The Economy

John McDonnell Excerpts

Thursday 24th October 2019 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move amendment (g), at end add

‘but respectfully regret that the Gracious Speech fails to rebuild the UK economy, tackle the housing crisis, further pushes public services into crisis and contains no vision to bring this divided country back together; call on the Government to bring forward a plan to rebuild the economy so that it works in the interest of the many, not just handing out rewards to those at the top; and further call on the Government to address the climate emergency by bringing forward a green industrial revolution to decarbonise the economy and boost economic growth.’

Mr Speaker, may I just say this? This is the last time that you will be chairing a day of the Queen’s Speech debate, and I may not get the opportunity in other tribute debates to say this. It has been a privilege to serve in this House while you have been Speaker. Thank you.

I listened to the Prime Minister introducing the Queen’s Speech. What I always find most startling about the Prime Minister is his ability to create his own truth and, when confronted with any reality that contradicts his truth, to bluster his way through. I believe he believes that, with a combination of bluster and the occasional pretentious use of Latin, he can always avoid confronting reality or answering for it. So, if we can achieve anything in today’s debate, let us at least try to confront the reality of what some of our people face and assess whether the announcements in the Queen’s Speech in any way meet those challenges.

On the economy, the Prime Minister referred in his speech to “economic success” and “free market success”. He also said:

“in important respects this country is the greatest place to live and to be—the greatest place on earth.”—[Official Report, 14 October 2019; Vol. 666, c. 19.]

I think many of us feel that way, but I just wish it was the same for everyone. For so many of our people, tragically, it is not at the moment. There is a multitude of statistics evidencing just how far the Prime Minister is out of touch and how he appears to have no understanding of what our people have gone through over nearly a decade. Let me start with three stark examples of what the austerity the Conservative party has inflicted on our people has meant and continues to mean, and which I deeply regret were not addressed in the Queen’s Speech.

First, on infant mortality and child poverty, earlier this month, the British Medical Journal published a research project into infant mortality. Declines in infant mortality have been reversed for the first time in 100 years. The research found that, between 2014 and 2017, there were 570 excess infant deaths. The research concluded that 172 of those infant deaths were associated with the increase in child poverty. Out there, there are nearly 200 families who are grieving as a result of the Government’s austerity policies. There is nothing in the Queen’s Speech—nothing—that will tackle the poverty affecting 14 million of our people, and nothing that will tackle the poverty that 4.5 million of our children are being brought up in, or help the 125,000 children who are forced to live in temporary accommodation. There is nothing to address the £3 billion funding gap local councils face in trying to provide the services needed to support those very families. I will not forget, and many Labour Members will not forget, that this is a Government who have closed over 500 Sure Start centres, the very institutions we founded to support those families and to prevent infant mortality and morbidity on the scale we have seen.

Let me take the second example of what the Tories have done to our people. Earlier this month, the Office for National Statistics reported a record number of deaths of homeless people in England and Wales in 2018. Last year, 726 homeless people died. That represents the highest year-to-year increase since data was first collected. The Government have cut £1 billion from support to the homeless since 2010, so it is hardly surprising that rough sleeping has risen by almost 165%. In London, rough sleeping has more than tripled since 2010. Again, there is nothing—nothing—in the Queen’s Speech to tackle the scourge of homelessness.

My third example is the distance between what the Government claim and what employment and wages are like in this country. The Prime Minister claimed that

“we have unemployment at its lowest level since 1974”.—[Official Report, 14 October 2019; Vol. 666, c. 22.]

The reality is this: more than 3 million people are missing from the unemployment rate because they report themselves as “economically inactive,” we have over 2.5 million people counted as employed even though they work fewer than 15 hours a week and there are 3.7 million people in insecure work.

[Nick Smith (Blaenau Gwent) (Lab)]

The Government have received over £4 billion from the mineworkers’ pension scheme, despite not having paid a penny in. With retired miners getting by on a pension of, on average, £84 a week, does my right hon. Friend agree that it is time for the Government to listen? This Queen’s Speech should announce a review of the scheme so that miners and their widows get a fair deal.

[John McDonnell]

Madam Deputy Speaker, I know that large numbers of Members are seeking to make speeches—I will take a number of interventions, but I will protect the time as best I can for others to speak.

Let me give my hon. Friend this assurance on that critical point: in our last Labour party manifesto, we promised that we would review the mineworkers’ pensions scheme—it is dear to my heart, because I was one of the administrators of the scheme soon after I left university, when I worked for the RMT—and we will review it because we want to lift miners and many miners’ widows out of the poverty that they now live in. We give that commitment.

I mentioned insecure work. There are now about 900,000 people on zero-hour contracts—up by 100,000 from a year ago—and real wages are still below pre-crisis levels. The Government like to talk about wage rises and wages rising at their fastest rate in a decade. It is a bizarre claim, because the Government have been in charge of the economy for the last decade, suppressing wages all through that period. According to the Financial Times, the UK was the only major economy where growth returned but wages fell. According to TUC calculations, since 2010, average pay has also fallen for 7.7 million low to middle-income earners, and 11.5 million middle to high-income earners. It is extraordinary that that was not even acknowledged in the Queen’s Speech—that we now have a low-pay, insecure-job economy that this Government have created over the last decade.

[Ian Murray (Edinburgh South) (Lab)]

What my right hon. Friend’s wonderful speech is proving is that Government priorities make a difference. The previous Labour Government lifted millions and millions of children out of poverty, and the Government’s priorities since 2010 have plunged them all back in again.

[John McDonnell]

Let me put on record that we pay tribute to Gordon Brown for the work that he did during that period. He committed himself to lifting children out of poverty and, my God, he delivered it.

[David T. C. Davies (Monmouth) (Con)]

I am listening with great interest to what the right hon. Gentleman is saying. I do not share his perception of the economy and I am wondering whether he still believes that Venezuela offers a better economic model than that of my hon. Friends on the Front Bench.

[John McDonnell]

I said that I would limit interventions, but I accept that they can often be a job application, so I do not want to limit this job creation scheme that we are creating here—I wish the hon. Gentleman well in his future career.

The scale of human suffering and hardship inflicted on our people over the last nine years is never mentioned by the Government. The reason is that they would have to explain why our people have endured so much. They would have to admit that austerity was never—as we have said, and let us repeat it—an economic necessity; it was always a political choice. The choice the Tories took was that the bankers—their friends, many now populating the Government Front Bench—would never have to pay for the crisis that they had caused through their speculation. Instead, they determined—[Interruption.] The Chancellor of the Exchequer says, “You caused it”—this is the man who was selling the CDOs through Deutsche Bank. Deutsche Bank was a major contributor to the economic crisis that we faced—they have a nerve coming here blaming others, when they caused it. They determined that they would not pay for the crisis, but that the rest of our society would. They also took the view that they would never let a crisis go to waste, so they used it as the excuse to cut the taxes of the corporations and the rich. They have made £47 billion in cuts to our public services and, on their plans, they will have given away £110 billion in tax cuts to the corporations by 2022.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

The right hon. Gentleman pointed to the fact that it was this Government who bailed out the banks when, actually, the Asset Protection Agency was set up by the Labour Government.

