Budget 2021: key points from Rishi Sunak’s speech, alcohol duty overhaul, public sector pay rise

Shadow chancellor Rachel Reeves insisted that in the long history of the British Parliament, never “has a Chancellor asked the British people to pay so much for so little”.

Reflecting on the choices made by Rishi Sunak, Ms Reeves told the Commons: “The highest sustained tax burden in peace time. And who is going to pay for it? It is not international giants like Amazon, no, the Chancellor has found a tax deduction for them.

“It is not property speculators, they already pocketed a stamp duty cut and it is clearly not the banks, even though bankers bonuses are set to reach a record high this years. Instead, the Chancellor is loading the burden on working people. A national insurance tax rise on working people, a council tax hike on working people, and no support today for working people with VAT on their gas and electricity bills.”

Instead, she argued, people are getting in return a “record NHS waiting list with no plan to clear it”, adding: “No way to see a GP and still having to sell their homes to pay for social care. Community policing nowhere to be seen, a court backlog leaving victims without justice and almost every rape going unprosecuted.”

Shadow chancellor Rachel Reeves responded to the Chancellor’s words on the importance of early years spending, saying the Government cut Sure Start programmes.

She said: “The Chancellor says today that he’s realised what a difference early years spending makes. I would just say to the Chancellor has he ever heard of the Sure Start programme that this Government has cut?”

Shadow chancellor Rachel Reeves said: “Working people are being asked to pay more for less, for three simple reasons: economic mismanagement, an unfair tax system, and wasteful spending.

“Each of these problems is down to 11 years of Conservative failure. They shake their heads, but the cuts to our public services have cut them to the bone.

“And while the Chancellor and Prime Minister like to pretend that they’re different, this Budget today will only make things worse.”

She said “the solution starts with growth” and that “under the Conservatives Britain has become a low growth economy”.

Shadow chancellor Rachel Reeves said that under the growth experienced under Labour there would be more money for public services.

She said that over the past 10 years the economy has grown at 1.8% a year, and “if we had grown at the same rate of other advanced economies we could have had an additional £30 billion to invest in public services without raising the taxes that the Tories are raising on working people today”.

She said “Labour grew the economy much faster, by 2.3% a year”, and said if the Conservatives had matched that there would be “£30 billion more a year to spend on public services”.

“The Conservatives are now the party of high taxation because the Conservatives are the party of low growth,” she added.

On Covid-19, Ms Reeves said: “So as well as having the highest death toll in Europe, Britain has suffered the worst economic hit of any major economy… Our economy is set to be permanently weaker.”

On Brexit, she said: “British exporters facing more barriers than their European competitors because of the deal that this Government did is not good for our economy. If this were a plan it would be economic sabotage.”

Families, she said, were “struggling with rising gas and electricity bills, with rising prices of petrol at the pump and with rising food prices. He’s out of touch, he’s out of ideas and he’s left working people out of pocket.”

On tax, she said: “Taxes on those with the broadest shoulders, those who earn their income from stocks and shares and dividends and property portfolios, they’ve been left barely – untouched.”

She added: “We have a Government that is a by-word for waste, cronyism and vanity projects.”

Rachel Reeves accused Rishi Sunak of asking workers to pay more while giving contracts to friends and donors of the Conservative Party.

She said: “Just when we needed every penny of public money to make a difference, we have a Government that is a byword for waste, cronyism and vanity projects.

“We’ve had £37 billion for a test and trace system that the spending watchdog says treats taxpayers like an ATM cash machine, a yacht for ministers, a fancy paint job for the Prime Minister’s plane, and a TV studio for Conservative Party broadcasts which seems to have morphed into the world’s most expensive home cinema.

“£3.5 billion of Government contracts to friends and donors of the Conservative Party, a £190 million loan to a company employing the Prime Minister’s former chief of staff, £30 million to the former health secretary’s pub landlord, and every single one of those cheques signed by the Chancellor.

“Now he comes to ordinary working people and asks them to pay more – more than they’ve ever been asked to pay before, and at the same time to put up with worse public services all because of his economic mismanagement, his unfair tax system and his wasteful spending.”

Rachel Reeves welcomed the increase in the minimum wage but said the Government needed to go “further and faster” and should have moved to a rise of at least £10 an hour.

She welcomed the end of the “punitive” public sector pay freeze, but said: “We know how much this Chancellor likes his smoke and mirrors so we’ll be checking the books to make sure the money is there for a real terms pay rise.”

Ms Reeves welcomed the reduction of the Universal Credit taper rate from 63p to 55p but warned working people receiving the benefit “still face a higher marginal tax rate than the Prime Minister”.

She added: “Those unable to work through no fault of their own still face losing £1,000 a year.”

Rachel Reeves accused the Chancellor of failing to tackle the “huge issue” that is “adapting to climate change”.

She told MPs: “Adapting to climate change presents opportunities, more jobs, lower bills and cleaner air. But only if we act now and if we act at scale. According to the Office for Budget Responsibility (OBR), failure to act will mean public sector debt to explode later: it is nearly 300% of GDP.

“The only way to be a prudent and responsible Chancellor is to be a green Chancellor, to invest in a transition to a zero carbon economy and give British businesses a head start in the industry of the future.”

Instead, Ms Reeves insisted home owners are left to face the cost of insulation on their own, and industries like steel and hydrogen are “in a global race but without the support they need”.

Rachel Reeves told the House a Labour Budget would have ensured the next generation of quality jobs are created “right here in Britain”.

The shadow chancellor said: “This Budget did nothing to deal with the spiralling cost of living, it is a shocking missed opportunity by a Government that is completely out of touch.

“There is an alternative: rather than just tweak the system, Labour would scrap business rates and replace it with something much better by ensuring online giants pay their fair share. That’s what being pro business looks like.

“We would have not put up national insurance for working people, we would ensure that those with the broadest shoulders pay their share. That’s what being on the side of working people looks like.”

Ms Reeves insisted Britain deserves better, adding: “This country deserves better but they’ll never get it under this Chancellor, who gives with one hand but takes so much more with the other.”

She said Labour would reduce the power of Government “to ensure the next generation of quality jobs are created right here in Britain” and that it would “tax fairly, spend wisely” to get Britain’s economy “firing on all cylinders”.

A leading think tank has criticised the Chancellor’s decision to cut domestic air passenger duty just days before the start of the COP26 summit and said it was a ‘climate-void’ Budget.