“We needed ambitious action” – Dodds’ speech in response to spending review

Anneliese Dodds
© UK Parliament/Jessica Taylor

Below is the full text of the speech delivered by Shadow Chancellor Anneliese Dodds in parliament this afternoon in response to the spending review.

This spending review was a moment for the Chancellor to take the responsible choices our country needs. It was an opportunity to protect key workers, secure the economy and recover jobs in every part of our country. During this crisis we’ve seen who’s taken responsibility. Community health workers working round the clock to keep us all safe. The teachers who kept working so key workers could too. The delivery drivers and shop staff who made sure we had critical food supplies. Earlier this year the Chancellor stood on his doorstep and clapped for key workers. Today, his government institutes a pay freeze for many of them.

This takes a sledgehammer to consumer confidence. Firefighters, police officers and teachers will know their spending power is going down, so they will spend less in our small businesses and on our High Streets. They will spend less in our private sector. Many key workers who willingly took on so much responsibility during this crisis, are now being forced to tighten their belts. Now, not in the medium term to which the Chancellor refers, now. In contrast there’s been a bonanza for those who have won contracts from this government. Companies with political connections have been ten times more likely to win government contracts.

So many businesses have worked tirelessly through this pandemic – to support local communities, keep critical supplies going, and to produce drugs and vaccines – at cost-price, in AstraZeneca’s case, working with some of our country’s best scientists. But in its response to this pandemic, the Conservative government has wasted and mismanaged public finances on an industrial scale. £130m to a Conservative donor for testing kits that were unsafe; £150m for facemasks and £700m on coveralls that couldn’t be used. A £12bn hit to our economy because the more effective, shorter circuit breaker was blocked, and a lengthier, more expensive lockdown put in place instead. £12bn – so far – spent on a test and trace system that is still not working. And today, news of £10bn in additional costs for PPE, at least partly down to the Conservatives’ lack of pre-pandemic planning.

This waste and mismanagement is part of a longer-term pattern – showing that claims today around levelling up simply don’t match the evidence. Hospitals in Liverpool and Sandwell left unbuilt, over deadline by years and over budget by hundreds of millions of pounds. Not a single ‘starter home’ built, despite almost £200m being spent. Northern Powerhouse Rail still not even approved, six years after being announced. The courts modernisation programme three years behind schedule, letting victims down, up and down this country. People in the North more likely to have been made redundant during this crisis, holding everything else equal.

Photocalls aren’t enough, we need delivery – like Liam Byrne’s promotion of green manufacturing in the West Midlands and the work of Labour mayors and councils across the country. And we need a government in Westminster that takes its responsibility towards all four nations seriously. That means informing the finance minister of Northern Ireland about the shorter timescale for this spending review ahead of time and fulfilling the ‘New Decade, New Approach’ commitments.

It means the doing the right thing by the people of Wales to repair flood damage and make safe legacy coal tips. It means ending the barney between Westminster and Holyrood and instead working together in partnership to protect jobs and livelihoods. And it means a shared prosperity fund which is effective because it’s delivered, not on the whim of Conservative ministers, but from our devolved governments and our regions. The ‘levelling up fund’ the Chancellor just announced – his rabbit out of the hat – yet again involves MPs, just as with the Beechings reopening programme, going to ministers and begging for support for their areas. Rather than that change being driven from local communities. So much for taking back control, this about the centre handing over support in a very top down manner.

Now, Labour has been clear about the responsible choices we wanted the Chancellor to make today – to recover jobs, retrain workers and rebuild businesses. To recover jobs, Labour called for £30bn of capital spending accelerated into the next 18 months, focused on green initiatives, supporting 400,000 jobs and bringing us in line with countries like France and Germany. This government’s ambition is for half that number of new jobs. To retrain workers, we needed an emergency programme to support people back into work. But Kickstart has been slow to get started and the skills offer for those over 25 won’t start until April.

