Budget Resolutions and Economic Situation

Debate between Lord Bellingham and Toby Perkins

Monday 21st March 2016 Commons Chamber

[Sir Henry Bellingham (North West Norfolk) (Con)]

It is a pleasure to be called early in the debate and to follow the two Front-Bench speeches—particularly the quite superb opening speech by the Secretary of State. I pay tribute to him and his team of Ministers, who serve us really well.

This was a Budget for small businesses and enterprise as much as anything else. I welcome the doubling of small business rate relief and the increase in the maximum threshold for relief from £12,000 to £15,000. I really welcome the reduction in corporation tax, the capital gains tax changes, and particularly the 10% rate on long-term investments in unlisted companies, which will do a great deal for start-ups and business angels. I also welcome the stamp duty changes on commercial properties and the abolition of national insurance for the self-employed.

The other day, I worked out that this is the 40th Budget, including emergency Budgets, that I have been privileged to listen to, but this is without doubt one of the best Budgets, if not the best Budget, for small businesses, enterprise and wealth creation in our communities.

The Opposition have accused the Chancellor of favouring the rich, but let us hang on a moment. In the last financial year, the richest 1% paid 28% of all income tax. That is really quite staggering, and it completely undermines the Opposition’s argument.

[Toby Perkins]

Like other Conservative Members, the hon. Gentleman seems to be celebrating the fact that, under a Government that have seen the rich get much, much richer and the poor get much, much poorer, the rich are actually starting to pay more tax. Would it not be better not only if the top 20% paid more tax, but if the bottom 20% actually got wealthier rather than poorer?

[Sir Henry Bellingham]

I am grateful to the hon. Gentleman for that intervention; he and I get on very well together, and I respect his views. However, I would refer him to the comments by Paul Johnson, the head of the Institute for Fiscal Studies, who pointed out that, over the past few Budgets, higher earners have

“seen huge reductions in pensions tax relief”,

as well as a host of other measures, such as a “clampdown on buy-to-let”, and that they have been “squeezed in other ways”. He points out that this Budget’s impact on income distribution has been “incredibly modest”. That underscores the point that this is a fair Budget and, indeed, one for all our constituents and communities.

In the few minutes I have left, I want to touch on the devolution proposals. I support devolution. The flexibility that comes with making Government money available at the local level and responsive to local aspirations makes sense. I will certainly look carefully at the Secretary of State’s proposals for the combined authority in East Anglia. However, I would ask the Minister who winds up to confirm whether the £30 million a year is new money and whether the £170 million for housing will be spread over 30 years or treated on an annual basis. Could we have a look at that?

I certainly support the idea of devolution, but I am sceptical about the idea of elected mayors, for the following reasons. Back in 2000 and 2001, I was one of those politicians who were vehemently opposed to the now Lord Prescott’s proposals for regional assemblies, on the grounds of extreme cost and empire building. I also took the view that they would probably lead to the demise of the shire counties. I therefore regard the plan to bring in elected mayors with extreme suspicion. We are going to have to look at the cost very carefully. I remember when we discussed the plans for police and crime commissioners four years ago, and the view was that they would cost very little. It was said that the chairman of the authority—who is now called the police and crime commissioner—would sit in the police headquarters at no extra cost, but our PCC now costs £1.37 million and has a large number of staff in a separate building. He has built a mini-empire. The cost of the 41 PCCs across the country comes to £52 million.