[John McDonnell]

I say to the hon. Gentleman, who I have a lot of time for: it is best to listen to what I have said before he intervenes, because he did not, I think, accurately report what I said.

[Ben Bradley (Mansfield) (Con)]

Will the right hon. Gentleman give way?

[John McDonnell]

No, I will press on. The hon. Gentleman will have the opportunity to speak.

The Government have made £47 billion in cuts to our public services, they are giving away £110 billion, and to ramp up the profits of these corporations, they have sold out our public services to them: £9 billion-worth of contracts in health and social care were handed over to private companies this year. Outsourcing under this Government has been exposed this week for the racket it is. A report by the think tank Reform showed that outsourcing contracts wasted £14.3 billion of taxpayers’ money in the last three years. Nothing in this Queen’s Speech even acknowledges these rip-offs, let alone promises action to reverse them.



I found nothing either in the Queen’s Speech that addresses the scandal of the industrial scale of tax avoidance and money laundering that is staining the reputation of our country. Today, Transparency International published its report “At Your Service”, which shows how

“UK service providers have been involved in some of the most egregious cases of corruption in our time.”

From the looks of this Queen’s Speech, the Government will continue to do nothing about it. The registration of overseas entities Bill, which will create a register of controlling owners of overseas legal entities that own UK land, is nowhere to be seen in the Queen’s Speech, three and a half years after the Government first committed to it.

We are at the tail end of what has been nearly a lost decade for our country—a near decade of the grotesque mismanagement of our economy by successive Conservative Chancellors; I am on my third in three years. The New Economics Foundation has shown that austerity has suppressed growth by almost £100 billion—that is more than £3,600 per household. After nine years of stuttering growth, GDP even went backwards in the last quarter. Public debt was meant to peak at 70% of GDP in 2013-14, only for it to rise to 86% of GDP in 2018-19. For all their stale claims of reducing the deficit, the reality is that the Conservatives have simply shifted that burden on to the shoulders of headteachers, councillors, NHS managers and police chiefs. These are the people who have had to make the tough decisions, not Ministers, and who have had to face up to the undermining of their services by these cuts.

Part of the testament to the Government’s failed fiscal strategy has been the litany of fiscal rules, invented, published, broadcast widely and then quietly and embarrassingly dropped. Within weeks, we hear that a new fiscal rule—probably largely stolen from us—will be announced in the Budget. I should say that we may have a new fiscal rule because we cannot be sure: only yesterday, despite the Chancellor announcing the Budget and its date, other Government sources were briefing that it was off. We have a Chancellor whose staff are sacked and escorted by armed guard out of their office, without his being told, and now Cummings is possibly cancelling his Budget. I give a word of advice to the Chancellor and his colleagues: get a grip on Cummings before he does any more damage to our country.

Apart from Budget making, one of the vitally important responsibilities of the Chancellor is to ensure that the Government and this House have the fullest information before them when considering legislation or issues impacting our economy. It is therefore extraordinary, and I think a dereliction of the Chancellor’s duties, that he—unlike his predecessors—has refused to publish a detailed economic impact assessment of the Government’s Brexit proposals. Studies of similar proposals have indicated a hit to the growth of our economy of between 3.4% and 8.1%. Even the lower range of that hit will have a severe impact on our people’s jobs and living standards, and on the economy overall. Surely it is only reasonable for Members to have a degree of information and analysis from the Chancellor’s Department before they make this momentous decision.

In their most recent manifestos, both the main parties committed themselves to respecting the outcome of the referendum. We do and we will, but, as we made clear on Tuesday, the House will not be bounced into an unrealistic and unfeasible timetable for considering and scrutinising such a critically important piece of legislation. That is why the Leader of the Opposition and Labour’s Chief Whip met the Prime Minister yesterday to offer a genuine compromise and to agree on a proper timetable that will allow, in the normal manner, proper scrutiny of the Bill and the opportunity to promote, debate and determine amendments. The Opposition have set out their views on the parts of the Bill that it wishes to amend, but of course we accept that it will be the House that decides. As always, we must accept the will of the House, even if, on many occasions, we disagree with it. It is a pity that the Prime Minister does not adopt that attitude.

There is an opportunity here for us to demonstrate to our people that Parliament can and does work. If we can demonstrate civility and a rational process in the House, we may be able to help to overcome some of the division and, indeed, bitterness that have set in within our own society.

[Maria Caulfield (Lewes) (Con)]

I thank the shadow Chancellor for giving way. It is very generous of him.

The Labour party’s policy of a four-day week will reduce the earnings of the poorest workers in the country. Those are not my words, but the words of a Labour peer, Lord Skidelsky.

[John McDonnell]

Lord Skidelsky’s report suggests a 32-hour week—not a four-day week—but one without loss of pay, which will be achieved over a decade as a result of our investment in the economy to increase productivity.

[Lilian Greenwood (Nottingham South) (Lab)]

My right hon. Friend is making an excellent speech. Does he agree that perhaps one of the reasons why the Government are so anxious not to publish an economic impact assessment of their Brexit proposals is that it would show that our economy will suffer under their hard Brexit, that our public finances will suffer under their hard Brexit and that the promises that they have made about investment in our police, our schools and our health service could not possibly be met under those Brexit proposals?

[John McDonnell]

Although the Government will not publish their economic impact assessment, others have made such assessments and have concluded that a hard Brexit could cripple our economy in the short and long term. We need to have a proper debate in the House to consider the consequences and discuss what amendments can be made to protect our economy.

[Albert Owen (Ynys Môn) (Lab)]

My hon. right Friend is absolutely right about those economic impact studies. Has he had any conversations with the Welsh and Scottish Governments about the huge impact that a border in the Irish sea will have on Welsh and Scottish communities? It appears that the Government have not done so.

[John McDonnell]

Is it not interesting that virtually every Government apart from this one are willing to undertake an impact assessment of some sort? What does that display? I am not usually a suspicious person, but I think we have our suspicions.

Let me say to the Chancellor that he has a role to play in shouldering his responsibility to provide us all with the fullest possible information on the basis of which we can make our decisions. That means publishing a full economic impact assessment and doing it fast, so that we can have a proper debate.

As the Government have a working majority of minus 45, it is obvious that the Queen’s Speech is little more than a pretty crude election stunt. In all their various comments in the House and the media, the Prime Minister and the Chancellor have depicted their programme as “the people’s priorities”. As a political artisan, I can admire a good turn of phrase—

[The Economic Secretary to the Treasury (John Glen)]

Apprentice. [Laughter.]

[John McDonnell]

I have been here for 22 years. That is a long apprenticeship—and sometimes the apprentice can point out the truth as well.

