Budget Resolutions and Economic Situation

Baroness Winterton of Doncaster Excerpts

Wednesday 3rd March 2021 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. I am afraid the right hon. Gentleman has come to the end of his time.

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[Douglas Ross (Moray) (Con)]

I want to welcome the Budget on behalf of my constituents in Moray and of people across Scotland. There is a lot of good news in what the Chancellor had to say today. First, however, I want to pick up on a few remarks in the speech made by the leader of the Scottish National party, the right hon. Member for Ross, Skye and Lochaber (Ian Blackford). He accused members of this Government of not understanding what it was like to be poor. That is quite an incredible statement from someone who earned his fortune as an investment banker in the City of London before he rediscovered himself as a humble crofter.

The right hon. Gentleman went on to say that this Budget lacked ambition, but I thought there was ambition weaved throughout the Chancellor’s statement. It has ambition for individuals, families and businesses in the weeks and months ahead, and ambition for our country in the years ahead. If the leader of the SNP at Westminster wanted to see a statement that lacked ambition, he should have looked at Nicola Sturgeon’s statement last week on her partial route map out of lockdown restrictions for Scotland. That was a document and a statement that lacked ambition, hope and clarity and one that we are seeing unravel at the moment as people in Scotland expect more from their Government.

The final point I want to focus on from the right hon. Gentleman’s speech is his comment about how in Scotland there has been an extension to the freeze on business rates for a further year. That is true, but that further freeze, for another 12 months, was made possible and accepted by the SNP Finance Minister only because of an additional £1.1 billion of support from the UK Government to the Scottish Government. Kate Forbes stood up in Holyrood and said that she was able to do this only because of additional support coming from the UK Government to Holyrood, to the Scottish Government, so that is why we have the extension for a full year of business rates in Scotland.

The right hon. Gentleman mentioned that newspapers were also covered. Of course, the SNP had to be forced to include newspapers in the business rates relief. A vote by the Scottish Conservatives in Holyrood, which the SNP was against to begin with, forced a U-turn. I will leave it to others to speculate why the SNP at this time would not want to support the newspaper industry in Scotland.

Throughout the last year, in dealing with this pandemic, the UK Government have delivered unprecedented support for Scottish families and businesses: the furlough scheme and the self-employed income support, protecting 930,000 Scottish jobs; loans to over 90,000 Scottish businesses and an extension of the reduced rate of VAT for hospitality, leisure and tourism; the £20 a week uplift for universal credit to help those in our society who need it most, which is something I have been calling for since October last year; and £9.7 billion of additional funding for Scottish public services. With this Budget, the Chancellor is continuing those vital lifelines, extending furlough and the self-employed income support until September.

Just as this pandemic has gone on longer than any of us could have imagined back in March last year, so, too, has the broad support delivered by the UK Treasury to the people of Scotland. Yet this is not just a Budget to help the Scottish economy to survive the pandemic. It is also a Budget for our recovery, with investments to support the economy in the north-east in its transition towards green energy, an acceleration of the transformative funding for Scottish growth deals to bolster the local economies in Ayrshire, Argyll and Bute, and Falkirk, and a freeze on the fuel duty to back Scottish drivers, which is crucial to our remote and rural areas. Just look at how that contrasts with the SNP Scottish Government lobbying for an increase in fuel duty. It has gone widely unreported that the SNP is calling for an increase. When we look at the options for fuel duty, how will that go down with voters in rural Scotland in a few weeks’ time? And, of course, as the MP for Moray, representing more Scotch whisky distilleries than any other MP in this place, I warmly welcome the freeze on spirits duty. That is hugely important to the distilleries in my constituency and alcohol producers more widely in Scotland and across the UK.

The Budget shows that the UK Government have a plan to rebuild Scotland’s economy after the immediate health crisis is over, to create jobs and opportunity in every part of our country as we pull together to deliver our recovery. The Chancellor said that the majority of these measures apply across the United Kingdom. We have a further £1.2 billion of spending going to the Scottish Government. We need to see the Scottish Government ensuring that that gets to the services and businesses that need it most. On the stamp duty freeze, we now see that holiday continuing in England until September, but in Scotland it has now ended. We need to see action on that in Scotland as well.

Yet SNP Members cannot welcome this plan—they could not support the Budget because they would rather focus on another divisive independence referendum than our recovery from coronavirus. They say that they want to bring this referendum forward at the earliest opportunity, just when people are renewing their ties with friends and families and businesses are beginning to reopen. Their plan would damage not only our Scottish recovery, but that of the whole of the United Kingdom. That is the last thing we need right now. What families and businesses across Scotland want to hear from the Scottish Government is a full route map for ending restrictions, not a route map for separation. As I said earlier, they are looking for certainty and for hope. This Budget has delivered that by extending the vital lifelines that Scottish families and businesses are relying on. It is now time for the Scottish Government to do the same.

