it needs.
The economy has shrunk 10% in the past year. Unemployment this morning is at 5.1%, and half of those who have joined that massive figure from paid employment are less than 25 years old. Our young people do not know if the future they have worked and planned for is now going to be possible. The future is uncertain for so many. Of course we should learn from what has gone before, but we should be talking about and planning for what is ahead of us, because this is about recovery. Our experiences may differ, but surely we have all felt the pain of the past year and more, through the people we serve. Many have felt it more acutely than others, and that is the point. We have to keep people in work and businesses afloat, so that they are as strong as they can be as we slowly come through to the other side of this. Some will have to rebuild, and it is our responsibility to give them the tools to be able to do that. That is why the country is holding its breath, hoping to hear some hope from the Chancellor next week.
We need to innovate our way out of this crisis and to put the environment back at the heart of the UK’s agenda. We need to tackle mass unemployment and establish ourselves as the country of the green industrial revolution. We need to bring under Government support the countless self-employed people who have been excluded from all help, and we need a long-term extension to the furlough. We need a bold green recovery plan, an increased carers allowance, access to free school meals and better mental health services, and maybe the time has come to recognise that universal credit has gone wrong. We need to investigate a universal basic income, and listen to the voices from our cross-party parliamentary groups, the devolved Administrations, the Mayors and the public bodies up and down the country—
To the uncorrected myopic, today’s Opposition day debate could appear as a chance for Labour to claim an advantage, by criticising the Conservatives’ economic record. This view is a mirage. I thank the Leader of the Opposition for choosing this subject. He has given us a wonderful opportunity to showcase the Conservatives, who time and again repair the damage and clean the mess that Labour leaves.
Labour’s economic mismanagement and failure remain the only constants that characterise the end of every period of Labour Government in our history. As day follows night, the Conservative party steadfastly toils to build back better a stronger and fairer economy. In 2010, the outgoing Labour Chief Secretary to the Treasury left a note to his successor saying:
“I’m afraid there is no money.”
Labour’s deficit, which we inherited, was a stunning £153.1 billion. Only through Conservative policies, which reduced Government spending and unleashed the power of the market economy, were we able to enjoy nine years of uninterrupted economic growth.
When we examine the immediate effect of Conservative economic policies in 2010, it is clear that they were the right policies. There was no prolonged or double-dip recession; rather, our recovery outstripped that of all other G7 economies in terms of growth. Conservative management of the economy has meant that 3.4 million more people have entered employment since Labour left office. All measures of inequality fell between 2010 and 2019, and more people were filled with the confidence to set up their own businesses. Since 2012, 75,000 entrepreneurs have been supported through our start-up loans programme, worth more than £623 million. Without these Conservative policies, the Government would not be in the position to provide the support that they have to businesses and individuals affected by the covid pandemic.
Opposition Members might herald our response to the pandemic as a turn towards more Government intervention and a command structure economy, but this is yet another mirage. Conservatives see clearly that the state is the only entity that possesses the necessary heft and resources to respond to national emergencies and, crucially, recognise that such responses are, and must be, only temporary. Labour Members would do well to look at their own track record before trying to lambast the Conservatives and to see how the policies they advocate fail the people in socialist states. It is clear that Conservative policies of less state intervention and unleashing the power of business—
If the coronavirus pandemic has shown us anything, it is that the Conservative austerity programme just does not work. A decade of Conservative spending cuts has left our economy weak and unable to deal effectively with the crisis when it hit. This, coupled with the Government’s irresponsible decision making, is why we have had the worst economic crisis of any major economy. This economic crisis has hit individuals, families and businesses hard, many being robbed of their livelihoods.
So many of those who have had a drop in their income have had to turn to our social security system for support. This is why we need to invest in an ethical social security system that people can rely on and why the £20 a week uplift to universal credit must remain permanently, as well as be extended to all those on legacy benefits. The uplift has simply been a lifeline to so many. It might not seem a lot to some of us in this place, but to some it is the difference between having heating in their home or food on their table. Figures released today show that, in January, 7.3% of the adult working population in my constituency of Jarrow were in receipt of jobseeker’s allowance or universal credit. That compares with 4.8% when the pandemic began. Those figures serve as a reminder that the journey to economic recovery will be long.
We must ensure that the coronavirus job retention scheme, which is set to end in April, is extended and that the decision is made now, not in four weeks’ time. If the scheme is removed or the Chancellor waits until the last minute to make an announcement, as he has done on previous occasions, many businesses will have to make the difficult decision to make employees redundant, causing increased unemployment and meaning that more people claim universal credit.
The Government must also bring in an amendment to existing employment legislation to outlaw “fire and rehire” practices that are being used by employers to force workers to sign up to wage cuts and inferior terms and conditions under the threat of dismissal. The coronavirus crisis should not be used by employers or the Government as a way to weaken workers’ rights. Instead, those should be enhanced and workers in the UK should be treated with decency. Our trade union movement is doing a fantastic job in pushing back these disgraceful practices, but the Government must step up. I urge the Government and Members across the House to act now and back this motion to protect the finances of not just my constituents, but theirs. Waiting until the Budget will only cause many families even more uncertainty at a time when certainty is needed.
