Budget Statement

Lord Bourne of Aberystwyth Excerpts

Thursday 27th March 2014 Lords Chamber

[Lord Bourne of Aberystwyth (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Hunt of Chesterton, who spoke with such authority on science and technology. I should also tell him that I am very familiar with the railway line that he referred to and, thankfully, it still does go through many a marginal constituency.

I think that the central thrust of the Budget thinking is right: we must as a nation reduce the deficit; we must press down on the debt, otherwise we will saddle future generations with that debt.

In general, Budgets can be broken down into three categories: calamitous, of which there are a few; routine, of which there are many; and transformational, of which there are very few. There is a strong case for suggesting that this Budget is transformational. It makes fundamental changes to the tax and budgetary system applying to pensions. It deserves comparison with the Budget of my noble and learned friend Lord Howe of Aberavon abolishing exchange controls. Another such Budget was that of my noble friend Lord Lawson of Blaby abolishing higher rates of income tax.

The fundamental change to pensions—and I disagree fundamentally with the noble Viscount, Lord Hanworth, on this point—is to give people power over their pension pots. I accept that we need a system of good advice, a point which was well made by the noble Lord, Lord Hollick, and the right reverend Prelate the Bishop of Chester. It is certainly true that we need to ensure that proper advice is in place for people. Subject to that, however, surely it is right to give people control over their own pension pots which they have built up over time. For the first time people will be trusted to manage their own pension pots. It is a major transfer of power to the individual. In fairness, it has been widely welcomed by all political parties. The added beauty of the move is that it does not cost the Exchequer any money; indeed, it will add to the country’s coffers as the amounts paid through drawdown will exceed the amount paid on an annuity in the early years. Admittedly, however, that will smooth out over time.

The Budget is also good news for the nation’s economy in terms of savings in general. That point has been made by my noble friends Lord Flight and Lord Northbrook, who are not in the Chamber at present, in relation to ISAs and the increase of the limit. That increase is also very welcome. Successive Governments have for too long neglected savers. Fairly recently the World Economic Forum pointed out that that needs to be addressed, and I think that it now has been. Another factor, which has not been mentioned overmuch, is abolition of the 10p rate for lower-income savers. Again, it is sensible to help people on lower incomes with their savings income. In addition there is the pensioners bond, which has certainly been mentioned. These boosts are very welcome. One of the key aspects of the Budget is what we are doing for savers.

In addition to savers, this is a good Budget for business. Business means prosperity and jobs. Increasing the tax breaks on business investment by business, doubling it to £500,000 annually, provides a significant boost to investment, and the Chancellor has also extended the life of the scheme. Cutting energy costs for business will also boost enterprise.

In this debate there has rightly been much talk about needing to rebalance the economy in regional terms. In that context, it is worth noting that half of the businesses that benefit most from the carbon price floor are in the north of England, and a further third are in Scotland and Wales. That is good news. We should also welcome the extension of the life of the business rate relief and enhanced capital allowances in enterprise zones. I declare my interest as chairman of an enterprise zone in Wales. This, too, is a welcome incentive to business.

It is a good Budget for savers and for business, and it is also a good Budget for export. We have seen in this Budget a doubling of the amount that the Government are making available, to £3 billion, and also a cut in the interest rate for exporters. Surely that is good news, too.

In relation to housing, there were one or two comments suggesting that the Help to Buy scheme was something that we should be ashamed of, but I do not believe so at all. For too long, successive Governments in this country have not concentrated on housing. We should welcome not just the Help to Buy scheme extension but the help that is now being provided for the development of Ebbsfleet. The greatest concentration and problem is clearly in the south-east and so Ebbsfleet, the help for Barkingside and in the redevelopment of Brent Cross are measures that should be welcomed rather than otherwise. So in many respects, this Budget will help the economy. It is helping savers, business and exporters.

Perhaps I might also mention some of the micro aspects of the Budget, which are in danger of being overlooked but which provide assistance to our tourist industry, as well as to our well-being as a country. There is help for the 800th anniversary of the Magna Carta, and for cathedrals and theatres. These aspects should not be neglected as they also provide a boost for our tourism industry, our country and our economy.

I believe this is a good Budget in many respects. Its legacy will be for savers but it continues on the right course for the country: of deficit reduction and bearing down on the debt. In concluding, I add my support, as a relatively new boy here, for this House having a greater role in relation to the Budget. That point seems to have been very well made and I hope that we can pursue it in the future because we have a definite and positive role here.