Groundhog day for the North beckons as cuts loom in the Chancellor’s spring statement - Andrew Vine
They’re deliberately not calling it an emergency budget, but that’s exactly what it is. Tomorrow’s spring statement by the Chancellor, Rachel Reeves, is not, as the government would have us believe, an update on a plan for the nation’s finances that is going just fine, but a response to a deepening economic crisis.
And for all of us in the north, that is especially unwelcome. If the economy is doing badly, the people of Yorkshire are hit disproportionately hard because we are already at a financial disadvantage to the most affluent parts of the country.
Until Ms Reeves stands up in the Commons at lunchtime, we can’t be certain what’s in store for us.
But you don’t have to be a clairvoyant to see cuts to public spending coming our way, which will be very bad news for Yorkshire. At a time when we need new investment to close the north-south divide that has held us back for so many years, the prospect of getting it is receding.
It’s possible that tomorrow presents us with a squeeze on public finances on a scale not seen since the austerity budget introduced by the Conservative chancellor George Osborne in 2010.
While Ms Reeves will undoubtedly avoid uttering the word ‘austerity’ at all costs, that’s most likely the unspoken truth behind whatever she says, which is worrying.
Yorkshire remembers all too well what austerity meant for this county of ours. Crumbling infrastructure, declining public services, a lack of opportunities for the young and greater inequalities between regions were among its legacies.
If that’s where we’re heading again, Ms Reeves and Sir Keir Starmer are going to have an uphill struggle persuading even the most loyal Labour-supporting voters of Yorkshire that their economic plans are in the best interests of this region.
Doubtless, there will be an attempt to lay the blame for the nation’s financial problems at the door of the last government.
That has been a familiar refrain ever since Labour won power last July, but however much justification there is for levelling the charge of wrecking the economy at the Conservatives, it is looking increasingly desperate to blame today’s problems on the past.
Last autumn’s budget, with its £40bn tax raid, was supposed to be a one-off moment of unpleasantness that had to be endured if the economy was to be put back on track.
It hasn’t worked. And that can’t be blamed on a government decisively kicked out of office by the electorate last year.
Businesses which the Chancellor needs to drive her plans for growth have instead been set back by her hike in national insurance and the increase in the minimum wage.
Virtually every survey since the budget has found companies freezing recruitment or pausing investment as a result, and there has been no sign of strong or sustained growth.
Business leaders have even cast doubts on the massive housebuilding programme which is a central element of the government’s growth strategy, pointing to a shortage of skilled labour needed to deliver all the new homes.
It is not all the government’s fault. The disruption to international markets caused by Donald Trump’s volatility in starting trade wars has dealt Sir Keir and Ms Reeves a bad hand to play. And Trump’s military abandonment of America’s European allies has resulted in them having to boost defence spending when money is already tight.
For the north, all these elements come together to produce a disheartening picture.
If businesses aren’t hiring or investing, there is little prospect of Yorkshire’s economy showing much in the way of growth.
And if the public sector – on which the north is traditionally more dependent than the south – is being starved of funds by cuts to departmental budgets, that could mean job losses and even more problems for already hard-pressed households.
If such cuts are having to be made, it is most unlikely that the Chancellor will allocate funding for the long-term strategic investment that the north has so desperately needed for decades, in transport, infrastructure, development of new industries and training for better jobs that give people a route out of poverty and into rewarding careers.
Investment in those things were what Yorkshire’s voters wanted and expected last summer when they put their faith in Labour. Change for the better was the promise made to us.
Instead, we’ve had cuts to pensioners’ incomes over the winter just past, a threat to Yorkshire’s rural economy because of tax changes that will ruin family farms and businesses put on the back foot.
This doesn’t feel like things are getting better for the north.