As I say, I admire a good turn of phrase, and I congratulate the creatives in whatever PR agency the Conservative Party now uses for coming up with that one—it must have tested very well in the focus groups—but that is all it is: a slogan, a turn of phrase. The reality, as demonstrated in the Queen’s Speech, is that after something approaching a decade of harsh and brutal austerity, a few cynical publicity stunt commitments to paper over the massive cuts in our NHS, schools, policing and care will go nowhere near what is needed. A slogan will not suffice.

People know—and this is relevant to the Brexit debate—that if the economy hits the buffers again, as a result of Brexit, economic mismanagement by the Tories or both, and when a choice must be made by the Tories about who will pay, they will always protect their own: the corporations and the rich.

[Chris Ruane (Vale of Clwyd) (Lab)]

Before he ends his speech, will my right hon. Friend say something about the impact of future cuts on women? Over the past 10 years, 80% of austerity has fallen on their backs.

[John McDonnell]

I met members of the Women’s Budget Group again yesterday, and they said that 86% of cuts were falling on women. Our society remains patriarchal, and many caring responsibilities still fall to them. Cuts in social care undermine the basis of support for many elderly people in particular, and that falls on the shoulders of women. This is what austerity has done over the last nine years. We are committed to providing free personal care for everyone, and that is what we will do.

[Tom Tugendhat (Tonbridge and Malling) (Con)]

The right hon. Gentleman has said that the Conservatives look after their own, and I agree with him. That is why we have cut the taxes of 32 million working people. That is why we are cutting taxes on businesses that are generating growth and employment for the people of this country.

[John McDonnell]

Tragically for so many at the lower levels, all those tax cuts have been cancelled out by cuts in benefits and the introduction of universal credit. Some of the most vulnerable, particularly disabled people, have been forced to the wall as a result of the brutal implementation of the work capability assessment and the scrapping of the independent living fund. There is a litany of attacks on ordinary working people that Labour Members should consider a disgrace.

[Ben Bradley]

Will the right hon. Gentleman give way?

[Kevin Hollinrake]

Will the right hon. Gentleman give way?

[John McDonnell]

No, I will press on. I understand that we are short of time.

The Tories will indeed protect their own. Under them, it will always be the people who are burdened with cuts in services and pay and benefit freezes. What people need now is real change. They need real change in our economy, so that we can face up to the existential threat of climate change through Labour’s green industrial revolution; real change to provide the scale of resources that our NHS, our schools and our police services need, funded by a fair taxation system in which we will tackle tax evasion and avoidance; real change to bring forward the scale of investment that our infrastructure needs to compete in the global economy and meet the challenges of the fourth industrial revolution; and real change to ensure that our people share in the prosperity that we will create through decent wages, ownership and an end to the rip-off of privatisation.

Only a Labour Government can bring about the real change that our country needs after a lost decade under the Tories. What does that say? It says that it is time for a Labour Government.

HMRC Impact Analysis: Customs

John McDonnell Excerpts

Tuesday 8th October 2019 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab) (Urgent Question)]

To ask the Chancellor of the Exchequer to make a statement on HMRC’s published impact analysis of introducing new customs legislation and amendments.

[The Financial Secretary to the Treasury (Jesse Norman)]

I am delighted to respond to the right hon. Gentleman’s question. The Government are devoting huge energies, as the House will know, to Brexit preparations. The Prime Minister has stated that the Government’s preference is to leave with a deal, but, if necessary, they will leave without a deal as it is so vital that we get Brexit done and move the country forward. The last thing that businesses need is more uncertainty and delay. A key part of those preparations is to ensure that there is a functioning customs, VAT and excise regime on exit to put the legal underpinnings in place. HMRC has laid 56 regulations to date following last year’s Taxation (Cross-border Trade) Act 2018 .

To support the latest bunch of statutory instruments, which were debated by this House yesterday, the Government published a third edition of the overarching impact assessment of the movement of goods if the UK leaves the EU without a deal. This updates and builds on previous versions of the impact assessment, which were published in December 2018 and February 2018. The new version provides updates to cover the September 2019 regulations, including transitional and other arrangements for safety and security declaration requirements for the period after exit; further temporary customs and excise easements to extend the transitional arrangements after exit; further VAT data-gathering powers to specify the type of information that was collected from postal operators; and, finally, various technical amendments and transitional provisions.

As I have said, our preference is very much for a deal, but the Government continue to ensure that this country is ready for no deal and that the impact on business is minimised as far as possible, which is why we have introduced a series of easements for traders moving goods in the UK to take effect in a no-deal scenario. Those easements, for example, are planned to simplify radically import processes for EU goods, which means that the costs identified in this impact assessment will be mitigated for UK importers. Crucially, the Government are also working to boost the long-term potential of the economy so that the United Kingdom can seize the opportunities that exist for us outside the EU.

[John McDonnell]

Perhaps I can help the Minister fill in some of the gaps in the statement. The Government’s own assessment shows that their no-deal Brexit policy will introduce

“significant ongoing administrative costs impacting on UK and EU businesses of all sectors.”

It is an avalanche of paperwork descending on British businesses in the form of import, export, safety and security declarations. The burden will cost our business sector an annual £15 billion in administrative costs, and that does not even include the costs of complying with the new VAT procedures, which will hit our vital service companies—all this to pursue the hardest possible Tory no-deal Brexit.

We have heard the Prime Minister’s previous crude dismissal of British business. Now we are seeing his words become Government policy. Does the Minister not understand that this only compounds the uncertainty brought about by this Government’s failure to secure a deal that protects the UK economy? A senior No. 10 source, who I most believe to be the Prime Minister’s adviser—well, I say “adviser”—Dominic Cummings, said:

“We’ll either leave with no deal on 31 October or there will be an election and then we will leave with no deal”,

and that everything to do with the duty of sincere co-operation that we have with the EU partners

“will be in the toilet”.

Does the Minister agree with the priorities set out by No. 10 as a result of that statement? Does he also challenge the Institute for Fiscal Studies, which said today that this would push UK debt to its highest level since the 1960s, soaring to 90% of national income?

The reckless incompetence of this Government just knows no bounds, does it? At a moment of national crisis, this Government pose a threat to their own people and the economy they rely upon. Has the Minister any idea of the scale of the destruction of confidence in the British economy that this Government’s stated policy is bringing about?

[Jesse Norman]

This is a long document at some 45 pages or so, but I would have hoped that the right hon. Gentleman could have made it to page 9. He claims that the cost to British business will be £15 billion, but it says perfectly clearly at the bottom of page 9:

“The latest…estimate for the annual administrative burden…is £7.5 billion (updated to reflect 2017 data)”.

I am in no sense happy about that—[Interruption.] I am just correcting the record. The right hon. Gentleman said £15 billion, when in fact the figure is £7.5 billion. That figure is, of course, prior to any mitigations that might be put in place by the Government.