There is no doubt that the coronavirus has hit us very hard and that we are undergoing the worst economic crisis of any major economy. While some of that impact would have happened anyway, much of it is due to two things. First, there is the Government’s chaotic handling of the crisis, with failures and shortcuts being followed by U-turns, causing a great deal of confusion and damaging public health messaging. Secondly, the coronavirus crisis arrived on the back of 10 years of austerity, public sector cuts and privatisation. There are deep roots of this crisis.
The north-east has been badly let down, but all over the country, the impact of austerity has left working-class communities vulnerable to the pandemic and to lockdown. On Friday, the Health Foundation highlighted the legacy of poor health and inequalities, which has left much of the population more vulnerable to coronavirus. We know that mortality from the virus has been higher for those with pre-existing health conditions. Since 2011, for areas such as the north-east and some deprived groups, life expectancy has declined. In addition, many families were ill-prepared for the economic impact of the virus. Action for Children has shown that going into the crisis, 51% of children in the UK were living in families with no savings at all.
This underlying vulnerability has been made worse by social conditions that allowed the virus to spread: overcrowded housing, poverty and insecure work, making it hard for people to self-isolate. That is why it is so important that economic support goes hand in hand with restrictions, so that people can stay safe in reality, rather than just in theory. That means an immediate extension to the furlough scheme to give certainty to workers and businesses and a pay rise for key workers, so that they can live with some security and confidence.
Of course, it is not all gloom and doom. The coronavirus has taught us a lot about work, our communities and our society. If the Government had any ambition, they would look beyond sticking-plaster solutions towards a new type of economy, aimed at reducing the inequalities between regions in health, housing, work and opportunities. They might also imagine a green future for our economy, based in areas such as the north-east that have been neglected. Years ago, we talked about 1 million climate jobs. That should be part of the transition to a net-zero future. This is an opportunity to rebuild the economy on different foundations, if those in power could only see it.
I suspect that we all anticipated the Leader of the Opposition’s speech last Thursday to be bold, with a strong economic vision for the future. The speech was billed as “A New Chapter for Britain” and we were told to expect fresh new ideas from the Labour party. It was therefore a great disappointment that the speech contained nothing of any substance—no charisma, no impassioned speech, no vision for our economic prosperity as a country. Instead, we were treated to the same old Labour arguments about the economy—the same arguments, I add, that the British people rejected only 14 months ago. The Leader of the Opposition talked about economic legacies, yet the only legacy of the last Labour Government was summed up effectively by one note, which read:
“I’m afraid there is no money left.”
The Labour party said that the Government were not prepared for the challenges and events of the pandemic, but this is an unprecedented time, the like of which we have not seen for more than a century. Labour said that 10 years under the Conservatives has left us unable to support the economy through this time; looking at the evidence, I suggest the opposite is true. After years of the deficit rising under Labour, the Conservatives made the difficult but important decisions necessary to get it to a sustainable level.
It is because the Conservatives worked to reverse the dire economic consequences of the last Labour Government that we have been able to provide world-beating support for our businesses over the past year. The Government have already spent £280 billion to protect livelihoods during the pandemic, helping to fund our hospitals, schools and local governments. The furlough scheme, which has helped more than 13,000 people in Keighley and Ilkley, has been vital to the protection of jobs in the hardest-hit industries, including the hospitality and tourism sectors. Cash grants, deferred VAT payments and the bounce back loan scheme are examples of the way the Government have assisted businesses throughout this crisis. All those vital measures were possible because we entered this pandemic with the public finances under control.
Yes, the months ahead may be tough, but Britain’s economy and the British people have bounced back before and we will do so again. The Labour party’s response to the pandemic is certainly being delivered by Captain Hindsight, but when it comes to an economic vision for the country, it would seem that Captain No Foresight is in charge.
I had been an MP for only a few months when the pandemic hit, and hearing about its impact on my constituents has been harrowing. We have seen demand at Coventry food bank skyrocket. The number of people on universal credit has doubled. Thousands have lost their jobs. Now, more than 2.5 million children go to bed hungry. But what I find most difficult—what makes me shake with anger—is knowing that while the vast majority of people have suffered hardship, a wealthy few have cashed in.
Last week, the Secretary of State for Health and Social Care was found to have acted unlawfully in his handling of covid contracts. Having broken transparency rules designed to safeguard against corruption, his Department now stands accused of awarding fortunes to Tory friends and donors. For example, a friend of the Secretary of State whose partner just so happens to be a donor to the Secretary of State was awarded a £14 million contract for PPE. A staggering £881 million has been handed to just eight big Tory donors. These people do not give their money just because they are generous; they give it because they want a Government who work for them, not our constituents.
