Finance Bill

Robert Syms Excerpts

Committee stage
Wednesday 30th November 2022 Commons Chamber

[The Financial Secretary to the Treasury (Victoria Atkins)]

It is a pleasure to represent the Government in this important Committee. At the autumn statement, my right hon. Friend the Chancellor set out the significant economic challenges that we face and our plan to ensure that we have economic stability, encourage growth and protect our public services. Securing fiscal sustainability in a responsible and balanced way inevitably requires some difficult decisions. We do not shy away from that, but we have sought to ensure that the heaviest burden falls on those with the broadest shoulders.

The Bill’s first three clauses relate to the energy profits levy. Clause 1 increases the rate of the levy and addresses consequential technical matters. It will ensure that oil and gas companies benefiting from extraordinary profits due to exceptionally high prices will continue to pay their fair share of tax. As hon. Members will know, the Government introduced the levy in May this year as a temporary surcharge on the extraordinary profits being made on the oil and gas sector, driven by global circumstances.

[Sir Robert Syms (Poole) (Con)]

Will the Minister define “extraordinary”—not necessarily now, but during the debate?

[Victoria Atkins]

I will happily do so. My hon. Friend will know the definition of “extraordinary” in relation to the electricity generators levy. We will come to the profits levy in due course.

The Government are raising the rate of the levy from 25% to 35% from 1 January next year, bringing the headline tax rate for the sector to 75%. That is because commodity prices—particularly gas—are expected to remain above their long-term average for the foreseeable future. However, the Government want the oil and gas sector to reinvest its profits to support the economy, jobs and the UK’s energy security, which is why the levy has an investment allowance that means that businesses overall get a 91p tax saving for every pound that they invest, providing them with an additional, immediate incentive to invest.

Clause 2 makes changes to the rate of the investment allowance within the levy to ensure that the total tax relief remains broadly the same following the increase in rate to 35%. Specifically, the clause reduces the rate of the investment allowance from 80% to 29%, effective, again, from 1 January next year. That will maintain the overall cumulative value of investment reliefs, which means that a company investing £100 will be able to claim £91.40 back in tax relief. To be clear, the investment allowance will remain at 80% for investment expenditure on upstream decarbonisation, so that we continue to support the transition to low-carbon electricity production. That will be legislated for in the spring Finance Bill, following further detailed technical work and consultation with interested parties.

[Victoria Atkins]

Certainly. I hope the hon. Lady will agree that we all want to see more decarbonisation, which is precisely why we have set the net zero landmark achievement for 2050, as she knows. In relation to energy security, we have to be realistic about where we are. Much as some campaigners would like it, we cannot stop using oil tomorrow. We have to find reasonable and methodical ways of decarbonising, which is precisely what the investment allowances aim to do, while encouraging different businesses, and indeed those businesses, to invest in carbon-free and low-carbon forms of energy production.

Clause 3 will extend the levy so that it ends on 31 March 2028 rather than in 2025. Although the levy remains a temporary measure, the change simply reflects the fact that global factors are now expected to keep commodity prices, particularly gas prices, elevated for longer than was first anticipated. At the same time, the Government recognise that certainty is key for oil and gas investments. There will therefore no longer be an early phase-out of the levy ahead of the new March 2028 end date, according to prices.

Together, the changes introduced in clauses 1 to 3 will raise approximately £20 billion over the next six years. The total revenue now expected from the levy is just over £40 billion over the same period.

Clause 4 relates to rates of research and development tax credits. The changes it makes will ensure that taxpayers’ money is spent as effectively as possible. Despite the UK spending the most in the OECD on R&D tax reliefs, the current system does not provide good enough value for taxpayers. The cash value of the scheme that looks after small and medium-sized enterprises is currently three times that of the research and development expenditure credit. The corporation rate change due from April next year will make the issue worse by incentivising less R&D per £1 of taxpayer support. Sadly, the SME scheme’s generosity has also made it a target for fraud.

