The coronavirus outbreak is an emergency, so I want to make it clear that we will have to work together, all of us, to meet this head-on and to overcome it. However, we will only overcome this virus because of the dedication of our NHS staff, carers and public servants. The steps the Government have announced today to head off the economic impact of the coronavirus are obviously welcome, but I have some points I wish to raise. We have to be straight with people that it is going to be much tougher because of the last 10 years of deeply damaging and counterproductive cuts to all of our essential public services. We are going into this crisis with our public services on their knees, and as today’s figures confirm, with a fundamentally weak economy. It is now flatlining, with zero growth even before the impact of coronavirus.
Today’s Budget was billed as a turning point, a chance to deliver in particular on the promises made to working-class communities during the general election, but it does not come close. The Government’s boast of the biggest investment since the 1950s is, frankly, a sleight of hand. In fact, it is only the biggest since they began their slash-and-burn assault on our services, economic infrastructure and living standards in 2010. Having ruthlessly forced down the living standards and life chances of millions of our people for a decade, the talk of levelling up is a cruel joke. The reality is that this Budget is an admission of failure: an admission that austerity has been a failed experiment. It did not solve our economic problems, but made them worse. It held back our own recovery, and failed even in its own terms. Today’s measures go nowhere near reversing the damage that has been done to our country.
I am sure the whole House will wish the hon. Member for Mid Bedfordshire (Ms Dorries) well. Many people are understandably very worried about the impact of coronavirus on their own lives. The Government need to be very clear what they are announcing, and there are still questions to be answered about the Government’s response. What coverage is there for people on zero-hours contracts or those without a contract of employment beyond the reforms to benefits? Will statutory sick pay adjustments announced today be available to all workers from day one? What support will be made available for low-paid workers who do not meet the lower earnings limit for statutory sick pay? Are there any plans to increase the level of statutory sick pay, which itself is actually scandalously low? Will people who are doing the right thing by self-isolating continue to be punished with a five-week wait for universal credit payments? The benefits system cannot be the only support for the millions of workers not entitled to statutory sick pay.
The crisis is exposing the vulnerabilities in our economy and our public services. When 17,000 national health service beds have been cut, leaving 94% of the remaining
beds full, and when 100,000 people were forced to wait more than four hours on trolleys in A&E departments in January, it is little wonder that people worry that the extra money for the health service is too little, too late. We have only a quarter of the intensive care beds per person that Germany has. We do not have enough ventilators to deal with a mass outbreak, or the people trained with the necessary skills to operate those ventilators. Across the national health service there are, at this moment, 100,000 staff vacancies.
Moreover, public health budgets have been slashed by £1 billion in recent years. What an irony! Public health is based on the principle that prevention is better than cure, but this Government are providing money only after a serious outbreak is under way. We know that the people most vulnerable to coronavirus are older people, and this is when we need a strong social care system, but social care is in crisis. There is an £8 billion funding gap since 2010. Instead of the Government presenting a social care plan, which the part-time Prime Minister told us was ready long ago, they are asking the rest of us to come up with ideas. Underpaid careworkers, a quarter of them on zero-hours contracts, travel from house to house to provide care to elderly and sick people. It is a model that could scarcely be better designed to encourage the spread of a virus, so it is vital that the Government do not wait a few months, but come up now with answers to ensure that careworkers do not lose out for staying away from work if they experience the symptoms.
The Chancellor shows not some but a lot of brass neck when he boasts that measures to deal with coronavirus are possible only because of his party’s management of the economy. Look outside: in the real world, we are still living through the slowest economic recovery in a century. Our economy is fundamentally weak. ONS figures out today show the economy is not growing: growth was 0.0% in the three months to January—0.0% in the three months to the end of January. [Laughter.] The Prime Minister might find this funny; those struggling do not.
Future growth has been downgraded yet again from 1.4% to 1.1% this year, and that is before coronavirus is taken into account. We have stalling productivity and flatlining business investment, and wages have only just scraped past pre-crisis levels. None of this can be blamed on coronavirus, and it is not all because of Brexit either. It is because the Government have failed on the economy. That failure has left us the most regionally unequal country in Europe. Investment spending per head in London is currently more than double that in the east midlands. Now they talk about levelling up, but who pushed huge swathes of our country so low in the first place? It is Conservative Governments who have starved the country of investment over the last 10 years, resulting in a £192 billion hole in infrastructure spending.
What has that meant for people? It has meant that bus services have been cut, there is patchy access to broadband, and homes and businesses have been ruined because of inadequate flood defences. The Chancellor expects plaudits for half-filling the investment hole his party created in the first place. Amid a blizzard of hype, he is claiming that today marks the biggest capital injection since the 1950s, but this is actually all smoke
and mirrors. As a percentage of GDP, it only returns us to the levels we had before the Conservatives slashed investment so drastically in 2010. Given the challenge of the coronavirus crisis, we need far-reaching action to strengthen and stabilise our economy, and ensure we are in the strongest position possible to navigate the transition to new relationships with the EU and the post-Brexit economy, with the trade deals that will enable that to happen.
