Charter for Budget Responsibility and Welfare Cap

Pat McFadden Excerpts

Monday 10th January 2022 Commons Chamber

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I begin by echoing the sentiments from Mr Speaker earlier following the death of my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). I knew Jack for many years, from his time as deputy general secretary of what was then the Transport and General Workers’ Union, and later as a colleague and fellow west midlands MP. He was a tough negotiator, always determined and loquacious, but pragmatic enough to reach a deal and stick to it. We are still in shock at Jack’s sudden death on Friday. We will miss him greatly, and my sincere condolences go to my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman) and their family.

On the motion, the Chancellor announced at the time of the Budget that he would bring this before the House. He made a big thing of it. At the time, we presumed that he would come along and display his credentials for fiscal probity. He probably thought that it was a clever move at the time, but it does not look so clever now. He has not even turned up for tonight’s debate. What happened? Where is he? When he was dishing out money, he was everywhere. We could not move for Instagram videos and pictures of his slippers or sliders, or whatever they are called. Now the crunch is coming, he is nowhere to be seen.

Was the Chancellor worried that if he turned up tonight he would be asked what he will do about the cost of living crisis facing the country? Is he avoiding the House because he has nothing to offer people facing rises in energy bills of hundreds of pounds a year? Why is it that he has done one of his disappearing acts again? He was not here last month when businesses were crying out for support as Christmas bookings were cancelled in their thousands, and he is not here again this month for what he once told us was a central plank of the Treasury’s strategy.

On the rules themselves, during the covid pandemic the Chancellor has had to borrow a great deal of money—approaching £400 billion extra. The pandemic was an emergency situation that required emergency measures. That is true in this country and around the world. Our fiscal rules, published at the time of our conference, take account of such emergency situations, because there is no point in having a set of fiscal rules that work only when times are good. Fiscal rules have to take account of all kinds of economic weather, and ours do exactly that. Crucially, our rules also allow for the investment plan needed for the transition to the lower carbon economy that we will need. The Government’s fiscal rules do neither of those things.

Indeed, when we look at what is happening in the economy right now and what families around the country face in the real world, we have to wonder what the point of this exercise is. Did the Chancellor really think that tabling this motion would take attention away from the fact that he is imposing the highest tax burden on the country for 70 years? The Tories have become a high-tax party because they are a low-growth party. They are asking the British people to stump up the cost of their economic record not for the one or two years of the pandemic but for the past 12 years. Projections from the Bank of England do not look any better, with forecasts for growth of about 1% in 2024. Does the Minister really think that, with this motion, people will not notice or remember that the Prime Minister and the Chancellor have driven a coach and horses through one of their central manifesto promises on tax with the forthcoming rise in national insurance? Is he trying to cover up for the fact that, as families face a cost of living crisis with steep rises in energy bills, he has no plan to help them?

The Minister may not have a plan, but Labour does, and it was set out yesterday by the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves). Our plan would offer every family £200 off bills this year. It would give a further £400 off bills for those with the lowest incomes. It would help the energy-intensive industries on which so many good jobs rely. It would be paid for, in part, by a windfall levy on the companies making the most money out of the huge spike in gas prices. It is fair, it would help the poorest most and it is fully costed. That is what people need right now—not a reheated political stunt thought up by George Osborne a decade ago.

We have to wonder what the conversation was when this was thought to be some great political idea. Did they sit around in the Treasury and say, “We’ve borrowed £400 billion. We’re putting taxes up to levels not seen since the 1950s. We’ve wasted billions on failed programmes and dodgy contracts. But let’s have a parliamentary vote to show that we are really fiscally disciplined”? It will not wash. People are seeing through it.

You do not have to take my word for it. Only today, the head of the National Audit Office drew attention to the level of waste that the Government are presiding over. He wrote that

“many of the interventions carried out by government are either not evaluated robustly or not evaluated at all. This means government…has little information in most policy areas on what difference is made by the billions of pounds being spent.”

He added that only 8% of major Government projects “had robust evaluation plans”. Perhaps that is not surprising when we have seen £3.5 billion-worth of contracts handed out to businesses run by contacts of the Conservative party, and—the Minister and I debated this last Wednesday night—£17 billion in extra costs for the taxpayer, which the Government casually legislated for last Wednesday night to pay for their own mistake in messing up public sector pensions reform.

Where is the Government’s commitment to transparency, value for money or proper procurement practices in their fiscal rules? Did they forget to include those bits? Where is the commitment to tackling the level of fraud that has been exposed in Government lending schemes? Where is the commitment to controlling the Prime Minister’s pet schemes? How much was spent on the Prime Minister’s idea of building a bridge between Scotland and Ireland before the project was abandoned? The Chancellor should have known, because the Prime Minister has got form. He could not even build a garden bridge over the River Thames, let alone a bridge across the Irish sea.

[Alison Thewliss (Glasgow Central) (SNP)]

I am always glad to hear that bridge mentioned, because I did a second-year geography project at high school that could have told the Prime Minister it was a terrible idea. Does the right hon. Gentleman agree that, given that was an infrastructure project for the people of Northern Ireland and Scotland, we should get the money that was committed to it?

--- Later in debate ---

[Mr McFadden]

I would like to know how much was committed to it. I hope the Minister clarifies that while he is wrapping up and telling us about fiscal probity.

But in the spirit of solidarity, I do have some sympathy with the Chancellor these days. It cannot be easy when his tax policies do not even have the support of his own Cabinet colleagues. The Leader of the House has made his views known. He has told all and sundry that he wants the tax rises coming in April to be cancelled and the Prime Minister has been too weak to do anything about this open breach of Cabinet discipline. Is it a free-for-all in Cabinet nowadays? Does every Cabinet member get to have their own tax policy? Have all the leadership campaigns destroyed whatever collective discipline there might once have been? The former Brexit Secretary, the right hon. Member for Haltemprice and Howden (Mr Davis), who is not with us tonight, has even taken to using our argument about this Government resembling Ted Heath more than Margaret Thatcher. I know that is not how the Chancellor wanted to be remembered. He wanted to be regarded as a tax-cutting modern monetarist, a worshipper of the true Tory faith. But the real truth is that you cannot stand up and give a Budget that imposes the highest tax burden since the 1950s and then issue a disclaimer at the end of it. It is just not credible. It will not wash and nor will this motion today.

People want help with what they are facing now. The impending squeeze on family incomes in this country is going to take a battering ram to people’s standard of living. It is not just global factors; it is about years of regulatory neglect in the energy market that created a whole host of small energy Northern Rocks that have now had to be bailed out, and about the choices made by this Government through tax rises. Yes, there are global factors in the energy market, but the crisis has been made worse because of decisions and choices made by the Government.

We have published a plan to help people. This is a changed Labour party coming up with real answers to a real cost-of-living crisis faced by families today, and we are facing an exhausted Conservative party that has run out of answers and has sacrificed for ever the mantle of being the party of low taxation. Perhaps there is no greater evidence for that weariness than the fact that on the question households throughout the country are most worried about, how they are going to pay the bills this year, the Government have said nothing at all.