The clause will therefore rebalance the generosity between RDEC and the SME scheme, specifically by increasing the RDEC rate from 13% to 20%, decreasing the SME enhanced deduction from 130% to 86%, and decreasing the SME credit rate from 14.5% to 10%. The changes that the clause will introduce are also a step towards a possible simplified single RDEC-like scheme for all.

Despite raising revenue, this reform is forecast to leave the level of R&D investment in the economy unchanged. More broadly, the Government have recommitted to increasing R&D spending to £20 billion by 2024-25. Ahead of the spring Budget, we will work with industry to understand whether further support is necessary for R&D-intensive SMEs. I know that is the point that most concerns several colleagues; I suspect that we will hear more about it in due course.

Clauses 5 and 6 relate to income tax thresholds. As the autumn statement sets out, the path to fiscal sustainability requires us to ask everyone to contribute a little more towards our public finances, but we are doing so in a fair way: those with more are being asked to contribute more.

Clause 5 will set the personal allowance at £12,570 and the basic rate limit at £37,700 for 2026-27 and 2027-28. Those thresholds, which have already been fixed at the current levels until April 2026, will be maintained for a further two years until April 2028. I hope hon. Members will note that the personal allowance is still the most generous tax-free personal allowance of any G7 country. Thanks to previous significant real-terms increases, it will still be more than £2,000 higher by April 2028 than if it had been uprated by inflation since 2010, with an estimated 1.6 million more people taken out of paying tax. Approximately 30% of people do not pay tax as a result of the personal allowance. I hope Government Members are proud that we have achieved that.

This Government also enacted the largest ever increase to a personal tax starting threshold in July this year by raising the national insurance starting threshold to £12,570, ensuring that some of the lowest earners do not pay any tax. That means that in 2028 someone on the average salary of £28,000 will still pay almost £900 less in tax than if tax thresholds had gone up with inflation since 2010. The income tax higher rate threshold is still high enough to protect the vast majority of people from paying the higher rate of income tax; approximately 80% of taxpayers pay tax at the basic rate.

Clause 6 will deal with those at the higher end of the income scale, to ensure that our return to sustainable public finances happens in a fair way. It will lower the additional rate threshold from £150,000 to £125,140 from April next year, meaning that income above that level will be taxed at 45%. Only the top 2% of taxpayers will be affected by this measure, which is expected to raise £800 million per year by 2024-25, with the vast majority of revenue—more than 80%—coming from those who earn more than £150,000.

[Sir Robert Syms]

My hon. Friend is no doubt aware that, because some higher rate taxpayers lose their personal allowance, the marginal rate between about £100,000 and £120,000 can be as high as 60%. Has any thought been given to whether we should smooth that out, particularly if we are lowering the rate when you hit 45p? I think it would make for a better tax system. The artificial level needs to be dealt with, perhaps by ensuring that the withdrawal of the personal allowance happens over a wider income band.

[Victoria Atkins]

A great deal of thought went into the matter at the Treasury ahead of the autumn statement. The reason for our approach is that there are significant difficulties with the alternatives. I do not think that anyone would want a cliff edge at £100,000 where someone who earned £1 over that amount would suddenly lose the entirety of their personal allowance. We have tried in the past to taper it, although I appreciate that that has led to the situation that my hon. Friend describes. We have brought the 45p rate down to £125,000 precisely because that is the end of the taper rate for the personal allowance. We have tried to make things a little simpler; I will happily admit that the tax system is very complicated, but we have tried to simplify that part of it. I do accept my hon. Friend’s point about the marginal tax relief rate, which we genuinely continue to consider because we want to be fair to those who, through hard work, contribute as much to the tax system as they do.

On clause 6, I was saying that the vast majority of revenue—more than 80%—will come from those who earn more than £150,000. We say that the UK remains an attractive place to work and do business. The threshold is still comparable to those of other countries with a similar top marginal rate of tax, but in the circumstances we are in, it is fair that those who earn more contribute more.