If we look at the economy before the pandemic hit, we see that this is what these people got. While median earnings are down nearly 5% in the past decade, the wealth of the richest 1,000 people has more than doubled. While the working-class have had a decade of services cut, the super-rich have had their taxes cut. This economy is not broken; it is rigged. It does not work for the majority, but it works perfectly well for the wealthy few. This rigged economy has meant that the virus has hit so much harder than it had to. It thrives on poverty and inequality and exposes brutal cuts to public services.
The pandemic is not the only crisis we face: we have a crisis of poverty, a crisis of inequality and a climate crisis that overshadows it all. This is not a time for tinkering around the edges; it is 40 years of neoliberalism that got us here in the first place and we cannot go back to that. So let this be our 1945 moment. Then, from the rubble of war, we saw people refusing to go back to the society of old—an unfair society. They created the NHS and built the welfare state and millions of council homes.
Let us have the same level of ambition today, with a people’s green new deal—a programme of economic transformation that combats social injustice and the climate emergency by investing in green technology, infrastructure and services and creating more than a million well-paid jobs. Let us give key workers a pay rise and make the super-rich pay their fair share. Instead of returning to the rigged economy of the past, with a people’s green new deal let us build a fairer future.
To continue the fairy tale theme so brilliantly evoked by my hon. Friend Lee Anderson, this debate has truly been a “Through the Looking-Glass” experience—“Anneliese in Wonderland”, if you will, with due apologies to Anneliese Dodds.
We have heard no acknowledgement from Labour Members today of the awful fiscal inheritance the Conservative coalition Government of 2010 received—the worst inheritance of any incoming Government. We had to clean up the mess Labour left behind. The contrast with the golden legacy the Blair Government received from the last Conservative Government in 1997 is stark.
There is also no acknowledgement from Labour Members today that the British people have already had their say about this three times. In 2015, 2017 and 2019 they rejected the arguments Labour Members have continued to make today. Clearly, the Labour party still does not believe in any compromise with the electorate. The British people are far more sensible than they are given credit for. They know they cannot get something for nothing. They know we have to live within our means. They know we have to pay our way. They know that free broadband is nothing of the sort—there is always a price to be paid. They saw through the ludicrous Corbynite manifesto. “Manifesto” is perhaps too strong a word; it was a wish list that even Santa would have struggled with. The hard-working, working-class, patriotic voters of the red wall—seats like mine of Newcastle-under-Lyme—saw through that manifesto even more than most.
There has been no compromise with the electorate from the Labour party, but frankly there is no compromise with reality either. The only reason we were able to respond as we did when covid struck was that we had taken those difficult decisions over the past decade to reduce our deficit by 80%. That provided the fiscal space—the headroom—that allowed the Chancellor to make the dramatic manoeuvres he made to support the economy through furlough and business grants. Those were difficult decisions that Gordon Brown ducked when he was Prime Minister and that the Labour party opposed when Edward Miliband was Leader of the Opposition.
Briefly, in the time I have left, I will focus on some of the economic successes of the past decade, which those decisions made possible. There is more investment in towns like Newcastle-under-Lyme. We have secured £11 million through the future high streets fund, and hopefully £25 million more is on the way through our towns fund bid. We have more jobs across the nation, with a record level of employment in February 2020. Obviously the coronavirus crisis has had an impact on unemployment, but we will get those people back to work.
We have reduced inequality by all measures across the last decade. We have far fewer children living in workless households than in 2010. The income tax cuts have been directed at the lowest-paid, who now keep more of what they earn through the improvements we have made to the personal allowance. Finally, all the savings and difficult decisions we have made have enabled us to provide the biggest cash boost in the history of the NHS and to guarantee that in law.
A decade ago, the Labour party said that there was no money left. Listening to Labour Members today, I feel that they have no arguments left.
I am left bemused by some of the contributions today. Perhaps some Conservative Members are auditioning for roles on university campuses as champions of free, if not historically accurate, speech.
I will start with a few facts. The 2008 crisis was a global financial crash. Thank goodness we had some adults leading the country at the time, with Gordon Brown and Alistair Darling working in concert with Angela Merkel and Barack Obama to avert more serious disaster. They acted, while David Cameron and George Osborne suggested that markets be allowed to run their course. When there was a run on banks such as Northern Rock—we remember the scenes well—they said, “Let them go to the wall.” That is easy to say when one’s savings are in the Cayman Islands, as was the case according to the Panama papers.
The coalition Government claimed they were a roofing contractor—probably one hired as a mate of the Health Secretary—but they and the Conservative Government that followed simply undermined the foundations of our economy, our communities and our health and social care services. That is why the UK was the G7 country least prepared to face the pandemic—that and the Government’s failure to prepare or to act. Listening to John Major, Tony Blair, Gordon Brown and David Cameron, one realises what a blundering, blagging Government we have.
This is the Prime Minister’s failure. He missed five Cobra meetings a year ago that could have set us on a different course. He had two weeks more to prepare than France, Spain or Germany, yet here we are with the worst economic performance for 300 years. Gross domestic product is down 10% compared with 2019. Compare that to Germany on minus 5%, France on minus 8%, Italy on minus 9% and the US on minus 3.5%. I repeat: the Conservative Government managed to cause a drop in growth three times that of the US and twice that of Germany. That is some crash in prosperity. Let me put that into some tangible, understandable stats. In my question to the Prime Minister in December, I used car sales as a proxy, as they are the bellwether of our economy. Car sales were down 29% in the UK, down 25% in France and down 19% in Germany; that is a loss of 180,000 car sales versus Germany. That is the reality behind the Government’s mishandling of the crisis and the economy.