Let me turn to the right hon. Gentleman’s other concerns. He criticised the Government for, as he puts it, failing to secure a deal. All his party had to do was support the perfectly sensible series of deals that have been put before this Parliament, and it would have a deal.

I am not going to comment on unsourced speculation of the kind mentioned by the right hon. Gentleman. Let me just remind the House that when this Government’s predecessor came into office in 2010, debt was at a peacetime high thanks to the previous Labour Government. The deficit was at almost 10% and, interestingly, inequality under the Labour Government was significantly higher than it is today.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 1st October 2019 Commons Chamber

[The Financial Secretary to the Treasury (Jesse Norman)]

I thank my hon. Friend for that question. I have addressed the substance of it, but let me make a point about Sir Amyas Morse. I think that Sir Amyas is a superb choice. As my hon. Friend may be aware, in a debate in the House of Commons on 6 March 2019, the Chamber united across the parties in praise of Sir Amyas. The Chair of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Meg Hillier), called him

“a fearless advocate for what is good in the public sector and for challenging Governments of whatever party”.

The Liberal Democrat spokesman, the hon. Member for Oxford West and Abingdon (Layla Moran), said that he was not only “unfailingly courteous”, but had

“an intelligence of steel. He has a knack for calling out obfuscation, fudge and imprecision”,

and

“a reputation for being completely fair.”—[Official Report, 6 March 2019; Vol. 655, c. 1004-05.]

He is a very good choice to lead this review.

[John McDonnell (Hayes and Harlington) (Lab)]

Will the Chancellor give the House a quick fact-check of his speech yesterday? The Conservatives have cut funding for buses by £640 million a year. Yesterday, he announced nothing new; he simply reannounced £220 million from the spending review. His Government have cut £900 million a year from annual youth services budgets. Yesterday, he offered £500 million, possibly as a one-off. The National Infrastructure Commission says that we need £33 billion to roll out full-fibre broadband. Yesterday, he offered £5 billion. All of those promises will count for nothing if there is a no-deal Brexit. Has he not just followed the Cummings code: grab a headline, possibly wrap it around a bus and ignore the truth? But there is one figure that I would like to ask him about: 120,000. What significance does the figure 120,000 have for him?

[Sajid Javid]

The right hon. Gentleman knows that the last time his party was in office, we had the biggest budget deficit in our peacetime history and the biggest banking collapse this country has ever seen, and our country was virtually bankrupt. Now our economy is strong, with the lowest unemployment rate in 45 years, and it is because the economy is strong that yesterday I could make the announcement of investments in buses, roads, youth facilities and full fibre. If he wants to see that kind of investment continue at the next general election, he should vote Conservative.

[John McDonnell]

I did not ask about the Chancellor’s record at Deutsche Bank; I never asked about the products he was selling that brought about the financial crash.

Let me tell the Chancellor what the figure 120,000 means. It is the number of deaths linked by the British Medical Journal to the Conservatives’ cuts since they came to power in 2010. No amount of spin will wash away the memory of nine years of this scale of human suffering. He claimed yesterday:

“We believe in a society where everyone knows that if they work hard, and play by the rules then they will have every opportunity to succeed.”

But isn’t it true that the Conservatives have broken the link between people working and being able to lift themselves out of poverty, when 70% of our children living in poverty are in households where someone is at work? And isn’t it the case that, despite the Chancellor’s pathetic attempt yesterday at playing catch-up to Labour party policy, under the Tories’ plans no one will reach the Tories’ target minimum wage until five years from now? And isn’t it the truth that, with this Chancellor and Prime Minister in charge, the Conservatives will always be the party of tax avoiders, bankers and the super-rich?

[Sajid Javid]

Let me tell the right hon. Gentleman a fact: the Labour party no longer represents working people and it is no longer the party of working people. That stopped a long, long time ago. He should reflect on his own policies of renationalisation; mass confiscation of private property, including the shares and homes of individual investors; protectionism; and state control. He calls business the real enemy, but the fact is that the Labour party is no longer fit to govern. It would wreck the economy and it would be hard-working people who would pay the price.

No-deal Brexit: Short Positions against the Pound

John McDonnell Excerpts

Monday 30th September 2019 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on short positions being taken against the pound in the lead-up to a possible no-deal Brexit.

[The Exchequer Secretary to the Treasury (Mr Simon Clarke)]

It is not appropriate for the Government to comment on specific currency market movements, or on market positioning—

--- Later in debate ---

[Mr Clarke]

I will do my best, Mr Speaker. One would not want to be accused of being unduly meek in the circumstances.

We accept the market-based price of sterling and do not have a view on what level this should be. Were the Government to speculate on the value of sterling, it could hurt confidence in our macroeconomic framework. However, as the price of sterling fluctuates in the normal way, Her Majesty’s Treasury believes that investors should be entitled to hedge, including by short selling. The foreign exchange market is a global market, and it is essential that we work with other jurisdictions to ensure a consistent international approach to the oversight of these markets. That is why the UK has supported the work of the Bank for International Settlements to create a single global foreign exchange code, and work is ongoing to ensure that it embeds common standards of good practice in this area.

The United Kingdom will be leaving the European Union on 31 October, whatever the circumstances. We must respect the referendum result. We would prefer to leave with a deal, and we will work in an energetic and determined way to get that better deal done.

[John McDonnell]

I welcome the hon. Gentleman to his post and congratulate him on his promotion.

The threats by the Prime Minister of taking our country over a no-deal cliff edge have created inevitable uncertainty in the markets, reflected in the varying position of the pound. Uncertainty, as we know, is the breeding ground for speculation. Evidence has mounted of sizeable sums being mobilised to short the pound, betting on sterling falling in the case of a no-deal Brexit. We have heard nothing from the Government until this morning. On the other hand, the former Chancellor has expressed his concern, saying that the Prime Minister

“is backed by speculators who have bet billions on a hard Brexit—and there is only one outcome that works for them: a crash-out no-deal Brexit that sends the currency tumbling and inflation soaring.”

The former permanent secretary to the Treasury, Nick Macpherson, said yesterday,

“Mr Hammond is right to question the political connections of some of the hedge funds with a financial interest in no deal. They are shorting the £ and the country, with the British people the main loser.”

Others will consider that what makes the situation so much worse is not just that we have speculators gambling on our country’s failure and at our country’s expense, but that the Conservative party has been willing to accept donations from those speculators. We are not talking about trivial sums: in this year alone, the Prime Minister and the Conservative party have received £726,000 from individuals who back a no-deal Brexit, many of them involved in hedge funds.

There are questions to be answered. Can the Minister confirm the Government’s estimate of the scale of speculation on the economic outcome of Brexit—placing bets on risks to our economy? Is there not a danger that the promotion of a no-deal scare by the Prime Minister, resulting in profiteering by his friends and donors, could be a seen as a conflict of interest by any standard, and contrary to the ministerial code, which says that Members

“must avoid real or apparent conflicts of interest”?

