Jeremy Hunt’s Budget failed to address the “real challenges” facing Britain, the boss of Britain’s most influential economic think tank has warned.

Archie Mitchell www.independent.co.uk 

Paul Johnson, director of the Institute for Fiscal Studies (IFS), laid bare the chaos facing the NHS, local authorities, social care and the justice system, and said the chancellor had not been “transparent” about the scale of the problems.

And, in a damning assessment of the Conservative government and Labour, he said both are engaged in a “conspiracy of silence” about just how bleak the outlook for the country is.

In his widely-watched post-Budget analysis, Mr Johnson said: “This was not a budget which addressed the real challenges we are facing because it was not transparent about what those challenges are.

“Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election. They, and we, could be in for a rude awakening when those choices become unavoidable.”

As the impacts of the chancellor’s Budget became clear:

• The IFS said Jeremy Hunt had failed to address the “real challenges” facing the country
• Its director accused Labour and the Conservatives of engaging in a “conspiracy of silence” about those challenges
• The Resolution Foundation said living standards would fall this parliament for the first time on record 
• Rishi Sunak doubled down on Jeremy Hunt’s suggestion that the Tories would seek to scrap national insurance, a move branded “reckless” by Labour 
• Mr Hunt claimed he was bringing down the tax burden “in a way that is responsible and protects our public services”
• Shadow chancellor Rachel Reeves said the government had “given with one hand and taken much more with the other”

Mr Johnson said Mr Hunt’s Budget “did not change anything very significantly… which is a shame”.

The economist said the national debt is at its highest in 70 years and “showing no signs of falling”, while interest payments soar. And he highlighted a “worrying increases in the number of individuals moving onto health and disability related benefits”, which brings its own “huge challenges” to the public purse.

And, after Mr Hunt offered voters a pre-election bung in the form of a 2p national insurance cut, Mr Johnson said the Budget came with “big implicit cuts in public investment spending overall and cuts to many areas of day-to-day spending on public services despite very obvious signs of strain in many areas”.

Rachel Reeves accused the chancellor of giving with one hand and taking ‘much more’ back with the other

“One only has to look at the scale of NHS waiting lists, the number of local authorities at or near bankruptcy, the backlogs in the justice system, the long-term cuts to university funding, the struggles of the social care system, to wonder where these cuts will really, credibly come from,” he added. Mr Johnson warned that cuts to day-to-day spending on a range of public services outside of health, defence and education, will have to fall by around £20 billion.

The damning verdict came as the Resolution Foundation warned that Rishi Sunak and Mr Hunt will oversee the first ever fall in living standards between elections despite Wednesday’s tax-cutting Budget, the Resolution Foundation has warned.

In its own withering assesment of the state of the economy, the think tank said this has been a parliament of “flatlining growth” and falling living standards.

And, even accounting for the chancellor’s national insurance giveaway, the Resolution Foundation said that by the next election, households’ disposable income will have fallen by 0.9 per cent – the first parliament in modern history to see a fall in living standards.

Chief executive Torsten Bell said: “Budgets are always a big day for Westminster, but the big picture for Britain has not changed at all. This remains a country where taxes are heading up not down, and one where incomes are stagnating.”

And he told BBC Radio 4’s Today programme: “If you look over the course of the last 15 years, what we see is that our wages today are back where they were in 2008.

“In fact, the Office of Budget Responsibility (OBR) says we won’t get back to 2008 wage levels until 2026.

“That’s 18 last years of wage growth.”

The think tank also pointed to the “implausible” post-election spending cuts pencilled in by Mr Hunt to give him room for the tax handouts without breaching his so-called “fiscal rules”.

Mr Bell added: “Big tax cuts may or may not affect the outcome of that election, but the task for whoever wins is huge.

“They will need to both wrestle with implausible spending cuts, and also restart sustained economic growth – the only route to end Britain’s stagnation.”

It comes after Mr Hunt used Wednesday’s Budget, likely the last before an autumn general election, to cut 2p from national insurance, saving a person on an average £35,000 salary around £450 a year. Combined with a cut last autumn, the chancellor said average earners would now be £900 better off.

But despite the handout, which Mr Hunt and the PM had hoped would boost the Tories’ dire poll ratings, experts warned the savings for voters had been eclipsed by the amount taken back through so-called stealth taxes.

The highly respected Institute for Fiscal Studies (IFS) said for every £1 handed back to voters by the chancellor, the decision to freeze tax thresholds would claim £1.30 as taxpayers are dragged into higher brackets.

Defending his Budget on Thursday, Mr Hunt said he was bringing down the tax burden “in a way that is responsible and protects our public services”.

“That’s what I have done in the autumn statement and the spring Budget, if you want to see that continue then it is only the Conservative Party that wants to bring down the tax burden,” he told Sky News.