There are many other indicators. For example, the premier league reopened a full month after Germany’s Bundesliga. Why? There is the damage to and the underlying challenges for our hospitality sector, including the penalty of business rates. For 11 years, the Government have failed to address the desperate need for fundamental change to those unfair and disproportionate taxes. No wonder the UK high streets are looking so terrible.
There is one positive; the Government did listen to my hon. Friend Anneliese Dodds and introduce the furlough scheme, but the statistics are crystal clear: this Government have failed the economy, they are failing our communities and they are failing our people. Sadly, it is the people who will end up paying for the Government’s mistakes.
I find this a somewhat surprising choice for an Opposition day debate, in that the Opposition—by anybody’s judgment, really—have a terrible record on the economy, and the shadow Chancellor gave no indication as to why it would be different this time. The motion says that
“the last decade of UK economic policy weakened the foundations of this country’s economy”.
That just makes no sense. Labour Members seem to point to the global financial crisis as the reason for the disastrous end to their management of the economy, yet that is a rewriting of history.
The reality is that in 1997 the then Chancellor, Ken Clarke, passed on a Goldilocks economy to Tony Blair and Gordon Brown. The Labour Government, to get elected, had said that they would continue with our spending plans, and they did—for four years. After that, of course, they reverted to type and started to spend. For seven years, there was a growing deficit. It was a much bigger deficit than we had last year with the rise of this crisis; that was in the good times. Huge issues—not all caused by the Labour Government—then left a £153 billion annual deficit.
The shadow Chancellor said that she was somewhat surprised that the debt had grown over the last decade. Well, what did she expect and what alternatives might she have put forward? It takes time to get that kind of deficit down, unless the Government hugely cut spending or massively put up taxes; yet she offered no solutions, just criticism. Anybody can stand on the sidelines and criticise. What I expected to hear from the shadow Chancellor was some indication of what a Labour Government would actually do, how they would manage these problems, and how they would manage future tax or spending policy. The only indication we have is a recent article in the New Statesman, which says that the shadow Chancellor’s fiscal approach will be “strikingly similar” to that of her predecessor, John McDonnell. Not many people will be reassured by that.
The reality is that even pre-covid, this country was facing some huge problems. Owing to our demographics—our ageing population and the smaller number of children per household—the debt is going to fall on fewer and fewer people. The debt is going to grow if we do not change our tax policy to—would you believe it—314% of GDP by 2060. We need an honest conversation about taxation, and we need to do things differently. We need to look differently at the funding of things such as social care, healthcare and pensions. I particularly recommend looking at an adult social care premium to pay for social care. We need sensible, honest economics.
The covid-19 pandemic has exposed the roots of a broken economic system that fails to serve the public. Our frail economic system did not emerge overnight; it is a result of the Conservative party’s economic dogma, which sees the state purely as a market fixer and rejects a role for an active state in shaping the market’s direction. It is committed to outsourcing the state’s capacity and services to private companies. That failure of the Government’s industrial strategy has led to the UK’s labour market having an over-reliance on the insecure, low-paid gig economy, where people struggle to make ends meet, while at the same time allowing huge, reckless levels of corporate debt due to dividend payments, share buy-backs and growing executive pay, leaving businesses with little in reserve to weather the crisis.
In 10 years as a local councillor, I have seen how the Government’s austerity programme, rather than driving growth and productivity through an innovative industrial strategy, has caused the slowest economic recovery since the 1930s. It has devastated living standards and meant that more children in my constituency of Luton South live in poverty.
We have seen £138 million stripped from our local council’s budget, The public health grant for 2020-21 is £600,000 lower than it was four years ago. NHS hospitals, mental health services and community providers have a shortage of around 84,000 staff; 38,000 of them nurses. Bedfordshire fire and rescue service’s budget has been cut by 19% since 2016-17. Everyone has seen homelessness increase at the same time as the housing crisis has worsened. Food bank use in the east has risen by 74% since 2015-16 and there has been substantial wage stagnation. Throughout the pandemic, the Government’s “whatever it takes” rhetoric has rung hollow as for the past decade they have downgraded the public sector’s ability to respond to a crisis.
The past shows us that the market is incapable of finding solutions to climate change, to widening inequality and to the continuation of the public health emergency. We need an empowered public sector at the wheel, driving a green economic recovery that redistributes economic prosperity and creates well-paid, secure, unionised jobs. To help with the economic recovery, the Government should value our local councils, which are on the frontline, supporting our communities, and scrap the council tax hike that is being forced on them.
