Economic and Fiscal Outlook

Peter Dowd Excerpts

Monday 30th April 2018 Commons Chamber

[Peter Dowd (Bootle) (Lab)]

Meanwhile, back on planet Earth, a prerequisite of the UK’s participation in the EU has been regular submissions of the Government’s assessment of the UK’s medium-term economic and budgetary position. I think the Chief Secretary to the Treasury will appreciate that one of the advantages of leaving the EU—for once, everyone on the Conservative Benches will agree—is the humiliation, wincing and cringing that the Government will forgo when they no longer need to submit their economic record to the scrutiny of European colleagues. The Government are rudderless, collapsing in on the weight of their own contradictions and economic ineptitude.

Let us turn to the record. While countries in the eurozone post a 10-year high in terms of economic growth, the UK under the Tories is left behind. Let us look at the seven deadly sins of the Tories. No. 1 is self-delusion, which we had in spadeloads from the right hon. Lady. Last year, growth in our economy was the lowest in the G7, and growth in the first quarter was the weakest since 2012. The Office for Budget Responsibility has now revised forecast growth down in both 2021 and 2022 since the Government’s autumn Budget, and growth is lower in every year of the forecast compared with March 2017. The upbeat tone of the Chancellor at the spring statement betrays the economic reality that many have experienced over the last eight years of Conservative mismanagement, and while the Chancellor may want to blame recent poor growth on a bit of bad weather, those of us living in the real world see an economy desperate for investment.

The second sin is sloth. The Government have provided the slowest recovery since the 1920s, and productivity growth is at its worst for two centuries. On productivity, the Government’s record is one of failure. Productivity forecasts have been revised down this year and for every year of the forecast. While the Treasury celebrates a slight uptick in the productivity figures referred to by the right hon. Lady with a “thumbs up” emoji and manic optimism, the underlying figures show a fall in production and a fall in the hours worked.

[Simon Hoare]

Particularly in relation to point 2, were the hon. Gentleman to be making the report to the EU, which of the options of the shadow Education Secretary would he be reporting—would Labour’s policy be shit or bust?

[Mr Deputy Speaker (Sir Lindsay Hoyle)]

Order. Those are not normal terms that we would use in the House.

[Peter Dowd]

I would rather not respond to a rather crude comment, which is quite frankly almost as crude as the Government’s economic policy.

Number 3 is profligacy. The right hon. Lady talked about it, but here is a bit of profligacy: since coming to power, the Conservative Government have added more than £700 billion to the national debt. There was no mention of that. The UK’s debt-to-GDP ratio this year stands at a staggering 86.4%, as referred to by my hon. Friend the Member for High Peak (Ruth George). The UK has a higher debt-to-GDP ratio than 20 out of the 27 other EU member states after eight years of this so-called economic miracle.

Sin No. 4 is misplaced pride. The Government have long prided themselves on being the so-called party of business, yet in eight short years they have managed to alienate the business community. Business investment has been revised down for the next two years, and businesses are holding off key investment decisions due to the uncertainty caused by this Government’s shambolic approach to the Brexit negotiations. Ministers claim that the Government have raised an extra £175 billion from clamping down on tax avoidance—another visit to fantasy island—but they have refused to offer a breakdown of this figure, a list of the anti-avoidance measures involved and the amount each has raised.

[Huw Merriman (Bexhill and Battle) (Con)]

What does the hon. Gentleman think would be the view of the extra 1.2 million businesses that have been created since 2010 on his proposed increases in taxation?

[Peter Dowd]

I suggest that the hon. Gentleman read the Labour party’s “Funding Britain’s Future”—our Grey Book. I will send him a signed copy for him to look at, and it will show that what he has said is arrant nonsense.

Under the Conservatives, Her Majesty’s Revenue and Customs has become a pale imitation of its former self, with staff and resource levels cut by 17% since 2010. HMRC’s failure to investigate Lycamobile, one of the Conservative party’s largest donors, for money laundering raises further questions about its independence and effectiveness. The Chancellor has been privately lobbied into supporting the former Prime Minister’s UK-China investment fund, but we now learn that it will be domiciled in the Republic of Ireland. That, presumably, is for tax purposes—it is certainly not for charitable purposes. So much for this being the most transparent Government in history.

Sin No. 5 is bullying. I have often heard Ministers speak about the resilience of the economy, but they say little about the resilience of the workers who work in it. The reality is that this Government have spent the past eight years laying siege to the poorest in our society and the public services they depend on. They bully the powerless and, in oleaginous fashion, suck up to the powerful. The Government’s austerity agenda has left our local services on their knees. Since they came to power, local authority spending on early intervention has had a 40% cut in real terms—and so it goes on. I could give a catalogue or litany of these issues, but we know what they are. Rather than throwing our indebted and overstretched local authorities a lifeline, this Government are instead pushing ahead with further cuts.

With sin No. 6, we turn to education, which the Chief Secretary mentioned. The Conservatives are responsible for the first real terms per capita cut in schools funding in 20 years, and they have deprived 1 million children of a decent free school meal. [Interruption.] They just do not like the truth. The trebling of tuition fees, the abolition of maintenance grants and the sale of the student loan book have ensured that students leaving university today will be the most indebted in our country’s history. Meanwhile, the NHS moves from a winter crisis to a spring crisis—and it will go on to a summer crisis —and the staff who run it continue to struggle. Under the Conservatives, they find themselves understaffed, underpaid and under-appreciated. While Rome burns and our public services crumble, the Chief Secretary can be found instagramming and tweeting selfies of herself at the Dispatch Box with other Treasury Ministers.

The last of the sins is pomposity, which the Government do very well: they are very good at pomposity. Listening to the Chief Secretary speak about the need for robust public finances and the merits of the free market, people would wonder which country she has been living in for the past eight years. After all, the Government have missed every deficit target they have ever set themselves. The former Chancellor’s target for a 2020 surplus is but a distant memory—an inconvenient truth, quickly forgotten. Public debt stands a £1.8 trillion, and the Government have put more debt on to the shoulders of the people of this country that any other Government. When they came to power, they proclaimed that we were all in it together—we are all in it together right up to our necks —but eight miserable, oppressive years later, communities have been left to fend for themselves.

What will be the Tories’ parting legacy as we leave the EU? It will be a divided, poorer, less confident, low-growth, low-wage, low-skilled and less productive country, all thanks to a clapped-out, self-obsessed and failing Government who rely on oligarchs to give them £160,000 bungs to help them to hang on to power—I hear the Foreign Secretary say, “Anyone for a game of tennis?”