Coalition Finance Bill
I want to start by thanking the Prime Minister for her support and appointment of me as Chancellor of the Exchequer. I am committed to carrying out a policy of continued public investment while also managing the looming deficit. Since taking over this role, my entire focus has been to finalize a budget that keeps Coalition promises and continues to invest in the future of our country. Recently, the Opposition has released their own form of focused investure. However, this proposal is woefully lacking. I rise today to submit to the house this government's budget and to demonstrate to the British people why this budget is best.
Upon inspection, we see that the Opposition has chosen to continue a plan of austerity instead of investment. It is true that they have allowed for modest increases in health professionals. However, our budget radically invests in our nurses, GP’s, and other health services across the board, while also going above the opposition proposals for pay increases. That means that this government is committed, not to status quo, but working and making the investments for a stronger and more staffed NHS. But we will go further. Unlike the Shadow Chancellor, this government will not increase prescription costs. She speaks of deficit reduction, and surely this is a noble goal. But funding austerity out of the pockets of the sick and their families isn’t austerity, it’s abuse. She tells the Guardian, “the NHS isn’t free. Keeping prescription prices flat in real terms is surely not too high a price to keep the NHS going?” Unfortunately, the Shadow Chancellor left her Conservative Calculator in her office because a fifteen pence increase isn’t flat. “Is a fifteen pence increase worth it?” she asks. Veiled in that Thatcherite austerity is nothing more than holding the sick hostage and saying the NHS is the cost.
We see that when it comes to the home front, the conservative mantra is that the way things are are the the way things ought to be. While they should be applauded for finding a little bit more for student grants, they have done nothing to tackle tuition fees. They tell us that staying the course is the right way forward despite the outcry from students for relief. Labour promised that we would reduce tuition fees, and this budget does exactly that. Not by some minimal amount; but we are slashing tuition fees by one third and increasing investments by over 400%. This government knows that in order to have a prosperous country, we must invest, not only in our current citizens, but also in our students and teachers. That is why we are increasing teacher pay. But the Conservative party has continued their ways of austerity. When it comes to true investments in our teachers, they are proposing no increase. This means that our students will continue to sit in overcrowded classrooms. So while the Tory party may sit and speak of responsibility, we do not believe this responsible to leave our children in crowded classrooms. We do not believe it responsible to create wider teacher to student ratio. What our children need is and one on one teacher interaction. What that calls for is more teachers and that’s exactly what this government is proposing.
Antisocial behaviour continues to be a problem. We see that the Tory solution is nothing more than a “Keep Calm and Carry On” attitude. That is why when you look at their budget they refuse to pay for a single new officer on the street. Even in the face of horrendous knife attacks, they do nothing. That is not responsibility. That is a do nothing policy. This government is in the business of combating antisocial behavior directly with bobbies on the streets. It is shameful absolutely shameful to see the problem, but not provide a solution. So no, we reject this tragic hands in the air surrender. It is not just irresponsible to know the right thing and not to do it, it is a sin. That is why we are investing in more police officers and detectives. The Shadow Chancellor may say that this is politicising the issue. But when members of her party take to Twitter to say something must be done, this government will not play the part, “Keep Calm and Tory On”. Rather this government has a different plan-more police for safer streets.
We have insured the triple lock on pensions will continue and we have done so for the arm forces as well. We must be a government who looks to take care of, not only our pensioners, but also those men and women who fight for Crown and country bravely. This government is a government that seeks to provide those who have worked all of their lives and also for those risk their lives for the stand ever grateful for their service. Unfortunately, the Shadow Chancellor didn’t find the funds to provide the triple lock for armed forces. I find it astounding that with all bolstering winds coming from opposition ministers, they themselves can not find an armed forces triple lock. The sons and daughters of austerity do not have the shred of decency to submit a budget that looks at our brave soldiers and ensures that they and their families will be taken care of.
We are making all of this investure not on the backs of hard-working middle-class families just trying to make ends meet. We have not raised VAT, we have frozen and we have not touched public transport fares by one pence. Rather we will use this investure and offset it by increasing capital gains and introducing a 1.5% mansion tax. This tax more than 2,000,000 pounds that we find investments for every one of the wealthiest pay their fair share. The conservatives have a history of increasing VAT, and yet want to be patted on the back for not doing it this time. Yet, Mr. Speaker, they increase the fuel duty, in order to make their budget more palatable. But then to hear the Shadow Chancellor justify it by saying “at least there will be more roads” isn’t just bad policy, it’s shameful.