I want to make two points, neither of which will come as a surprise. Madam Deputy Speaker, if I were to take you north, on a journey through the highlands, we would drive from Lairg to Kinlochbervie and Durness in north-west Sutherland and when we came to a place called Laxford Bridge, we would shortly find a sign with stars in a circle that said: “This improved stretch of road was paid for with help from the EC”—from the European Union. Those signs are found throughout the highlands.
It may seem that I am making a classic remainer speech. I merely want to make the point that all over the highlands, the European Union invested in harbours, airports, roads and bridges, and that made a great difference to all our lives. It was about levelling up a poorer part of Europe to some sort of equality with the richer parts of the UK and Europe. That sort of development helped arrest that great curse of the highlands: depopulation.
My first point for the Chancellor next week is therefore that we are looking forward with hope and anticipation to the shared prosperity fund. It is essential that the Chancellor and the Government roll it out in a way that equals, if not betters, what went before, now that we are out of the European Union. All of us in the highlands wait with bated breath for that, and it will be hugely important to our country.
My second point is very simple—you have heard me make it many times before, Madam Deputy Speaker. It is good news for the Government. I am extremely grateful, as are my constituents, for the Government’s proposal to site the first vertical space port centre in Sutherland in my constituency. It could mean a great deal to my constituents through providing quality employment in future, but, more important, by giving young people the hope that they will have jobs and homes in years to come in the places where they come from. It will literally keep the lights on in some of our most remote straths and glens.
My second point therefore is to ask the Chancellor and the Government to say—possibly in next week’s Budget, but at any rate, as part of a steady stream of good funding announcements—“Yes, we back the space port in Sutherland and we will do everything in our power to make sure it becomes a reality.” That reality will not only keep employment vibrant in my constituency, but earn a great deal of income for the United Kingdom.
I think Conservative Members must be living in some kind of alternative universe, because this Government have presided over the highest death toll in Europe and the worst economic recession of any G7 country. This was not an accident. It was not inevitable, and it did not need to happen this way. The 10 richest men in the world have seen their wealth increase by £400 billion during this pandemic—enough, says Oxfam, to prevent the world from falling into poverty because of the virus and to pay for vaccines for all. However, instead, the vast majority of us have been forced by this Government to pay the price, with a £20 cut in universal credit, a hike in council tax, and a pay freeze for our key workers. At the same time, billions have been squandered on private firms that have failed to provide a functioning test-and-trace system and have made a profit out of poverty. This Government have spent nearly £2 billion on crony contracts, taking public money away from local authorities that are more capable of delivering the vital services we need during the pandemic and instead giving it to their mates, who have inevitably failed to deliver. This is proof that the Government are the party of the bosses and the billionaires, not the workers as they keep telling us.
We are now staring down the barrel of the worst recession for 300 years—and why is that? Let us not forget that it was the Tories who dragged our country through over 10 years of ideologically driven austerity that undermined our economy, society and the public sector, and left us vulnerable to this crisis. The numbers in precarious work and on zero-hours contracts have gone through the roof, and the obscene practice of fire and rehire is now being increasingly used by unscrupulous employers to force their staff into low wages, work terms and conditions, and longer hours, essentially doing more for less.
I would like to take this opportunity to tell you about Kevin, a striker in the British Gas dispute and one of my constituents, who has kindly agreed to share his story. Kevin is a British Gas engineer who has spent the last few months standing on a picket line. I send my full support and solidarity to him and all the British Gas strikers who have just finished their latest round of industrial action, and urge Chris O’Shea to get around the negotiating table and treat these workers with the respect and dignity they deserve. They went back into work and put themselves at risk of covid to ensure that homes had heat and power. Kevin tells me that he is proud to have done this work because that is what engineers do—“It’s what we do.”
As British Gas is successful in forcing through these cuts to terms and conditions, we risk a domino effect putting hundreds of thousands more jobs at risk of having their terms and conditions undercut. This would further weaken our economy and our society, continuing an economic policy agenda that left our country and economy so vulnerable to the virus in the first place. We need to take decisive action to address the deep inequalities and injustices in this country. I call on Members to support this motion so that we can begin to reverse the damage done by the last decade of draconian economic policies—
Can I first put on record my thanks to Government for their regional strategy?
Before covid-19 came, the unemployment rate in my constituency of Strangford was at its lowest. This was not all because of the Government here but because of the partnership that they had with the Northern Ireland Assembly and with the Deputy First Minister when my party held that portfolio. It is very clear to me that that strategy was successful, but covid-19 came, and with it came a whole change in where we are. The Government stepped up to the plate and made sure that the moneys were made available. The deficit is now expected to be £384 billion—£339 billion higher than had been anticipated before public health restrictions were first imposed back in March. I would ask the Minister, and hopefully this response will be forthcoming, to recognise that we need to see continued investment in our workforce as the only way out of this. By having that investment, we have the taxes, and then we have an economic boost and we do better.