Should not the Minister who is responsible for overseeing the risks to our economy stand up to the Minister and tell him how inappropriate it is for any candidate for prime ministerial office, or any party, to accept funds from individuals who are speculating on the potentially enormous risks to our economy from no-deal Brexit? Will the Government now support Labour’s proposals for an inquiry into the finance sector, including the regulation of hedge funds and short selling?

[Mr Clarke]

The right hon. Gentleman talks about uncertainty, but the only people generating uncertainty in this place are the Opposition. It is they who are selling this country short. They will not vote for a deal, they will not vote for no deal, and they will not vote for a general election. As anyone who talks to British business knows, the main threat to our economy would come from the economic policies we heard set out in Brighton last week.

As I set out in my remarks, the Government’s central position is that we are working to secure a good deal, and the focus of that will be at the summit on 17 and 18 October. That remains our overwhelming focus and our best hope. Clearly, it does not help when the Opposition come together to remove our negotiating leverage in those vital talks.

The right hon. Gentleman referenced the former Chancellor of the Exchequer. I am grateful to the right hon. Member for Runnymede and Weybridge (Mr Hammond) for all the work he did as Chancellor to help prepare for no deal. We have been able to build on that over the last few weeks. I would note, however, when it comes to some of the more outlandish speculation in this area, that Frances Coppola in the Financial Times, in an article entitled, “The Mythical Bets On No-Deal Brexit”, wrote yesterday that this was yet another “tinfoil hat conspiracy theory”. That is about the sum of the merit of this debate.

The Government will not comment on individual positions—no one would expect us to—or the actions of individuals. We do not accept that there is any prospect of a conflict of interest. Insofar as anyone needs standing up to, it is not my right hon. Friend the Prime Minister; it is the right hon. Gentleman, who is making a political and, dare I say it, speculative attempt to throw mud around the House. I did not hear anything in his statement or questions that amounted to a substantive point; they amounted to trying to propagate myths and to smear. In a week when we are trying to lower the temperature in the House, the Opposition seem intent on stoking it. I have nothing further to add.

Spending Round 2019

John McDonnell Excerpts

Wednesday 4th September 2019 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I welcome the Chancellor to his new job, although, after that, I am beginning to miss the old one. I believe the Chancellor may be the first person to hold that role whose father—like my own—was a bus driver. I would like to welcome him to his new job. I also hope that what they say is true: you wait ages for one son of a bus driver to become Chancellor of the Exchequer, only for them to be followed soon after by another.

I am afraid that that is probably the end of what the Chancellor and I have in common. I thank him for abiding by the convention of providing me with a copy of his statement. It was a compendium of meaningless platitudes. I ask him to take a message back to the person who obviously drafted the statement. Could he tell Mr Cummings, the man who cancels the Chancellor’s own speeches, sacks his staff without telling him and then has them—

[The Prime Minister (Boris Johnson)]

You don’t like spending on education?

[John McDonnell]

Mr Speaker, I believe that the right hon. Member for Uxbridge is shouting at me. The last time he was shouting at someone, they had to call the police. I do not think we need to go as far as that. Mr Cummings, who had the member of staff escorted—[Interruption.]. You might need to call the police.

[Mr Speaker]

Order. Calm must descend on the Chamber. People should try to operate at the level of events and, in all parts of the House, at the level of their important responsibilities as Members of the House.

[John McDonnell]

Thank you, Mr Speaker. The member of staff was escorted off the premises by an armed police officer. Can I just say that that is no way to treat a member of staff? I ask the Chancellor to tell Mr Cummings, on the spending review: do not insult the intelligence of the British people. The people will see today’s statement as the grubby electioneering that it is.

This is not a spending review as we know it. This is straight out of the Lynton Crosby handbook of opinion-poll politics. The Tories have checked what the top three or four issues in the polls are and they have cynically judged how little money they have to throw around to try to neutralise those issues and the concerns of people. To come here and try to fool us with references to people’s priorities is beyond irony.

When did this extremist, right-wing Tory group ever put the people first—ever? Were they putting the people first when they froze child benefit year after year or when they introduced universal credit, a brutal regime? The result this summer, according to the Childhood Trust, was children scavenging for food in bins because they did not have free school meals in the summer holidays. Were they putting people first when they cut council budgets, and prevented 1 million elderly and disabled people from getting the social care they needed? Were they putting people first when they cut social services budgets so much that we now have record numbers of children coming into care and 155 women a day turned away from refuges?

We are expected to believe that these Tories, who for years have voted for harsh, brutal austerity, have had some form of damascene conversion. I tell you, they treat our people with contempt. Announcements have been dripped out over the last week or so, all designed to give the impression of a spending spree—announcements dictated by No. 10 and meekly accepted by a Chancellor too weak to conduct a full multi-year spending review as he should, even before the Government’s majority disappeared yesterday.

We have seen the so-called headroom, which the Chancellor’s predecessor had claimed was needed to prepare for a no-deal Brexit, spent instead on preparing for a general election. We all know that the Chancellor may not be in his job very long and maybe that is why he felt he needed to rush a spending round based on figures from March, rather than wait for the Office for Budget Responsibility to tell him officially what the rest of us have known for some time: that the economy, after nine years of Tory austerity, is in bad shape and, yes, is getting worse, stagnating.

A full fiscal event would have meant new economic forecasts and the need for a fiscal framework to give Departments security over the Parliament, allowing them to plan ahead after years of cuts. Instead we get this sham of a spending review. The Tories are claiming to be against austerity after years of voting for it. They are claiming to be using headroom, which the Chancellor knows has largely disappeared, yet they are still failing to deliver a real end to austerity.

Let us take a look at some of the announcements that the Chancellor has confirmed today. For schools, the Chancellor announced new spending of £1.8 billion next year. The Institute for Fiscal Studies has previously estimated that it would cost £3.8 billion this year alone to reverse the cuts that have been made. Was the Chancellor aware, when drawing up his spending plans, that the Department for Education budget as a whole has been slashed by almost £10 billion in real terms since 2010? The reality is this, is it not: heads will still be sending out begging letters and teachers will still be buying basic materials for their classes?

The Government have some front to mention childcare after hundreds of Sure Start centres closed on their watch, undermining the start in life for our children. They mention that £700 million was announced for children with special educational needs and disabilities. Does the Chancellor know that the Local Government Association found that councils already face a funding shortfall for SEN children of £1.2 billion by 2021? The reality is that these children will still be left vulnerable and in need, with their futures in jeopardy. That is what it means today.

Further education colleges are getting a one-off £400 million. Does the Chancellor really think that they should be grateful when he has cut £3.3 billion from them since 2010? The reality is that the economy will continue to desperately need skills and training, and our young people will still be denied them.