Clauses 7 to 9 deal with other allowances. Clause 7 will reduce the tax-free allowance for dividend income from £2,000 to £1,000 in April 2023, and to £500 from April 2024. That will raise more than £3 billion by April 2028 and will make the tax system fairer by bringing the treatment of investment income closer in line with that of earned income. Keeping the dividend allowance at £500 will still ensure that people are not taxed on low levels of dividend income, because the combination of the personal allowance and the dividend allowance will mean that approximately 25% of people with taxable dividend income will continue to pay no dividend tax, even once the measure has come into effect. People will still be able to receive tax-free dividend income from investments made through their individual savings accounts, in which taxpayers can invest £20,000 each year.

Clause 8 makes changes to the capital gains tax annual exempt amount, or AEA. The AEA is the total amount of capital gains that an individual may make free of capital gains tax each year, and is currently set at £12,300. For the tax year 2023-24, the rate will be £6,000 for individuals; it will then be reduced to £3,000 from 2024 onwards. The clause also abolishes the annual uprating of the AEA in line with the consumer prices index, and fixes the capital gains tax reporting proceeds limit at £50,000. Reforming the system to reduce the value of the capital gains tax-free allowance supports strong public finances, and makes the system fairer by bringing the treatment of capital gains closer into line with that of income while still ensuring that individuals are not taxed on low levels of capital gains.

--- Later in debate ---

I hope Members will join the Opposition in supporting fairer choices on the tax system in our country and in pressing the Government on the urgent need for growth in our economy.

[Sir Robert Syms]

I rise, as I did on the autumn statement resolutions, broadly to support what the Government are trying to do. I am pleased that the Minister is in listening mode, which is good because not everything is perfect in these debates. Even if things are not quite right in the autumn statement, there will be further Budgets in the years ahead. I am sure she will have a very successful career and will be in the Treasury for a while, and I therefore hope she will take our comments on board.

Clearly, at a time when money is short and the demands of struggling people are high, it is more difficult to redesign the tax system in an ideal way. I raised in my second intervention the difficulty in which those earning between £100,000 and £120,000 find themselves, and I hope their marginal rate of 60% will be reviewed at a future date.

I have some sympathy with the comments about research and development. The Treasury has a habit of introducing incentives and then worrying about losing too much tax. Actually, research and development should be a priority for this Government. A business investing in new technology wants to know what will happen three, five or seven years ahead. Sudden changes to the research and development rate may undermine the funding model of new businesses. I am sure there will not be a change this year, but I hope we will review this area very carefully, because it was one of our better measures in previous Budgets.

My main remarks are about the windfall tax. I do not like windfall taxes, but the way in which the Government have designed this windfall tax is good because of the investment allowance, which is the subject of a number of amendments. The objective has to be to keep companies investing. We are blessed as a nation, as we have oil all the way around our coastline. The only question is, at what oil and gas price is it worth recovering?

What has happened in the North sea in my lifetime is a tremendous British success story. Getting oil and gas from the great depths of the North sea made us, at one point, self-sufficient. We still have a lot of oilfields that we can develop, but eking out further discoveries needs incentives. I am a bit worried about the windfall tax, but I understand the current political need to have one. I am pleased with the investment allowance, because it will encourage companies to invest, and that investment should help us to produce more oil and gas and should help the British economy.

Something else that has occurred in my lifetime is that Aberdeen and many other areas of the United Kingdom that are near oilfields have created thousands of jobs. Those people may no longer be working in our oilfields, but they are working in oilfields abroad. This is an area that we need to develop.

My concern about extending the windfall tax to 2028—I raised the word “extraordinary” in my first intervention—is that there will come a point at which prices fall, perhaps because there is peace in Ukraine or because other forms of energy come on tap. If we maintain the windfall tax, we will then do great damage to the oil and gas industry. We need a way of assessing what the Government do and do not consider to be extraordinary.