It is very important that we have a plan that also looks at the repayment of the moneys over this period of time. We cannot just leave it as a problem for our grandchildren, and indeed our great-grandchildren. For 2020, the Office for Budget Responsibility expects economic output to be 11% lower than it was in 2019—the biggest annual contraction in over 300 years. We must support small businesses, in particular. In Northern Ireland, in my constituency of Strangford and across the whole of the Province we have the largest number of small businesses and those who are self-employed, equal only to that in the south-east of England. We need to have support for the self-employed and for small businesses, and to make sure that that happens for the future as well.
The third point I want to make is one that has been relevant in the press today. The headline story in my provincial press back home and also in the national press here is the problem for those who have cancer. I know that cancer becomes a topic in this Chamber on every occasion, but as the health spokesman for my party, I put on record that the media confirmed that 100,000 people with cancer in the UK are struggling to pay for basic essentials, such as food, bills, rent or their mortgage. More than two in three of those people with cancer—70%—who are struggling with basic living costs have experienced stress, anxiety or depression as a result of covid-19. I ask that the Government make provision for those with cancer.
Across this country, we have all felt the pain of missing our family and friends, and we have all longed to go about our lives as we could before, but we have also seen the pain of this crisis fall unevenly, with some people facing greater difficulties and hardship than others. The virus has exposed weakness and unfairness in the foundations of our economy, and what unites so many people now is a determination to learn from what covid has exposed and make the UK a fairer place to live.
Going into this crisis, as the shadow Chancellor, my hon. Friend Anneliese Dodds pointed out, one in four UK households had less than £100 in the bank, while 3.6 million people were trapped in insecure work. A decade ago, the Conservative Chancellor stopped investing in new social housing, and now we see families told to stay at home in overcrowded flats.
Social care workers, delivery drivers, shop workers and others have all been on the frontline, but many are on such low incomes that if they are asked to self-isolate, they have a choice they should never be forced to make: doing the right thing or putting food on the table. We were on shaky foundations going into the crisis, and once it hit, the Government have been too slow to give people the support they need, with millions falling through the gaps altogether. Business closures are up by more than a third, yet the self-employed are left in the dark over what help might be on offer from one month to the next. Parents are struggling with the difficult job of home schooling, yet the Treasury refuses to heed our call to give working parents the legal right to request paid flexible furlough.
As many of my hon. Friends have set out today, the UK Government have left people exposed throughout this crisis. My hon. Friends the Members for Jarrow (Kate Osborne), for City of Durham (Mary Kelly Foy) and for Warwick and Leamington (Matt Western) set out how the Government’s choices over the past 10 years left us ill-prepared. My hon. Friend Tonia Antoniazzi spoke of the struggle that so many people face making ends meet, while my hon. Friend Zarah Sultana spoke about children going hungry and having to rely on food banks. My hon. Friend Christina Rees set out the different, fairer choices that the Welsh Government have taken.
The truth is that the state of the economy we had coming into covid, and the Chancellor’s irresponsible choices throughout the crisis—both to wind down support and to lift restrictions too soon—have undermined efforts to protect people’s health and left us suffering the worst economic crisis of any major economy. Time and again, businesses, workers and the self-employed have anxiously faced the looming end of support schemes, only for new grants to be introduced in a last-minute scramble as the public pressure to avoid the next cliff edge becomes overwhelming. People might have forgiven this early on in the outbreak, as the Government adjusted to the new challenge we all faced, but a year later that argument holds no water. What we have seen instead is a pattern of the Chancellor’s behaviour, and we should continue to question his judgment as our thoughts turn to what comes next. Ten years of the Conservatives has undermined the foundations of our economy and hollowed out our public services. We must not let the country suffer the same mistakes again.
We heard from many of my hon. Friends today about the damage to our economy and our public services over the past decade. My hon. Friends the Members for Liverpool, Wavertree (Paula Barker), for Vauxhall (Florence Eshalomi) and for Sheffield, Hallam (Olivia Blake) spoke about the rise of insecure working while wages have been falling. My hon. Friends the Members for Enfield North (Feryal Clark) and for Easington (Grahame Morris) spoke about the impact of cuts on local government, while my hon. Friend Debbie Abrahams spoke of cuts to social security.
My hon. Friends the Members for Slough (Mr Dhesi), for Wallasey (Dame Angela Eagle), for Luton South (Rachel Hopkins) and for Liverpool, Riverside (Kim Johnson) all reminded us of the ideological drive and dogma—not economic necessity—behind the cuts of the past 10 years, while my hon. Friend Stephen Kinnock spoke of the importance of an active state working in partnership with enterprise and business. My hon. Friend Nadia Whittome spoke of the need to rebuild our country with secure housing and secure jobs at its heart.
My hon. Friends are not alone in warning the Government to take a different path. In fact, the IMF’s head of fiscal policy has said that Governments should now use fiscal policy to not just beat the virus but stimulate the economy by reducing unemployment and restoring economic growth. As the shadow Chancellor set out, the path the Government should take is one that puts jobs and investment at the heart of rebuilding our economy. That is why we want to see start-up loans for 100,000 new businesses employing people across the country. It is why our approach would view public finances over the next 20 years, so that we can finally get on top of the long-term challenges our country faces. People are tired of the Government ducking big decisions, from social care to the housing crisis to climate change, and they want to see a fair, modern, robust approach to the future. Our responsible approach to the public finances—an approach in line with the IMF’s and OECD’s recommendations—would make sure that we could always protect people and businesses during a crisis and make crucial investments in our future.