On the NHS, the announcement of £1.8 billion spending for the NHS has already been exposed as largely a reannouncement of existing money. There is no mention, is there, of the £6 billion backlog in the maintenance we need in our hospitals? Our hospitals are still using buckets to catch water coming through leaking roofs. Operating theatres are closed because of the lack of maintenance over the past nine years of austerity. The Government mention GP waiting times. Any announcement on GP waiting times is likely to turn out to be totally undeliverable. Why? Because we have just lost 600 full-time equivalent GPs over the past year. They are just not there because of nine years of lack of investment.

On local government, any new money for local government today will be a drop in the ocean compared with the 60% funding cuts that councils have suffered in recent years. What effect does the Chancellor estimate his announcement today will have, for example, on the crisis in children’s services that we have highlighted at every spending review and budget over the past two years? There has been a 29% drop in Government funding after eight years and as a result vulnerable children are left at risk.

On homelessness, the Chancellor mentioned £54 million of additional spending to tackle homelessness. There has been a 160% increase in people sleeping rough. In the past two years, people have died near the doors of Parliament. The LGA says that there is a £100 million spending gap just to get by. The most vulnerable in our society have been put at risk as a result of the Government’s austerity over nine years, and he expects us to celebrate an inadequate attempt to plaster over the problems we have.

On bus services, the Chancellor mentions £200 million allocated to them. That is a third of the £645 million that has been cut from bus services since 2010.

The Government seem to forget that they cut 20,000 police officers. The Chancellor expects us to celebrate what he has announced today, when we now know that at best there will be only 13,000 on the streets. Can he tell us how many will be frontline? We will support him in the investment to protect religious establishments and communities, and we will support him in tackling the problem of protecting young children from online abuse—of course we will—but the real protection comes from the safer neighbourhood teams that we constructed under Labour and that we had in every one of our wards, with a sergeant, police officers and police support officers, all of whom have been wiped out. [Interruption.] An hon. Member shouts, “Not true.” He needs to go out into the community and talk about the increase in violent crime in our communities as a result of what has happened.

The Chancellor spoke of money to create another 10,000 prison places. Can he just tell us: are they the same 10,000 prison places promised by previous Justice Secretaries in 2016, 2017 and yet again in 2018? Can he answer how many suicides and how many assaults on staff have taken place because of the Government’s cuts to prison staff over the past nine years? Will he, or someone in the Government, ever apologise to the Prison Officers Association for ignoring its warnings about the effect of staff cuts on safety in our prisons?

Those are just some of the announcements we heard today, but there are many that we have heard very little about. What about those who have been effectively forgotten in the Chancellor’s opportunist, one-year spending round? What about real structural reform to address the social care crisis, which we have been waiting for, for how many years—three, four? All we have now is a sticking plaster of £1 billion, which will leave this sector in the same sorry state as it is in now. What does that mean in real terms? It means 1.4 million people not getting the care they need and 87 people a day dying before they get the social care they need to support them.

I understand that the Chancellor’s mates, the bankers, were pushing the other day for more tax cuts and less regulation. I suppose they think they have a soft touch in No. 10 and No. 11. I hope he sent them packing. When we compare how much has been cut from the basic social services that we and vulnerable people need for support, with what is calculated to be, by the end of the next couple of years, £110 billion given out in tax cuts to corporations, we can see why people do not believe the Government have any concept of social justice or equality. Does the Chancellor have any words for the thousands suffering—[Interruption.] The right hon. Member for Uxbridge and South Ruislip (Boris Johnson) said, “Pathetic.” I’ll tell you what develops real pathos. Many of us in our constituency surgeries are having to deal with people who are dependent on universal credit. Yet the Chancellor did not have any words for the thousands who are suffering from the brutal roll-out of universal credit—the people we represent who are now queueing up at food banks as a result of the cuts. Traditionally, the spending review concentrates on departmental expenditure limits, rather than social security. I appreciate that. But there was no reason why the Chancellor could not have signalled the Government’s intent at least to end the misery and hardship that their policy is causing and to end the roll-out of universal credit as it now is.

Most shockingly, the Chancellor has given no sign that he understands the scale of the climate emergency facing us and the urgency of the significant Government response that is needed. He mentions the climate but allocates minuscule amounts of funding to address an existential threat to our society. I hope that in the next few weeks Members will remember those who got no comfort from today’s announcements, if the Government push ahead with their plans for tax cuts that mainly benefit the wealthy, as is widely rumoured. I hope that Members will remember all those individuals and services that were deemed too unimportant by the Chancellor to address today. I tell him that whenever that election comes—in any election campaign—he can be sure that the Labour party will remind those people and the voters what nine years of austerity have done to them, and of today’s failure to act. The opportunity was there today really to end austerity—to start reversing austerity—and to give people some hope. What a missed opportunity.

We remember when we were told that there was no alternative, and that there was no money. We all know the lines—we have heard them enough times. They were not true then and they are not true now. The majority of economists have always agreed that there was another approach that the Government could have taken, rather than austerity, and we always argued—and we were right—that austerity was a political choice, not an economic necessity. As recently as March, the Conservatives ploughed on, saying that there was no alternative. Look at them now suddenly proclaiming an end to austerity—after 125,000 excess deaths as a result, after £100 billion has been taken out of the economy, and after the worst decade for wage growth since the 19th century—just because there may be an election around the corner. After all that, to deliver a pathetic sum to spending Departments, who are on their knees at the moment, is just adding insult to injury.

This is a Government who are not just callous and uncaring, but hypocritical. This is not a Government—it is a racket. They pretend to end austerity when they do nothing of the sort. They pretend to plan ahead while they plot a no-deal Brexit that would devastate parts of our economy. They are a Chancellor and a Prime Minister, as my right hon. Friend the Member for Islington North (Jeremy Corbyn) said yesterday, with no mandate, no morals and no majority. They are trying to distract us from the crumbling public services and stagnating wages that they have created after a decade in charge. It is almost as if they forget they have been in government for nine years. They seek to fool the British public with fantasy promises of a Brexit deal that they knew they could not deliver and they were not even trying to negotiate. This short-lived Government will go down in history for its unique combination of right-wing extremism and bumbling incompetence. This is a Government that betrays the people it is meant to serve—a Government that will never be forgiven, but will soon be forgotten.

[Sajid Javid]

At least the shadow Chancellor did not try to throw a little red book at me this time. He attacks the decisions that were made over the last decade to restore the nation’s finances. He attacks the same free enterprise system that has delivered the prosperity that our nation enjoys. He refuses to understand that a strong economy is absolutely necessary to pay for public services.

Why have we made these decisions over the last decade that get us to where we are now, where we can properly end austerity for good? Labour trashed the economy the last time it was in power, like it always does. The shadow Chancellor talked about cuts that were made to public services over the last decade. Let us just remember what we inherited—the absolute mess that we inherited—in 2010: a deficit that was 10% of GDP, with £150 billion in borrowing in that year. It was the biggest budget deficit in our peacetime history and the biggest budget deficit of any large industrialised nation. Labour was borrowing £5,000 a second. There was the deepest recession that we had seen in almost 100 years. The shadow Chancellor talked about the bankers. Which Government gave us the biggest banking bailout in global history? It was the last Labour Government. That was our inheritance.