I would understand, had they increased teachers or police. But instead, we see the same old Tories doing the same old thing. Continuing to give tax breaks to corporations and not investing in our teachers, firefighters, police, and students isn’t just bad policy, it’s bad for Britain. But not doing it, while taking money from the pockets of workers and families at the pump, is shameful. She spoke of the damage done to the country if we increase capital gains. She tells us that it’s bad for Britain. But Mr. Speaker, let me tell you what’s bad for Britain. Reverse Robin Hood Austerity. Robbing from the sick, the poor, the armed services, and the common man and woman, while giving hand over fist to the wealthiest.
Mr Speaker, this government is committed to funding our future, investing in our public services, and making a fairer stronger Britain. This budget makes substantial first steps towards eliminating the current budget deficit, while at the same time providing for a fairer and more sustainable economy and making up for lost investment. In accordance with the two fiscal rules set out in the coalition agreement, we aim to eliminate the current budget deficit by the end of parliament and run a balanced budget from 2018. This will necessitate a reduction to the deficit of approximately £19 billion in each fiscal year going forward. We believe that savings processes already in place and our economic growth programme will provide a substantial boon towards those efforts. We have delivered on most of our key pledges - to increase the personal allowance to give everyone 10,000 pounds tax free, to give small and medium enterprises a much-needed corporate tax cut, and to more than double the size of the pupil premium to increase the resources available for the schools most in need. This is the budget hardworking families deserve.
I commend this budget to the House
Calvin Ward Labour MP for Tottenham
Mr Deputy Speaker I would like to thank the Right Honourable Member for sending me an advanced copy of his statement and I would like to welcome him to his new post, may he last there longer than his predecessor and with significantly fewer scandals. Now Mr Deputy Speaker I wish I could stand in this chamber and do as the Chancellor did, I wish I could stand here and talk about my party’s Alternative Budget, it is after all a thing of beauty drawn up by my Right Honourable Friend the Shadow Chancellor. But that being said Mr Deputy Speaker whilst our party budget makes all the tough choices, reduces the deficit, cuts taxes, and creates targeted investments to secure the long term future of our public sector we are not here to discuss that particular document, we are here to discuss the Government’s budget. Now I’ll admit I understand why the Chancellor would rather not talk about the budget, it is after all a complete failure by every economic metric out there, but talk about it we must.
Mr Deputy Speaker this is a budget of u-turns, broken promises, and of failure. At this point I do wonder whether the British people will ever trust the Prime Minister, her party, or her coalition partners again when they say anything. The last budget, as short-lived as it was, broke the Government’s deficit reduction pledge of 1.2% in the first year by about 1%, this budget is even wider of the mark reducing the deficit as a % of GDP by 0.03%. In other words Mr Deputy Speaker the British Government will be borrowing even more this year than it did when the previous government were in office. £5bn may not sound like a lot Mr Deputy Speaker but when that £5bn takes the deficit to over £113bn we can see once and for all that Labour is the party of debt and the Liberal Democrats are nothing short of passive enablers if not actively encouraging this reckless profligacy. Now we know why this Government were so eager to stab our pensioners in the back, without that tactical knifing it was impossible for them to shave even one pound off of our national borrowing. Mr Deputy Speaker all of this failure comes amid the economic success of the last government, it comes at a time when consumer confidence is high and rising, economic growth is strong and inflation is stable, and unemployment is falling in both percentage and absolute terms. There is no excuse for this Government’s inability to reduce the deficit, it is simply taking another chance to abdicate its responsibility and to pass over on the tough choices, Mr Deputy Speaker this is not leadership, this is once again a nation of lions being led by donkeys.
Mr Deputy Speaker under the Treasury’s own projections next year Her Majesty’s Government will pay £51.8bn in debt interest, in other words they shall be paying over £50bn on absolutely nothing. I’m sure that this House and the country will be very interested to hear what that money could be spent on so allow me to indulge that particular line of thought. Mr Deputy Speaker £51.8bn is nearly one and a half times what we spend on our armed forces, it’s larger than this country’s entire hospital budget, it’s two and a half times larger than the entire Home Office budget - emergency services and all - in fact if debt interest were its own department in the British Government it would have the fifth largest budget in Whitehall only narrowly behind the foreign office and the devolved government spendings. Mr Deputy Speaker this travesty outlines exactly why this country needs to continue with the tough choices that we on this side of the House made between 2010 and the last election. Austerity may be a politically tough pill to swallow but it is an economically necessary one so that we can pay off our debts and start ensuring that we spend money on the things that matter like our NHS and public safety. For reference Mr Deputy Speaker if we didn’t have to pay to keep our national debt afloat we could afford a tax cut that would take all earnings under £30k out of income tax altogether lifting a majority of people out of paying full stop. Mr Deputy Speaker leadership is about taking the tough choices and about crafting the long term economic plan, this government have no plan and they refuse to take the tough decisions, I don’t see any leaders on the bench opposite me either.