Some years ago, the Wood review of the North sea looked at what could be done to extend the life of the North sea fields. It would be helpful if the Government reported on where they stand on the oil price and the windfall tax. It might be better if they employed an expert, independent of both the Government and the oil and gas industry, to look at what is being done to assess whether investment is being hurt and whether the rates are appropriate. We assume a rate of 35% all the way up to 2028; we are not assuming a reduction, even if oil prices reduce.

I see the autumn statement as a little like a business plan that we might show to our bank manager. It does not mean that everything will necessarily happen as set out until 2028. If we expect the industry to invest, it is important that it knows what will happen to the tax rate if oil and gas prices change. North sea oilfields and gas fields are five, 10, 15 or 20 years’ worth of investment, so they are long-term, not short-term, investments. We need to focus on the short-term need to raise money, which even the oil and gas industry probably understands. The investment allowance is good, and it will encourage short-term investment, but there will be long-term damage if we are not flexible enough either to reduce the rates or to abolish the windfall tax when we get back to more normal gas prices.

[Caroline Lucas]

I am grateful to the hon. Gentleman for giving way, because my anger is becoming so extreme that I might burst at any moment. Does he recognise that this country has the world’s most generous tax regime for oil and gas companies? Does he recollect that BP’s CEO said the company is raking in more money than it knows what to do with? He compared his company to a cash machine.

Does the hon. Gentleman not think his constituents in Poole might be rather more impressed if some of the money that has been forgone by the Treasury instead went into making sure we have enough teachers in our schools and enough health workers in our hospitals?

[Sir Robert Syms]

I am glad the hon. Lady is irritated by my comments, because I think I am right. We want a very successful oil and gas industry. My constituency is on top of the Wytch Farm oilfield, which has been going for 40 years. Most of my constituents do not know they are on top of an oilfield, so they keep writing to me about oil and gas. The reality is that we will need oil and gas over the next 30 or 40 years. Apart from power, many products derive from oil and gas.

Oil and gas is a very successful industry for the United Kingdom. The hon. Lady and I probably disagree on most things, but we need to ensure that we keep the industry growing, which will create lots of jobs. This very successful industry creates a lot of wealth, which does not undermine the fact that many oil companies are now investing heavily in renewables. The North sea investments of Shell and many other major companies are consistent with decarbonisation. What we can do in producing more North sea oil and gas and in decarbonising a lot of that production is very exciting.

That is my main concern for the Minister. This has been a difficult year for the Government, partly because of worldwide factors. I look around the world and see shipping costs falling and inflation starting to tail off. I hope there will be peace in Ukraine, and I hope the Ukrainians win, which may well improve the economic situation over the next two years. The Treasury needs to be flexible in how it looks at the situation. When I listen to Opposition Members, I feel they have a very inflexible view of the oil and gas industry that I think would do us great damage. I am glad the Government are in listening mode, and I hope they listen further to the comments of Back Benchers.

[The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)]

I should have reminded colleagues that when we are in Committee I am to be referred to as “Chair” or “Dame Rosie”.

I call the SNP spokesperson.

Autumn Statement Resolutions

Robert Syms Excerpts

Monday 21st November 2022 Commons Chamber

[Sir Robert Syms (Poole) (Con)]

I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests. Having been in this House for a while, I remember Gordon Brown saying that he would abolish boom and bust, but economics is always about cycles. I have been through a number of OBR assessments: they are usually either optimistic, saying that years 2, 3 and 4 look great, or pessimistic, saying that years 2, 3 and 4 look bad. The truth of the matter is that economies go down and then come back up. They recover.

