Debate: Can Labour Budget fix UK’s problems?

Cathy Newman: Tracy Brabin, you had one job as the Labour Party, to boost growth. That was your number one mission. The OBR shows that tax rises, that you’ve done today, a whole load of them record high, they’re going to suppress growth, aren’t they?
Tracy Brabin: This is absolutely clearing the decks, wiping the slate clean from Rachel. And let’s not forget, actually, the historic moment of having a female chancellor of the exchequer is quite something, breaking that glass ceiling. But what she’s done is absolutely focus on working people. Here in West Yorkshire, 40,000 people are going to benefit from the rise in the minimum wage. We’re going to enable 100,000 people to go back to work, who are currently economically inactive because they just can’t get well enough to get to work.
And that focus on housebuilding, which will obviously grow the economy. We’ve got 1,500 households who are currently in temporary accommodation, 500 of those have got children. And enabling those to get into affordable housing, that’s how you grow the economy. But also and it was in the speech, working with mayors on our growth plan, working with government to turbocharge our economy with those single settlements that was also mentioned. I mean, the future does look much better than it was a year ago.
Cathy Newman: The growth peters out by 2026. But I just want to pick up on what you said about working people, because Fiona Conor here, she employs a lot of working people. That increase to employers’ national insurance, bigger than anyone expected, what impact is that going to have on your business, did it worry you?
Fiona Conor: I think it was quite depressing today with the national insurance hike because we didn’t expect it. And for me, as a small business and we make electric radiators in Leeds, that will cost us about £44,000 a year. And that doesn’t include my future forecast of employment, future forecasts of infrastructure and innovation and everything else. So we’re going to have to readdress my own budgets now.
Cathy Newman: And does that mean you’re going to have to lay staff off or you’re going to have to suppress pay rises? How’s that going to look?
Fiona Conor: I think to look at the budget now, I think I wouldn’t probably lay anybody off now. I think we need a period of stability after today. That is what we need as a country really. I’m hoping with the spin on capital gains, that was quite a good move, really. And that will give me just..
Cathy Newman: Just explain why that’s a good move for you.
Fiona Conor: Because we need investment. We’re an innovative company. We need investment which will actually create job creation. And it will mean that investors will look at us as a business.
Cathy Newman: I mean, it’s interesting you say that because, you know, the mantra of the budget was invest, invest, invest. Tracy, I know you’re excited about the confirmed funding for your transport projects in your backyard but a lot of it you were expecting anyway, and it’s sort of pretty small beer in some ways. But the net impact, according to the OBR of this budget, will be lower business investment. Are you worried about that?
Tracy Brabin: I don’t think anything was set in stone. And the fact that mass transit was mentioned in the budget was really reassuring because it’s a phenomenally expensive project and you run a brilliant business. But I do know that some of these decisions were very difficult for Rachel to take. She did protect those smaller businesses with four employees on the minimum wage, and they are exempt from some of these challenges. But certainly when it comes to innovation, I know that part of the challenge is to get people to college onto those courses. And that’s why it was really important that we saw 300 million in further education colleges, because businesses are telling me not only do we not have the skilled workforce, we can’t get our skilled workforce to our business either. So as a society, we pay a bit of a price.
Cathy Newman: I mean, do you feel protected, to use Tracy’s word?
Fiona Conor: No, I don’t feel protected because I really believe that we are the backbone of the country. SMEs (small and medium sized enterprises) are the backbone. Yeah, 61% of the people in the workforce are SMEs. And we are responsible for job creation. And I think actually suffocating and suffocating our profits, we’ve now got to make loads of adjustments, and where’s that going to leave us? I mean, I’ve only got £34,000 NI and that is huge for me. But I’m only talking on behalf of my company. Some companies today and some SMEs will have to make redundancies.
Cathy Newman: So really it turns out that it does affect working people, doesn’t it? Employers’ national insurance. Let’s get that straight.
Tracy Brabin: But businesses also need a workforce that’s healthy. So we need a better NHS, it needs a workforce that can get around. We need transport. We need better schools and a chance for people to get in and get on. So this is a tension that I don’t think Rachel took lightly, that’s for sure.
Cathy Newman: Let me put that point about the NHS to Saffron Cordery, who’s in London for us from the NHS Providers. That increase, more than half the tax rises will go straight to the NHS. But NHS England is already spending £14 billion more than the Treasury allocated. Is she going to have to come back and ask for further tax rises? Is this going to be enough for you?
Saffron Cordery: I think it’s fair to say that what we’ve seen in today’s budget is incredibly welcome, coming on the back of many years of insignificant investment in the NHS. So I think it is fair to say that this is really welcome. I think that there is, however, a long way to go. We know the challenges facing the NHS – 7.6 million people on the waiting lists, really long waits for mental health and community services. A&E performance isn’t doing what it should, so we know that there are big challenges there, I think…
Cathy Newman: And so the chancellor might have to come back for more? Further tax rises. You’re not saying this is enough?
Saffron Cordery: No, I think this isn’t enough. I think what we have seen is some really important steps forward in terms of capital investment in particular. And that’s really, really important. So we’re seeing £1.5 billion being invested in surgical hubs and we’re seeing £1 billion for rebuilding those RAAC hospitals, which is absolutely critical. That’s a safety critical issue. And also we’re seeing some money going towards getting through that backlog of maintenance that the crumbling NHS estate needs. But what we aren’t seeing is huge increases in terms of day to day running costs.
Cathy Newman: When could you meet that crucial target of waiting times? No longer than 18 weeks. Can you see that on the horizon or no?
Saffron Cordery: I think that that’s going to be towards the end of this electoral cycle. And I think, you know, the figures we’ve seen today, the 22 billion for running costs, will be allocated quickly, pretty quickly. And we’ve got to bear in mind those run over two years. So that’s around 11 billion each year rather than being 22 billion for this year. But this investment is welcome, particularly compared to other government departments.
Cathy Newman: Briefly, are you disappointed that there was no specific allocation for social care?
Saffron Cordery: I think that was the point I was just about to come onto, which is the NHS absolutely depends on social care. The settlement for local government is around 1.3 billion with an expectation that 600 million goes to social care. I think you have to ask local government if that’s enough. But the NHS absolutely critically needs a well funded, reformed NHS.
Cathy Newman: Let me put some of those points to you actually, first, Fiona. I mean, do you support this extra health spending? If only that, it means that your workforce might well be healthier?
Fiona Conor: Yes, I think there needs to be a need to give investment to the NHS. We all know that the infrastructure needs a lot more finance. I think turning on its head, I mean, I gave a 5% wage increase to our employees in May, based on productivity. And what we’re doing is we’re giving five 7% wage increases to public services with, I think, what was decided, was it 2% productivity or something? I think it’s a mismatch.
Cathy Newman: You want to sort of link, the NHS needs to have this money, but there needs to be reform attached to it.
Fiona Conor: Yes, definitely.
Cathy Newman: Tracy. No strings attached on this?
Tracy Brabin: Certainly that’s the way that Wes Streeting is looking at this, isn’t he? Reforming the NHS. You can’t keep just pouring money into the crisis management. And here in West Yorkshire, we’re the home of the NHS, so I’m also pleased to see that the investment zone funding, which is going to help us with new ideas and innovations around health, tech and life sciences, you know. We are really specialisms here in West Yorkshire. So I think that reform is really important. That we have prevention rather than all of the crisis management.