The Chancellor has set out an ambitious programme that will not only secure the survival of many jobs and businesses in Scotland, but provide the basis for our economic recovery in the future. There was just one point that I agreed with the leader of the SNP on. He said that Scotland has a choice of two futures—we do. In the coming Scottish Parliament election, voters will decide whether they want the focus of all the politicians and all the parties within the Scottish Parliament to be on another independence referendum or on rebuilding Scotland from coronavirus. Let us not choose more damaging division. Let us instead rebuild Scotland and the whole of the UK together. Today’s Budget will help us do that.

[Madam Deputy Speaker (Dame Rosie Winterton)]

We now go via video link to Seema Malhotra, after which the time limit will go down to five minutes.

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[Simon Fell (Barrow and Furness) (Con) [V]]

[Inaudible.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

As we are having some trouble getting to Simon Fell, I call Colum Eastwood.

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[Chris Elmore (Ogmore) (Lab)]

Almost exactly a year ago on 28 February, Wales recorded its first case of coronavirus. Covid-19 would go on to turn countless lives, livelihoods and communities upside down. In my Ogmore constituency, many families have faced unimaginable loss in unprecedented circumstances. It has not just been the loss of loved ones, often without being able to say goodbye, or of the precious time with friends and family. There has also been a previously unimaginable scale of financial loss, with small businesses destroyed, seemingly overnight, disappearing jobs, reduced hours and some people—the excluded—simply falling through the gaps in support and receiving nothing, even after their income vanished before their eyes. Of course, I welcome the changes that the Chancellor has announced today to support some of the excluded, but there are still far too many people who are missing out on Government support and who have simply been bypassed again by this Conservative Government.

The emotional scarring of the pandemic will be with us for years to come, and we must do all we can to provide the support for mental health and wellbeing that people need. I am very proud that the Welsh Labour Government have already identified the need for this, and have begun to implement this support as they seek to move Wales forward. But we need to recognise that, alongside the emotional burden, there is also an economic burden; and, as so often during this pandemic, the Chancellor’s plans to tackle it are simply not up to the job.

Figures show that 4,415 people in Ogmore are currently furloughed and 2,705 people are claiming unemployment-related benefits. Months ago, I and my Labour party colleagues called on the Chancellor to end the speculation and uncertainty surrounding the continuation of this support and pledge that he would extend the £20 uplift beyond April. I was proud to do the right thing and vote for the £20 a week uplift to universal credit, as I have seen the difference that it has made in people’s lives across my constituency. While Labour was taking action, the UK Government decided to sit on their hands and pretend that no vote was going on. It will come as no surprise that I find it appalling that I have heard Conservative MPs today saying how important the uplift is, when they chose to pretend that there was no vote going on just a few months ago. They are now praising the uplift as if the Chancellor has ridden in on his white steed and rescued those people who receive universal credit.

The Chancellor could have stopped this speculation many months ago. Even this Sunday, he was asked by the press if he would end this cliff-edge approach to people’s incomes, but again he refused to relieve the anxiety that surrounds families’ household budgets. I am pleased that the Chancellor has finally listened and followed Labour’s lead, but I have to ask: why on earth has it taken him this long to make the decision? Has he perhaps been waiting for a new graphic for his social media? Does his Instagram account take some time to change these things? Meanwhile, families across my constituency have been living with this uncertainty, and it simply is not acceptable.

The difference between the Chancellor’s reluctance to extend the support, and the actions of a Welsh Labour Government straining every sinew to support Welsh families, is glaring. From the get-go, Welsh Labour ensured that the full force of our Government was used to support families, businesses and jobs, be that through: the barriers grant, giving up to £2,000 towards the essential costs of starting up a business; the restrictions business fund, giving businesses grants of between £6,000 and £10,000; or releasing £117 million, through rate relief for premises over £500,000, back into the economy. Welsh Labour has targeted everything towards protecting jobs in our communities.

This Budget is about not just tackling the challenges of the present, but laying the foundations for the future. The Welsh Labour Government understand that and have done that in their work every day over the last 10 years of continuous budget cuts. The Minister and the Chancellor have spent the past 10 years cutting, cutting and cutting the essential foundations of the economy; how do they expect now, with very little planning or ideas, to progress and build an economy back for the future? With such limited expectations and hopes for growth, the Budget is hardly the inspiring one that was being briefed daily for weeks before today.

The scale of the challenge we face as we seek to rebuild after this dreadful pandemic is immense. Our Welsh Labour Government recognise that, and have set out the bold and visionary policies we need to move Wales forward. Today’s Budget is sadly lacking in ambition and in the compassion required by the Chancellor and his colleagues. Families in Ogmore and across the UK have made enormous sacrifices in a collective effort to tackle covid-19 and keep each other safe. They need a plan for a recovery that matches the scale of that sacrifice, but they will not find it in today’s Budget.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I am afraid that after the next speaker the time limit will go down to three minutes.

[Mr Mark Harper (Forest of Dean) (Con)]

The first thing I want to say, reflecting on the Chancellor’s excellent Budget speech, is that in an emergency—that is what we have faced over the past year—it is right for the state to use its fiscal firepower to support the people of our country and protect jobs and livelihoods. That will be welcomed across the country, but particularly in my constituency. Listening to the Chancellor set out the more than £400 billion-worth of spending that has been put in place to support jobs and livelihoods, we can see the pay-off. The independent Office for Budget Responsibility now thinks that the level of unemployment we will reach at the peak is considerably lower than it was forecasting just last November. That reduction in the level of unemployment and the jobs that have been protected will be welcomed in my constituency and across the United Kingdom.