We know that the impact of this crisis has played out very differently for people in different situations. Many families have had to take on worrying levels of debt, while other households have been able to work from home and save. That will result in highly concentrated household savings, forecast to reach £250 billion by the end of June, and what happens with those savings will have a big impact on the economic recovery. The Chancellor is betting everything on people spending those savings, but the Bank of England evidence suggests that only around 5% of the money will be used in that way. The rest will remain in bank accounts or be invested in assets, which we know, among other things, will push up house prices. That is why we are proposing a new British recovery bond, which would give millions of people security for their savings while raising billions to invest in businesses, jobs and infrastructure for the future. That approach would bring people together, united around a common determination for us all to feel more secure and to live in a fairer country.
Today we have heard a string of tired claims from the Chief Secretary to the Treasury that the record simply does not reflect. He said that the economy was not growing when Labour left office, but as my hon. Friend Mr Perkins made clear, the truth is that it was. Government Members make claims about unemployment when Labour is in power, but if they looked at the last 40 years of unemployment data, they would find that unemployment was lower on average in the years when we were in power compared with those when they were.
Over the coming months, we may well hear the Chancellor repeat his flawed economic ideology around the need to cut people’s livelihoods, to cut support for businesses and to cut investment in the public services and infrastructure that we need. Will we hear him apologise for mismanaging hundreds of millions of pounds throughout the crisis and outsourcing projects that should have been delivered by public servants? Will we hear him explain how people with no income or savings can spend money in the economy or how a country with businesses closing, public services run down and infrastructure lacking is expected to grow? I doubt it. If he will not listen to us, he should listen to the fears of people in the country. He should use this Budget to reverse the planned £20 cut in universal credit, to reverse the key worker pay freeze and to provide councils with the funding they need to prevent huge increases in council tax. Then, he has the chance to listen to economic institutions around the world and follow their urging of him to invest in jobs and growth.
After a decade of the Conservatives, our economy was already weak when covid hit, and their irresponsible decisions since then have weakened it further. That is why we have had the worst economic crisis of any major economy. It does not have to be this way. We should come out of this crisis determined not to go back but to build an economy with fairer, more secure foundations. We should focus relentlessly on jobs and growth across the UK and on the long-term investment we need to meet the challenges we face. We need to change our economy for the better, and this is a chance to do so.
With the leave of the House, I will close the debate for the Government. I thank hon. and right hon. Members for their participation in the debate. We have heard a wide variety of arguments and many helpful and insightful contributions. It is clear that the House is united in its desire to build a stronger economy, although we may not always agree on how to achieve it.
Today’s motion asks us to reflect on the past decade. As Christine Jardine pointed out, the Labour party seems to particularly want to talk about the past, so let me once more remind the House what the coalition Government inherited: unsustainable public finances, an economy in deep malaise and a fundamental lack of public trust in the financial system. Over the years that followed, we worked to bring the national finances back to strength and to inspire confidence in the UK economy, and those efforts paid off. Before coronavirus hit, the economy had expanded every year since 2010, growing faster than France, Italy and Japan. We had succeeded in reducing the Budget deficit, and by the end of 2019 over 3.8 million more people were in work compared with 2010, with 85% of that growth being in high-skilled occupations and youth unemployment nearly halving.
Over the course of the debate, we have had a number of excellent contributions. In particular, I would like to pay tribute to my right hon. Friend Mr Mitchell, who correctly identified how the Leader of the Opposition, in so many areas, is simply following the Government in our agenda on levelling up. He rightly reminded the House that the last Labour Government were borrowing £1 in every £4 they spent. My hon. Friend Gareth Davies spoke about how the Conservative Government had delivered, before covid, the lowest levels of unemployment since the 1970s, and about the benefit of reducing the deficit in good times to be stronger in the bad times.
My hon. Friend Paul Maynard noted that the financial resilience now is due to the difficult decisions taken over the last decade, and also the fact that, from a progressive perspective, the top 1% pay a greater share of tax than under the previous Labour Government. My hon. Friend Mr Clarke emphasised our bold plans to build back better, and the opportunity this offers for areas such as Teesside. My hon. Friend John Lamont highlighted how the deficit has been reduced over the last decade, ahead of the pandemic, enabling us to enter that from a position of strength—steps every one of which were opposed by those on the Benches opposite.
My hon. Friend Lee Anderson talked about the practical difference that this Government are making in constituencies such as his, such as the £6.2 million funding from the future high streets fund or the £1.5 million from the towns fund, in contrast to the waste on schemes such as PFI that he had seen in areas like Ashfield. My hon. Friend Virginia Crosbie spoke about the covid support in her constituency and what a material difference that has made. My hon. Friend Chris Clarkson highlighted the gap between the briefing last week for the speech from the Leader of the Opposition, with language akin to Beveridge reports and the lacklustre content contained therein.