It was absolutely clear that had that unsustainable rate of spending continued, with no link between what was coming in and what was going out, the country would have gone bankrupt, just like it did with Labour in the past, when we had to go cap in hand to the International Monetary Fund. That is the legacy of every Labour Government. It took Conservatives to clear up Labour’s mess, bringing the deficit under control, bringing debt under control—having it falling for the first time in a generation in terms of the proportion of national income—reducing taxes for 40 million people and backing millions of businesses. And we have had a jobs miracle, with more people employed today in Britain than at any other time in our history and the lowest unemployment rate since 1975.

The shadow Chancellor talked about the impact of our policies on economic growth. Let me tell him about the impact on economic growth: since 2010, since the Conservatives were back in office, our economy has grown by 18.7%—faster than the economies of France, Italy and Japan. I will tell him about the risk to the economy—the only risk to the economy is from the shadow Chancellor, his policies and the entire Labour party. They have a tax hike for everyone. They have a tax hike if you happen to own a garden, if you want to give a gift to someone, if you want to go on holiday, if you own a home—whoever you are, they have a tax hike for you. They want to raid private pensions. Just this week, we learned more about their plans. They want to confiscate 10% of almost all our large companies. That is £300 billion that they want to confiscate from pensioners’ private plans. They also want to renationalise industries—is it seven, eight or nine? I do not know how many industries they want to renationalise—

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 2nd July 2019 Commons Chamber

[Mr Philip Hammond]

Yes, it is a vital cornerstone of our institutional structure that the Bank of England remains independent, and those who have suggested that they would seek to politicise appointments to the Bank of England would be doing a great disservice to this country and our economy.

[John McDonnell (Hayes and Harlington) (Lab)]

The Chancellor, like most of us, has been watching the accumulation of spending promises by the Tory leadership candidates. They amount now—[Interruption.] They amount now to nearly £100 billion, and one of the Chancellor’s colleagues commented yesterday that they make me look like a fiscal moderate. May I ask the Chancellor what impact this level of unfunded commitments would have on his economic strategy, or can he tell us how they could possibly be funded?

[Mr Hammond]

There are many people who could comment on spending commitments that have been made by candidates in the Tory leadership competition, but the right hon. Gentleman is not one of them.

[John McDonnell]

Let me try this one. Both Tory leadership candidates are threatening no deal. This morning, the Chancellor has eloquently set out the consequences of no deal. Bearing in mind what he said, may I ask him very straightforwardly whether he will join us and commit himself to doing everything he possibly can to oppose the Prorogation of Parliament to try to sneak no deal through, and also to voting against no deal?

With your permission, Mr Speaker, if I may: this might be the Chancellor’s last Treasury questions and I just want to thank him for the civility with which he has always maintained our relationship. I also admit that there have been times when we have enjoyed his dry sense of humour. I gave his predecessor a little red book as a present. We have another red book today, but this is a guide to London’s rebel walks and we hope that he will enjoy it in his leisure periods.

[Mr Hammond]

That is very kind of the right hon. Gentleman; I much prefer this little red book to the one he gave my predecessor, although I have to say that I have not read this one and I have read the other one.

On the broader question, I have been consistently clear that I believe that a no-deal exit would be bad for the UK, bad for the British economy and bad for the British people. We cannot rule out that happening, because it is not entirely in our hands, but I agree with him that it would be wrong for a British Government to seek to pursue no deal as a policy. I believe that it will be for the House of Commons, of which I will continue proudly to be a Member, to ensure that that does not happen.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 21st May 2019 Commons Chamber

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The clean growth strategy set out our ambition to enable businesses and industry to improve energy efficiency by 20% by 2030. Today farmers in a community such as Ludlow can make use of the rural development programme for agricultural buildings, but we have also announced two new schemes. First, there is the £315 million investment in a new industrial energy transformation fund, and secondly, we have published a call for evidence on a business energy efficiency scheme focused on smaller businesses.

[John McDonnell (Hayes and Harlington) (Lab)]

The Chancellor’s speech to the CBI this evening has been much trailed. I welcome his clear warnings to his Conservative colleagues about the hit the economy would face from a no-deal Brexit, especially those who have said there is nothing to fear from a no deal. For the benefit of Members in the Chamber, will he explain what he sees as the impact of a no-deal Brexit and his clear view that with

“all the preparation in the world”

a no-deal Brexit will still damage our economy?

[Mr Philip Hammond]

I am grateful to the right hon. Gentleman: I may not have to take the trouble to go and deliver the speech this evening.

The right hon. Gentleman has raised a serious point. There are two separate effects of a no-deal Brexit that concern me. First, there will clearly be short-term disruption, which will have an unpredictable and potentially significant effect on our economy. Secondly, and probably more importantly, all the analysis that the Government and external commentators have published shows that there will be a longer-term effect, meaning that our economy will be smaller than it would otherwise have been. I did not come into politics to make our economy smaller; I came into politics to make our economy bigger, and to make our people better off.

[John McDonnell]

I shall be happy to deliver the Chancellor’s speech this evening. Any time!

The reality is that for many the Brexit vote was, and may well be again, a kick at the establishment: an establishment that has inflicted nine years of harsh austerity on them, and which many feel has ignored them. As has been revealed this week, that austerity programme has meant children going to school hungry, without warm clothes or dry shoes, and single mothers with no food in their cupboards skipping meals so that their children can eat. Does the Chancellor even acknowledge the role that his austerity politics have played in delivering the Brexit vote?

[Mr Hammond]

I think the reasons behind the Brexit vote are complex, and it would be trite to stand here and try to identify them simplistically. Let me also remind the right hon. Gentleman of the contribution that his party’s Government made to the situation that we inherited, which caused us to have to make the tough decisions to which he has implicitly referred.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 9th April 2019 Commons Chamber

[Elizabeth Truss]

We have provided schools with additional funding to cope with the rise in pension contributions. We will be looking at school funding as part of the spending review and I will take my right hon. Friend’s representations into account.

[John McDonnell (Hayes and Harlington) (Lab)]

With the Brexit dialogue ongoing it is best to leave exchanges on that topic to the negotiations, although I hope we can all count on the Chancellor, if not everyone on his own side, to continue to insist that no deal is not an option.

Turning to Google, when will the Chancellor tackle the scandal of Google’s tax avoidance? Google has an estimated taxable profit of £8.3 billion in the UK, so it should have a tax bill, according to the Tax Justice Network, of £1.5 billion. That would pay for 60,000 nurses, 50,000 teachers, seven new hospitals, 75 new schools. It pays £67 million. Why is the Chancellor, year on year, letting Google the tax avoider off the hook?

