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Speech by Harriet Harman responding to the Budget

Harriet Harman MP, Labour’s Acting Leader, responding to the Budget Statement in the House of Commons, said:

The Chancellor is said to be liberated without the ties of coalition holding him back.

Mr Deputy Speaker, what we have heard today suggests he has liberated his rhetoric from its connection with reality.

A Budget for working people? How can he make that claim when he is making working people worse off and scrapping grants for the poorest students. Long term economic plan? What kind of long term economic plan when they are ducking it on Heathrow?

Northern economic powerhouse? But he’s pulled the plug on rail investment?

And as for One Nation Britain? How can he even stand and say those words when while he cuts tax credits for working people, he has not done enough to stop tax avoidance. Mr Deputy Speaker, more than seven years after the financial crisis – five of which were under this Tory Chancellor – the country is still dealing with the consequences and the recovery is still fragile.

Today’s Budget document shows growth has been revised down this year.

Of course there need to be tough decisions to get the deficit down.

Had we been in government, we would have cut spending outside protected departments and reduced the welfare bill.

So there are measures in the Budget which we will give serious consideration to.

When you’re in Opposition, the temptation is to oppose everything the government does – and believe me…I feel that temptation.

But we best serve this country by being a grown up and constructive opposition.

So while we will fiercely oppose policies that hit working people and we will expose policies that are unworkable, where the Government comes forward with ideas that are sensible, we will be prepared to look at them.

We will be a different kind of Opposition.

And I hope that this Government will reflect on how they conduct themselves.

This Chancellor is renowned for his political traps, games and tactics – but that’s not what he should be doing.

Normally it’s government that governs, whilst the opposition play politics, but this Government is playing politics with this Budget.

This Budget is less about economic strategy, more about political tactics designed by the Chancellor to help him move in next door.

Mr Deputy Speaker, the most important thing for working people is sustainable jobs, in productive firms, in a competitive economy.

Productivity is key to the virtuous circle of increasing investment, higher skills, successful businesses and rising wages.

That is the route not just to raising living standards, but the route to getting down the deficit.

When it comes to productivity, this Chancellor’s record is poor.

It’s not as if people aren’t working hard. But the things that turn their work into high productivity – skills, investment and infrastructure - are not there for them.

That’s why we in the UK produce on average 30 per cent less per hour than workers in Germany, France and the US.

Output per hour in this country is 17 per cent below the average for the G7 - the lowest we have been in the productivity league table since 1992.

It’s not enough just to publish a productivity plan. 

It’s about doing it.

Businesses are absolutely clear that infrastructure is vital for raising their productivity – whether it’s roads, rail, airports, energy supplies, broadband or housing.

A modern economy needs modern infrastructure.

But the Chancellor has: - pulled the plug on the electrification of the railways - pulled the rug out from investment in renewable energy - and flunked it on airports

And people are just weary of hearing the same old re-announcements on roads – they could resurface the A14 with the Treasury press releases about it. 

To be One Nation – you need every region to be productive, vibrant and powering ahead – not just some.

The Chancellor has made much of his commitment to devolution. But you can’t build a productive economy on a political slogan.

With last month’s cancellation of the railway electrification, the great Northern Powerhouse is starting to look like the great Northern power-cut.

He should tell the House today that he will reinstate the electrification of the Manchester-Leeds TransPennine service.

And if he doesn’t, let’s hear no more from him about that Northern Powerhouse.

And he should tell the House today end the delay on the electrification of the Midland Mainline, or let’s hear no more of One Nation.

Will he give an undertaking that he will consult fully on the announcement he’s made about Sunday trading? We know that shopping habits are changing, not least with internet shopping.

But we ask for an undertaking that he will consult fully on this with the British Retail Consortium, the Federation of Small Businesses, the Association of Convenience Stores, the Trade Unions as well as Councils.

He talks big about empowering local government in his devolution plan and the new City Deals – but look at what the Chancellor’s done over the last five years.

Local government has taken a disproportionate hit from his spending cuts.

Particularly in the North and in areas that most need economic regeneration.

The ten most deprived areas had their spending power cut by twelve times the amount of the ten least deprived areas.

Local government is key to regeneration, it drives growth throughout the country, raising productivity and crucially re-balancing our economy.

But you can’t empower local government if you impoverish it.