I also welcome the specific help in the Budget for my constituency. I particularly welcome the £150,000 to help my local authority put in place the capacity to bid for money from the levelling-up fund. As Members of Parliament are integrally involved, I look forward to working with it to put in place an ambitious plan to help improve economic conditions in my constituency. I also welcome the continued reduction in VAT for hospitality and tourism businesses, and the extension of the business rates holiday. I know that that will be incredibly welcome to those businesses in my constituency that are raring to go to get back into business but are not yet enabled to do so.

We have had a big, one-off amount of borrowing to get us through this crisis, so we need to get the public finances back in shape. The Chancellor set out very clearly why that is essential. First, if debt continues to rise, we are very vulnerable to a rise in interest rates. A 1% rise in interest rates, modest by historical standards, would mean our having to find £25 billion a year in debt interest. That would mean making very significant savings elsewhere from important public services. Secondly, we have to get the public finances in good shape to prepare us for the inevitable future crisis. As the Chancellor set out, it was only the difficult decisions that we took on tax and spending from 2010 onwards that allowed him to have the fiscal firepower and borrowing capacity to get us through this crisis. It is right that he wants to leave the public finances in shape, either for himself in the future or for a potential successor, to deal with any crises to come. It is important that that cannot happen immediately, but over time.

I am pleased to see in the independent forecast that we will get the Budget back into balance by 2025-26, by three mechanisms. The first is growing the economy faster, and I welcome the mechanisms that the Chancellor set out today to increase investment, to get businesses firing on all cylinders. However, secondly, it also requires controlling the growth in spending, and I am pleased to see controlled growth in public spending in the numbers. That will mean some difficult decisions in the spending review, and I say to Members on both sides of the House, especially my colleagues, that it will mean making choices, setting priorities and deciding what we think is important. We cannot spend money on absolutely everything we want; as Conservatives, we have to live within our means and make those difficult decisions. I hope that, as those decisions are made by ministerial colleagues and our Treasury colleagues later this year, we can all support them.

Finally, it also means an increase in taxes, which is uncomfortable for someone like me who wants to see lower taxes. I do not think we are undertaxed, because the tax rises in this Budget will leave us with the highest tax burden in my lifetime. However, I hope that they will be temporary and that, once we have got the public finances back into shape, the Chancellor—as he says, he is a low-tax Conservative—will be able to look to continue increasing public spending in line with the growth of the economy, but also to reduce taxes so that people can keep more of their hard-earned income, which is central to being a Conservative.

This is a very well-judged Budget that gets the public finances back into shape, deals with the crisis—the emergency —we have faced, prepares us for growth in the years to come and leaves us in better shape than the Chancellor found the Treasury. I commend it to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I understand that the hon. Member for Brent North (Barry Gardiner) is having some technical problems, so we will go to David Mundell.

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[Sir Edward Leigh]

My right hon. Friend makes an entirely valid point. One of the points that I want to make in my short contribution is that we have to accept that the high street and small businesses have moved on. The truth is that we have a very unequal tax system. Giants such as Amazon are paying an infinitely small proportion of their profits and turnover in business rates, and are driving small businesses and shops out of the high street. I personally think that there is something to be said for abolishing business rates all together. How would we pay for that? We could actually pay for it through a 3% increase on VAT on all businesses. That, of course, would hit the very large businesses such as Amazon, which pay derisory levels of tax, very hard indeed. My right hon. Friend makes a very fair point.

May I repeat what I say in every Budget? Perhaps I am a bit of a broken record on this, but I do believe in transparency, and I believe that ultimately we should try to reform our whole tax system. The TaxPayers’ Alliance has counted 1,651 tax changes since May 2010, including: 58 changes to air passenger duty; 130 changes to national insurance; 68 changes to stamp duty; 256 changes to VAT; 53 changes to tobacco duty; and 258 changes to vehicle excise duty. Our tax code is 17,000 pages long—or it was in 2015; it is even longer now. We should compare that with the tax code of an enterprise economy such as Hong Kong, which is only 350 pages long.

As things get easier next year, my plea to the Chancellor is to make our taxes clear, simple and fair. Tax complexity creates a structural bias in favour of the very rich and the big corporations, and that is not fair. Global giants can hire entire departments of tax advisers. I therefore agree with my right hon. Friend the Member for South Holland and The Deepings: let us look after middle-class people, who pay PAYE and bear the brunt of all tax increases, and let us direct tax increases at those who can pay, namely the digital giants.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Before I call the next speaker, I should explain that we are trying to get everybody into the debate. When there are interventions, if the speaker sticks to the time limit, that is fine—there is nothing against interventions—but the intervention on the right hon. Gentleman has effectively prevented a colleague from getting in. I am just pointing out that we are that tight on time.