In a series of blogs the Vuelio Policy team will be sharing insight from the main Party Conference speeches and from fringe meetings. Here Ingrid Marin compares the speeches of the Chancellor and Shadow Chancellor.
Is Chancellor Rishi Sunak’s goal to balance the books premature?
During his speech at the Conservative Conference last Monday, Chancellor of the Exchequer Rishi Sunak, highlighted the success of the furlough scheme which has been widely praised for protecting jobs during the height of the pandemic. He reiterated that he would not be able to protect every job in the UK, and instead pledged: ‘I am committing myself to a single priority – to create, support and extend opportunity to as many people as I can’. Chancellor Rishi Sunak has also promised to ‘always balance the books’ in his speech at the Conservative Conference. He claimed that the Conservative Party had a ‘sacred duty’ to ‘leave the public finances strong’ but also promised to use the ‘overwhelming might of the British state’ to help people find new jobs. He warned that the Government could not ‘borrow our way out of any hole’ and that debt and spending would need to be controlled in the ‘medium term’. Responding to the Chancellor’s speech, Shadow Chancellor Anneliese Dodds said Sunak didn’t appear to have ‘grasped the magnitude of the jobs crisis we’re facing’ and said that this is not the time for tax rises, this is the time to “remain focused on the jobs crisis”. She was particularly concerned that there was no further support in the speech for areas subject to localised restrictions. Similarly, in the Institute for Fiscal Studies’ (IFS) Green Budget the think tank concludes that ‘now is not the time for tax increases or any other form of fiscal consolidation’ and calls for government policy to focus on ‘supporting the economy almost irrespective of short-term impacts on borrowing’ for the next 18 months at least.
Four days after this speech at the Conservative Conference, Chancellor Rishi Sunak did set out more financial support for businesses that will have to close by law as virus restrictions are tightened in parts of England.
Is the Shadow Chancellor’s three-point plan for the economy out of date?
The core of Anneliese Dodds’ speech at the Labour Conference was to highlight that the UK Government’s response to the public health crisis has been slow and that it is not dealing with the major economic challenges the country is facing. During her speech, Ms Dodds unveiled three steps Labour wanted the Government to take on board and put into place as a ‘matter of absolute urgency’. Since then, much has changed, with the Government announcing various support schemes, however, parts of Anneliese Dodds speech still remain relevant today.
She championed a ‘Job Recovery Scheme’ that would allow businesses in key sectors to bring back more staff on reduced hours. Even though, Rishi Sunak did introduce the Job Support Scheme as part of the Winter Economic Plan, Shadow Chancellor Anneliese Dodds questioned whether the scheme actually incentivises short-hours working as it has to be more attractive for employers to retain more staff on reduced hours than to retain some full time and make others redundant. Since then, she has been constantly calling for reforms to fix the flaws in the design of the Job Support Scheme.
Anneliese Dodds said there needed to be a retraining strategy that was fit for purpose, at a scale appropriate for the crisis. She said the Government has already advocated a National Skills Strategy and set aside £3bn for it, but said it wasn’t getting on with it.
During a fringe event hosted by the Institute for Government at Labour Conference, asked how he would spend that money, Shadow Exchequer Secretary, Wes Streeting said he would work with local authorities and metro mayors to direct skills funding to the right places for their authorities. Shortly afterwards, the Prime Minister did announce the Lifetime Skills Guarantee, however, Shadow Financial Secretary to the Treasury, Dan Carden, said that the new training initiatives are little more than a mix of reheated existing policies and funding that won’t be available until April 2021. He thinks that by then, some people will have been out of work for a year or more, so it risks being too late for many.
Is Labour now the party of financial responsibility?
During the Labour Conference, the party sought to paint itself as the party of financial responsibility. Shadow Chancellor Anneliese Dodds accused the Government of taking a ‘cavalier’ approach to the public finances during the coronavirus crisis. In her speech, she accused the Government of wasting ‘enormous amounts of public money’ on failed schemes to tackle Covid, such as a £130m contract with a Conservative donor for testing kits that were unsafe and £150m on facemasks that could not be used by NHS staff. She published a ‘file of failure’ which shows the billions of pounds wasted and mismanaged by ministers during the Covid crisis.
During a fringe event hosted by IPPR, she emphasised that her speech was not an argument in favour of austerity, it was ‘quite the opposite’. Anneliese Dodds said the Conservatives claim they are already spending lots, but she thinks we need to look at where that money is going. She said that in many cases, the Government’s response to the crisis has been an ideological one. For example, they have provided significant contracts, which are part of our public health response, not to local public services in the case of Test, Trace and Isolate, but to major outsourcers which are not required to integrate with local services. The result is that is has set us back much further than other countries.