I think Harold Macmillan was once asked by a young person what the biggest problem in politics was. He said, “Events, dear boy.” When the 2019 manifesto was written, we did not know about covid, its worldwide impact or the extraordinary measures that the Government would have to take. I took a slightly different view of the issue from Government Front Benchers, but clearly a lot of money was spent, with the best of intentions, to try to reduce the number of people affected. That was bound to have an effect on our country. When I talk to my constituents, they all understand that if we spend a lot of money because of an emergency, we will ultimately end up with a bill. With several million people sitting at home and the Bank of England printing money at 20% a year, we should not be surprised if inflation picks up. The good news is that broad money is now growing at 7%, so inflation will come down, living standards will rise and the economy will recover.

After that extraordinary economic event, we have had the Russians invading Ukraine and a massive spike in energy prices. Again, the Government, doing what they can for people, have put in a major programme of assistance. We can argue about whether it should be more or less generous, but the fact is that those were two extraordinary events in a very short space of time, and they are bound to have an impact on the economics of the Government. That means that the Government have had to take some tough decisions. Ultimately, we can either borrow money, tax it or print it. Printing it leads to hell, as we see, and we can only borrow so much if we pay interest. I therefore think the Government have taken the responsible route in a difficult year to stabilise the economy.

But things will get better. The sun will come up; living standards will recover. I am optimistic about the future of our country, because our country always rises to a challenge. That does mean that, as Conservatives, we have to get back to a tax-cutting agenda when it is economically prudent to do so, and it means that we might have to look at public spending if it is too high, but at least now we have a plan. The markets can look ahead for four or five years and have an approximate idea of where the Government are coming from.

The world in which the Bank could print money and buy Government bonds, and the Treasury would underwrite losses on those Government bonds—the period of easy money that we had in Britain, the United States and the euro area—has come to an end. That means that Governments will find it more difficult to sell gilts over the next five to 10 years than they used to. That is why we need prudent and sensible economic management. The Government have taken a brave decision with the statement that they brought forward—notwithstanding the fact that we are not exactly in the lead in the opinion polls at the moment. I think it is the right thing to do for our nation, because ultimately we are here to do what is right for our country.

Within the difficulties of the statement, we have safeguarded the capital budget—I note colleagues criticising HS2, but that is a major capital project that may have a very positive impact on the midlands and the north, particularly in terms of redevelopment. We have also put more into education. We need to do a lot more in that sector, because some of the far eastern countries that are looking towards the future, such as Korea, do far better at 16, 17 and 18 than we seem to. We have to invest in the human capital that we have in our country.

I am hopeful the statement will stabilise the economic situation, that the plan will be for the economy to recover and that, as the economic situation eases, we can go back to some of the things we wanted to do in the summer: reducing the burden of taxation and increasing incentives. We all want to help strivers, but even the strivers in my constituency realise that things have to be paid for and that we have to be responsible in the way we do things, otherwise we get into trouble. I support the statement and what the Chancellor has done. He has been very measured in what he has proposed, but there will have to be a phase 2, phase 3 and phase 4, which will involve increasing productivity and incentives. Once we get over the immediate problems, I look forward to the Government doing a lot more to increase growth in our economy.

Energy (Oil and Gas) Profits

Robert Syms Excerpts

Tuesday 5th July 2022 Commons Chamber

[Sir Robert Syms (Poole) (Con)]

As the motion relates to a Treasury matter, may I pay tribute to the former Chancellor, my right hon. Friend the Member for Richmond (Yorks) (Rishi Sunak)? He had to get the country through a difficult period in the pandemic. He produced a number of interesting schemes, such as the furlough and the self-employment income support scheme, where the software worked and where people were helped. I think he was very creative in the way he handled a difficult situation. I know that it is not always easy for senior politicians to take decisions such as the one that he has taken today. I wish him well, along with the former Secretary of State for Health and Social Care, my right hon. Friend the Member for Bromsgrove (Sajid Javid). We will see how events unfold.

