Budget Statement

Lord McNicol of West Kilbride Excerpts

Friday 12th March 2021 Lords Chamber

[Lord Hunt of Kings Heath (Lab) [V]]

My Lords, the Chancellor’s claim that the Budget will support business and build our future economy seems somewhat fanciful with the raising of corporation tax, the collapse of exports to the EU, precious little action to improve our low productivity levels and the axing of the industrial strategy. I hope the Minister will explain the extraordinary decision to abolish the Industrial Strategy Council. Make UK, which represents manufacturers, says it raises a genuine fear that the critical part that companies can play in the economic recovery is no longer regarded as important. What does the Minister have to say to that?

On public finances, the Government say they cannot afford to give nurses a decent pay rise, yet they have managed to squander billions of pounds on management consultants, fly-by-night companies and friends of Ministers. This week’s PAC report on test and track is illuminating: hugely costly, with an overreliance on consultants and temporary staff, and no clear evidence with which to judge its overall effectiveness. One figure that we do know is that we have the highest death rate per million of population of any country in the world. Meanwhile, there is no decent pay rise for nurses, nor any plans for the NHS to treat the huge backlog of patients.

As for social care, the Chancellor’s complacency is quite extraordinary. There is no lifeline for our struggling social care sector, with the long-promised White Paper yet to surface. So the level of unmet need increases, the pressure on unpaid carers grows stronger, the supply of care providers diminishes and the strain on the care workforce continues, yet the Chancellor is silent. Will the Minister respond?

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

I call the noble Lord, Lord Mair. Can the noble Lord please unmute?

[Baroness Evans of Bowes Park (Con)]

My Lords, can the noble Lord unmute? Otherwise, we will move to the next speaker and return to him.

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

Let us try one more time. No? I call the noble Lord, Lord Blencathra; we will come back to the noble Lord, Lord Mair, as soon as we have reconnected.

--- Later in debate ---

[Baroness Scott of Needham Market (LD) [V]]

My Lords, in many areas, lockdowns and home-working have fostered a growing sense of connection with local communities. That is evidenced in an outpouring of community and voluntary activity, as well as support for small local businesses. These businesses have a kind of built-in agility, which has enabled them to repurpose and refocus in many instances.

However, the Government were dangerously slow to recognise the role that local government could play during the pandemic. They must not make the same mistake again with regard to the rebuild afterwards. The finances of local government were parlous before; they are now in a very dangerous state. Local government cannot keep postponing the reviews that need to take place to put its finances back on a sustainable footing.

The so-called third tier of local government, the town and parish councils, face a particular set of problems. They have been hugely active during the pandemic but have received no help from government with their direct costs. Throughout the country, only three principal councils have given money to their towns and parishes. I very much support the National Association of Local Councils, which wishes to see a dedicated and targeted package of support for the small local councils or indeed third-tier councils, some of which are quite big—in major towns, for example. Local councils must get the support that they need to do the work that they will need to do going forward.

The Government have announced a £150 million community ownership fund, but local councils are not allowed to bid for it. This is hugely disappointing, given their track record in protecting and supporting community assets such as libraries, post offices and parks. Finally, can the Minister say what the involvement of local councils will be in delivering projects under the new levelling-up fund? Communities everywhere have pulled together during this pandemic. Let us make sure that we help them to continue.

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

I now call the noble Lord, Lord Horam, and we will then try the noble Lord, Lord Mair, again.

[Lord Horam (Con)]

I, too, warmly welcome our five new noble Lords. I was lucky enough to read economics at Cambridge in the late 1950s, when the influence of the late and great economist John Maynard Keynes and his followers was very high. I have always taken the view thereafter that the first rule of economics is, in all circumstances, to maximise real economic growth. As a politician, the second rule that I have always advocated—I think that Keynes would also have agreed with this—is to make the distribution of the rewards of growth as fair as practically possible. I therefore support the Budget because it has made some real progress in both these areas.

In particular, it began to deliver on the levelling-up agenda. The brutal truth is that several regions of the United Kingdom have now been overtaken in GDP per head by countries such as Slovenia, Poland and Lithuania, which spent decades under the rule of communism. Some people worry about the huge debt that we have piled up to achieve these ends; I do not. Currently, the public debt is about 100% of our annual GDP. If you look over the long history of the UK, that is not far from the average. Nor is there a big problem with financing it while we have an independent Bank of England, which can, in the end, just print the money. The only factor to keep a beady eye on, as the noble Lord, Lord Eatwell, pointed out, is inflation. That is certainly a threat.

My only doubt about the Budget is over the proposed rise in corporation tax, which is also a reservation on the part of the Office for Budget Responsibility. I appreciate that the Chancellor is giving a super-deduction of 130% for those who invest, but this will last only two years. He might have been better to leave the rate at 19%, which compares favourably with our major rivals. Alternatively, he might consider extending the super-deduction for the full Parliament. We have a steep hill to climb as a result of Covid and Brexit—a double whammy—but the Chancellor has had a good shot at getting to first base.

[The Deputy Speaker (Lord McNicol of West Kilbride) (Lab)]

I call again the noble Lord, Lord Mair.