My hon. Friend Julie Marson correctly identified the resilience from decisions over the last decade that has enabled the package of covid support, praised by the IMF and others, that the Chancellor has been able to deliver. My hon. Friend Jack Brereton spoke about the increased prosperity in constituencies such as his, and his pride in what the Government are delivering. My hon. Friend Jerome Mayhew identified the importance of the reduction in the deficit by more than 80% since Labour was last in power, and how that enabled the package of support announced by my right hon. Friend the Chancellor. That is particularly important to the levelling up agenda, on which he spoke so powerfully.
My hon. Friend Lee Rowley highlighted how, over the last decade, the economy has been turned around from that inherited from the previous Labour Government and the fixation of those on the Benches opposite on simply spending more. My hon. Friend Suzanne Webb spoke about the unprecedented economic response, particularly the importance of supporting jobs and the work in her constituency to that effect, with the Chancellor’s £30 billion plan for jobs being a key component of that.
My hon. Friend Christian Wakeford spoke about the nine years of economic growth and the practical support through tax cuts that have been delivered, as well as schemes such as the national living wage introduced by those on these Benches. He contrasted that with the poor delivery of Labour local authorities. My hon. Friend Peter Gibson spoke about how the Government support has helped businesses in his constituency, and indeed how it helped him over the last decade in his own experience of business, as well as about how important that is to the levelling up agenda on which he secured election, as did many of my colleagues.
My hon. Friend Imran Ahmad Khan highlighted the economic legacy that was left by the Labour party after its time in government and contrasted that with the growth in the economy and the repairing of public finances that we have seen over the previous decade.
My hon. Friend Kevin Hollinrake highlighted the flaws in the policy proposals of the Labour party and how little substance there is in the proposals brought forward in the debate.
A range of contributions have made clear the importance of the resilience that comes from reducing the deficit from more than 10% when Labour was in power to less than 2% and how that has made possible the package of measures that the Chancellor has been able to bring forward. It is the actions of the Government over the past decade to restore the public finances that have enabled the Government to respond with more than £280 billion of economic support—one of the largest and most comprehensive support packages in the world. Schemes such as the furlough scheme and the self-employed income support scheme, the increase in the universal credit offer, the guaranteed loans for businesses, the grants, the tax breaks and the support to businesses on cash flow are a consequence of difficult decisions taken over the preceding decade.
I would also remind the House, and Anneliese Dodds, that this Government’s proud record of public spending long before this crisis has enabled our public services to weather the storm of the pandemic. We have made a legally binding commitment to put an extra £34 billion into the NHS by 2023-24, with the core health budget growing by £6.3 billion next year, allowing us to deliver 50,000 more nurses and 50 million more GP appointments.
We have said that we will provide up to £15.8 billion to the police over the next financial year. That is £636 million more than in 2021 and includes more than £400 million to continue our commitment to recruit 20,000 extra police officers, on which my right hon. Friend the Home Secretary has made such excellent progress.
We are increasing the schools budget next year by £2.2 billion and are on our way to delivering an extra £7.1 billion by 2022-23. We are investing in providing lifelong learning as well.
The motion suggests that Labour wants to focus on the past. Let us look at what past policies it wants to focus on. During his leadership, the Leader of the Opposition has said that he wants to renationalise huge swathes of the economy. He has been clear that he wants to remove the 50% turnout measure for industrial ballots, allowing disruption of workplaces with minimum support. He has described the economic policies of the previous Labour leader as
“the only platform going forward”,
which is slightly at odds with his message that the Opposition are under new management.
This is a Government with a record of real economic achievement. We have succeeded in providing better public services and supporting millions of people on low incomes, while significantly reducing the deficit in the pre-covid years. We are succeeding at safeguarding the UK economy, while protecting public health, when faced with the greatest challenge since the second world war. We will succeed in securing the UK’s recovery from coronavirus and in creating an even stronger, greener, more equal economy, which this country and its people so richly deserve.
The House divided: Ayes 253, Noes 0.
Question accordingly agreed to.
The list of Members currently certified as eligible for a proxy vote, and of the Members nominated as their proxy, is published at the end of today’s debates.
That this House believes that the last decade of UK economic policy weakened the foundations of this country’s economy and society, leaving the UK particularly vulnerable when the coronavirus crisis hit; further believes that many Government choices and actions during the coronavirus pandemic have exacerbated the problems that pandemic has caused, leading to the UK suffering the worst economic crisis of any major economy; calls on the Government, as the UK emerges out of the pandemic, to address the deep inequalities and injustices in this country and take the UK forward to a stronger, more prosperous future through a new partnership between an active state and enterprising business; further calls on the Government to protect family finances by reversing the planned £20 cut in Universal Credit, reversing the key worker pay freeze and providing councils with the funding they need to prevent huge rises in council tax; and calls on the Government to introduce a new British Recovery Bond to allow people who have accumulated savings during the pandemic to have a proper stake in Britain’s future and to back a new generation of British entrepreneurs by providing start-up loans for 100,000 new businesses.