Let me start by taking a traditional Conservative position and saying that I do not like windfall taxes. The North sea is a tremendous British success story. We have got oil out of deep seas using technology, investment and British initiative over decades and we have benefited the nation in doing so. We are a nation that has oil and gas all the way around its coast, as Professor Peter Odell used to say in the 1970s. It is just a question of whether it is viable to get it out, and whether the tax and investment regime is good enough.

The North sea is quite mature now. Although the rise in prices is unwelcome for motorists, it certainly gives the opportunity to extend the life of some fields and makes other oil fields with more marginal prospects more viable. If we are looking for a resilient future for our country, getting the best out of our natural resources in the transition to net zero, I think we ought to have a stable tax network, not act like a Venezuelan junta by jumping in and trying to take money away from oil companies. And what are oil companies? They are normally vehicles for pension funds for lots of elderly people living up and down the country who rely on that income to pay their cost of living bills. There is no such thing as a painless tax rise. There is no magic money tree if we go and punch the oil and gas companies in the mouth. I think this is a very short-sighted policy. It may raise money, but the consequences are long term, and it may have an impact on investment.

Apart from the creation of an oil industry, there are thousands of jobs in oil services in and around Aberdeen, in many other parts of the United Kingdom and, now, worldwide. I think we ought to be proud of what this country has achieved, and we ought to be doing what we can to support those well-paid and important jobs as we go towards net zero.

I am not going to divide the House today. I do not think I would get a seconder, as I am probably the only person who is against the windfall tax at the moment, but we will see how this transpires. I think that a stable tax system in which people in the oil and gas industry can look decades ahead—because investment decisions sometimes take decades—is a much better way of dealing with the situation.

[Kerry McCarthy (Bristol East) (Lab)]

I understand the hon. Gentleman’s arguments, although I do not agree with them, but has he an alternative proposal for helping people to bring down their energy bills? I am sure that many of his constituents are deeply worried about how they will make ends meet, particularly with the next increase in bills coming this autumn. How does he suggest we help them?

[Sir Robert Syms]

I am not sure that the £5 billion raised from the oil companies will find its way into the pockets of people who are worried about their energy bills. As far as I know, it is going into the Treasury.

I return to my original simple point. The Government have already undertaken a number of measures to help with bills; the problem is the lag between the decision making and the assistance that they are giving. So there is always more pressure to do more. I am hopeful that, as we proceed, people will suddenly see some of the bail-out help with bills that the Government have already factored in. But I think that a stable tax system is a better way of proceeding than adding a higher levy on top of corporation tax rates, which are already higher than the rates for most other companies. Let us not forget that many of these oil companies were losing money 18 months ago when we were in lockdown.

I am unhappy with this policy. I will find it interesting to see how the Government bring the positives forward. I am pleased that they have listened to representations—and the former Chancellor was talking to the oil industry—but I think that in the long term this is bound to have a negative effect on investment in the sector, and that what we should be doing is cherishing and encouraging the sector so that we import less from other countries and give ourselves more resilience and security of supply.

That is really all that I wanted to say. I wanted to make my reactionary right-wing comments about windfall taxes, and I did not want the motion to go through without my putting them on the record.

Budget Resolutions

Robert Syms Excerpts

Wednesday 27th October 2021 Commons Chamber

[Sir Robert Syms (Poole) (Con)]

Like my right hon. Friend the Member for Bexleyheath and Crayford (Sir David Evennett), I was pleased with the Chancellor’s optimistic Budget for our country today. We faced a major difficulty with the pandemic and have had to intervene in the economy more than any Government since the second world war, introducing schemes that were massive in their scale to protect people, jobs and businesses. The amazing thing is that that was delivered seamlessly and successfully. We used our fiscal position, whereby we had relatively low national debt, to get through this crisis. The fact that the OBR has reduced its estimate of scarring of the economy, and that the Bank of England has reduced it to only 1%—I suspect it may be reduced further—shows that the economy has got through a major crisis and emerged the other side in much better shape than one had any reason to suspect.