A key part of modernising infrastructure is building homes and we’ve got the biggest housing crisis for a generation. - With home ownership falling. - Building half the homes we need. - And the cost of renting or buying is soaring out of reach, especially in London and the South East.

We want people to be able to own their own homes.

We want to see as many people as possible fulfilling that aspiration.

Any credible housing policy must ease, rather than deepen, the housing crisis and enable more people to own their own homes.

And while it’s right to help people pass on their family home to their children, more important than giving inheritance tax relief for homes worth millions, is helping millions more people own their own homes.

Mr Deputy Speaker, what businesses wanted to see in this Budget are substantial measures to improve the skills of the work force.

He’s made further announcement on this today –but what he’s done in the past he hasn’t delivered. - The number of young people starting apprenticeships is it’s stagnating – it’s not going up. - New apprenticeships are skewed towards lower levels, whilst business are crying out for higher levels of skills. - And anyway, much of their so-called apprenticeships program is just a re-badging of existing in-work training.

Businesses also need to have the confidence to invest.

And they say they need longer term certainty in the tax relief regime.

The Chancellor chops and changes tax reliefs – cutting them back one day so that he can boast about putting them up the next.

It’s with the higher productivity you get from investment in infrastructure, people and industry that you get those sustainable jobs and rising wages that bring down the welfare bill.

Indeed one of the reasons the National Minimum Wage was introduced by the Labour Government in the first place was to tackle the rising costs of in-work benefits.

The Chancellor now claims that he wants a high wage economy with lower welfare bills – we all want that - but he’s putting the cart before the horse.

At the heart of this Budget is his announcement – heavily trailed in the press, but curiously not mentioned in the election campaign – to cut tax credits for people in work.

But doing that without an effective across-the-board plan for higher pay will make them worse off.

He’s saying he’ll cut welfare and wages will magically go up.

We say, get wages up and the welfare bill will come down.

We heard the announcement on the national minimum wage and the living wage.

But without tax credits, even the living wage is not enough for a family to live on.

And when it comes to tax cuts, we support a rise in the personal allowance and the higher rate threshold.

But we will look at the detail to make sure he is not up to his usual trick of giving with one hand and taking away with the other.

When it comes to tax, the burden of deficit reduction should be borne by those with the broadest shoulders.

Instead, he has chosen to put the heaviest burden on low paid working people.

He’s claiming to have found £12 billion in welfare cuts, but only aiming to get half that from tax avoidance.

On welfare, we back measures to get people in to work, to achieve full employment, and thereby get the social security bill down.

In our manifesto we committed to a benefit cap. 

But the Chancellor promised to protect the most vulnerable and disabled people from his welfare cuts.  And if he goes to break those promises, we will oppose him every step of the way.

The Chancellor has now accepted a slowdown of his original pace of cuts. We will look at the details but we will want to be sure that all this amounts to is not hitting working families one year later.

We’ve said we support pay restraint in the public sector, but it should be based on a fair process that isn’t causally discarded and fair to those on lower incomes.

In 2010 the Chancellor made that promise to the lowest paid workers in the public sector. He didn’t keep it then.

On the NHS, people will take Conservative NHS spending promises with a pinch of salt when they come from a Government that has cut funding for GP services, cut funding for cancer services, cut funding for mental health services.

He mentioned the surplus, which no-one would disagree with when economic circumstances allow.

We will look at what the Chancellor’s new proposed fiscal rule consists of when he actually spells it out.

But simply legislating for it has more to do with politics than economics.

Anyone can legislate for a surplus – the question is can you deliver it?

Mr Deputy Speaker, the Chancellor claims this is a Budget for working people but: - It doesn’t put working people first - It ducks the big decisions on infrastructure - And fails to give businesses the productivity boost they need.

And based on the measures set out in the Budget, let’s look at what the OBR says about productivity - they say his Budget will have no impact on productivity.

Mr Deputy Speaker, true to form, what this Chancellor says, and what he does are two very different things.

So that is why, it’s down to us to ensure that: - when he says it’s fair, it is fair - when he comes up with some new proposal, he consults in good faith to make sure it’s workable - And before he makes more promises, he delivers on those he’s already made.

He says he stands up for working people. What he does makes them worse off.

He says he has a long term economic plan. What he does is duck the big infrastructure projects.

He talks One Nation. But many of the measures announced today will make this country more divided.

Mr Deputy Speaker, the hopes of millions of working people are more important than his hopes of being a future Tory leader.

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