Now if I may Mr Deputy Speaker I would like to examine a great deal of the minutiae of this budget, let us start first on the taxation side. This budget will go down in history forever as the budget that decimated private investment into our economy, not only is the public sector crowding out private money flows by expanding aggressively but the tax reforms provided here will turn the UK into one of the highest taxing developed economies in the world. By expanding the top rate of income tax by 25% with both a rate hike and a threshold cut what this government are saying to the rich and the successful both in this country and abroad is “don’t stick around, take your money and go elsewhere”. By hiking Capital Gains tax by up to 33% in the higher rate they are saying to entrepreneurs that there’s simply no point taking the gamble and they are saying to investors that there’s no point brining the money in, the government will take a whacking great slice of the pie and you might as well chase higher returns in other G8 countries. But Mr Deputy Speaker I guess some on the left may be inclined to forgive such egregious increases in taxation if they actually allow the UK to pay its own way in the World in some capacity. With all this extra revenue there is an argument for the deficit to actually come down for the first time under Labour since the early 2000s, sadly despite nearly £25bn in additional revenue in direct taxes alone the deficit is as I have previously mentioned increasing this year. This is bull in a china shop economics, the politics of a child in a chocolate factory. The Government see something and they take it, whether that be your hard earned income, a slice of your house, or your investment returns.
Mr Deputy Speaker I would like to pause briefly here to congratulate the Government on actually remembering to keep the facade of caring for our nation’s pensioners, of course by this point everyone and their grandmother knows that the only time Labour cares about the old is during an election cycle, but image is everything I guess when your talking about the Labour Party.
Now Mr Deputy Speaker the Government has a line it has been pushing for a long long time, they alone understand students and they alone have their best interests at heart therefore it is they alone who will push to cut tuition fees. Mr Deputy Speaker this must surprise a lot of students because the Liberal Democrats joined us on this side of the House in voting for the £9000 tuition fees less than half a decade ago, another u-turn from the party that at this point should come with turn signals. Even more surprising though is the u-turn from Labour who commissioned the review which recommended the new tuition fee rate and joined us in proposing its implementation before the resignation of Gordon Brown. Mr Deputy Speaker those who propose reducing fees say that it is necessary because debt is crippling our students and freezing the poor from going to higher education, this is pure baloney. The number of applications is up, the participation gap between the rich and the poor is falling, there is more to do to help those on Free School Meals attend but that is why the Conservative Party budget increases maintenance support by over £100/yr and protects the Widening Participation Fund. Mr Deputy Speaker reducing tuition fees and instead massively expanding government involvement in higher education is nothing but a populist statement designed to see Labour support increase in metropolitan areas and to allow the Liberal Democrats to give themselves a ritualistic cleaning from their so so sorry routine. This Government has no plan for higher education, they have a headline, and “Labour takes Cambridge” at the next election will do nothing to help students needing the best quality education to compete on the World stage when it comes to the world of work.
Mr Deputy Speaker the Chancellor is very proud of his party’s record on healthcare. He claims, as many in his party do, that the creation of the NHS was a Labour achievement, now ignoring the fact that the NHS came from the Beveridge Report, a report commissioned by the Conservative-led Government and led by a Liberal, one would be forgiven for thinking that the Government were actually doing anything to help the NHS. A 6.5% real terms funding increase sounds good Mr Deputy Speaker but what does it achieve? The Government’s plans for hospitals in our country is so small-c conservative it doesn’t actually exceed my own party’s plan, a plan which actually manages to reduce the deficit and reduce spending as a percentage of GDP. The same goes for primary healthcare provision in this country, although one wouldn’t actually know that as the Government have made themselves what presumably amounts to another “clerical error”. Mr Deputy Speaker I will ask this Chancellor directly the same question that his predecessor lost his job trying to answer, is this an error or is it Government policy? Will the Government be building 25 new clinics or the 100 it would need to to reach the goal stated in cell D18 under Health? This Government really needs to start checking its homework, but then if you aren’t showing the Cabinet your budget why bother showing the spell checkers and the Civil Service either? Mr Deputy Speaker this is not a Government of the NHS, this Government is failing frontline NHS services, and it is borrowing more and taxing more to do so.