We have 1 million vacancies and an economy estimated by the OBR to grow by more than 6% this year, and it could be higher. We therefore have an economy that is growing and recovering extremely fast. I think that is a good thing. The fact that we have come through this with a growing economy is great. We also look like we will have rapid growth next year and growth in future years. The Government are now in quite a good position. They have a rising growth rate and rising tax income.

Two things concern me. First, I do not like raising taxes. I will only raise taxes if I feel that money is being spent well. We have increased spending in this Budget, and it is beholden on the Government to justify that it is being well spent in the NHS and through other Departments. I have to say that some of the examples—things such as Test and Trace—do not exactly fill one with enthusiasm that some of this money is being well spent. I call on the Government to look at that organisation and perhaps to start to reduce its size and the amount of money it is spending. Some £20 billion-odd a year is a lot of money—twice what we got from putting up national insurance on many people who are low paid. There are still many areas where the Government could save money.

I was pleased by the optimistic tone of what the Chancellor said today. What he has done with many taxes and charges, generally speaking, is just to let things flow on and not to put up inflation by raising things such as fuel duty and alcohol duty. The changes to business rates are welcome and will be helpful. In particular, I think the change of the taper rate in universal credit, so that people can earn more if they work more, is vital. It has always struck me that there is a barrier there. Many people working 16 hours a week, if they are asked to do overtime, say, “No, it’s not worth my while.” It must be right that those who are partly supported by the state and work for employers have flexible enough employment that they can take up more work and earn more when asked. That and many other measures should add flexibility to the British economy.

I welcome what my right hon. Friend the Member for Tunbridge Wells (Greg Clark) said about science. If any of us needed a lesson about the importance of science, the pandemic brought that home. We are a science superpower, but sometimes the proceeds of science are not turned into jobs, factories and other things.

At the beginning of the pandemic, we had world-class people to develop vaccines, but only two vaccine manufacturers for animals rather than people. Now we have factories and the capacity. Even the person who drives the van with vaccines in it from the factory to the delivery point is a job created in the United Kingdom. With any kind of science policy, we have to ensure not only that we have world-class science, but that that is turned into jobs in this country, which has always been our weak point.

One of big lessons of the past 12 months is that we have been living in a just-in-time world, so many businesses are finding higher freight rates and disruption due to the pandemic very difficult. We must have a more resilient economy, which may mean that the Government have to look at storemen and storing strategic materials. I was pleased to read in the newspapers that we are in discussions about increasing our gas capacity and bringing back some of the British Gas capacity. As an economy, the biggest challenge ahead is ensuring that we have the raw materials and the resources to get ahead. Relying on other people to build things is not as sustainable and sensible as it used to be.

Over the past 20 years, we have imported a lot from nice China, but we now find that it is more aggressive, so we have to look at where we source things from. There is nothing better than sourcing something at or near to home, which would make a big difference. Clearly, freight rates will make a big difference to the world economy. The economics change substantially if we can import a container of cheap products from the far east for £1,500 compared with £8,000 a container. That is why some British companies are busy filling a new market.

The essential lessons for the Government are to get the national debt and the deficit falling, which the Budget does; invest in the things that are worth investing in, such as decent infrastructure and science, where we can win; structure our economy so that we produce more at home; and plan for the fact that the free-flowing world-trading economy that we have known over the past 20 years may not be there in future. We have to be more resilient and more careful in how we proceed.

Health and Social Care Levy

Robert Syms Excerpts

1st reading
Wednesday 8th September 2021 Commons Chamber

[Sir Robert Syms (Poole) (Con)]

Political parties in this country set out with manifestos at general elections with a general intent to try to implement them. There is usually a number of rules. If a party thinks it will win, it has the shortest manifesto possible, and if a party is in opposition, it will usually have an endless manifesto with lots of promises to try to attract people. The truth of the matter is that what comes along is events, and a pragmatic, sensible Government have to respond to events.

