Harriet Harman

Member of Parliament for Camberwell and Peckham. Mother of the House of Commons.

Response to the Budget in the House of Commons

Response to the Budget - House of Commons 22nd June 2010


Tory budget

The chancellor has delivered his budget. It's his first budget. But we've seen it all before.


This is a Tory budget

  • that will throw people out of work,
  • that will hold back economic growth,
  • that will harm vital public services.


Yes, it's his first budget but it's the same old Tories 


  • hitting hardest at those who can least afford it
  • breaking promises

This is true to form for the Tories but it is everything that the lib/dems have always fought against!  Surely they cannot vote for this...


Bad for jobs and growth


The Chancellor says his top priority is cutting the deficit.  But in order to get the deficit down - you need to keep economic growth up and you need to keep unemployment down.


Today's Budget is bad for growth and that will make it harder to cut the deficit.


The new Office of Budget Responsibility has said today that because of this budget, growth next year will be lower than it would be under our policies to support the economy through difficult times. They have revised growth for next year down from 2.6% to 2.3% because of the harm that this budget does. 


Today's Budget is bad for jobs and that too will make it harder to cut the deficit.

The OBR forecast at page 84 that the price of his plans set out in this budget is tens of thousands of people out of work and unemployment higher next year and every year of this parliament.


They may be just numbers on a page to him.  But for people affected this is a high price to pay.  It's the equivalent in scale of putting every working man and woman in Worcester on the dole.


Its counter productive. Private sector jobs will not spontaneously emerge as we see fewer people employed in public services.  This budget will hit private sector jobs as well as public sector jobs.


The reality is that

  • you do not get borrowing down by pulling the plug on support for business
  • You do not get borrowing down by throwing people out of work and onto the dole
  • You do not get borrowing down by stifling economic growth


This reckless budget's short-sighted approach will jeopardise the recovery and make the deficit worse.  And when you do that, you end up with more tax rises further down the track.  

And it is unfair.




It's unfair on young people who need help to get work and make a decent start in life


They are scrapping the Future Jobs Fund before it has even been formally evaluated - but where every young person helped into work shows its value.


It's unfair on the regions whose manufacturing industries will suffer. They've cut the allowances to help business invest. They have cancelled the loan to Sheffield Forgemasters and snatched away the chance for new jobs.


It's unfair on families :

  • Cuts to child benefit
  • Cuts to the disability living allowance
  • Cuts to help for the jobless
  • Cuts to tax credits
  • Ending the health in pregnancy grant
  • Ending free swimming
  • cutting back free school meals



It's unfair to older people who will have to pay higher VAT and will have less money to spend in their local shops. 




The chancellor tells us that his plans are fair - that the rich will pay most. That is not true.  As the Prime Minister himself said of VAT...


"it's very regressive, it hits the poorest the hardest. It does, I absolutely promise you."


And - as the Hon member for Bermondsey and Old Southwark pointed out last week - "it penalises the poor"


And it's unfair when cuts in public spending hit those people and those areas where public services and benefits matter most.


The impact of his changes to benefits will be greatest in poorest areas.


We agree that borrowing must be brought down.  But look at who he's chosen to bear the brunt of cutting the deficit.


The area most affected by his austerity policy, where they will see the biggest fall in average incomes, is Merseyside.  The area least affected by his austerity policy - least affected by the fall in income will be Cheshire.   Yes, which includes his own constituency.


This is not a fair budget, it will entrench unfairness for the future.


Broken promises


And the VAT rise makes this a budget of broken promises.


Before the election the prime minister said he had no plans to put up VAT.

And now in his first budget he puts up VAT.


During the election campaign the Lib/Dems attacked what they called the Tory secret VAT bombshell. 


Little did we know that the lib/dems had their own secret bombshell to drop on us -that they would vote for it.


False excuses


The Tories present this budget but they try and evade responsibility for it.


They try and justify their broken promises saying that things have changed. That things are worse than they realised.


But what is this new information? The OBR forecasts are better than we predicted at the time of the March budget...

  • less borrowing than expected
  • lower unemployment than expected - because of our actions.


And the government cite new information from abroad - the problems of Greece.  Greece is in a completely different position to us.


  • they are still in recession
  • they do not control their interest rates and
  • their debt is over 115% of their GDP
  • Greece is no alibi for this budget.


And nor should they pray in aide the story of Canada's budget cuts. Canada's deficit reduction was taking place as Canada's economy was boosted by strong growth in their neighbouring economy and main export market - the US.  Our export market is the EU and growth there is sluggish. 


That's why president Obama wrote to his fellow G20 leaders this week urging them to turn away from the rush to austerity. 


Yes, deficits must be reduced but we must not risk undermining the fragile global recovery.


This is a budget based on rewritten history and false excuses.

They say there is no alternative but the truth is - this is what they want.


This budget is not driven by economics. It's driven by ideology - their commitment to a smaller state.


This is their choice


The Chancellor claims that he has no alternative - but the OBR last week clearly stated that our plans would have more than halved the deficit over 4 years.  No - this austerity budget is their choice, and right now it's exactly the wrong choice.




And this reckless, Tory budget would not be possible without the Lib/dems.


The Lib/dems denounced early cuts - now they are backing them.

They denounced VAT increases - now they are voting for them.


How could they support everything they fought against?

How could they let down everyone who voted for them?

How could they let the Tories so exploit them?


Don't they see that they are just a fig leaf.

The lib/dem chief secretary is nothing more than the Chancellors fig leaf.

The deputy PM is nothing more than the PMs fig leaf.

[And what this fig leaf conceals is not a pretty sight]


The Lib/dem leaders have sacrificed everything they ever stood for - to ride in the ministerial cars and to ride on the coat tails of the Tory government.


22 lib/dem ministerial jobs have been bought at the cost of 10s of thousands of people losing theirs.


The lib/dems used to stand up for people's jobs - now they only stand up for their own.


Look at the Business Sec. The Hon member for Twickenham. 


Mr Deputy Speaker, the House has noticed the Business secretary's remarkable transformation in the past few weeks.... National Treasure to Treasury Poodle.


They have no mandate for this Budget.  This budget has no legitimacy. 


It is clear the lib/dems will not speak up for jobs  - we will.

It is clear that they won't fight for fairness - we will.

It's clear that they will not protest against Tory broken promises - we will.

Measures We Support


Mr Speaker, we will support measures that are fair and will help the economy.


We will support the increase in Capital Gains Tax.  It will help stop people avoid income tax by getting payment in capital.  An avoidance of tax which is even more objectionable when we need to cut borrowing.


And we welcome the retention of the 50p tax rate.


This party was the first to call for a levy on the banks. The Government is going ahead. We will support this move - although I note the banks will get a corporation tax cut to compensate.


We will support the increase in personal allowance - but the public, hit by a rise in VAT, will rightly feel shortchanged.




Mr Deputy Speaker, in the face of a global economic crisis this has been a difficult time for businesses and families - not just here, but all around the world.


What this country needed was a budget to

  • Support economic growth
  • Protect jobs, and
  • Cut the deficit fairly


What we got was a reckless budget that pulls the rug out from under the economy. 


Predictably the Tories don't care and aren't listening.


The lib/dems are wringing their hands and well they might.  But that is not good enough.  They should think about their constituents who will suffer if this budget goes ahead. 

The lib/dems should think again - but whatever they do, we'll vote against it.




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