Let us finish Mr Deputy Speaker in the Home Office where a particularly shocking revelation comes to greet us. Mr Deputy Speaker the Labour Party are convinced that they are the only party to keep our streets safe. The Liberal Democrats are at least honest when they say they want to flood our streets with criminals by releasing prisoners but Labour always said that the safety of the streets was their top priority, so why then are this Government cutting down on the number of prison place this year? Prison population is increasing, prisoner density is increasing, prisons are getting closed to overcrowding, so this Chancellor, or maybe the Foreign Secretary, decides not to build any new places and instead let one thousand cells fall into disrepair? Mr Deputy Speaker if the Government’s first duty is to keep the people safe then this is dereliction of duty of the highest order, it is contemptible that this Government would actively pursue a policy that would see our prison workers less safe or would see prisoners prematurely let back into the community. Assaults on prisoners are up, assaults on prison staff are up, under this Government assaults in prison are going to grow faster and higher than ever before.
Mr Deputy Speaker as I said before this is a budget of broken promises, u-turns, and failures. There is no vision to this budget, there is no plan, there isn’t even a goal, this budget is a child’s pick n mix of policies ranging from the short-sighted to the stupid and from negligible to actively harmful to our society. The Government promised deficit reduction in their manifestos and in their coalition agreement, Labour promised 1.2% of GDP in Year 1, all of these promises lie before us today broken and shattered. The Prime Minister wants to win some university seats from her coalition partners so tuition fees, a policy which is increasing participation and breaking down barriers, are being phased out so the PM can stand in Cambridge over the broken career of the former Deputy Prime Minister. The NHS is being invested in but hospitals are being let down and we find yet more clerical errors in the provision of primary care, our NHS is not safe with a Labour Party that cuts it in Wales and then under delivers in the rest of the UK as well. This Budget must join its predecessor in the bin marked “waste paper”, this Chancellor must join his predecessor in the bin marked “political careers”, this country must have better. Only the Conservative Party have a long term economic plan, only our vision reduces the deficit and invests properly in the future of our nation, only our party have the clarity of thought and the singleness of execution to get this job done. Labour have failed again and again, this Budget is just another footnote in an already growing list of failures and disasters.
Conservative MP for North East Bedfordshire
Leader of the Opposition
Prime Minister (2014)
Parliamentary Experience: Novice (21)
Media Experience: Capable (58)
Policy Experience: Novice (29)
I'd like to begin by reminding the House why we find ourselves having this debate in the first place. No, we're not experiencing dejavue, as much as it may appear otherwise. We're back to debating the Government's budget once again, Mr. Speaker, because they couldn't be bothered to get it right the first time. Or the second time. It took them three tries simply to deliver a budget that was worthy to be presented for debate. The carelessness and utter incompetence with which the Government has handled the most important responsibly they are tasked with, determining the country's economic strategy, is indicative of a Government unfit to govern.
As I listened to the Chancellor's speech, I couldn't find myself wondering what was worse: that the Cabinet didn't even see the Government's second budget draft before it was released, or that they saw this draft and actually gave it the green light. Because while this budget may not be riddled with careless mistakes, Mr. Speaker, it is full of misguided, backwards, and anti-growth financial policies that will reverse the progress of the previous Parliament and undermine our economy's growth.
Let's start with the matter of deficit. The Chancellor has the nerve to stand at the dispatch box and tell the British people that his budget makes "substantial first steps" in reducing the deficit. The only way this statement could possibly be true is if the Chancellor's idea of a "substantial first step" is to actually increase the deficit, which is exactly what this budget does. It's one thing to disagree over policies, Mr. Speaker. It's another thing entirely to willfully and knowingly ignore the facts. The fact of the matter is this: anyone who even glances at the Government's budget for a mere 60 seconds will be able to include that it expands the deficit, and that the Government has broken their promise to reduce it.