The Chancellor said at the beginning of his speech that our economic emergency ‘has only just begun’. Try telling that to people who’ve been out of work since March. And Restart announced today, must meet three key tests to be effective: it should help people who need it most, not cherry pick. It should be up and running as soon as possible – yet it appears only a fraction of Restart funding will be available next year. And Restart must involve local actors who know their communities, not be imposed from Whitehall. And of course job search support ultimately only works if sufficient new jobs actually exist. That’s why we needed ambitious action to boost our economy and to support our businesses.

To rebuild business, we called for a National Investment Bank and I welcome the announcement of a new UK Infrastructure Bank, having lost valuable years since the Green Investment Bank was sold off. Now the Chancellor must boost its firepower and he must deliver on his Department’s responsibility for the drive to net zero. We’ve known since the Stern report that the climate crisis is the biggest long-term threat to our economy. Yet far too often this spending review locks us into a path that will make the transition to net zero harder, not easier – locking our economy out of the green jobs of the future.

To rebuild business the Chancellor also needs to listen to business. We are less than a week from the end of the lockdown – yet we’ve heard nothing about whether extra support will be provided through the Additional Restrictions Support Grant, for areas subject, once again, to tough restrictions. And the Chancellor is still threatening employers with an increased contribution to furlough in January at the worst possible time for increasing and building confidence.

Mr Speaker, in less than 40 days, we are due to leave the transition period. Yet the Chancellor didn’t even mention that in his speech. There’s still no trade deal. So does the Chancellor truly believe that his government is prepared and that he has done enough to help those businesses that will be heavily affected? Will he take responsible action also to help those excluded from government support? Why is he still refusing to make the speedy fixes to Universal Credit Labour has advocated, which would aid the self-employed? And why won’t he provide families with certainty, by ensuring the increase in Universal Credit is continued beyond April?

The IMF has made clear, time and time again, that now would be the worst time to slam on the brakes and put the car into reverse. They have called for a ‘meaningful additional push’ from our government; to “maintain fiscal support until the recovery is on a sound footing”. The UK’s GDP is 10% smaller now than it was at the end of last year. We’ve seen the worst downturn in the G7. We needed ambitious action today to stimulate growth and maintain demand. And we needed this government to take responsibility for the real reasons why people and communities are being held back, up and down our country.

Over the last ten years, child poverty has risen by 600,000, we’ve had the worst decade for pay growth in eight generations. The cost of childcare has risen twice as fast as wages. The number of young apprentices has plummeted. Last quarter we saw the highest level of redundancies on record. Social care is in increasing crisis, and despite his party’s manifesto promising a “long-term solution”, we’re still waiting.

In the press it was trailed that the Chancellor would be moving 20,000 jobs out of London. Yet cuts to local authorities over the last ten years have seen 240,000 jobs lost – twelve times that figure – with the hardest hit communities often those in the North, Midlands and South West. Today, the Chancellor could have matched his government’s promise to do ‘whatever is necessary’ to support local authorities through this crisis – he did not. And yet again, he showed his government’s lack of confidence in its own measures, by failing to provide an equality impact assessment.

Mr Speaker, the measure of this government won’t be the number of press releases it issued during this crisis or the number of pictures it published on Instagram. It will be the responsible action it took – or didn’t take – for the sake of our country.

Next year, the eyes of the world will be on the UK as we assume the presidency of the G7 and of the UN Security Council and host the COP26 summit. Yet now is the time the Chancellor has turned his back on the world’s poorest by cutting international aid. It’s in Britain’s national interest to lay the foundations for economic growth across the world – no wonder many British businesses have condemned his move.

And businesses have been more and more vocal about the problems with this government’s last-minute approach – always one step behind, when we need to plan responsibly for the future. We must learn the lessons from previous failures, and ensure that the next challenge – the roll-out of the vaccine – is dealt with as efficiently, effectively and as speedily as possible.

Next time, Mr Speaker, we need a comprehensive spending review which takes responsible choices, to build a future for our country as the best place in the world to grow up in, and the best place to grow old in. People should have opportunities on their doorstep, not at the other end of the country. Everywhere in the UK should feel like a good place to set up home. That’s what the Chancellor must deliver.

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