Mr Hunt also doubled down on the suggestion he wants to phase out national insurance as a tax altogether, describing it as an “unfair” levy. He admitted it will not happen “any time soon”, but suggested one option would be to merge income tax and national insurance.

Pressed on whether Wednesday’s Budget set the stage for a May 2 election, Mr Hunt insisted it was a decision for Mr Sunak, whose current plan is to go to the country this autumn.

It came as shadow chancellor Rachel Reeves savaged the Budget, highlighting Labour analysis of OBR figures which show average families will be left £870 per year worse off by Mr Hunt’s measures.

“The government have given with one hand and taken much more with the other,” she told Today.

EDDC’s scrutiny committee to look into how the authority allowed businesses and infrastructure at Sideshore to be built next to the part of the sea wall that has failed.

Was “due diligence” carried out on our behalf by the “Build,build,build” Tories? -Owl

Will Goddard, local democracy reporter www.radioexe.co.uk 

Delays were also caused by a change in design

Emergency repairs to Exmouth’s crumbling sea wall are set to begin this month after being delayed because of a change to the design and checking for unexploded bombs.

But costs have skyrocketed, and part of the project is to be pushed back until autumn. 

Cracks appeared in the structure in front of the Sideshore watersports and retail development last August.  

A subsequent storm weakened the wall further and put it at risk of collapse, but temporary repairs of concrete blocks and sand have since held it together. 

This section, which is believed to be around 100 years old, does not have foundations. This, together with low beach levels, has allowed waves to wash out sand from underneath. 

East Devon District Council (EDDC) had wanted to start installing a 255-metre barrier of steel sheet piles at the wall in January for £1.1 million. Cladding the steel piles later was projected to come to just over £2 million. 

But now the work will be split into two smaller phases, and costs have soared because of poor ground conditions. 

The first phase will begin in the next two weeks and replace 90 metres of failed wall near Sideshore. It should be complete by the end of May and will cost £1.5 million. Work will not take place over the four-day Easter bank holiday weekend. 

The second phase will tackle 115 metres of ‘at-risk but still-intact’ wall towards Coastwatch House, minus the slipway. Work on this section has been pushed back to September at the earliest and will come to an estimated £1.8 million. 

Cladding the steel piles should cost just shy of £1 million, bringing the total amount up to £4.3 million.  

EDDC hopes it will be able to get a grant of £1.1 million from the Environment Agency to help. 

Cllr Geoff Jung (Lib Dem, Woodbury and Lympstone) said: “There is no choice, we have to do it.  

“We want it to be just as good as before, if not better aesthetically, and provide protection from increased risk from climate change.  

“We will endeavour to find funding from elsewhere, but we need to be prepared to dip into our reserves on this one, and probably put back some other projects that are less urgent.” 

Delays to the project are down to having to change the design because of poor-quality ground, figuring out how to work around businesses and a risk of unexploded bombs in the area requiring more surveys. 

The second phase has been deferred amid concerns piling could damage businesses along the wall towards Coastwatch House. 

There are suggestions one or two of the buildings could be moved next to the western-most building to make the repairs simpler and cheaper. But this would be “extremely risky” for the council to undertake without following proper planning procedure, which would need more time. 

The steel sheet piles will initially be installed without cladding. They will last for around 100 years once clad.  

The 90 metres of wall in the first phase will be replaced with a vertical wall, while the second phase could keep its current sloped revetments.

Councillors also agreed for EDDC’s scrutiny committee to look into how the authority allowed businesses and infrastructure at Sideshore to be built next to the part of the sea wall that has failed. 

Both the Conservatives and Labour are engaged in a “conspiracy of silence” about public spending after the election, the head of the Institute for Fiscal Studies has said.

Christopher McKeon www.independent.co.uk

Paul Johnson, director of the respected think tank, said Wednesday’s Budget had not been transparent about the challenges facing the UK, pencilling in significant cuts to public spending for after the election without setting out what that would involve.

The prospective cuts are required to ensure the Government meets its fiscal rule to have debt falling in five years’ time, and involve cutting spending on unprotected departments – including courts, prisons and local councils – by around £20 billion, and cutting public investment by £18 billion a year in real terms.

Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election.

They also assume that the “temporary” freeze on fuel duty will end, something that has not happened in the last 15 years.

Mr Johnson said: “Maybe that is possible, but keeping to these plans would require some staggeringly hard choices which the Government has not been willing to lay out.

“Indeed, we heard yesterday that the next spending review, in which these choices will have to be announced, will rather conveniently not happen until after the election.

“One only has to look at the scale of NHS waiting lists, the number of local authorities at or near bankruptcy, the backlogs in the justice system, the long-term cuts to university funding, the struggles of the social care system, to wonder where these cuts will really, credibly come from.”