If the Government truly wanted to level up after Brexit, there is one thing they should be doing above all else: a green industrial revolution. They would have a plan to kick-start new green industries and create skilled jobs all across our country. The climate emergency threatens our very existence. It demands that we mobilise our resources on a massive scale. The environmental measures announced by the Chancellor today get nowhere near that. The Government have maintained the freeze on fuel duty without lowering bus and rail fares, showing complacency about the climate emergency. Young people especially will be dismayed by the lack of urgency to reduce our emissions, which they will rightly see as the Conservatives, once again, putting the profits of big polluters and oil companies above people’s safety and wellbeing. When the Chancellor announced, with such aplomb, a huge investment in road building across the country, where was the environmental impact assessment for that policy, or for the pollution that will come from that increased use of cars and traffic across the country?
Today’s Budget confirms that austerity has not worked, even under its own terms. We have had a decade of decline, and according to the New Economics Foundation, austerity has cost the UK economy almost £100 billion. The true cost, however, is incalculable, and I want to give the House an example to bring that home.
Errol Graham was an amateur footballer when he was young. By his mid-50s, and suffering from mental health issues, he had become reclusive, unable to leave his flat in Nottingham, and terrified of the world outside. He could not attend his fitness-for-work assessment, and because of the Government’s harsh and very uncaring attitude, his benefits were cut off. With no income for food, he obviously began to go hungry. He wrote a desperate letter to his Department for Work and Pensions assessor:
“Judge me fairly…It’s not nice living this way.”
Errol weighed four and a half stone when the bailiffs found his body inside his flat. He had starved to death in this, the fifth richest country in the world. When the Chancellor talks about the “difficult decisions” that the Government took in imposing austerity, is he thinking of the decision to deprive Errol, and people like him who are going through such trauma in their lives, of their income?
The worst thing is that austerity, and all that suffering, has been a political choice, not an economic necessity. The Conservative party continues to make the absurd claim that austerity was needed because spending on schools, hospitals and public services by Labour was somehow the cause of the worldwide financial crash in 2008. A US Senate report into the root causes of the crash singled out two investment banks for blame: Goldman Sachs and Deutsche Bank. A few weeks ago, the Prime Minister turfed out one Chancellor who had previously worked at Deutsche Bank, and replaced him with another one who worked at Goldman Sachs. Truly a Government of the people!
The Government want us to believe that austerity is over, but that is not true. According to the Institute for Fiscal Studies, it would take at least £54 billion of current spending this year, excluding health and social care, to get us back to 2010 levels. We have heard nothing even approaching that scale from the Chancellor today, but without it, the IFS says that austerity is “baked in” to our economy. Try telling local councils, which face a further £8 billion black hole over this Parliament, that austerity is over.
To end austerity truly and fund urgent action on the climate emergency and our public services, we need a fair taxation system, and that means making the richest pay their share. The Government’s changes to the national insurance threshold will mostly benefit higher earners, while those on lower incomes would be far better supported by boosting wages and real social security. The incomes of the poorest fifth of families have fallen by 7% in just two years. As the Resolution Foundation said,
“this has been driven by policy choices.”
How can it be right that 12 years after the bankers crashed the economy, the poorest 20% of the population are still being made to pay for it, while those at the top are rewarded yet again? Today we learn that the Government will not even scrap entrepreneurs’ relief—a huge subsidy that mainly benefits 5,000 people who make an average of £350,000 per year. I can assume only that those who fund the Conservative party have had a quiet word with the Chancellor, and told him to back off.
Creating a fair taxation system also means tackling tax avoidance and evasion. How can we have confidence that this Chancellor will clamp down on tax dodgers, when previously he worked for hedge funds that used the Cayman Islands, and he had a close business associate who engaged in a multi-million pound tax avoidance scheme? How can we have confidence when the Government’s big idea is apparently free ports—tax-free zones that allow the super-rich to dodge taxes and take away workers’ protections?
The last Chancellor resigned, saying that no self-respecting Minister could accept being controlled by advisers in No.10. The new Chancellor accepted that control, and has now presented a Budget just 27 days after taking the job. Through him, and the chuntering Prime Minister, may I pass on our congratulations to Dominic Cummings on writing a Budget so quickly?
But what a let-down it has been. When I first responded to a Budget, austerity was very much in vogue, and our demands for investment and spending were dismissed. The terrain of public debate has shifted dramatically in just a few years, but there is a gaping chasm between the rhetoric that the Conservative party has adopted, and the reality of what it delivers. Whatever it says, the Conservative party will never stand up for working class communities, and it will always, always, put the interests of its wealthy friends first.
The reality of today’s announcements will become clear. The hard sell and spin will fade away, and this Budget will be seen as a lost opportunity, a failure of ambition, and a bitter disappointment for all those people who have been promised so much but, from what we have heard today, will see very little.