[Mr Philip Hammond]

As the right hon. Gentleman probably knows very well, the issue is a good deal more complex than he suggested in his question. We have announced the introduction of a digital services tax to begin to address the challenge of shaping our tax system to respond to the digital age, but the problem is that we have a set of international tax rules that we are obliged to follow, which were invented in the age when international trade was all about goods. Nowadays it is mostly about services, and much of it is about digital services. The international tax system is simply not fit for purpose and the UK is leading the charge in international forums—including the G20, which will be meeting later this week in Washington—in looking for a new way to allocate profits appropriately between jurisdictions where digital platform businesses are involved.

[John McDonnell]

After nine years in government, that smacks of an excuse, and let me say to the Chancellor that the Government’s digital services tax has been roundly criticised as being too narrow and having artificial carve-outs. Let me move on from one scandal to another: the scandal of London Capital & Finance. LCF collapsed in January, leaving 11,000 investors in the lurch. They had £286 million invested in the company and most of them were not wealthy people. The Financial Conduct Authority was repeatedly warned of LCF’s dubious structure and operations and failed to respond to those warnings. A decade on from the financial crash and our regulatory system is still not fit for purpose. What action is the Chancellor taking to secure justice for the LCF investors and to reform our regulatory system?

[Mr Hammond]

We take very seriously the failure of London Capital & Finance. Last week, my hon. Friend the Economic Secretary directed the FCA to launch an investigation into the company. We will carry that investigation out and look carefully at the findings.

Spring Statement

John McDonnell Excerpts

Wednesday 13th March 2019 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

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

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

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

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

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

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

That was the hon. Member for South Cambridgeshire (Heidi Allen) referring to the cuts to tax credits in 2015.

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

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

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

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

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

The Chancellor describes

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

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

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

“inconsistent and subject to constant change.”

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

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

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

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

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

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

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

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

[Mr Hammond]

We have just heard the same old recycled lines. I must be going a little bit deaf, because I did not hear any mention of record employment. Perhaps the shadow Chancellor is so ashamed of Labour’s record: no Labour Government have ever left office with unemployment below that which they inherited. I did not hear anything about rising wages; they are rising the fastest in a decade. He did not mention the extra £1.3 billion for local government, or the extra £1 billion of police funding, both of which he voted against. He did not mention the fact that we have had nine years of unbroken growth. He did not mention the fact that this economy is out-performing that of Germany this year. He witters on about manufacturing without any recognition of the global economic context in which this sits—perhaps he does not inhabit the global economy. If he did, he would know very well that the downturn in manufacturing is happening across Europe and is affecting everyone. He did not mention the remarkable turnaround in our public finances and the real choices that we have as a consequence. He just relentlessly talked Britain and its economy down.

Once again, we hear this absurd proposition that the decisions that we took in 2010 were some kind of political choice—as if we could have gone on borrowing £1 for every £1 spent indefinitely, racking up interest bills and burdening future generations with debt. No responsible politician could credibly believe that these were choices in 2010.

The shadow Chancellor talks about homelessness. We have committed £1.2 billion to tackling homelessness and rough sleeping—I did not hear any mention of that. He talks about the downgrade of the 2019 economic forecast without mentioning the global context. He confuses the debt and the deficit. The reason that the debt has risen—[Interruption.] He is not listening, but it is very, very simple. It is not even economics; it is just maths. It is very, very simple. If you have a £150 billion deficit in your last year in office, your successor will find that debt is rising, and that is what we found. I have announced, since 2016, £150 billion of additional public spending as well as getting the forecast deficit down to 0.5% of GDP. That means that we have real and genuine sustainable choices in this country for the first time in a decade.

The shadow Chancellor delivers repeated misinformation which we have heard countless times from those on the Labour Benches. Let us take transport funding for example. He knows that central Government transport funding is higher per capita in the north than it is in London and the south—that is a fact. He knows that there are 665,000 fewer children in workless households now than there were in 2010—that is a fact. He knows that public investment set out in the OBR report today represents Britain’s biggest public capital investment programme for 40 years—that is a fact. He accuses me of talking about housing again. Well, I will talk about housing again, and again, and again, because we have announced £44 billion investment in housing, and that is an awful lot of announcements that I will have to make.

The ultimate audacity is the moral lecturing tone in the shadow Chancellor’s closing remarks. I really do take exception to being lectured to by a man who has stood idly by, turning a blind eye, while his leader has allowed antisemitism to all but destroy a once great political party from the inside out. Attlee and Bevan must be rotating in their graves. People should look at what this pair have done to the Labour party and just think what they would do to our country.

Oral Answers to Questions

John McDonnell Excerpts

Tuesday 5th March 2019 Commons Chamber

[The Chief Secretary to the Treasury (Elizabeth Truss)]

We were able to increase the education budget by £1.3 billion last year, which means there have been real-terms funding increases per pupil. We are already the top spenders in the G7 as a proportion of GDP, according to the OECD. But I do recognise that we need to make sure that, going into the future, our education system is properly supported. I would be delighted to meet my hon. Friend and colleagues to discuss this further.

[John McDonnell (Hayes and Harlington) (Lab)]

When the Conservatives lost their majority at the last election, the Chancellor conjured up a £1 billion bung to the Democratic Unionist party to buy the Tories back into office. Yesterday, with the announcement of the towns fund, we reached a new low in politics in this country, with the attempt by the Government to purchase the votes of Labour MPs to vote for the Brexit deal. Pork barrel politics has become the new norm under this Government. Can I ask the Chancellor: if the price of a DUP vote has been £100 million each, how much has he calculated a Labour MP’s vote will cost?

[The Exchequer Secretary to the Treasury (Robert Jenrick)]

The Government have been investing in our cities across the country with interventions such as the transforming cities fund—a £2.5 billion investment. We believe it is important to mirror those investments to drive productivity and economic growth in our towns. This week, we have announced a £1.6 billion intervention to support those towns, building on other interventions that we have made throughout the course of the past 12 months, including the future high streets fund.

[John McDonnell]

I can understand why the Chancellor has broken convention today in not responding, because I think he would be ashamed to respond. Let me tell him what the answer is: if a DUP vote is worth £100 million, what Labour MPs were offered yesterday was £6 million.

Let me ask the Chancellor to undertake another calculation. Seven days ago, he was forced to publish the Government’s assessment, again, of how much a no-deal Brexit would cost this country—in today’s prices, nearly £200 billion. How much of a threatened cost to this country will it take for this Chancellor to find a backbone to stand up to the Prime Minister and the European Research Group to prevent no deal or a bad deal? Or is the Secretary of State for Work and Pensions the only Cabinet Minister willing to put country before career?

[Mr Philip Hammond]

Oh dear, oh dear. As the right hon. Gentleman knows very well, I have been working tirelessly to ensure that we avoid a no-deal exit—that we leave the European Union in a smooth and orderly fashion to a new negotiated partnership that allows our complex and important trade relationships to continue to flourish in the future. That is what I spend every working day doing.