While he was doubtful that the Conservatives would deliver their current spending plans, Mr Johnson also expressed scepticism that Labour would oversee significant cuts to public spending if it won the election.

He said: “Government and opposition are joining in a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election.

“They, and we, could be in for a rude awakening when those choices become unavoidable.”

He went on to dismiss the Chancellor’s stated ambitions to abolish employees’ national insurance contributions and increase defence spending to 2.5% of GDP without further detail on how they would be funded as “unlikely”.

He said: “Remarkably, Mr Hunt stuck with the claim that he wants defence spending to rise to 2.5% of national income ‘as soon as economic conditions allow’.

“Well, economic conditions allowed a £10 billion cut in NICs this year. So they could have allowed a £10 billion increase in defence spending instead.

“That would have just about met the target. Actions speak louder than words.”

On national insurance, he added: “This pledge to cut taxes by more than £40 billion goes in the same bucket as pledges to increase defence spending – not worth the paper it’s written on unless accompanied by some sense of how it will be afforded.”

Speaking to broadcasters on Thursday, Rishi Sunak declined to explain how he would fund an abolition of national insurance, saying people “trust me on these things” and that he would only cut taxes “responsibly”.

Introduction

“The costs of cleaning up coastal waters, a national resource, have not fallen fairly across the country. Thirty percent of the cost has fallen on Devon and Cornwall, which have just 3 percent of the nation’s population.” Written in a policy paper in 1996 that still chimes today.(Richard Foord).

What was Simon Jupp’s aim in calling this third parliamentary debate so late in the electoral cycle when there is insufficient time for any meaningful government action?

Perhaps all that Tories can do at this stage is to come out fighting.

Simon Jupp sets the scene

“Thanks to this Conservative Government, we finally have the tools to hold South West Water to account. It is the biggest crackdown on sewage spills in history: the Government have introduced unlimited fines, accelerated investment plans, legal targets to reduce discharges from every single storm overflow and eliminate all ecological harm, as well as compulsory storm overflow monitors, and they have forced live spill data to be made public. I voted for all that…”

After a bit of finger wagging at South West Water (SWW) he turned his fire on EDDC:

“Councillors on East Devon District Council very much jumped the gun to sign off a further new town of 8,000 homes in our district—just weeks before the new national planning policy framework was announced, which provides the tools to challenge such housing targets, especially in these circumstances. That was spectacularly short-sighted and risks further challenges for the district’s water infrastructure.”

Steady on Simon, EDDC Leader Cllr Paul Arnott has already gone on record as questioning whether development can continue until SWW  has increased its treatment capacity.

But turning off the tap is not as easy as that. The 2013 Tory administration set East Devon an eighteen year target to build a minimum of 950 houses/year (17,100 in total by 2031).

Simon did not mention the fact that, uniquely amongst Devon councils, EDDC has just passed a vote of “no confidence” in SWW nor that one of his constituents, Jo Bateman, is suing SWW for loss of amenity. 

He then hinted at goodies to come by saying: The Government are looking to consult on whether to make water companies statutory consultees on major planning applications. I wholeheartedly support such a move, and I urge the Minister to press ahead with that as quickly as possible.

He also urged the Minister to get water companies to install monitors on all emergency overflows. [No commitment from the minister to do this was given].

That then set the scene – trumpet government action, hint at further action and blame everyone else.

Main Debate

There was a short discussion on water supply raised by Anne Marie Morris (Newton Abbot) (Con). She disclosed that in an email Environment Agency said that South West Water “were not honest, open and transparent with regulators about their drought projections”.

Had there been any direct representation by a Cornish MP this subject might have had greater prominence. 

Luke Pollard (Plymouth) (Lab) highlighted that since 2010, Environment Agency funding has been cut by over 50%

Richard Foord got to speak about half an hour in.

He started by saying that Since 1990, South West Water has paid out in dividends an amount equivalent to £2,931 per property. That is more than any of the other 13 English water companies.

He continued by remarking that: South West Water is a poorly performing water company, but we have to look at the environment in which it is working. The water companies are working to the incentives that their shareholders set for them, rather than for the public benefit and good.

“There were 146 recorded dry spills over a 12-month period last year. To recap, those are illegal spills made by water companies when there is no heavy rainfall. Just yesterday evening, I was talking to Jo Bateman from the East Devon constituency, who attended the End Sewage Pollution coalition meeting that I brought together. She explained to me that she is suing South West Water for those illegal dry spills. I am not at all persuaded that water companies will simply do the right thing without Government intervention. We know the Environment Agency has been denuded of resources in recent years. The agency had £235 million cut from its budget when the right hon. Member for South West Norfolk (Elizabeth Truss) was the Secretary of State for Environment, Food and Rural Affairs.”

