Diane Abbott MP: The government’s economic plans leave me fearing for my constituents

'The cuts and tax increases that are coming must be opposed'.

Jeremy Hunt

Diane Abbott is the Labour MP for Hackney North and Stoke Newington

The economic news we read and hear is grim and getting grimmer. The government has offered only false promises, on building back better and levelling up.  

But one of the myths that has grown up is that somehow Londoners are exempt from the crisis. This is political propaganda which turns reality on its head. It was nonsense like this which helped Rishi Sunak to take levelling up money away from poorer areas to give to richer, Tory-voting ones.

This alone helps to demonstrate that this government is the main culprit in causing rising inequality, shifting the burden of the crisis onto those who can least afford it. Ministers could have done much more to soften the blows for the most vulnerable, but it is this government and its ministers who are choosing not to.

That was true in the furlough during lockdown, which cut pay for millions to 80% of their previous level while others got nothing at all. Rishi Sunak wanted to cut it even further. He and the rest of the government were also responsible for huge tax rises in the March Budget, at a time of rising inflation and an economic slump.

The government are now set to add to this list of attacks on ordinary people with the Fiscal Statement later today. This is really another budget, because the last one caused living standards to fall even further. Informed commentators suggest this new set of measures could be even worse than the austerity under David Cameron and George Osborne.

For millions, this will mean further falls in real incomes, after taking inflation into account. It will mean further deterioration in public services and a deeper economic downturn. Unemployment could rise. That is what the Bank of England is forecasting.

The widespread myth that London is somehow exempt from the government-sponsored fall in living standards leaves its communities particularly vulnerable. Hackney itself is used as a short-hand for the well-to-do who are sheltered from everyday financial concerns. This serves two purposes. The first is the government’s ‘culture wars’ which is dog-whistle politics by another name. The other is to allow transfers from poor London communities to Tory targets.

The real picture is very different. Official ONS data show that median average incomes in Hackney North and Stoke Newington were just over £500 per week in 2021. This is almost exactly the same as the national average and way below the London average, which is over £600.

If you take into account the higher cost of living in London, especially in housing, this means it is actually one of the poorest in the country. It’s true that diversity, house prices and the Overground links mean that richer people have been attracted to live here. But there has been no local levelling up and inequality has widened.

So, government plans will hit my constituents the hardest, and others like them. The cuts and tax increases that are coming must be opposed. The government should instead go after the money where it is, especially from the companies making money hand over fist by raising prices. Leave Britain’s poor and the underpaid alone.

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