All the warning lights were flashing red at the recent Budget. The cost of household essentials is spiralling, while the Office for Budget Responsibility predicts a 17 year pay squeeze. The Chancellor has added more to the national debt in his first year than any in history, while the pound weakens. Poverty among children and older people has risen by 700,000 in five years.
Now more than ever we need government action, yet the Budget proposals being debated in parliament this week represent “no change”. One of the world’s oldest political parties has run out of steam.
Take the Chancellor’s decision to cut the Bank Levy, which was introduced to make the big banks pay a fair share after the financial crisis. This is a giveaway to our largest banking institutions worth nearly £5bn. The same old Tories looking after the same old interests: the Prime Minister’s “fight against burning injustices” hasn’t left a scratch.
Though austerity may be over for a few, the cuts continue for the many. Days before the Budget, Sir Tony Hawkhead of Action for Children warned of a “crisis” in our children’s services. The Local Government Association agreed, suggesting there will be a funding gap of £2bn a year by 2020. This means less support for foster care, adoption and Sure Start centres.
The choice between giving tax breaks to our largest financial institutions or providing better care for our children should have been simple. Yet it is the bankers that are being let off the hook.
It’s not just what was in the Budget, it’s what is being left out. Despite a few headline grabbers, the Chancellor did nothing to tackle the cause of the housing crisis – the government’s failure to build genuinely affordable homes. The stamp duty exemption in this Budget – much hailed by the Chancellor – will increase prices for all first time buyers, and reward existing home owners. No increase in homes built, just tinkering around; a continuationof the same, tired strategy.
The Paradise Papers gave us all an insight into the truly disgraceful extent of tax avoidance by some of the wealthiest in our society. Money that we could have invested in our economy to drive growth. No effective measures were introduced to tackle avoidance or evasion, despite the recent revelations. This should be a national scandal.
It seems only Labour understands the huge challenge ahead, and how to get to grips with it. We know that after eight years of starving our economy, investment is the only route to prosperity. That’s why we will be pushing the government in Parliament this week to look again at its steady-as-she-goes approach.
We’ll be challenging the £5bn being handed to the banks by pushing for the money to go to children’s services instead. We’ll demand the government looks again at its lacklustre approach to housing and acts to tackle tax avoidance.
Anyone can see that these eight years have widened inequality, hitting those groups that were already struggling the hardest. Yet the data can be hard to find, as the government refuses to publish an assessment of the impact of its policies. That’s why we are demanding a full equality impact assessment of this Budget. We will hold a tired, broken, inactive government to account. If it can’t tackle the problems facing the regions and nations, or the demoralisation in our overstretched public services, this government should step aside and let Labour do the job properly.
Peter Dowd is the Labour MP for Bootle and shadow chief secretary to the Treasury.