The Chancellor argues that our party's budget is one rooted in austerity, while there's is rooted in investing in Britain's future. Which is interesting, Mr. Speaker, considering that the Government invests less in primary care, less in rural broadband connectivity, and less on environment spending. It's odd that the Chancellor would want to bring up investment at all given how horribly mishandled their investment strategy is. The Government is building new hospitals, but won't be hiring the doctors and nurses needed to staff them. The demand for space in prisons is rising, but the Government won't be investing in prisons to meet that demand. The Government is borrowing money and raising taxes to invest in ludicrous spending projects, while radically jacking up capital gains tax so that businesses will be starved of the investment they need. This is what happens when you put Labour in charge of our country's economy: we're left with higher spending, higher taxes, and no cohesive plan for our economic future.
As a result of this budget, Mr. Speaker, hardworking Britons across the country will be worse off. It will be harder to purchase your own home, harder to take a loan out from a bank, and harder to attract investment. With this most recent draft of the budget, the Government is sending a message to the global community that Britain is no longer open for business. They have failed to hit the mark, and have reminded all of us why Labour can't be trusted with the keys to the Treasury. Their mismanagement and radical spending wrecked our economy the last time they were in government, and with this budget they seem dead set on wrecking the economy all over again.
This budget is one that has a lot to be said for it. I believe that the Chancellor has touched on most of the important points on a wide-ranging scale, and the Leader of the Opposition raised predictable criticisms. It is inevitable that both major parties will feel the need to populate this debate with rhetoric. I want to talk about this budget honestly, from the position of someone with a background in economics & as a former Treasury minister, and as someone liberated from the two-party system.
Unlike the last budget, attention to detail is something that I find to be a major point of praise for the work of our new Chancellor. That is not always for the best, of course. Continued rises in beer and wine duties will be regressive and harm the British pub trade, which many rural areas - like Montgomeryshire - will suffer most from. This said, looking through this budget for points to criticise - and, I must assure the house, that was not a task done without the due thoroughness - I find very little that is disagreeable.
Looking past the larger policy points, which are for the most part positive - generally easing the necessary but now outdated austerity programs of the last term, and spending on public services - smaller policies are the highlights here for me. This budget gets the big picture right, yes, but also manages the little things well for the most part. Freezing railway fares is an example of the sort of simple policy that will help the poorest, at low cost, that this budget is littered with. The same goes for government plans to boost capital spending, a long-term policy that will yield rewards for the next generation.
I would have liked to see deficit reduction be given some priority, however, ultimately, I see the logic in borrowing more this year as a way to grow and make our debts manageable. There is a sense to this budget, and it feels like it forms a coherent plan for the national finances. I understand how difficult the Treasury is to work in, and I understand that the scenario changes. My concerns about increasing the deficit are fairly neutered as a result of those experiences. Just as I backed coalition budgets as part of an imperfect mid-term plan, I feel able to back this budget’s imperfect mid-term plan too.
Before I bring my speech to a close, and vote for this budget, I want to bring up a policy that is - for me - the star of the show. This budget more than doubles the pupil premium. For me, the pupil premium was the best thing that the Cameron-Clegg government did. I am immensely proud to see that it is continuing as policy, and being bolstered so much by the current government. The attainment gap is a stain on the notion of meritocracy in this nation, and it must be addressed.
This government’s pupil premium boost will be of huge help to schools across England. I am happy to see that boosts to the Welsh Block Grant will be substantial enough to see Wales be given the chance to adopt a similar set of policies. My hope now is that more Welsh parties will join me and my friends in the Welsh Liberal Democrats in using this funding to back the creation of a Welsh pupil premium of this level or higher.
So, to conclude, Mr Speaker, I will be backing this budget. It makes some tough decisions in a measured, kind, and calculated way. It is to the benefit of Montgomeryshire, the benefit of Wales, and the benefit of Britain on the whole. I am confident that rural communities like those I represent will see a good proportion of those benefits quite directly. I will have no issue with voting Aye in the division lobbies once they open. Diolch yn fawr iawn!
MP for Montgomeryshire
Parliamentary - 5
Media - 16
Policy - 3
Graham Adiputera (Lib Dem - Sutton and Cheam)
Deputy Prime Minister
Secretary of State for Education and Employment
Secretary of State for Business, Energy and Climate Change
Secretary of State for Culture, Media and Technology
Parliamentary - 22
Media - 46
Policy - 26
Deborah Carpenter | Conservative Party
MP for Hertford & Stortford (2001-present)
Shadow Chancellor of the Exchequer and Shadow Business Secretary (2014-present)
Former Chancellor of the Exchequer (2013-2014)
Parliamentary experience: Unknown (16)
Media experience: Novice (28)
Policy experience: Novice (26)