Steve Barclay

The Defence Secretary opened today’s debate by praising the former Prime Minister and former Chancellor. That may come as a surprise to them both, given that earlier this year the Defence Secretary resigned from the Government, saying in his resignation letter that he could not serve alongside them because of the lack of direction and the drift. It is less than a year since Labour Members cheered and waved their Order Papers at the Budget from the right hon. Member for Leeds West and Pudsey (Rachel Reeves), and it is striking how much continuity there is today with measures that they cheered yesterday, despite being so unhappy with the previous Chancellor. To illustrate that, I will highlight certain phrases and words we hear from Labour Members on a regular basis, starting with perhaps the most frequent, which is the need to have no austerity. An “end to austerity” is a constant refrain—[Interruption.] I see those on the Front Bench nodding. They might be surprised to see that the OBR report states on pages 21 and 115 that there is an £11 billion shortfall from the year after next for all Departments, other than protected Departments such as Health. The Government have already said that they want to commit to Defence. I do not think the party that stands saying “24 hours to save the NHS” will cut funding to the health service going into an election, but perhaps that is its policy. If not, according to the OBR, Labour will be cutting funding for unprotected Departments by 2.6% in those final three years. There is a paradox about that: only last week, the Defence Secretary came to the House to say that there is urgency in national resilience, yet Departments like the Ministry of Housing, Communities and Local Government, which would deliver that national resilience, will be the same unprotected ones facing cuts, so Labour Members are cheering a Budget in which there is austerity baked in—[Interruption.] They shake their heads. Labour Members may have been told by the Labour Whips, “Do not worry—the spending review will fix that”, but having run a spending review, I know that a spending review allocates the funds but does not decide on the quantum. They may have been told, “Do not worry, there will be a election”—maybe there will—but yesterday the Prime Minister was saying the opposite. Either they believe a Budget that has austerity baked in, they think the spending review will fix it, or they do not believe the Prime Minister and think an election will avoid the issue entirely. But it is an odd position for Members who come to the Chamber talking about an end to austerity to then be cheering a Budget where that austerity is in the Red Book numbers. The second paradox is that Labour Members talk about breathing space. There are policy areas that show continuity with last year’s Budget: the 2p on property income tax is a repeat of last year’s 2p increase—4p in all—with both measures starting at the same time, in April next year. The OBR makes it clear that that will lead to fewer people entering the rental market, fewer landlords and prices going up. The Budget includes a bank tax, again repeating a trick of the former Chancellor, who thought, “If I tax employers with national insurance, it will not go through into a jobs’ tax”, so we have a bank tax on the basis that that will be more palatable. But do not take my word for it: The Times leader on 16 October said it will be a tax on growth, and one of Labour’s favourite advisers, Lord O’Neill, said it will “hobble” growth.