He pointed out that the government has only acted because of the level of public outrage and pressure from opposition parties such as the Lib Dems.

His main focus was on laying out the changes Lib Dems propose. Abolish Ofwat as it stands and bolster the Environment Agency so that we have a regulator with teeth and transform water companies into public benefit companies. Fantastic campaigners such as those he hosted the previous day need a voice at the board level of these companies, otherwise we will face the catastrophe of our tourist hotspots being struck with the affliction that is water pollution. According to Blue Flag, four of the 10 beaches most affected by pollution last year were in Devon, including Sidmouth, which endured over 600 hours of sewage spills.

“We need to see the end of operator self-monitoring, which is where water companies get to gather their data themselves before passing it to the regulator. It means that they can potentially vary the data they are collecting. Water companies are essentially marking their own homework. This is having a devastating effect on some tourist areas such as the ones in Honiton.”

Unfortunately a succession of conservative interruptions disrupted the flow of his arguments. What the Tories jumped on was the proposal to abolish Ofwat, when Lib Dem policy is to replace it with a tough new regulator with new powers to prevent sewage dumps.

They returned to this three times, but it’s not the Lib Dems who are in the dock.

Selaine Saxby drops a bombshell – Campaign group misrepresent the data!

At this point Selaine Saxby (North Devon) (Con), a surfer herself, dropped a bit of a bombshell claiming:

“A campaign group [clarified later as Surfer Against Sewage] has chosen to misrepresent the data it has, issuing sewage alerts when the combined storm overflows run and scaring people from entering our beautiful waters.”

She needs to do her research on the Environment Agency’s questionable testing methods and the fact that SWW data cannot yet be trusted. The “rules of thumb” adopted by Surfers Against Sewage are a much safer bet. (See “Is it safe to swim in Budleigh?”)

Labour’s View.

Mr Toby Perkins (Lab) shadow minister for rural affairs said, amongst other things:

“Yesterday, along with the hon. Member for Tiverton and Honiton, I spoke at the launch of the election manifesto for the Surfers Against Sewage campaign. It was a shame that the Government were not able to send the Minister, although he was intending to go. It is an important coalition, because the issue is of huge importance to our constituents, particularly to the economy of the south-west. As the hon. Member for Tiverton and Honiton reflected, we heard from Jo Bateman about the powerful campaign that she is fighting for the ability to swim in clean waterways, recognised as an amenity that should be available to us all.

In preparing for this debate, I was pleased to hear about the work of Jayne Kirkham and Perran Moon, Labour’s parliamentary candidates for Truro and Falmouth and for Camborne and Redruth, respectively. They have supported protests and started petitions that add to the community fight to preserve Cornwall’s waterways. Jayne stressed that the discharges into Cornwall’s rivers was impacting on tourism and costing millions alongside the environmental damage.

Many people are concerned that Ofwat’s new growth duty will further reduce its ability to be a force for environmental good. When the Minister responds, I hope that he can set out how he sees that duty working alongside Ofwat’s responsibilities to improve environmental outcomes. Does the Minister agree that the perception that our waterways are not fit to swim in is damaging to growth as it depletes tourist revenue? If so, will he confirm whether he has instructed Ofwat that its new growth duty must mean that no sewage discharge is liable to reduce tourist growth?”

Ministerial response

From: The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Robbie Moore).

Moore recognised that SWW remains one of the worst performing companies particularly on pollution incidents and storm overflow discharges. “That is completely unacceptable. South West Water should be under no illusion: it must take urgent steps to reduce its pollution incidents significantly, as well as addressing other performance concerns, such as increasing resilience of the water supply.”

He mentioned the old news of the 2050 target for overflow reduction. And that we supposedly have 100% monitoring of storm overflows. Though in an interjection, Mr Perkins raised the big problem of “self-monitoring”.

Moore then mentioned SWW latest business plans of £2.8 bn investment to turn things around [but we have heard plenty of promises in the past – haven’t we?]

Last words from Simon Jupp

“As ever, Lib Dem policy is as clear as mud.“

So was this a debate about South West Water and pollution or a grandstand for electioneering? – Owl

Question put and agreed to.

Resolved,

That this House has considered the performance of South West Water.

Westminster Hall debates are strictly timed. 

This one lasted an hour and involved the following speakers:

One Lib Dem, Richard Foord,

Two Labour MP’s, Luke Pollard (Plymouth) & Toby Perkins (Chesterfield) shadow minister for rural affairs; and 

Five Conservatives Simon Jupp (East Devon), who led the debate, Anne Marie Morris (Newton Abbot), Selaine Saxby (North Devon), Kevin Foster (Torbay) & Anthony Mangnall (Totnes). 

The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Robbie Moore) replied. 

Note there was no MP from Cornwall. 

Follow link to the Hansard transcript of the debate