We have had one big event, the pandemic. Nobody said, “You didn’t have the furlough in the manifesto”, because how could we have foreseen that? The jobs of 7 million, 8 million, 9 million people were protected to get through the pandemic. Nobody said, “You cannot give grants”, or, “You cannot spend £400 billion.” We live in a funny country where the Prime Minister can spend £400 billion getting us through a pandemic, but God forbid he try to put wallpaper up in his flat in Downing Street, which of course the Cabinet Office would not pay for.

The reality is that the Government have been pragmatic and sensible, and the consequence of the pandemic is that we have a higher debt level, and that changes the parameters of what the party that is governing can do. We want to implement our manifesto promises dealing with care. We need to get the backlog of the NHS down. Many people in my constituency have been quiet, waiting for their operation and their opportunity to get back to normal, and we need to give them support. That is what we are trying to do.

The simple truth is that we are in a different world from the one we had in 2019. This Government are treating the world as it is, and that means tough decisions and unpopular decisions. I would not be surprised if we fell behind in the opinion polls, but the reality is that we are doing what the British people expect us to do, which is to govern and deal with the problems we face. I support this Government, not because I agree with everything that they do, but because I am proud of the fact that they take tough decisions. That is what Governments are meant to do. They are meant to take challenges head on.

We are dealing with the NHS backlog. Who can tell how quickly we will get it shifted? Of course we need more staff, but we are seeing in figures out recently that the backlog is already starting to fall. Let us hope it is cleared quickly. We are starting to deal with some of the care issues. Is this proposal a silver bullet for dealing with them all? No, it is not. Is it enough money? I wonder, because there is a list of Government priorities that may mean some funds may be diverted before they get to care. The Government are trying their best to deal with people’s concerns.

We all have constituents whose parents have worked hard all their life to buy a home; we see the unlucky ones when mum or dad has Alzheimer’s and goes into a home and they see the proceeds of a life’s work disappear. If that person is in a home next to someone fully funded by a local authority, it is quite right and proper that we should pay at least some regard to their hard work and recognise the things they did not have—perhaps holidays or horseracing or gambling—because they wanted to buy a home.

The Government are roughly on the right track. I hope that we will get back to a more tax-cutting agenda as the years roll by. I am very hopeful for the deficit this year because we are growing quite rapidly, we seem to be getting control of spending and we have had to take some tough decisions with tax. I am confident that when we come to face the British people, I will hold my head up high because we are tackling the issues that my constituents care about.

Spending Review 2020 and OBR Forecast

Robert Syms Excerpts

Wednesday 25th November 2020 Commons Chamber

[Rishi Sunak]

I believe we have, with £1.3 billion of extra funding next year for the Welsh Government to spend as they see fit on their devolved competencies, of which flooding is one. I am sure that the hon. Gentleman can raise that with the Welsh Government. We in England are doubling investment in flood defences over the next few years to over £5 billion, protecting over 300,000 homes, and the £1.3 billion of Barnett funding for Wales will enable that funding to go to where it is needed.

[Sir Robert Syms (Poole) (Con)]

I thank the Chancellor for his statement. Over the last 10 years, we have spent over £100 billion on overseas aid, with a lot of it borrowed. Most of my constituents will understand the difficult decision that the Government have had to make. At 0.5%, our aid spending will be higher than that of most of our neighbours, and probably higher than the Major Government and many other Governments in the past. He has set out the recovery in GDP and growth over the next three or four years, and no doubt the budget will go up again.

[Rishi Sunak]

I thank my hon. Friend for his comment. He is right—I think the average aid spending of the last Labour Government was 0.36%, so it will be sufficiently ahead of that. As I said, we intend to return to this over time when the fiscal situation allows. He will appreciate better than others the unbelievable uncertainty at the moment, but that is our intention.