Last week the Chancellor delivered his Budget to the House of Commons. It’s a budget that fails to give back what the Government has cut from communities after 11 years and fails to tackle the climate challenge.
After years of low growth, the economy isn’t creating the wealth to invest in services, so the Government has increased the tax burden to spend on repairing some of the public services they’ve slashed since 2010.
There are three big problems with this budget;
The Conservatives have no plan to tackle the growing cost of living crisis.
They have no plan to remove the enormous tax burden they have placed on working people and businesses.
And they have no plan for growth, which is crucial to boosting our economy.
Revelations that households will pay £3,000 more tax by 2026/27 than when Boris Johnson became Prime Minister are shocking. It’s going to be a tough winter, with rising costs, inflation and empty supermarket shelves. People are feeling the pinch. But the Tories are out of touch and have the wrong priorities. They’ve let shortages and prices get out of control. Gas bills are up, petrol costs are up, food costs are up.
Meanwhile, they’ve handed tax cuts to big companies like Amazon, while putting taxes up on working families with a record increase in national insurance.
The increase in the national minimum wage is the right thing to do, but it’s not enough. With costs rising, taxes rising, and the Universal Credit cut starting to bite, it’s give with one hand and take with the other. Changes to the Universal Credit taper rate will only benefit a third of those affected by the £20 a week cut, with the most vulnerable claimants missing out.
Labour has a plan to ease the pressure on households and businesses right now. We’d abolish VAT on domestic energy bills for 6 months to help people get through the winter months, and we’d cut Business Rates next year.
These measures would be paid for through the higher than expected VAT receipts in the first half of the year, and a temporary increase in tax on digital services firms like Google and Facebook who’ve done so well out of the pandemic.
Smoke and mirrors on local funding promises
When it comes to the Budget’s talk of increased funding for services, it’s smoke and mirrors.
The government’s piecemeal regeneration funds don’t come close to making up for £15 billion of Conservative cuts to local government services since 2010. Nor does a modest increase to local authority funding and ”spending power” – much of which will come from forcing Councils into raising council tax to keep services going.
The Government likes to talk about recruiting police – but recent announcements won’t replace the 20,000 officers lost since 2010.
And the new “family hubs” won’t replace the 1,000 Sure start centres that were established by Labour in communities across the country, and which have been lost under the Tories since 2010.
The money promised in the Budget to modernise transport in Greater Manchester city-region is welcome. However, to really make a difference, we also need support to introduce London style integrated ticketing and lower fares.
And the Budget contained no mention of the vital Northern Powerhouse rail link – for the second time in a row. The Integrated Rail Plan didn’t appear, with the Chancellor instead promising it at some unspecified point in the future. If the Government really wants to “level up” the north, they’d invest in our infrastructure – and especially our major transport links.
There were also announcements of pots of funding for specific projects in Greater Manchester awarded as part of the Government’s ‘Levelling Up Fund’, although not – sadly – for Withington’s bid. While it’s good news for any area that has managed to win some money, the Government’s approach to regional development is dividing the country; pitting regions and nations against each other for competitive funding pots, and often handing wealthy areas money ahead of those in greater need.
With the ‘levelling up’ white paper delayed yet again, and the Government’s approach increasingly being to let Ministers decide from Whitehall which projects and areas will receive funding, this shows that Tory promises on devolution ring hollow. Labour in government would deliver the most radical programme of devolution our country has seen and give communities control over their own destinies.
The Chancellor’s decision to cut taxes on short-haul domestic flights, just days before the COP26 summit was to begin, is scandalous. Working people and our planet will pay the price of Tory climate delay.
Delivering on the green transition presents enormous opportunities – good jobs, lower bills and cleaner air. But only if we act now and at scale. According to the OBR, failure to act will mean public sector debt explodes later, to nearly 300% of GDP. The prudent and responsible economic course is to invest in the transition to a zero-carbon economy, support households, and give British businesses a head start in the industries of the future.
But with no mention of climate in his conference speech and announcing policies that undermine our climate targets during the budget, we have a Chancellor unwilling to meet the challenges we face.
This Government is squandering the opportunities of the green transition to support jobs and invest in British industries and stacking up the costs for working people and future generations. Homeowners are left to face the costs of insulation on their own – and with no national retrofit plan, households face an extra £400 each year on their energy bills.
The Conservative Government has seemingly abandoned its Clean Steel Fund, leaving the steel industry and steel communities in the lurch. New industries like hydrogen are also left without the support they need. This Tory failure to support our industries risks the UK losing the global race for the Green Industrial Revolution.
There is an alternative. Labour would deliver a Climate Investment Pledge – £28bn every year for the rest of the decade. That’s investment in bringing down energy bills, affordable public transport systems, cleaner air, and backing British industries with a real plan for jobs and wages. That’s what real action on climate change looks like.
Labour has a plan to deliver for the country.
We’ll Buy, Make and Sell More in Britain by bringing jobs back to this country and awarding public contracts to British businesses, and create hundreds of thousands of secure jobs in low-carbon industries that tackle the challenge of climate change.
We’ll bring in a New Deal for Working People so people earn a proper wage, have job security, and can balance work with their lives with a right to flexible working. And we’ll always make sure work pays.
We’ll deliver efficient, modern public services that drive up standards in schools, hospitals, transport and the places we live and work.
We’ll always be on the side of British business, which is where wealth is created and where the jobs are created. We will work together with industry in a national endeavour to remake Britain and to seize the opportunities of the future.
And we will get real value for money for the taxpayer and stop the waste that is prolific under this government, with a new Office for Value for Money and strong fiscal rules. We will say how every commitment we make will be paid for.
In contrast to this Conservative government, Labour will tax fairly, spend wisely, and get our economy firing on all cylinders.