Budget Statement

Lord Suri Excerpts

Wednesday 23rd March 2016 Grand Committee

[Lord Suri (Con)]

My Lords, I was very impressed with the speech from the noble Baroness, Lady Knight, about her successful career in both Houses. I wish her good luck and a long life. All noble Lords can learn a great lesson from her.

I thank the noble Lord for securing time for this debate. As any businessman will tell you, cutting taxes is one of the best ways of generating growth in small and medium-sized enterprises. I still remember the 1987 Budget from the noble Lord, Lord Lawson, and the positive effect of its tax cuts.

A tax on profits is, in my view, an extremely distorting tax. From the employer paying wages to the profits of a private firm, money is taxed by VAT, income tax, various levies, national insurance, business rates and many other minor taxes. Corporation tax is another unnecessary layer of complexity. Profit is not a dirty word. It allows employers, like me, to invest in more productive capital. It lets me pay wages and take on new staff and cut unemployment. The Chancellor’s consistent cutting of corporation tax is the correct course of action and I can only hope this will continue until the tax shrivels away altogether.

Productivity is another area of concern. Across the rich world, there appears to be a post-crash trend rate of growth well below what would be expected at this point in the business cycle. The easy gains have been made already and the Government will need to do more to generate rises in productivity. Without this, the rapid acceleration of living standards that we have all enjoyed is in danger of shuddering to a halt. I welcome some of the new measures introduced this time last week.

Academisation has a proven track record in improving the standards of schools. I have been a supporter of the devolution agenda for this very reason; namely, that service users and employees often know better than service providers. Allowing headmasters to hire staff and set pay scales is far better than using local authorities. Combined with an extra hour at school, I hope that this will provide employers with a better educated workforce, which is what we need if we are to own the industries of the future, like biotechnology.

I will finish on this point. We have a referendum on the European Union coming up. For all its faults—and there are many that the renegotiation did not address—we must vote to remain. The EU is the biggest single market in the world, with 500 million people to buy our goods and services. Almost half our exports go to the continent. We now have opt-outs from the euro and Schengen. Our European partners have accommodated us to the extreme, and we must appreciate what they have done. It may be the case that we are now the fastest-growing major European economy, but when we joined, we were the sick man of Europe. Times change, and working with allies is the only proven path to achieving success in an ever more globalised world.